As filed with the Securities and Exchange Commission on June 21, 1996
Registration No. 333-
===============================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------------------------
FORM S-4
REGISTRATION STATEMENT
UNDER THE
SECURITIES ACT OF 1933
-----------------------------
SFX BROADCASTING, INC.
(Exact Name of Registrant as Specified in Its Charter)
-----------------------------
DELAWARE 4832 13-3649750
(State or Other Jurisdiction of (Primary Standard Industrial (I.R.S. Employer
Incorporation or Organization) Classification Code Number) Identification No.)
150 EAST 58TH STREET, 19TH FLOOR
NEW YORK, NEW YORK 10155
(212) 407-9191
(Address, including zip code and telephone number, including area
code, of registrant's principal executive offices)
-----------------------------
ROBERT F.X. SILLERMAN
EXECUTIVE CHAIRMAN
150 EAST 58TH STREET, 19TH FLOOR
NEW YORK, NEW YORK 10155
(212) 407-9191
(Name, address, including zip code and telephone number, including area code,
of agent for service)
-----------------------------
COPIES TO:
HOWARD M. BERKOWER, ESQ.
BAKER & MCKENZIE
805 THIRD AVENUE
NEW YORK, NEW YORK 10122
(212) 751-5700
-----------------------------
Approximate date of commencement of proposed sale of the securities
to the public: As soon as practicable after this Registration Statement
becomes effective.
If the securities being registered on this Form are being offered in
connection with the formation of a holding company and there is compliance
with General Instruction G, check the following box.[ ]
-----------------------------
CALCULATION OF REGISTRATION FEE
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Proposed Maximum Amount of
Title of Each Class of Amount to be Proposed Maximum Aggregate Offering Price Registration
Securities to be Registered Registered Offering Price Per Unit (1) (1) Fee
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10 3/4% Senior Subordinated Notes
due 2006, $450,000,000
Series B........................... Principal Amount $1,000 $450,000,000 $155,172.41
==================================================================================================================================
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(1) Estimated solely for the purpose of calculating the registration fee in
accordance with Rule 457(f) of the Securities Act of 1933, as amended.
-----------------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE
OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH
SECTION 8(A) OF THE SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THIS
REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION,
ACTING PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
<PAGE>
SFX BROADCASTING, INC.
CROSS-REFERENCE SHEET
PURSUANT TO ITEM 404(A) AND ITEM 501(B) OF REGULATION S-K
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ITEM AND HEADING ON FORM S-4 HEADING OR LOCATION IN PROSPECTUS
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A. INFORMATION ABOUT THE TRANSACTION
1. Forepart of the Registration Statement and
Outside Front Cover Page of Prospectus................. Cover Pages of Registration Statement and Prospectus; Cross
Reference Sheet
2. Inside Front and Outside Back Cover Pages of
Prospectus.............................................. Inside Front and Outside Back Cover Pages of Prospectus
3. Risk Factors, Ratio of Earnings to Fixed
Charges and Other Information........................... Prospectus Summary; Summary Consolidated Financial Data; Risk
Factors
4. Terms of the Transaction................................ Prospectus Summary; The Exchange Offer; Certain Federal
Income Tax Considerations; Description of Notes
5. Pro Forma Financial Information......................... Summary and Consolidated Financial Data
6. Material Contracts with the Company Being
Acquired................................................ Not Applicable
7. Additional Information Required for Reoffering
by Persons and Parties Deemed to be
Underwriters............................................ Not Applicable
8. Interests of Named Experts and Counsel.................. Not Applicable
9. Disclosure of Commission Position on
Indemnification for Securities Act Liabilities.......... Not Applicable
B. INFORMATION ABOUT THE REGISTRANT
10. Information with Respect to S-3 Registrants............. Available Information; Prospectus Summary; Risk Factors;
Use of Proceeds
11. Incorporation of Certain Information By Reference.......... Incorporation by Reference
12. Information with Respect to S-2 or S-3 Registrants........ Not Applicable
13. Incorporation of Certain Information by Reference......... Not Applicable
14. Information with Respect to Registrants Other Than S-3
or S-2 Registrants...................................... Not Applicable
C. INFORMATION ABOUT THE COMPANY BEING
ACQUIRED
15. Information with Respect to S-3
Companies............................................... Not Applicable
16. Information with Respect to S-2 or S-3 Companies........ Not Applicable
17. Information with Respect to Companies Other Than S-3
or S-2 Companies........................................ Not Applicable
D. VOTING AND MANAGEMENT INFORMATION
18. Information if Proxies, Consents or Authorizations are
to be Solicited......................................... Not Applicable
19. Information if Proxies, Consents or Authorizations are
not to be Solicited or in an Exchange Offer............. Prospectus Summary; The Exchange Offer; Use of Proceeds
</TABLE>
<PAGE>
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these
securities in any State in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the securities laws of
any such State.
SUBJECT TO COMPLETION,
DATED JUNE 21, 1996 PROSPECTUS
S F X Broadcasting, Inc.
OFFER TO EXCHANGE
10 3/4% SENIOR SUBORDINATED NOTES DUE 2006, SERIES B
FOR ANY AND ALL OF ITS OUTSTANDING
10 3/4% SENIOR SUBORDINATED NOTES DUE 2006, SERIES A
THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY
TIME, ON , 1996, UNLESS EXTENDED, PROVIDED IT MAY NOT BE
EXTENDED BEYOND , 1996.
SFX Broadcasting, Inc., a Delaware corporation (the
"Company"), hereby offers, upon the terms and subject to the conditions set
forth in this Prospectus and the accompanying Letter of Transmittal (which
together constitutes the "Exchange Offer"), to exchange $1,000 principal
amount of its 10 3/4% Senior Subordinated Notes due 2006, Series B (the
"Series B Notes") for each $1,000 principal amount of its outstanding 10 3/4%
Senior Subordinated Notes due 2006, Series A (the "Series A Notes") of which
$450.0 million in aggregate principal amount are outstanding as of the date
hereof, which exchange has been registered under the Securities Act of 1933,
as amended (the "Securities Act"), pursuant to a registration statement of
which this Prospectus is a part (the "Registration Statement"). The form and
terms of the Series B Notes are the same as the form and terms of the Series A
Notes except that (i) the exchange will have been registered under the
Securities Act and therefore the Series B Notes will not bear legends
restricting the transfer thereof and (ii) holders of the Series B Notes will
not be entitled to certain rights of holders of the Series A Notes under the
Registration Rights Agreement (as defined herein), which rights will terminate
upon the consummation of the Exchange Offer. The Series B Notes will evidence
the same debt as the Series A Notes (which they replace) and will be entitled
to the benefits of an indenture dated as of May 31, 1996 governing the Series
A Notes and the Series B Notes (the "Indenture"). The Series A Notes and the
Series B Notes are sometimes referred to herein collectively as the "Notes."
See "The Exchange Offer" and "Description of Notes."
The Company will accept for exchange any and all validly
tendered Series A Notes not withdrawn prior to 5:00 p.m., New York City time,
on , 1996 unless extended by the Company, in its sole discretion (the
"Expiration Date"). Tenders of Series A Notes may be withdrawn at any time
prior to the Expiration Date. The Exchange Offer is subject to certain
customary conditions. Series A Notes may be tendered only in integral
multiples of $1,000. See "The Exchange Offer--Conditions."
(continued on the next page)
SEE "RISK FACTORS" FROM PAGES 12 TO 20 FOR A DISCUSSION OF
CERTAIN FACTORS TO BE CONSIDERED BY HOLDERS WHO TENDER THEIR SERIES A NOTES IN
THE EXCHANGE OFFER.
-----------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF
THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
-----------------------------
The date of this Prospectus is , 1996.
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The Series B Notes will bear interest at the same rate and
on the same terms as the Series A Notes. Consequently, interest on the Notes
will be payable semi-annually on May 15 and November 15 of each year,
commencing November 15, 1996, at the rate of 10 3/4% per annum. The Series B
Notes will bear interest from and including May 31, 1996, the date of issuance
of the Series A Notes. Holders whose Series A Notes are accepted for exchange
will be deemed to have waived the right to receive any interest accrued on the
Series A Notes.
The Notes are redeemable, in whole or in part, at the option
of the Company on or after May 15, 2001 at the redemption prices set forth
herein plus accrued interest to the date of redemption. In addition, until May
31, 1999, the Company may, on any one or more occasions, redeem up to $154.0
million in aggregate principal amount of Notes at a redemption price of
110.75% of the principal amount thereof plus accrued and unpaid interest and
Liquidated Damages (as defined herein), if any, thereon to the redemption
date, with the net proceeds of an offering of common equity; provided that at
least $286.0 million in aggregate principal amount of Notes must remain
outstanding immediately after the occurrence of each such redemption; and
provided, further that any such redemption shall occur within 75 days of the
date of closing of such offering of common equity of the Company.
The Notes are general unsecured obligations of the Company
and are subordinated in right of payment to all existing and future Senior
Debt (as defined herein) of the Company. The Notes are guaranteed on a senior
subordinated basis by each of the Company's existing and future subsidiaries
(the "Subsidiary Guarantors"). The Subsidiary Guarantees (as defined herein)
are general unsecured obligations of the Subsidiary Guarantors and are
subordinated in right of payment to all existing and future Guarantor Senior
Debt (as defined herein). As of March 31, 1996, on a pro forma basis after
giving effect to the Transactions (as defined herein), the Company would have
had no Senior Debt and the Subsidiary Guarantors would have had no Guarantor
Senior Debt.
Upon a Change of Control (as defined herein), each holder of
Notes has the right to require the Company to repurchase such holder's Notes
at a price equal to 101% of the principal amount thereof plus accrued and
unpaid interest and Liquidated Damages, if any, to the date of repurchase. In
addition, the Company is obligated to offer to repurchase the Notes at 100% of
the principal amount thereof plus accrued interest and Liquidated Damages, if
any, to the date of repurchase in the event of certain asset sales. See
"Description of Notes."
Based upon no-action letters issued by the staff of the
Securities and Exchange Commission (the "Commission") to third parties, the
Company believes that the Series B Notes issued pursuant to the Exchange Offer
in exchange for Series A Notes may be offered for resale, resold and otherwise
transferred by a holder thereof (other than any holder which is an "affiliate"
of the Company within the meaning of Rule 405 under the Securities Act or a
holder that is a broker-dealer who acquires Series B Notes to resell pursuant
to Rule 144A or any other available exemption under the Securities Act),
without compliance with the registration and prospectus delivery provisions of
the Securities Act, provided that such Series B Notes are acquired in the
ordinary course of such holders' business and such holder is not
participating, does not intent to participate, and has no arrangement with any
person to participate in the distribution of such Series B Notes. However, the
Commission has not considered the Exchange Offer in the context of a no-action
letter and there can be no assurance that the staff of the Commission would
make a similar determination with respect to the Exchange Offer as in such
other circumstances. Holders of Series A Notes wishing to accept the Exchange
Offer must represent to the Company, that such conditions have been met. Each
broker-dealer that receives Series B Notes for its own account pursuant to the
Exchange Offer where it acquired the Series A Notes exchanged for such Series
B Notes for its own account as a result of market-making or other trading
activities, must acknowledge that it will deliver a prospectus in connection
with the resale of such Series B Notes. The Letter of Transmittal states that
by so acknowledging and by delivering a prospectus, a broker-dealer will not
be deemed to admit that it is an "underwriter" within the meaning of the
Securities Act. This Prospectus, as it may be amended or supplemented from
time to time, may be used by a broker-dealer in connection with resales of
Series B Notes received in exchange for Series A Notes where such Series A
Notes were acquired by such broker-dealer as a result of market-making
activities or other trading activities. The Company has agreed that, for a
period of 180 days after the Expiration Date, it will make this Prospectus
available to any broker-dealer for use in connection with any such resale. See
"Plan of Distribution."
The Company will not receive any proceeds from the Exchange
Offer and will pay all the expenses incident thereto. Tenders of Series A
Notes pursuant to the Exchange Offer may be withdrawn at any time prior to the
Expiration Date. In the event the Company terminates the Exchange Offer and
does not accept for exchange any Series A Notes, the Company will promptly
return the Series A Notes to the holders thereof. See "The Exchange Offer."
(continued on next page)
ii
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Prior to this Exchange Offer, there has been no public
market for the Notes. The Company does not intend to list the Notes on any
securities exchange or to seek approval for quotation through any automated
quotation system. There can be no assurance that an active market for the
Notes will develop. To the extent that a market for the Notes does develop,
the market value of the Notes will depend on a market conditions (such as
yields on alternative investments), general economic conditions, the Company's
financial condition and other conditions. Such conditions might cause the
Notes, to the extent that they are actively traded, to trade at a significant
discount from face value. See "Risk Factors--Absence of Public Market."
THE EXCHANGE OFFER IS NOT BEING MADE TO, NOR WILL THE
COMPANY ACCEPT SURRENDERS FOR EXCHANGE FROM, HOLDERS OF SERIES A NOTES IN ANY
JURISDICTION IN WHICH THE EXCHANGE OFFER OR THE ACCEPTANCE THEREOF WOULD NOT
BE IN COMPLIANCE WITH THE SECURITIES OR BLUE SKY LAWS OF SUCH JURISDICTION.
iii
<PAGE>
AVAILABLE INFORMATION
The Company has filed with the Commission a Registration
Statement on Form S-4 under the Securities Act with respect to the Series B
Notes being offered by this Prospectus. This Prospectus, which constitutes a
part of the Registration Statement, does not contain all of the information
set forth in the Registration Statement, certain items of which are contained
in exhibits and schedules to the Registration Statement as permitted by the
rules and regulations of the Commission. For further information with respect
to the Company and the Series B Notes offered hereby, reference is made to the
Registration Statement, including the exhibits thereto, and the financial
statements and notes filed as a part thereof. Statements made in this
Prospectus concerning the contents of any contract, agreement or other
document filed with the Commission as an exhibit are not necessarily complete.
With respect to each such contract, agreement or other document filed with the
Commission as an exhibit, reference is made to the exhibit for a more complete
description of the matter involved, and each such statement shall be deemed
qualified in its entirety by such reference.
The Company is subject to the information requirements of
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and, in
accordance therewith, files reports, proxy statements and other information
with the Commission. The reports, proxy statements and other information filed
by the Company with the Commission pursuant to the informational requirements
of the Exchange Act may be inspected and copied at the public reference
facilities maintained by the Commission at Judiciary Plaza, 450 Fifth Street,
N.W., Washington, D.C. 20549, and at the Commission's Regional Offices at 7
World Trade Center, New York, New York 10048 and the Northwestern Atrium
Center, 500 West Madison Street, Room 1400, Chicago, Illinois 60661. Copies of
such material can be obtained at prescribed rates from the Public Reference
Section of the Commission at Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549. In the event the Company is not required to be subject
to the reporting requirements of the Exchange Act in the future, the Company
has agreed that, for so long as any of the Notes remain outstanding, it will
furnish to the applicable trustee or transfer agent and the holders of the
Notes, as applicable, and file with the Commission (unless the Commission will
not accept such a filing) (i) all quarterly and annual financial information
that would be required to be contained in a filing with the Commission on
Forms 10-Q and 10-K if the Company was required to file such forms, including
a "Management's Discussion and Analysis of Results of Operations and Financial
Condition" and, with respect to the annual information only, a report thereon
by the Company's certified independent accountants and (ii) all current
reports that would be required to be filed with the Commission on Form 8-K if
the Company was required to file such reports.
INCORPORATION BY REFERENCE
The following documents, which have been filed by the
Company with the Commission, are hereby incorporated by reference in this
Prospectus and made a part hereof:
(i) the Company's Annual Report on Form 10-K for the year ended
December 31, 1995;
(ii) the Company's Quarterly Report on Form 10-Q for the quarter
ended March 31, 1996; and
(iii) the Company's Current Reports on Form 8-K filed on
April 19, 1996, May 8, 1996, May 9, 1996, May 24, 1996,
May 30, 1996 and on June 21, 1996, respectively.
All documents and reports subsequently filed by the Company
pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act prior to
the termination of the Exchange Offer shall be deemed to be incorporated by
reference into this Prospectus and to be a part hereof from the date of filing
of such documents or reports. Any statement contained in a document
incorporated or deemed to be incorporated by reference herein, shall be deemed
to be modified or superseded for purposes of this Prospectus to the extent
that a statement contained herein or in any other subsequently filed document
which also is or is deemed to be incorporated by reference herein modifies or
supersedes such statement. Any such statements so modified or superseded,
except as so modified or superseded, shall not be deemed to constitute a part
of this Prospectus.
THIS PROSPECTUS INCORPORATES THE DOCUMENTS BY REFERENCE
WHICH ARE NOT PRESENTED HEREIN OR DELIVERED HEREWITH. SUCH DOCUMENTS ARE
AVAILABLE UPON REQUEST FROM CYNTHIA A. BOND, 150 EAST 58TH STREET, 19TH FLOOR,
NEW YORK, NEW YORK 10155, TELEPHONE (212) 407-9191. IN ORDER TO ENSURE TIMELY
DELIVERY OF THE DOCUMENTS, ANY REQUESTS SHOULD BE MADE AT LEAST FIVE BUSINESS
DAYS PRIOR TO THE DATE ON WHICH A FINAL INVESTMENT DECISION IS TO BE MADE.
[NYCORP] 24893.6
2
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PROSPECTUS SUMMARY
The following summary is qualified in its entirety by, and should be
read in conjunction with, the more detailed information and financial
statements and notes thereto appearing elsewhere in this Prospectus, and in
the documents incorporated herein by reference. Certain capitalized terms used
herein have the meanings assigned to them in the Glossary appearing on pages
10 and 11 in this Prospectus. As used in this Prospectus, except under the
caption "Description of Notes" or where the context otherwise requires, the
"Company" refers to SFX Broadcasting, Inc., a Delaware corporation, and its
subsidiaries, after giving effect to the Acquisitions and the Dispositions.
The timing and completion of the Acquisitions and the Dispositions are subject
to a number of conditions, certain of which are beyond the Company's control,
and there can be no assurance that such transactions will be approved by the
Federal Communications Commission (the "FCC") or completed on the terms
described herein or at all. Investors should consider carefully the
information set forth under "Risk Factors."
THE COMPANY
The Company, founded in 1992, currently owns and operates, provides
programming to or sells advertising on behalf of 22 radio stations in eight
markets. Upon consummation of the Acquisitions and the Dispositions (as
defined herein), the Company will own and operate, provide programming to or
sell advertising on behalf of 69 radio stations (53 FM and 16 AM stations
located in 23 markets) and will be one of the largest companies in terms of
the number of stations in the United States exclusively devoted to radio
broadcasting. The Company will be diverse in terms of format and geographic
markets and will own and operate, provide programming to or sell advertising
on behalf of two or more stations in 20 of these markets. The Company's
principal executive offices are located at 150 East 58th Street, 19th Floor,
New York, New York 10155, and its telephone number at such offices is (212)
407-9191.
PENDING ACQUISITIONS AND DISPOSITIONS
In November 1995, the Company entered into an agreement to acquire
Liberty Broadcasting, Incorporated which owns and operates, provides
programming to or sells advertising on behalf of 14 FM and six AM radio
stations located in six markets: Washington, DC/Baltimore, Maryland;
Nassau-Suffolk, New York; Providence, Rhode Island; Hartford, Connecticut;
Albany, New York and Richmond, Virginia (the "Liberty Acquisition"). On May 1,
1996, the Company entered into an agreement to sell three of the Liberty
Stations operating in the Washington, DC/Baltimore, Maryland market (the
"Washington Dispositions").
In February 1996, the Company entered into an agreement to acquire from
Prism Radio Partners L.P. substantially all of the assets used in the
operation of ten FM and six AM radio stations (the "Prism Stations") located
in five markets: Louisville, Kentucky; Jacksonville, Florida; Raleigh, North
Carolina; Tucson, Arizona and Wichita, Kansas (the "Prism Acquisition"). In
April 1996, the Company entered into two separate agreements to sell three of
the Prism Stations operating in the Louisville, Kentucky market (the
"Louisville Dispositions").
In April 1996, the Company entered into an agreement and plan of merger
pursuant to which it has agreed to acquire Multi-Market Radio, Inc. ("MMR")
(the "MMR Merger"), which owns and operates, provides programming to or sells
advertising on behalf of 16 FM radio stations and one AM radio station located
in seven markets: New Haven, Connecticut; Springfield/Northampton,
Massachusetts; Daytona Beach, Florida; Augusta, Georgia; Biloxi, Mississippi;
Little Rock, Arkansas and Myrtle Beach, South Carolina. MMR has entered into
agreements to acquire WKSS-FM, Hartford, Connecticut (the "MMR Hartford
Acquisition"), and WMYB-FM, Myrtle Beach, South Carolina (the "MMR Myrtle
Beach Acquisition"), and to sell WRXR-FM and WKBG-FM, both operating in
Augusta, Georgia, and has entered into a non-binding letter of intent to sell
KOLL-FM, Little Rock, Arkansas to Triathlon Broadcasting Company ("Triathlon")
(collectively, the "MMR Dispositions"). Except where the context otherwise
requires, the term "MMR Merger" as used herein gives effect to the MMR
Hartford Acquisition, the MMR Myrtle Beach Acquisition and the consummation of
the MMR Dispositions. In addition, MMR is currently negotiating the
termination of a joint sales agreement with respect to WCHZ-FM, Augusta,
Georgia, and the termination of an acquisition agreement and a local marketing
agreement with respect to WAEG-FM and WAEJ-FM, both operating in Augusta,
Georgia. The MMR Hartford Acquisition, the MMR Myrtle Beach Acquisition and
the MMR Dispositions are anticipated to be completed prior to the consummation
of the MMR Merger. MMR was organized in 1992 by Robert F.X. Sillerman, Chief
Executive Officer and controlling stockholder of the Company, Michael G.
Ferrel and Howard J. Tytel, a Director and Executive Vice President of the
Company. Mr. Sillerman owns a substantial equity interest in MMR which will be
exchanged for common stock of the Company upon the consummation of the MMR
Merger.
Pursuant to four separate agreements, the Company has agreed to acquire
substantially all of the assets of WROQ-FM, Greenville, South Carolina,
WJDX-FM, WSTZ-FM and WZRX-AM, each operating in Jackson, Mississippi, WTRG-FM
and
3
<PAGE>
WRDU-FM, both operating in Raleigh, North Carolina, and WMFR-AM, WMAG-FM
and WTCK-AM, each operating in Greensboro, North Carolina, and, pursuant to a
separate agreement, has an option, which it intends to exercise, to acquire
WHSL-FM, operating in Greensboro, North Carolina (collectively, the
"Additional Acquisitions"). In addition, the Company has entered into an
agreement to exchange radio station KRLD-AM, operating in Dallas, Texas, and
the Texas State Networks for radio station KKRW-FM, operating in Houston,
Texas (the "Houston Exchange"), and has entered into a non-binding letter of
intent to sell radio station KTCK-AM, operating in Dallas, Texas (the "Dallas
Disposition").
The Liberty Acquisition, the Prism Acquisition, the MMR Merger, the
Additional Acquisitions and the Houston Exchange are referred to herein
collectively as the "Acquisitions." The Washington Dispositions, the
Louisville Dispositions and the Dallas Disposition are referred to herein
collectively as the "Dispositions."
RECENT TRANSACTIONS
Note Offering, Preferred Stock Offering and New Credit Agreement. On
May 31, 1996, the Company consummated a private placement of $450.0 million in
aggregate principal amount of the Series A Notes (the "Note Offering") and
$149.5 million in aggregate amount (the "Preferred Stock Offering") of its 6
1/2% Series D Cumulative Convertible Preferred Stock due May 31, 2007 (the
"Series D Preferred Stock"). In addition, the Company has received a
commitment from its lender to increase amounts available under its senior
credit facility from $50.0 million to $150.0 million and expects to enter into
a definitive credit agreement (the "New Credit Agreement") with respect to
such facility. There can be no assurance, however, that the Company will be
able to enter into the New Credit Agreement on a timely basis or at all. The
private placement of the Series A Notes and the Preferred Stock are herein
referred to as the Financings.
Agreement with SCMC. In April 1996, the Company and Sillerman
Communications Management Corporation ("SCMC"), a corporation controlled by
Mr. Sillerman, entered into an agreement to terminate SCMC's financial
consulting services to the Company in exchange for the cancellation of certain
indebtedness owing from SCMC to the Company and the grant to SCMC of warrants
to purchase common stock of the Company (the "SCMC Termination Agreement").
Pursuant to such agreement, SCMC has also assigned to the Company its rights
to receive certain fees payable by MMR and Triathlon, a publicly-traded radio
company of which affiliates of Mr. Sillerman own a substantial non-voting
equity interest and which operates in small and medium-sized markets in the
Midwest and the West, for services that SCMC provides in connection with
consulting agreements between SCMC and such companies. In addition, pursuant
to the SCMC Termination Agreement, SCMC has agreed to continue to provide
financial consulting services to MMR (until completion of the MMR Merger) and
to Triathlon at SCMC's expense.
Tender Offer and Consent Solicitation. On May 31, 1996, the Company
also purchased for cash (the "Tender Offer") $79,406,000 of its 11 3/8% Senior
Subordinated Notes due 2000 (the "Old Notes") and finalized a related
solicitation of consents to modify certain terms of the indenture under which
the Old Notes were issued (the "Old Indenture"). Currently $594,000 in
principal amount of the Old Notes remain outstanding.
Management. On June 19, 1996, the Company entered into an Amended and
Restated Agreement with R. Steven Hicks, the President, Chief Executive
Officer and Chief Operating Officer of the Company (the "Amended Hicks
Agreement") which supersedes the agreement entered into between the Company
and Mr. Hicks on April 15, 1996 (the "Hicks Agreement"). Pursuant to the
Amended Hicks Agreement, Mr. Hicks, among other things, resigned as an officer
and director of the Company and the Company repurchased all of Mr. Hicks'
securities of the Company. In addition, Mr. Hicks agreed not to compete with
the Company for the period of approximately one year with the Company or MMR
in any market in which the Company or MMR currently owns, operates, provides
programming to or sells advertising on behalf of radio stations and any eight
additional markets in which the Company or MMR has entered into agreements to
purchase one or more radio stations on or before the consummation of the MMR
Merger. Pursuant to the Amended Hicks Agreement, the Company paid Mr. Hicks an
aggregate amount of $18.7 million and agreed to forgive on June 19, 1999 a
$2.0 million loan to Mr. Hicks, plus accrued and unpaid interest of $0.3
million, if Mr. Hicks has complied with certain provisions of the agreement.
Upon the resignation of Mr. Hicks, Robert F.X. Sillerman reassumed the
position of the sole Chief Executive Officer of the Company and D. Geoffrey
Armstrong, the interim Chief Financial Officer of the Company, was appointed
the Chief Operating Officer. In addition, the Company entered into an
agreement effective as of June 24, 1996 with Thomas P. Benson pursuant to
which Mr. Benson was appointed the Vice President of Financial Affairs.
Pursuant to the agreement the Company agreed to appoint Mr. Benson as the
Chief Financial Officer upon the resignation by Mr. Armstrong as the Chief
Financial Officer. The Company anticipates that Mr. Armstrong will resign as
the Chief Financial Officer of the Company upon the consummation of the merger
with MMR.
4
<PAGE>
The Acquisitions, the Dispositions, the Financing, the Tender Offer and
the implementation of each of the SCMC Termination Agreement, the Hicks
Agreement and the Armstrong Agreement are collectively referred to hereinafter
as the "Transactions."
THE EXCHANGE OFFER
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<S> <C>
The Exchange Offer............. The Company is offering to exchange $1,000 principal amount of
Series B Notes for each $1,000 principal amount of Series A Notes that
are properly tendered and accepted. The issuance of the Series B
Notes are intended to satisfy obligations of the Company contained in
the Registration Rights Agreement. Subject to certain conditions,
a holder who wishes to tender must transmit a properly completed
and duly executed Letter of Transmittal to Chemical Bank (the "Exchange
Agent") on or prior to the Expiration Date. For procedures for tendering,
see "The Exchange Offer."
Based upon no-action letters issued by the staff of the Commission to
third parties, the Company believes that the Series B Notes issued
pursuant to the Exchange Offer in exchange for Series A Notes may be
offered for resale, resold and otherwise transferred by a holder thereof
(other than any holder which is an "affiliate" of the Company within the
meaning of Rule 405 under the Securities Act or a holder that is a
broker-dealer who acquires Series B Notes to resell pursuant to Rule 144A
or any other available exemption under the Securities Act), without
compliance with the registration and prospectus delivery provisions of
the Securities Act, provided that such Series B Notes are acquired in the
ordinary course of such holders' business and such holder is not
participating, does not intend to participate, and has no arrangement
with any person to participate in the distribution of such Series B
Notes. However, the Commission has not considered the Exchange Offer in
the context of a no-action letter and there can be no assurance that the
staff of the Commission would make a similar determination with respect
to the Exchange Offer as in such other circumstances. Holders of Series A
Notes wishing to accept the Exchange Offer must represent to the Company
that such conditions have been met. Each broker-dealer that receives
Series B Notes for its own account pursuant to the Exchange Offer where
it acquired the Series A Notes exchanged for such Series B Notes for its
own account as a result of market-making or other trading activities,
must acknowledge that it will deliver a prospectus in connection with the
resale of such Series B Notes.
Registration Rights
Agreement; Tenders . The Series A Notes were sold by the Company on May 31, 1996 to BT Securities
Corporation, Goldman Sachs & Co. and Lehman Brothers, Inc. (collectively, the
"Initial Purchasers") pursuant to a Purchase Agreement dated May 31, 1996 by and
among the Company, the Subsidiary Guarantors, and the Initial Purchasers (the
"Purchase Agreement"). Pursuant to the Purchase Agreement, the Company, the
Subsidiary Guarantors and the Initial Purchasers entered into a Registration Rights
Agreement dated as of May 31, 1996 which grants the holders of the Series A Notes
certain exchange and registration rights. See "The Exchange Offer." This Exchange
Offer is intended to satisfy such rights, which terminate upon the consummation of the
Exchange Offer. The holders of the Series B Notes are not entitled to any exchange
or registration rights with respect to the Series B Notes. The Series A Notes are
subject to the payment of liquidated damages ("Liquidated Damages") under certain
circumstances if the Company and the Subsidiary Guarantors are not in compliance
with their obligations under the Registration Rights Agreement. See "Description of
Notes -- Registration Rights; Liquidated Damages."
Expiration Date;
Withdrawal.............. The Exchange Offer will expire at 5:00 p.m., New York City time, on , 1996
(the "Expiration Date") unless extended, provided it may not be extended beyond
, 1996. The tender of Series A Notes pursuant to the Exchange Offer may be
withdrawn at any time prior to the Expiration Date by sending a written notice of
withdrawal to the
</TABLE>
5
<PAGE>
Exchange Agent. Any
Series A Notes so withdrawn will be
deemed not to have been validly
tendered for exchange for purposes of
the Exchange Offer. Any shares of
Series A Notes not accepted for
exchange for any reason will be
returned without expense to the
tendering holder thereof as promptly
as practicable after the expiration
or termination of the Exchange Offer.
See "The Exchange Offer."
Certain Conditions to the
Exchange Offer..................... The Exchange Offer is subject to
certain customary conditions, which
may be waived by the Company. See
"The Exchange Offer--Certain Conditions
to the Exchange Offer."
Federal Income Tax
Consequences...................... For Federal income tax purposes, the
exchange pursuant to the Exchange Offer
should not result in any income, gain
or loss to the holders or the Company.
See "Certain Federal Income Tax
Considerations."
Use of Proceeds...................... There will be no proceeds to the
Company from the exchange pursuant to
the Exchange Offer.
Exchange Agent....................... Chemical Bank is serving as Exchange
Agent in connection with the Exchange
Offer.
THE SERIES B NOTES
The form and terms of the Series B Notes are the same as the form and
terms of the Series A Notes except that (i) the exchange will have been
registered under the Securities Act and therefore the Series B Notes will not
bear legends restricting the transfer thereof, and (ii) holders of the Series
B Notes will not be entitled to certain rights of holders of the Series A
Notes under the Registration Rights Agreement (as defined herein), which
rights will terminate upon the consummation of the Exchange Offer. The Series
B Notes will evidence the same debt as the Series A Notes (which they replace)
and will be entitled to the benefits of the Indenture governing the Series A
Notes and the Series B Notes. See "Description of Notes" for further
information and for definitions of certain capitalized terms used below.
In the Exchange Offer, the holders of Series A Notes (the "Holders")
will receive Series B Notes with the same interest rate. The Series B Notes
issued in exchange for Series A Notes will accrue interest from May 31, 1996,
the date of the issuance of the Series A Notes (the "Issue Date"). Holders
whose Series A Notes are accepted for exchange will be deemed to have waived
the right to receive any interest accrued on the Series A Notes.
Maturity Date........................ May 15, 2006.
Interest Payment Dates...............Interest on the Series B Notes is
payable semi-annually on each May 15 and
November 15, commencing November 15, 1996.
Ranking ............................ The Series B Notes are general unsecured
obligations of the Company and are
subordinated in right of payment to
all existing and future Senior Debt of the
Company. The Series B Notes
rank pari passu with any future senior
subordinated indebtedness of the
Company and rank senior to all other
subordinated indebtedness of the
Company. As of March 31, 1996, on a pro
forma basis after giving effect
to the Transactions, the Company would
have had no Senior Debt.
Optional Redemption................. The Series B Notes are redeemable,
in whole or in part, at the option of the
Company on or after May 15, 2001, at
the redemption prices set forth herein
plus accrued and unpaid interest to the
date of redemption. In addition, until May
31, 1999, the Company may, on any
one or more occasions, redeem up to $154.0
million in aggregate principal
amount of Series B Notes at a redemption
price of 110.75% of the principal
amount thereof plus accrued and unpaid
interest and Liquidated Damages, if
any, thereon to the redemption date, with
the net proceeds of an offering of
common equity; provided that at least
$286.0 million in aggregate principal
amount of Series B Notes must remain
outstanding immediately after the
occurrence of each such redemption; and
provided, further that any such redemption
shall occur within 75 days of the
date of closing of such offering of
common equity of the Company.
Change of Control.................... Upon a Change of Control, each
holder has the right to require the
Company to repurchase such holder's Series
B Notes at a price equal to 101% of the
principal amount thereof plus accrued
and unpaid interest and Liquidated
Damages, if any, to the date of
repurchase.
Guarantees................. The Series B Notes are guaranteed
(the "Subsidiary Guarantees") on a senior
subordinated basis by the Subsidiary
Guarantors. The Subsidiary Guarantees are
general unsecured obligations of the
Subsidiary Guarantors and are subordinated
in right of payment to all existing
and future Guarantor Senior Debt. As of
March 31, 1996, on a pro forma basis
after giving effect to the Transactions,
the Subsidiary Guarantors collectively
would have had no Guarantor Senior Debt.
Certain Covenants.................... The Indenture governing the Series
B Notes contains certain covenants that
limit the ability of the Company and
certain of its subsidiaries to, among
other things, incur additional
indebtedness, pay dividends or make
certain other restricted payments,
consummate certain asset sales, enter
into certain transactions with
affiliates, incur indebtedness that is
subordinate in right of payment to any
Senior Debt and senior in right of payment
to the Series B Notes, incur liens,
impose restrictions on the ability of a
subsidiary to pay dividends or make
certain payments to the Company and its
subsidiaries, merge or consolidate
with any other person or sell, assign,
transfer, lease, convey or otherwise
dispose of all or substantially all of
the assets of the Company.
7
<PAGE>
SUMMARY CONSOLIDATED FINANCIAL DATA
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
The Summary Consolidated Financial Data of the Company and predecessors
include the historical financial statements of Capstar Communications, Inc.
("Capstar") and the historical financial statements of the Company since its
formation on February 26, 1992. The Summary Consolidated Financial Data as of
March 31, 1996 and for the three months ended March 31, 1996 and 1995 have
been derived from the unaudited consolidated financial statements and notes
thereto of the Company which are incorporated herein by reference. The pro
forma summary data as of March 31, 1996, and for the year ended December 31,
1995, and the three months ended March 31, 1996 and 1995 are derived from the
unaudited pro forma condensed combined financial statements which, in the
opinion of the Company, reflect all adjustments necessary for a fair
presentation of the Transactions. Operating results for the three months ended
March 31, 1996 are not necessarily indicative of the results that may be
achieved for the fiscal year ending December 31, 1996. The historical
consolidated financial results for the Company are not comparable from year to
year because of the acquisition and disposition of various radio stations by
the Company during the periods covered. See "Available Information" and
"Incorporation by Reference."
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-----------------------
1991 1992 1993 1994 1995
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Net revenues(1)............... $13,442 $15,003 $34,233 $55,556 $76,830
Station operating expenses.... 9,105 9,624 21,555 33,956 51,039
Depreciation, amortization,
duopoly integration costs
and acquisition related
costs(2).................... 3,726 3,208 4,475 5,873 9,137
Corporate expenses............ 726 769 1,808 2,964 3,797
Corporate expenses-non-
recurring charge(3)........ -- -- 13,980 -- --
Write down of broadcast rights -- -- -- -- 5,000
agreement and other........ ----------- ----------- ----------- ----------- -----------
Operating income (loss)....... (115) 1,402 (7,585) 12,763 7,857
Other (income) loss net....... (124) (17) 121 (650)
Interest expense, including
amortization of deferred
financing costs ............ 4,241 3,610 7,351 9,332 12,903
----------- ----------- ----------- ----------- -----------
Income (loss) before income
taxes extraordinary item
and cumulative effect of
a change in accounting
principle ................ (4,232) (2,208) (14,919) 3,310 (4,396)
Income tax expense............ -- -- 1,015 1,474 --
Extraordinary loss on debt retirement -- -- 1,665 -- --
Cumulative effect of a change
in accounting principle.... -- -- 182 -- --
----------- ----------- ----------- ----------- -----------
Net income (loss)............. (4,232) (2,208) (17,781) 1,836 (4,396)
Redeemable preferred stock
dividends and accretion(4). 302 385 557 348 291
----------- ----------- ----------- ----------- -----------
Net income (loss) applicable to $(4,534) $(2,593) $(18,338) $1,488 $(4,687)
common stock............... ----------- ----------- ----------- ----------- -----------
$ (3.85) $ (2.20) $ (7.08) $ 0.26 $ (0.71)
Net income (loss) per share... ----------- ----------- ----------- ----------- -----------
Weighted average common
shares outstanding 1,179 1,179 2,589 5,792 6,596
----------- ----------- ----------- ----------- -----------
Ratio of earnings to fixed
charges(5) -- -- -- 1.4x --
Ratio of earnings to combined
fixed charges and preferred
stock dividends(5) ........ -- -- -- 1.3x --
OTHER OPERATING DATA:
Broadcast Cash Flow(6)........ $4,337 $5,379 $12,678 $21,600 $25,791
EBITDA (6).................... 3,611 4,610 10,870 18,636 21,994
</TABLE>
(RESTUBBED TABLE CONTINUED FROM ABOVE)
<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH 31,
----------------------------------------------------------------------------------------
PRO FORMA FOR
RECENT ACQUISIONS
AND THE PRO FORMA FOR THE
TRANSACTIONS RECENT ACQUISITIONS PRO FORMA FOR THE RECENT PRO FORMA FOR THE RECENT
OTHER THAN THE AND THE ACQUISITIONS AND THE TRANSACTIONS ACQUISITIONS AND THE
MMR MERGER (7) TRANSACTIONS (7) (UNAUDITED) (UNAUDITED) OTHER THAN THE MMR MERGER (7) TRANSACTIONS (7)
----------------------------------------- ------------------------
1995 1995 1995 1996 1995 1996 1995 1996
---- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
$168,542 $191,508 $13,717 $19,800 $35,191 $39,032 $40,167 $44,112
109,140 122,032 9,676 14,056 27,186 25,901 30,311 28,803
28,957 33,218 1,697 2,299 7,093 6,981 8,188 7,941
6,060 6,300 807 1,210 1,423 1,759 1,483 1,819
-- -- -- -- -- -- -- --
-- 281 -- -- (37) -- 43 65
- ------------ ---------- -------- --------- ---------- --------- -------- -----------
24,385 29,677 1,537 2,235 (474) 4,391 142 5,484
(1,549) (1,549) 3 (164) (71) (475) (71) (475)
50,243 50,243 2,432 3,384 12,561 12,561 12,561 12,561
- ------------ ---------- -------- --------- ---------- --------- -------- -----------
(24,309) (19,017) (898) (985) (12,964) (7,695) (12,348) (6,602)
-- -- (377) -- -- -- -- --
-- -- -- -- -- -- -- --
-- -- -- -- -- -- -- --
- ------------ ---------- -------- --------- --------- ---------- ---------- ----------
(24,309) (19,017) (521) (985) (12,964) (7,695) (12,348) (6,602)
10,009 10,009 71 136 2,500 2,565 2,500 2,565
- ------------- ---------- -------- --------- -------- ---------- ---------- ---------
$(34,318) $(29,026) $(592) $(1,121) $(15,464) $(10,260) $(14,848) $(9,167)
======== ======== ===== ======= ======== ======== ======== =======
$ (4.60) $ (3.07) $(0.10) $ (0.15) $ (2.07) $ (1.38) $ (1.57) $(0.97)
=========== ======== ====== ======= ======== ======== ======== ======
7,458 9,459 5,916 7,458 7,458 7,458 9,459 9,459
===== ===== ===== ===== ===== ===== ===== =====
-- -- -- -- -- -- -- --
-- -- -- -- -- -- -- --
$59,402 $69,476 $4,041 $5,744 $8,005 $13,131 $9,856 $15,309
53,342 63,176 3,234 4,534 6,582 11,372 8,373 13,490
</TABLE>
8
<PAGE>
<TABLE>
<CAPTION>
MARCH 31, 1996
------------------------------------------------------
PRO FORMA
FOR THE
TRANSACTIONS
DECEMBER 31, OTHER THAN THE PRO FORMA FOR THE
----------------------------------------------
1991 1992 1993 1994 1995 ACTUAL MMR MERGER (8) TRANSACTIONS (8)
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
Cash and cash equivalents.. $ 96 $ 657 $ 10,287 $ 3,194 $ 11,893 $ 3,349 $87,304 $35,737
Current assets............. 3,065 4,515 31,273 28,367 32,505 22,750 132,794 79,694
Total assets............... 37,367 36,127 152,871 145,808 187,337 202,852 707,728 799,288
Long-term debt............. 38,828 39,011 81,627 81,516 81,850 98,500 450,594 450,594
Redeemable preferred stock:
Series A Preferred Stock.. 2,839 3,892 917 -- -- -- -- --
Series B Preferred Stock.. 133 -- 2,784 2,466 1,735 1,806 1,806 1,806
Series C Preferred Stock.. -- -- -- -- 1,550 1,550 -- --
Series D Cumulative
Convertible Preferred Stock -- -- -- -- -- -- 149,500 149,500
Stockholders' equity....... (6,951) (9,411) 48,598 48,856 83,061 81,940 36,024 108,024
</TABLE>
- ----------------
(1) Net revenues on a pro forma basis includes $3,584,000 and $2,645,000 of
fees from Triathlon for the year ended December 31, 1995 and three months
ended March 31, 1996, respectively, that would have been received by the
Company pursuant to the SCMC Termination Agreement. Future fees may be
lesser or greater based upon future acquisition and financing activities
of Triathlon.
(2) Includes $1,400,000 of duopoly integration costs during the year ended
December 31, 1995 and $277,000 of acquisition related costs during the
three months ended March 31, 1996.
(3) Represents the 1993 non-cash non-recurring charge related to the valuation
of the common stock issued to the Company's founders at the Company's
initial public offering in September 1993 and certain pooling costs
related to the merger of Capstar with and into a subsidiary of the
Company.
(4) Includes dividends on preferred stock which the Company redeemed in 1993,
accretion on outstanding redeemable preferred stock and assumed dividends
on the Series D Preferred Stock.
(5) For purposes of computing the ratio of earnings to combined fixed charges,
"earnings" consists of earnings before income taxes and fixed charges.
"Fixed charges and preferred stock dividends" consists of interest on all
indebtedness, amortization of deferred financing costs and preferred stock
dividends. "Fixed charges" consists of interest on all indebtedness and
amortization of deferred financing costs. Earnings were insufficient to
cover combined fixed charges and preferred stock dividends by $1,121,000,
$969,000, $4,687,000, $15,476,000, $2,593,000 and $4,534,000 for the three
months ended March 31, 1996 and 1995 and the years ended December 31,
1995, 1993, 1992 and 1991, respectively. Pro forma earnings for the three
months ended March 31, 1996 and 1995 and the year ended December 31, 1995
would have been insufficient to cover combined fixed charges and preferred
stock dividends by $10,260,000 $15,464,000 and $34,318,000, respectively,
pro forma for the Recent Acquisitions and the Transactions other than the
MMR Merger, and $9,167,000, $14,848,000 and $29,026,000, respectively, pro
forma for the Recent Acquisitions and the Transactions. Earnings were
insufficient to cover fixed charges by $985,000, $898,000, $4,396,000,
$14,919,000, $2,208,000 and $4,232,000 during the three months ended March
31, 1996 and 1995 and the years ended December 31, 1995, 1993, 1992 and
1991, respectively. Pro forma earnings for the three months ended March
31, 1996 and 1995 and the year ended December 31, 1995 would have been
insufficient to cover fixed charges by $7,695,000, $12,964,000 and
$24,309,000, respectively, pro forma for the Recent Acquisitions and the
Transactions other than the MMR Merger and $6,602,000, $12,348,000 and
$19,017,000, respectively, pro forma for the Recent Acquisitions and the
Transactions.
For the year ended December 31, 1995, Broadcast Cash Flow exceeded fixed
charges and preferred stock dividends by $12,597,000 for the Company, had
a deficiency of $850,000 pro forma for the Recent Acquisitions and the
Transactions other than the MMR Merger, and exceeded by $9,224,000 pro
forma for the Recent Acquisitions and the Transactions. For the three
months ended March 31, 1996, Broadcast Cash Flow exceeded fixed charges
and preferred stock dividends by $2,224,000 for the Company, and had a
deficiency of $1,995,000 pro forma for the Recent Acquisitions and the
Transactions other than the MMR Merger and exceeded by $183,000 for the
Recent Acquisitions and the Transactions.
(6) Broadcast Cash Flow is defined as net revenues (including where
applicable, fees earned by the Company pursuant to the SCMC Termination
Agreement) less station operating expenses. EBITDA is defined as net
income (loss) before (i) extraordinary items, (ii) provisions for income
taxes, (iii) interest (income) expense, (iv) other (income) expense, (v)
cumulative effects of changes in accounting principles, (vi) depreciation,
amortization, duopoly integration costs and acquisition related costs and
(vii) non-recurring charges related to the write-down of the Texas Rangers
broadcast rights and the valuation charge related to the Founders' Stock.
The difference between Broadcast Cash Flow and EBITDA is that EBITDA
includes corporate expenses. Although Broadcast Cash Flow and EBITDA are
not measures of performance calculated in accordance with GAAP, the
Company believes that Broadcast Cash Flow and EBITDA are accepted by the
broadcasting industry as generally recognized measures of performance and
are used by analysts who report publicly on the performance of
broadcasting companies. In addition, EBITDA is the basis for determining
compliance with several covenants in certain of the Company's debt
instruments. Nevertheless, these measures should not be considered in
isolation or as a substitute for operating income, net income, net cash
provided by operating activities or any other measure for determining the
Company's operating performance or liquidity which is calculated in
accordance with GAAP.
(7) The Unaudited Pro Forma Statement of Operations Data for the three months
ended March 31, 1996 and 1995 and the year ended December 31, 1995 are
presented as if the Company had completed the Recent Acquisitions and the
Transactions as of January 1, 1995.
(8) The Unaudited Pro Forma Balance Sheet Data at March 31, 1996 is presented
as if the Company had completed the Transactions as of March 31, 1996.
9
<PAGE>
GLOSSARY
"Acquisitions" refers collectively to the Liberty Acquisition,
the Prism Acquisition, the MMR Merger, the Additional Acquisitions and the
Houston Exchange.
"Additional Acquisitions" refers collectively to the acquisitions
by the Company, pursuant to four separate agreements, of all of the assets of
WROQ-FM, operating in Greenville, South Carolina, WJDX-FM, WSTZ-FM and
WZRX-AM, each operating in Jackson, Mississippi, WTRG-FM and WRDU-FM, both
operating in Raleigh-Durham, North Carolina, and WMFR-AM, WMAG-FM and WTCK-AM,
each operating in Greensboro, North Carolina, and, pursuant to an option
agreement, WHSL-FM, operating in Greensboro, North Carolina.
"Broadcast Cash Flow" is defined as net revenues (including where
applicable, fees earned by the Company pursuant to the SCMC Termination
Agreement) less station operating expenses. EBITDA is defined as net income
(loss) before (i) extraordinary items, (ii) provisions for income taxes, (iii)
interest (income) expense, (iv) other (income) expense, (v) cumulative effects
of changes in accounting principles, (vi) depreciation, amortization, duopoly
integration costs and acquisition related costs and (vii) non-recurring
charges related to the write-down of the Texas Rangers broadcast rights and
the valuation charge related to the Founders' Stock. The difference between
Broadcast Cash Flow and EBITDA is that EBITDA includes corporate expenses.
Although Broadcast Cash Flow and EBITDA are not measures of performance
calculated in accordance with generally accepted accounting principles
("GAAP"), the Company believes that Broadcast Cash Flow and EBITDA are
accepted by the broadcasting industry as generally recognized measures of
performance and are used by analysts who report publicly on the performance of
broadcasting companies. In addition, EBITDA is the basis for determining
compliance with several covenants in certain of the Company's debt
instruments. Nevertheless, these measures should not be considered in
isolation or as a substitute for operating income, net income, net cash
provided by operating activities or any other measure for determining the
Company's operating performance or liquidity which is calculated in accordance
with GAAP.
"Charlotte Acquisition" refers to the Company's recent
acquisition of WTDR-FM and WLYT-FM, both operating in Charlotte, North
Carolina.
"Dallas Acquisition" refers to the Company's recent acquisition
of KTCK-AM, operating in Dallas, Texas.
"Dallas Disposition" refers to the sale of radio station KTCK-AM,
operating in Dallas, Texas.
"Dispositions" refers collectively to the Washington Dispositions,
the Louisville Dispositions and the Dallas Disposition.
"EBITDA" refers to the definition set forth under Broadcast Cash
Flow.
"Financing" refers collectively to the Note Offering and the
Preferred Stock Offering.
"Houston Exchange" refers to the exchange of the Company's radio
station KRLD-AM, operating in Dallas, Texas, and the Company's Texas State
Networks for radio station KKRW-FM, operating in Houston, Texas.
"Liberty Acquisition" refers to the acquisition of Liberty
Broadcasting, Incorporated, which owns and operates, provides programming to
or sells advertising on behalf of 14 FM and six AM radio stations located in
six markets: Washington, DC/Baltimore, Maryland; Nassau-Suffolk, New York;
Providence, Rhode Island; Hartford, Connecticut; Albany, New York and
Richmond, Virginia.
"Louisville Dispositions" refers collectively to the sale of
three of the stations to be acquired from Prism Radio Partners L.P., each
operating in the Louisville, Kentucky market.
"MMR Dispositions" refers collectively to the sale by Multi-Market
Radio, Inc. of KOLL-FM, operating in Little Rock, Arkansas, and WRXR-FM and
WKBG-FM, both operating in Augusta, Georgia.
10
<PAGE>
"MMR Hartford Acquisition" refers to the acquisition by
Multi-Market Radio, Inc. of WKSS-FM, operating in Hartford, Connecticut.
"MMR Merger" refers to the acquisition by merger of Multi-Market
Radio, Inc. after giving effect to the MMR Hartford Acquisition, the MMR
Myrtle Beach Acquisition and the MMR Dispositions.
"MMR Myrtle Beach Acquisition" refers to the acquisition by
Multi-Market Radio, Inc. of WMYB-FM, Myrtle Beach, South Carolina.
"Prism Acquisition" refers to the acquisition of substantially all
of the assets of Prism Radio Partners L.P. used in the operation of ten FM and
six AM radio stations located in five markets: Louisville, Kentucky;
Jacksonville, Florida; Raleigh, North Carolina; Tucson, Arizona and Wichita,
Kansas.
"Recent Acquisitions" refers to the Charlotte Acquisition, the
Dallas Acquisition and the San Diego Acquisition.
"Recent Legislation" refers to the recently enacted
Telecommunications Act of 1996.
"San Diego Acquisition" refers to the Company's recent
acquisition of KYXY-FM, operating in San Diego, California.
"Tender Offer" refers to the purchase for cash by the Company on
May 31, 1996, of $79,406,000 of the Old Notes.
"Transactions" refers collectively to the Acquisitions, the
Tender Offer, the Dispositions, the Financing and the implementation of each
of the Amended Hicks Agreement, the Armstrong Agreement and the SCMC
Termination Agreement.
"Washington Dispositions" refers to the sale of three of the
stations to be acquired from Liberty Broadcasting, Incorporated, each
operating in the Washington, DC/Baltimore, Maryland market.
11
<PAGE>
RISK FACTORS
Holders of Series A Notes should consider carefully all the
information contained in this Prospectus (including the financial statements
and notes thereto), before tendering their Series A Notes in the Exchange
Offer. Prospective investors should consider the lack of a public market for
the Notes and the high leverage of the Company. Many of the statements in this
Prospectus are forward-looking in nature and, accordingly, whether they prove
to be accurate is subject to many risks and uncertainties. The actual results
that the Company achieves may differ materially from any forward-looking
statements in this Prospectus. Factors that could cause or contribute to such
differences include, but are not limited to, those discussed below and those
contained elsewhere in this Prospectus and in the documents incorporated
herein by reference.
CONSEQUENCES OF FAILURE TO EXCHANGE SERIES A NOTES
The Series B Notes will be issued in exchange for Series A Notes only
after timely receipt by the Exchange Agent of such Series A Notes, a properly
completed and duly executed Letter of Transmittal and all other required
documents. Therefore, holders of Series A Notes desiring to tender such Series
A Notes in exchange for Series B Notes should allow sufficient time to ensure
timely delivery. Neither the Exchange Agent nor the Company is under any duty
to give notification of defects or irregularities with respect to tenders of
Series A Notes for exchange. Holders of Series A Notes who do not exchange
their Series A Notes for Series B Notes pursuant to the Exchange Offer will
continue to be subject to the restrictions on transfer of such Series A Notes
as set forth in the legend thereon as a consequence of the issuance of the
Series A Notes pursuant to exemption from, or in transactions not subject to,
the registration requirements of the Securities Act and applicable state
securities laws. In general, the Series A Notes may not be offered or sold,
unless registered under the Securities Act, except pursuant to an exemption
from, or in a transaction not subject to, the Securities Act and applicable
state securities laws. In addition, any holder of Series A Notes who tenders
in the Exchange Offer for the purpose of participating in a distribution of
the Series B Notes will be required to comply with the registration and
prospectus delivery requirements of the Securities Act in connection with any
resale transaction. Each broker-dealer that receives Series B Notes for its
own account in exchange for Series A Notes, where such Series A Notes were
acquired by such broker-dealer as a result of market-making activities or any
other trading activities, must acknowledge that it will deliver a prospectus
in connection with any resale of such Series B Notes. See "Plan of
Distribution," "Description of Notes--Registration Rights; Liquidated Damages"
and "The Exchange Offer-- Consequences of Failure to Exchange."
ABSENCE OF PUBLIC MARKET
The Series B Notes are being offered to the holders of the Series A
Notes. The Series A Notes were resold in May 1996 to qualified institutional
buyers as defined in Rule 144A of the Securities Act and institutional
accredited investors within the meaning of Rule 501 (a) (1), (2), (3) or (7)
of the Securities Act and are trading in the Private Offering, Resale and
Trading through Automated Linkages (PORTAL) Market, the National Association
of Securities Dealers' screen based, automated market for trading of
securities eligible for resale under Rule 144A. The Series B Notes are new
securities for which there currently is no market. Although the Initial
Purchasers have advised the Company that they currently intend to make a
market in the Series B Notes, they are not obligated to do so and may
discontinue such market making at any time without notice. The Company does
not currently intend to list the Notes on a national securities exchange or to
seek the admission thereof to trading in the National Association of
Securities Dealers Automated Quotation System. Accordingly, no assurance can
be given that an active market will develop for any of the Notes or as to the
liquidity of the trading market for any of the Notes. If a trading market does
not develop or is not maintained, holders of the Notes may experience
difficulty in reselling such Notes or may be unable to sell them at all. If a
market for the Notes develops, any such market may be discontinued at any
time. If a trading market develops for the Notes, future trading prices of
such Notes will depend on many factors, including, among other things,
prevailing interest rates, the Company's results of operations and the market
for similar securities. Depending on prevailing interest rates, the market for
similar securities and other factors, including the financial condition of the
Company, the Notes may trade at a discount from their principal amount.
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RISKS RELATED TO THE ACQUISITIONS AND THE DISPOSITIONS
Consummation of each of the Acquisitions and the Dispositions is
subject to a number of closing conditions, certain of which are beyond the
Company's control. In particular, consummation of each of the Acquisitions and
the Dispositions is dependent upon the prior approval by the FCC of the
assignments or transfers of control of operating licenses issued by the FCC
and the continued operating performance of the stations to be acquired or
disposed such that there is no material adverse change in such stations that
would prevent consummation of any such transactions. Furthermore, as a result
of the Recent Legislation, certain of the Acquisitions and the Dispositions
may be subject to antitrust review by the Federal Trade Commission and the
U.S. Department of Justice, Antitrust Division (the "Antitrust Agencies"),
even if approved by the FCC, and there can be no assurance that the Antitrust
Agencies will approve such Acquisitions and Dispositions. In addition, the
consummation of the MMR Merger is also dependent upon the transaction being
approved by the stockholders of each of the Company and MMR and also requires
the approval of the holders of certain indebtedness of MMR and the approval of
the Antitrust Agencies. The failure to satisfy such conditions would permit
the parties thereto to refuse to consummate the respective Acquisitions and
Dispositions. Certain of the Dispositions are evidenced by non-binding letters
of intent and there can be no assurance that a definitive agreement will be
executed on the terms described herein or at all. Copies of the agreements and
letters of intent have been filed as exhibits to the Registration Statement of
which this Prospectus is a part.
In a complaint dated April 18, 1996, Paul Pops, who purports to be a
stockholder of MMR, brought suit in the Supreme Court of the State of New York
against MMR, each of the directors of MMR, the Company and Robert F.X.
Sillerman seeking to enjoin the MMR Merger or, in the alternative, seeking
monetary damages. The suit alleges that the consideration to be paid to the
MMR stockholders in the MMR Merger is unfair and grossly inadequate. The suit
also alleges that in connection with entering into the MMR Merger Agreement
(as defined herein), the directors of MMR violated their fiduciary duties to
MMR and its stockholders and that the Company aided and abetted such
violation. The plaintiff is seeking to have his suit certified as a class
action representing the interests of the stockholders of MMR. The Company
believes, and the Company has been advised by MMR that it believes, the suit
to be without substantial merit and intends to vigorously defend the action.
As a result of the foregoing, there can be no assurance as to when
the Acquisitions or the Dispositions will be consummated or that they will be
consummated on the terms described herein or at all. Furthermore, the Company
cannot predict whether the consummation of the Acquisitions or the
Dispositions will conform to the assumptions used in the preparation of the
Unaudited Pro Forma Condensed Combined Financial Statements incorporated
herein by reference. In analyzing the Unaudited Pro Forma Condensed Combined
Financial Statements and information contained herein, prospective investors
should consider that the Acquisitions or the Dispositions may not be
consummated at all or on the terms described herein, and that the Acquisitions
or the Dispositions, if consummated, may be subject to substantial delay. In
the event the Dispositions are not completed in a timely manner, the Company
may be required to seek additional financing. There can be no assurance that
such financing will be available to the Company on commercially acceptable
terms, if at all. In the event that the Acquisitions are not consummated due
to a material breach by the Company, the Company may lose deposits in the
aggregate amount of approximately $12.3 million. In the event that the Company
fails to consummate the Liberty Acquisition and the MMR Merger is terminated,
the Company will be required, except in certain circumstances, to pay $3.5
million to MMR. In addition, the Company will be required to pay MMR $1.0
million in the event that the majority of the combined voting power of the
Company votes with respect to, but does not vote in favor of, the MMR Merger.
RISKS ASSOCIATED WITH INTEGRATION OF THE STATIONS TO BE ACQUIRED
The Company's plans with respect to the radio stations to be acquired
in the Acquisitions involve, to a substantial degree, strategies to increase
net revenue while at the same time reducing operating expenses, as well as the
implementation of a new regional management structure and a modified senior
management team. Although the Company believes that its strategies are
reasonable, there can be no assurance that it will be able to implement its
plans without delay or that, when implemented, its efforts will result in the
increased Broadcast Cash Flow or other benefits currently anticipated by the
Company. In addition, there can be no assurance that the Company will not
encounter unanticipated problems or liabilities in connection with the
implementation of the new management changes or the
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operation of the radio stations to be acquired in the Acquisitions. The
integration of such stations into the Company will require substantial
attention from members of the Company's senior management, which will limit
the amount of time such members have available to devote to the Company's
existing operations.
SUBSTANTIAL LEVERAGE; INABILITY TO SERVICE OBLIGATIONS
The Company has incurred and will incur a significant amount of
indebtedness. As of March 31, 1996, the Company's indebtedness would have been
approximately $450.6 million on a pro forma basis after giving effect to the
Transactions. In addition, subject to the restrictions in the New Credit
Agreement, the Old Indenture, the Indenture, and the Certificate of
Designations, Preferences and Relative, Participating, Optional and Other
Special Rights of Preferred Stock and Qualifications, Limitations and
Restrictions thereof setting forth the term of the Company's Series D
Preferred Stock (the "Certificate of Designations") the Company may incur
additional indebtedness from time to time to finance acquisitions, for capital
expenditures or for other purposes. See "--Expansion Strategy; Need for
Additional Funds." For the year ended December 31, 1995 and the three months
ended March 31, 1996, on a pro forma basis after giving effect to the Recent
Acquisitions and the Transactions (other than the MMR Merger), as if all such
transactions had occurred on January 1, 1995, the Company's earnings would
have been insufficient to cover its fixed charges by $24.3 million and $7.7
million, respectively, and would have been insufficient to cover its combined
fixed charges and preferred stock dividends by $34.3 million and $10.3
million, respectively. In addition, for the year ended December 31, 1995 and
the three months ended March 31, 1996, on a pro forma basis after giving
effect to the Recent Acquisitions and the Transactions, as if all such
transactions had occurred on January 1, 1995, the Company's earnings would
have been insufficient to cover its fixed charges by $19.0 million and $6.6
million, respectively, and would have been insufficient to cover its combined
fixed charges and preferred stock dividends by $29.0 million and $9.2 million,
respectively.
The degree to which the Company is leveraged could have material
consequences to the Company and the holders of the Company's securities,
including, but not limited to, the following: (i) the Company's ability to
obtain additional financing in the future for acquisitions, working capital,
capital expenditures, general corporate or other purposes may be impaired,
(ii) a substantial portion of the Company's cash flow from operations will be
dedicated to the payment of the principal and interest on its debt and
dividends on the Series D Preferred Stock and will not be available for other
purposes, (iii) certain of the Company's borrowings may be at variable rates
of interest, which could result in higher interest expense in the event of
increases in interest rates and (iv) the agreements governing the Company's
long-term debt will contain restrictive financial and operating covenants, and
the failure by the Company to comply with such covenants could result in an
event of default under the applicable instruments, which could permit
acceleration of the debt under such instrument and in some cases acceleration
of debt under other instruments that contain cross-default or
cross-acceleration provisions. Certain of the Company's competitors operate on
a less leveraged basis, and have significantly greater operating and financial
flexibility, than the Company. See "Description of Notes."
The Company's ability to make scheduled payments of principal of, or
to pay interest on or to refinance, its debt (including the Old Notes and the
Notes), to make dividend payments on or Conversion Payments (as defined
herein) with respect to the Series D Preferred Stock and to redeem the Series
B Preferred Stock depends on its future financial performance, which, to a
certain extent, is subject to general economic, financial, competitive,
legislative, regulatory and other factors beyond its control, as well as the
success of the radio stations to be acquired and the integration of such
stations into the Company's operations. Based upon the Company's current level
of operations and anticipated improvements, management believes that cash flow
from operations, together with the net proceeds of the Financing, the
Dispositions, the MMR Dispositions, the exercise of the MMR Class A Warrants
and available borrowings under the New Credit Agreement, will be adequate to
meet the Company's anticipated future requirements for working capital,
capital expenditures and scheduled payments of interest on its debt and to
make dividend payments on the Series D Preferred Stock and to redeem the
Series B Preferred Stock. There can be no assurance that the Dispositions and
the exercise of the MMR Class A Warrants will occur or that the Company's
business will generate sufficient cash flow from operations, that anticipated
improvements in operating results will be achieved or that future working
capital borrowings will be available in an amount sufficient to enable the
Company to service its debt, to make dividend payments on or Conversion
Payments with respect to the Series D Preferred Stock, to redeem the Series B
Preferred Stock or to make necessary capital or other expenditures. The
Company may be required to refinance the Old
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Notes and the Notes or the aggregate liquidation preference of the Series D
Preferred Stock prior to their respective maturities. There can be no
assurance that the Company will be able to raise additional capital through
the sale of securities, the disposition of radio stations or otherwise for any
such refinancing.
SUBORDINATION OF THE NOTES; SUBSIDIARY GUARANTEES
The Notes and the Subsidiary Guarantees are subordinated in right of
payment to all Senior Debt of the Company and Guarantor Senior Debt of the
Subsidiary Guarantors, respectively. In the event of bankruptcy, liquidation
or reorganization of the Company or the Subsidiary Guarantors, the assets of
the Company or the Subsidiary Guarantors will be available to pay obligations
on the Notes only after all Senior Debt or Guarantor Senior Debt, as the case
may be, has been paid in full and there may not be sufficient assets remaining
to pay amounts due on any or all of the Notes then outstanding. In addition,
indebtedness outstanding under the New Credit Agreement is expected to be
secured by substantially all of the assets of the Company and its subsidiaries
in which a security interest may lawfully be granted. As of March 31, 1996, on
a pro forma basis after giving effect to the Transactions, the Company would
have had no Senior Debt and the Subsidiary Guarantors would have no Guarantor
Senior Debt (excluding guarantees of Senior Debt). Senior Debt and Guarantor
Senior Debt may be incurred by the Company and the Subsidiary Guarantors from
time to time subject to certain restrictions contained in the New Credit
Agreement and the Indenture. See "Description of Notes."
HOLDING COMPANY STRUCTURE; DEPENDENCE UPON OPERATIONS OF SUBSIDIARIES
Substantially all of the assets of the Company are held by the
Company's subsidiaries, and all of the Company's operating revenues are
derived from operations of such subsidiaries. In addition, future acquisitions
may be made through present or future subsidiaries of the Company. Therefore,
the Company's ability to pay interest and principal when due to holders of the
Notes is dependent upon the earnings of its subsidiaries and the distribution
of sufficient funds from its direct and indirect subsidiaries. The Company's
subsidiaries will have no obligation, contingent or otherwise, to make any
funds available to the Company for payment of principal of or interest on the
Notes. Under the Indenture and the New Credit Agreement, the Company's
subsidiaries will be restricted in their ability to incur debt in the future.
See "Description of Notes--Certain Covenants."
HISTORICAL LOSSES
Although the Company had net income of $1.8 million for the year
ended December 31, 1994, the Company had net losses of $985,000, $4.4 million
(including a charge of $5.0 million relating to the write-down of the Texas
Rangers broadcast rights) and $17.8 million (including a non-recurring charge
of approximately $14.0 million, substantially all of which was non-cash) for
the three months ended March 31, 1996 and the years ended December 31, 1995
and 1993, respectively. On a pro forma basis, after giving effect to the
Recent Acquisitions and the Transactions, as if such transactions had occurred
on January 1, 1995, for the year ended December 31, 1995 and the three months
ended March 31, 1996, the Company would have had a net loss of approximately
$19.0 million and $6.6 million, respectively. In connection with the SCMC
Termination Agreement, the Company has agreed to the cancellation of $2.0
million of indebtedness plus accrued interest thereon owing from SCMC to the
Company and has issued warrants to SCMC to purchase up to 600,000 shares of
Class A Common Stock at an exercise price of $33 3/4 per share. In connection
with such agreement, the Company will recognize a non-cash charge to earnings
of approximately $4.5 million during the three-month period ended June 30,
1996 and $1.1 million upon completion of the MMR Merger. Approximately $19.5
million of the net proceeds of the Financing has been allocated to make
certain payments to R. Steven Hicks, the current President and Chief Executive
Officer of the Company, and D. Geoffrey Armstrong, the current Executive Vice
President and Chief Financial Officer of the Company, and in connection
therewith, the Company will recognize a non-recurring charge to earnings of
approximately $19.4 million during the three-month period ended June 30, 1996.
In addition, the Company will recognize an extraordinary loss of approximately
$14.7 million relating to the write-off of deferred financing costs of the Old
Credit Agreement and the costs of the Tender Offer during the three month
period ended June 30, 1996. Depreciation and amortization relating to past
acquisitions and future acquisitions, interest
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expenses under the Company's debt and dividend payments on the Series D
Preferred Stock will continue to affect the Company's net income (loss) in the
future.
CHANGE OF CONTROL
The Indenture and the Old Indenture provide that, upon the occurrence
of a Change of Control, the holders of the Notes and the Old Notes will have
the right to require the Company to repurchase their notes at a price equal to
101% of the aggregate principal amount thereof, plus accrued and unpaid
interest and Liquidated Damages, if any, to the date of repurchase. In
addition, a Change of Control may constitute a default under the New Credit
Agreement. Unless waived or cured, any such default could create a default
under the Notes, the Old Notes and the Series D Preferred Stock. If a Change
of Control were to occur, due to the highly leveraged nature of the Company,
the Company may not have the financial resources to repay all of its
obligations under any indebtedness that would become payable upon the
occurrence of such Change of Control. The Company's failure to make a required
repurchase in the event of a Change of Control would create an Event of
Default under the Notes and the Old Notes. In addition, the Communications Act
of 1934, as amended, and FCC rules require the prior consent of the FCC to any
change of control of the Company. See "--Substantial Leverage; Inability to
Service Obligations" and "Description of Notes--Repurchase at the Option of
Holders--Change of Control."
EXPANSION STRATEGY; NEED FOR ADDITIONAL FUNDS
The Company's principal growth strategy is to operate and acquire
highly-ranked radio stations with attractive audience demographics in major
and medium-sized markets located throughout the United States. The Company
regularly explores acquisition opportunities; however, with the exception of
the Acquisitions, the Company has no agreements or understandings regarding
such possible future acquisitions. There can be no assurance that the Company
will consummate the Acquisitions or be able to identify stations to acquire in
the future. Each acquisition will be subject to the prior approval of the FCC
and of the lenders under debt instruments to which the Company is a party.
Furthermore, as a result of the Recent Legislation, future acquisitions may be
subject to antitrust review by the Antitrust Agencies, even if approved by the
FCC. In addition, the Company may require additional debt or equity financing
to finance properties it may seek to acquire in the future. The availability
of additional acquisition financing cannot be assured, and depending on the
terms of proposed acquisitions and financings, could be restricted by the
terms of debt instruments to which the Company is a party. There can be no
assurance that any future acquisitions will be successfully integrated into
the Company's operations or that such acquisitions will not have a material
adverse effect on the Company's financial condition and results of operations.
See "-- Risks Associated with Integration of the Stations to be Acquired" and
"--Regulatory Matters."
CONTROL BY MANAGEMENT
Robert F.X. Sillerman holds approximately 52.5% of the combined
voting power of the Company. Mr. Sillerman and his affiliates, together with
other members of the Company's management, hold approximately 61.6% of the
combined voting power of the Company. Mr. Sillerman and his affiliates will
hold approximately 55.3% and Mr. Sillerman and his affiliates, together with
the Company's management, will hold approximately 57.5% of the combined voting
power of the Company following completion of the MMR Merger. The Class A
Common Stock, par value $.01 per share ("Class A Common Stock"), has one vote
per share on all matters, whereas the Class B Common Stock, par value $.01 per
share ("Class B Common Stock"), has ten votes per share except in certain
matters. Accordingly, management currently is, and following the MMR Merger
will be, able to control the vote on all matters except (i) in the election of
directors, with respect to which the holders of the Class A Common Stock will
be entitled to elect two of the Company's seven Directors (and three of the
Company's nine Directors following completion of the MMR Merger) by a class
vote, (ii) in connection with any proposed "going private" transaction between
the Company and Mr. Sillerman or his affiliates, with respect to which the
holders of the Class A Common Stock and Class B Common Stock vote as a single
class, with each share of Class A Common Stock and Class B Common Stock
entitled to one vote per share and (iii) as otherwise provided by law. In
addition, in the event dividends on the Series D Preferred Stock are in
arrears and unpaid in an aggregate amount equal to six full quarterly
dividends and in certain other circumstances, the
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holders of the Series D Preferred Stock (voting separately as a class) will be
entitled to elect two additional members of the Board of Directors of the
Company.
POTENTIAL CONFLICTS OF INTEREST; TRANSACTIONS WITH AFFILIATES
Mr. Sillerman and other members of the Company's management have
direct and indirect investments and interests in entities that own and operate
radio stations, including radio stations that are in certain of the same
markets as the Company's existing or proposed radio stations. These
investments and interests (and any similar investments and interests in the
future) may give rise to certain conflicts of interest as well as to potential
attribution under FCC rules or invocation of the FCC's cross-interest policy,
which could restrict the Company's ability to acquire radio stations in
certain markets. See "-- Regulatory Matters."
SCMC, Mr. Sillerman and Howard J. Tytel, a Director and Executive
Vice President of the Company, have interests in entities that own and operate
radio stations other than the Company. Messrs. Sillerman and Tytel and their
affiliates hold a substantial equity interest in, and are parties to
consulting and marketing agreements with, each of MMR and Triathlon. Pursuant
to the consulting and marketing agreements, SCMC is obligated to offer to such
companies any radio broadcasting opportunities that come to their attention in
medium and small markets (defined in such agreements as those markets ranked
71st and smaller out of the radio markets summarized by Duncan's Radio Market
Guide (1995 ed.)). The Company does not intend to pursue acquisitions in the
medium-sized markets in the eastern United States that MMR primarily focuses
on until the consummation of the MMR Merger or in the small and medium-sized
markets in the Midwest and Western regions of the United States that Triathlon
primarily focuses on, except that upon consummation of the Prism Acquisition
the Company will own three radio stations in the Wichita, Kansas market, a
market in which Triathlon has radio station ownership interests.
SCMC has acted from time to time as the Company's financial advisor
since the Company's inception. SCMC is controlled by Mr. Sillerman, and
Messrs. Sillerman and Tytel are officers and directors of SCMC. SCMC acts in
similar capacities for each of MMR and Triathlon. These companies may seek to
participate in business opportunities which may be suitable for the Company.
In addition, SCMC provided advisory services to MMR and the Company in
connection with the MMR Merger. The MMR Merger was approved by independent
committees of the Board of Directors of each of MMR and the Company and both
the Company and MMR received opinions from nationally-recognized investment
banking firms that the MMR Merger was fair to their respective stockholders
from a financial point of view. On April 15, 1996, the Company and SCMC
entered into the SCMC Termination Agreement pursuant to which SCMC assigned to
the Company its rights to receive fees for consulting and marketing services
payable by each of MMR and Triathlon in consideration of which SCMC received
warrants to purchase 600,000 shares of Class A Common Stock and the Company
will forgive, upon the consummation of the MMR Merger, a $2.0 million loan
made to SCMC plus accrued and unpaid interest thereon. In addition, pursuant
to such agreement, the Company and SCMC terminated the arrangement whereby
SCMC performed financial consulting services for the Company. Subsequent to
the termination of its current relationship with SCMC, the Company intends to
perform internally the functions performed by SCMC.
On April 15, 1996, the Company and SCMC entered into the SCMC
Termination Agreement pursuant to which SCMC assigned to the Company its
rights to receive fees for consulting and marketing services payable by each
of MMR and Triathlon in consideration of which SCMC received warrants to
purchase 600,000 shares of Class A Common Stock and the Company will forgive,
upon the consummation of the MMR Merger, a $2.0 million loan made to SCMC plus
accrued and unpaid interest thereon. In addition, pursuant to such agreement,
the Company and SCMC terminated the arrangement whereby SCMC performed
financial consulting services for the Company. Subsequent to the termination
of its current relationship with SCMC, the Company intends to perform
internally the functions performed by SCMC.
On June 19, 1996, the Company and Mr. Hicks entered into an agreement
pursuant to which Mr. Hicks resigned as an officer and Director of the Company
effective on that date and agreed not to compete with the Company for the
period of approximately one year with the Company or MMR in any market in
which the Company or MMR currently
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owns, operates, provides programming to or sells advertising on behalf of
radio stations and any eight additional markets in which the Company or MMR
has entered into agreements to purchase one or more radio stations on or
before the consummation of the MMR Merger.
RELIANCE ON KEY PERSONNEL
Following consummation of the Acquisitions, the Company's business
will be dependent to a significant extent upon the performance of certain key
individuals, including Messrs. Sillerman, Ferrel and Armstrong. Mr. Ferrel,
Chief Executive Officer, President and Chief Operating Officer of MMR, has
agreed to become the Chief Executive Officer of the Company upon consummation
of the MMR Merger. The Company has entered into a five-year employment
agreement with each of Messrs. Sillerman and Armstrong, effective as of April
1, 1995. In addition, the Company expects to enter into an employment
agreement with Mr. Ferrel, to be effective upon the consummation of the MMR
Merger. There can be no assurance that the services of Messrs. Sillerman,
Ferrel or Armstrong will continue to be provided for the term of such
agreements. Messrs. Sillerman's and Armstrong's employment agreements require,
and Mr. Ferrel's employment agreement will require, that they devote
substantially all of their business time to the business and affairs of the
Company, except that Mr. Sillerman's agreement permits him to fulfill his
obligations as a director and officer of companies in which he currently
serves in such capacities and to devote a portion of his business time to
personal, non-broadcast investments or commitments or to certain broadcast
investments. It is anticipated that in the event that the MMR Merger is not
consummated, the services of Mr. Ferrel will not be available to the Company
and Mr. Sillerman will continue to serve as the Chief Executive Officer of the
Company.
The loss of the services of Messrs. Sillerman or Armstrong, or of Mr.
Ferrel (following the consummation of the MMR Merger), could have a material
adverse effect on the Company. The Company has obtained key-man insurance for
its benefit on the life of Mr. Sillerman, and intends to obtain such insurance
for Messrs. Ferrel and Armstrong effective upon the consummation of the MMR
Merger, in the amount of $5.0 million for each individual. In addition, the
Company has entered into employment agreements with several high-profile
on-air personalities. However, there can be no assurance that the Company will
be able to retain any of such employees or prevent them from competing with
the Company in the event of their departure.
DEPENDENCE ON ECONOMIC FACTORS
Because the Company derives substantially all of its revenue from the
sale of advertising time, its revenues may be adversely affected by economic
conditions which impact advertisers. In particular, because approximately 75%
of the Company's revenue has generally been derived from local advertisers,
operating results in individual geographic markets will be adversely affected
by local or regional economic downturns. Such economic downturns might have an
adverse impact on the Company's financial condition and results of operations.
In addition, revenues of radio stations may be affected by many other factors
including: (i) the popularity of programming, including programming such as
sports programming where the Company makes long-term commitments; (ii)
regulatory restrictions on types of programming or advertising (such as beer
and wine advertising); (iii) competition within national, regional or local
markets from programming on other stations or from other media; (iv) loss of
market share to other technologies and (v) challenges to license renewals.
REGULATORY MATTERS
The radio broadcasting industry is subject to extensive regulation by
the FCC. In particular, the Company's business is dependent upon its
continuing to hold, and, in connection with acquisitions of radio stations,
upon obtaining prior FCC consent to assignments or transfers of control of,
broadcasting station operating licenses issued by the FCC. Radio broadcasting
licenses may be granted for maximum terms of seven years, although the FCC has
proposed in a recent rulemaking raising the maximum term to eight years, as
permitted by the Recent Legislation. There can be no assurance that the
Company's licenses will be renewed or that the FCC will approve any of the
Acquisitions or the Dispositions, especially if third parties challenge the
Company's renewal, acquisition or disposition applications. Third parties have
challenged certain FCC applications of the Company or the radio stations
involved in the Acquisitions.
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Failure to obtain the renewal of any of the Company's principal broadcast
licenses or to obtain FCC approval for an assignment or transfer of control to
the Company of a license in connection with a station acquisition could have a
material adverse effect on the Company's business and operations. In addition,
the number and locations of radio stations the Company may acquire is limited by
FCC rules and will vary depending upon whether the interests in other radio
stations or certain other media properties of certain individuals affiliated
with the Company are attributable to those individuals. Moreover, under the
FCC's cross-interest policy, the FCC in certain instances may prohibit one party
from acquiring an attributable interest in one media outlet and a substantial
non-attributable economic interest in another media outlet in the same market,
thereby prohibiting a particular acquisition by the Company. Also, the
activities of persons who are deemed by the FCC to control the Company could
adversely affect the Company's ability to obtain license renewals and to acquire
radio stations.
The issuance of shares of Class A Common Stock, including those
issuable upon conversion of shares of Series D Preferred Stock that would
cause Robert F.X. Sillerman not to hold directly voting stock of the Company
representing more than 50% of the total voting power of the Company would
require the Company to seek the prior consent of the FCC. The Company intends
to seek such consent at such time as it may be required. The Certificate of
Designations, Preferences and Relative, Participating, Optional and other
Special Rights of Preferred Stock and Qualifications, Limitations and
Restrictions Thereof (the "Certificate of Designations") setting forth the
terms of the Series D Preferred Stock provides that the Company will use its
best efforts to secure all necessary consents and approvals, if any, and take
all other commercially reasonable steps to permit conversion of the Series D
Preferred Stock. Presently, due to the single majority stockholder exemption,
stockholders holding 5% or more of the total voting power of the Company do
not have an attributable interest in the Company because Mr. Sillerman owns
more than 50% of the voting power of the Company. In the event that Mr.
Sillerman's voting power in the Company dropped to 50% or less, all
stockholders holding 5% or more of the total voting power of the Company would
have an attributable interest in the Company for purposes of the FCC's local
ownership rules, which could adversely affect the Company's ability to acquire
or to hold interests in radio stations in particular markets, depending upon
the other media interests of those stockholders. The FCC has outstanding a
notice of proposed rule making that, among other things, seeks comment on
whether the FCC should modify its attribution rules by (i) restricting the
availability of the single majority stockholder exemption and (ii) attributing
under certain circumstances certain interests such as non-voting stock or
debt. The Company cannot predict the outcome of this proceeding or how it will
affect the Company's business.
As a result of the Recent Legislation, radio station acquisitions are
subject to antitrust review by the Antitrust Agencies, even if approved by the
FCC. The Antitrust Agencies have not articulated the standards that may be
applied in an antitrust review in the radio broadcasting industry. There can
be no assurance that the Antitrust Agencies will approve the Acquisitions and
Dispositions or that such antitrust review will not otherwise impact the
Company's business or its strategy.
There can be no assurance that there will not be changes in the
current regulatory requirements, the imposition of additional regulations or
the creation of new regulatory agencies, which changes would restrict or
curtail the ability of the Company to acquire, operate and dispose of stations
or, in general, to compete profitably with other operators of radio and other
media properties. Moreover, there can be no assurance that there will not be
other regulatory changes, including aspects of deregulation, that will result
in a decline in the value of broadcasting licenses held by the Company or
adversely affect the Company's competitive position.
COMPETITION
The radio broadcasting industry is highly competitive. The financial
results of each of the Company's stations are dependent to a significant
degree upon its audience ratings and its share of the overall advertising
revenue within the station's geographic market. Each of the Company's stations
competes for audience share and advertising revenue directly with other FM and
AM radio stations, as well as with other media, within their respective
markets. The Company's audience ratings and market share are subject to change
and any adverse change in audience share and advertising ratings in any
particular market could have a material and adverse effect on the Company's
net revenues. The Recent Legislation will permit other radio broadcasting
companies to enter the markets in which the Company operates or may operate in
the future, some of which may be larger and have more financial resources than
the
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Company. The Company's stations also compete with other advertising media such
as newspapers, television, magazines, billboard advertising, transit
advertising and direct mail advertising. Radio broadcasting is also subject to
competition from new media technologies that are being developed or
introduced, such as the delivery of audio programming by cable television
systems or the introduction of digital audio broadcasting. Competition within
the radio broadcasting industry occurs primarily in individual markets, so
that a station in one market does not generally compete directly with stations
in other markets. Although the Company believes that each of its stations is
able to compete effectively in its market, there can be no assurance that any
of the Company's stations will be able to maintain or increase current
audience ratings and advertising revenue market share.
FRAUDULENT TRANSFER STATUTES
The incurrence by the Company and the Subsidiary Guarantors of
indebtedness such as the Notes and the Subsidiary Guarantees to finance the
Acquisitions may be subject to review under relevant state and federal
fraudulent conveyance laws if a bankruptcy case or lawsuit is commenced by or
on behalf of unpaid creditors of the Company or the Subsidiary Guarantors.
Under these laws, if a court were to find that, after giving effect to the
sale of the Notes and the application of the net proceeds therefrom, either
(a) the Company or the Subsidiary Guarantors incurred such indebtedness with
the intent of hindering, delaying or defrauding creditors or (b) the Company
or the Subsidiary Guarantors received less than reasonably equivalent value or
consideration for incurring such indebtedness and (i) was insolvent or was
rendered insolvent by reason of such transactions, (ii) was engaged in a
business or transaction for which the property remaining with the Company or
the Subsidiary Guarantors constituted unreasonably small capital or (iii)
intended to incur, or believed that it would incur, debts beyond its ability
to pay such debts as they matured, such court may subordinate such
indebtedness to presently existing and future indebtedness of the Company or
the Subsidiary Guarantors, as the case may be, avoid the issuance of such
indebtedness and direct the repayment of any amounts paid thereunder to the
Company's or the Subsidiary Guarantors', as the case may be, creditors or take
other action detrimental to the holders of the Notes.
The definition of insolvency for purposes of determining whether a
transfer is avoidable as a fraudulent transfer may vary depending upon the law
of the jurisdiction which is being applied. Generally, however, a debtor would
be considered insolvent if the sum of all its liabilities, including
contingent liabilities, were greater than the value of all its property at a
fair valuation, or if the present fair saleable value of the debtor's assets
were less than the amount required to repay its probable liabilities on its
debt, including contingent liabilities, as they become absolute and matured.
There can be no assurance as to what standard a court would apply in
order to determine solvency. To the extent that proceeds from the sale of the
Notes are used to finance the Acquisitions, a court may find that the Company
or the Subsidiary Guarantors, as the case may be, did not receive fair
consideration or reasonably equivalent value for the incurrence of the
indebtedness represented thereby. In addition, if a court were to find that
any of the components of the Acquisitions constituted a fraudulent transfer,
to the extent that proceeds from the sale of the Notes are used to finance
such Acquisitions a court may find that the Company or the Subsidiary
Guarantors, as the case may be, did not receive fair consideration or
reasonably equivalent value for the incurrence of the indebtedness represented
by the Notes or the Subsidiary Guarantees, as the case may be. Pursuant to the
terms of the Subsidiary Guarantees, the liability of each Subsidiary Guarantor
is limited to the maximum amount of indebtedness permitted, at the time of the
grant of such Subsidiary Guarantee, to be incurred in compliance with
fraudulent conveyance or similar laws.
Each of the Company and the Subsidiary Guarantors believes that it
received reasonably equivalent value at the time the indebtedness under the
Notes and the Subsidiary Guarantees was incurred. It addition, neither the
Company nor the Subsidiary Guarantors believes that it, after giving effect to
the Financing and the application of the net proceeds therefrom, (i) was or
will be insolvent or rendered insolvent, (ii) was or will be engaged in a
business or transaction for which its remaining property constituted
unreasonably small capital or (iii) intends or intended to incur, or believes
or believed that it will or would incur, debts beyond its ability to pay such
debts as they mature. These beliefs are based on the Company's operating
history and analysis of internal cash flow projections and estimated values of
assets and liabilities of the Company and the Subsidiary Guarantors at the
time of the Note Offering. There can be no assurance, however, that a court
determining the merit of these issues would reach the same conclusion.
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USE OF PROCEEDS
The Company will not receive any proceeds from the issuance of the
Series B Notes or the consummation of the Exchange Offer or any sale of Series
B Notes by any broker-dealer.
THE EXCHANGE OFFER
PURPOSE OF THE EXCHANGE OFFER
The Series A Notes were sold by the Company on May 31, 1996 to the
Initial Purchasers pursuant to the Purchase Agreement. The Initial Purchasers
subsequently placed the Series A Notes with qualified institutional buyers in
reliance on Rule 144A under the Securities Act and institutional accredited
investors pursuant to Rule 501(a) (1), (2), (3) or (7) under the Securities
Act. As a condition to the sale of the Series A Notes, the Company, the
Subsidiary Guarantors and the Initial Purchasers entered into the Registration
Rights Agreement on May 31, 1996. Pursuant to the Registration Rights
Agreement, the Company agreed that, unless the Exchange Offer is not permitted
by applicable law or Commission policy, it would (i) file with the Commission
a Registration Statement under the Securities Act with respect to the Series B
Notes by July 15, 1996, (ii) use its reasonable best efforts to cause such
Registration Statement to become effective under the Securities Act by
September 28, 1996 and (iii) upon effectiveness of the Registration Statement,
to commence the Exchange Offer and maintain the effectiveness of the
Registration Statement and keep the Exchange Offer open for at least 20
business days but in no event later than 30 business days. A copy of the
Registration Rights Agreement has been filed as an exhibit to the Registration
Statement of which this Prospectus is a part. The Registration Statement of
which this Prospectus is a part is intended to satisfy certain of the
Company's obligations under the Registration Rights Agreement and the Purchase
Agreement.
RESALE OF THE SERIES B NOTES
With respect to the Series B Notes, based upon an interpretation by
the staff of the Commission set forth in certain no-action letters issued to
third parties, the Company believes that a holder (other than (i) a
broker-dealer who purchases such Series B Notes directly from the Company to
resell pursuant to Rule 144A or any other available exemption under the
Securities Act or (ii) any such holder which is an "affiliate" of the Company
within the meaning of Rule 405 under the Securities Act) who exchanges the
Series A Notes for the Series B Notes in the ordinary course of business and
who is not participating, does not intend to participate, and has no
arrangement with any person to participate, in the distribution of the Series
B Notes, will be allowed to resell the Series B Notes to the public without
further registration under the Securities Act and without delivering to the
purchasers of the Series B Notes a prospectus that satisfies the requirements
of Section 10 of the Securities Act. However, if any holder acquires the
Series B Notes in the Exchange Offer for the purpose of distributing or
participating in the distribution of the Series B Notes or is a broker-dealer,
such holder cannot rely on the position of the staff of the Commission
enumerated in certain no-action letters issued to third parties and must
comply with the registration and prospectus delivery requirements of the
Securities Act in connection with any resale transaction, unless an exemption
from registration is otherwise available. Each broker-dealer that receives
Series B Notes for its own account in exchange for Series A Notes, where such
Series A Notes were acquired by such broker-dealer as a result of
market-making activities or other trading activities, must acknowledge that it
will deliver a prospectus in connection with any resale of such Series B
Notes. The Letter of Transmittal states that by so acknowledging and by
delivering a prospectus, a broker-dealer will not be deemed to admit that it
is an "underwriter" within the meaning of the Securities Act. This Prospectus,
as it may be amended or supplemented from time to time, may be used by a
broker-dealer in connection with resales of Series B Notes received in
exchange for Series A Notes where such Series A Notes were acquired by such
broker-dealer as a result of market-making or other trading activities.
Pursuant to the Registration Rights Agreement, the Company has agreed to make
this Prospectus, as it may be amended or supplemented from time to time,
available to broker-dealers for use in connection with any resale for a period
of 180 days after the Expiration Date. See "Plan of Distribution."
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TERMS OF THE EXCHANGE OFFER; PERIOD FOR TENDERING SERIES A NOTES
Upon the terms and subject to the conditions set forth in this
Prospectus and in the accompanying Letter of Transmittal (which together
constitutes the Exchange Offer), the Company will accept for exchange any and
all Series A Notes which are properly tendered on or prior to the Expiration
Date and not withdrawn as permitted below. The Company will issue $1,000
principal amount of Series B Notes in exchange for each $1,000 principal
amount of outstanding Series A Notes surrendered pursuant to the Exchange
Offer. Series A Notes may be tendered only in integral multiples of $1,000. As
used herein, the term "Expiration Date" means 5:00 p.m., New York City time, on
__________, 1996; provided, however, that if the Company, in its sole
discretion, has extended the period of time for which the Exchange Offer is
open, the term "Expiration Date" means the latest time and date to which the
Exchange Offer is extended; provided further that in no event will the Exchange
Offer be extended beyond _______, 1996.
The form and terms of the Series B Notes are the same as the form and
terms of the Series A Notes except that (i) the exchange will be registered
under the Securities Act and hence the Series B Notes will not bear legends
restricting their transfer and (ii) holders of the Series B Notes will not be
entitled to the certain rights of holders of Series A Notes under the
Registration Rights Agreement, which rights will terminate upon the
consummation of the Exchange Offer. The Series B Notes will evidence the same
debt as the Series A Notes (which they replace) and will be issued under, and
be entitled to the benefits of, the Indenture, which also authorized the
issuance of the Series A Notes, such that both series will be treated as a
single class of debt securities under the Indenture.
As of the date of this Prospectus, an aggregate of $450.0 million of
the Series A Notes is outstanding. This Prospectus, together with the Letter
of Transmittal, is first being sent on or about _________, 1996, to all
Holders of Series A Notes known to the Company. The Company's obligation to
accept Series A Notes for exchange pursuant to the Exchange Offer is subject
to certain conditions as set forth under "--Certain Conditions to the Exchange
Offer" below.
Holders of the Series A Notes do not have any appraisal or
dissenters' rights under the Indenture in connection with the Exchange Offer.
The Company intends to conduct the Exchange Offer in accordance with the
provisions of the Registration Rights Agreement and the applicable
requirements of the Securities Act, the Exchange Act and the rules and
regulations of the Commission thereunder.
The Company expressly reserves the right, at any time or from time to
time, to extend the period of time during which the Exchange Offer is open,
and thereby delay acceptance for exchange of any Series A Notes, by giving
written notice of such extension to the Holders thereof as described below.
During any such extension, all Series A Notes previously tendered will remain
subject to the Exchange Offer and may be accepted for exchange by The Company.
Any Series A Notes not accepted for exchange for any reason will be returned
without expense to the tendering Holder thereof as promptly as practicable
after the expiration or termination of the Exchange Offer.
The Company expressly reserves the right to amend or terminate the
Exchange Offer, and not to accept for exchange any Series A Notes not
theretofore accepted for exchange, upon the occurrence of any of the
conditions of the Exchange Offer specified below under "--Certain Conditions
to the Exchange Offer." The Company will give written notice of any extension,
amendment, nonacceptance or termination to the Holders of the Series A Notes
as promptly as practicable, such notice in the case of any extension to be
issued by means of a press release or other public announcement no later than
9:00 a.m., New York City time, on the next business day after the previously
scheduled Expiration Date.
PROCEDURES FOR TENDERING SERIES A NOTES
The tender to the Company of Series A Notes by a Holder thereof as
set forth below and the acceptance thereof by the Company will constitute a
binding agreement between the tendering Holder and the Company upon the terms
and subject to the conditions set forth in this Prospectus and in the
accompanying Letter of Transmittal. Except as set forth below, a Holder who
wishes to tender Series A Notes for exchange pursuant to the Exchange Offer
must transmit
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a properly completed and duly executed Letter of Transmittal, including all
other documents required by such Letter of Transmittal, to the Exchange Agent
at one of the addresses set forth below under "Exchange Agent" on or prior to
the Expiration Date. In addition, either (i) certificates for such Series A
Notes must be received by the Exchange Agent along with the Letter of
Transmittal, or (ii) a timely confirmation of a book-entry transfer (a
"Book-Entry Confirmation") of such Series A Notes, if such procedure is
available, into the Exchange Agent's account at The Depository Trust Company
(the "Book-Entry Transfer Facility") pursuant to the procedure for book-entry
transfer described below, must be received by the Exchange Agent prior to the
Expiration Date, or (iii) the Holder must comply with the guaranteed delivery
procedures described below.
THE METHOD OF DELIVERY OF SERIES A NOTES, LETTERS OF TRANSMITTAL AND
ALL OTHER REQUIRED DOCUMENTS IS AT THE ELECTION AND RISK OF THE
HOLDERS. IF SUCH DELIVERY IS BY MAIL, IT IS RECOMMENDED THAT
REGISTERED MAIL, PROPERLY INSURED, WITH RETURN RECEIPT REQUESTED, BE
USED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ASSURE
TIMELY DELIVERY. NO LETTERS OF TRANSMITTAL OR SERIES A NOTES SHOULD
BE SENT TO THE COMPANY.
Any beneficial owner whose Series A Notes are registered in the name
of a broker, dealer, commercial bank, trust company or other nominee and who
wishes to tender should contact such registered holder of Series A Notes
promptly and instruct such registered holder of Series A Notes to tender on
behalf of the beneficial owner. If such beneficial owner wishes to tender on
its own behalf, such beneficial owner must, prior to completing and executing
the Letter of Transmittal and delivering its Series A Notes, either make
appropriate arrangements to register ownership of the Series A Notes in such
beneficial owner's name or obtain a properly completed bond power from the
registered holder of Series A Notes. The transfer of record ownership may take
considerable time.
Signatures on a Letter of Transmittal or a notice of withdrawal, as
the case may be, must be guaranteed unless the Series A Notes surrendered for
exchange pursuant thereto is tendered (i) by a registered Holder of the Series
A Notes who has not completed the box entitled "Special Issuance Instructions"
or "Special Delivery Instructions" on the Letter of Transmittal or (ii) for
the account of an Eligible Institution (as defined herein below). In the event
that signatures on a Letter of Transmittal or a notice of withdrawal, as the
case may be, are required to be guaranteed, such guarantees must be by a firm
which is a member of a registered national securities exchange or a member of
the National Association of Securities Dealers, Inc. or by a commercial bank
or trust company having an office or correspondent in the United States
(collectively, "Eligible Institutions"). If Series A Notes are registered in
the name of a person other than a signer of the Letter of Transmittal, the
Series A Notes surrendered for exchange must be endorsed by, or be accompanied
by a written instrument or instruments of transfer or exchange, in
satisfactory form as determined by the Company in its sole discretion, duly
executed by the registered Holder with the signature thereon guaranteed by an
Eligible Institution.
All questions as to the validity, form, eligibility (including time
of receipt) and acceptance of Series A Notes tendered for exchange will be
determined by the Company in its sole discretion, which determination shall be
final and binding. The Company reserves the absolute right to reject any and
all tenders of any particular Series A Notes not properly tendered or to not
accept any particular Series A Notes which acceptance might, in the judgment
of the Company or its counsel, be unlawful. The Company also reserves the
absolute right to waive any defects or irregularities or conditions of the
Exchange Offer as to any particular Series A Notes either before or after the
Expiration Date (including the right to waive the ineligibility of any Holder
who seeks to tender Series A Notes in the Exchange Offer). The interpretation
of the terms and conditions of the Exchange Offer as to any particular Series
A Notes either before or after the Expiration Date (including the Letter of
Transmittal and the instructions thereto) by the Company shall be final and
binding on all parties. Unless waived, any defects or irregularities in
connection with tenders of Series A Notes for exchange must be cured within
such reasonable period of time as the Company shall determine. Neither the
Company, the Exchange Agent nor any other person shall be under any duty to
give notification of any defect or irregularity with respect to any tender of
Series A Notes for exchange, nor shall any of them incur any liability for
failure to give such notification.
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If the Letter of Transmittal is signed by a person or persons other
than the registered Holder or Holders of Series A Notes, such Series A Notes
must be endorsed or accompanied by appropriate powers of attorney, in either
case signed exactly as the name or names of the registered Holder or Holders
that appear on the Series A Notes.
If the Letter of Transmittal or any Series A Notes or powers of
attorney are signed by trustees, executors, administrators, guardians,
attorneys-in-fact, officers of corporations or others acting in a fiduciary or
representative capacity, such persons should so indicate when signing, and,
unless waived by the Company, proper evidence satisfactory to the Company of
their authority to so act must be submitted.
By tendering, each holder will represent to the Company that,
among other things, (i) the Series B Notes to be acquired by the holder of the
Series A Notes in connection with the Exchange Offer are being acquired by the
holder in the ordinary course of business of the holder, (ii) the holder has
no arrangement or understanding with any person to participate in the
distribution of Series B Notes, (iii) the holder acknowledges and agrees that
any person who is a broker-dealer registered under the Exchange Act or is
participating in the Exchange Offer for the purposes of distributing the
Series B Notes must comply with the registration and prospectus delivery
requirements of the Securities Act in connection with a secondary resale
transaction of the Series B Notes acquired by such person and cannot rely on
the position of the staff of the Commission set forth in certain no-action
letters, (iv) the holder understands that a secondary resale transaction
described in clause (iii) above and any resales of Series B Notes obtained by
such holder in exchange for Series A Notes acquired by such holder directly
from the Company should be covered by an effective registration statement
containing the selling security holder information required by Item 507 or
Item 508, as applicable, of Regulation S-K of the Commission, and (v) the
holder is not an "affiliate," as defined in Rule 405 of the Securities Act, of
the Company. If the holder is a broker-dealer that will receive Series B Notes
for its own account in exchange for Series A Notes that were acquired as a
result of market-making activities or other trading activities, the holder is
required to acknowledge in the Letter of Transmittal that it will deliver a
prospectus in connection with any resale of such Series B Notes; however, by
so acknowledging and by delivering a prospectus, the holder will not be deemed
to admit that it is an "underwriter" within the meaning of the Securities Act.
ACCEPTANCE OF SERIES A NOTES FOR EXCHANGE; DELIVERY OF SERIES B NOTES
Upon satisfaction or waiver of all of the conditions to the Exchange
Offer, the Company will accept, promptly after the Expiration Date, all Series
A Notes properly tendered and will issue the Series B Notes promptly after
acceptance of the Series A Notes. See "--Certain Conditions to the Exchange
Offer" below. For purposes of the Exchange Offer, the Company shall be deemed
to have accepted properly tendered Series A Notes for exchange when, as and if
the Company has given oral or written notice thereof to the Exchange Agent,
with written confirmation of any oral notice to be given promptly thereafter.
The Series B Notes bear interest at a rate equal to 10 3/4% per
annum. Interest on the Series B Notes is payable semi-annually on each May 15
and November 15, commencing on November 15, 1996. Holders of Series B Notes
will receive interest on November 15, 1996 from the date of initial issuance
of the Series B Notes, plus an amount equal to the accrued interest on the
Series A Notes from May 31, 1996 to the date of exchange thereof for Series B
Notes. Holders of Series A Notes that are accepted for exchange will be deemed
to have waived the right to receive any interest accrued on the Series A
Notes.
In all cases, the issuance of Series B Notes for Series A Notes that
is accepted for exchange pursuant to the Exchange Offer will be made only
after timely receipt by the Exchange Agent of certificates for such Series A
Notes or a timely Book-Entry Confirmation of such Series A Notes into the
Exchange Agent's account at the Book- Entry Transfer Facility, a properly
completed and duly executed Letter of Transmittal and all other required
documents. If any tendered Series A Notes are not accepted for any reason set
forth in the terms and conditions of the Exchange Offer, or if Series A Notes
are submitted for a greater amount than the Holder desires to exchange, such
unaccepted or non-exchanged Series A Notes will be returned without expense to
the tendering Holder thereof (or, in the case of Series A Notes tendered by
book-entry procedures described below, such non exchanged Series A Notes will
be credited to an
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account maintained with such Book-Entry Transfer Facility) designated by the
tendering Holder as promptly as practicable after the expiration or
termination of the Exchange Offer.
BOOK-ENTRY TRANSFER
The Exchange Agent will make a request to establish an account
with respect to the Series A Notes at the Book-Entry Transfer Facility for
purposes of the Exchange Offer within two business days after the date of this
Prospectus, and any financial institution that is a participant in the
Book-Entry Transfer Facility's systems may make book-entry delivery of Series
A Notes by causing the Book-Entry Facility to transfer such Series A Notes
into the Exchange Agent's account at the Book-Entry Transfer Facility in
accordance with such Book-Entry Transfer Facility's procedures for transfer.
However, although delivery of Series A Notes may be effected through
book-entry transfer at the Book-Entry Transfer Facility, the Letter of
Transmittal or facsimile thereof, with any required signature guarantees and
any other required documents, must, in any case, be transmitted to and
received by the Exchange Agent at one of the addresses set forth below under
"--Exchange Agent" on or prior to the Expiration Date or the guaranteed
delivery procedures described below must be complied with.
GUARANTEED DELIVERY PROCEDURES
If a registered Holder of the Series A Notes desires to tender such
Series A Notes and the Series A Notes is not immediately available, or time
will not permit such Holder's Series A Notes or other required documents to
reach the Exchange Agent before the Expiration Date, or the procedure for
book-entry transfer cannot be completed on a timely basis, a tender may be
effected if (i) the tender is made through an Eligible Institution, (ii) prior
to the Expiration Date, the Exchange Agent has received from such Eligible
Institution a properly completed and duly executed Letter of Transmittal (or a
facsimile thereof) and notice of Guaranteed Delivery, substantially in the
form provided by the Company (by telegram, telex, facsimile transmission, mail
or hand delivery), setting forth the name and address of the Holder of the
Series A Notes and the amount of Series A Notes, stating that the tender is
being made thereby and guaranteeing that within five New York Stock Exchange
("NYSE") trading days after the date of execution of the Notice of Guaranteed
Delivery, the certificates for all physically tendered Series A Notes, in
proper form for transfer, or a Book-Entry Confirmation, as the case may be,
and any other documents required by the Letter of Transmittal will be
deposited by the Eligible Institution with the Exchange Agent, and (iii) the
certificates for all physically tendered Series A Notes, in proper form for
transfer, or a Book-Entry Confirmation, as the case may be, and all other
documents required by the Letter of Transmittal, are received by the Exchange
Agent within five NYSE trading days after the date of execution of the Notice
of Guaranteed Delivery.
WITHDRAWAL RIGHTS
Tenders of Series A Notes may be withdrawn at any time prior to the
Expiration Date.
For a withdrawal to be effective, a written notice of withdrawal must
be received by the Exchange Agent at one of the addresses set forth below
under "Exchange Agent." Any such notice of withdrawal must specify the name of
the person having tendered the Series A Notes to be withdrawn, identify the
Series A Notes to be withdrawn (including the amount of such Series A Notes),
and (where certificates for Series A Notes have been transmitted) specify the
name in which such Series A Notes is registered, if different from that of the
withdrawing Holder. If certificates for Series A Notes have been delivered or
otherwise identified to the Exchange Agent, then, prior to the release of such
certificates the withdrawing Holder must also submit the serial numbers of the
particular certificates to be withdrawn and a signed notice of withdrawal with
signatures guaranteed by an Eligible Institution unless such Holder is an
Eligible Institution. If Series A Notes have been tendered pursuant to the
procedure for book-entry transfer described above, any notice of withdrawal
must specify the name and number of the account at the Book- Entry Transfer
Facility to be credited with the withdrawn Series A Notes and otherwise comply
with the procedures of such facility. All questions as to the validity, form
and eligibility (including time of receipt) of such notices will be determined
by the Company whose determination shall be final and binding on all parties.
Any Series A Notes so withdrawn will be deemed not to have been validly
tendered for exchange for purposes of the Exchange Offer. Any Series A Notes
which has been
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tendered for exchange but which is not exchanged for any reason will be
returned to the Holder thereof without cost to such Holder (or, in the case of
Series A Notes tendered by book-entry transfer into the Exchange Agent's
account at the Book-Entry Transfer Facility pursuant to the book-entry
transfer procedures described above, such Series A Notes will be credited to
an account with such Book-Entry Transfer Facility specified by the Holder) as
soon as practicable after withdrawal, rejection of tender or terminations of
the Exchange Offer. Properly withdrawn Series A Notes may be retendered by
following one of the procedures described under "--Procedures for Tendering
Series A Notes" above at any time on or prior to the Expiration Date.
CERTAIN CONDITIONS TO THE EXCHANGE OFFER
Notwithstanding any other provision of the Exchange Offer, the
Company shall not be required to accept for exchange, or to issue Series B
Notes in exchange for, any Series A Notes and may terminate or amend the
Exchange Offer, if at any time before the acceptance of such Series A Notes
for exchange or the exchange of the Series B Notes for such Series A Notes,
any of the following events shall occur:
(a) there shall be threatened, instituted or pending any action or
proceeding before, or any injunction, order or decree shall have been
issued by, any court or governmental agency or other governmental
regulatory or administrative agency or commission, (i) seeking to
restrain or prohibit the making or consummation of the Exchange Offer
or any other transaction contemplated by the Exchange Offer, or
assessing or seeking any damages as a result thereof, or (ii)
resulting in a material delay in the ability of the Company to accept
for exchange or exchange some or all of the Series A Notes pursuant
to the Exchange Offer; or any statute, rule, regulation, order or
injunction shall be sought, proposed, introduced, enacted,
promulgated or deemed applicable to the Exchange Offer or any other
transactions contemplated by the Exchange Offer by any government or
governmental authority, domestic or foreign, or any action shall have
been taken, proposed or threatened, by any government, governmental
authority, agency or court, domestic or foreign, that in the sole
judgment of the Company might directly or indirectly result in any of
the consequences referred to in clauses (i) or (ii) above or, in the
sole judgment of the Company might result in the holders of Series B
Notes having obligations with respect to resales and transfers to
Series B Notes which are greater than those described in the
interpretation of the Commission referred to on the cover page of
this Prospectus, or would otherwise make it inadvisable to proceed
with the Exchange Offer; or
(b) there shall have occurred (i) any general suspension of or
general limitation on prices for, or trading in, securities on any
national securities exchange or in the over-the-counter market, (ii)
any limitation by any governmental agency or authority which may
adversely affect the ability of the Company to complete the
transactions contemplated by the Exchange Offer, (iii) a declaration
of a banking moratorium or any suspension of payments in respect of
banks in the United States or any limitation by any governmental
agency or authority which adversely affects the extension of credit
or (iv) a commencement of a war, armed hostilities or other similar
international calamity directly or indirectly involving the United
States, or, in the case of any of the foregoing existing at the time
of the commencement of the Exchange Offer, a material acceleration or
worsening thereof; or
(c) any change (or any development involving a prospective change)
shall have occurred or be threatened in the business, properties,
assets, liabilities, financial condition, operations, results of
operations or prospects of the Company and its subsidiaries taken as
a whole that, in the sole judgment of the Company, is or may be
adverse to the Company, or the Company shall have become aware of
facts that, in the sole judgment of the Company have or may have
adverse significance with respect to the value of the Series A Notes
or the Series B Notes;
which, in the sole judgment of the Company in any case, and regardless of the
circumstances (including any action by the Company) giving rise to any such
condition, makes it inadvisable to proceed with the Exchange Offer and/or with
such acceptance for exchange or with such exchange.
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To the Company's knowledge as of the date of this Prospectus none of
the foregoing events has occurred.
The foregoing conditions are for the sole benefit of the Company and
may be asserted by the Company regardless of the circumstances giving rise to
any such condition or may be waived by the Company in whole or in part at any
time and from time to time in its sole discretion. The failure by the Company
at any time to exercise any of the foregoing rights shall not be deemed a
waiver of any such right and each such right shall be deemed an ongoing right
which may be asserted at any time and from time to time.
In addition, the Company will not accept for exchange any Series A
Notes tendered, and no Series B Notes will be issued in exchange for any such
Series A Notes, if at such time any stop order shall be threatened or in
effect with respect to the Registration Statement of which this Prospectus
constitutes a part.
EXCHANGE AGENT
Chemical Bank, the Trustee under the Indenture, has been appointed
as the Exchange Agent for the Exchange Offer. All executed Letters of
Transmittal should be directed to the Exchange Agent at the addresses set
forth below. Questions and requests for assistance, requests for additional
copies of this Prospectus or of the Letter of Transmittal and requests for
Notices of Guaranteed Delivery should be directed to the Exchange Agent
addressed as follows:
Delivery to: Chemical Bank
By Facsimile: By Mail, By Hand and Confirm by Telephone:
Overnight Courier:
(212) 638-7389 Chemical Bank Carlos Esteves
(212) 344-9387 Corporate Trust-Securities Window (212) 638-0828
Room 234-North Building Sharon Lewis
55 Water Street (212) 638-0454
New York, NY 10041
DELIVERY OF A LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET
FORTH ABOVE OR TRANSMISSION OF INSTRUCTIONS VIA A FACSIMILE NUMBER OTHER THAN
THE ONE LISTED ABOVE DOES NOT CONSTITUTE A VALID DELIVERY OF SUCH LETTER OF
TRANSMITTAL.
FEES AND EXPENSES
The Company will not make any payment to brokers, dealers or others
soliciting acceptances of the Exchange Offer.
The estimated cash expenses to be incurred in connection with the
Exchange Offer will be paid by the Company and are estimated in the aggregate
to be approximately $_____________.
ACCOUNTING TREATMENT
For accounting purposes, the Company will recognize no gain or loss
as a result of the Exchange Offer. The expenses of the Exchange Offer will be
amortized over the term of the Series B Notes.
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TRANSFER TAXES
Holders who tender their Series A Notes for exchange will not be
obligated to pay any transfer taxes in connection therewith, except that
Holders who instruct the Company to register Series B Notes in the name of, or
request that Series A Notes not tendered or not accepted in the Exchange Offer
be returned to, a person other than the registered tendering holder will be
responsible for the payment of any applicable transfer tax thereon.
REGULATORY MATTERS
The Company is not aware of any governmental or regulatory approvals
that are required in order to consummate the Exchange Offer.
CONSEQUENCES OF EXCHANGING SERIES A NOTES
Based upon no-action letters issued by the staff of the Commission to
third parties, the Company believes that Series B Notes issued pursuant to the
Exchange Offer in exchange for Series A Notes may be offered for resale,
resold or otherwise transferred by a Holder thereof (other than any Holder
which is an "affiliate" of the Company within the meaning of Rule 405 under
the Securities Act or a holder that is a broker-dealer who acquires Series B
Notes to resell pursuant to Rule 144A or any other available exemption under
the Securities Act) without compliance with the registration and prospectus
delivery provisions of the Securities Act, provided that such Series B Notes
are acquired in the ordinary course of such Holder's business and such Holder
is not participating, does not intend to participate, and has no arrangement
with any person to participate, in the distribution of such Series B Notes.
However, the Commission has not considered the Exchange Offer in the context
of a no-action letter and there can be no assurance that the staff of the
Commission would make a similar determination with respect to the Exchange Offer
as in such other circumstances. If any Holder is an affiliate of the Company, is
engaged in or intends to engage in or has any arrangement or understanding with
respect to the distribution of the Series B Notes to be acquired pursuant to the
Exchange Offer, such Holder (i) could not rely on the relevant determinations of
the staff of the Commission and (ii) must comply with the registration and
prospectus delivery requirements of the Securities Act in connection with any
resale transaction. Each broker-dealer that receives Series B Notes for its
own account in exchange for Series A Notes, where such Series A Notes were
acquired by such broker-dealer as a result of market-making activities or
other trading activities, must acknowledge that it will deliver a prospectus
in connection with any resale of such Series B Notes. Pursuant to the
Registration Rights Agreement, the Company has agreed to make this Prospectus,
as it may be amended or supplemented from time to time, available to
broker-dealers for use in connection with any resale for a period of 180 days
after the Expiration Date. Under certain circumstances, the Company may cause
the Prospectus to not be available for resale for a period of up to 30 days.
See "Plan of Distribution." In addition, to comply with the securities laws of
certain jurisdictions, if applicable, the Series B Notes may not be offered or
sold unless it has been registered or qualified for sale in such jurisdiction
or an exemption from registration or qualification is available and is
complied with. The Company has agreed to register or qualify the sale of the
Series B Notes in such jurisdictions only in limited circumstances and subject
to certain conditions.
CONSEQUENCE OF FAILURE TO EXCHANGE
Participation in the Exchange Offer is voluntary. Holders of the
Series A Notes are urged to consult their financial and tax advisors in making
their own decisions on what action to take.
The Series A Notes which are not exchanged for the Series B Notes
pursuant to the Exchange Offer will remain restricted securities. Accordingly,
such Series A Notes may be resold only (i) to a person whom the seller
reasonably believes is a qualified institutional buyer (as defined in Rule
144A under the Securities Act) in a transaction meeting the requirements of
Rule 144A, (ii) in a transaction meeting the requirements of Rule 144 under
the Securities Act, (iii) outside the United States to a foreign person in a
transaction meeting the requirements of Rule 904 under the Securities Act or
(iv) in accordance with another exemption from the registration requirements
of the Securities Act (and based upon an opinion of counsel if the Company so
requests), (v) to the Company or (vi) pursuant to an effective registration
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statement and, in each case, in accordance with any applicable securities laws
of any state of the United States or any other applicable jurisdiction under
certain circumstances, the Company is required to file a Shelf Registration
Statement. See "Description of Notes--Registration Rights; Liquidated
Damages."
LIQUIDATED DAMAGES
In the event of a Registration Default (as hereinafter defined), the
Company is required to pay liquidated damages. See "Description of
Notes--Registration Rights; Liquidated Damages."
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DESCRIPTION OF NOTES
GENERAL
The Series A Notes were and the Series B Notes will be issued pursuant
to an Indenture (the "Indenture") between the Company and Chemical Bank, as
trustee (the "Trustee") in a private transaction that was not subject to the
registration requirements of the Securities Act. See "Notice to Investors."
The terms of the Notes include those stated in the Indenture and those made
part of the Indenture by reference to the Trust Indenture Act of 1939 (the
"Trust Indenture Act"). The Notes are subject to all such terms, and Holders
of Notes are referred to the Indenture and the Trust Indenture Act for a
statement thereof. The following summary of certain provisions of the
Indenture does not purport to be complete and is qualified in its entirety by
reference to the Indenture, including the definitions therein of certain terms
used below. Copies of the Indenture and Registration Rights Agreement are
available as set forth under "Additional Information" and "Incorporation by
Reference." The definitions of certain terms used in the following summary are
set forth below under "--Certain Definitions." The terms of the Series B Notes
and the Series A Notes are identical in all material respects except for
certain transfer restrictions and registration rights relating to the Senior A
Notes and except that, if the Exchange Offer is not consummated by September
28, 1996, Holders of Series A Notes will be entitled to certain Liquidated
Damages. See "--Registration Rights; Liquidated Damages."
The Notes rank senior in right of payment to all subordinated
Indebtedness of the Company issued in the future, if any. The Notes are
subordinated in right of payment to all Senior Debt, including borrowings
under the New Credit Agreement.
Certain operations of the Company are conducted through its Subsidiaries
and, therefore, the Company is dependent upon the cash flow of its
Subsidiaries to meet its obligations, including its obligations under the
Notes. The Notes are guaranteed on a senior subordinated basis by each of the
Company's current and future subsidiaries (the "Subsidiary Guarantors"). See
"--Subsidiary Guarantees."
As used in this "Description of Notes," the "Company" shall refer to SFX
Broadcasting, Inc., excluding its Subsidiaries.
PRINCIPAL, MATURITY AND INTEREST
The Notes are limited in aggregate principal amount to $450.0 million
and mature on May 15, 2006. Interest on the Notes accrues at the rate of 10
3/4 % per annum and is payable semi-annually in arrears on May 15 and November
15, commencing on November 15, 1996, to Holders of record on the immediately
preceding May 1 and November 1. The Series B Notes issued in exchange for
Series A Notes will accrue dividends, from May 31, 1996. Holders whose Series
A Notes are accepted for exchange will be deemed to have waived the right to
receive any interest accrued on the Series A Notes. Interest is computed on
the basis of a 360-day year comprised of twelve 30-day months. Principal,
premium, if any, and interest and Liquidated Damages, if any, on the Notes is
payable at the office or agency of the Company maintained for such purpose
within the City and State of New York or, at the option of the Company,
payment of interest and Liquidated Damages, if any, may be made by check
mailed to the Holders of the Notes at their respective addresses set forth in
the register of Holders of Notes; provided that all payments with respect to
Global Notes and Certificated Securities the Holders of which have given wire
transfer instructions to the Company will be required to be made by wire
transfer of immediately available funds to the accounts specified by the
Holders thereof. Until otherwise designated by the Company, the Company's
office or agency in the City and State of New York will be the office of the
Trustee maintained for such purpose. The Notes are issued in denominations of
$1,000 and integral multiples thereof.
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SUBORDINATION
The payment of principal of, premium, if any, and interest and
Liquidated Damages, if any, on the Notes is subordinated in right of payment,
as set forth in the Indenture, to the prior payment in full of all Senior
Debt, whether outstanding on the date of the Indenture or thereafter incurred.
Upon any distribution to creditors of the Company in a liquidation or
dissolution of the Company or in a bankruptcy, reorganization, insolvency,
receivership or similar proceeding relating to the Company or its property, or
in an assignment for the benefit of creditors or any marshaling of Company's
assets and liabilities, the holders of Senior Debt are entitled to receive
payment in full of all Obligations due in respect of such Senior Debt
(including interest after the commencement of any such proceeding at the rate
specified in the applicable Senior Debt, whether or not an allowable claim)
before the Holders are entitled to receive any payment with respect to the
Notes; and until all Obligations with respect to Senior Debt are paid in full,
any distribution to which the Holders will be entitled will be made to the
holders of Senior Debt (except that, in either case, Holders may receive (i)
securities that are subordinated at least to the same extent as the Notes to
Senior Debt and any securities issued in exchange for Senior Debt and (ii)
payments made from the trust described below under "--Legal Defeasance and
Covenant Defeasance").
The Company also may not make any payment upon or in respect of the
Notes (except as described above) if (i) a default in the payment of the
principal of, premium, if any, or interest on Designated Senior Debt occurs
and is continuing or (ii) any other default occurs and is continuing with
respect to Designated Senior Debt that permits holders of Designated Senior
Debt as to which such default relates to accelerate its maturity and the
trustee receives a notice of such default (a "Payment Blockage Notice") from
the Company or the holders of any Designated Senior Debt. Payments on the
Notes may and shall be resumed (a) in the case of a payment default, upon the
date on which such default is cured or waived and (b) in the case of a
nonpayment default, the earlier of the date on which such nonpayment default
is cured or waived or 179 days after the date on which the applicable Payment
Blockage Notice is received, unless the maturity of any Designated Senior Debt
has been accelerated. No new period of payment blockage may be commenced
unless and until (1) 360 days have elapsed since the effectiveness of the
immediately prior Payment Blockage Notice and (2) all scheduled payments of
principal, premium, if any, interest and Liquidated Damages, if any, on the
Notes that have come due have been paid in full. No nonpayment default that
existed or was continuing on the date of delivery of any Payment Blockage
Notice to the Trustee shall be, or be made, the basis for a subsequent Payment
Blockage Notice.
The Indenture further requires that the Company promptly notify the
holders of Senior Debt if payment of the Notes is accelerated because of an
Event of Default.
As a result of the subordination provisions described above, in the
event of a liquidation or insolvency, Holders may recover less ratably than
creditors of the Company who are holders of Senior Debt or other creditors of
the Company who are not subordinated to holders of Senior Debt. As of March
31, 1996, after giving pro forma effect to the Transactions, the Company would
have had no Senior Debt and the Subsidiary Guarantors would have had no
Guarantor Senior Debt. The Indenture limits, subject to certain financial
tests, the amount of additional Indebtedness, including Senior Debt, that the
Company and its Subsidiaries may incur. See "--Certain Covenants--Incurrence
of Indebtedness and Issuance of Preferred Stock."
"Designated Senior Debt" means (i) so long as any Senior Bank Debt is
outstanding, the Senior Bank Debt and (ii) thereafter, any other Senior Debt
permitted under the Indenture, the principal amount of which is $25.0 million
or more and that has been designated by the Company as "Designated Senior
Debt."
"Senior Bank Debt" means any Indebtedness outstanding under, and any
other Obligations with respect to, Bank Facilities, to the extent that any
such Indebtedness and other Obligations are permitted by the Indenture to be
incurred.
"Senior Debt" means (a) the Senior Bank Debt, (b) all additional
Indebtedness that is permitted under the Indenture that is not by its terms
pari passu with or subordinated to the Notes, (c) all Obligations of the
Company with respect to the foregoing clauses (a) and (b), including
post-petition interest and (d) all (including all subsequent)
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renewals, extensions, amendments, refinancings, repurchases or redemptions,
modifications, replacements or refundings thereto (whether or not coincident
therewith) that are permitted by the Indenture. Notwithstanding anything to
the contrary in the foregoing, Senior Debt shall not include (i) any
Indebtedness of the Company to any of its Subsidiaries, (ii) any Indebtedness
incurred for the purchase of goods or materials or for services obtained in
the ordinary course of business (other than with the proceeds of borrowings
from banks or other financial institutions) or (iii) any Indebtedness incurred
in violation of the Indenture.
SUBSIDIARY GUARANTEES
The Company's payment obligations under the Notes is jointly and
severally guaranteed (the "Subsidiary Guarantees") by the Subsidiary
Guarantors. The Subsidiary Guarantee of each Subsidiary Guarantor is
subordinated to the prior payment in full of all Senior Debt of such
Subsidiary Guarantor, which includes the amounts for which the Subsidiary
Guarantors will be liable under the guarantees issued from time to time with
respect to Senior Debt. The obligations of each Subsidiary Guarantor under its
Subsidiary Guarantee are limited so as not to constitute a fraudulent
conveyance under applicable law. See, however, "Risk Factors--Fraudulent
Transfer Statutes."
The Indenture provides that no Subsidiary Guarantor may consolidate
with or merge with or into (whether or not such Subsidiary Guarantor is the
surviving Person) another corporation, Person or entity (except the Company or
another Subsidiary Guarantor) whether or not affiliated with such Subsidiary
Guarantor unless (i) subject to the provisions of the following paragraph, the
Person formed by or surviving any such consolidation or merger (if other than
such Subsidiary Guarantor) assumes all the obligations of such Subsidiary
Guarantor under the Notes and the Indenture pursuant to a supplemental
indenture in form and substance reasonably satisfactory to the Trustee; (ii)
other than with respect to the MMR Merger, immediately after giving effect to
such transaction, no Default or Event of Default exists; (iii) other than with
respect to the MMR Merger, such Subsidiary Guarantor, or any Person formed by
or surviving any such consolidation or merger, would have Consolidated Net
Worth (immediately after giving effect to such transaction) equal to or
greater than the Consolidated Net Worth of such Subsidiary Guarantor
immediately preceding the transaction; and (iv) other than with respect to the
MMR Merger, the Company would be permitted by virtue of the Company's pro
forma Debt to Cash Flow Ratio, immediately after giving effect to such
transaction, to Incur at least $1.00 of additional Indebtedness (other than
Permitted Debt) pursuant to the covenant described below under the caption
"--Certain Covenants--Incurrence of Indebtedness and Issuance of Preferred
Stock."
The Indenture provides that in the event of a sale or other disposition
of all of the assets of any Subsidiary Guarantor, by way of merger,
consolidation or otherwise, or a sale or other disposition of all of the
capital stock of any Subsidiary Guarantor, then such Subsidiary Guarantor (in
the event of a sale or other disposition, by way of such a merger,
consolidation or otherwise, of all of the capital stock of such Subsidiary
Guarantor) or the corporation acquiring the property (in the event of a sale
or other disposition of all of the assets of such Subsidiary Guarantor) will
be released and relieved of any obligations under its Subsidiary Guarantee;
provided that the Net Proceeds of such sale or other disposition are applied
in accordance with the applicable provisions of the Indenture. See
"--Repurchase at the Option of Holders--Asset Sales."
"Subsidiary Guarantors" means each of the Company's current Subsidiaries
and any other Subsidiary that executes a Subsidiary Guarantee in accordance
with the provisions of the Indenture, and their respective successors and
assigns.
OPTIONAL REDEMPTION
The Notes are not redeemable at the Company's option prior to May 15,
2001. Thereafter, the Notes are subject to redemption at the option of the
Company, in whole or in part, upon not less than 30 nor more than 60 days'
notice, at the redemption prices (expressed as percentages of principal
amount) set forth below plus accrued and unpaid interest and Liquidated
Damages, if any, thereon to the applicable redemption date, if redeemed during
the twelve-month period beginning on May 15 of the years indicated below:
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YEAR PERCENTAGE
2001................... 105.375%
2002................... 103.583%
2003................... 101.792%
2004 and thereafter.... 100.000%
Notwithstanding the foregoing, until May 31, 1999, the Company may, on
any one or more occasions, redeem up to $154.0 million in aggregate principal
amount of Notes at a redemption price of 110.750% of the principal amount
thereof plus accrued and unpaid interest and Liquidated Damages, if any,
thereon to the redemption date, with the net proceeds of an offering of common
equity; provided that at least $286.0 million in aggregate principal amount of
Notes must remain outstanding immediately after the occurrence of each such
redemption; and provided, further that any such redemption shall occur within
75 days of the date of closing of such offering of common equity of the
Company.
SELECTION AND NOTICE
If less than all of the Notes are to be redeemed at any time, selection
of Notes for redemption will be made by the Trustee in compliance with the
requirements of the principal national securities exchange, if any, on which
the Notes are listed, or, if the Notes are not so listed, on a pro rata basis,
by lot or by such method as the Trustee shall deem fair and appropriate;
provided that no Notes of $1,000 or less shall be redeemed in part. Notices of
redemption shall be mailed by first class mail at least 30 but not more than
60 days before the redemption date to each Holder of Notes to be redeemed at
its registered address. If any Note is to be redeemed in part only, the notice
of redemption that relates to such Note shall state the portion of the
principal amount thereof to be redeemed. A new Note in principal amount equal
to the unredeemed portion thereof will be issued in the name of the Holder
thereof upon cancellation of the original Note. On and after the redemption
date, interest ceases to accrue on Notes or portions of them called for
redemption.
REPURCHASE AT THE OPTION OF HOLDERS
CHANGE OF CONTROL
Upon the occurrence of a Change of Control, each Holder of Notes has
the right to require the Company to repurchase all or any part (equal to
$1,000 or an integral multiple thereof) of such Holder's Notes pursuant to the
offer described below (the "Change of Control Offer") at an offer price in
cash equal to 101% of the aggregate principal amount thereof plus accrued and
unpaid interest and Liquidated Damages, if any, thereon to the date of
purchase (the "Change of Control Payment"). Within ten days following any
Change of Control, the Company will mail a notice to each Holder describing
the transaction or transactions that constitute the Change of Control and
offering to repurchase Notes pursuant to the procedures required by the
Indenture and described in such notice. The Company will comply with the
requirements of Rule 14e-1 under the Exchange Act and any other securities
laws and regulations thereunder to the extent such laws and regulations are
applicable in connection with the repurchase of the Notes as a result of a
Change of Control.
On the Change of Control Payment Date, the Company will, to the extent
lawful, (1) accept for payment all Notes or portions thereof properly tendered
pursuant to the Change of Control Offer, (2) deposit with the Paying Agent an
amount equal to the Change of Control Payment in respect of all Notes or
portions thereof so tendered and (3) deliver or cause to be delivered to the
Trustee the Notes so accepted together with an Officers' Certificate stating
the aggregate principal amount of Notes or portions thereof being purchased by
the Company. The Paying Agent will promptly mail to each Holder of Notes so
tendered the Change of Control Payment for such Notes, and the Trustee will
promptly
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authenticate and mail (or cause to be transferred by book entry) to each
Holder a new Note equal in principal amount to any unpurchased portion of the
Notes surrendered, if any; provided that each such new Note will be in a
principal amount of $1,000 or an integral multiple thereof. The Indenture will
provide that, prior to complying with the provisions of this covenant, but in
any event within 90 days following a Change of Control, the Company will
either repay all outstanding Senior Debt or obtain the requisite consents, if
any, under all agreements governing outstanding Senior Debt to permit the
repurchase of Notes required by this covenant. The Company will publicly
announce the results of the Change of Control Offer on or as soon as
practicable after the Change of Control Payment Date.
The Change of Control provisions described above are applicable whether
or not any other provisions of the Indenture are applicable. Except as
described above with respect to a Change of Control, the Indenture does not
contain provisions that permit the Holders of the Notes to require that the
Company repurchase or redeem the Notes in the event of a takeover,
recapitalization or similar transaction.
The New Credit Agreement will prohibit the Company from purchasing any
Notes prior to its maturity, and will also provide that certain change of
control events with respect to the Company would constitute a default
thereunder. Any future credit agreements or other agreements relating to
Senior Debt to which the Company becomes a party may contain similar
restrictions and provisions. In the event a Change of Control occurs at a time
when the Company is prohibited from purchasing Notes, the Company could seek
the consent of its lenders to the purchase of Notes or could attempt to
refinance the borrowings that contain such prohibition. If the Company does
not obtain such a consent or repay such borrowings, the Company will remain
prohibited from purchasing Notes. In such case, the Company's failure to
purchase tendered Notes would constitute an Event of Default under the
Indenture which would, in turn, constitute a default under the New Credit
Agreement. In such circumstances, the subordination provisions in the
Indenture would likely restrict payments to the Holders of Notes. See "Risk
Factors--Change of Control."
The Company is not required to make a Change of Control Offer upon a
Change of Control if a third party makes the Change of Control Offer in the
manner, at the times and otherwise in compliance with the requirements set
forth in the Indenture applicable to a Change of Control Offer made by the
Company and purchases all Notes validly tendered and not withdrawn under such
Change of Control Offer.
"Change of Control" means the occurrence of any of the following: (i)
the sale, lease, transfer, conveyance or other disposition (other than by way
of merger or consolidation), in one or a series of related transactions, of
all or substantially all of the assets of the Company and its Subsidiaries
taken as a whole to any "person" (as such term is used in Section 13(d)(3) of
the Exchange Act) other than the Principal or his Related Parties (as defined
below), (ii) the adoption of a plan relating to the liquidation or dissolution
of the Company, (iii) the consummation of any transaction (including, without
limitation, any merger or consolidation) the result of which is that any
"person" (as defined above), other than the Principal and his Related Parties,
becomes the "beneficial owner" (as such term is defined in Rule 13d-3 and Rule
13d-5 under the Exchange Act, except that a person shall be deemed to have
"beneficial ownership" of all securities that such person has the right to
acquire, whether such right is exercisable immediately or only after the
passage of time, upon the happening of an event or otherwise), directly or
indirectly, of Voting Stock of the Company having more than 35% of the
combined voting power of all classes of Voting Stock of the Company then
outstanding, or (iv) the first day on which a majority of the members of the
Board of Directors of the Company are not Continuing Directors.
The definition of Change of Control includes a phrase relating to the
sale, lease, transfer, conveyance or other disposition of "all or
substantially all" of the assets of the Company and its Subsidiaries taken as
a whole. Although there is a developing body of case law interpreting the
phrase "substantially all," there is no precise established definition of the
phrase under applicable law. Accordingly, the ability of a Holder of Notes to
require the Company to repurchase such Notes as a result of a sale, lease,
transfer, conveyance or other disposition of less than all of the assets of
the Company and its Subsidiaries taken as a whole to another Person or group
may be uncertain.
"Continuing Directors" means, as of any date of determination, any
member of the Board of Directors of the Company who (i) was a member of such
Board of Directors on the date of the Indenture or (ii) was nominated for
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election or elected to such Board of Directors with the approval of a majority
of the Continuing Directors who were members of such Board at the time of such
nomination or election.
"Principal" means Robert F.X. Sillerman.
"Related Party" with respect to the Principal means (A) any spouse or
immediate family member (in the case of an individual) of the Principal or (B)
any trust, corporation, partnership or other entity, the beneficiaries,
stockholders, partners, owners or Persons beneficially holding an 80% or more
controlling interest of which consist of the Principal and/or such other
Persons referred to in the immediately preceding clause (A).
ASSET SALES
The Indenture provides that the Company will not, and will not permit
any of its Subsidiaries to, engage in any Asset Sale unless (i) the Company
(or the Subsidiary, as the case may be) receives consideration at the time of
such Asset Sale at least equal to the Fair Market Value (evidenced by a
resolution of the Board of Directors set forth in an Officers' Certificate
delivered to the Trustee) of the assets or Equity Interests issued or sold or
otherwise disposed of and (ii) at least 75% of the consideration therefor
received by the Company or such Subsidiary is in the form of cash; provided
that the amount of (x) any liabilities (as shown on the Company's or such
Subsidiary's most recent balance sheet), of the Company or any Subsidiary
(other than contingent liabilities and liabilities that are by their terms
subordinated to the Notes or any guarantee thereof) that are assumed by the
transferee of any such assets pursuant to a customary novation agreement that
releases the Company or such Subsidiary from further liability and (y) any
notes or other obligations received by the Company or any such Subsidiary from
such transferee that are immediately converted by the Company or such
Subsidiary into cash (to the extent of the cash received), shall be deemed to
be cash for purposes of this provision.
Within 360 days after the receipt of any Net Proceeds from an Asset
Sale, the Company may apply such Net Proceeds, at its option, (a) to
permanently reduce Senior Debt (and to correspondingly reduce commitments with
respect thereto, in the case of Senior Debt that is revolving debt), or (b) to
the acquisition of a controlling interest in another business, the making of a
capital expenditure or the acquisition of other long-term assets, in each
case, in the Broadcast Business. Pending the final application of any such Net
Proceeds, the Company may temporarily reduce Senior Debt or otherwise invest
such Net Proceeds in any manner that is not prohibited by the Indenture. Any
Net Proceeds from Asset Sales that are not applied or invested as provided in
the first sentence of this paragraph will be deemed to constitute "Excess
Proceeds." When the aggregate amount of Excess Proceeds exceeds $10.0 million,
the Company will be required to make an offer to all Holders of Notes and the
holders of Pari Passu Debt, to the extent required by the terms thereof (an
"Asset Sale Offer"), to purchase the maximum principal amount of Notes and any
such Pari Passu Debt that may be purchased out of the Excess Proceeds, at an
offer price in cash in an amount equal to 100% of the principal amount thereof
plus accrued and unpaid interest and Liquidated Damages, if any, thereon to
the date of purchase, in accordance with the procedures set forth in the
Indenture or the agreements governing Pari Passu Debt, as applicable;
provided, however, that the Company may only purchase Pari Passu Debt in an
Asset Sale Offer that was issued pursuant to an indenture having a provision
substantially similar to the Asset Sale Offer provision contained in the
Indenture. To the extent that the aggregate amount of Notes and Pari Passu
Debt tendered pursuant to an Asset Sale Offer is less than the Excess
Proceeds, the Company may use any remaining Excess Proceeds for general
corporate purposes. If the aggregate principal amount of Notes and Pari Passu
Debt surrendered exceeds the amount of Excess Proceeds, the Trustee shall
select the Notes and Pari Passu Debt to be purchased on a pro rata basis,
based upon the principal amount thereof surrendered in such Asset Sale Offer.
Upon completion of such offer to purchase, the amount of Excess Proceeds shall
be reset at zero. Notwithstanding the foregoing, in the event that a
Disposition or the exercise of the MMR Warrants occurs at a time when any
Disposition Debt is outstanding, then all of the Net Proceeds of such
Disposition or exercise of the MMR Warrants will be required to be applied to
redeem, substantially concurrently with such Disposition or exercise of the
MMR Warrants, such Disposition Debt.
Notwithstanding the immediately preceding paragraph, the Company and its
Subsidiaries are permitted to consummate an Asset Sale without complying with
such paragraph if (i) the Company or the applicable Subsidiary, as
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the case may be, receives consideration at the time of such Asset Sale at
least equal to the fair market value of the assets or other property sold,
issued or otherwise dispose of (as evidenced by a resolution of the Company's
Board of Directors set forth in an Officers' Certificate delivered to the
Trustee) and (ii) at least 75% of the consideration for such Asset Sale
constitutes assets or other property of a kind usable by the Company and its
Subsidiaries in the business of the Company and its Subsidiaries as conducted
by the Company and its Subsidiaries on the date of the Indenture; provided
that any consideration not constituting assets or property of a kind usable by
the Company and its Subsidiaries in the business conducted by them on the date
of such Asset Sale received by the Company or any of its Subsidiaries in
connection with any Asset Sale permitted to be consummated under this
paragraph shall constitute Net Proceeds subject to the provisions of the two
succeeding paragraphs.
CERTAIN COVENANTS
RESTRICTED PAYMENTS
The Indenture provides that the Company will not, and will not permit
any of its Subsidiaries to, directly or indirectly: (i) declare or pay any
dividend or make any other payment or distribution on account of the Company's
Equity Interests (including, without limitation, any payment in connection
with any merger or consolidation involving the Company) or to the direct or
indirect holders of the Company's Equity Interests in their capacity as such
(other than dividends or distributions payable in Capital Stock (other than
Disqualified Stock) of the Company); (ii) purchase, redeem or otherwise
acquire or retire for value any Equity Interests of the Company or any direct
or indirect parent of the Company; (iii) make any principal payment on, or
purchase, redeem, defease or otherwise acquire or retire for value any
Indebtedness that is subordinated to the Notes, except at final maturity; or
(iv) make any Restricted Investment (all such payments and other actions set
forth in clauses (i) through (iv) above being collectively referred to as
"Restricted Payments"), unless, at the time of and after giving effect to such
Restricted Payment:
(a) no Default or Event of Default shall have occurred and be
continuing or would occur as a consequence thereof; and
(b) the Company would, at the time of such Restricted Payment and
after giving pro forma effect thereto as if such Restricted Payment had
been made at the beginning of the applicable four-quarter period, have
been permitted to incur at least $1.00 of additional Indebtedness (other
than Permitted Debt) pursuant to the Debt to Cash Flow Ratio test set
forth in the first paragraph of the covenant described below under the
caption "--Certain Covenants--Incurrence of Indebtedness and Issuance of
Preferred Stock;" and
(c) such Restricted Payment, together with the aggregate amount of
all other Restricted Payments declared or made after the date of the
Indenture (other than Restricted Payments permitted by clauses (2), (4),
(6) or (11) of the following paragraph) shall not exceed, at the date of
determination, the sum of (1) an amount equal to the Company's
Consolidated Cash Flow from the date of the Indenture to the end of the
Company's most recently ended full fiscal quarter for which internal
financial statements are available, taken as a single accounting period,
less the product of 1.4 times the Company's Consolidated Interest
Expense from the date of the Indenture to the end of the Company's most
recently ended full fiscal quarter, for which internal financial
statements are available, taken as a single accounting period, plus (2)
an amount equal to the net cash proceeds received by the Company from
the issue or sale after the date of the Indenture of Equity Interests
(other than (i) in the Preferred Stock Offering, (ii) sales of
Disqualified Stock and (iii) Equity Interests sold to any of the
Company's Subsidiaries) or of debt securities or Disqualified Stock
(other than the Series D Preferred Stock) of the Company that have been
converted into such Equity Interests plus (3) to the extent that any
Restricted Investment that was made after the date of the Indenture is
sold for cash or otherwise liquidated or repaid for cash, the lesser of
(A) the cash return of capital with respect to such Restricted
Investment (less the cost of disposition, if any) and (B) the initial
amount of such Restricted Investment.
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If no Default or Event of Default shall have occurred and be continuing
immediately as a result thereof, the foregoing provisions will not prohibit:
(1) the payment of any dividend within 60 days after the date of declaration
thereof, if at said date of declaration such payment would have complied with
the provisions of the Indenture; (2) the redemption, repurchase, retirement or
other acquisition of any Equity Interests of the Company in exchange for, or
out of the proceeds of, the substantially concurrent sale (other than to a
Subsidiary of the Company) of other Equity Interests of the Company (other
than any Disqualified Stock); provided that the amount of any such net cash
proceeds that are utilized for any such redemption, repurchase, retirement or
other acquisition shall be excluded from clause (c)(2) of the preceding
paragraph; (3) cash payments made in respect of fractional shares of Capital
Stock not to exceed $100,000 in the aggregate in any fiscal year; (4) the
issuance of the Exchange Notes in exchange for the Series D Preferred Stock;
provided that such issuance is permitted by the covenant described below under
the caption "--Incurrence of Indebtedness and Issuance of Preferred Stock;"
(5) in the event that the Company elects to issue the Exchange Notes in
exchange for the Series D Preferred Stock, cash payments made in lieu of the
issuance of Exchange Notes having a face amount less than $50 and any cash
payments representing accrued and unpaid liquidated damages and dividends in
respect thereof, not to exceed $100,000 in the aggregate in any fiscal year;
(6) the defeasance, redemption or repurchase of subordinated Indebtedness with
the net cash proceeds from an incurrence of Permitted Refinancing Indebtedness
or the substantially concurrent sale (other than to a Subsidiary of the
Company) of Equity Interests of the Company (other than Disqualified Stock);
provided that the amount of any such net cash proceeds that are utilized for
any such redemption, repurchase, retirement or other acquisition shall be
excluded from clause (c)(2) of the preceding paragraph; (7) the payment of
dividends on the Series D Preferred Stock in accordance with the terms thereof
as in effect on the date of the Indenture; (8) the redemption by the Company
of its Series B Preferred Stock in accordance with the terms thereof as in
effect on the date of the Indenture; provided that payments made by the
Company to redeem the Series B Notes shall not exceed $1.0 million in any
fiscal year or $2.0 million in the aggregate since the date of the Indenture;
(9) the redemption by the Company of its Series C Preferred Stock in
accordance with the terms thereof as in effect on the date of the Indenture in
connection with the Dallas Disposition; (10) payments made by the Company to
SCMC for facilities maintenance and other services and reimbursements pursuant
to the Shared Facilities Agreement in accordance with the terms thereof as in
effect on the date of the Indenture; and (11) payments by the Company pursuant
to the Management Termination Agreements in accordance with the terms thereof
as in effect on the date of the Indenture.
The amount of all Restricted Payments (other than cash) shall be the
Fair Market Value (evidenced by a resolution of the Board of Directors set
forth in an Officers' Certificate delivered to the Trustee) on the date of the
Restricted Payment of the asset(s) or securities proposed to be transferred by
the Company or such Subsidiary, as the case may be, pursuant to the Restricted
Payment. Not later than the date of making any Restricted Payment, the Company
shall deliver to the Trustee an Officers' Certificate stating that such
Restricted Payment is permitted and setting forth the basis upon which the
calculations required by this covenant were computed, which calculations may
be based upon the Company's latest available financial statements.
INCURRENCE OF INDEBTEDNESS AND ISSUANCE OF PREFERRED STOCK
The Indenture provides that the Company will not, and will not permit
any of its Subsidiaries to, directly or indirectly, create, incur, issue,
assume, guarantee or otherwise become directly or indirectly liable,
contingently or otherwise, with respect to (collectively, "incur") any
Indebtedness (including Acquired Debt) and that the Company will not issue any
Disqualified Stock and will not permit any of its Subsidiaries to issue any
shares of Preferred Stock; provided, however, that (A) the Company may incur
Indebtedness (including Acquired Debt) or issue shares of Disqualified Stock
and (B) a Subsidiary Guarantor may issue shares of Preferred Stock (other than
shares of Preferred Stock that are convertible into or exchangeable for any
other class of Capital Stock) if, in either case, the Company's Debt to Cash
Flow Ratio at the time of incurrence of such Indebtedness or the issuance of
such Disqualified Stock or Preferred Stock, as the case may be, after giving
pro forma effect to such incurrence or issuance as of such date and to the use
of proceeds therefrom as if the same had occurred at the beginning of the most
recently ended four full fiscal quarter period of the Company for which
internal financial statements are available, would have been no greater than
7.0 to 1.
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The foregoing provisions will not apply to the incurrence of any of the
following Indebtedness (collectively, "Permitted Debt"):
(i) the incurrence by the Company and its Subsidiaries of Indebtedness
pursuant to one or more Bank Facilities, so long as the aggregate principal
amount of all Indebtedness outstanding under all Bank Facilities does not, at
the time of incurrence, exceed an amount equal to the sum of (A) $150.0
million less the aggregate amount of all Net Proceeds of Asset Sales applied
to reduce Senior Debt pursuant to clause (a) of the second paragraph of the
covenant described under the caption "--Repurchase at the Option of
Holders--Asset Sales" (other than repayments of Disposition Debt) plus (B) the
Permitted Disposition Amount;
(ii) the incurrence by the Company and its Subsidiaries of the
Existing Indebtedness;
(iii) the incurrence by the Company and its Subsidiaries of the Existing
MMR Indebtedness; provided that, substantially concurrently with such
incurrence, the Existing MMR Indebtedness is repaid by the Company with the
proceeds of Indebtedness incurred under Bank Facilities;
(iv) the issuance of the Series D Preferred Stock;
(v) the issuance of Disqualified Stock by the Company that by its terms
would not require or permit any payment of dividends or other distributions
that would violate the covenant described above under the caption
"--Restricted Payments;"
(vi) the incurrence by the Company or any of its Subsidiaries of
Indebtedness represented by the Notes and any Subsidiary Guarantees thereof;
(vii) the incurrence by the Company or any of its Subsidiaries of
Indebtedness in connection with the acquisition of assets or a new Subsidiary;
provided that such Indebtedness was incurred by the prior owner of such assets
or such Subsidiary prior to such acquisition by the Company or one of its
Subsidiaries and was not incurred in connection with, or in contemplation of,
such acquisition by the Company or one of its Subsidiaries and provided
further that, after giving pro forma effect to such incurrence of Indebtedness
as of such date and to the use of proceeds therefrom as if the same had
occurred at the beginning of the most recently ended four full fiscal quarter
period for which internal financial statements are available, the Company's
Debt to Cash Flow Ratio would have been no greater than 7.0 to 1;
(viii) the incurrence by the Company or any of its Subsidiaries of
Permitted Refinancing Debt in exchange for, or the net proceeds of which are
used to extend, refinance, renew, replace, defease or refund, Indebtedness
that was permitted by the Indenture to be incurred;
(ix) the incurrence by the Company or any of its Subsidiaries of
intercompany Indebtedness between or among the Company and any of its
Subsidiaries; provided, however, that (i) if the Company is the obligor on
such Indebtedness, such Indebtedness is expressly subordinate to the payment
in full of all Obligations with respect to the Notes and (ii)(A) any
subsequent issuance or transfer of Equity Interests that results in any such
Indebtedness being held by a Person other than the Company or a Subsidiary and
(B) any sale or other transfer of any such Indebtedness to a Person that is
not either the Company or a Subsidiary shall be deemed, in each case, to
constitute an incurrence of such Indebtedness by the Company or such
Subsidiary, as the case may be;
(x) the incurrence by the Company or any of its Subsidiaries of Hedging
Obligations that are incurred for the purpose of fixing or hedging interest
rate risk with respect to any floating rate Indebtedness that is permitted by
the terms of this Indenture to be outstanding; and
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(xi) the incurrence by the Company and any of its Subsidiaries of
Indebtedness (in addition to Indebtedness permitted by any other clause of
this paragraph) in an aggregate principal amount (or accreted value, as
applicable) at any time outstanding not to exceed $10.0 million.
LIENS
The Indenture provides that the Company will not, and will not permit
any of its Subsidiaries to, directly or indirectly, create, incur, assume or
suffer to exist any Lien securing Indebtedness (other than Senior Debt) on any
asset now owned or hereafter acquired, or on any income or profits therefrom,
except Permitted Liens.
DIVIDEND AND OTHER PAYMENT RESTRICTIONS AFFECTING SUBSIDIARIES
The Indenture provides that the Company will not, and will not permit
any of its Subsidiaries to, directly or indirectly, create or otherwise cause
or suffer to exist or become effective any encumbrance or restriction on the
ability of any Subsidiary to (i)(x) pay dividends or make any other
distributions to the Company or any of its Subsidiaries (1) on its Capital
Stock or (2) with respect to any other interest or participation in, or
measured by, its profits, or (y) pay any indebtedness owed to the Company or
any of its Subsidiaries, (ii) make loans or advances to the Company or any of
its Subsidiaries or (iii) transfer any of its properties or assets to the
Company or any of its Subsidiaries, except for such encumbrances or
restrictions existing under or by reason of (a) Existing Indebtedness as in
effect on the date of the Indenture, (b) the New Credit Agreement, in a form
substantially consistent with the terms of the Commitment Letter as in effect
as of the date of the Indenture, and any amendments, modifications,
restatements, renewals, increases, supplements, refundings, replacements or
refinancings thereof, and any other agreement governing or relating to Senior
Debt, provided that all such amendments, modifications, restatements,
renewals, increases, supplements, refundings, replacement or refinancings and
other agreements are no more restrictive with respect to such dividend and
other payment restrictions than those contained in the New Credit Agreement,
in a form substantially consistent with the terms of the Commitment Letter as
in effect on the date of the Indenture, (c) the Indenture, the Notes and the
Subsidiary Guarantees, (d) applicable law, (e) any instrument governing
Indebtedness or Capital Stock of a Person acquired by the Company or any of
its Subsidiaries as in effect at the time of such acquisition (except to the
extent such Indebtedness was incurred in connection with or in contemplation
of such acquisition), which encumbrance or restriction is not applicable to
any Person, or the properties or assets of any Person, other than the Person,
or the property or assets of the Person, so acquired, provided that, in the
case of Indebtedness, such Indebtedness was permitted by the terms of the
Indenture to be incurred, (f) by reason of customary non-assignment provisions
in leases entered into in the ordinary course of business and consistent with
past practices, or (g) Permitted Refinancing Debt, provided that the
restrictions contained in the agreements governing such Permitted Refinancing
Debt are no more restrictive than those contained in the agreements governing
the Indebtedness being refinanced.
MERGER, CONSOLIDATION OR SALE OF ASSETS
The Indenture provides that the Company may not consolidate or merge
with or into (whether or not the Company is the surviving corporation), or
sell, assign, transfer, lease, convey or otherwise dispose of all or
substantially all of its properties or assets in one or more related
transactions, to another corporation, Person or entity unless (i) the Company
is the surviving corporation or the entity or the Person formed by or
surviving any such consolidation or merger (if other than the Company) or to
which such sale, assignment, transfer, lease, conveyance or other disposition
shall have been made is a corporation organized or existing under the laws of
the United States, any state thereof or the District of Columbia; (ii) the
entity or Person formed by or surviving any such consolidation or merger (if
other than the Company) or the entity or Person to which such sale,
assignment, transfer, lease, conveyance or other disposition shall have been
made assumes all the obligations of the Company under the Notes and the
Indenture pursuant to a supplemental indenture in a form reasonably satisfactory
to the Trustee; (iii) immediately after such transaction no Default or Event of
Default exists; (iv) such transaction will not result in the loss or suspension
or material impairment of any Material Broadcast License; and (v) except in the
case of a merger of the Company with or into a Wholly Owned Subsidiary of the
Company, the Company or the entity or Person formed by or surviving any such
consolidation or merger (if other than the Company), or to which such sale,
assignment, transfer, lease, conveyance or other disposition
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shall have been made (A) will have Consolidated Net Worth immediately after the
transaction equal to or greater than the Consolidated Net Worth of the Company
immediately preceding the transaction and (B) will, at the time of such
transaction and after giving pro forma effect thereto as if such transaction had
occurred at the beginning of the applicable four-quarter period, be permitted to
incur at least $1.00 of additional Indebtedness pursuant to the Debt to Cash
Flow Ratio test set forth in the first paragraph of the covenant described above
under the caption "--Certain Covenants--Incurrence of Indebtedness and Issuance
of Preferred Stock."
TRANSACTIONS WITH AFFILIATES
The Indenture provides that the Company will not, and will not permit
any of its Subsidiaries to, make any payment to, or sell, lease, transfer or
otherwise dispose of any of its properties or assets to, or purchase any
property or assets from, or enter into or make or amend any contract,
agreement, understanding, loan, advance or guarantee with, or for the benefit
of, any Affiliate (each of the foregoing, an "Affiliate Transaction"), unless
(i) such Affiliate Transaction is on terms that are no less favorable to the
Company or the relevant Subsidiary than those that would have been obtained in
a comparable transaction by the Company or such Subsidiary with an unrelated
Person and (ii) the Company delivers to the Trustee (a) with respect to any
Affiliate Transaction or series of related Affiliate Transactions involving
aggregate consideration in excess of $1.0 million, a resolution of the Board
of Directors set forth in an Officers' Certificate certifying that such
Affiliate Transaction complies with clause (i) above and that such Affiliate
Transaction has been approved by a majority of the members of the Board of
Directors that are disinterested as to such Affiliate Transaction and (b) with
respect to any Affiliate Transaction or series of related Affiliate
Transactions involving aggregate consideration in excess of $5.0 million, an
opinion as to the fairness to the Holders of such Affiliate Transaction from a
financial point of view issued by an accounting, appraisal or investment
banking firm of national standing; provided that (1) transactions between or
among the Company and/or its Wholly Owned Subsidiaries, (2) the MMR
Acquisition and transactions and agreements specifically contemplated by the
Agreement and Plan of Merger among the Company, SFX Merger Company and MMR as
in effect on the date of the Indenture (3) the redemption or repurchase of the
Existing MMR Indebtedness, (4) transactions and agreements specifically
contemplated by the Termination and Assignment Agreement between the Company
and SCMC as in effect on the date of the Indenture, (5) payments required by
the terms of the joint lease among the Company, SCMC and the landlord
thereunder for the Company's corporate headquarters located at 150 East 58th
Street, New York, New York and any agreements directly related thereto, in
each case, as the same are in effect on the date of the Indenture and (6)
Restricted Payments and Permitted Investments that are permitted by the
provisions of the Indenture described above under the caption "--Certain
Covenants--Restricted Payments," in each case, shall not be deemed to be
Affiliate Transactions.
ADDITIONAL SUBSIDIARY GUARANTEES
The Indenture provides that if the Company or any of its Subsidiaries
shall acquire or create another Subsidiary after the date of the Indenture,
then such newly acquired or created Subsidiary shall execute a Subsidiary
Guarantee and deliver an opinion of counsel, in accordance with the terms of
the Indenture.
NO SENIOR SUBORDINATED DEBT
The Indenture provides that (i) the Company will not incur, create,
issue, assume, guarantee or otherwise become liable for any Indebtedness that
is subordinate or junior in right of payment to any Senior Debt and senior in
any respect in right of payment to the Notes, and (ii) no Subsidiary Guarantor
will incur, create, issue, assume, guarantee or otherwise become liable for
any Indebtedness that is subordinate or junior in right of payment to its
Senior Debt and senior in any respect in right of payment to its Subsidiary
Guarantee.
SALE AND LEASEBACK TRANSACTIONS
The Indenture provides that the Company will not, and will not permit
any of its Subsidiaries to, enter into any sale and leaseback transaction;
provided that the Company may enter into a sale and leaseback transaction if
(i) the Company could have (a) incurred Indebtedness (other than Permitted
Debt) in an amount equal to the Attributable Debt
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relating to such sale and leaseback transaction pursuant to the Debt to Cash
Flow Ratio test set forth in the first paragraph of the covenant described
above under the caption "--Certain Covenants--Incurrence of Additional
Indebtedness and Issuance of Preferred Stock" and (b) incurred a Lien to
secure such Indebtedness pursuant to the covenant described above under the
caption "--Certain Covenants--Liens," (ii) the gross cash proceeds of such
sale and leaseback transaction are at least equal to the Fair Market Value (as
determined in good faith by the Board of Directors and set forth in an
Officers' Certificate delivered to the Trustee) of the property that is the
subject of such sale and leaseback transaction and (iii) the transfer of
assets in such sale and leaseback transaction is permitted by, and the Company
applies the proceeds of such transaction in compliance with, the covenant
described above under the caption "--Repurchase at the Option of
Holders--Asset Sales."
LIMITATION ON ISSUANCES AND SALES OF CAPITAL STOCK OF WHOLLY OWNED SUBSIDIARIES
The Indenture provides that the Company (i) will not, and will not
permit any Wholly Owned Subsidiary of the Company to, transfer, convey, sell,
lease or otherwise dispose of any Capital Stock of any Wholly Owned Subsidiary
of the Company to any Person (other than the Company or a Wholly Owned
Subsidiary of the Company), unless (a) such transfer, conveyance, sale, lease
or other disposition is of all the Capital Stock of such Wholly Owned
Subsidiary and (b) the cash Net Proceeds from such transfer, conveyance, sale,
lease or other disposition are applied in accordance with the covenant
described above under the caption "--Repurchase at the Option of
Holders--Asset Sales," and (ii) will not permit any Wholly Owned Subsidiary of
the Company to issue any of its Equity Interests (other than, if necessary,
shares of its Capital Stock constituting directors' qualifying shares) to any
Person other than to the Company or a Wholly Owned Subsidiary of the Company.
BUSINESS ACTIVITIES
The Company will not, and will not permit any Subsidiary to, engage in
any business other than (i) the Broadcast Business and such business
activities as are incidental or related thereto, (ii) such other businesses as
the Company or its Subsidiaries are engaged in on the date of the Indenture.
PAYMENTS FOR CONSENT
The Indenture provides that neither the Company nor any of its
Subsidiaries will, directly or indirectly, pay or cause to be paid any
consideration, whether by way of interest, fee or otherwise, to any Holder of
any Notes for or as an inducement to any consent, waiver or amendment of any
of the terms or provisions of the Indenture or the Notes unless such
consideration is offered to be paid and is paid to all Holders of the Notes
that consent, waive or agree to amend in the time frame set forth in the
solicitation documents relating to such consent, waiver or agreement.
REPORTS
The Indenture provides that, whether or not required by the rules and
regulations of the Securities and Exchange Commission (the "Commission"), so
long as any Notes are outstanding, the Company will furnish to the Trustee and
to the Holders of Notes (i) all quarterly and annual financial information
that would be required to be contained in a filing with the Commission on
Forms 10-Q and 10-K if the Company were required to file such Forms, including
a "Management's Discussion and Analysis of Financial Condition and Results of
Operations" and, with respect to the annual information only, a report thereon
by the Company's certified independent accountants and (ii) all current
reports that would be required to be filed with the Commission on Form 8-K if
the Company were required to file such reports. In addition, whether or not
required by the rules and regulations of the Commission, the Company will file
a copy of all such information and reports with the Commission for public
availability (unless the Commission will not accept such a filing) and make
such information available to securities analysts and prospective investors
upon request. In addition, the Company has agreed that, for so long as any
Notes remain outstanding, it will furnish to the Holders, and to securities
analysts and prospective investors upon their request, the information
required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act.
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EVENTS OF DEFAULT AND REMEDIES
The Indenture provides that each of the following constitutes an Event
of Default: (i) default for 30 days in the payment when due of interest on, or
Liquidated Damages, if any, with respect to, the Notes (whether or not
prohibited by the subordination provisions of the Indenture); (ii) default in
payment when due of the principal of or premium, if any, on the Notes (whether
or not prohibited by the subordination provisions of the Indenture); (iii)
failure by the Company to comply with the provisions described under the
captions "--Repurchase at the Option of Holders--Change of Control," "--
Repurchase at the Option of Holders--Asset Sales," "--Certain
Covenants--Restricted Payments," "--Certain Covenants--Incurrence of
Indebtedness and Issuance of Preferred Stock" or "--Certain Covenants--Merger,
Consolidation or Sale of Assets"; (iv) failure by the Company for 60 days
after notice to comply with any of its other agreements in the Indenture or
the Notes; (v) default under any mortgage, indenture or instrument under which
there may be issued or by which there may be secured or evidenced any
Indebtedness for money borrowed by the Company or any of its Subsidiaries (or
the payment of which is guaranteed by the Company or any of its Subsidiaries)
whether such Indebtedness or guarantee now exists, or is created after the
date of the Indenture, which default (a) is caused by a failure to pay
principal of or premium, if any, or interest on such Indebtedness prior to the
expiration of the grace period provided in such Indebtedness on the date of
such default (a "Payment Default") or (b) results in the acceleration of such
Indebtedness prior to its express maturity and, in each case, the principal
amount of any such Indebtedness, together with the principal amount of any
other such Indebtedness under which there has been a Payment Default or the
maturity of which has been so accelerated, aggregates $10.0 million or more;
(vi) failure by the Company or any of its Subsidiaries to pay final judgments
aggregating in excess of $10.0 million, which judgments are not paid,
discharged or stayed for a period of 60 days; (vii) any Subsidiary Guarantee
shall be held in any judicial proceeding to be unenforceable or invalid or
shall cease for any reason to be in full force and effect or any Subsidiary
Guarantor, or any Person acting on behalf of any Subsidiary Guarantor, shall
deny or disaffirm its obligations under its Subsidiary Guarantee; and (viii)
certain events of bankruptcy or insolvency with respect to the Company, any of
its Significant Subsidiaries or any group of Subsidiaries that, taken
together, would constitute a Significant Subsidiary.
If any Event of Default occurs and is continuing, the Trustee or the
Holders of at least 25% in principal amount of the then outstanding Notes may
declare all the Notes to be due and payable immediately. Notwithstanding the
foregoing, in the case of an Event of Default arising from certain events of
bankruptcy or insolvency, with respect to the Company, any Significant
Subsidiary or any group of Subsidiaries that, taken together, would constitute
a Significant Subsidiary, all outstanding Notes will become due and payable
without further action or notice. Holders of the Notes may not enforce the
Indenture or the Notes except as provided in the Indenture. Subject to certain
limitations, Holders of a majority in principal amount of the then outstanding
Notes may direct the Trustee in its exercise of any trust or power. The
Trustee may withhold from Holders of the Notes notice of any continuing
Default or Event of Default (except a Default or Event of Default relating to
the payment of principal or interest) if it determines that withholding notice
is in their interest.
In the case of any Event of Default occurring by reason of any willful
action (or inaction) taken (or not taken) by or on behalf of the Company with
the intention of avoiding payment of the premium that the Company would have
had to pay if the Company then had elected to redeem the Notes pursuant to the
optional redemption provisions of the Indenture, an equivalent premium shall
also become and be immediately due and payable to the extent permitted by law
upon the acceleration of the Notes. If an Event of Default occurs prior to May
15, 2001 by reason of any willful action (or inaction) taken (or not taken) by
or on behalf of the Company with the intention of avoiding the prohibition on
redemption of the Notes prior to May 15, 2001, then the premium specified in
the Indenture shall also become immediately due and payable to the extent
permitted by law upon the acceleration of the Notes.
The Holders of a majority in aggregate principal amount of the Notes
then outstanding by notice to the Trustee may on behalf of the Holders of all
of the Notes waive any existing Default or Event of Default and its
consequences under the Indenture except a continuing Default or Event of
Default in the payment of interest on, or the principal of, the Notes.
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The Company is required to deliver to the Trustee annually a statement
regarding compliance with the Indenture, and the Company is required upon
becoming aware of any Default or Event of Default, to deliver to the Trustee a
statement specifying such Default or Event of Default.
NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS, EMPLOYEES AND STOCKHOLDERS
No director, officer, employee, incorporator or stockholder of the
Company or the Subsidiary Guarantors, as such, shall have any liability for
any obligations of the Company or the Subsidiary Guarantors, as applicable,
under the Notes, the Subsidiary Guarantees or the Indenture, as applicable, or
for any claim based on, in respect of, or by reason of, such obligations or
their creation. Each Holder of Notes by accepting a Note waives and releases
all such liability. The waiver and release are part of the consideration for
issuance of the Notes. Such waiver may not be effective to waive liabilities
under the federal securities laws and it is the view of the Commission that
such a waiver is against public policy.
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
The Company may, at its option and at any time, elect to have all of its
obligations discharged with respect to the outstanding Notes ("Legal
Defeasance") except for (i) the rights of Holders of outstanding Notes to
receive payments in respect of the principal of, premium, if any, interest and
Liquidated Damages, if any, on such Notes when such payments are due from the
trust referred to below, (ii) the Company's obligations with respect to the
Notes concerning issuing temporary Notes, registration of Notes, mutilated,
destroyed, lost or stolen Notes and the maintenance of an office or agency for
payment and money for security payments held in trust, (iii) the rights,
powers, trusts, duties and immunities of the Trustee, and the Company's
obligations in connection therewith and (iv) the Legal Defeasance provisions
of the Indenture. In addition, the Company may, at its option and at any time,
elect to have the obligations of the Company released with respect to certain
covenants that are described in the Indenture ("Covenant Defeasance") and
thereafter any omission to comply with such obligations shall not constitute a
Default or Event of Default with respect to the Notes. In the event Covenant
Defeasance occurs, certain events (not including non-payment, bankruptcy,
receivership, rehabilitation and insolvency events) described under "Events of
Default" will no longer constitute an Event of Default with respect to the
Notes.
In order to exercise either Legal Defeasance or Covenant Defeasance, (i)
the Company must irrevocably deposit with the Trustee, in trust, for the
benefit of the Holders of the Notes, cash in U.S. Dollars, non-callable
Government Securities, or a combination thereof, in such amounts as will be
sufficient, in the opinion of a nationally recognized firm of independent
public accountants, to pay the principal of, premium, if any, interest and
Liquidated Damages, if any, on the outstanding Notes on the stated maturity or
on the applicable redemption date, as the case may be, and the Company must
specify whether the Notes are being defeased to maturity or to a particular
redemption date; (ii) in the case of Legal Defeasance, the Company shall have
delivered to the Trustee an opinion of counsel in the United States reasonably
acceptable to the Trustee confirming that (A) the Company has received from,
or there has been published by, the Internal Revenue Service a ruling or (B)
since the date of the Indenture, there has been a change in the applicable
federal income tax law, in either case to the effect that, and based thereon
such opinion of counsel shall confirm that, the Holders of the outstanding
Notes will not recognize income, gain or loss for federal income tax purposes
as a result of such Legal Defeasance and will be subject to federal income tax
on the same amounts, in the same manner and at the same times as would have
been the case if such Legal Defeasance had not occurred; (iii) in the case of
Covenant Defeasance, the Company shall have delivered to the Trustee an
opinion of counsel in the United States reasonably acceptable to the Trustee
confirming that the Holders of the outstanding Notes will not recognize
income, gain or loss for federal income tax purposes as a result of such
Covenant Defeasance and will be subject to federal income tax on the same
amounts, in the same manner and at the same times as would have been the case
if such Covenant Defeasance had not occurred; (iv) no Default or Event of
Default shall have occurred and be continuing on the date of such deposit
(other than a Default or Event of Default resulting from the borrowing of
funds to be applied to such deposit) or insofar as Events of Default from
bankruptcy or insolvency events are concerned, at any time in the period
ending on the 91st day after the date of deposit (or greater period of time in
which any such deposit of trust funds may remain subject to bankruptcy or
insolvency laws insofar as those apply to the deposit by the Company); (v)
such Legal Defeasance or Covenant Defeasance will not result in a breach or
violation of, or constitute a default under any material agreement
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or instrument (other than the Indenture) to which the Company or any of its
Subsidiaries is a party or by which the Company or any of its Subsidiaries is
bound; (vi) the Company must have delivered to the Trustee an opinion of
counsel to the effect that, as of the date of such opinion, (A) the trust
funds will not be subject to rights of holders of Indebtedness other than the
Notes and (B) assuming no intervening bankruptcy of the Company between the
date of deposit and the 91st day following the deposit and assuming no Holder
of Notes is an insider of the Company, after the 91st day following the
deposit, the trust funds will not be subject to the effects of any applicable
bankruptcy, insolvency, reorganization or similar laws affecting creditors'
rights generally under any applicable United States or state law; (vii) the
Company must deliver to the Trustee an Officers' Certificate stating that the
deposit was not made by the Company with the intent of preferring the Holders
of Notes over the other creditors of the Company with the intent of defeating,
hindering, delaying or defrauding creditors of the Company or others; and
(viii) the Company must deliver to the Trustee an Officers' Certificate and an
opinion of counsel, each stating that all conditions precedent provided for
relating to the Legal Defeasance or the Covenant Defeasance have been complied
with.
TRANSFER AND EXCHANGE
A Holder may transfer or exchange Notes in accordance with the
Indenture. The Registrar and the Trustee may require a Holder, among other
things, to furnish appropriate endorsements and transfer documents and the
Company may require a Holder to pay any taxes and fees required by law or
permitted by the Indenture. The Company is not required to transfer or
exchange any Note selected for redemption. Also, the Company is not required
to transfer or exchange any Note for a period of 15 days before a selection of
Notes to be redeemed.
AMENDMENT, SUPPLEMENT AND WAIVER
Except as provided in the next two succeeding paragraphs, the Indenture
or the Notes may be amended or supplemented with the consent of the Holders of
at least a majority in principal amount of the Notes then outstanding
(including, without limitation, consents obtained in connection with a
purchase of, or tender offer or exchange offer for, Notes), and any existing
default or compliance with any provision of the Indenture or the Notes may be
waived with the consent of the Holders of a majority in principal amount of
the then outstanding Notes (including consents obtained in connection with a
purchase of, or tender offer or exchange offer for, Notes).
Without the consent of each Holder affected, an amendment or waiver may
not (with respect to any Notes held by a non-consenting Holder): (i) reduce
the principal amount of Notes whose Holders must consent to an amendment,
supplement or waiver, (ii) reduce the principal of or change the fixed
maturity of any Note or alter the provisions with respect to the redemption of
the Notes (other than provisions relating to the covenants described above
under the caption "--Repurchase at the Option of Holders"), (iii) reduce the
rate of or change the time for payment of interest on any Note, (iv) waive a
Default or Event of Default in the payment of principal of or premium, if any,
or interest or Liquidated Damages, if any, on the Notes (except a rescission
of acceleration of the Notes by the Holders of at least a majority in
aggregate principal amount of the Notes and a waiver of the payment default
that resulted from such acceleration), (v) make any Note payable in money
other than that stated in the Notes, (vi) make any change in the provisions of
the Indenture relating to waivers of past Defaults or the rights of Holders of
Notes to receive payments of principal of or premium, if any, or interest or
Liquidated Damages, if any, on the Notes, (vii) waive a redemption payment
with respect to any Note (other than a payment required by one of the
covenants described above under the caption "--Repurchase at the Option of
Holders") or (viii) make any change in the foregoing amendment and waiver
provisions. In addition, any amendment to (a) the provisions of Article 10 of
the Indenture (which relate to subordination) and (b) the covenants described
under the caption "--Repurchase at Option of Holders" including, in each case,
the related definitions will require the consent of the Holders of at least
75% in aggregate principal amount of the Notes then outstanding if such
amendment would adversely affect the rights of Holders of Notes.
Notwithstanding the foregoing, without the consent of any Holder of
Notes, the Company and the Trustee may amend or supplement the Indenture or
the Notes to cure any ambiguity, defect or inconsistency, to provide for
uncertificated Notes in addition to or in place of certificated Notes, to
provide for the assumption of the Company's obligations to Holders of Notes in
the case of a merger or consolidation, to make any change that would provide
any
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additional rights or benefits to the Holders of Notes or that does not
adversely affect the legal rights under the Indenture of any such Holder, or
to comply with requirements of the Commission in order to effect or maintain
the qualification of the Indenture under the Trust Indenture Act.
CONCERNING THE TRUSTEE
The Indenture contains certain limitations on the rights of the Trustee,
should it become a creditor of the Company, to obtain payment of claims in
certain cases, or to realize on certain property received in respect of any
such claim as security or otherwise. The Trustee is permitted to engage in
other transactions; however, if it acquires any conflicting interest it must
eliminate such conflict within 90 days, apply to the Commission for permission
to continue or resign.
The Holders of a majority in principal amount of the then outstanding
Notes have the right to direct the time, method and place of conducting any
proceeding for exercising any remedy available to the Trustee, subject to
certain exceptions. The Indenture provides that in case an Event of Default
shall occur (which shall not be cured), the Trustee is required, in the
exercise of its power, to use the degree of care of a prudent man in the
conduct of his own affairs. Subject to such provisions, the Trustee is under
no obligation to exercise any of its rights or powers under the Indenture at
the request of any Holder of Notes, unless such Holder shall have offered to
the Trustee security and indemnity satisfactory to it against any loss,
liability or expense.
BOOK-ENTRY, DELIVERY AND FORM
All of the Series A Notes were initially be issued in the form of one
Global Note (the "Series A Global Note"). The Series A Global Note was
deposited on May 31, 1996 with, or on behalf of, The Depository Trust Company
(the "Depositary") and registered in the name of Cede & Co., as nominee of the
Depositary (such nominee being referred to herein as the "Global Note
Holder"). Series B Notes which will be issued in exchange for the Series A
Notes will be issued in the form of one Global Note (the "Series B Global
Note") and deposited with, or on behalf of the depositary and registered in
the name of the Global Note Holder.
The Depositary is a limited-purpose trust company that was created to
hold securities for its participating organizations (collectively, the
"Participants" or the "Depositary's Participants") and to facilitate the
clearance and settlement of transactions in such securities between
Participants through electronic book-entry changes in accounts of its
Participants. The Depositary's Participants include securities brokers and
dealers (including the Initial Purchasers), banks and trust companies,
clearing corporations and certain other organizations. Access to the
Depositary's system is also available to other entities such as banks,
brokers, dealers and trust companies (collectively, the "Indirect
Participants" or the "Depositary's Indirect Participants") that clear through
or maintain a custodial relationship with a Participant, either directly or
indirectly. Persons who are not Participants may beneficially own securities
held by or on behalf of the Depositary only thorough the Depositary's
Participants or the Depositary's Indirect Participants.
The Company expects that pursuant to procedures established by the
Depositary (i) upon deposit of the Global Series B Note, the Depositary will
credit the accounts of Participants designated by the Exchange Agent with
portions of the principal amount of the Series B Global Note and (ii)
ownership of the Series B Notes evidenced by the Series B Global Note will be
shown on, and the transfer of ownership thereof will be effected only through,
records maintained by the Depositary (with respect to the interests of the
Depositary's Participants), the Depositary's Participants and the Depositary's
Indirect Participants. Prospective purchasers are advised that the laws of
some states require that certain persons take physical delivery in definitive
form of securities that they own. Consequently, the ability to transfer Series
B Notes evidenced by the Series B Global Note will be limited to such extent.
For certain other restrictions on the transferability of the Notes, see
"Notice to Investors."
So long as the Global Note Holder is the registered owner of any Notes,
the Global Note Holder will be considered the sole Holder under the Indenture
of any Notes evidenced by the Global Series A Note and the Global Series B
Note. Beneficial owners of Notes evidenced by the Global Series A Note and the
Global Series B Note will
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not be considered the owners or Holders thereof under the Indenture for any
purpose, including with respect to the giving of any directions, instructions
or approvals to the Trustee thereunder. Neither the Company nor the Trustee
has any responsibility or liability for any aspect of the records of the
Depositary or for maintaining, supervising or reviewing any records of the
Depositary relating to the Notes.
Payments in respect of the principal of, premium, if any, interest and
Liquidated Damages, if any, on any Notes registered in the name of the Global
Note Holder on the applicable record date will be payable by the Trustee to or
at the direction of the Global Note Holder in its capacity as the registered
Holder under the Indenture. Under the terms of the Indenture, the Company and
the Trustee may treat the persons in whose names Notes, including the Global
Senior Note, are registered as the owners thereof for the purpose of receiving
such payments. Consequently, neither the Company nor the Trustee has or will
have any responsibility or liability for the payment of such amounts to
beneficial owners of Notes. The Company believes, however, that it is
currently the policy of the Depositary to immediately credit the accounts of
the relevant Participants with such payments, in amounts proportionate to
their respective holdings of beneficial interests in the relevant security as
shown on the records of the Depositary. Payments by the Depositary's
Participants and the Depositary's Indirect Participants to the beneficial
owners of Notes will be governed by standing instructions and customary
practice and will be the responsibility of the Depositary's Participants or
the Depositary's Indirect Participants.
CERTIFICATED SECURITIES
Subject to certain conditions, any person having a beneficial interest
in the Global Series A Note and the Global Series B Note may, upon request to
the Trustee, exchange such beneficial interest for Notes in the form of a
definitive registered certificate ("Certificated Securities"). Upon any such
issuance, the Trustee is required to register such Certificated Securities in
the name of, and cause the same to be delivered to, such person or persons (or
the nominee of any thereof) except that all certificated Series A Notes would
be subject to transfer restriction legend requirements. In addition, if (i)
the Company notifies the Trustee in writing that the Depositary is no longer
willing or able to act as a depositary and the Company is unable to locate a
qualified successor within 90 days or (ii) the Company, at its option,
notifies the Trustee in writing that it elects to cause the issuance of Notes
in the form of Certificated Securities under the Indenture, then, upon
surrender by the Global Note Holder of its Global Series A Note and the Global
Series B Note, Notes in such form will be issued to each person that the
Global Note Holder and the Depositary identify as being the beneficial owner
of the related Notes.
Neither the Company nor the Trustee will be liable for any delay by the
Global Note Holder or the Depositary in identifying the beneficial owners of
Notes and the Company and the Trustee may conclusively rely on, and will be
protected in relying on, instructions from the Global Note Holder or the
Depositary for all purposes.
SAME-DAY SETTLEMENT AND PAYMENT
The Indenture requires that payments in respect of the Notes represented
by the Global Note (including principal, premium, if any, interest and
Liquidated Damages, if any) be made by wire transfer of immediately available
funds to the accounts specified by the Global Note Holder. With respect to
Certificated Securities, the Company will make all payments of principal,
premium, if any, interest and Liquidated Damages, if any, by wire transfer of
immediately available funds to the accounts specified by the Holders thereof
or, if no such account is specified, by mailing a check to each such Holder's
registered address. The Notes represented by the Global Series A Note are
eligible to trade in the PORTAL Market and to trade in the Depositary's
Same-Day Funds Settlement System, and any permitted secondary market trading
activity in Series A Notes will, therefore, be required by the Depositary to
be settled in immediately available funds. The Company expects that secondary
trading in the Certificated Securities will also be settled in immediately
available funds.
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REGISTRATION RIGHTS; LIQUIDATED DAMAGES
On May 31, 1996, the Company, the Subsidiary Guarantors and the Initial
Purchasers entered into the Registration Rights Agreement. Pursuant to the
Registration Rights Agreement, the Company and the Subsidiary Guarantors
agreed to file with the Commission the Registration Statement of which this
Prospectus is a part on the appropriate form under the Securities Act with
respect to the Series B Notes. Upon the effectiveness of this Registration
Statement, the Company will offer to the Holders of Series A Notes pursuant to
the Exchange Offer who are able to make certain representations the
opportunity to exchange their Series A Notes for Series B Notes. If (i) the
Company and the Subsidiary Guarantors are not required to file this
Registration Statement or permitted to consummate the Exchange Offer because
the Exchange Offer is not permitted by applicable law or Commission policy or
(ii) any Holder of Series A Notes notifies the Company within 20 business days
following consummation of the Exchange Offer that (A) it is prohibited by law
or Commission policy from participating in the Exchange Offer or (B) that it
may not resell the Series B Notes acquired by it in the Exchange Offer to the
public without delivering a prospectus and the prospectus contained in this
Registration Statement is not appropriate or available for such resales or (C)
that it is a broker-dealer and owns Series A Notes acquired directly from the
Company or an affiliate of the Company, the Company and the Subsidiary
Guarantors will file with the Commission a shelf registration statement
pursuant to Rule 415 under the Securities Act (the "Shelf Registration
Statement") to cover resales of the Series A Notes by the Holders thereof who
satisfy certain conditions relating to the provision of information in
connection with the Shelf Registration Statement. The Company and the
Subsidiary Guarantors will use their reasonable best efforts to cause the
applicable registration statement to be declared effective as promptly as
possible by the Commission. For purposes of the foregoing, "Series A Note"
means each Series A Note until (i) the date on which such Series A Note has
been exchanged by a person other than a broker-dealer for a New Note in the
Exchange Offer, (ii) following the exchange by a broker-dealer in the Exchange
Offer of a Series A Note for a Series B Note, the date on which such Series B
Note is sold to a purchaser who receives from such broker-dealer on or prior
to the date of such sale a copy of the prospectus contained in this
Registration Statement, (iii) the date on which such Series A Note has been
effectively registered under the Securities Act and disposed of in accordance
with the Shelf Registration Statement or (iv) the date on which such Series A
Note is distributed to the public pursuant to Rule 144 under the Securities
Act.
The Registration Rights Agreement provides that (i) the Company and the
Subsidiary Guarantors will file this Registration Statement with the
Commission on or prior to July 15, 1996, (ii) the Company and the Subsidiary
Guarantors will use their reasonable best efforts to have the Exchange Offer
Registration Statement declared effective by the Commission on or prior to
September 28, 1996, (iii) unless the Exchange Offer would not be permitted by
applicable law or Commission policy, the Company and the Subsidiary Guarantors
will commence the Exchange Offer and use their reasonable best efforts to
issue on or prior to 30 business days after the date on which the Exchange
Offer Registration Statement was declared effective by the Commission, Series
B Notes in exchange for all Series A Notes tendered prior thereto in the
Exchange Offer and (iv) if obligated to file the Shelf Registration Statement,
the Company and the Subsidiary Guarantors will use their best efforts to file
the Shelf Registration Statement with the Commission on or prior to 30 days
after such filing obligation arises and to cause the Shelf Registration to be
declared effective by the Commission on or prior to the later of 30 days after
such filing and September 28, 1996 and to cause the Shelf Registration
Statement to be continuously effective until May 31, 1999 or such earlier time
as such Notes have been sold pursuant to such Shelf Registration Statement.
The Company may cause the Shelf Registration Statement to not be available for
up to 120 days during the three year period, but in no event for more than 45
consecutive days or for more than 60 days in any calendar year. If (a) the
Company and the Subsidiary Guarantors fail to file any of the Registration
Statements required by the Registration Rights Agreement on or before the date
specified for such filing, (b) any of such Registration Statements is not
declared effective by the Commission on or prior to the date specified for
such effectiveness (the "Effectiveness Target Date"), (c) the Company and the
Subsidiary Guarantors fail to Consummate the Exchange Offer within 30 business
days of the Effectiveness Target Date with respect to this Registration
Statement, or (d) the Shelf Registration Statement or the Exchange Offer
Registration Statement is declared effective but thereafter ceases to be
effective or usable in connection with resales of Series A Notes during the
periods specified in the Registration Rights Agreement (each such event
referred to in clauses (a) through (d) above a "Registration Default"), then
the Company will pay Liquidated Damages to each Holder of Series A Notes, with
respect to the first 90-day period immediately following the occurrence of
such Registration Default in an amount equal to $.05 per week per $1,000
principal amount of Series A Notes held by such Holder. The amount of the
Liquidated Damages will increase by an additional $.05 per week per $1,000
principal amount of Series A Notes with respect to each
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subsequent 90-day period until all Registration Defaults have been cured, up
to a maximum amount of Liquidated Damages of $.50 per week per $1,000
principal amount of Series A Notes. All accrued Liquidated Damages will be
paid by the Company on each interest payment date to the Global Note Holder by
wire transfer of immediately available funds or by federal funds check and to
Holders of Certificated Securities by wire transfer to the accounts specified
by them or by mailing checks to their registered addresses if no such accounts
have been specified. Following the cure of all Registration Defaults, the
accrual of Liquidated Damages will cease.
Holders of Series A Notes will be required to make certain
representations to the Company (as described in the Registration Rights
Agreement) in order to participate in the Exchange Offer and will be required
to deliver information to be used in connection with the Shelf Registration
Statement and to provide comments on the Shelf Registration Statement within
the time periods set forth in the Registration Rights Agreement in order to
have their Series A Notes included in the Shelf Registration Statement and
benefit from the provisions regarding Liquidated Damages set forth above.
CERTAIN DEFINITIONS
Set forth below are certain defined terms used in the Indenture.
Reference is made to the Indenture for a full disclosure of all such terms, as
well as any other capitalized terms used herein for which no definition is
provided.
"Acquired Debt" means, with respect to any specified Person, (i)
Indebtedness of any other Person existing at the time such other Person is
merged with or into or became a Subsidiary of such specified Person,
including, without limitation, Indebtedness incurred in connection with, or in
contemplation of, such other Person merging with or into or becoming a
Subsidiary of such specified Person, and (ii) Indebtedness secured by a Lien
encumbering any asset acquired by such specified Person.
"Advertising Business" means any business deriving substantially all of
its revenues from the (i) sale of advertisements and (ii) sale of products or
provision of services to any business described in clause (i) above.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For purposes of this definition, "control"
(including, with correlative meanings, the terms "controlling," "controlled
by" and "under common control with"), as used with respect to any Person,
shall mean the possession, directly or indirectly, of the power to direct or
cause the direction of the management or policies of such Person, whether
through the ownership of voting securities, by agreement or otherwise;
provided that beneficial ownership of 10% or more of the voting securities of
a Person shall be deemed to be control.
"Asset Sale" means (i) the sale, lease, conveyance or other disposition
of any assets (including, without limitation, by way of a sale and leaseback
or pursuant to an LMA or similar arrangement); provided that the sale, lease,
conveyance or other disposition of all or substantially all of the assets of
the Company and its Subsidiaries taken as a whole will be governed by the
provisions of the Indenture described above under the caption "--Repurchase at
the Option of Holders--Change of Control" and/or the provisions described
above under the caption "--Certain Covenants--Merger, Consolidation or Sale of
Assets" and not by the provisions of the Asset Sale covenant, and (ii) the
issue or sale by the Company or any of its Subsidiaries of Equity Interests of
any of the Company's Subsidiaries, in the case of either clause (i) or (ii),
whether in a single transaction or a series of related transactions (a) that
have a Fair Market Value in excess of $5.0 million or (b) for aggregate net
proceeds in excess of $5.0 million. Notwithstanding the foregoing: (i) to the
extent that no Disposition Debt is outstanding, the Washington Disposition,
the Louisville Disposition and the Dallas Disposition, (ii) the Houston
Exchange, (iii) a transfer of assets by the Company to a Wholly Owned
Subsidiary or by a Wholly Owned Subsidiary to the Company or to another Wholly
Owned Subsidiary, (iv) an issuance of Equity Interests by a Wholly Owned
Subsidiary to the Company or to another Wholly Owned Subsidiary, (v) a
Restricted Payment that is permitted by the covenant described above under the
caption "--Certain Covenants--Restricted Payments" and (vi) sales of obsolete
equipment in the ordinary course of business, will not be deemed to be Asset
Sales.
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"Attributable Debt" in respect of a sale and leaseback transaction
means, at the time of determination, the present value (discounted at the rate
of interest implicit in such transaction, determined in accordance with GAAP)
of the obligation of the lessee for net rental payments during the remaining
term of the lease included in such sale and leaseback transaction (including
any period for which such lease has been extended or may, at the option of the
lessor, be extended).
"Bank Facilities" means, with respect to the Company, one or more debt
facilities (including, without limitation, the New Credit Agreement) or
commercial paper facilities with banks or other institutional lenders
providing for revolving credit loans, term loans, receivables financing
(including through the sale of receivables to such lenders or to special
purpose entities formed to borrow from such lenders against such receivables)
or letters of credit, in each case, as amended, restated, modified, renewed,
refunded, replaced or refinanced in whole or in part from time to time.
Indebtedness under Bank Facilities outstanding on the date on which the Notes
are first issued and authenticated under the Indenture shall be deemed to have
been incurred on such date in reliance on the exception provided by clause (i)
under the covenant described under the caption "--Incurrence of Indebtedness
and Issuance of Preferred Stock."
"Broadcast Business" means any business, the majority of whose revenues
are derived from the broadcast of radio programming.
"Capital Lease Obligation" means, at the time any determination thereof
is to be made, the amount of the liability in respect of a capital lease that
would at such time be required to be capitalized on a balance sheet in
accordance with GAAP.
"Capital Stock" means (i) in the case of a corporation, corporate stock,
(ii) in the case of an association or business entity, any and all shares,
interests, participations, rights or other equivalents (however designated) of
corporate stock, (iii) in the case of a partnership, partnership interests
(whether general or limited) and (iv) any other interest or participation that
confers on a Person the right to receive a share of the profits and losses of,
or distributions of assets of, the issuing Person.
"Cash Equivalents" means (i) United States dollars, (ii) securities
issued or directly and fully guaranteed or insured by the United States
government or any agency or instrumentality thereof having maturities of not
more than six months from the date of acquisition, (iii) certificates of
deposit and eurodollar time deposits with maturities of six months or less
from the date of acquisition, bankers' acceptances with maturities not
exceeding six months and overnight bank deposits, in each case with any lender
party to the New Credit Agreement or with any domestic commercial bank having
capital and surplus in excess of $500.0 million and a Thomson Bank Watch
Rating of "B" or better, (iv) repurchase obligations with a term of not more
than seven days for underlying securities of the types described in clauses
(ii) and (iii) above entered into with any financial institution meeting the
qualifications specified in clause (iii) above and (v) commercial paper having
the highest rating obtainable from Moody's Investors Service, Inc. or Standard
& Poor's Corporation and in each case maturing within six months after the
date of acquisition.
"Commitment Letter" means the Commitment Letter between the Company and
The Bank of New York relating to the New Credit Agreement.
"Consolidated Cash Flow" means, with respect to any Person for any
period, the Consolidated Net Income of such Person for such period plus (i) an
amount equal to any extraordinary loss plus any net loss realized in
connection with an Asset Sale by such Person or any of its Subsidiaries during
such period (to the extent such losses were deducted in computing such
Consolidated Net Income), plus (ii) provision for taxes based on income or
profits of such Person and its Subsidiaries for such period, to the extent
that such provision for taxes was included in computing such Consolidated Net
Income, plus (iii) Consolidated Interest Expense of such Person for such
period, to the extent any such Consolidated Interest Expense was deducted in
computing such Consolidated Net Income, plus (iv) depreciation, amortization
(including amortization of goodwill and other intangibles but excluding
amortization of prepaid cash expenses that were paid in a prior period) and
other non-cash charges (excluding any such non-cash charge to the extent that
it represents an accrual of or reserve for cash charges in any future period)
of such Person and its Subsidiaries for
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such period to the extent that such depreciation, amortization and other
non-cash charges were deducted in computing such Consolidated Net Income, less
(v) all non-cash items increasing Consolidated Net Income for such period
(excluding any such non-cash income to the extent it represents an accrual of
cash income in any future period), in each case, on a consolidated basis and
determined in accordance with GAAP.
"Consolidated Indebtedness" of any Person as of any date of
determination means the sum (without duplication) of (i) the total amount of
Indebtedness and Attributable Debt of such Person and its Subsidiaries, plus
(ii) the total amount of other Indebtedness shown on the balance sheet of the
primary obligor on such Indebtedness, to the extent that such Indebtedness has
been Guaranteed by such Person or one of its Subsidiaries, plus (iii) the
aggregate liquidation value or redemption amount (if larger) of all
Disqualified Stock of such Person and all preferred stock of Subsidiaries of
such Person, in each case, determined on a consolidated basis in accordance
with GAAP.
"Consolidated Interest Expense" means, with respect to any Person for
any period, (i) the sum of the consolidated interest expense of such Person
and its Subsidiaries for such period, whether paid or accrued (including,
without limitation, amortization of original issue discount, non-cash interest
payments, the interest component of any deferred payment obligations, the
interest component of all payments associated with Capital Lease Obligations,
imputed interest with respect to Attributable Debt, commissions, discounts and
other fees and charges incurred in respect of letter of credit or bankers'
acceptance financings, and net payments (if any) pursuant to Hedging
Obligations) and (ii) the consolidated interest expense of such Person and its
Subsidiaries that was capitalized during such period, and (iii) any interest
expense on Indebtedness of another Person that is guaranteed by such Person or
one of its Subsidiaries or secured by a Lien on assets of such Person or one
of its Subsidiaries (whether or not such Guarantee or Lien is called upon) and
(iv) the product of (a) all cash dividend payments (and non-cash dividend
payments in the case of a Person that is a Subsidiary) on any series of
preferred stock of such Person, times (b) a fraction, the numerator of which
is one and the denominator of which is one minus the then current combined
federal, state and local statutory tax rate of such Person, expressed as a
decimal, in each case, on a consolidated basis and in accordance with GAAP.
"Consolidated Net Income" means, with respect to any Person for any
period, the aggregate of the Net Income of such Person and its Subsidiaries
for such period, determined on a consolidated basis in accordance with GAAP;
provided that (i) the Net Income (but not loss) of any Person that is not a
Subsidiary or that is accounted for by the equity method of accounting shall
be included only to the extent of the amount of dividends or distributions
paid in cash to the referent Person or to a Wholly Owned Subsidiary thereof
that is a Subsidiary Guarantor, (ii) the Net Income of any Subsidiary shall be
excluded to the extent that the declaration or payment of dividends or similar
distributions by that Subsidiary of that Net Income is not at the date of
determination permitted without any prior governmental approval (that has not
been obtained) or, directly or indirectly, by operation of the terms of its
charter or any agreement, instrument, judgment, decree, order, statute, rule
or governmental regulation applicable to that Subsidiary or its stockholders,
(iii) the Net Income of any Person acquired in a pooling of interests
transaction for any period prior to the date of such acquisition shall be
excluded and (iv) the cumulative effect of a change in accounting principles
shall be excluded.
"Consolidated Net Worth" means, with respect to any Person as of any
date, the sum of (i) the consolidated equity of the common stockholders of
such Person and its consolidated Subsidiaries as of such date plus (ii) the
respective amounts reported on such Person's balance sheet as of such date
with respect to any series of preferred stock (other than Disqualified Stock)
that by its terms is not entitled to the payment of dividends unless such
dividends may be declared and paid only out of net earnings in respect of the
year of such declaration and payment, but only to the extent of any cash
received by such Person upon issuance of such preferred stock, less (x) all
write-ups (other than write-ups resulting from foreign currency translations
and write-ups of tangible assets of a going concern business made within 12
months after the acquisition of such business) subsequent to the date of the
Indenture in the book value of any asset owned by such Person or a
consolidated Subsidiary of such Person, (y) all investments as of such date in
unconsolidated Subsidiaries and in Persons that are not Subsidiaries (except,
in each case, Permitted Investments), and (z) all unamortized debt discount
and expense and unamortized deferred charges as of such date, all of the
foregoing determined in accordance with GAAP.
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"Dallas Disposition" means the sale by the Company of KTCK-AM (Dallas,
TX) on substantially the terms set forth in the sale agreement as the same is
in effect on the date of the Indenture.
"Debt to Cash Flow Ratio" means, as of any date of determination, the
ratio of (a) the Consolidated Indebtedness as of such date to (b) the
Consolidated Cash Flow of the Company and its Subsidiaries on a consolidated
basis for the four most recent full fiscal quarters ending immediately prior
to such date for which internal financial statements are available. For
purposes of calculating Consolidated Cash Flow for the computation referred to
above, (i) acquisitions that have been made by the Company or any of its
Subsidiaries, including through mergers or consolidations and including any
related financing transactions, during the four-quarter reference period or
subsequent to such reference period and on or prior to the date on which such
Ratio is being calculated (the "Calculation Date") shall be deemed to have
occurred on the first day of the four-quarter reference period and
Consolidated Cash Flow for such reference period shall be calculated without
giving effect to clause (iii) of the proviso set forth in the definition of
Consolidated Net Income, and (ii) the Consolidated Cash Flow attributable to
discontinued operations, as determined in accordance with GAAP, and operations
or businesses disposed of prior to the Calculation Date, shall be excluded.
"Default" means any event that is or with the passage of time or the
giving of notice or both would be an Event of Default.
"Disposition" means the sale of any of (i) WVEZ-FM, WTFX-FM and WWKY-AM
operating in Louisville, Kentucky, (ii) KTCK-AM operating in Dallas, Texas or
(iii) WXVR-FM, WXTR-FM and WQSI-AM operating in Washington, DC and, in each
case, all assets related thereto.
"Disposition Debt" means Indebtedness incurred pursuant to clause (i)(B)
of the second paragraph contained in the covenant described above under the
caption "--Certain Covenants--Incurrence of Indebtedness and Issuance of
Preferred Stock."
"Disqualified Stock" means any Capital Stock that, by its terms (or by
the terms of any security into which it is convertible or for which it is
exchangeable at the option of the holder thereof), or upon the happening of
any event, matures or is mandatorily redeemable, pursuant to a sinking fund
obligation or otherwise, or redeemable at the option of the holder thereof, in
whole or in part, on or prior to the date that is 91 days after the date on
which the Notes mature.
"Equity Interests" means Capital Stock and all warrants, options or
other rights to acquire Capital Stock (but excluding any debt security that is
convertible into, or exchangeable for, Capital Stock).
"Exchange Notes" means the Company's 6 1/2 % Convertible Subordinated
Exchange Notes due 2007 issuable in exchange for the Company's Series D
Preferred Stock.
"Existing Indebtedness" means all Indebtedness of the Company and its
Subsidiaries (other than Indebtedness under the New Credit Agreement) in
existence on the date of the Indenture, until such amounts are repaid.
"Existing MMR Indebtedness" means all Indebtedness of MMR and its
Subsidiaries in existence at the closing of the MMR Merger, until such amounts
are repaid.
"Fair Market Value" means, with respect to any asset or property, the
sale value that would be obtained in an arm's length transaction between an
informed and willing seller under no compulsion to sell and an informed and
willing buyer under no compulsion to buy.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as have been approved by a significant segment of the accounting
profession, which are in effect on the date of the Indenture.
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"Government Securities" means direct obligations of, or obligations
guaranteed by, the United States of America for the payment of which
obligations or guarantee the full faith and credit of the United States of
America is pledged.
"Guarantee" means a guarantee (other than by endorsement of negotiable
instruments for collection in the ordinary course of business), direct or
indirect, in any manner (including, without limitation, letters of credit and
reimbursement agreements in respect thereof), of all or any part of any
Indebtedness.
"Hedging Obligations" means, with respect to any Person, the obligations
of such Person under (i) interest rate swap agreements, interest rate cap
agreements and interest rate collar agreements and (ii) other agreements or
arrangements designed to protect such Person against fluctuations in interest
rates.
"Houston Exchange" means the exchange by the Company of KRLD-AM (Dallas,
Texas) and the Texas State Networks for KKRW-FM (Houston, Texas) on
substantially the terms set forth in the exchange agreement as the same is in
effect on the date of the Indenture.
"Indebtedness" means, with respect to any Person, without duplication,
any indebtedness of such Person, whether or not contingent, in respect of
borrowed money or evidenced by bonds, notes, debentures or similar instruments
or letters of credit (or reimbursement agreements in respect thereof) or
banker's acceptances or representing Capital Lease Obligations or the balance
deferred and unpaid of the purchase price of any property or payment
obligations under an LMA or representing any Hedging Obligations, except any
such balance that constitutes an accrued expense or trade payable, if and to
the extent any of the foregoing (other than letters of credit and Hedging
Obligations) would appear as a liability upon a balance sheet of such Person
prepared in accordance with GAAP, as well as all indebtedness of others
secured by a Lien on any asset of such Person (whether or not such
indebtedness is assumed by such Person) and, to the extent not otherwise
included, the Guarantee by such Person of any indebtedness of any other
Person.
"Investments" means, with respect to any Person, all investments by such
Person in other Persons (including Affiliates) in the forms of direct or
indirect loans (including guarantees of Indebtedness or other obligations),
advances or capital contributions (excluding commission, travel and similar
advances to officers and employees made in the ordinary course of business),
purchases or other acquisitions for consideration of Indebtedness, Equity
Interests or other securities, together with all items that are or would be
classified as investments on a balance sheet prepared in accordance with GAAP;
provided that an acquisition of assets, Equity Interests or other securities
by the Company for consideration consisting of common equity securities of the
Company shall not be deemed to be an Investment. If the Company or any
Subsidiary of the Company sells or otherwise disposes of any Equity Interests
of any direct or indirect Subsidiary of the Company such that, after giving
effect to any such sale or disposition, such Person is no longer a Subsidiary
of the Company, the Company shall be deemed to have made an Investment on the
date of any such sale or disposition equal to the Fair Market Value of the
Equity Interests of such Subsidiary not sold or disposed of.
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset,
whether or not filed, recorded or otherwise perfected under applicable law
(including any conditional sale or other title retention agreement, any lease
in the nature thereof, any option or other agreement to sell or give a
security interest in and any filing of or agreement to give any financing
statement under the Uniform Commercial Code (or equivalent statutes) of any
jurisdiction).
"Local Marketing Agreement" or "LMA" means a local marketing
arrangement, sale agreement, time brokerage agreement, management agreement or
similar arrangement pursuant to which a Person, subject to customary
preemption rights and other limitations (i) obtains the right to sell at least
a majority of the advertising inventory of a radio station of which a third
party is the licensee, (ii) obtains the right to broadcast programming and
sell advertising time during a majority of the air time of a radio station or
(iii) manages the selling operations of a radio station with respect to at
least a majority of the advertising inventory of such station.
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"Louisville Disposition" means the sale by the Company of each of
WVEZ-FM, WTFX-FM and WWXY-AM (Louisville, Kentucky) on substantially the terms
set forth in the sale agreement as the same is in effect on the date of the
Indenture.
"Management Termination Agreements" means each of (i) the termination
agreement between the Company and R. Steven Hicks, dated April 16, 1996, and
(ii) the amendment to the employment agreement between the Company and D.
Geoffrey Armstrong, effective as of April 15, 1996, in each case, as in effect
on the date of the Indenture.
"Material Broadcast License" means one or more authorizations issued by
the Federal Communications Commission for the operation of AM or FM radio
stations that individually or collectively are material to the financial
condition, results of operations or prospects of the Company and its
Subsidiaries taken as a whole.
"MMR" means Multi-Market Radio, Inc., a Delaware corporation.
"MMR Merger" means the merger of SFX Merger Company, a Wholly Owned
Subsidiary of the Company, with and into MMR, pursuant to which MMR will
become a Wholly Owned Subsidiary of the Company.
"MMR Stations" means the following radio stations: WPLR-FM and WYBC-FM
(New Haven, Connecticut); WHMP-FM, WPKX-FM and WHMP-AM
(Springfield/Northampton, Massachusetts); WGNE-FM (Daytona Beach, Florida);
WRXR-FM, WKBG-FM and WCHZ-FM (Augusta, Georgia); WKNN-FM and WMJY-FM (Biloxi,
Mississippi); and WYAK-FM and WVCO-FM (Myrtle Beach, South Carolina).
"MMR Warrants" means MMR's outstanding Class A Warrants to purchase
1,840,000 shares of MMR's Class A Common Stock.
"Net Income" means, with respect to any Person, the net income (loss) of
such Person, determined in accordance with GAAP and before any reduction in
respect of preferred stock dividends, excluding, however, (i) any gain (but
not loss), together with any related provision for taxes on such gain (but not
loss), realized in connection with (a) any Asset Sale (including, without
limitation, dispositions pursuant to sale and leaseback transactions) or (b)
the disposition of any securities by such Person or any of its Subsidiaries or
the extinguishment of any Indebtedness of such Person or any of its
Subsidiaries and (ii) any extraordinary or nonrecurring gain (but not loss),
together with any related provision for taxes on such extraordinary or
nonrecurring gain (but not loss).
"Net Proceeds" means the aggregate cash proceeds received by the Company
or any of its Subsidiaries in respect of any Asset Sale (including, without
limitation, any cash received upon the sale or other disposition of any
non-cash consideration received in any Asset Sale), net of the direct costs
relating to such Asset Sale (including, without limitation, legal, accounting
and investment banking fees, and sales commissions) and any relocation
expenses incurred as a result thereof, taxes paid or payable as a result
thereof (after taking into account any available tax credits or deductions and
any tax sharing arrangements), amounts required to be applied to the repayment
of Indebtedness (other than Senior Debt) secured by a Lien on the asset or
assets that were the subject of such Asset Sale and any reserve for adjustment
in respect of the sale price of such asset or assets established in accordance
with GAAP.
"New Credit Agreement" means that certain credit agreement to be entered
into by and among the Company, the Company's Subsidiaries and the lenders
party thereto, providing for $150.0 million of revolving credit borrowings,
including any related notes, guarantees, collateral documents, and other
agreements executed in connection therewith, and in each case as amended,
modified, renewed, refunded, replaced or refinanced from time to time.
"Obligations" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any Indebtedness.
"Pari Passu Debt" means Indebtedness that ranks pari passu in right of
payment with the Notes.
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"Permitted Disposition Amount" means the sum of (i) until the
consummation of the sale by the Company of WVEZ-FM, WTFX-FM and WWKY-AM
operating in Louisville, Kentucky, $19.5 million, plus (ii) until the
consummation of the sale by the Company of WXVR-FM, WXTR-FM and WQSI-AM
operating in Washington, DC, $25.0 million, plus (iii) until the consummation
of the sale by the Company of KTCK-FM operating in Dallas, Texas, $9.5
million, plus (iv) prior to the exercise of the MMR Warrants, $13.6 million.
"Permitted Investments" means (a) any Investment in the Company or in a
Subsidiary of the Company that is a Subsidiary Guarantor; (b) any Investment
in Cash Equivalents; (c) any Investment by the Company or any Subsidiary of
the Company in a Person, if after such Investment (i) such Person becomes a
Subsidiary of the Company and a Subsidiary Guarantor or (ii) such Person is
merged, consolidated or amalgamated with or into, or transfers or conveys
substantially all of its assets to, or is liquidated into, the Company or a
Subsidiary of the Company that is a Subsidiary Guarantor; (d) any Restricted
Investment made as a result of the receipt of non-cash consideration from an
Asset Sale that was made pursuant to and in compliance with the covenant
described above under the caption "--Repurchase at the Option of
Holders--Asset Sales;" (e) any obligations or shares of Capital Stock received
in connection with or as a result of a bankruptcy, workout or reorganization
of the issuer of such obligations or shares of Capital Stock; (f) any
Investment received involuntarily; (g) Investments in any Person (other than
an Affiliate of the Company that is not also a Subsidiary of the Company)
engaged in a Broadcast Business or an Advertising Business which Investments
have an aggregate fair market value (measured on the date each such Investment
was made and without giving effect to subsequent changes in value), when taken
together with all other Investments made pursuant to this clause (g) that are
at the time outstanding, not to exceed $20.0 million and (h) other Investments
in any Person (other than an Affiliate of the Company that is not also a
Subsidiary of the Company) having an aggregate fair market value (measured on
the date each such Investment was made and without giving effect to subsequent
changes in value), when taken together with all other Investments made
pursuant to this clause (h) that are at the time outstanding, not to exceed
$15.0 million.
"Permitted Liens" means (i) Liens securing Senior Debt of the Company
or Senior Debt of any Subsidiary Guarantor that was permitted by the terms of
the Indenture to be incurred; (ii) Liens in favor of the Company; (iii) Liens
on property of a Person existing at the time such Person is merged into or
consolidated with the Company or any Subsidiary of the Company; provided that
such Liens were in existence prior to the contemplation of such merger or
consolidation and do not extend to any assets other than those of the Person
merged into or consolidated with the Company; (iv) Liens on property existing
at the time of acquisition thereof by the Company or any Subsidiary of the
Company, provided that such Liens were in existence prior to the contemplation
of such acquisition and do not extend to any assets other than such assets so
acquired; (v) Liens existing on the date of the Indenture; (vi) Liens for
taxes, assessments or governmental charges or claims that are not yet
delinquent or that are being contested in good faith by appropriate
proceedings promptly instituted and diligently concluded, provided that any
reserve or other appropriate provision as shall be required in conformity with
GAAP shall have been made therefor; and (vii) Liens incurred in the ordinary
course of business of the Company or any Subsidiary of the Company with
respect to obligations that do not exceed $10.0 million at any one time
outstanding and that (a) are not incurred in connection with the borrowing of
money or the obtaining of advances or credit (other than trade credit in the
ordinary course of business) and (b) do not in the aggregate materially
detract from the value of the property or materially impair the use thereof in
the operation of business by the Company or such Subsidiary.
"Permitted Refinancing Debt" means any Indebtedness of the Company or
any of its Subsidiaries issued in exchange for, or the net proceeds of which
are used to extend, refinance, renew, replace, defease or refund other
Indebtedness of the Company or any of its Subsidiaries; provided that: (i) the
principal amount (or accreted value, if applicable) of such Permitted
Refinancing Indebtedness does not exceed the principal amount (or accreted
value, if applicable) of the Indebtedness so extended, refinanced, renewed,
replaced, defeased or refunded (plus the amount of reasonable expenses
incurred in connection therewith); (ii) such Permitted Refinancing
Indebtedness has a final maturity date later than the final maturity date of,
and has a Weighted Average Life to Maturity equal to or greater than the
Weighted Average Life to Maturity of, the Indebtedness being extended,
refinanced, renewed, replaced, defeased or refunded; (iii) if the Indebtedness
being extended, refinanced, renewed, replaced, defeased or refunded is
subordinated in right of payment to the Notes, such Permitted Refinancing
Indebtedness has a final maturity date later than the final maturity date of,
and is subordinated in right of payment to, the Notes on terms at least as
favorable to the Holders of
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Notes as those contained in the documentation governing the Indebtedness being
extended, refinanced, renewed, replaced, defeased or refunded; and (iv) such
Indebtedness is incurred either by the Company or by the Subsidiary who was
the obligor on the Indebtedness being extended, refinanced, renewed, replaced,
defeased or refunded.
"Preferred Stock" of any Person, means Capital Stock of such Person of
any class or series (however designated) that ranks prior, as to payment of
dividends or as to the distribution of assets upon any voluntary or
involuntary liquidation, dissolution or winding up of such Person, to shares
of Capital Stock of any other class or series of such Person.
"Restricted Investment" means an Investment other than a Permitted
Investment.
"SCMC" means Sillerman Communications Management Company, a Delaware
corporation
"Series B Preferred Stock" means the Company's Series B Redeemable
Preferred Stock, par value $.01 per share.
"Series C Preferred Stock" means the Company's Series C Redeemable
Convertible Preferred Stock, par value $.01 per share.
"Series D Preferred Stock" means the Company's 6 1/2% Series D
Cumulative Convertible Exchangeable Preferred Stock due 2007.
"SFX Merger Company" means SFX Merger Company, a Delaware corporation.
"Shared Facilities Agreement" means the Shared Facilities Agreement
between the Company and SCMC, as in effect on the date of the Indenture.
"Significant Subsidiary" means any Subsidiary that would be a
"significant subsidiary" as defined in Article 1, Rule 1-02 of Regulation S-X,
promulgated pursuant to the Securities Act, as such Regulation is in effect on
the date hereof.
"Subsidiary" means, with respect to any Person, (i) any corporation,
association or other business entity of which more than 50% of the total
voting power of shares of Voting Stock thereof is at the time owned or
controlled, directly or indirectly, by such Person or one or more of the other
Subsidiaries of that Person (or a combination thereof) and (ii) any
partnership (a) the sole general partner or the managing general partner of
which is such Person or a Subsidiary of such Person or (b) the only general
partners of which are such Person or of one or more Subsidiaries of such
Person (or any combination thereof).
"Voting Stock" means with respect to any specified Person, Capital Stock
with voting power, under ordinary circumstances and without regard to the
occurrence of any contingency, to elect the directors or other managers or
trustees of such Person.
"Washington Disposition" means the sale by the Company of each of
WXVR-FM, WXTR-FM and WQSI-AM (Washington, DC) on substantially the terms set
forth in the sale agreement as the same is in effect on the date of the
Indenture.
"Weighted Average Life to Maturity" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing (i) the sum
of the products obtained by multiplying (a) the amount of each then remaining
installment, sinking fund, serial maturity or other required payments of
principal, including payment at final maturity,
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in respect thereof, by (b) the number of years (calculated to the nearest one-
twelfth) that will elapse between such date and the making of such payment, by
(ii) the then outstanding principal amount of such Indebtedness.
"Wholly Owned Subsidiary" of any Person means a Subsidiary of such
Person all of the outstanding Capital Stock or other ownership interests of
which (other than directors' qualifying shares) shall at the time be owned by
such Person or by one or more Wholly Owned Subsidiaries of such Person and one
or more Wholly Owned Subsidiaries of such Person.
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CERTAIN FEDERAL INCOME TAX CONSIDERATIONS
It is the opinion of Baker & McKenzie, counsel to the Company, that the
material federal income tax consequences to holders whose Series A Notes are
exchanged for Series B Notes in the Exchange Offer are as described herein,
subject to the limitations and qualifications set forth below. Because the
Series B Notes should not be considered to differ materially either in kind or
in extent from the Series A Notes, the exchange of the Series B Notes for the
Series A Notes pursuant to the Exchange Offer should not be treated as an
"exchange" for federal income tax purposes pursuant to Section 1001 of the
Internal Revenue Code of 1986, as amended (the "Code"). As a result, no
material federal income tax consequences should result to holders exchanging
Series A Notes for Series B Notes. If, however, the exchange of Series A Notes
for Series B Notes were treated as a taxable event, such transaction should
constitute a recapitalization for federal income tax purposes and holders
would not recognize any gain or loss upon such exchange.
The foregoing opinion is based upon the current provisions of the Code,
applicable existing and proposed Treasury Regulations promulgated thereunder,
judicial authority and current administrative rulings and practice. There can
be no assurance that the final Treasury Regulations will not differ materially
from those which are presently proposed nor that the Internal Revenue Service
(the "IRS") will not take a contrary view. No ruling from the IRS has been or
will be sought. Legislative, judicial or administrative changes or
interpretations may be forthcoming that could alter or modify the statements
or conclusions set forth herein. Any such changes or interpretations may or
may not be retroactive and could affect the tax consequences to holders.
Certain holders (including insurance companies, tax-exempt organizations,
financial institutions, broker-dealers, foreign corporations and individuals
who are not citizens or residents of the United States) may be subject to
special rules not discussed herein. AS A RESULT, EACH HOLDER OF SERIES A NOTES
SHOULD CONSULT HIS OR HER OWN TAX ADVISOR WITH RESPECT TO THE PARTICULAR TAX
CONSEQUENCES OF EXCHANGING HIS OR HER SERIES A NOTES FOR SERIES B NOTES,
INCLUDING THE APPLICABILITY AND EFFECT OF ANY FEDERAL, STATE, LOCAL AND
FOREIGN TAX LAWS.
PLAN OF DISTRIBUTION
Each broker-dealer that receives Series B Notes for its own account
pursuant to the Exchange Offer must acknowledge that it will deliver a
prospectus in connection with any resale of such Series B Notes. This
Prospectus, as it may be amended or supplemented from time to time, may be
used by a broker-dealer in connection with resales of Series B Notes received
in exchange for Series A Notes where such Series A Notes was acquired as a
result of market-making activities or other trading activities. The Company
has agreed that for a period of 180 days after the Expiration Date, it will
make available a prospectus meeting the requirements of the Securities Act to
any broker-dealer for use in connection with any such resale. In addition,
until ___________, 1996 all dealers effecting transactions in the Series B
Notes may be required to deliver a prospectus.
The Company will not receive any proceeds from any sale of Series B
Notes by any broker-dealer. Series B Notes received by broker-dealers for
their own account pursuant to the Exchange Offer may be sold from time to time
in one or more transactions in the over-the-counter market, in negotiated
transactions, through the writing of options on the Series B Notes or a
combination of such methods of resale, at market prices prevailing at the time
of resale, at prices related to such prevailing market prices or negotiated
prices. Any such resale may be made directly to purchasers or to or through
brokers or dealers who may receive compensation in the form of commissions or
concessions from any such broker-dealer or the purchasers of any such Series B
Notes. Any broker-dealer that resells Series B Notes that was received by it
for its own account pursuant to the Exchange Offer and any broker or dealer
that participates in a distribution of such Series B Notes may be deemed to be
an "underwriter" within the meaning of the Securities Act and any profit on
any such resale of Series B Notes and any commissions or concessions received
by any such persons may be deemed to be underwriting compensation under the
Securities Act. The Letter of Transmittal states that by acknowledging that it
will deliver and by delivering a prospectus, a broker-dealer will not be
deemed to admit that it is an "underwriter" within the meaning of the
Securities Act.
57
<PAGE>
The Company has agreed to pay all expenses incident to the Company's
performance of, or compliance with, the Registration Rights Agreement and will
indemnify the holders (including any broker-dealers) and certain parties
related to the holders against certain liabilities, including liabilities
under the Securities Act.
LEGAL MATTERS
Certain legal matters will be passed upon for the Company by Baker &
McKenzie, New York, New York. Howard J. Tytel, Esq., who has an equity
interest in, and is an executive officer and director of, the Company, is Of
Counsel to Baker & McKenzie. Fisher Wayland Cooper Leader & Zaragoza L.L.P.,
Washington D.C. represented the Company with respect to certain legal matters
under the Communications Act and the rules and regulations promulgated
thereunder by the FCC.
EXPERTS
The consolidated financial statements of SFX Broadcasting, Inc. and
Subsidiaries at December 31, 1995 and 1994, and for each of the three years in
the period ended December 31, 1995, the consolidated financial statements of
Multi-Market Radio, Inc. at December 31, 1995 and 1994, and for the years then
ended, and the financial statements of KKRW-FM (a division of CBS, Inc.) at
December 31, 1995 and 1994, and for the years then ended all appearing in the
Company's Current Report on Form 8-K dated May 30, 1996, have been audited by
Ernst & Young LLP, independent auditors, as stated in their reports appearing
therein and are incorporated herein by reference. Such consolidated financial
statements are incorporated herein by reference in reliance upon such report
given upon the authority of such firm as experts in accounting and auditing.
The consolidated financial statements of Liberty Broadcasting, Inc. at
December 31, 1995 and 1994, and for the years ended December 31, 1995, 1994,
and the nine months ended December 31, 1993, and the combined financial
statements of HMW Communications, Inc-Selected Operations (combination of six
radio stations to be sold) as of December 31, 1995 and 1994, for the year
ended December 31, 1995, and various periods from January 6, 1994 to December
31, 1994, all appearing in the Company's Current Report on Form 8-K dated May
9, 1996, have been audited by Coopers & Lybrand L.L.P., independent auditors,
as stated in their reports appearing therein and are incorporated herein by
reference. Such consolidated financial statements are incorporated herein by
reference in reliance upon such report given upon the authority of such firm
as experts in accounting and auditing.
The financial statements of Prism Radio Partners, L.P. as of December
31, 1995 and 1994, and for each of the three years in the period ended
December 31, 1995, all appearing in the Company's Current Report on Form 8-K
dated May 9, 1996, have been audited by KPMG Peat Marwick LLP, independent
certified public accountants, to the extent and for the period indicated in
their report thereon and are incorporated herein by reference. Such financial
statements are incorporated herein by reference in reliance upon such report
given upon the authority of such firm as experts in accounting and auditing.
The financial statements of ABS Greenville Partners, L.P. at December
31, 1995 and 1994 and for the year then ended, all appearing in the Company's
Current Report on Form 8-K dated May 9, 1996, have been audited by Cheely
Burcham Eddins Rokenbrod & Carroll, independent auditors, as stated in their
report appearing therein and are incorporated herein by reference. Such
financial statements are incorporated herein by reference in reliance upon
such report given upon the authority of such firm as experts in accounting and
auditing.
58
<PAGE>
=============================================================================
NO DEALER, SALESPERSON OR ANY OTHER
INDIVIDUAL HAS BEEN AUTHORIZED TO
GIVE ANY INFORMATION OR TO MAKE
ANY REPRESENTATION OTHER THAN THOSE
CONTAINED IN THIS PROSPECTUS IN
CONNECTION WITH THE OFFER MADE
HEREBY. IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATION MUST
NOT BE RELIED UPON AS HAVING BEEN A
UTHORIZED BY THE COMPANY. THIS
PROSPECTUS DOES NOT CONSTITUTE AN
OFFER TO SELL OR A SOLICITATION OF
AN OFFER TO BUY ANY SECURITIES
OFFERED HEREBY IN ANY JURISDICTION
IN WHICH OR TO ANY PERSON TO WHOM
IT IS UNLAWFUL TO MAKE ANY SUCH
OFFER OR SOLICITATION. NEITHER THE
DELIVERY OF THIS PROSPECTUS NOR ANY
SALE MADE HEREUNDER SHALL, UNDER ANY
CIRCUMSTANCES, CREATE ANY IMPLICATION
THAT THE INFORMATION SET FORTH HEREIN
IS CORRECT AS OF ANY TIME SUBSEQUENT
TO THE DATE HEREOF.
--------------------
TABLE OF CONTENTS
Page
Available Information............2 S F X BROADCASTING, INC.
Incorporation by Reference.......2
Prospectus Summary...............3
Risk Factors....................14 10 3/4% SENIOR SUBORDINATED
Use of Proceeds.................20 NOTES DUE 2006, SERIES B
The Exchange Offer..............22
Description of Notes............28
Certain Federal Income Tax
Considerations..................53
Plan of Distribution............54 ----------------------------
Legal Matters...................54 PROSPECTUS
Experts.........................54 ----------------------------
----------------------, 1996
------------------
Until _____, 1996 (90 days after the date of this Prospectus), all dealers
effecting transactions in the Series B Notes, whether or not participating
in the Exchange Offer, may be required to deliver a Prospectus. This is in
addition to the obligation of dealers to deliver a prospectus when acting as
underwriters and with respect to their unsold allotments or subscriptions.
==============================================================================
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the General Corporation Law of the State of Delaware
empowers a Delaware corporation to indemnify any person who is, or is
threatened to be made, a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal administrative or investigative
(other than an action by or in the right of such corporation) by reason of the
fact that such person is or was an officer or director of such corporation, or
is or was serving at the request of such corporation as a director, officer,
employee or agent of another corporation or enterprise. The indemnity may
include expenses (including attorneys' fees), judgments, fines and amounts
paid in settlement actually and reasonably incurred by such person in
connection with such action, suit or proceeding, provided that he acted in
good faith and in a manner he reasonably believed to be in or not opposed to
the best interests of the corporation, and, with respect to any criminal
action or proceeding, had no reasonable cause to believe his conduct was
unlawful. Where an officer or director is successful on the merits or
otherwise in the defense of any action referred to above, the corporation must
indemnify him against the expenses which he actually and reasonably incurred
in connection therewith.
SFX's Certificate of Incorporation provides that no director of SFX
shall be personally liable to SFX or its stockholders for monetary damages for
breach of fiduciary duty as a director, except for liability (i) for any
breach of the director's duty of loyalty to SFX or its stockholders, (ii) for
acts or omissions not in good faith or which involve intentional misconduct or
a knowing violation of law, (iii) under Section 174 of the General Corporation
Law of the State of Delaware or (iv) for any transaction from which the
director derived an improper personal benefit.
SFX's By-Laws provide that SFX shall indemnify any person who was or is
a party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative
or investigative (other than an action by or in the right of SFX) by reason of
the fact that he is, was or has agreed to become a director or officer of SFX,
or is or was serving or has agreed to serve at the request of SFX as a
director or officer of another company, partnership, joint venture, trust or
other enterprise, against costs, charges, expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by him or on his behalf in connection with such action, suit or
proceeding and any appeal therefrom, if he acted in good faith and in a manner
he reasonably believed to be in or not opposed to the best interests of SFX,
and, with respect to any criminal action or proceeding, had no reasonable
cause to believe his conduct was unlawful. The termination of any action, suit
or proceeding by judgment, order, settlement, conviction, or upon a plea of
nolo contendere or its equivalent, shall not, of itself, create a presumption
that the person did not act in good faith and in a manner which he reasonably
believed to be in or not opposed to the best interests of SFX, and, with
respect to any criminal action or proceeding, had reasonable cause to believe
that his conduct was unlawful.
The By-laws also provide that SFX shall indemnify any person who was or
is a party or is threatened to be made a party to any threatened, pending or
completed action or suit by or in the right of SFX to procure a judgment in
its favor by reason of the fact that he is, was or has agreed to become a
director or officer of SFX, or is or was serving at the request of SFX as a
director or officer of another company, partnership, joint venture, trust or
other enterprise, or by reason of any action alleged to have been taken or
omitted in such capacity, against costs, charges and expenses (including
attorneys' fees) actually and reasonably incurred by him or on his behalf in
connection with the defense or settlement of such action or suit and any
appeal therefrom, if he acted in good faith and in a manner he reasonably
believed to be in or not opposed to the best interests of SFX and except that
no such indemnification shall be made in respect of any claim, issue or matter
as to which such person shall have been adjudged to be liable to SFX unless
and only to the extent that the Court of Chancery of Delaware or the court in
which such action or suit was brought shall determine upon application that,
despite the adjudication of such liability but in view of all the
circumstances of the case, such person is fairly and reasonably entitled to
indemnity for such expenses which such Court of Chancery or such other court
shall deem proper.
II-1
<PAGE>
To the extent that a director or officer of SFX shall be successful on
the merits or otherwise, including, without limitation, the dismissal of an
action without prejudice, in defense of any action, suit or proceeding
referred to above, or in the defense of any claim, issue or matter therein, he
shall be indemnified against all costs, charges and expenses (including
attorneys' fees) actually and reasonably incurred by him or on his behalf in
connection therewith.
The By-Laws further provide that any indemnification (unless ordered by
a court) shall be paid by SFX as authorized in the specific case upon a
determination that indemnification of the director or officer is proper in the
circumstances because he has met the applicable standard of conduct set forth
in the By-Laws unless a determination is made that indemnification of the
director or officer is not proper in the circumstances because he has not met
the applicable standard of conduct set forth in the By-Laws. Such
determination shall be made (i) by the Board of Directors of SFX by a majority
vote of a quorum consisting of directors who were not parties to such action,
suit or proceeding, or (ii) if such a quorum is not obtainable, or, even if
obtainable a quorum of disinterested directors so directs, by independent
legal counsel in a written opinion, or (iii) by the stockholders.
Expenses incurred by an officer or director in defending a civil or
criminal action, suit or proceeding shall be paid by SFX in advance of the
final disposition of such action, suit or proceeding upon receipt of an
undertaking by or on behalf of such director or officer to repay such amount
if it shall ultimately be determined that he is not entitled to be indemnified
by SFX as authorized in the By-Laws.
The Board of Directors of SFX shall purchase and maintain insurance on
behalf of any person who is or was or has agreed to become a director or
officer of SFX, or is or was serving at the request of SFX as a director or
officer of another company, partnership, joint venture, trust or other
enterprise against any liability asserted against him and incurred by him or
on his behalf in any such capacity, or arising out of his status as such,
whether or not SFX would have the power to indemnify him against such
liability under the provisions of the By-Laws, provided that such insurance is
available on acceptable terms, which determination shall be made by a vote of
a majority of the Board of Directors.
The By-Laws also provide that the indemnification and advancement of
expenses provided by, or granted pursuant to, the By-Laws shall continue as to
a person who has ceased to be a director or officer and shall inure to the
benefit of the estate, heirs, executors and administrators of such person.
ITEM 21. EXHIBITS.
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
2.1 Amended and Restated Agreement and Plan of Merger, dated as of April 15,
1996, among SFX Broadcasting, Inc., SFX Merger Company and Multi-Market
Radio, Inc., including exhibits (Incorporated by reference to Exhibit 2.1
to Form 8-K filed May 8, 1996).
3.1 Restated Certificate of Incorporation of the Company (Incorporated by
reference to Exhibit 3.1 to Amendment No. 3 to Registration Statement on
Form S-1 (File No. 33-65442) filed with the Commission on September 29,
1993).
3.2 Certificate of Amendment to the Restated Certificate of Incorporation of
the Company filed with the Delaware Secretary of State's office on July
29, 1994 (Incorporated by reference to Exhibit 3.2 to Form 10-K for the
period ending December 31, 1994).
3.3 By-laws of the Company (Incorporated by reference to Exhibit 3.2 to
Registration Statement on Form S-1 (File No. 33-65442) filed with the
Commission on July 2, 1993).
II-2
<PAGE>
*3.4 Certificate of Designations of the Company's Series C Redeemable
Convertible Preferred Stock.
*3.5 Certificate of Designations of the Company's 6 1/2% Series D
Cumulative Convertible Exchangeable Preferred Stock.
+3.6 Warrants issued to Sillerman Communications Management Corporation.
4.1 Form of Certificate for shares of Class A Common Stock (Incorporated
by reference to Exhibit 4.1 to Amendment No. 3 to Registration
Statement Form S-1 (File No. 33-65442) filed with the Commission on
September 29, 1993).
4.2 Voting Trust Agreement Between Mr. Sillerman, Mr. Tytel and William J.
Magee, Jr. (Incorporated by reference to Exhibit 9 to Amendment No. 1
to Registration Statement Form S- 1 (File No. 33-65442) filed with the
Commission on September 7, 1993).
*4.3 Indenture relating to the Company's 10 3/4% Senior Subordinated Notes
due 2006.
*4.4 Supplemental Indenture relating to the Company's 113/8% Senior
Subordinated Notes due 2000.
4.5 Offer to Purchase and Consent Solicitation, dated May 2, 1996, of
SFX Broadcasting, Inc. with respect to its 113/8 Senior Subordinated
Notes due 2000 (Incorporated by reference to Exhibit 4.1 to Form 8-K
filed May 9, 1996).
*5 Opinion of Baker & McKenzie with respect to the legality of the
securities being registered.
*8 Opinion of Baker & McKenzie with respect to the certain tax matters.
*10.52 Form of Registration Rights Agreement between HMW Communications, Inc.
WWWB/WGLD Operating Company, Inc. WWWB/WGLD License Subsidiary, Inc.
and SFX Communications, Inc.
*10.53 Amendment No. 1 To Amended And Restated Financial
Consulting And Marketing Agreement dated March __, 1996
between Sillerman Communications Management Corporation
and SFX Broadcasting, Inc.
*10.54 Supplement to the Termination and Assignment Agreement
dated May 21, 1996 by and between Sillerman Communications
Management Corporation and SFX Broadcasting, Inc.
*10.55 Registration Rights Agreement dated as of May 31, 1996
by and among SFX Broadcasting, Inc., the Guarantors and BT
Securities Corporation, Goldman Sachs & Co. and Lehman
Brothers, Inc.
*10.56 Registration Rights Agreement dated as of May 31, 1996 by and among
SFX Broadcasting, Inc., and Goldman Sachs & Co., Lehman Brothers,
Inc., and BT Securities Corporation.
*10.57 Lock-up letter dated May 21, 1996 from Robert F.X.
Sillerman, Sillerman Communications Management
Corporation, R. Steven Hicks, D. Geoffrey Armstrong,
Howard J. Tytel, and Richard A. Liese.
+10.58 Form of cash-only stock appreciation rights agreement
between SFX Broadcasting, Inc. and James O'Grady, Jr.
II-3
<PAGE>
+10.59 Form of cash-only stock appreciation rights agreement
between SFX Broadcasting, Inc. and Paul Kramer.
*11.1 Statement Regarding Calculation of Per Share Earnings.
*21 List of subsidiaries of the Company.
*23.1 Consent of Ernst & Young LLP.
*23.2 Consent of Coopers & Lybrand LLP.
*23.3 Consent of KPMG Peat Marwick LLP.
*23.4 Consent of Burcham Edding Rokenbrod & Carroll.
23.5 Consent of Baker & McKenzie (contained in Exhibit 5).
*23.6 Consent of Fisher Wayland Cooper Leader & Zaragoza L.L.P.
*25 Statement of Eligibility of Chemical Bank; Form T-1.
*99.1 Letter of Transmittal relating to the Exchange Offer.
*99.2 Letter to Brokers, Dealers, Commercial Banks, Trust
Companies and Other Nominees relating to the Exchange
Offer.
*99.3 Letter to Clients relating to the Exchange Offer.
*99.4 Notice of Guaranteed Delivery relating to the Exchange Offer.
- ---------
* Filed herewith
+ To be filed by amendment
ITEM 22. UNDERTAKINGS.
(a) The undersigned Registrant hereby undertakes:
(1) That prior to any public reoffering of the securities
registered hereunder through use of a prospectus which is a part of this
registration statement, by any person or party who is deemed to be an
underwriter within the meaning of Rule 145(c) under the Securities Act
of 1933, as amended (the "Securities Act"), the issuer undertakes that
such reoffering prospectus will contain the information called for by
the applicable registration form with respect to reofferings by persons
who may be deemed underwriters, in addition to the information called
for by the other Items of the applicable form.
(2) That every prospectus (i) that is filed pursuant to paragraph
(1) immediately preceding, or (ii) that purports to meet the
requirements of section 10(a)(3) of the Securities Act and is used in
connection with an offering of securities subject to Rule 415 under the
Securities Act, will be filed as a part of an amendment to the
registration statement and will not be used until such amendment is
effective, and that, for purposes of determining any liability under the
Securities Act, each such post-effective amendment shall be
II-4
<PAGE>
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof.
(b) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceedings) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
indemnification by it is against public policy as expressed in the Securities
Act and will be governed by the final adjudication of such issue.
(c) The undersigned registrant hereby undertakes to respond to requests
for information that is incorporated by reference into the prospectus pursuant
to Items 4, 10(b), 11 or 13 of this Form, within one business day of receipt
of such request, and to send the incorporated documents by first class mail or
other equally prompt means. This includes information contained in documents
filed subsequent to the effective date of the registration statement through
the date of responding to the request.
(d) The undersigned registrant hereby undertakes to supply by means of a
post-effective amendment all information concerning a transaction, and the
company being acquired involved therein, that was not the subject of and
included in the registration statement when it became effective.
(e) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
(f) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) to include any prospectus required by Section 10(a)(3) of
the Securities Act of 1933;
(ii) to reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually or in
the aggregate, represent a fundamental change in the information
set forth in the registration statement; and
(iii) to include any material information with respect to the
plan of distribution not previously disclosed in the registration
statement or any material change to such information in the
registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to
II-5
<PAGE>
the securities offered therein, and the offering of such securities at
that time shall be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at
the termination of the offering.
II-6
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of New York,
State of New York, on the 21st day of June, 1996.
SFX BROADCASTING, INC.
By: /s/ Robert F.X. Sillerman
-------------------------
Robert F.X. Sillerman,
Chief Executive Officer
In accordance with the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates stated. Each person whose signature to this
Registration Statement appears below hereby appoints Howard J. Tytel or D.
Geoffrey Armstrong as his attorney-in-fact to sign on his behalf, individually
and in the capacities stated below, and to file any and all amendments and
post-effective amendments to this Registration Statement, which amendment or
amendments may make such changes and additions as such attorney-in-fact may
deem necessary or appropriate.
SIGNATURE TITLE DATE
--------- ----- ----
/s/ Robert F.X. Sillerman
- ------------------------- Chairman of the Board of Directors, June 21, 1996
Robert F.X. Sillerman Chief Executive Officer and
Director (principal executive
officer)
/s/ D. Geoffrey Armstrong
- ------------------------- Executive Vice President, Treasurer June 21, 1996
D. Geoffrey Armstrong Chief Operating Officer, Chief
Financial Officer and Director
(principal financial and accounting
officer)
/s/ Howard J. Tytel
- ------------------------- Executive Vice President, June 21, 1996
Howard J. Tytel Secretary and Director
/s/ Richard A. Liese
- ------------------------- Vice President and Director June 21, 1996
Richard A. Liese
/s/ James F. O'Grady, Jr.
- ------------------------- Director June 21, 1996
James F. O'Grady, Jr.
/s/ Paul Kramer
- ----------------------- Director June 21, 1996
Paul Kramer
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT PAGE
- ------- ---------------------- ---------
<S> <C> <C>
2.1 Amended and Restated Agreement and Plan of Merger, dated as of April 15,
1996, among SFX Broadcasting, Inc., SFX Merger Company and Multi-Market
Radio, Inc., including exhibits (Incorporated by reference to Exhibit 2.1
to Form 8-K filed May 8, 1996).
3.1 Restated Certificate of Incorporation of the Company (Incorporated by
reference to Exhibit 3.1 to Amendment No. 3 to Registration Statement on
Form S-1 (File No. 33-65442) filed with the Commission on September 29,
1993).
3.2 Certificate of Amendment to the Restated Certificate of Incorporation of
the Company filed with the Delaware Secretary of State's office on July
29, 1994 (Incorporated by reference to Exhibit 3.2 to Form 10-K for the
period ending December 31, 1994).
3.3 By-laws of the Company (Incorporated by reference to Exhibit 3.2 to
Registration Statement on Form S-1 (File No. 33-65442) filed with the
Commission on July 2, 1993).
*3.4 Certificate of Designations of the Company's Series C Redeemable
Convertible Preferred Stock.
*3.5 Certificate of Designations of the Company's 6 1/2% Series D Cumulative
Convertible Exchangeable Preferred Stock.
+3.6 Warrants issued to Sillerman Communications Management Corporation.
4.1 Form of Certificate for shares of Class A Common Stock (Incorporated by
reference to Exhibit 4.1 to Amendment No. 3 to Registration Statement
Form S-1 (File No. 33-65442) filed with the Commission on September 29,
1993).
4.2 Voting Trust Agreement Between Mr. Sillerman, Mr. Tytel and William J.
Magee, Jr. (Incorporated by reference to Exhibit 9 to Amendment No. 1 to
Registration Statement Form S- 1 (File No. 33-65442) filed with the
Commission on September 7, 1993).
*4.3 Indenture relating to the Company's 10 3/4% Senior Subordinated Notes
due 2006.
*4.4 Supplemental Indenture relating to the Company's 113/8% Senior
Subordinated Notes due 2000.
4.5 Offer to Purchase and Consent Solicitation, dated May 2, 1996, of
SFX Broadcasting, Inc. with respect to its 113/8 Senior Subordinated
Notes due 2000 (Incorporated by reference to Exhibit 4.1 to Form 8-K
filed May 9, 1996).
*5 Opinion of Baker & McKenzie with respect to the legality of the
securities being registered.
*8 Opinion of Baker & McKenzie with respect to the certain tax matters.
<PAGE>
*10.52 Form of Registration Rights Agreement between HMW Communications, Inc.
WWWB/WGLD Operating Company, Inc. WWWB/WGLD License Subsidiary, Inc. and
SFX Communications, Inc.
*10.53 Amendment No. 1 To Amended And Restated Financial
Consulting And Marketing Agreement dated March __, 1996
between Sillerman Communications Management Corporation
and SFX Broadcasting, Inc.
*10.54 Supplement to the Termination and Assignment Agreement
dated May 21, 1996 by and between Sillerman Communications
Management Corporation and SFX Broadcasting, Inc.
*10.55 Registration Rights Agreement dated as of May 31, 1996
by and among SFX Broadcasting, Inc., the Guarantors and BT
Securities Corporation, Goldman Sachs & Co. and Lehman
Brothers, Inc.
*10.56 Registration Rights Agreement dated as of May 31, 1996 by and among
SFX Broadcasting, Inc., and Goldman Sachs & Co., Lehman Brothers,
Inc., and BT Securities Corporation.
*10.57 Lock-up letter dated May 21, 1996 from Robert F.X.
Sillerman, Sillerman Communications Management
Corporation, R. Steven Hicks, D. Geoffrey Armstrong,
Howard J. Tytel, and Richard A. Liese.
+10.58 Form of cash-only stock appreciation rights agreement
between SFX Broadcasting, Inc. and James O'Grady, Jr.
+10.59 Form of cash-only stock appreciation rights agreement
between SFX Broadcasting, Inc. and Paul Kramer.
*11.1 Statement Regarding Calculation of Per Share Earnings.
*21 List of subsidiaries of the Company.
*23.1 Consent of Ernest & Young LLP.
*23.2 Consent of Coopers & Lybrand LLP.
*23.3 Consent of KPMG Peat Marwick LLP.
*23.4 Consent of Burcham Edding Rokenbrod & Carroll.
23.5 Consent of Baker & McKenzie (contained in Exhibit 5).
*23.6 Consent of Fisher Wayland Cooper Leader & Zaragoza L.L.P.
*25 Statement of Eligibility of Chemical Bank; Form T-1.
*99.1 Letter of Transmittal relating to the Exchange Offer.
*99.2 Letter to Brokers, Dealers, Commercial Banks, Trust
Companies and Other Nominees relating to the Exchange
Offer.
*99.3 Letter to Clients relating to the Exchange Offer.
*99.4 Notice of Guaranteed Delivery relating to the Exchange Offer.
</TABLE>
- ---------
* Filed herewith
+ To be filed by amendment
CERTIFICATE OF DESIGNATIONS, PREFERENCES
AND RELATIVE, PARTICIPATING, OPTIONAL
AND OTHER SPECIAL RIGHTS OF PREFERRED
STOCK AND QUALIFICATIONS, LIMITATIONS
AND RESTRICTIONS THEREOF
OF
SFX BROADCASTING, INC.
SERIES C REDEEMABLE CONVERTIBLE PREFERRED STOCK
-------------------
PURSUANT TO SECTION 151
OF THE GENERAL CORPORATION LAW OF THE STATE OF DELAWARE
The following resolution has been duly adopted by the Board of
Directors (such Board, including any committee thereof duly authorized to act
on behalf of such Board, herein referred to as the "Board") of SFX
Broadcasting, Inc., a Delaware corporation (the "Corporation"), pursuant to
the provisions of Section 151 of the General Corporation Law of the State of
Delaware, which resolution remains in full force and effect as of the date
hereof;
WHEREAS, the Board is authorized, within the limitations and
restrictions stated in the Restated Certificate of Incorporation of the
Corporation, to fix by resolution or resolutions the voting rights, if any, of
each series of Preferred Stock, par value $0.1 per share (the "Preferred
Stock"), of the Corporation and the designations, preferences and relative,
participating, optional and other special rights and qualifications,
limitations and restrictions thereof; and
WHEREAS, it is the desire of the Board, pursuant to its authority as
aforesaid, to authorize and fix the terms of a series of Preferred Stock and
the number of shares constituting such series:
RESOLVED, that there is hereby authorized and created a series of
Preferred Stock on the terms and with the provisions (in addition to those set
forth in the Restated Certificate of Incorporation of the Corporation that are
applicable to all Preferred Stock) as follows:
Section 1. Designation and Number of Shares.
The series of Preferred Stock shall be designated the "Series C
Redeemable Convertible Preferred Stock" (the "Series C Preferred Stock"). The
number of authorized shares of Series C Preferred Stock shall be two thousand
(2,000).
<PAGE>
Section 2. Rank.
The Series C Preferred Stock shall, as to the distribution of assets
upon liquidation, dissolution or winding up of the Corporation, rank (i) prior
to the "Class A Shares" of the Corporation, as defined in Section 4.1(a) of
the Corporation's Restated Certificate of Incorporation, and any other capital
stock of the Corporation (other than (a) the Series A Redeemable Preferred
Stock, par value $.01 per share, of the Corporation (the "Series A Preferred
Stock"); (b) the Series B Redeemable Preferred Stock, par value $.01 per
share, of the Corporation (the "Series B Preferred Stock"); and (c) any other
class or series of a class of capital stock of the Corporation the terms of
which expressly provide that the shares thereof rank senior or on a parity as
to the payment of dividends and the distribution of assets upon the
liquidation, dissolution or winding-up of the Corporation with the shares of
the Series C Preferred Stock) (such securities, other than those described in
the immediately preceding parenthetical clause, collectively referred to
herein as the "Junior Securities") and (ii) on a parity with the Series A
Preferred Stock and the Series B Preferred Stock and any other class or series
of a class of capital stock of the Corporation the terms of which expressly
provide that the shares thereof rank on a parity as to the payment of
dividends and the distribution of assets upon the liquidation, dissolution or
winding-up of the Corporation with the shares of the Series C Preferred Stock
(the "Parity Securities").
2. Dividends.
(a) The holders of the Series C Preferred Stock shall be entitled
to share equally in, and to receive, in accordance with the number of Series C
Preferred Stock held by each such holder, cumulative dividends equal to six
percent (6%) per annum of the Liquidation Preference (as defined in Section 6
hereof) of each share of Series C Preferred Stock. Dividends shall be payable
by the Corporation in arrears for each calendar quarter during which the
Series C Preferred Stock is outstanding and shall be paid on or before the
first business day of each calendar quarter in which the closing (the
"Closing") of the acquisition by SFX Broadcasting of Texas (KTCK), Inc. ("SFX
of Texas") of radio station KTCK-AM, Dallas, Texas, occurs.
(b) The Corporation's obligation to pay such dividends to the
holders of the Series C Preferred Stock is subject to and contingent upon the
absence of a material default under the terms of the Corporation's then
existing senior credit facility; provided, however, that such dividends shall
continue to accrue during the period of any such default and shall be payable
by the Corporation on the first business day of the calendar quarter following
the calendar quarter in which such default is cured.
(c) For so long as any of the shares of Series C Preferred Stock
shall remain outstanding, no dividends, whether in cash or property, may be
paid or declared by the Corporation, nor may any distribution be made for any
other class or series of capital stock of the Corporation, nor may any other
class or series of capital stock of the Corporation be purchased or acquired
for value by the Corporation, unless all accrued dividends payable for the
shares of Series C Preferred Stock for all previous quarterly periods and for
the then current quarterly period shall have been paid.
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<PAGE>
(d) Notwithstanding anything to the contrary contained herein, no
dividends on Series C Preferred Stock shall be paid or set apart for payment
by the Corporation at any time that such payment or setting apart is
prohibited by applicable law.
Section 4. Redemption.
(a) The Corporation shall be entitled, at its option, to redeem the
Series C Preferred Stock, in whole or in part at any time, and from time to
time, after the third anniversary of the date of the closing at a redemption
price per share equal to one hundred percent (100%) of the Liquidation
Preference (as defined in Section 6 hereof) per share, together with all
accrued and unpaid dividends for the shares of Series C Preferred Stock so
redeemed (collectively, the "Redemption Price").
(b) The Corporation shall mail to each holder of Series C Preferred
Stock to be redeemed, in a postage paid envelope bearing the name and post
office address of such holders as shown on the records of the Corporation, a
written notice of redemption of such shares of Series C Preferred Stock
stating the date fixed for redemption of any shares of Series C Preferred
Stock, which date shall be the first business day of the calendar quarter
immediately following the expiration of 60 days after the date of such notice
(each a "Redemption Date"), and the Redemption Price to be paid for such
shares and calling upon such holder to surrender its certificate or
certificates for such shares to the Corporation on the Redemption Date at the
place designated in such notice of redemption. On or after the Redemption
Date, each holder of Series C Preferred Stock which is to be redeemed shall
present and surrender its certificate or certificates for such shares to the
Corporation at the place designated in such notice and thereupon the
Redemption Price of such shares shall be paid to or on the order of the person
whose name appears on such certificate or certificates as the owner thereof
and each surrendered certificate shall be cancelled. From and after the
Redemption Date (unless default shall be made by the Corporation in payment of
the redemption price), all rights of the holders of the Series C Preferred
Stock so redeemed, as stockholders of the Corporation, except the right to
receive the Redemption Price thereof upon the surrender of certificates
representing the same, shall cease and terminate and such shares shall not
thereafter be transferred (except with the consent of the Corporation) on the
books of the Corporation, and such shares shall not be deemed to be
outstanding for any purpose whatsoever.
(c) The holders of Series C Preferred Stock shall be entitled, at
their option, to cause the Corporation to purchase the Series C Preferred
Stock, in whole or in part at any time, and from time to time, after the fifth
anniversary of the date of the Closing at the Redemption Price.
(d) The holders of Series C Preferred Stock to be purchased by the
Corporation shall mail to the Corporation in a postage prepaid envelope a
written notice thereof stating the date fixed for the Corporation's purchase
of any shares of Series C Preferred Stock, which date shall be the first
business day of the calendar quarter immediately following the expiration of
60 days after the date of such notice (each a "Purchase Date"), and the
Redemption Price to be paid for such shares and calling upon the Corporation
to purchase such shares on the Purchase Date at
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<PAGE>
the offices of the Corporation. On or after the Purchase Date, each holder of
Series C Preferred Stock which is to be purchased shall present and surrender
its certificate or certificates for such shares to the Corporation at the
offices of the Corporation and thereupon the Redemption Price of such shares
shall be paid to or on the order of the person whose name appears on such
certificate or certificates as the owner thereof and each surrendered
certificate shall be cancelled. From and after the Purchase Date (unless
default shall be made by the Corporation in payment of the Redemption Price),
all rights of the holders of the Series C Preferred Stock so purchased, as
stockholders of the Corporation, except the right to receive the Redemption
Price thereof upon the surrender of certificates representing the same, shall
cease and terminate and such shares shall not thereafter be transferred
(except with the consent of the Corporation) on the books of the Corporation,
and such shares shall not be deemed to be outstanding for any purpose
whatsoever.
(c) Any cash payment to a holder of shares of Series C Preferred
Stock on the Redemption Date or the Purchase Date shall be made in immediately
available funds in coin or currency of the United States of America which as
of the date of payment shall be legal tender for the payment of public and
private debts.
Section 5. Convertibility.
(a) Upon the occurrence of an Event of Default under (and as
defined in) Section 5.5 of that certain Asset Purchase Agreement dated April
24, 1995 by and among Cardinal Communications Partners, L.P., SFX of Texas and
the Corporation, which Event of Default is not cured within ninety (90) days
after receipt of notice of such default as provided therein, the holders of
the Series C Preferred Stock shall be entitled to convert their shares of
Series C Preferred Stock then outstanding into the number of shares of Class A
Shares that shall be determined by dividing the number of shares of Series C
Preferred Stock then outstanding by the product of seventy-five percent (75%)
multiplied by the average closing bid and ask price per share for the Class A
Shares quoted on the NASDAQ National Market or any successor exchange on which
the Class A Shares are listed for the thirty (30) day period immediately prior
to the effective date of the conversion.
(b) Any holder of Series C Preferred Stock which is thereafter
eligible for conversion may surrender the certificate or certificates
therefor, duly endorsed in blank or accompanied by proper instruments of
transfer, at the office of the Corporation, and shall give written notice to
the Corporation at such office (i) stating that their shares of Series C
Preferred Stock are being returned to the Corporation for conversion into
shares of Class A Shares as provided in subparagraph (a) above, (ii)
identifying the number of shares of Series C Preferred Stock so converted, and
(iii) setting forth the name or names (with addresses) in which the
certificate or certificates for shares of Class A Shares shall be issued and
shall include instructions for delivery thereof. Delivery of such notice
together with the certificates representing such shares of Series C Preferred
Stock shall obligate the Corporation to issue such shares of Class A Shares
and the Corporation shall be justified in relying upon the information and
certifications contained in such notice and shall not be liable for the result
of any inaccuracy with respect thereto. Thereupon the Corporation shall
promptly issue and deliver at such stated
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<PAGE>
address to such holder a certificate or certificates for the number of shares
of Class A Shares to which such holder is entitled, registered in the name of
such holder or the designee of such holder as specified in such notice. The
Class A Shares so issued shall be freely tradeable pursuant to a registration
or an exemption from registration under applicable federal securities laws.
(c) Series C Preferred Stock that is converted into Class A Shares
as provided herein shall be retired and cancelled and shall not be reissued.
Section 6. Liquidation.
The shares of Series C Preferred Stock shall rank prior to the shares
of Junior Securities upon liquidation, dissolution or winding-up of the
Corporation, whether voluntary or involuntary (a "Liquidation Transaction"),
so that in the event of any Liquidation Transaction the holders of shares of
Series C Preferred Stock then outstanding shall be entitled to receive out of
the assets or surplus funds of the Corporation available for distribution to
its stockholders, or proceeds thereof, whether from capital, surplus or
earnings, before any distribution is made to holders of any Junior Securities,
a liquidation preference (the "Liquidation Preference") in the amount per
share of Series C Preferred Stock equal to One Thousand Dollars ($1,000). If,
upon any Liquidation Transaction, the assets or surplus funds of the
Corporation, or proceeds thereof, whether from capital, surplus or earnings,
distributable among the holders of shares of Series C Preferred Stock and any
Parity Securities then outstanding are insufficient to pay in full the
preferential liquidation payments due to such holders, such assets or proceeds
shall be distributable among such holders ratably in accordance with the
amounts that would be payable on such shares of Series C Preferred Stock and
Parity Securities if all amounts payable thereon were payable in full. In the
event of a Liquidating Transaction, the Corporation shall give written notice
to the holders of shares of Series C Preferred Stock, by first class mail to
such holders' respective addresses as shown on the stock books of the
Corporation. Neither the consolidation, merger or other business combination
of the Corporation with or into any other person or persons nor the sale of
all or substantially all of the assets of the Corporation shall be deemed to
be a Liquidation Transaction.
Section 7. Voting Rights.
The holders of shares of Series C Preferred Stock shall not be
entitled to any voting rights except as required by law.
Section 8. Transfer.
The holder of shares of Series C Preferred Stock shall be prohibited
from selling, giving or in any way transferring any shares of Series C
Preferred Stock held by each of them; provided however, that any such holder
of Series C Preferred Stock shall be entitled to sell, give or in any way
transfer such shares of Series C Preferred Stock to a member of such holders
immediate family.
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<PAGE>
IN WITNESS WHEREOF, SFX Broadcasting, Inc. has caused this Certificate
of Designations, Preferences and Relative, Participating, Optional and other
Special Rights of Preferred Stock and Qualifications, Limitations and
Restrictions thereof of its Series C Preferred Stock to be duly executed by
its Secretary and has caused its corporate seal to be affixed hereto, as of
this 12th day of September, 1995.
/s/ Howard J. Tytel
------------------------------
Name: Howard J. Tytel
Title: Executive Vice President
and Secretary
Attest:
/s/ Richard A. Liese
- ------------------------------
Name: Richard A. Liese
Title: Assistant Secretary
- 6 -
CERTIFICATE OF DESIGNATIONS, PREFERENCES
AND RELATIVE, PARTICIPATING, OPTIONAL AND
OTHER SPECIAL RIGHTS OF PREFERRED
STOCK AND QUALIFICATIONS, LIMITATIONS
AND RESTRICTIONS THEREOF
OF
6 1/2% SERIES D CUMULATIVE CONVERTIBLE EXCHANGEABLE PREFERRED
STOCK DUE MAY DUE MAY 31, 2007
OF
SFX BROADCASTING, INC.
-------------------------
Pursuant to Section 151 of the
General Corporation Law of the State of Delaware
-------------------------
SFX Broadcasting, Inc. (the "Corporation"), a corporation
organized and existing under the General Corporation Law of the State of
Delaware, certifies that pursuant to the authority contained in Article 6 of
its Restated Certificate of Incorporation (the "Certificate of Incorporation")
and in accordance with the provisions of Section 151 of the General
Corporation Law of the State of Delaware, the Board of Directors of the
Corporation by unanimous written consent dated May 21, 1996 duly approved and
adopted the following resolution which resolution remains in full force and
effect on the date hereof:
RESOLVED, that pursuant to the authority vested in the Board
of Directors by its Certificate of Incorporation, the Board of Directors does
hereby designate, create, authorized and provide for the issue of 6 1/2%
Series D Cumulative Convertible Exchangeable Preferred Stock due May 31, 2007
(the "Series D Preferred Stock"), par value $0.01 per share, with a liquidation
preference of $50.00 per share, consisting of up to 2,990,000 shares, having
the following voting powers, preferences and relative, participating, optional
and other special rights, and qualifications, limitations and restrictions
thereof as follows:
1. Certain Definitions.
Unless the context otherwise requires, the terms defined in
this Section 1 shall have, for all purposes of this resolution, the meanings
herein specified (with terms defined in the singular having comparable
meanings when used in the plural).
<PAGE>
Advertising Business. The term "Advertising Business" shall
mean any business deriving substantially all of its revenues from the (i) sale
of advertisements and (ii) sale of products or provision of services to any
business described in clause (i) above.
Applicable Redemption Price. The term "Applicable Redemption
Price" shall mean a price per share equal to the following redemption prices
(expressed as a percentage of the Liquidation Preference thereof) during the
twelve-month periods commencing on June 1 of the years indicated:
1999............. 104.55% 2003..................... 101.95%
2000............. 103.90% 2004..................... 101.30%
2001............. 103.25% 2005..................... 100.65%
2002............. 102.60% 2006 and thereafter...... 100.00%
in each case, together with accrued and unpaid dividends and Liquidated
Damages (if any) thereon to the Redemption Date.
Affiliate. The term "Affiliate" of any specified Person
shall mean any other Person directly or indirectly controlling or controlled
by or under direct or indirect common control with such specified Person. For
purposes of this definition, "control" (including, with correlative meanings,
the terms "controlling," "controlled by" and "under common control with"), as
used with respect to any Person, shall mean the possession, directly or
indirectly, of the power to direct or cause the direction of the management or
policies of such Person, whether through the ownership of voting securities,
by agreement or otherwise; provided that beneficial ownership of 10% or more
of the voting securities of a Person shall be deemed to be control.
Affiliate Transaction. The term "Affiliate Transaction" shall have the
meaning set forth in Section 9(a) below.
Broadcast Business. The term "Broadcast Business" shall mean any
business, the majority of whose revenues are derived from the broadcast of
radio programming.
Business Day. The term "Business Day" shall mean a day other than a
Saturday or Sunday or any federal holiday.
Capital Lease Obligation. The term "Capital Lease
Obligation" shall mean, at the time any determination thereof is to be made,
the amount of the liability in respect of a capital lease that would at such
time be required to be capitalized on a balance sheet in accordance with GAAP.
Capital Stock. The term "Capital Stock" shall mean (i) in
the case of a corporation, corporate stock, (ii) in the case of an association
or business entity, any and all shares, interests, participations, rights or
other equivalents (however designated) of corporate stock, (iii) in the case
of a partnership, partnership interests (whether general or limited) and (iv)
any other interest or participation that confers on a Person the right to
receive a share of the profits and losses of, or distributions of assets of,
the issuing Person.
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<PAGE>
Cash Equivalents. The term "Cash Equivalents" shall mean (i)
United States dollars, (ii) securities issued or directly and fully guaranteed
or insured by the United States government or any agency or instrumentality
thereof having maturities of not more than six months from the date of
acquisition, (iii) certificates of deposit and eurodollar time deposits with
maturities of six months or less from the date of acquisition, bankers'
acceptances with maturities not exceeding six months and overnight bank
deposits, in each case with any lender party to the New Credit Agreement or
with any domestic commercial bank having capital and surplus in excess of
$500.0 million and a Thomson Bank Watch Rating of "B" or better, (iv)
repurchase obligations with a term of not more than seven days for underlying
securities of the types described in clauses (ii) and (iii) above entered into
with any financial institution meeting the qualifications specified in clause
(iii) above and (v) commercial paper having the highest rating obtainable from
Moody's Investors Service, Inc. or Standard & Poor's Corporation and in each
case maturing within six months after the date of acquisition.
Change of Control. The term "Change of Control" shall mean
the occurrence of any of the following: (i) the sale, lease, transfer,
conveyance or other disposition (other than by way of merger or
consolidation), in one or a series of related transactions, of all or
substantially all of the assets of the Corporation and its Subsidiaries taken
as a whole to any "person" (as such term is used in Section 13(d)(3) of the
Exchange Act) other than the Principal or his Related Parties (as defined
below), (ii) the adoption of a plan relating to the liquidation or dissolution
of the Corporation, (iii) the consummation of any transaction (including,
without limitation, any merger or consolidation) the result of which is that
(A) any "person" (as defined above), other than the Principal and his Related
Parties, becomes the "beneficial owner" (as such term is defined in Rule 13d-3
and Rule 13d-5 under the Exchange Act, except that a person shall be deemed to
have "beneficial ownership" of all securities that such person has the right
to acquire, whether such right is exercisable immediately or only after the
passage of time, upon the happening of an event or otherwise), directly or
indirectly, of Voting Stock of the Corporation having more than 35% of the
combined voting power of all classes of Voting Stock of the Corporation then
outstanding or (B) the Principal and his Affiliates acquire, in the aggregate,
beneficial ownership (as defined above) of more than 66 2/3% of the shares of
Class A Common Stock at the time outstanding, or (iv) the first day on which a
majority of the members of the Board of Directors of the Corporation are not
Continuing Directors.
Change of Control Offer. The term "Change of Control Offer" shall have
the meaning set forth in Section 8(a) below.
Change of Control Payment. The term "Change of Control Payment" shall
have the meaning set forth in Section 8(a) below.
Change of Control Payment Date. The term "Change of Control
Payment Date" shall have the meaning set forth in Section 8(e)(ii) below.
Class A Common Stock. The term "Class A Common Stock" shall
mean the Class A Common Stock, par value $.01 per share, of the Corporation.
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<PAGE>
Class B Common Stock. The term "Class B Common Stock" shall
mean the Class B Common Stock, par value $.01 per share, of the Corporation.
Common Equity. The term "Common Equity" shall mean all
shares now or hereafter authorized of any class of common stock of the
Corporation, including the Class A Common Stock and Class B Common Stock, and
any other stock of the Corporation, howsoever designated, authorized after the
Initial Issue Date, that have the right (subject always to prior rights of any
class or series of preferred stock) to participate in the distribution of the
assets and earnings of the Corporation without limit as to per share amount.
Continuing Directors. The term "Continuing Directors" shall
mean, as of any date of determination, any member of the Board of Directors of
the Corporation who (i) was a member of such Board of Directors on the Initial
Issue Date or (ii) was nominated for election or elected to such Board of
Directors with the approval of a majority of the Continuing Directors who were
members of such Board at the time of such nomination or election.
Conversion Agent. The term "Conversion Agent" shall mean the
entity designated from time to time by the Corporation to act as conversion
agent for the Series D Preferred Stock.
Conversion Date. The term "Conversion Date" shall have the
meaning set forth
in Section 4(b) below.
Conversion Rate. The term "Conversion Rate" shall mean, as
of any date, the number of shares of Class A Common Stock issuable upon
conversion of one share of Series D Preferred Stock, determined by dividing
the Liquidation Preference of such share of Series D Preferred Stock by the
Conversion Price then in effect.
Conversion Payments. The term "Conversion Payments" shall
have the meaning set forth in Section 4(a) below.
Conversion Price. The term "Conversion Price" shall
initially mean $45.5083 and thereafter shall be subject to adjustment from
time to time pursuant to the terms of Section 4 below. The Conversion Price
shall be rounded to four decimal places.
Current Market Price. The term "Current Market Price" shall
mean, with respect to any particular security on any date of determination,
the average over the 20 Trading Days ending on the date immediately preceding
the date of such determination of the last reported sale price, or, if no such
sale takes place on any such day, the closing bid price, in either case as
reported for consolidated transactions on the principal national securities
exchange (including the Nasdaq National Market) on which such security is
listed or admitted for trading; provided, however, that if any event that
results in an adjustment of the Conversion Rate occurs during the period
beginning on the first day of such 20-day period and ending on the date
immediately preceding the date of determination, the Current Market Price as
determined pursuant to the foregoing will be appropriately adjusted to reflect
the occurrence of such event or, if such security is not listed on any
exchange or admitted for trading on the Nasdaq Stock Market, the Current
Market Price of such
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<PAGE>
security shall be the last reported bid price for such security on the
date preceding the date of such determination provided by a New York Stock
Exchange member firm designated by the Corporation or, if no such member firm
can provide such a bid price, as determined in good faith by a majority of the
independent directors of the Corporation. In the event the Corporation elects
to pay any Change of Control Payment in shares of Class A Common Stock or is
required to pay cash to Holders of Series D Preferred Stock seeking to convert
shares of Series D Preferred Stock at a time when an insufficient number of
shares of Class A Common Stock are authorized for issuance, the Corporation is
restricted by FCC rules from issuing shares of Class A Common Stock upon
conversion of any shares of Series D Preferred Stock or in lieu of the
issuance of a fractional share, the Current Market Price shall be determined
on the basis of the average of the five Trading Days ending on and including
the third Trading Day preceding the Change of Control Payment Date or the date
of such conversion, as the case may be.
Default. The term "Default" shall mean any event that is or with the
passage of time or the giving of notice or both would be an Event of Default.
Dividend Payment Date. The term "Dividend Payment Date" shall have the
meaning set forth in Section 2(a) below.
Dividend Period. The term "Dividend Period" shall mean the period from,
and including, the Initial Issue Date to, but not including, the first
Dividend Payment Date and thereafter, each quarterly period from, and
including, the preceding Dividend Payment Date to, but not including the next
Dividend Payment Date.
Equity Interests. The term "Equity Interests" shall mean Capital Stock
and all warrants, options or other rights to acquire Capital Stock (but
excluding any debt security that is convertible into, or exchangeable for,
Capital Stock).
Exchange Date. The term "Exchange Date" shall have the meaning set forth
in Section 6(b) below.
Exchange Notes. The term "Exchange Notes" shall mean the
Corporations's 6 1/2% Convertible Subordinated Exchange Notes due 2007
issuable in exchange for the Corporation's Series D Preferred Stock.
Exchange Indenture. The term "Exchange Indenture" shall mean that certain
indenture under which the Exchange Notes would be issued and which shall be
substantially in the form attached as Annex A hereto.
Executive Officer. The term "Executive Officer" shall mean
any officer of the Corporation that would be deemed to be an "executive
officer" within meaning of the rules and regulations of the Securities and
Exchange Commission.
Exempt Issuances. The term "Exempt Issuances" shall have the meaning set
forth in Section 4(i) below.
5
<PAGE>
Existing MMR Indebtedness. The term "Existing MMR
Indebtedness" shall mean all Indebtedness of MMR and its Subsidiaries in
existence at the closing of the MMR Merger, until such amounts are repaid.
Fair Market Value. The term "Fair Market Value" shall be
determined in accordance with Section 4(o) hereof.
GAAP. The term "GAAP" shall mean generally accepted
accounting principles set forth in the opinions and pronouncements of the
Accounting Principles Board of the American Institute of Certified Public
Accountants and statements and pronouncements of the Financial Accounting
Standards Board or in such other statements by such other entity as have been
approved by a significant segment of the accounting profession, which are in
effect on the Initial Issue Date.
Guarantee. The term "Guarantee" shall mean a guarantee
(other than by endorsement of negotiable instruments for collection in the
ordinary course of business), direct or indirect, in any manner (including,
without limitation, letters of credit and reimbursement agreements in respect
thereof), of all or any part of any Indebtedness.
Holder. The term "Holder" shall mean the record holder of
one or more shares of Series D Preferred Stock, as shown on the books and
records of the Transfer Agent.
Hedging Obligations. The term "Hedging Obligations" shall
mean, with respect to any Person, the obligations of such Person under (i)
interest rate swap agreements, interest rate cap agreements and interest rate
collar agreements and (ii) other agreements or arrangements designed to
protect such Person against fluctuations in interest rates.
Indebtedness. The term "Indebtedness" shall mean, with
respect to any Person, any indebtedness of such Person, whether or not
contingent, in respect of borrowed money or evidenced by bonds, notes,
debentures or similar instruments or letters of credit (or reimbursement
agreements in respect thereof) or banker's acceptances or representing Capital
Lease Obligations or the balance deferred and unpaid of the purchase price of
any property or payment obligations under an LMA or representing any Hedging
Obligations, except any such balance that constitutes an accrued expense or
trade payable, if and to the extent any of the foregoing (other than letters
of credit and Hedging Obligations) would appear as a liability upon a balance
sheet of such Person prepared in accordance with GAAP, as well as all
indebtedness of others secured by a Lien on any asset of such Person (whether
or not such indebtedness is assumed by such Person) and, to the extent not
otherwise included, the Guarantee by such Person of any indebtedness of any
other Person.
Initial Issue Date. The term "Initial Issue Date" shall mean
the date that shares of Series D Preferred Stock are first issued by the
Corporation.
Investments. The term "Investments" shall mean, with respect
to any Person, all investments by such Person in other Persons (including
Affiliates) in the forms of direct or indirect loans (including guarantees of
Indebtedness or other obligations), advances or capital contributions
(excluding commission, travel and similar advances to officers and employees
made in the ordinary
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<PAGE>
course of business), purchases or other acquisitions for consideration of
Indebtedness, Equity Interests or other securities, together with all items
that are or would be classified as investments on a balance sheet prepared in
accordance with GAAP; provided that an acquisition of assets, Equity Interests
or other securities by the Corporation for consideration consisting of Common
Equity shall not be deemed to be an Investment. If the Corporation or any
Subsidiary of the Corporation sells or otherwise disposes of any Equity
Interests of any direct or indirect Subsidiary of the Corporation such that,
after giving effect to any such sale or disposition, such Person is no longer
a Subsidiary of the Corporation, the Corporation shall be deemed to have made
an Investment on the date of any such sale or disposition equal to the Fair
Market Value of the Equity Interests of such Subsidiary not sold or disposed
of.
Junior Securities. The term "Junior Securities" shall mean
any class of stock ranking junior to the Series D Preferred Stock as to the
payment of dividends and as to rights in liquidation, dissolution or winding
up of the affairs of the Corporation. The Corporation's Series A Preferred
Stock, Series B Preferred Stock and Series C Preferred Stock are expressly
defined and included as Junior Securities.
Lien. The term "Lien" shall mean, with respect to any asset,
any mortgage, lien, pledge, charge, security interest or encumbrance of any
kind in respect of such asset, whether or not filed, recorded or otherwise
perfected under applicable law (including any conditional sale or other title
retention agreement, any lease in the nature thereof, any option or other
agreement to sell or give a security interest in and any filing of or
agreement to give any financing statement under the Uniform Commercial Code
(or equivalent statutes) of any jurisdiction).
Liquidated Damages. The term "Liquidated Damages" shall have
the meaning assigned in the registration rights agreement dated May 31, 1996
among the Corporation, the Initial Purchasers (as defined in such agreement)
and the other parties listed on the signature pages thereto, with respect to
the Series D Preferred Stock, as the same is in effect on May 31, 1996.
Liquidation Preference. The term "Liquidation Preference"
shall mean $50 per share of Series D Preferred Stock.
Local Marketing Agreement or LMA. The terms "Local Marketing
Agreement" or "LMA" shall mean a local marketing arrangement, sale agreement,
time brokerage agreement, management agreement or similar arrangement pursuant
to which a Person, subject to customary preemption rights and other
limitations (i) obtains the right to sell at least a majority of the
advertising inventory of a radio station of which a third party is the
licensee, (ii) obtains the right to broadcast programming and sell advertising
time during a majority of the air time of a radio station or (iii) manages the
selling operations of a radio station with respect to at least a majority of
the advertising inventory of such station.
Management Termination Agreements. The term "Management
Termination Agreements" shall mean each of (i) the termination agreement
between the Corporation and R. Steven Hicks, dated April 15, 1996, and (ii)
the employment agreement between the Corporation and D. Geoffrey Armstrong,
effective April 15, 1996, in each case, as in effect on the Initial Issue
Date.
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Mandatory Redemption Date. The term "Mandatory Redemption
Date" shall have the meaning set forth in Section 5(a) below.
Market Capitalization. The term "Market Capitalization"
shall mean, as of any date, the product of the Current Market Price of the
Class A Common Stock as of such date times the number of shares of Class A
Common Stock outstanding as of such date.
MMR. The term "MMR" shall mean Multi-Market Radio, Inc., a
Delaware corporation.
MMR Merger. The term "MMR Merger" means the merger of SFX
Merger Company, a wholly-owned Subsidiary of the Corporation, with and into
MMR, pursuant to which MMR will become a wholly-owned Subsidiary of the
Corporation.
New Credit Agreement. The term "New Credit Agreement" shall
mean that certain Credit Agreement to be entered into by and among the
Corporation, the Corporation's Subsidiaries and the lenders party thereto,
providing for $150.0 million of revolving credit borrowings, including any
related notes, guarantees, collateral documents, and other agreements executed
in connection therewith, and in each case as amended, modified, renewed,
refunded, replaced or refinanced from time to time.
Officers' Certificate. The term "Officers' Certificate"
shall mean a certificate signed on behalf of the Corporation by two officers
of the Corporation, one of whom must be the Chief Executive Officer, the Chief
Financial Officer, the Treasurer or the principal accounting officer of the
Corporation that meets the requirements of Section 11 hereof.
Parity Securities. The term "Parity Securities" shall mean
any class or series of stock of the Corporation authorized after the Initial
Issue Date that is entitled to receive payment of dividends and to receive
assets upon liquidation, dissolution or winding up of the affairs of the
Corporation on a parity with the Series D Preferred Stock.
Permitted Investments. The term "Permitted Investments"
shall mean (a) any Investment in the Corporation or any Subsidiary of the
Corporation; (b) any Investment in Cash Equivalents; (c) any Investment by the
Corporation or any Subsidiary of the Corporation in a Person, if after such
Investment (i) such Person becomes a Subsidiary of the Corporation or (ii)
such Person is merged, consolidated or amalgamated with or into, or transfers
or conveys substantially all of its assets to, or is liquidated into, the
Corporation or a Subsidiary of the Corporation; (d) any obligations or shares
of Capital Stock received in connection with or as a result of a bankruptcy,
workout or reorganization of the issuer of such obligations or shares of
Capital Stock; (e) any Investment received involuntarily; (f) Investments in
any Person (other than an Affiliate of the Corporation that is not also a
Subsidiary of the Corporation) engaged in a Broadcast Business or an
Advertising Business which Investments have an aggregate fair market value
(measured on the date each such Investment was made and without giving effect
to subsequent changes in value), when taken together with all other
Investments made pursuant to this clause (f) that are at the time outstanding,
not to exceed $20.0 million and (g) other Investments in any Person (other
than an Affiliate of the
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Corporation that is not also a Subsidiary of the Corporation) having an
aggregate fair market value (measured on the date each such Investment was
made and without giving effect to subsequent changes in value), when taken
together with all other Investments made pursuant to this clause (g) that are
at the time outstanding, not to exceed $15.0 million.
Principal. The term "Principal" shall mean Robert F.X.
Sillerman.
Record Date. The term "Record Date" shall have the meaning
set forth in Section 2(a) below.
Redemption Date. The term "Redemption Date" shall have the
meaning set forth in Section 5(d) below.
Related Party. The term "Related Party" with respect to the
Principal shall mean (A) any spouse or immediate family member (in the case of
an individual) of the Principal or (B) any trust, corporation, partnership or
other entity, the beneficiaries, stockholders, partners, owners or persons (as
defined in "Change of Control") beneficially holding an 80% or more
controlling interest of which consist of the Principal and/or such other
persons referred to in the immediately preceding clause (A).
Rights. The term "Rights" shall mean securities, rights,
options or warrants entitling a holder thereof to subscribe for or purchase
any shares of Class A Common Stock of the Corporation.
SCMC. The term "SCMC" shall mean Sillerman Communications
Management Corporation, a Delaware corporation.
Securities Act. The term "Securities Act" shall mean the
Securities Act of 1933, as amended.
Senior Securities. The term "Senior Securities" shall mean
any class or series of stock of the Corporation authorized after the Initial
Issue Date ranking senior to the Series D Preferred Stock in respect of the
right to receive dividends and in respect of the right to participate in any
distribution upon liquidation, dissolution or winding up of the affairs of the
Corporation.
SFX Merger Company. The term "SFX Merger Company" shall mean
SFX Merger Company, a Delaware Corporation.
Shared Facilities Agreement. The term "Shared Facilities
Agreement" shall mean the Shared Facilities Agreement between the Corporation
and SCMC, as in effect on the Initial Issue Date.
Significant Subsidiary. The term "Significant Subsidiary"
shall mean any Subsidiary that would be a "significant subsidiary" as defined
in Article 1, Rule 1-02 of Regulation S-X, promulgated pursuant to the
Securities Act, as such Regulation is in effect on the date hereof.
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Subsidiary. The term "Subsidiary" shall mean, with respect
to any person, (i) any corporation, association or other business entity of
which more than 50% of the total voting power of shares of Voting Stock
thereof is at the time owned or controlled, directly or indirectly, by such
person or one or more of the other Subsidiaries of that person (or a
combination thereof) and (ii) any partnership (a) the sole general partner or
the managing general partner of which is such person or a Subsidiary of such
person or (b) the only general partners of which are such person or of one or
more Subsidiaries of such person (or any combination thereof).
Trading Day. The term "Trading Day" with respect to either
the Class A Common Stock or Series D Preferred Stock, as the case may be,
shall mean any day on which any market (including, without limitation, any
formal or informal over the counter market) in which the applicable security
is then traded and in which a quoted price may be ascertained is open for
business.
Transfer Agent. The term "Transfer Agent" shall mean the
entity designated from time to time by the Corporation to act as the registrar
and transfer agent for the Series D Preferred Stock.
Voting Stock. The term "Voting Stock" shall mean with
respect to any specified Person, Capital Stock with voting power, under
ordinary circumstances and without regard to the occurrence of any
contingency, to elect the directors or other managers or trustees of such
Person.
Voting Rights Trigger Event. The term "Voting Rights Trigger
Event" shall have the meaning set forth in Section 7(b) below.
2. Dividends.
(a) The Holders of shares of the Series D Preferred Stock
shall be entitled to receive, when, as and if dividends are declared by the
Board of Directors out of funds of the Corporation legally available therefor,
cumulative preferential dividends from the Initial Issue Date of the Series D
Preferred Stock accruing at the rate per share of $3.25 per annum, or $0.8125
per quarter, payable quarterly in arrears on February 28, May 31, August 31
and November 30 in each year or, if any such date is not a Business Day, on
the next succeeding business day (each, a "Dividend Payment Date"), to the
Holders of record as of the immediately preceding February 15, May 15, August
15 and November 15 (each, a "Record Date"). Dividends will be payable in cash.
The first dividend payment of $0.8125 per share of Series D Preferred Stock
will be payable on August 31, 1996. Dividends payable on the Series D
Preferred Stock will be computed on the basis of a 360-day year of twelve
30-day months and will be deemed to accrue on a daily basis. The Series D
Preferred Stock will not be redeemable unless all dividends accrued through
May 31, 1999 shall have been paid in cash.
(b) Dividends on the Series D Preferred Stock shall accrue
whether or not the Corporation has earnings or profits, whether or not there
are funds legally available for the payment of such dividends and whether or
not dividends are declared. Dividends will accumulate to the extent they are
not paid on the Dividend Payment Date for the quarter to which they relate.
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Accumulated unpaid dividends will bear interest at the rate of 6 1/2% per
annum. The Corporation shall take all actions required or permitted under
Delaware law to permit the payment of dividends on the Series D Preferred
Stock.
(c) No dividend whatsoever shall be declared or paid upon,
or any sum set apart for the payment of dividends upon, any outstanding share
of the Series D Preferred Stock with respect to any Dividend Period unless all
dividends for all preceding Dividend Periods have been declared and paid upon,
or declared and a sufficient sum set apart for the payment of such dividend
upon, all outstanding shares of Series D Preferred Stock. Unless full
cumulative dividends on all outstanding shares of Series D Preferred Stock due
for all past Dividend Periods shall have been declared and paid, or declared
and a sufficient sum for the payment thereof set apart, then: (i) no dividend
(other than a dividend payable solely in shares of any Junior Securities)
shall be declared or paid upon, or any sum set apart for the payment of
dividends upon, any shares of Junior Securities; (ii) no other distribution
shall be made upon or any sum set apart for the payment of any distribution
upon, any shares of Junior Securities; (iii) no shares of Junior Securities
shall be purchased, redeemed or otherwise acquired or retired for value
(excluding an exchange for shares of other Junior Securities) by the
Corporation or any of its Subsidiaries; and (iv) no monies shall be paid into
or set apart or made available for a sinking or other like fund for the
purchase, redemption or other acquisition or retirement for value of any
shares of Junior Securities by the Corporation or any of its Subsidiaries.
Holders of the Series D Preferred Stock will not be entitled to any dividends,
whether payable in cash, property or stock, in excess of the full cumulative
dividends as herein described.
3. Distributions Upon Liquidation, Dissolution or Winding
Up.
Upon any voluntary or involuntary liquidation, dissolution or winding
up of the affairs of the Corporation or reduction or decrease in its capital
stock resulting in a distribution of assets to the holders of any class or
series of the Corporation's Capital Stock (a "reduction or decrease in capital
stock"), each Holder of shares of the Series D Preferred Stock shall be
entitled to payment out of the assets of the Corporation available for
distribution of an amount equal to the Liquidation Preference per share of
Series D Preferred Stock held by such Holder, plus accrued and unpaid
dividends and Liquidated Damages (if any) to the date fixed for liquidation,
dissolution, winding up or reduction or decrease in capital stock, before any
distribution is made on any Junior Securities, including, without limitation,
Common Equity of the Corporation. After payment in full of the Liquidation
Preference and all accrued dividends and Liquidated Damages (if any) to which
Holders of Series D Preferred Stock are entitled, such Holders will not be
entitled to any further participation in any distribution of assets of the
Corporation. However, neither the voluntary sale, conveyance, exchange or
transfer (for cash, shares of stock, securities or other consideration)
of all or substantially all of the property or assets of the Corporation nor
the consolidation or merger of the Corporation with or into one or more
corporations will be deemed to be a voluntary or involuntary liquidation,
dissolution or winding up of the Corporation or reduction or decrease in
capital stock, unless such sale, conveyance, exchange or transfer shall be
in connection with a liquidation, dissolution or winding up of the business
of the Corporation or reduction or decrease in capital stock.
4. Conversion Rights.
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(a) Each Holder of shares of Series D Preferred Stock shall
have the right, at such Holder's option, to convert all or any portion of its
shares of Series D Preferred Stock into shares of Class A Common Stock at any
time, unless previously redeemed or repurchased, at the Conversion Rate
calculated as of the close of business on the Conversion Date (subject to
adjustment pursuant to this Section 4 and subject to the Corporation obtaining
the approval of the Federal Communications Commission (the "FCC"), if
required). In the event that an insufficient number of shares of Class A
Common Stock are available for issuance or the Corporation is restricted by
FCC rules from issuing shares of Class A Common Stock upon conversion of any
shares of Series D Preferred Stock, the Corporation shall be required to pay
to the Holder of each share of Series D Preferred Stock seeking to convert
such share an amount per share of Class A Common Stock in cash equal to 110%
of the Current Market Price of the Class A Common Stock as of the date of such
conversion (the "Conversion Payments"). The right to convert a share of Series
D Preferred Stock called for redemption or delivered for repurchase shall
terminate at the close of business on the Redemption Date for such Series D
Preferred Stock or the repurchase date, as the case may be.
(b) The right of conversion attaching to any share of Series
D Preferred Stock may be exercised by the Holder thereof by delivering the
share of Series D Preferred Stock to be converted to the office of the
Conversion Agent, accompanied by a duly signed and completed notice of
conversion in form reasonably satisfactory to the Conversion Agent. The
"Conversion Date" will be the date on which the share of Series D Preferred
Stock and the duly signed and completed notice of conversion are so delivered.
As promptly as practicable on or after the conversion date, the Corporation
shall issue and deliver to the Conversion Agent a certificate or certificates
for the number of full shares of Class A Common Stock issuable upon
conversion, together with payment in cash, determined as provided below, in
lieu of any fraction of a share. Such certificate or certificates shall be
delivered by the Conversion Agent to the appropriate Holder on a book-entry
basis or by mailing certificates evidencing the additional shares to the
Holders at their respective addresses set forth in the register of Holders
maintained by the Transfer Agent. All shares of Class A Common Stock issuable
upon conversion of the Series D Preferred Stock shall be fully paid and
nonassessable and shall rank pari passu with the other shares of Class A
Common Stock outstanding from time to time. Any Series D Preferred Stock
surrendered for conversion during the period from the close of business on any
Record Date to the opening of business on the next succeeding Dividend Payment
Date must be accompanied by payment of an amount equal to the dividends
payable on such Dividend Payment Date on the Series D Preferred Stock being
surrendered for conversion. In the case of any Series D Preferred Stock that
has been converted after any Record Date but before the next Dividend Payment
Date, dividends that are payable on such Dividend Payment Date shall be
payable on such DividendPayment Date notwithstanding such conversion, and
such dividends shall be paid to the Holder of such Series D Preferred Stock
on such Record Date. No other payment or adjustment for dividends, or for any
dividends in respect of shares of Class A Common Stock, shall by made upon
conversion. Holders of Class A Common Stock issued upon conversion shall not
be entitled to receive any dividends payable to holders of Class A Common
Stock as of any record time before the close of business on the Conversion Date.
(c) The Corporation shall not issue a fractional share of
Class A Common Stock upon conversion of Series D Preferred Stock. Instead the
Corporation shall deliver a check for an
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<PAGE>
amount equal to the applicable fraction of a share multiplied by the Current
Market Price calculated as of the close of business on the Conversion Date,
rounded to the nearest cent.
(d) A Holder delivering Series D Preferred Stock for
conversion will not be required to pay any taxes or duties in respect of the
issue or delivery of Class A Common Stock on conversion but will be required
to pay any tax or duty that may be payable in respect of any transfer involved
in the issue or delivery of the shares of Class A Common Stock in a name other
than that of the Holder of the Series D Preferred Stock. Certificates
representing shares of Class A Common Stock will not be issued or delivered
unless all taxes and duties, if any, payable by the Holder have been paid.
(e) The Corporation has reserved and shall continue to
reserve out of its authorized but unissued Class A Common Stock or its Class A
Common Stock held in treasury enough shares of Class A Common Stock to permit
the conversion of at least 2,987,000 shares of Series D Preferred Stock in
full and shall, as soon as practical, reserve and continue to reserve out of
its authorized but unissued Class A Common Stock held in treasury enough
shares of Class A Common Stock to permit the conversion of any other
outstanding shares of Series D Preferred Stock in full, assuming, in each
case, that such conversion took place at the Conversion Rate in effect on the
Initial Issue Date (provided that such reservation shall be proportionally
reduced as shares of Series D Preferred Stock are repurchased, redeemed,
converted, exchanged or retired). All shares of Class A Common Stock that may
be issued upon conversion of Series D Preferred Stock shall be fully paid and
nonassessable. The Corporation shall take all commercially reasonable steps to
comply with all securities laws regulating the offer and delivery of shares of
Class A Common Stock upon conversion of Series D Preferred Stock and shall
take all commercially reasonable steps to list such shares on each national
securities exchange on which the Class A Common Stock is listed.
(f) If the Corporation:
(i) pays a dividend (or makes a distribution) on its
Class A Common Stock in shares of its Class A Common Stock;
(ii) subdivides its outstanding shares of Class A
Common Stock into a greater number of shares;
(iii) combines its outstanding shares of Class A Common
Stock into a smaller number of shares; or
(iv) issues any shares of its Capital Stock by
reclassification of its Class A Common Stock;
then the Conversion Price in effect immediately prior to such action shall be
adjusted so that the Holder of each share of Series D Preferred Stock
thereafter converted may receive the number of shares of capital stock of the
Corporation that he would have owned immediately following such action if he
had converted Series D Preferred Stock immediately prior to such action. The
adjustment shall become effective immediately after the record date in the
case of a dividend or
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distribution and immediately after the effective date of a subdivision,
combination or reclassification. Such adjustment shall be made successively
whenever any event listed above shall occur. If, after an adjustment referred
to in clauses (f)(i) through (iv) above, a Holder of Series D Preferred Stock
upon conversion of it may receive shares of two or more classes of Capital
Stock of the Corporation, then the Conversion Price shall be split into two or
more components, as the case may be, and the Conversion Price of each class of
Capital Stock shall thereafter be subject to adjustment on terms comparable to
those applicable to Class A Common Stock in this Section 4(f).
(g) If the Corporation distributes any Rights to all holders
of its Class A Common Stock entitling them to purchase shares of Class A
Common Stock at a price per share that is less than the Current Market Price
per share on the date of distribution of such Rights, the Conversion Price
shall be adjusted in accordance with the formula:
C' = C x ((O + ((N x P) / M)) / (O + N))
where:
C' = the adjusted Conversion Price.
C = the then current Conversion Price.
O = the number of shares of Class A Common
Stock outstanding on the record date.
N = the number of additional shares of Class A
Common Stock offered.
P = the offering price per share of the
additional shares of Class A Common Stock.
M = the Current Market Price per share of
Class A Common Stock on the record date.
The adjustment shall be made successively whenever any such Rights are issued
and shall become effective immediately after the record date for the
determination of stockholders entitled to receive such Rights. If at the end
of the period during which such Rights are exercisable, not all Rights shall
have been exercised, the Conversion Price shall be immediately readjusted to
what it would have been if "N" in the above formula had been the number of
shares actually issued.
(h) If the Corporation distributes to all holders of shares
of its Class A Common Stock (i) any shares of any class of Capital Stock of
the Corporation other than its Class A Common Stock, (ii) any evidence of
indebtedness or other securities of the Corporation or any Subsidiary of the
Corporation, or (iii) cash or any other assets of the Corporation (including
securities, but excluding those dividends, Rights and distributions referred
to above in this Section 4 and in Section 4(i) and Section 4(j), dividends and
distributions paid exclusively in cash and distributions upon mergers or
consolidations
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to which Section 4(m) applies), the Conversion Price shall be adjusted in
accordance with the formula:
C' = C x ((M - F) / M)
where:
C' = the adjusted Conversion Price.
C = the then current Conversion Price.
M = the Current Market Price per share of
Class A Common Stock on the record date
mentioned below.
F = the fair market value on the record date
of the Capital Stock, indebtedness, other
securities, cash or other assets
distributed per share of Class A Common
Stock.
The adjustment shall be made successively whenever any such distribution is
made and shall become effective immediately after the record date for the
determination of stockholders entitled to receive the distribution.
(i) If the Corporation issues shares of Class A Common Stock
for a consideration per share less than the Current Market Price per share on
the date the Corporation issues such additional shares, the Conversion Price
shall be adjusted in accordance with the formula:
C' = C x ((O + (P / M)) / A)
where:
C' = the adjusted Conversion Price.
C = the then current Conversion Price.
O = the number of shares of Class A Common
Stock outstanding immediately prior to the
issuance of such additional shares.
P = the aggregate consideration received for the
issuance of such additional shares.
M = the Current Market Price per share on
the date of issuance of such additional
shares.
A = the number of shares Class A Common
Stock outstanding immediately after the
issuance of such additional shares.
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<PAGE>
The adjustment shall be made successively whenever any such
issuance is made, and shall become effective immediately after such issuance.
This Section 4(i) does not apply to (i) any transaction or issuance described
in Section 4(g) or 4(h) above or Section 4(j) below, (ii) the conversion of
Series D Preferred Stock or the conversion, exchange or exercise of securities
issued in transactions that were subject to Sections 4(g) or 4(h) above, (iii)
Class A Common Stock issued to the Corporation's employees under bona fide
employee benefit plans adopted by the Board of Directors of the Corporation
and approved by the holders of Class A Common Stock when required by law, (iv)
Class A Common Stock issued in the MMR Merger or to acquire, or in the
acquisition of, all or any portion of a business as a going concern, in an
arm's-length transaction between the Corporation and an unaffiliated third
party, whether such acquisition shall be effected by purchase of assets,
exchange of securities, merger, consolidation or otherwise, (v) Class A Common
Stock issued in a bona fide public offering pursuant to a firm commitment
underwriting or (vi) Class A Common Stock issued to lenders or bond purchasers
that are unaffiliated third parties in any financing transaction on
arm's-length terms (collectively, "Exempt Issuances").
(j) If the Corporation issues any Rights (other than Series
D Preferred Stock or securities issued in transactions described in Section
4(g) or Section 4(h)) and for a consideration per share of Class A Common
Stock initially deliverable upon conversion, exchange or exercise of such
Rights that is less than the Current Market Price per share on the date of
issuance of such Rights, the Conversion Price shall be adjusted in accordance
with the formula:
C' = C x ((O + (P / M)) / (O + D))
where:
C' = the adjusted Conversion Price.
C = the then current Conversion Price.
O = the number of shares of Class A Common
Stock outstanding immediately prior to the
issuance of such Rights.
P = the aggregate consideration received for
the issuance of such Rights plus the
aggregate consideration payable upon
exercise of all such Rights.
M = the Current Market Price per share of
Class A Common Stock on the date of
issuance of such securities.
D = the maximum number of shares deliverable
upon conversion or in exchange for or upon
exercise of such Rights at the initial
conversion, exchange or exercise rate.
The adjustment shall be made successively whenever any such
issuance is made, and shall become effective immediately after such issuance.
If all of the Class A Common Stock
16
APITAL PRINTING SYSTEMS]
<PAGE>
deliverable upon conversion, exchange or exercise of such Rights has not been
issued when such Rights are no longer outstanding, then the Conversion Price
shall promptly be readjusted to the Conversion Price that would then be in
effect had the adjustment upon the issuance of such Rights been made on the
basis of the actual number of shares of Class A Common Stock issued upon
conversion, exchange or exercise of such Rights. This Section 4(j) does not
apply to any transaction that would be an Exempt Issuance if shares of Class A
Common Stock were issued instead of Rights.
(k) In case the Corporation or any of its Subsidiaries
shall, by dividend or otherwise, make distributions exclusively in cash
(excluding any cash that is distributed upon a merger or consolidation to
which Section 4(m) applies or as part of a distribution referred to in Section
4(h)) to all the holders of its Class A Common Stock in an aggregate amount
that, combined together with (i) the aggregate amount of all other such
all-cash distributions to all holders of its Class A Common Stock made within
the 12 months preceding the date of payment of such distribution and in
respect of which no adjustment pursuant to this Section 4(k) or Section 4(l)
has been made and (ii) the aggregate of any cash plus the fair market value of
other consideration payable in respect of any tender or exchange offer or
other stock repurchase program by the Corporation or any of its Subsidiaries
for all or any portion of the Class A Common Stock concluded within the 12
months preceding the date of payment of such distribution and in respect of
which no adjustment pursuant to this Section 4(k) or Section 4(l) has been
made, exceeds 10% of the Corporation's Market Capitalization on the record
date for such distribution then, and in each such case, immediately after the
close of business on such date of such determination, the Conversion Price
shall be adjusted in accordance with the formula:
C' = C x ((M - E) / M)
where:
C' = the adjusted Conversion Price.
C = the then current Conversion Price.
M = the Current Market Price per share of
Class A Common Stock on the date fixed for
determination times the number of shares
of Class A Common Stock outstanding on
such date.
E = the total of such combined amount.
(l) In the case of the consummation of a tender offer,
exchange offer (other than an odd-lot offer) or other stock repurchase program
made by the Corporation or any Subsidiary thereof for all or any portion of
the Class A Common Stock involving the payment by the Corporation or such
Subsidiary of an aggregate consideration that, together with (i) any cash or
other consideration payable in a tender offer, exchange offer or other stock
repurchase program by the Corporation or any of its Subsidiaries for Class A
Common Stock consummated within 12 months preceding the consummation of such
tender offer, exchange offer or other stock repurchase program (the
"Expiration Time") in respect of which no adjustment has been made pursuant to
this Section
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4(l) or Section 4(k) and (ii) the aggregate amount of all such all-cash
distributions referred to in Section 4(k) above to all holders of Class A
Common Stock within the 12 months preceding such Expiration Time in respect of
which no adjustments have been made, exceeds 10% of the Corporation's Market
Capitalization as of the Trading Day next succeeding the Expiration Time, the
Conversion Price shall be reduced in accordance with the formula:
C' = C x ((M - E) / N)
where:
C' = the adjusted Conversion Price.
C = the then current Conversion Price.
M = the Current Market Price per share of
Class A Common Stock on the Trading Day
next succeeding the Expiration Time times
the number of shares of Class A Common
Stock outstanding at the Expiration Time
(including any tendered, exchanged or
purchased shares).
N = The Current Market Price per share of
Class A Common Stock on the Trading Day
next succeeding the Expiration Time times
the number of shares of the Class A Common
Stock outstanding at the Expiration Time
(less any shares purchased in such tender
offer, exchange offer or other stock
repurchase program).
E = the total of such combined amount.
The reduction shall become effective immediately prior to
the opening of business on the day following the Expiration Time.
(m) In case of any consolidation, amalgamation, arrangement
or merger of the Corporation with or into another Person or any merger of
another Person with or into the Corporation (other than a merger that does not
result in any reclassification, conversion, exchange or cancellation of any
class or series of the Common Equity), or in case of any sale or transfer of
all or substantially all of the assets of the Corporation, each share of
Series D Preferred Stock then outstanding will, without the consent of the
Holder of any Series D Preferred Stock, become convertible only into the kind
and amount of securities, cash and other property receivable upon such
consolidation, merger, sale or transfer by a Holder of the number of shares
of Class A Common Stock (and other securities, if applicable) into which such
Series D Preferred Stock was convertible immediately prior thereto (assuming
such holder of Class A Common Stock (and other securities, if applicable)
failed to exercise any rights of election and that such Series D Preferred
Stock was then convertible).
(n) In addition, in the event that any other transaction or
event occurs as to which the foregoing conversion price adjustment provisions
are not strictly applicable but the failure to
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<PAGE>
make any adjustment would adversely affect the conversion rights represented
by the Series D Preferred Stock in accordance with the essential intent and
principles of such provisions, then, in each such case, either (i) the
Corporation shall appoint an investment banking firm of recognized national
standing, or any other financial expert that does not (or whose directors,
officers, employees, affiliates or stockholders do not) have a direct or
material indirect financial interest in the Corporation or any of its
Subsidiaries, who has not been, and, at the time it is called upon to give
independent financial advice to the Corporation, is not (and none of its
directors, officers, employees, affiliates or stockholders are) a promoter,
director or officer of the Corporation or any of its Subsidiaries, which will
give their opinion upon or (ii) the Board of Directors shall determine,
consistent with the Board of Directors' fiduciary duties to the Corporation's
stockholders, the adjustment, if any, on a basis consistent with the essential
intent and principles established in the foregoing conversion price adjustment
provisions, necessary to preserve, without dilution, the conversion rights
represented by the Series D Preferred Stock. Upon receipt of such opinion or
determination, the Corporation shall promptly mail a copy thereof to the
Holders of the Series D Preferred Stock and will make the adjustments
described therein.
(o) For purposes of any computation respecting consideration
received pursuant to a transaction described or contemplated by this Section
4, the following shall apply:
(i) in the case of the issuance of shares of Class
A Common Stock for cash, the consideration shall be the amount of
such cash, provided that in no case shall any deduction be made for
any commissions, discounts or other expenses incurred by the
Corporation for any underwriting of the issue or otherwise in
connection therewith;
(ii) in the case of the issuance of shares of Class
A Common Stock for a consideration in whole or in part other than
cash, the consideration other than cash shall be deemed to be the
fair market value thereof (irrespective of the accounting treatment
thereof);
(iii) whenever this Certificate of Designations
calls for the determination of "fair market value," such fair market
value shall be determined in good faith by the Board of Directors of
the Corporation and as evidenced by a written resolution thereof; and
(iv) in the case of the issuance of Rights, the
aggregate consideration received therefor shall be deemed to be the
consideration received by the Corporation for the issuance of such
Rights plus the additional minimum consideration, if any, to be
received by the Corporation upon the conversion or exchange or exercise
thereof (the consideration in each case to be determined in the same
manner as provided in this Section 4(o)).
(p) No adjustment in the Conversion Price need be made
unless the adjustment would require an increase or decrease of at least 1% in
the Conversion Price. Any adjustments that are not made shall be carried
forward and taken into account in any subsequent adjustment. All calculations
under this Section 4 shall be made to the nearest one hundredth of a cent or
to the nearest 1/1000th of a share, as the case may be.
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(q) No adjustment in the Conversion Price need be made under
this Section 4 for (i) rights to purchase Class A Common Stock pursuant to a
Corporation plan for reinvestment of dividends or interest, or (ii) any change
in the par value or no par value of the Class A Common Stock, and in no event
shall any adjustment made under this Section 4 that would reduce the
Conversion Price below the par value of the Class A Common Stock. If an
adjustment is made to the Conversion Price upon the establishment of a record
date for a distribution subject to Sections 4(g) or 4(h) above and if such
distribution is subsequently cancelled, the Conversion Price then in effect
shall be readjusted, effective as of the date when the Board of Directors of
the Corporation determines to cancel such distribution, to the Conversion
Price that would have been in effect if such record date had not been fixed.
No adjustment in the Conversion Price need be made under Sections 4(g) and
4(h) above if the Corporation issues or distributes to each Holder of Series D
Preferred Stock the shares of Class A Common Stock, evidences of indebtedness,
assets or Rights referred to in those Sections that each Holder would have
been entitled to receive had the Series D Preferred Stock been converted into
Class A Common Stock prior to the happening of such event or the record date
with respect thereto.
(r) The Corporation shall provide to Holders of Series D
Preferred Stock reasonable notice of any event that would result in an
adjustment to the Conversion Price pursuant to any of the adjustments in this
Section 4 so as to permit the Holders to effect a conversion of shares of
Series D Preferred Stock into shares of Class A Common Stock prior to the
occurrence of such event. The Corporation shall file with the Transfer Agent a
certificate from the Corporation's independent public accountants briefly
stating the facts requiring the adjustment and the manner of computing it.
Subject to Section 4(v) below, the certificate shall be conclusive evidence
that the adjustment is correct.
(s) The Corporation from time to time may reduce the
Conversion Price by any amount for any period of time if the period is at
least 20 Business Days and if the reduction is irrevocable during the period,
but in no event may the Conversion Price be less than the par value of a share
of Class A Common Stock. Whenever the Conversion Price is reduced, the
Corporation shall mail to holders of Series D Preferred Stock a notice of the
reduction. The Corporation shall mail, first class, postage prepaid, the
notice at least 15 days before the date the reduced conversion price takes
effect. The notice shall state the reduced conversion price and the period it
will be in effect. A reduction of the Conversion Price does not change or
adjust the Conversion Price otherwise in effect for purposes of Sections 4(f),
4(g), 4(h), 4(i), 4(j), 4(k) and 4(l) above.
(t) If:
(i) the Corporation takes any action which would
require an adjustment in the Conversion Price pursuant to Section
4(g) or 4(h) above, or clause (iv) of Section 4(f) above;
(ii) the Corporation consolidates or merges with,
or transfers all or substantially all of its assets to, another
corporation, and stockholders of the Corporation must approve the
transaction; or
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(iii) there is a dissolution or liquidation of
the Corporation;
a holder of Series D Preferred Stock may want to convert such stock into
shares of Class A Common Stock prior to the record date for or the effective
date of the transaction so that he may receive the rights, warrants,
securities or assets which a holder of shares of Class A Common Stock on that
date may receive. Therefore, the Corporation shall mail to such holders, first
class, postage prepaid, a notice stating the proposed record or effective
date, as the case may be. The Corporation shall mail the notice at least ten
days before such date. Failure to mail the notice or any defect in it shall
not affect the validity of any transaction referred to in clause (i), (ii) or
(iii) of this Section 4(t).
(u) In any case in which this Section 4 shall require that
an adjustment as a result of any event become effective from and after a
record date, the Corporation may elect to defer until after the occurrence of
such event (i) the issuance to the holder of any shares of Series D Preferred
Stock converted after such record date and before the occurrence of such event
of the additional shares of Class A Common Stock issuable upon such conversion
over and above the shares issuable on the basis of the Conversion Price in
effect immediately prior to adjustment and (ii) a check for any remaining
fractional shares of Class A Common Stock as provided in Section 4(c) above.
(v) Except as provided in the immediately following
sentence, any determination that the Corporation or its Board of Directors
must make pursuant to this Section 4 shall be conclusive. Whenever the
Corporation or its Board of Directors shall be required to make a
determination under this Section 4, such determination shall be made in good
faith and may be challenged in good faith by the Holders of a majority of the
outstanding shares of Series D Preferred Stock (with shares held by the
Corporation or any of its Affiliates not being considered to be outstanding
for this purpose), and any dispute shall be resolved by an investment banking
firm of recognized national standing selected by the Corporation and
acceptable to such Holders of Series D Preferred Stock. If such investment
banking firm resolves that the adjustment should have been more favorable to
the Holders, the Corporation shall bear the costs of such firm and if such
investment banking firm resolves that such determination was correct or should
have been less favorable to the Holders, the Holders challenging such
determination shall bear the costs of such firm.
(w) All shares of Series D Preferred Stock converted
pursuant to this Section 4 shall be retired and shall be restored to the
status of authorized and unissued shares of convertible exchangeable preferred
stock, without designation as to series and may thereafter be reissued as
shares of any series of convertible exchangeable preferred stock other than
Series D Preferred Stock.
(x) The Corporation shall not pay any dividend or make any
distribution to, or on behalf of the holders of any class or series of Common
Stock unless the holders of Class A Common Stock share therein on an equal
share for share basis.
(y) Overdue Conversion Payments shall bear interest at
the rate of 6 1/2% per annum.
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(z) Commencing on the earlier of (i) the consummation of the
MMR Merger or (ii) December 31, 1996, the Corporation shall use its best
efforts to secure all necessary consents and approvals, if any, and make all
necessary filings (including, without limitation, consents and approvals of
and filings with the FCC) and take all other commercially reasonable steps to
permit conversion of the Series D Preferred Stock in accordance with the terms
in this Section 4.
(aa) Except as set forth in this Section 4, none of the
adjustments described in this Section 4 shall duplicate adjustments previously
made or made simultaneously pursuant to other subsections of this Section 4,
or otherwise double count any transaction.
5. Redemption by the Corporation
(a) On May 31, 2007 (the "Mandatory Redemption Date"), the
Corporation shall redeem (subject to the legal availability of funds therefor)
all outstanding shares of Series D Preferred Stock at a price in cash equal to
the Liquidation Preference thereof, plus accrued and unpaid dividends and
Liquidated Damages (if any) to the date of redemption.
(b) The Series D Preferred Stock may not be redeemed at the
option of the Corporation on or prior to June 1, 1999. The Series D Preferred
Stock may be redeemed, in whole or in part, at the option of the Corporation
on or after June 1, 1999, at the Applicable Redemption Price.
(c) In case of redemption of less than all of the shares of
Series D Preferred Stock at the time outstanding, the shares to be redeemed
shall be selected pro rata or by lot as determined by the Corporation in its
sole discretion.
(d) Notice of any redemption shall be sent by or on behalf
of the Corporation not more than 60 days nor less than 30 days prior to the
date specified for redemption in such notice (including the Mandatory
Redemption Date, the "Redemption Date"), by first class mail, postage prepaid,
to all Holders of record of the Series D Preferred Stock at their respective
last addresses as they shall appear on the books of the Corporation; provided,
however, that no failure to give such notice or any defect therein or in the
mailing thereof shall affect the validity of the proceedings for the
redemption of any shares of Series D Preferred Stock except as to the Holder
to whom the Corporation has failed to give notice or except as to the Holder
to whom notice was defective. In addition to any information required by law
or by the applicable rules of any exchange upon which Series D Preferred Stock
may be listed or admitted to trading, such notice shall state: (i) whether
such redemption is being made pursuant to the optional or the mandatory
redemption provisions hereof; (ii) the Redemption Date; (iii) the Applicable
Redemption Price; (iv) the number of shares of Series D Preferred to be
redeemed and, if less than all shares held by such Holder are to be redeemed,
the number of such shares to be redeemed; (v) the place or places where
certificates for such shares are to be surrendered for payment of the
Applicable Redemption Price, including any procedures applicable to
redemptions to be accomplished through book-entry transfers; (vi) that
dividends on the shares to be redeemed will cease to accrue on the Redemption
Date; (vii) the Conversion Price; (viii) that Series D Preferred Stock called
for redemption may be converted at any time before the close of business on
the Redemption Date; and (ix) that Holders of Series D
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Preferred Stock must satisfy the requirements of Section 4(b) above if such
Holders desire to convert such shares. Upon the mailing of any such notice of
redemption, the Corporation shall become obligated to redeem at the time of
redemption specified thereon all shares called for redemption.
(e) If notice has been mailed in accordance with Section
5(d) above and provided that on or before the Redemption Date specified in
such notice, all funds necessary for such redemption shall have been set aside
by the Corporation, separate and apart from its other funds in trust for the
pro rata benefit of the Holders of the shares so called for redemption, so as
to be, and to continue to be available therefor, then, from and after the
Redemption Date, dividends on the shares of the Series D Preferred Stock so
called for redemption shall cease to accrue, and said shares shall no longer
be deemed to be outstanding and shall not have the status of shares of Series
D Preferred Stock, and all rights of the Holders thereof as stockholders of
the Corporation (except the right to receive from the Corporation the
Applicable Redemption Price) shall cease. Upon surrender, in accordance with
said notice, of the certificates for any shares so redeemed (properly endorsed
or assigned for transfer, if the Corporation shall so require and the notice
shall so state), such shares shall be redeemed by the Corporation at the
Applicable Redemption Price. In case fewer than all the shares represented by
any such certificate are redeemed, a new certificate or certificates shall be
issued representing the unredeemed shares without cost to the Holder thereof.
(f) Any funds deposited with a bank or trust company for the
purpose of redeeming Series D Preferred Stock shall be irrevocable except
that:
(i) the Corporation shall be entitled to receive
from such bank or trust company the interest or other earnings, if
any, earned on any money so deposited in trust, and the Holders of
any shares redeemed shall have no claim to such interest or other
earnings; and
(ii) any balance of monies so deposited by the
Corporation and unclaimed by the Holders of the Series D Preferred
Stock entitled thereto at the expiration of two years from the
applicable Redemption Date shall be repaid, together with any
interest or other earnings earned thereon, to the Corporation, and
after any such repayment, the Holders of the shares entitled to the
funds so repaid to the Corporation shall look only to the Corporation
for payment without interest or other earnings.
(g) No Series D Preferred Stock may be redeemed except with
funds legally available for the purpose. The Corporation shall take all
actions required or permitted under Delaware Law to permit any such
redemption.
(h) Notwithstanding the foregoing provisions of this
Section 5, unless the full cumulative dividends on all outstanding shares of
Series D Preferred Stock shall have been paid or contemporaneously are
declared and paid for all past dividend periods, none of the shares of Series D
Preferred Stock shall be redeemed unless all outstanding shares of Series D
Preferred Stock are simultaneously redeemed.
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(i) All shares of Series D Preferred Stock redeemed pursuant
to this Section 5 shall be restored to the status of authorized and unissued
shares of preferred stock, without designation as to series and may thereafter
be reissued as shares of any series of preferred stock other than shares of
Series D Preferred Stock.
6. Exchange.
(a) On any Dividend Payment Date, the Corporation may, at
its option, exchange all but not less than all of the outstanding shares of
Series D Preferred Stock for Exchange Notes; provided that the Corporation
shall not be entitled to make the exchange if a default under the Exchange
Note Indenture or any other instrument or agreement governing Indebtedness of
the Corporation or any of its Subsidiaries would result from the exchange.
Holders of shares of Series D Preferred Stock shall be entitled to receive $50
in principal amount of Exchange Notes for each $50 of Liquidation Preference
of Series D Preferred Stock held by such Holder at the time of the exchange,
plus cash in amount equal to all accrued and unpaid dividends and Liquidated
Damages (if any) thereon to the Exchange Date.
(b) The Exchange Notes shall be issuable in all appropriate
denominations. Notice of the intention to exchange shall be sent by or on
behalf of the Corporation not more than 60 days nor less than 30 days prior to
the date fixed for the exchange (the "Exchange Date"), by first class mail,
postage prepaid, to all Holders of record of the Series D Preferred Stock at
their respective last addresses as they shall appear on the books of the
Corporation; provided, however, that no failure to give such notice or any
defect therein or in the mailing thereof shall affect the validity of the
proceedings for the exchange of any shares of Series D Preferred Stock except
as to the Holder to whom the Corporation has failed to give notice or except
as to the Holder to whom notice was defective. In addition to any information
required by law or by the applicable rules of any exchange upon which Series D
Preferred Stock may be listed or admitted to trading, such notice shall state:
(i) the Exchange Date; (ii) the place or places where certificates for such
shares are to be surrendered for exchange, including any procedures applicable
to exchanges to be accomplished through book-entry transfers; and (iii) that
dividends on the shares of Series D Preferred Stock to be exchanged will cease
to accrue on the Exchange Date. Prior to giving the notice of intention to
exchange, the Corporation shall execute and deliver with a bank or trust
company, with capital, surplus and undivided profits of not less than
$100,000,000, selected by the Corporation, and qualify under the Trust
Indenture Act of 1939, as amended, the Exchange Indenture with such changes as
would not adversely affect any of the voting powers, preferences and relative,
participating, optional and other special rights of any holders of Series D
Preferred Stock as may be required by law or usage.
(c) A Holder delivering Series D Preferred Stock for
exchange will not be required to pay any taxes or duties in respect of the
issue or delivery of Exchange Notes on exchange but will be required to pay
any tax or duty that may be payable in respect of any transfer involved in the
issue or delivery of the Exchange Notes in a name other than that of the
Holder of the Series D Preferred Stock. Certificates representing Exchange
Notes will not be issued or delivered unless all taxes and duties, if any,
payable by the Holder have been paid.
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<PAGE>
(d) If notice of any exchange has been properly given, and
if on or before the Exchange Date the Exchange Notes have been duly executed
and authenticated and an amount in cash equal to all accrued and unpaid
dividends and Liquidated Damages (if any) thereon to the Exchange Date has
been deposited with the Transfer Agent, then on or after the close of business
on the Exchange Date, the shares of Series D Preferred to be exchanged will no
longer be deemed to be outstanding and may thereafter be issued in the same
manner as the other authorized but unissued convertible exchangeable preferred
stock, but not as Series D Preferred Stock, and all rights of the Holders
thereof as stockholders of the Corporation will cease, except the right of the
Holders to receive upon surrender of their certificates the Exchange Notes and
all accrued and unpaid dividends and Liquidated Damages (if any) thereon to
the Exchange Date.
(e) As a condition to the exercise of the exchange rights
described in this Section 6, the Corporation shall deliver an opinion to the
Trustee as to the due authorization, execution, delivery and enforceability of
both the Exchange Notes and the Exchange Note Indenture.
7. Voting Rights.
(a) The Holders of record of shares of Series D Preferred
Stock shall not be entitled to any voting rights except as hereinafter
provided in this Section 7 or as otherwise provided by law.
(b) If and upon:
(i) the accumulation of accrued and unpaid
dividends on the outstanding Series D Preferred Stock in an amount
equal to six (6) full quarterly dividends (whether or not
consecutive);
(ii) the failure of the Corporation to satisfy any
mandatory redemption or repurchase obligation (including, without
limitation, pursuant to any required Change of Control Offer) with
respect to the Series D Preferred Stock;
(iii) the failure of the Corporation to make a
Change of Control Offer on the terms and in accordance with the
provisions described below in Section 8 hereof;
(iv) the failure of the Corporation to honor its
obligations with respect to any share of Series D Preferred Stock
upon conversion thereof pursuant to Section 4 hereof; or
(v) the failure of the Corporation to comply with
any of the other covenants or agreements set forth in this
Certificate of Designations and the continuance of such failure for
60 consecutive days or more (each of the events described in clauses
7(b)(i) through (v) being referred to herein as a "Voting Rights
Trigger Event");
then the authorized number of members of the Corporation's Board of Directors
will be immediately and automatically increased by two, and the Holders of a
majority of the outstanding shares of Series
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D Preferred Stock, voting separately as a class, shall be entitled to elect
two directors of the Corporation.
(c) Whenever such voting right shall have vested, such right
may be exercised initially either at a special meeting of the Holders of
Series D Preferred Stock, called as hereinafter provided, or at any annual
meeting of stockholders held for the purpose of electing directors, and
thereafter at such annual meetings or by the written consent of the Holders of
Series D Preferred Stock. Such right of the Holders of Series D Preferred
Stock to elect directors may be exercised until (i) all dividends in arrears
shall have been paid in full and (ii) all other Voting Rights Trigger Events
have been cured or waived, at which time the right of the Holders of Series D
Preferred Stock to elect such number of directors shall cease, the term of
such directors previously elected shall thereupon terminate, and the
authorized number of directors of the Corporation shall thereupon return to
the number of authorized directors otherwise in effect, but subject always to
the same provisions for the renewal and divestment of such special voting
rights in the case of any such future dividend default or defaults or any such
failure to make redemption payments.
(d) At any time when such voting right shall have vested in
the Holders of Series D Preferred Stock and if such right shall not already
have been initially exercised, a proper officer of the Corporation shall, upon
the written request of Holders of record of 10% or more of the Series D
Preferred Stock then outstanding, addressed to the Secretary of the
Corporation, call a special meeting of Holders of Series D Preferred Stock.
Such meeting shall be held at the earliest practicable date upon the notice
required for annual meetings of stockholders at the place for holding annual
meetings of stockholders of the Corporation or, if none, at a place designated
by the Secretary of the Corporation. If such meeting shall not be called by
the proper officers of the Corporation within 30 days after the personal
service of such written request upon the Secretary of the Corporation, or
within 30 days after mailing the same within the United States, by registered
mail, addressed to the Secretary of the Corporation at its principal office
(such mailing to be evidenced by the registry receipt issued by the postal
authorities), then the Holders of record of 10% of the shares of Series D
Preferred Stock then outstanding may designate in writing a Holder of Series D
Preferred Stock to call such meeting at the expense of the Corporation, and
such meeting may be called by such person so designated upon the notice
required for annual meetings of stockholders and shall be held at the place
for holding annual meetings of the Corporation or, if none, at a place
designated by such Holder. Any Holder of Series D Preferred Stock that would
be entitled to vote at such meeting shall have access to the stock books of
the Corporation for the purpose of causing a meeting of stockholders to be
called pursuant to the provisions of this Section. Notwithstanding the
provisions of this paragraph, however, no such special meeting shall be called
if any such request is received less than 90 days before the date fixed for
the next ensuing annual or special meeting of stockholders.
(e) If the directors so elected by the Holders of Series D
Preferred Stock shall cease to serve as a director before his term shall
expire, the Holders of Series D Preferred Stock then outstanding may, at a
special meeting of the Holders called as provided above, elect a successor to
hold office for the unexpired term of the director whose place shall be
vacant.
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(f) The Corporation shall not, without the affirmative vote
or consent of the Holders of a majority of the then outstanding shares of
Series D Preferred Stock (with shares held by the Corporation or any of its
Affiliates not being considered to be outstanding for this purpose):
(i) authorize, create (by way of reclassification
or otherwise) or issue any Parity Securities, or any obligation or
security convertible into or evidencing the right to purchase any
Parity Securities; or
(ii) amend or otherwise alter its Certificate of
Incorporation in any manner that adversely affects the rights of
Holders of Series D Preferred Stock or the holders of Class A Common
Stock.
(g) Without the consent of each Holder affected, an
amendment or waiver may not (with respect to any shares of Series D Preferred
Stock held by a non-consenting Holder):
(i) alter the voting rights with respect to the
Series D Preferred Stock or reduce the number of shares of Series D
Preferred Stock whose Holders must consent to an amendment,
supplement or waiver;
(ii) reduce the Liquidation Preference of or change
the Mandatory Redemption Date of any share of Series D Preferred
Stock or alter the provisions with respect to the redemption of the
Series D Preferred Stock (other than provisions relating to the
covenant described above in Section 8 hereof);
(iii) reduce the rate of or change the time for
payment of dividends on any share of Series D Preferred Stock;
(iv) waive a default or event of default in the
payment of dividends or Liquidated Damages (if any) on the Series D
Preferred Stock;
(v) make any share of Series D Preferred Stock
payable in money other than that stated in this Certificate of
Designations;
(vi) make any change in the provisions of this
Certificate of Designations relating to waivers of the rights of
Holders of Series D Preferred Stock to receive the Liquidation
Preference, dividends or Liquidated Damages (if any) on the Series D
Preferred Stock;
(vii) waive a redemption payment with respect to
any share of Series D Preferred Stock (other than a payment required
by the covenant described above in Section 8 hereof); or
(viii) make any change in the foregoing amendment
and waiver provisions.
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(h) The Corporation shall not, without the consent of at
least 66 2/3% of the then outstanding shares of Series D Preferred Stock (with
shares held by the Corporation or its Affiliates not being considered to be
outstanding for this purpose), authorize, create (by way of reclassification
or otherwise) or issue any Senior Securities or any obligation or security
convertible or exchangeable into or evidencing a right to purchase, shares of
any class or series of Senior Securities.
(i) In addition, any amendment to the provisions of Section
8 hereof (including the related definitions) will require the consent of the
Holders of at least 75% of the shares of Series D Preferred Stock then
outstanding (with shares held by the Corporation or its Affiliates not being
considered to be outstanding for this purpose) if such amendment would
adversely affect the rights of Holders of Series D Preferred Stock.
(j) The Corporation in its sole discretion may without the
vote or consent of any Holders of the Series D Preferred Stock amend or
supplement this Certificate of Designations:
(i) to cure any ambiguity, defect or
inconsistency;
(ii) to provide for uncertificated Series D
Preferred Stock in addition to or in place of certificated Series D
Preferred Stock; or
(iii) to make any change that would provide any
additional rights or benefits to the Holders of the Series D
Preferred Stock or that does not adversely affect the legal rights or
benefits under this Certificate of Designations of any such Holder.
8. Special Conversion Rights; Change of Control.
(a) Upon the occurrence of a Change of Control, each Holder
of Series D Preferred Stock shall have the right to require the Corporation to
repurchase all or any part of such Holder's shares of Series D Preferred Stock
(a "Change of Control Offer") at an offer price in cash equal to 101% of the
aggregate Liquidation Preference thereof plus accrued and unpaid dividends and
Liquidated Damages, if any, thereon to the date of purchase (the "Change of
Control Payment").
(b) The Corporation may, at its option, in lieu of paying
the Change of Control Payment in cash, pay the Change of Control Payment in
shares of Class A Common Stock valued at 95% of the Current Market Price of
the Class A Common Stock determined solely on the basis of the five trading
days ending on and including the third trading day preceding the Change of
Control Payment Date; provided that the payment may not be made in shares of
Class A Common Stock unless such shares are listed on a United States national
securities exchange or traded on the Nasdaq National Market at the time of
payment.
(c) The Change of Control Offer shall include all
instructions and materials necessary to enable Holders to tender their shares
of Series D Preferred Stock.
(d) The Corporation shall comply with the requirements of
Rule 14e-1 under the Exchange Act and any other securities laws and
regulations thereunder to the extent such laws and
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regulations are applicable in connection with the repurchase of the shares of
Series D Preferred Stock as a result of a Change of Control.
(e) Within 30 days following any Change of Control, the
Corporation shall mail a notice to each Holder stating:
(i) that the Change of Control Offer is being made
pursuant to this Section 8 and that all shares of Series D Preferred
Stock tendered will be accepted for payment;
(ii) the purchase price and the purchase date,
which shall be no earlier than 30 days nor later than 60 days from
the date such notice is mailed (the "Change of Control Payment
Date");
(iii) that any share of Series D Preferred Stock
not tendered will continue to accrue dividends;
(iv) that, unless the Corporation fails to pay the
Change of Control Payment, all shares of Series D Preferred Stock
accepted for payment pursuant to the Change of Control Offer shall
cease to accrue dividends after the Change of Control Payment Date;
(v) that Holders electing to have any shares of
Series D Preferred Stock purchased pursuant to a Change of Control
Offer will be required to surrender the shares of Series D Preferred
Stock, with the form entitled "Option of Holder to Elect Purchase"
which shall be included with the Notice of Change of Control
completed, to the Paying Agent at the address specified in the notice
prior to the close of business on the third Business Day preceding
the Change of Control Payment Date;
(vi) that Holders will be entitled to withdraw
their election if the Paying Agent receives, not later than the close
of business on the second Business Day preceding the Change of
Control Payment Date, a telegram, telex, facsimile transmission or
letter setting forth the name of the Holder, the number of shares of
Series D Preferred Stock delivered for purchase, and a statement that
such Holder is withdrawing his election to have such shares purchased;
and
(vii) the circumstances and relevant facts
regarding such Change of Control (including, but not limited to,
information with respect to pro forma historical financial
information after giving effect to such Change of Control and
information regarding the Person or Persons acquiring control).
(f) On the Change of Control Payment Date, the Corporation
shall, to the extent lawful, (i) accept for payment all shares of Series D
Preferred Stock properly tendered pursuant to the Change of Control Offer,
(ii) deposit with the Paying Agent an amount equal to the Change of Control
Payment in respect of all shares of Series D Preferred Stock so tendered and
(iii) deliver or cause to be delivered to the Transfer Agent shares of Series
D Preferred Stock so accepted together
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with an Officers' Certificate stating the aggregate Liquidation Preference of
the shares of Series D Preferred Stock or portions thereof being purchased by
the Corporation. The Paying Agent shall promptly mail to each Holder of Series
D Preferred Stock so tendered the Change of Control Payment for such Series D
Preferred Stock and the Transfer Agent will promptly authenticate and mail (or
cause to be transferred by book-entry) to each Holder a new certificate
representing the shares of Series D Preferred Stock equal in Liquidation
Preference amount to any unpurchased portion of the shares of Series D
Preferred Stock surrendered, if any. The Corporation shall publicly announce
the results of the Change of Control Offer on or as soon as practicable after
the Change of Control Payment Date.
(g) Prior to complying with the provisions of this
Section 8, but in any event within 90 days following a Change of Control, the
Corporation shall either repay all outstanding Indebtedness or obtain the
requisite consents, if any, under all agreements governing outstanding
Indebtedness to permit the repurchase of Series D Preferred Stock required by
this Section 8. The Corporation will publicly announce the results of the
Change of Control Offer on or as soon as practicable after the Change of
Control Payment Date.
(h) The Corporation shall not be required to make a Change
of Control Offer upon a Change of Control if a third party makes the Change of
Control Offer in the manner, at the times and otherwise in compliance with the
requirements set forth in this Section 8 applicable to a Change of Control
Offer made by the Corporation and purchases all shares of Series D Preferred
Stock validly tendered and not withdrawn under such Change of Control Offer.
9. Certain Covenants.
(a) Transactions with Affiliates. The Corporation shall not,
and shall not permit any of its Subsidiaries to, make any payment to, or sell,
lease, transfer or otherwise dispose of any of its properties or assets to, or
purchase any property or assets from, or enter into or make or amend any
contract, agreement, understanding, loan, advance or guarantee with, or for
the benefit of, any Affiliate (each of the foregoing, an "Affiliate
Transaction"), unless (i) such Affiliate Transaction is on terms that are no
less favorable to the Corporation or the relevant Subsidiary than those that
would have been obtained in a comparable transaction by the Corporation or
such Subsidiary with an unrelated Person and (ii) the Corporation delivers to
the Holders (a) with respect to any Affiliate Transaction or series of related
Affiliate Transactions involving aggregate consideration in excess of $1.0
million, a resolution of the Board of Directors set forth in an Officers'
Certificate certifying that such Affiliate Transaction complies with clause
(i) above and that such Affiliate Transaction has been approved by a majority
of the members of the Board of Directors that are disinterested as to such
Affiliate Transaction and (b) with respect to any Affiliate Transaction or
series of related Affiliate Transactions involving aggregate consideration in
excess of $5.0 million, an opinion as to the fairness to the Holders of such
Affiliate Transaction from a financial point of view issued by an accounting,
appraisal or investment banking firm of national standing; provided that (1)
transactions between or among the Corporation and/or its wholly-owned
Subsidiaries, (2) the MMR Merger and transactions and agreements specifically
contemplated by the Agreement and Plan of Merger among the Corporation, SFX
Merger Company and MMR as in effect on the Initial Issue Date, (3) the
redemption or repurchase of the Existing MMR Indebtedness, (4) transactions
and agreements
30
<PAGE>
specifically contemplated by the Termination and Assignment Agreement between
the Corporation and SCMC as in effect on the Initial Issue Date, (5) payments
required by the terms of the joint lease among the Corporation, SCMC and the
landlord thereunder for the Corporation's corporate headquarters located at
150 East 58th Street, New York, New York and any agreements directly related
thereto, in each case, as the same are in effect on the Initial Issue Date,
(6) the payment of any dividend or the issuance of the Exchange Notes in
exchange for the Series D Preferred Stock, provided that such dividends are
paid on a pro rata basis and the Exchange Notes are issued in accordance with
the terms of Section 6 hereof, (7) payments made by the Corporation to SCMC
for the facilities maintenance and other services and reimbursements pursuant
to the Shared Facilities Agreement, (8) payments by the Corporation pursuant
to the Management Termination Agreements and (9) any Permitted Investments, in
each case, shall not be deemed to be Affiliate Transactions.
(b) Payments for Consent. Neither the Corporation nor any of
its Subsidiaries shall, directly or indirectly, pay or cause to be paid any
consideration, whether by way of dividend or other distribution, fee or
otherwise, to any Holder of any Series D Preferred Stock for or as an
inducement to any consent, waiver or amendment of any of the terms or
provisions of this Certificate of Designations or the Series D Preferred Stock
unless such consideration is offered to be paid and is paid to all Holders of
the Series D Preferred Stock that consent, waive or agree to amend in the time
frame set forth in the solicitation documents relating to such consent, waiver
or agreement.
(c) Reports.
(i) Whether or not required by the rules and
regulations of the Securities and Exchange Commission (the
"Commission"), so long as any shares of Series D Preferred Stock are
outstanding, the Corporation shall furnish to the Holders of Series D
Preferred Stock (i) all quarterly and annual financial information that
would be required to be contained in a filing with the Commission on
Forms 10-Q and 10-K if the Corporation were required to file such Forms,
including "Management's Discussion and Analysis of Financial Condition
and Results of Operations" and, with respect to the annual information
only, a report thereon by the Corporation's certified independent
accountants and (ii) all current reports that would be required to be
filed with the Commission on Form 8-K if the Corporation were required
to file such reports. In addition, whether or not required by the rules
and regulations of the Commission, the Corporation shall file a copy of
all such information and reports with the Commission for public
availability (unless the Commission will not accept such a filing) and
make such information available to securities analysts and prospective
investors upon request. In addition, for so long as any Series D
Preferred Stock remains outstanding, the Corporation shall furnish to
the Holders and to securities analysts and prospective investors, upon
their request, the information required to be delivered pursuant to
Rule 144A(d)(4) under the Securities Act.
(ii) The Corporation shall deliver to the Holders,
within 90 days after the end of each fiscal year, an Officers'
Certificate stating that a review of the activities of the
Corporation and its Subsidiaries during the preceding fiscal year has
been made under the supervision of the signing officers with a view
to determining whether the Corporations has kept, observed, performed
and fulfilled its obligations under this Certificate of Designations
31
<PAGE>
and further stating, as to each such officer signing such
certificate, that to the best of his or her knowledge the Corporation
has kept, observed, performed and fulfilled each and every covenant
contained in this Certificate of Designations and is not in default
in the performance or observance of any of the terms, provisions and
conditions of this Certificate of Designations (or, if any such
default shall have occurred, describing all such defaults of which he
or she may have knowledge and what action the Corporation is taking
or proposes to take with respect thereto) and that to the best of his
or her knowledge no event has occurred and remains in existence by
reason of which payments on account of the Liquidation Preference of
or dividends, if any, on the Series D Preferred Stock is prohibited
or if such event has occurred, a description of the event and what
action the Corporation is taking or proposes to take with respect
thereto.
(iii) So long as not contrary to the then current
recommendations of the American Institute of Certified Public
Accountants, the year-end financial statements delivered pursuant to
Section 9(c)(i) above shall be accompanied by a written statement of
the Corporation's independent public accountants (who shall be a firm
of established national reputation) that in making the examination
necessary for certification of such financial statements, nothing has
come to their attention that would lead them to believe that the
Corporation has violated any provisions of this Certificate of
Designations or, if any such violation has occurred, specifying the
nature and period of existence thereof, it being understood that such
accountants shall not be liable directly or indirectly to any Person
for any failure to obtain knowledge of any such violation.
(iv) The Corporation shall, so long as any of the
shares of Series D Preferred Stock are outstanding, deliver to the
Holders, forthwith upon any Executive Officer of the Corporation
becoming aware of any default under this Certificate of Designations,
an Officers' Certificate specifying such default and what action the
Corporation is taking or proposes to take with respect thereto.
(d) Conflicts with By-laws. If any provisions of the
Corporation's By-laws conflict in any way with this Certificate of
Designations, the Corporation shall, so long as any of the shares of Series D
Preferred Stock are outstanding, take all necessary actions to amend such
By-laws and thereby resolve the conflict.
10. Payment and Conversion.
(a) All amounts payable in cash with respect to the Series D
Preferred Stock shall be payable in United States dollars at the office or
agency of the Corporation maintained for such purpose within the City and
State of New York or, at the option of the Corporation, payment of dividends
and Liquidated Damages (if any) may be made by check mailed to the Holders of
the Series D Preferred Stock at their respective addresses set forth in the
register of Holders of Series D Preferred Stock maintained by the Transfer
Agent, provided that all cash payments with respect to the Global Shares (as
defined below) and shares of Series D Preferred Stock the Holders of which
have given wire transfer instructions to the Corporation will be required to
be made by wire transfer of immediately available funds to the accounts
specified by the Holders thereof. Unless otherwise
32
<PAGE>
designated by the Corporation, the Corporation's office or agency in New York
shall be the office of the Paying Agent maintained for such purpose.
(b) Any payment on the Series D Preferred Stock due on any
day that is not a Business Day need not be made on such day, but may be made
on the next succeeding Business Day with the same force and effect as if made
on such due date.
(c) The Corporation has initially appointed the Transfer
Agent to act as the Paying Agent and Conversion Agent. The Corporation may at
any time terminate the appointment of any Paying Agent or Conversion Agent and
appoint additional or other Paying Agents and Conversion Agents, provided that
until the Series D Preferred Stock has been delivered to the Corporation for
cancellation, or moneys sufficient to pay the Liquidation Preference and
accrued dividends and Liquidated Damages (if any) on the Series D Preferred
Stock have been made available for payment and either paid or returned to the
Corporation as provided in this Certificate of Designations, it shall maintain
an office or agency in the Borough of Manhattan, The City of New York for
surrender of Series D Preferred Stock for conversion.
(d) Dividends payable on the Series D Preferred Stock on any
redemption date or repurchase date that is a Dividend Payment Date will be
paid to the Holders of record as of the immediately preceding Record Date.
(e) All moneys deposited with any Paying Agent or then held
by the Corporation in trust for the payment of the Liquidation Preference and
dividends or Liquidated Damages (if any) on any shares of Series D Preferred
Stock which remain unclaimed at the end of two years after such payment has
become due and payable will be repaid to the Corporation, and the Holder of
such shares of Series D Preferred Stock will thereafter look only to
Corporation for payment thereof.
11. Officers' Certificate.
Each Officers' Certificate provided for in this Certificate
of Designations shall include:
(a) a statement that the officer making such certificate
or opinion has read such covenant or condition;
(b) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(c) a statement that, in the opinion of such officer, he or
she has made such examination or investigation as is necessary to
enable him to express an informed opinion as to whether or not such
covenant or condition has been satisfied; and
(d) a statement as to whether or not, in the opinion of
such officer, such condition or covenant has been satisfied.
33
<PAGE>
12. Exclusion of Other Rights.
Except as may otherwise be required by law, the shares of
Series D Preferred Stock shall not have any voting powers, preferences and
relative, participating, optional or other special rights, other than those
specifically set forth in this Certificate of Designations (as such
Certificate of Designations may be amended from time to time) and in the
Certificate of Incorporation. The shares of Series D Preferred Stock shall
have no preemptive or subscription rights.
13. Headings of Subdivisions.
The headings of the various subdivisions hereof are for
convenience of reference only and shall not affect the interpretation of any
of the provisions hereof.
14. Severability of Provisions.
If any voting powers, preferences and relative,
participating, optional and other special rights of the Series D Preferred
Stock and qualifications, limitations and restrictions thereof set forth in
this resolution (as such resolution may be amended from time to time) is
invalid, unlawful or incapable of being enforced by reason of any rule of law
or public policy, all other voting powers, preferences and relative,
participating, optional and other special rights of Series D Preferred Stock
and qualifications, limitations and restrictions thereof set forth in this
resolution (as so amended) which can be given effect without the invalid,
unlawful or unenforceable voting powers, preferences and relative,
participating, optional and other special rights of Series D Preferred Stock
and qualifications, limitations and restrictions thereof shall, nevertheless,
remain in full force and effect, and no voting powers, preferences and
relative, participating, optional or other special rights of Series D
Preferred Stock and qualifications, limitations and restrictions thereof
herein set forth shall be deemed dependent upon any other such voting powers,
preferences and relative, participating, optional or other special rights of
Series D Preferred Stock and qualifications, limitations and restrictions
thereof unless so expressed herein.
15. Form of Securities.
(a) The Series D Preferred Stock shall initially be issued
in the form of one or more Global Preferred Shares (the "Global Shares"). The
Global Shares shall be deposited on the Initial Issue Date with, or on behalf
of, The Depository Trust Company (the "Depository") and registered in the name
of Cede & Co., as nominee of the Depository (such nominee being referred to as
the "Global Share Holder").
(b) So long as the Global Share Holder is the registered
owner of any Series D Preferred Stock, the Global Share Holder will be
considered the sole Holder under this Certificate of Designations of any
shares of Series D Preferred Stock evidenced by the Global Shares. Beneficial
owners of shares of Series D Preferred Stock evidenced by the Global Shares
shall not be considered the owners or Holders thereof under this Certificate
of Designations for any purpose. The Corporation shall not have any
responsibility or liability for any aspect of the records of the Depositary
relating to the Series D Preferred Stock.
34
<PAGE>
(c) Payments in respect of the Liquidation Preference,
dividends and Liquidated Damages (if any) on any Series D Preferred Stock
registered in the name of the Global Share Holder on the applicable record
date shall be payable by the Corporation to or at the direction of the Global
Share Holder in its capacity as the registered Holder under this Certificate
of Designations. The Corporation may treat the persons in whose names Series D
Preferred Stock, including the Global Shares, are registered as the owners
thereof for the purpose of receiving such payments. The Corporation does not
have nor will have any responsibility or liability for the payments of such
amounts to beneficial holders of Series D Preferred Stock.
(d) Any person having a beneficial interest in a Global
Share may, upon request to the Corporation, exchange such beneficial interest
for Series D Preferred Stock in the form of registered definitive certificates
("Certificated Securities"). Upon any such issuance, the Corporation shall
register such Certificated Securities in the name of, and cause the same to be
delivered to, such person or persons (or the nominee of any thereof). If (i)
the Corporation notifies the Holders in writing that the Depositary is no
longer willing or able to act as a depositary and the Corporation is unable to
locate a qualified successor within 90 days or (ii) the Corporation, at its
option, notifies the Holders in writing that it elects to cause the issuance
of Series D Preferred Stock in the form of Certificated Securities under the
Certificate of Designations, then, upon surrender by the Global Share Holder
of its Global Shares, Series D Preferred Stock in such form will be issued to
each person that the Global Share Holder and the Depositary identify as being
the beneficial owner of the related Series D Preferred Stock.
(e) The shares of Series D Preferred Stock , the shares of
Class A Common Stock issuable upon conversion thereof and the Exchange Notes
issuable upon exchange thereof will bear a legend to the following effect,
unless the Corporation determines otherwise in compliance with applicable law:
THE SECURITIES (OR ITS PREDECESSOR) EVIDENCED HEREBY WERE ORIGINALLY
ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF
THE UNITED STATES SECURITIES ACT OF 1933 (THE "SECURITIES ACT"), AND
THE SECURITIES EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD, PLEDGED OR
OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN
APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THE SECURITIES
EVIDENCED HEREBY IS HEREBY NOTIFIED THAT THE SELLER MAY BE RELYING ON
THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT
PROVIDED BY RULE 144A THEREUNDER. THE HOLDER OF THE SECURITIES
EVIDENCED HEREBY AGREES FOR THE BENEFIT OF THE COMPANY THAT (A) SUCH
SECURITIES MAY NOT BE REOFFERED, RESOLD, PLEDGED OR OTHERWISE
TRANSFERRED EXCEPT (1) BY THE INITIAL INVESTOR (a) TO A PERSON WHO THE
SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN
THE MEANING OF RULE 144A UNDER THE SECURITIES ACT PURCHASING FOR ITS
OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (b) IN AN OFFSHORE
TRANSACTION COMPLYING WITH RULE 903 OR RULE 904 OF REGULATION S UNDER
THE SECURITIES ACT, (c) PURSUANT TO AN
35
<PAGE>
EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY
RULE 144 THEREUNDER (IF AVAILABLE), (d) TO THE COMPANY OR (e) PURSUANT
TO AN EXEMPTION TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OR (2) BY SUBSEQUENT INVESTORS, AS SET FORTH IN
(1) ABOVE AND, IN ADDITION, TO AN INSTITUTIONAL ACCREDITED INVESTOR IN
A TRANSACTION EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT AND, IN EACH CASE, IN ACCORDANCE WITH ALL APPLICABLE
SECURITIES LAWS OF THE STATES OF THE UNITED STATES AND (B) THE HOLDER
WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER
FROM IT OF THE SECURITIES EVIDENCED HEREBY OF THE RESALE RESTRICTIONS
SET FORTH IN (A) ABOVE.
36
<PAGE>
IN WITNESS WHEREOF, the Corporation has caused this
certificate to be duly executed by Robert F.X. Sillerman, Executive Chairman,
and attested by Howard J. Tytel, its secretary, this 30th day of May, 1996.
SFX BROADCASTING, INC.
By: /s/ Robert F.X. Sillerman
-------------------------------
Robert F.X. Sillerman
Executive Chairman
ATTEST:
By: /s/ Howard J. Tytel
------------------------
Howard J. Tytel
Secretary
<PAGE>
ANNEX A
SFX Broadcasting, Inc.
6 1/2% CONVERTIBLE SUBORDINATED EXCHANGE NOTES DUE 2007
-----------------
INDENTURE
Dated as of ______ __, ____
-----------------
-----------------
-----------------
Trustee
<PAGE>
CROSS-REFERENCE TABLE*
<TABLE>
<CAPTION>
Trust Indenture
Act Section Indenture Section
----------- -----------------
<S> <C>
310 (a)(1).................................................................... 7.10
(a)(2).................................................................... 7.10
(a)(3) ................................................................... N.A.
(a)(4).................................................................... N.A.
(a)(5).................................................................... 7.10
(b) ...................................................................... 7.10
(c) ...................................................................... N.A.
311 (a) ...................................................................... 7.11
(b) ...................................................................... 7.11
(c) ...................................................................... N.A.
312 (a)....................................................................... 2.05
(b)....................................................................... 12.03
(c) ...................................................................... 12.03
313 (a) ...................................................................... 7.06
(b)(1) ................................................................... N.A.
(b)(2) ................................................................... 7.06
(c) ...................................................................... 7.06;12.02
(d)....................................................................... 7.06
314 (a) ...................................................................... 4.03;4.04
(b) ...................................................................... N.A.
(c)(1) ................................................................... 12.04
(c)(2) ................................................................... 12.04
(c)(3) ................................................................... N.A.
(d)....................................................................... N.A.
(e) ..................................................................... 12.05
(f)....................................................................... N.A.
315 (a)....................................................................... 7.02,12.02
(b)....................................................................... 7.05,12.02
(c) ..................................................................... 7.01
(d)....................................................................... 7.01
(e)....................................................................... 6.11
316 (a)(last sentence) ....................................................... 2.09
(a)(1)(A) ................................................................ 6.05
(a)(1)(B) ................................................................ 6.04
(a)(2) ................................................................... N.A.
(b) ...................................................................... 6.07
(c) ...................................................................... N.A.
317 (a)(1) .................................................................... 6.08
(a)(2).................................................................... 6.09
(b) ...................................................................... 2.04
318 (a)........................................................................ 12.01
(b)....................................................................... N.A.
(c)....................................................................... 12.01
</TABLE>
N.A. means not applicable.
*This Cross-Reference Table is not part of the Indenture.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C> <C>
ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.01. Definitions....................................................... 1
Section 1.02. Other Definitions................................................. 9
Section 1.03. Incorporation by Reference of Trust Indenture Act ................ 9
Section 1.04. Rules of Construction............................................. 10
ARTICLE 2
THE EXCHANGE NOTES
Section 2.01. Form and Dating................................................... 10
Section 2.02. Execution and Authentication...................................... 11
Section 2.03. Registrar and Paying Agent........................................ 11
Section 2.04. Paying Agent to Hold Money in Trust............................... 12
Section 2.05. Holder Lists...................................................... 12
Section 2.06. Transfer and Exchange............................................. 12
Section 2.07. Replacement Exchange Notes........................................ 18
Section 2.08. Outstanding Exchange Notes........................................ 18
Section 2.09. Treasury Exchange Notes........................................... 18
Section 2.10. Temporary Exchange Notes.......................................... 18
Section 2.11. Cancellation...................................................... 18
Section 2.12. Defaulted Interest................................................ 19
ARTICLE 3
REDEMPTION AND PREPAYMENT
Section 3.01. Notices to Trustee................................................ 19
Section 3.02. Selection of Notes to Be Redeemed................................. 19
Section 3.03. Notice of Redemption.............................................. 20
Section 3.04. Effect of Notice of Redemption.................................... 20
Section 3.05. Deposit of Redemption or Purchase Price........................... 21
Section 3.06. Notes Redeemed or Purchased in Part............................... 21
Section 3.07. Optional Redemption............................................... 21
Section 3.08. Mandatory Redemption.............................................. 22
ARTICLE 4
COVENANTS
Section 4.01. Payment of Exchange Notes......................................... 22
Section 4.02. Maintenance of Office or Agency................................... 22
Section 4.03. Reports........................................................... 23
i
<PAGE>
Section 4.04. Compliance Certificate............................................ 23
Section 4.05. Taxes............................................................. 24
Section 4.06. Stay, Extension and Usury Laws.................................... 24
Section 4.07. Transactions with Affiliates...................................... 24
Section 4.08. Continued Existence............................................... 25
Section 4.09. Offer to Repurchase Upon Change of Control........................ 25
Section 4.10. Payments For Consent.............................................. 26
ARTICLE 5
SUCCESSORS
Section 5.01. Merger, Consolidation, or Sale of Assets.......................... 26
Section 5.02. Successor Corporation Substituted................................. 27
ARTICLE 6
DEFAULTS AND REMEDIES
Section 6.01. Events of Default................................................. 27
Section 6.02. Acceleration...................................................... 29
Section 6.03. Other Remedies.................................................... 30
Section 6.04. Waiver of Past Defaults........................................... 30
Section 6.05. Control by Majority............................................... 30
Section 6.06. Limitation on Suits............................................... 30
Section 6.07. Rights of Holders of Notes to Receive Payment..................... 31
Section 6.08. Collection Suit by Trustee........................................ 31
Section 6.09. Trustee May File Proofs of Claim.................................. 31
Section 6.10. Priorities........................................................ 31
Section 6.11. Undertaking for Costs............................................. 32
ARTICLE 7
TRUSTEE
Section 7.01. Duties of Trustee................................................. 32
Section 7.02. Rights of Trustee................................................. 33
Section 7.03. Individual Rights of Trustee...................................... 34
Section 7.04. Trustee's Disclaimer.............................................. 34
Section 7.05. Notice of Defaults................................................ 34
Section 7.06. Reports by Trustee to Holders of the Notes........................ 34
Section 7.07. Compensation, Reimbursement and Indemnity......................... 35
Section 7.08. Replacement of Trustee............................................ 35
Section 7.09. Successor Trustee by Merger, etc.................................. 36
Section 7.10. Eligibility; Disqualification..................................... 36
Section 7.11. Preferential Collection of Claims Against Company................. 37
ii
<PAGE>
ARTICLE 8
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
Section 8.01. Option to Effect Legal Defeasance or Covenant
Defeasance........................................................ 37
Section 8.02. Legal Defeasance and Discharge.................................... 37
Section 8.03. Covenant Defeasance............................................... 37
Section 8.04. Conditions to Legal or Covenant Defeasance........................ 38
Section 8.05. Deposited Money and Government Securities to be
Held in Trust; Other Miscellaneous Provisions..................... 39
Section 8.06. Repayment to the Company.......................................... 40
Section 8.07. Reinstatement..................................................... 40
ARTICLE 9
AMENDMENT, SUPPLEMENT AND WAIVER
Section 9.01. Without Consent of Holders of Exchange Notes...................... 41
Section 9.02. With Consent of Holders of Exchange Notes......................... 41
Section 9.03. Compliance with Trust Indenture Act............................... 42
Section 9.04. Revocation and Effect of Consents................................. 42
Section 9.05. Notation on or Exchange of Notes.................................. 42
Section 9.06. Trustee to Sign Amendments, etc................................... 43
ARTICLE 10
SUBORDINATION
Section 10.01. Agreement to Subordinate............................................. 43
Section 10.02. Certain Definitions.................................................. 43
Section 10.03. Liquidation; Dissolution; Bankruptcy................................. 44
Section 10.04. Default on Designated Senior Debt.................................... 44
Section 10.05. Acceleration of Exchange Notes....................................... 45
Section 10.06. When Distribution Must Be Paid Over.................................. 45
Section 10.07. Notice by Company.................................................... 45
Section 10.08. Subrogation.......................................................... 46
Section 10.09. Relative Rights...................................................... 46
Section 10.10. Subordination May Not Be Impaired by Company......................... 46
Section 10.11. Distribution or Notice to Representative............................. 46
Section 10.12. Rights of Trustee and Paying Agent................................... 47
Section 10.13. Authorization to Effect Subordination................................ 47
Section 10.14. Amendments........................................................... 47
ARTICLE 11
CONVERSION
iii
<PAGE>
Section 11.01. Conversion Rights.................................................... 47
Section 11.02. Exercise of Conversion Rights........................................ 48
Section 11.03. Fractional Shares.................................................... 48
Section 11.04. Taxes upon Conversion................................................ 48
Section 11.05. Reservation of Class A Common Stock.................................. 48
Section 11.06. Adjustments to Conversion Price...................................... 49
ARTICLE 12
MISCELLANEOUS
Section 12.01. Trust Indenture Act Controls...................................... 56
Section 12.02. Notices........................................................... 56
Section 12.03. Communication by Holders of Exchange Notes with Other
Holders of Exchange Notes......................................... 57
Section 12.04. Certificate and Opinion as to Conditions Precedent................ 57
Section 12.05. Statements Required in Certificate or Opinion..................... 58
Section 12.06. Rules by Trustee and Agents....................................... 58
Section 12.07. No Personal Liability of Directors, Officers, Employees and
Stockholders...................................................... 58
Section 12.08. Governing Law..................................................... 58
Section 12.09. No Adverse Interpretation of Other Agreements..................... 58
Section 12.10. Successors........................................................ 59
Section 12.11. Severability...................................................... 59
Section 12.12. Counterpart Originals............................................. 59
Section 12.13. Table of Contents, Headings, etc.................................. 59
EXHIBITS
Exhibit A FORM OF EXCHANGE NOTE
Exhibit B CERTIFICATE OF TRANSFEROR
</TABLE>
iv
<PAGE>
INDENTURE dated as of _______ __, ____ among SFX Broadcasting,
Inc., a Delaware corporation (the "Company") and ____________________, a
__________ banking corporation, as trustee (the "Trustee").
The Company and the Trustee agree as follows for the benefit of
each other and for the equal and ratable benefit of the Holders of the 6 1/2%
Convertible Subordinated Exchange Notes due 2007 of the Company:
ARTICLE 1
DEFINITIONS AND INCORPORATION
BY REFERENCE
Section 1.01. Definitions.
"Advertising Business" means any business deriving substantially
all of its revenues from the (i) sale of advertisements and (ii) sale of
products or provision of services to any business described in clause (i)
above.
"Affiliate" of any specified Person means any other Person directly
or indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For purposes of this definition, "control"
(including, with correlative meanings, the terms "controlling," "controlled
by" and "under common control with"), as used with respect to any Person,
shall mean the possession, directly or indirectly, of the power to direct or
cause the direction of the management or policies of such Person, whether
through the ownership of voting securities, by agreement or otherwise;
provided that beneficial ownership of 10% or more of the voting securities of
a Person shall be deemed to be control.
"Agent" means any Registrar, Paying Agent or co-registrar.
"Bank Facilities" means, with respect to the Company, one or more
debt facilities (including, without limitation, the New Credit Agreement) or
commercial paper facilities with banks or other institutional lenders
providing for revolving credit loans, term loans, receivables financing
(including through the sale of receivables to such lenders or to special
purpose entities formed to borrow from such lenders against the sale of
receivables ) or letters of credit, in each case, as amended, restated,
modified, renewed, refunded, replaced or refinanced in whole or in part from
time to time.
"Bankruptcy Law" means Title 11, U.S. Code or any similar federal
or state law for the relief of debtors.
"Board" or "Board of Directors" means the Board of Directors of the
Company, the members of which are elected by the equity holders of the
Company.
"Broadcast Business" means any business, the majority of whose
revenues are derived from the broadcast of radio programming.
"Business Day" means each Monday, Tuesday, Wednesday, Thursday and
Friday which is not a Legal Holiday.
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"Capital Lease Obligation" means, at the time any determination
thereof is to be made, the amount of the liability in respect of a capital
lease that would at such time be required to be capitalized on a balance sheet
in accordance with GAAP.
"Capital Stock" means (i) in the case of a corporation, corporate
stock, (ii) in the case of an association or business entity, any and all
shares, interests, participations, rights or other equivalents (however
designated) of corporate stock, (iii) in the case of a partnership,
partnership interests (whether general or limited) and (iv) any other interest
or participation that confers on a Person the right to receive a share of the
profits and losses of, or distributions of assets of, the issuing Person.
"Cash Equivalents" means (i) United States dollars, (ii) securities
issued or directly and fully guaranteed or insured by the United States
government or any agency or instrumentality thereof having maturities of not
more than six months from the date of acquisition, (iii) certificates of
deposit and eurodollar and time deposits with maturities of six months or less
from the date of acquisition, bankers' acceptances with maturities not
exceeding six months and overnight bank deposits, in each case with any lender
party to the New Credit Agreement or with any domestic commercial bank having
capital and surplus in excess of $500.0 million and a Thomson Bank Watch
Rating of "B" or better, (iv) repurchase obligations with a term of not more
than seven days for underlying securities of the types described in clauses
(ii) and (iii) above entered into with any financial institution meeting the
qualifications specified in clause (iii) above and (v) commercial paper having
the highest rating obtainable from Moody's Investors Service, Inc. or Standard
& Poor's Corporation and in each case maturing within six months after the
date of acquisition.
"Certificated Exchange Notes" means Exchange Notes that are in the
form of the Exchange Notes attached hereto as Exhibit A, that do not include
the information called for by footnotes 1 and 2 thereof.
"Change of Control" means the occurrence of any of the following:
(i) the sale, lease, transfer, conveyance or other disposition (other than by
way of merger or consolidation), in one or a series of related transactions,
of all or substantially all of the assets of the Company and its Subsidiaries
taken as a whole to any "person" (as such term is used in Section 13(d)(3) of
the Exchange Act) other than the Principal or his Related Parties, (ii) the
adoption of a plan relating to the liquidation or dissolution of the Company,
(iii) the consummation of any transaction (including, without limitation, any
merger or consolidation) the result of which is that any "person" (as defined
above), other than the Principal and his Related Parties, becomes the
"beneficial owner" (as such term is defined in Rule 13d-3 and Rule 13d-5 under
the Exchange Act, except that a person shall be deemed to have "beneficial
ownership" of all securities that such person has the right to acquire,
whether such right is exercisable immediately or only after the passage of
time, upon the happening of an event or otherwise), directly or indirectly, of
Voting Stock of the Company having more than 35% of the combined voting power
of all classes of Voting Stock of the Company then outstanding, or (iv) the
first day on which a majority of the members of the Board of Directors of the
Company are not Continuing Directors.
"Commitment Letter" means the Commitment Letter between the Company
and The Bank of New York relating to the New Credit Agreement.
"Company" means SFX Broadcasting, Inc., a Delaware Corporation.
"Consolidated Net Worth" means, with respect to any Person as of
any date, the sum of (i) the consolidated equity of the common stockholders of
such Person and its consolidated Subsidiaries as of such date plus (ii) the
respective amounts reported on such Person's balance sheet as of such date
with respect to any series of Preferred Stock (other than Disqualified Stock)
that by its terms is not entitled to the payment of dividends unless such
dividends may be declared and paid only out of net earnings in respect of the
year
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of such declaration and payment, but only to the extent of any cash received
by such Person upon issuance of such Preferred Stock, less (x) all write-ups
(other than write-ups resulting from foreign currency translations and
write-ups of tangible assets of a going concern business made within 12 months
after the acquisition of such business) subsequent to the date hereof in the
book value of any asset owned by such Person or a consolidated Subsidiary of
such Person, (y) all investments as of such date in unconsolidated
Subsidiaries and in Persons that are not Subsidiaries (except, in each case,
Permitted Investments) and (z) all unamortized debt discount and expense and
unamortized deferred charges as of such date, all of the foregoing determined
in accordance with GAAP.
"Continuing Directors" means, as of any date of determination, any
member of the Board of Directors of the Company who (i) was a member of such
Board of Directors on the date hereof or (ii) was nominated for election or
elected to such Board of Directors with the approval of a majority of the
Continuing Directors who were members of such Board at the time of such
nomination or election.
"Conversion Agent" means the entity designated from time to time by
the Company to act as conversion agent for the Exchange Notes.
"Conversion Rate" means, as of any date, the number of shares of
Class A Common Stock issuable upon conversion of one Exchange Note, determined
by dividing $50.00 by the Conversion Price then in effect.
"Conversion Price" initially means the conversion price of the Series
D Preferred Stock calculated as of the date hereof and thereafter shall be
subject to adjustment from time to time pursuant to the terms of Section 11.06
below. The Conversion Price shall be rounded to four decimal places.
"Corporate Trust Office of the Trustee" shall be at the address of
the Trustee specified in Section 12.02 hereof or such other address as to
which the Trustee may give notice to the Company.
"Current Market Price" means, with respect to any particular
security on any date of determination, the average over the 20 Trading Days
ending on the date immediately preceding the date of such determination of the
last reported sale price, or, if no such sale takes place on any such day, the
closing bid price, in either case as reported for consolidated transactions on
the principal national securities exchange (including the Nasdaq National
Market) on which such security is listed or admitted for trading; provided,
however, that if any event that results in an adjustment of the Conversion
Rate occurs during the period beginning on the first day of such 20-day period
and ending on the date immediately preceding the date of determination, the
Current Market Price as determined pursuant to the foregoing will be
appropriately adjusted to reflect the occurrence of such event or, if such
security is not listed on any exchange or admitted for trading on the Nasdaq
Stock Market, the Current Market Price of such security shall be the last
reported bid price for such security on the date preceding the date of such
determination provided by a New York Stock Exchange member firm designated by
the Company or, if no such member firm can provide such a bid price, as
determined in good faith by a majority of the independent directors of the
Company. In the event the Company elects to pay any Change of Control Payment
in shares of Class A Common Stock or is required to pay cash to Holders of
Exchange Notes seeking to convert Exchange Notes at a time when an
insufficient number of shares of Class A Common Stock are authorized for
issuance, the Company is restricted by FCC rules from issuing shares of Class
A Common Stock upon conversion of any Exchange Notes or in lieu of the
issuance of a fractional share, the Current Market Price shall be determined
on the basis of the average of the five Trading Days ending on and including
the third Trading Day preceding the Change of Control Payment Date or the date
of such conversion, as the case may be.
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"Default" means any event that is or with the passage of time or
the giving of notice or both would be an Event of Default.
"Depositary" means, with respect to the Exchange Notes issuable or
issued in whole or in part in global form, the Person specified in Section
2.03 hereof as the Depositary with respect to the Exchange Notes, until a
successor shall have been appointed and become such pursuant to the applicable
provision of this Indenture, and, thereafter, "Depositary" shall mean or
include such successor.
"Disqualified Stock" means any Capital Stock that, by its terms (or
by the terms of any security into which it is convertible or for which it is
exchangeable at the option of the holder thereof), or upon the happening of
any event, matures or is mandatorily redeemable, pursuant to a sinking fund
obligation or otherwise, or redeemable at the option of the holder thereof, in
whole or in part, on or prior to the date that is 91 days after the date on
which the Exchange Notes mature.
"Equity Interests" means Capital Stock and all warrants, options or
other rights to acquire Capital Stock (but excluding any debt security that is
convertible into, or exchangeable for, Capital Stock).
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exchange Note Custodian" means the Trustee, as custodian with
respect to the Exchange Notes in global form, or any successor entity thereto.
"Exchange Notes" means the Company's 6 1/2% Convertible
Subordinated Exchange Notes due 2007 issuable in exchange for the Company's
Series D Preferred Stock.
"Exempt Issuances" has the meaning set forth in Section 11.06 below.
"Existing MMR Indebtedness" means all Indebtedness of MMR and its
Subsidiaries in existence at the closing of the MMR Merger, until such amounts
are repaid.
"Fair Market Value" means, with respect to any asset or property,
the sale value that would be obtained in an arm's length transaction between
an informed and willing seller under no compulsion to sell and an informed and
willing buyer under no compulsion to buy.
"GAAP" means generally accepted accounting principles set forth in
the opinions and pronouncements of the Accounting Principles Board of the
American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as have been approved by a significant segment
of the accounting profession, which are in effect on the date hereof.
"Global Exchange Note" means an Exchange Note that contains the
paragraph referred to in footnote 1 and the additional schedule referred to in
footnote 2 to the form of the Exchange Note attached hereto as Exhibit A.
"Government Securities" means direct obligations of, or obligations
guaranteed by, the United States of America for the payment of which
obligations or guarantee the full faith and credit of the United States of
America is pledged.
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"Guarantee" means a guarantee (other than by endorsement of
negotiable instruments for collection in the ordinary course of business),
direct or indirect, in any manner (including, without limitation, letters of
credit and reimbursement agreements in respect thereof), of all or any part of
any Indebtedness.
"Hedging Obligations" means, with respect to any Person, the
obligations of such Person under (i) interest rate swap agreements, interest
rate cap agreements and interest rate collar agreements and (ii) other
agreements or arrangements designed to protect such Person against
fluctuations in interest rates.
"Holder" means a Person in whose name an Exchange Note is registered.
"Indebtedness" means, with respect to any Person, without
duplication any indebtedness of such Person, whether or not contingent, in
respect of borrowed money or evidenced by bonds, notes, debentures or similar
instruments or letters of credit (or reimbursement agreements in respect
thereof) or banker's acceptances or representing Capital Lease Obligations or
the balance deferred and unpaid of the purchase price of any property or
payment obligations under an LMA or representing any Hedging Obligations,
except any such balance that constitutes an accrued expense or trade payable,
if and to the extent any of the foregoing (other than letters of credit and
Hedging Obligations) would appear as a liability upon a balance sheet of such
Person prepared in accordance with GAAP, as well as all indebtedness of others
secured by a Lien on any asset of such Person (whether or not such
indebtedness is assumed by such Person) and, to the extent not otherwise
included, the Guarantee by such Person of any indebtedness of any other
Person.
"Indenture" means this Indenture, as amended or supplemented from
time to time.
"Investments" means, with respect to any Person, all investments by
such Person in other Persons (including Affiliates) in the form of direct or
indirect loans (including guarantees of Indebtedness or other obligations),
advances or capital contributions (excluding commission, travel and similar
advances to officers and employees made in the ordinary course of business),
purchases or other acquisitions for consideration of Indebtedness, Equity
Interests or other securities, together with all items that are or would be
classified as investments on a balance sheet prepared in accordance with GAAP;
provided that an acquisition of assets, Equity Interests or other securities
by the Company for consideration consisting of common equity securities of the
Company shall not be deemed to be an Investment. If the Company or any
Subsidiary of the Company sells or otherwise disposes of any Equity Interests
of any direct or indirect Subsidiary of the Company such that, after giving
effect to any such sale or disposition, such Person is no longer a Subsidiary
of the Company, the Company shall be deemed to have made an Investment on the
date of any such sale or disposition equal to the Fair Market Value of the
Equity Interests of such Subsidiary not sold or disposed of.
"Legal Holiday" means a Saturday, a Sunday or a day on which
banking institutions in the City of New York or at a place of payment are
authorized by law, regulation or executive order to remain closed. If a
payment date is a Legal Holiday at a place of payment, payment may be made at
that place on the next succeeding day that is not a Legal Holiday, and no
interest shall accrue for the intervening period.
"Lien" means, with respect to any asset, any mortgage, lien,
pledge, charge, security interest or encumbrance of any kind in respect of
such asset, whether or not filed, recorded or otherwise perfected under
applicable law (including any conditional sale or other title retention
agreement, any lease in the nature thereof, any option or other agreement to
sell or give a security interest in and any filing of or agreement to give any
financing statement under the Uniform Commercial Code (or equivalent statutes)
of any jurisdiction).
5
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"Liquidated Damages" means all liquidated damages then owing
pursuant to Section 4 of the Registration Rights Agreement.
"Local Marketing Agreement" or "LMA" means a local marketing
arrangement, sale agreement, time brokerage agreement, management agreement or
similar arrangement pursuant to which a Person, subject to customary
preemption rights and other limitations (i) obtains the right to sell at least
a majority of the advertising inventory of a radio station of which a third
party is the licensee, (ii) obtains the right to broadcast programming and
sell advertising time during a majority of the air time of a radio station or
(iii) manages the selling operations of a radio station with respect to at
least a majority of the advertising inventory of such station.
"Management Termination Agreements" means each of (i) the
termination agreement between the Company and R. Steven Hicks, dated April 16,
1996, and (ii) the amendment to the employment agreement between the Company
and D. Geoffrey Armstrong, effective as of April 15, 1996, in each case, as in
effect on the date hereof.
"Market Capitalization" means, as of any date, the product of the
Current Market Price of the Class A Common Stock as of such date times the
number of shares of Class A Common Stock outstanding as of such date.
"Material Broadcast License" means one or more authorizations
issued by the Federal Communications Commission for the operation of AM or FM
radio stations that individually or collectively are material to the financial
condition, results of operations or prospects of the Company and its
Subsidiaries taken as a whole.
"MMR" means Multi-Market Radio, Inc., a Delaware corporation.
"MMR Merger" means the merger of SFX Merger Company, a Wholly Owned
Subsidiary of the Company, with and into MMR, pursuant to which MMR will
become a Wholly Owned Subsidiary of the Company.
"New Credit Agreement" means the Credit Agreement to be entered
into by and among the Company, as borrower, the Company's Subsidiaries, as
guarantors, and the lenders party thereto, providing for up to $150.0 million
of revolving credit borrowings, including any related notes, guarantees,
collateral documents, and other agreements executed in connection therewith,
and in each case as amended, modified, renewed, refunded, replaced or
refinanced from time to time.
"Obligations" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any Indebtedness.
"Offering" means the Offering of the Exchange Notes by the Company.
"Offering Circular" means the Offering Circular, dated May 22,
1996, relating to the Preferred Stock Offering.
"Officer" means, (a) with respect to any Person that is a
corporation, the Chairman of the Board, the Chief Executive Officer, the
President, the Chief Operating Officer, the Chief Financial Officer, the
Treasurer, any Assistant Treasurer, the Controller, the Secretary or any
Vice-President of such Person and (b) with respect to any other Person, the
individuals selected by the Board of such Person to perform functions similar
to those of the officers listed in clause (a).
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"Officers' Certificate" means a certificate signed on behalf of the
Company by two Officers of the Company, one of whom must be the Chief
Executive Officer, President or Vice President and one of whom must be the
Chief Financial Officer, the Treasurer or the controller of the Company that
meets the requirements of Section 12.05 hereof.
"Opinion of Counsel" means an opinion from legal counsel who is
reasonably acceptable to the Trustee, that meets the requirements of Section
12.05 hereof. The counsel may be an employee of or counsel to the Company, any
Subsidiary of the Company or the Trustee.
"Pari Passu Debt" means Indebtedness that ranks pari passu in right
of payment with the Exchange Notes.
"Permitted Investments" means (a) any Investment in the Company or
in a Subsidiary of the Company; (b) any Investment in Cash Equivalents; (c)
any Investment by the Company or any Subsidiary of the Company in a Person, if
after such Investment (i) such Person becomes a Subsidiary of the Company or
(ii) such Person is merged, consolidated or amalgamated with or into, or
transfers or conveys substantially all of its assets to, or is liquidated
into, the Company or a Subsidiary of the Company; (d) any obligations or
shares of Capital Stock received in connection with or as a result of a
bankruptcy, workout or reorganization of the issuer of such obligations or
shares of Capital Stock; (e) any Investment received involuntarily; (f)
Investments in any Person (other than an Affiliate of the Company that is not
also a Subsidiary of the Company) engaged in a Broadcast Business or an
Advertising Business which Investments have an aggregate Fair Market Value
(measured on the date each such Investment was made and without giving effect
to subsequent changes in value), when taken together with all other
Investments made pursuant to this clause (f) that are at the time outstanding,
not to exceed $20.0 million and (g) other Investments in any Person (other
than an Affiliate of the Company that is not also a Subsidiary of the Company)
having an aggregate Fair Market Value (measured on the date each such
Investment was made and without giving effect to subsequent changes in value),
when taken together with all other Investments made pursuant to this clause
(g) that are at the time outstanding, not to exceed $15.0 million.
"Person" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization
or government or agency or political subdivision thereof (including any
subdivision or ongoing business of any such entity or substantially all of the
assets of any such entity, subdivision or business).
"Preferred Stock," of any Person, means Capital Stock of such
Person of any class or series (however designated) that ranks prior, as to
payment of dividends or as to the distribution of assets upon any voluntary or
involuntary liquidation, dissolution or winding up of such Person, to shares
of Capital Stock of any other class or series of such Person.
"Preferred Stock Offering" means the private placement of
$130,000,000 in aggregate liquidation preference of the Series D Preferred
Stock.
"Principal" means Robert F.X. Sillerman.
"Registration Rights Agreement" means the Registration Rights
Agreement relating to the Exchange Notes, dated as of the date hereof, by and
among the Company and the other parties named on the signature pages thereof,
as such agreement may be amended, modified or supplemented from time to time.
"Related Party" with respect to the Principal means (A) any spouse
or immediate family member (in the case of an individual) of the Principal or
(B) or trust, corporation, partnership or other entity, the
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beneficiaries, stockholders, partners, owners or Persons beneficially holding
an 80% or more controlling interest of which consist of the Principal and/or
such other Persons referred to in the immediately preceding clause (A).
"Responsible Officer," when used with respect to the Trustee, means
any officer within the Corporate Trust Administration department of the
Trustee (or any successor group of the Trustee) or any other officer of the
Trustee customarily performing functions similar to those performed by any of
the above designated officers and also means, with respect to a particular
corporate trust matter, any other officer to whom such matter is referred
because of his knowledge of and familiarity with the particular subject.
"Rights" means securities, rights, options or warrants entitling a
holder thereof to subscribe for or purchase any shares of Class A Common Stock
of the Corporation.
"SCMC" means Sillerman Communications Management Company, a
Delaware corporation.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Senior Subordinated Notes" means the Company's 10 3/4% Senior
Subordinated Notes due 2006.
"Series D Preferred Stock" means the Company's 6 1/2% Series D
Cumulative Convertible Exchangeable Preferred Stock due May 31, 2007.
"SFX Merger Company" means SFX Merger Company, a Delaware
corporation.
"Shared Facilities Agreement" means the Shared Facilities Agreement
between the Company and SCMC, as in effect on the date hereof.
"Significant Subsidiary" means any Subsidiary that would be a
"significant subsidiary" as defined in Article 1, Rule 1-02 of Regulation S-X,
promulgated pursuant to the Securities Act, as such Regulation is in effect on
the date hereof.
"Subsidiary" means, with respect to any Person, (i) any
corporation, association or other business entity of which more than 50% of
the total voting power of shares of Voting Stock thereof is at the time owned
or controlled, directly or indirectly, by such Person or one or more of the
other Subsidiaries of that Person (or a combination thereof) and (ii) any
partnership (a) the sole general partner or the managing general partner of
which is such Person or a Subsidiary of such Person or (b) the only general
partners of which are such Person or of one or more Subsidiaries of such
Person (or any combination thereof).
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. ss.ss.
77aaa-77bbbb) as amended as in effect on the date of this Indenture.
"Trading Day" with respect to either the Class A Common Stock or
Exchange Notes, as the case may be, means any day on which any market
(including, without limitation, any formal or informal over the counter
market) in which the applicable security is then traded and in which a quoted
price may be ascertained is open for business.
"Transfer Restricted Securities" means Exchange Notes that bear or
are required to bear the legend set forth in Section 2.06 hereof.
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"Trustee" means the party named as such above until a successor
replaces it in accordance with the applicable provisions of this Indenture and
thereafter means the successor serving hereunder.
"Voting Stock" means with respect to any specified Person, Capital
Stock with voting power, under ordinary circumstances and without regard to
the occurrence of any contingency, to elect the directors or other managers or
trustees of such Person.
"Wholly Owned Subsidiary" of any Person means a Subsidiary of such
Person all of the outstanding Capital Stock or other ownership interests of
which (other than directors' qualifying shares) shall at the time be owned by
such Person or by one or more Wholly Owned Subsidiaries of such Person and one
or more Wholly Owned Subsidiaries of such Person.
Section 1.02. Other Definitions.
Defined in
Term Section
"Affiliate Transaction"......................... 4.07
"Change of Control Offer"....................... 4.09
"Change of Control Payment"..................... 4.09
"Change of Control Payment Date"................ 4.09
"Covenant Defeasance"........................... 8.03
"Custodian"..................................... 6.01
"Designated Senior Debt"........................ 10.02
"distribution".................................. 10.02
"DTC"........................................... 2.03
"Event of Default".............................. 6.01
"Legal Defeasance" ............................. 8.02
"Notice of Default"............................. 6.01
"Outstanding"................................... 8.02
"Paying Agent".................................. 2.03
"Payment Blockage Notice"....................... 10.04
"Registrar"..................................... 2.03
"Representative" ............................... 10.02
"Senior Bank Debt".............................. 10.02
"Senior Debt"................................... 10.02
Section 1.03. Incorporation by Reference of Trust Indenture Act.
Whenever this Indenture refers to a provision of the TIA, the
provision is incorporated by reference in and made a part of this Indenture.
The following TIA terms used in this Indenture have the following
meanings:
"indenture securities" means the Exchange Notes;
"indenture security Holder" means a Holder of an Exchange Note;
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means the Trustee;
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"obligor" on the Exchange Notes means the Company and any successor
obligor upon the Exchange Notes.
All other terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by SEC rule under the
TIA have the meanings so assigned to them.
Section 1.04. Rules of Construction.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning
assigned to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and in the
plural include the singular;
(5) provisions apply to successive events and transactions; and
(6) references to sections of or rules under the Securities Act
shall be deemed to include substitute, replacement of successor sections
or rules adopted by the SEC from time to time.
ARTICLE 2
THE EXCHANGE NOTES
Section 2.01. Form and Dating.
The Exchange Notes and the Trustee's certificate of authentication
shall be substantially in the form of Exhibit A hereto. The Exchange Notes may
have notations, legends or endorsements required by law, stock exchange rule
or usage. Each Note shall be dated the date of its authentication. The
Exchange Notes shall be in all appropriate denominations.
The terms and provisions contained in the Exchange Notes shall
constitute, and are hereby expressly made, a part of this Indenture and the
Company and the Trustee, by their execution and delivery of this Indenture,
expressly agree to such terms and provisions and to be bound thereby.
Exchange Notes issued in global form shall be substantially in the
form of Exhibit A attached hereto (including the text referred to in footnotes
1 and 2 thereto). Exchange Notes issued in certificated form shall be
substantially in the form of Exhibit A attached hereto (but without including
the text referred to in footnotes 1 and 2 thereto). Each Global Exchange Note
shall represent such of the outstanding Exchange Notes as shall be specified
therein and each shall provide that it shall represent the aggregate amount of
outstanding Exchange Notes from time to time endorsed thereon and that the
aggregate amount of outstanding Exchange Notes represented thereby may from
time to time be reduced or increased, as appropriate, to reflect exchanges and
redemptions. Any endorsement of a Global Exchange Note to reflect the amount
of any increase or decrease in the amount of outstanding Exchange Notes
represented thereby shall be made by the Trustee or the Exchange Note
Custodian, at the direction of the Trustee, in accordance with instructions
given by the Holder thereof as required by Section 2.06 hereof.
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SECTION 2.02. EXECUTION AND AUTHENTICATION.
An Officer of the Company shall sign the Exchange Notes for the
Company by manual or facsimile signature.
If an Officer whose signature is on an Exchange Note no longer
holds that office at the time an Exchange Note is authenticated, the Exchange
Note shall nevertheless be valid.
An Exchange Note shall not be valid until authenticated by the
manual signature of the Trustee. The signature shall be conclusive evidence
that the Exchange Note has been authenticated under this Indenture.
The Trustee shall, upon a written order of the Company signed by
two Officers of the Company, authenticate Exchange Notes for original issue up
to the aggregate principal amount stated in paragraph 4 of the Exchange Notes.
The aggregate principal amount of Exchange Notes outstanding at any time may
not exceed such amount.
The Trustee may appoint an authenticating agent acceptable to the
Company to authenticate the Exchange Notes. An authenticating agent may
authenticate Exchange Notes whenever the Trustee may do so. Each reference in
this Indenture to authentication by the Trustee includes authentication by
such agent. An authenticating agent has the same rights as an Agent to deal
with the Company or an Affiliate of the Company.
SECTION 2.03. REGISTRAR AND PAYING AGENT.
The Company shall maintain an office or agency where Exchange Notes
may be presented for registration of transfer or for exchange ("Registrar")
and an office or agency where Exchange Notes may be presented for payment
("Paying Agent"). The Registrar shall keep a register of the Exchange Notes
and of their transfer and exchange. The Company may appoint one or more
co-registrars and one or more additional paying agents. The term "Registrar"
includes any co-registrar and the term "Paying Agent" includes any additional
paying agent. The Company may change any Paying Agent or Registrar without
notice to any Holder. The Company shall notify the Trustee in writing of the
name and address of any Agent not a party to this Indenture. If the Company
fails to appoint or maintain another entity as Registrar or Paying Agent, the
Trustee shall act as such. The Company may act as Paying Agent or Registrar.
The Company initially appoints The Depository Trust Company ("DTC")
to act as Depositary with respect to the Global Exchange Notes.
The Company initially appoints the Trustee to act as the Registrar
and Paying Agent and to act as Exchange Note Custodian with respect to the
Global Exchange Notes.
SECTION 2.04. PAYING AGENT TO HOLD MONEY IN TRUST.
The Company shall require each Paying Agent other than the Trustee
to agree in writing that the Paying Agent will hold in trust for the benefit
of Holders or the Trustee all money held by the Paying Agent for the payment
of principal, premium or Liquidated Damages, if any, or interest on the
Exchange Notes, and will notify the Trustee of any default by the Company in
making any such payment. While any such default continues, the Trustee may
require a Paying Agent to pay all money held by it to the Trustee. The Company
at any time may require a Paying Agent to pay all money held by it to the
Trustee. Upon payment over to the Trustee, the Paying Agent (if other than the
Company) shall have no further liability for the
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money. If the Company acts as Paying Agent, it shall segregate and hold in a
separate trust fund for the benefit of the Holders all money held by it as
Paying Agent. Upon any bankruptcy or reorganization proceedings relating to
the Company, the Trustee shall serve as Paying Agent for the Exchange Notes.
SECTION 2.05. HOLDER LISTS.
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
all Holders and shall otherwise comply with TIA ss. 312(a). If the Trustee is
not the Registrar, the Company shall furnish to the Trustee at least seven
Business Days before each interest payment date and at such other times as the
Trustee may request in writing, a list in such form and as of such date as the
Trustee may reasonably require of the names and addresses of the Holders of
Exchange Notes and the Company shall otherwise comply with TIA ss. 312(a).
SECTION 2.06. TRANSFER AND EXCHANGE.
(a) Transfer and Exchange of Certificated Exchange Notes. When
Certificated Exchange Notes are presented by a Holder to the Registrar with a
request:
(x) to register the transfer of the Certificated Exchange Notes; or
(y) to exchange such Certificated Exchange Notes for an equal
principal amount of Certificated Exchange Notes of other authorized
denominations,
the Registrar shall register the transfer or make the exchange as requested if
its requirements for such transactions are met; provided, however, that the
Certificated Exchange Notes presented or surrendered for register of transfer
or exchange:
(i) shall be duly endorsed or accompanied by a written
instruction of transfer in form satisfactory to the
Registrar duly executed by such Holder or by his
attorney, duly authorized in writing; and
(ii) in the case of a Certificated Note that is a
Transfer Restricted Security, such request shall be
accompanied by the following additional information
and documents, as applicable:
(A) if such Transfer Restricted Security is being
delivered to the Registrar by a Holder for
registration in the name of such Holder,
without transfer, a certification to that
effect from such Holder (in substantially the
form of Exhibit B hereto); or
(B) if such Transfer Restricted Security is being
transferred to a "qualified institutional
buyer" (as defined in Rule 144A under the
Securities Act) in accordance with Rule 144A
under the Securities Act or pursuant to an
exemption from registration in accordance with
Rule 144 or Rule 904 under the Securities Act
or pursuant to an effective registration
statement under the Securities Act, a
certification to that effect from such Holder
(in substantially the form of Exhibit B hereto)
and, if the Company so requests, an Opinion of
Counsel from such Holder or the transferee
reasonably acceptable to the Company and to the
Registrar to the effect that such transfer is
in compliance with the Securities Act; or
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(C) if such Transfer Restricted Security is being
transferred in reliance on another exemption
from the registration requirements of the
Securities Act, a certification to that effect
from such Holder (in substantially the form of
Exhibit B hereto) and an Opinion of Counsel
from such Holder or the transferee reasonably
acceptable to the Company and to the Registrar
to the effect that such transfer is in
compliance with the Securities Act.
(b) Transfer of a Certificated Note for a Beneficial Interest in a
Global Exchange Note. A Certificated Note may not be exchanged for a
beneficial interest in a Global Exchange Note except upon satisfaction of the
requirements set forth below. Upon receipt by the Trustee of a Certificated
Note, duly endorsed or accompanied by appropriate instruments of transfer, in
form satisfactory to the Trustee, together with:
(i) if such Certificated Note is a Transfer Restricted Security,
a certification from the Holder thereof (in substantially the
form of Exhibit B hereto) to the effect that such
Certificated Note is being transferred by such Holder to a
"qualified institutional buyer" (as defined in Rule 144A
under the Securities Act) in accordance with Rule 144A under
the Securities Act or to an "Accredited Investor" (as defined
in Rule 501(a)(1), (2), (3) or (7) under the Securities Act)
in accordance with Regulation D under the Securities Act and,
if the Company so requests, an Opinion of Counsel from such
Holder or the transferee reasonably acceptable to the Company
and to the Registrar to the effect that such transfer is in
compliance with the Securities Act; and
(ii) whether or not such Certificated Note is a Transfer Restricted
Security, written instructions from the Holder thereof
directing the Trustee to make, or to direct the Exchange Note
Custodian to make, an endorsement on the Global Exchange Note
to reflect an increase in the aggregate principal amount of
the Exchange Notes represented by the Global Exchange Note,
in which case the Trustee shall cancel such Certificated Note in accordance
with Section 2.11 hereof and cause, or direct the Exchange Note Custodian to
cause, in accordance with the standing instructions and procedures existing
between the Depositary and the Exchange Note Custodian, the aggregate
principal amount of Exchange Notes represented by the Global Exchange Note to
be increased accordingly. If no Global Exchange Notes are then outstanding,
the Company shall issue and, upon receipt of a written order in accordance
with Section 2.02 hereof, the Trustee shall authenticate a new Global Exchange
Note in the appropriate principal amount.
(c) Transfer and Exchange of Global Exchange Notes. The transfer
and exchange of Global Exchange Notes or beneficial interests
therein shall be effected through the Depositary, in
accordance with this Indenture and the procedures of the
Depositary therefor, which shall include restrictions on
transfer comparable to those set forth herein to the extent
required by the Securities Act.
(d) Transfer of a Beneficial Interest in a Global Exchange Note
for a Certificated Note.
(i) Any Person having a beneficial interest in a Global
Exchange Note may upon request exchange such beneficial
interest for a Certificated Note. Upon receipt by the
Trustee of written instructions or such other form of
instructions as is customary for the Depositary, from
the Depositary or its nominee on behalf of any Person
having a beneficial interest in a Global Exchange Note,
and, in the case of a Transfer Restricted Security, the
following additional information and documents (all of
which may be submitted by facsimile):
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(A) if such beneficial interest is being
transferred to the Person designated by the
Depositary as being the beneficial owner, a
certification to that effect from such Person
(in substantially the form of Exhibit B
hereto); or
(B) if such beneficial interest is being
transferred to a "qualified institutional
buyer" (as defined in Rule 144A under the
Securities Act) in accordance with Rule 144A
under the Securities Act or pursuant to an
exemption from registration in accordance
with Rule 144 or Rule 904 under the
Securities Act or pursuant to an effective
registration statement under the Securities
Act, a certification to that effect from the
transferor (in substantially the form of
Exhibit B hereto) and, if the Company so
requests, an Opinion of Counsel from such
Holder or the transferee reasonably
acceptable to the Company and to the
Registrar to the effect that such transfer is
in compliance with the Securities Act; or
(C) if such beneficial interest is being
transferred in reliance on another exemption
from the registration requirements of the
Securities Act, a certification to that effect
from the transferor (in substantially the form
of Exhibit B hereto) and an Opinion of Counsel
from such Holder or transferor reasonably
acceptable to the Company and to the Registrar
to the effect that such transfer is in
compliance with the Securities Act,
in which case the Trustee or the Exchange Note
Custodian, at the direction of the Trustee, shall, in
accordance with the standing instructions and procedures
existing between the Depositary and the Exchange Note
Custodian, cause the aggregate principal amount of
Global Exchange Notes to be reduced accordingly and,
following such reduction, the Company shall execute and,
upon receipt of an authentication order in accordance
with Section 2.02 hereof, the Trustee shall authenticate
and deliver to the transferee a Certificated Note in the
appropriate principal amount.
(ii) Certificated Exchange Notes issued in exchange for a
beneficial interest in a Global Exchange Note pursuant
to this Section 2.06(d) shall be registered in such
names and in such authorized denominations as the
Depositary, pursuant to instructions from its direct or
indirect participants or otherwise, shall instruct the
Trustee. The Trustee shall deliver such Certificated
Exchange Notes to the Persons in whose names such
Exchange Notes are so registered.
(e) Restrictions on Transfer and Exchange of Global Exchange Notes.
Notwithstanding any other provision of this Indenture (other than the
provisions set forth in subsection (f) of this Section 2.06), a Global
Exchange Note may not be transferred as a whole except by the Depositary to a
nominee of the Depositary or by a nominee of the Depositary to the Depositary
or another nominee of the Depositary or by the Depositary or any such nominee
to a successor Depositary or a nominee of such successor Depositary.
(f) Authentication of Certificated Exchange Notes in Absence
of Depositary. If at any time:
(i) the Depositary for the Exchange Notes notifies the
Company that the Depositary is unwilling or unable to
continue as Depositary for the Global Exchange Notes and
a successor Depositary for the Global Exchange Notes is
not appointed by the Company within 90 days after
delivery of such notice; or
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(ii) the Company, at its sole discretion, notifies the
Trustee in writing that it elects to cause the issuance
of Certificated Exchange Notes under this Indenture,
then the Company shall execute, and the Trustee shall, upon receipt of a
written order in accordance with Section 2.02 hereof, authenticate and
deliver, Certificated Exchange Notes in an aggregate principal amount equal to
the principal amount of the Global Exchange Notes in exchange for such Global
Exchange Notes.
(g) Legends.
(i) Except as permitted by the following paragraphs (ii) and
(iii), each Note certificate evidencing Global Exchange
Notes and Certificated Exchange Notes (and all Exchange
Notes issued in exchange therefor or substitution
thereof) shall bear legends in substantially the
following form:
"THE SECURITIES (OR ITS PREDECESSOR) EVIDENCED HEREBY
WERE ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM
REGISTRATION UNDER SECTION 5 OF THE UNITED STATES
SECURITIES ACT OF 1933 (THE "SECURITIES ACT"), AND THE
SECURITIES EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD,
PLEDGED OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH
REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH
PURCHASER OF THE SECURITIES EVIDENCED HEREBY IS HEREBY
NOTIFIED THAT THE SELLER MAY BE RELYING ON THE EXEMPTION
FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT
PROVIDED BY RULE 144A THEREUNDER. THE HOLDER OF THE
SECURITIES EVIDENCED HEREBY AGREES FOR THE BENEFIT OF
THE COMPANY THAT (A) SUCH SECURITIES MAY NOT BE
REOFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED
EXCEPT (1) BY THE INITIAL INVESTOR (a) TO A PERSON WHO
THE SELLER REASONABLY BELIEVES IS A QUALIFIED
INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A
UNDER THE SECURITIES ACT PURCHASING FOR ITS OWN ACCOUNT
OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER IN
A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (b)
IN AN OFFSHORE TRANSACTION COMPLYING WITH RULE 903 OR
RULE 904 OF REGULATION S UNDER THE SECURITIES ACT (c)
PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE
SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF
AVAILABLE) (d) TO THE COMPANY OR (e) PURSUANT TO AN
EXEMPTION TO AN EFFECTIVE REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OR (2) BY SUBSEQUENT INVESTORS, AS
SET FORTH IN (1) ABOVE AND, IN ADDITION, TO AN
INSTITUTIONAL ACCREDITED INVESTOR IN A TRANSACTION EXEMPT
FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT
AND, IN EACH CASE, IN ACCORDANCE WITH ALL APPLICABLE
SECURITIES LAWS OF THE STATES OF THE UNITED STATES AND
(B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS
REQUIRED TO, NOTIFY ANY PURCHASER FROM IT OF THE
SECURITIES EVIDENCED HEREBY OF THE RESALE RESTRICTIONS
SET FORTH IN (A) ABOVE."
(ii) Upon any sale or transfer of a Transfer Restricted
Security (including any Transfer Restricted Security
represented by a Global Exchange Note) pursuant to Rule
144 under the Securities Act or pursuant to an effective
registration statement under the Securities Act:
(A) in the case of any Transfer Restricted Security
that is a Certificated Note, the Registrar shall
permit the Holder thereof to exchange such Transfer
Restricted
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Security for a Certificated Note that does not
bear the legend set forth in (i) above and
rescind any restriction on the transfer of such
Transfer Restricted Security; and
(B) in the case of any Transfer Restricted
Security represented by a Global Exchange
Note, such Transfer Restricted Security shall
not be required to bear the legend set forth
in (i) above, but shall continue to be
subject to the provisions of Section 2.06(c)
hereof; provided, however, that with respect
to any request for an exchange of a Transfer
Restricted Security that is represented by a
Global Exchange Note for a Certificated Note
that does not bear the first legend set forth
in (i) above, which request is made in
reliance upon Rule 144, the Holder thereof
shall certify in writing to the Registrar
that such request is being made pursuant to
Rule 144 (such certification to be
substantially in the form of Exhibit B
hereto).
(h) Cancellation and/or Adjustment of Global Exchange Notes. At
such time as all beneficial interests in Global Exchange Notes have been
exchanged for Certificated Exchange Notes, redeemed, repurchased or cancelled,
all Global Exchange Notes shall be returned to or retained and cancelled by
the Trustee in accordance with Section 2.11 hereof. At any time prior to such
cancellation, if any beneficial interest in a Global Exchange Note is
exchanged for Certificated Exchange Notes, redeemed, repurchased or cancelled,
the principal amount of Exchange Notes represented by such Global Exchange
Note shall be reduced accordingly and an endorsement shall be made on such
Global Exchange Note, by the Trustee or the Exchange Note Custodian, at the
direction of the Trustee, to reflect such reduction.
(i) General Provisions Relating to Transfers and Exchanges.
(i) To permit registrations of transfers and exchanges,
the Company shall execute and the Trustee shall
authenticate Certificated Exchange Notes and Global
Exchange Notes at the Registrar's request.
(ii) No service charge shall be made to a Holder for any
registration of transfer or exchange, but the
Company may require payment of a sum sufficient to
cover any transfer tax or similar governmental
charge payable in connection therewith (other than
any such transfer taxes or similar governmental
charge payable upon exchange or transfer pursuant
to Sections 3.07, 4.09 and 9.05 hereto).
(iii) The Registrar shall not be required to register the
transfer of or exchange any Note selected for
redemption in whole or in part, except the
unredeemed portion of any Note being redeemed in
part.
(iv) All Certificated Exchange Notes and Global Exchange
Notes issued upon any registration of transfer or
exchange of Certificated Exchange Notes or Global
Exchange Notes shall be the valid obligations of
the Company, evidencing the same debt, and entitled
to the same benefits under this Indenture, as the
Certificated Exchange Notes or Global Exchange
Notes surrendered upon such registration of
transfer or exchange.
(v) The Company shall not be required:
(A) to issue, to register the transfer of or to
exchange the Exchange Notes during a period
beginning at the opening of business 15 days
before the day of any
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selection of Exchange Notes for redemption under
Section 3.02 hereof and ending at the close of
business on the day of selection; or
(B) to register the transfer of or to exchange any
Note so selected for redemption, in whole or
in part, except the unredeemed portion of any
Note being redeemed in part; or
(C) to register the transfer of or to exchange a
Note between a record date and the next
succeeding interest payment date.
(vi) Prior to due presentment for the registration of a
transfer of any Note, the Trustee, any Agent and
the Company may deem and treat the Person in whose
name any Note is registered as the absolute owner
of such Note for the purpose of receiving payment
of principal of and interest and Liquidated
Damages, if any, on such Note, and none of the
Trustee, any Agent or the Company shall be affected
by notice to the contrary.
(vii) The Trustee shall authenticate Certificated
Exchange Notes and Global Exchange Notes in
accordance with the provisions of Section 2.02
hereof.
Section 2.07. Replacement Exchange Notes.
If any mutilated Exchange Note is surrendered to the Trustee or
either of the Company or the Trustee receives evidence to its satisfaction of
the destruction, loss or theft of any Exchange Note, the Company shall issue
and the Trustee, upon the written order of the Company signed by two Officers
of the Company, shall authenticate a replacement Exchange Note if the
Trustee's requirements are met. If required by the Trustee or the Company, an
indemnity bond must be supplied by the Holder that is sufficient in the
judgment of the Trustee and the Company to protect the Company, the Trustee,
any Agent and any authenticating agent from any loss that any of them may
suffer if a Note is replaced. The Company may charge for their expenses in
replacing an Exchange Note.
Every replacement Exchange Note is an additional obligation of the
Company and shall be entitled to all of the benefits of this Indenture equally
and proportionately with all other Exchange Notes duly issued hereunder.
Section 2.08. Outstanding Exchange Notes.
The Exchange Notes outstanding at any time are all the Exchange
Notes authenticated by the Trustee except for those cancelled by it, those
delivered to it for cancellation, those reductions in the interest in a Global
Exchange Note effected by the Trustee in accordance with the provisions
hereof, and those described in this Section 2.08 as not outstanding. Except as
set forth in Section 2.09 hereof, a Note does not cease to be outstanding
because the Company or an Affiliate of the Company holds the Note.
If an Exchange Note is replaced pursuant to Section 2.07 hereof, it
ceases to be outstanding unless the Trustee receives proof satisfactory to it
that the replaced Note is held by a bona fide purchaser.
If the principal amount of any Exchange Note is considered paid
under Section 4.01 hereof, it ceases to be outstanding and interest and
Liquidated Damages, if any, on it ceases to accrue.
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If the Paying Agent (other than the Company, a Subsidiary or an
Affiliate of any thereof) holds, by 10:00 a.m. Eastern Time on a redemption
date or maturity date, money sufficient to pay the Exchange Notes payable on
that date, then on and after that date such Exchange Notes shall be deemed to
be no longer outstanding and shall cease to accrue interest and Liquidated
Damages, if any.
SECTION 2.09. TREASURY EXCHANGE NOTES.
In determining whether the Holders of the required principal amount
of Exchange Notes have concurred in any direction, waiver or consent, Exchange
Notes owned by the Company or by any Person directly or indirectly controlling
or controlled by or under direct or indirect common control with the Company,
shall be considered as though not outstanding, except that for the purposes of
determining whether the Trustee shall be protected in relying on any such
direction, waiver or consent, only Exchange Notes that the Trustee knows are
so owned shall be so disregarded. The Company agrees to notify the Trustee of
the existence of any Exchange Notes owned by the Company or any Person
directly or indirectly controlling or controlled by or under direct or
indirect common control with the Company.
SECTION 2.10. TEMPORARY EXCHANGE NOTES.
Until Certificated Exchange Notes are ready for delivery, the
Company may prepare and the Trustee shall authenticate temporary Exchange
Notes upon a written order of the Company signed by two Officers of the
Company. Temporary Exchange Notes shall be substantially in the form of
Certificated Exchange Notes but may have variations that the Company considers
appropriate for temporary Exchange Notes and as shall be reasonably acceptable
to the Trustee. Without unreasonable delay, the Company shall prepare and the
Trustee shall authenticate Certificated Exchange Notes in exchange for
temporary Exchange Notes.
Holders of temporary Exchange Notes shall be entitled to all of the
benefits of this Indenture.
SECTION 2.11. CANCELLATION.
The Company at any time may deliver Exchange Notes to the Trustee
for cancellation. The Registrar and Paying Agent shall forward to the Trustee
any Exchange Notes surrendered to them for registration of transfer, exchange
or payment. The Trustee and no one else shall cancel all Exchange Notes
surrendered for registration of transfer, exchange, payment, replacement or
cancellation and shall destroy cancelled Exchange Notes (subject to the record
retention requirement of the Exchange Act). Certification of the destruction
of all cancelled Exchange Notes shall be delivered to the Company unless
the Company directs the Trustee to return the Exchange Notes to the Company
upon written order signed by an Officer of the Company. The Company may not
issue new Exchange Notes to replace Exchange Notes that have been paid or that
have been delivered to the Trustee for cancellation.
SECTION 2.12. DEFAULTED INTEREST.
If the Company defaults in a payment of interest on the Exchange
Notes, they shall pay the defaulted interest in any lawful manner plus, to the
extent lawful, interest payable on the defaulted interest, to the Persons who
are Holders on a subsequent special record date, in each case at the rate
provided in the Exchange Notes and in Section 4.01 hereof. The Company shall
notify the Trustee in writing of the amount of defaulted interest proposed to
be paid on each Note and the date of the proposed payment. The Company shall
fix or cause to be fixed each such special record date and payment date,
provided that no such special record date shall be less than 10 days prior to
the related payment date for such defaulted interest. At least 15 days before
the special record date, the Company (or, upon the written request of the
Company, the
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Trustee in the name and at the expense of the Company) shall mail
or cause to be mailed to Holders a notice that states the special record date,
the related payment date and the amount of such interest to be paid.
Notwithstanding the foregoing, such interest may be paid at any time in any
other lawful manner not inconsistent with the requirements of any securities
exchange on which the Exchange Notes may be listed, and upon such notice as
may be required by such exchange.
ARTICLE 3
REDEMPTION AND PREPAYMENT
SECTION 3.01. NOTICES TO TRUSTEE.
If the Company redeems Exchange Notes pursuant to the optional
redemption provisions of Section 3.07 hereof, it shall furnish to the Trustee,
at least 45 days (unless a shorter period may be satisfactory to the Trustee)
but not more than 60 days before a redemption date, an Officers' Certificate
setting forth (i) the clause of this Indenture pursuant to which the
redemption shall occur, (ii) the redemption date, (iii) the principal amount
of Exchange Notes to be redeemed and (iv) the redemption price.
If the Company is required to make an offer to purchase Exchange
Notes pursuant to the provisions of Section 4.09 hereof, it shall furnish to
the Trustee an Officers' Certificate setting forth (i) the Section of this
Indenture pursuant to which the purchase shall occur, (ii) the purchase date,
(iii) the principal amount of Exchange Notes to be purchased, (iv) the
purchase price and (v) a statement to the effect that a Change of Control has
occurred and the conditions set forth in Section 4.09 have been satisfied, as
applicable.
SECTION 3.02. SELECTION OF EXCHANGE NOTES TO BE REDEEMED.
If less than all of the Exchange Notes are to be redeemed at any
time, the Trustee shall select the Exchange Notes to be redeemed among the
Holders of the Exchange Notes in compliance with the requirements of the
principal national securities exchange, if any, on which the Exchange Notes
are listed or, if the Exchange Notes are not so listed, to be redeemed among
the Holders of Exchange Notes on a pro rata basis, by lot or in accordance
with any other method the Trustee deems fair and appropriate. In the event of
partial redemption by lot, the particular Exchange Notes to be redeemed shall
be selected, unless otherwise provided herein, not less than 30 nor more than
60 days prior to the redemption date by the Trustee from the outstanding
Exchange Notes not previously called for redemption.
The Trustee shall promptly notify the Company in writing of the
Exchange Notes selected for redemption and, in the case of any Note selected
for partial redemption, the principal amount thereof to be redeemed. Exchange
Notes and portions of Exchange Notes selected shall be in amounts of $1,000 or
whole multiples of $1,000; except that if all of the Exchange Notes of a
Holder are to be redeemed, the entire outstanding amount of Exchange Notes
held by such Holder, even if not a multiple of $1,000, shall be redeemed.
Except as provided in the preceding sentence, provisions of this Indenture
that apply to Exchange Notes called for redemption also apply to portions of
Exchange Notes called for redemption.
SECTION 3.03. NOTICE OF REDEMPTION.
At least 30 days but not more than 60 days before a redemption
date, the Company shall mail or cause to be mailed, by first class mail, a
notice of redemption to each Holder whose Exchange Notes are to be redeemed at
its registered address.
The notice shall identify the Exchange Notes to be redeemed and
shall state:
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(a) the redemption date;
(b) the redemption price;
(c) if any Exchange Note is being redeemed in part, the portion of
the principal amount of such Note to be redeemed and that, after the
redemption date upon surrender of such Exchange Note, a new Exchange
Note or Exchange Notes in principal amount equal to the unredeemed
portion shall be issued upon cancellation of the original Exchange Note;
(d) the name and address of the Paying Agent;
(e) that Exchange Notes called for redemption must be surrendered
to the Paying Agent to collect the redemption price;
(f) that, unless the Company defaults in making such redemption
payment, interest and Liquidated Damages, if any, on Exchange Notes
called for redemption ceases to accrue on and after the redemption date;
(g) the paragraph of the Exchange Notes and/or Section of this
Indenture pursuant to which the Exchange Notes called for redemption are
being redeemed; and
(h) that no representation is made as to the correctness or
accuracy of the CUSIP number, if any, listed in such notice or printed
on the Exchange Notes.
At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at its expense; provided, however, that
the Company shall have delivered to the Trustee, at least 45 days prior to the
redemption date, an Officers' Certificate requesting that the Trustee give
such notice and setting forth the information to be stated in such notice as
provided in the preceding paragraph.
SECTION 3.04. EFFECT OF NOTICE OF REDEMPTION.
Once notice of redemption is mailed in accordance with Section 3.03
hereof, Exchange Notes called for redemption become irrevocably due and
payable on the redemption date at the redemption price. A notice of redemption
may not be conditional.
SECTION 3.05. DEPOSIT OF REDEMPTION OR PURCHASE PRICE.
On or prior to 10:00 a.m. Eastern Time on the redemption date, the
Company shall deposit with the Trustee or with the Paying Agent money
sufficient to pay the redemption or purchase price of and accrued interest and
Liquidated Damages, if any, on all Exchange Notes to be redeemed or purchased
on that date. The Trustee or the Paying Agent shall promptly return to the
Company any money deposited with the Trustee or the Paying Agent by the
Company in excess of the amounts necessary to pay the redemption or purchase
price of, and accrued interest and Liquidated Damages, if any, on all Exchange
Notes to be redeemed or purchased.
If Exchange Notes called for redemption or tendered in a Change of
Control Offer are paid or if the Company has deposited with the Trustee or
Paying Agent money sufficient to pay the redemption or purchase price of, and
unpaid and accrued interest and Liquidated Damages, if any, on all Exchange
Notes to be redeemed or purchased, on and after the applicable redemption or
purchase date, interest and Liquidated Damages, if any, ceases to accrue on
the Exchange Notes or the portions of Exchange Notes called for redemption or
tendered and not withdrawn in a Change of Control Offer (regardless of whether
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certificates for such Exchange Notes are actually surrendered). If an Exchange
Note is redeemed or purchased on or after an interest record date but on or
prior to the related interest payment date, then any accrued and unpaid
interest and Liquidated Damages, if any, shall be paid to the Person in whose
name such Exchange Note was registered at the close of business on such record
date. If any Exchange Note called for redemption or subject to a Change of
Control Offer shall not be so paid upon surrender for redemption or purchase
because of the failure of the Company to comply with the preceding paragraph,
interest shall be paid on the unpaid principal, from the redemption or
purchase date until such principal is paid, and to the extent lawful on any
interest or Liquidated Damages, if any, not paid on such unpaid principal, in
each case, at the rate provided in the Exchange Notes and in Section 4.01
hereof.
SECTION 3.06. EXCHANGE NOTES REDEEMED OR PURCHASED IN PART.
Upon surrender of an Exchange Note that is redeemed or purchased in
part, the Company shall issue and, upon the Company's written request, the
Trustee shall authenticate for the Holder at the expense of the Company a new
Exchange Note equal in principal amount to the unredeemed or unpurchased
portion of the Exchange Note surrendered.
SECTION 3.07. OPTIONAL REDEMPTION.
The Exchange Notes are not redeemable, in whole or in part, at the
Company's option prior to June 1, 1999. On or after June 1, 1999, the Company
may redeem all or any portion of the Exchange Notes at a redemption price
(expressed as a percentage of the principal amount thereof), as set forth in
the immediately succeeding paragraph, plus accrued and unpaid interest and
Liquidated Damages, if any, to the redemption date.
The redemption price as a percentage of the principal amount shall
be as follows, if the Exchange Notes are redeemed during the 12-month period
commencing on June 1 of the year set forth below, plus, in each case, accrued
interest and Liquidated Damages, if any, thereon to the redemption date:
Year Percentage
---- ----------
1999...................................................... 104.55%
2000...................................................... 103.90%
2001...................................................... 103.25%
2002...................................................... 102.60%
2003...................................................... 101.95%
2004...................................................... 101.30%
2005...................................................... 100.65%
2006 and thereafter....................................... 100.00%
SECTION 3.08. MANDATORY REDEMPTION.
The Company shall not be required to make mandatory redemption
payments with respect to the Exchange Notes.
ARTICLE 4
COVENANTS
SECTION 4.01. PAYMENT OF EXCHANGE NOTES.
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The Company shall pay or cause to be paid the principal of,
premium, if any, and interest on the Exchange Notes on the dates and in the
manner provided in the Exchange Notes. Principal, premium, if any, and
interest shall be considered paid on the date due if the Paying Agent, if
other than the Company, holds as of 10:00 a.m. Eastern Time on the due date
money deposited by the Company in immediately available funds and designated
for and sufficient to pay all principal, premium, if any, and interest then
due. The Company shall pay all Liquidated Damages, if any, in the same manner
and on the dates as set forth above and in the amounts set forth in the
Registration Rights Agreement.
The Company shall pay interest (including post-petition interest in
any proceeding under any Bankruptcy Law) on overdue principal at the rate
equal to 1% per annum in excess of the then applicable interest rate on the
Exchange Notes to the extent lawful; it shall pay interest (including
post-petition interest in any proceeding under any Bankruptcy Law) on overdue
installments of interest and Liquidated Damages, if any, (without regard to
any applicable grace period) at the same rate to the extent lawful.
SECTION 4.02. MAINTENANCE OF OFFICE OR AGENCY.
The Company shall maintain in the Borough of Manhattan, the City of
New York, an office or agency (which may be an office of the Trustee or an
affiliate of the Trustee, Registrar or co-registrar) where Exchange Notes may
be surrendered for registration of transfer or for exchange and where notices
and demands to or upon the Company in respect of the Exchange Notes and this
Indenture may be served. The Company shall give prompt written notice to the
Trustee of the location, and any change in the location, of such office or
agency. If at any time the Company shall fail to maintain any such required
office or agency or shall fail to furnish the Trustee with the address
thereof, such presentations, surrenders, notices and demands may be made or
served at the Corporate Trust Office of the Trustee.
The Company may also from time to time designate one or more other
offices or agencies where the Exchange Notes may be presented or surrendered
for any or all such purposes and may from time to time rescind such
designations; provided, however, that no such designation or rescission shall
in any manner relieve the Company of its obligation to maintain an office or
agency in the Borough of Manhattan, the City of New York for such purposes.
The Company shall give prompt written notice to the Trustee of any such
designation or rescission and of any change in the location of any such other
office or agency.
The Company hereby designates the Corporate Trust Office of the
Trustee as one such office or agency of the Company in accordance with Section
2.03 hereof. The Trustee may resign such agency at any time by giving written
notice to the Company no later than 30 days prior to the effective date of
such resignation.
SECTION 4.03. REPORTS.
Whether or not required by the rules and regulations of the SEC, so
long as any Exchange Notes are outstanding, the Company shall furnish to the
Trustee and to the Holders of Notes (i) all quarterly and annual financial
information that would be required to be contained in a filing with the SEC on
Forms 10-Q and 10-K if the Company were required to file such Forms, including
a "Management's Discussion and Analysis of Financial Condition and Results of
Operations" and, with respect to the annual information only, a report thereon
by the Company's certified independent accountants and (ii) all current
reports that would be required to be filed with the SEC on Form 8-K if the
Company were required to file such reports. In addition, whether or not
required by the rules and regulations of the SEC, the Company shall file a
copy of all such information and reports with the SEC for public availability
(unless the SEC will not accept such a filing) and make such information
available to securities analysts and prospective investors upon request. In
addition, the Company agrees that, for so long as any Exchange Notes remain
outstanding, it shall furnish
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to the Holders, and to securities analysts and prospective investors upon
their request, the information required to be delivered pursuant to Rule
144A(d)(4) under the Securities Act.
SECTION 4.04. COMPLIANCE CERTIFICATE.
(a) The Company shall deliver to the Trustee, within 90 days after
the end of each fiscal year (which fiscal year, as of the date hereof, ends on
December 31), an Officers' Certificate stating that a review of the activities
of the Company and its Subsidiaries during the preceding fiscal year has been
made under the supervision of the signing Officers with a view to determining
whether the Company has kept, observed, performed and fulfilled their
obligations under this Indenture, and further stating, as to each such Officer
signing such certificate, that to the best of his or her knowledge the Company
has kept, observed, performed and fulfilled each and every covenant contained
in this Indenture and are not in default in the performance or observance of
any of the terms, provisions and conditions of this Indenture (or, if a
Default or Event of Default shall have occurred, describing all such Defaults
or Events of Default of which he or she may have knowledge and what action the
Company is taking or proposes to take with respect thereto) and that to the
best of his or her knowledge no event has occurred and remains in existence by
reason of which payments on account of the principal of or interest or
Liquidated Damages, if any, on the Exchange Notes is prohibited or if such
event has occurred, a description of the event and what action the Company is
taking or proposes to take with respect thereto.
(b) So long as not contrary to the then current recommendations of
the American Institute of Certified Public Accountants, the year-end financial
statements delivered pursuant to Section 4.03 above shall be accompanied by a
written statement of the Company's independent public accountants (who shall
be a firm of established national reputation) that in making the examination
necessary for certification of such financial statements, nothing has come to
their attention that would lead them to believe that the Company has violated
any provisions of Article Four or Article Five hereof or, if any such
violation has occurred, specifying the nature and period of existence thereof,
it being understood that such accountants shall not be liable directly or
indirectly to any Person for any failure to obtain knowledge of any such
violation.
(c) The Company shall, so long as any of the Exchange Notes are
outstanding, deliver to the Trustee, forthwith upon any Officer of the Company
becoming aware of any Default or Event of Default, an Officers' Certificate
specifying such Default or Event of Default and what action the Company is
taking or proposes to take with respect thereto.
SECTION 4.05. TAXES.
The Company shall pay, and shall cause each of its Subsidiaries to
pay, prior to delinquency, all material taxes, assessments, and governmental
levies except such as are contested in good faith and by appropriate
proceedings or where the failure to effect such payment is not adverse in any
material respect to the Holders of the Exchange Notes.
SECTION 4.06. STAY, EXTENSION AND USURY LAWS.
The Company covenants (to the extent that it may lawfully do so)
that it shall not at any time insist upon, plead, or in any manner whatsoever
claim or take the benefit or advantage of, any stay, extension or usury law
wherever enacted, now or at any time hereafter in force, that may affect the
covenants or the performance of this Indenture; and the Company (to the extent
that it may lawfully do so) hereby expressly waives all benefit or advantage
of any such law, and covenants that it shall not, by resort to any such law,
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hinder, delay or impede the execution of any power herein granted to the
Trustee, but shall suffer and permit the execution of every such power as
though no such law has been enacted.
SECTION 4.07. TRANSACTIONS WITH AFFILIATES.
The Company shall not, and shall not permit any of its Subsidiaries
to, make any payment to, or sell, lease, transfer or otherwise dispose of any
of its properties or assets to, or purchase any property or assets from, or
enter into or make or amend any contract, agreement, understanding, loan,
advance or guarantee with, or for the benefit of, any Affiliate (each of the
foregoing, an "Affiliate Transaction"), unless (i) such Affiliate Transaction
is on terms that are no less favorable to the Company or the relevant
Subsidiary than those that would have been obtained in a comparable
transaction by the Company or such Subsidiary with an unrelated Person and
(ii) the Company delivers to the Trustee (a) with respect to any Affiliate
Transaction or series of related Affiliate Transactions involving aggregate
consideration in excess of $1.0 million, a resolution of the Board of
Directors set forth in an Officers' Certificate certifying that such Affiliate
Transaction complies with clause (i) above and that such Affiliate Transaction
has been approved by a majority of the members of the Board of Directors that
are disinterested as to such Affiliate Transaction and (b) with respect to any
Affiliate Transaction or series of related Affiliate Transactions involving
aggregate consideration in excess of $5.0 million, an opinion as to the
fairness to the Holders of Exchange Notes of such Affiliate Transaction from a
financial point of view issued by an accounting, appraisal or investment
banking firm of national standing; provided that (1) transactions between or
among the Company and/or its Wholly Owned Subsidiaries, (2) the MMR Merger and
transactions and agreements specifically contemplated by the Agreement and
Plan of Merger among the Company, SFX Merger Company and MMR as in effect on
the date hereof that are disclosed in the Offering Circular under the caption
"Agreements Relating to the Acquisitions and Dispositions," (3) the redemption
or repurchase of the Existing MMR Indebtedness, (4) transactions and
agreements specifically contemplated by the Termination and Assignment
Agreement between the Company and SCMC as in effect on the date hereof, (5)
payments required by the terms of the joint lease among the Company, SCMC and
the landlord thereunder for the Company's corporate headquarters located at
150 East 58th Street, New York, New York and any agreements directly related
thereto, in each case, as the same are in effect on the date hereof, (6)
payments made by the Company to SCMC for the facilities maintenance and other
services and reimbursements pursuant to the Shared Facilities Agreements and
(7) payments by the Company pursuant to the Management Termination Agreements
and (8) Permitted Investments, in each case, shall not be deemed to be
Affiliate Transactions.
SECTION 4.08. CONTINUED EXISTENCE.
Subject to Article 5 hereof, the Company shall do or cause to be
done all things necessary to preserve and keep in full force and effect (i)
its corporate, partnership, limited liability company or other existence, and
the corporate, partnership, limited liability company or other existence of
each of its Subsidiaries, in accordance with the respective organizational
documents (as the same may be amended from time to time) of the Company or any
such Subsidiary and (ii) the rights (charter and statutory), licenses and
franchises of the Company and any of their respective Subsidiaries; provided,
however, that the Company shall not be required to preserve any such right,
license or franchise, or the corporate, partnership or other existence of any
of their Subsidiaries, if the respective Board of Directors shall determine
that the preservation thereof is no longer desirable in the conduct of the
business of the Company and its respective Subsidiaries, taken as a whole, and
that the loss thereof is not adverse in any material respect to the Holders of
the Exchange Notes.
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SECTION 4.09. OFFER TO REPURCHASE UPON CHANGE OF CONTROL.
(a) Upon the occurrence of a Change of Control, each Holder of
Exchange Notes shall have the right to require the Company to repurchase all
or any part of such Holder's Exchange Notes pursuant to the offer described
below (the "Change of Control Offer") at an offer price in cash equal to 101%
of the principal amount thereof plus, accrued and unpaid interest and
Liquidated Damages, if any, thereon to the date of purchase (the "Change of
Control Payment").
(b) The Company may, at its option, in lieu of paying the Change of
Control Payment in cash, pay the market prices of the Class A Common Stock
valued at 95% of the average of the market prices of the Class A Common Stock
for the five trading days ending on and including the third trading day
preceding the Change of Control Payment Date; provided that the payment may
not be made in shares of Class A Common Stock unless such shares are listed on
a United States national securities exchange or traded on Nasdaq at the time
of payment.
(c) Within 10 days following any Change of Control, the Company
shall mail a notice to each Holder, with a copy to the Trustee, stating: (1)
that the Change of Control Offer is being made pursuant to this Section 4.10
and that all Exchange Notes tendered shall be accepted for payment; (2) the
purchase price and the purchase date, which shall be no later than 30 Business
Days from the date such notice is mailed (the "Change of Control Payment
Date"); (3) that any Exchange Note not tendered shall continue to accrue
interest and Liquidated Damages, if any; (4) that, unless the Company defaults
in the payment of the Change of Control Payment, all Exchange Notes accepted
for payment pursuant to the Change of Control Offer shall cease to accrue
interest and Liquidated Damages, if any, after the Change of Control Payment
Date; (5) that Holders electing to have any Exchange Notes purchased pursuant
to a Change of Control Offer shall be required to surrender the Exchange
Notes, with the form entitled "Option of Holder to Elect Purchase" on the
reverse of the Exchange Notes completed, to the Paying Agent at the address
specified in the notice prior to the close of business on the third Business
Day preceding the Change of Control Payment Date; and (6) that Holders whose
Exchange Notes are being purchased only in part shall be issued new Exchange
Notes equal in principal amount to the unpurchased portion of the Exchange
Notes surrendered, which unpurchased portion must be equal to $1,000 in
principal amount or an integral multiple thereof. The Company shall comply
with the requirements of Rule 14e-1 under the Exchange Act and any other
securities laws and regulations thereunder to the extent such laws and
regulations are applicable in connection with the repurchase of Exchange Notes
in connection with a Change of Control.
(d) On or prior to 10:00 a.m. Eastern Time on the Change of Control
Payment Date, the Company shall, to the extent lawful, (1) accept for payment
all Exchange Notes or portions thereof properly tendered pursuant to the
Change of Control Offer, (2) deposit with the Paying Agent an amount equal to
the Change of Control Payment in respect of all Exchange Notes or portions
thereof so tendered and (3) deliver or cause to be delivered to the Trustee
the Exchange Notes so accepted together with an Officers' Certificate stating
the aggregate principal amount of Exchange Notes or portions thereof being
purchased by the Company. The Paying Agent shall promptly mail to each Holder
of Exchange Notes so tendered the Change of Control Payment for such Exchange
Notes, and the Trustee shall promptly authenticate and mail (or cause to be
transferred by book entry) to each Holder a new Exchange Note equal in
principal amount to any unpurchased portion of the Exchange Notes surrendered,
if any. Prior to complying with the provisions of this Section 4.09, but in
any event within 90 days following a Change of Control, the Company shall
either repay all outstanding Senior Debt or obtain the requisite consents, if
any, under all agreements governing outstanding Senior Debt to permit the
repurchase of Exchange Notes required by this Section 4.09. The Company shall
publicly announce the results of the Change of Control Offer on or as soon as
practicable after the Change of Control Payment Date.
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(e) The Company shall not be required to make a Change of Control
Offer upon a Change of Control if a third party makes the Change of Control
Offer in the manner, at the times and otherwise in compliance with the
requirements set forth in this Indenture applicable to a Change of Control
Offer made by the Company, and purchases all Exchange Notes validly tendered
and not withdrawn under such Change of Control Offer.
SECTION 4.10. PAYMENTS FOR CONSENT.
Neither the Company nor any of its Subsidiaries shall, directly or
indirectly, pay or cause to be paid any consideration, whether by way of
interest, fee or otherwise, to any Holder of any Exchange Notes for or as an
inducement to any consent, waiver or amendment of any of the terms or
provisions of this Indenture or the Exchange Notes unless such consideration
is offered to be paid or is paid to all Holders of the Exchange Notes that
consent, waive or agree to amend in the time frame set forth in the
solicitation documents relating to such consent, waiver or agreement.
ARTICLE 5
SUCCESSORS
SECTION 5.01. MERGER, CONSOLIDATION, OR SALE OF ASSETS.
The Company shall not consolidate or merge with or into (whether
or not the Company is the surviving corporation), or sell, assign, transfer,
lease, convey or otherwise dispose of all or substantially all of its
properties or assets in one or more related transactions, to another
corporation, Person or entity unless (i) the Company is the surviving entity
or the entity or the Person formed by or surviving any such consolidation or
merger (if other than the Company) or to which such sale, assignment,
transfer, lease, conveyance or other disposition shall have been made is a
corporation organized or existing under the laws of the United States, any
state thereof or the District of Columbia; (ii) the entity or Person formed by
or surviving any such consolidation or merger (if other than the Company) or
the entity or Person to which such sale, assignment, transfer, lease,
conveyance or other disposition shall have been made assumes all the
Obligations of the Company under the Exchange Notes and this Indenture
pursuant to a supplemental indenture in a form reasonably satisfactory to the
Trustee; (iii) immediately after such transaction no Default or Event of
Default exists; (iv) such transaction will not result in the loss or
suspension or material impairment of any Material Broadcast License; (v)
except in the case of a merger of the Company with or into a Wholly Owned
Subsidiary of the Company, the Company or the entity or Person formed by or
surviving any such consolidation or merger (if other than the Company), or to
which such sale, assignment, transfer, lease, conveyance or other disposition
shall have been made shall have a Consolidated Net Worth immediately after the
transaction equal to or greater than the Consolidated Net Worth of the Company
immediately preceding the transaction; and (vi) the Company has delivered to
the Trustee an Officers' Certificate and Opinion of Counsel, each stating that
such consolidation, merger or transfer complies with this Indenture, that the
surviving Person agrees to be bound thereby, and that all conditions precedent
in this Indenture relating to such transaction have been satisfied. For
purposes of the foregoing, the transfer (by lease, assignment, sale or
otherwise) of all or substantially all of the properties and assets of one or
more Subsidiaries of the Company, the Capital Stock of which constitutes all
or substantially all of the properties and assets of the Company, shall be
deemed to be the transfer of all or substantially all of the properties and
assets of the Company.
SECTION 5.02. SUCCESSOR CORPORATION SUBSTITUTED.
Upon any consolidation or merger, or any sale, assignment,
transfer, lease, conveyance or other disposition of all or substantially all
of the assets of the Company in accordance with Section 5.01 hereof,
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the successor corporation formed by such consolidation or into or with which the
Company is merged or to which such sale, assignment, transfer, lease,
conveyance or other disposition is made shall succeed to, and be substituted
for (so that from and after the date of such consolidation, merger, sale,
lease, conveyance or other disposition, the provisions of this Indenture
referring to the "Company" shall refer instead to the successor corporation
and not to the Company), and may exercise every right and power of the Company
under this Indenture with the same effect as if such successor Person had been
named as the Company herein; provided, however, that the predecessor Company
shall not be relieved from the obligation to pay the principal of and interest
and Liquidated Damages, if any, on the Exchange Notes except in the case of a
sale of all of the Company's assets that meets the requirements of Section
5.01 hereof.
ARTICLE 6
DEFAULTS AND REMEDIES
SECTION 6.01. EVENTS OF DEFAULT.
Each of the following constitutes an "Event of Default":
(i) a default for 30 days in the payment when due of interest
on, or Liquidated Damages, if any, with respect to, the Exchange
Notes (whether or not prohibited by Article 10 hereof);
(ii) a default in payment when due of the principal of or
premium, if any, on the Exchange Notes (whether or not prohibited
by Article 10 hereof);
(iii) the failure by the Company to comply with the provisions
described under Sections 4.09 and 5.01 hereof;
(iv) the failure by the Company to honor any of its obligations
with respect to any Exchange Note upon conversion thereof;
(v) the failure by the Company for 60 days after notice to
comply with any of its other agreements in this Indenture or the
Exchange Notes;
(vi) a default under any mortgage, indenture or instrument
under which there may be issued or by which there may be secured or
evidenced any Indebtedness for money borrowed by the Company or any
of its Subsidiaries (or the payment of which is guaranteed by the
Company or any of its Subsidiaries) whether such Indebtedness or
guarantee now exists, or is created after the date hereof, which
default results in the acceleration of such Indebtedness prior to
its express maturity and, in each case, the principal amount of any
such Indebtedness, together with the principal amount of any other
such Indebtedness under which there has been a payment default or
the maturity of which has been so accelerated, aggregates $25.0
million or more;
(vii) the failure by the Company or any of its Subsidiaries to
pay final judgments aggregating in excess of $25.0 million, which
judgments are not paid, discharged or stayed for a period of 60
days;
(viii) the Company, any Significant Subsidiary of the Company
or any group of Subsidiaries that, taken together, would constitute
a Significant Subsidiary pursuant to or within the meaning of
Bankruptcy Law:
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(a) commences a voluntary case,
(b) consents to the entry of an order for relief
against it in an involuntary case,
(c) consents to the appointment of a Custodian of it or
for all or substantially all of its property,
(d) makes a general assignment for the benefit of its
creditors, or
(e) generally is not paying its debts as they become
due; or
(ix) a court of competent jurisdiction enters an order or
decree under any Bankruptcy Law that:
(a) is for relief against the Company, any of its
Significant Subsidiaries or any group of its Subsidiaries
that, taken together, would constitute a Significant
Subsidiary in an involuntary case;
(b) appoints a Custodian of the Company, any of its
Significant Subsidiaries, or any group of its Subsidiaries
that, taken together, would constitute a Significant
Subsidiary or for all or substantially all of the property of
the Company, any of its Significant Subsidiaries or any group
of its Subsidiaries that, taken together, would constitute a
Significant Subsidiary; or
(c) orders the liquidation of the Company, any of its
Significant Subsidiaries or any group of its Subsidiaries
that, taken together, would constitute a Significant
Subsidiary;
and the order or decree remains unstayed and in effect for 60
consecutive days.
The term "Custodian" means any receiver, trustee, assignee,
liquidator or similar official under any Bankruptcy Law.
An Event of Default shall not be deemed to have occurred under clause
(iv) of this Section 6.01 until the Trustee notifies the Company, or the
Holders of at least 25% in principal amount of the then outstanding Exchange
Notes notify the Company and the Trustee, of the Default and the Company does
not cure the Default within 60 days after receipt of the notice. The notice
must specify the Default, demand that it be remedied and state that the notice
is a "Notice of Default."
In the case of any Event of Default pursuant to the provisions of this
Section 6.01 occurring by reason of any willful action (or inaction) taken (or
not taken) by or on behalf of the Company with the intention of avoiding
payment of the premium that the Company would have had to pay if the Company
then had elected to redeem the Exchange Notes pursuant to Section 3.07 hereof,
an equivalent premium shall also become and be immediately due and payable to
the extent permitted by law upon the acceleration of the Exchange Notes,
anything in this Indenture or in the Exchange Notes to the contrary
notwithstanding. If an Event of Default occurs prior to May 31, 1999 by reason
of any action (or inaction) willfully taken (or not taken) by or on behalf of
the Company with the intention of avoiding the prohibition on redemption of
the Exchange Notes prior to May 31, 1999, then the premium payable for
purposes of this paragraph for each of the years beginning on May 31 of the
years set forth below shall be as set forth in the following table expressed
as a percentage of the amount that would otherwise be due but for the
provisions of this sentence, plus accrued interest and Liquidated Damages, if
any, to the date of payment:
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Year Percentage
1996.................................................. 106.50%
1997.................................................. 105.85%
1998.................................................. 105.20%
SECTION 6.02. ACCELERATION.
If any Event of Default (other than an Event of Default specified
in clauses (viii) and (ix) of Section 6.01 hereof) occurs and is continuing,
the Trustee or the Holders of at least 25% in principal amount of the then
outstanding Exchange Notes may declare all the Exchange Notes to be due and
payable immediately. Upon any such declaration, the Exchange Notes shall
become due and payable immediately. Notwithstanding the foregoing, if an Event
of Default specified in clauses (viii) or (ix) of Section 6.01 hereof occurs
with respect to the Company, any of its Significant Subsidiaries or any group
of its Subsidiaries that, taken together, would constitute a Significant
Subsidiary, such an amount shall ipso facto become and be immediately due and
payable without any declaration or other act on the part of the Trustee or any
Holder. The Holders of a majority in principal amount of the then outstanding
Exchange Notes by written notice to the Trustee may rescind an acceleration
and its consequences if the rescission would not conflict with any judgment or
decree and if all existing Events of Default (except nonpayment of principal
or interest that has become due solely because of the acceleration) have been
cured or waived.
In addition, the Company shall promptly notify holders of Senior
Debt if payment of the Exchange Notes is accelerated because of an Event of
Default.
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SECTION 6.03. OTHER REMEDIES.
If an Event of Default occurs and is continuing, the Trustee may
pursue any available remedy to collect the payment of principal, premium and
Liquidated Damages, if any, and interest on the Exchange Notes or to enforce
the performance of any provision of the Exchange Notes or this Indenture.
The Trustee may maintain a proceeding even if it does not possess
any of the Exchange Notes or does not produce any of them in the proceeding. A
delay or omission by the Trustee or any Holder of a Exchange Notes in
exercising any right or remedy accruing upon an Event of Default shall not
impair the right or remedy or constitute a waiver of or acquiescence in the
Event of Default. All remedies are cumulative to the extent permitted by law.
SECTION 6.04. WAIVER OF PAST DEFAULTS.
Holders of not less than a majority in aggregate principal amount
of the then outstanding Exchange Notes may by notice to the Trustee on behalf
of the Holders of all of the Exchange Notes waive an existing Default or Event
of Default and its consequences hereunder, except a continuing Default or
Event of Default in the payment of the principal of, premium or Liquidated
Damages, if any, or interest on, the Exchange Notes (including in connection
with an offer to purchase) (provided, however, that the Holders of a majority
in aggregate principal amount of the then outstanding Exchange Notes may
rescind an acceleration and its consequences, including any related payment
default that resulted from such acceleration). Upon any such waiver, such
Default shall cease to exist, and any Event of Default arising therefrom shall
be deemed to have been cured for every purpose of this Indenture; but no such
waiver shall extend to any subsequent or other Default or impair any right
consequent thereon.
SECTION 6.05. CONTROL BY MAJORITY.
Holders of a majority in principal amount of the then outstanding
Exchange Notes may direct the time, method and place of conducting any
proceeding for exercising any remedy available to the Trustee or exercising
any trust or power conferred on it. However, the Trustee may refuse to follow
any direction that conflicts with law or this Indenture that the Trustee
determines may be unduly prejudicial to the rights of other Holders of
Exchange Notes or that may involve the Trustee in personal liability and shall
be entitled to the benefit of Section 7.01(c)(iii) hereof.
SECTION 6.06. LIMITATION ON SUITS.
A Holder of a Exchange Notes may pursue a remedy with respect to
this Indenture or the Exchange Notes only if:
(a) the Holder of a Exchange Notes gives to the Trustee written
notice of a continuing Event of Default;
(b) the Holders of at least 25% in principal amount of the then
outstanding Exchange Notes make a written request to the Trustee to
pursue the remedy;
(c) such Holder of a Exchange Notes or Holders of Exchange Notes
offer and, if requested, provide to the Trustee indemnity satisfactory
to the Trustee against any loss, liability or expense;
(d) the Trustee does not comply with the request within 60 days
after receipt of the request and the offer and, if requested, the
provision of indemnity; and
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(e) during such 60-day period the Holders of a majority in
principal amount of the then outstanding Exchange Notes do not give the
Trustee a direction inconsistent with the request.
A Holder of a Exchange Notes may not use this Indenture to prejudice the
rights of another Holder of a Exchange Notes or to obtain a preference or
priority over another Holder of a Exchange Notes.
SECTION 6.07. RIGHTS OF HOLDERS OF EXCHANGE NOTES TO RECEIVE PAYMENT.
Notwithstanding any other provision of this Indenture, the right of
any Holder of a Exchange Notes to receive payment of principal, premium and
Liquidated Damages, if any, and interest on the Exchange Notes, on or after
the respective due dates expressed in the Exchange Notes (including in
connection with an offer to purchase), or to bring suit for the enforcement of
any such payment on or after such respective dates, shall not be impaired or
affected without the consent of such Holder.
SECTION 6.08. COLLECTION SUIT BY TRUSTEE.
If an Event of Default specified in Section 6.01(i) or (ii) hereof
occurs and is continuing, the Trustee is authorized to recover judgment in its
own name and as trustee of an express trust against the Company for the whole
amount of principal of, premium and Liquidated Damages, if any, and interest
remaining unpaid on the Exchange Notes and interest on overdue principal and,
to the extent lawful, interest and Liquidated Damages, if any, and such
further amount as shall be sufficient to cover the costs and expenses of
collection, including the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel.
SECTION 6.09. TRUSTEE MAY FILE PROOFS OF CLAIM.
The Trustee is authorized to file such proofs of claim and other
papers or documents as may be necessary or advisable in order to have the
claims of the Trustee (including any claim for the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents (including
accountants, experts or such other professionals as the Trustee deems
necessary, advisable or appropriate) and counsel (including the allocated
costs of inside counsel)) and the Holders of the Exchange Notes allowed in any
judicial proceedings relative to the Company (or any other obligor upon the
Exchange Notes), its creditors or its property and shall be entitled and
empowered to collect, receive and distribute any money or other property
payable or deliverable on any such claims and any custodian in any such
judicial proceeding is hereby authorized by each Holder to make such payments
to the Trustee, and in the event that the Trustee shall consent to the making
of such payments directly to the Holders, to pay to the Trustee any amount due
to it for the reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel, and any other amounts due the Trustee
under Section 7.07 hereof. To the extent that the payment of any such
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, and any other amounts due the Trustee under Section 7.07 hereof
out of the estate in any such proceeding, shall be denied for any reason,
payment of the same shall be secured by a Lien on, and shall be paid out of,
any and all distributions, dividends, money, securities and other properties
that the Holders may be entitled to receive in such proceeding whether in
liquidation or under any plan of reorganization or arrangement or otherwise.
Nothing herein contained shall be deemed to authorize the Trustee to authorize
or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Exchange
Notes or the rights of any Holder, or to authorize the Trustee to vote in
respect of the claim of any Holder in any such proceeding.
SECTION 6.10. PRIORITIES.
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If the Trustee collects any money pursuant to this Article 6, it
shall pay out the money in the following order:
First: to the Trustee, its agents and attorneys for amounts due
under Section 7.07 hereof, including payment of all compensation, expense and
liabilities incurred, and all advances made, by the Trustee and the costs and
expenses of collection;
Second: to Holders of Exchange Notes for amounts due and unpaid on
the Exchange Notes for principal, premium and Liquidated Damages, if any, and
interest, ratably, without preference or priority of any kind, according to
the amounts due and payable on the Exchange Notes for principal, premium and
Liquidated Damages, if any, and interest, respectively; and
Third: to the Company or to such party as a court of competent
jurisdiction shall direct.
The Trustee may fix a record date and payment date for any payment
to Holders of Exchange Notes pursuant to this Section 6.10.
SECTION 6.11. UNDERTAKING FOR COSTS.
In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or omitted
by it as a Trustee, a court in its discretion may require the filing by any
party litigant in the suit of an undertaking to pay the costs of the suit, and
the court in its discretion may assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in the suit, having due regard to
the merits and good faith of the claims or defenses made by the party
litigant. This Section 6.11 does not apply to a suit by the Trustee, a suit by
a Holder of a Exchange Notes pursuant to Section 6.07 hereof, or a suit by
Holders of more than 10% in principal amount of the then outstanding Exchange
Notes.
ARTICLE 7
TRUSTEE
SECTION 7.01. DUTIES OF TRUSTEE.
(a) If an Event of Default has occurred and is continuing, the
Trustee shall exercise such of the rights and powers vested in it by this
Indenture, and use the same degree of care and skill in its exercise thereof,
as a prudent man would exercise or use under the circumstances in the conduct
of his own affairs.
(b) Except during the continuance of an Event of Default:
(i) the duties of the Trustee shall be determined solely by the
express provisions of this Indenture and the TIA and the Trustee need
perform only those duties that are specifically set forth in this
Indenture and no others, and no implied covenants or obligations shall
be read into this Indenture or the TIA against the Trustee; and
(ii) in the absence of bad faith on its part, the Trustee may
conclusively rely, without investigation, as to the truth of the
statements and the correctness of the opinions expressed therein, upon
any statements, certificates or opinions furnished to the Trustee and
conforming to the requirements of this Indenture. However, the Trustee
shall examine the certificates and opinions to determine whether or not
they conform on their face to the requirements of this Indenture.
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(c) The Trustee may not be relieved from liabilities for its own
gross negligent action, its own gross negligent failure to act, or its own
willful misconduct, except that:
(i) this paragraph does not limit the effect of paragraph (b) of
this Section;
(ii) the Trustee shall not be liable for any error of judgment made
in good faith by a Responsible Officer, unless it is proved that the
Trustee was negligent in ascertaining the pertinent facts; and
(iii) the Trustee shall not be liable with respect to any action it
takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.05 hereof.
(d) Whether or not therein expressly so provided, every provision
of this Indenture that in any way relates to the Trustee is subject to this
Section 7.01.
(e) No provision of this Indenture shall require the Trustee to
expend or risk its own funds or incur any liability. The Trustee shall be
under no obligation to exercise any of its rights and powers under this
Indenture at the request of any Holders, unless such Holder shall have offered
to the Trustee security and indemnity satisfactory to it against any loss,
liability or expense which might be incurred by it in compliance with such
request or direction.
(f) The Trustee shall not be liable for interest on any money
received by it except as the Trustee may agree in writing with the Company.
Money held in trust by the Trustee need not be segregated from other funds
except to the extent required by law.
SECTION 7.02. RIGHTS OF TRUSTEE.
(a) The Trustee may conclusively rely and shall be protected in
acting or refraining from acting upon any document believed by it to be
genuine and to have been signed or presented by the proper Person. The Trustee
need not investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may require
an Officers' Certificate or an Opinion of Counsel or both. The Trustee shall
not be liable for any action it takes or omits to take in good faith in
reliance on such Officers' Certificate or Opinion of Counsel. The Trustee may
consult with counsel and the written advice of such counsel or any Opinion of
Counsel shall be full and complete authorization and protection from liability
in respect of any action taken, suffered or omitted by it hereunder in good
faith and in reliance thereon.
(c) The Trustee may act through its attorneys, accountants, experts
and such other professionals as the Trustee deems necessary, advisable or
appropriate and shall not be responsible for the misconduct or negligence of
any attorney, accountant, expert or other such professional appointed with due
care.
(d) The Trustee shall not be liable for any action it takes or
omits to take in good faith that it believes to be authorized or within the
rights or powers conferred upon it by this Indenture.
(e) Unless otherwise specifically provided in this Indenture, any
demand, request, direction or notice from the Company shall be sufficiently
evidenced by a written order signed by an Officer of the Company issuing such
demand, request, direction or notice.
(f) The Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction of
any of the Holders unless such Holders shall have offered to
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the Trustee reasonable security or indemnity against the costs, expenses and
liabilities that might be incurred by it in compliance with such request or
direction.
SECTION 7.03. INDIVIDUAL RIGHTS OF TRUSTEE.
The Trustee in its individual or any other capacity may become the
owner or pledgee of Exchange Notes and may otherwise deal with the Company or
any Affiliate of the Company with the same rights it would have if it were not
Trustee. However, in the event that the Trustee acquires any conflicting
interest within the meaning of the TIA it must eliminate such conflict within
90 days, apply to the SEC for permission to continue as trustee or resign. Any
Agent may do the same with like rights and duties. The Trustee is also subject
to Sections 7.10 and 7.11 hereof.
SECTION 7.04. TRUSTEE'S DISCLAIMER.
The Trustee shall not be responsible for and makes no
representation as to the validity or adequacy of this Indenture, the Exchange
Notes or the Subsidiary Guarantees, it shall not be accountable for the
Company's use of the proceeds from the Exchange Notes or any money paid to the
Company or upon the Company's direction under any provision of this Indenture,
it shall not be responsible for the use or application of any money received
by any Paying Agent other than the Trustee, and it shall not be responsible
for any statement or recital herein or any statement in the Exchange Notes or
any other document in connection with the sale of the Exchange Notes or
pursuant to this Indenture other than its certificate of authentication.
SECTION 7.05. NOTICE OF DEFAULTS.
If a Default or Event of Default occurs and is continuing and if it
is known to the Trustee, the Trustee shall mail to Holders of Exchange Notes a
notice of the Default or Event of Default within 90 days after it occurs.
Except in the case of a Default or Event of Default in payment of principal
of, premium or Liquidated Damages, if any, or interest on any Exchange Notes,
the Trustee may withhold the notice if and so long as a committee of its
Responsible Officers in good faith determines that withholding the notice is
in the interests of the Holders of the Exchange Notes.
SECTION 7.06. REPORTS BY TRUSTEE TO HOLDERS OF THE EXCHANGE NOTES.
Within 60 days after each ______ beginning with the ______
following the date of this Indenture, and for so long as Exchange Notes remain
outstanding, the Trustee shall mail to the Holders of the Exchange Notes a
brief report dated as of such reporting date that complies with TIA ss. 313(a)
(but if no event described in TIA ss. 313(a) has occurred within the twelve
months preceding the reporting date, no report need be transmitted). The
Trustee also shall comply with TIA ss. 313(b)(2). The Trustee shall also
transmit by mail all reports as required by TIA ss. 313(c).
A copy of each report at the time of its mailing to the Holders of
Exchange Notes shall be mailed to the Company and filed with the SEC and each
stock exchange on which the Exchange Notes are listed in accordance with TIA
ss. 313(d). The Company shall promptly notify the Trustee when the Exchange
Notes are listed on any stock exchange.
SECTION 7.07. COMPENSATION, REIMBURSEMENT AND INDEMNITY.
The Company shall pay to the Trustee from time to time reasonable
compensation for its acceptance of this Indenture and the rendering by it of
the services required hereunder. The Trustee's
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compensation shall not be limited by any law on compensation of a trustee of
an express trust. The Company shall reimburse the Trustee promptly upon
request for all reasonable disbursements, advances and expenses incurred or
made by or on behalf of it in addition to the compensation for its services.
Such expenses shall include the reasonable compensation, disbursements and
expenses of the Trustee's attorneys, accountants, experts and such other
professionals as the Trustee deems reasonably necessary, advisable or
appropriate.
The Company shall indemnify the Trustee against any and all losses,
liabilities or expenses incurred by it arising out of or in connection with
the acceptance or administration of its duties under this Indenture (including
its duties under Section 9.06 hereof), including the costs and expenses of
enforcing this Indenture against the Company (including this Section 7.07
hereof) and defending itself against or investigating any claim (whether
asserted by the Company or any Holder or any other person) or liability in
connection with the exercise or performance of any of its powers or duties
hereunder, except to the extent any such loss, liability or expense may be
attributable to its gross negligence or willful misconduct. The Trustee shall
notify the Company promptly of any claim for which it may seek indemnity.
Failure by the Trustee to so notify the Company shall not relieve the Company
of its obligations hereunder. The Company shall defend any claim or threatened
claim asserted against the Trustee, and the Trustee shall cooperate in the
defense thereof. The Trustee may have separate counsel and the Company shall
pay the reasonable fees and expenses of such counsel. The Company need not pay
for any settlement made without their consent, which consent shall not be
unreasonably withheld.
The obligations of the Company under this Section 7.07 shall
survive the satisfaction and discharge of this Indenture.
To secure the Company's payment obligations in this Section 7.07,
the Trustee shall have a Lien prior to the Exchange Notes on all money or
property held or collected by the Trustee, except any money held in trust to
pay principal, interest and Liquidated Damages, if any, on particular Exchange
Notes. Such Lien shall survive the satisfaction and discharge of this Indenture.
When the Trustee incurs expenses or renders services after an Event
of Default specified in Section 6.01(viii) or (ix) hereof occurs, the expenses
and the compensation for the services (including the fees and expenses of its
agents and counsel) are intended to constitute expenses of administration
under any Bankruptcy Law.
The Trustee shall comply with the provisions of TIA ss. 313(b)(2)
to the extent applicable.
SECTION 7.08. REPLACEMENT OF TRUSTEE.
A resignation or removal of the Trustee and appointment of a
successor Trustee shall become effective only upon the successor Trustee's
acceptance of appointment as provided in this Section.
The Trustee may resign in writing at any time and be discharged
from the trust hereby created by so notifying the Company. The Holders of
Exchange Notes of a majority in principal amount of the then outstanding
Exchange Notes may remove the Trustee by so notifying the Trustee and the
Company in writing. The Company may remove the Trustee if:
(a) the Trustee fails to comply with Section 7.10 hereof;
(b) the Trustee is adjudged a bankrupt or an insolvent or an order
for relief is entered with respect to the Trustee under any applicable
Bankruptcy Law;
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(c) a Custodian or public officer takes charge of the Trustee or
its property for the purpose of rehabilitation, conservation or liquidation;
or
(d) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Company shall promptly appoint a
successor Trustee. Within one year after the successor Trustee takes office,
the Holders of a majority in principal amount of the then outstanding Exchange
Notes may appoint a successor Trustee to replace the successor Trustee
appointed by the Company.
If a successor Trustee does not take office within 60 days after
the retiring Trustee resigns or is removed, the retiring Trustee, the Company,
or the Holders of Exchange Notes of at least 10% in principal amount of the
then outstanding Exchange Notes may petition any court of competent
jurisdiction for the appointment of a successor Trustee.
If the Trustee, after written request by any Holder of a Exchange
Notes who has been a Holder of a Exchange Notes for at least six months, fails
to comply with Section 7.10 hereof, such Holder of a Exchange Notes may
petition any court of competent jurisdiction for the removal of the Trustee
and the appointment of a successor Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon, the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. The Company shall mail a notice of its succession to
Holders of the Exchange Notes. The retiring Trustee shall promptly transfer
all property held by it as Trustee to the successor Trustee, provided all sums
owing to the Trustee hereunder have been paid and subject to the Lien provided
for in Section 7.07 hereof. Notwithstanding replacement of the Trustee
pursuant to this Section 7.08, the Company's obligations under Section 7.07
hereof shall continue for the benefit of the retiring Trustee.
SECTION 7.09. SUCCESSOR TRUSTEE BY MERGER, ETC.
If the Trustee consolidates, merges or converts into, or transfers
all or substantially all of its corporate trust business to, another
corporation, the successor corporation without any further act shall be the
successor Trustee.
SECTION 7.10. ELIGIBILITY; DISQUALIFICATION.
There shall at all times be a Trustee hereunder that is a
corporation organized and doing business under the laws of the United States
of America or of any state thereof that is authorized under such laws to
exercise corporate trustee power, that is subject to supervision or
examination by federal or state authorities and that has a combined capital
and surplus of at least $100 million as set forth in its most recent published
annual report of condition.
This Indenture shall always have a Trustee who satisfies the
requirements of TIA ss. 310(a)(1), (2) and (5). The Trustee is subject to TIA
ss. 310(b).
SECTION 7.11. PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY.
The Trustee is subject to TIA ss. 311(a), excluding any creditor
relationship listed in TIA ss. 311(b). A Trustee who has resigned or been
removed shall be subject to TIA ss. 311(a) to the extent indicated therein.
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ARTICLE 8
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
SECTION 8.01. OPTION TO EFFECT LEGAL DEFEASANCE OR COVENANT DEFEASANCE.
The Company may, at the option of its Board of Directors evidenced
by a resolution set forth in an Officers' Certificate, at any time, elect to
have either Section 8.02 or 8.03 hereof be applied to all outstanding Exchange
Notes upon compliance with the conditions set forth below in this Article 8.
SECTION 8.02. LEGAL DEFEASANCE AND DISCHARGE.
Upon the Company's exercise under Section 8.01 hereof of the option
applicable to this Section 8.02, the Company shall, subject to the
satisfaction of the conditions set forth in Section 8.04 hereof, be deemed to
have been discharged from their obligations with respect to all outstanding
Exchange Notes and Subsidiary Guarantees, as applicable, on the date the
conditions set forth below are satisfied (hereinafter, "Legal Defeasance").
For this purpose, Legal Defeasance means that the Company shall be deemed to
have paid and discharged the entire Indebtedness represented by the
outstanding Exchange Notes, which shall thereafter be deemed to be
"outstanding" only for the purposes of Section 8.05 hereof and the other
Sections of this Indenture referred to in (a) and (b) below, and to have
satisfied all of its other Obligations under such Exchange Notes and this
Indenture (and the Trustee, on demand of and at the expense of the Company,
shall execute proper instruments acknowledging the same), except for the
following provisions which shall survive until otherwise terminated or
discharged hereunder: (a) the rights of Holders of outstanding Exchange Notes
to receive solely from the trust fund described in Section 8.04 hereof, and as
more fully set forth in such Section, payments in respect of the principal of,
premium, if any, and interest and Liquidated Damages, if any, on such Exchange
Notes when such payments are due, (b) the Company's obligations with respect
to such Exchange Notes under Article 2 and Section 4.02 hereof, (c) the
rights, powers, trusts, duties and immunities of the Trustee hereunder and the
Company's obligations in connection therewith and (d) this Article 8. Subject
to compliance with this Article 8, the Company may exercise its option under
this Section 8.02 notwithstanding the prior exercise of its option under
Section 8.03 hereof.
SECTION 8.03. COVENANT DEFEASANCE.
Upon the Company's exercise under Section 8.01 hereof of the
option applicable to this Section 8.03, the Company shall, subject to the
satisfaction of the conditions set forth in Section 8.04 hereof, be released
from their obligations under the covenants contained in Sections 4.07, 4.09
and 5.01 hereof with respect to the outstanding Exchange Notes on and after
the date the conditions set forth below are satisfied (hereinafter, "Covenant
Defeasance"), and the Exchange Notes shall thereafter be deemed not
"outstanding" for the purposes of any direction, waiver, consent or
declaration or act of Holders (and the consequences of any thereof) in
connection with such covenants, but shall continue to be deemed "outstanding"
for all other purposes hereunder (it being understood that such Exchange Notes
shall not be deemed outstanding for accounting purposes). For this purpose,
Covenant Defeasance means that, with respect to the "outstanding" Exchange
Notes, the Company may omit to comply with and shall have no liability in
respect of any term, condition or limitation set forth in any such covenant,
whether directly or indirectly, by reason of any reference elsewhere herein to
any such covenant or by reason of any reference in any such covenant to any
other provision herein or in any other document and such omission to comply
shall not constitute a Default or an Event of Default under Section 6.01(iii)
hereof, but, except as specified above, the remainder of this Indenture and
such Exchange Notes shall be unaffected thereby. In addition, upon the
Company's exercise under Section 8.01 hereof of the option applicable to this
Section 8.03, subject to the satisfaction of the
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conditions set forth in Section 8.04 hereof, Sections 6.01(iv) through
6.01(ix) hereof shall not constitute Events of Default.
SECTION 8.04. CONDITIONS TO LEGAL OR COVENANT DEFEASANCE.
The following shall be the conditions to the application of either
Section 8.02 or 8.03 hereof to the outstanding Exchange Notes:
In order to exercise either Legal Defeasance or Covenant Defeasance:
(a) the Company must irrevocably deposit with the
Trustee, in trust, for the benefit of the Holders of the Exchange
Notes, cash in United States dollars, non-callable Government
Securities, or a combination thereof, in such amounts as will be
sufficient, in the opinion of a nationally recognized firm of
independent public accountants, to pay the principal of, premium,
if any, and interest and Liquidated Damages, if any, on the
outstanding Exchange Notes on the stated date for payment thereof
or on the applicable redemption date, as the case may be, and the
Company must specify whether the Exchange Notes are being defeased
to maturity or to a particular redemption date;
(b) in the case of an election under Section 8.02
hereof, the Company shall have delivered to the Trustee an Opinion
of Counsel in the United States reasonably acceptable to the
Trustee confirming that (A) the Company has received from, or there
has been published by, the Internal Revenue Service a ruling or (B)
since the date of this Indenture, there has been a change in the
applicable federal income tax law, in either case to the effect
that, and based thereon such Opinion of Counsel shall confirm that,
the Holders of the outstanding Exchange Notes will not recognize
income, gain or loss for federal income tax purposes as a result of
such Legal Defeasance and will be subject to federal income tax on
the same amounts, in the same manner and at the same times as would
have been the case if such Legal Defeasance had not occurred;
(c) in the case of an election under Section 8.03
hereof, the Company shall have delivered to the Trustee an Opinion
of Counsel in the United States reasonably acceptable to the
Trustee confirming that the Holders of the outstanding Exchange
Notes will not recognize income, gain or loss for federal income
tax purposes as a result of such Covenant Defeasance and will be
subject to federal income tax on the same amounts, in the same
manner and at the same times as would have been the case if such
Covenant Defeasance had not occurred;
(d) no Default or Event of Default shall have occurred
and be continuing on the date of such deposit (other than a Default
or Event of Default resulting from the borrowing of funds to be
applied to such deposit) or insofar as Section 6.01(viii) or (ix)
hereof are concerned, at any time in the period ending on the 91st
day after the date of deposit (or greater period of time in which
any such deposit of trust funds may remain subject to
bankruptcy or insolvency laws insofar as those apply to the deposit
by the Company);
(e) such Legal Defeasance or Covenant Defeasance shall
not result in a breach or violation of, or constitute a default
under, any material agreement or instrument (other than this
Indenture) to which the Company or any of its Subsidiaries is a
party or by which the Company or any of its Subsidiaries is bound;
(f) the Company shall have delivered to the Trustee an
Opinion of Counsel to the effect that, as of the date of such
opinion, (A) the trust funds will not be subject to the rights of
holders
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of Indebtedness other than the Exchange Notes and (B)
assuming no intervening bankruptcy of the Company between the date
of deposit and the 91st day following the deposit, the trust funds
will not be subject to the effects of any applicable bankruptcy,
insolvency, reorganization or similar laws affecting creditors'
rights generally under any applicable United States or state law;
(g) the Company shall have delivered to the Trustee an
Officers' Certificate stating that the deposit was not made by the
Company with the intent of preferring the Holders of Exchange Notes
over the other creditors of the Company, or with the intent of
defeating, hindering, delaying or defrauding any other creditors of
the Company or others; and
(h) the Company shall have delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, each stating that
all conditions precedent provided for or relating to the Legal
Defeasance or the Covenant Defeasance have been complied with.
SECTION 8.05. DEPOSITED MONEY AND GOVERNMENT SECURITIES TO BE HELD IN TRUST;
OTHER MISCELLANEOUS PROVISIONS.
Subject to Section 8.06 hereof, all money and non-callable
Government Securities (including the proceeds thereof) deposited with the
Trustee (or other qualifying trustee, collectively for purposes of this
Section 8.05, the "Trustee") pursuant to Section 8.04 hereof in respect of the
outstanding Exchange Notes shall be held in trust and applied by the Trustee,
in accordance with the provisions of such Exchange Notes and this Indenture,
to the payment, either directly or through any Paying Agent (including the
Company acting as Paying Agent) as the Trustee may determine, to the Holders
of such Exchange Notes of all sums due and to become due thereon in respect of
principal, premium and Liquidated Damages, if any, and interest, but such
money need not be segregated from other funds except to the extent required by
law.
The Company shall pay and indemnify the Trustee against any tax,
fee or other charge imposed on or assessed against the cash or non-callable
Government Securities deposited pursuant to Section 8.04 hereof or the
principal and interest received in respect thereof other than any such tax,
fee or other charge which by law is for the account of the Holders of the
outstanding Exchange Notes.
Anything in this Article 8 to the contrary notwithstanding, the
Trustee shall deliver or pay to the Company from time to time upon the request
of the Company any money or non-callable Government Securities held by it as
provided in Section 8.04 hereof which, in the opinion of a nationally
recognized firm of independent public accountants expressed in a written
certification thereof delivered to the Trustee (which may be the opinion
delivered under Section 8.04(a) hereof), are in excess of the amount thereof
that would then be required to be deposited to effect an equivalent Legal
Defeasance or Covenant Defeasance.
SECTION 8.06. REPAYMENT TO THE COMPANY.
Any money deposited with the Trustee or any Paying Agent, or then
held by the Company, in trust for the payment of the principal of, premium or
Liquidated Damages, if any, or interest on any Exchange Notes and remaining
unclaimed for two years after such principal, and premium or Liquidated
Damages, if any, or interest has become due and payable shall be paid to the
Company on its request or (if then held by the Company) shall be discharged
from such trust; and the Holder of such Exchange Notes shall thereafter, as a
secured creditor, look only to the Company for payment thereof, and all
liability of the Trustee or such Paying Agent with respect to such trust
money, and all liability of the Company as trustee thereof, shall thereupon
cease; provided, however, that the Trustee or such Paying Agent, before being
required to make any such repayment, may at the expense of the Company cause
to be published once, in the New York Times and The Wall Street Journal
(national editions), notice that such money remains unclaimed and that, after
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a date specified therein, which shall not be less than 30 days from the date
of such notification or publication, any unclaimed balance of such money then
remaining will be repaid to the Company.
SECTION 8.07. REINSTATEMENT.
If the Trustee or Paying Agent is unable to apply any United States
dollars or non-callable Government Securities in accordance with Section 8.02
or 8.03 hereof, as the case may be, by reason of any order or judgment of any
court or governmental authority enjoining, restraining or otherwise
prohibiting such application, then the obligations of the Company under this
Indenture and the Exchange Notes, as applicable, shall be revived and
reinstated as though no deposit had occurred pursuant to Section 8.02 or 8.03
hereof until such time as the Trustee or Paying Agent is permitted to apply
all such money in accordance with Section 8.02 or 8.03 hereof, as the case may
be; provided, however, that, if the Company makes any payment of principal of,
premium or Liquidated Damages, if any, or interest on any Exchange Notes
following the reinstatement of its obligations, the Company shall be
subrogated to the rights of the Holders of such Exchange Notes to receive such
payment from the money held by the Trustee or Paying Agent.
ARTICLE 9
AMENDMENT, SUPPLEMENT AND WAIVER
SECTION 9.01. WITHOUT CONSENT OF HOLDERS OF EXCHANGE NOTES.
Notwithstanding Section 9.02 of this Indenture, the Company and the
Trustee may amend or supplement this Indenture or the Exchange Notes without
the consent of any Holder of a Exchange Notes:
(a) to cure any ambiguity, defect or inconsistency;
(b) to provide for uncertificated Exchange Notes in addition to or
in place of certificated Exchange Notes;
(c) to provide for the assumption of the Company's obligations to
the Holders of the Exchange Notes in the case of a merger or
consolidation pursuant to Article 5 hereof, as applicable;
(d) to make any change that would provide any additional rights or
benefits to the Holders of the Exchange Notes or that does not adversely
affect the legal rights hereunder of any Holder of Exchange Notes; or
(e) to comply with the requirements of the SEC in order to effect
or maintain the qualification of this Indenture under the TIA.
Upon the request of the Company accompanied by a resolution of the
Board of Directors of the Company authorizing the execution of any such
amended or supplemental Indenture, and upon receipt by the Trustee of the
documents described in Section 7.02 hereof, the Trustee shall join with the
Company in the execution of any amended or supplemental Indenture authorized
or permitted by the terms of this Indenture and to make any further
appropriate agreements and stipulations that may be therein contained, but the
Trustee shall not be obligated to enter into such amended or supplemental
Indenture that affects its own rights, duties or immunities under this
Indenture or otherwise.
SECTION 9.02. WITH CONSENT OF HOLDERS OF EXCHANGE NOTES.
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Except as provided below in this Section 9.02, the Company and the
Trustee may amend or supplement this Indenture and the Exchange Notes may be
amended or supplemented with the consent of the Holders of at least a majority
in principal amount of the Exchange Notes then outstanding (including consents
obtained in connection with a purchase of, or tender offer or exchange offer
for the Exchange Notes), and, subject to Sections 6.04 and 6.07 hereof, any
existing Default or Event of Default (other than a Default or Event of Default
in the payment of the principal of, premium or Liquidated Damages, if any, or
interest on the Exchange Notes) or compliance with any provision of this
Indenture or the Exchange Notes may be waived with the consent of the Holders
of a majority in principal amount of the then outstanding Exchange Notes
(including consents obtained in connection with a purchase of, or tender offer
or exchange offer for the Exchange Notes). Any amendment to (a) the provisions
of Article 10 hereof and (b) Section 4.09 including the related definitions
will require the consent of the Holders of at least 75% in aggregate principal
amount of the Exchange Notes then outstanding if such amendment would
adversely affect the rights of Holders of Exchange Notes.
Upon the request of the Company accompanied by a resolution of the
Board of Directors of the Company authorizing the execution of any such
amended or supplemental Indenture, and upon the filing with the Trustee of
evidence satisfactory to the Trustee of the consent of the Holders of Exchange
Notes as aforesaid, and upon receipt by the Trustee of the documents described
in Section 7.02 hereof, the Trustee shall join with the Company in the
execution of such amended or supplemental Indenture unless such amended or
supplemental Indenture affects the Trustee's own rights, duties or immunities
under this Indenture or otherwise, in which case the Trustee may in its
discretion, but shall not be obligated to, enter into such amended or
supplemental Indenture.
It shall not be necessary for the consent of the Holders of
Exchange Notes under this Section 9.02 to approve the particular form of any
proposed amendment or waiver, but it shall be sufficient if such consent
approves the substance thereof.
After an amendment, supplement or waiver under this Section 9.02
becomes effective, the Company shall mail to the Holders of Exchange Notes
affected thereby a notice briefly describing the amendment, supplement or
waiver. Any failure of the Company to mail such notice, or any defect therein,
shall not, however, in any way impair or affect the validity of any such
amended or supplemental Indenture or waiver. Subject to Sections 6.04 and 6.07
hereof, the Holders of a majority in aggregate principal amount of the
Exchange Notes then outstanding may waive compliance in a particular instance
by the Company with any provision of this Indenture or the Exchange Notes.
However, without the consent of each Holder affected, an amendment or waiver
may not (with respect to any Exchange Notes held by a non-consenting Holder):
(a) reduce the principal amount of Exchange Notes whose
Holders must consent to an amendment, supplement or waiver;
(b) reduce the principal of or change the fixed maturity of
any Exchange Notes or alter or waive any of the provisions with
respect to the redemption of the Exchange Notes (except as provided
above with respect to Section 4.09 hereof);
(c) reduce the rate of or change the time for payment of
interest, including default interest, on any Exchange Notes;
(d) waive a Default or Event of Default in the payment of
principal of or premium or Liquidated Damages, if any, or interest
on the Exchange Notes (except a rescission of acceleration of the
Exchange Notes by the Holders of at least a majority in aggregate
principal amount of the
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then outstanding Exchange Notes and a waiver of the payment default
that resulted from such acceleration);
(e) make any Exchange Notes payable in money other than that
stated in the Exchange Notes;
(f) make any change in the provisions of this Indenture
relating to waivers of past Defaults or the rights of Holders of
Exchange Notes to receive payments of principal of or premium or
Liquidated Damages, if any, or interest on the Exchange Notes;
(g) waive a redemption payment with respect to any Exchange
Notes (except as provided above with respect to Section 4.09
hereof); or
(h) make any change in Section 6.04 or 6.07 hereof or in the
foregoing amendment and waiver provisions.
SECTION 9.03. COMPLIANCE WITH TRUST INDENTURE ACT.
Every amendment or supplement to this Indenture or the Exchange
Notes shall be set forth in a amended or supplemental Indenture that complies
with the TIA as then in effect.
SECTION 9.04. REVOCATION AND EFFECT OF CONSENTS.
Until an amendment, supplement or waiver becomes effective, a
consent to it by a Holder of a Exchange Notes is a continuing consent by the
Holder of a Exchange Notes and every subsequent Holder of a Exchange Notes or
portion of a Exchange Notes that evidences the same debt as the consenting
Holder's Exchange Notes, even if notation of the consent is not made on any
Exchange Notes. However, any such Holder of a Exchange Notes or subsequent
Holder of a Exchange Notes may revoke the consent as to its Exchange Notes if
the Trustee receives written notice of revocation before the date the waiver,
supplement or amendment becomes effective. An amendment, supplement or waiver
becomes effective in accordance with its terms and thereafter binds every
Holder.
SECTION 9.05. NOTATION ON OR EXCHANGE OF EXCHANGE NOTES.
The Trustee may place an appropriate notation about an amendment,
supplement or waiver on any Exchange Notes thereafter authenticated. The
Company in exchange for all Exchange Notes may issue and the Trustee shall
authenticate new Exchange Notes that reflect the amendment, supplement or
waiver.
Failure to make the appropriate notation or to issue a new Exchange
Notes shall not affect the validity and effect of such amendment, supplement
or waiver.
SECTION 9.06. TRUSTEE TO SIGN AMENDMENTS, ETC.
The Trustee shall sign any amendment or supplemental Indenture
authorized pursuant to this Article 9 if the amendment does not adversely
affect the rights, duties, liabilities or immunities of the Trustee. If it
does, the Trustee may, but need not, sign it. In signing or refusing to sign
such amendment or supplemental Indenture, the Trustee shall be entitled to
receive and, subject to Section 7.01 hereof, shall be fully protected in
relying upon, an Officers' Certificate and an Opinion of Counsel as conclusive
evidence that such amendment or supplemental Indenture is authorized or
permitted by this Indenture, that it is not inconsistent herewith, and that it
will be valid and binding upon the Company in accordance with its terms.
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The Company may not sign an amendment or supplemental Indenture until their
respective Board of Directors approves it.
ARTICLE 10
SUBORDINATION
SECTION 10.01. AGREEMENT TO SUBORDINATE.
The Company agree, and each Holder by accepting a Exchange Notes
agrees, that the Indebtedness evidenced by the Exchange Notes is subordinated
in right of payment, to the extent and in the manner provided in this Article
10, to the prior payment in full of all Senior Debt (whether outstanding on
the date hereof or hereafter created, incurred, assumed or guaranteed), and
that the subordination is for the benefit of the holders of Senior Debt.
SECTION 10.02. CERTAIN DEFINITIONS.
"Designated Senior Debt" means (i) so long as any Senior Bank Debt
is outstanding, the Senior Bank Debt, (ii) so long as any Senior Subordinated
Notes are outstanding, the Senior Subordinated Notes and (ii) thereafter, any
other Senior Debt permitted hereunder, the principal amount of which is $25.0
million or more and that has been designated by the Company as "Designated
Senior Debt."
A "distribution" may consist of cash, securities or other property,
by set-off or otherwise.
"Representative" means the indenture trustee or other trustee,
agent or representative for any Senior Debt.
"Senior Bank Debt" means any Indebtedness outstanding under, and
any other Obligations with respect to, Bank Facilities, to the extent that any
such Indebtedness and other Obligations are permitted by this Indenture to be
incurred.
"Senior Debt" means (a) the Senior Bank Debt, (b) the Senior
Subordinated Notes, (c) all additional Indebtedness that is permitted under
this Indenture that is not by its terms pari passu with or subordinated to the
Exchange Notes, (d) all Obligations of the Company with respect to the
foregoing clauses (a), (b) and (c), including post-petition interest and (d)
all (including all subsequent) renewals, extensions, amendments, refinancings,
repurchases or redemptions, modifications, replacements or refundings thereto
(whether or not coincident therewith) that are permitted by this Indenture.
Notwithstanding anything to the contrary in the foregoing, Senior Debt shall
not include (i) any Indebtedness of the Company to any of its Subsidiaries,
(ii) any Indebtedness incurred for the purchase of goods or materials or for
services obtained in the ordinary course of business (other than with the
proceeds of borrowings from banks or other financial institutions) or (iii)
any Indebtedness incurred in violation of this Indenture.
SECTION 10.03. LIQUIDATION; DISSOLUTION; BANKRUPTCY.
Upon any distribution to creditors of the Company in a liquidation
or dissolution of the Company in a bankruptcy, reorganization, insolvency,
receivership or similar proceeding relating to the Company or its respective
property, or in an assignment for the benefit of creditors or any marshalling
of the Company's assets and liabilities:
(1) holders of Senior Debt shall be entitled to receive payment in
full of all Obligations due in respect of such Senior Debt (including
interest after the commencement of any such proceeding at the rate
specified in the applicable Senior Debt, whether or not an allowable
claim) before the Holders of
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Exchange Notes shall be entitled to receive any payment with respect to
the Exchange Notes (except that Holders may receive (i) securities that
are subordinated to at least the same extent as the Exchange Notes to
(a) Senior Debt and (b) any securities issued in exchange for Senior Debt
and (ii) payments and other distributions made from any defeasance trust
created pursuant to Section 8.01 hereof); and
(2) until all Obligations with respect to Senior Debt (as provided
in subsection (1) above) are paid in full, any distribution to which the
Holders of Exchange Notes would be entitled but for this Article 10
shall be made to holders of Senior Debt (except that Holders may receive
(i) securities that are subordinated to at least the same extent as the
Exchange Notes to (a) Senior Debt and (b) any securities issued in
exchange for Senior Debt and (ii) payments and other distributions made
from any defeasance trust created pursuant to Section 8.01 hereof), as
their interests may appear.
SECTION 10.04. DEFAULT ON DESIGNATED SENIOR DEBT.
(a) The Company may not make any payment or distribution to the
Trustee or any Holder in respect of the Exchange Notes and may not acquire
from the Trustee or any Holder any Exchange Notes for cash or property (other
than (1) securities that are subordinated to at least the same extent as the
Exchange Notes to (A) Senior Debt and (B) any securities issued in exchange
for Senior Debt and (2) payments and other distributions made from any
defeasance trust created pursuant to Section 8.01 hereof) until all principal
and other Obligations with respect to the Senior Debt have been paid in full
if:
(i) a default in the payment of the principal of, premium, if any,
or interest on Designated Senior Debt occurs and is continuing beyond
any applicable grace period in the agreement, indenture or other
document governing such Designated Senior Debt; or
(ii) a default, other than a default specified in Section
10.04(a)(i) hereof, on Designated Senior Debt occurs and is continuing
with respect to Designated Senior Debt that then permits holders of the
Designated Senior Debt as to which such default relates to accelerate
its maturity and the Trustee receives a notice of the default (a
"Payment Blockage Notice") from a Person who may give it pursuant to
Section 10.12 hereof. If the Trustee receives any such Payment Blockage
Notice, no subsequent Payment Blockage Notice shall be effective for
purposes of this Section 10.04 unless and until (I) at least 360 days
shall have elapsed since the effectiveness of the immediately prior
Payment Blockage Notice and (II) all scheduled payments of principal,
premium and Liquidated Damages, if any, and interest on the Exchange
Notes that have come due (other than by reason of acceleration) have
been paid in full in cash. No default described in this paragraph (ii)
that existed or was continuing on the date of delivery of any Payment
Blockage Notice to the Trustee shall be, or be made, the basis for a
subsequent Payment Blockage Notice.
(b) The Company may and shall resume payments on and distributions
in respect of the Exchange Notes and may acquire them in the case of a default
described in Section 10.04(a)(i) hereof, upon the date on which the default is
cured or waived.
if this Article 10 otherwise permits the payment, distribution or acquisition
at the time of such payment or acquisition.
SECTION 10.05. ACCELERATION OF EXCHANGE NOTES.
If payment of the Exchange Notes is accelerated because of an Event
of Default, the Company shall promptly notify holders of Senior Debt of the
acceleration.
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SECTION 10.06. WHEN DISTRIBUTION MUST BE PAID OVER.
In the event that the Trustee or any Holder receives any payment of
any Obligations with respect to the Exchange Notes at a time when the Trustee
or such Holder, as applicable, has actual knowledge that such payment is
prohibited by Section 10.04 hereof, such payment shall be held by the Trustee
or such Holder, in trust for the benefit of, and shall be paid forthwith over
and delivered, upon written request, to, the holders of Senior Debt as their
interests may appear or their Representative under the indenture or other
agreement (if any) pursuant to which Senior Debt may have been issued, as
their respective interests may appear, for application to the payment of all
Obligations with respect to Senior Debt remaining unpaid to the extent
necessary to pay such Obligations in full in accordance with their terms,
after giving effect to any concurrent payment or distribution to or for the
holders of Senior Debt.
With respect to the holders of Senior Debt, the Trustee undertakes
to perform only such obligations on the part of the Trustee as are
specifically set forth in this Article 10, and no implied covenants or
obligations with respect to the holders of Senior Debt shall be read into this
Indenture against the Trustee. The Trustee shall not be deemed to owe any
fiduciary duty to the holders of Senior Debt, and shall not be liable to any
such holders if the Trustee shall pay over or distribute to or on behalf of
Holders or the Company or any other Person money or assets to which any
holders of Senior Debt shall be entitled by virtue of this Article 10, except
if such payment is made as a result of the willful misconduct or gross
negligence of the Trustee.
SECTION 10.07. NOTICE BY COMPANY.
The Company shall promptly notify the Trustee and the Paying Agent
of any facts known to the Company that would cause a payment of any
Obligations with respect to the Exchange Notes to violate this Article 10, but
failure to give such notice shall not affect the subordination of the Exchange
Notes to the Senior Debt as provided in this Article 10.
SECTION 10.08. SUBROGATION.
After all Senior Debt is paid in full and until the Exchange Notes
are paid in full, Holders shall be subrogated (equally and ratably with all
other Indebtedness pari passu with the Exchange Notes) to the rights of
holders of Senior Debt to receive distributions applicable to Senior Debt to
the extent that distributions otherwise payable to the Holders have been
applied to the payment of Senior Debt. A distribution made under this Article
10 to holders of Senior Debt that otherwise would have been made to Holders of
Exchange Notes is not, as between the Company and Holders of Exchange Notes, a
payment by the Company on the Senior Debt.
Section 10.09. Relative Rights.
This Article 10 defines the relative rights of Holders of Exchange
Notes and holders of Senior Debt. Nothing in this Indenture shall:
(1) impair, as between the Company and Holders of Exchange Notes,
the obligation of the Company, which is absolute and unconditional, to
pay principal of and interest and Liquidated Damages, if any, on the
Exchange Notes in accordance with their terms;
(2) affect the relative rights of Holders of Exchange Notes and
creditors of the Company other than their rights in relation to holders
of Senior Debt; or
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(3) prevent the Trustee or any Holder of Exchange Notes from
exercising its available remedies upon a Default or Event of Default,
subject to the rights of holders and owners of Senior Debt to receive
distributions and payments otherwise payable to Holders of Exchange
Notes.
If the Company fails because of this Article 10 to pay principal of
or interest or Liquidated Damages, if any, on a Exchange Notes on the due
date, the failure is still a Default or Event of Default.
SECTION 10.10. SUBORDINATION MAY NOT BE IMPAIRED BY COMPANY.
No right of any holder of Senior Debt to enforce the subordination
of the Indebtedness evidenced by the Exchange Notes shall be impaired by any
act or failure to act by the Company or any Holder of Exchange Notes or by the
failure of the Company or any Holder of Exchange Notes to comply with this
Indenture.
SECTION 10.11. DISTRIBUTION OR NOTICE TO REPRESENTATIVE.
Whenever a distribution is to be made or a notice given to holders
of Senior Debt, the distribution may be made and the notice given to their
Representative.
Upon any payment or distribution of assets of the Company referred
to in this Article 10, the Trustee and the Holders of Exchange Notes shall be
entitled to rely upon any order or decree made by any court of competent
jurisdiction or upon any certificate of such Representative or of the
liquidating trustee or agent or other Person making any distribution to the
Trustee or to the Holders of Exchange Notes for the purpose of ascertaining
the Persons entitled to participate in such distribution, the holders of the
Senior Debt and other Indebtedness of the Company, the amount thereof or
payable thereon, the amount or amounts paid or distributed thereon and all
other facts pertinent thereto or to this Article 10.
SECTION 10.12. RIGHTS OF TRUSTEE AND PAYING AGENT.
Notwithstanding the provisions of this Article 10 or any other
provision of this Indenture, the Trustee shall not be charged with knowledge
of the existence of any facts that would prohibit the making of any payment or
distribution by the Trustee, and the Trustee and the Paying Agent may continue
to make payments on the Notes, unless the Trustee shall have received at its
Corporate Trust Office at least five Business Days prior to the date of such
payment written notice of facts that would cause the payment of any
Obligations with respect to the Notes to violate this Article 10. Only the
Company or a Representative may give such notice. Nothing in this Article 10
shall impair the claims of, or payments to, the Trustee under or pursuant to
Section 7.07 hereof.
The Trustee in its individual or any other capacity may hold Senior
Debt with the same rights it would have if it were not the Trustee. Any Agent
may do the same with like rights.
SECTION 10.13. AUTHORIZATION TO EFFECT SUBORDINATION.
Each Holder of a Note by the Holder's acceptance thereof authorizes
and directs the Trustee on the Holder's behalf to take such action as may be
necessary or appropriate to effectuate the subordination as provided in this
Article 10, and appoints the Trustee to act as the Holder's attorney-in-fact
for any and all such purposes. If the Trustee does not file a proper proof of
claim or proof of debt in the form required in any proceeding referred to in
Section 6.09 hereof at least 30 days before the expiration of the time to file
such claim, the agent under the New Credit Agreement (or in the absence of
such agent, the lender) is hereby authorized to file an appropriate claim for
and on behalf of the Holders of the Notes.
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SECTION 10.14. AMENDMENTS.
The provisions of this Article 10 shall not be amended or modified
without the written consent of the holders of all Senior Debt.
ARTICLE 11
CONVERSION
SECTION 11.01. CONVERSION RIGHTS.
Each Holder of Exchange Notes shall have the right, at such
Holder's option, to convert all or any portion of its Exchange Notes into
shares of Class A Common Stock at any time, unless previously redeemed or
repurchased, at the (i) Conversion Rate calculated as of the close of business
on the Conversion Date (subject to adjustment pursuant to this Section 11 and
subject to the Company obtaining the approval of the Federal Communications
Commission (the "FCC"), if required) times (ii) every $50 in aggregate principal
amount of such Exchange Notes. In the event that an insufficient number
of shares of Class A Common Stock are available for issuance or the Company is
restricted by FCC rules from issuing shares of Class A Common Stock upon
conversion of any Exchange Notes, the Company shall be required to pay to the
Holder of Exchange Notes seeking to convert such Exchange Note an amount
per share of Class A Common Stock in cash equal to 110% of the Current Market
Price of the Class A Common Stock as of the date of such conversion (the
"Conversion Payments"). The right to convert Exchange Notes called for
redemption or delivered for repurchase shall terminate at the close of
business on the Redemption Date for such Exchange Notes or the repurchase
date, as the case may be.
SECTION 11.02. EXERCISE OF CONVERSION RIGHTS.
The right of conversion attaching to any Exchange Notes may be
exercised by the Holder thereof by delivering the Exchange Notes to
be converted to the office of the Conversion Agent, accompanied by a duly
signed and completed notice of conversion in form reasonably satisfactory to
the Conversion Agent. The "Conversion Date" will be the date on which the
Exchange Notes and the duly signed and completed notice of conversion are so
delivered. As promptly as practicable on or after the conversion date, the
Company shall issue and deliver to the Conversion Agent a certificate or
certificates for the number of full shares of Class A Common Stock issuable
upon conversion, together with payment in cash, determined as provided below,
in lieu of any fraction of a share. Such certificate or certificates shall be
delivered by the Conversion Agent to the appropriate Holder on a book-entry
basis or by mailing certificates evidencing the additional shares to the Holders
at their respective addresses set forth in the register of Holders maintained
by the Trustee. All shares of Class A Common Stock issuable upon conversion
of the Exchange Notes shall be fully paid and nonassessable and shall rank pari
passu with the other shares of Class A Common Stock outstanding from time to
time. Any Exchange Notes surrendered for conversion during the period from the
close of business on any Record Date to the opening of business on the next
succeeding Interest Payment Date must be accompanied by payment of an amount
equal to the interest payable on such Interest Payment Date on the Exchange
Notes being surrendered for conversion. In the case of any Exchange Notes that
has been converted after any Record Date but before the next Interest Payment
Date, interest that is payable on such Interest Payment Date shall be payable on
such Interest Payment Date notwithstanding such conversion, and such interest
shall be paid to the Holder of such Exchange Notes on such Record Date. No other
payment or adjustment for interest, or for any dividends in respect of shares of
Class A Common Stock, shall by made upon conversion. Holders of Class A Common
Stock issued upon conversion shall not be entitled
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to receive any dividends payable to holders of Class A Common Stock as of any
record time before the close of business on the Conversion Date.
SECTION 11.03. FRACTIONAL SHARES.
The Company shall not issue a fractional share of Class A Common
Stock upon conversion of Exchange Notes. Instead the Company shall deliver a
check for an amount equal to the applicable fraction of a share multiplied by
the Current Market Price calculated as of the close of business on the
Conversion Date, rounded to the nearest cent.
SECTION 11.04. TAXES UPON CONVERSION.
A Holder delivering Exchange Notes for conversion will not be
required to pay any taxes or duties in respect of the issue or delivery of
Class A Common Stock on conversion but will be required to pay any tax or duty
that may be payable in respect of any transfer involved in the issue or
delivery of the shares of Class A Common Stock in a name other than that of
the Holder of the Exchange Notes. Certificates representing shares of Class A
Common Stock will not be issued or delivered unless all taxes and duties, if
any, payable by the Holder have been paid.
SECTION 11.05. RESERVATION OF CLASS A COMMON STOCK.
The Company has reserved and shall continue to reserve out of its
authorized but unissued Class A Common Stock or its Class A Common Stock held
in treasury enough shares of Class A Common Stock to permit the conversion of
at least $149,350,000 in aggregate principal amount of Exchange Notes and
shall, as soon as practical, reserve and continue to reserve out of its
authorized but unissued Class A Common Stock held in treasury enough shares of
Class A Common Stock to permit the conversion of any other Exchange Notes,
assuming, in each case, that such conversion took place at the Conversion Rate
in effect on the Closing Date (provided that such reservation shall be
proportionally reduced as Exchange Notes are repurchased, redeemed, converted
or otherwise retired). All shares of Class A Common Stock that may be issued
upon conversion of Exchange Notes shall be fully paid and nonassessable. The
Company shall take all commercially reasonable steps to comply with all
securities laws regulating the offer and delivery of shares of Class A Common
Stock upon conversion of Exchange Notes and shall take all commercially
reasonable steps to list such shares on each national securities exchange on
which the Class A Common Stock is listed.
SECTION 11.06. ADJUSTMENTS TO CONVERSION PRICE.
(a) If the Company:
(i) pays a dividend (or makes a distribution) on its Class A Common
Stock in shares of its Class A Common Stock;
(ii) subdivides its outstanding shares of Class A Common Stock into
a greater number of shares;
(iii) combines its outstanding shares of Class A Common Stock into
a smaller number of shares; or
(iv) issues any shares of its Capital Stock by reclassification of
its Class A Common Stock;
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then the Conversion Price in effect immediately prior to such action shall be
adjusted so that the Holder of each Exchange Note thereafter converted may
receive the number of shares of capital stock of the Company that he would
have owned immediately following such action if he had converted such Exchange
Notes immediately prior to such action. The adjustment shall become effective
immediately after the record date in the case of a dividend or distribution
and immediately after the effective date of a subdivision, combination or
reclassification. Such adjustment shall be made successively whenever any
event listed above shall occur. If, after an adjustment referred to in clauses
(a) (i) through (iv) above, a Holder of an Exchange Note upon conversion of it
may receive shares of two or more classes of Capital Stock of the Company, then
the Conversion Price shall be split into two or more components, as the case
may be, and the Conversion Price of each class of Capital Stock shall
thereafter be subject to adjustment on terms comparable to those applicable to
Class A Common Stock in this Section 11.06.
(b) If the Company distributes any Rights to all holders of its
Class A Common Stock entitling them to purchase shares of Class A Common Stock
at a price per share that is less than the Current Market Price per share on
the date of distribution of such Rights, the Conversion Price shall be adjusted
in accordance with the formula:
C' = C x ((O + ((N x P) / M)) / (O + N))
where:
C' = the adjusted Conversion Price.
C = the then current Conversion Price.
O = the number of shares of Class A Common Stock outstanding on
the record date.
N = the number of additional shares of Class A Common Stock
offered.
P = the offering price per share of the additional shares of
Class A Common Stock.
M = the Current Market Price per share of Class A Common Stock
on the record date.
The adjustment shall be made successively whenever any such Rights are issued
and shall become effective immediately after the record date for the
determination of stockholders entitled to receive such Rights. If at the end
of the period during which such Rights are exercisable, not all Rights shall
have been exercised, the Conversion Price shall be immediately readjusted to
what it would have been if "N" in the above formula had been the number of
shares actually issued.
(c) If the Company distributes to all holders of shares of its
Class A Common Stock (i) any shares of any class of Capital Stock of the
Company other than its Class A Common Stock, (ii) any evidence of indebtedness
or other securities of the Company or any Subsidiary of the Company, or (iii)
cash or any other assets (including securities, but excluding those dividends,
Rights and distributions referred to above in this Section 11.06 and in
Section 11.06(d) and Section 11.06(e), dividends and distributions paid
exclusively in cash and distributions upon mergers or consolidations to which
Section 11.06(h) applies), the Conversion Price shall be adjusted in accordance
with the formula:
C' = C x ((M - F) / M)
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where:
C' = the adjusted Conversion Price.
C = the then current Conversion Price.
M = the Current Market Price per share of Class A Common
Stock on the record date mentioned below.
F = the fair market value on the record date of the
Capital Stock, indebtedness, other securities, cash or
other assets distributed per share of Class A Common
Stock.
The adjustment shall be made successively whenever any such distribution is
made and shall become effective immediately after the record date for the
determination of stockholders entitled to receive the distribution.
(d) If the Company issues shares of Class A Common Stock for a
consideration per share less than the Current Market Price per share on the
date the Company issues such additional shares, the Conversion Price shall be
adjusted in accordance with the formula:
C' = C x ((O + (P / M)) / A)
where:
C' = the adjusted Conversion Price.
C = the then current Conversion Price.
O = the number of shares of Class A Common Stock
outstanding immediately prior to the issuance of such
additional shares.
P = the aggregate consideration received for the issuance of
such additional shares.
M = the Current Market Price per share on the date of issuance
of such additional shares.
A = the number of shares Class A Common Stock outstanding
immediately after the issuance of such additional
shares.
The adjustment shall be made successively whenever any such
issuance is made, and shall become effective immediately after such issuance.
This Section 11.06(d) does not apply to (i) any transaction or issuance
described in Section 11.06(b) or 11.06(c) above or Section 11.06(e) below,
(ii) the conversion of Exchange Notes or the conversion, exchange or exercise
of securities issued in transactions that were subject to Sections 11.06(b) or
11.06(c) above, (iii) Class A Common Stock issued to the Company's employees
under bona fide employee benefit plans adopted by the Board of Directors of
the Company and approved by the holders of Class A Common Stock when required
by law, (iv) Class A Common Stock issued in the MMR Merger or to acquire, or
in the acquisition of, all or any portion of a business as a going concern, in
an arm's-length transaction between the Company and an unaffiliated third
party, whether such acquisition shall be effected by purchase of assets,
exchange of securities, merger, consolidation or otherwise, (v) Class A Common
Stock issued in a bona fide public offering pursuant to a firm commitment
underwriting or (vi)
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Class A Common Stock issued to lenders or bond purchasers that are
unaffiliated third parties in any financing transaction on arm's-length terms
(collectively, "Exempt Issuances").
(e) If the Company issues any Right (other than Exchange
Notes or securities issued in transactions described in Section 11.06(c)
above) and for a consideration per share of Class A Common Stock initially
deliverable upon conversion, exchange or exercise of such Rights that is less
than the Current Market Price per share on the date of issuance of such
Rights, the Conversion Price shall be adjusted in accordance with the
formula:
C' = C x ((O + (P / M)) / (O + D))
where:
C' = the adjusted Conversion Price.
C = the then current Conversion Price.
O = the number of shares of Class A Common Stock
outstanding immediately prior to the issuance of such
Rights.
P = the aggregate consideration received for the issuance
of such Rights plus the aggregate consideration receivable
upon exercise of all such Rights.
M = the Current Market Price per share of Class A Common
Stock on the date of issuance of such securities.
D = the maximum number of shares deliverable upon
conversion or in exchange for or upon exercise of such
Rights at the initial conversion, exchange or exercise
rate.
The adjustment shall be made successively whenever any such
issuance is made, and shall become effective immediately after such issuance.
If all of the Class A Common Stock deliverable upon conversion, exchange or
exercise of such Rights has not been issued when such Rights are no longer
outstanding, then the Conversion Price shall promptly be readjusted to the
Conversion Price that would then be in effect had the adjustment upon the
issuance of such Rights been made on the basis of the actual number of shares
of Class A Common Stock issued upon conversion, exchange or exercise of such
Rights. This Section 11.06(e) does not apply to any transaction that would be
an Exempt Transaction if shares of Class A Common Stock were issued instead of
Rights.
(f) In case the Company or any of its Subsidiaries shall, by
dividend or otherwise, make distributions exclusively in cash (excluding any
cash that is distributed upon a merger or consolidation to which Section
11.06(h) applies or as part of a distribution referred to in Section and
11.06(c)) to all holders of its Class A Common Stock in an aggregate amount
that, combined together with (i) the aggregate amount of all other such
all-cash distributions to all holders of any class of its Class A Common Stock
made exclusively in cash within the 12 months preceding the date of payment
of such distribution and in respect of which no adjustment pursuant to this
Section 11.06(f) or Section 11.06(g) has been made and (ii) the aggregate of
any cash plus the fair market value of other consideration payable in respect
of any tender or exchange offer or other stock repurchase program by the
Company or any of its Subsidiaries for all or any portion of any class of the
Class A Common Stock concluded within the 12 months preceding the date of
payment of such distribution and in respect of which no adjustment pursuant to
this Section 11.06(f) or Section 11.06(g) has been made, exceeds 10% of the
Company's Market Capitalization on the record date
51
<PAGE>
for such distribution then, and in each such case, immediately after the close
of business on such date of such determination, the Conversion Price shall be
adjusted in accordance with the formula:
C' = C x ((M - E) / M))
where:
C' = the adjusted Conversion Price.
C = the then current Conversion Price.
M = the Current Market Price per share of Class A Common
Stock on the date fixed for determination times the
number of shares of Class A Common Stock outstanding on
such date.
E = the total of such combined amount.
(g) In the case of the consummation of a tender offer, exchange
offer (other than an odd-lot offer) or other stock repurchase program made by
the Company or any Subsidiary thereof for all or any portion of the Class A
Common Stock involving the payment by the Company or such Subsidiary of an
aggregate consideration that, together with (i) any cash or other
consideration payable in a tender offer, exchange offer or other stock
repurchase program by the Company or any of its Subsidiaries for Class A
Common Stock consummated within 12 months preceding consummation of such
tender offer, exchange offer or other stock repurchase program (the
"Expiration Time") in respect of which no adjustment has been made pursuant to
this section 11.06(g) or Section 11.06(f) and (ii) the aggregate
amount of all such all-cash distributions referred to in Section 11.06(f)
above to all holders of Class A Common Stock within the 12 months preceding
such Expiration Time in respect of which no adjustments have been made,
exceeds 10% of the Company's Market Capitalization as of the Trading Day next
succeeding the Expiration Time, the Conversion Price shall be reduced in
accordance with the formula:
C' = C x ((M - E) / N)
where:
C' = the adjusted Conversion Price.
C = the then current Conversion Price.
M = the Current Market Price per share of Class A Common
Stock on the Trading Day next succeeding the Expiration
Time times the number of shares of Class A Common Stock
outstanding at the Expiration Time (including any
tendered, exchanged or purchased shares).
N = the Current Market Price per share of Class A Common
Stock on the Trading Day next succeeding the Expiration
Time times the number of shares of the Class A Common
Stock outstanding at the Expiration Time (less any
shares purchased in such tender offer, exchange offer or
other stock repurchase program).
E = the total of such combined amount.
52
<PAGE>
The reduction shall become effective immediately prior to the
opening of business on the day following the Expiration Time.
(h) In case of any consolidation, amalgamation, arrangement or
merger of the Company with or into another Person or any merger of another
Person with or into the Company (other than a merger that does not result in
any reclassification, conversion, exchange or cancellation of any class or
series of the Common Equity), or in case of any sale or transfer of all or
substantially all of the assets of the Company, each Exchange Note then
outstanding will, without the consent of the Holder of any Exchange Notes,
become convertible only into the kind and amount of securities, cash and other
property receivable upon such consolidation, merger, sale or transfer by a
Holder of the number of shares of Class A Common Stock (and other securities,
if applicable) into which such Exchange Notes was convertible immediately
prior thereto (assuming such holder of Class A Common Stock (and other
securities, if applicable) failed to exercise any rights of election and that
such Exchange Note was then convertible).
(i) In addition, in the event that any other transaction or event
occurs as to which the foregoing conversion price adjustment provisions are
not strictly applicable but the failure to make any adjustment would adversely
affect the conversion rights represented by the Exchange Notes in accordance
with the essential intent and principles of such provisions, then, in each
such case, either (i) the Company shall appoint an investment banking firm of
recognized national standing, or any other financial expert that does not (or
whose directors, officers, employees, affiliates or stockholders do not) have
a direct or material indirect financial interest in the Company or any of its
Subsidiaries, who has not been, and, at the time it is called upon to give
independent financial advice to the Company, is not (and none of its
directors, officers, employees, affiliates or stockholders are) a promoter,
director or officer of the Company or any of its Subsidiaries, which will give
their opinion upon or (ii) the Board of Directors shall determine, consistent
with the Board of Directors' fiduciary duties to the Company's stockholders,
the adjustment, if any, on a basis consistent with the essential intent and
principles established in the foregoing conversion price adjustment
provisions, necessary to preserve, without dilution, the conversion rights
represented by the Exchange Notes. Upon receipt of such opinion or
determination, the Company shall promptly mail a copy thereof to the Holders
of the Exchange Notes and will make the adjustments described therein.
(j) For purposes of any computation respecting consideration
received pursuant to a transaction described or contemplated by this Section
11.06, the following shall apply:
(i) in the case of the issuance of shares of Class A Common
Stock for cash, the consideration shall be the amount of such cash,
provided that in no case shall any deduction be made for any
commissions, discounts or other expenses incurred by the Company for any
underwriting of the issue or otherwise in connection therewith;
(ii) in the case of the issuance of shares of Class A Common
Stock for a consideration in whole or in part other than cash, the
consideration other than cash shall be deemed to be the fair market
value thereof (irrespective of the accounting treatment thereof);
(iii) whenever this Indenture calls for the determination of
"fair market value," such fair market value shall be determined in good
faith by the Board of Directors of the Company and as evidenced by a
written resolution thereof; and
(iv) in the case of the issuance of Rights, the aggregate
consideration received therefor shall be deemed to be the consideration
received by the Company for the issuance of such Rights plus the
additional minimum consideration, if any, to be received by the Company
upon the conversion or
53
<PAGE>
exchange or exercise thereof (the consideration in each case to be
determined in the same manner as provided in clauses (i) and (ii) of this
Section 11.06(j)).
(k) No adjustment in the Conversion Price need be made unless the
adjustment would require an increase or decrease of at least 1% in the
Conversion Price. Any adjustments that are not made shall be carried forward
and taken into account in any subsequent adjustment. All calculations under
this Section 11.06 shall be made to the nearest one hundredth of a cent.
(l) No adjustment in the Conversion Price need be made under this
Section 11.06 for (i) rights to purchase Class A Common Stock pursuant to a
Company plan for reinvestment of dividends or interest, or (ii) any change in
the par value or no par value of the Class A Common Stock, and in no event
shall any adjustment made under this Section 11.06 that would reduce the
Conversion Price below the par value of the Class A Common Stock. If an
adjustment is made to the Conversion Price upon the establishment of a record
date for a distribution subject to Sections 11.06(b) or 11.06(c) above and if
such distribution is subsequently cancelled, the Conversion Price then in
effect shall be readjusted, effective as of the date when the Board of
Directors of the Company determines to cancel such distribution, to the
Conversion Price that would have been in effect if such record date had not
been fixed. No adjustment in the Conversion Price need be made under Sections
11.06(b) and 11.06(c) above if the Company issues or distributes to each
Holder of Exchange Notes the shares of Class A Common Stock, evidences of
indebtedness, assets or Rights referred to in those Sections that each Holder
would have been entitled to receive had the Exchange Notes been converted into
Class A Common Stock prior to the happening of such event or the record date
with respect thereto.
(m) The Company shall provide to Holders of Exchange Notes
reasonable notice of any event that would result in an adjustment to the
Conversion Price pursuant to any of the adjustments in this Article 11 so as
to permit the Holders to effect a conversion of Exchange Notes into shares of
Class A Common Stock prior to the occurrence of such event. The Company shall
file with the Trustee a certificate from the Company's independent public
accountants briefly stating the facts requiring the adjustment and the manner
of computing it. Subject to Section 11.06(q) below, the certificate shall be
conclusive evidence that the adjustment is correct.
(n) The Company from time to time may reduce the Conversion Price
by any amount for any period of time if the period is at least 20 Business
Days and if the reduction is irrevocable during the period, but in no event
may the Conversion Price be less than the par value of a share of Class A
Common Stock. Whenever the Conversion Price is reduced, the Company shall mail
to holders of Exchange Notes a notice of the reduction. The Company shall
mail, first class, postage prepaid, the notice at least 15 days before the
date the reduced conversion price takes effect. The notice shall state the
reduced conversion price and the period it will be in effect. A reduction of
the Conversion Price does not change or adjust the Conversion Price otherwise
in effect for purposes of Sections 11.06(a), 11.06(b), 11.06(c), 11.06(d),
11.06(e), 11.06(f) and 11.06(g) above.
(o) If:
(i) the Company takes any action which would require an
adjustment in the Conversion Price pursuant to Sections 11.06(b) or
11.06(c) above, or clause (iv) of Section 11.06(a) above;
(ii) the Company consolidates or merges with, or transfers all
or substantially all of its assets to, another corporation, and
stockholders of the Company must approve the transaction; or
(iii) there is a dissolution or liquidation of the Company;
54
<PAGE>
a holder of Exchange Notes may want to convert such Exchange Notes into shares
of Class A Common Stock prior to the record date for or the effective date of
the transaction so that he may receive the rights, warrants, securities or
assets which a holder of shares of Class A Common Stock on that date may
receive. Therefore, the Company shall mail to such holders, first class, postage
prepaid, a notice stating the proposed record or effective date, as the case
may be. The Company shall mail the notice at least ten (10) days before such
date. Failure to mail the notice or any defect in it shall not affect the
validity of any transaction referred to in clause (i), (ii) or (iii) of this
Section 11.06(o).
(p) In any case in which this Section 11.06 shall require that an
adjustment as a result of any event become effective from and after a record
date, the Company may elect to defer until after the occurrence of such event
(i) the issuance to the holder of any Exchange Notes converted after such
record date and before the occurrence of such event of the additional shares
of Class A Common Stock issuable upon such conversion over and above the
shares issuable on the basis of the Conversion Price in effect immediately
prior to adjustment and (ii) a check for any remaining fractional shares of
Class A Common Stock as provided in Section 11.04 above.
(q) Except as provided in the immediately following sentence, any
determination that the Company or its Board of Directors must make pursuant to
this Article 11 shall be conclusive. Whenever the Company or its Board of
Directors shall be required to make a determination under this Article 11,
such determination shall be made in good faith and may be challenged in good
faith by the Holders of a majority of the aggregate principal amount of
outstanding Exchange Notes (with Exchange Notes held by the Company or any of
its Affiliates not being considered to be outstanding for this purpose), and any
dispute shall be resolved by an investment banking firm of recognized national
standing selected by the Company and acceptable to such Holders of Exchange
Notes. If such investment banking firm resolves that the adjustment should have
been more favorable to the Holders, the Company shall bear the costs of such
firm and if such investment banking firm resolves that such determination was
correct or should have been less favorable to the Holders, the Holders
challenging such determination shall bear the costs of such firm.
(r) The Company shall not pay any dividend or make any distribution
to, or on behalf of the holders of any class or series of Common Stock unless
the holders of Class A Common Stock share therein on an equal share for share
basis.
(s) Overdue Conversion Payments shall bear interest at the rate of
6 1/2% per annum.
(t) Commencing on the earlier of (i) the consummation of the MMR
Merger or (ii) December 31, 1996, the Company shall use its best efforts to
secure all necessary consents and approvals, if any, and make all necessary
filings (including, without limitation, consents and approvals of and filings
with the FCC) and take all other commercially reasonable steps to permit
conversion of the Exchange Notes in accordance with this terms of this
Indenture.
(u) Except as specifically set forth in this Section 11.06, none of
the adjustments described in this Section 11.06 shall duplicate adjustments
previously made or made simultaneously pursuant to other subsections of this
Section 11.06, or otherwise double count any transaction.
ARTICLE 12
MISCELLANEOUS
SECTION 12.01. TRUST INDENTURE ACT CONTROLS.
55
<PAGE>
If any provision hereof limits, qualifies or conflicts with a
provision of the TIA or another provision that would be required or deemed
under the TIA to be part of and govern this Indenture if this Indenture were
subject thereto, the latter provision shall control. If any provision of this
Indenture modifies or excludes any provision of the TIA that may be so
modified or excluded, the latter provision shall be deemed to apply to this
Indenture as so modified or to be excluded, as the case may be.
SECTION 12.02. NOTICES.
Any notice or communication by the Company or the Trustee to others
is duly given if in writing and delivered in Person or mailed by first class
mail (registered or certified, return receipt requested), telex, telecopier or
overnight air courier guaranteeing next day delivery, to the others' address:
If to the Company:
SFX Broadcasting, Inc.
150 East 58th Street
New York, New York 10155
Telecopier No.: (212) 753-3188
Attention: Howard J. Tytel, Esq.
With a copy to:
Baker & McKenzie
805 Third Avenue
New York, New York 10022
Telecopier No.: (212) 759-9133
Attention: Howard Berkower, Esq.
If to the Trustee:
The Company or the Trustee, by notice to the others may designate
additional or different addresses for subsequent notices or communications.
All notices and communications (other than those sent to Holders of
Notes) shall be deemed to have been duly given: at the time delivered by hand,
if personally delivered; five Business Days after being deposited in the mail,
postage prepaid, if mailed; when answered back, if telexed; when receipt
acknowledged, if telecopied; and the next Business Day after timely delivery
to the courier, if sent by overnight air courier guaranteeing next day
delivery.
Any notice or communication to a Holder of Exchange Notes shall be
mailed by first class mail, certified or registered, return receipt requested,
or by overnight air courier guaranteeing next day delivery to its address
shown on the register kept by the Registrar. Any notice or communication shall
also be so mailed to any Person described in TIA ss. 313(c), to the extent
required by the TIA. Failure to mail a notice
56
<PAGE>
or communication to a Holder of Notes or any defect in it shall not affect its
sufficiency with respect to other Holders of Exchange Notes.
If a notice or communication is mailed in the manner provided above
within the time prescribed, it is duly given, whether or not the addressee
receives it.
If the Company mails a notice or communication to Holders of Notes,
it shall mail a copy to the Trustee and each Agent at the same time.
SECTION 12.03. COMMUNICATION BY HOLDERS OF EXCHANGE NOTES WITH OTHER HOLDERS OF
EXCHANGE NOTES.
Holders of Exchange Notes may communicate pursuant to TIA ss.
312(b) with other Holders of Exchange Notes with respect to their rights under
this Indenture or the Exchange Notes. The Company, the Trustee, the Registrar
and anyone else shall have the protection of TIA ss. 312(c).
SECTION 12.04. CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT.
Upon any request or application by the Company to the Trustee to
take any action under this Indenture, the Company shall furnish to the
Trustee:
(a) an Officers' Certificate in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set
forth in Section 12.05 hereof) stating that, in the opinion of the
signers, all conditions precedent and covenants, if any, provided for in
this Indenture relating to the proposed action have been satisfied; and
(b) an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set
forth in Section 12.05 hereof) stating that, in the opinion of such
counsel, all such conditions precedent and covenants have been
satisfied.
SECTION 12.05. STATEMENTS REQUIRED IN CERTIFICATE OR OPINION.
Each certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture (other than a certificate
provided pursuant to TIA ss. 314(a)(4)) shall comply with the provisions of
TIA ss. 314(e) and shall include:
(a) a statement that the Person making such certificate or opinion
has read such covenant or condition;
(b) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(c) a statement that, in the opinion of such Person, he or she has
made such examination or investigation as is necessary to enable him to
express an informed opinion as to whether or not such covenant or
condition has been satisfied; and
(d) a statement as to whether or not, in the opinion of such
Person, such condition or covenant has been satisfied.
57
<PAGE>
SECTION 12.06. RULES BY TRUSTEE AND AGENTS.
The Trustee may make reasonable rules for action by or at a meeting
of Holders of Notes. The Registrar or Paying Agent may make reasonable rules
and set reasonable requirements for its functions.
SECTION 12.07. NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS, EMPLOYEES
AND STOCKHOLDERS.
No director, officer, employee, incorporator or stockholder of the
Company, as such, shall have any liability for any obligations of the Company,
as applicable, under the Exchange Notes, this Indenture or for any claim based
on, in respect of, or by reason of, such obligations or their creation. Each
Holder of Exchange Notes by accepting a Exchange Note waives and releases all
such liability. The waiver and release are part of the consideration for
issuance of the Exchange Notes.
SECTION 12.08. GOVERNING LAW.
THE INTERNAL LAW OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED
TO CONSTRUE THIS INDENTURE AND THE EXCHANGE NOTES.
Section 12.09. No Adverse Interpretation of Other Agreements.
This Indenture may not be used to interpret any other indenture,
loan or debt agreement of the Company or its Subsidiaries or of any other
Person. Any such indenture, loan or debt agreement may not be used to
interpret this Indenture.
SECTION 12.10. SUCCESSORS.
All agreements of the Company in this Indenture and the Exchange
Notes shall bind their successors. All agreements of the Trustee in this
Indenture shall bind its successors.
SECTION 12.11. SEVERABILITY.
In case any provision in this Indenture, the Notes or the
Subsidiary Guarantees shall be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby.
SECTION 12.12. COUNTERPART ORIGINALS.
The parties may sign any number of copies of this Indenture. Each
signed copy shall be an original, but all of them together represent the same
agreement.
SECTION 12.13. TABLE OF CONTENTS, HEADINGS, ETC.
The Table of Contents, Cross-Reference Table and Headings of the
Articles and Sections of this Indenture, which have been inserted for
convenience of reference only, are not to be considered a part of this
Indenture and shall in no way modify or restrict any of the terms or
provisions hereof.
[Signatures on following page]
58
<PAGE>
SIGNATURES
IN WITNESS WHEREOF, the parties have executed this Indenture as of
the date first written above.
Very truly yours,
SFX Broadcasting, Inc.
By:
-----------------------------
Name:
Title:
[Trustee]
By:
-----------------------
Name:
Title:
59
<PAGE>
Exhibit A
(Face of Note)
6 1/2% Convertible Subordinated Exchange Notes due 2007
CUSIP:
No. $______________
SFX Broadcasting, Inc.
promise to pay to ________________ or registered assigns, the principal sum of
__________________ Dollars on May 31, 2007.
Interest Payment Dates: May 31 and November 30
Record Dates: May 15 and November 15
Dated:
SFX BROADCASTING, INC.
By:______________________________
Name:
Title:
This is one of the
Notes referred to in
within-mentioned Indenture:
- ------------------------- ,
as Trustee
By:__________________________________
A-1
<PAGE>
(Back of Note)
6 1/2% Convertible Subordinated Notes due 2007
[Unless and until it is exchanged in whole or in part for Exchange
Notes in definitive form, this Exchange Note may not be transferred except as
a whole by the Depositary to a nominee of the Depositary or by a nominee of
the Depositary to the Depositary or another nominee of the Depositary or by
the Depositary or any such nominee to a successor Depositary or a nominee of
such successor Depositary. Unless this certificate is presented by an
authorized representative of The Depository Trust Company (55 Water Street,
New York, New York) ("DTC"), to the issuers or their agent for registration of
transfer, exchange or payment, and any certificate issued is registered in the
name of Cede & Co. or such other name as may be requested by an authorized
representative of DTC (and any payment is made to Cede & Co. or such other
entity as may be requested by an authorized representative of DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY
PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an
interest herein.]1
[THE SECURITIES (OR ITS PREDECESSOR) EVIDENCED HEREBY WERE
ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER
SECTION 5 OF THE UNITED STATES SECURITIES ACT OF 1933 (THE "SECURITIES
ACT"), AND THE SECURITIES EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD,
PLEDGED OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION
OR AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THE
SECURITIES EVIDENCED HEREBY IS HEREBY NOTIFIED THAT THE SELLER MAY BE
RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE
SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER. THE HOLDER OF THE
SECURITIES EVIDENCED HEREBY AGREES FOR THE BENEFIT OF THE COMPANY
THAT (A) SUCH SECURITIES MAY NOT BE REOFFERED, RESOLD, PLEDGED OR
OTHERWISE TRANSFERRED EXCEPT (1) BY THE INITIAL INVESTOR (a) TO A PERSON
WHO THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER
WITHIN THE MEANING OF RULE 144A UNDER THE SECURITIES ACT PURCHASING
FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL
BUYER IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (b) IN AN
OFFSHORE TRANSACTION COMPLYING WITH RULE 903 OR RULE 904 OF
REGULATION S UNDER THE SECURITIES ACT (c) PURSUANT TO AN EXEMPTION
FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144
THEREUNDER (IF AVAILABLE) (d) TO THE COMPANY OR (e) PURSUANT TO AN
EXEMPTION TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OR (2) BY SUBSEQUENT INVESTORS, AS SET FORTH IN (1) ABOVE
AND, IN ADDITION, TO AN INSTITUTIONAL ACCREDITED INVESTOR IN A
TRANSACTION EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT AND, IN EACH CASE, IN ACCORDANCE WITH ALL APPLICABLE
SECURITIES LAWS OF THE STATES OF THE UNITED STATES AND (B) THE HOLDER
WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY
PURCHASER FROM IT OF THE SECURITIES EVIDENCED HEREBY OF THE RESALE
RESTRICTIONS SET FORTH IN (A) ABOVE.]2
- --------
1. To be included only if the Exchange Note is issued in Global form.
2. This legend should be included on the Exchange Notes until the
Exchange Notes have been transferred pursuant to the Shelf
Registration Statement.
A-2
<PAGE>
Capitalized terms used herein shall have the meanings assigned to
them in the Indenture referred to below unless otherwise indicated.
1. INTEREST. SFX Broadcasting, Inc., a Delaware corporation (the
"Company") promises to pay interest on the principal amount of this Exchange
Note at 6 1/2% per annum from the date hereof until maturity and shall pay the
Liquidated Damages, if any, payable pursuant to Section 4 of the Registration
Rights Agreement referred to below. The Company will pay interest and
Liquidated Damages semi-annually on May 31 and November 30 of each year, or if
any such day is not a Business Day, on the next succeeding Business Day (each
an "Interest Payment Date"). Interest on the Exchange Notes will accrue from
the most recent date to which interest has been paid or, if no interest has
been paid, from the date of issuance; provided that if there is no existing
Default in the payment of interest, and if this Exchange Note is authenticated
between a record date referred to on the face hereof and the next succeeding
Interest Payment Date, interest shall accrue from such next succeeding
Interest Payment Date; provided, further, that the first Interest Payment Date
shall be ________, 1996. The Company shall pay interest (including
post-petition interest in any proceeding under any Bankruptcy Law) on overdue
principal and premium, if any, from time to time on demand at a rate that is
1% per annum in excess of the rate then in effect; it shall pay interest
(including post-petition interest in any proceeding under any Bankruptcy Law)
on overdue installments of interest and Liquidated Damages, if any, (without
regard to any applicable grace periods) from time to time on demand at the
same rate to the extent lawful. Interest will be computed on the basis of a
360-day year of twelve 30-day months.
2. METHOD OF PAYMENT. The Company will pay interest on the Exchange
Notes (except defaulted interest) and Liquidated Damages, if any, to the
Persons who are registered Holders of Exchange Notes at the close of business
on the May 15 or November 15 next preceding the Interest Payment Date, even if
such Exchange Notes are cancelled after such record date and on or before such
Interest Payment Date, except as provided in Section 2.12 of the Indenture
with respect to defaulted interest. Any such interest installment not
punctually paid or duly provided for shall forthwith cease to be payable to
the registered Holders on such Interest Payment Date, and may be paid to the
registered Holders at the close of business on a special interest payment date
to be fixed by the Trustee for the payment of such defaulted interest, notice
whereof shall be given to the registered Holders not less than 15 days prior
to such special interest payment date, or may be paid at any time in any other
lawful manner not inconsistent with the requirements of any securities
exchange on which the Exchange Notes may be listed, and upon such notice as
may be required by such exchange, all as more fully provided in the Indenture.
The Exchange Notes will be payable as to principal, premium, interest and
Liquidated Damages, if any, at the office or agency of the Company maintained
for such purpose within or without the City and State of New York, or, at the
option of the Company, payment of interest and Liquidated Damages, if any, may
be made by check mailed to the Holders at their addresses set forth in the
register of Holders, and provided that payment by wire transfer of immediately
available funds will be required with respect to principal of and interest,
premium and Liquidated Damages, if any, on, all Global Exchange Notes and all
other Exchange Notes the Holders of which shall have provided wire transfer
instructions to the Company or the Paying Agent. Such payment shall be in such
coin or currency of the United States of America as at the time of payment is
legal tender for payment of public and private debts.
3. PAYING AGENT AND REGISTRAR. Initially, ____________, the Trustee
under the Indenture, will act as Paying Agent and Registrar. The Company may
change any Paying Agent or Registrar without notice to any Holder. The Company
may act in any such capacity.
4. INDENTURE. The Company issued the Exchange Notes under an
Indenture dated as of _________, ____ (the "Indenture") between the Company
and the Trustee. The terms of the Exchange Notes include
A-3
<PAGE>
those stated in the Indenture and those made part of the Indenture by
reference to the Trust Indenture Act of 1939, as amended (15 U.S. Code ss.ss.
77aaa-77bbbb). The Exchange Notes are subject to all such terms, and Holders
are referred to the Indenture and such Act for a statement of such terms. The
Exchange Notes are general obligations of the Company limited to $440,000,000
million in aggregate principal amount, plus amounts, if any issued to pay
Liquidated Damages, if any, on outstanding Exchange Notes as set forth in
Paragraph 2 hereof.
5. OPTIONAL REDEMPTION.
The Exchange Notes will not be redeemable at the Company's option
prior to June 1, 1999. Thereafter, the Exchange Notes will be subject to
redemption at the option of the Company, in whole or in part, upon not less
than 30 nor more than 60 days' notice, at the redemption prices (expressed as
percentages of principal amount) set forth below plus accrued and unpaid
interest and Liquidated Damages, if any, thereon to the applicable redemption
date, if redeemed during the twelve-month period beginning on July 1 of the
years indicated below:
Year Percentage
---- ----------
1999............................................... 104.55%
2000............................................... 103.90%
2001............................................... 103.25%
2002............................................... 102.60%
2003............................................... 101.95%
2004............................................... 101.30%
2005............................................... 100.65%
2006 and thereafter................................ 100.00%
6. MANDATORY REDEMPTION. Except as set forth in Paragraph 7 below,
the Company shall not be required to make mandatory redemption payments with
respect to the Exchange Notes.
7. REPURCHASE AT OPTION OF HOLDER.
(a) If there is a Change of Control, the Company shall be required
to make an offer (a "Change of Control Offer") to repurchase all or any part
of each Holder's Exchange Notes at a purchase price equal to 101% of the
principal amount thereof plus, in each case, accrued and unpaid interest and
Liquidated Damages, if any, to the date of purchase (in either case, the
"Change of Control Payment"). Within 10 days following any Change of Control,
the Company shall mail a notice to each Holder setting forth the procedures
governing the Change of Control Offer as required by the Indenture.
8. NOTICE OF REDEMPTION. Notice of redemption will be mailed at least 30
days but not more than 60 days before the redemption date to each Holder whose
Exchange Notes are to be redeemed at its registered address. Exchange Notes in
denominations larger than $1,000 may be redeemed in part but only in whole
multiples of $1,000, unless all of the Exchange Notes held by a Holder are to
be redeemed. On and after the redemption date interest and Liquidated Damages,
if any, ceases to accrue on Exchange Notes or portions thereof called for
redemption.
9. SUBORDINATION. Each Holder by accepting an Exchange Note agrees that
the payment of principal of, premium and Liquidated Damages, if any, and
interest on each Exchange Note is subordinated in right
A-4
<PAGE>
of payment, to the extent and in the manner provided in Article 10 of the
Indenture, to the prior payment in full of all Senior Debt (whether
outstanding on the date of the Indenture or thereafter created, incurred,
assumed or guaranteed), and that the subordination is for the benefit of the
holders of Senior Debt.
10. DENOMINATIONS, TRANSFER, EXCHANGE. The Exchange Notes are in
registered form without coupons in all appropriate denominations. The transfer
of Exchange Notes may be registered and Exchange Notes may be exchanged as
provided in the Indenture. The Registrar and the Trustee may require a Holder,
among other things, to furnish appropriate endorsements and transfer documents
and the Company may require a Holder to pay any taxes and fees required by law
or permitted by the Indenture. The Company need not exchange or register the
transfer of any Exchange Note or portion of a Exchange Note selected for
redemption, except for the unredeemed portion of any Exchange Note being
redeemed in part. Also, it need not exchange or register the transfer of any
Exchange Notes for a period of 15 days before a selection of Exchange Notes to
be redeemed or during the period between a record date and the corresponding
Interest Payment Date.
11. PERSONS DEEMED OWNERS. The registered Holder of an Exchange Note may
be treated as its owner for all purposes.
12. AMENDMENT, SUPPLEMENT AND WAIVER. Subject to certain exceptions, the
Indenture or the Exchange Notes may be amended or supplemented with the
consent of the Holders of at least a majority in principal amount of the then
outstanding Exchange Notes, and any existing default or compliance with any
provision of the Indenture or the Exchange Notes may be waived with the
consent of the Holders of a majority in principal amount of the then
outstanding Exchange Notes. Without the consent of any Holder of an Exchange
Note, the Indenture or the Exchange Notes may be amended or supplemented to
cure any ambiguity, defect or inconsistency, to provide for uncertificated
Exchange Notes in addition to or in place of certificated Exchange Notes, to
provide for the assumption of the Company's obligations to Holders of the
Exchange Notes in case of a merger or consolidation, to make any change that
would provide any additional rights or benefits to the Holders of the Exchange
Notes or that does not adversely affect the legal rights under the Indenture
of any such Holder, or to comply with the requirements of the SEC in order to
effect or maintain the qualification of the Indenture under the Trust
Indenture Act. Any amendment to the provisions of Article 10 of the Indenture
and Section 4.09 including, in each case, the related definitions will require
the consent of the Holders of at least 75% in aggregate principal amount of
the Exchange Notes then outstanding if such amendment would adversely affect
the rights of Holders of Exchange Notes.
13. DEFAULTS AND REMEDIES. Events of Default include: (i) a default
for 30 days in the payment when due of interest on, or Liquidated Damages, if
any, with respect to, the Exchange Notes (whether or not prohibited by Article
10 of the Indenture); (ii) a default in payment when due of the principal of
or premium, if any, on the Exchange Notes (whether or not prohibited by
Article 10 of the Indenture); (iii) the failure by the Company to comply with
the provisions described under Sections 4.09 and 5.01 of the Indenture; (iv)
the failure by the Company to honor any of its obligations with respect to any
Exchange Note upon conversion thereof; (v) the failure by the Company for 60
days after notice to comply with any of its other agreements in the Indenture
or the Exchange Notes; (vi) a default under any mortgage, indenture or
instrument under which there may be issued or by which there may be secured or
evidenced any Indebtedness for money borrowed by the Company or any of its
Subsidiaries (or the payment of which is guaranteed by the Company or any of
its Subsidiaries) whether such Indebtedness or guarantee now exists, or is
created after the date hereof, which default (a) is caused by a failure to pay
principal of or premium, if any, or interest on such Indebtedness prior to the
expiration of the grace period provided in such Indebtedness on the date of
such default (a "Payment Default") or (b) results in the acceleration of such
Indebtedness prior to its express maturity and, in each case, the principal
amount of any such Indebtedness,
A-5
<PAGE>
together with the principal amount of any other such Indebtedness under which
there has been a Payment Default or the maturity of which has been so
accelerated, aggregates $25.0 million or more; (vii) the failure by the
Company or any of its Subsidiaries to pay final judgments aggregating in
excess of $25.0 million, which judgments are not paid, discharged or stayed
for a period of 60 days; (viii) certain events of bankruptcy or insolvency
with respect to the Company or any of its Significant Subsidiaries or a group
of Subsidiaries that, taken as a whole, would constitute a Significant
Subsidiary. If any Event of Default occurs and is continuing, the Trustee or
the Holders of at least 25% in principal amount of the then outstanding
Exchange Notes may declare all the Exchange Notes to be due and payable.
Notwithstanding the foregoing, in the case of an Event of Default arising from
certain events of bankruptcy or insolvency, all outstanding Exchange Notes
will become due and payable without further action or notice. Holders may not
enforce the Indenture or the Exchange Notes except as provided in the
Indenture. Subject to certain limitations, Holders of a majority in principal
amount of the then outstanding Exchange Notes may direct the Trustee in its
exercise of any trust or power. The Trustee may withhold from Holders of the
Exchange Notes notice of any continuing Default or Event of Default (except a
Default or Event of Default relating to the payment of principal or interest)
if it determines that withholding notice is in their interest. The Holders of
a majority in aggregate principal amount of the Exchange Notes then
outstanding by notice to the Trustee may on behalf of the Holders of all of
the Exchange Notes waive any existing Default or Event of Default and its
consequences under the Indenture except a continuing Default or Event of
Default in the payment of interest or Liquidated Damages, if any, on, or the
principal of, the Exchange Notes. The Company is required to deliver to the
Trustee annually a statement regarding compliance with the Indenture, and the
Company is required upon becoming aware of any Default or Event of Default, to
deliver to the Trustee a statement specifying such Default or Event of
Default.
15. TRUSTEE DEALINGS WITH THE COMPANY. The Trustee, in its individual or
any other capacity, may make loans to, accept deposits from, and perform
services for its Company or its Affiliates, and may otherwise deal with the
Company or its Affiliates, as if it were not the Trustee.
16. NO RECOURSE AGAINST OTHERS. A director, officer, employee,
incorporator or stockholder, of the Company, as such, shall not have any
liability for any obligations of the Company under the Exchange Notes or the
Indenture, as applicable, or for any claim based on, in respect of, or by
reason of, such obligations or their creation. Each Holder by accepting an
Exchange Note waives and releases all such liability. The waiver and release
are part of the consideration for the issuance of the Exchange Notes.
17. AUTHENTICATION. This Exchange Note shall not be valid until
authenticated by the manual signature of the Trustee or an authenticating
agent.
18. ABBREVIATIONS. Customary abbreviations may be used in the name of a
Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (=
tenants by the entireties), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform
Gifts to Minors Act).
19. ADDITIONAL RIGHTS OF HOLDERS OF TRANSFER RESTRICTED SECURITIES.
In addition to the rights provided to Holders of Exchange Notes under the
Indenture, Holders of Transferred Restricted Securities shall have all the
rights set forth in the Registration Rights Agreement dated
as of the date hereof, among the Company and the parties named on the
signature pages thereof.
20. CUSIP NUMBERS. Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Company has
caused CUSIP numbers to be printed on the Exchange Notes and the Trustee may
use CUSIP numbers in notices of redemption as a convenience to Holders. No
A-6
<PAGE>
representation is made as to the accuracy of such numbers either as printed on
the Exchange Notes or as contained in any notice of redemption and reliance
may be placed only on the other identification numbers placed thereon.
The Company will furnish to any Holder upon written request and without
charge a copy of the Indenture and/or the Registration Rights Agreement.
Requests may be made to:
SFX Broadcasting, Inc.
150 East 58th Street
New York, New York 10155
Attention: Howard J. Tytel
A-7
<PAGE>
Assignment Form
To assign this Exchange Note, fill in the form below: (I) or (we)
assign and transfer this Exchange Note to
- -------------------------------------------------------------------------------
(Insert assignee's soc. sec. or tax I.D. no.)
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
and irrevocably appoint --------------------------------------------------------
to transfer this Exchange Note on the books of the Company. The agent may
substitute another to act for him.
- -------------------------------------------------------------------------------
Date:
-------------
Your Signature:
-------------------------------------------
(Sign exactly as your name appears on the face of this Exchange Note)
Signature Guarantee:
---------------------------------------
A-8
<PAGE>
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Exchange Note purchased by the
Company pursuant to Section 4.10 or 4.14 of the Indenture, check the box
below:
[ ] Section 4.10 [ ] Section 4.14
If you want to elect to have only part of the Exchange Note
purchased by the Company pursuant to Section 4.10 or Section 4.14 of the
Indenture, state the amount you elect to have purchased:
$
------------
Date:
-------------- Your Signature:
---------------------------------------
(Sign exactly as your name appears on the Exchange Note)
Tax Identification No.:
--------------------------------
Signature Guarantee:
------------------------------------
A-9
<PAGE>
SCHEDULE OF EXCHANGES OF CERTIFICATED EXCHANGE NOTES
The following exchanges of a part of this Global Exchange Note for
Certificated Exchange Notes have been made:
<TABLE>
<CAPTION>
Amount of decrease in Amount of increase in Principal Amount of this Signature of
Principal Amount of Principal Amount of Global Exchange Note authorized officer of
this Global Exchange this Global Exchange following such decrease Trustee or Note
Date of Exchange Note Note (or increase) Custodian
- ---------------- ---- ---- ------------- ---------
<S> <C> <C> <C> <C>
</TABLE>
A-10
<PAGE>
EXHIBIT B
CERTIFICATE TO BE DELIVERED UPON EXCHANGE OR REGISTRATION OF TRANSFER OF
EXCHANGE NOTES
Re: 6 1/2% Convertible Subordinated Exchange Notes due 2007 of SFX
Broadcasting, Inc.
This Certificate relates to $_____ principal amount of Exchange
Notes held in * ________ book-entry or *_______ certificated form by
________________ (the "Transferor").
The Transferor*:
[ ] has requested the Trustee by written order to deliver in exchange
for its beneficial interest in the Global Exchange Note held by the Depositary
an Exchange Note or Exchange Notes in certificated, registered form of
authorized denominations in an aggregate principal amount equal to its
beneficial interest in such Global Exchange Note (or the portion thereof
indicated above); or
[ ] has requested the Trustee by written order to exchange or register
the transfer of an Exchange Note or Exchange Notes.
In connection with such request and in respect of each such
Exchange Note, the Transferor does hereby certify that Transferor is familiar
with the Indenture relating to the above captioned Exchange Notes and as
provided in Section 2.06 of such Indenture, the transfer of this Exchange Note
does not require registration under the Securities Act (as defined below)
because:*
[ ] Such Exchange Note is being acquired for the Transferor's own
account, without transfer (in satisfaction of Section 2.06(a)(ii)(A) or
Section 2.06(d)(i)(A) of the Indenture).
[ ] Such Exchange Note is being transferred to a "qualified
institutional buyer" (as defined in Rule 144A under the Securities Act of
1933, as amended (the "Securities Act")) in reliance on Rule 144A or to an
"Accredited Investor," (as defined in Rule 501(a)(1), (2), (3) or (7) under
the Securities Act) in accordance with Regulation D under the Securities Act
(in satisfaction of Section 2.06(a)(ii)(B), Section 2.06(b)(i) or Section
2.06(d)(i) (B) of the Indenture) or pursuant to an exemption from registration
in accordance with Rule 904 under the Securities Act (in satisfaction of
Section 2.06(a)(ii)(B) or Section 2.06(d)(i)(B) of the Indenture.)
- ---------------
*Check applicable box.
B-1
<PAGE>
[ ] Such Exchange Note is being transferred in accordance with Rule 144
under the Securities Act, or pursuant to an effective registration statement
under the Securities Act (in satisfaction of Section 2.06(a)(ii)(B) or Section
2.06(d)(i)(B) of the Indenture).
[ ] Such Exchange Note is being transferred in reliance on and in
compliance with an exemption from the registration requirements of the
Securities Act, other than Rule 144A, 144 or Rule 904 under the Securities
Act.
--------------------------------------
[INSERT NAME OF TRANSFEROR]
By:
--------------------------------------
Date:
------------------
- ---------------
*Check applicable box.
B-2
=============================================================================
EXECUTIVE COPY
SFX BROADCASTING, INC.
10 3/4% SENIOR SUBORDINATED NOTES DUE 2006
-----------------
INDENTURE
Dated as of May 31, 1996
-----------------
-----------------
CHEMICAL BANK
-----------------
Trustee
=============================================================================
<PAGE>
CROSS-REFERENCE TABLE*
Trust Indenture
Act Section Indenture Section
310 (a)(1).................................................. 7.10
(a)(2).................................................. 7.10
(a)(3).................................................. N.A.
(a)(4).................................................. N.A.
(a)(5).................................................. 7.10
(b) ................................................... 7.10
(c) ................................................... N.A.
311 (a) ................................................... 7.11
(b) ................................................... 7.11
(c) ................................................... N.A.
312 (a) .................................................... 2.05
(b) .................................................... 12.03
(c) ................................................... 12.03
313 (a) ................................................... 7.06
(b)(1) ................................................. N.A.
(b)(2) ................................................. 7.06
(c) ................................................... 7.06;12.02
(d) .................................................... 7.06
314 (a) .................................................... 4.03;4.04
(b) .................................................... N.A
(c)(1) ................................................. 12.04
(c)(2) ................................................. 12.04
(c)(3) ................................................. N.A.
(d) .................................................... N.A.
(e) ................................................... 12.05
(f) .................................................... N.A.
315 (a) .................................................... 7.02,12.02
(b) .................................................... 7.05,12.02
(c) .................................................. 7.01
(d) .................................................... 7.01
(e) .................................................... 6.11
316 (a)(last sentence) ..................................... 2.09
(a)(1)(A) .............................................. 6.05
(a)(1)(B) .............................................. 6.04
(a)(2) ................................................. N.A.
(b) .................................................... 6.07
(c) .................................................... N.A.
317 (a)(1) ................................................. 6.08
(a)(2).................................................. 6.09
(b) ................................................... 2.04
318 (a) .................................................... 12.01
(b) .................................................... N.A.
(c) .................................................... 12.01
N.A. means not applicable.
* This Cross-Reference Table is not part of the Indenture.
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.01. Definitions.......................................... 1
Section 1.02. Other Definitions.................................... 14
Section 1.03. Incorporation by Reference of Trust Indenture Act.... 14
Section 1.04. Rules of Construction................................ 15
ARTICLE 2
THE NOTES
Section 2.01. Form and Dating...................................... 15
Section 2.02. Execution and Authentication......................... 16
Section 2.03. Registrar and Paying Agent........................... 16
Section 2.04. Paying Agent to Hold Money in Trust.................. 16
Section 2.05. Holder Lists......................................... 17
Section 2.06. Transfer and Exchange................................ 17
Section 2.07. Replacement Notes.................................... 22
Section 2.08. Outstanding Notes.................................... 22
Section 2.09. Treasury Notes....................................... 23
Section 2.10. Temporary Notes...................................... 23
Section 2.11. Cancellation......................................... 23
Section 2.12. Defaulted Interest................................... 23
ARTICLE 3
REDEMPTION AND PREPAYMENT
Section 3.01. Notices to Trustee................................... 24
Section 3.02. Selection of Notes to Be Redeemed.................... 24
Section 3.03. Notice of Redemption................................. 25
Section 3.04. Effect of Notice of Redemption....................... 25
Section 3.05. Deposit of Redemption or Purchase Price.............. 25
Section 3.06. Notes Redeemed or Purchased in Part.................. 26
Section 3.07. Optional Redemption.................................. 26
Section 3.08. Mandatory Redemption................................. 27
Section 3.09. Offer to Purchase by Application of Excess Proceeds.. 27
ARTICLE 4
COVENANTS
Section 4.01. Payment of Notes..................................... 29
Section 4.02. Maintenance of Office or Agency...................... 29
Section 4.03. Reports.............................................. 29
Section 4.04. Compliance Certificate............................... 30
Section 4.05. Taxes................................................ 30
Section 4.06. Stay, Extension and Usury Laws....................... 31
Section 4.07. Restricted Payments.................................. 31
Section 4.08. Dividend and Other Payment Restrictions Affecting
Subsidiaries......................................... 32
i
<PAGE>
Section 4.09. Incurrence of Indebtedness and Issuance of Preferred
Stock................................................ 33
Section 4.10. Asset Sales.......................................... 34
Section 4.11. Transactions with Affiliates......................... 36
Section 4.12. Liens................................................ 36
Section 4.13. Continued Existence.................................. 36
Section 4.14. Offer to Repurchase Upon Change of Control........... 37
Section 4.15. Additional Subsidiary Guarantees..................... 38
Section 4.16. Limitation on Issuances and Sales of Capital Stock of
Wholly Owned Subsidiaries............................ 38
Section 4.17. No Senior Subordinated Debt.......................... 38
Section 4.18. Sale and Leaseback Transactions...................... 39
Section 4.19. Business Activities.................................. 39
Section 4.20. Payments For Consent................................. 39
ARTICLE 5
SUCCESSORS
Section 5.01. Merger, Consolidation, or Sale of Assets............. 39
Section 5.02. Successor Corporation Substituted.................... 40
ARTICLE 6
DEFAULTS AND REMEDIES
Section 6.01. Events of Default.................................... 40
Section 6.02. Acceleration......................................... 42
Section 6.03. Other Remedies....................................... 43
Section 6.04. Waiver of Past Defaults.............................. 43
Section 6.05. Control by Majority.................................. 43
Section 6.06. Limitation on Suits.................................. 43
Section 6.07. Rights of Holders of Notes to Receive Payment........ 44
Section 6.08. Collection Suit by Trustee........................... 44
Section 6.09. Trustee May File Proofs of Claim..................... 44
Section 6.10. Priorities........................................... 45
Section 6.11. Undertaking for Costs................................ 45
ARTICLE 7
TRUSTEE
Section 7.01. Duties of Trustee.................................... 45
Section 7.02. Rights of Trustee.................................... 46
Section 7.03. Individual Rights of Trustee......................... 47
Section 7.04. Trustee's Disclaimer................................. 47
Section 7.05. Notice of Defaults................................... 47
Section 7.06. Reports by Trustee to Holders of the Notes........... 48
Section 7.07. Compensation, Reimbursement and Indemnity............ 48
Section 7.08. Replacement of Trustee............................... 49
Section 7.09. Successor Trustee by Merger, etc..................... 50
Section 7.10. Eligibility; Disqualification........................ 50
Section 7.11. Preferential Collection of Claims Against Company.... 50
ii
<PAGE>
ARTICLE 8
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
Section 8.01. Option to Effect Legal Defeasance or Covenant
Defeasance........................................... 50
Section 8.02. Legal Defeasance and Discharge....................... 50
Section 8.03. Covenant Defeasance.................................. 51
Section 8.04. Conditions to Legal or Covenant Defeasance........... 51
Section 8.05. Deposited Money and Government Securities to be
Held in Trust; Other Miscellaneous Provisions........ 52
Section 8.06. Repayment to the Company............................. 53
Section 8.07. Reinstatement........................................ 53
ARTICLE 9
AMENDMENT, SUPPLEMENT AND WAIVER
Section 9.01. Without Consent of Holders of Notes.................. 54
Section 9.02. With Consent of Holders of Notes..................... 54
Section 9.03. Compliance with Trust Indenture Act.................. 56
Section 9.04. Revocation and Effect of Consents.................... 56
Section 9.05. Notation on or Exchange of Notes..................... 56
Section 9.06. Trustee to Sign Amendments, etc...................... 56
ARTICLE 10
SUBORDINATION
Section 10.01. Agreement to Subordinate............................. 57
Section 10.02. Certain Definitions.................................. 57
Section 10.03. Liquidation; Dissolution; Bankruptcy................. 57
Section 10.04. Default on Designated Senior Debt.................... 58
Section 10.05. Acceleration of Notes................................ 59
Section 10.06. When Distribution Must Be Paid Over.................. 59
Section 10.07. Notice by Company.................................... 59
Section 10.08. Subrogation.......................................... 59
Section 10.09. Relative Rights...................................... 59
Section 10.10. Subordination May Not Be Impaired by Company......... 60
Section 10.11. Distribution or Notice to Representative............. 60
Section 10.12. Rights of Trustee and Paying Agent................... 60
Section 10.13. Authorization to Effect Subordination................ 61
Section 10.14. Amendments........................................... 61
ARTICLE 11
SUBSIDIARY GUARANTEES
Section 11.01. Subsidiary Guarantees................................ 61
Section 11.02. Execution and Delivery of Subsidiary Guarantees...... 62
Section 11.03. Guarantors May Consolidate, etc., on Certain Terms... 62
Section 11.04. Releases Following Sale of Assets.................... 63
Section 11.05. Limitation on Guarantor Liability.................... 63
Section 11.06. "Trustee" to Include Paying Agent.................... 64
iii
<PAGE>
ARTICLE 12
MISCELLANEOUS
Section 12.01. Trust Indenture Act Controls......................... 64
Section 12.02. Notices.............................................. 65
Section 12.03. Communication by Holders of Notes with Other
Holders of Notes..................................... 66
Section 12.04. Certificate and Opinion as to Conditions Precedent... 66
Section 12.05. Statements Required in Certificate or Opinion........ 66
Section 12.06. Rules by Trustee and Agents.......................... 66
Section 12.07. No Personal Liability of Directors, Officers,
Employees and Stockholders........................... 67
Section 12.08. Governing Law........................................ 67
Section 12.09. No Adverse Interpretation of Other Agreements........ 67
Section 12.10. Successors........................................... 67
Section 12.11. Severability......................................... 67
Section 12.12. Counterpart Originals................................ 67
Section 12.13. Table of Contents, Headings, etc..................... 67
EXHIBITS
Exhibit A FORM OF NOTE
Exhibit B CERTIFICATE OF TRANSFEROR
Exhibit C FORM OF SUBSIDIARY GUARANTEE
Exhibit D FORM OF SUPPLEMENTAL INDENTURE
iv
<PAGE>
INDENTURE dated as of May 31, 1996 among SFX Broadcasting, Inc.,
a Delaware corporation (the "Company"); SFX Broadcasting of the Southwest,
Inc., a Delaware corporation; SFX Broadcasting of Texas, Inc., a Delaware
corporation; SFX Broadcasting of Texas (KRLD), Inc., a Delaware corporation;
SFX Broadcasting of Texas (KRLD) Licensee, Inc., a Delaware corporation; SFX
Broadcasting of Texas (TSN), Inc., a Delaware corporation; SFX Broadcasting of
Texas (TSN), Licensee, Inc., a Delaware corporation; KODA-FM Licensee, Inc., a
Delaware corporation; KJQY-FM Licensee, Inc., a Delaware corporation; SFX
Broadcasting of Texas (KTCK), Inc., a Delaware corporation; SFX Broadcasting
of Texas (KTCK), Licensee, Inc., a Delaware corporation; SFX Broadcasting of
the Southeast, Inc., a Delaware corporation; SFX Broadcasting of South
Carolina (WMYI), Inc., a Delaware corporation; SFX Broadcasting of South
Carolina (WMYI) Licensee, Inc., a Delaware corporation; SFX Broadcasting of
Mississippi, Inc., a Delaware corporation; SFX Broadcasting of Mississippi
Licensee, Inc., a Delaware corporation; SFX Broadcasting of South Carolina
(WSSL), Inc., a Delaware corporation; SFX Broadcasting of South Carolina
(WSSL) Licensee, Inc., a Delaware corporation; SFX Broadcasting of Tennessee,
Inc., a Delaware corporation; SFX Broadcasting of Tennessee Licensee, Inc., a
Delaware corporation; SFX Broadcasting of Jackson, Inc., a Delaware
corporation; SFX Broadcasting of Jackson Licensee, Inc., a Delaware
corporation; SFX Broadcasting of North Carolina, Inc., a Delaware corporation;
SFX Broadcasting of North Carolina Licensee, Inc., a Delaware corporation; SFX
Broadcasting of San Diego, Inc., a Delaware corporation; Parker Broadcasting
Company, a California corporation; SFX Broadcasting of San Diego Licensee,
Inc., a Delaware corporation; SFX Acquisition Corporation, a Delaware
corporation; and SFX Merger Company, a Delaware corporation; and Chemical
Bank, a New York corporation, as trustee (the "Trustee").
The Company, the Guarantors (as defined in Section 1.01 hereof) and
the Trustee agree as follows for the benefit of each other and for the equal
and ratable benefit of the Holders of the 10 3/4% Senior Subordinated Notes
due 2006 of the Company:
ARTICLE 1
DEFINITIONS AND INCORPORATION
BY REFERENCE
SECTION 1.01. DEFINITIONS.
"Acquired Debt" means, with respect to any specified Person, (i)
Indebtedness of any other Person existing at the time such other Person is
merged with or into or became a Subsidiary of such specified Person,
including, without limitation, Indebtedness incurred in connection with, or in
contemplation of, such other Person merging with or into or becoming a
Subsidiary of such specified Person, and (ii) Indebtedness secured by a Lien
encumbering any asset acquired by such specified Person.
"Advertising Business" means any business deriving substantially all
of its revenues from the (i) sale of advertisements and (ii) sale of products
or provision of services to any business described in clause (i) above.
"Affiliate" of any specified Person means any other Person directly
or indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For purposes of this definition, "control"
(including, with correlative meanings, the terms "controlling," "controlled
by" and "under common control with"), as used with respect to any Person,
shall mean the possession, directly or indirectly, of the power to direct or
cause the direction of the management or policies of such
<PAGE>
Person, whether through the ownership of voting securities, by agreement or
otherwise; provided that beneficial ownership of 10% or more of the voting
securities of a Person shall be deemed to be control.
"Agent" means any Registrar, Paying Agent or co-registrar.
"Asset Sale" means (i) the sale, lease, conveyance or other
disposition of any assets (including, without limitation, by way of a sale and
leaseback or pursuant to an LMA or similar arrangement); provided that the
sale, lease, conveyance or other disposition of all or substantially all of
the assets of the Company and its Subsidiaries taken as a whole will be
governed by the provisions of Section 4.15 and/or Article 5 hereof and not by
the provisions of Section 4.10 hereof, and (ii) the issue or sale by the
Company or any of its Subsidiaries of Equity Interests of any of the Company's
Subsidiaries, in the case of either clause (i) or (ii), whether in a single
transaction or a series of related transactions (a) that have a Fair Market
Value in excess of $5.0 million or (b) for aggregate net proceeds in excess of
$5.0 million. Notwithstanding the foregoing: (i) to the extent that no
Disposition Debt is outstanding, the Washington Disposition, the Louisville
Disposition and the Dallas Disposition, (ii) the Houston Exchange, (iii) a
transfer of assets by the Company to a Wholly Owned Subsidiary or by a Wholly
Owned Subsidiary to the Company or to another Wholly Owned Subsidiary, (iv) an
issuance of Equity Interests by a Wholly Owned Subsidiary to the Company or to
another Wholly Owned Subsidiary, (v) a Restricted Payment that is permitted by
Section 4.07 hereof and (vi) sales of obsolete equipment in the ordinary
course of business, will not be deemed to be Asset Sales.
"Attributable Debt" in respect of a sale and leaseback transaction
means, at the time of determination, the present value (discounted at the rate
of interest implicit in such transaction, determined in accordance with GAAP)
of the obligation of the lessee for net rental payments during the remaining
term of the lease included in such sale and leaseback transaction (including
any period for which such lease has been extended or may, at the option of the
lessor, be extended).
"Bank Facilities" means, with respect to the Company, one or more
debt facilities (including, without limitation, the New Credit Agreement) or
commercial paper facilities with banks or other institutional lenders
providing for revolving credit loans, term loans, receivables financing
(including through the sale of receivables to such lenders or to special
purpose entities formed to borrow from such lenders against such receivables)
or letters of credit, in each case, as amended, restated, modified, renewed,
refunded, replaced or refinanced in whole or in part from time to time.
Indebtedness under Bank Facilities outstanding on the date hereof shall be
deemed to have been incurred on the date hereof in reliance on the exception
provided by clause (i) of the second paragraph of Section 4.09 hereof.
"Bankruptcy Law" means Title 11, U.S. Code or any similar federal or
state law for the relief of debtors.
"Board" or "Board of Directors" means the Board of Directors of the
Company, the members of which are elected by the equity holders of the
Company.
"Broadcast Business" means any business, the majority of whose
revenues are derived from the broadcast of radio programming.
"Business Day" means each Monday, Tuesday, Wednesday, Thursday and
Friday which is not a Legal Holiday.
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"Capital Lease Obligation" means, at the time any determination
thereof is to be made, the amount of the liability in respect of a capital
lease that would at such time be required to be capitalized on a balance sheet
in accordance with GAAP.
"Capital Stock" means (i) in the case of a corporation, corporate
stock, (ii) in the case of an association or business entity, any and all
shares, interests, participations, rights or other equivalents (however
designated) of corporate stock, (iii) in the case of a partnership,
partnership interests (whether general or limited) and (iv) any other interest
or participation that confers on a Person the right to receive a share of the
profits and losses of, or distributions of assets of, the issuing Person.
"Cash Equivalents" means (i) United States dollars, (ii) securities
issued or directly and fully guaranteed or insured by the United States
government or any agency or instrumentality thereof having maturities of not
more than six months from the date of acquisition, (iii) certificates of
deposit and eurodollar and time deposits with maturities of six months or less
from the date of acquisition, bankers' acceptances with maturities not
exceeding six months and overnight bank deposits, in each case with any lender
party to the New Credit Agreement or with any domestic commercial bank having
capital and surplus in excess of $500.0 million and a Thomson Bank Watch
Rating of "B" or better, (iv) repurchase obligations with a term of not more
than seven days for underlying securities of the types described in clauses
(ii) and (iii) above entered into with any financial institution meeting the
qualifications specified in clause (iii) above and (v) commercial paper having
the highest rating obtainable from Moody's Investors Service, Inc. or Standard
& Poor's Corporation and in each case maturing within six months after the
date of acquisition.
"Certificated Notes" means Notes that are in the form of the Notes
attached hereto as Exhibit A, that do not include the information called for
by footnotes 1 and 2 thereof.
"Change of Control" means the occurrence of any of the following: (i)
the sale, lease, transfer, conveyance or other disposition (other than by way
of merger or consolidation), in one or a series of related transactions, of
all or substantially all of the assets of the Company and its Subsidiaries
taken as a whole to any "person" (as such term is used in Section 13(d)(3) of
the Exchange Act) other than the Principal or his Related Parties, (ii) the
adoption of a plan relating to the liquidation or dissolution of the Company,
(iii) the consummation of any transaction (including, without limitation, any
merger or consolidation) the result of which is that any "person" (as defined
above), other than the Principal and his Related Parties, becomes the
"beneficial owner" (as such term is defined in Rule 13d-3 and Rule 13d-5 under
the Exchange Act, except that a person shall be deemed to have "beneficial
ownership" of all securities that such person has the right to acquire,
whether such right is exercisable immediately or only after the passage of
time, upon the happening of an event or otherwise), directly or indirectly, of
Voting Stock of the Company having more than 35% of the combined voting power
of all classes of Voting Stock of the Company then outstanding, or (iv) the
first day on which a majority of the members of the Board of Directors of the
Company are not Continuing Directors.
"Commitment Letter" means the Commitment Letter between the Company
and The Bank of New York relating to the New Credit Agreement.
"Company" means SFX Broadcasting, Inc., a Delaware Corporation.
"Consolidated Cash Flow" means, with respect to any Person for any
period, the Consolidated Net Income of such Person for such period plus (i) an
amount equal to any extraordinary loss plus any net loss realized in
connection with an Asset Sale by such Person or any of its Subsidiaries during
such period (to the extent such losses were deducted in computing such
Consolidated Net Income), plus (ii)
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provision for taxes based on income or profits of such Person and its
Subsidiaries for such period, to the extent that such provision for taxes was
included in computing such Consolidated Net Income, plus (iii) Consolidated
Interest Expense of such Person for such period, to the extent any such
Consolidated Interest Expense was deducted in computing such Consolidated Net
Income, plus (iv) depreciation, amortization (including amortization of
goodwill and other intangibles but excluding amortization of prepaid cash
expenses that were paid in a prior period) and other non-cash charges
(excluding any such non-cash charge to the extent that it represents an
accrual of or reserve for cash charges in any future period) of such Person
and its Subsidiaries for such period to the extent that such depreciation,
amortization and other non-cash charges were deducted in computing such
Consolidated Net Income, less (v) all non-cash items increasing Consolidated
Net Income for such period (excluding any such non-cash income to the extent
it represents an accrual of cash income in any future period), in each case,
on a consolidated basis and determined in accordance with GAAP.
"Consolidated Indebtedness" of any Person as of any date of
determination means the sum (without duplication) of (i) the total amount of
Indebtedness and Attributable Debt of such Person and its Subsidiaries, plus
(ii) the total amount of other Indebtedness shown on the balance sheet of the
primary obligor on such Indebtedness, to the extent that such Indebtedness has
been Guaranteed by such Person or one of its Subsidiaries, plus (iii) the
aggregate liquidation value or redemption amount (if larger) of all
Disqualified Stock of such Person and all Preferred Stock of Subsidiaries of
such Person, in each case, determined on a consolidated basis in accordance
with GAAP.
"Consolidated Interest Expense" means, with respect to any Person for
any period, the sum of (i) the consolidated interest expense of such Person
and its Subsidiaries for such period, whether paid or accrued (including,
without limitation, amortization of original issue discount, non-cash interest
payments, the interest component of any deferred payment obligations, the
interest component of all payments associated with Capital Lease Obligations,
imputed interest with respect to Attributable Debt, commissions, discounts and
other fees and charges incurred in respect of letter of credit or bankers'
acceptance financings, and net payments (if any) pursuant to Hedging
Obligations) and (ii) the consolidated interest expense of such Person and its
Subsidiaries that was capitalized during such period, and (iii) any interest
expense on Indebtedness of another Person that is guaranteed by such Person or
one of its Subsidiaries or secured by a Lien on assets of such Person or one
of its Subsidiaries (whether or not such Guarantee or Lien is called upon) and
(iv) the product of (a) all cash dividend payments (and non-cash dividend
payments in the case of a Person that is a Subsidiary) on any series of
Preferred Stock of such Person, times (b) a fraction, the numerator of which
is one and the denominator of which is one minus the then current combined
federal, state and local statutory tax rate of such Person, expressed as a
decimal, in each case, on a consolidated basis and in accordance with GAAP.
"Consolidated Net Income" means, with respect to any Person for any
period, the aggregate of the Net Income of such Person and its Subsidiaries
for such period, determined on a consolidated basis in accordance with GAAP;
provided that (i) the Net Income (but not loss) of any Person that is not a
Subsidiary or that is accounted for by the equity method of accounting shall
be included only to the extent of the amount of dividends or distributions
paid in cash to the referent Person or to a Wholly Owned Subsidiary thereof
that is a Subsidiary Guarantor, (ii) the Net Income of any Subsidiary shall be
excluded to the extent that the declaration or payment of dividends or similar
distributions by that Subsidiary of that Net Income is not at the date of
determination permitted without any prior governmental approval (that has not
been obtained) or, directly or indirectly, by operation of the terms of its
charter or any agreement, instrument, judgment, decree, order, statute, rule
or governmental regulation applicable to that Subsidiary or its stockholders,
(iii) the Net Income of any Person acquired
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in a pooling of interests transaction for any period prior to the date of such
acquisition shall be excluded and (iv) the cumulative effect of a change in
accounting principles shall be excluded.
"Consolidated Net Worth" means, with respect to any Person as of any
date, the sum of (i) the consolidated equity of the common stockholders of
such Person and its consolidated Subsidiaries as of such date plus (ii) the
respective amounts reported on such Person's balance sheet as of such date
with respect to any series of Preferred Stock (other than Disqualified Stock)
that by its terms is not entitled to the payment of dividends unless such
dividends may be declared and paid only out of net earnings in respect of the
year of such declaration and payment, but only to the extent of any cash
received by such Person upon issuance of such Preferred Stock, less (x) all
write-ups (other than write-ups resulting from foreign currency translations
and write-ups of tangible assets of a going concern business made within 12
months after the acquisition of such business) subsequent to the date hereof
in the book value of any asset owned by such Person or a consolidated
Subsidiary of such Person, (y) all investments as of such date in
unconsolidated Subsidiaries and in Persons that are not Subsidiaries (except,
in each case, Permitted Investments) and (z) all unamortized debt discount and
expense and unamortized deferred charges as of such date, all of the foregoing
determined in accordance with GAAP.
"Continuing Directors" means, as of any date of determination, any
member of the Board of Directors of the Company who (i) was a member of such
Board of Directors on the date hereof or (ii) was nominated for election or
elected to such Board of Directors with the approval of a majority of the
Continuing Directors who were members of such Board at the time of such
nomination or election.
"Corporate Trust Office of the Trustee" shall be at the address of
the Trustee specified in Section 12.02 hereof or such other address as to
which the Trustee may give notice to the Company.
"Dallas Disposition" means the sale by the Company of KTCK-FM
(Dallas, TX) on substantially the terms set forth in the sale agreement as the
same is in effect on the date hereof.
"Debt to Cash Flow Ratio" means, as of any date of determination, the
ratio of (a) the Consolidated Indebtedness as of such date to (b) the
Consolidated Cash Flow of the Company and its Subsidiaries on a consolidated
basis for the four most recent full fiscal quarters ending immediately prior
to such date for which internal financial statements are available. For
purposes of calculating Consolidated Cash Flow for the computation referred to
above, (i) acquisitions that have been made by the Company or any of its
Subsidiaries, including through mergers or consolidations and including any
related financing transactions, during the four-quarter reference period or
subsequent to such reference period and on or prior to the date on which such
Ratio is being calculated (the "Calculation Date") shall be deemed to have
occurred on the first day of the four-quarter reference period and
Consolidated Cash Flow for such reference period shall be calculated without
giving effect to clause (iii) of the proviso set forth in the definition of
Consolidated Net Income, and (ii) the Consolidated Cash Flow attributable to
discontinued operations, as determined in accordance with GAAP, and operations
or businesses disposed of prior to the Calculation Date, shall be excluded.
"Default" means any event that is or with the passage of time or the
giving of notice or both would be an Event of Default.
"Depositary" means, with respect to the Notes issuable or issued in
whole or in part in global form, the Person specified in Section 2.03 hereof
as the Depositary with respect to the Notes, until a
5
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successor shall have been appointed and become such pursuant to the applicable
provision of this Indenture, and, thereafter, "Depositary" shall mean or
include such successor.
"Disposition" means the sale of any of (i) WVEZ-FM, WTFX-FM and
WWKY-AM operating in Louisville, Kentucky, (ii) KTCK-FM operating in Dallas,
Texas or (iii) WXVR-FM, WXTR-FM and WQSI-AM operating in Washington, D.C. and,
in each case, all assets related thereto.
"Disposition Debt" means Indebtedness incurred pursuant to clause
(i)(B) of the second paragraph of Section 4.09 hereof.
"Disqualified Stock" means any Capital Stock that, by its terms (or
by the terms of any security into which it is convertible or for which it is
exchangeable at the option of the holder thereof), or upon the happening of
any event, matures or is mandatorily redeemable, pursuant to a sinking fund
obligation or otherwise, or redeemable at the option of the holder thereof, in
whole or in part, on or prior to the date that is 91 days after the date on
which the Notes mature.
"Equity Interests" means Capital Stock and all warrants, options or
other rights to acquire Capital Stock (but excluding any debt security that is
convertible into, or exchangeable for, Capital Stock).
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exchange Notes" means the Company's 6 1/2% Convertible Subordinated
Exchange Notes due 2007 issuable in exchange for the Company's Series D
Preferred Stock.
"Exchange Offer" means the offer that shall be made by the Company
pursuant to the Registration Rights Agreement to exchange Senior Notes for New
Notes.
"Existing Indebtedness" means all Indebtedness of the Company and its
Subsidiaries (other than Indebtedness under the New Credit Agreement) in
existence on the date hereof, until such amounts are repaid.
"Existing MMR Indebtedness" means all Indebtedness of MMR and its
Subsidiaries in existence at the closing of the MMR Merger, until such amounts
are repaid.
"Fair Market Value" means, with respect to any asset or property, the
sale value that would be obtained in an arm's length transaction between an
informed and willing seller under no compulsion to sell and an informed and
willing buyer under no compulsion to buy.
"GAAP" means generally accepted accounting principles set forth in
the opinions and pronouncements of the Accounting Principles Board of the
American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as have been approved by a significant segment
of the accounting profession, which are in effect on the date hereof.
"Global Note" means a Note that contains the paragraph referred to in
footnote 1 and the additional schedule referred to in footnote 2 to the form
of the Note attached hereto as Exhibit A.
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"Government Securities" means direct obligations of, or obligations
guaranteed by, the United States of America for the payment of which obligations
or guarantee the full faith and credit of the United States of America is
pledged.
"Guarantee" means a guarantee (other than by endorsement of
negotiable instruments for collection in the ordinary course of business),
direct or indirect, in any manner (including, without limitation, letters of
credit and reimbursement agreements in respect thereof), of all or any part of
any Indebtedness.
"Guarantors" means (i) each of SFX Broadcasting of the Southwest,
Inc., a Delaware corporation; SFX Broadcasting of Texas, Inc., a Delaware
corporation; SFX Broadcasting of Texas (KRLD), Inc., a Delaware corporation;
SFX Broadcasting of Texas (KRLD) Licensee, Inc., a Delaware corporation; SFX
Broadcasting of Texas (TSN), Inc., a Delaware corporation; SFX Broadcasting of
Texas (TSN), Licensee, Inc., a Delaware corporation; KODA-FM Licensee, Inc., a
Delaware corporation; KJQY-FM Licensee, Inc., a Delaware corporation; SFX
Broadcasting of Texas (KTCK), Inc., a Delaware corporation; SFX Broadcasting
of Texas (KTCK), Licensee, Inc., a Delaware corporation; SFX Broadcasting of
the Southeast, Inc., a Delaware corporation; SFX Broadcasting of South
Carolina (WMYI), Inc., a Delaware corporation; SFX Broadcasting of South
Carolina (WMYI) Licensee, Inc., a Delaware corporation; SFX Broadcasting of
Mississippi, Inc., a Delaware corporation; SFX Broadcasting of Mississippi
Licensee, Inc., a Delaware corporation; SFX Broadcasting of South Carolina
(WSSL), Inc., a Delaware corporation; SFX Broadcasting of South Carolina
(WSSL) Licensee, Inc., a Delaware corporation; SFX Broadcasting of Tennessee,
Inc., a Delaware corporation; SFX Broadcasting of Tennessee Licensee, Inc., a
Delaware corporation; SFX Broadcasting of Jackson, Inc., a Delaware
corporation; SFX Broadcasting of Jackson Licensee, Inc., a Delaware
corporation; SFX Broadcasting of North Carolina, Inc., a Delaware corporation;
SFX Broadcasting of North Carolina Licensee, Inc., a Delaware corporation; SFX
Broadcasting of San Diego, Inc., a Delaware corporation; Parker Broadcasting
Company, a California corporation; SFX Broadcasting of San Diego Licensee,
Inc., a Delaware corporation; SFX Acquisition Corporation, a Delaware
corporation; and SFX Merger Company, a Delaware corporation; and (ii) each
other Subsidiary formed or acquired after the date hereof, and their
respective successors and assigns.
"Hedging Obligations" means, with respect to any Person, the
obligations of such Person under (i) interest rate swap agreements, interest
rate cap agreements and interest rate collar agreements and (ii) other
agreements or arrangements designed to protect such Person against
fluctuations in interest rates.
"Holder" means a Person in whose name a Note is registered.
"Houston Exchange" means the exchange by the Company of KRLD-AM
(Dallas, Texas) and the Texas State Networks for KKRW-FM (Houston, Texas) on
substantially the terms set forth in the exchange agreement as the same is in
effect on the date hereof.
"Indebtedness" means, with respect to any Person, without duplication,
any indebtedness of such Person, whether or not contingent, in respect of
borrowed money or evidenced by bonds, notes, debentures or similar instruments
or letters of credit (or reimbursement agreements in respect thereof) or
banker's acceptances or representing Capital Lease Obligations or the balance
deferred and unpaid of the purchase price of any property or payment
obligations under an LMA or representing any Hedging Obligations, except
any such balance that constitutes an accrued expense or trade payable, if and
to the extent any of the foregoing (other than letters of credit and Hedging
Obligations) would appear as a liability upon a balance sheet of such
Person prepared in accordance with GAAP, as well
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as all indebtedness of others secured by a Lien on any asset of such Person
(whether or not such indebtedness is assumed by such Person) and, to the
extent not otherwise included, the Guarantee by such Person of any
indebtedness of any other Person.
"Indenture" means this Indenture, as amended or supplemented from
time to time.
"Investments" means, with respect to any Person, all investments by
such Person in other Persons (including Affiliates) in the form of direct or
indirect loans (including guarantees of Indebtedness or other obligations),
advances or capital contributions (excluding commission, travel and similar
advances to officers and employees made in the ordinary course of business),
purchases or other acquisitions for consideration of Indebtedness, Equity
Interests or other securities, together with all items that are or would be
classified as investments on a balance sheet prepared in accordance with GAAP;
provided that an acquisition of assets, Equity Interests or other securities
by the Company for consideration consisting of common equity securities of the
Company shall not be deemed to be an Investment. If the Company or any
Subsidiary of the Company sells or otherwise disposes of any Equity Interests
of any direct or indirect Subsidiary of the Company such that, after giving
effect to any such sale or disposition, such Person is no longer a Subsidiary
of the Company, the Company shall be deemed to have made an Investment on the
date of any such sale or disposition equal to the Fair Market Value of the
Equity Interests of such Subsidiary not sold or disposed of.
"Legal Holiday" means a Saturday, a Sunday or a day on which banking
institutions in the City of New York or at a place of payment are authorized
by law, regulation or executive order to remain closed. If a payment date is a
Legal Holiday at a place of payment, payment may be made at that place on the
next succeeding day that is not a Legal Holiday, and no interest shall accrue
for the intervening period.
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset,
whether or not filed, recorded or otherwise perfected under applicable law
(including any conditional sale or other title retention agreement, any lease
in the nature thereof, any option or other agreement to sell or give a
security interest in and any filing of or agreement to give any financing
statement under the Uniform Commercial Code (or equivalent statutes) of any
jurisdiction).
"Liquidated Damages" means all liquidated damages then owing pursuant
to Section 5 of the Registration Rights Agreement.
"Local Marketing Agreement" or "LMA" means a local marketing
arrangement, sale agreement, time brokerage agreement, management agreement or
similar arrangement pursuant to which a Person, subject to customary
preemption rights and other limitations (i) obtains the right to sell at least
a majority of the advertising inventory of a radio station of which a third
party is the licensee, (ii) obtains the right to broadcast programming and
sell advertising time during a majority of the air time of a radio station or
(iii) manages the selling operations of a radio station with respect to at
least a majority of the advertising inventory of such station.
"Louisville Disposition" means the sale by the Company of each of
WVEZ-FM, WTFX-FM and WWXY-AM (Louisville, Kentucky) on substantially the terms
set forth in the sale agreement as the same is in effect on the date hereof.
"Management Termination Agreements" means each of (i) the termination
agreement between the Company and R. Steven Hicks, dated April 16, 1996, and
(ii) the amendment to the employment
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agreement between the Company and D. Geoffrey Armstrong, effective as of April
15,1996, in each case, as in effect on the date hereof.
"Material Broadcast License" means one or more authorizations
issued by the Federal Communications Commission for the operation of AM or FM
radio stations that individually or collectively are material to the financial
condition, results of operations or prospects of the Company and its
Subsidiaries taken as a whole.
"MMR" means Multi-Market Radio, Inc., a Delaware corporation.
"MMR Merger" means the merger of SFX Merger Company, a Wholly Owned
Subsidiary of the Company, with and into MMR, pursuant to which MMR will
become a Wholly Owned Subsidiary of the Company.
"MMR Stations" means the following radio stations: WPLR-FM and
WYBC-FM (New Haven, Connecticut); WHMP-FM, WPKX-FM and WHMP-AM
(Springfield/Northampton, Massachusetts); WGNE-FM (Daytona Beach, Florida);
WRXR-FM, WKBG-FM and WCHZ-FM (Augusta, Georgia); WKNN-FM and WMJY-FM (Biloxi,
Mississippi); and WYAK-FM and WVCO-FM (Myrtle Beach, South Carolina).
"MMR Warrants" means MMR's outstanding Class A Warrants to purchase
1,840,000 shares of MMR's Class A Common Stock.
"Net Income" means, with respect to any Person, the net income (loss)
of such Person, determined in accordance with GAAP and before any reduction in
respect of preferred stock dividends, excluding, however, (i) any gain (but
not loss), together with any related provision for taxes on such gain (but not
loss), realized in connection with (a) any Asset Sale (including, without
limitation, dispositions pursuant to sale and leaseback transactions) or (b)
the disposition of any securities by such Person or any of its Subsidiaries or
the extinguishment of any Indebtedness of such Person or any of its
Subsidiaries and (ii) any extraordinary or nonrecurring gain (but not loss),
together with any related provision for taxes on such extraordinary or
nonrecurring gain (but not loss).
"Net Proceeds" means the aggregate cash proceeds received by the
Company or any of its Subsidiaries in respect of any Asset Sale (including,
without limitation, any cash received upon the sale or other disposition of
any non-cash consideration received in any Asset Sale), net of the direct
costs relating to such Asset Sale (including, without limitation, legal,
accounting and investment banking fees, and sales commissions) and any
relocation expenses incurred as a result thereof, taxes paid or payable as a
result thereof (after taking into account any available tax credits or
deductions and any tax sharing arrangements), amounts required to be applied
to the repayment of Indebtedness (other than Senior Debt) secured by a Lien on
the asset or assets that were the subject of such Asset Sale and any reserve
for adjustment in respect of the sale price of such asset or assets
established in accordance with GAAP.
"New Credit Agreement" means the Credit Agreement to be entered into
by and among the Company, as borrower, the Company's Subsidiaries, as
guarantors, and the lenders party thereto, providing for up to $150.0 million
of borrowings, including any related notes, guarantees, collateral documents,
and other agreements executed in connection therewith, and in each case as
amended, modified, renewed, refunded, replaced or refinanced from time to time.
"New Notes" means the 10 3/4% Senior Subordinated Notes due 2006 of the
Company issued in exchange for the Senior Notes pursuant to the Exchange
Offer.
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"Note Custodian" means the Trustee, as custodian with respect to the
Notes in global form, or any successor entity thereto.
"Notes" means the Senior Notes and the New Notes.
"Obligations" means any principal, interest, penalties, fees
(including, but not limited to, reasonable fees and expenses of counsel),
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any Indebtedness.
"Offering" means the Offering of the Notes by the Company.
"Offering Memorandum" means the Offering Memorandum, dated May 22,
1996, relating to the Notes.
"Officer" means, (a) with respect to any Person that is a
corporation, the Chairman of the Board, the Chief Executive Officer, the
President, the Chief Operating Officer, the Chief Financial Officer, the
Treasurer, any Assistant Treasurer, the Controller, the Secretary or any
Vice-President of such Person and (b) with respect to any other Person, the
individuals selected by the Board of such Person to perform functions similar
to those of the officers listed in clause (a).
"Officers' Certificate" means a certificate signed on behalf of the
Company by two Officers of the Company, one of whom must be the Chief
Executive Officer, President or any Vice President and one of whom must be
the Chief Financial Officer, the Treasurer or the Controller of the Company
that meets the requirements of Section 12.05 hereof.
"Opinion of Counsel" means an opinion from legal counsel who is
acceptable to the Trustee, that meets the requirements of Section 12.05 hereof.
The counsel may be an employee of or counsel to the Company, any Subsidiary of
the Company or the Trustee.
"Pari Passu Debt" means Indebtedness that ranks pari passu in right
of payment with the Notes.
"Permitted Disposition Amount" means the sum of (i) until the
consummation of the sale by the Company of WVEZ-FM, WTFX-FM and WWKY-AM
operating in Louisville, Kentucky, $19.5 million, plus (ii) until the
consummation of the sale by the Company of WXVR-FM, WXTR-FM and WQSI-AM
operating in Washington, D.C., $25.0 million, plus (iii) until the
consummation of the sale by the Company of KTCK-FM operating in Dallas, Texas,
$9.5 million, plus (iv) prior to the exercise of the MMR Warrants, $13.6
million.
"Permitted Investments" means (a) any Investment in the Company or in
a Subsidiary of the Company that is a Guarantor; (b) any Investment in Cash
Equivalents; (c) any Investment by the Company or any Subsidiary of the
Company in a Person, if after such Investment (i) such Person becomes a
Subsidiary of the Company and a Guarantor or (ii) such Person is merged,
consolidated or amalgamated with or into, or transfers or conveys
substantially all of its assets to, or is liquidated into, the Company or a
Subsidiary of the Company that is a Guarantor; (d) any Restricted Investment
made as a result of the receipt of non-cash consideration from an Asset Sale
that was made pursuant to and in compliance with Section 4.10 hereof; (e) any
obligations or shares of Capital Stock received in connection with or as a
result of a bankruptcy, workout or reorganization of the issuer of such
obligations or shares of Capital Stock; (f) any Investment received
involuntarily; (g) Investments in any Person (other than an Affiliate of the
Company that is not also a Subsidiary of the Company) engaged
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in a Broadcast Business or an Advertising Business which Investments have an
aggregate Fair Market Value (measured on the date each such Investment was made
and without giving effect to subsequent changes in value), when taken together
with all other Investments made pursuant to this clause (g) that are at the time
outstanding, not to exceed $20.0 million and (h) other Investments in any
Person (other than an Affiliate of the Company that is not also a Subsidiary of
the Company) having an aggregate Fair Market Value (measured on the date each
such Investment was made and without giving effect to subsequent changes in
value), when taken together with all other Investments made pursuant to this
clause (h) that are at the time outstanding, not to exceed $15.0 million.
"Permitted Liens" means (i) Liens securing Senior Debt of the Company
or Senior Debt of any Guarantor that was permitted by the terms hereof to be
incurred; (ii) Liens in favor of the Company; (iii) Liens on property of a
Person existing at the time such Person is merged into or consolidated with
the Company or any Subsidiary of the Company; provided that such Liens were in
existence prior to the contemplation of such merger or consolidation and do
not extend to any assets other than those of the Person merged into or
consolidated with the Company; (iv) Liens on property existing at the time of
acquisition thereof by the Company or any Subsidiary of the Company, provided
that such Liens were in existence prior to the contemplation of such
acquisition and do not extend to any assets other than such assets so
acquired; (v) Liens existing on the date hereof; (vi) Liens for taxes,
assessments or governmental charges or claims that are not yet delinquent or
that are being contested in good faith by appropriate proceedings promptly
instituted and diligently concluded, provided that any reserve or other
appropriate provision as shall be required in conformity with GAAP shall have
been made therefor; and (vii) Liens incurred in the ordinary course of
business of the Company or any Subsidiary of the Company with respect to
obligations that do not exceed $10.0 million at any one time outstanding and
that (a) are not incurred in connection with the borrowing of money or the
obtaining of advances or credit (other than trade credit in the ordinary
course of business) and (b) do not in the aggregate materially detract from
the value of the property or materially impair the use thereof in the
operation of business by the Company or such Subsidiary.
"Permitted Refinancing Debt" means any Indebtedness of the Company or
any of its Subsidiaries issued in exchange for, or the net proceeds of which
are used to extend, refinance, renew, replace, defease or refund other
Indebtedness of the Company or any of its Subsidiaries; provided that: (i) the
principal amount (or accreted value, if applicable) of such Permitted
Refinancing Debt does not exceed the principal amount (or accreted value, if
applicable) of the Indebtedness so extended, refinanced, renewed, replaced,
defeased or refunded (plus the amount of reasonable expenses incurred in
connection therewith); (ii) such Permitted Refinancing Debt has a final
maturity date later than the final maturity date of, and has a Weighted
Average Life to Maturity equal to or greater than the Weighted Average Life to
Maturity of, the Indebtedness being extended, refinanced, renewed, replaced,
defeased or refunded; (iii) if the Indebtedness being extended, refinanced,
renewed, replaced, defeased or refunded is subordinated in right of payment to
the Notes, such Permitted Refinancing Debt has a final maturity date later
than the final maturity date of, and is subordinated in right of payment to,
the Notes on terms at least as favorable to the Holders of Notes as those
contained in the documentation governing the Indebtedness being extended,
refinanced, renewed, replaced, defeased or refunded; and (iv) such Permitted
Refinancing Debt is incurred either by the Company or by the Subsidiary who
was the obligor on the Indebtedness being extended, refinanced, renewed,
replaced, defeased or refunded.
"Person" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization
or government or agency or political subdivision thereof (including any
subdivision or ongoing business of any such entity or substantially all of the
assets of any such entity, subdivision or business).
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"Preferred Stock," of any Person, means Capital Stock of such Person
of any class or series (however designated) that ranks prior, as to payment of
dividends or as to the distribution of assets upon any voluntary or
involuntary liquidation, dissolution or winding up of such Person, to shares
of Capital Stock of any other class or series of such Person.
"Preferred Stock Offering" means the private placement $130,000,000
in aggregate liquidation preference of the Company's 6 1/2% Series D Cumulative
Convertible Exchangeable Preferred Stock due May 31, 2007.
"Principal" means Robert F.X. Sillerman.
"Registration Rights Agreement" means the Registration Rights
Agreement, dated as of the date hereof, by and among the Company, the
Guarantors and the other parties named on the signature pages thereof, as such
agreement may be amended, modified or supplemented from time to time.
"Related Party" with respect to the Principal means (A) any spouse or
immediate family member (in the case of an individual) of the Principal or (B)
or trust, corporation, partnership or other entity, the beneficiaries,
stockholders, partners, owners or Persons beneficially holding an 80% or more
controlling interest of which consist of the Principal and/or such other
Persons referred to in the immediately preceding clause (A).
"Responsible Officer," when used with respect to the Trustee, means
any officer within the Corporate Trust Administration department of the
Trustee (or any successor group of the Trustee) or any other officer of the
Trustee customarily performing functions similar to those performed by any of
the above designated officers and also means, with respect to a particular
corporate trust matter, any other officer to whom such matter is referred
because of his knowledge of and familiarity with the particular subject.
"Restricted Investment" means an Investment other than a Permitted
Investment.
"SCMC" means Sillerman Communications Management Company, a Delaware
corporation.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Senior Notes" means the Company's 10 3/4% Senior Subordinated Notes
due 2006 issued pursuant to this Indenture.
"Series B Preferred Stock" means the Company's Series B Redeemable
Preferred Stock, par value $.01 per share.
"Series C Preferred Stock" means the Company's Series C Redeemable
Convertible Preferred Stock, par value $.01 per share.
"Series D Preferred Stock" means the Company's 6 1/2% Series D
Cumulative Convertible Exchangeable Preferred Stock due May 31, 2007.
"SFX Merger Company" means SFX Merger Company, a Delaware
corporation.
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"Shared Facilities Agreement" means the Shared Facilities Agreement
between the Company and SCMC, as in effect on the date hereof.
"Significant Subsidiary" means any Subsidiary that would be a
"significant subsidiary" as defined in Article 1, Rule 1-02 of Regulation S-X,
promulgated pursuant to the Securities Act, as such Regulation is in effect on
the date hereof.
"Subsidiary" means, with respect to any Person, (i) any
corporation, association or other business entity of which more than 50% of
the total voting power of shares of Voting Stock thereof is at the time owned
or controlled, directly or indirectly, by such Person or one or more of the
other Subsidiaries of that Person (or a combination thereof) and (ii) any
partnership (a) the sole general partner or the managing general partner of
which is such Person or a Subsidiary of such Person or (b) the only general
partners of which are such Person or of one or more Subsidiaries of such
Person (or any combination thereof).
"Subsidiary Guarantees" means the Guarantees of the Notes by each of
the Guarantors pursuant to this Indenture.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C.
[sections] 77aaa-77bbbb) as amended and as in effect on the date of this
Indenture.
"Transfer Restricted Securities" means Notes that bear or are
required to bear the legend set forth in Section 2.06 hereof.
"Trustee" means the party named as such above until a successor
replaces it in accordance with the applicable provisions of this Indenture and
thereafter means the successor serving hereunder.
"Voting Stock" means with respect to any specified Person, Capital
Stock with voting power, under ordinary circumstances and without regard to
the occurrence of any contingency, to elect the directors or other managers or
trustees of such Person.
"Washington Disposition" means the sale by the Company of each of
WXVR-FM, WXTR-FM and WQSI-AM (Washington, DC) on substantially the terms set
forth in the sale agreement as the same is in effect on the date hereof.
"Weighted Average Life to Maturity" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing (i) the sum
of the products obtained by multiplying (a) the amount of each then remaining
installment, sinking fund, serial maturity or other required payments of
principal, including payment at final maturity, in respect thereof, by (b) the
number of years (calculated to the nearest one-twelfth) that will elapse
between such date and the making of such payment, by (ii) the then outstanding
principal amount of such Indebtedness.
"Wholly Owned Subsidiary" of any Person means a Subsidiary of such
Person all of the outstanding Capital Stock or other ownership interests of
which (other than directors' qualifying shares) shall at the time be owned by
such Person or by one or more Wholly Owned Subsidiaries of such Person and one
or more Wholly Owned Subsidiaries of such Person.
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SECTION 1.02. OTHER DEFINITIONS.
Defined in
Term Section
"Affiliate Transaction"............................. 4.11
"Asset Sale Offer".................................. 3.09
"Calculation Date".................................. 1.01
"Change of Control Offer"........................... 4.14
"Change of Control Payment"......................... 4.14
"Change of Control Payment Date".................... 4.14
"Covenant Defeasance"............................... 8.03
"Custodian"......................................... 6.01
"Designated Senior Debt"............................ 10.02
"distribution"...................................... 10.02
"DTC"............................................... 2.03
"Event of Default".................................. 6.01
"Excess Proceeds"................................... 4.10
"incur"............................................. 4.09
"insolvent"......................................... 11.05
"Legal Defeasance" ................................. 8.02
"Notice of Default"................................. 6.01
"Offer Amount"...................................... 3.09
"Offer Period"...................................... 3.09
"Outstanding"....................................... 8.02
"Paying Agent"...................................... 2.03
"Payment Default"................................... 6.01
"Payment Blockage Notice"........................... 10.04
"Permitted Debt".................................... 4.09
"Purchase Date"..................................... 3.09
"Registrar"......................................... 2.03
"Representative" ................................... 10.02
"Restricted Payments"............................... 4.07
"Senior Bank Debt".................................. 10.02
"Senior Debt"....................................... 10.02
SECTION 1.03. INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT.
Whenever this Indenture refers to a provision of the TIA, the
provision is incorporated by reference in and made a part of this Indenture.
The following TIA terms used in this Indenture have the following
meanings:
"indenture securities" means the Notes;
"indenture security Holder" means a Holder of a Note;
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means the Trustee;
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"obligor" on the Notes and the Subsidiary Guarantees means the
Company and the Guarantors, respectively, and any successor obligor upon the
Notes and the Subsidiary Guarantees, respectively.
All other terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by SEC rule under the
TIA have the meanings so assigned to them.
SECTION 1.04. RULES OF CONSTRUCTION.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning assigned
to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and in the plural
include the singular;
(5) provisions apply to successive events and transactions; and
(6) references to sections of or rules under the Securities Act shall
be deemed to include substitute, replacement of successor sections or
rules adopted by the SEC from time to time.
ARTICLE 2
THE NOTES
SECTION 2.01. FORM AND DATING.
The Notes and the Trustee's certificate of authentication shall be
substantially in the form of Exhibit A hereto. The Subsidiary Guarantees shall
be substantially in the form of Exhibit C hereto, the terms of which are
incorporated in and made part of this Indenture. The Notes may have notations,
legends or endorsements required by law, stock exchange rule or usage. Each
Note shall be dated the date of its authentication. The Notes shall be in
denominations of $1,000 and integral multiples thereof.
The terms and provisions contained in the Notes shall constitute, and
are hereby expressly made, a part of this Indenture and the Company, the
Guarantors and the Trustee, by their execution and delivery of this Indenture,
expressly agree to such terms and provisions and to be bound thereby.
Notes issued in global form shall be substantially in the form of
Exhibit A attached hereto (including the text referred to in footnotes 1 and 2
thereto). Notes issued in certificated form shall be substantially in the form
of Exhibit A attached hereto (but without including the text referred to in
footnotes 1 and 2 thereto). Each Global Note shall represent such of the
outstanding Notes as shall be specified therein and each shall provide that it
shall represent the aggregate amount of outstanding Notes from time to time
endorsed thereon and that the aggregate amount of outstanding Notes
represented thereby may from time to time be reduced or increased, as
appropriate, to reflect exchanges and redemptions. Any endorsement of a Global
Note to reflect the amount of any increase or decrease in the amount of
outstanding Notes represented thereby shall be made by the Trustee or the Note
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Custodian, at the direction of the Trustee, in accordance with instructions
given by the Holder thereof as required by Section 2.06 hereof.
SECTION 2.02. EXECUTION AND AUTHENTICATION.
An Officer of the Company shall sign the Notes for the Company by
manual or facsimile signature.
If an Officer whose signature is on a Note no longer holds that
office at the time a Note is authenticated, the Note shall nevertheless be
valid.
A Note shall not be valid until authenticated by the manual signature
of the Trustee. The signature shall be conclusive evidence that the Note has
been authenticated under this Indenture.
The Trustee shall, upon a written order of the Company signed by two
Officers of the Company, authenticate Notes for original issue up to the
aggregate principal amount stated in paragraph 4 of the Notes. The aggregate
principal amount of Notes outstanding at any time may not exceed such amount.
The Trustee may appoint an authenticating agent acceptable to the
Company to authenticate Notes. An authenticating agent may authenticate Notes
whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such agent. An
authenticating agent has the same rights as an Agent to deal with the Company
or an Affiliate of the Company.
SECTION 2.03. REGISTRAR AND PAYING AGENT.
The Company shall maintain an office or agency where Notes may be
presented for registration of transfer or for exchange ("Registrar") and an
office or agency where Notes may be presented for payment ("Paying Agent").
The Registrar shall keep a register of the Notes and of their transfer and
exchange. The Company may appoint one or more co-registrars and one or more
additional paying agents. The term "Registrar" includes any co-registrar and
the term "Paying Agent" includes any additional paying agent. The Company may
change any Paying Agent or Registrar without notice to any Holder. The Company
shall notify the Trustee in writing of the name and address of any Agent not a
party to this Indenture. If the Company fails to appoint or maintain another
entity as Registrar or Paying Agent, the Trustee shall act as such. The
Company or any of the Guarantors may act as Paying Agent or Registrar.
The Company initially appoints The Depository Trust Company ("DTC")
to act as Depositary with respect to the Global Notes.
The Company initially appoints the Trustee to act as the Registrar
and Paying Agent and to act as Note Custodian with respect to the Global
Notes.
SECTION 2.04. PAYING AGENT TO HOLD MONEY IN TRUST.
The Company shall require each Paying Agent other than the Trustee to
agree in writing that the Paying Agent will hold in trust for the benefit of
Holders or the Trustee all money held by the Paying Agent for the payment of
principal, premium or Liquidated Damages, if any, or interest on the Notes,
and will notify the Trustee of any Default by the Company or any Guarantor in
making any such
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payment. While any such default continues, the Trustee may require a Paying
Agent to pay all money held by it to the Trustee. The Company at any time may
require a Paying Agent to pay all money held by it to the Trustee. Upon
payment over to the Trustee, the Paying Agent (if other than the Company or a
Guarantor) shall have no further liability for the money. If the Company, or a
Guarantor acts as Paying Agent, it shall segregate and hold in a separate
trust fund for the benefit of the Holders all money held by it as Paying
Agent.
SECTION 2.05. HOLDER LISTS.
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
all Holders and shall otherwise comply with TIA [section] 312(a). If the
Trustee is not the Registrar, the Company and/or the Guarantors shall furnish
to the Trustee at least seven Business Days before each interest payment date
and at such other times as the Trustee may request in writing, a list in such
form and as of such date as the Trustee may reasonably require of the names
and addresses of the Holders of Notes and the Company and the Guarantors shall
otherwise comply with TIA [section] 312(a).
SECTION 2.06. TRANSFER AND EXCHANGE.
(a) Transfer and Exchange of Certificated Notes. When Certificated
Notes are presented by a Holder to the Registrar with a request:
(x) to register the transfer of the Certificated Notes; or
(y) to exchange such Certificated Notes for an equal principal
amount of Certificated Notes of other authorized
denominations,
the Registrar shall register the transfer or make the exchange as requested if
its requirements for such transactions are met; provided, however, that the
Certificated Notes presented or surrendered for register of transfer or
exchange:
(i) shall be duly endorsed or accompanied by a written
instruction of transfer in form satisfactory to the
Registrar duly executed by such Holder or by his
attorney, duly authorized in writing; and
(ii) in the case of a Certificated Note that is a Transfer
Restricted Security, such request shall be accompanied
by the following additional information and documents,
as applicable:
(A) if such Transfer Restricted Security is being
delivered to the Registrar by a Holder for
registration in the name of such Holder, without
transfer, a certification to that effect from such
Holder (in substantially the form of Exhibit B
hereto); or
(B) if such Transfer Restricted Security is being
transferred to a "qualified institutional buyer"
(as defined in Rule 144A under the Securities Act)
in accordance with Rule 144A under the Securities
Act or pursuant to an exemption from registration
in accordance with Rule 144 or Rule 904 under the
Securities Act or pursuant to an effective
registration statement under the Securities Act, a
certification to that effect from such Holder (in
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substantially the form of Exhibit B hereto) and, if
the Company so requests, an Opinion of Counsel from
such Holder or the transferee reasonably acceptable
to the Company and to the Registrar to the effect
that such transfer is in compliance with the
Securities Act; or
(C) if such Transfer Restricted Security is being
transferred in reliance on another exemption from
the registration requirements of the Securities
Act, a certification to that effect from such
Holder (in substantially the form of Exhibit B
hereto) and an Opinion of Counsel from such Holder
or the transferee reasonably acceptable to the
Company and to the Registrar to the effect that
such transfer is in compliance with the Securities
Act.
(b) Transfer of a Certificated Note for a Beneficial Interest in a
Global Note. A Certificated Note may not be exchanged for a beneficial
interest in a Global Note except upon satisfaction of the requirements set
forth below. Upon receipt by the Trustee of a Certificated Note, duly endorsed
or accompanied by appropriate instruments of transfer, in form satisfactory to
the Trustee, together with:
(i) if such Certificated Note is a Transfer Restricted Security, a
certification from the Holder thereof (in substantially the form
of Exhibit B hereto) to the effect that such Certificated Note
is being transferred by such Holder to a "qualified
institutional buyer" (as defined in Rule 144A under the
Securities Act) in accordance with Rule 144A under the
Securities Act or to an "Accredited Investor" (as defined in
Rule 501(a)(1), (2), (3) or (7) under the Securities Act) in
accordance with Regulation D under the Securities Act and, if
the Company so requests, an Opinion of Counsel from such Holder
or the transferee reasonably acceptable to the Company and to
the Registrar to the effect that such transfer is in compliance
with the Securities Act; and
(ii) whether or not such Certificated Note is a Transfer Restricted
Security, written instructions from the Holder thereof directing
the Trustee to make, or to direct the Note Custodian to make, an
endorsement on the Global Note to reflect an increase in the
aggregate principal amount of the Notes represented by the
Global Note,
in which case the Trustee shall cancel such Certificated Note in accordance
with Section 2.11 hereof and cause, or direct the Note Custodian to cause, in
accordance with the standing instructions and procedures existing between the
Depositary and the Note Custodian, the aggregate principal amount of Notes
represented by the Global Note to be increased accordingly. If no Global Notes
are then outstanding, the Company shall issue and, upon receipt of a written
order in accordance with Section 2.02 hereof, the Trustee shall authenticate a
new Global Note in the appropriate principal amount.
(c) Transfer and Exchange of Global Notes. The transfer and
exchange of Global Notes or beneficial interests therein shall be effected
through the Depositary, in accordance with this Indenture and the procedures
of the Depositary therefor, which shall include restrictions on transfer
comparable to those set forth herein to the extent required by the Securities
Act.
(d) Transfer of a Beneficial Interest in a Global Note for a
Certificated Note.
(i) Any Person having a beneficial interest in a Global Note may
upon request exchange such beneficial interest for a
Certificated Note. Upon receipt by the Trustee of written
instructions or such other form of instructions as is
customary for the Depositary, from the Depositary or its
nominee on behalf of any Person having a
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beneficial interest in a Global Note, and, in the case of a
Transfer Restricted Security, the following additional
information and documents (all of which may be submitted by
facsimile):
(A) if such beneficial interest is being transferred to
the Person designated by the Depositary as being the
beneficial owner, a certification to that effect from
such Person (in substantially the form of Exhibit B
hereto); or
(B) if such beneficial interest is being transferred to a
"qualified institutional buyer" (as defined in Rule
144A under the Securities Act) in accordance with Rule
144A under the Securities Act or pursuant to an
exemption from registration in accordance with Rule
144 or Rule 904 under the Securities Act or pursuant
to an effective registration statement under the
Securities Act, a certification to that effect from
the transferor (in substantially the form of Exhibit B
hereto) and, if the Company so requests, an Opinion of
Counsel from such Holder or the transferee reasonably
acceptable to the Company and to the Registrar to the
effect that such transfer is in compliance with the
Securities Act; or
(C) if such beneficial interest is being transferred in
reliance on another exemption from the registration
requirements of the Securities Act, a certification to
that effect from the transferor (in substantially the
form of Exhibit B hereto) and an Opinion of Counsel
from such Holder or transferor reasonably acceptable
to the Company and to the Registrar to the effect that
such transfer is in compliance with the Securities
Act,
in which case the Trustee or the Note Custodian, at the
direction of the Trustee, shall, in accordance with the
standing instructions and procedures existing between the
Depositary and the Note Custodian, cause the aggregate
principal amount of Global Notes to be reduced accordingly
and, following such reduction, the Company shall execute
and, upon receipt of a written order in accordance with
Section 2.02 hereof, the Trustee shall authenticate and
deliver to the transferee a Certificated Note in the
appropriate principal amount.
(ii) Certificated Notes issued in exchange for a beneficial
interest in a Global Note pursuant to this Section 2.06(d)
shall be registered in such names and in such authorized
denominations as the Depositary, pursuant to instructions
from its direct or indirect participants or otherwise, shall
instruct the Trustee. The Trustee shall deliver such
Certificated Notes to the Persons in whose names such Notes
are so registered.
(e) Restrictions on Transfer and Exchange of Global Notes.
Notwithstanding any other provision of this Indenture (other than the
provisions set forth in subsection (f) of this Section 2.06), a Global Note
may not be transferred as a whole except by the Depositary to a nominee of the
Depositary or by a nominee of the Depositary to the Depositary or another
nominee of the Depositary or by the Depositary or any such nominee to a
successor Depositary or a nominee of such successor Depositary.
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(f) Authentication of Certificated Notes in Absence of Depositary. If
at any time:
(i) the Depositary for the Notes notifies the Company that the
Depositary is unwilling or unable to continue as Depositary
for the Global Notes and a successor Depositary for the
Global Notes is not appointed by the Company within 90 days
after delivery of such notice; or
(ii) the Company, at its sole discretion, notifies the Trustee in
writing that it elects to cause the issuance of Certificated
Notes under this Indenture,
then the Company shall execute, and the Trustee shall, upon receipt of a
written order in accordance with Section 2.02 hereof, authenticate and deliver,
Certificated Notes in an aggregate principal amount equal to the principal
amount of the Global Notes in exchange for such Global Notes.
(g) Legends.
(i) Except as permitted by the following paragraphs (ii) and
(iii), each Note certificate evidencing Global Notes and
Certificated Notes (and all Notes issued in exchange
therefor or substitution thereof) shall bear legends in
substantially the following form:
"THIS SECURITY HAS NOT BEEN REGISTERED, UNDER THE U.S.
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), AND,
ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT AS SET FORTH
BELOW. BY ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT
(A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN
RULE 144A UNDER THE ACT) OR (B) IT IS AN "ACCREDITED INVESTOR"
(AS DEFINED IN RULE 501(a)(1), (2), (3) OR (7) UNDER THE ACT)
(AN "ACCREDITED INVESTOR"), (2) AGREES THAT IT WILL NOT WITHIN
THREE YEARS AFTER ORIGINAL ISSUANCE OF THIS SECURITY RESELL OR
OTHERWISE TRANSFER THIS SECURITY EXCEPT (A) TO THE ISSUER OR
ANY SUBSIDIARY THEREOF, (B) TO A QUALIFIED INSTITUTIONAL BUYER
IN COMPLIANCE WITH RULE 144A UNDER THE ACT, (C) TO AN
ACCREDITED INVESTOR THAT, PRIOR TO SUCH TRANSFER, FURNISHES
(OR HAS FURNISHED ON ITS BEHALF BY A U.S. BROKER-DEALER) TO
THE TRUSTEE A SIGNED LETTER CONTAINING CERTAIN RESTRICTIONS
AND AGREEMENTS RELATING TO THE RESTRICTION ON TRANSFER OF THIS
SECURITY (THE FORM OF WHICH LETTER CAN BE OBTAINED FROM THE
TRUSTEE FOR THIS SECURITY), (D) OUTSIDE THE UNITED STATES IN
AN OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 904 UNDER THE
ACT, (E) PURSUANT TO THE EXEMPTION PROVIDED BY RULE 144 UNDER
THE ACT (IF AVAILABLE), OR (F) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE ACT AND, IN EACH CASE, AGREES
THAT IT WILL GIVE TO EACH PERSON TO WHOM THIS SECURITY IS
TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS
LEGEND, IN CONNECTION WITH ANY TRANSFER OF THIS SECURITY
WITHIN THREE YEARS AFTER ORIGINAL ISSUANCE OF THIS SECURITY,
IF THE PROPOSED TRANSFEREE IS AN ACCREDITED INVESTOR, THE
HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH TO THE TRUSTEE
AND THE ISSUER SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER
INFORMATION AS EITHER OF THEM MAY REASONABLY REQUIRE TO
CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN
EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE ACT."
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(ii) Upon any sale or transfer of a Transfer Restricted Security
(including any Transfer Restricted Security represented by a
Global Note) pursuant to Rule 144 under the Securities Act
or pursuant to an effective registration statement under the
Securities Act:
(A) in the case of any Transfer Restricted Security that is
a Certificated Note, the Registrar shall permit the
Holder thereof to exchange such Transfer Restricted
Security for a Certificated Note that does not bear the
legend set forth in (i) above and rescind any
restriction on the transfer of such Transfer Restricted
Security; and
(B) in the case of any Transfer Restricted Security
represented by a Global Note, such Transfer Restricted
Security shall not be required to bear the legend set
forth in (i) above, but shall continue to be subject to
the provisions of Section 2.06(c) hereof; provided,
however, that with respect to any request for an
exchange of a Transfer Restricted Security that is
represented by a Global Note for a Certificated Note
that does not bear the first legend set forth in (i)
above, which request is made in reliance upon Rule 144,
the Holder thereof shall certify in writing to the
Registrar that such request is being made pursuant to
Rule 144 (such certification to be substantially in the
form of Exhibit B hereto).
(iii) Notwithstanding the foregoing, upon consummation of the
Exchange Offer, the Company shall issue and, upon receipt of
a written order in accordance with Section 2.02 hereof, the
Trustee shall authenticate New Notes in exchange
for Senior Notes accepted for exchange in the Exchange
Offer, which New Notes shall not bear the legend set forth
in (i) above, and the Registrar shall rescind any
restriction on the transfer of such Notes, in each case
unless the Holder of such Notes is either (A) a
broker-dealer, (B) a Person participating in the
distribution of the Notes or (C) a Person who is an
affiliate (as defined in Rule 144A) of the Company.
(h) Cancellation and/or Adjustment of Global Notes. At such time as
all beneficial interests in Global Notes have been exchanged for Certificated
Notes, redeemed, repurchased or cancelled, all Global Notes shall be returned
to or retained and cancelled by the Trustee in accordance with Section 2.11
hereof. At any time prior to such cancellation, if any beneficial interest in
a Global Note is exchanged for Certificated Notes, redeemed, repurchased or
cancelled, the principal amount of Notes represented by such Global Note shall
be reduced accordingly and an endorsement shall be made on such Global Note,
by the Trustee or the Note Custodian, at the direction of the Trustee, to
reflect such reduction.
(i) General Provisions Relating to Transfers and Exchanges.
(i) To permit registrations of transfers and exchanges, the
Company shall issue and the Trustee shall authenticate
Certificated Notes and Global Notes at the Registrar's
request.
(ii) No service charge shall be made to a Holder for any
registration of transfer or exchange, but the Company
may require payment of a sum sufficient to cover any
transfer tax or similar governmental charge payable in
connection therewith (other than any such transfer
taxes or similar governmental charge payable upon
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exchange or transfer pursuant to Sections 3.07, 3.09,
4.10, 4.14 and 9.05 hereto).
(iii) The Registrar shall not be required to register the
transfer of or exchange any Note selected for
redemption in whole or in part, except the unredeemed
portion of any Note being redeemed in part.
(iv) All Certificated Notes and Global Notes issued upon any
registration of transfer or exchange of Certificated
Notes or Global Notes shall be the valid obligations of
the Company and the Guarantors, evidencing the same
debt, and entitled to the same benefits under this
Indenture, as the Certificated Notes or Global Notes
surrendered upon such registration of transfer or
exchange.
(v) The Company shall not be required:
(A) to issue, to register the transfer of or to
exchange Notes during a period beginning at the
opening of business 15 days before the day of any
selection of Notes for redemption under Section
3.02 hereof and ending at the close of business on
the day of selection; or
(B) to register the transfer of or to exchange any
Note so selected for redemption, in whole or in
part, except the unredeemed portion of any Note
being redeemed in part; or
(C) to register the transfer of or to exchange a Note
between a record date and the next succeeding
interest payment date.
(vi) Prior to due presentment for the registration of a
transfer of any Note, the Trustee, any Agent and the
Company may deem and treat the Person in whose name any
Note is registered as the absolute owner of such Note
for the purpose of receiving payment of principal of
and interest and Liquidated Damages, if any, on such
Note, and none of the Trustee, any Agent or the Company
shall be affected by notice to the contrary.
(vii) The Trustee shall authenticate Certificated Notes and
Global Notes in accordance with the provisions of
Section 2.02 hereof.
SECTION 2.07. REPLACEMENT NOTES.
If any mutilated Note is surrendered to the Trustee or either of
the Company or the Trustee receives evidence to its satisfaction of the
destruction, loss or theft of any Note, the Company shall issue and the
Trustee, upon the written order of the Company signed by two Officers of the
Company, shall authenticate a replacement Note if the Trustee's requirements
are met. If required by the Trustee or the Company, an indemnity bond must be
supplied by the Holder that is sufficient in the judgment of the Trustee and
the Company to protect the Company, the Trustee, any Agent and any
authenticating agent from any loss that any of them may suffer if a Note is
replaced. The Company may charge for their expenses in replacing a Note.
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Every replacement Note is an additional obligation of the Company
and the Guarantors and shall be entitled to all of the benefits of this
Indenture equally and proportionately with all other Notes duly issued
hereunder.
SECTION 2.08. OUTSTANDING NOTES.
The Notes outstanding at any time are all the Notes authenticated by
the Trustee except for those cancelled by it, those delivered to it for
cancellation, those reductions in the interest in a Global Note effected by
the Trustee in accordance with the provisions hereof, and those described in
this Section 2.08 as not outstanding. Except as set forth in Section 2.09
hereof, a Note does not cease to be outstanding because the Company or an
Affiliate of the Company holds the Note.
If a Note is replaced pursuant to Section 2.07 hereof, it ceases to
be outstanding unless the Trustee receives proof satisfactory to it that the
replaced Note is held by a bona fide purchaser.
If the principal amount of any Note is considered paid under Section
4.01 hereof, it ceases to be outstanding and interest and Liquidated Damages,
if any, on it ceases to accrue.
If the Paying Agent (other than the Company, a Subsidiary or an
Affiliate of any thereof) holds, by 10:00 a.m. Eastern Time on a redemption
date or maturity date, money sufficient to pay Notes payable on that date, then
on and after that date such Notes shall be deemed to be no longer outstanding
and shall cease to accrue interest and Liquidated Damages, if any.
SECTION 2.09. TREASURY NOTES.
In determining whether the Holders of the required principal amount
of Notes have concurred in any direction, waiver or consent, Notes owned by
the Company, by any Guarantor or by any Person directly or indirectly
controlling or controlled by or under direct or indirect common control with
the Company or any Guarantor, shall be considered as though not outstanding,
except that for the purposes of determining whether the Trustee shall be
protected in relying on any such direction, waiver or consent, only Notes that
the Trustee knows are so owned shall be so disregarded. The Company agrees to
notify the Trustee of the existence of any Notes owned by the Company, by any
Guarantor or by any Person directly or indirectly controlling or controlled by
or under direct or indirect common control with the Company or any Guarantor.
SECTION 2.10. TEMPORARY NOTES.
Until Certificated Notes are ready for delivery, the Company may
prepare and the Trustee shall authenticate temporary Notes upon a written
order of the Company signed by two Officers of the Company. Temporary Notes
shall be substantially in the form of Certificated Notes but may have
variations that the Company considers appropriate for temporary Notes and as
shall be reasonably acceptable to the Trustee. Without unreasonable delay, the
Company shall prepare and the Trustee shall authenticate Certificated Notes in
exchange for temporary Notes.
Holders of temporary Notes shall be entitled to all of the benefits
of this Indenture.
SECTION 2.11. CANCELLATION.
The Company at any time may deliver Notes to the Trustee for
cancellation. The Registrar and Paying Agent shall forward to the Trustee any
Notes surrendered to them for registration of transfer,
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exchange or payment. The Trustee and no one else shall cancel all Notes
surrendered for registration of transfer, exchange, payment, replacement or
cancellation and shall destroy cancelled Notes (subject to the record
retention requirement of the Exchange Act). Certification of the destruction
of all cancelled Notes shall be delivered to the Company unless the Company
directs the Trustee to return the Notes to the Company upon written order
signed by an Officer of the Company. The Company may not issue new Notes to
replace Notes that have been paid or that have been delivered to the Trustee
for cancellation.
SECTION 2.12. DEFAULTED INTEREST.
If either the Company or any Guarantor defaults in a payment of
interest on the Notes, they shall pay the defaulted interest in any lawful
manner plus, to the extent lawful, interest payable on the defaulted interest,
to the Persons who are Holders on a subsequent special record date, in each
case at the rate provided in the Notes and in Section 4.01 hereof. The Company
shall notify the Trustee in writing of the amount of defaulted interest
proposed to be paid on each Note and the date of the proposed payment. The
Company shall fix or cause to be fixed each such special record date and
payment date, provided that no such special record date shall be less than 10
days prior to the related payment date for such defaulted interest. At least
15 days before the special record date, the Company (or, upon the written
request of the Company, the Trustee in the name and at the expense of the
Company) shall mail or cause to be mailed to Holders a notice that states the
special record date, the related payment date and the amount of such interest
to be paid. Notwithstanding the foregoing, such interest may be paid at any
time in any other lawful manner not inconsistent with the requirements of any
securities exchange on which the Notes may be listed, and upon such notice as
may be required by such exchange.
ARTICLE 3
REDEMPTION AND PREPAYMENT
SECTION 3.01. NOTICES TO TRUSTEE.
If the Company redeems Notes pursuant to the optional redemption
provisions of Section 3.07 hereof, it shall furnish to the Trustee, at least
45 days (unless a shorter period may be satisfactory to the Trustee) but not
more than 60 days before a redemption date, an Officers' Certificate setting
forth (i) the clause of this Indenture pursuant to which the redemption shall
occur, (ii) the redemption date, (iii) the principal amount of Notes to be
redeemed and (iv) the redemption price.
If the Company is required to make an offer to purchase Notes
pursuant to the provisions of Section 3.09 or 4.14 hereof, it shall furnish to
the Trustee an Officers' Certificate setting forth (i) the Section of this
Indenture pursuant to which the purchase shall occur, (ii) the purchase date,
(iii) the principal amount of Notes to be purchased, (iv) the purchase price
and (v) a statement to the effect that (a) the Company or one of its
Subsidiaries has effected an Asset Sale and the conditions set forth in
Sections 3.09 and 4.10 have been satisfied or (b) a Change of Control has
occurred and the conditions set forth in Section 4.14 have been satisfied, as
applicable.
SECTION 3.02. SELECTION OF NOTES TO BE REDEEMED.
If less than all of the Notes are to be redeemed at any time, the
Trustee shall select the Notes to be redeemed among the Holders of the Notes
on a pro rata basis, by lot or in accordance with any other method the
Trustee deems fair and appropriate; provided that no Notes of $1,000 or less
shall be redeemed in part. In the event of partial redemption by lot, the
particular Notes to be redeemed shall
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be selected, unless otherwise provided herein, not less than 30 nor more than
60 days prior to the redemption date by the Trustee from the outstanding Notes
not previously called for redemption.
The Trustee shall promptly notify the Company in writing of the Notes
selected for redemption and, in the case of any Note selected for partial
redemption, the principal amount thereof to be redeemed. Notes and portions of
Notes selected shall be in amounts of $1,000 or whole multiples of $1,000;
except that if all of the Notes of a Holder are to be redeemed, the entire
outstanding amount of Notes held by such Holder, even if not a multiple of
$1,000, shall be redeemed. Except as provided in the preceding sentence,
provisions of this Indenture that apply to Notes called for redemption also
apply to portions of Notes called for redemption.
SECTION 3.03. NOTICE OF REDEMPTION.
Subject to the provisions of Section 3.09 hereof, at least 30 days
but not more than 60 days before a redemption date, the Company shall mail or
cause to be mailed, by first class mail, a notice of redemption to each Holder
whose Notes are to be redeemed at its registered address.
The notice shall identify the Notes to be redeemed and shall state:
(a) the redemption date;
(b) the redemption price;
(c) if any Note is being redeemed in part, the portion of the
principal amount of such Note to be redeemed and that, after the
redemption date upon surrender of such Note, a new Note or Notes in
principal amount equal to the unredeemed portion shall be issued upon
cancellation of the original Note;
(d) the name and address of the Paying Agent;
(e) that Notes called for redemption must be surrendered to the
Paying Agent to collect the redemption price;
(f) that, unless the Company defaults in making such redemption
payment, interest and Liquidated Damages, if any, on Notes called for
redemption ceases to accrue on and after the redemption date;
(g) the paragraph of the Notes and/or Section of this Indenture
pursuant to which the Notes called for redemption are being redeemed; and
(h) that no representation is made as to the correctness or accuracy
of the CUSIP number, if any, listed in such notice or printed on the
Notes.
At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at its expense; provided, however, that
the Company shall have delivered to the Trustee, at least 45 days prior to
the redemption date, an Officers' Certificate requesting that the Trustee give
such notice and setting forth the information to be stated in such notice as
provided in the preceding paragraph.
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SECTION 3.04. EFFECT OF NOTICE OF REDEMPTION.
Once notice of redemption is mailed in accordance with Section 3.03
hereof, Notes called for redemption become irrevocably due and payable on the
redemption date at the redemption price. A notice of redemption may not be
conditional.
SECTION 3.05. DEPOSIT OF REDEMPTION OR PURCHASE PRICE.
On or prior to 10:00 a.m. Eastern Time on the redemption date or the
date upon which the Notes must be accepted for purchase pursuant to Section 3.09
or 4.14 hereof, the Company shall deposit with the Trustee or with the Paying
Agent money sufficient to pay the redemption or purchase price of and accrued
interest and Liquidated Damages, if any, on all Notes to be redeemed or
purchased on that date. The Trustee or the Paying Agent shall promptly return
to the Company any money deposited with the Trustee or the Paying Agent by the
Company in excess of the amounts necessary to pay the redemption or purchase
price of, and accrued interest and Liquidated Damages, if any, on all Notes to
be redeemed or purchased.
If Notes called for redemption or tendered in an Asset Sale Offer or
Change of Control Offer are paid or if the Company has deposited with the
Trustee or Paying Agent money sufficient to pay the redemption or purchase
price of, and unpaid and accrued interest and Liquidated Damages, if any, on
all Notes to be redeemed or purchased, on and after the applicable redemption
or purchase date, interest and Liquidated Damages, if any, ceases to accrue on
the Notes or the portions of Notes called for redemption or tendered and not
withdrawn in an Asset Sale Offer or Change of Control Offer (regardless of
whether certificates for such Notes are actually surrendered). If a Note is
redeemed or purchased on or after an interest record date but on or prior to
the related interest payment date, then any accrued and unpaid interest and
Liquidated Damages, if any, shall be paid to the Person in whose name such
Note was registered at the close of business on such record date. If any Note
called for redemption or subject to an Asset Sale Offer or Change of Control
Offer shall not be so paid upon surrender for redemption or purchase because
of the failure of the Company to comply with the preceding paragraph, interest
shall be paid on the unpaid principal, from the redemption or purchase date
until such principal is paid, and to the extent lawful on any interest or
Liquidated Damages, if any, not paid on such unpaid principal, in each case,
at the rate provided in the Notes and in Section 4.01 hereof.
SECTION 3.06. NOTES REDEEMED OR PURCHASED IN PART.
Upon surrender of a Note that is redeemed or purchased in part, the
Company shall issue and, upon the Company's written request, the Trustee shall
authenticate for the Holder at the expense of the Company a new Note equal in
principal amount to the unredeemed or unpurchased portion of the Note
surrendered.
SECTION 3.07. OPTIONAL REDEMPTION.
The Notes are not redeemable, in whole or in part, at the Company's
option prior to May 15, 2001. On or after May 15, 2001, the Company may
redeem all or any portion of the Notes at a redemption price (expressed as a
percentage of the principal amount thereof), as set forth in the immediately
succeeding paragraph, plus accrued and unpaid interest and Liquidated Damages,
if any, to the redemption date.
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The redemption price as a percentage of the principal amount shall
be as follows, if the Notes are redeemed during the 12-month period commencing
on May 15 of the year set forth below, plus, in each case, accrued interest
and Liquidated Damages, if any, thereon to the redemption date:
Year Percentage
---- ----------
2001................................................... 105.375%
2002................................................... 103.583%
2003................................................... 101.792%
2004 and thereafter.................................... 100.000%
Notwithstanding the foregoing, during the first 36 months after the
date hereof, the Company may, on any one or more occasions, redeem up to
$154.0 million in aggregate principal amount of Notes at a redemption price of
110.75% of the principal amount thereof plus accrued and unpaid interest and
Liquidated Damages, if any, thereon to the redemption date, with the net
proceeds of any offering of common equity of the Company; provided that at
least $286.0 million in aggregate principal amount of Notes must remain
outstanding immediately after the occurrence of each such redemption; and
provided, further that any such redemption shall occur within 75 days of the
date of closing of such offering of common equity of the Company.
SECTION 3.08. MANDATORY REDEMPTION.
Except as set forth under Sections 4.10 and 4.14 hereof, the Company
shall not be required to make mandatory redemption payments with respect to
the Notes.
SECTION 3.09. OFFER TO PURCHASE BY APPLICATION OF EXCESS PROCEEDS.
In the event that, pursuant to Section 4.10 hereof, the Company shall
be required to commence an offer to all Holders to purchase Notes (an "Asset
Sale Offer"), it shall follow the procedures specified below.
The Asset Sale Offer shall remain open for a period of 20 Business
Days following its commencement, except to the extent that a longer period is
required by applicable law (the "Offer Period"). No later than five Business
Days after the termination of the Offer Period (the "Purchase Date"), the
Company shall purchase the principal amount of Notes required to be purchased
pursuant to Section 4.10 hereof (the "Offer Amount") or, if less than the
Offer Amount has been tendered, all Notes tendered in response to the Asset
Sale Offer. Payment for any Notes so purchased shall be made in the same
manner as interest payments are made.
If the Purchase Date is on or after an interest record date and on or
before the related interest payment date, any accrued and unpaid interest and
Liquidated Damages, if any, shall be paid to the Person in whose name a Note
is registered at the close of business on such record date, and no additional
interest or Liquidated Damages, if any, shall be payable to Holders who tender
Notes pursuant to the Asset Sale Offer.
Upon the commencement of an Asset Sale Offer, the Company shall send,
by first class mail, a notice to the Trustee and each of the Holders. The notice
shall contain all instructions and materials necessary to enable such Holders to
tender Notes pursuant to the Asset Sale Offer. The Asset
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Sale Offer shall be made to all Holders. The notice, which shall govern the
terms of the Asset Sale Offer, shall state:
(a) that the Asset Sale Offer is being made pursuant to Sections
3.09 and 4.10 hereof and the length of the Offer Period;
(b) the Offer Amount, the purchase price and the Purchase Date;
(c) that any Note not tendered or accepted for payment shall
continue to accrue interest and Liquidated Damages, if any;
(d) that, unless the Company defaults in making such payment,
any Note accepted for payment pursuant to the Asset Sale Offer shall
cease to accrue interest and Liquidated Damages, if any after the
Purchase Date;
(e) that Holders electing to have a Note purchased pursuant to
an Asset Sale Offer may only elect to have all of such Note purchased
and may not elect to have only a portion of such Note purchased;
(f) that Holders electing to have a Note purchased pursuant to
any Asset Sale Offer shall be required to surrender the Note, with
the form entitled "Option of Holder to Elect Purchase" on the reverse
of the Note completed, or transfer by book-entry transfer, to the
Company, a depositary, if appointed by the Company, or a Paying Agent
at the address specified in the notice at least three days before the
Purchase Date;
(g) that Holders shall be entitled to withdraw their election if
the Company, the depositary or the Paying Agent, as the case may be,
receives, not later than the expiration of the Offer Period, a
telegram, facsimile transmission or letter setting forth the
name of the Holder, the principal amount of the Note the Holder
delivered for purchase and a statement that such Holder is
withdrawing his election to have such Note purchased;
(h) that, if the aggregate principal amount of Notes and Pari
Passu Debt surrendered by Holders exceeds the Offer Amount, the
Company shall select the Notes to be purchased on a pro rata basis
(with such adjustments as may be deemed appropriate by the Company so
that only Notes in denominations of $1,000, or integral multiples
thereof, shall be purchased); and
(i) that Holders whose Notes were purchased only in
part shall be issued new Notes equal in principal amount to the
unpurchased portion of the Notes surrendered (or transferred by
book-entry transfer).
On or before the Purchase Date, the Company shall, to the extent
lawful, accept for payment, on a pro rata basis to the extent necessary, the
Offer Amount of Notes or portions thereof tendered pursuant to the Asset Sale
Offer, or if less than the Offer Amount has been tendered, all Notes tendered,
and shall deliver to the Trustee an Officers' Certificate stating that such
Notes or portions thereof were accepted for payment by the Company in
accordance with the terms of this Section 3.09. The Company, the Depositary or
the Paying Agent, as the case may be, shall promptly (but in any case not
later than five days after the Purchase Date) mail or deliver to each
tendering Holder an amount equal to the purchase price of the Notes tendered
by such Holder and accepted by the Company for purchase, and the Company shall
promptly issue a new Note, and the Trustee, upon written request from the
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Company shall authenticate and mail or deliver such new Note to such Holder,
in a principal amount equal to any unpurchased portion of the Note
surrendered. Any Note not so accepted shall be promptly mailed or delivered by
the Company to the Holder thereof. The Company shall publicly announce the
results of the Asset Sale Offer on the Purchase Date. The Company shall comply
with the requirements of Rule 14e-1 under the Exchange Act and any other
securities laws and regulations thereunder to the extent such laws and
regulations are applicable in connection with the repurchase of Notes in an
Asset Sale Offer.
Other than as specifically provided in this Section 3.09, any
purchase pursuant to this Section 3.09 shall be made pursuant to the
provisions of Sections 3.01 through 3.06 hereof.
ARTICLE 4
COVENANTS
SECTION 4.01. PAYMENT OF NOTES.
The Company shall pay or cause to be paid the principal of, premium,
if any, and interest on the Notes on the dates and in the manner provided in
the Notes. Principal, premium, if any, and interest shall be considered paid
on the date due if the Paying Agent, if other than the Company or any
Guarantor, holds as of 10:00 a.m. Eastern Time on the due date money deposited
by the Company in immediately available funds and designated for and
sufficient to pay all principal, premium, if any, and interest then due. The
Company shall pay all Liquidated Damages, if any, in the same manner and on
the dates as set forth above and in the amounts set forth in the Registration
Rights Agreement.
The Company shall pay interest (including post-petition interest in
any proceeding under any Bankruptcy Law) on overdue principal at the rate
equal to 1% per annum in excess of the then applicable interest rate on the
Notes to the extent lawful; it shall pay interest (including post-petition
interest in any proceeding under any Bankruptcy Law) on overdue installments
of interest and Liquidated Damages, if any, (without regard to any applicable
grace period) at the same rate to the extent lawful.
SECTION 4.02. MAINTENANCE OF OFFICE OR AGENCY.
The Company shall maintain in the Borough of Manhattan, the City of
New York, an office or agency (which may be an office of the Trustee or an
affiliate of the Trustee, Registrar or co-registrar) where Notes may be
surrendered for registration of transfer or for exchange and where notices and
demands to or upon the Company in respect of the Notes and this Indenture may
be served. The Company shall give prompt written notice to the Trustee of the
location, and any change in the location, of such office or agency. If at any
time the Company shall fail to maintain any such required office or agency or
shall fail to furnish the Trustee with the address thereof, such
presentations, surrenders, notices and demands may be made or served at the
Corporate Trust Office of the Trustee.
The Company may also from time to time designate one or more other
offices or agencies where the Notes may be presented or surrendered for any or
all such purposes and may from time to time rescind such designations;
provided, however, that no such designation or rescission shall in any manner
relieve the Company of its obligation to maintain an office or agency in the
Borough of Manhattan, the City of New York for such purposes. The Company
shall give prompt written notice to the Trustee of any such designation or
rescission and of any change in the location of any such other office or
agency.
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The Company hereby designates the Corporate Trust Office of the
Trustee as one such office or agency of the Company in accordance with Section
2.03 hereof. The Trustee may resign such agency at any time by giving written
notice to the Company no later than 30 days prior to the effective date of
such resignation.
SECTION 4.03. REPORTS.
Whether or not required by the rules and regulations of the SEC, so
long as any Notes are outstanding, the Company shall furnish to the Trustee
and to the Holders of Notes (i) all quarterly and annual financial information
that would be required to be contained in a filing with the SEC on Forms 10-Q
and 10-K if the Company were required to file such Forms, including a
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and, with respect to the annual information only, a report thereon
by the Company's certified independent accountants and (ii) all current
reports that would be required to be filed with the SEC on Form 8-K if the
Company were required to file such reports. In addition, whether or not
required by the rules and regulations of the SEC, the Company shall file a
copy of all such information and reports with the SEC for public availability
(unless the SEC will not accept such a filing) and make such information
available to securities analysts and prospective investors upon request. In
addition, the Company agrees that, for so long as any Notes remain
outstanding, it shall furnish to the Holders, and to securities analysts and
prospective investors upon their request, the information required to be
delivered pursuant to Rule 144A(d)(4) under the Securities Act.
SECTION 4.04. COMPLIANCE CERTIFICATE.
(a) The Company shall deliver to the Trustee, within 90 days after
the end of each fiscal year (which fiscal year, as of the date hereof, ends on
December 31), an Officers' Certificate stating that a review of
the activities of the Company and its Subsidiaries during the preceding fiscal
year has been made under the supervision of the signing Officers with a view
to determining whether the Company and the Guarantors have kept, observed,
performed and fulfilled their obligations under this Indenture and the
Subsidiary Guarantees, respectively, and further stating, as to each such
Officer signing such certificate, that to the best of his or her knowledge the
Company and the Guarantors have kept, observed, performed and fulfilled each
and every covenant contained in this Indenture and are not in default in the
performance or observance of any of the terms, provisions and conditions of
this Indenture (or, if a Default or Event of Default shall have occurred,
describing all such Defaults or Events of Default of which he or she may have
knowledge and what action the Company is taking or proposes to take with
respect thereto) and that to the best of his or her knowledge no event has
occurred and remains in existence by reason of which payments on account of
the principal of or interest or Liquidated Damages, if any, on the Notes is
prohibited or if such event has occurred, a description of the event and what
action the Company is taking or proposes to take with respect thereto.
(b) So long as not contrary to the then current recommendations of
the American Institute of Certified Public Accountants, the year-end financial
statements delivered pursuant to Section 4.03 above shall be accompanied by a
written statement of the Company's independent public accountants (who shall
be a firm of established national reputation) that in making the examination
necessary for certification of such financial statements, nothing has come to
their attention that would lead them to believe that the Company has violated
any provisions of Article Four or Article Five hereof or, if any such
violation has occurred, specifying the nature and period of existence thereof,
it being understood that such accountants shall not be liable directly or
indirectly to any Person for any failure to obtain knowledge of any such
violation.
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(c) The Company shall, so long as any of the Notes are outstanding,
deliver to the Trustee, forthwith upon any Officer of the Company or any
Guarantor becoming aware of any Default or Event of Default, an Officers'
Certificate specifying such Default or Event of Default and what action the
Company is taking or proposes to take with respect thereto.
SECTION 4.05. TAXES.
The Company shall pay, and shall cause each of its Subsidiaries to
pay, prior to delinquency, all material taxes, assessments, and governmental
levies except such as are contested in good faith and by appropriate
proceedings or where the failure to effect such payment is not adverse in any
material respect to the Holders of the Notes.
SECTION 4.06. STAY, EXTENSION AND USURY LAWS.
The Company and each of the Guarantors covenants (to the extent that
it may lawfully do so) that it shall not at any time insist upon, plead, or in
any manner whatsoever claim or take the benefit or advantage of, any stay,
extension or usury law wherever enacted, now or at any time hereafter in
force, that may affect the covenants or the performance of this Indenture; and
the Company and each of the Guarantors (to the extent that it may lawfully do
so) hereby expressly waives all benefit or advantage of any such law, and
covenants that it shall not, by resort to any such law, hinder, delay or
impede the execution of any power herein granted to the Trustee, but shall
suffer and permit the execution of every such power as though no such law has
been enacted.
SECTION 4.07. RESTRICTED PAYMENTS.
The Company shall not, and shall not permit any of its Subsidiaries
to, directly or indirectly: (i) declare or pay any dividend or make any other
payment or distribution on account of the Company's Equity Interests
(including, without limitation, any payment in connection with any merger or
consolidation involving the Company) or to the direct or indirect holders of
the Company's Equity Interests in their capacity as such (other than dividends
or distributions payable in Capital Stock (other than Disqualified Stock) of
the Company); (ii) purchase, redeem or otherwise acquire or retire for value
any Equity Interests of the Company or any direct or indirect parent of the
Company; (iii) make any principal payment on, or purchase, redeem, defease or
otherwise acquire or retire for value any Indebtedness that is subordinated to
the Notes, except at final maturity; or (iv) make any Restricted Investment
(all such payments and other actions set forth in clauses (i) through (iv)
above being collectively referred to as "Restricted Payments"), unless, at the
time of and after giving effect to such Restricted Payment:
(a) no Default or Event of Default shall have occurred and be
continuing or would occur as a consequence thereof; and
(b) the Company would, at the time of such Restricted Payment
and after giving pro forma effect thereto as if such Restricted
Payment had been made at the beginning of the applicable four-quarter
period, have been permitted to incur at least $1.00 of additional
Indebtedness (other than Permitted Debt) pursuant to the Debt to Cash
Flow Ratio test set forth in the first paragraph of Section 4.09
hereof; and
(c) such Restricted Payment, together with the aggregate amount
of all other Restricted Payments declared or made after the date
hereof (other than Restricted Payments permitted by clauses (2), (4),
(6) or (11) of the following paragraph) shall not exceed, at the date
of
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determination, the sum of (1) an amount equal to the Company's
Consolidated Cash Flow from the date hereof to the end of the
Company's most recently ended full fiscal quarter for which internal
financial statements are available, taken as a single accounting
period, less the product of 1.4 times the Company's Consolidated
Interest Expense from the date hereof to the end of the Company's
most recently ended full fiscal quarter, for which internal financial
statements are available, taken as a single accounting period, plus
(2) an amount equal to the net cash proceeds received by the Company
from the issue or sale of Equity Interests (other than (i) in the
Preferred Stock Offering, (ii) sales of Disqualified Stock and (iii)
Equity Interests sold to any of the Company's Subsidiaries) or of debt
securities or Disqualified Stock (other than the Series D Preferred
Stock) of the Company that have been converted into such Equity
Interests plus (3) to the extent that any Restricted Investment that
was made after the date hereof is sold for cash or otherwise
liquidated or repaid for cash, the lesser of (A) the cash return of
capital with respect to such Restricted Investment (less the cost of
disposition, if any) and (B) the initial amount of such Restricted
Investment.
If no Default or Event of Default shall have occurred and be
continuing immediately as a result thereof, the foregoing provisions shall not
prohibit: (1) the payment of any dividend within 60 days after the date of
declaration thereof, if at said date of declaration such payment would have
complied with the provisions hereof; (2) the redemption, repurchase,
retirement or other acquisition of any Equity Interests of the Company in
exchange for, or out of the proceeds of, the substantially concurrent sale
(other than to a Subsidiary of the Company) of other Equity Interests of the
Company (other than any Disqualified Stock); provided that the amount of any
such net cash proceeds that are utilized for any such redemption, repurchase,
retirement or other acquisition shall be excluded from clause (c)(2) of the
preceding paragraph; (3) cash payments made in respect of fractional shares of
Capital Stock not to exceed $100,000 in the aggregate in any fiscal year; (4)
the issuance of the Exchange Notes in exchange for the Series D Preferred
Stock; provided that such issuance is permitted by Section 4.09 hereof; (5) in
the event that the Company elects to issue the Exchange Notes in exchange for
the Series D Preferred Stock, cash payments made in lieu of the issuance of
Exchange Notes having a face amount less than $50 and any cash payments
representing accrued and unpaid liquidated damages and dividends in respect
thereof, not to exceed $100,000 in the aggregate in any fiscal year; (6) the
defeasance, redemption or repurchase of subordinated Indebtedness with the net
cash proceeds from an incurrence of Permitted Refinancing Debt or the
substantially concurrent sale (other than to a Subsidiary of the Company) of
Equity Interests of the Company (other than Disqualified Stock); provided that
the amount of any such net cash proceeds that are utilized for any such
redemption, repurchase, retirement or other acquisition shall be excluded from
clause (c)(2) of the preceding paragraph; (7) the payment of dividends on the
Series D Preferred Stock in accordance with the terms thereof as in effect on
the date hereof; (8) the redemption by the Company of its Series B Preferred
Stock in accordance with the terms thereof as in effect on the date hereof;
provided that payments made by the Company to redeem the Series B Preferred
Stock shall not exceed $1.0 million in any fiscal year or $2.0 million in the
aggregate since the date hereof; (9) the redemption by the Company of its
Series C Preferred Stock in accordance with the terms thereof as in effect on
the date hereof in connection with the Dallas Disposition; (10) payments made
by the Company to SCMC for facilities maintenance and other services and
reimbursements pursuant to the Shared Facilities Agreement in accordance with
the terms thereof as in effect on the date hereof; and (11) payments by the
Company pursuant to the Management Termination Agreements in accordance with
the terms thereof as in effect on the date hereof.
The amount of all Restricted Payments (other than cash) shall be the
Fair Market Value (evidenced by a resolution of the Board of Directors set
forth in an Officers' Certificate delivered to the Trustee) on the date of the
Restricted Payment of the asset(s) or securities proposed to be transferred by
the Company or such Subsidiary, as the case may be, pursuant to the Restricted
Payment. Not later than
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the date of making any Restricted Payment, the Company shall deliver to the
Trustee an Officers' Certificate stating that such Restricted Payment is
permitted and setting forth the basis upon which the calculations required by
this covenant were computed, which calculations may be based upon the
Company's latest available financial statements.
SECTION 4.08. DIVIDEND AND OTHER PAYMENT RESTRICTIONS AFFECTING SUBSIDIARIES.
The Company shall not, and shall not permit any of its Subsidiaries
to, directly or indirectly, create or otherwise cause or suffer to exist or
become effective any encumbrance or restriction on the ability of any
Subsidiary to (i)(x) pay dividends or make any other distributions to the
Company or any of its Subsidiaries (1) on its Capital Stock or (2) with
respect to any other interest or participation in, or measured by, its
profits, or (y) pay any indebtedness owed to the Company or any of its
Subsidiaries, (ii) make loans or advances to the Company or any of its
Subsidiaries or (iii) transfer any of its properties or assets to the Company
or any of its Subsidiaries, except for such encumbrances or restrictions
existing under or by reason of (a) Existing Indebtedness as in effect on the
date hereof, (b) the New Credit Agreement, in a form substantially consistent
with the terms of the Commitment Letter as in effect as of the date hereof,
and any amendments, modifications, restatements, renewals, increases,
supplements, refundings, replacements or refinancings thereof, and any other
agreement governing or relating to Senior Debt, provided that all such
amendments, modifications, restatements, renewals, increases, supplements,
refundings, replacement or refinancings and other agreements are no more
restrictive with respect to such dividend and other payment restrictions than
those contained in the New Credit Agreement in a form substantially consistent
with the terms of the Commitment Letter as in effect on the date hereof, (c)
this Indenture, the Notes and the Subsidiary Guarantees, (d) applicable law,
(e) any instrument governing Indebtedness or Capital Stock of a Person
acquired by the Company or any of its Subsidiaries as in effect at the time of
such acquisition (except to the extent such Indebtedness was incurred in
connection with or in contemplation of such acquisition), which encumbrance or
restriction is not applicable to any Person, or the properties or assets of
any Person, other than the Person, or the property or assets of the Person, so
acquired, provided that, in the case of Indebtedness, such Indebtedness was
permitted to be incurred by the terms hereof, (f) by reason of customary
non-assignment provisions in leases entered into in the ordinary course of
business and consistent with past practices, or (g) Permitted Refinancing
Debt, provided that the restrictions contained in the agreements governing
such Permitted Refinancing Debt are no more restrictive than those contained
in the agreements governing the Indebtedness being refinanced.
SECTION 4.09. INCURRENCE OF INDEBTEDNESS AND ISSUANCE OF PREFERRED STOCK.
The Company shall not, and shall not permit any of its Subsidiaries
to, directly or indirectly, create, incur, issue, assume, guarantee or
otherwise become directly or indirectly liable, contingently or otherwise,
with respect to (collectively, "incur") any Indebtedness (including Acquired
Debt) and that the Company shall not issue any Disqualified Stock and shall
not permit any of its Subsidiaries to issue any shares of Preferred Stock;
provided, however, that (A) the Company may incur Indebtedness (including
Acquired Debt) or issue shares of Disqualified Stock and (B) a Guarantor may
issue shares of Preferred Stock (other than shares of Preferred Stock that are
convertible into or exchangeable for any other class of Capital Stock) if, in
either case, the Company's Debt to Cash Flow Ratio at the time of the
incurrence of such Indebtedness or the issuance of such Disqualified Stock or
Preferred Stock, as the case may be, after giving pro forma effect to such
incurrence or issuance as of such date and to the use of proceeds therefrom as
if the same had occurred at the beginning of the most recently ended four full
fiscal quarter period of the Company for which internal financial statements
are available, would have been no greater than 7.0 to 1.
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The foregoing provisions shall not apply to the incurrence of any of
the following Indebtedness (collectively, "Permitted Debt"):
(i) the incurrence by the Company and its Subsidiaries of
Indebtedness pursuant to one or more Bank Facilities, so long as the aggregate
principal amount of all Indebtedness outstanding under all Bank Facilities
does not, at the time of incurrence, exceed an amount equal to the sum of (A)
$150.0 million less the aggregate amount of all Net Proceeds of Asset Sales
applied to reduce Senior Debt pursuant to clause (a) of the second paragraph
of Section 4.10 hereof (other than repayments of Disposition Debt) plus (B)
the Permitted Disposition Amount;
(ii) the incurrence by the Company and its Subsidiaries of the
Existing Indebtedness;
(iii) the incurrence by the Company and its Subsidiaries of the
Existing MMR Indebtedness; provided that, substantially concurrently with such
incurrence, the Existing MMR Indebtedness is repaid by the Company;
(iv) the issuance of the Series D Preferred Stock;
(v) the issuance of Disqualified Stock by the Company that by its
terms would not require or permit any payment of dividends or other
distributions that would violate Section 4.07 hereof;
(vi) the incurrence by the Company or any of its Subsidiaries of
Indebtedness represented by the Notes and Subsidiary Guarantees;
(vii) the incurrence by the Company or any of its Subsidiaries of
Indebtedness in connection with the acquisition of assets or a new Subsidiary;
provided that such Indebtedness was incurred by the prior owner of such assets
or such Subsidiary prior to such acquisition by the Company or one of its
Subsidiaries and was not incurred in connection with, or in contemplation of,
such acquisition by the Company or one of its Subsidiaries and provided
further that, after giving pro forma effect to such incurrence of Indebtedness
as of such date and to the use of proceeds therefrom as if the same had
occurred at the beginning of the most recently ended four full fiscal quarter
period for which internal financial statements are available, the Company's
Debt to Cash Flow Ratio would have been no greater than 7.0 to 1;
(viii) the incurrence by the Company or any of its Subsidiaries of
Permitted Refinancing Debt in exchange for, or the net proceeds of which are
used to extend, refinance, renew, replace, defease or refund, Indebtedness
that was permitted by this Indenture to be incurred;
(ix) the incurrence by the Company or any of its Subsidiaries of
intercompany Indebtedness between or among the Company and any of its
Subsidiaries; provided, however, that (i) if the Company is the obligor on
such Indebtedness, such Indebtedness is expressly subordinate to the payment
in full of all Obligations with respect to the Notes and (ii)(A) any
subsequent issuance or transfer of Equity Interests that results in any such
Indebtedness being held by a Person other than the Company or a Subsidiary and
(B) any sale or other transfer of any such Indebtedness to a Person that is
not either the Company or a Subsidiary shall be deemed, in each case, to
constitute an incurrence of such Indebtedness by the Company or such
Subsidiary, as the case may be;
(x) the incurrence by the Company or any of its Subsidiaries of
Hedging Obligations that are incurred for the purpose of fixing or hedging
interest rate risk with respect to any floating rate Indebtedness that is
permitted by the terms of this Indenture to be outstanding; and
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(xi) the incurrence by the Company and any of its Subsidiaries of
Indebtedness (in addition to Indebtedness permitted by any other clause of
this paragraph) in an aggregate principal amount (or accreted value, as
applicable) at any time outstanding not to exceed $10.0 million.
SECTION 4.10. ASSET SALES.
The Company shall not, and shall not permit any of its Subsidiaries
to, engage in any Asset Sale unless (i) the Company (or the Subsidiary, as the
case may be) receives consideration at the time of such Asset Sale at least
equal to the Fair Market Value (evidenced by a resolution of the Board of
Directors set forth in an Officers' Certificate delivered to the Trustee) of
the assets or Equity Interests issued or sold or otherwise disposed of and
(ii) at least 75% of the consideration therefor received by the Company or
such Subsidiary is in the form of cash; provided that the amount of (x) any
liabilities (as shown on the Company's or such Subsidiary's most recent
balance sheet), of the Company or any Subsidiary (other than contingent
liabilities and liabilities that are by their terms subordinated to the Notes
or any Subsidiary Guarantee) that are assumed by the transferee of any such
assets pursuant to a customary novation agreement that releases the Company or
such Subsidiary from further liability and (y) any notes or other Obligations
received by the Company or any such Subsidiary from such transferee that are
immediately converted by the Company or such Subsidiary into cash (to the
extent of the cash received), shall be deemed to be cash for purposes of this
provision.
Within 360 days after the receipt of any Net Proceeds from an Asset
Sale, the Company may apply such Net Proceeds, at its option, (a) to
permanently reduce Senior Debt (and to correspondingly reduce commitments with
respect thereto, in the case of Senior Debt that is revolving debt), or (b) to
the acquisition of a controlling interest in another business, the making of a
capital expenditure or the acquisition of other long-term assets, in each
case, in the Broadcast Business. Pending the final application of any such Net
Proceeds, the Company may temporarily reduce Senior Debt or otherwise invest
such Net Proceeds in any manner that is not prohibited by this Indenture. Any
Net Proceeds from Asset Sales that are not applied or invested as provided in
the first sentence of this paragraph will be deemed to constitute "Excess
Proceeds." Within fifteen Business Days of each date on which the aggregate
amount of Excess Proceeds exceeds $10.0 million, the Company shall be required
to make an Asset Sale Offer, in accordance with the procedures set forth in
Section 3.09 hereof, to all Holders of Notes and the holders of Pari Passu Debt,
to the extent required by the terms thereof, to purchase the maximum principal
amount of Notes and any such Pari Passu Debt that may be purchased out of the
Excess Proceeds, at an offer price in cash in an amount equal to 100% of the
principal amount thereof plus accrued and unpaid interest and Liquidated
Damages, if any, thereon to the date of purchase in accordance with the
procedures set forth herein or the agreements governing Pari Passu Debt, as
applicable; provided, however, that the Company may only purchase Pari Passu
Debt in an Asset Sale Offer that was issued pursuant to an indenture having a
provision substantially similar to this Section 4.10. To the extent that the
aggregate amount of Notes and Pari Passu Debt tendered pursuant to an Asset Sale
Offer is less than the Excess Proceeds, the Company may use any remaining Excess
Proceeds for general corporate purposes. If the aggregate principal amount of
Notes and Pari Passu Debt surrendered exceeds the amount of Excess Proceeds, the
Trustee shall select the Notes and Pari Passu Debt to be purchased on a pro rata
basis, based upon the principal amount thereof surrendered in such Asset Sale
Offer. Upon completion of such offer to purchase, the amount of Excess Proceeds
shall be reset at zero. Notwithstanding the foregoing, in the event that a
Disposition or the exercise of the MMR Warrants occurs at a time when any
Disposition Debt is outstanding, then all of the Net Proceeds of such
Disposition or the exercise of the MMR Warrants will be required to be applied
to redeem, substantially concurrently with such Disposition or exercise of the
MMR Warrants, the component of the Permitted Disposition Amount related to such
Disposition Debt.
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Notwithstanding the immediately preceding paragraph, the Company and
its Subsidiaries shall be permitted to consummate an Asset Sale without
complying with such paragraph if (i) the Company or the applicable Subsidiary,
as the case may be, receives consideration at the time of such Asset Sale at
least equal to the Fair Market Value of the assets or other property sold,
issued or otherwise disposed of (as evidenced by a resolution of the Company's
Board of Directors set forth in an Officers' Certificate delivered to the
Trustee) and (ii) at least 75% of the consideration for such Asset Sale
constitutes assets or other property of a kind usable by the Company and its
Subsidiaries in the business of the Company and its Subsidiaries as conducted
by the Company and its Subsidiaries on the date hereof; provided that any
consideration not constituting assets or property of a kind usable by the
Company and its Subsidiaries in the business conducted by them on the date of
such Asset Sale received by the Company or any of its Subsidiaries in
connection with any Asset Sale permitted to be consummated under this
paragraph shall constitute Net Proceeds subject to the provisions of the two
preceding paragraphs of this Section 4.10.
SECTION 4.11. TRANSACTIONS WITH AFFILIATES.
The Company shall not, and shall not permit any of its Subsidiaries
to, make any payment to, or sell, lease, transfer or otherwise dispose of any
of its properties or assets to, or purchase any property or assets from, or
enter into or make or amend any contract, agreement, understanding, loan,
advance or guarantee with, or for the benefit of, any Affiliate (each of the
foregoing, an "Affiliate Transaction"), unless (i) such Affiliate Transaction
is on terms that are no less favorable to the Company or the relevant
Subsidiary than those that would have been obtained in a comparable
transaction by the Company or such Subsidiary with an unrelated Person and
(ii) the Company delivers to the Trustee (a) with respect to any Affiliate
Transaction or series of related Affiliate Transactions involving aggregate
consideration in excess of $1.0 million, a resolution of the Board of
Directors set forth in an Officers' Certificate certifying that such Affiliate
Transaction complies with clause (i) above and that such Affiliate Transaction
has been approved by a majority of the members of the Board of Directors that
are disinterested as to such Affiliate Transaction and (b) with respect to any
Affiliate Transaction or series of related Affiliate Transactions involving
aggregate consideration in excess of $5.0 million, an opinion as to the
fairness to the Holders of Notes of such Affiliate Transaction from a
financial point of view issued by an accounting, appraisal or investment
banking firm of national standing; provided that (1) transactions between or
among the Company and/or its Wholly Owned Subsidiaries, (2) the MMR Merger and
transactions and agreements specifically contemplated by the Agreement and
Plan of Merger among the Company, SFX Merger Company and MMR as in effect on
the date hereof that are disclosed in the Offering Memorandum under the
caption "Agreements Relating to the Acquisitions and Dispositions,"
(3) the redemption or repurchase of the Existing MMR Indebtedness, (4)
transactions and agreements specifically contemplated by the Termination and
Assignment Agreement between the Company and SCMC as in effect on the date
hereof, (5) payments required by the terms of the joint lease among the Company,
SCMC and the landlord thereunder for the Company's corporate headquarters
located at 150 East 58th Street, New York, New York and any agreements directly
related thereto, in each case, as the same are in effect on the date hereof and
(6) Restricted Payments and Permitted Investments that are permitted by Section
4.07 hereof, in each case, shall not be deemed to be Affiliate Transactions.
SECTION 4.12. LIENS.
The Company shall not, and shall not permit any of its Subsidiaries
to, directly or indirectly, create, incur, assume or suffer to exist any Lien
securing Indebtedness (other than Senior Debt) on any asset now owned or
hereafter acquired, or on any income or profits therefrom, except Permitted
Liens.
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SECTION 4.13. CONTINUED EXISTENCE.
Subject to Article 5 hereof, each of the Company and each of the
Guarantors shall do or cause to be done all things necessary to preserve and
keep in full force and effect (i) its corporate, partnership, limited
liability company or other existence, and the corporate, partnership, limited
liability company or other existence of each of its Subsidiaries, in
accordance with the respective organizational documents (as the same may be
amended from time to time) of the Company, any such Guarantor or any such
Subsidiary and (ii) the rights (charter and statutory), licenses and
franchises of the Company, the Guarantors and any of their respective
Subsidiaries; provided, however, that the Company and the Guarantors shall not
be required to preserve any such right, license or franchise, or the
corporate, partnership or other existence of any of their Subsidiaries, if the
respective Board of Directors shall determine that the preservation thereof is
no longer desirable in the conduct of the business of the Company or such
Guarantor, as applicable, and their respective Subsidiaries, taken as a whole,
and that the loss thereof is not adverse in any material respect to the
Holders of the Notes.
SECTION 4.14. OFFER TO REPURCHASE UPON CHANGE OF CONTROL.
(a) Upon the occurrence of a Change of Control, each Holder of Notes
shall have the right to require the Company to repurchase all or any part
(equal to $1,000 or an integral multiple thereof) of such Holder's Notes
pursuant to the offer described below (the "Change of Control Offer") at an
offer price in cash equal to 101% of the principal amount thereof plus, in
each case, accrued and unpaid interest and Liquidated Damages, if any, thereon
to the date of purchase (the "Change of Control Payment"). Within 10 days
following any Change of Control, the Company shall mail a notice to each
Holder, with a copy to the Trustee, stating: (1) that the Change of Control
Offer is being made pursuant to this Section 4.14 and that all Notes tendered
shall be accepted for payment; (2) the purchase price and the purchase date,
which shall be no later than 30 Business Days from the date such notice is
mailed (the "Change of Control Payment Date"); (3) that any Note not tendered
shall continue to accrue interest and Liquidated Damages, if any; (4) that,
unless the Company defaults in the payment of the Change of Control Payment, all
Notes accepted for payment pursuant to the Change of Control Offer shall cease
to accrue interest and Liquidated Damages, if any, after the Change of Control
Payment Date; (5) that Holders electing to have any Notes purchased pursuant to
a Change of Control Offer shall be required to surrender the Notes, with the
form entitled "Option of Holder to Elect Purchase" on the reverse of the Notes
completed, to the Paying Agent at the address specified in the notice prior to
the close of business on the third Business Day preceding the Change of Control
Payment Date; and (6) that Holders whose Notes are being purchased only in part
shall be issued new Notes equal in principal amount to the unpurchased portion
of the Notes surrendered, which unpurchased portion must be equal to $1,000 in
principal amount or an integral multiple thereof. The Company shall comply with
the requirements of Rule 14e-1 under the Exchange Act and any other securities
laws and regulations thereunder to the extent such laws and regulations are
applicable in connection with the repurchase of Notes in connection with a
Change of Control.
(b) On or prior to 10:00 a.m. Eastern Time on the Change of Control
Payment Date, the Company shall, to the extent lawful, (1) accept for payment
all Notes or portions thereof properly tendered pursuant to the Change of
Control Offer, (2) deposit with the Paying Agent an amount equal to the Change
of Control Payment in respect of all Notes or portions thereof so tendered and
(3) deliver or cause to be delivered to the Trustee the Notes so accepted
together with an Officers' Certificate stating the aggregate principal amount of
Notes or portions thereof being purchased by the Company. The Paying Agent shall
promptly mail to each Holder of Notes so tendered the Change of Control Payment
for such Notes, and the Trustee shall promptly authenticate and mail (or cause
to be transferred by book entry) to each Holder a new Note equal in principal
amount to any unpurchased portion of the Notes
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surrendered, if any; provided that each such new Note shall be in a principal
amount of $1,000 or an integral multiple thereof. Prior to complying with the
provisions of this Section 4.14, but in any event within 90 days following a
Change of Control, the Company shall either repay all outstanding Senior Debt
or obtain the requisite consents, if any, under all agreements governing
outstanding Senior Debt to permit the repurchase of Notes required by this
Section 4.14. The Company shall publicly announce the results of the Change of
Control Offer on or as soon as practicable after the Change of Control Payment
Date.
(c) The Company shall not be required to make a Change of Control
Offer upon a Change of Control if a third party makes the Change of Control
Offer in the manner, at the times and otherwise in compliance with the
requirements set forth in this Indenture applicable to a Change of Control
Offer made by the Company, and purchases all Notes validly tendered and not
withdrawn under such Change of Control Offer.
SECTION 4.15. ADDITIONAL SUBSIDIARY GUARANTEES.
If, after the date hereof, the Company or any Guarantor shall acquire
another Person which becomes a Subsidiary, then the Company will cause such
Subsidiary to (A) execute and deliver to the Trustee a supplemental indenture
substantially in the form of Exhibit D hereto pursuant to which such Subsidiary
shall unconditionally guarantee all of the Company's obligations under the Notes
on the terms set forth in such supplemental indenture and (B) deliver to the
Trustee an Opinion of Counsel reasonably satisfactory to the Trustee that such
supplemental indenture has been duly executed and delivered by such Subsidiary.
SECTION 4.16. LIMITATION ON ISSUANCES AND SALES OF CAPITAL STOCK OF
WHOLLY OWNED SUBSIDIARIES.
The Company (i) shall not, and shall not permit any Wholly Owned
Subsidiary of the Company to, transfer, convey, sell, lease or otherwise
dispose of any Capital Stock of any Wholly Owned Subsidiary of the Company to
any Person (other than the Company or a Wholly Owned Subsidiary of the
Company), unless (a) such transfer, conveyance, sale, lease or other
disposition is of all the Capital Stock of such Wholly Owned Subsidiary and
(b) the Net Proceeds from such transfer, conveyance, sale, lease or other
disposition are applied in accordance with Section 4.10 hereof and (ii) shall
not permit any Wholly Owned Subsidiary of the Company to issue any of its
Equity Interests (other than, if necessary, shares of its Capital Stock
constituting directors' qualifying shares) to any Person other than to the
Company or a Wholly Owned Subsidiary of the Company.
SECTION 4.17. NO SENIOR SUBORDINATED DEBT.
The Company shall not incur, create, issue, assume, guarantee or
otherwise become liable for any Indebtedness that is subordinate or junior in
right of payment to any Senior Debt and senior in any respect in right of
payment to the Notes, and no Guarantor shall incur, create, issue, assume,
guarantee or otherwise become liable for any Indebtedness that is subordinate
or junior in right of payment to its Senior Debt and senior in any respect in
right of payment to its Subsidiary Guarantee.
SECTION 4.18. SALE AND LEASEBACK TRANSACTIONS.
The Company shall not, and shall not permit any of its Subsidiaries
to, enter into any sale and leaseback transaction; provided that the Company
may enter into a sale and leaseback transaction if (i) the Company could have
(a) incurred Indebtedness (other than Permitted Debt) in an amount equal to
the Attributable Debt relating to such sale and leaseback transaction pursuant
to the Debt to Cash Flow
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Ratio test set forth in the first paragraph of Section 4.09 hereof and (b)
incurred a lien to secure such Indebtedness pursuant to the covenant set forth
in Section 4.12 hereof, (ii) the gross cash proceeds of such sale and
leaseback transaction are at least equal to the Fair Market Value (as
determined in good faith by the Board of Directors and set forth in an
Officers' Certificate delivered to the Trustee) of the property that is the
subject of such sale and leaseback transaction and (iii) the transfer of
assets in such sale and leaseback transaction is permitted by, and the Company
applies the proceeds of such transaction in compliance with, Section 4.10
hereof.
SECTION 4.19. BUSINESS ACTIVITIES.
The Company shall not, and shall not permit any Subsidiary to, engage
in any business other than (i) the Broadcast Business and such business
activities as are incidental or related thereto, (ii) such other businesses as
the Company or its Subsidiaries are engaged in on the date hereof.
SECTION 4.20. PAYMENTS FOR CONSENT.
Neither the Company nor any of its Subsidiaries shall, directly or
indirectly, pay or cause to be paid any consideration, whether by way of
interest, fee or otherwise, to any Holder of any Notes for or as an inducement
to any consent, waiver or amendment of any of the terms or provisions of this
Indenture or the Notes unless such consideration is offered to be paid or is
paid to all Holders of the Notes that consent, waive or agree to amend in the
time frame set forth in the solicitation documents relating to such consent,
waiver or agreement.
ARTICLE 5
SUCCESSORS
SECTION 5.01. MERGER, CONSOLIDATION, OR SALE OF ASSETS.
The Company shall not consolidate or merge with or into (whether or not
the Company is the surviving corporation), or sell, assign, transfer, lease,
convey or otherwise dispose of all or substantially all of its properties or
assets in one or more related transactions, to another corporation, Person or
entity unless (i) the Company is the surviving entity or the entity or the
Person formed by or surviving any such consolidation or merger (if other than
the Company) or to which such sale, assignment, transfer, lease, conveyance or
other disposition shall have been made is a corporation organized or existing
under the laws of the United States, any state thereof or the District of
Columbia; (ii) the entity or Person formed by or surviving any such
consolidation or merger (if other than the Company) or the entity or Person to
which such sale, assignment, transfer, lease, conveyance or other disposition
shall have been made assumes all the Obligations of the Company under the
Notes and this Indenture pursuant to a supplemental indenture in a form
substantially similar to Exhibit D hereto; (iii) immediately after such
transaction no Default or Event of Default exists; (iv) such transaction will
not result in the loss or suspension or material impairment of any Material
Broadcast License; (v) except in the case of a merger of the Company with or
into a Wholly Owned Subsidiary of the Company, the Company or the entity or
Person formed by or surviving any such consolidation or merger (if other than
the Company), or to which such sale, assignment, transfer, lease, conveyance
or other disposition shall have been made (A) shall have a Consolidated Net
Worth immediately after the transaction equal to or greater than the
Consolidated Net Worth of the Company immediately preceding the transaction
and (B) shall, at the time of such transaction and after giving pro forma
effect thereto as if such transaction had occurred at the beginning of the
applicable four-quarter period, be permitted to incur at least $1.00 of
additional Indebtedness pursuant to the Debt to Cash Flow Ratio test set forth
in the first paragraph of
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Section 4.09 hereof; (vi) each Guarantor, unless it is the other party to the
transactions described above, shall have by supplemental indenture confirmed
that its Subsidiary Guarantee shall apply to the Company's or the surviving
Person's Obligations under this Indenture and the Notes; and (vii) the Company
has delivered to the Trustee an Officers' Certificate and Opinion of Counsel,
each stating that such consolidation, merger or transfer complies with this
Indenture, that the surviving Person agrees to be bound thereby, and that all
conditions precedent in this Indenture relating to such transaction have been
satisfied. For purposes of the foregoing, the transfer (by lease, assignment,
sale or otherwise) of all or substantially all of the properties and assets of
one or more Subsidiaries of the Company, the Capital Stock of which constitutes
all or substantially all of the properties and assets of the Company, shall be
deemed to be the transfer of all or substantially all of the properties and
assets of the Company.
SECTION 5.02. SUCCESSOR CORPORATION SUBSTITUTED.
Upon any consolidation or merger, or any sale, assignment, transfer,
lease, conveyance or other disposition of all or substantially all of the
assets of the Company in accordance with Section 5.01 hereof, the successor
corporation formed by such consolidation or into or with which the Company is
merged or to which such sale, assignment, transfer, lease, conveyance or other
disposition is made shall succeed to, and be substituted for (so that from and
after the date of such consolidation, merger, sale, lease, conveyance or other
disposition, the provisions of this Indenture referring to the "Company" shall
refer instead to the successor corporation and not to the Company), and may
exercise every right and power of the Company under this Indenture with the
same effect as if such successor Person had been named as the Company herein;
provided, however, that the predecessor Company shall not be relieved from the
obligation to pay the principal of and interest and Liquidated Damages, if
any, on the Notes except in the case of a sale of all of the Company's assets
that meets the requirements of Section 5.01 hereof.
ARTICLE 6
DEFAULTS AND REMEDIES
SECTION 6.01. EVENTS OF DEFAULT.
Each of the following constitutes an "Event of Default":
(i) a default for 30 days in the payment when due of
interest on, or Liquidated Damages, if any, with respect
to, the Notes (whether or not prohibited by Article 10
hereof);
(ii) a default in payment when due of the principal
of or premium, if any, on the Notes (whether or not
prohibited by Article 10 hereof);
(iii) the failure by the Company to comply with the
provisions described under Sections 3.09, 4.07, 4.09, 4.10,
4.14 and 5.01 hereof;
(iv) the failure by the Company for 60 days after
notice to comply with any of its other agreements in this
Indenture or the Notes;
(v) a default under any mortgage, indenture or
instrument under which there may be issued or by which
there may be secured or evidenced any Indebtedness for
money borrowed by the Company or any of its Subsidiaries
(or the payment of which is
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guaranteed by the Company or any of its Subsidiaries)
whether such Indebtedness or guarantee now exists, or
is created after the date hereof, which default (a)
is caused by a failure to pay principal of or
premium, if any, or interest on such Indebtedness
prior to the expiration of the grace period provided
in such Indebtedness on the date of such default (a
"Payment Default") or (b) results in the acceleration
of such Indebtedness prior to its express maturity
and, in each case, the principal amount of any such
Indebtedness, together with the principal amount of
any other such Indebtedness under which there has
been a Payment Default or the maturity of which has
been so accelerated, aggregates $10.0 million or
more;
(vi) the failure by the Company or any of its
Subsidiaries to pay final judgments aggregating in excess
of $10.0 million, which judgments are not paid, discharged
or stayed for a period of 60 days;
(vii) any Subsidiary Guarantee shall be held in any
judicial proceeding to be unenforceable or invalid or shall
cease for any reason to be in full force and effect or any
Subsidiary Guarantor, or any Person acting on behalf of any
Subsidiary Guarantor, shall deny or disaffirm its
obligations under its Subsidiary Guarantee;
(viii) the Company, any Significant Subsidiary of the
Company or any group of Subsidiaries that, taken together,
would constitute a Significant Subsidiary pursuant to or
within the meaning of Bankruptcy Law:
(a) commences a voluntary case,
(b) consents to the entry of an order for
relief against it in an involuntary case,
(c) consents to the appointment of a
Custodian of it or for all or substantially all
of its property,
(d) makes a general assignment for the
benefit of its creditors, or
(e) generally is not paying its debts as
they become due; or
(ix) a court of competent jurisdiction enters an
order or decree under any Bankruptcy Law that:
(a) is for relief against the Company, any
of its Significant Subsidiaries or any group of
its Subsidiaries that, taken together, would
constitute a Significant Subsidiary in an
involuntary case;
(b) appoints a Custodian of the Company, any
of its Significant Subsidiaries, or any group of
its Subsidiaries that, taken together, would
constitute a Significant Subsidiary or for all or
substantially all of the property of the Company,
any of its Significant Subsidiaries or any group
of its Subsidiaries that, taken together, would
constitute a Significant Subsidiary; or
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(c) orders the liquidation of the Company,
any of its Significant Subsidiaries or any group
of its Subsidiaries that, taken together, would
constitute a Significant Subsidiary;
and the order or decree remains unstayed and in effect for 60
consecutive days.
The term "Custodian" means any receiver, trustee, assignee, liquidator
or similar official under any Bankruptcy Law.
An Event of Default shall not be deemed to have occurred under clause
(iv) of this Section 6.01 until the Trustee notifies the Company, or the
Holders of at least 25% in principal amount of the then outstanding Notes
notify the Company and the Trustee, of the Default and the Company does not
cure the Default within 60 days after receipt of the notice. The notice must
specify the Default, demand that it be remedied and state that the notice is a
"Notice of Default."
In the case of any Event of Default pursuant to the provisions of
this Section 6.01 occurring by reason of any action (or inaction) willfully
taken (or not taken) by or on behalf of the Company with the intention of
avoiding payment of the premium that the Company would have had to pay if the
Company then had elected to redeem the Notes pursuant to Section 3.07 hereof,
an equivalent premium shall also become and be immediately due and payable to
the extent permitted by law upon the acceleration of the Notes, anything in
this Indenture or in the Notes to the contrary notwithstanding. If an Event of
Default occurs prior to May 15, 2001 by reason of any action (or inaction)
willfully taken (or not taken) by or on behalf of the Company with the
intention of avoiding the prohibition on redemption of the Notes prior to
May 15, 2001, then the premium payable for purposes of this paragraph for
each of the years beginning on May 15 of the years set forth below shall
be as set forth in the following table expressed as a percentage of the amount
that would otherwise be due but for the provisions of this sentence, plus
accrued interest and Liquidated Damages, if any, to the date of payment:
Year Percentage
---- ----------
1996.................................................. 114.335%
1997.................................................. 112.543%
1998.................................................. 110.751%
1999.................................................. 108.959%
2000.................................................. 107.167%
SECTION 6.02. ACCELERATION.
If any Event of Default (other than an Event of Default specified in
clauses (viii) and (ix) of Section 6.01 hereof) occurs and is continuing, the
Trustee or the Holders of at least 25% in principal amount of the then
outstanding Notes may declare all the Notes to be due and payable immediately.
Upon any such declaration, the Notes shall become due and payable immediately.
Notwithstanding the foregoing, if an Event of Default specified in clauses
(viii) or (ix) of Section 6.01 hereof occurs with respect to the Company, any
of its Significant Subsidiaries or any group of its Subsidiaries that, taken
together, would constitute a Significant Subsidiary, such an amount shall ipso
facto become and be immediately due and payable without any declaration or
other act on the part of the Trustee or any Holder. The Holders of a majority
in principal amount of the then outstanding Notes by written notice to the
Trustee may rescind an acceleration and its consequences if the rescission
would not conflict with
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any judgment or decree and if all existing Events of Default (except
nonpayment of principal or interest that has become due solely because of the
acceleration) have been cured or waived.
In addition, the Company shall promptly notify holders of Senior Debt
if payment of the Notes is accelerated because of an Event of Default.
SECTION 6.03. OTHER REMEDIES.
If an Event of Default occurs and is continuing, the Trustee may
pursue any available remedy to collect the payment of principal, premium and
Liquidated Damages, if any, and interest on the Notes or to enforce the
performance of any provision of the Notes or this Indenture.
The Trustee may maintain a proceeding even if it does not possess any
of the Notes or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Holder of a Note in exercising any right or
remedy accruing upon an Event of Default shall not impair the right or remedy
or constitute a waiver of or acquiescence in the Event of Default. All
remedies are cumulative to the extent permitted by law.
SECTION 6.04. WAIVER OF PAST DEFAULTS.
Holders of not less than a majority in aggregate principal amount of
the then outstanding Notes may by notice to the Trustee on behalf of the
Holders of all of the Notes waive an existing Default or Event of Default and
its consequences hereunder, except a continuing Default or Event of Default in
the payment of the principal of, premium or Liquidated Damages, if any, or
interest on, the Notes (including in connection with an offer to purchase)
(provided, however, that the Holders of a majority in aggregate principal
amount of the then outstanding Notes may rescind an acceleration and its
consequences, including any related payment default that resulted from such
acceleration). Upon any such waiver, such Default shall cease to exist, and
any Event of Default arising therefrom shall be deemed to have been cured for
every purpose of this Indenture; but no such waiver shall extend to any
subsequent or other Default or impair any right consequent thereon.
SECTION 6.05. CONTROL BY MAJORITY.
Holders of a majority in principal amount of the then outstanding
Notes may direct the time, method and place of conducting any proceeding for
exercising any remedy available to the Trustee or exercising any trust or
power conferred on it. However, the Trustee may refuse to follow any direction
that conflicts with law or this Indenture that the Trustee determines may be
unduly prejudicial to the rights of other Holders of Notes or that may involve
the Trustee in personal liability and shall be entitled to the benefit of
Section 7.01(c)(iii) hereof.
SECTION 6.06. LIMITATION ON SUITS.
A Holder of a Note may pursue a remedy with respect to this Indenture
or the Notes only if:
(a) the Holder of a Note gives to the Trustee written notice of a
continuing Event of Default;
(b) the Holders of at least 25% in principal amount of the then
outstanding Notes make a written request to the Trustee to pursue the
remedy;
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(c) such Holder of a Note or Holders of Notes offer and, if
requested, provide to the Trustee indemnity satisfactory to the Trustee
against any loss, liability or expense;
(d) the Trustee does not comply with the request within 60 days after
receipt of the request and the offer and, if requested, the provision of
indemnity; and
(e) during such 60-day period the Holders of a majority in principal
amount of the then outstanding Notes do not give the Trustee a direction
inconsistent with the request.
A Holder of a Note may not use this Indenture to prejudice the rights of
another Holder of a Note or to obtain a preference or priority over another
Holder of a Note.
SECTION 6.07. RIGHTS OF HOLDERS OF NOTES TO RECEIVE PAYMENT.
Notwithstanding any other provision of this Indenture, the right of
any Holder of a Note to receive payment of principal, premium and Liquidated
Damages, if any, and interest on the Note, on or after the respective due
dates expressed in the Note (including in connection with an offer to
purchase), or to bring suit for the enforcement of any such payment on or
after such respective dates, shall not be impaired or affected without the
consent of such Holder.
SECTION 6.08. COLLECTION SUIT BY TRUSTEE.
If an Event of Default specified in Section 6.01(i) or (ii) hereof
occurs and is continuing, the Trustee is authorized to recover judgment in its
own name and as trustee of an express trust against the Company for the whole
amount of principal of, premium and Liquidated Damages, if any, and interest
remaining unpaid on the Notes and interest on overdue principal and, to the
extent lawful, interest and Liquidated Damages, if any, and such further
amount as shall be sufficient to cover the costs and expenses of collection,
including the reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel.
SECTION 6.09. TRUSTEE MAY FILE PROOFS OF CLAIM.
The Trustee is authorized to file such proofs of claim and other
papers or documents as may be necessary or advisable in order to have the
claims of the Trustee (including any claim for the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents (including
accountants, experts or such other professionals as the Trustee deems
necessary, advisable or appropriate) and counsel (including the allocated
costs of inside counsel)) and the Holders of the Notes allowed in any judicial
proceedings relative to the Company or any of the Guarantors (or any other
obligor upon the Notes), its creditors or its property and shall be entitled
and empowered to collect, receive and distribute any money or other property
payable or deliverable on any such claims and any custodian in any such
judicial proceeding is hereby authorized by each Holder to make such payments
to the Trustee, and in the event that the Trustee shall consent to the making
of such payments directly to the Holders, to pay to the Trustee any amount due
to it for the reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel, and any other amounts due the Trustee
under Section 7.07 hereof. To the extent that the payment of any such
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, and any other amounts due the Trustee under Section 7.07 hereof
out of the estate in any such proceeding, shall be denied for any reason,
payment of the same shall be secured by a Lien on, and shall be paid out of,
any and all distributions, dividends, money, securities and other properties
that the Holders may be entitled to receive in such proceeding whether in
liquidation or under any plan of reorganization or arrangement or otherwise.
Nothing herein contained
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shall be deemed to authorize the Trustee to authorize or consent to or accept
or adopt on behalf of any Holder any plan of reorganization, arrangement,
adjustment or composition affecting the Notes or the rights of any Holder, or
to authorize the Trustee to vote in respect of the claim of any Holder in any
such proceeding.
SECTION 6.10. PRIORITIES.
If the Trustee collects any money pursuant to this Article 6, it
shall pay out the money in the following order:
First: to the Trustee, its agents and attorneys for amounts due under
Section 7.07 hereof, including payment of all compensation, expense and
liabilities incurred, and all advances made, by the Trustee and the costs and
expenses of collection;
Second: to Holders of Notes for amounts due and unpaid on the Notes
for principal, premium and Liquidated Damages, if any, and interest, ratably,
without preference or priority of any kind, according to the amounts due and
payable on the Notes for principal, premium and Liquidated Damages, if any,
and interest, respectively; and
Third: to the Company or to such party as a court of competent
jurisdiction shall direct.
The Trustee may fix a record date and payment date for any payment to
Holders of Notes pursuant to this Section 6.10.
SECTION 6.11. UNDERTAKING FOR COSTS.
In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or omitted
by it as a Trustee, a court in its discretion may require the filing by any
party litigant in the suit of an undertaking to pay the costs of the suit, and
the court in its discretion may assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in the suit, having due regard to
the merits and good faith of the claims or defenses made by the party
litigant. This Section 6.11 does not apply to a suit by the Trustee, a suit by
a Holder of a Note pursuant to Section 6.07 hereof, or a suit by Holders of
more than 10% in principal amount of the then outstanding Notes.
ARTICLE 7
TRUSTEE
SECTION 7.01. DUTIES OF TRUSTEE.
(a) If an Event of Default has occurred and is continuing, the
Trustee shall exercise such of the rights and powers vested in it by this
Indenture, and use the same degree of care and skill in its exercise thereof,
as a prudent man would exercise or use under the circumstances in the conduct
of his own affairs.
(b) Except during the continuance of an Event of Default:
(i) the duties of the Trustee shall be determined solely by the
express provisions of this Indenture and the TIA and the Trustee need
perform only those duties that are specifically
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set forth in this Indenture and no others, and no implied covenants or
obligations shall be read into this Indenture or the TIA against the
Trustee; and
(ii) in the absence of bad faith on its part, the Trustee may
conclusively rely, without investigation, as to the truth of the
statements and the correctness of the opinions expressed therein, upon any
statements, certificates or opinions furnished to the Trustee and
conforming to the requirements of this Indenture. However, the Trustee
shall examine the certificates and opinions to determine whether or not
they conform on their face to the requirements of this Indenture.
(c) The Trustee may not be relieved from liabilities for its own
gross negligent action, its own gross negligent failure to act, or its own
willful misconduct, except that:
(i) this paragraph does not limit the effect of paragraph (b) of this
Section;
(ii) the Trustee shall not be liable for any error of judgment made
in good faith by a Responsible Officer, unless it is proved that the
Trustee was negligent in ascertaining the pertinent facts; and
(iii) the Trustee shall not be liable with respect to any action it
takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.05 hereof.
(d) Whether or not therein expressly so provided, every provision of
this Indenture that in any way relates to the Trustee is subject to this
Section 7.01.
(e) No provision of this Indenture shall require the Trustee to
expend or risk its own funds or incur any liability. The Trustee shall be
under no obligation to exercise any of its rights and powers under this
Indenture at the request of any Holders, unless such Holder shall have offered
to the Trustee security and indemnity satisfactory to it against any loss,
liability or expense which might be incurred by it in compliance with such
request or direction.
(f) The Trustee shall not be liable for interest on any
money received by it except as the Trustee may agree in writing with the
Company. Money held in trust by the Trustee need not be segregated from other
funds except to the extent required by law.
SECTION 7.02. RIGHTS OF TRUSTEE.
(a) The Trustee may conclusively rely and shall be protected in
acting or refraining from acting upon any document believed by it to be
genuine and to have been signed or presented by the proper Person. The Trustee
need not investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may require
an Officers' Certificate or an Opinion of Counsel or both. The Trustee shall
not be liable for any action it takes or omits to take in good faith in
reliance on such Officers' Certificate or Opinion of Counsel. The Trustee may
consult with counsel and the written advice of such counsel or any Opinion of
Counsel shall be full and complete authorization and protection from liability
in respect of any action taken, suffered or omitted by it hereunder in good
faith and in reliance thereon.
(c) The Trustee may act through its attorneys, accountants, experts
and such other professionals as the Trustee deems necessary, advisable or
appropriate and shall not be responsible for
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the misconduct or negligence of any attorney, accountant, expert or other such
professional appointed with due care.
(d) The Trustee shall not be liable for any action it takes or omits
to take in good faith that it believes to be authorized or within the rights
or powers conferred upon it by this Indenture.
(e) Unless otherwise specifically provided in this Indenture, any
demand, request, direction or notice from the Company or any Guarantor shall
be sufficiently evidenced by a written order signed by two Officers of the
Company or Guarantor issuing such demand, request, direction or notice.
(f) The Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction of
any of the Holders unless such Holders shall have offered to the Trustee
reasonable security or indemnity against the costs, expenses and liabilities
that might be incurred by it in compliance with such request or direction.
SECTION 7.03. INDIVIDUAL RIGHTS OF TRUSTEE.
The Trustee in its individual or any other capacity may become the
owner or pledgee of Notes and may otherwise deal with the Company, the
Guarantors or any Affiliate of the Company with the same rights it would have
if it were not Trustee. However, in the event that the Trustee acquires any
conflicting interest within the meaning of the TIA it must eliminate such
conflict within 90 days, apply to the SEC for permission to continue as
trustee or resign. Any Agent may do the same with like rights and duties. The
Trustee is also subject to Sections 7.10 and 7.11 hereof.
SECTION 7.04. TRUSTEE'S DISCLAIMER.
The Trustee shall not be responsible for and makes no representation
as to the validity or adequacy of this Indenture, the Notes or the Subsidiary
Guarantees, it shall not be accountable for the Company's use of the proceeds
from the Notes or any money paid to the Company or upon the Company's
direction under any provision of this Indenture, it shall not be responsible
for the use or application of any money received by any Paying Agent other
than the Trustee, and it shall not be responsible for any statement or recital
herein or any statement in the Notes or any other document in connection with
the sale of the Notes or pursuant to this Indenture other than its certificate
of authentication.
SECTION 7.05. NOTICE OF DEFAULTS.
If a Default or Event of Default occurs and is continuing and if it
is known to the Trustee, the Trustee shall mail to Holders of Notes a notice
of the Default or Event of Default within 90 days after it occurs. Except in
the case of a Default or Event of Default in payment of principal of, premium
or Liquidated Damages, if any, or interest on any Note, the Trustee may
withhold the notice if and so long as a committee of its Responsible Officers
in good faith determines that withholding the notice is in the interests of
the Holders of the Notes.
SECTION 7.06. REPORTS BY TRUSTEE TO HOLDERS OF THE NOTES.
Within 60 days after each May 15 beginning with the May 15 following
the date of this Indenture, and for so long as Notes remain outstanding, the
Trustee shall mail to the Holders of the Notes a brief report dated as of such
reporting date that complies with TIA [section] 313(a) (but if no event
described in TIA [section] 313(a) has occurred within the twelve months
preceding the reporting date, no report need be
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transmitted). The Trustee also shall comply with TIA [section] 313(b)(2). The
Trustee shall also transmit by mail all reports as required by TIA [section]
313(c).
A copy of each report at the time of its mailing to the Holders of
Notes shall be mailed to the Company and filed with the SEC and each stock
exchange on which the Notes are listed in accordance with TIA [section]
313(d). The Company shall promptly notify the Trustee when the Notes are
listed on any stock exchange.
SECTION 7.07. COMPENSATION, REIMBURSEMENT AND INDEMNITY.
The Company and the Guarantors shall pay to the Trustee from time to
time reasonable compensation for its acceptance of this Indenture and the
rendering by it of the services required hereunder. The Trustee's compensation
shall not be limited by any law on compensation of a trustee of an express
trust. The Company and the Guarantors shall reimburse the Trustee promptly
upon request for all reasonable disbursements, advances and expenses incurred
or made by or on behalf of it in addition to the compensation for its
services. Such expenses shall include the reasonable compensation,
disbursements and expenses of the Trustee's attorneys, accountants, experts
and such other professionals as the Trustee deems reasonably necessary,
advisable or appropriate.
The Company and the Guarantors shall indemnify the Trustee against
any and all losses, liabilities or expenses incurred by it arising out of or
in connection with the acceptance or administration of its duties under this
Indenture (including its duties under Section 9.06 hereof), including the
costs and expenses of enforcing this Indenture against the Company and the
Guarantors (including this Section 7.07 hereof) and defending itself against
or investigating any claim (whether asserted by the Company, the Guarantors or
any Holder or any other person) or liability in connection with the exercise
or performance of any of its powers or duties hereunder, except to the extent
any such loss, liability or expense may be attributable to its negligence or
willful misconduct. The Trustee shall notify the Company and the Guarantors
promptly of any claim for which it may seek indemnity.
The obligations of the Company and the Guarantors under this Section
7.07 shall survive the satisfaction and discharge of this Indenture.
To secure the Company's and the Guarantors' payment obligations in
this Section 7.07, the Trustee shall have a Lien prior to the Notes on all
money or property held or collected by the Trustee, except any money held in
trust to pay principal, interest and Liquidated Damages, if any, on particular
Notes. Such Lien shall survive the satisfaction and discharge of this
Indenture. Compensation, reimbursement and indemnification of the Trustee under
this Section 7.07 is not subordinated to Senior Debt or the Company.
When the Trustee incurs expenses or renders services after an Event
of Default specified in Section 6.01(viii) or (ix) hereof occurs, the expenses
and the compensation for the services (including the fees and expenses of its
agents and counsel) are intended to constitute expenses of administration
under any Bankruptcy Law.
The Trustee shall comply with the provisions of TIA [section]
313(b)(2) to the extent applicable.
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SECTION 7.08. REPLACEMENT OF TRUSTEE.
A resignation or removal of the Trustee and appointment of a
successor Trustee shall become effective only upon the successor Trustee's
acceptance of appointment as provided in this Section.
The Trustee may resign in writing at any time and be discharged from
the trust hereby created by so notifying the Company. The Holders of Notes of
a majority in principal amount of the then outstanding Notes may remove the
Trustee by so notifying the Trustee and the Company in writing. The Company
may remove the Trustee if:
(a) the Trustee fails to comply with Section 7.10 hereof;
(b) the Trustee is adjudged a bankrupt or an insolvent or an order
for relief is entered with respect to the Trustee under any applicable
Bankruptcy Law;
(c) a Custodian or public officer takes charge of the Trustee or its
property for the purpose of rehabilitation, conservation or liquidation; or
(d) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Company shall promptly appoint a
successor Trustee. Within one year after the successor Trustee takes office,
the Holders of a majority in principal amount of the then outstanding Notes
may appoint a successor Trustee to replace the successor Trustee appointed by
the Company.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company, or
the Holders of Notes of at least 10% in principal amount of the then
outstanding Notes may petition any court of competent jurisdiction for the
appointment of a successor Trustee.
If the Trustee, after written request by any Holder of a
Note who has been a Holder of a Note for at least six months, fails to comply
with Section 7.10 hereof, such Holder of a Note may petition any court of
competent jurisdiction for the removal of the Trustee and the appointment of a
successor Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon, the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. The Company shall mail a notice of its succession to
Holders of the Notes. The retiring Trustee shall promptly transfer all
property held by it as Trustee to the successor Trustee, provided all sums
owing to the Trustee hereunder have been paid and subject to the Lien provided
for in Section 7.07 hereof. Notwithstanding replacement of the Trustee
pursuant to this Section 7.08, the Company's obligations under Section 7.07
hereof shall continue for the benefit of the retiring Trustee.
SECTION 7.09. SUCCESSOR TRUSTEE BY MERGER, ETC.
If the Trustee consolidates, merges or converts into, or transfers
all or substantially all of its corporate trust business to, another
corporation, the successor corporation without any further act shall be the
successor Trustee.
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SECTION 7.10. ELIGIBILITY; DISQUALIFICATION.
There shall at all times be a Trustee hereunder that is a corporation
organized and doing business under the laws of the United States of America or
of any state thereof that is authorized under such laws to exercise corporate
trustee power, that is subject to supervision or examination by federal or
state authorities and that has a combined capital and surplus of at least $100
million as set forth in its most recent published annual report of condition.
This Indenture shall always have a Trustee who satisfies the
requirements of TIA [section] 310(a)(1), (2) and (5). The Trustee is subject
to TIA [section] 310(b).
SECTION 7.11. PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY.
The Trustee is subject to TIA [section] 311(a), excluding any
creditor relationship listed in TIA [section] 311(b). A Trustee who has
resigned or been removed shall be subject to TIA [section] 311(a) to the
extent indicated therein.
ARTICLE 8
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
SECTION 8.01. OPTION TO EFFECT LEGAL DEFEASANCE OR COVENANT DEFEASANCE.
The Company may, at the option of its Board of Directors evidenced by
a resolution set forth in an Officers' Certificate, at any time, elect to have
either Section 8.02 or 8.03 hereof be applied to all outstanding Notes upon
compliance with the conditions set forth below in this Article 8.
SECTION 8.02. LEGAL DEFEASANCE AND DISCHARGE.
Upon the Company's exercise under Section 8.01 hereof of the option
applicable to this Section 8.02, the Company and the Guarantors shall, subject
to the satisfaction of the conditions set forth in Section 8.04 hereof, be
deemed to have been discharged from their obligations with respect to all
outstanding Notes and Subsidiary Guarantees, as applicable, on the date the
conditions set forth below are satisfied (hereinafter, "Legal Defeasance").
For this purpose, Legal Defeasance means that the Company shall be deemed to
have paid and discharged the entire Indebtedness represented by the
outstanding Notes, which shall thereafter be deemed to be "outstanding" only
for the purposes of Section 8.05 hereof and the other Sections of this
Indenture referred to in (a) and (b) below, and to have satisfied all of its
other Obligations under such Notes and this Indenture (and the Trustee, on
demand of and at the expense of the Company, shall execute proper instruments
acknowledging the same), except for the following provisions which shall
survive until otherwise terminated or discharged hereunder: (a) the rights of
Holders of outstanding Notes to receive solely from the trust fund described
in Section 8.04 hereof, and as more fully set forth in such Section, payments
in respect of the principal of, premium, if any, and interest and Liquidated
Damages, if any, on such Notes when such payments are due, (b) the Company's
obligations with respect to such Notes under Article 2 and Section 4.02
hereof, (c) the rights, powers, trusts, duties and immunities of the Trustee
hereunder and the Company's obligations in connection therewith and (d) this
Article 8. Subject to compliance with this Article 8, the Company may exercise
its option under this Section 8.02 notwithstanding the prior exercise of its
option under Section 8.03 hereof.
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SECTION 8.03. COVENANT DEFEASANCE.
Upon the Company's exercise under Section 8.01 hereof of the option
applicable to this Section 8.03, the Company and the Guarantors shall, subject
to the satisfaction of the conditions set forth in Section 8.04 hereof, be
released from their obligations under the covenants contained in Sections
4.07, 4.08, 4.09, 4.10, 4.11, 4.12, 4.14, 4.15, 4.16, 4.17, 4.18, 4.19, 5.01
and 11.01 hereof with respect to the outstanding Notes on and after the date
the conditions set forth below are satisfied (hereinafter, "Covenant
Defeasance"), and the Notes shall thereafter be deemed not "outstanding" for
the purposes of any direction, waiver, consent or declaration or act of
Holders (and the consequences of any thereof) in connection with such
covenants, but shall continue to be deemed "outstanding" for all other
purposes hereunder (it being understood that such Notes shall not be deemed
"outstanding" for accounting purposes). For this purpose, Covenant Defeasance
means that, with respect to the outstanding Notes, the Company may omit to
comply with and shall have no liability in respect of any term, condition or
limitation set forth in any such covenant, whether directly or indirectly, by
reason of any reference elsewhere herein to any such covenant or by reason of
any reference in any such covenant to any other provision herein or in any
other document and such omission to comply shall not constitute a Default or
an Event of Default under Section 6.01(iii) hereof, but, except as specified
above, the remainder of this Indenture and such Notes shall be unaffected
thereby. In addition, upon the Company's exercise under Section 8.01 hereof of
the option applicable to this Section 8.03, subject to the satisfaction of the
conditions set forth in Section 8.04 hereof, Sections 6.01(iv) through
6.01(ix) hereof shall not constitute Events of Default.
SECTION 8.04. CONDITIONS TO LEGAL OR COVENANT DEFEASANCE.
The following shall be the conditions to the application of either
Section 8.02 or 8.03 hereof to the outstanding Notes:
In order to exercise either Legal Defeasance or Covenant Defeasance:
(a) the Company must irrevocably deposit with the
Trustee, in trust, for the benefit of the Holders of the
Notes, cash in United States dollars, non-callable
Government Securities, or a combination thereof, in such
amounts as will be sufficient, in the opinion of a
nationally recognized firm of independent public
accountants, to pay the principal of, premium, if any, and
interest and Liquidated Damages, if any, on the outstanding
Notes on the stated date for payment thereof or on the
applicable redemption date, as the case may be, and the
Company must specify whether the Notes are being defeased
to maturity or to a particular redemption date;
(b) in the case of an election under Section 8.02
hereof, the Company shall have delivered to the Trustee an
Opinion of Counsel in the United States reasonably
acceptable to the Trustee confirming that (A) the Company
has received from, or there has been published by, the
Internal Revenue Service a ruling or (B) since the date of
this Indenture, there has been a change in the applicable
federal income tax law, in either case to the effect that,
and based thereon such Opinion of Counsel shall confirm
that, the Holders of the outstanding Notes will not
recognize income, gain or loss for federal income tax
purposes as a result of such Legal Defeasance and will be
subject to federal income tax on the same amounts, in the
same manner and at the same times as would have been the
case if such Legal Defeasance had not occurred;
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(c) in the case of an election under Section 8.03
hereof, the Company shall have delivered to the Trustee an
Opinion of Counsel in the United States reasonably
acceptable to the Trustee confirming that the Holders of
the outstanding Notes will not recognize income, gain or
loss for federal income tax purposes as a result of such
Covenant Defeasance and will be subject to federal income
tax on the same amounts, in the same manner and at the same
times as would have been the case if such Covenant
Defeasance had not occurred;
(d) no Default or Event of Default shall have occurred
and be continuing on the date of such deposit (other than a
Default or Event of Default resulting from the borrowing of
funds to be applied to such deposit) or insofar as Section
6.01(viii) or (ix) hereof are concerned, at any time in the
period ending on the 91st day after the date of deposit (or
greater period of time in which any such deposit of trust
funds may remain subject to bankruptcy or insolvency laws
insofar as those apply to the deposit by the Company);
(e) such Legal Defeasance or Covenant Defeasance shall
not result in a breach or violation of, or constitute a
default under, any material agreement or instrument (other
than this Indenture) to which the Company or any of its
Subsidiaries is a party or by which the Company or any of
its Subsidiaries is bound;
(f) the Company shall have delivered to the Trustee an
Opinion of Counsel to the effect that, as of the date of
such opinion, (A) the trust funds will not be subject to
the rights of holders of Indebtedness other than the Notes
and (B) assuming no intervening bankruptcy of the Company
between the date of deposit and the 91st day following the
deposit, the trust funds will not be subject to the effects
of any applicable bankruptcy, insolvency, reorganization or
similar laws affecting creditors' rights generally under
any applicable United States or state law;
(g) the Company shall have delivered to the Trustee an
Officers' Certificate stating that the deposit was not made
by the Company with the intent of preferring the Holders of
Notes over the other creditors of the Company, or with the
intent of defeating, hindering, delaying or defrauding any
other creditors of the Company or others; and
(h) the Company shall have delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, each
stating that all conditions precedent provided for or
relating to the Legal Defeasance or the Covenant Defeasance
have been complied with.
SECTION 8.05. DEPOSITED MONEY AND GOVERNMENT SECURITIES TO BE HELD IN
TRUST; OTHER MISCELLANEOUS PROVISIONS.
Subject to Section 8.06 hereof, all money and non-callable Government
Securities (including the proceeds thereof) deposited with the Trustee (or
other qualifying trustee, collectively for purposes of this Section 8.05, the
"Trustee") pursuant to Section 8.04 hereof in respect of the outstanding Notes
shall be held in trust and applied by the Trustee, in accordance with the
provisions of such Notes and this Indenture, to the payment, either directly
or through any Paying Agent (including the Company acting as Paying Agent) as
the Trustee may determine, to the Holders of such Notes of all sums due and
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to become due thereon in respect of principal, premium and Liquidated Damages,
if any, and interest, but such money need not be segregated from other funds
except to the extent required by law.
The Company and the Guarantors shall pay and indemnify the Trustee
against any tax, fee or other charge imposed on or assessed against the cash
or non-callable Government Securities deposited pursuant to Section 8.04
hereof or the principal and interest received in respect thereof other than
any such tax, fee or other charge which by law is for the account of the
Holders of the outstanding Notes.
Anything in this Article 8 to the contrary notwithstanding, the
Trustee shall deliver or pay to the Company from time to time upon the request
of the Company any money or non-callable Government Securities held by it as
provided in Section 8.04 hereof which, in the opinion of a nationally
recognized firm of independent public accountants expressed in a written
certification thereof delivered to the Trustee (which may be the opinion
delivered under Section 8.04(a) hereof), are in excess of the amount thereof
that would then be required to be deposited to effect an equivalent Legal
Defeasance or Covenant Defeasance.
SECTION 8.06. REPAYMENT TO THE COMPANY.
Any money deposited with the Trustee or any Paying Agent, or then
held by the Company, in trust for the payment of the principal of, premium or
Liquidated Damages, if any, or interest on any Note and remaining unclaimed
for two years after such principal, and premium or Liquidated Damages, if any,
or interest has become due and payable shall be paid to the Company on its
request or (if then held by the Company) shall be discharged from such trust;
and the Holder of such Note shall thereafter, as a secured creditor, look only
to the Company or Guarantors for payment thereof, and all liability of the
Trustee or such Paying Agent with respect to such trust money, and all
liability of the Company as trustee thereof, shall thereupon cease; provided,
however, that the Trustee or such Paying Agent, before being required to make
any such repayment, may at the expense of the Company mail or cause to be
published once, in the New York Times and The Wall Street Journal (national
editions), notice that such money remains unclaimed and that, after a date
specified therein, which shall not be less than 30 days from the date of such
notification or publication, any unclaimed balance of such money then
remaining will be repaid to the Company.
SECTION 8.07. REINSTATEMENT.
If the Trustee or Paying Agent is unable to apply any United States
dollars or non-callable Government Securities in accordance with Section 8.02
or 8.03 hereof, as the case may be, by reason of any order or judgment of any
court or governmental authority enjoining, restraining or otherwise
prohibiting such application, then the obligations of the Company and the
Guarantors under this Indenture, the Notes and the Subsidiary Guarantees, as
applicable, shall be revived and reinstated as though no deposit had occurred
pursuant to Section 8.02 or 8.03 hereof until such time as the Trustee or
Paying Agent is permitted to apply all such money in accordance with Section
8.02 or 8.03 hereof, as the case may be; provided, however, that, if either
the Company or any Guarantor makes any payment of principal of, premium or
Liquidated Damages, if any, or interest on any Note following the
reinstatement of its obligations, the Company or such Guarantor shall be
subrogated to the rights of the Holders of such Notes to receive such payment
from the money held by the Trustee or Paying Agent.
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ARTICLE 9
AMENDMENT, SUPPLEMENT AND WAIVER
SECTION 9.01. WITHOUT CONSENT OF HOLDERS OF NOTES.
Notwithstanding Section 9.02 of this Indenture, the Company and the
Trustee may amend or supplement this Indenture or the Notes without the
consent of any Holder of a Note:
(a) to cure any ambiguity, defect or inconsistency;
(b) to provide for uncertificated Notes in addition to or in
place of certificated Notes;
(c) to provide for the assumption of the Company's or any
Guarantor's obligations to the Holders of the Notes in the case of a
merger or consolidation pursuant to Article 5 or Article 11 hereof,
as applicable;
(d) to make any change that would provide any additional
rights or benefits to the Holders of the Notes or that does not
adversely affect the legal rights hereunder of any Holder of Notes;
or
(e) to comply with the requirements of the SEC in order to
effect or maintain the qualification of this Indenture under the TIA.
Upon the request of the Company accompanied by a resolution
of the Board of Directors of the Company and each of the Guarantors
authorizing the execution of any such amended or supplemental indenture, and
upon receipt by the Trustee of the documents described in Section 7.02 hereof,
the Trustee shall join with the Company and each of the Guarantors in the
execution of any amended or supplemental indenture authorized or permitted by
the terms of this indenture and to make any further appropriate agreements and
stipulations that may be therein contained, but the Trustee shall not be
obligated to enter into such amended or supplemental indenture that affects
its own rights, duties or immunities under this Indenture or otherwise.
SECTION 9.02. WITH CONSENT OF HOLDERS OF NOTES.
Except as provided below in this Section 9.02, the Company and the
Trustee may amend or supplement this Indenture and the Notes may be amended or
supplemented with the consent of the Holders of at least a majority in
principal amount of the Notes then outstanding (including consents obtained in
connection with a purchase of, or tender offer or exchange offer for the
Notes), and, subject to Sections 6.04 and 6.07 hereof, any existing Default or
Event of Default (other than a Default or Event of Default in the payment of
the principal of, premium or Liquidated Damages, if any, or interest on the
Notes) or compliance with any provision of this Indenture or the Notes may be
waived with the consent of the Holders of a majority in principal amount of
the then outstanding Notes (including consents obtained in connection with a
purchase of, or tender offer or exchange offer for the Notes). Any amendment
to (a) the provisions of Article 10 hereof and (b) Sections 3.09, 4.10 and
4.14 including the related definitions will require the consent of the Holders
of at least 75% in aggregate principal amount of the Notes then outstanding if
such amendment would adversely affect the rights of Holders of Notes.
Upon the request of the Company accompanied by a resolution of the
Board of Directors of the Company and each of the Guarantors authorizing the
execution of any such amended or supple-
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mental indenture, and upon the filing with the Trustee of evidence
satisfactory to the Trustee of the consent of the Holders of Notes as
aforesaid, and upon receipt by the Trustee of the documents described in
Section 7.02 hereof, the Trustee shall join with the Company and each of the
Guarantors in the execution of such amended or supplemental indenture unless
such amended or supplemental indenture affects the Trustee's own rights,
duties or immunities under this indenture or otherwise, in which case the
Trustee may in its discretion, but shall not be obligated to, enter into such
amended or supplemental indenture.
It shall not be necessary for the consent of the Holders of Notes
under this Section 9.02 to approve the particular form of any proposed
amendment or waiver, but it shall be sufficient if such consent approves the
substance thereof.
After an amendment, supplement or waiver under this Section 9.02
becomes effective, the Company shall mail to the Holders of Notes affected
thereby a notice briefly describing the amendment, supplement or waiver. Any
failure of the Company to mail such notice, or any defect therein, shall not,
however, in any way impair or affect the validity of any such amended or
supplemental indenture or waiver. Subject to Sections 6.04 and 6.07 hereof,
the Holders of a majority in aggregate principal amount of the Notes then
outstanding may waive compliance in a particular instance by the Company with
any provision of this Indenture or the Notes. However, without the consent of
each Holder, an amendment or waiver may not (with respect to any
Notes held by a non-consenting Holder):
(a) reduce the principal amount of Notes whose
Holders must consent to an amendment, supplement or waiver;
(b) reduce the principal of or change the fixed
maturity of any Note or alter or waive any of the provisions
with respect to the redemption of the Notes (except as
provided above with respect to Sections 3.09, 4.10 and 4.14
hereof);
(c) reduce the rate of or change the time for
payment of interest, including default interest, on any Note;
(d) waive a Default or Event of Default in the
payment of principal of or premium or Liquidated Damages, if
any, or interest on the Notes (except a rescission of
acceleration of the Notes by the Holders of at least a
majority in aggregate principal amount of the then
outstanding Notes and a waiver of the payment default that
resulted from such acceleration);
(e) make any Note payable in money other than that
stated in the Notes;
(f) make any change in the provisions of this
Indenture relating to waivers of past Defaults or the rights
of Holders of Notes to receive payments of principal of or
premium or Liquidated Damages, if any, or interest on the
Notes;
(g) waive a redemption payment with respect to any
Note (except as provided above with respect to Sections
3.09, 4.10 and 4.14 hereof); or
(h) make any change in Section 6.04 or 6.07 hereof
or in the foregoing amendment and waiver provisions.
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SECTION 9.03. COMPLIANCE WITH TRUST INDENTURE ACT.
Every amendment or supplement to this Indenture or the Notes shall be
set forth in a amended or supplemental indenture that complies with the TIA as
then in effect.
SECTION 9.04. REVOCATION AND EFFECT OF CONSENTS.
Until an amendment, supplement or waiver becomes effective, a consent
to it by a Holder of a Note is a continuing consent by the Holder of a Note
and every subsequent Holder of a Note or portion of a Note that evidences the
same debt as the consenting Holder's Note, even if notation of the consent is
not made on any Note. However, any such Holder of a Note or subsequent Holder
of a Note may revoke the consent as to its Note if the Trustee receives
written notice of revocation before the date the waiver, supplement or
amendment becomes effective. An amendment, supplement or waiver becomes
effective in accordance with its terms and thereafter binds every Holder.
SECTION 9.05. NOTATION ON OR EXCHANGE OF NOTES.
The Trustee may place an appropriate notation about an amendment,
supplement or waiver on any Note thereafter authenticated. The Company in
exchange for all Notes may issue and the Trustee shall authenticate new Notes
(accompanied by a notation of the Subsidiary Guarantees duly endorsed by the
Guarantors) that reflect the amendment, supplement or waiver.
Failure to make the appropriate notation or to issue a new Note shall
not affect the validity and effect of such amendment, supplement or waiver.
SECTION 9.06. TRUSTEE TO SIGN AMENDMENTS, ETC.
The Trustee shall sign any amendment or supplemental indenture
authorized pursuant to this Article 9 if the amendment does not adversely
affect the rights, duties, liabilities or immunities of the Trustee. If it
does, the Trustee may, but need not, sign it. In signing or refusing to sign
such amendment or supplemental indenture, the Trustee shall be entitled to
receive and, subject to Section 7.01 hereof, shall be fully protected in
relying upon, an Officers' Certificate and an Opinion of Counsel as conclusive
evidence that such amendment or supplemental indenture is authorized or
permitted by this Indenture, that it is not inconsistent herewith, and that it
will be valid and binding upon the Company and the Guarantors in accordance
with its terms. Neither the Company nor any Guarantor may sign an amendment or
supplemental indenture until their respective Board of Directors approves it.
ARTICLE 10
SUBORDINATION
SECTION 10.01. AGREEMENT TO SUBORDINATE.
The Company and the Guarantors agree, and each Holder by accepting a
Note agrees, that the Indebtedness evidenced by the Notes and Liquidated
Damages, if any, on the Notes is subordinated in right of payment, to the
extent and in the manner provided in this Article 10 and in Article 11,
to the prior payment in full of all Senior Debt (whether outstanding on the
date hereof or hereafter created, incurred, assumed or guaranteed), and that
the subordination is for the benefit of the holders of Senior Debt.
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SECTION 10.02. CERTAIN DEFINITIONS.
"Designated Senior Debt" means (i) so long as any Senior Bank Debt is
outstanding, the Senior Bank Debt and (ii) thereafter, any other Senior Debt
permitted hereunder, the principal amount of which is $25.0 million or more
and that has been designated by the Company as "Designated Senior Debt."
A "distribution" may consist of cash, securities or other property, by
set-off or otherwise.
"Representative" means the indenture trustee or other trustee, agent
or representative for any Senior Debt.
"Senior Bank Debt" means, with respect to the Company and any
Subsidiary, any Indebtedness outstanding under, and any other Obligations with
respect to, Bank Facilities, to the extent that any such Indebtedness and other
Obligations are permitted by this Indenture to be incurred.
"Senior Debt" means (a) the Senior Bank Debt, (b) all additional
Indebtedness that is permitted under this Indenture that is not by its terms
pari passu with or subordinated to the Notes, (c) all Obligations of the
Company and Subsidiaries with respect to the foregoing clauses (a) and (b),
including post-petition interest and (d) all (including all subsequent)
renewals, extensions, amendments, refinancings, repurchases or redemptions,
modifications, replacements or refundings thereto (whether or not coincident
therewith) that are permitted by this Indenture. Notwithstanding anything to
the contrary in the foregoing, Senior Debt shall not include (i) any
Indebtedness of the Company to any of its Subsidiaries, (ii) any Indebtedness
incurred for the purchase of goods or materials or for services obtained in
the ordinary course of business (other than with the proceeds of borrowings
from banks or other financial institutions) or (iii) any Indebtedness incurred
in violation of this Indenture.
SECTION 10.03. LIQUIDATION; DISSOLUTION; BANKRUPTCY.
Upon any distribution to creditors of the Company or any Guarantor in
a liquidation or dissolution of the Company or such Guarantor or in a
bankruptcy, reorganization, insolvency, receivership or similar proceeding
relating to the Company or such Guarantor or their respective property, or in
an assignment for the benefit of creditors or any marshalling of the Company's
or such Guarantor's assets and liabilities:
(1) holders of Senior Debt shall be entitled to receive
payment in full of all Obligations due in respect of such Senior Debt
(including interest after the commencement of any such proceeding at
the rate specified in the applicable Senior Debt, whether or not an
allowable claim) before the Holders of Notes shall be entitled to
receive any payment with respect to the Notes (except that Holders
may receive (i) securities that are subordinated to at least the same
extent as the Notes to (a) Senior Debt and (b) any securities issued
in exchange for Senior Debt and (ii) payments and other distributions
made from any defeasance trust created pursuant to Section 8.01
hereof); and
(2) until all Obligations with respect to Senior Debt (as
provided in subsection (1) above) are paid in full, any distribution
to which the Holders of Notes would be entitled but for this Article
10 shall be made to holders of Senior Debt (except that Holders may
receive (i) securities that are subordinated to at least the same
extent as the Notes to (a) Senior Debt and (b) any securities issued
in exchange for Senior Debt and (ii) payments and other distributions
made from any defeasance trust created pursuant to Section 8.01
hereof), as their interests may appear.
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Subject to Section 7.07, in the event that, notwithstanding the
foregoing provisions of this Section, the Trustee receives payment or
distribution of assets of the Company of any kind or character, before all
the Senior Debt is paid in full, then and in such event such payment or
distribution of assets shall be paid over or delivered forthwith to the trustee
in bankruptcy, receiver, liquidating trustee, custodian, assignee, agent or
other Person making payment or distribution of assets of the Company for
application to the payment of all Senior Debt remaining unpaid, to the extent
necessary to pay the Senior Debt in full.
SECTION 10.04. DEFAULT ON DESIGNATED SENIOR DEBT.
(a) The Company and the Guarantors may not make any payment
or distribution to the Trustee or any Holder in respect of the Notes and may
not acquire from the Trustee or any Holder any Notes for cash or property
(other than (1) securities that are subordinated to at least the same extent
as the Notes to (A) Senior Debt and (B) any securities issued in exchange for
Senior Debt and (2) payments and other distributions made from any defeasance
trust created pursuant to Section 8.01 hereof) until all principal and other
Obligations with respect to the Senior Debt have been paid in full if:
(i) a default in the payment of the principal of, premium, if any, or
interest on Designated Senior Debt occurs and is continuing beyond any
applicable grace period in the agreement, indenture or other document
governing such Designated Senior Debt; or
(ii) a default, other than a default specified in Section 10.04(a)(i)
hereof, on Designated Senior Debt occurs and is continuing with respect to
Designated Senior Debt that then permits holders of the Designated Senior
Debt as to which such default relates to accelerate its maturity and the
Trustee receives a notice of the default (a "Payment Blockage Notice")
from a Person who may give it pursuant to Section 10.12 hereof. If the
Trustee receives any such Payment Blockage Notice, no subsequent Payment
Blockage Notice shall be effective for purposes of this Section 10.04
unless and until (I) at least 360 days shall have elapsed since the
effectiveness of the immediately prior Payment Blockage Notice and (II)
all scheduled payments of principal, premium and Liquidated Damages, if
any, and interest on the Notes that have come due (other than by reason of
acceleration) have been paid in full in cash. No default described in this
paragraph (ii) that existed or was continuing on the date of delivery of
any Payment Blockage Notice to the Trustee shall be, or be made, the basis
for a subsequent Payment Blockage Notice.
(b) The Company may and shall resume payments on and distributions in
respect of the Notes and may acquire them:
(1) in the case of a default described in Section 10.04(a)(i) hereof,
upon the date on which the default is cured or waived, and
(2) in the case of a default referred to in Section 10.04(a)(ii)
hereof, the earlier of the date on which such default is cured or waived
or 179 days after the date on which the applicable Payment Blockage Notice
is received, unless the maturity of any Designated Senior Debt has been
accelerated,
if this Article 10 otherwise permits the payment, distribution or acquisition
at the time of such payment or acquisition.
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SECTION 10.05. ACCELERATION OF NOTES.
If payment of the Notes is accelerated because of an Event of
Default, the Company shall promptly notify holders of Senior Debt of the
acceleration.
SECTION 10.06. WHEN DISTRIBUTION MUST BE PAID OVER.
In the event that the Trustee or any Holder receives any payment of
any Obligations with respect to the Notes at a time when the Trustee or such
Holder, as applicable, has actual knowledge that such payment is prohibited by
Section 10.04 hereof, such payment shall be held by the Trustee or such
Holder, in trust for the benefit of, and shall be paid forthwith over and
delivered, upon written request, to, the holders of Senior Debt as their
interests may appear or their Representative under the indenture or other
agreement (if any) pursuant to which Senior Debt may have been issued, as
their respective interests may appear, for application to the payment of all
Obligations with respect to Senior Debt remaining unpaid to the extent
necessary to pay such Obligations in full in accordance with their terms,
after giving effect to any concurrent payment or distribution to or for the
holders of Senior Debt.
With respect to the holders of Senior Debt, the Trustee undertakes to
perform only such obligations on the part of the Trustee as are specifically
set forth in this Article 10, and no implied covenants or obligations with
respect to the holders of Senior Debt shall be read into this Indenture
against the Trustee. The Trustee shall not be deemed to owe any fiduciary duty
to the holders of Senior Debt, and shall not be liable to any such holders if
the Trustee shall pay over or distribute to or on behalf of Holders or the
Company or any other Person money or assets to which any holders of Senior
Debt shall be entitled by virtue of this Article 10, except if such payment is
made as a result of the willful misconduct or gross negligence of the Trustee.
SECTION 10.07. NOTICE BY COMPANY.
The Company shall promptly notify the Trustee and the Paying Agent of
any facts known to the Company that would cause a payment of any Obligations
with respect to the Notes to violate this Article 10, but failure to give such
notice shall not affect the subordination of the Notes to the Senior Debt as
provided in this Article 10.
SECTION 10.08. SUBROGATION.
After all Senior Debt is paid in full and until the Notes are paid in
full, Holders shall be subrogated (equally and ratably with all other
Indebtedness pari passu with the Notes) to the rights of holders of Senior
Debt to receive distributions applicable to Senior Debt to the extent that
distributions otherwise payable to the Holders have been applied to the
payment of Senior Debt. A distribution made under this Article 10 to holders
of Senior Debt that otherwise would have been made to Holders of Notes is not,
as between the Company and Holders of Notes, a payment by the Company on the
Senior Debt.
SECTION 10.09. RELATIVE RIGHTS.
This Article 10 defines the relative rights of Holders of Notes and
holders of Senior Debt. Nothing in this Indenture shall:
(1) impair, as between the Company and Holders of Notes, the
obligation of the Company, which is absolute and unconditional, to pay
principal of and interest and Liquidated Damages, if any, on the Notes in
accordance with their terms;
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(2) affect the relative rights of Holders of Notes and creditors of
the Company other than their rights in relation to holders of Senior Debt;
or
(3) prevent the Trustee or any Holder of Notes from exercising its
available remedies upon a Default or Event of Default, subject to the
rights of holders and owners of Senior Debt to receive distributions and
payments otherwise payable to Holders of Notes.
If the Company fails because of this Article 10 to pay principal of
or interest or Liquidated Damages, if any, on a Note on the due date, the
failure is still a Default or Event of Default.
SECTION 10.10. SUBORDINATION MAY NOT BE IMPAIRED BY COMPANY.
No right of any holder of Senior Debt to enforce the subordination of
the Indebtedness evidenced by the Notes shall be impaired by any act or
failure to act by the Company or any Holder of Notes or by the failure of the
Company or any Holder of Notes to comply with this Indenture.
SECTION 10.11. DISTRIBUTION OR NOTICE TO REPRESENTATIVE.
Whenever a distribution is to be made or a notice given to holders of
Senior Debt, the distribution may be made and the notice given to their
Representative.
Upon any payment or distribution of assets of the Company
referred to in this Article 10, the Trustee and the Holders of Notes shall be
entitled to rely upon any order or decree made by any court of competent
jurisdiction or upon any certificate of such Representative or of the
liquidating trustee or agent or other Person making any distribution to the
Trustee or to the Holders of Notes for the purpose of ascertaining the Persons
entitled to participate in such distribution, the holders of the Senior Debt
and other Indebtedness of the Company, the amount thereof or payable thereon,
the amount or amounts paid or distributed thereon and all other facts
pertinent thereto or to this Article 10.
SECTION 10.12. RIGHTS OF TRUSTEE AND PAYING AGENT.
Notwithstanding the provisions of this Article 10 or any other
provision of this Indenture, the Trustee shall not be charged with knowledge
of the existence of any facts that would prohibit the making of any payment or
distribution by the Trustee, and the Trustee and the Paying Agent may continue
to make payments on the Notes, unless the Trustee shall have received at its
Corporate Trust Office at least five Business Days prior to the date of such
payment written notice of facts that would cause the payment of any
Obligations with respect to the Notes to violate this Article 10. Only the
Company or a Representative may give such notice. Nothing in this Article 10
shall impair the claims of, or payments to, the Trustee under or pursuant to
Section 7.07 hereof.
The Trustee in its individual or any other capacity may hold Senior
Debt with the same rights it would have if it were not the Trustee. Any Agent
may do the same with like rights.
SECTION 10.13. AUTHORIZATION TO EFFECT SUBORDINATION.
Each Holder of a Note by the Holder's acceptance thereof authorizes
and directs the Trustee on the Holder's behalf to take such action as may be
necessary or appropriate to effectuate the subordination as provided in this
Article 10, and appoints the Trustee to act as the Holder's attorney-in-fact
for any and all such purposes. If the Trustee does not file a proper proof of
claim or proof of debt in the form required in any proceeding referred to in
Section 6.09 hereof at least 30 days
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before the expiration of the time to file such claim, the agent under the New
Credit Agreement (or in the absence of such agent, the lender) is hereby
authorized to file an appropriate claim for and on behalf of the Holders of
the Notes.
SECTION 10.14. AMENDMENTS.
The provisions of this Article 10 shall not be amended or modified
without the written consent of the holders of all Senior Debt.
ARTICLE 11
SUBSIDIARY GUARANTEES
SECTION 11.01. SUBSIDIARY GUARANTEES.
Each of the Guarantors hereby, jointly and severally, unconditionally
guarantees to each Holder of a Note authenticated and delivered by the Trustee
and to the Trustee and its successors and assigns, irrespective of the
validity and enforceability of this Indenture, the Notes or the Obligations of
the Company hereunder or thereunder, that: (a) the principal of and interest
and Liquidated Damages, if any, on the Notes shall be promptly paid in full
when due, whether at maturity, by acceleration, redemption, repurchase or
otherwise, and interest on the overdue principal of and interest and
Liquidated Damages, if any, on the Notes, if lawful, and all other Obligations
of the Company to the Holders or the Trustee hereunder or thereunder shall be
promptly paid in full or performed, all in accordance with the terms hereof
and thereof; and (b) in case of any extension of time of payment or renewal of
any Notes or any of such other Obligations, that same shall be promptly paid
in full when due or performed in accordance with the terms of the extension or
renewal, whether at stated maturity, by acceleration, redemption, repurchase
or otherwise. Failing payment when due of any amount so guaranteed or any
performance so guaranteed for whatever reason, the Guarantors shall be jointly
and severally obligated to pay the same immediately. The Guarantors hereby
agree that their Obligations hereunder shall be unconditional, irrespective of
the validity, regularity or enforceability of the Notes or this Indenture, the
absence of any action to enforce the same, any waiver or consent by any Holder
of the Notes with respect to any provisions hereof or thereof, the recovery of
any judgment against the Company, any action to enforce the same or any other
circumstance which might otherwise constitute a legal or equitable discharge
or defense of a Guarantor. Each Guarantor hereby waives diligence,
presentment, demand of payment, filing of claims with a court in the event of
insolvency or bankruptcy of the Company, any right to require a proceeding
first against the Company, protest, notice and all demands whatsoever and
covenant that this Subsidiary Guarantee shall not be discharged except by
complete performance of the Obligations contained in the Notes and this
Indenture. If any Holder of Notes or the Trustee is required by any court or
otherwise to return to the Company or Guarantors, or any Custodian, Trustee,
liquidator or other similar official acting in relation to either the Company
or Guarantors, any amount paid either to the Trustee or such Holder, this
Subsidiary Guarantee, to the extent theretofore discharged, shall be
reinstated in full force and effect. Each Guarantor agrees that it shall not
be entitled to any right of subrogation in relation to the Holders of Notes in
respect of any Obligations guaranteed hereby until payment in full of all
Obligations guaranteed hereby. Each Guarantor further agrees that, as between
the Guarantors, on the one hand, and the Holders and the Trustee, on the other
hand, (x) the maturity of the Obligations guaranteed hereby may be accelerated
as provided in Article 6 hereof for the purposes of this Subsidiary Guarantee,
notwithstanding any stay, injunction or other prohibition preventing such
acceleration in respect of the Obligations guaranteed hereby and (y) in the
event of any declaration of acceleration of such Obligations as provided in
Article 6 hereof, such Obligations (whether or not due and payable) shall
forthwith become due and payable by the Guarantors for the purpose of this
Subsidiary
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Guarantee. The Guarantors shall have the right to seek contribution
from any non-paying Guarantor so long as the exercise of such right does not
impair the rights of the Holders under the Subsidiary Guarantees.
SECTION 11.02. EXECUTION AND DELIVERY OF SUBSIDIARY GUARANTEES.
To evidence its Subsidiary Guarantee set forth in Section 11.01
hereof, each Guarantor hereby agrees that a notation of such Subsidiary
Guarantee substantially in the form of Exhibit C (executed by the manual or
facsimile signature of one of its Officers) shall be endorsed by an Officer of
such Guarantor on each Note authenticated and delivered by the Trustee and
that this Indenture shall be executed on behalf of such Guarantor by an
Officer of such Guarantor.
Each Guarantor hereby agrees that its Subsidiary Guarantee set forth
in Section 11.01 hereof shall remain in full force and effect notwithstanding
any failure to endorse on each Note a notation of such Subsidiary Guarantee.
If an Officer whose signature is on this Indenture or on the
Subsidiary Guarantee no longer holds that office at the time the Trustee
authenticates the Note on which a Subsidiary Guarantee is endorsed, the
Subsidiary Guarantee shall be valid nevertheless.
The delivery of any Note by the Trustee, after the authentication
thereof hereunder, shall constitute due delivery of the Subsidiary Guarantee
set forth in this Indenture on behalf of the Guarantors.
SECTION 11.03. GUARANTORS MAY CONSOLIDATE, ETC., ON CERTAIN TERMS.
(a) Except as set forth in Articles 4 and 5 hereof, nothing contained
in this Indenture or in any of the Notes shall prevent any consolidation or
merger of a Guarantor with or into the Company or another Guarantor or shall
prevent any sale or conveyance of the property of a Guarantor, as an entirety
or substantially as an entirety, to the Company.
(b) Except as provided in Section 11.03(a) hereof or in a transaction
referred to in Section 11.04 hereof, no Guarantor may consolidate with or
merge with or into (whether or not such Guarantor is the surviving Person)
another corporation, Person or entity whether or not affiliated with such
Guarantor, or sell, assign, transfer, lease, convey or otherwise dispose of
all or substantially all of its assets to, another corporation, Person or
entity unless: (i) subject to the provisions of Section 11.04 hereof, the
Person formed by or surviving any such consolidation or merger (if other than
such Guarantor) shall assume all the Obligations of such Guarantor pursuant to
a supplemental indenture in form and substance reasonably satisfactory to the
Trustee, under the Notes and this Indenture; (ii) other than with respect to
the MMR Merger, immediately after giving effect to such transaction, no
Default or Event of Default exists; (iii) other than with respect to the MMR
Merger, such Guarantor, or any Person formed by or surviving and such
consolidation or merger, would have a Consolidated Net Worth (immediately
after giving effect to such transaction) equal to or greater than the
Consolidated Net Worth of such Guarantor immediately prior to such
transaction; and (iv) other than with respect to the MMR Merger, the Company
would be permitted by virtue of the Company's pro forma Debt to Cash Flow
Ratio, immediately after giving effect to such transaction, to incur at least
$1.00 of additional Indebtedness (other than Permitted Debt) pursuant to
Section 4.09 hereof. Subject to Section 11.04 hereof, in case of any such
consolidation, merger, sale or conveyance and upon the assumption by the
successor corporation, by supplemental indenture, executed and delivered to
the Trustee and satisfactory in form to the Trustee, of the Subsidiary
Guarantee endorsed upon the Notes and the due and punctual performance of all
of the covenants and conditions of this Indenture to be performed by the
Guarantor,
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such successor corporation shall succeed to and be substituted for the
Guarantor with the same effect as if it had been named herein as a Guarantor.
Such successor corporation thereupon may cause to be signed any or all of the
Subsidiary Guarantees to be endorsed upon all of the Notes issuable hereunder
which theretofore shall not have been signed by the Company and delivered to
the Trustee. All the Subsidiary Guarantees so issued shall in all respects
have the same legal rank and benefit under this Indenture as the Subsidiary
Guarantees theretofore and thereafter issued in accordance with the terms of
this Indenture as though all of such Subsidiary Guarantees had been issued at
the date of the execution hereof.
SECTION 11.04. RELEASES FOLLOWING SALE OF ASSETS.
Concurrently with any sale of assets of any Guarantor (including, if
applicable, all of the Capital Stock of any Guarantor), any Liens in favor of
the Trustee in the assets sold thereby shall be released; provided that in the
event of an Asset Sale, the Net Proceeds from such sale or other disposition
are treated in accordance with the provisions of Section 4.10 hereof. In the
event of a sale or other disposition of all of the assets of any Guarantor, by
way of merger, consolidation or otherwise, or a sale or other disposition of
all of the Capital Stock of any Guarantor, then such Guarantor (in the event
of a sale or other disposition, by way of such a merger, consolidation or
otherwise, of all of the Capital Stock of such Guarantor in accordance with
the provisions of this Indenture) or the corporation acquiring the property
(in the event of a sale or other disposition of all of the assets of such
Guarantor), shall be released and relieved of its Obligations under its
Subsidiary Guarantee and Section 11.03 hereof; provided that in the event of
an Asset Sale, the Net Proceeds from such sale or other disposition are
treated in accordance with the provisions of Section 4.10 hereof. Upon
delivery by the Company to the Trustee of an Officers' Certificate and an
Opinion of Counsel to the effect that such sale or other disposition was made
by the Company in accordance with the provisions of this Indenture, including
without limitation Section 4.10 hereof, the Trustee shall execute any
documents reasonably required in order to evidence the release of any
Guarantor from its Obligations under its Subsidiary Guarantee. Any Guarantor
not released from its Obligations under its Subsidiary Guarantee shall remain
liable for the full amount of principal of and interest and Liquidated
Damages, if any, on the Notes and for the other Obligations of any Guarantor
under this Indenture as provided in this Article 11. The release of any
Guarantor pursuant to this Section 11.04 shall be effective whether or not
such release shall be noted on any Note then outstanding or thereafter
authenticated and delivered.
SECTION 11.05. LIMITATION ON GUARANTOR LIABILITY.
For purposes hereof, each Guarantor's liability shall be that amount
from time to time equal to the aggregate liability of such Guarantor
thereunder, but shall be limited to the lesser of (i) the aggregate amount of
the Obligations of the Company under the Notes and this Indenture and (ii) the
amount, if any, which would not have (A) rendered such Guarantor "insolvent"
(as such term is defined in the federal Bankruptcy Law and in the Debtor and
Creditor Law of the State of New York) or (B) left it with unreasonably small
capital at the time its Subsidiary Guarantee was entered into, after giving
effect to the incurrence of existing Indebtedness immediately prior to such
time; provided that, it shall be a presumption in any lawsuit or other
proceeding in which such Guarantor is a party that the amount guaranteed
pursuant to its Subsidiary Guarantee is the amount set forth in clause (i)
above unless any creditor, or representative of creditors of such Guarantor,
or debtor in possession or trustee in bankruptcy of such Guarantor, otherwise
proves in such a lawsuit that the aggregate liability of such Guarantor is
limited to the amount set forth in clause (ii). In making any determination as
to the solvency or sufficiency of capital of a Guarantor in accordance with
the previous sentence, the right of such Guarantor to contribution from other
Guarantors and any other rights such Guarantor may have, contractual or
otherwise, shall be taken into account.
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SECTION 11.06. "TRUSTEE" TO INCLUDE PAYING AGENT.
In case at any time any Paying Agent other than the Trustee shall
have been appointed by the Company and be then acting hereunder, the term
"Trustee" as used in this Article 11 shall in such case (unless the context
shall otherwise require) be construed as extending to and including such
Paying Agent within its meaning as fully and for all intents and purposes as
if such Paying Agent were named in this Article 11 in place of the Trustee.
SECTION 11.07. SUBORDINATION OF SUBSIDIARY GUARANTEE.
The obligations of each Guarantor under its Subsidiary Guarantee
pursuant to this Article 11 shall be junior and subordinated to the Senior
Debt of such Guarantor on the same basis as the Notes are junior and
subordinated to Senior Debt. For the purposes of the foregoing sentence, the
Trustee and the Holders of Notes shall have the right to receive and/or retain
payments by any of the Guarantors only at such times as they may receive and/or
retain payments in respect of the Notes pursuant to this Indenture, including
Article 10 hereof. In the event that the Trustee or any Holder shall have
received any Guarantor payment that is prohibited by the foregoing sentence,
such Guarantor payment shall be paid over and delivered forthwith to the
holders of the Senior Debt remaining unpaid, to the extent necessary to pay
in full all Senior Debt.
Each Holder of a note by its acceptance thereof (a) agrees to and shall
be bound by the provisions of this Section 11.07, (b) authorizes and directs the
Trustee on its behalf to take such action as may be necessary or appropriate
to effectuate the subordination so provided and (c) appoints the Trustee its
attorney-in-fact for any and all such purposes. Consistent with the
subordination of the Subsidiary Guarantees, for purposes of any applicable
fraudulent transfer or similar laws, Indebtedness incurred under any Bank
Facility will be deemed to have been incurred prior to the incurrence by any
Guarantor of its liability under its Subsidiary Guarantee.
ARTICLE 12
MISCELLANEOUS
SECTION 12.01. TRUST INDENTURE ACT CONTROLS.
If any provision hereof limits, qualifies or conflicts with a
provision of the TIA or another provision that would be required or deemed
under the TIA to be part of and govern this Indenture if this Indenture were
subject thereto, the latter provision shall control. If any provision of this
Indenture modifies or excludes any provision of the TIA that may be so
modified or excluded, the latter provision shall be deemed to apply to this
Indenture as so modified or to be excluded, as the case may be.
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SECTION 12.02. NOTICES.
Any notice or communication by the Company or the Trustee to others
is duly given if in writing and delivered in Person or mailed by first class
mail, telecopier or overnight air courier guaranteeing next day delivery, to
the others' address:
If to the Company or any Guarantor:
SFX Broadcasting, Inc.
150 East 58th Street
New York, New York 10155
Telecopier No.: (212) 753-3188
Attention: Howard J. Tytel, Esq.
With a copy to:
Baker & McKenzie
805 Third Avenue
New York, New York 10022
Telecopier No.: (212) 759-9133
Attention: Howard Berkower, Esq.
If to the Trustee:
Chemical Bank
450 West 33rd Street, 15th Floor
New York, New York 10001
Telecopier No.: (212) 946-7682
Attention: Corporate Trust Department
The Company, any Guarantor or the Trustee, by notice to the others
may designate additional or different addresses for subsequent notices or
communications.
All notices and communications (other than those sent to Holders of
Notes) shall be deemed to have been duly given: at the time delivered by hand,
if personally delivered; five Business Days after being deposited in the mail,
postage prepaid, if mailed; when receipt acknowledged, if telecopied; and
the next Business Day after timely delivery to the courier, if sent by
overnight air courier guaranteeing next day delivery.
Any notice or communication to a Holder of Notes shall be mailed by
first class mail or by overnight air courier guaranteeing next day delivery
to its address shown on the register kept by the Registrar. Any notice or
communication shall also be so mailed to any Person described in TIA
[section] 313(c), to the extent required by the TIA. Failure to mail a notice
or communication to a Holder of Notes or any defect in it shall not affect its
sufficiency with respect to other Holders of Notes.
If a notice or communication is mailed in the manner provided above
within the time prescribed, it is duly given, whether or not the addressee
receives it.
If the Company mails a notice or communication to Holders of Notes,
it shall mail a copy to the Trustee and each Agent at the same time.
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SECTION 12.03. COMMUNICATION BY HOLDERS OF NOTES WITH OTHER HOLDERS OF NOTES.
Holders of Notes may communicate pursuant to TIA [section] 312(b)
with other Holders of Notes with respect to their rights under this Indenture
or the Notes. The Company, the Guarantors, the Trustee, the Registrar and
anyone else shall have the protection of TIA [section] 312(c).
SECTION 12.04. CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT.
Upon any request or application by the Company or any Guarantor to
the Trustee to take any action under this Indenture, the Company or such
Guarantor shall furnish to the Trustee:
(a) an Officers' Certificate in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set forth
in Section 12.05 hereof) stating that, in the opinion of the signers, all
conditions precedent and covenants, if any, provided for in this Indenture
relating to the proposed action have been satisfied; and
(b) an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set forth
in Section 12.05 hereof) stating that, in the opinion of such counsel, all
such conditions precedent and covenants have been satisfied.
SECTION 12.05. STATEMENTS REQUIRED IN CERTIFICATE OR OPINION.
Each certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture (other than a certificate
provided pursuant to TIA [section] 314(a)(4)) shall comply with the provisions
of TIA [section] 314(e) and shall include:
(a) a statement that the Person making such certificate or opinion
has read such covenant or condition;
(b) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(c) a statement that, in the opinion of such Person, he or she has
made such examination or investigation as is necessary to enable him to
express an informed opinion as to whether or not such covenant or
condition has been satisfied; and
(d) a statement as to whether or not, in the opinion of such Person,
such condition or covenant has been satisfied.
SECTION 12.06. RULES BY TRUSTEE AND AGENTS.
The Trustee may make reasonable rules for action by or at a
meeting of Holders of Notes. The Registrar or Paying Agent may make reasonable
rules and set reasonable requirements for its functions.
SECTION 12.07. NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS, EMPLOYEES AND
STOCKHOLDERS.
No director, officer, employee, incorporator or stockholder
of the Company or any Guarantor, as such, shall have any liability for any
obligations of the Company or the Guarantors, as
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applicable, under the Notes, this Indenture, or the Subsidiary Guarantees or
for any claim based on, in respect of, or by reason of, such obligations or
their creation. Each Holder of Notes by accepting a Note waives and releases
all such liability. The waiver and release are part of the consideration for
issuance of the Notes.
SECTION 12.08. GOVERNING LAW.
THE INTERNAL LAW OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO
CONSTRUE THIS INDENTURE, THE NOTES AND THE SUBSIDIARY GUARANTEES.
SECTION 12.09. NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS.
This Indenture may not be used to interpret any other indenture, loan
or debt agreement of the Company or its Subsidiaries or of any other Person.
Any such indenture, loan or debt agreement may not be used to interpret this
Indenture and the Subsidiary Guarantees.
SECTION 12.10. SUCCESSORS.
All agreements of the Company and the Guarantors in this Indenture,
the Notes and the Subsidiary Guarantees shall bind their successors. All
agreements of the Trustee in this Indenture shall bind its successors.
SECTION 12.11. SEVERABILITY.
In case any provision in this Indenture, the Notes or the Subsidiary
Guarantees shall be invalid, illegal or unenforceable, the validity, legality
and enforceability of the remaining provisions shall not in any way be
affected or impaired thereby.
SECTION 12.12. COUNTERPART ORIGINALS.
The parties may sign any number of copies of this Indenture. Each
signed copy shall be an original, but all of them together represent the same
agreement.
SECTION 12.13. TABLE OF CONTENTS, HEADINGS, ETC.
The Table of Contents, Cross-Reference Table and Headings of the
Articles and Sections of this Indenture, which have been inserted for
convenience of reference only, are not to be considered a part of this
Indenture and shall in no way modify or restrict any of the terms or
provisions hereof.
[Signatures on following page]
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SIGNATURES
IN WITNESS WHEREOF, the parties have executed this Indenture as of
the date first written above.
Very truly yours,
SFX BROADCASTING, INC.
By: /s/ Robert F.X. Sillerman
---------------------------------------------
Name: Robert F.X. Sillerman
Title: Executive Chairman
SFX BROADCASTING OF THE SOUTHWEST, INC.
By: /s/ Robert F.X. Sillerman
---------------------------------------------
Name: Robert F.X. Sillerman
Title: President
SFX BROADCASTING OF TEXAS, INC.
By: /s/ Robert F.X. Sillerman
---------------------------------------------
Name: Robert F.X. Sillerman
Title: President
SFX BROADCASTING OF TEXAS (KRLD), INC.
By: /s/ Robert F.X. Sillerman
---------------------------------------------
Name: Robert F.X. Sillerman
Title: President
SFX BROADCASTING OF TEXAS (KRLD) LICENSEE, INC.
By: /s/ Robert F.X. Sillerman
---------------------------------------------
Name: Robert F.X. Sillerman
Title: President
SFX BROADCASTING OF TEXAS (TSN), INC.
By: /s/ Robert F.X. Sillerman
---------------------------------------------
Name: Robert F.X. Sillerman
Title: President
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SFX BROADCASTING OF TEXAS (TSN) LICENSEE, INC.
By: /s/ Robert F.X. Sillerman
---------------------------------------------
Name: Robert F.X. Sillerman
Title: President
KODA-FM LICENSEE, INC.
By: /s/ Robert F.X. Sillerman
---------------------------------------------
Name: Robert F.X. Sillerman
Title: President
KJQY-FM LICENSEE, INC.
By: /s/ Robert F.X. Sillerman
---------------------------------------------
Name: Robert F.X. Sillerman
Title: President
SFX BROADCASTING OF TEXAS (KTCK), INC.
By: /s/ Robert F.X. Sillerman
---------------------------------------------
Name: Robert F.X. Sillerman
Title: President
SFX BROADCASTING OF TEXAS (KTCK) LICENSEE, INC.
By: /s/ Robert F.X. Sillerman
---------------------------------------------
Name: Robert F.X. Sillerman
Title: President
SFX BROADCASTING OF THE SOUTHEAST, INC.
By: /s/ Robert F.X. Sillerman
---------------------------------------------
Name: Robert F.X. Sillerman
Title: President
SFX BROADCASTING OF SOUTH CAROLINA (WMYI), INC.
By: /s/ Robert F.X. Sillerman
---------------------------------------------
Name: Robert F.X. Sillerman
Title: President
SFX BROADCASTING OF SOUTH CAROLINA (WMYI)
LICENSEE, INC.
By: /s/ Robert F.X. Sillerman
---------------------------------------------
Name: Robert F.X. Sillerman
Title: President
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SFX BROADCASTING OF MISSISSIPPI, INC.
By: /s/ Robert F.X. Sillerman
---------------------------------------------
Name: Robert F.X. Sillerman
Title: President
SFX BROADCASTING OF MISSISSIPPI LICENSEE, INC.
By: /s/ Robert F.X. Sillerman
---------------------------------------------
Name: Robert F.X. Sillerman
Title: President
SFX BROADCASTING OF SOUTH CAROLINA (WSSL), INC.
By: /s/ Robert F.X. Sillerman
---------------------------------------------
Name: Robert F.X. Sillerman
Title: President
SFX BROADCASTING OF SOUTH CAROLINA (WSSL) LICENSEE,
INC.
By: /s/ Robert F.X. Sillerman
---------------------------------------------
Name: Robert F.X. Sillerman
Title: President
SFX BROADCASTING OF TENNESSEE, INC.
By: /s/ Robert F.X. Sillerman
---------------------------------------------
Name: Robert F.X. Sillerman
Title: President
SFX BROADCASTING OF TENNESSEE LICENSEE, INC.
By: /s/ Robert F.X. Sillerman
---------------------------------------------
Name: Robert F.X. Sillerman
Title: President
SFX BROADCASTING OF JACKSON, INC.
By: /s/ Robert F.X. Sillerman
---------------------------------------------
Name: Robert F.X. Sillerman
Title: President
SFX BROADCASTING OF JACKSON LICENSEE, INC.
By: /s/ Robert F.X. Sillerman
---------------------------------------------
Name: Robert F.X. Sillerman
Title: President
70
<PAGE>
SFX BROADCASTING OF NORTH CAROLINA, INC.
By: /s/ Robert F.X. Sillerman
---------------------------------------------
Name: Robert F.X. Sillerman
Title: President
SFX BROADCASTING OF NORTH CAROLINA LICENSEE, INC.
By: /s/ Robert F.X. Sillerman
---------------------------------------------
Name: Robert F.X. Sillerman
Title: President
SFX BROADCASTING OF SAN DIEGO, INC.
By: /s/ Robert F.X. Sillerman
---------------------------------------------
Name: Robert F.X. Sillerman
Title: President
PARKER BROADCASTING COMPANY
By: /s/ Robert F.X. Sillerman
---------------------------------------------
Name: Robert F.X. Sillerman
Title: President
SFX BROADCASTING OF SAN DIEGO LICENSEE, INC.
By: /s/ Robert F.X. Sillerman
---------------------------------------------
Name: Robert F.X. Sillerman
Title: President
SFX ACQUISITION CORPORATION
By: /s/ Robert F.X. Sillerman
---------------------------------------------
Name: Robert F.X. Sillerman
Title: President
SFX MERGER COMPANY
By: /s/ Robert F.X. Sillerman
---------------------------------------------
Name: Robert F.X. Sillerman
Title: President
Chemical Bank
By:/s/ Michael A. Smith
--------------------------
Name: Michael A. Smith
Title: Vice President
<PAGE>
EXHIBIT A
(Face of Note)
10 3/4% Senior Subordinated Notes due 2006
CUSIP:
No. $______________
SFX Broadcasting, Inc.
promises to pay to ____________ or registered assigns, the principal sum
of___________ Dollars on ____ , 2006.
Interest Payment Dates: May 15 and November 15
Record Dates: May 1 and November 1
Dated: May __, 1996
SFX Broadcasting, Inc.
By:
-------------------------
Name:
Title:
This is one of the
Notes referred to in
within-mentioned Indenture:
CHEMICAL BANK
as Trustee
By:
------------------------------
Authorized Officer
A-1
<PAGE>
(Back of Note)
10 3/4% Senior Subordinated Notes due 2006
[Unless and until it is exchanged in whole or in part for Notes in
definitive form, this Note may not be transferred except as a whole by the
Depositary to a nominee of the Depositary or by a nominee of the Depositary to
the Depositary or another nominee of the Depositary or by the Depositary or
any such nominee to a successor Depositary or a nominee of such successor
Depositary. Unless this certificate is presented by an authorized
representative of The Depository Trust Company (55 Water Street, New York, New
York) ("DTC"), to the issuers or their agent for registration of transfer,
exchange or payment, and any certificate issued is registered in the name of
Cede & Co. or such other name as may be requested by an authorized
representative of DTC (and any payment is made to Cede & Co. or such other
entity as may be requested by an authorized representative of DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY
PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an
interest herein.]1
THE SECURITY HAS NOT BEEN REGISTERED UNDER THE U.S.
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), AND, ACCORDINGLY,
MAY NOT BE OFFERED OR SOLD EXCEPT AS SET FORTH BELOW, BY ACQUISITION
HEREOF, THE HOLDER (1) REPRESENTS THAT (A) IT IS A "QUALIFIED
INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE ACT) OR (B) IT
IS AN "ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(a)(1), (2), (3) OR
(7) UNDER THE ACT) (AN "ACCREDITED INVESTOR"), (2) AGREES THAT IT WILL
NOT WITHIN THREE YEARS AFTER ORIGINAL ISSUANCE OF THIS SECURITY RESELL
OR OTHERWISE TRANSFER THIS SECURITY EXCEPT (A) TO THE ISSUER OR ANY
SUBSIDIARY THEREOF, (B) TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE
WITH RULE 144A UNDER THE ACT, (C) TO AN ACCREDITED INVESTOR THAT, PRIOR
TO SUCH TRANSFER, FURNISHES (OR HAS FURNISHED ON ITS BEHALF BY A U.S.
BROKER-DEALER) TO THE TRUSTEE A SIGNED LETTER CONTAINING CERTAIN
RESTRICTIONS AND AGREEMENTS RELATING TO THE RESTRICTION ON TRANSFER OF
THIS SECURITY (THE FORM OF WHICH LETTER CAN BE OBTAINED FROM THE TRUSTEE
FOR THIS SECURITY), (D) OUTSIDE THE UNITED STATES IN AN OFFSHORE
TRANSACTION IN COMPLIANCE WITH RULE 904 UNDER THE ACT, (E) PURSUANT TO
THE EXEMPTION PROVIDED BY RULE 144 UNDER THE ACT (IF AVAILABLE), OR (F)
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT AND, IN
EACH CASE, AGREES THAT IT WILL GIVE TO EACH PERSON TO WHOM THIS SECURITY
IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND, IN
CONNECTION WITH ANY TRANSFER OF THIS SECURITY WITHIN THREE YEARS AFTER
ORIGINAL ISSUANCE OF THIS SECURITY, IF THE PROPOSED TRANSFEREE IS AN
ACCREDITED INVESTOR, THE HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH TO
THE TRUSTEE AND THE ISSUER SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER
INFORMATION AS EITHER OF THEM MAY REASONABLY REQUIRE TO CONFIRM THAT
SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A
TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE ACT. 2
- --------
1. To be included only if the Note is issued in Global form.
2. This legend should be included on the Senior Notes and omitted from the
New Senior Notes.
A-2
<PAGE>
Capitalized terms used herein shall have the meanings assigned to
them in the Indenture referred to below unless otherwise indicated.
1. INTEREST. SFX Broadcasting, Inc., a Delaware corporation (the
"Company") promises to pay interest on the principal amount of this Note at
10 3/4% per annum from the date hereof until maturity and shall pay the
Liquidated Damages, if any, payable pursuant to Section 5 of the Registration
Rights Agreement referred to below. The Company will pay interest and
Liquidated Damages semi-annually on May 15 and November 15 of each year, or
if any such day is not a Business Day, on the next succeeding Business Day
(each an "Interest Payment Date"). Interest on the Notes will accrue from the
most recent date to which interest has been paid or, if no interest has been
paid, from the date of issuance; provided that if there is no existing Default
in the payment of interest, and if this Note is authenticated between a record
date referred to on the face hereof and the next succeeding Interest Payment
Date, interest shall accrue from such next succeeding Interest Payment Date;
provided, further, that the first Interest Payment Date shall be November 15,
1996. The Company shall pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue principal and premium, if any,
from time to time on demand at a rate that is 1% per annum in excess of the
rate then in effect; it shall pay interest (including post-petition interest
in any proceeding under any Bankruptcy Law) on overdue installments of
interest and Liquidated Damages, if any, (without regard to any applicable
grace periods) from time to time on demand at the same rate to the extent
lawful. Interest will be computed on the basis of a 360-day year of twelve
30-day months.
2. METHOD OF PAYMENT. The Company will pay interest on the Notes
(except defaulted interest) and Liquidated Damages, if any, to the Persons who
are registered Holders of Notes at the close of business on the May 1 or
November 1 next preceding the Interest Payment Date, even if such Notes are
cancelled after such record date and on or before such Interest Payment Date,
except as provided in Section 2.12 of the Indenture with respect to defaulted
interest. Any such interest installment not punctually paid or duly provided
for shall forthwith cease to be payable to the registered Holders on such
Interest Payment Date, and may be paid to the registered Holders at the close
of business on a special interest payment date to be fixed by the Trustee for
the payment of such defaulted interest, notice whereof shall be given to the
registered Holders not less than 15 days prior to such special interest
payment date, or may be paid at any time in any other lawful manner not
inconsistent with the requirements of any securities exchange on which the
Notes may be listed, and upon such notice as may be required by such exchange,
all as more fully provided in the Indenture. The Notes will be payable as to
principal, premium, interest and Liquidated Damages, if any, at the office or
agency of the Company maintained for such purpose within or without the City
and State of New York, or, at the option of the Company, payment of interest
and Liquidated Damages, if any, may be made by check mailed to the Holders at
their addresses set forth in the register of Holders, and provided that
payment by wire transfer of immediately available funds will be required with
respect to principal of and interest, premium and Liquidated Damages, if any,
on, all Global Notes and all other Notes the Holders of which shall have
provided wire transfer instructions to the Company or the Paying Agent. Such
payment shall be in such coin or currency of the United States of America as
at the time of payment is legal tender for payment of public and private
debts.
3. PAYING AGENT AND REGISTRAR. Initially, Chemical Bank, the Trustee
under the Indenture, will act as Paying Agent and Registrar. The Company may
change any Paying Agent or Registrar without notice to any Holder. The Company
or any of the Guarantors may act in any such capacity.
4. INDENTURE. The Company issued the Notes under an Indenture dated
as of May 31, 1996 (the "Indenture") between the Company, the Guarantors
and the Trustee. The terms of the Notes include
A-3
<PAGE>
those stated in the Indenture and those made part of the Indenture by
reference to the Trust Indenture Act of 1939, as amended (15 U.S. Code
[section][section] 77aaa-77bbbb). The Notes are subject to all such terms, and
Holders are referred to the Indenture and such Act for a statement of such
terms. The Notes are general obligations of the Company limited to
$450,000,000 (Four Hundred and Fifty Million Dollars) in aggregate principal
amount, plus amounts, if any issued to pay Liquidated Damages, if any, on
outstanding Notes as set forth in Paragraph 2 hereof.
5. OPTIONAL REDEMPTION.
(a) The Notes will not be redeemable at the Company's option prior to
May 15, 2001. Thereafter, the Notes will be subject to redemption at the
option of the Company, in whole or in part, upon not less than 30 nor more
than 60 days' notice, at the redemption prices (expressed as percentages of
principal amount) set forth below plus accrued and unpaid interest and
Liquidated Damages, if any, thereon to the applicable redemption date, if
redeemed during the twelve-month period beginning on May 15 of the years
indicated below:
Year Percentage
---- ----------
2001.................................................. 105.375%
2002.................................................. 103.583%
2003.................................................. 101.792%
2004 and thereafter................................... 100.000%
(b) Notwithstanding the provisions of clause (a) of this Paragraph 5,
during the first 36 months after the date hereof, the Company may, on any one
or more occasions, redeem up to $154.0 million in aggregate principal amount
of Notes at a redemption price equal to 110.75% of the principal amount thereof
plus accrued and unpaid interest and Liquidated Damages, if any, thereon, to
the redemption date with the net proceeds of any offering of common equity of
the Company; provided, however, that at least $286.0 million in aggregate
principal amount of Notes must remain outstanding immediately following each
such redemption, and provided, further that any such redemption shall occur
within 75 days of the date of closing of such offering of common equity of the
Company.
6. MANDATORY REDEMPTION. Except as set forth in Paragraphs 7 and 8
below, the Company shall not be required to make mandatory redemption payments
with respect to the Notes.
7. REPURCHASE AT OPTION OF HOLDER.
(a) If there is a Change of Control, the Company shall be required
to make an offer (a "Change of Control Offer") to repurchase all or any part
(equal to $1,000 or an integral multiple thereof) of each Holder's Notes at a
purchase price equal to 101% of the principal amount thereof plus, in each
case, accrued and unpaid interest and Liquidated Damages, if any, to the date
of purchase (in either case, the "Change of Control Payment"). Within 10 days
following any Change of Control, the Company shall mail a notice to each
Holder setting forth the procedures governing the Change of Control Offer as
required by the Indenture.
(b) If the Company or a Subsidiary consummates any Asset Sale,
within five days of each date on which the aggregate amount of Excess Proceeds
exceeds $10.0 million, the Company shall commence an offer to all Holders of
Notes and the holders of Pari Passu Debt to the extent required by the terms
A-4
<PAGE>
thereof (an "Asset Sale Offer") pursuant to Section 3.09 of the Indenture to
purchase the maximum principal amount of Notes and any such Pari Passu Debt
that may be purchased out of the Excess Proceeds at an offer price in cash in
an amount equal to 100% of the principal amount thereof plus accrued and
unpaid interest and Liquidated Damages, if any, to the date fixed for the
closing of such offer, in accordance with the procedures set forth in the
Indenture or the agreements governing Pari Passu Debt, as applicable. To the
extent that the aggregate amount of Notes and Pari Passu Debt tendered
pursuant to an Asset Sale Offer is less than the Excess Proceeds, the Company
(or such Subsidiary) may use such deficiency for general corporate purposes.
If the aggregate principal amount of Notes and Pari Passu Debt surrendered by
Holders thereof exceeds the amount of Excess Proceeds, the Trustee shall
select the Notes and Pari Passu Debt to be purchased on a pro rata basis.
Holders of Notes that are the subject of an offer to purchase will receive an
Asset Sale Offer from the Company prior to any related purchase date and may
elect to have such Notes purchased by completing the form entitled "Option of
Holder to Elect Purchase" on the reverse of the Notes.
9. NOTICE OF REDEMPTION. Notice of redemption will be mailed at least
30 days but not more than 60 days before the redemption date to each Holder
whose Notes are to be redeemed at its registered address. Notes in
denominations larger than $1,000 may be redeemed in part but only in whole
multiples of $1,000, unless all of the Notes held by a Holder are to be
redeemed. On and after the redemption date interest and Liquidated Damages, if
any, ceases to accrue on Notes or portions thereof called for redemption.
10. SUBORDINATION. Each Holder by accepting a Note agrees that the
payment of principal of, premium and Liquidated Damages, if any, and interest
on each Note is subordinated in right of payment, to the extent and in the
manner provided in Article 10 of the Indenture, to the prior payment in full
of all Senior Debt (whether outstanding on the date of the Indenture or
thereafter created, incurred, assumed or guaranteed), and that the
subordination is for the benefit of the holders of Senior Debt.
11. DENOMINATIONS, TRANSFER, EXCHANGE. The Notes are in registered
form without coupons in denominations of $1,000 and integral multiples of
$1,000. The transfer of Notes may be registered and Notes may be exchanged as
provided in the Indenture. The Registrar and the Trustee may require a Holder,
among other things, to furnish appropriate endorsements and transfer documents
and the Company may require a Holder to pay any taxes and fees required by law
or permitted by the Indenture. The Company need not exchange or register the
transfer of any Note or portion of a Note selected for redemption, except for
the unredeemed portion of any Note being redeemed in part. Also, it need not
exchange or register the transfer of any Notes for a period of 15 days before
a selection of Notes to be redeemed or during the period between a record date
and the corresponding Interest Payment Date.
12. PERSONS DEEMED OWNERS. The registered Holder of a Note may be
treated as its owner for all purposes.
13. AMENDMENT, SUPPLEMENT AND WAIVER. Subject to certain exceptions,
the Indenture or the Notes may be amended or supplemented with the consent of
the Holders of at least a majority in principal amount of the then outstanding
Notes, and any existing default or compliance with any provision of the
Indenture or the Notes may be waived with the consent of the Holders of a
majority in principal amount of the then outstanding Notes. Without the
consent of any Holder of a Note, the Indenture or the Notes may be amended or
supplemented to cure any ambiguity, defect or inconsistency, to provide for
uncertificated Notes in addition to or in place of certificated Notes, to
provide for the assumption of the Company's and Guarantors' obligations to
Holders of the Notes in case of a merger or consolidation, to make any change
that would provide any additional rights or benefits to the Holders of the
Notes or that
A-5
<PAGE>
does not adversely affect the legal rights under the Indenture of any such
Holder, or to comply with the requirements of the SEC in order to effect or
maintain the qualification of the Indenture under the Trust Indenture Act. Any
amendment to the provisions of Article 10 of the Indenture and Sections 3.09,
4.10 and 4.14 including, in each case, the related definitions will require
the consent of the Holders of at least 75% in aggregate principal amount of
the Notes then outstanding if such amendment would adversely affect the rights
of Holders of Notes.
14. DEFAULTS AND REMEDIES. Events of Default include: (i) a default
for 30 days in the payment when due of interest on, or Liquidated Damages, if
any, with respect to, the Notes (whether or not prohibited by Article 10 of
the Indenture); (ii) a default in payment when due of the principal of or
premium, if any, on the Notes (whether or not prohibited by Article 10 of the
Indenture); (iii) the failure by the Company to comply with the provisions
described under Sections 3.09, 4.07, 4.09, 4.10, 4.14 and 5.01 of the
Indenture; (iv) the failure by the Company for 60 days after notice to comply
with any of its other agreements in the Indenture or the Notes; (v) a default
under any mortgage, indenture or instrument under which there may be issued or
by which there may be secured or evidenced any Indebtedness for money borrowed
by the Company or any of its Subsidiaries (or the payment of which is
guaranteed by the Company or any of its Subsidiaries) whether such
Indebtedness or guarantee now exists, or is created after the date hereof,
which default (a) is caused by a failure to pay principal of or premium, if
any, or interest on such Indebtedness prior to the expiration of the grace
period provided in such Indebtedness on the date of such default (a "Payment
Default") or (b) results in the acceleration of such Indebtedness prior to its
express maturity and, in each case, the principal amount of any such
Indebtedness, together with the principal amount of any other such
Indebtedness under which there has been a Payment Default or the maturity of
which has been so accelerated, aggregates $10.0 million or more; (vi) the
failure by the Company or any of its Subsidiaries to pay final judgments
aggregating in excess of $10.0 million, which judgments are not paid,
discharged or stayed for a period of 60 days; (vii) certain events of
bankruptcy or insolvency with respect to the Company or any of its Significant
Subsidiaries or a group of Subsidiaries that, taken as a whole, would
constitute a Significant Subsidiary; and (viii) any Subsidiary Guarantee shall
be held in any judicial proceeding to be unenforceable or invalid or shall
cease for any reason to be in full force and effect or any Subsidiary
Guarantor, or any Person acting on behalf of any Subsidiary Guarantor, shall
deny or disaffirm its obligations under its Subsidiary Guarantee. If any Event
of Default occurs and is continuing, the Trustee or the Holders of at least
25% in principal amount of the then outstanding Notes may declare all the
Notes to be due and payable. Notwithstanding the foregoing, in the case of an
Event of Default arising from certain events of bankruptcy or insolvency, all
outstanding Notes will become due and payable without further action or
notice. Holders may not enforce the Indenture or the Notes except as provided
in the Indenture. Subject to certain limitations, Holders of a majority in
principal amount of the then outstanding Notes may direct the Trustee in its
exercise of any trust or power. The Trustee may withhold from Holders of the
Notes notice of any continuing Default or Event of Default (except a Default
or Event of Default relating to the payment of principal or interest) if it
determines that withholding notice is in their interest. The Holders of a
majority in aggregate principal amount of the Notes then outstanding by notice
to the Trustee may on behalf of the Holders of all of the Notes waive any
existing Default or Event of Default and its consequences under the Indenture
except a continuing Default or Event of Default in the payment of interest or
Liquidated Damages, if any, on, or the principal of, the Notes. The Company is
required to deliver to the Trustee annually a statement regarding compliance
with the Indenture, and the Company is required upon becoming aware of any
Default or Event of Default, to deliver to the Trustee a statement specifying
such Default or Event of Default.
A-6
<PAGE>
15. TRUSTEE DEALINGS WITH THE COMPANY. The Trustee, in its individual
or any other capacity, may make loans to, accept deposits from, and perform
services for its Company or its Affiliates, and may otherwise deal with the
Company or its Affiliates, as if it were not the Trustee.
16. NO RECOURSE AGAINST OTHERS. A director, officer, employee,
incorporator or stockholder, of the Company or the Guarantors, as such, shall
not have any liability for any obligations of the Company or the Guarantors
under the Notes, the Subsidiary Guarantees or the Indenture, as applicable, or
for any claim based on, in respect of, or by reason of, such obligations or
their creation. Each Holder by accepting a Note waives and releases all such
liability. The waiver and release are part of the consideration for the
issuance of the Notes.
17. AUTHENTICATION. This Note shall not be valid until authenticated
by the manual signature of the Trustee or an authenticating agent.
18. ABBREVIATIONS. Customary abbreviations may be used in the name of
a Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (=
tenants by the entireties), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform
Gifts to Minors Act).
19. ADDITIONAL RIGHTS OF HOLDERS OF TRANSFER RESTRICTED SECURITIES.
In addition to the rights provided to Holders of Notes under the Indenture,
Holders of Transferred Restricted Securities shall have all the rights set
forth in the Registration Rights Agreement dated as of the date hereof, among
the Company, the Guarantors and the parties named on the signature pages
thereof.
20. CUSIP NUMBERS. Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Company has
caused CUSIP numbers to be printed on the Notes and the Trustee may use CUSIP
numbers in notices of redemption as a convenience to Holders. No
representation is made as to the accuracy of such numbers either as printed on
the Notes or as contained in any notice of redemption and reliance may be
placed only on the other identification numbers placed thereon.
The Company will furnish to any Holder upon written request and
without charge a copy of the Indenture and/or the Registration Rights
Agreement. Requests may be made to:
SFX Broadcasting, Inc.
150 East 58th Street
New York, New York 10155
Attention: Howard J. Tytel
A-7
<PAGE>
ASSIGNMENT FORM
To assign this Note, fill in the form below: (I) or (we) assign and
transfer this Note to
- -----------------------------------------------------------------------------
(Insert assignee's soc. sec. or tax I.D. no.)
- -----------------------------------------------------------------------------
- -----------------------------------------------------------------------------
- -----------------------------------------------------------------------------
- -----------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
and irrevocably appoint _____________________________________________________
to transfer this Note on the books of the Company. The agent may substitute
another to act for him.
- -----------------------------------------------------------------------------
Date:
------------------------
Your Signature:
------------------------------
(Sign exactly as your name
appears on the face of
this Note)
Signature Guarantee:
-------------------------
A-8
<PAGE>
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the Company
pursuant to Section 4.10 or 4.14 of the Indenture, check the box below:
[ ] Section 4.10 [ ] Section 4.14
If you want to elect to have only part of the Note purchased by the
Company pursuant to Section 4.10 or Section 4.14 of the Indenture, state the
amount you elect to have purchased: $
---------
Date: Your Signature:
-------------- ----------------------------------
(Sign exactly as your name appears on the Note)
Tax Identification No.:
--------------------------
Signature Guarantee:
-----------------------------
A-9
<PAGE>
SCHEDULE OF EXCHANGES OF CERTIFICATED NOTES
The following exchanges of a part of this Global Note for
Certificated Notes have been made:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Principal Amount of this Signature of
Amount of decrease in Amount of increase in Global Note authorized officer of
Principal Amount of Principal Amount of following such decrease Trustee or Note
Date of Exchange this Global Note this Global Note (or increase) Custodian
- ---------------------- ----------------------- ------------------------ ------------------------ -----------------------
</TABLE>
A-10
<PAGE>
EXHIBIT B
CERTIFICATE TO BE DELIVERED UPON EXCHANGE OR REGISTRATION OF TRANSFER OF
NOTES
Re: 10 3/4% Senior Subordinated Notes due 2006 of SFX Broadcasting, Inc.
This Certificate relates to $_____ principal amount of Notes held
in * ________ book-entry or *_______ certificated form by ________________
(the "Transferor").
The Transferor*:
[ ] has requested the Trustee by written order to deliver in exchange for
its beneficial interest in the Global Note held by the Depositary a Note or
Notes in certificated, registered form of authorized denominations in an
aggregate principal amount equal to its beneficial interest in such Global
Note (or the portion thereof indicated above); or
[ ] has requested the Trustee by written order to exchange or register
the transfer of a Note or Notes.
In connection with such request and in respect of each such Note, the
Transferor does hereby certify that Transferor is familiar with the Indenture
relating to the above captioned Notes and as provided in Section 2.06 of such
Indenture, the transfer of this Note does not require registration under the
Securities Act (as defined below) because:*
[ ] Such Note is being acquired for the Transferor's own account, without
transfer (in satisfaction of Section 2.06(a)(ii)(A) or Section 2.06(d)(i)(A)
of the Indenture).
[ ] Such Note is being transferred to a "qualified institutional buyer"
(as defined in Rule 144A under the Securities Act of 1933, as amended (the
"Securities Act")) in reliance on Rule 144A or to an "Accredited Investor,"
(as defined in Rule 501(a)(1), (2), (3) or (7) under the Securities Act) in
accordance with Regulation D under the Securities Act (in satisfaction of
Section 2.06(a)(ii)(B), Section 2.06(b)(i) or Section 2.06(d)(i) (B) of the
Indenture) or pursuant to an exemption from registration in accordance with
Rule 904 under the Securities Act (in satisfaction of Section 2.06(a)(ii)(B)
or Section 2.06(d)(i)(B) of the Indenture.)
- ---------------
*Check applicable box.
B-1
<PAGE>
[ ] Such Note is being transferred in accordance with Rule 144 under the
Securities Act, or pursuant to an effective registration statement under the
Securities Act (in satisfaction of Section 2.06(a)(ii)(B) or Section
2.06(d)(i)(B) of the Indenture).
[ ] Such Note is being transferred in reliance on and in compliance with
an exemption from the registration requirements of the Securities Act, other
than Rule 144A, 144 or Rule 904 under the Securities Act.
----------------------------------
[INSERT NAME OF TRANSFEROR]
By:
-------------------------------
Date:
------------------------------
- ---------------
*Check applicable box.
B-2
<PAGE>
EXHIBIT C
SUBSIDIARY GUARANTEE
Each Guarantor hereby, jointly and severally, unconditionally
guarantees to each Holder of Notes authenticated and delivered by the Trustee
and to the Trustee and its successors and assigns, irrespective of the
validity and enforceability of the Indenture, the Notes or the Obligations of
the Company to the Holders or the Trustee under the Notes or under the
Indenture, that: (a) the principal of, and premium and Liquidated Damages, if
any, and interest on the Notes shall be promptly paid in full when due,
whether at maturity, by acceleration, redemption or otherwise, and interest on
overdue principal of interest and Liquidated Damages if any, on any Note, if
any, if lawful and all other Obligations of the Company to the Holders or the
Trustee under the Indenture or under the Notes shall be promptly paid in full
or performed, all in accordance with the terms thereof; and (b) in case of any
extension of time of payment or renewal of any Notes or any of such other
Obligations, the same will be promptly paid in full when due in accordance
with the terms of the extension or renewal, whether at stated maturity, by
acceleration or otherwise. Failing payment when due of any amount so
guaranteed, for whatever reason, the Guarantors will be jointly and severally
obligated to pay the same immediately.
The Obligations of the Guarantors to the Holders of Notes and to the
Trustee pursuant to this Subsidiary Guarantee and the Indenture are expressly
set forth in Article 11 of the Indenture, and reference is hereby made to such
Indenture for the precise terms of this Subsidiary Guarantee. The terms of
Article 11 of the Indenture are incorporated herein by reference.
No director, officer, employee, incorporator or stockholder, as such,
past, present or future, of each of the Guarantors shall have any personal
liability under this Subsidiary Guarantee by reason of its status as such
director, officer, employee incorporator or stockholder.
Each of the Guarantors agrees, and each Holder by accepting a Note
and the related Subsidiary Guarantees agrees, that the payment of principal
of, premium, if any, and interest and Liquidated Damages, if any, on the Notes
pursuant to the Subsidiary Guarantees is subordinated in right of payment, to
the extent and in the manner provided in Articles 10 and 11 of the Indenture,
to the prior payment of all Senior Debt of such Guarantor and the
subordination set forth herein is for the benefit of an enforceable by the
holders of Senior Debt. Each Holder by accepting a Note authorizes and directs
the Trustee on his behalf to take such action as may be necessary or
appropriate to acknowledge or effectuate the subordination between the Holders
and the holders of Senior Debt as provided in Section 10.02 of the Indenture
and appoints the Trustee as attorney-in-fact for any and all such purposes.
This is a continuing Subsidiary Guarantee and shall remain in full
force and effect and shall be binding upon each Guarantor and its respective
successors and assigns to the extent set forth in the Indenture until full and
final payment of all of the Company's Obligations under the Notes and the
Indenture and shall inure to the benefit of the successors and assigns of the
Trustee and the Holders of Notes and, in the event of any transfer or
assignment of rights by any Holder of Notes or the Trustee, the rights and
privileges herein conferred upon that party shall automatically extend to and
be vested in such transferee or assignee, all subject to the terms and
conditions hereof. This a Subsidiary Guarantee of payment and not a guarantee
of collection.
In certain circumstances more fully described in the Indenture, any
Guarantor may be released from its liability under this Subsidiary Guarantee,
and any such release will be effective whether or not noted hereon.
C-1
<PAGE>
This Subsidiary Guarantee shall not be valid or obligatory for any
purpose until the certificate of authentication on the Note upon which this
Subsidiary Guarantee is noted shall have been executed by the Trustee under
the Indenture by the manual signature of one of its authorized officers.
For purposes hereof, each Guarantor's liability will be that amount
from time to time equal to the aggregate liability of such Guarantor
hereunder, but shall be limited to the lesser of (i) the aggregate amount of
the Obligations of the Company under the Notes and the Indenture and (ii) the
amount, if any, which would not have (A) rendered such Guarantor "insolvent"
(as such term is defined in the federal Bankruptcy Law and in the Debtor and
Creditor Law of the State of New York) or (B) left it with unreasonably small
capital at the time its Subsidiary Guarantee of the Notes was entered into,
after giving effect to the incurrence of existing Indebtedness immediately
prior to such time; provided that, it shall be a presumption in any lawsuit or
other proceeding in which such Guarantor is a party that the amount guaranteed
pursuant to its Subsidiary Guarantee is the amount set forth in clause (i)
above unless any creditor, or representative of creditors of such Guarantor,
or debtor in possession or trustee in bankruptcy of such Guarantor, otherwise
proves in such a lawsuit that the aggregate liability of such Guarantor is
limited to the amount set forth in clause (ii). The Indenture provides that,
in making any determination as to the solvency or sufficiency of capital of a
Guarantor in accordance with the previous sentence, the right of such
Guarantor to contribution from other Guarantors and any other rights such
Guarantor may have, contractual or otherwise, shall be taken into account.
Capitalized terms used herein have the same meanings given in the
Indenture unless otherwise indicated.
SFX Broadcasting of the Southwest, Inc.
By:
---------------------------------------------
Name:
Title:
SFX Broadcasting of Texas, Inc.
By:
---------------------------------------------
Name:
Title:
SFX Broadcasting of Texas (KRLD), Inc.
By:
---------------------------------------------
Name:
Title:
SFX Broadcasting of Texas (KRLD) Licensee, Inc.
By:
---------------------------------------------
Name:
Title:
C-2
<PAGE>
SFX Broadcasting of Texas (TSN), Inc.
By:
---------------------------------------------
Name:
Title:
SFX Broadcasting of Texas (TSN) Licensee, Inc.
By:
---------------------------------------------
Name:
Title:
KODA-FM Licensee, Inc.
By:
---------------------------------------------
Name:
Title:
KJQY-FM Licensee, Inc.
By:
---------------------------------------------
Name:
Title:
SFX Broadcasting of Texas (KTCK), Inc.
By:
---------------------------------------------
Name:
Title:
SFX Broadcasting of Texas (KTCK) Licensee, Inc.
By:
---------------------------------------------
Name:
Title:
SFX Broadcasting of The Southeast, Inc.
By:
---------------------------------------------
Name:
Title:
SFX Broadcasting of South Carolina (WMYI), Inc.
By:
---------------------------------------------
Name:
Title:
C-3
<PAGE>
SFX Broadcasting of South Carolina (WMYI)
Licensee, Inc.
By:
---------------------------------------------
Name:
Title:
SFX Broadcasting of Mississippi, Inc.
By:
---------------------------------------------
Name:
Title:
SFX Broadcasting of Mississippi Licensee, Inc.
By:
---------------------------------------------
Name:
Title:
SFX Broadcasting of South Carolina (WSSL), Inc.
By:
---------------------------------------------
Name:
Title:
SFX Broadcasting of South Carolina (WSSL)
Licensee, Inc.
By:
---------------------------------------------
Name:
Title:
SFX Broadcasting of Tennessee, Inc.
By:
---------------------------------------------
Name:
Title:
SFX Broadcasting of Tennessee Licensee, Inc.
By:
---------------------------------------------
Name:
Title:
SFX Broadcasting of Jackson, Inc.
By:
---------------------------------------------
Name:
Title:
C-4
<PAGE>
SFX Broadcasting of Jackson Licensee, Inc.
By:
---------------------------------------------
Name:
Title:
SFX Broadcasting of North Carolina, Inc.
By:
---------------------------------------------
Name:
Title:
SFX Broadcasting of North Carolina Licensee, Inc.
By:
---------------------------------------------
Name:
Title:
SFX Broadcasting of San Diego, Inc.
By:
---------------------------------------------
Name:
Title:
Parker Broadcasting Company
By:
---------------------------------------------
Name:
Title:
SFX Broadcasting of San Diego Licensee, Inc.
By:
---------------------------------------------
Name:
Title:
SFX Acquisition Corporation
By:
---------------------------------------------
Name:
Title:
SFX Merger Company
By:
---------------------------------------------
Name:
Title:
C-5
<PAGE>
EXHIBIT D
FORM OF SUPPLEMENTAL INDENTURE
SUPPLEMENTAL INDENTURE (this "Supplemental Indenture"), dated as of
________________________, between __________________(the "Guarantor"), a
direct or indirect subsidiary of SFX Broadcasting, Inc. (or its successor), a
Delaware corporation (the "Company"), and Chemical Bank as trustee under the
indenture referred to below (the "Trustee").
WITNESSETH
WHEREAS, The Company has heretofore executed and delivered to the
Trustee an indenture (the "Indenture"), dated as of May 31, 1996, providing
for the issuance of an aggregate principal amount of $450,000,000 of 10 3/4%
Senior Subordinated Notes due 2006 (the "Securities");
WHEREAS, Section 4.15 of the Indenture provides that under certain
circumstances the Company is required to cause the Guarantor to execute and
deliver to the Trustee a supplemental indenture pursuant to which the
Guarantor shall unconditionally guarantee all of the Company's Obligations
under the Securities pursuant to a Subsidiary Guarantee on the terms and
conditions set forth herein; and
NOW THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the receipt of which is hereby acknowledged, the
Guarantor and the Trustee mutually covenant and agree for the equal and ratable
benefit of the holders of the Securities as follows:
1. CAPITALIZED TERMS. Capitalized terms used herein without
definition shall have the meanings assigned to them in the Indenture.
2. AGREEMENT TO GUARANTEE. The Guarantor hereby agrees, jointly and
severally with all other Guarantors, to guarantee the Company's obligations
under the Securities on the terms and subject to the conditions set forth in
Article 11 of the Indenture and to be bound by all other applicable provisions
of the Indenture, including, without limitation, the provisions of Article 10
of the Indenture.
D-1
<PAGE>
3. NO RECOURSE AGAINIST OTHERS. No past, present or future
director, officer, employee, incorporator, shareholder or agent of the
Guarantor, as such, shall have any liability for any obligations of the
Company or any Guarantor under the Securities, any Subsidiary Guarantees, the
Indenture or this Supplemental Indenture or for any claim based on, in respect
of, or by reason of, such obligations or their creation. Each holder of the
Securities by accepting a Security waives and releases all such liability. The
waiver and release are part of the consideration for issuance of the
Securities. Such waiver may not be effective to waive liabilities under the
federal securities laws and it is the view of the Commission that such a
waiver is against public policy.
4. EFFECTIVENESS. This Supplemental Indenture shall be effective
upon execution by the parties hereto.
5. RECITALS. The recitals contained herein shall be taken as the
statements of the Company and the Guarantors and the Trustee assumes no
responsibility for their correctness. The Trustee makes no representations as to
the validity of this Supplemental Indenture.
6. NEW YORK LAW TO GOVERN. THE INTERNAL LAW OF THE STATE OF NEW
YORK SHALL GOVERN AND BE USED TO CONSTRUE THIS SUPPLEMENTAL INDENTURE.
7. COUNTERPARTS. The parties may sign any number of copies of this
Supplemental Indenture. Each signed copy shall be an original, but all of them
together represent the same agreement.
8. EFFECT OF HEADINGS. The Section headings herein are for
convenience only and shall not affect the construction hereof.
D-2
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture
to be duly executed and attested, all as of the date first above written.
Dated: ,
-------------------------
[Guarantor]
By:
----------------------------
Name:
Title:
Chemical Bank, as Trustee
By:
----------------------------
Name:
Title:
D-3
- -------------------------------------------------------------------
SFX BROADCASTING, INC.,
Issuer
to
CHEMICAL BANK,
Trustee
----------
FIRST SUPPLEMENTAL INDENTURE
Dated as of May 23, 1996
Supplemental to
Indenture Dated as of October 7, 1993
----------
11-3/8% SENIOR SUBORDINATED NOTES DUE 2000
- -------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
Page
RECITALS.........................................................- 1 -
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION......- 1 -
Section 101. Capitalized Terms..............................- 1 -
SECTION 102. Effectiveness; Operativeness of Amendments. ...- 1 -
SECTION 103. Incorporation of First Supplemental Indenture
into Indenture. - 2 -
SECTION 104. Effect of Headings and Table of Contents.......- 2 -
SECTION 105. Governing Law..................................- 2 -
SECTION 106. Counterparts...................................- 2 -
SECTION 107. Recitals.......................................- 2 -
ARTICLE TWO
AMENDMENTS TO PROVISIONS OF INDENTURE........................- 3 -
SECTION 201. Definitions....................................- 3 -
SECTION 202. Covenants.....................................- 13 -
SECTION 203. Mergers.......................................- 21 -
SECTION 204. Events of Default.............................- 22 -
Testimonium
Signatures and Seals
(i)
<PAGE>
FIRST SUPPLEMENTAL INDENTURE, dated as of May 23, 1996 between SFX
BROADCASTING, INC. (the "Company"), a Delaware corporation, and CHEMICAL BANK
(the "Trustee"), a New York corporation, as trustee under the Indenture dated
as of October 7, 1993 between the Company and the Trustee (the "Indenture").
RECITALS
WHEREAS, Sections 2.09 and 9.02 of the Indenture provide that, except with
respect to certain specified provisions, the Indenture may be amended or
supplemented with the written consent of the Holders of not less than a
majority of the aggregate principal amount of the outstanding Securities,
excluding Securities owned by the Company or any Affiliate of the Company;
WHEREAS, the Company wishes to supplement the Indenture to change certain
provisions of the Indenture as set forth below, and the Holders of a majority
of the aggregate principal amount of the outstanding Securities as of May 23,
1996, excluding Securities owned by the Company or any Affiliate of the
Company, have consented to the execution of this First Supplemental Indenture
pursuant to the consent solicitation made by the Company through that certain
Amended and Restated Offer to Purchase and Consent Solicitation dated May 16,
1996, as supplemented (the "Offer to Purchase"); and
WHEREAS, the Company hereby covenants and represents that all things
necessary have been done to make this First Supplemental Indenture a legal,
valid and binding agreement of the Company in accordance with the terms hereof
and of the Indenture.
NOW THEREFORE, THIS FIRST SUPPLEMENTAL INDENTURE
WITNESSETH, that, for and in consideration of the premises, it is mutually
covenanted and agreed as follows:
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
SECTION 101. Capitalized Terms.
Capitalized terms used herein and not otherwise defined herein are used
with the respective meanings ascribed to such terms in the Indenture.
SECTION 102. Effectiveness; Operativeness of Amendments.
(a) Subject to Section 102(b) hereof, this First Supplemental Indenture
shall become effective, and shall bind the parties hereto, upon its execution
by the Company and the Trustee.
CAPITAL PRINTING SYSTEMS]
<PAGE>
(b) Notwithstanding the foregoing, the amendments to the Indenture
contained in Article Two hereof, (the "Amendments") shall not become
operative, and shall not be binding on the Company or the Trustee, until the
acceptance by the Company for payment of Securities validly tendered for
purchase (and not withdrawn) in the tender offer (the "Tender Offer") made by
the Company pursuant to the Offer to Purchase. In the event that the Company
does not, on or prior to June 14, 1996, accept for payment Securities which
have been validly tendered for purchase (and not withdrawn) in the Tender
Offer, the Amendments shall not become operative and shall not bind the
Company or the Trustee. The Company shall promptly notify the Trustee, in the
manner set forth in Section 11.02 of the Indenture, (i) of its acceptance for
payment of Securities validly tendered for purchase (and not withdrawn) in the
Tender Offer, or (ii) that it will not accept for payment Securities which
have been validly tendered for purchase (and not withdrawn) in the Tender
Offer. The Company shall, in any event, send such notice to the Trustee on or
prior to June 15, 1996. In the event the Company sends a notice to the Trustee
to the effect set forth in clause (ii) above, this First Supplemental
Indenture shall lapse automatically and be of no further force or effect.
SECTION 103. Incorporation of First Supplemental Indenture into Indenture.
This First Supplemental Indenture is executed by the Company and the
Trustee pursuant to the provisions of Section 9.02 of the Indenture, and the
terms and conditions hereof shall be deemed to be part of the Indenture for
all purposes upon the effectiveness of this First Supplemental Indenture. The
Indenture, as amended and supplemented by this First Supplemental Indenture,
is in all respects hereby adopted, ratified and confirmed.
SECTION 104. Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table of Contents are for
convenience only and shall not affect the construction hereof.
SECTION 105. Governing Law.
This First Supplemental Indenture shall be governed by and construed in
accordance with the laws of the State of New York.
SECTION 106. Counterparts.
This First Supplemental Indenture may be executed in any number of
counterparts, each of which so executed shall be deemed to be an original, but
all such counterparts shall together constitute but one and the same
instrument.
SECTION 107. Recitals.
The recitals contained herein shall be taken as the statements of the
Company and the Trustee assumes no responsibility for their correctness. The
Trustee makes no representations as to the validity or sufficiency of this
First Supplemental Indenture.
- 2 -
<PAGE>
ARTICLE TWO
AMENDMENTS TO PROVISIONS OF INDENTURE
SECTION 201. Definitions.
Section 1.01 of the Indenture is hereby amended as follows:
(a)The following defined terms are deleted in their entirety:
"Acquired Debt," "Affiliate," "Asset Disposition," "Capital Stock," "Capital
Lease Obligations," "Consolidated Net Income," "Consolidated Net Worth,"
"Currency Agreement," "Debt to Operating Cash Flow Ratio," "Disqualified
Stock," "Guarantee," "Hicks Loan," "Independent Director," "Interest Rate
Protection Agreement," "Investment," "Lien," "Net Available Proceeds," "Net
Income," "Obligations," "Operating Cash Flow," "Permitted Investments,"
"Permitted Liens," "Permitted Transactions," "Qualified Stock," "Refinancing
Debt," "Related Person," "Subsidiary," "Total Interest Expense," "Weighted
Average Life to Maturity" and "WKTF Note."
(b)The following new terms shall be added to Section 1.01 and inserted
in alphabetical order in relation to the existing defined terms not deleted by
this First Supplemental Indenture:
"Acquired Debt" means, with respect to any specified Person, (i)
Indebtedness of any other Person existing at the time such other Person is
merged with or into or became a Subsidiary of such specified Person,
including, without limitation, Indebtedness incurred in connection with, or in
contemplation of, such other Person merging with or into or becoming a
Subsidiary of such specified Person, and (ii) Indebtedness secured by a Lien
encumbering any asset acquired by such specified Person.
"Advertising Business" means any business deriving substantially all of
its revenues from the (i) sale of advertisements and (ii) sale of products or
provision of services to any business described in clause (i) above.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For purposes of this definition, "control"
(including, with correlative meanings, the terms "controlling," "controlled
by" and "under common control with"), as used with respect to any Person,
shall mean the possession, directly or indirectly, of the power to direct or
cause the direction of the management or policies of such Person, whether
through the ownership of voting securities, by agreement or otherwise;
provided that beneficial ownership of 10% or more of the voting securities of
a Person shall be deemed to be control.
"Asset Sale" means (i) the sale, lease, conveyance or other disposition of
any assets (including, without limitation, by way of a sale and leaseback or
pursuant to an LMA or similar arrangement); provided that the sale, lease,
conveyance or other disposition of all or substantially
- 3 -
<PAGE>
all of the assets of the Company and its Subsidiaries taken as a whole will be
governed by the provisions of Section 4.15 hereof and/or the provisions of
Section 5.01 hereof and not by the provisions of the Asset Sale covenant, and
(ii) the issue or sale by the Company or any of its Subsidiaries of Equity
Interests of any of the Company's Subsidiaries, in the case of either clause
(i) or (ii), whether in a single transaction or a series of related
transactions (a) that have a Fair Market Value in excess of $5.0 million or
(b) for aggregate net proceeds in excess of $5.0 million. Notwithstanding the
foregoing: (i) to the extent that no Disposition Debt is outstanding, the
Washington Disposition, the Louisville Disposition and the Dallas Disposition,
(ii) the Houston Exchange, (iii) a transfer of assets by the Company to a
Wholly Owned Subsidiary or by a Wholly Owned Subsidiary to the Company or to
another Wholly Owned Subsidiary, (iv) an issuance of Equity Interests by a
Wholly Owned Subsidiary to the Company or to another Wholly Owned Subsidiary,
(v) a Restricted Payment that is permitted by Section 4.08 hereof, and (vi)
sales of obsolete equipment in the ordinary course of business, will not be
deemed to be Asset Sales.
"Attributable Debt" in respect of a sale and leaseback transaction means,
at the time of determination, the present value (discounted at the rate of
interest implicit in such transaction, determined in accordance with GAAP) of
the obligation of the lessee for net rental payments during the remaining term
of the lease included in such sale and leaseback transaction (including any
period for which such lease has been extended or may, at the option of the
lessor, be extended).
"Bank Facilities" means, with respect to the Company, one or more debt
facilities (including, without limitation, the New Credit Agreement) or
commercial paper facilities with banks or other institutional lenders
providing for revolving credit loans, term loans, receivables financing
(including through the sale of receivables to such lenders or to special
purpose entities formed to borrow from such lenders against such receivables)
or letters of credit, in each case, as amended, restated, modified, renewed,
refunded, replaced or refinanced in whole or in part from time to time.
Indebtedness under Bank Facilities outstanding on the date on which the New
Notes are first issued and authenticated under the indenture governing the New
Notes shall be deemed to have been incurred on such date in reliance on the
exception provided by clause (i) of Section 4.10 hereof.
"Broadcast Business" means any business, the majority of whose revenues
are derived from the broadcast of radio programming.
"Capital Lease Obligation" means, at the time any determination thereof is
to be made, the amount of the liability in respect of a capital lease that
would at such time be required to be capitalized on a balance sheet in
accordance with GAAP.
"Capital Stock" means (i) in the case of a corporation, corporate stock,
(ii) in the case of an association or business entity any and all shares,
interests, participations, rights or other equivalents (however designated) of
corporate stock, (iii) in the case of a partnership, partnership interests
(whether general or limited) and (iv) any other interest or participation that
confers on a
- 4 -
<PAGE>
Person the right to receive a share of the profits and losses of, or
distributions of assets of, the issuing Person.
"Cash Equivalents" means (i) United States dollars, (ii) securities issued
or directly and fully guaranteed or insured by the United States government or
any agency or instrumentality thereof having maturities of not more than six
months from the date of acquisition, (iii) certificates of deposit and
eurodollar time deposits with maturities of six months or less from the date
of acquisition, bankers' acceptances with maturities not exceeding six months
and overnight bank deposits, in each case with any lender party to the New
Credit Agreement or with any domestic commercial bank having capital and
surplus in excess of $500.0 million and a Thomson Bank Watch Rating of "B" or
better, (iv) repurchase obligations with a term of not more than seven days
for underlying securities of the types described in clauses (ii) and (iii)
above entered into with any financial institution meeting the qualifications
specified in clause (iii) above and (v) commercial paper having the highest
rating obtainable from Moody's Investors Service, Inc. or Standard & Poor's
Corporation and in each case maturing within six months after the date of
acquisition.
"Commitment Letter" means the Commitment Letter between the Company and
the Bank of New York relating to the New Credit Agreement.
"Consolidated Cash Flow" means, with respect to any Person for any period,
the Consolidated Net Income of such Person for such period plus (i) an amount
equal to any extraordinary loss plus any net loss realized in connection with
an Asset Sale by such Person or any of its Subsidiaries during such period (to
the extent such losses were deducted in computing such Consolidated Net
Income), plus (ii) provision for taxes based on income or profits of such
Person and its Subsidiaries for such period, to the extent that such provision
for taxes was included in computing such Consolidated Net Income, plus (iii)
Consolidated Interest Expense of such Person for such period to the extent any
such Consolidated Interest Expense was deducted in computing such Consolidated
Net Income, plus (iv) depreciation, amortization (including amortization of
goodwill and other intangibles but excluding amortization of prepaid cash
expenses that were paid in a prior period) and other non-cash charges
(excluding any such non-cash charge to the extent that it represents an
accrual of or reserve for cash charges in any future period) of such Person
and its Subsidiaries for such period to the extent that such depreciation,
amortization and other non-cash charges were deducted in computing such
Consolidated Net Income, less (v) all non-cash items increasing Consolidated
Net Income for such period (excluding any such non-cash income to the extent
it represents an accrual of cash income in any future period), in each case,
on a consolidated basis and determined in accordance with GAAP.
"Consolidated Indebtedness" of any Person as of any date of determination
means the sum (without duplication) of (i) the total amount of Indebtedness
and Attributable Debt of such Person and its Subsidiaries, plus (ii) the total
amount of other Indebtedness shown on the balance sheet of the primary obligor
on such Indebtedness, to the extent that such Indebtedness has been Guaranteed
by such Person or one of its Subsidiaries, plus (iii) the aggregate
liquidation value or redemption amount (if larger) of all Disqualified Stock
of such Person and all preferred stock of
- 5 -
<PAGE>
Subsidiaries of such Person, in each case, determined on a consolidated basis
in accordance with GAAP.
"Consolidated Interest Expense" means, with respect to any Person for any
period, the sum of (i) the consolidated interest expense of such Person and
its Subsidiaries for such period, whether paid or accrued (including, without
limitation, amortization of original issue discount, non-cash interest
payments, the interest component of any deferred payment obligations, the
interest component of all payments associated with Capital Lease Obligations,
imputed interest with respect to Attributable Debt, commissions, discounts and
other fees and charges incurred in respect of letter of credit or bankers'
acceptance financings, and net payments (if any) pursuant to Hedging
Obligations); and (ii) the consolidated interest expense of such Person and
its Subsidiaries that was capitalized during such period; and (iii) any
interest expense on Indebtedness of another Person that is guaranteed by such
Person or one of its Subsidiaries or secured by a Lien on assets of such
Person or one of its Subsidiaries (whether or not such Guarantee or Lien is
called upon); and (iv) the product of (a) all cash dividend payments (and
non-cash dividend payments in the case of a Person that is a Subsidiary) on
any series of preferred stock of such Person, times (b) a fraction, the
numerator of which is one and the denominator of which is one minus the then
current combined federal, state and local statutory tax rate of such Person,
expressed as a decimal, in each case, on a consolidated basis and in
accordance with GAAP.
"Consolidated Net Income" means, with respect to any Person for any
period, the aggregate of the Net Income of such Person and its Subsidiaries
for such period, determined on a consolidated basis in accordance with GAAP;
provided that (i) the Net Income (but not loss) of any Person that is not a
Subsidiary or that is accounted for by the equity method of accounting shall
be included only to the extent of the amount of dividends or distributions
paid in cash to the referenced Person or a Wholly Owned Subsidiary thereof,
(ii) the Net Income of any Subsidiary shall be excluded to the extent that the
declaration or payment of dividends or similar distributions by that
Subsidiary of that Net Income is not at the date of determination permitted
without any prior governmental approval (that has not been obtained) or,
directly or indirectly, by operation of the terms of its charter or any
agreement, instrument, judgment, decree, order, statute, rule or governmental
regulation applicable to that Subsidiary or its stockholders, (iii) the Net
Income of any Person acquired in a pooling of interests transaction for any
period prior to the date of such acquisition shall be excluded and (iv) the
cumulative effect of a change in accounting principles shall be excluded.
"Consolidated Net Worth" means, with respect to any Person as of any date,
the sum of (i) the consolidated equity of the common stockholders of such
Person and its consolidated Subsidiaries as of such date plus (ii) the
respective amounts reported on such Person's balance sheet as of such date
with respect to any series of preferred stock (other than Disqualified Stock)
that by its terms is not entitled to the payment of dividends unless such
dividends may be declared and paid only out of net earnings in respect of the
year of such declaration and payment, but only to the extent of any cash
received by such Person upon issuance of such preferred stock, less (x) all
write-ups (other than write-ups resulting from foreign currency translations
and write-ups of tangible assets of a going concern business made within 12
months after the
- 6 -
<PAGE>
acquisition of such business) subsequent to the date of the indenture
governing the New Notes in the book value of any asset owned by such Person or
a consolidated Subsidiary of such Person, (y) all investments as of such date
in unconsolidated Subsidiaries and in Persons that are not Subsidiaries
(except, in each case, Permitted Investments), and (z) all unamortized debt
discount and expense and unamortized deferred charges as of such date, all of
the foregoing determined in accordance with GAAP.
"Dallas Disposition" means the sale by the Company of KTCK-FM (Dallas, TX)
on substantially the terms set forth in the sale agreement as the same is in
effect on the date of the indenture governing the New Notes.
"Debt to Cash Flow Ratio" means, as of any date of determination, the
ratio of (a) the Consolidated Indebtedness as of such date to (b) the
Consolidated Cash Flow of the Company and its Subsidiaries on a consolidated
basis for the four most recent full fiscal quarters ending immediately prior
to such date for which internal financial statements are available. For
purposes of calculating Consolidated Cash Flow for the computation referred to
above, (i) acquisitions that have been made by the Company or any of its
Subsidiaries, including through mergers or consolidations and including any
related financing transactions, during the four-quarter reference period or
subsequent to such reference period and on or prior to the date on which such
Ratio is being calculated (the "Calculation Date") shall be deemed to have
occurred on the first day of the four-quarter reference period and
Consolidated Cash Flow for such reference period shall be calculated without
giving effect to clause (iii) of the proviso set forth in the definition of
Consolidated Net Income, and (ii) the Consolidated Cash Flow attributable to
discontinued operations, as determined in accordance with GAAP, and operations
or businesses disposed of prior to the Calculation Date, shall be excluded.
"Disposition" means the sale of any of (i) WVEZ-FM, WTFX-FM and WWKY-AM
operating in Louisville, Kentucky, (ii) KTCK-FM operating in Dallas, Texas or
(iii) WXVR-FM, WXTR-FM and WQSI-AM operating in Washington, DC and, in each
case, all assets related thereto.
"Disposition Debt" means Indebtedness incurred pursuant to clause (i)(B)
of the second paragraph of Section 4.10 hereof.
"Disqualified Stock" means any Capital Stock that, by its terms (or by the
terms of any security into which it is convertible or for which it is
exchangeable at the option of the holder thereof), or upon the happening of
any event, matures or is mandatorily redeemable, pursuant to a sinking fund
obligation or otherwise, or redeemable at the option of the Holder thereof, in
whole or in part, on or prior to the date that is 91 days after the date on
which the Securities mature.
"Equity Interests" means Capital Stock and all warrants, options or other
rights to acquire Capital Stock (but excluding any debt security that is
convertible into, or exchangeable for, Capital Stock).
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"Exchange Notes" means the Company's Convertible Subordinated Exchange
Notes due 2007 issuable in exchange for the Company's Series D Preferred
Stock.
"Existing Indebtedness" means all Indebtedness of the Company and its
Subsidiaries (other than Indebtedness under the New Credit Agreement) in
existence on the date of the indenture governing the New Notes, until such
amounts are repaid.
"Existing MMR Indebtedness" means all Indebtedness of MMR and its
Subsidiaries in existence at the closing of the MMR Merger until such amounts
are repaid.
"Fair Market Value" means, with respect to any asset or property, the sale
value that would be obtained in an arm's length transaction between an
informed and willing seller under no compulsion to sell and an informed and
willing buyer under no compulsion to buy.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as have been approved by a significant segment of the accounting
profession, which are in effect on the date of the Indenture.
"Government Securities" means direct obligations of, or obligations
guaranteed by, the United States of America for the payment of which
obligations or guarantee the full faith and credit of the United States of
America is pledged.
"Guarantee" means a guarantee (other than by endorsement of negotiable
instruments for collection in the ordinary course of business), direct or
indirect, in any manner (including, without limitation, letters of credit and
reimbursement agreements in respect thereof), of all or any part of any
Indebtedness.
"Hedging Obligations" means, with respect to any Person, the obligations
of such Person under (i) interest rate swap agreements, interest rate cap
agreements and interest rate collar agreements and (ii) other agreements or
arrangements designed to protect such Person against fluctuations in interest
rates.
"Houston Exchange" means the exchange by the Company of KRLD-AM (Dallas,
Texas) and the Texas State Networks for KKRW-FM (Houston, Texas) on
substantially the terms set forth in the exchange agreement as the same is in
effect on the date of the indenture governing the New Notes.
"Indebtedness" means, with respect to any Person, any indebtedness of such
Person, whether or not contingent, in respect of borrowed money or evidenced
by bonds, notes, debentures or similar instruments or letters of credit (or
reimbursement agreements in respect thereof) or banker's acceptances or
representing Capital Lease Obligations or the balance deferred and unpaid of
the purchase price of any property or payment obligations under an LMA or
representing any Hedging Obligations, except any such balance that constitutes
an accrued
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expense or trade payable, if and to the extent any of the foregoing (other
than letters of credit and Hedging Obligations) would appear as a liability
upon a balance sheet of such Person prepared in accordance with GAAP, as well
as all indebtedness of others secured by a Lien on any asset of such Person
(whether or not such indebtedness is assumed by such Person) and, to the
extent not otherwise included, the Guarantee by such Person of any
indebtedness of any other Person.
"Investments" means, with respect to any Person, all investments by such
Person in other Persons (including Affiliates) in the forms of direct or
indirect loans (including guarantees of Indebtedness or other obligations),
advances or capital contributions (excluding commission, travel and similar
advances to officers and employees made in the ordinary course of business),
purchases or other acquisitions for consideration of Indebtedness, Equity
Interests or other securities, together with all items that are or would be
classified as investments on a balance sheet prepared in accordance with GAAP;
provided that an acquisition of assets, Equity Interests or other securities
by the Company for consideration consisting of common equity securities of the
Company shall not be deemed to be an Investment. If the Company or any
Subsidiary of the Company sells or otherwise disposes of any Equity Interests
of any direct or indirect Subsidiary of the Company such that, after giving
effect to any such sale or disposition, such Person is no longer a Subsidiary
of the Company, the Company shall be deemed to have made an Investment on the
date of any such sale or disposition equal to the Fair Market Value of the
Equity Interests of such Subsidiary not sold or disposed of.
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset,
whether or not filed, recorded or otherwise perfected under applicable law
(including any conditional sale or other title retention agreement, any lease
in the nature thereof, any option or other agreement to sell or give a
security interest in and any filing of or agreement to give any financing
statement under the Uniform Commercial Code (or equivalent statutes) of any
jurisdiction).
"Local Marketing Agreement" or "LMA" means a local marketing arrangement,
sale agreement, time brokerage agreement, management agreement or similar
arrangement pursuant to which a Person, subject to customary preemption rights
and other limitations (i) obtains the right to sell at least a majority of the
advertising inventory of a radio station of which a third party is the
licensee, (ii) obtains the right to broadcast programming and sell advertising
time during a majority of the air time of a radio station or (iii) manages the
selling operations of a radio station with respect to at least a majority of
the advertising inventory of such station.
"Louisville Disposition" means the sale by the Company of each of WVEZ-FM,
WTFX-FM and WWXY-AM (Louisville, Kentucky) on substantially the terms set
forth in the sale agreement as the same is in effect on the date of the
indenture governing the New Notes.
"Management Termination Agreements" means each of (i) the termination
agreement between the Company and R. Steven Hicks, dated April 16, 1996 and
(ii) the amendment to the employment agreement between the Company and D.
Geoffrey Armstrong, effective as of April 15, 1996, in each case, as in effect
on the date of the indenture governing the New Notes.
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"Material Broadcast License" means one or more authorizations issued by
the Federal Communications Commission for the operation of AM or FM radio
stations that individually or collectively are material to the financial
condition, results of operations or prospects of the Company and its
Subsidiaries taken as a whole.
"MMR" means Multi-Market Radio, Inc., a Delaware corporation.
"MMR Merger" means the merger of SFX Merger Company a Wholly Owned
Subsidiary of the Company, with and into MMR, pursuant to which MMR will
become a Wholly Owned Subsidiary of the Company.
"MMR Stations" means the following radio stations: WPLR-FM and WYBC-FM
(New Haven, Connecticut); WHMP-FM, WPKX-FM and WHMP-AM
(Springfield/Northampton, Massachusetts); WGNE-FM (Daytona Beach, Florida);
WRXR-FM, WKBG-FM and WCHZ-FM (Augusta, Georgia); WKNN-FM and WMJY-FM (Biloxi,
Mississippi); and WYAK-FM and WVCO-FM (Myrtle Beach, South Carolina).
"MMR Warrants" means MMR's outstanding Class A Warrants to purchase
1,840,000 shares of MMR's Class A Common Stock.
"Net Income" means, with respect to any Person, the net income (loss) of
such Person, determined in accordance with GAAP and before any reduction in
respect of preferred stock dividends, excluding, however, (i) any gain (but
not loss), together with any related provision for taxes on such gain (but not
loss), realized in connection with (a) any Asset Sale (including, without
limitation, dispositions pursuant to sale and leaseback transactions) or (b)
the disposition of any securities by such Person or any of its Subsidiaries or
the extinguishment of any Indebtedness of such Person or any of its
Subsidiaries and (ii) any extraordinary or nonrecurring gain (but not loss),
together with any related provision for taxes on such extraordinary or
nonrecurring gain (but not loss).
"Net Proceeds" means the aggregate cash proceeds received by the Company
or any of its Subsidiaries in respect of any Asset Sale (including, without
limitation, any cash received upon the sale or other disposition of any
non-cash consideration received in any Asset Sale), net of the direct costs
relating to such Asset Sale (including, without limitation, legal, accounting
and investment banking fees, and sales commissions) and any relocation
expenses incurred as a result thereof, taxes paid or payable as a result
thereof (after taking into account any available tax credits or deductions and
any tax sharing arrangements), amounts required to be applied to the repayment
of Indebtedness (other than Senior Debt of the Company) secured by a Lien on
the asset or assets that were the subject of such Asset Sale and any reserve
for adjustment in respect of the sale price of such asset or assets
established in accordance with GAAP.
"New Credit Agreement" means that certain Credit Agreement currently being
negotiated by the Company to provide for up to $150.0 million of revolving
credit borrowings, including any related notes, guarantees, collateral
documents, and other agreements to be executed in
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connection therewith, and in each case as amended, modified, renewed,
refunded, replaced or refinanced from time to time.
"New Notes" means the $440.0 million aggregate principal amount of the
Company's Senior Subordinated Notes due 2006.
"Obligations" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any Indebtedness.
"Pari Passu Debt" means Indebtedness that ranks pari passu in right of
payment with the Securities.
"Permitted Disposition Amount" means the sum of (i) until the consummation
of the sale by the Company of WVEZ-FM, WTFX-FM and WWKY-AM operating in
Louisville, Kentucky, $19.5 million, plus (ii) until the consummation of the
sale by the Company of WXVR-FM, WXTR-FM and WQSI-AM operating in Washington,
DC, $25.0 million, plus (iii) until the consummation of the sale by the
Company of KTCK-FM operating in Dallas, Texas, $9.5 million, plus (iv) prior
to the exercise of the MMR Warrants, $13.6 million.
"Permitted Investments" means (a) any Investment in the Company or in a
Subsidiary of the Company; (b) any Investment in Cash Equivalents; (c) any
Investment by the Company or any Subsidiary of the Company in a Person, if
after such Investment (i) such Person becomes a Subsidiary of the Company or
(ii) such Person is merged, consolidated or amalgamated with or into, or
transfers or conveys substantially all of its assets to, or is liquidated
into, the Company or a Subsidiary of the Company; (d) any Restricted
Investment made as a result of the receipt of non-cash consideration from an
Asset Sale that was made pursuant to and in compliance with Section 4.14
hereof; (e) any obligations or shares of Capital Stock received in connection
with or as a result of a bankruptcy, workout or reorganization of the issuer
of such obligations or shares of Capital Stock; (f) any Investment received
involuntarily; (g) Investments in any Person (other than an Affiliate of the
Company that is not also a Subsidiary of the Company) engaged in a Broadcast
Business or an Advertising Business which Investments have an aggregate fair
market value (measured on the date each such Investment was made and without
giving effect to subsequent changes in value), when taken together with all
other Investments made pursuant to this clause (g) that are at the time
outstanding, not to exceed $20.0 million; and (h) other Investments in any
Person (other than an Affiliate of the Company that is not also a Subsidiary
of the Company) having an aggregate fair market value measured on the date
each such Investment was made and without giving effect to subsequent changes
in value, when taken together with all other Investments made pursuant to this
clause (h) that are at the time outstanding, not to exceed $15.0 million.
"Permitted Liens" means (i) Liens securing Senior Debt of the Company or
Indebtedness of a Subsidiary that was permitted by the terms of the Indenture
or the Supplemental Indenture to be incurred; (ii) Liens in favor of the
Company; (iii) Liens on property of a Person existing at the time such Person
is merged into or consolidated with the Company or any Subsidiary of the
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Company; provided that such Liens were in existence prior to the contemplation
of such merger or consolidation and do not extend to any assets other than
those of the Person merged into or consolidated with the Company; (iv) Liens
on property existing at the time of acquisition thereof by the Company or any
Subsidiary of the Company, provided that such Liens were in existence prior to
the contemplation of such acquisition and do not extend to any assets other
than such assets so acquired; (v) Liens existing on the date of the indenture
governing the New Notes; (vi) Liens for taxes, assessments or governmental
charges or claims that are not yet delinquent or that are being contested in
good faith by appropriate proceedings promptly instituted and diligently
concluded, provided that any reserve or other appropriate provision as shall
be required in conformity with GAAP shall have been made therefor; and (vii)
Liens incurred in the ordinary course of business of the Company or any
Subsidiary of the Company with respect to obligations that do not exceed $10.0
million at any one time outstanding and that (a) are not incurred in
connection with the borrowing of money or the obtaining of advances or credit
(other than trade credit in the ordinary course of business) and (b) do not in
the aggregate materially detract from the value of the property or materially
impair the use thereof in the operation of business by the Company or such
Subsidiary.
"Permitted Refinancing Debt" means any Indebtedness of the Company or any
of its Subsidiaries issued in exchange for, or the net proceeds of which are
used to extend, refinance, renew, replace, defease or refund other
Indebtedness of the Company or any of its Subsidiaries; provided that: (i) the
principal amount (or accreted value, if applicable) of such Permitted
Refinancing Indebtedness does not exceed the principal amount (or accreted
value, if applicable) of the Indebtedness so extended, refinanced, renewed,
replaced, defeased or refunded (plus the amount of reasonable expenses
incurred in connection therewith); (ii) such Permitted Refinancing
Indebtedness has a final maturity date later than the final maturity date of,
and has a Weighted Average Life to Maturity equal to or greater than the
Weighted Average Life to Maturity of, the Indebtedness being extended,
refinanced, renewed, replaced, defeased or refunded; (iii) if the Indebtedness
being extended, refinanced, renewed, replaced, defeased or refunded is
subordinated in right of payment to the Securities, such Permitted Refinancing
Indebtedness has a final maturity date later than the final maturity date of,
and is subordinated in right of payment to, the Securities, on terms at least
as favorable to the Holders of Securities as those contained in the
documentation governing the Indebtedness being extended, refinanced, renewed,
replaced, defeased or refunded; and (iv) such Indebtedness is incurred either
by the Company or by the Subsidiary who was the obligor on the Indebtedness
being extended, refinanced, renewed, replaced, defeased or refunded.
"Preferred Stock Offering" means the offering of the Company's Series D
Preferred Stock.
"Restricted Investment" means an Investment other than a Permitted
Investment.
"SCMC" means Sillerman Communications Management Company, a Delaware
corporation.
"Series B Preferred Stock" means the Company's Series B Redeemable
Preferred Stock, par value $.01 per share.
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"Series C Preferred Stock" means the Company's Series C Redeemable
Convertible Preferred Stock, par value $0.1 per share.
"Series D Preferred Stock" means the Company's Series D Cumulative
Convertible Exchangeable Preferred Stock.
"Shared Facilities Agreement" means the Shared Facilities Agreement
between the Company and SCMC, as in effect on the date of the indenture
governing the New Notes.
"Significant Subsidiary" means any Subsidiary that would be a "significant
subsidiary" as defined in Article 1, Rule 1-02 of Regulation S-X, promulgated
pursuant to the Securities Act of 1933, as amended, as such Regulation is in
effect on the date hereof.
"Subsidiary" means, with respect to any Person, (i) any corporation,
association or other business entity of which more than 50% of the total
voting power of shares of Voting Stock thereof is at the time owned or
controlled, directly or indirectly, by such Person or one or more of the other
Subsidiaries of that Person (or a combination thereof) and (ii) any
partnership (a) the sole general partner or the managing general partner of
which is such Person or a Subsidiary of such Person or (b) the only general
partners of which are such Person or of one or more Subsidiaries of such
Person (or any combination thereof).
"Voting Stock" means with respect to any specified Person, Capital Stock
with voting power, under ordinary circumstances and without regard to the
occurrence of any contingency, to elect the directors or other managers or
trustees of such Person.
"Washington Disposition" means the sale by the Company of each of WXVR-FM,
WXTR-FM and WQSI-AM (Washington, DC) on substantially the terms set forth in
the sale agreement as the same is in effect on the date of the indenture
governing the New Notes.
"Weighted Average Life to Maturity" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing (i) the sum
of the products obtained by multiplying (a) the amount of each then remaining
installment, sinking fund, serial maturity or other required payments of
principal, including payment at final maturity, in respect thereof, by (b) the
number of years (calculated to the nearest one-twelfth) that will elapse
between such date and the making of such payment, by (ii) the then outstanding
principal amount of such Indebtedness.
"Wholly Owned Subsidiary" of any Person means a Subsidiary of such Person
all of the outstanding Capital Stock or other ownership interests of which
(other than directors' qualifying shares) shall at the time be owned by such
Person or by one or more Wholly Owned Subsidiaries of such Person.
SECTION 202. Covenants.
Article 4 of the Indenture is hereby amended as follows:
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(a)Sections 4.08, 4.09, 4.10, 4.12, 4.14 and 4.16 shall be deleted in
their entirety and the following shall be substituted therefor:
Section 4.08. Limitation on Restricted Payments
The Company will not, and will not permit any of its Subsidiaries to,
directly or indirectly: (i) declare or pay any dividend or make any other
payment or distribution on account of the Company's Equity Interests
(including, without limitation, any payment in connection with any merger or
consolidation involving the Company) or to the direct or indirect holders of
the Company's Equity Interests in their capacity as such (other than dividends
or distributions payable in Capital Stock (other than Disqualified Stock) of
the Company; (ii) purchase, redeem or otherwise acquire or retire for value
any Equity Interests of the Company or any direct or indirect parent of the
Company; (iii) make any principal payment on, or purchase, redeem, defease or
otherwise acquire or retire for value any Indebtedness that is subordinated to
the Securities, except at final maturity; or (iv) make any Restricted
Investment (all such payments and other actions set forth in Clauses (i)
through (iv) above being collectively referred to as "Restricted Payments"),
unless, at the time of and after giving effect to such Restricted Payment:
(a) no Default or Event of Default shall have occurred and be continuing or
would occur as a consequence thereof; and
(b) the Company would, at the time of such Restricted Payment and after
giving pro forma effect thereto as if such Restricted Payment had been made at
the beginning of the applicable four-quarter period, have been permitted to
incur at least $1.00 of additional Indebtedness (other than Permitted Debt)
pursuant to the Debt to Cash Flow Ratio test set forth in the first paragraph
of Section 4.10 hereof; and
(c) such Restricted Payment, together with the aggregate amount of all
other Restricted Payments declared or made after the date of the indenture
governing the New Notes (other than Restricted Investments permitted by
clauses (2), (4), (6) or (11) of the following paragraph) shall not exceed, at
the date of determination, the sum of (1) an amount equal to the Company's
Consolidated Cash Flow from the date of the indenture governing the New Notes
to the end of the Company's most recently ended full fiscal quarter for which
internal financial statements are available, taken as a single accounting
period, less the product of 1.4 times the Company's Consolidated Interest
Expense from the date of the indenture governing the New Notes to the end of
the Company's most recently ended full fiscal quarter for which internal
financial statements are available, taken as a single accounting period, plus
(2) an amount equal to the net cash proceeds received by the Company from the
issue or sale after the date of the indenture governing the New Notes of
Equity Interests (other than (i) in the Preferred Stock Offering, (ii) sales
of Disqualified Stock, and (iii) Equity Interests sold to any of the Company's
Subsidiaries) or of debt securities or Disqualified Stock (other than the
Series D Preferred Stock) of the Company that have been converted into such
Equity Interests plus (3) to the extent that any Restricted Investment that
was made after the date of the indenture governing the New Notes is sold for
cash or otherwise liquidated or repaid for cash, the lesser of (A) the cash
return of capital
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with respect to such Restricted Investment (less the cost of disposition, if
any) and (B) the initial amount of such Restricted Investment.
If no Default or Event of Default shall have occurred and be continuing
immediately as a result thereof, the foregoing provisions will not prohibit;
(1) the payment of any dividend within 60 days after the date of declaration
thereof, if at said date of declaration such payment would have complied with
the provisions of the Indenture; (2) the redemption, repurchase, retirement or
other acquisition of any Equity Interests of the Company in exchange for, or
out of the proceeds of, the substantially concurrent sale (other than to a
Subsidiary of the Company) of other Equity Interests of the Company (other
than any Disqualified Stock); provided that the amount of any such net cash
proceeds that are utilized for any such redemption, repurchase, retirement or
other acquisition shall be excluded from clause (c)(2) of the preceding
paragraph; (3) cash payments made in respect of fractional shares of Capital
Stock not to exceed $100,000 in the aggregate in any fiscal year; (4) the
issuance of the Exchange Notes in exchange for the Series D Preferred Stock;
provided that such issuance is permitted by Section 4.10 hereof; (5) in the
event that the Company elects to issue the Exchange Notes in exchange for the
Series D Preferred Stock, any cash payments made in lieu of the issuance of
Exchange Notes having a face amount of less than $50 and any cash payments
representing accrued and unpaid liquidated damages and dividends in respect
thereof not to exceed $100,000 in the aggregate in any fiscal year; (6) the
defeasance, redemption or repurchase of subordinated Indebtedness with the net
cash proceeds from an incurrence of Permitted Refinancing Indebtedness or the
substantially concurrent sale (other than to a Subsidiary of the Company) of
Equity Interests of the Company (other than Disqualified Stock); provided that
the amount of any such net cash proceeds that are utilized for any such
redemption, repurchase, retirement or other acquisition shall be excluded from
clause (c)(2) of the preceding paragraph; (7) the payment of dividends on the
Series D Preferred Stock in accordance with the terms thereof as in effect on
the date of the indenture governing the New Notes; (8) the redemption by the
Company of its Series B Preferred Stock in accordance with the terms thereof
as in effect on the date of the indenture governing the New Notes; provided
that payments made by the Company to redeem the Series B Preferred Stock shall
not exceed $1.0 million in any fiscal year or $2.0 million in the aggregate
since the date of the indenture governing the New Notes; (9) the redemption by
the Company of its Series C Preferred Stock in accordance with the terms
thereof as in effect on the date of the indenture governing the New Notes in
connection with the Dallas Disposition; (10) payments made by the Company to
SCMC for facilities maintenance and other services and reimbursements pursuant
to the Shared Facilities Agreement in accordance with the terms thereof as in
effect on the date of the indenture governing the New Notes; and (11) payments
by the Company pursuant to the Management Termination Agreements in accordance
with the terms thereof as in effect on the date of the indenture governing the
New Notes.
The amount of all Restricted Payments (other than cash) shall be the Fair
Market Value (evidenced by a resolution of the Board of Directors set forth in
an Officers' Certificate delivered to the Trustee) on the date of the
Restricted Payment of the asset(s) or securities proposed to be transferred by
the Company or such Subsidiary, as the case may be, pursuant to the Restricted
Payment. Not later than the date of making any Restricted Payment, the Company
shall deliver to the Trustee an Officers' Certificate stating that such
Restricted Payment is permitted and setting
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forth the basis upon which the calculations required by this covenant were
computed, which calculations may be based upon the Company's latest available
financial statements.
Section 4.09. Limitation on Dividend Restrictions Affecting Subsidiaries.
The Company will not, and will not permit any of its Subsidiaries to,
directly or indirectly, create or otherwise cause or suffer to exist or become
effective any encumbrance or restriction on the ability of any Subsidiary to
(i)(x) pay dividends or make any other distributions to the Company or any of
its Subsidiaries (1) on its Capital Stock or (2) with respect to any other
interest or participation in, or measured by, its profits, or (y) pay any
Indebtedness owed to the Company or any of its Subsidiaries, (ii) make loans
or advances to the Company or any of its Subsidiaries or (iii) transfer any of
its properties or assets to the Company or any of its Subsidiaries, except for
such encumbrances or restrictions existing under or by reason of (a) Existing
Indebtedness as in effect on the date of the indenture governing the New
Notes, (b) the New Credit Agreement, in a form substantially consistent with
the terms of the Commitment Letter as in effect as of the date of the
indenture governing the New Notes, and any amendments, modifications,
restatements, renewals, increases, supplements, refundings, replacements or
refinancings thereof, and any other agreement governing or relating to Senior
Debt of the Company, provided that all such amendments, modifications,
restatements, renewals, increases, supplements, refundings, replacement or
refinancings and other agreements are no more restrictive with respect to such
dividend and other payment restrictions than those contained in the New Credit
Agreement, in a form substantially consistent with the terms of the Commitment
Letter as in effect on the date of the indenture governing the New Notes, (c)
the Indenture (as supplemented by the Supplemental Indenture) and the
Securities (d) the New Notes and the indenture governing the issuance of the
New Notes, (e) applicable law, (f) any instrument governing Indebtedness or
Capital Stock of a Person acquired by the Company or any of its Subsidiaries
as in effect at the time of such acquisition (except to the extent such
Indebtedness was incurred in connection with or in contemplation of such
acquisition), which encumbrance or restriction is not applicable to any
Person, or the properties or assets of any Person, other than the Person, or
the property or assets of the Person, so acquired, provided that, in the case
of Indebtedness, such Indebtedness was permitted by the terms of the
Indenture, as amended from time to time by supplemental indentures in form
acceptable to the Trustee, (g) by reason of customary non-assignment
provisions in leases entered into in the ordinary course of business and
consistent with past practices, or (h) Permitted Refinancing Debt, provided
that the restrictions contained in the agreements governing such Permitted
Refinancing Debt are no more restrictive than those contained in the
agreements governing the Indebtedness being refinanced.
Section 4.10. Limitation on Incurrence of Additional Debt and Preferred Stock.
The Company will not, and will not permit any of its Subsidiaries to,
directly or indirectly, create, incur, issue, assume, guarantee or otherwise
become directly or indirectly liable, contingently or otherwise, with respect
to (collectively, "incur") any Indebtedness (including Acquired Debt) and the
Company will not issue any Disqualified Stock and will not permit any of its
Subsidiaries to issue any shares of Preferred Stock; provided, however, that
(A) the
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<PAGE>
Company may incur Indebtedness (including Acquired Debt) or issue shares of
Disqualified Stock and (B) a Subsidiary may issue shares of Preferred Stock
(other than shares of Preferred Stock that are convertible into or
exchangeable for any other class of Capital Stock) if, in either case, the
Company's Debt to Cash Flow Ratio at the time of incurrence of such
Indebtedness or the issuance of such Disqualified Stock or Preferred Stock, as
the case may be, after giving pro forma effect to such incurrence or issuance
as of such date and to the use of proceeds therefrom as if the same had
occurred at the beginning of the most recently ended four full fiscal quarter
period of the Company for which internal financial statements are available,
would have been no greater than 7.0 to 1.
The foregoing provision will not apply to the incurrence of any of the
following Indebtedness (collectively, "Permitted Debt"):
(i) the incurrence by the Company and its Subsidiaries of Indebtedness
pursuant to one or more Bank Facilities, so long as the aggregate principal
amount of all Indebtedness outstanding under all Bank Facilities does not, at
the time of incurrence, exceed an amount equal to the sum of (A) $150.0
million less the aggregate amount of all Net Proceeds of Asset Sales applied
to reduce Senior Debt of the Company pursuant clause (a) of the second
paragraph of Section 4.14 hereof plus (B) the Permitted Disposition Amount;
(ii) the incurrence by the Company and its Subsidiaries of the Existing
Indebtedness;
(iii) the incurrence by the Company and its Subsidiaries of the Existing
MMR Indebtedness; provided that, substantially concurrently with such
incurrence, the Existing MMR Indebtedness is repaid by the Company with the
proceeds of Indebtedness incurred under Bank Facilities;
(iv) the issuance of the Series D Preferred Stock;
(v) the issuance of Disqualified Stock by the Company that by its terms
would not require or permit any payment of dividends or other distributions
that would violate Section 4.08 hereof;
(vi) the incurrence by the Company or any of its Subsidiaries of
Indebtedness represented by the Securities, the New Notes and any Subsidiary
guarantees thereof;
(vii) the incurrence by the Company or any of its Subsidiaries of
Indebtedness in connection with the acquisition of assets or a new Subsidiary;
provided that such Indebtedness was incurred by the prior owner of such assets
or such Subsidiary prior to such acquisition by the Company or one of its
Subsidiaries and was not incurred in connection with, or in contemplation of,
such acquisition by the Company or one of its Subsidiaries and provided
further that, after giving pro forma effect to such incurrence of Indebtedness
as of such date and to the use of proceeds therefrom as if the same had
occurred at the beginning of the most recently ended four full fiscal quarter
period for which internal financial statements are available, the Company's
Debt to Cash Flow Ratio would have been no greater than 7.0 to 1;
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<PAGE>
(viii) the incurrence by the Company or any of its Subsidiaries of
Permitted Refinancing Debt in exchange for, or the net proceeds of which are
used to extend, refinance, renew, replace, defease or refund, Indebtedness
that was permitted by the Indenture and the Supplemental Indenture to be
incurred;
(ix) the incurrence by the Company or any of its Subsidiaries of
intercompany Indebtedness between or among the Company and any of its
Subsidiaries; provided, however, that (i) if the Company is the obliger on
such Indebtedness, such Indebtedness is expressly subordinate to the payment
in full of all Obligations with respect to the Notes and (ii)(A) any
subsequent issuance or transfer of Equity Interests that results in any such
Indebtedness being held by a Person other than the Company or a Subsidiary and
(B) any sale or other transfer of any such Indebtedness to a Person that is
not either the Company or a Subsidiary shall be deemed, in each case, to
constitute an incurrence of such Indebtedness by the Company or such
Subsidiary, as the case may be;
(x) the incurrence by the Company or any of its Subsidiaries of Hedging
Obligations that are incurred for the purpose of fixing or hedging interest
rate risk with respect to any floating rate Indebtedness that is permitted by
the terms of the Indenture or the Supplemental Indenture to be outstanding;
and
(xi) the incurrence by the Company and any of its Subsidiaries of
Indebtedness (in addition to Indebtedness permitted by any other clause of
this paragraph) in an aggregate principal amount (or accreted value, as
applicable) at any time outstanding not to exceed $10.0 million.
Section 4.12. Limitation on Transactions with Related Persons.
The Company will not, and will not permit any of its Subsidiaries to, make
any payment to, or sell, lease, transfer or otherwise dispose of any of its
properties or assets to, or purchase any property or assets from, or enter
into or make or amend any contract, agreement, understanding, loan, advance or
guarantee with, or for the benefit of, any Affiliate (each of the foregoing,
an "Affiliate Transaction"), unless (i) such Affiliate Transaction is on terms
that are no less favorable to the Company or the relevant Subsidiary than
those that would have been obtained in a comparable transaction by the Company
or such Subsidiary with an unrelated Person and (ii) the Company delivers to
the Trustee (a) with respect to any Affiliate Transaction or series of related
Affiliate Transactions involving aggregate consideration in excess of $1.0
million, a resolution of the Board of Directors set forth in an Officers'
Certificate certifying that such Affiliate Transaction complies with clause
(i) above and that such Affiliate Transaction has been approved by a majority
of the members of the Board of Directors that are disinterested as to such
Affiliate Transaction and (b) with respect to any Affiliate Transaction or
series of related Affiliate Transactions involving aggregate consideration in
excess of $5.0 million, an opinion as to the fairness to the Company and the
Holders of such Affiliate Transaction from a financial point of view issued by
an accounting, appraisal or investment banking firm of national standing;
provided that (1) transactions between or among the Company and/or its Wholly
Owned Subsidiaries, (2) the MMR Acquisition and transactions and agreements
specifically contemplated by the Agreement and Plan of Merger among the
Company, SFX Merger Company
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<PAGE>
and MMR as in effect on the date of the indenture governing the New Notes that
are disclosed in the Offering Memorandum relating to the New Notes, (3) the
redemption or repurchase of Existing MMR Indebtedness, (4) transactions and
agreements specifically contemplated by the Termination and Assignment
Agreement between the Company and SCMC as in effect on the date of the
indenture governing the New Notes; (5) payments required by the terms of the
joint lease among the Company, SCMC and the landlord thereunder for the
Company's corporate headquarters located at 150 East 58th Street, New York,
New York and any agreements directly related thereto, in each case, as the
same are in effect on the date of the indenture governing the New Notes; and
(6) Restricted Payments and Permitted Investments that are permitted by the
provisions of Section 4.08 hereof, in each case, shall not be deemed to be
Affiliate Transactions.
Section 4.14. Limitation on Disposition of Assets and Subsidiary Stock.
The Company will not, and will not permit any of its Subsidiaries to,
engage in any Asset Sale unless (i) the Company (or the Subsidiary, as the
case may be) receives consideration at the time of such Asset Sale at least
equal to the Fair Market Value (evidenced by a resolution of the Board of
Directors set forth in an Officers' Certificate delivered to the Trustee) of
the assets or Equity Interests issued or sold or otherwise disposed of and
(ii) at least 75% of the consideration therefor received by the Company or
such Subsidiary is in the form of cash; provided that the amount of (x) any
liabilities (as shown on the Company's or such Subsidiary's most recent
balance sheet) of the Company or any Subsidiary (other than contingent
liabilities and liabilities that are by their terms subordinated to the Notes
or any guarantee thereof) that are assumed by the transferee of any such
assets pursuant to a customary novation agreement that releases the Company or
such Subsidiary from further liability and (y) any notes or other obligations
received by the Company or any such Subsidiary from such transferee that are
immediately converted by the Company or such Subsidiary into cash (to the
extent of the cash received), shall be deemed to be cash for purposes of this
provision.
Within 360 days after the receipt of any Net Proceeds from an Asset Sale,
the Company may apply such Net Proceeds, at its option, (a) to permanently
reduce Senior Debt of the Company (and to correspondingly reduce commitments
with respect thereto, in the case of Senior Debt of the Company that is
revolving debt), or (b) to the acquisition of a controlling interest in
another business, the making of a capital expenditure or the acquisition of
other long-term assets, in each case, in the Broadcast Business. Pending the
final application of any such Net Proceeds, the Company may temporarily reduce
Senior Debt of the Company or otherwise invest such Net Proceeds in any manner
that is not prohibited by the Indenture, as supplemented by the Supplemental
Indenture. Any Net Proceeds from Asset Sales that are not applied or invested
as provided in the first sentence of this paragraph will be deemed to
constitute "Excess Proceeds." When the aggregate amount of Excess Proceeds
exceeds $10.0 million, the Company will be required to make an Offer to
Purchase to all Holders of Securities and the holders of Pari Passu Debt, to
the extent required by the terms thereof, to purchase the maximum principal
amount of Securities and any such Pari Passu Debt that may be purchased out of
the Excess Proceeds, at an offer price in cash in an amount equal to 100% of
the principal amount thereof plus accrued and unpaid interest and liquidated
damages, if any, thereon to the date of purchase, in accordance with the
procedures set forth in the Indenture, as
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<PAGE>
supplemented by the Supplemental Indenture or the agreements governing Pari
Passu Debt, as applicable; provided, however, that the Company may only
purchase Pari Passu Debt in an Offer to Purchase that was issued pursuant to
an indenture having a provision substantially similar to the Offer to Purchase
provision contained in the Indenture, as supplemented by the Supplemental
Indenture. To the extent that the aggregate amount of Securities and Pari
Passu Debt tendered pursuant to an Offer to Purchase is less than the Excess
Proceeds, the Company may use any remaining Excess Proceeds for general
corporate purposes. If the aggregate principal amount of Securities and Pari
Passu Debt surrendered exceeds the amount of Excess Proceeds, the Trustee
shall select the Notes and Pari Passu Debt to be purchased on a pro rata
basis, based upon the principal amount thereof surrendered in such Offer to
Purchase. Upon completion of such Offer to Purchase, the amount of Excess
Proceeds shall be reset at zero. Notwithstanding the foregoing, in the event
that a Disposition or the exercise of the MMR Warrants occurs at a time when
any Disposition Debt is outstanding, then all of the Net Proceeds of such
Disposition or exercise of the MMR Warrants shall be applied to redeem,
substantially concurrently with such Disposition or exercise of the MMR
Warrants, such Disposition Debt.
Notwithstanding the immediately preceding paragraph, the Company and its
Subsidiaries will be permitted to consummate an Asset Sale without complying
with such paragraph if (i) the Company or the applicable Subsidiary, as the
case may be, receives consideration at the time of such Asset Sale at least
equal to the fair market value of the assets or other property sold, issued or
otherwise disposed of (as evidenced by a resolution of the Company's Board of
Directors set forth in an Officers' Certificate delivered to the Trustee) and
(ii) at least 75% of the consideration for such Asset Sale constitutes assets
or other property of a kind usable by the Company and its Subsidiaries in the
business of the Company and its Subsidiaries as conducted by the Company and
its Subsidiaries on the date of the indenture governing the New Notes;
provided that any consideration not constituting assets or property of a kind
usable by the Company and its Subsidiaries in the business conducted by them
on the date of such Asset Sale received by the Company or any of its
Subsidiaries in connection with any Asset Sale permitted to be consummated
under this paragraph shall constitute Net Proceeds subject to the provisions
of the two succeeding paragraphs.
Notwithstanding the immediately preceding paragraph, the Company and its
Subsidiaries will be permitted to consummate an Asset Sale without complying
with such paragraph if (i) the Company or the applicable Subsidiary, as the
case may be, receives consideration at the time of such Asset Sale at least
equal to the fair market value of the assets or other property sold, issued or
otherwise disposed of (as evidenced by a resolution of the Company's Board of
Directors set forth in an Officers' Certificate delivered to the Trustee) and
(ii) at least 75% of the consideration for such Asset Sale constitutes assets
or other property of a kind usable by the Company and its Subsidiaries in the
business of the Company and its Subsidiaries as conducted by the Company and
its Subsidiaries on the date of the Supplemental Indenture; provided that any
consideration not constituting assets or property of a kind usable by the
Company and its Subsidiaries in the business conducted by them on the date of
such Asset Sale received by the Company or any of its Subsidiaries in
connection with any Asset Sale permitted to be consummated under this
paragraph shall constitute Net Proceeds subject to the provisions of the two
succeeding paragraphs.
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<PAGE>
Section 4.16. Limitation on Line of Business.
The Company will not, and will not permit any Subsidiary to, engage in any
business other than (i) the Broadcast Business and such business activities as
are incidental or related thereto, (ii) such other businesses as the Company
or its Subsidiaries are engaged in on the date of the indenture governing the
New Notes.
(b)Section 4.18 shall be deleted in its entirety.
SECTION 203. Mergers.
Section 5.01 of the Indenture is hereby deleted in its entirety and the
following shall be substituted therefor:
Section 5.01. When Company May Merge, etc.
The Company may not consolidate or merge with or into (whether or not the
Company is the surviving corporation), or sell, assign, transfer, lease,
convey or otherwise dispose of all or substantially all of its properties or
assets in one or more related transactions, to another corporation, Person or
entity unless (i) the Company is the surviving corporation or the entity or
the Person formed by or surviving any such consolidation or merger (if other
than the Company) or to which such sale, assignment, transfer, lease,
conveyance or other disposition shall have been made is a corporation
organized or existing under the laws of the United States, any state thereof
or the District of Columbia; (ii) the entity or Person formed by or surviving
any such consolidation or merger (if other than the Company) or the entity or
Person to which such sale, assignment, transfer, lease, conveyance or other
disposition shall have been made assumes all the obligations of the Company
under the Notes and the Indenture pursuant to a supplemental indenture in a
form reasonably satisfactory to the Trustee; (iii) immediately after such
transaction no Default or Event of Default exists; (iv) such transaction will
not result in the loss or suspension or material impairment of any Material
Broadcast License; and (v) except in the case of a merger of the Company with
or into a Wholly Owned Subsidiary of the Company, the Company or the entity or
Person formed by or surviving any such consolidation or merger (if other than
the Company), or to which such sale, assignment, transfer, lease, conveyance
or other disposition shall have been made (A) will have Consolidated Net Worth
immediately after the transaction equal to or greater than the Consolidated
Net Worth of the Company immediately preceding the transaction and (B) will at
the time of such transaction and after giving pro forma effect thereto as if
such transaction had occurred at the beginning of the applicable four-quarter
period, be permitted to incur at least $1.00 of additional Indebtedness
pursuant to the Debt to Cash Flow Ratio test set forth in the first paragraph
of Section 4.10 hereof. Notwithstanding the foregoing, the consummation of any
of the Permitted Transactions shall not violate this Section 5.01.
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<PAGE>
The Company shall deliver to the Trustee prior to the consummation of the
proposed transaction an Officers' Certificate to the foregoing effect and an
Opinion of Counsel stating that the proposed transaction and such supplemental
indenture will, upon consumation of the proposed transaction, comply with this
Indenture.
SECTION 204. Events of Default.
Section 6.01 of the Indenture is hereby deleted in its entirety and the
following shall be substituted therefor:
Section 6.01. Events of Default.
"Event of Default," wherever used herein, means any one of the following
events (whatever the reason for such Event of Default and whether it shall be
occasioned by the provisions of Article 10 or be voluntary or involuntary or
be effected by operation of law or pursuant to any judgment, decree or order
of any court or any order, rule or regulation of any administrative or
governmental body):
(1) a default in the payment when due of the principal of, or premium, if
any, on, any Security, (whether or not prohibited by the subordination
provisions of this Indenture);
(2) a default for 30 days in the payment when due of interest on any
Security (whether or not prohibited by the subordination provisions of this
Indenture);
(3) failure by the Company (i) to comply with the provisions of Sections
4.08, 4.10, 4.14, 4.15 or 5.01 hereof, and (ii) for 60 days after notice, to
comply with any of its other agreements in the Securities or this Indenture:
(4) default under any mortgage, indenture or instrument under which there
may be issued or by which there may be secured or evidenced any Indebtedness
for money borrowed by the Company or any of its Subsidiaries (or the payment
of which is guaranteed by the Company or any of its Subsidiaries) whether such
Indebtedness or guarantee now exists, or is created after the date of this
Indenture, which default (a) is caused by a failure to pay principal of or
premium, if any, or interest on such Indebtedness prior to the expiration of
the grace period provided in such Indebtedness on the date of such default (a
"Payment Default") or (b) results in the acceleration of such Indebtedness
prior to its express maturity and, in each case, the principal amount of any
such Indebtedness, together with the principal amount of any other such
Indebtedness under which there has been a Payment Default or the maturity of
which has been so accelerated, aggregates $10.0 million or more;
(5) if the Company shall file a petition commencing a voluntary case under
any Bankruptcy Law; or the Company shall file a petition or answer or consent
seeking reorganization, arrangement, adjustment, or composition under any
other similar applicable law, or shall consent to the filing of any such
petition, answer, or consent; or the Company shall appoint, or consent to the
appointment of, a custodian, receiver, liquidator, trustee, assignee,
sequestrator or other
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<PAGE>
similar official in bankruptcy or insolvency of it or of any substantial part
of its Property; or shall make an assignment for the benefit of creditors, or
shall admit in writing its inability to pay its debts generally as they become
due;
(6) if any order for relief against the Company or a Significant
Subsidiary shall have been entered by a court having jurisdiction in the
premises under any Bankruptcy Law, and such order shall have continued
undischarged or unstayed for a period of 60 days; or a decree or order by a
court having jurisdiction in the premises shall have been entered approving as
properly filed a petition seeking reorganization, arrangement, adjustment, or
composition of the Company or a Significant Subsidiary under any other similar
applicable law, and such decree or order shall have continued undischarged or
unstayed for a period of 60 days; or a decree or order of a court having
jurisdiction in the premises for the appointment of a custodian, receiver,
liquidator, trustee, assignee, sequestrator, or other similar official in
bankruptcy or insolvency of the Company or a Significant Subsidiary or of any
substantial part of the Company's Property, or for the winding-up or
liquidation of the affairs of the Company or a Significant Subsidiary, shall
have been entered, and such decree or order shall have remained in force
undischarged or unstayed for a period of 60 days; or
(7) failure by the Company or any of its Subsidiaries to pay final
judgments aggregating in excess of $10.0 million, which judgments are not
paid, discharged or stayed for a period of 60 days.
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this First
Supplemental Indenture as of the date first above written.
SFX BROADCASTING, INC.
[CORPORATE SEAL]
Attest: By: /s/ Howard J. Tytel
-----------------------------
By: /s/ Name: Howard J. Tytel
------------------------- Title: Executive Vice-President
CHEMICAL BANK
as Trustee
[CORPORATE SEAL]
Attest: By: /s/ Michael A. Smith
--------------------------
By: /s/ Name: Michael A. Smith
-------------------------- Title: Vice-President
- 24 -
SFX Broadcasting, Inc.
June 21, 1996
Page 1
June 21, 1996
SFX Broadcasting Inc.
150 East 58th Street, 19th Floor
New York, NY 10155
Ladies and Gentlemen:
We have acted as counsel to SFX Broadcasting, a Delaware corporation
(the "Company"), in connection with its filing with the Securities and
Exchange Commission under the Securities Act of 1933, as amended, of a
registration statement on Form S-4, (the "Registration Statement"), relating
to the Company's 10-3/4% Senior Subordinated Notes Due 2006, Series B (the
"Series B Notes") to be issued under an Indenture, dated as of May 31, 1996
(the "Indenture") among the Company, the Guarantors (as defined in the
Purchase Agreement related thereto) and Chemical Bank, as Trustee.
We have examined the originals, or photostatic or certified copies,
of such records of the Company, certificates of officers of the Company and of
public officials, and such other documents as we have deemed relevant and
necessary as the basis of the opinion set forth below. In such examination, we
have assumed the genuineness of all signatures, the authenticity of all
documents submitted to us as originals, the conformity to original documents
of all documents submitted to us as photostatic or certified copies and the
authenticity of the originals of such copies.
Based upon the foregoing, we are of the opinion that:
1. the Indenture is the legal, valid and binding agreement of the
Company and each of the Guarantors (assuming it is a legal, valid
and binding agreement of the Trustee), enforceable against the
Company and each Guarantor in accordance with its terms except to
the extent that: (i) the same may be limited by bankruptcy,
insolvency, reorganization, fraudulent conveyance, moratorium or
other laws now or hereafter in effect relating to creditors' rights
generally or by general principles of equity whether asserted in an
action at law or in equity; and (ii) rights to indemnity and
contribution hereunder may be limited by state or federal securities
laws;
<PAGE>
SFX Broadcasting, Inc.
June 21, 1996
Page 2
2. the Series B Notes, when duly executed, authenticated, issued and
delivered in exchange for outstanding 10-3/4 Senior Subordinated Notes
Due 2006 of the Company, will be the legal, valid and binding obligations
of the Company, entitled to the benefits of the Indenture and enforceable
against the Company in accordance with their terms except to the extent
that: (i) the same may be limited by bankruptcy, insolvency,
reorganization, fraudulent conveyance, moratorium or other laws now or
hereafter in effect relating to creditors' rights generally or by general
principles of equity whether asserted in an action at law or in equity;
and (ii) rights to indemnity and contribution hereunder may be limited by
state or federal securities laws.
We hereby consent to the use of our opinion as herein set forth as
an exhibit to the Registration Statement and to the use of our name under the
caption "Legal Matters" in the prospectus forming a part of the Registration
Statement. This consent is not to be construed as an admission that we are a
person whose consent is required to be filed with the Registration Statement
under the provisions of the Securities Act.
Very truly yours,
/s/ Baker & McKenzie
HMB/JHJB/AB/WD
[LETTERHEAD]
June 21, 1996
SFX Broadcasting Inc.
150 East 58th Street
19th Floor
New York, NY 10155
Ladies and Gentlemen:
We have acted as counsel to SFX Broadcasting Inc., a
Delaware corporation (the "Company"), in connection with its filing of a
registration statement on Form S-4, Reg. No. 333-_____, (the "Registration
Statement") under the Securities Act of 1933, as amended (the "Securities
Act"), covering 10 3/4% Senior Subordinated Notes Due 2006, Series B (the
"Series B Notes").
We have examined such records and documents, including the
Registration Statement, as we have deemed relevant and necessary as the basis
of the opinion set forth below. On the basis of the foregoing, our opinion,
under present United States federal tax laws, is set forth in the Registration
Statement under the caption "Certain Federal Income Tax Considerations." This
opinion is limited by the qualifications set forth in the Registration
Statement section captioned "Certain Federal Income Tax Considerations."
We hereby consent to the use of our opinion as herein set
forth as an exhibit to the Registration Statement and to the use of our name
under the caption "Legal Matters" in the prospectus forming a part of the
Registration Statement. This consent is not to be construed as an admission
that we are a person whose consent is required to be filed with the
Registration Statement under the provisions of the Securities Act.
Very truly yours,
/s/ Baker & McKenzie
BLG/PJC/WD
EXHIBIT F
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT ("Agreement")
is made and entered as of ____________________, 1996, by HMW
Communications, Inc., a Delaware corporation ("Parent"),
WWWB/WGLD Operating Company, Inc., a Delaware corporation
("WWWB Operating"), WWWB/WGLD License Subsidiary, Inc., a
Delaware corporation ("WWWB License") (each of WWWB
Operating and WWWB License being referred to herein as a
"Seller" and such companies being referred to collectively
as the "Sellers"), and SFX Communications, Inc., a Delaware
corporation (the "Company").
1. Definitions.
"Business Day" means any day except a Saturday, Sunday
or other day on which commercial banks in the City of New
York are authorized by law to close.
"Commission" means the Securities and Exchange Commission.
"Holder" means any of Parent and the Sellers or any
assignee or transferee of Parent's or either Seller's
Registrable Securities.
"Registrable Securities" means the shares of Common
Stock of the Company issued to one or more of Parent and the
Sellers pursuant to that certain Asset Purchase Agreement,
dated as of January ____, 1996, between the Company and
Parent; provided, that any Registrable Security will cease
to be a Registrable Security when (i) a registration
statement covering such Registrable Security has been
declared effective by the Commission and it has been
disposed of pursuant to such effective registration
statement or (ii) it is sold under circumstances in which
all of the applicable conditions of Rule 144 (or any similar
provisions then in force) under the Securities Act are met.
"Securities Act" means the Securities Act of 1933, as
amended.
"Selling Holder" means a Holder who is selling
Registrable Securities pursuant to a registration statement.
"Underwriter" means a securities dealer which purchases
any Registrable Securities as principal and not as part of
such dealer's market-making activities.
2. Demand Registration.
(a) Request for Registration. Holders of 50% of the
Registrable Securities may make a written request for
registration under the Securities Act (a "Demand
Registration") of all or part of its or their Registrable
Securities; provided that the Company need effect only two
Demand Registrations. Such request shall specify the number
of shares of Registrable Securities proposed to be sold and
shall also specify the intended method of disposition
thereof. Within 10 days after receipt of such request, the
Company will give written notice of such registration
request to all other Holders of the Registrable Securities
and include in such registration all Registrable Securities
with respect to which the Company has received written
requests for inclusion therein within 15 Business Days after
the receipt by the applicable Holder of the Company's
notice. Each such request shall also specify the number of
shares of Registrable Securities to be registered and the
intended method of disposition thereof. Unless the Holder
or Holders of a majority of the Registrable Securities to be
registered in such Demand Registration shall consent in
writing, no other person, including the Company (but
excluding another Holder of a Registrable Security), shall
be permitted to offer securities under any such Demand
Registration.
(b) Effective Registration and Expenses. A
registration will not count as a Demand Registration until
it has become effective (unless the Holders demanding such
registration withdraw the Registrable Securities, in which
case such demand will count as a Demand Registration unless
the holders of such Registrable Securities agree to pay all
Registration Expenses, as hereinafter defined). Except as
provided above, the Company will pay all Registration
Expenses in connection with any registration initiated as a
Demand Registration, whether or not it becomes effective.
3. Piggy-Back Registration.
(a) If the Company proposes to file a registration
statement under the Securities Act with respect to an
offering of Common Stock by the Company for its own account
or for the account of any of its security holders (other
than a registration statement on Form S-4 or S-8 or any
substitute form that may be adopted by the Commission, any
registration statement filed in connection with an exchange
offer or offering of securities solely to the Company's
2
existing security holders, and any registration statement
filed pursuant to Section 2 hereof), then the Company shall
give written notice of such proposed filing to the Holders
of the Registrable Securities as soon as practicable (but in
no event less than 30 days before the anticipated effective
date of such registration statement), and such notice shall
offer such Holders the opportunity to register such number
of Registrable Securities as each such Holder may request.
(b) The Company shall use its best efforts to cause
the managing Underwriter or Underwriters of a proposed
underwritten offering to permit the Registrable Securities
requested to be included in the registration statement for
such offering to be included on the same terms and
conditions as the shares of Common Stock of the Company
included therein. Notwithstanding the foregoing, if the
managing Underwriter or, in the event that there is more
than one managing Underwriter, the book-running managing
Underwriter of such offering delivers a written opinion to
the Company that because of the size of the offering which
Holders, the Company and such other persons intend to make,
the success of the offering would be materially and
adversely affected by inclusion of the Registrable
Securities requested to be included, then the number of
Registrable Securities to be offered for the accounts of
Holders shall be reduced pro rata (according to the
Registrable Securities proposed for registration) to the
extent necessary to reduce the total amount of securities to
be included in such offering to the amount recommended by
such managing Underwriter or Underwriters; provided that if
securities are being offered for the account of other
persons or entities as well as the Company, then with
respect to the Registrable Securities intended to be offered
by Holders, the proportion by which the number of
Registrable Securities intended to be offered by Holders is
reduced shall not exceed the proportion by which the number
of shares of Common Stock intended to be offered by such
other persons or entities (other than the Company) is
reduced.
4. Holdback Agreements.
(a) Restrictions on Public Sale by Holder of
Registrable Securities. Each Holder whose Registrable
Securities are included in a Registration Statement agrees
not to effect any public sale or distribution of the issue
being registered or a similar security of the Company or any
securities convertible into or exchangeable or exercisable
3
for such securities, including a sale pursuant to Rule 144
under the Securities Act, during the 14 days prior to, and
during the 90-day period beginning on, the effective date of
such registration statement (except as part of such
registration), if and to the extent requested by the Company
in the case of a non-underwritten public offering or if and
to the extent requested by the managing Underwriter or
Underwriters in the case of an underwritten public offering.
(b) Restrictions on Public Sale by the Company and
Others. The Company agrees (i) not to effect any public
sale or distribution of any securities similar to those
being registered, or any securities convertible into or
exchangeable or exercisable for such securities, during the
14 days prior to, and during the 90-day period beginning on,
the effective date of any registration statement (except as
part of such registration statement (x) where the Holders of
a majority of the shares of Registrable Securities to be
included in such registration statement consent or (y) where
Holders are participating pursuant to Section 3 hereof in
such registration statement, such registration statement was
filed by the Company with respect to the sale of securities
by the Company and no Holder is simultaneously participating
in a registration statement pursuant to Section 2 hereof);
and (ii) that any agreement entered into after the date of
the Agreement pursuant to which the Company issues or agrees
to issue any privately placed securities shall contain a
provision under which holders of such securities agree not
to effect any public sale or distribution of any such
securities during the period described in (i) above, in each
case including a sale pursuant to Rule 144 under the
Securities Act (except as part of any such registration, if
permitted).
5. Registration Procedures.
Whenever the Holders have requested that any
Registrable Securities be registered pursuant to Section 2
hereof, the Company will use its best efforts to effect the
registration and the sale of such Registrable Securities in
accordance with the intended method of disposition thereof
as quickly as practicable, and in connection with any such
request, the Company will as expeditiously as possible:
(a) prepare and file with the Commission a
registration statement on any form for which the Company
then qualifies or which counsel for the Company shall deem
appropriate and which form shall be available for the sale
4
<PAGE>
of the Registrable Securities to be registered thereunder in
accordance with the intended method of distribution thereof,
and use its best efforts to cause such filed registration
statement to become effective; provided that if the Company
shall furnish to the Holders making a request pursuant to
Section 2 a certificate signed by the Chief Executive
Officer of the Company stating that in his good faith
judgment it would be significantly disadvantageous to the
Company or its shareholders for such a registration
statement to be filed as expeditiously as possible, the
Company shall have a period of not more than 90 days within
which to file such registration statement measured from the
date of receipt of the request in accordance with Section 2;
and provided (i) that before filing a registration statement
or prospectus or any amendments or supplements thereto, the
Company will furnish to all Selling Holders and to one
counsel selected by the Holders of a majority of the shares
of Registrable Securities covered by such registration
statement copies of all such documents proposed to be filed,
which documents will be subject to the review of such
counsel, and (ii) that after the filing of the registration
statement, the Company will promptly notify each Selling
Holder of Registrable Securities covered by such
registration statement of any stop order issued or
threatened by the Commission and take all reasonable actions
required to prevent the entry of such stop order or to
remove it if entered;
(b) prepare and file with the Commission such
amendments and supplements to such registration statement
and the prospectus used in connection therewith as may be
necessary to keep such registration statement effective
pursuant to Section 2 for a period of not less than 270 days
or such shorter period which will terminate when all
Registrable Securities covered by such registration
statement have been sold (but not before the expiration of
the 90-day period referred to in Section 4(3) of the
Securities Act and Rule 174 thereunder, if applicable) and
comply with the provisions of the Securities Act with
respect to the disposition of all securities covered by such
registration statement during such period in accordance with
the intended methods of disposition by the Selling Holders
thereof set forth in such registration statement;
(c) furnish to each Selling Holder, prior to filing
the registration statement, if requested, copies of such
registration statement as proposed to be filed, and
thereafter furnish to such Selling Holder such number of
5
<PAGE>
copies of such registration statement, each amendment and
supplement thereto (in each case including all exhibits
thereto), the prospectus included in such registration
statement (including each preliminary prospectus) and such
other documents as such Selling Holder may reasonably
request in order to facilitate the disposition of the
Registrable Securities owned by such Selling Holder;
(d) use its best efforts to register or qualify such
Registrable Securities under such other securities or blue
sky laws of such jurisdictions as any Selling Holder or
managing Underwriter reasonably (in light of the intended
plan of distribution) requests and do any and all other acts
and things which may be reasonably necessary or advisable to
enable such Selling Holder or managing Underwriter to
consummate the disposition in such jurisdictions of the
Registrable Securities owned by such Selling Holder;
provided that the Company will not be required to (i)
qualify generally to do business in any jurisdiction where
it would not otherwise be required to qualify but for this
paragraph (d), (ii) subject itself to taxation in any such
jurisdiction or (iii) consent to general service of process
in any such jurisdiction;
(e) use its best efforts to cause such Registrable
Securities to be registered with or approved by such other
governmental agencies or authorities as may be necessary by
virtue of the business and operations of the Company to
enable the Selling Holder or Selling Holders thereof to
consummate the disposition of such Registrable Securities;
(f) notify each Selling Holder of such Registrable
Securities, at any time when a prospectus relating thereto
is required to be delivered under the Securities Act, of the
occurrence of an event requiring the preparation of a
supplement or amendment to such prospectus so that, as
thereafter delivered to the purchasers of such Registrable
Securities, such prospectus will not contain an untrue
statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the
statements therein not misleading and promptly make
available to each Selling Holder any such supplement or
amendment;
(g) enter into customary agreements (including an
underwriting agreement in customary form) and take such
other actions as are reasonably required in order to
6
<PAGE>
expedite or facilitate the disposition of such Registrable
Securities;
(h) make available for inspection by any Selling
Holder of such Registrable Securities, any underwriter
participating in any disposition pursuant to such
registration statement and any attorney, accountant or other
professional retained by any such Selling Holder or
underwriter (collectively, the "Inspectors"), all financial
and other records, pertinent corporate documents and
properties of the Company (collectively, the "Records") as
shall be reasonably necessary to enable them to exercise
their due diligence responsibility, and cause the Company's
officers, directors and employees to supply all information
reasonably requested by any such Inspectors in connection
with such registration statement;
(i) in the event such sale is pursuant to an
underwritten offering, use its best efforts to obtain a
comfort letter or comfort letters from the Company's
independent public accountants in customary form and
covering such matters of the type customarily covered by
comfort letters as the Selling Holders of a majority of the
shares of Registrable Securities being sold or the managing
Underwriter, reasonably requests;
(j) otherwise use its best efforts to comply with all
applicable rules and regulations of the Commission, and make
available to its security holders, as soon as reasonably
practicable, an earning statement covering a period of
twelve months, beginning within three months after the
effective date of the registration statement, which earnings
statement shall satisfy the provisions of Section 11(a) of
the Securities Act; and
(k) use its best efforts to cause all such Registrable
Securities to be listed on each securities exchange on which
similar securities issued by the Company are then listed.
The Company may require such Selling Holder of
Registrable Securities to promptly furnish in writing to the
Company such information regarding the distribution of the
Registrable Securities as it may from time to time
reasonably request and such other information as may be
legally required in connection with such registration.
Each Selling Holder agrees that, upon receipt of any
notice from the Company of the happening of any event of the
7
<PAGE>
kind described in Section 5(f) hereof, such Selling Holder
will forthwith discontinue disposition of Registrable
Securities pursuant to the registration statement covering
such Registrable Securities until such Selling Holder's
receipt of the copies of the supplemented or amended
prospectus contemplated by Section 5(f) hereof, and, if so
directed by the Company such Selling Holder will deliver to
the Company all copies, other than permanent file copies,
then in such Selling Holder's possession, of the most recent
prospectus covering such Registrable Securities at the time
of receipt of such notice. In the event the Company shall
give such notice, the Company shall extend the period during
which such registration statement shall be maintained
effective (including the period referred to in Section 5(b)
hereof) by the number of days durings the period from and
including the date of the giving of notice pursuant to
Section 5(f) hereof to the date when the Company shall make
available to the Selling Holders of Registrable Securities
covered by such registration statement a prospectus
supplemented or amended to conform with the requirements of
Section 5(f) hereof.
6. REGISTRATION EXPENSES.
In connection with any registration statement required
to be filed hereunder, the Company shall pay the following
registration expenses (the "Registration Expenses"): (i) all
registration and filing fees, (ii) fees and expenses of
compliance with securities or blue sky laws (including
reasonable fees and disbursements of counsel in connection
with blue sky qualifications of the Registrable Securities),
(iii) printing expenses, (iv) internal expenses (including,
without limitation, all salaries and expenses of its
officers and employees performing legal or accounting
duties), (v) the fees and expenses incurred in connection
with the listing of the Registrable Securities if the
Company shall choose to list such Registrable Securities,
(vi) reasonable fees and disbursements of counsel for the
Company and customary fees and expenses for independent
certified public accountants retained by the Company
(including the expenses of any comfort letters or costs
associated with the delivery by independent certified public
accountants of a comfort letter or comfort letters requested
pursuant to Section 5(i) hereof), (vii) the reasonable fees
and expenses of any special experts retained by the Company
in connection with such registration, and (viii) reasonable
fees and expenses of one counsel (who shall be reasonably
acceptable to the Company) for the Holders incurred in
8
<PAGE>
connection with the registration hereunder. The Company
shall not have any obligation to pay any underwriting fees,
discounts or commissions attributable to the sale of
Registrable Securities, or, except as provided by (ii) or
(viii) above, any out-of-pocket expenses of the Holders (or
the agents who manage their accounts) or the fees and
disbursements of counsel for any Underwriter.
7. INDEMNIFICATION; CONTRIBUTION.
(a) INDEMNIFICATION BY THE COMPANY. The Company
agrees to indemnify and hold harmless each Selling Holder of
Registrable Securities, its officers, directors and agents,
and each Person, if any, who controls such Selling Holder
within the meaning of Section 15 of the Securities Act or
Section 20 of the Securities and Exchange Act of 1934, as
amended (the "Exchange Act"), from and against any and all
losses, claims, damages, liabilities and expenses (including
reasonable costs of investigation) arising out of or based
upon any untrue statement or alleged untrue statement of a
material fact contained in any registration statement or
prospectus relating to the Registrable Securities or in any
amendment or supplement thereto or in any preliminary
prospectus, or arising out of or based upon any omission or
alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements
therein not misleading, except insofar as such losses,
claims, damages, liabilities or expenses arise out of, or
are based upon, any such untrue statement or omission or
allegation thereof based upon information furnished in
writing to the Company by such Selling Holder or on such
Selling Holder's behalf expressly for use therein and;
provided, further, that with respect to any untrue statement
or omission or alleged untrue statement or omission made in
any preliminary prospectus, the indemnity agreement
contained in this paragraph shall not apply to the extent
that any such loss, claim, damage, liability or expense
results from the fact that a current copy of the prospectus
was not sent or given to the persons asserting any such
loss, claim, damage, liability or expense at or prior to the
written confirmation of the sale of the Registrable
Securities concerned to such person if it is determined that
it was the responsibility of such Selling Holder to provide
such person with a current copy of the prospectus and such
current copy of the prospectus would have cured the defect
giving rise to such loss, claim, damage, liability or
expanse. The Company also agrees to indemnify any
Underwriters of the Registrable Securities, their officers
9
<PAGE>
and directors and each person who controls such Underwriters
on substantially the same basis as that of the
indemnification of the Selling Holders provided in this
Section 7(a).
(b) INDEMNIFICATION BY HOLDER OF REGISTRABLE
SECURITIES. Each Selling Holder agrees to indemnify and
hold harmless the Company, its directors and officers and
each person, if any, who controls the Company within the
meaning of either Section 15 of the Securities Act or
Section 20 of the Exchange Act to the same extent as the
foregoing indemnity from the Company to such Selling Holder,
but only with respect to information furnished in writing by
such Selling Holder or on such Selling Holder's behalf
expressly for use in any registration statement or
prospectus relating to the Registrable Securities, or any
amendment or supplement thereto, or any preliminary
prospectus. Each Selling Holder agrees to indemnify and
holder harmless Underwriters of the Registrable Securities,
their officers and directors and each person who controls
such Underwriters on substantially the same basis as that of
the indemnification of the Company provided in this Section
7(b).
(c) CONDUCT OF INDEMNIFICATION PROCEEDINGS. If any
action or proceeding (including any governmental
investigation) shall be brought or asserted against any
person or entity entitled to indemnification under clauses
(a) or (b) above (an "Indemnified Party") in respect of
which indemnity may be sought from any party who has agreed
to provide such indemnification (an "Indemnifying Party"),
the Indemnifying Party shall assume the defense thereof,
including the employment of counsel reasonably satisfactory
to such Indemnified Party, and shall assume the payment of
all expenses. Such Indemnified Party shall have the right
to employ separate counsel in any such action and to
participate in the defense thereof, but the fees and
expenses of such counsel shall be at the expense of such
Indemnified Party unless (i) the Indemnifying Party has
agreed to pay such fees and expenses, (ii) the Indemnifying
Party shall have failed to assume the defense and employ
counsel or (iii) the named parties to any such action or
proceeding (including any impleaded parties) include both
such Indemnified Party and the Indemnifying Party, and such
Indemnified Party shall have been advised by counsel that
there is a conflict of interest on the part of counsel
employed by the Indemnifying Party to represent such
Indemnified Party (in which case, if such Indemnified Party
10
notifies the Indemnifying Party in writing that it 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 action or proceeding on behalf of
such Indemnified Party; it being understood, however, that
the Indemnified Party shall not, in connection with any one
such action or proceeding or separate but substantially
similar or related actions or proceedings in the same
jurisdiction arising out of the same general allegations or
circumstances, be liable for the fees and expenses of more
than one separate firm of attorneys (together with
appropriate local counsel) at any time for all such
Indemnified Parties, which firm shall be designated in
writing by such Indemnified Parties). The Indemnifiying
Party shall not be liable for any settlement of any such
action or proceeding effected without its written consent,
but if settled with its written consent, or if there be a
final judgment for the plaintiff in any such action or
proceeding, the Indemnifying Party shall indemnify and hold
harmless such Indemnified Parties from and against any loss
or liability (to the extent stated above) by reason of such
settlement or judgment. Notwithstanding the foregoing
sentence, if at any time an Indemnified Party shall have
requested an Indemnifying Party to reimburse the Indemnified
Party for fees and expenses of counsel as contemplated by
the second sentence of this paragraph, the Indemnifying
Party agrees that it shall be liable for any settlement of
any proceeding effected without its written consent if (i)
such settlement is entered into more than 30 days after
receipt by such Indemnifying Party of the aforesaid request
and more than 30 days after notice of such proposed
settlement is given to the Indemnifying Party and (ii) such
Indemnifying Party shall not have reimbursed the Indemnified
Party in accordance with such request prior to the date of
such settlement. No Indemnifying Party shall, without the
prior written consent of the Indemnified Party, effect any
settlement of any pending or threatened proceeding in
respect of which any Indemnified Party is or could have been
a party and indemnity could have been sought hereunder by
such Indemnified Party, unless such settlement includes an
unconditional release of such Indemnified Party from all
liability on claims that are the subject matter of such
proceeding.
(d) Contribution. If the indemnification provided for
in this Section 7 is unavailable to the Indemnified Parties
in respect of any losses, claims, damages, liabilities or
judgments referred to herein, then each such Indemnifying
11
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 and judgments (i) as between the Company and the
Selling Holders on the one hand and the Underwriters on the
other, in such proportion as is appropriate to reflect the
relative benefits received by the Company and the Selling
Holders on the one hand and the Underwriters on the other,
from the offering of the Securities, or if such allocation
is not permitted by applicable law, in such proportion as is
appropriate to reflect not only such relative benefits but
also the relative fault of the Company and the Selling
Holders on the one hand and of the Underwriters on the other
in connection with the statements or omissions which
resulted in such losses, claims, damages, liabilities or
judgments, as well as any other relevant equitable
considerations and (ii) as between the Company on the one
hand and each Selling Holder on the other, in such
proportion as is appropriate to reflect the relative fault
of the Company and of each Selling Holder in connection with
such statements or omissions, as well as any other relevant
equitable considerations. The relative benefits received by
the Company and the Selling Holders on the one hand and the
Underwriters on the other shall be deemed to be in the same
proportion as the total proceeds from the offering (net of
underwriting discounts and commissions but before deducting
expenses) received by the Company and the Selling Holders
bear to the total underwriting discounts and commissions
received by the Underwriters, in each case as set forth in
the table on the cover page of the prospectus. The relative
fault of the Company and the Selling Holders on the one hand
and of the Underwriters on the other shall be determined by
reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission
or alleged omission to state a material fact relates to
information supplied by the Company and the Selling Holders
or by the Underwriters. The relative fault of the Company
on the one hand and of each Selling Holder on the other
shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material
fact or the omission or alleged omission to state a material
fact relates to information supplied by such party, and the
parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or
omission.
The Company and the Selling Holders agree that it would
not be just and equitable if contribution pursuant to this
12
Section 7(d) were determined by pro rata allocation (even if
the Underwriters were treated as once entity for such
purpose) or by any other method of allocation which does not
take account of the equitable considerations referred to in
the immediately preceding paragraph. The amount paid or
payable by an Indemnified Party as a result of the losses,
claims, damages, liabilities, or judgments referred to in
the immediately preceding paragraph shall be deemed to
include, subject to the limitations set forth above, any
legal or other expenses reasonably incurred by such
Indemnified Party in connection with investigating or
defending any such action or claim. Notwithstanding the
provisions of this Section 7(d), no Underwriter shall be
required to contribute any amount in excess of the amount by
which the total price at which the Securities underwritten
by it and distributed to the public were offered to the
public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or
alleged omission, and no Selling Holder shall be required to
contribute any amount in excess of the amount by which the
total price at which the Securities of such Selling Holder
were offered to the public exceeds the amount of any damages
which such Selling Holder has otherwise been required to pay
by reason of such untrue or alleged untrue statement or
omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such
fraudulent misrepresentation. The Underwriters' obligations
to contribute pursuant to this Section 7(d) are several in
proportion to the respective number of shares of Common
Stock purchased by each of the Underwriters and not joint.
8. Participation in Underwritten Registrations.
No Person may participate in any underwritten
registration hereunder unless such Person (a) agrees to sell
such Person's securities on the basis provided in any
underwriting arrangements approved by the Persons entitled
hereunder to approve such arrangements and (b) completes and
executes all questionnaires, powers of attorney,
indemnities, underwriting agreements and other documents
reasonably required under the terms of such underwriting
arrangements and these Registration Rights.
9. Rule 144.
13
The Company covenants that, so long as it is required
by law to do so, it will file any reports required to be
filed by it under the Securities Act and the Exchange Act so
as to enable Holders 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,
the Company will deliver to such Holder a written statement
as to whether it has complied with such requirements.
[Remainder of page intentionally left blank.]
14
IN WITNESS WHEREOF, each of the parties hereto has
caused this Agreement to be duly executed as of the ___ day
of ____________, 1996.
COMPANY:
SFX BROADCASTING, INC.
By:
Name:
Title:
SELLERS:
WWWB/WGLD OPERATING COMPANY, INC.
By:
Name:
Title:
WWWB/WGLD LICENSE SUBSIDIARY, INC.
By:
Name:
Title:
PARENT:
HMW COMMUNICATIONS, INC.
By:
Name:
Title:
15
AMENDMENT NO. 1
TO AMENDED AND RESTATED
FINANCIAL CONSULTING AND MARKETING AGREEMENT
AMENDMENT NO. 1 made this 1st day of March, 1996 and effective as of
January 1, 1996 by and between Multi-Market Radio, Inc. (the "Company") and
Sillerman Communications Management Corporation ("SCMC").
WHEREAS, the Company and SCMC have heretofore entered into an Amended
and Restated Financial Consulting and Marketing Agreement dated March , 1995
(the "Agreement"); and
WHEREAS, the Company and SCMC wish to further amend the Agreement on the
terms and conditions set forth; and
WHEREAS, all capitalized terms used but not defined herein shall have
the respective meanings ascribed to them in the Agreement;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:
Article 1. Amendments to Financial Consulting and Marketing Agreement
The Agreement is hereby further amended as follows:
1.1 Article 4 is amended to read in its entirety as follows:
"4. Compensation. As compensation for the services to be
rendered by SCMC pursuant to this Agreement as well as SCMC's agreement to
perform such services, the Company shall pay to SCMC during the Term hereof the
sum of $500,000 per year (the "Consulting Fees"). The Consulting Fees shall be
payable in advance in monthly installments on the first day of each and every
month of the Term hereof. The Consulting Fees shall be increased annually by a
percentage amount equal to the percentage increase in the Consumer Price Index
for New York City."
Article 2. Miscellaneous.
2.1 Without limiting any of the other provisions of this
Amendment, the Agreement shall be deemed to be amended to the full extent
necessary to give effect to the provisions of this Amendment.
2.2 Except as amended hereby, the Agreement remains in full
force and effect in accordance with its terms.
2.3 All references in the Agreement and in any other
agreement, instrument or document executed or delivered in connection therewith
to the "Agreement" shall be deemed to refer to the Agreement as amended hereby
and as it may hereafter be amended.
2.4 If any provision of this Amendment shall be determined
to be contrary to law and unenforceable by any court of law, the remaining
provisions shall be severable and enforceable in accordance with their terms.
2.5 This Amendment may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together will constitute one and the same instrument.
2.6 The article and section headings contained in this
Amendment are inserted for convenience only and shall not affect in any way the
meaning or interpretation of the Amendment. Each party has participated
substantially in the negotiation and drafting of this Amendment and each party
hereby disclaims any defense or assertion in any litigation or arbitration that
any ambiguity herein should be construed against the draftsman.
2.7 THIS AMENDMENT SHALL BE CONSTRUED AND INTERPRETED
ACCORDING TO THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO THE CONFLICTS
OF LAWS PRINCIPLES THEREOF.
IN WITNESS WHEREOF, the parties hereto have duly executed this Amendment
as of the day and year first above written.
SILLERMAN COMMUNICATIONS
MANAGEMENT CORPORATION
By: /s/ Robert F.X. Sillerman
---------------------------------
Name: Robert F.X. Sillerman
Title: Executive Chairman
MULTI-MARKET RADIO, INC.
By: /s/ Michael G. Ferrel
---------------------------------
Name: Michael G. Ferrel
Title: Chief Executive Officer
SUPPLEMENT TO
THE TERMINATION AND ASSIGNMENT AGREEMENT
This SUPPLEMENT TO THE TERMINATION AND ASSIGNMENT AGREEMENT is entered
into on this 21st day of May, 1996, by and between SILLERMAN COMMUNICATIONS
MANAGEMENT CORPORATION ("SCMC") AND SFX BROADCASTING, INC. ("SFX").
WITNESSETH
WHEREAS, the parties have entered into that certain Termination and
Assignment Agreement dated as of the 15th day of April, 1996 (the "Agreement");
WHEREAS, the parties wish to supplement the Agreement effective as of
April 15, 1996, as more specifically described herein; and
NOW, THEREFORE, the parties hereby agree as follows:
1. Schedule B of the Agreement shall be supplemented to add the
following:
The warrant shall vest as follows:
warrants to purchase 300,000 shares of Class A Common Stock
shall vest immediately and warrants to purchase the remaining
300,000 shares of Class A Common Stock shall vest upon the
receipt of the approval of the stockholders of SFX;
2. All other terms and conditions of the Agreement shall remain
unchanged.
IN WITNESS WHEREOF, the parties have set their hands to this Supplement
as of the year and day first above written.
SILLERMAN COMMUNICATIONS
MANAGEMENT CORPORATION
By: /s/ Howard J. Tytel
---------------------------------
Name: Howard J. Tytel
Title: Executive Vice President
SFX BROADCASTING, INC.
By: /s/ Howard J. Tytel
---------------------------------
Name: Howard J. Tytel
Title: Executive Vice President
Multi-Market Radio, Inc. ("MMR") hereby consents to the entering into of
the Supplement to the Termination and Assignment Agreement attached hereto as
Annex A.
The parties hereto acknowledge and agree that, in lieu MMR and Multi-
Market Radio Acquisition Corporation using all commercially reasonable efforts
to obtain consents and assign its rights under the Asset Purchase Agreements (as
such term is defined in the Amended and Restated Agreement and Plan of Merger
dated as of April 15, 1996 among SFX Broadcasting, Inc., SFX Merger Company and
MMR (as amended)), MMR shall not take any action with respect to the Asset
Purchase Agreements without the prior written consent of SFX Broadcasting, Inc.
("SFX") and SFX will lend to MMR the financing necessary to complete the
purchase of the radio stations pursuant to the Asset Purchase Agreements and MMR
will transfer the purchased assets to SFX simultaneously with the purchase of
such stations.
Dated: May , 1996
Multi-Market Radio, Inc. SFX Broadcasting, Inc.
By: /s/ Michael G. Ferrel By: /s/ Howard J. Tytel
------------------------------- ----------------------------
Name: Michael G. Ferrel Name: Howard J. Tytel
Title: President Title: Executive Vice President
EXECUTION COPY
- -------------------------------------------------------------------
REGISTRATION RIGHTS AGREEMENT
Dated as of May 31, 1996
by and among
SFX BROADCASTING, INC.
As Issuer
SFX BROADCASTING OF THE SOUTHWEST, INC., SFX BROADCASTING OF TEXAS, INC., SFX
BROADCASTING OF TEXAS (KRLD) INC., SFX BROADCASTING OF TEXAS (KRLD) LICENSEE,
INC., SFX BROADCASTING OF TEXAS (TSN), INC., SFX BROADCASTING OF TEXAS (TSN),
LICENSEE, INC., KODA-FM LICENSEE, INC., KJQY-FM LICENSEE, INC., SFX
BROADCASTING OF TEXAS (KTCK), INC., SFX BROADCASTING OF TEXAS (KTCK),
LICENSEE, INC., SFX BROADCASTING OF THE SOUTHEAST, INC., SFX BROADCASTING OF
SOUTH CAROLINA (WMYI), INC., SFX BROADCASTING OF SOUTH CAROLINA (WMYI)
LICENSEE, INC., SFX BROADCASTING OF MISSISSIPPI, INC., SFX BROADCASTING OF
MISSISSIPPI LICENSEE, INC., SFX BROADCASTING OF SOUTH CAROLINA (WSSL), INC.,
SFX BROADCASTING OF SOUTH CAROLINA (WSSL) LICENSEE, INC., SFX BROADCASTING OF
TENNESSEE, INC., SFX BROADCASTING OF TENNESSEE LICENSEE, INC., SFX
BROADCASTING OF JACKSON, INC., SFX BROADCASTING OF JACKSON LICENSEE, INC., SFX
BROADCASTING OF NORTH CAROLINA, INC., SFX BROADCASTING OF NORTH CAROLINA
LICENSEE, INC., SFX BROADCASTING OF SAN DIEGO, INC., PARKER BROADCASTING
COMPANY, SFX BROADCASTING OF SAN DIEGO LICENSEE, INC., SFX ACQUISITION
CORPORATION, SFX MERGER COMPANY
As Guarantors
AND
BT SECURITIES CORPORATION
GOLDMAN, SACHS & CO.
LEHMAN BROTHERS INC.
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This Registration Rights Agreement (this "Agreement") is made and
entered into as of May 31, 1996 by and among SFX Broadcasting, Inc., a
Delaware corporation (the "Company"), the Guarantors and BT Securities
Corporation, Goldman, Sachs & Co. and Lehman Brothers Inc. (each an "Initial
Purchaser" and collectively, the "Initial Purchasers"), who have agreed to
purchase the Company's 10 3/4% Senior Subordinated Notes due 2006 (the "Senior
Notes") pursuant to the Purchase Agreement (as defined below).
This Agreement is made pursuant to the Purchase Agreement, dated
May 22, 1996 (the "Purchase Agreement"), by and among the Company, the
Guarantors and the Initial Purchasers. In order to induce the Initial
Purchasers to purchase the Senior Notes, the Company and the Guarantors have
agreed to provide the registration rights set forth in this Agreement. The
execution and delivery of this Agreement is a condition to the obligations of
the Initial Purchasers set forth in Section 3 of the Purchase Agreement.
The parties hereby agree as follows:
1. Definitions. As used in this Agreement, the following
capitalized terms shall have the following meanings:
Broker-Dealer: Any broker or dealer registered under the
Exchange Act.
Business Day: Each Monday, Tuesday, Wednesday, Thursday and
Friday which is not a Legal Holiday.
Closing Date: The date of this Agreement.
Commission: The Securities and Exchange Commission.
Consummate: A Registered Exchange Offer shall be deemed
"Consummated" for purposes of this Agreement upon the occurrence of (i)
the filing and effectiveness under the Securities Act of the Exchange
Offer Registration Statement relating to the New Senior Notes to be
issued in the Exchange Offer, (ii) the maintenance of such Registration
Statement continuously effective and the keeping of the Exchange Offer
open for a period not less than the minimum period required pursuant to
Section 3(b) hereof, and (iii) the delivery by the Company to the
Registrar under the Indenture of New Senior Notes in the same aggregate
principal amount as the aggregate principal amount of Senior Notes that
were tendered by Holders thereof pursuant to the Exchange Offer.
Damages Payment Date: Each Interest Payment Date.
Effectiveness Target Date: As defined in Section 5 hereof.
Exchange Act: The Securities Exchange Act of 1934, as amended.
Exchange Offer: The registration by the Company under the
Securities Act of the New Senior Notes pursuant to a Registration
Statement pursuant to which the Company offers the Holders of all
outstanding Transfer Restricted Securities the opportunity to exchange
all such outstanding Transfer Restricted Securities held by such Holders
for New Senior Notes in an aggregate principal amount equal to the
aggregate principal amount of the Transfer Restricted Securities
tendered in such exchange offer by such Holders.
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Exchange Offer Registration Statement: The Registration
Statement relating to the Exchange Offer, including the Prospectus which
forms a part thereof.
Exempt Resales: The transactions in which the Initial
Purchasers propose to sell the Senior Notes to certain "qualified
institutional buyers," as such term is defined in Rule 144A under the
Securities Act, and to certain institutional "accredited investors," as
such term is defined in Rule 501(a)(1), (2), (3) or (7) of Regulation D
under the Securities Act ("Accredited Institutions").
Guarantors: Each of the entities listed on Schedule I hereto
and each other Subsidiary (as defined in the Indenture) of the Company
formed or acquired after the Closing Date, and their respective
successors and assigns pursuant to their guarantees of the Notes.
Holders: As defined in Section 2(b) hereof.
Indemnified Holder: As defined in Section 8(a) hereof.
Indenture: The Indenture, dated as of May 31, 1996, among the
Company, the Guarantors and Chemical Bank, as trustee (the "Trustee"),
pursuant to which the Notes are to be issued, as such Indenture is
amended or supplemented from time to time in accordance with the terms
thereof.
Initial Purchasers: As defined in the preamble hereto.
Interest Payment Date: As defined in the Indenture and the
Notes.
Liquidated Damages: As defined in Section 5 hereof.
NASD: National Association of Securities Dealers, Inc.
New Senior Notes: The Company's 10 3/4% Senior Subordinated
Notes due 2006 to be issued pursuant to the Indenture in the Exchange
Offer.
Notes: The Senior Notes, New Senior Notes and Private Exchange
Notes, if any.
Person: Any individual, corporation, partnership, joint
venture, association, joint- stock company, trust, unincorporated
organization or government or agency or political subdivision thereof
(including any subdivision or ongoing business of any such entity or
substantially all of the assets of any such entity, subdivision or
business).
Private Exchange: As defined in Section 3 hereof.
Private Exchange Notes: As defined in Section 3 hereof.
Prospectus: The prospectus included in a Registration
Statement, as amended or supplemented by any prospectus supplement and
by all other amendments thereto, including post-effective amendments,
and all material incorporated by reference into such Prospectus.
Record Holder: With respect to any Damages Payment Date
relating to Notes, each Person who is a Holder of Notes on the record
date with respect to the Interest Payment Date on which such Damages
Payment Date shall occur.
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Registration Default: As defined in Section 5 hereof.
Registration Statement: Any registration statement of the
Company relating to (a) an offering of New Senior Notes pursuant to an
Exchange Offer or (b) the registration for resale of Transfer Restricted
Securities pursuant to the Shelf Registration Statement, which is filed
pursuant to the provisions of this Agreement, in each case, including
the Prospectus included therein, all amendments and supplements thereto
(including post-effective amendments) and all exhibits and material
incorporated by reference therein.
Securities Act: The Securities Act of 1933, as amended.
Shelf Filing Deadline: As defined in Section 4 hereof.
Shelf Registration Statement: As defined in Section 4 hereof.
TIA: The Trust Indenture Act of 1939 (15 U.S.C. Section
77aaa-77bbbb) as in effect on the date of the Indenture.
Transfer Restricted Securities: Each Senior Note, until the
earliest to occur of (a) the date on which such Senior Note is exchanged
in the Exchange Offer and entitled to be resold to the public by the
Holder thereof without complying with the prospectus delivery
requirements of the Securities Act, (b) the date on which such Senior
Note has been effectively registered under the Securities Act and
disposed of in accordance with a Shelf Registration Statement and (c)
the date on which such Senior Note is distributed to the public pursuant
to Rule 144 under the Securities Act or by a Broker-Dealer pursuant to
the "Plan of Distribution" contemplated by the Exchange Offer
Registration Statement (including delivery of the Prospectus contained
therein).
Underwritten Registration or Underwritten Offering: A
registration in which securities of the Company are sold to an
underwriter for reoffering to the public.
Other capitalized terms used but not defined herein shall have the
meanings assigned to them in the Indenture.
2. Securities Subject to This Agreement.
(a) Transfer Restricted Securities. The securities entitled to
the benefits of this Agreement are the Transfer Restricted Securities.
(b) Holders of Transfer Restricted Securities. A Person is
deemed to be a holder of Transfer Restricted Securities (each, a
"Holder") whenever such Person owns, beneficially or otherwise, Transfer
Restricted Securities.
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3. Registered Exchange Offer.
(a) Unless the Exchange Offer shall not be permissible under
applicable law or Commission policy (after the procedures set forth in
Section 6(a) below have been complied with), the Company and the
Guarantors shall (i) cause to be filed with the Commission as soon as
practicable after the Closing Date, but in no event later than 45 days
after the Closing Date, a Registration Statement under the Securities
Act relating to the New Senior Notes and the Exchange Offer, (ii) use
their reasonable best efforts to cause such Registration Statement to
become effective at the earliest possible time, but in no event later
than 120 days after the Closing Date, (iii) in connection with the
foregoing, file (A) all pre-effective amendments to such Registration
Statement as may be necessary in order to cause such Registration
Statement to become effective, (B) if applicable, a post-effective
amendment to such Registration Statement pursuant to Rule 430A under the
Securities Act and (C) cause all necessary filings in connection with
the registration and qualification of the New Senior Notes to be made
under the Blue Sky laws of such jurisdictions as are necessary to permit
the Exchange Offer to be Consummated and (iv) upon the effectiveness of
such Registration Statement, commence the Exchange Offer. The Exchange
Offer shall be on the appropriate form permitting registration of the
New Senior Notes to be offered in exchange for the Transfer Restricted
Securities and to permit resales of New Senior Notes held by
Broker-Dealers as contemplated by Section 3(c) below.
(b) The Company and each of the Guarantors shall cause the
Exchange Offer Registration Statement to be effective continuously and
shall keep the Exchange Offer open for a period of not less than the
minimum period required under applicable federal and state securities
laws to Consummate the Exchange Offer; provided, however, that in no
event shall such period be less than 20 Business Days. The Company and
each of the Guarantors shall cause the Exchange Offer to comply with all
applicable federal and state securities laws. No securities other than
the Notes shall be included in the Exchange Offer Registration
Statement. The Company and each of the Guarantors shall use their
reasonable best efforts to cause the Exchange Offer to be Consummated on
the earliest practicable date after the Exchange Offer Registration
Statement has become effective, but in no event later than 30 Business
Days thereafter.
(c) The Company shall indicate in a "Plan of Distribution"
section contained in the Prospectus contained in the Exchange Offer
Registration Statement that any Broker-Dealer who holds Senior Notes
that are Transfer Restricted Securities and that were acquired for its
own account as a result of market-making activities or other trading
activities (other than Transfer Restricted Securities acquired directly
from the Company or an affiliate of the Company), may exchange such
Senior Notes pursuant to the Exchange Offer; however, such Broker-Dealer
may be deemed to be an "underwriter" within the meaning of the
Securities Act and must, therefore, deliver a prospectus meeting the
requirements of the Securities Act in connection with any resales of the
New Senior Notes received by such Broker-Dealer in the Exchange Offer,
which prospectus delivery requirement may be satisfied by the delivery
by such Broker-Dealer of the Prospectus contained in the Exchange Offer
Registration Statement. Such "Plan of Distribution" section shall also
contain all other information with respect to such resales by
Broker-Dealers that the Commission may require in order to permit such
resales pursuant thereto, but such "Plan of Distribution" shall not name
any such Broker-Dealer or disclose the amount of New Senior Notes held
by any such Broker-Dealer except to the extent required by the
Commission as a result of a change in policy announced after the date of
this Agreement.
The Company and each of the Guarantors shall use their reasonable
best efforts to keep the Exchange Offer Registration Statement continuously
effective, supplemented and amended as required
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by the provisions of Section 6(c) below to the extent necessary to ensure that
it is available for resales of New Senior Notes acquired by Broker-Dealers for
their own accounts as a result of market-making activities or other trading
activities, and to ensure that it conforms with the requirements of this
Agreement, the Securities Act and the policies, rules and regulations of the
Commission as announced from time to time, for a period of 180 days from the
date on which the Exchange Offer Registration Statement is declared effective.
The Company shall provide sufficient copies of the latest version
of such Prospectus to Broker-Dealers promptly upon request at any time,
subject to Section 6(c)(i) hereof, during such one-year period in order to
facilitate such resales.
If, prior to consummation of the Exchange Offer, the Initial
Purchasers hold any Senior Notes acquired by them and having, or which are
reasonably likely to be determined to have, the status of an unsold allotment
in the initial distribution, the Company, upon the request of the Initial
Purchasers simultaneously with the delivery of the New Senior Notes in the
Exchange Offer, shall issue and deliver to the Initial Purchasers in exchange
(the "Private Exchange") for such Senior Notes held by the Initial Purchasers
a like principal amount of debt securities of the Company that are identical
in all material respects to the New Senior Notes (the "Private Exchange
Notes") (and which are issued pursuant to the Indenture), except that such
Private Exchange Notes will bear a legend as to restriction on transfer. To
the extent permitted by Standard & Poor's, the Private Exchange Notes shall
bear the same CUSIP number as the New Senior Notes.
4. Shelf Registration.
(a) Shelf Registration. If (i) the Company is not required or
permitted to file an Exchange Offer Registration Statement or to
consummate the Exchange Offer because the Exchange Offer is not
permitted by applicable law or Commission policy (after the procedures
set forth in Section 6(a) below have been complied with) or (ii) if any
Holder of Transfer Restricted Securities that is a "qualified
institutional buyer" (as defined in Rule 144A under the Securities Act)
or an "accredited investor" (as defined in Rule 501(A)(1), (2), (3) or
(7) under the Securities Act) shall notify the Company within 20
Business Days after the Exchange Offer is Consummated (A) that such
Holder is prohibited by applicable law or Commission policy from
participating in the Exchange Offer or (B) that such Holder may not
resell the New Senior Notes acquired by it in the Exchange Offer to the
public without delivering a prospectus and that the Prospectus contained
in the Exchange Offer Registration Statement is not appropriate or
available for such resales by such Holder or (C) that such Holder is a
Broker-Dealer and holds Senior Notes acquired directly from the Company
or one of its affiliates, then the Company and each of the Guarantors
shall use their best efforts to:
(x) cause to be filed a shelf registration statement
pursuant to Rule 415 under the Securities Act, which may be an
amendment to the Exchange Offer Registration Statement (in either
event, the "Shelf Registration Statement") on or prior to the
earliest to occur of (1) the 30th day after the date on which the
Company determines that it is not required to file the Exchange
Offer Registration Statement or permitted to consummate the
Exchange Offer or (2) the 30th day after the date on which the
Company receives notice from a Holder of Transfer Restricted
Securities as contemplated by clause (ii) above (such earliest date
being the "Shelf Filing Deadline"), which Shelf Registration
Statement shall provide for resales of all Transfer Restricted
Securities the Holders of which shall have provided the information
required pursuant to Section 4(b) hereof; and
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(y) use their best efforts to cause such Shelf
Registration Statement to be declared effective by the Commission
on or before the later of 30 days after the filing of the Shelf
Registration Statement and 120 days after the Closing Date.
The Company and each of the Guarantors shall use their reasonable best
efforts to keep such Shelf Registration Statement continuously
effective, supplemented and amended as required by the provisions of
Sections 6(b) and (c) hereof to the extent necessary to ensure that it
is available for resales of Notes by the Holders of Transfer Restricted
Securities entitled to the benefit of this Section 4(a), and to ensure
that it conforms with the requirements of this Agreement, the Securities
Act and the policies, rules and regulations of the Commission as
announced from time to time, for a period of at least three years
following the Closing Date or such shorter period that will terminate
when all Transfer Restricted Securities covered by the Shelf
Registration Statement have been sold pursuant to the Shelf Registration
Statement.
(b) Provision by Holders of Certain Information in Connection
with the Shelf Registration Statement. No Holder of Transfer Restricted
Securities may include any of its Transfer Restricted Securities in any
Shelf Registration Statement pursuant to this Agreement unless and until
such Holder furnishes to the Company in writing, within 10 Business Days
after receipt of a request therefor, such information as the Company may
reasonably request for use in connection with any Shelf Registration
Statement or Prospectus or preliminary Prospectus included therein and
in any application to be filed with the NASD. No Holder of Transfer
Restricted Securities shall be entitled to Liquidated Damages pursuant
to Section 5 hereof unless and until such Holder shall have used its
best efforts to provide all such reasonably requested information. Each
Holder as to which any Shelf Registration Statement is being effected
agrees to furnish promptly to the Company all information required to be
disclosed in order to make the information previously furnished to the
Company by such Holder not materially misleading.
5. Liquidated Damages.
If (a) any of the Registration Statements required by this
Agreement is not filed with the Commission on or prior to the date specified
for such filing in this Agreement, (b) any of such Registration Statements has
not been declared effective by the Commission on or prior to the date
specified for such effectiveness in this Agreement (the "Effectiveness Target
Date"), (c) the Exchange Offer has not been Consummated within 30 Business
Days after the Effectiveness Target Date with respect to the Exchange Offer
Registration Statement or (d) subject to the provisions of Section 6(c)(i)
below, any Registration Statement required by this Agreement is filed and
declared effective but shall thereafter cease to be effective or fail to be
usable for its intended purpose without being succeeded within two Business
Days by a post-effective amendment to such Registration Statement that cures
such failure and that is itself immediately declared effective (each such
event referred to in clauses (a) through (d), a "Registration Default"), the
Company and each Guarantor hereby, jointly and severally, agree to pay
liquidated damages ("Liquidated Damages") to each Holder of Transfer
Restricted Securities with respect to the first 90-day period immediately
following the occurrence of such Registration Default, in an amount equal to
$.05 per week per $1,000 principal amount of Transfer Restricted Securities
held by such Holder for each week or portion thereof that the Registration
Default continues. The amount of the Liquidated Damages payable to any Holder
of Transfer Restricted Securities shall increase by an additional $.05 per
week per $1,000 in principal amount of Transfer Restricted Securities held by
such Holder with respect to each subsequent 90-day period until all
Registration Defaults have been cured, up to a maximum amount of Liquidated
Damages of $.50 per week per $1,000 principal amount of Transfer Restricted
Securities. All accrued Liquidated Damages shall be paid to Record Holders by
the Company by wire transfer of immediately
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available funds or by federal funds check on each Damages Payment Date, as
provided in the Indenture. Following the cure of all Registration Defaults
relating to any particular Transfer Restricted Securities, the accrual of
Liquidated Damages with respect to such Transfer Restricted Securities will
cease.
All obligations of the Company and the Guarantors set forth in the
preceding paragraph that are outstanding with respect to any Transfer
Restricted Security at the time such security ceases to be a Transfer
Restricted Security shall survive until such time as all such obligations with
respect to such Transfer Restricted Security shall have been satisfied in
full.
6. Registration Procedures.
(a) Exchange Offer Registration Statement. In connection with
the Exchange Offer, the Company and each of the Guarantors shall comply
with all of the provisions of Section 6(c) below, shall use their
reasonable best efforts to effect such exchange to permit the sale of
Transfer Restricted Securities being sold in accordance with the
intended method or methods of distribution thereof, and shall comply
with all of the following provisions:
(i) If in the reasonable opinion of counsel to the
Company there is a question as to whether the Exchange Offer is
permitted by applicable law, the Company and each of the Guarantors
hereby agree to seek a no-action letter or other favorable decision
from the Commission allowing the Company and the Guarantors to
Consummate an Exchange Offer for such Senior Notes. The Company and
each of the Guarantors hereby agree to pursue the issuance of such
a decision to the Commission staff level but shall not be required
to take commercially unreasonable action to effect a change of
Commission policy. The Company and each of the Guarantors hereby
agree, however, to (A) participate in telephonic conferences with
the Commission, (B) deliver to the Commission staff an analysis
prepared by counsel to the Company setting forth the legal bases,
if any, upon which such counsel has concluded that such an Exchange
Offer should be permitted and (C) diligently pursue a resolution
(which need not be favorable) by the Commission staff of such
submission.
(ii) As a condition to its participation in the Exchange
Offer pursuant to the terms of this Agreement, each Holder of
Transfer Restricted Securities shall furnish, upon the request of
the Company, prior to the date on which the Exchange Offer is
Consummated, a written representation to the Company (which may be
contained in the letter of transmittal contemplated by the Exchange
Offer Registration Statement) to the effect that (A) it is not an
affiliate of the Company, (B) it is not engaged in, and does not
intend to engage in, and has no arrangement or understanding with
any person to participate in, a distribution of the New Senior
Notes to be issued in the Exchange Offer and (C) it is acquiring
the New Senior Notes in its ordinary course of business. In
addition, all such Holders of Transfer Restricted Securities shall
otherwise cooperate in the Company's preparations for the Exchange
Offer. Each Holder hereby acknowledges and agrees that any
Broker-Dealer and any such Holder using the Exchange Offer to
participate in a distribution of the securities to be acquired in
the Exchange Offer (1) could not under Commission policy as in
effect on the date of this Agreement rely on the position of the
Commission enunciated in Morgan Stanley and Co., Inc. (available
June 5, 1991) and Exxon Capital Holdings Corporation (available May
13, 1988), as interpreted in the Commission's letter to Shearman &
Sterling dated July 2, 1993, and similar no-action letters
(including any no-action letter obtained pursuant to clause (i)
above) and (2) must comply with the registration and prospectus
delivery requirements of the Securities Act in
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connection with a secondary resale transaction and that such a
secondary resale transaction should be covered by an effective
registration statement containing the selling security holder
information required by Item 507 or 508, as applicable, of
Regulation S-K if the resales are of New Senior Notes obtained by
such Holder in exchange for Senior Notes acquired by such Holder
directly from the Company.
(iii) Prior to effectiveness of the Exchange Offer
Registration Statement, the Company and the Guarantors shall
provide a supplemental letter to the Commission (A) stating that
the Company and the Guarantors are registering the Exchange Offer
in reliance on the position of the Commission enunciated in Exxon
Capital Holdings Corporation (available May 13, 1988), Morgan
Stanley and Co., Inc. (available June 5, 1991) and, if applicable,
any no-action letter obtained pursuant to clause (i) above and (B)
including a representation that neither the Company nor any of the
Guarantors has entered into any arrangement or understanding with
any Person to distribute the New Senior Notes to be received in the
Exchange Offer and that, to the best of the Company's and the
Guarantors' information and belief, each Holder participating in
the Exchange Offer is acquiring the New Senior Notes in its
ordinary course of business and has no arrangement or understanding
with any Person to participate in the distribution of the New
Senior Notes received in the Exchange Offer.
(b) Shelf Registration Statement. In connection with the Shelf
Registration Statement, the Company and each of the Guarantors shall
comply with all the provisions of Section 6(c) below and shall use their
reasonable best efforts to effect such registration to permit the sale
of the Transfer Restricted Securities being sold in accordance with the
intended method or methods of distribution thereof, and pursuant thereto
the Company and each of the Guarantors will as expeditiously as possible
prepare and file with the Commission a Registration Statement relating
to the registration on any appropriate form under the Securities Act,
which form shall be available for the sale of the Transfer Restricted
Securities in accordance with the intended method or methods of
distribution thereof.
(c) General Provisions. In connection with any Registration
Statement and any Prospectus required by this Agreement to permit the
sale or resale of Transfer Restricted Securities (including, without
limitation, any Registration Statement and the related Prospectus
required to permit resales of Notes by Broker-Dealers), the Company and
the Guarantors shall:
(i) use their reasonable best efforts to keep such
Registration Statement continuously effective and provide all
requisite financial statements (including, if required by the
Securities Act or any regulation thereunder, financial statements
of the Guarantors) for the period specified in Section 3 or 4 of
this Agreement, as applicable; upon the occurrence of any event
that would cause any such Registration Statement or the Prospectus
contained therein (A) to contain a material misstatement or
omission or (B) not to be effective and usable for resale of
Transfer Restricted Securities during the period required by this
Agreement, the Company and the Guarantors shall file promptly an
appropriate amendment to such Registration Statement, in the case
of clause (A), correcting any such misstatement or omission, and,
in the case of either clause (A) or (B), use their reasonable best
efforts to cause such amendment to be declared effective and such
Registration Statement and the related Prospectus to become usable
for their intended purpose(s) as soon as practicable thereafter.
Notwithstanding the foregoing, if the Board of Directors of the
Company determines in good faith that it is in the best interests
of the Company and the Guarantors not to disclose the existence of
or facts surrounding any
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proposed or pending material corporate transaction involving the
Company or the Guarantors, the Company and the Guarantors may allow
the Shelf Registration Statement or the Exchange Offer Registration
Statement to fail to be effective and usable as a result of such
nondisclosure for up to 120 days during the three year period of
effectiveness required by Section 4 hereof, but in no event (x) for
any period in excess of 45 consecutive days or (y) for more than 60
days in any calendar year, provided, that in the event the Exchange
Offer is Consummated, the Company and the Guarantors shall not
allow the Exchange Offer Registration Statement to fail to be
effective and usable for a period in excess of 30 days during the
one year period of effectiveness required by Section 3 hereof;
(ii) prepare and file with the Commission such amendments
and post-effective amendments to the Registration Statement as may
be necessary to keep the Registration Statement effective for the
applicable period set forth in Section 3 or 4 hereof, as
applicable, or such shorter period as will terminate when all
Transfer Restricted Securities covered by such Registration
Statement have been sold; cause the 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 to comply
fully with the applicable provisions of Rules 424 and 430A under
the Securities Act in a timely manner; and comply with the
provisions of the Securities Act with respect to the disposition of
all securities covered by such Registration Statement during the
applicable period in accordance with the intended method or methods
of distribution by the sellers thereof set forth in such
Registration Statement or supplement to the Prospectus;
(iii) advise the underwriter(s), if any, and selling
Holders promptly (but in any event within two Business Days) and,
if requested by such Persons, to confirm such advice in writing,
(A) when the Prospectus or any Prospectus supplement or
post-effective amendment has been filed, and, with respect to any
Registration Statement or any post-effective amendment thereto,
when the same has become effective, (B) of any request by the
Commission for amendments to the Registration Statement or
amendments or supplements to the Prospectus or for additional
information relating thereto, (C) of the issuance by the Commission
of any stop order suspending the effectiveness of the Registration
Statement under the Securities Act or of the suspension by any
state securities commission of the qualification of the Transfer
Restricted Securities for offering or sale in any jurisdiction, or
the initiation of any proceeding for any of the preceding purposes,
(D) of the existence of any fact or the happening of any event that
makes any statement of a material fact made in the Registration
Statement, the Prospectus, any amendment or supplement thereto, or
any document incorporated by reference therein untrue, or that
requires the making of any additions to or changes in the
Registration Statement or the Prospectus in order to make the
statements therein not misleading, including, without limitation,
under circumstances described in Section 6(c)(i) above. If at any
time the Commission shall issue any stop order suspending the
effectiveness of the Registration Statement, or any state
securities commission or other regulatory authority shall issue an
order suspending the qualification or exemption from qualification
of the Transfer Restricted Securities under state securities or
Blue Sky laws, the Company and each of the Guarantors shall use
their reasonable best efforts to obtain the withdrawal or lifting
of such order at the earliest possible time;
(iv) furnish to each of the selling Holders and each of
the underwriter(s), if any, before filing with the Commission,
copies of any Registration Statement or any Prospectus included
therein or any amendments or supplements to any
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such Registration Statement or Prospectus (including, upon request
in writing, all documents incorporated by reference after the
initial filing of such Registration Statement), which documents
will be subject to the review of such Holders and underwriter(s),
if any, for a period of at least three Business Days, and the
Company and the Guarantors will not file any such Registration
Statement or Prospectus or any amendment or supplement to any such
Registration Statement or Prospectus (including all such documents
incorporated by reference) to which a selling Holder of Transfer
Restricted Securities covered by such Registration Statement or the
underwriter(s), if any, shall reasonably object within three
Business Days after the receipt thereof. A selling Holder or
underwriter, if any, shall be deemed to have reasonably objected to
such filing if such Registration Statement, amendment, Prospectus
or supplement, as applicable, as proposed to be filed, contains a
material misstatement or omission;
(v) promptly prior to the filing of any document that is
to be incorporated by reference into a Registration Statement or
Prospectus, provide copies of such document to the selling Holders
and to the underwriter(s), if any, make the Company's
representatives (and representatives of the Guarantors) available
for discussion of such document and other customary due diligence
matters, and include such information in such document prior to the
filing thereof as such selling Holders or underwriter(s), if any,
reasonably may request;
(vi) make available at reasonable times for inspection by
the selling Holders, any underwriter participating in any
disposition pursuant to such Registration Statement, and any
attorney or accountant retained by such selling Holders or any of
the underwriter(s), all financial and other records, pertinent
corporate documents and properties of the Company and the
Guarantors and cause the Company's and the Guarantors' officers,
directors, managers and employees to supply all information
reasonably requested by any such Holder, underwriter, attorney or
accountant in connection with such Registration Statement
subsequent to the filing thereof and prior to its effectiveness;
(vii) if requested by any selling Holders or the
underwriter(s), if any, promptly incorporate in any Registration
Statement or Prospectus, pursuant to a supplement or post-effective
amendment if necessary, such information as such selling Holders
and underwriter(s), if any, may reasonably request to have included
therein, including, without limitation, information relating to the
"Plan of Distribution" of the Transfer Restricted Securities,
information with respect to the principal amount of Transfer
Restricted Securities being sold to such underwriter(s), the
purchase price being paid therefor and any other terms of the
offering of the Transfer Restricted Securities to be sold in such
offering; and make all required filings of such Prospectus
supplement or post-effective amendment as soon as practicable after
the Company is notified of the matters to be incorporated in such
Prospectus supplement or post-effective amendment;
(viii) cause the Transfer Restricted Securities covered
by the Registration Statement to be rated with the appropriate
rating agencies, if so requested by the Holders of a majority in
aggregate principal amount of Notes covered thereby or the
underwriter(s), if any;
(ix) furnish to each selling Holder and each of the
underwriter(s), if any, without charge, at least one copy of the
Registration Statement, as first filed with the
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Commission, and of each amendment thereto, including all documents
incorporated by reference therein and all exhibits (including
exhibits incorporated therein by reference);
(x) deliver to each selling Holder and each of the
underwriter(s), if any, without charge, as many copies of the
Prospectus (including each preliminary prospectus) and any
amendment or supplement thereto as such Persons reasonably may
request; the Company and the Guarantors hereby consent to the use
of the Prospectus and any amendment or supplement thereto by each
of the selling Holders and each of the underwriter(s), if any, in
connection with the offering and the sale of the Transfer
Restricted Securities covered by the Prospectus or any amendment or
supplement thereto;
(xi) enter into, and cause the Guarantors to enter into,
such agreements (including an underwriting agreement), and make,
and cause the Guarantors to make, such representations and
warranties, and take all such other actions in connection therewith
in order to expedite or facilitate the disposition of the Transfer
Restricted Securities pursuant to any Registration Statement
contemplated by this Agreement, all to such extent as may be
requested by any Holder of Transfer Restricted Securities or
underwriter in connection with any sale or resale pursuant to any
Registration Statement contemplated by this Agreement; and whether
or not an underwriting agreement is entered into and whether or not
the registration is an Underwritten Registration, the Company and
each of the Guarantors shall:
(A) upon request, furnish to each selling Holder and
each underwriter, if any, in such substance and scope as they
may reasonably request and as are customarily made by issuers
to underwriters in primary underwritten offerings, upon the
date the Exchange Offer is Consummated and, if applicable, the
effectiveness of the Shelf Registration Statement:
(1) a certificate, dated the date the Exchange
Offer is Consummated or the date of effectiveness of the
Shelf Registration Statement, as the case may be, signed
by (y) the Chairman of the Board or the President and (z)
the Chief Financial Officer of the Company and each of
the Guarantors confirming, as of the date thereof, the
matters set forth in paragraph (f) of Section 7 of the
Purchase Agreement and such other matters as such parties
may reasonably request;
(2) an opinion, dated the date the Exchange
Offer is Consummated or the date of effectiveness of the
Shelf Registration Statement, as the case may be, of
counsel for the Company and the Guarantors covering such
matters as are customarily given to underwriters in
primary underwritten offerings and such other matters as
such parties may reasonably request, and in any event
including a statement to the effect that such counsel has
participated in conferences with officers and other
representatives of the Company and the Guarantors, and
representatives of the independent public accountants for
the Company and the Guarantors, and in connection with
the preparation of such Registration Statement and the
related Prospectus and have considered the matters
required to be stated therein and the statements
contained therein, although such counsel has not
independently verified the accuracy, completeness or
fairness of such statements; and that such counsel
advises
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that, on the basis of the foregoing (relying as to
materiality to a large extent upon facts provided to such
counsel by officers and other representatives of the
Company and the Guarantors and without independent check
or verification), no facts came to such counsel's
attention that caused such counsel to believe that the
applicable Registration Statement (except as to (a)
financial statements, including the notes thereto, (b)
statistical data and (c) other financial and accounting
data (including, without limitation, the pro forma
financial information), in each case, included or omitted
therefrom, as to which no belief need be expressed), at
the time such Registration Statement or any
post-effective amendment thereto became effective, and,
in the case of the Exchange Offer Registration Statement,
as of the date the Exchange Offer is Consummated,
contained an untrue statement of a material fact or
omitted to state a material fact required to be stated
therein or necessary to make the statements therein not
misleading, or that the Prospectus (except as to (a)
financial statements, including the notes thereto, (b)
statistical data and (c) other financial and accounting
data (including, without limitation, the pro forma
financial information), in each case, included or omitted
therefrom, as to which no belief need be expressed)
contained in such Registration Statement as of its date
and, in the case of the opinion dated the date the
Exchange Offer is Consummated, as of the date the
Exchange Offer is Consummated, contained an untrue
statement of a material fact or omitted to state a
material fact necessary in order to make the statements
therein, in light of the circumstances under which they
were made, not misleading. Without limiting the
foregoing, such counsel may state further that such
counsel assumes no responsibility for, and has not
undertaken to investigate or verify independently the
accuracy, completeness or fairness of the statements
included in any Registration Statement contemplated by
this Agreement or the related Prospectus; and
(3) customary comfort letters, dated as of the
date the Exchange Offer is Consummated or the date of
effectiveness of the Shelf Registration Statement, as the
case may be, from the Company's independent accountants,
in the customary form and covering matters of the type
customarily covered in comfort letters by underwriters in
connection with primary underwritten offerings;
(B) set forth in full or incorporate by reference in
the underwriting agreement, if any, the indemnification
provisions and procedures of Section 8 hereof with respect to
all parties to be indemnified pursuant to said Section; and
(C) deliver such other documents and certificates as
may be reasonably requested by such parties to evidence
compliance with clause (A) above and with any customary
conditions contained in the underwriting agreement or other
agreement entered into by the Company and the Guarantors
pursuant to this clause (xi), if any.
(xii) prior to any public offering of Transfer Restricted
Securities, cooperate with, and cause the Guarantors to cooperate
with, the selling Holders, the
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<PAGE>
underwriter(s), if any, and their respective counsel in connection
with the registration and qualification of the Transfer Restricted
Securities under the securities or Blue Sky laws of such
jurisdictions as the selling Holders or underwriter(s) may
reasonably request and do any and all other acts or things
necessary or advisable to enable the disposition in such
jurisdictions of the Transfer Restricted Securities covered by the
Shelf Registration Statement; provided, however, that neither the
Company nor any of the Guarantors shall be required to register or
qualify as a foreign corporation where they are not now so
qualified or to take any action that would subject them to the
service of process in suits or to taxation, other than as to
matters and transactions relating to the Registration Statement, in
any jurisdiction where they are not now so subject;
(xiii) shall issue, upon the request of any Holder of
Senior Notes covered by the Shelf Registration Statement, New
Senior Notes, having an aggregate principal amount equal to the
aggregate principal amount of Senior Notes surrendered to the
Company by such Holder in exchange therefor or being sold by such
Holder (such New Senior Notes shall bear the same CUSIP number as
the New Senior Notes issued in the Exchange Offer); such New Senior
Notes to be registered in the name of such Holder or in the name of
the purchaser(s) of such Notes, as the case may be; in return for
the Senior Notes held by such Holder shall be surrendered to the
Company for cancellation;
(xiv) cooperate with, and cause the Guarantors to
cooperate with, the selling Holders and the underwriter(s), if any,
to facilitate the timely preparation and delivery of certificates
representing Transfer Restricted Securities to be sold and not
bearing any restrictive legends; and enable such Transfer
Restricted Securities to be in such denominations and registered in
such names as the Holders or the underwriter(s), if any, may
request at least two Business Days prior to any sale of Transfer
Restricted Securities made by such underwriter(s);
(xv) use its reasonable best efforts to cause the
Transfer Restricted Securities covered by the Registration
Statement to be registered with or approved by such other U.S.
governmental agencies or authorities as may be necessary to enable
the seller or sellers thereof or the underwriter(s), if any, to
consummate the disposition of such Transfer Restricted Securities,
subject to the proviso contained in clause (xii) above;
(xvi) subject to Section 6(c)(i), if any fact or event
contemplated by clause (c)(iii)(D) above shall exist or have
occurred, 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
Transfer Restricted Securities, the 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;
(xvii) provide a CUSIP number for all Transfer Restricted
Securities not later than the effective date of the Registration
Statement and provide the Trustee under the Indenture with printed
certificates for the Transfer Restricted Securities which are in a
form eligible for deposit with The Depository Trust Company;
(xviii) cooperate and assist in any filings required to
be made with the NASD and in the performance of any due diligence
investigation by any underwriter (including any "qualified
independent underwriter") that is required to be retained in
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<PAGE>
accordance with the rules and regulations of the NASD, and use its
reasonable best efforts to cause such Registration Statement to
become effective and approved by such U.S. governmental agencies or
authorities as may be necessary to enable the Holders selling
Transfer Restricted Securities to consummate the disposition of
such Transfer Restricted Securities;
(xix) otherwise use its reasonable best efforts to comply
with all applicable rules and regulations of the Commission, and
make generally available to its security holders, as soon as
practicable, a consolidated earnings statement meeting the
requirements of Rule 158 (which need not be audited) for the
twelve-month period (A) commencing at the end of any fiscal quarter
in which Transfer Restricted Securities are sold to underwriters in
a firm or best efforts Underwritten Offering or (B) if not sold to
underwriters in such an offering, beginning with the first month of
the Company's first fiscal quarter commencing after the effective
date of the Registration Statement;
(xx) cause the Indenture to be qualified under the TIA
not later than the effective date of the first Registration
Statement required by this Agreement, and, in connection therewith,
cooperate, and cause the Guarantors to cooperate, with the Trustee
and the Holders of Notes to effect such changes to the Indenture as
may be required for such Indenture to be so qualified in accordance
with the terms of the TIA; and execute, and cause the Guarantors to
execute, and use its reasonable best efforts to cause the Trustee
to execute, all documents that may be required to effect such
changes and all other forms and documents required to be filed with
the Commission to enable such Indenture to be so qualified in a
timely manner;
(xxi) cause all Transfer Restricted Securities covered by
the Registration Statement to be listed on each securities exchange
on which similar securities issued by the Company are then listed
if requested by the Holders of a majority in aggregate principal
amount of Senior Notes or the managing underwriter(s), if any; and
(xxii) provide promptly to each Holder upon written
request each document filed with the Commission pursuant to the
requirements of Section 13 and Section 15 of the Exchange Act.
Each Holder agrees by acquisition of a Transfer Restricted
Security that, upon receipt of any notice from the Company of the
existence of any fact of the kind described in Section 6(c)(iii)(D)
hereof, such Holder will forthwith discontinue disposition of Transfer
Restricted Securities pursuant to the applicable Registration Statement
until such Holder's receipt of the copies of the supplemented or amended
Prospectus contemplated by Section 6(c)(xvi) hereof, or until it is
advised in writing (the "Advice") by the Company that the use of the
Prospectus may be resumed, and has received copies of any additional or
supplemental filings that are incorporated by reference in the
Prospectus. If so directed by the Company, each Holder will 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 Transfer Restricted Securities that was current at the time of
receipt of such notice.
7. Registration Expenses.
(a) All expenses incident to the Company's or the Guarantors'
performance of or compliance with this Agreement will be borne by the
Company and the Guarantors regardless
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<PAGE>
of whether a Registration Statement becomes effective, including without
limitation: (i) all registration and filing fees and expenses (including
filings made by any Purchaser or Holder with the NASD (and, if
applicable, the fees and expenses of any "qualified independent
underwriter" and its counsel that may be required by the rules and
regulations of the NASD)); (ii) all fees and expenses of compliance with
federal securities and state Blue Sky or securities laws; (iii) all
expenses of printing (including printing certificates for the New Senior
Notes to be issued in the Exchange Offer and printing of Prospectuses),
messenger and delivery services and telephone; (iv) all fees and
disbursements of counsel for the Company and the Guarantors and, subject
to Section 7(b) below, the Holders of Transfer Restricted Securities;
(v) all application and filing fees in connection with listing Notes on
a national securities exchange or automated quotation system pursuant to
the requirements hereof; and (vi) all fees and disbursements of
independent certified public accountants of the Company and the
Guarantors (including the expenses of any special audit and comfort
letters required by or incident to such performance), but specifically
excluding (a) fees and expenses of counsel to the underwriter(s), if any
(other than fees and expenses set forth in clauses (i) and (ii) above),
(b) underwriting discounts and commissions and (c) transfer fees and
taxes if any, relating to the sale and disposition of Transfer
Restricted Securities by a selling Holder.
The Company and the Guarantors will, in any event, bear their
internal expenses (including, without limitation, all salaries and
expenses of their officers and employees performing legal or accounting
duties), the expenses of any annual audit and the fees and expenses of
any Person, including special experts, retained by the Company and the
Guarantors.
(b) In connection with any Registration Statement required by
this Agreement (including, without limitation, the Exchange Offer
Registration Statement and the Shelf Registration Statement), the
Company and the Guarantors will reimburse the Initial Purchasers and the
Holders of Transfer Restricted Securities being tendered in the Exchange
Offer and/or resold pursuant to the "Plan of Distribution" contained in
the Exchange Offer Registration Statement or registered pursuant to the
Shelf Registration Statement, as applicable, for the reasonable fees and
disbursements of not more than one counsel, who shall be Latham &
Watkins or such other counsel as may be chosen by the Holders of a
majority in principal amount of the Transfer Restricted Securities for
whose benefit such Registration Statement is being prepared provided
that such fees and disbursements shall not exceed $25,000.
8. Indemnification and Contribution.
(a) The Company and the Guarantors, jointly and severally,
agree to indemnify and hold harmless (i) each Holder and (ii) each
person, if any, who controls (within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act) any Holder (any of the
persons referred to in this clause (ii) being referred to as a
"controlling person") and (iii) the respective officers, directors,
partners, employees, representatives and agents of any Holder or any
controlling person (any person referred to in clause (i), (ii), or (iii)
may hereinafter be referred to as an "Indemnified Holders"), against any
losses, claims, damages or liabilities, joint or several, to which such
Indemnified Holder may become subject under the Securities Act, the
Exchange Act or otherwise, insofar as any such losses, claims, damages
or liabilities (or actions in respect thereof) arise out of or are based
upon:
(i) any untrue statement or alleged untrue statement of any
material fact contained in (A) in any Registration Statement
or Prospectus or in any amendment or supplement thereto or (B)
any application or other document, or any
15
<PAGE>
amendment or supplement thereto, executed by the Company or
any Guarantor or based upon written information furnished by
or on behalf of the Company or any Guarantor filed in any
jurisdiction in order to qualify the Notes under the
securities or "Blue Sky" laws thereof or filed with the
Commission or any securities association or securities
exchange (each an "Application"); or
(ii) the omission or alleged omission to state, in such
Registration Statement or Prospectus or any amendment or
supplement thereto or in any Application a material fact
required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under
which they were made, not misleading,
and will reimburse, as incurred, each Indemnified Holder for any legal
or other expenses reasonably incurred by such Indemnified Holder or
controlling person in connection with investigating, defending against
or appearing as a third-party witness in connection with any such loss,
claim, damage, liability or action; provided, however, neither the
Company nor any of the Guarantors will be liable in any such case to the
extent that any such loss, claim, damage, or liability is finally
judicially determined to arise out of or be based upon any untrue
statement or alleged untrue statement or omission or alleged omission
made in such Registration Statement or Prospectus or amendment or
supplement thereto or Application in reliance upon and in conformity
with written information furnished to the Company through the Holders by
or on behalf of any Holder (or its related Indemnified Holder)
specifically for use therein. This indemnity agreement will be in
addition to any liability that the Company and the Guarantors may
otherwise have to the Indemnified Holders. The Company and the
Guarantors shall not be liable under this Section 8 for any settlement
of any claim or action effected without their consent, which shall not
be unreasonably withheld.
(b) Each Holder, severally and not jointly, will indemnify and
hold harmless each of the Company, the Guarantors and each person, if
any, who controls the Company or the Guarantors within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act
against any losses, claims, damages or liabilities to which the Company
or any such controlling person may become subject under the Securities
Act, the Exchange Act, or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or
are based upon (i) any untrue statement or alleged untrue statement of
any material fact contained in the Registration Statement or the
Prospectus or any amendment or supplement thereto or any Application or
(ii) the omission or the alleged omission to state therein a material
fact required to be stated therein, or necessary to make the statements
therein not misleading, in each case to the extent, but only to the
extent, that such untrue statement or alleged untrue statement or
omission or alleged omission was made in reliance upon and in conformity
with written information furnished to the Company through the Holders by
or on behalf of any Holder or its related Indemnified Holder
specifically for use therein; and, subject to the limitation set forth
immediately preceding this clause, will reimburse, as incurred, any
legal or other expenses incurred by the Company, the Guarantors or any
controlling person in connection with investigating or defending against
or appearing as a third party witness in connection with any such loss,
claim, damage, liability or action in respect thereof. This indemnity
agreement will be in addition to any liability that any Holder may
otherwise have to the indemnified parties. No Holder shall be liable
under this Section 8 for any settlement of any claim or action effected
without its consent, which shall not be unreasonably withheld. In no
event shall the liability of any selling Holder hereunder be greater in
amount than the dollar amount of the proceeds received by such Holder
upon the sale of Transfer Restricted Securities giving rise to such
indemnification obligation.
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<PAGE>
(c) Promptly after receipt by an indemnified party under this
Section 8 of notice of the commencement of any action for which such
indemnified party is entitled to indemnification under this Section 8,
such indemnified party will, if a claim in respect thereof is to be made
against the indemnifying party under this Section 8, notify the
indemnifying party of the commencement thereof; but the omission so to
notify the indemnifying party (i) will not relieve it from any liability
under paragraph (a) or (b) above unless and to the extent it did not
otherwise learn of such action and such failure results in the
forfeiture by the indemnifying party of substantial rights and defenses
and (ii) will not, in any event, relieve the indemnifying party from any
obligations to any indemnified party other than the indemnification
obligation provided in paragraphs (a) and (b) above. In case any such
action is brought against any indemnified party, and it notifies the
indemnifying party of the commencement thereof, the indemnifying party
will be entitled to participate therein and, to the extent that it may
wish, jointly with any other indemnifying party similarly notified, to
assume the defense thereof, with counsel reasonably satisfactory to such
indemnified party; provided, however, that if (i) the use of counsel
chosen by the indemnifying party to represent the indemnified party
would present such counsel with a conflict of interest, (ii) the
defendants in any such action include both the indemnified party and the
indemnifying party and the indemnified party shall have been advised by
counsel that there may be one or more legal defenses available to it
and/or other indemnified parties that are different from or additional
to those available to the indemnifying party or (iii) the indemnifying
party shall not have employed counsel reasonably satisfactory to the
indemnified party to represent the indemnified party within a reasonable
time after notice of the institution of such action, then, in each such
case, the indemnifying party shall not have the right to direct the
defense of such action on behalf of such indemnified party or parties
and such indemnified party or parties shall have the right to select
separate counsel to defend such action on behalf of such indemnified
party or parties. After notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof and
approval by such indemnified party of counsel appointed to defend such
action, the indemnifying party will not be liable to such indemnified
party under this Section 8 for any legal or other expenses, other than
reasonable costs of investigation, subsequently incurred by such
indemnified party in connection with the defense thereof, unless (i) the
indemnified party shall have employed separate counsel in accordance
with the proviso to the immediately preceding sentence (it being
understood, however, that in connection with such action the
indemnifying party shall not be liable for the expenses of more than one
separate counsel (in addition to local counsel) in any one action or
separate but substantially similar actions in the same jurisdiction
arising out of the same general allegations or circumstances, designated
by the Holders in the case of paragraph (a) of this Section 8 or the
Company in the case of paragraph (b) of this Section 8, representing the
indemnified parties under such paragraph (a) or paragraph (b), as the
case may be, who are parties to such action or actions) or (ii) the
indemnifying party has authorized in writing the employment of counsel
for the indemnified party at the expense of the indemnifying party.
After such notice from the indemnifying party to such indemnified party,
the indemnifying party will not be liable for the costs and expenses of
any settlement of such action effected by such indemnified party without
the consent of the indemnifying party, unless such indemnified party
waived in writing its rights under this Section 8, in which case the
indemnified party may effect such a settlement without such consent.
(d) In circumstances in which the indemnity agreement provided
for in the preceding paragraphs of this Section 8 is unavailable or
insufficient to hold harmless an indemnified party in respect of any
losses, claims, damages or liabilities (or actions in respect thereof),
each indemnifying party, in order to provide for just and equitable
contribution, shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or
liabilities (or actions in respect thereof) in such proportion as is
appropriate
17
<PAGE>
to reflect (i) the relative benefits received by the Company and the
Guarantors on the one hand and any Holder on the other from such
Holder's sale of Transfer Restricted Securities or (ii) if the
allocation provided by the foregoing clause (i) is not permitted by
applicable law, not only such relative benefits but also the relative
fault of the Company and the Guarantors on the one hand and such Holder
on the other in connection with the statements or omissions or alleged
statements or omissions that resulted in such losses, claims, damages or
liabilities (or actions in respect thereof). The relative fault of the
parties shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to
information supplied by the Company or the Guarantors on the one hand or
such Holder on the other, the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such
statement or omission, and any other equitable considerations
appropriate in the circumstances. The Company, the Guarantors and each
Holder of Transfer Restricted Securities agree that it would not be
equitable if the amount of such contribution were determined by pro rata
or per capita allocation or by any other method of allocation that does
not take into account the equitable considerations referred to in the
first sentence of this paragraph (d). Notwithstanding the provisions of
this Section 8(d), none of the Holders (or any of their related
Indemnified Holders) shall be required to contribute any amount in
excess of the amount by which the total discount received by such Holder
with respect to the Notes exceeds the amount of any damages which such
Holder has otherwise paid or become liable to pay by reason of any
untrue or alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) shall be entitled to contribution
from any person who was not guilty of such fraudulent misrepresentation.
For purposes of this paragraph (d), each person, if any, who controls
any Holder within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act shall have the same rights to
contribution as such Holder, and each person, if any, who controls the
Company or any Guarantor within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act, shall have the same
rights to contribution as the Company.
9. Rule 144A.
The Company hereby agrees with each Holder, for so long as any
Transfer Restricted Securities remain outstanding, to make available to any
Holder or beneficial owner of Transfer Restricted Securities in connection
with any sale thereof and any prospective purchaser of such Transfer
Restricted Securities from such Holder or beneficial owner, the information
required by Rule 144A(d)(4) under the Securities Act in order to permit
resales of such Transfer Restricted Securities pursuant to Rule 144A.
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<PAGE>
10. Participation in Underwritten Registrations.
No Holder may participate in any Underwritten Registration
hereunder unless such Holder (a) agrees to sell such Holder's Transfer
Restricted Securities on the basis provided in any underwriting arrangements
approved by the Persons entitled hereunder to approve such arrangements and
(b) completes and executes all reasonable questionnaires, powers of attorney,
indemnities, underwriting agreements, lockup letters and other documents
required under the terms of such underwriting arrangements.
11. Selection of Underwriters.
The Holders of Transfer Restricted Securities covered by the Shelf
Registration Statement who desire to do so may sell such Transfer Restricted
Securities in an Underwritten Offering. In any such Underwritten Offering, the
investment banker or investment bankers and manager or managers that will
administer the offering will be selected by the Holders of a majority in
aggregate principal amount of the Transfer Restricted Securities included in
such offering; provided, that such investment bankers and managers must be
reasonably satisfactory to the Company.
12. Miscellaneous.
(a) Remedies. The Company and the Guarantors agree that
monetary damages (including the Liquidated Damages contemplated hereby)
would not be adequate compensation for any loss incurred by reason of a
breach by it of the provisions of this Agreement other than with respect
to Registration Defaults and hereby agrees to waive the defense in any
action for specific performance that a remedy at law would be adequate.
(b) No Inconsistent Agreements. The Company will not, and will
cause the Guarantors not to, on or after the date of this Agreement
enter into any agreement with respect to its securities that is
inconsistent with the rights granted to the Holders in this Agreement or
otherwise conflicts with the provisions hereof. Neither the Company nor
the Guarantors have previously entered into any agreement granting any
registration rights with respect to their securities to any Person which
rights conflict with the provisions hereof. The rights granted to the
Holders hereunder do not in any way conflict with and are not
inconsistent with the rights granted to the holders of the Company's or
any of the Guarantors' securities under any agreement in effect on the
date hereof.
(c) Adjustments Affecting the Notes. The Company and the
Guarantors will not take any action, or permit any change to occur, with
respect to the Notes that would materially and adversely affect the
ability of the Holders to Consummate any Exchange Offer.
(d) Amendments and Waivers. The provisions of this Agreement
may not be amended, modified or supplemented, and waivers or consents to
or departures from the provisions hereof may not be given unless the
Company has obtained the written consent of Holders of a majority of the
outstanding principal amount of Transfer Restricted Securities.
Notwithstanding the foregoing, a waiver or consent to departure from the
provisions hereof that relates exclusively to the rights of Holders
whose securities are being tendered pursuant to the Exchange Offer and
that does not affect directly or indirectly the rights of other Holders
whose securities are not being tendered pursuant to such Exchange Offer
may be given by the Holders of a majority of the outstanding principal
amount of Transfer Restricted Securities being tendered or registered.
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<PAGE>
(e) Notices. All notices and other communications provided for
or permitted hereunder shall be made in writing by hand-delivery,
first-class mail (registered or certified, return receipt requested),
telex, telecopier, or air courier guaranteeing overnight delivery:
(i) if to a Holder, at the address set forth on the
records of the Registrar under the Indenture, with a copy to the
Registrar under the Indenture; and
(ii) if to the Company and the Guarantors:
SFX Broadcasting, Inc.
150 East 58th Street
New York, New York 10155
Telecopier No.: (212) 753-3188
Attention: Howard J. Tytel, Esq.
With a copy to:
Baker & McKenzie
805 Third Avenue
New York, New York 10022
Telecopier No.: (212) 759-9133
Attention: Howard Berkower, Esq.
All such notices and communications shall be deemed to have
been duly given: at the time delivered by hand, if personally delivered;
five Business Days after being deposited in the mail, postage prepaid,
if mailed; when answered back, if telexed; when receipt acknowledged, if
telecopied; and on the next Business Day, if timely delivered to an air
courier guaranteeing overnight delivery.
Copies of all such notices, demands or other communications
shall be concurrently delivered by the Person giving the same to the
Trustee at the address specified in the Indenture.
(f) Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the successors and assigns of each of the
parties, including without limitation and without the need for an
express assignment, subsequent Holders of Transfer Restricted
Securities; provided, however, that this Agreement shall not inure to
the benefit of or be binding upon a successor or assign of a Holder
unless and to the extent such successor or assign acquired Transfer
Restricted Securities from such Holder.
(g) Counterparts. This Agreement may be executed in any number
of 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 agreement.
(h) Headings. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect
the meaning hereof.
(i) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT
REGARD TO THE CONFLICT OF LAW RULES THEREOF.
20
<PAGE>
(j) Severability. In the event that any one or more of the
provisions contained herein, or the application thereof in any
circumstance, is held invalid, illegal or unenforceable, the validity,
legality and enforceability of any such provision in every other respect
and of the remaining provisions contained herein shall not be affected
or impaired thereby.
(k) 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.
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 and the Guarantors with
respect to the Transfer Restricted Securities. This Agreement supersedes
all prior agreements and understandings between the parties with respect
to such subject matter.
[signature page follows]
21
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement as of
the date first written above.
Very truly yours,
SFX BROADCASTING, INC.
By:/s/ Robert F.X. Sillerman
-------------------------
Name: Robert F.X. Sillerman
Title: Executive Chairman
SFX BROADCASTING OF THE SOUTHWEST, INC.
By:/s/ Robert F.X. Sillerman
-------------------------
Name: Robert F.X. Sillerman
Title: President
SFX BROADCASTING OF TEXAS, INC.
By:/s/ Robert F.X. Sillerman
-------------------------
Name: Robert F.X. Sillerman
Title: President
SFX BROADCASTING OF TEXAS (KRLD) INC.
By:/s/ Robert F.X. Sillerman
-------------------------
Name: Robert F.X. Sillerman
Title: President
SFX BROADCASTING OF TEXAS (KRLD) LICENSEE, INC.
By:/s/ Robert F.X. Sillerman
-------------------------
Name: Robert F.X. Sillerman
Title: President
SFX BROADCASTING OF TEXAS (TSN), INC.
By:/s/ Robert F.X. Sillerman
-------------------------
Name: Robert F.X. Sillerman
Title: President
SFX BROADCASTING OF TEXAS (TSN) LICENSEE, INC.
By:/s/ Robert F.X. Sillerman
-------------------------
Name: Robert F.X. Sillerman
Title: President
22
<PAGE>
KODA-FM LICENSEE, INC.
By:/s/ Robert F.X. Sillerman
-------------------------
Name: Robert F.X. Sillerman
Title: President
KJQY-FM LICENSEE, INC.
By:/s/ Robert F.X. Sillerman
-------------------------
Name: Robert F.X. Sillerman
Title: President
SFX BROADCASTING OF TEXAS (KTCK), INC.
By:/s/ Robert F.X. Sillerman
-------------------------
Name: Robert F.X. Sillerman
Title: President
SFX BROADCASTING OF TEXAS (KTCK) LICENSEE, INC.
By:/s/ Robert F.X. Sillerman
-------------------------
Name: Robert F.X. Sillerman
Title: President
SFX BROADCASTING OF THE SOUTHEAST, INC.
By:/s/ Robert F.X. Sillerman
-------------------------
Name: Robert F.X. Sillerman
Title: President
SFX BROADCASTING OF SOUTH CAROLINA (WMYI), INC.
By:/s/ Robert F.X. Sillerman
-------------------------
Name: Robert F.X. Sillerman
Title: President
SFX BROADCASTING OF SOUTH CAROLINA (WMYI)
LICENSEE, INC.
By:/s/ Robert F.X. Sillerman
-------------------------
Name: Robert F.X. Sillerman
Title: President
SFX BROADCASTING OF MISSISSIPPI, INC.
By:/s/ Robert F.X. Sillerman
-------------------------
Name: Robert F.X. Sillerman
Title: President
23
<PAGE>
SFX BROADCASTING OF MISSISSIPPI LICENSEE, INC.
By:/s/ Robert F.X. Sillerman
-------------------------
Name: Robert F.X. Sillerman
Title: President
SFX BROADCASTING OF SOUTH CAROLINA (WSSL), INC.
By:/s/ Robert F.X. Sillerman
-------------------------
Name: Robert F.X. Sillerman
Title: President
SFX BROADCASTING OF SOUTH CAROLINA (WSSL) LICENSEE,
INC.
By:/s/ Robert F.X. Sillerman
-------------------------
Name: Robert F.X. Silllerman
Title: President
SFX BROADCASTING OF TENNESSEE, INC.
By:/s/ Robert F.X. Sillerman
-------------------------
Name: Robert F.X. Sillerman
Title: President
SFX BROADCASTING OF TENNESSEE LICENSEE, INC.
By:/s/ Robert F.X. Sillerman
-------------------------
Name: Robert F.X. Sillerman
Title: President
SFX BROADCASTING OF JACKSON, INC.
By:/s/ Robert F.X. Sillerman
-------------------------
Name: Robert F.X. Sillerman
Title: President
SFX BROADCASTING OF JACKSON LICENSEE, INC.
By:/s/ Robert F.X. Sillerman
-------------------------
Name: Robert F.X. Sillerman
Title: President
SFX BROADCASTING OF NORTH CAROLINA, INC.
By:/s/ Robert F.X. Sillerman
-------------------------
Name: Robert F.X. Sillerman
Title: President
24
<PAGE>
SFX BROADCASTING OF NORTH CAROLINA LICENSEE, INC.
By:/s/ Robert F.X. Sillerman
-------------------------
Name: Robert F.X. Sillerman
Title: President
SFX BROADCASTING OF SAN DIEGO, INC.
By:/s/ Robert F.X. Sillerman
-------------------------
Name: Robert F.X. Sillerman
Title: President
PARKER BROADCASTING COMPANY
By:/s/ Robert F.X. Sillerman
-------------------------
Name: Robert F.X. Sillerman
Title: President
SFX BROADCASTING OF SAN DIEGO LICENSEE, INC.
By:/s/ Robert F.X. Sillerman
-------------------------
Name: Robert F.X. Sillerman
Title: President
SFX ACQUISITION CORPORATION
By:/s/ Robert F.X. Sillerman
-------------------------
Name: Robert F.X. Sillerman
Title: President
SFX MERGER COMPANY
By:/s/ Robert F.X. Sillerman
-------------------------
Name: Robert F.X. Sillerman
Title: President
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
BT SECURITIES CORPORATION
By:/s/ Jack Langer
-----------------
Name: Jack Langer
Title:
25
<PAGE>
GOLDMAN, SACHS & CO.
By:/s/ Goldman, Sachs & Co.
------------------------
Name:
Title:
LEHMAN BROTHERS INC.
By:/s/ Robert D. Redmond
------------------------
Name: Robert D. Redmond
Title: Managing Director
26
<PAGE>
SCHEDULE I
1. SFX Broadcasting of the Southwest, Inc., a Delaware corporation
2. SFX Broadcasting of Texas, Inc., a Delaware corporation
3. SFX Broadcasting of Texas (KRLD) Inc., a Delaware corporation
4. SFX Broadcasting of Texas (KRLD) Licensee, Inc., a Delaware corporation
5. SFX Broadcasting of Texas (TSN), Inc., a Delaware corporation
6. SFX Broadcasting of Texas (TSN) Licensee, Inc., a Delaware corporation
7. KODA-FM Licensee, Inc., a Delaware corporation
8. KJQY-FM Licensee, Inc., a Delaware corporation
9. SFX Broadcasting of Texas (KTCK), Inc., a Delaware corporation
10. SFX Broadcasting of Texas (KTCK) Licensee, Inc., a Delaware corporation
11. SFX Broadcasting of the Southeast, Inc., a Delaware corporation
12. SFX Broadcasting of South Carolina (WMYI), Inc., a Delaware corporation
13. SFX Broadcasting of South Carolina (WMYI) Licensee, Inc., a Delaware
corporation
14. SFX Broadcasting of Mississippi, Inc., a Delaware corporation
15. SFX Broadcasting of Mississippi Licensee, Inc., a Delaware corporation
16. SFX Broadcasting of South Carolina (WSSL), Inc., a Delaware corporation
17. SFX Broadcasting of South Carolina (WSSL) Licensee, Inc., a Delaware
corporation
18. SFX Broadcasting of Tennessee, Inc., a Delaware corporation
19. SFX Broadcasting of Tennessee Licensee, Inc., a Delaware corporation
20. SFX Broadcasting of Jackson, Inc., a Delaware corporation
21. SFX Broadcasting of Jackson Licensee, Inc., a Delaware corporation
22. SFX Broadcasting of North Carolina, Inc., a Delaware corporation
23. SFX Broadcasting of North Carolina Licensee, Inc., a Delaware corporation
24. SFX Broadcasting of San Diego, Inc., a Delaware corporation
25. Parker Broadcasting Company, a California corporation
26. SFX Broadcasting of San Diego Licensee, Inc., a Delaware corporation
27. SFX Acquisition Corporation, a Delaware corporation
28. SFX Merger Company, a Delaware corporation
EXECUTION COPY
REGISTRATION RIGHTS AGREEMENT
Dated as of May 31, 1996
by and among
SFX BROADCASTING, INC.,
SFX BROADCASTING OF THE SOUTHWEST, INC., SFX BROADCASTING OF TEXAS, INC., SFX
BROADCASTING OF TEXAS (KRLD) INC., SFX BROADCASTING OF TEXAS (KRLD) LICENSEE,
INC., SFX BROADCASTING OF TEXAS (TSN), INC., SFX BROADCASTING OF TEXAS (TSN)
LICENSEE, INC., KODA-FM LICENSEE, INC., KJQY-FM LICENSEE, INC., SFX
BROADCASTING OF TEXAS (KTCK), INC., SFX BROADCASTING OF TEXAS (KTCK) LICENSEE,
INC., SFX BROADCASTING OF THE SOUTHEAST, INC., SFX BROADCASTING OF SOUTH
CAROLINA (WMYI), INC., SFX BROADCASTING OF SOUTH CAROLINA (WMYI) LICENSEE,
INC., SFX BROADCASTING OF MISSISSIPPI, INC., SFX BROADCASTING OF MISSISSIPPI
LICENSEE, INC., SFX BROADCASTING OF SOUTH CAROLINA (WSSL), INC., SFX
BROADCASTING OF SOUTH CAROLINA (WSSL) LICENSEE, INC., SFX BROADCASTING OF
TENNESSEE, INC., SFX BROADCASTING OF TENNESSEE LICENSEE, INC., SFX
BROADCASTING OF JACKSON, INC., SFX BROADCASTING OF JACKSON LICENSEE, INC., SFX
BROADCASTING OF NORTH CAROLINA, INC., SFX BROADCASTING OF NORTH CAROLINA
LICENSEE, INC., SFX BROADCASTING OF SAN DIEGO, INC., PARKER BROADCASTING
COMPANY, SFX BROADCASTING OF SAN DIEGO LICENSEE, INC., SFX ACQUISITION
CORPORATION, SFX MERGER COMPANY
AND
GOLDMAN, SACHS & CO.
LEHMAN BROTHERS INC.
BT SECURITIES CORPORATION
<PAGE>
This Registration Rights Agreement (this "Agreement") is made and
entered into as of May 31, 1996 by and among SFX Broadcasting, Inc., a
Delaware corporation (the "Company"), each of the entities listed in Schedule
I hereto (each a "Subsidiary" and collectively, the "Subsidiaries") and
Goldman, Sachs & Co., Lehman Brothers Inc. and BT Securities Corporation (each
an "Initial Purchaser" and collectively, the "Initial Purchasers"), who have
agreed to purchase the Company's 6 1/2% Series D Cumulative Convertible
Exchangeable Preferred Stock due May 31, 2007 (the "Preferred Stock") pursuant
to the Purchase Agreement (as defined below). Pursuant to terms of the
Company's Certificate of Designations for the Preferred Stock (the
"Certificate of Designations"), the Preferred Stock shall be convertible into
shares of the Company's Class A Common Stock, par value $.01 per share (the
"Class A Common Stock"), and exchangeable, in full but not in part, for the
Company's 6 1/2% Convertible Subordinated Exchange Notes due 2007 (the
"Exchange Notes").
This Agreement is made pursuant to the Purchase Agreement, dated
May 22, 1996 (the "Purchase Agreement"), by and among the Company, the
Subsidiaries and the Initial Purchasers. In order to induce the Initial
Purchasers to purchase the Preferred Stock, the Company has agreed to provide
the registration rights set forth in this Agreement. The execution and
delivery of this Agreement is a condition to the obligations of the Initial
Purchasers set forth in Section 2 of the Purchase Agreement.
The parties hereby agree as follows:
1. Definitions. As used in this Agreement, the following
capitalized terms shall have the following meanings:
Broker-Dealer: Any broker or dealer registered under the
Exchange Act.
Business Day: A day other than a Saturday or Sunday or any
federal holiday.
Certificate of Designations: The Certificate of Designations,
Preferences and Relative, Optional and Other Special Rights of Preferred
Stock and Qualifications, Limitations and Restrictions Thereof of 6 1/2%
Series D Cumulative Convertible Exchangeable Preferred Stock due May 31,
2007, pursuant to which the shares of Preferred Stock are to be issued,
as such Certificate of Designations is amended or supplemented from time
to time in accordance with the terms thereof.
Closing Date: The date of this Agreement.
Commission: The Securities and Exchange Commission.
Damages Payment Date: Each Dividend Payment Date or Interest
Payment Date, as the case may be. For purposes of this Agreement, in the
event that no shares of Preferred Stock or Exchange Notes are
outstanding, "Damages Payment Date" shall mean each February 28, May 31,
August 31 and November 30.
Dividend Payment Date: As defined in Certificate of
Designations.
Effectiveness Target Date: As defined in Section 4 hereof.
Exchange Act: The Securities Exchange Act of 1934, as amended.
Exchange Notes: As defined in the preamble hereto.
1
<PAGE>
Exchange Note Indenture: The Exchange Note Indenture to be
entered into upon exchange of the Preferred Stock for Exchange Notes
between the Company and a trustee, pursuant to which the Exchange Notes
are to be issued, as such Exchange Note Indenture is amended or
supplemented from time to time in accordance with the terms thereof.
Holders: As defined in Section 2(b) hereof.
Indemnified Holder: As defined in Section 7(a) hereof.
Initial Purchasers: As defined in the preamble hereto.
Interest Payment Date: As defined in the Exchange Note
Indenture.
Liquidated Damages: As defined in Section 4 hereof.
Liquidation Preference: As defined in the Certificate of
Designations.
NASD: National Association of Securities Dealers, Inc.
Person: An individual, partnership, corporation,
unincorporated organization, trust, joint venture or a government or
agency or political subdivision thereof.
Prospectus: The prospectus included in a Registration
Statement, as amended or supplemented by any prospectus supplement and
by all other amendments thereto, including post-effective amendments,
and all material incorporated by reference into such Prospectus.
Record Holder: With respect to any Damages Payment Date, each
Person who is a Holder of Transfer Restricted Securities on the record
date with respect to the Dividend Payment Date or Interest Payment Date,
as the case may be, on which such Damages Payment Date shall occur. In
the case of a Holder of shares of Class A Common Stock issued upon
conversion of shares of Preferred Stock or Exchange Notes, as the case
may be, "Record Holder" shall mean each Person who is a Holder of shares
of Class A Common Stock which constitute Transfer Restricted Securities
on the February 15, May 15, August 15 or November 15 immediately
preceding the respective Damages Payment Date.
Registration Default: As defined in Section 4(a) hereof.
Registration Statement: The registration for resale of
Transfer Restricted Securities pursuant to the Shelf Registration
Statement, which is filed pursuant to the provisions of this Agreement,
in each case, including the Prospectus included therein, all amendments
and supplements thereto (including post-effective amendments) and all
exhibits and material incorporated by reference therein.
Securities Act: The Securities Act of 1933, as amended.
Shelf Filing Deadline: As defined in Section 3 hereof.
Shelf Registration Statement: As defined in Section 3 hereof.
2
<PAGE>
TIA: The Trust Indenture Act of 1939 (15 U.S.C. Section
77aaa-77bbbb) as in effect on the date of the Exchange Note Indenture.
Transfer Restricted Securities: Each Share of Preferred Stock,
Exchange Note and share of Class A Common Stock issued upon conversion
thereof until the earlier of (i) the date on which such share of
Preferred Stock, Exchange Note or share of Class A Common Stock issued
upon conversion thereof has been effectively registered under the
Securities Act and disposed of in accordance with the Shelf Registration
Statement or (ii) the date on which such share of Preferred Stock,
Exchange Note or share of Class A Common Stock issued upon conversion
thereof is distributed to the public pursuant to Rule 144(k) under the
Securities Act.
Underwritten Registration or Underwritten Offering: A
registration in which securities of the Company are sold to an
underwriter for reoffering to the public.
Other capitalized terms used but not defined herein shall have the
meanings assigned to them in the Certificate of Designations.
2. Securities Subject to This Agreement.
(a) Transfer Restricted Securities. The securities entitled to
the benefits of this Agreement are the Transfer Restricted Securities.
(b) Holders of Transfer Restricted Securities. A Person is
deemed to be a holder of Transfer Restricted Securities (each, a
"Holder") whenever such Person owns, beneficially or otherwise, Transfer
Restricted Securities.
3. Shelf Registration.
(a) Shelf Registration. The Company shall:
(x) cause to be filed a shelf registration statement
pursuant to Rule 415 under the Securities Act (the "Shelf
Registration Statement"), on or prior to the 45th day after the
Closing Date (the "Shelf Filing Deadline"), which Shelf
Registration Statement shall provide for resales of all Transfer
Restricted Securities the Holders of which shall have provided the
information required pursuant to Section 3(b) hereof; and
(y) use its reasonable best efforts to cause such Shelf
Registration Statement to be declared effective by the Commission
on or before 120 days after the Closing Date.
The Company shall use its best efforts to keep such Shelf Registration
Statement continuously effective, supplemented and amended as required
by the provisions of Section 5(b) hereof to the extent necessary to
ensure that it is available for resales of securities by the Holders of
Transfer Restricted Securities entitled to the benefit of this
Agreement, and to ensure that it conforms with the requirements of this
Agreement, the Securities Act and the policies, rules and regulations of
the Commission as announced from time to time, for a period of at least
three years following the Closing Date or such shorter period that will
terminate when all Transfer Restricted Securities covered by the Shelf
Registration Statement have been sold pursuant to the Shelf Registration
Statement.
3
<PAGE>
(b) Provision by Holders of Certain Information in Connection
with the Shelf Registration Statement. No Holder of Transfer Restricted
Securities may include any of its Transfer Restricted Securities in any
Shelf Registration Statement pursuant to this Agreement unless and until
such Holder furnishes to the Company in writing, within 10 Business Days
after receipt of a request therefor, such information as the Company may
reasonably request for use in connection with any Shelf Registration
Statement or Prospectus or preliminary Prospectus included therein and
in any application to be filed with the NASD. No Holder of Transfer
Restricted Securities shall be entitled to Liquidated Damages pursuant
to Section 4 hereof unless and until such Holder shall have used its
best efforts to provide all such reasonably requested information. Each
Holder as to which any Shelf Registration Statement is being effected
agrees to furnish promptly to the Company all information required to be
disclosed in order to make the information previously furnished to the
Company by such Holder not materially misleading.
4. Liquidated Damages.
If (i) the Shelf Registration Statement required by this Agreement
is not filed with the Commission on or prior to the date specified for such
filing in Section 3(a)(x) hereof, (ii) such Shelf Registration Statement has
not been declared effective by the Commission on or prior to the date
specified for such effectiveness in Section 3(a)(y) hereof (the "Effectiveness
Target Date"), (iii) subject to the provisions of Section 5(b)(i) below, the
Shelf Registration Statement required by this Agreement is filed and declared
effective but, during the period specified in Section 3(a) hereof, shall
thereafter cease to be effective or fail to be usable for its intended purpose
without being succeeded within two Business Days by a post-effective amendment
to such Registration Statement that cures such failure and that is itself
immediately declared effective (each such event referred to in clauses (i)
through (iii), a "Registration Default"), the Company hereby agrees to pay
liquidated damages ("Liquidated Damages") to each
(A) (i) Holder of Preferred Stock with respect to the first
90-day period immediately following the occurrence of such Registration
Default, in an amount equal to $.05 per week per $1,000 in Liquidation
Preference of Preferred Stock held by such Holder for each week or
portion thereof that the Registration Default continues. The amount of
the Liquidated Damages payable to any Holder of Preferred Stock shall
increase by an additional $.05 per week per $1,000 in Liquidation
Preference of Preferred Stock held by such Holder with respect to each
subsequent 90-day period until all Registration Defaults have been
cured, up to a maximum amount of Liquidated Damages of $.50 per week per
$1,000 in Liquidation Preference of Preferred Stock. All accrued
Liquidated Damages shall be paid on each Damages Payment Date in cash.
Such payment shall be made to Holders of Preferred Stock in global form
by wire transfer of immediately available funds or by federal funds
check and to Holders of Preferred Stock in certificated form by wire
transfer to the accounts specified by them or by mailing checks to their
registered addresses if no such accounts have been specified. Following
the cure of all Registration Defaults relating to any particular share
of Preferred Stock, the accrual of Liquidated Damages with respect to
such Preferred Stock will cease; or
(ii) Holder of Exchange Notes with respect to the first
90-day period immediately following the occurrence of such Registration
Default, in an amount equal to $.05 per week per $1,000 in principal
amount of Exchange Notes held by such Holder for each week or portion
thereof that the Registration Default continues. The amount of the
Liquidated Damages payable to any Holder of Exchange Notes shall
increase by an additional $.05 per week per $1,000 in principal amount
of Exchange Notes held by such Holder with respect to each subsequent
90-day period until all Registration Defaults have been cured, up to a
maximum amount of Liquidated Damages of $.50 per week per $1,000 in
principal amount of Exchange Notes. All accrued
4
<PAGE>
Liquidated Damages shall be paid on each Damages Payment Date in cash.
Such payment shall be made to Holders of Exchange Notes in global form
by wire transfer of immediately available funds or by federal funds
check and to Holders of Exchange Notes in certificated form by wire
transfer to the accounts specified by them or by mailing checks to their
registered addresses if no such accounts have been specified. Following
the cure of all Registration Defaults relating to any particular
Exchange Notes, the accrual of Liquidated Damages with respect to such
Exchange Notes will cease; and
(B) Holder of shares of Class A Common Stock issued upon
conversion of shares of Preferred Stock or Exchange Notes, as the case
may be, with respect to the first 90-day period immediately following
the occurrence of such Registration Default, in an amount equal to $.05
per week per $1,000 in Liquidation Preference of Preferred Stock or
principal amount of Exchange Notes which were converted into such shares
of Class A Common Stock held by such Holder for each week or portion
thereof that the Registration Default continues. The amount of the
Liquidated Damages payable to any Holder of shares of Class A Common
Stock issued upon conversion of shares of Preferred Stock or Exchange
Notes, as the case may be, shall increase by an additional $.05 per week
per $1,000 in Liquidation Preference of Preferred Stock or principal
amount of Exchange Notes which were converted into such shares of Class
A Common Stock held by such Holder with respect to each subsequent
90-day period until all Registration Defaults have been cured, up to a
maximum amount of Liquidated Damages of $.50 per week per $1,000 in
Liquidation Preference of Preferred Stock or principal amount of
Exchange Notes which were converted into such shares of Class A Common
Stock held by such Holder. All accrued Liquidated Damages shall be paid
to Record Holders by the Company in the same manner as provided for the
Holders of Preferred Shares in Section 4(A)(i) above. Following the cure
of all Registration Defaults relating to any particular share of Class A
Common Stock issued upon conversion of shares of Preferred Stock or
Exchange Notes, as the case may be, the accrual of Liquidated Damages
with respect to such shares of Class A Common Stock will cease.
All obligations of the Company set forth in the preceding
paragraphs that are outstanding with respect to any Transfer Restricted
Security at the time such security ceases to be a Transfer Restricted Security
shall survive until such time as all such obligations with respect to such
Transfer Restricted Security shall have been satisfied in full.
5. Registration Procedures.
(a) In connection with the Shelf Registration Statement, the
Company shall comply with all the provisions of Section 5(b) below and shall
use its best efforts to effect such registration to permit the sale of the
Transfer Restricted Securities being sold in accordance with the intended
method or methods of distribution thereof, and pursuant thereto the Company
will as expeditiously as possible prepare and file with the Commission a
Registration Statement relating to the registration on any appropriate form
under the Securities Act, which form shall be available for the sale of the
Transfer Restricted Securities in accordance with the intended method or
methods of distribution thereof.
(b) In connection with the Shelf Registration Statement and any
Prospectus required by this Agreement to permit the sale or resale of Transfer
Restricted Securities (including, without limitation, any Registration
Statement and the related Prospectus required to permit resales of shares of
Preferred Stock, Exchange Notes and shares of Class A Common Stock issued upon
conversion thereof by Broker-Dealers), the Company shall:
5
<PAGE>
(i) use its best efforts to keep such Registration
Statement continuously effective and provide all requisite financial
statements for the period specified in Section 3(a) of this
Agreement; upon the occurrence of any event that would cause any
such Registration Statement or the Prospectus contained therein (A)
to contain a material misstatement or omission or (B) not to be
effective and usable for resale of Transfer Restricted Securities
during the period required by this Agreement, the Company shall
file promptly an appropriate amendment to such Registration
Statement, in the case of clause (A), correcting any such
misstatement or omission, and, in the case of either clause (A) or
(B), use its reasonable best efforts to cause such amendment to be
declared effective and such Registration Statement and the related
Prospectus to become usable for their intended purpose(s) as soon
as practicable thereafter. Notwithstanding the foregoing, if the
Board of Directors of the Company determines in good faith that it
is in the best interests of the Company not to disclose the
existence of or facts surrounding any proposed or pending material
corporate transaction involving the Company, the Company may allow
the Shelf Registration Statement to fail to be effective and usable
as a result of such nondisclosure for up to 120 days during the
three year period of effectiveness required by Section 3 hereof,
but in no event (x) for any period in excess of 45 consecutive days
or (y) for more than 60 days in any calendar year;
(ii) prepare and file with the Commission such amendments
and post-effective amendments to the Registration Statement as may
be necessary to keep the Registration Statement effective for the
period set forth in Section 3 hereof or such shorter period as will
terminate when all Transfer Restricted Securities covered by such
Registration Statement have been sold; cause the 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 to comply fully with the applicable provisions of Rules
424 and 430A under the Securities Act in a timely manner; and
comply with the provisions of the Securities Act with respect to
the disposition of all securities covered by such Registration
Statement during the applicable period in accordance with the
intended method or methods of distribution by the sellers thereof
set forth in such Registration Statement or supplement to the
Prospectus;
(iii) advise the underwriter(s), if any, and selling
Holders promptly (but in any event within two Business Days) and,
if requested by such Persons, to confirm such advice in writing,
(A) when the Prospectus or any Prospectus supplement or
post-effective amendment has been filed, and, with respect to any
Registration Statement or any post-effective amendment thereto,
when the same has become effective, (B) of any request by the
Commission for amendments to the Registration Statement or
amendments or supplements to the Prospectus or for additional
information relating thereto, (C) of the issuance by the Commission
of any stop order suspending the effectiveness of the Registration
Statement under the Securities Act or of the suspension by any
state securities commission of the qualification of the Transfer
Restricted Securities for offering or sale in any jurisdiction, or
the initiation of any proceeding for any of the preceding purposes,
(D) of the existence of any fact or the happening of any event that
makes any statement of a material fact made in the Registration
Statement, the Prospectus, any amendment or supplement thereto, or
any document incorporated by reference therein untrue, or that
requires the making of any additions to or changes in the
Registration Statement or the Prospectus in order to make the
statements therein not misleading, including, without limitation,
under circumstances described in Section 5(b)(i) above. If at any
time the Commission shall issue any stop order suspending the
effectiveness of the Registration
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Statement, or any state securities commission or other regulatory
authority shall issue an order suspending the qualification or
exemption from qualification of the Transfer Restricted Securities
under state securities or Blue Sky laws, the Company shall use its
reasonable best efforts to obtain the withdrawal or lifting of such
order at the earliest possible time;
(iv) furnish to each of the selling Holders and each of
the underwriter(s), if any, before filing with the Commission,
copies of any Registration Statement or any Prospectus included
therein or any amendments or supplements to any such Registration
Statement or Prospectus (including, upon request in writing, all
documents incorporated by reference after the initial filing of
such Registration Statement), which documents will be subject to
the review of such Holders and underwriter(s), if any, for a period
of at least three Business Days, and the Company will not file any
such Registration Statement or Prospectus or any amendment or
supplement to any such Registration Statement or Prospectus
(including all such documents incorporated by reference) to which a
selling Holder of Transfer Restricted Securities covered by such
Registration Statement or the underwriter(s), if any, shall
reasonably object within three Business Days after the receipt
thereof. A selling Holder or underwriter, if any, shall be deemed
to have reasonably objected to such filing if such Registration
Statement, amendment, Prospectus or supplement, as applicable, as
proposed to be filed, contains a material misstatement or omission;
(v) promptly prior to the filing of any document that is
to be incorporated by reference into a Registration Statement or
Prospectus, provide copies of such document to the selling Holders
and to the underwriter(s), if any, make the Company's
representatives available for discussion of such document and other
customary due diligence matters, and include such information in
such document prior to the filing thereof as such selling Holders
or underwriter(s), if any, reasonably may request;
(vi) make available at reasonable times for inspection by
the selling Holders, any underwriter participating in any
disposition pursuant to such Registration Statement, and any
attorney or accountant retained by such selling Holders or any of
the underwriter(s), all financial and other records, pertinent
corporate documents and properties of the Company and cause the
Company's officers, directors, managers and employees to supply all
information reasonably requested by any such Holder, underwriter,
attorney or accountant in connection with such Registration
Statement subsequent to the filing thereof and prior to its
effectiveness;
(vii) if requested by any selling Holders or the
underwriter(s), if any, promptly incorporate in any Registration
Statement or Prospectus, pursuant to a supplement or post-effective
amendment if necessary, such information as such selling Holders
and underwriter(s), if any, may reasonably request to have included
therein, including, without limitation, information relating to the
"Plan of Distribution" of the Transfer Restricted Securities,
information with respect to the principal amount of Transfer
Restricted Securities being sold to such underwriter(s), the
purchase price being paid therefor and any other terms of the
offering of the Transfer Restricted Securities to be sold in such
offering; and make all required filings of such Prospectus
supplement or post-effective amendment as soon as practicable after
the Company is notified of the matters to be incorporated in such
Prospectus supplement or post-effective amendment;
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<PAGE>
(viii) cause the Transfer Restricted Securities covered
by the Registration Statement to be rated with the appropriate
rating agencies, if so requested by the Holders of a majority in
liquidation preference of Preferred Stock or principal amount of
Exchange Notes, as the case may be, and in number of shares of
Class A Common Stock issued upon conversion thereof or the
underwriter(s), if any;
(ix) furnish to each selling Holder and each of the
underwriter(s), if any, without charge, at least one copy of the
Registration Statement, as first filed with the Commission, and of
each amendment thereto, including all documents incorporated by
reference therein and all exhibits (including exhibits incorporated
therein by reference);
(x) deliver to each selling Holder and each of the
underwriter(s), if any, without charge, as many copies of the
Prospectus (including each preliminary prospectus) and any
amendment or supplement thereto as such Persons reasonably may
request; the Company hereby consents to the use of the Prospectus
and any amendment or supplement thereto by each of the selling
Holders and each of the underwriter(s), if any, in connection with
the offering and the sale of the Transfer Restricted Securities
covered by the Prospectus or any amendment or supplement thereto;
(xi) whether or not an underwriting agreement is entered
into and whether or not the registration is an Underwritten
Registration, the Company shall:
(A) upon request, furnish to each selling Holder and
each underwriter, if any, in such substance and scope as they
may reasonably request and as are customarily made by issuers
to underwriters in primary underwritten offerings, upon the
date of effectiveness of the Shelf Registration Statement:
(1) a certificate, dated the date of
effectiveness of the Shelf Registration Statement, signed
by (y) the Executive Chairman or the President and (z)
the Chief Financial Officer of the Company confirming, as
of the date thereof, the matters set forth in paragraph
(f) of Section 7 of the Purchase Agreement and such other
matters as such parties may reasonably request;
(2) an opinion, dated the date of effectiveness
of the Shelf Registration Statement of counsel for the
Company covering such matters as are customarily given to
underwriters in primary underwritten offerings and such
other matters as such parties may reasonably request, and
in any event including a statement to the effect that
such counsel has participated in conferences with
officers and other representatives of the Company and
representatives of the independent public accountants for
the Company, and in connection with the preparation of
such Registration Statement and the related Prospectus
and have considered the matters required to be stated
therein and the statements contained therein, although
such counsel has not independently verified the accuracy,
completeness or fairness of such statements; and that
such counsel advises that, on the basis of the foregoing,
no facts came to such counsel's attention that caused
such counsel to believe that the applicable Registration
Statement (except as to (a) financial statements,
including the notes thereto, (b) statistical data and (c)
other financial and accounting
8
<PAGE>
data (including, without limitation, the pro forma
financial information), in each case, included or omitted
therefrom, as to which no belief need be expressed), at
the time such Registration Statement or any
post-effective amendment thereto became effective,
contained an untrue statement of a material fact or
omitted to state a material fact required to be stated
therein or necessary to make the statements therein not
misleading, or that the Prospectus (except as to (a)
financial statements, including the notes thereto, (b)
statistical data and (c) other financial and accounting
data (including, without limitation, the pro forma
financial information), in each case, included or omitted
therefrom, as to which no belief need be expressed)
contained in such Registration Statement as of its date
contained an untrue statement of a material fact or
omitted to state a material fact necessary in order to
make the statements therein, in light of the
circumstances under which they were made, not misleading.
Without limiting the foregoing, such counsel may state
further that such counsel assumes no responsibility for,
and has not undertaken to investigate or verify
independently the accuracy, completeness or fairness of
the statements contained in any Registration Statement
contemplated by this Agreement or the related Prospectus;
and
(3) customary comfort letters, dated as of the
date of effectiveness of the Shelf Registration Statement
from the Company's independent accountants, in the
customary form and covering matters of the type
customarily covered in comfort letters by underwriters in
connection with primary underwritten offerings;
(B) set forth in full or incorporate by reference in
the underwriting agreement, if any, the indemnification
provisions and procedures of Section 7 hereof with respect to
all parties to be indemnified pursuant to said Section; and
(C) deliver such other documents and certificates as
may be reasonably requested by such parties to evidence
compliance with clause (A) above and with any customary
conditions contained in the underwriting agreement or other
agreement entered into by the pursuant to this clause (xi), if
any.
(xii) prior to any public offering of Transfer Restricted
Securities, cooperate with: the selling Holders, the
underwriter(s), if any, and their respective counsel in connection
with the registration and qualification of the Transfer Restricted
Securities under the securities or Blue Sky laws of such
jurisdictions as the selling Holders or underwriter(s) may
reasonably request and do any and all other acts or things
necessary or advisable to enable the disposition in such
jurisdictions of the Transfer Restricted Securities covered by the
Shelf Registration Statement; provided, however, that the Company
shall not be required to register or qualify as a foreign
corporation where they are not now so qualified or to take any
action that would subject them to the service of process in suits
or to taxation, other than as to matters and transactions relating
to the Registration Statement, in any jurisdiction where they are
not now so subject;
(xiii) cooperate with the selling Holders and the
underwriter(s), if any, to facilitate the timely preparation and
delivery of certificates representing Transfer
9
<PAGE>
Restricted Securities to be sold and not bearing any restrictive
legends; and enable such Transfer Restricted Securities to be in
such denominations and registered in such names as the Holders or
the underwriter(s), if any, may request at least two Business Days
prior to any sale of Transfer Restricted Securities made by such
underwriter(s);
(xiv) use its reasonable best efforts to cause the
Transfer Restricted Securities covered by the Registration
Statement to be registered with or approved by such other U.S.
governmental agencies or authorities as may be necessary to enable
the seller or sellers thereof or the underwriter(s), if any, to
consummate the disposition of such Transfer Restricted Securities,
subject to the proviso contained in clause (xii) above;
(xv) subject to Section 5(b)(i), if any fact or event
contemplated by clause (b)(iii)(D) above shall exist or have
occurred, 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
Transfer Restricted Securities, the 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;
(xvi) provide a CUSIP number for all Transfer Restricted
Securities not later than the effective date of the Registration
Statement and provide the transfer agent for the Preferred Stock or
the trustee under the Exchange Indenture and the transfer agent for
the Company's Class A Common Stock, as applicable, with printed
certificates for the Transfer Restricted Securities which are in a
form eligible for deposit with The Depository Trust Company;
(xvii) cooperate and assist in any filings required to be
made with the NASD and in the performance of any due diligence
investigation by any underwriter (including any "qualified
independent underwriter") that is required to be retained in
accordance with the rules and regulations of the NASD, and use its
reasonable best efforts to cause such Registration Statement to
become effective and approved by such U.S. governmental agencies or
authorities as may be necessary to enable the Holders selling
Transfer Restricted Securities to consummate the disposition of
such Transfer Restricted Securities;
(xiii) otherwise use its reasonable best efforts to
comply with all applicable rules and regulations of the Commission,
and make generally available to its security holders, as soon as
practicable, a consolidated earnings statement meeting the
requirements of Rule 158 (which need not be audited) for the
twelve-month period (A) commencing at the end of any fiscal quarter
in which Transfer Restricted Securities are sold to underwriters in
a firm or best efforts Underwritten Offering or (B) if not sold to
underwriters in such an offering, beginning with the first month of
the Company's first fiscal quarter commencing after the effective
date of the Registration Statement;
(xix) in the event that such Transfer Restricted
Securities are Exchange Notes, cause the Exchange Note Indenture to
be qualified under the TIA not later than the later of (a) the date
on which the Preferred Stock is exchanged for the Exchange Notes
and (b) the effective date of the first Registration Statement
required by this Agreement, and, in connection therewith,
cooperate, with the trustee and the Holders of Exchange Notes to
effect such changes to the Indenture as may be required for such
Exchange Indenture
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<PAGE>
to be so qualified in accordance with the terms of the TIA; and
execute and use its reasonable best efforts to cause the trustee
thereunder to execute, all documents that may be required to effect
such changes and all other forms and documents required to be filed
with the Commission to enable such Exchange Indenture to be so
qualified in a timely manner;
(xx) cause all Transfer Restricted Securities covered by
the Registration Statement to be listed on each securities exchange
on which similar securities issued by the Company are then listed
if requested by the Holders of a majority in liquidation preference
of Preferred Stock or principal amount of Exchange Notes, as the
case may be, and in number of shares of Class A Common Stock issued
upon conversion thereof or the managing underwriter(s), if any; and
(xxi) provide promptly to each Holder upon written
request each document filed with the Commission pursuant to the
requirements of Section 13 and Section 15 of the Exchange Act.
Each Holder agrees by acquisition of a Transfer Restricted
Security that, upon receipt of any notice from the Company of the
existence of any fact of the kind described in Section 5(b)(iii)(D)
hereof, such Holder will forthwith discontinue disposition of Transfer
Restricted Securities pursuant to the applicable Registration Statement
until such Holder's receipt of the copies of the supplemented or amended
Prospectus contemplated by Section 5(b)(xv) hereof, or until it is
advised in writing (the "Advice") by the Company that the use of the
Prospectus may be resumed, and has received copies of any additional or
supplemental filings that are incorporated by reference in the
Prospectus. If so directed by the Company, each Holder will 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 Transfer Restricted Securities that was current at the time of
receipt of such notice.
6. Registration Expenses.
(a) All expenses incident to the Company's performance of or
compliance with this Agreement will be borne by the Company regardless
of whether a Registration Statement becomes effective, including without
limitation: (i) all registration and filing fees and expenses (including
filings made by any Initial Purchaser or Holder with the NASD (and, if
applicable, the fees and expenses of any "qualified independent
underwriter" and its counsel that may be required by the rules and
regulations of the NASD)); (ii) all fees and expenses of compliance with
federal securities and state Blue Sky or securities laws; (iii) all
expenses of printing (including printing of Prospectuses), messenger and
delivery services and telephone; (iv) all fees and disbursements of
counsel for the Company and, subject to Section 6(b) below, the Holders
of Transfer Restricted Securities; (v) all application and filing fees
in connection with listing of the Preferred Stock, Exchange Notes or
shares of Class A Common Stock issued upon conversion thereof on a
national securities exchange or automated quotation system pursuant to
the requirements hereof; and (vi) all fees and disbursements of
independent certified public accountants of the Company (including the
expenses of any special audit and comfort letters required by or
incident to such performance), but specifically excluding (a) fees and
expenses of counsel to the underwriter(s), if any (other than fees and
expenses set forth in clauses (i) and (ii) above), (b) underwriting
discounts and commissions and (c) transfer fees and taxes if any,
relating to the sale and disposition of Transfer Restricted Securities
by a selling Holder.
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<PAGE>
The Company will, in any event, bear their internal expenses
(including, without limitation, all salaries and expenses of their
officers and employees performing legal or accounting duties), the
expenses of any annual audit and the fees and expenses of any Person,
including special experts, retained by the Company.
(b) In connection with any Registration Statement required by
this Agreement, the Company will reimburse the Initial Purchasers and
the Holders of Transfer Restricted Securities being registered pursuant
to the Shelf Registration Statement, as applicable, for the reasonable
fees and disbursements of not more than one counsel, who shall be Latham
& Watkins or such other counsel as may be chosen by the Holders of a
majority in liquidation preference of Preferred Stock or principal
amount of Exchange Notes, as the case may be, and in number of shares of
Class A Common Stock issued upon conversion thereof for whose benefit
such Registration Statement is being prepared; provided that such fees
and disbursements shall not exceed $30,000.
7. Indemnification and Contribution.
(a) The Company and the Subsidiaries, jointly and severally,
agree to indemnify and hold harmless (i) each Holder and (ii) each
person, if any, who controls (within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act) any Holder (any of the
persons referred to in this clause (ii) being referred to as a
"controlling person") and (iii) the respective officers, directors,
partners, employees, representatives and agents of any Holder or any
controlling person (any person referred to in clause (i), (ii), or (iii)
may hereinafter be referred to as an "Indemnified Holders"), against any
losses, claims, damages or liabilities, joint or several, to which such
Indemnified Holder may become subject under the Securities Act, the
Exchange Act or otherwise, insofar as any such losses, claims, damages
or liabilities (or actions in respect thereof) arise out of or are based
upon:
(i) any untrue statement or alleged untrue statement of any
material fact contained in (A) in any Registration Statement
or Prospectus or in any amendment or supplement thereto or (B)
any application or other document, or any amendment or
supplement thereto, executed by the Company or any Subsidiary
or based upon written information furnished by or on behalf of
the Company or any Subsidiary filed in any jurisdiction in
order to qualify the Preferred Stock, Exchange Notes or shares
of Class A Common Stock issued upon conversion thereof under
the securities or "Blue Sky" laws thereof or filed with the
Commission or any securities association or securities
exchange (each an "Application"); or
(ii) the omission or alleged omission to state, in such
Registration Statement or Prospectus or any amendment or
supplement thereto or in any Application a material fact
required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under
which they were made, not misleading,
and will reimburse, as incurred, each Indemnified Holder for any legal
or other expenses reasonably incurred by such Indemnified Holder or
controlling person in connection with investigating, defending against
or appearing as a third-party witness in connection with any such loss,
claim, damage, liability or action; provided, however, neither the
Company nor any of the Guarantors will be liable in any such case to the
extent that any such loss, claim, damage, or liability is finally
judicially determined to arise out of or be based upon any untrue
statement or
12
<PAGE>
alleged untrue statement or omission or alleged omission made in such
Registration Statement or Prospectus or amendment or supplement thereto
or Application in reliance upon and in conformity with written
information furnished to the Company through the Holders by or on behalf
of any Holder (or its related Indemnified Holder) specifically for use
therein. This indemnity agreement will be in addition to any liability
that the Company and the Guarantors may otherwise have to the
Indemnified Holders. The Company and the Guarantors shall not be liable
under this Section 7 for any settlement of any claim or action effected
without their consent, which shall not be unreasonably withheld.
(b) Each Holder, severally and not jointly, will indemnify and
hold harmless each of the Company and each person, if any, who controls
the Company within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act against any losses, claims, damages or
liabilities to which the Company or any such controlling person may
become subject under the Securities Act, the Exchange Act, or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon (i) any untrue statement
or alleged untrue statement of any material fact contained in the
Registration Statement or the Prospectus or any amendment or supplement
thereto or any Application or (ii) the omission or the alleged omission
to state therein a material fact required to be stated therein, or
necessary to make the statements therein not misleading, in each case to
the extent, but only to the extent, that such untrue statement or
alleged untrue statement or omission or alleged omission was made in
reliance upon and in conformity with written information furnished to
the Company through the Holders by or on behalf of any Holder or its
related Indemnified Holder specifically for use therein; and, subject to
the limitation set forth immediately preceding this clause, will
reimburse, as incurred, any legal or other expenses incurred by the
Company or any controlling person in connection with investigating or
defending against or appearing as a third party witness in connection
with any such loss, claim, damage, liability or action in respect
thereof. This indemnity agreement will be in addition to any liability
that any Holder may otherwise have to the indemnified parties. No Holder
shall be liable under this Section 7 for any settlement of any claim or
action effected without its consent, which shall not be unreasonably
withheld. In no event shall the liability of any selling Holder
hereunder be greater in amount than the dollar amount of the proceeds
received by such Holder upon the sale of Transfer Restricted Securities
giving rise to such indemnification obligation.
(c) Promptly after receipt by an indemnified party under this
Section 7 of notice of the commencement of any action for which such
indemnified party is entitled to indemnification under this Section 7,
such indemnified party will, if a claim in respect thereof is to be made
against the indemnifying party under this Section 7, notify the
indemnifying party of the commencement thereof; but the omission so to
notify the indemnifying party (i) will not relieve it from any liability
under paragraph (a) or (b) above unless and to the extent it did not
otherwise learn of such action and such failure results in the
forfeiture by the indemnifying party of substantial rights and defenses
and (ii) will not, in any event, relieve the indemnifying party from any
obligations to any indemnified party other than the indemnification
obligation provided in paragraphs (a) and (b) above. In case any such
action is brought against any indemnified party, and it notifies the
indemnifying party of the commencement thereof, the indemnifying party
will be entitled to participate therein and, to the extent that it may
wish, jointly with any other indemnifying party similarly notified, to
assume the defense thereof, with counsel reasonably satisfactory to such
indemnified party; provided, however, that if (i) the use of counsel
chosen by the indemnifying party to represent the indemnified party
would present such counsel with a conflict of interest, (ii) the
defendants in any such action include both the indemnified party and the
indemnifying party and the indemnified party shall have been advised by
counsel that there may
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<PAGE>
be one or more legal defenses available to it and/or other indemnified
parties that are different from or additional to those available to the
indemnifying party or (iii) the indemnifying party shall not have
employed counsel reasonably satisfactory to the indemnified party to
represent the indemnified party within a reasonable time after notice of
the institution of such action, then, in each such case, the
indemnifying party shall not have the right to direct the defense of
such action on behalf of such indemnified party or parties and such
indemnified party or parties shall have the right to select separate
counsel to defend such action on behalf of such indemnified party or
parties. After notice from the indemnifying party to such indemnified
party of its election so to assume the defense thereof and approval by
such indemnified party of counsel appointed to defend such action, the
indemnifying party will not be liable to such indemnified party under
this Section 7 for any legal or other expenses, other than reasonable
costs of investigation, subsequently incurred by such indemnified party
in connection with the defense thereof, unless (i) the indemnified party
shall have employed separate counsel in accordance with the proviso to
the immediately preceding sentence (it being understood, however, that
in connection with such action the indemnifying party shall not be
liable for the expenses of more than one separate counsel (in addition
to local counsel) in any one action or separate but substantially
similar actions in the same jurisdiction arising out of the same general
allegations or circumstances, designated by the Holders in the case of
paragraph (a) of this Section 7 or the Company in the case of paragraph
(b) of this Section 7, representing the indemnified parties under such
paragraph (a) or paragraph (b), as the case may be, who are parties to
such action or actions) or (ii) the indemnifying party has authorized in
writing the employment of counsel for the indemnified party at the
expense of the indemnifying party. After such notice from the
indemnifying party to such indemnified party, the indemnifying party
will not be liable for the costs and expenses of any settlement of such
action effected by such indemnified party without the consent of the
indemnifying party, unless such indemnified party waived in writing its
rights under this Section 7, in which case the indemnified party may
effect such a settlement without such consent.
(d) In circumstances in which the indemnity agreement provided
for in the preceding paragraphs of this Section 7 is unavailable or
insufficient to hold harmless an indemnified party in respect of any
losses, claims, damages or liabilities (or actions in respect thereof),
each indemnifying party, in order to provide for just and equitable
contribution, shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or
liabilities (or actions in respect thereof) in such proportion as is
appropriate to reflect (i) the relative benefits received by the Company
and the Subsidiaries on the one hand and any Holder on the other from
such Holder's sale of Transfer Restricted Securities or (ii) if the
allocation provided by the foregoing clause (i) is not permitted by
applicable law, not only such relative benefits but also the relative
fault of the Company and the Subsidiaries on the one hand and such
Holder on the other in connection with the statements or omissions or
alleged statements or omissions that resulted in such losses, claims,
damages or liabilities (or actions in respect thereof). The relative
fault of the parties shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material
fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company or the Subsidiaries on
the one hand or such Holder on the other, the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent
such statement or omission, and any other equitable considerations
appropriate in the circumstances. The Company, the Subsidiaries and each
Holder of Transfer Restricted Securities agree that it would not be
equitable if the amount of such contribution were determined by pro rata
or per capita allocation or by any other method of allocation that does
not take into account the equitable considerations referred to in the
first sentence of this paragraph (d). Notwithstanding the provisions of
this Section 7(d), none of the Holders (or any of their related
Indemnified Holders) shall be required to contribute any amount
14
<PAGE>
in excess of the amount by which the total discount received by such
Holder with respect to the Preferred Stock, Exchange Notes or shares of
Class A Common Stock issued upon conversion thereof exceeds the amount
of any damages which such Holder has otherwise paid or become liable to
pay by reason of any untrue or alleged untrue statement or omission or
alleged omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be
entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. For purposes of this paragraph (d), each
person, if any, who controls any Holder within the meaning of Section 15
of the Securities Act or Section 20 of the Exchange Act shall have the
same rights to contribution as such Holder, and each person, if any, who
controls the Company or any Guarantor within the meaning of Section 15
of the Securities Act or Section 20 of the Exchange Act, shall have the
same rights to contribution as the Company.
8. Rule 144A.
The Company hereby agrees with each Holder, for so long as any
Transfer Restricted Securities remain outstanding, to make available to any
Holder or beneficial owner of Transfer Restricted Securities in connection
with any sale thereof and any prospective purchaser of such Transfer
Restricted Securities from such Holder or beneficial owner, the information
required by Rule 144A(d)(4) under the Securities Act in order to permit
resales of such Transfer Restricted Securities pursuant to Rule 144A.
9. Participation in Underwritten Registrations.
No Holder may participate in any Underwritten Registration
hereunder unless such Holder (a) agrees to sell such Holder's Transfer
Restricted Securities on the basis provided in any underwriting arrangements
approved by the Persons entitled hereunder to approve such arrangements and
(b) completes and executes all reasonable questionnaires, powers of attorney,
indemnities, underwriting agreements, lockup letters and other documents
required under the terms of such underwriting arrangements.
10. Selection of Underwriters.
The Holders of Transfer Restricted Securities covered by the Shelf
Registration Statement who desire to do so may sell such Transfer Restricted
Securities in an Underwritten Offering. In any such Underwritten Offering, the
investment banker or investment bankers and manager or managers that will
administer the offering will be selected by the Holders of a majority in
liquidation preference of Preferred Stock or principal amount of Exchange
Notes, as the case may be, and in number of shares of Class A Common Stock
issued upon conversion thereof included in such offering; provided, that such
investment bankers and managers must be reasonably satisfactory to the
Company.
11. Miscellaneous.
(a) Remedies. The Company and the Subsidiaries agree that
monetary damages (including the Liquidated Damages contemplated hereby)
would not be adequate compensation for any loss incurred by reason of a
breach by it of the provisions of this Agreement other than with respect
to Registration Defaults and hereby agree to waive the defense in any
action for specific performance that a remedy at law would be adequate.
(b) No Inconsistent Agreements. The Company will not, on or
after the date of this Agreement, enter into any agreement with respect
to its securities that is inconsistent with the rights granted to the
Holders in this Agreement or otherwise conflicts with the provisions
hereof. The Company has not previously entered into any agreement
granting any registration
15
<PAGE>
rights with respect to their securities to any Person which rights
conflict with the provisions hereof. The rights granted to the Holders
hereunder do not in any way conflict with and are not inconsistent with
the rights granted to the holders of the Company's securities under any
agreement in effect on the date hereof..
(c) Amendments and Waivers. The provisions of this Agreement
may not be amended, modified or supplemented, and waivers or consents to
or departures from the provisions hereof may not be given unless the
Company has obtained the written consent of Holders of a majority in
liquidation preference of Preferred Stock or principal amount of
Exchange Notes, as the case may be, or in number of shares of Class A
Common Stock issued upon conversion thereof, as the case may be.
(d) Notices. All notices and other communications provided for
or permitted hereunder shall be made in writing by hand-delivery,
first-class mail (registered or certified, return receipt requested),
telex, telecopier, or air courier guaranteeing overnight delivery:
(i) if to a Holder, at the address set forth on the
records of the transfer agent under the Certificate of
Designations, the Registrar under the Exchange Indenture or the
transfer agent of the Class A Common Stock, as the case may be; and
(ii) if to the Company:
SFX Broadcasting, Inc.
150 East 58th Street
New York, New York 10155
Telecopier No.: (212) 753-3188
Attention: Howard J. Tytel, Esq.
With a copy to:
Baker & McKenzie
805 Third Avenue
New York, New York 10022
Telecopier No.: (212) 759-9133
Attention: Howard Berkower, Esq.
All such notices and communications shall be deemed to have
been duly given: at the time delivered by hand, if personally delivered;
five Business Days after being deposited in the mail, postage prepaid,
if mailed; when answered back, if telexed; when receipt acknowledged, if
telecopied; and on the next Business Day, if timely delivered to an air
courier guaranteeing overnight delivery.
(e) Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the successors and assigns of each of the
parties, including without limitation and without the need for an
express assignment, subsequent Holders of Transfer Restricted
Securities; provided, however, that this Agreement shall not inure to
the benefit of or be binding upon a successor or assign of a Holder
unless and to the extent such successor or assign acquired Transfer
Restricted Securities from such Holder.
16
<PAGE>
(f) Counterparts. This Agreement may be executed in any number
of 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 agreement.
(g) Headings. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect
the meaning hereof.
(h) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT
REGARD TO THE CONFLICT OF LAW RULES THEREOF.
(i) Severability. In the event that any one or more of the
provisions contained herein, or the application thereof in any
circumstance, is held invalid, illegal or unenforceable, the validity,
legality and enforceability of any such provision in every other respect
and of the remaining provisions contained herein shall not be affected
or impaired thereby.
(j) 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.
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 Transfer
Restricted Securities. This Agreement supersedes all prior agreements
and understandings between the parties with respect to such subject
matter.
[signature page follows]
17
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement as of
the date first written above.
Very truly yours,
SFX BROADCASTING, INC.
By:/s/ Robert F.X. Sillerman
-------------------------
Name: Robert F.X. Sillerman
Title: Executive Chairman
SFX BROADCASTING OF THE SOUTHWEST, INC.
By:/s/ Robert F.X. Sillerman
-------------------------
Name: Robert F.X. Sillerman
Title: President
SFX BROADCASTING OF TEXAS, INC.
By:/s/ Robert F.X. Sillerman
-------------------------
Name: Robert F.X. Sillerman
Title: President
SFX BROADCASTING OF TEXAS (KRLD), INC.
By:/s/ Robert F.X. Sillerman
-------------------------
Name: Robert F.X. Sillerman
Title: President
SFX BROADCASTING OF TEXAS (KRLD) LICENSEE, INC.
By:/s/ Robert F.X. Sillerman
-------------------------
Name: Robert F.X. Sillerman
Title: President
SFX BROADCASTING OF TEXAS (TSN), INC.
By:/s/ Robert F.X. Sillerman
-------------------------
Name: Robert F.X. Sillerman
Title: President
SFX BROADCASTING OF TEXAS (TSN) LICENSEE, INC.
By:/s/ Robert F.X. Sillerman
-------------------------
Name: Robert F.X. Sillerman
Title: President
18
<PAGE>
KODA-FM LICENSEE, INC.
By:/s/ Robert F.X. Sillerman
-------------------------
Name: Robert F.X. Sillerman
Title: President
KJQY-FM LICENSEE, INC.
By:/s/ Robert F.X. Sillerman
-------------------------
Name: Robert F.X. Sillerman
Title: President
SFX BROADCASTING OF TEXAS (KTCK), INC.
By:/s/ Robert F.X. Sillerman
-------------------------
Name: Robert F.X. Sillerman
Title: President
SFX BROADCASTING OF TEXAS (KTCK) LICENSEE, INC.
By:/s/ Robert F.X. Sillerman
-------------------------
Name: Robert F.X. Sillerman
Title: President
SFX BROADCASTING OF THE SOUTHEAST, INC.
By:/s/ Robert F.X. Sillerman
-------------------------
Name: Robert F.X. Sillerman
Title: President
SFX BROADCASTING OF SOUTH CAROLINA (WMYI), INC.
By:/s/ Robert F.X. Sillerman
-------------------------
Name: Robert F.X. Sillerman
Title: President
SFX BROADCASTING OF SOUTH CAROLINA (WMYI)
LICENSEE, INC.
By:/s/ Robert F.X. Sillerman
-------------------------
Name: Robert F.X. Sillerman
Title: President
SFX BROADCASTING OF MISSISSIPPI, INC.
By:/s/ Robert F.X. Sillerman
-------------------------
Name: Robert F.X. Sillerman
Title: President
19
<PAGE>
SFX BROADCASTING OF MISSISSIPPI LICENSEE, INC.
By:/s/ Robert F.X. Sillerman
-------------------------
Name: Robert F.X. Sillerman
Title: President
SFX BROADCASTING OF SOUTH CAROLINA (WSSL), INC.
By:/s/ Robert F.X. Sillerman
-------------------------
Name: Robert F.X. Sillerman
Title: President
SFX BROADCASTING OF SOUTH CAROLINA (WSSL) LICENSEE,
INC.
By:/s/ Robert F.X. Sillerman
-------------------------
Name: Robert F.X. Sillerman
Title: President
SFX BROADCASTING OF TENNESSEE, INC.
By:/s/ Robert F.X. Sillerman
-------------------------
Name: Robert F.X. Sillerman
Title: President
SFX BROADCASTING OF TENNESSEE LICENSEE, INC.
By:/s/ Robert F.X. Sillerman
-------------------------
Name: Robert F.X. Sillerman
Title: President
SFX BROADCASTING OF JACKSON, INC.
By:/s/ Robert F.X. Sillerman
-------------------------
Name: Robert F.X. Sillerman
Title: President
SFX BROADCASTING OF JACKSON LICENSEE, INC.
By:/s/ Robert F.X. Sillerman
-------------------------
Name: Robert F.X. Sillerman
Title: President
SFX BROADCASTING OF NORTH CAROLINA, INC.
By:/s/ Robert F.X. Sillerman
-------------------------
Name: Robert F.X. Sillerman
Title: President
20
<PAGE>
SFX BROADCASTING OF NORTH CAROLINA LICENSEE, INC.
By:/s/ Robert F.X. Sillerman
-------------------------
Name: Robert F.X. Sillerman
Title: President
SFX BROADCASTING OF SAN DIEGO, INC.
By:/s/ Robert F.X. Sillerman
-------------------------
Name: Robert F.X. Sillerman
Title: President
PARKER BROADCASTING COMPANY
By:/s/ Robert F.X. Sillerman
-------------------------
Name: Robert F.X. Sillerman
Title: President
SFX BROADCASTING OF SAN DIEGO LICENSEE, INC.
By:/s/ Robert F.X. Sillerman
-------------------------
Name: Robert F.X. Sillerman
Title: President
SFX ACQUISITION CORPORATION
By:/s/ Robert F.X. Sillerman
-------------------------
Name: Robert F.X. Sillerman
Title: President
SFX MERGER COMPANY
By:/s/ Robert F.X. Sillerman
-------------------------
Name: Robert F.X. Sillerman
Title: President
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
GOLDMAN, SACHS & CO.
/s/ Goldman, Sachs & Co.
- ----------------------------
(Goldman, Sachs & Co.)
21
<PAGE>
LEHMAN BROTHERS INC.
By:/s/ Robert D. Redmond
------------------------
Name: Robert D. Redmond
Title: Managing Director
BT SECURITIES CORPORATION
By:/s/ Jack Langer
------------------------
Name: Jack Langer
Title:
22
<PAGE>
SCHEDULE I
1. SFX Broadcasting of the Southwest, Inc., a Delaware corporation
2. SFX Broadcasting of Texas, Inc., a Delaware corporation
3. SFX Broadcasting of Texas (KRLD) Inc., a Delaware corporation
4. SFX Broadcasting of Texas (KRLD) Licensee, Inc., a Delaware corporation
5. SFX Broadcasting of Texas (TSN), Inc., a Delaware corporation
6. SFX Broadcasting of Texas (TSN) Licensee, Inc., a Delaware corporation
7. KODA-FM Licensee, Inc., a Delaware corporation
8. KJQY-FM Licensee, Inc., a Delaware corporation
9. SFX Broadcasting of Texas (KTCK), Inc., a Delaware corporation
10. SFX Broadcasting of Texas (KTCK) Licensee, Inc., a Delaware corporation
11. SFX Broadcasting of the Southeast, Inc., a Delaware corporation
12. SFX Broadcasting of South Carolina (WMYI), Inc., a Delaware corporation
13. SFX Broadcasting of South Carolina (WMYI) Licensee, Inc., a Delaware
corporation
14. SFX Broadcasting of Mississippi, Inc., a Delaware corporation
15. SFX Broadcasting of Mississippi Licensee, Inc., a Delaware corporation
16. SFX Broadcasting of South Carolina (WSSL), Inc., a Delaware corporation
17. SFX Broadcasting of South Carolina (WSSL) Licensee, Inc., a Delaware
corporation
18. SFX Broadcasting of Tennessee, Inc., a Delaware corporation
19. SFX Broadcasting of Tennessee Licensee, Inc., a Delaware corporation
20. SFX Broadcasting of Jackson, Inc., a Delaware corporation
21. SFX Broadcasting of Jackson Licensee, Inc., a Delaware corporation
22. SFX Broadcasting of North Carolina, Inc., a Delaware corporation
23. SFX Broadcasting of North Carolina Licensee, Inc., a Delaware corporation
24. SFX Broadcasting of San Diego, Inc., a Delaware corporation
25. Parker Broadcasting Company, a California corporation
26. SFX Broadcasting of San Diego Licensee, Inc., a Delaware corporation
27. SFX Acquisition Corporation, a Delaware corporation
28. SFX Merger Company, a Delaware corporation
May 21, 1996
SFX Broadcasting, Inc.
158 East 58th Street
New York, New York
Dear Sirs:
In connection with the sale of 2,400,000 shares of Series D Cumulative
Convertible Preferred Stock due May 31, 2007 (the "Series D Preferred Stock")
by SFX Broadcasting, Inc. (the "Company") pursuant to the Purchase Agreement
dated May 22, 1996 between the Company and Goldman, Sachs & Co., Lehman
Brothers Inc. and BT Securities Corporation (the "Offering"), the undersigned
hereby agrees that the undersigned will not transfer or convert into shares
of Class A Common Stock, par value $.01 per share, of the Company ("Class A
Common Stock") the securities of the Company listed on Exhibit A hereto which
are convertible into shares of Class A Common Stock or exercise any option or
warrant to purchase any shares of Class A Common Stock of the Company listed
on Exhibit A hereto, for the period starting on this date and ending on the
date on which the Company increases the number of shares of Class A Common
Stock which it shall have authority to issue to an amount sufficient to
provide for the conversion of all of the shares of Series D Preferred Stock
and the exercise, conversion or exchange of all other securities of the
Company which are exercisable, convertible or exchangeable for shares of
Class A Common Stock. Notwithstanding anything to the contrary in the
foregoing sentence, R. Steven Hicks is hereby authorized to convert 75,000
shares of Class B Common Stock into 75,000 shares of Class A Common Stock and
to sell all of the shares of Class A Common Stock held by him and all options to
purchase Class A Common Stock to the Company.
Each of the undersigned hereby acknowledges that the shareholders of the
Company are under no obligation to approve an increase in the number of
authorized shares of Class A Common Stock and, in such event, the undersigned
will be unable to convert, exchange or exercise their securities of the
Company into shares of Class A Common Stock.
This Agreement will terminate and no longer be in full force and effect
in the event that the closing of the Offering does not occur on or before
June 30, 1996.
Very truly yours,
-----------------------------------
Robert F.X. Sillerman
Sillerman Communications
Management Corporation
By: /s/ Robert F.X. Sillerman
------------------------------
Robert F.X. Sillerman
/s/ R. Steven Hicks
------------------------------
R. Steven Hicks
/s/ D. Geoffrey Armstrong
------------------------------
D. Geoffrey Armstrong
/s/ Howard J. Tytel
------------------------------
Howard J. Tytel
/s/ Richard A. Liese
------------------------------
Richard A. Liese
<PAGE>
EXHIBIT A
220,000 options to purchase Class A Common Stock held by Sillerman
135,000 options to purchase Class A Common Stock held by Armstrong
2,000 options to purchase Class A Common Stock held by Liese
5,000 options to purchase Class A Common Stock held by Tytel
210,000 Hicks options to purchase Class A Common Stock held by Hicks (to be
repurchased)
856,126 shares of Class B Common Stock held by Sillerman
75,000 shares of Class B Common Stock held by Hicks (to be converted into
Class A Common Stock and then repurchased)
68,874 shares of Class B Common Stock held by Hicks (to be repurchased)
150,000 shares of Class A Common Stock to be issued by WHSL
600,000 warrants to purchase Class A Common Stock held by SCMC
EXHIBIT 12
STATEMENT REGARDING RECOMPUTATION OF RATIOS
IN THOUSANDS EXCEPT RATIOS
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-----------------------------------------------------------------
PRO FORMA
FOR THE
RECENT
ACQUISITIONS PRO FORMA
AND THE FOR THE
TRANSACTIONS RECENT
OTHER ACQUISITIONS
THAN THE AND THE
MMR MERGER TRANSACTIONS
1991 1992 1993 1994 1995 1995 1995
----- ----- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
RATIO OF EARNINGS TO COMBINED
FIXED CHARGES AND PREFERRED STOCK
DIVIDENDS:
Income (loss) before income taxes
extraordinary item and cumulative
effect on a change in accounting
principle (4,232) (2,208) (14,919) 3,310 (4,396) (24,309) (19,017)
Fixed charges (interest expense,
including amortization of deferred
financing costs) 4,241 3,610 7,351 9,332 12,903 50,243 50,243
- ------------------------------------- ------- ------- -------- ------- ------- --------- ---------
Earnings 9 1,402 (7,568) 12,642 8,507 25,934 31,226
------- ------- -------- ------- ------- --------- ---------
Fixed charges (interest expense,
including amortization of deferred
financing costs) 4,241 3,610 7,351 9,332 12,903 50,243 50,243
Preferred stock dividends 302 385 557 348 291 10,009 10,009
- ------------------------------------- ------- ------- -------- ------- ------- --------- ---------
Combined fixed charges and preferred
stock dividends 4,543 3,995 7,908 9,680 13,194 60,252 60,252
------- ------- -------- ------- ------- --------- ---------
Ratio of earnings to combined fixed
charges and preferred stock
dividends -- -- -- 1.3 -- -- --
Deficiency of earnings to cover
combined fixed charges and preferred
stock dividends (4,534) (2,593) (15,476) -- (4,687) (34,318) (29,026)
RATIO OF EARNINGS TO FIXED CHARGES:
Income (loss) before income taxes
extraordinary item and cumulative
effect of a change in accounting
principle (4,232) (2,208) (14,919) 3,310 (4,396) (24,309) (19,017)
Fixed charges (interest expense,
including amortization of deferred
financing costs) 4,241 3,610 7,351 9,332 12,903 50,243 50,243
- ------------------------------------- ------- ------- -------- ------- ------- --------- ---------
Earnings 9 1,402 (7,568) 12,642 8,507 25,934 31,226
------- ------- -------- ------- ------- --------- ---------
Fixed charges (interest expense,
including amortization of deferred
financing costs) 4,241 3,610 7,351 9,332 12,903 50,243 50,243
- ------------------------------------- ------- ------- -------- ------- ------- --------- ---------
Ratio of earnings to fixed charges -- -- -- 1.4 -- -- --
Deficiency of earnings to cover fixed
charges (4,232) (2,208) (14,919) -- (4,396) (24,309) (19,017)
</TABLE>
(RESTUBBED TABLE CONTINUED FROM ABOVE)
<TABLE>
<CAPTION>
MARCH 31,
-----------------------------------------------------------
PRO FORMA
FOR THE
RECENT
ACQUISITIONS PRO FORMA
AND THE FOR THE
TRANSACTIONS RECENT
OTHER ACQUISITIONS
THAN THE AND THE
UNAUDITED UNAUDITED MMR MERGER TRANSACTIONS
1995 1996 1995 1996 1995 1996
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
RATIO OF EARNINGS TO COMBINED
FIXED CHARGES AND PREFERRED STOCK
DIVIDENDS:
Income (loss) before income taxes
extraordinary item and cumulative
effect on a change in accounting
principle (898) (985) (12,964) (7,695) (12,348) (6,602)
Fixed charges (interest expense,
including amortization of deferred
financing costs) 2,432 3,384 12,561 12,561 12,561 12,561
- ------------------------------------- --------- --------- -------- -------- -------- -------
Earnings 1,534 2,399 (403) 4,866 213 5,959
--------- --------- -------- -------- -------- -------
Fixed charges (interest expense,
including amortization of deferred
financing costs) 2,432 3,384 12,561 12,561 12,561 12,561
Preferred stock dividends 71 136 2,500 2,565 2,500 2,565
- ------------------------------------- --------- --------- -------- -------- -------- -------
Combined fixed charges and preferred
stock dividends 2,503 3,520 15,061 15,126 15,061 15,126
--------- --------- -------- -------- -------- -------
Ratio of earnings to fixed
charges and preferred stock
dividends -- -- -- -- -- --
Deficiency of earnings to cover
combined fixed charges and preferred
stock dividends (969) (1,121) (15,464) (10,260) (14,848) (9,167)
RATIO OF EARNINGS TO COMBINED FIXED
CHARGES
Income (loss) before income taxes
extraordinary item and cumulative
effect of a change in accounting
principle (898) (985) (12,964) (7,695) (12,348) (6,602)
Fixed charges (interest expense,
including amortization of deferred
financing costs) 2,432 3,384 12,561 12,561 12,561 12,561
- ------------------------------------- --------- --------- -------- -------- -------- -------
Earnings 1,534 2,399 (403) 4,866 213 5,959
--------- --------- -------- -------- -------- -------
Fixed charges (interest expense,
including amortization of deferred
financing costs) 2,432 3,384 12,561 12,561 12,561 12,561
- ------------------------------------- --------- --------- -------- -------- -------- -------
Ratio of earnings to fixed charges -- -- -- -- -- --
Deficiency of earnings to cover fixed
charges (898) (985) (12,964) (7,695) (12,348) (6,602)
</TABLE>
1
<PAGE>
Exhibit 21
SUBSIDIARIES
<TABLE>
<CAPTION>
<S> <C>
1. SFX Broadcasting of the Southwest, Inc., a Delaware corporation
2. SFX Broadcasting of Texas, Inc., a Delaware corporation
3. SFX Broadcasting of Texas (KRLD) Inc., a Delaware corporation
4. SFX Broadcasting of Texas (KRLD) Licensee, Inc., a Delaware corporation
5. SFX Broadcasting of Texas (TSN), Inc., a Delaware corporation
6. SFX Broadcasting of Texas (TSN) Licensee, Inc., a Delaware corporation
7. KODA-FM Licensee, Inc., a Delaware corporation
8. KJQY-FM Licensee, Inc., a Delaware corporation
9. SFX Broadcasting of Texas (KTCK), Inc., a Delaware corporation
10. SFX Broadcasting of Texas (KTCK) Licensee, Inc., a Delaware corporation
11. SFX Broadcasting of the Southeast, Inc., a Delaware corporation
12. SFX Broadcasting of South Carolina (WMYI), Inc., a Delaware corporation
13. SFX Broadcasting of South Carolina (WMYI) Licensee, Inc., a Delaware corporation
14. SFX Broadcasting of Mississippi, Inc., a Delaware corporation
15. SFX Broadcasting of Mississippi Licensee, Inc., a Delaware corporation
16. SFX Broadcasting of South Carolina (WSSL), Inc., a Delaware corporation
17. SFX Broadcasting of South Carolina (WSSL) Licensee, Inc., a Delaware corporation
18. SFX Broadcasting of Tennessee, Inc., a Delaware corporation
19. SFX Broadcasting of Tennessee Licensee, Inc., a Delaware corporation
20. SFX Broadcasting of Jackson, Inc., a Delaware corporation
21. SFX Broadcasting of Jackson Licensee, Inc., a Delaware corporation
22. SFX Broadcasting of North Carolina, Inc., a Delaware corporation
23. SFX Broadcasting of North Carolina Licensee, Inc., a Delaware corporation
24. SFX Broadcasting of San Diego, Inc., a Delaware corporation
25. Parker Broadcasting Company, a California corporation
26. SFX Broadcasting of San Diego Licensee, Inc., a Delaware corporation
27. SFX Acquisition Corporation, a Delaware corporation
28. SFX Merger Company, a Delaware corporation
</TABLE>
Consent of Ernst & Young LLP
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement (Form S-4) and related Prospectus of SFX Broadcasting,
Inc. for the registration of $450,000,000 10 3/4% Senior Subordinated Notes due
2006, Series B and to the incorporation by reference therein of our reports
dated February 20, 1996, except for Note 14 as to which the date is May 1, 1996
with respect to the consolidated financial statements of SFX Broadcasting, Inc.,
February 14, 1996, except for Note 10 as to which the date is May 1, 1996 with
respect to the consolidated financial statements of Multi-Market Radio, Inc. and
May 20, 1996 with respect to the financial statements of KKRW-FM (a division of
CBS, Inc.) all included in the Current Report on Form 8-K dated May 26, 1996 of
SFX Broadcasting, Inc., filed with the Securities and Exchange Commission.
/s/ Ernst & Young LLP
Ernst & Young LLP
New York, New York
June 19, 1996
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the Registration Statement of
SFX Broadcasting, Inc. on Form S-4 of our report dated March 13, except as to
Note 14 for which the date is March 26, 1996, on our audits of the consolidated
financial statements of Liberty Broadcasting, Inc., as of December 31, 1995 and
1994, and for the years ended December 31, 1995, 1994 and for the nine months
ended December 31, 1993, which report is included in SFX Broadcasting, Inc.
current report on Form 8-K dated May 9, 1996. We also consent to the reference
to our firm under the caption "Experts."
/s/ Coopers & Lybrand L.L.P.
COOPERS & LYBRAND L.L.P.
2400 Eleven Penn Center
Philadelphia, Pennsylvania
June 19, 1996
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference the registration statement of SFX
Broadcasting, Inc. on Form S-4 of our report dated March 8, 1996, on our audits
of the combined financial statements of HMW Communications, Inc.- Selected
Operations as of December 31, 1995 and 1994, and for the years ended December
31, 1995 and 1994, which report is included in SFX Broadcasting, Inc.'s current
report on Form 8-K dated May 9, 1996. We also consent to the reference to our
firm under the caption "Experts."
/s/ Coopers & Lybrand L.L.P.
Raleigh, North Carolina
June 19, 1996
Independent Accountants' Consent
We consent to incorporation by reference in the registration statement filed on
Form S-4 of SFX Broadcasting, Inc. of our report dated March 29, 1996 relating
to the balance sheets of Prism Radio Partners L.P. as of December 31, 1995 and
1994, and the related statements of operations, partners' capital and cash flows
for each of the years in the three year period ended December 31, 1995, which
report appears in SFX Broadcasting, Inc.'s Form 8-K dated May 9, 1996, and to
the reference to our firm appearing under the heading "Experts" in the
registration statement.
/s/ KPMG Peat Marwick LLP
Phoenix, Arizona
June 19, 1996
INDEPENDENT ACCOUNTANTS' CONSENT
We consent to incorporation by reference in the registration statement filed on
Form S-4 of SFX Broadcasting, Inc. of our report dated February 1, 1996 relating
to the balance sheet of ABS Greenville Partners, L.P. as of December 31, 1995,
and the related statements of operations, partners' deficit and cash flows for
the year then ended, which report appears in SFX Broadcasting, Inc.'s Form 8-K
dated May 9, 1996, and to the reference to our firm appearing under the heading
"Experts" in the registration statement.
Richmond, Virginia
June 19, 1996
CONSENT
We hereby consent to the use of our firm name in SFX Broadcasting,
Inc.'s Registration Statement on Form S-4 and in the Prospectus forming a part
of such Registration Statement. In giving this consent, we do not concede that
we come within the category of persons whose consent is required by Section 7 of
the Securities Act of 1933, as amended.
FISHER WAYLAND COOPER LEADER
& ZARAGOZA L.L.P.
Dated: June 21, 1996
-------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
-------------------------
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF
A CORPORATION DESIGNATED TO ACT AS TRUSTEE
-------------------------------------------
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF
A TRUSTEE PURSUANT TO SECTION 305(b)(2)
----------------------------------------
CHEMICAL BANK
(Exact name of trustee as specified in its charter)
NEW YORK 13-4994650
(State of incorporation (I.R.S. employer
if not a national bank) identification No.)
270 PARK AVENUE
NEW YORK, NEW YORK 10017
(Address of principal executive offices) (Zip Code)
William H. McDavid
General Counsel
270 Park Avenue
New York, New York 10017
Tel: (212) 270-2611
(Name, address and telephone number of agent for service)
---------------------------------------------
SFX BROADCASTING, INC.
(Exact name of obligor as specified in its charter)
DELAWARE 13-3649750
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification No.)
150 EAST 58TH STREET
NEW YORK, NY 10155
(Address of principal executive offices) (Zip Code)
-------------------------------------------
10 3/4% SENIOR SUBORDINATED NOTES DUE 2006, SERIES B
(Title of the indenture securities)
-----------------------------------------------------
<PAGE>
GENERAL
Item 1. General Information.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority to
which it is subject. New York State Banking Department, State
House, Albany, New York 12110. Board of Governors of the Federal
Reserve System, Washington, D.C., 20551 Federal Reserve Bank of
New York, District No. 2, 33 Liberty Street, New York, N.Y.
Federal Deposit Insurance Corporation, Washington, D.C., 20429.
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
Item 2. Affiliations with the Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
- 2 -
<PAGE>
Item 16. List of Exhibits
List below all exhibits filed as a part of this Statement of
Eligibility.
1. A copy of the Articles of Association of the Trustee as now in
effect, including the Organization Certificate and the Certificates of
Amendment dated February 17, 1969, August 31, 1977, December 31, 1980,
September 9, 1982, February 28, 1985 and December 2, 1991 (see Exhibit 1 to
Form T-1 filed in connection with Registration Statement No. 33-50010, which
is incorporated by reference).
2. A copy of the Certificate of Authority of the Trustee to Commence
Business (see Exhibit 2 to Form T-1 filed in connection with Registration
Statement No. 33-50010, which is incorporated by reference).
3. None, authorization to exercise corporate trust powers being
contained in the documents identified above as Exhibits 1 and 2.
4. A copy of the existing By-Laws of the Trustee (see Exhibit 4 to
Form T-1 filed in connection with Registration Statement No. 33-84460, which is
incorporated by reference).
5. Not applicable.
6. The consent of the Trustee required by Section 321(b) of the Act
(see Exhibit 6 to Form T-1 filed in connection with Registration Statement No.
33-50010, which is incorporated by reference).
7. A copy of the latest report of condition of the Trustee,
published pursuant to law or the requirements of its supervising or examining
authority.
8. Not applicable.
9. Not applicable.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, the
Trustee, Chemical Bank, a corporation organized and existing under the laws of
the State of New York, has duly caused this statement of eligibility to be
signed on its behalf by the undersigned, thereunto duly authorized, all in the
City of New York and State of New York, on the 19TH day of JUNE, 1996.
CHEMICAL BANK
By /s/Michael A. Smith
-------------------
Michael A. Smith
Vice President
- 3 -
<PAGE>
Exhibit 7 to Form T-1
Bank Call Notice
RESERVE DISTRICT NO. 2
CONSOLIDATED REPORT OF CONDITION OF
Chemical Bank
of 270 Park Avenue, New York, New York 10017
and Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System,
at the close of business March 31, 1996, in accordance
with a call made by the Federal Reserve Bank of this District
pursuant to the provisions of the Federal Reserve Act.
<TABLE>
<CAPTION>
DOLLAR AMOUNTS
ASSETS IN MILLIONS
-------- --------------
<S> <C>
Cash and balances due from depository institutions:
Noninterest-bearing balances and
currency and coin ...................................................... $ 3,391
Interest-bearing balances .............................................. 2,075
Securities:
Held to maturity securities ................................................. 3,607
Available for sale securities ............................................... 29,029
Federal Funds sold and securities purchased under agreements to resell in
domestic offices of the bank and of its Edge and Agreement subsidiaries,
and in IBF's:
Federal funds sold .......................................................... 1,264
Securities purchased under agreements to resell ........................ 354
Loans and lease financing receivables:
Loans and leases, net of unearned income ...................... $73,216
Less: Allowance for loan and lease losses ..................... 1,854
Less: Allocated transfer risk reserve.......................... 104
-------
Loans and leases, net of unearned income,
allowance, and reserve ................................................. 71,258
Trading Assets .............................................................. 25,919
Premises and fixed assets (including capitalized
leases)................................................................. 1,337
Other real estate owned ..................................................... 30
Investments in unconsolidated subsidiaries and
associated companies ................................................... 187
Customer's liability to this bank on acceptances
outstanding............................................................. 1,082
Intangible assets............................................................ 419
Other assets................................................................. 7,406
-------
TOTAL ASSETS................................................................. $147,358
=======
</TABLE>
- 4 -
<PAGE>
LIABILITIES
<TABLE>
<CAPTION>
<S> <C> <C>
Deposits
In domestic offices .................................................... $ 45,786
Noninterest-bearing ......................................... $ 14,972
Interest-bearing ............................................ 30,814
---------
In foreign offices, Edge and Agreement subsidiaries, and IBF's ......... 36,550
Noninterest-bearing ........................................ $ 202
Interest-bearing ........................................... 36,348
---------
Federal funds purchased and securities sold under agreements to repurchase in
domestic offices of the bank and of its Edge and Agreement subsidiaries,
and in IBF's Federal funds purchased ................................... 11,412
Securities sold under agreements to repurchase ......................... 2,444
Demand notes issued to the U.S. Treasury..................................... 699
Trading liabilities ......................................................... 19,998
Other Borrowed money:
With a remaining maturity of one year or less........................... 11,305
With a remaining maturity of more than one year......................... 130
Mortgage indebtedness and obligations under capitalized
leases.................................................................. 13
Bank's liability on acceptances executed and outstanding .................... 1,089
Subordinated notes and debentures............................................ 3,411
Other liabilities............................................................ 6,778
TOTAL LIABILITIES ........................................................... 139,615
---------
EQUITY CAPITAL
Common stock ................................................................ 620
Surplus...................................................................... 4,664
Undivided profits and capital reserves ...................................... 3,058
Net unrealized holding gains (Losses)
on available-for-sale securities............................................. (607)
Cumulative foreign currency translation adjustments ......................... 8
TOTAL EQUITY CAPITAL......................................................... 7,743
---------
TOTAL LIABILITIES, LIMITED-LIFE PREFERRED
STOCK AND EQUITY CAPITAL ............................................... $147,358
=========
</TABLE>
I, Joseph L. Sclafani, S.V.P. & Controller of the above-named bank, do hereby
declare that this Report of Condition has been prepared in conformance with
the instructions issued by the appropriate Federal regulatory authority and is
true to the best of my knowledge and belief.
JOSEPH L. SCLAFANI
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us, and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the appropriate Federal regulatory authority and is true and
correct.
WALTER V. SHIPLEY )
EDWARD D. MILLER )DIRECTORS
THOMAS G. LABRECQUE )
- 5 -
LETTER OF TRANSMITTAL
-------------------------------------------------------
SFX Broadcasting, Inc.
OFFER TO EXCHANGE
10 3/4% SENIOR SUBORDINATED NOTES DUE 2006, SERIES B
FOR ANY AND ALL OF ITS OUTSTANDING
10 3/4% SENIOR SUBORDINATED NOTES DUE 2006, SERIES A
PURSUANT TO THE PROSPECTUS, DATED , 1996
- -------------------------------------------------------------------------------
THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK
CITY TIME, ON , 1996 UNLESS EXTENDED, PROVIDED IT MAY NOT BE
EXTENDED BEYOND , 1996.
- -------------------------------------------------------------------------------
Delivery to: Chemical Bank, the Exchange Agent
By Facsimile: By Mail, By Hand and Confirm by Telephone:
Overnight Courier:
(212) 638-7380 Carlos Esteves
(212) 344-9387 Chemical Bank (212) 638-0828
Corporate Trust-Securities Window
Room 234-North Building Sharon Lewis
55 Water Street (212) 638-0454
New York, NY 10041
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN AS SET FORTH
ABOVE OR TRANSMISSION OF INSTRUCTIONS VIA A FACSIMILE NUMBER OTHER THAN THE
ONE LISTED ABOVE WILL NOT CONSTITUTE A VALID DELIVERY.
The undersigned acknowledges that he or she has received the
Prospectus, dated , 1996 (the "Prospectus"), of SFX Broadcasting, Inc. a
Delaware corporation (the "Company"), and this Letter of Transmittal (this
"Letter"), which together constitute the Company's offer (the "Exchange
Offer") to exchange $1,000 principal amount of its outstanding 10 3/4% Senior
Subordinated Notes due 2006, Series B (the "Series B Notes") for each $1,000
principal amount of 10 3/4% Senior Subordinated Notes due 2006, Series A (the
"Series A Notes") of which $450.0 million in aggregate principal amount are
outstanding of the Company from the holders thereof.
With respect to the Series A Notes accepted for exchange, the
holders of such Series A Notes will receive Series B Notes which will bear
interest at the same rate and on the same terms as their Series A Notes.
Consequently, interest on the Series B Notes will be payable semi-annually on
May 15 and November 15, 1996, at the rate of 10 3/4% per annum. The Series B
Notes will bear interest from and including May 31, 1996, the date of issuance
of the Series A Notes. Holders whose Series A Notes are accepted for exchange
will be deemed to have waived the right to receive any interest accrued on the
Series A Notes.
This Letter is to be completed by a holder of Series A Notes
either if certificates are to be forwarded herewith or if a tender of
certificates for Series A Notes, if available, is to be made by book-entry
transfer to the account maintained by the Exchange Agent at The Depository
Trust Company (the "Book-Entry Transfer Facility") pursuant to the procedures
set forth in "The Exchange Offer--Guaranteed Delivery Procedures" section of
the Prospectus. Holders of Series A Notes whose certificates are not
immediately available, or who are unable to deliver their certificates or
confirmation of the book-entry tender of their Series A Notes into the
Exchange Agent's account at the Book-Entry Transfer Facility (a "Book-Entry
Confirmation") and all other documents required by this Letter to the Exchange
Agent on or prior to the Expiration Date, must tender their
<PAGE>
2
Series A Notes according to the guaranteed delivery procedures set forth in
"The Exchange Offer--Guaranteed Delivery Procedures" section of the
Prospectus. See Instruction 1. Delivery of Documents to the Book-Entry
Transfer Facility does not constitute delivery to the Exchange Agent.
Any beneficial owner whose Series A Notes are registered in the
name of a broker, dealer, commercial bank, trust company or other nominee and
who wishes to tender should contact such registered holder of Series A Notes
promptly and instruct such registered holder of Series A Notes to tender on
behalf of the beneficial owner. If such beneficial owner wishes to tender on
its own behalf, such beneficial owner must, prior to completing and executing
this Letter and delivering its Series A Notes, either make appropriate
arrangements to register ownership of the Series A Notes in such beneficial
owner's name or obtain a properly completed bond power from the registered
holder of Series A Notes. The transfer of record ownership may take
considerable time.
The undersigned has completed the appropriate boxes below and
signed this letter to indicate the action the undersigned desires to take with
respect to the Exchange Offer.
List below the Series A Notes to which this Letter relates. If
the space provided below is inadequate, the certificate numbers and the
aggregate principal amount of the Series A Notes should be listed on a
separate signed schedule affixed hereto.
<TABLE>
DESCRIPTION OF
SERIES A NOTES 1 2 3
NAME(S) AND ADDRESS(ES) OF REGISTERED HOLDER(S) CERTIFICATE AGGREGATE AGGREGATE PRINCIPAL
(PLEASE FILL IN, IF BLANK) NUMBER(S)* PRINCIPAL AMOUNT AMOUNT TENDERED**
------------------------------------------------ ----------- ---------------- -------------------
<S> <C> <C> <C>
TOTAL
</TABLE>
* Need not be completed if Series A Notes are being tendered by book-entry
transfer.
** Unless otherwise indicated in this column, a holder will be deemed to
have tendered ALL of the Series A Notes represented by the Series A
Notes indicated in column 2. See Instruction 2.
- ------------------------------------------------------------------------------
o CHECK HERE IF TENDERED SERIES A NOTES ARE BEING DELIVERED BY BOOK-ENTRY
TRANSFER MADE TO THE ACCOUNT MAINTAINED BY THE EXCHANGE AGENT WITH THE
BOOK-ENTRY TRANSFER FACILITY AND COMPLETE THE FOLLOWING:
Name of Tendering Institution
----------------------------------------------
Account Number Transaction Code Number
----------------- -------------------
o CHECK HERE IF TENDERED SERIES A NOTES ARE BEING DELIVERED PURSUANT TO A
NOTICE OF GUARANTEED DELIVERY PREVIOUSLY SENT TO THE EXCHANGE AGENT AND
COMPLETE THE FOLLOWING:
Names(s) of Registered Holder(s)
----------------------------------------------
Window Ticket Number (if any)
-------------------------------------------------
Date of Execution of Notice of Guaranteed Delivery
---------------------------
Name of Institution which Guaranteed Delivery
--------------------------------
IF DELIVERED BY BOOK-ENTRY TRANSFER, COMPLETE THE FOLLOWING:
Account Number Transaction Code Number
--------------- --------------
o CHECK HERE IF YOU ARE A BROKER-DEALER AND WISH TO RECEIVE TEN
ADDITIONAL COPIES OF THE PROSPECTUS AND TEN COPIES OF ANY AMENDMENTS
OR SUPPLEMENTS THERETO.
Name:
------------------------------------------------------------------------
Address:
---------------------------------------------------------------------
<PAGE>
3
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
Ladies and Gentlemen:
Upon the terms and subject to the conditions of the Exchange
Offer, the undersigned hereby tenders to the Company the aggregate principal
amount of Series A Notes indicated above. Subject to, and effective upon, the
acceptance for exchange of the Series A Notes tendered hereby, the undersigned
hereby sells, assigns and transfers to, or upon the order of, the Company all
rights, title and interest in and to such Series A Notes as is being tendered
hereby, and hereby appoints the Exchange Agent as the true and lawful agent
and attorney-in-fact (with full knowledge that the Exchange Agent also acts as
agent of the Company) of such holder of Series A Notes, or transfer ownership
of such Series Notes A Notes on the account books maintained by The Depositary
Trust Company (together, in any such case, with all accompanying evidences of
transfer and authenticity), to the Company, (ii) present and deliver such
Series A Notes for transfer on the books of the Company and (iii) receive all
benefits and otherwise exercise all rights and incidents of beneficial
ownership with respect to such Series A Notes, all in accordance with the
terms of the Exchange Offer. The power of attorney granted in this paragraph
shall be deemed to be irrevocable and coupled with an interest.
The undersigned hereby represents and warrants that the
undersigned has full power and authority to tender, sell, assign and transfer
the Series A Notes tendered hereby and that the Company will acquire good and
unencumbered title thereto, free and clear of all liens, restrictions, charges
and encumbrances and not subject to any adverse claim when the same is
accepted by the Company. The undersigned hereby further represents that any
Series B Notes acquired in exchange for Series A Notes tendered hereby will
have been acquired in the ordinary course of business of the person receiving
such Series B Notes, whether or not such person is the undersigned, that
neither the holder of such Series A Notes nor any such other person has an
arrangement or understanding with any person to participate in the
distribution of such Series B Notes and that neither the holder of such Series
A Notes nor any such other person is an "affiliate," as defined in Rule 405
under the Securities Act of 1933, as amended (the "Securities Act"), of the
Company.
The undersigned hereby represents and warrants that (i) the
undersigned has a net long position within the meaning of Rule 14e-4 under the
Securities Exchange Act, as amended ("Rule 14e-4"), equal to or greater than
the principal amount of Series A Notes tendered hereby; and (ii) the tender of
such Series A Notes complies with Rule 14e-4 (to the extent that Rule 14e-4 is
applicable to such exchange).
The undersigned hereby further represents to the Company that the
Series B Notes to be acquired by the undersigned in exchange for the Series A
Notes tendered hereby and any beneficial owner(s) of such Series A Notes in
connection with the Exchange Offer will be acquired by the undersigned and
such beneficial owner(s) in the ordinary course of business of the
undersigned, the undersigned (if not a broker-dealer referred to in the last
sentence of this paragraph) are not participating and do not intend to
participate in the distribution of the Series B Notes, the undersigned have no
arrangement or understanding with any person to participate in the
distribution of the Series B Notes, the undersigned and each beneficial owner
acknowledge and agree that any person participating in the Exchange Offer for
the purpose of distributing the Series B Notes must comply with the
registration and prospectus delivery requirements of the Securities Act in
connection with a secondary resale transaction of the Series B Notes acquired
by such person and cannot rely on the position of the staff of the Commission
set forth in certain no-action letters, the undersigned and each beneficial
owner understand that a secondary resale transaction described in clause,
above should be covered by an effective registration statement containing the
selling security holder information required by Item 507 or Item 508, as
applicable, of Regulation S-K of the Commission and neither the undersigned
nor any beneficial owner is an "affiliate" of the Company, as defined under
Rule 405 under the Securities Act. If the undersigned is a broker-dealer that
will receive Series B Notes for its own account in exchange for Series A Notes
that were acquired as a result of market making activities or other trading
activities, it acknowledges that it will deliver a prospectus meeting the
requirements of the Securities Act in connection with any resale of such
Series B Notes received in respect of such Series A Notes pursuant to the
Exchange Offer; however, by so acknowledging and by delivering a prospectus,
the undersigned will not be deemed to admit that it is an "underwriter" within
the meaning of the Securities Act.
The undersigned will, upon request, execute and deliver any
additional documents deemed by the Company to be necessary or desirable to
complete the sale, assignment and transfer of the Series A Notes tendered
hereby. All authority conferred or agreed to be conferred in this Letter and
every obligation of the undersigned hereunder shall be binding upon the
successors, assigns, heirs, executors, administrators, trustees in bankruptcy
and legal representatives of the undersigned and shall not be affected by, and
shall survive, the death or incapacity of the undersigned. This tender may be
withdrawn only in accordance with the procedures set forth in "The Exchange
Offer--Withdrawal Rights" section of the Prospectus.
<PAGE>
4
Unless otherwise indicated herein in the box entitled "Special
Issuance Instructions" below, please deliver the Series B Notes (and, if
applicable, substitute certificates representing Series A Notes for any Series
A Notes not exchanged) in the name of the undersigned or, in the case of a
book-entry delivery of Series A Notes, please credit the account indicated
above maintained at the Book-Entry Transfer Facility. Similarly, unless
otherwise indicated under the box entitled "Special Delivery Instructions"
below, please send the Series B Notes (and, if applicable, substitute
certificates representing Series A Notes for any Series A Notes not exchanged)
to the undersigned at the address shown above in the box entitled "Description
of Series A Notes."
THE UNDERSIGNED, BY COMPLETING THE BOX ENTITLED "DESCRIPTION OF
SERIES A NOTES" ABOVE AND SIGNING THIS LETTER, WILL BE DEEMED TO HAVE TENDERED
THE SERIES A NOTES AS SET FORTH IN SUCH BOX ABOVE.
<PAGE>
5
SPECIAL ISSUANCE INSTRUCTIONS
(SEE INSTRUCTIONS 3 AND 4)
To be completed ONLY if certificates for Series A Notes not
exchanged and/or Series B Notes are to be issued in the name of and sent to
someone other than the person or persons whose signature(s) appear(s) on
Letter above, or if Series A Notes delivered by book-entry transfer which
is not accepted for exchange is to be returned by credit to an account
maintained at the Book-Entry Transfer Facility other than the account
indicated above.
Issue: Series B Notes and/or Series A Notes to:
Name(s)
----------------------------------------------------------
(PLEASE TYPE OR PRINT)
----------------------------------------------------------
(PLEASE TYPE OR PRINT)
Address
---------------------------------------------------------
---------------------------------------------------------
(ZIP CODE)
(COMPLETE SUBSTITUTE FORM W-9)
o Credit unexchanged Series A Notes delivered by book-entry transfer to the
Book-Entry Transfer Facility set forth below.
-----------------------------------------------------------------
(Book-Entry Transfer Facility
Account Number, if applicable)
-----------------------------------------------------------------
SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 3 AND 4)
To be completed ONLY if certificates for Series A Notes not
exchanged and/or Series B Notes are to be sent to someone other than the
person or persons whose signature(s) appear(s) on this Letter above or to
such person or persons at an address other than shown in the box entitled
"Description of Series A Notes" on this Letter above.
Mail: Series B Notes and/or Series A Notes to:
Name(s)
----------------------------------------------------------
(PLEASE TYPE OR PRINT)
----------------------------------------------------------
(PLEASE TYPE OR PRINT)
Address
---------------------------------------------------------
---------------------------------------------------------
(ZIP CODE)
IMPORTANT: THIS LETTER (TOGETHER WITH THE CERTIFICATES FOR SERIES A NOTES OR A
BOOK-ENTRY CONFIRMATION AND ALL OTHER REQUIRED DOCUMENTS OR THE NOTICE OF
GUARANTEED DELIVERY) MUST BE RECEIVED BY THE EXCHANGE AGENT PRIOR TO 5:00
P.M., NEW YORK CITY TIME, ON THE EXPIRATION DATE.
PLEASE READ THIS ENTIRE LETTER OF TRANSMITTAL
CAREFULLY BEFORE COMPLETING ANY BOX ABOVE.
<PAGE>
6
PLEASE SIGN HERE
(TO BE COMPLETED BY ALL TENDERING HOLDERS)
(COMPLETE ACCOMPANYING SUBSTITUTE FORM W-9 ON REVERSE SIDE)
Dated:................................................................. 1996
X .................................................................... 1996
X .................................................................... 1996
SIGNATURE(S) OF OWNER DATE
Area Code and telephone Number ...................................
If a holder is tendering any Series A Notes, this Letter must be
signed by the registered holder(s) as the name(s) appear(s) on the
certificate(s) for the Series A Notes, or by any person(s) authorized to
become registered holder(s) by endorsements and documents transmitted
herewith. If signature is by a trustee, executor, administrator, guardian,
officer or other person acting in a fiduciary or representative capacity,
please set forth full title. See Instruction 3.
Name(s): ..................................................
............................................................
(PLEASE TYPE OR PRINT)
Capacity: .................................................
Address: ..................................................
............................................................
(INCLUDING ZIP CODE)
SIGNATURE GUARANTEE
(IF REQUIRED BY INSTRUCTION 3)
Signature(s) Guaranteed by
an Eligible Institution: ..................................
(AUTHORIZED SIGNATURE)
............................................................
(TITLE)
............................................................
(NAME AND FIRM)
............................................................
Dated: ............................................. , 1996
<PAGE>
7
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF OFFER TO EXCHANGE
10 3/4% SENIOR SUBORDINATED NOTES DUE 2006, SERIES B
FOR ANY AND ALL OF ITS OUTSTANDING
10 3/4% SENIOR SUBORDINATED NOTES DUE 2006, SERIES A
OF SFX BROADCASTING, INC.
1. DELIVERY OF THIS LETTER AND NOTES; GUARANTEED DELIVERY PROCEDURES.
This letter is to be completed by securityholders either if
certificates are to be forwarded herewith or if tenders are to be made
pursuant to the procedures for delivery by book-entry transfer set forth in
"The Exchange Offer--Book-Entry Transfer" section of the Prospectus.
Certificates for all physically tendered Series A Notes, or Book-Entry
Confirmation, as the case may be, as well as a properly completed and duly
executed Letter (or manually signed facsimile hereof) and any other documents
required by this Letter, must be received by the Exchange Agent at the address
set forth herein on or prior to the Expiration Date, or the tendering holder
must comply with the guaranteed delivery procedures set forth below.
Securityholders whose certificates for Series A Notes are not
immediately available or who cannot deliver their certificates and all other
required documents to the Exchange Agent on or prior to the Expiration Date,
or who cannot complete the procedure for book-entry transfer on a timely
basis, may tender their Series A Notes pursuant to the guaranteed delivery
procedures set forth in "The Exchange Offer--Guaranteed Delivery Procedures"
section of the Prospectus. Pursuant to such procedures, (i) such tender must
be made through an Eligible Institution, (ii) prior to the Expiration Date,
the Exchange Agent must receive from such Eligible Institution a properly
completed and duly executed Letter (or a facsimile thereof) and Notice of
Guaranteed Delivery, substantially in the form provided by the Company (by
telegram, telex, facsimile transmission, mail or hand delivery), setting forth
the name and address of the holder of Series A Notes and the amount of Series
A Notes tendered, stating that the tender is being made thereby and
guaranteeing that within five New York Stock Exchange ("NYSE") trading days
after the date of execution of the Notice of Guaranteed Delivery, the
certificates for all physically tendered Series A Notes in proper format for
transfer, or a Book-Entry Confirmation as the case may be, and any other
documents required by this Letter will be deposited by the Eligible
Institution with the Exchange Agent, and (iii) the certificates for all
physically tendered Series A Notes, in proper form for transfer, or Book-Entry
Confirmation, as the case may be, and all other documents required by this
Letter, are received by the Exchange Agent within five NYSE trading days after
the date of execution of the Notice of Guaranteed Delivery.
The method of delivery of this Letter, the Series A Notes, and all
other required documents is at the election and risk of the tendering holders,
but the delivery will be deemed made only when actually received or confirmed
by the Exchange Agent. If Series A Notes are sent by mail, it is suggested
that registered mail, properly insured, with return receipt requested, be used
and that the mailing be made sufficiently in advance of the Expiration Date to
permit delivery to the Exchange Agent prior to 5:00 p.m., New York City time,
on the Expiration Date.
See "The Exchange Offer" section of the Prospectus.
2. PARTIAL TENDERS (NOT APPLICABLE TO SECURITYHOLDERS WHO TENDER BY
BOOK-ENTRY TRANSFER).
If less than all of the Series A Notes evidenced by a submitted
certificate are to be tendered, the tendering holder(s) should fill in the
aggregate principal amount of Series A Notes to be tendered in the box above
entitled "Description of Series A Notes--Aggregate Principle Amount Tendered."
A reissued certificate representing the balance of nontendered Series A Notes
will be sent to such tendering holder, unless otherwise provided in the
appropriate box on this Letter, promptly after the Expiration Date. ALL OF THE
SERIES A NOTES DELIVERED TO THE EXCHANGE AGENT WILL BE DEEMED TO HAVE BEEN
TENDERED UNLESS OTHERWISE INDICATED.
<PAGE>
8
3. SIGNATURES ON THIS LETTER; POWERS OF ATTORNEY AND ENDORSEMENTS;
GUARANTEE OF SIGNATURES.
If this Letter is signed by the registered holder of the Series A
Notes tendered hereby, the signature must correspond exactly with the name as
written on the face of the certificates without any change whatsoever.
If any tendered Series A Notes are owned of record by two or more
joint owners, all of such owners must sign this Letter.
If any tendered Series A Notes are registered in different names on
several certificates, it will be necessary to complete, sign and submit as
many separate copies of this Letter as there are different registrations of
certificates.
When this Letter is signed by the registered holder or holders of
the Series A Notes specified herein and tendered hereby, no endorsements of
certificates or separate powers of attorney are required. If, however, the
Series B Notes are to be issued, or any untendered Series A Notes are to be
reissued, to a person other than the registered holder, then endorsements of
any certificates transmitted hereby or separate powers of attorney are
required to be submitted together with the Certificates for Series A Notes.
Signatures on such certificate(s) must be guaranteed by an Eligible
Institution as defined below.
If this Letter is signed by a person or persons other than the
registered holder or holders of any certificate(s) specified herein, such
certificate(s) must be endorsed or accompanied by appropriate powers of
attorney, in either case signed exactly as the name or names of the registered
holder or holders appear(s) on the certificate(s) and signatures on such
certificate(s) must be guaranteed by an Eligible Institution.
If this Letter or any certificates or powers of attorney are signed
by trustees, executors, administrators, guardians, attorneys-in-fact, officers
of corporations or others acting in a fiduciary or representative capacity,
such persons should so indicate when signing, and, unless waived by the
Company, proper evidence satisfactory to the Company of their authority to so
act must be submitted.
ENDORSEMENTS ON CERTIFICATES FOR SERIES A NOTES OR SIGNATURES ON
POWERS OF ATTORNEY REQUIRED BY THIS INSTRUCTION 3 MUST BE GUARANTEED BY A FIRM
WHICH IS A MEMBER OF A REGISTERED NATIONAL SECURITIES EXCHANGE OR A MEMBER OF
THE NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC. OR BY A COMMERCIAL BANK
OR TRUST COMPANY HAVING AN OFFICE OR CORRESPONDENT IN THE UNTIED STATES (AN
"ELIGIBLE INSTITUTION").
SIGNATURES ON THIS LETTER NEED NOT BE GUARANTEED BY AN ELIGIBLE
INSTITUTION, PROVIDED THE SERIES A NOTES ARE TENDERED: (I) BY A REGISTERED
HOLDER OF SERIES A NOTES (WHICH TERM, FOR PURPOSES OF THE EXCHANGE OFFER,
INCLUDES ANY PARTICIPANT IN THE BOOK-ENTRY TRANSFER FACILITY SYSTEM WHOSE NAME
APPEARS ON A SECURITY POSITION LISTING AS THE HOLDER OF SUCH SERIES A NOTES)
WHO HAS NOT COMPLETED THE BOX ENTITLED "SPECIAL ISSUANCE INSTRUCTIONS" OR
"SPECIAL DELIVERY INSTRUCTIONS" ON THIS LETTER, OR (II) FOR THE ACCOUNT OF AN
ELIGIBLE INSTITUTION.
4. SPECIAL ISSUANCE AND DELIVERY INSTRUCTIONS.
Tendering holders of Series A Notes should indicate in the
applicable box above the name and address to which Series B Notes issued
pursuant to the Exchange Offer and/or substitute certificates evidencing
Series A Notes not exchanged are to be issued or sent, if different from the
name or address of the person signing this Letter. In the case of issuance in
a different name, the employer identification or social security number of the
person named must also be indicated. Securityholders tendering Series A Notes
by book-entry transfer may request that Series A Notes not exchanged be
credited to such account maintained at the Book-Entry Transfer Facility as
such securityholder may designate hereon. If no such instructions are given,
such Series A Notes not exchanged will be returned to the name or address of
the person signing this Letter.
<PAGE>
9
5. TAX IDENTIFICATION NUMBER.
Federal income tax law generally requires that a tendering holder
whose Series A Notes are accepted for exchange must provide the Company (as
payor) with such holder's correct Taxpayer Identification Number ("TIN") on
Substitute Form W-9 below, which in the case of a tendering holder who is an
individual, is his or her social security number. If the Company is not
provided with the current TIN or an adequate basis for an exemption, such
tendering holder may be subject to a $50 penalty imposed by the Internal
Revenue Service. In addition, delivery to such tendering holder of Series B
Notes may be subject to backup withholding in an amount equal to 31% of all
reportable payments made after the exchange. If withholding results in an
overpayment of taxes, a refund may be obtained.
Exempt holders of Series A Notes (including, among others, all
corporations and certain foreign individuals) are not subject to these backup
withholding and reporting requirements. See the enclosed Guidelines of
Certification of Taxpayer Identification Number on Substitute Form W-9 (the
"W-9 Guidelines") for additional instructions.
To prevent backup withholding, each tendering holder of Series A
Notes must provide its correct TIN by completing the Substitute Form W-9 set
forth below, certifying that the TIN provided is correct (or that such holder
is awaiting a TIN) and that (i) the holder is exempt from backup withholding,
or (ii) the holder has not been notified by the Internal Revenue Service that
such holder is subject to backup withholding as a result of a failure to
report all interest or dividends or (iii) the Internal Revenue Service has
notified the holder that such holder is no longer subject to backup
withholding. If the tendering holder of Series A Notes is a nonresident alien
or foreign entity not subject to backup withholding, such holder must give the
Company a completed Form W-8, Certificate of Foreign Status. These forms may
be obtained from the Exchange Agent. If the Series A Notes are in more than
one name or are not in the name of the actual owner, such holder should
consult the W-9 Guidelines for information on which TIN to report. If such
holder does not have a TIN, such holder should (i) consult the W-9 Guidelines
for instructions on applying for a TIN, (ii) check the box in Part 2 of the
Substitute Form W-9 and (iii) write "applied for" in lieu of its TIN. Note:
Checking this box and writing "applied for" on the form means that such holder
has already applied for a TIN or that such holder intends to apply for one in
the near future. If such holder does not provide its TIN to Holdings within 60
days, backup withholding will begin and continue until such holder furnishes
its TIN to Holdings.
6. TRANSFER TAXES.
The Company will pay all transfer taxes, if any, applicable to the
transfer of Series A Notes to it or its order pursuant to the Exchange Offer.
If however, Series B Notes and/or substitute Series A Notes not exchanged are
to be delivered to, or are to be registered or issued in the name of, any
person other than the registered holder of the Series A Notes tendered hereby,
or if tendered Series A Notes are registered in the name of any person other
than the person signing this Letter, or if a transfer tax is imposed for any
reason other than the transfer of Series A Notes to the Company or its order
pursuant to the Exchange Offer, the amount of any such transfer taxes (whether
imposed on the registered holder or any other persons) will be payable by the
tendering holder. If satisfactory evidence of payment of such taxes or
exemption therefrom is not submitted herewith, the amount of such transfer
taxes will be billed directly to such tendering holder.
EXCEPT AS PROVIDED IN THIS INSTRUCTION 6, IT WILL NOT BE NECESSARY
FOR TRANSFER TAX STAMPS TO BE AFFIXED TO THE SERIES A NOTES SPECIFIED IN THIS
LETTER.
7. WAIVER OF CONDITIONS.
The Company reserves the absolute right to waive satisfaction of
any or all conditions enumerated in the Prospectus.
<PAGE>
10
8. NO CONDITIONAL TENDERS.
No alternative, conditional, irregular or contingent tenders will
be accepted. All tendering holders of Series A Notes, by execution of this
Letter, shall waive any right to receive notice of the acceptance of their
Series A Notes for exchange.
Neither the Company, the Exchange Agent nor any other person is
obligated to give notice of any defect or irregularity with respect to any
tender of Series A Notes nor shall any of them incur any liability for failure
to give any such notice.
9. MUTILATED, LOST, STOLEN OR DESTROYED SERIES A PREFERRED STOCK.
Any holder whose Series A Notes have been mutilated, lost, stolen
or destroyed should contact the Exchange Agent at the address indicated above
for further instructions.
10. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES.
Questions relating to the procedure for tendering, as well as
requests for additional copies of the Prospectus and this Letter, may be
directed to the Exchange Agent, at the address and telephone number indicated
above.
<PAGE>
11
TO BE COMPLETED BY ALL TENDERING HOLDERS
(SEE INSTRUCTION 5)
PAYOR'S NAME: BCP/ESSEX HOLDINGS INC.
<TABLE>
<S> <C> <C>
SUBSTITUTE PART 1--PLEASE PROVIDE YOUR TIN IN THE
FORM W-9 BOX AT RIGHT AND CERTIFY BY SIGNING AND TIN:________________________________
DEPARTMENT OF THE TREASURY DATING BELOW SOCIAL SECURITY NUMBER OR
INTERNAL REVENUE SERVICE EMPLOYER IDENTIFICATION NUMBER
PAYER'S REQUEST FOR TAXPAYER PART 2--TIN Applied for [ ]
IDENTIFICATION NUMBER
("TIN") AND
CERTIFICATION
11. CERTIFICATION: UNDER THE PENALTIES OF PERJURY, I CERTIFY THAT:
(1) The number shown on this form is my correct Taxpayer Identification
Number (or I am waiting for a number to be issued to me).
(2) I am not subject to backup withholding because (a) I am exempt
from backup withholding, or (b) I have not been notified by the
Internal Revenue Service (the "IRS") that I am subject to backup
withholding as a result of a failure to report all interest or
dividends or (c) the IRS has notified me that I am no longer
subject to backup withholding, and
(3) any other information provided on this form is true and correct.
SIGNATURE........................................... DATE.........................
</TABLE>
You must cross out item (2) of the above certification if you have been
notified by the IRS that you are subject to backup withholding because of
underreporting of interest or dividends on your tax return and you have not
been notified by the IRS that you are no longer subject to backup withholding.
- ---------------------------------
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX
IN PART 2 OF SUBSTITUTE FORM W-9
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a taxpayer identification number has
not been issued to me, and either (a) I have mailed or delivered an
application to receive a taxpayer identification number to the appropriate
Internal Revenue Service Center or Social Security Administration Office or
(b) I intend to mail or deliver an application in the near future. I
understand that if I do not provide a taxpayer identification number by the
time of the exchange, 31 percent of all reportable payments made to me
thereafter will be withheld until I provide a number.
- -------------------------------- ------------------------------------
Signature Date
<PAGE>
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
GUIDELINES FOR DETERMINING THE PROPER IDENTIFICATION NUMBER TO GIVE
THE PAYER. -- Social Security numbers have nine digits separated by two
hyphens: i.e., 000-00-0000. Employer identification numbers have nine digits
separated by only one hyphen: i.e., 00-0000000. The table below will help
determine the number to give the payer.
<TABLE>
GIVE THE GIVE THE NAME
FOR THIS TYPE OF ACCOUNT: NAME AND FOR THIS TYPE OF ACCOUNT: AND EMPLOYER
SOCIAL SECURITY IDENTIFICATION
NUMBER OF -- NUMBER OF --
- ------------------------------- --------------------------------- ------------------------------- ---------
<S> <C> <C> <C>
1. An individual's account The individual 8. Sole proprietorship account The owner(4)
2. Two or more individuals The actual owner of the account 9. A valid trust, estate, or The legal entity (Do not
(joint account) or, if combined funds, the first pension trust furnish the identifying
individual on the account(1) number of the personal
representative or trustee
unless the legal entity
itself is not designated
in the account title.)(5)
3. Husband and wife (joint The actual owner of the account 10. Corporate account The corporation
account) or, if joint funds, either person(1)
4. Custodian account of a The minor(2) 11. Religious, charitable, or The organization
minor (Uniform Gift to educational organization
Minors Act) account
5. Adult and minor (joint The adult or, if the minor is the 12. Partnership account held in The partnership
account) only contributor, the minor(1) the name of the business
6. Account in the name of The ward, minor, or incompetent 13. Association, club, or other The organization
guardian or committee for person(3) tax-exempt organization
a designated ward, minor,
or incompetent person
7. a. The usual revocable The grantor-trustee(1) 14. A broker or registered The broker or nominee
savings trust nominee
account (grantor is
also trustee)
b. So-called trust The actual owner(1) 15. Account with the The public entity
account that is not Department of Agriculture
a legal or valid in the name of a public
trust under state law entity (such as a state or
local government, school
district, or prison) that
receives agricultural
program payments
- -----------------------------------------------------------------------------------------------------------------------------------
(1) List first and circle the name of the person whose number you
furnish.
(2) Circle the minor's name and furnish the minor's social security
number.
(3) Circle the ward's, minor's or incompetent person's name and furnish
such person's social security number.
(4) Show your individual name. You may also enter your business name.
You may use your Social Security number or employer identification
number.
(5) List first and circle the name of the legal trust, estate or pension
trust.
Note: If no name is circled when there is more than one name, the number
will be considered to be that of the first name listed.
</TABLE>
- 12 -
<PAGE>
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
OBTAINING A NUMBER
If you don't have a taxpayer identification number or you don't know your
number, obtain Form SS-5, Application for a Social Security Number Card, or
Form SS-4, Application for Employer Identification Number, at the local office
of the Social Security Administration or the Internal Revenue
Service and apply for a number.
PAYEES AND PAYMENTS EXEMPT FROM BACKUP WITHHOLDING Payees specifically
exempted from backup withholding on ALL payments include the following:
o A corporation.
o A financial institution.
o An organization exempt from tax under Section 501(a) of the Internal
Revenue Code of 1986, as amended (the "Code"), or an individual
retirement plan.
o The United States or any agency or instrumentality
thereof.
o A State, the District of Columbia, a possession of the United States,
or any subdivision or instrumentality thereof.
o A foreign government, a political subdivision of a foreign government,
or any agency or instrumentality thereof.
o An international organization or any agency or
instrumentality thereof.
o A registered dealer in securities or commodities registered in the
United States or a possession of the United States.
o A real estate investment trust.
o A common trust fund operated by a bank under
Section 584(a) of the Code.
o An exempt charitable remainder trust, or a non-
exempt trust described in Section 4947(a)(1) of the
Code.
o An entity registered at all times under the Investment Company Act of
1940.
o A foreign central bank of issue.
Payments of dividends and patronage dividends not generally subject to
backup withholding include the following:
o Payments to nonresident aliens subject to withholding under Section
1441 of the Code.
o Payments to partnerships not engaged in a trade or business in the
United States and which have at least one nonresident partner.
o Payments of patronage dividends where the amount
received is not paid in money.
o Payments made by certain foreign organizations.
o Payments made to a nominee.
Payments of interest not generally subject to backup
withholding including the following:
o Payments of interest on obligations issued by
individuals. Note: You may be subject to backup
withholding if this interest is $600 or more and is
paid in the course of the taxpayer's trade or business
and you have not provided your correct taxpayer
identification number to the payer.
o Payments of tax-exempt interest (including exempt-interest dividends
under Section 852 of the Code).
o Payments described in Section 6049(b)(5) of the
Code to nonresident aliens.
o Payments on tax-free covenant bonds under Section
1451 of the Code.
o Payments made by certain foreign organizations.
o Payments made to a nominee.
Exempt payees described above should file Substitute Form
W-9 to avoid possible erroneous backup withholding. FILE
THIS FORM WITH THE PAYER, FURNISH YOUR TAXPAYER IDENTIFICATION NUMBER, WRITE
"EXEMPT" ON THE FACE OF THE FORM, SIGN AND DATE THE FORM AND RETURN IT TO THE
PAYER. IF YOU ARE A NON-RESIDENT ALIEN OR A FOREIGN ENTITY NOT SUBJECT TO
BACKUP WITHHOLDING, FILE WITH PAYER A COMPLETED INTERNAL REVENUE FORM W-8
(CERTIFICATE OF FOREIGN STATUS).
Certain payments other than interest, dividends, and patronage dividends, that
are not subject to information reporting are also not subject to backup
withholding. For details, see the regulations under Sections 6041, 6041A(a),
6042, 6044, 6045, 6049, 6050A and 6050N of the Code.
PRIVACY ACT NOTICE. -- Section 6109 of the Code require most recipients of
dividends, interest, or other payments to give taxpayer identification numbers
to payers who must report the payments to IRS. IRS uses the numbers for
identification purposes. Payers must be given the numbers whether or not
recipients are required to file tax returns. Payers must generally withhold
31% of taxable interest, dividends, and certain other payments to a payee who
does not furnish a taxpayer identification number to a payer.
Certain penalties may also apply.
PENALTIES
(1) FAILURE TO FURNISH TAXPAYER NUMBER. -- If you fail to furnish your
taxpayer identification number to a payer, you are subject to a penalty of $50
for each such failure unless your failure is due to reasonable cause and not
to willful neglect.
(2) CIVIL PENALTY FOR FALSE INFORMATION WITH RESPECT TO
WITHHOLDING. -- If you make a false statement with no
reasonable basis which results in no imposition of backup
withholding, you are subject to a penalty of $500.
(3) CRIMINAL PENALTY FOR FALSIFYING INFORMATION. --
Falsifying certifications or affirmations may subject you to
criminal penalties including fines and/or imprisonment.
FOR ADDITIONAL INFORMATION, CONTACT
YOUR TAX CONSULTANT OR THE INTERNAL
REVENUE SERVICE.
- 13 -
SFX BROADCASTING, INC.
OFFER TO EXCHANGE
10 3/4% SENIOR SUBORDINATED NOTES DUE 2006, SERIES B
FOR ANY AND ALL OF ITS OUTSTANDING
10 3/4% SENIOR SUBORDINATED NOTES DUE 2006, SERIES A
TO: BROKERS, DEALERS, COMMERCIAL BANKS,
TRUST COMPANIES AND OTHER NOMINEES:
SFX Broadcasting, Inc. (the "Company") is offering, upon and subject
to the terms and conditions set forth in the Prospectus, dated
__________________, 1996 (the "Prospectus"), and the enclosed Letter of
Transmittal (the "Letter of Transmittal"), to exchange (the "Exchange Offer")
$1,000 principal amount of its 10 3/4% Senior Subordinated Notes due 2006,
Series B (the "Series B Notes"), which exchange has been registered under the
Securities Act of 1933, as amended (the "Securities Act"), pursuant to a
registration statement of which this Prospectus is a part (the "Registration
Statement") for each $1,000 principal amount of its outstanding 10 3/4% Senior
Subordinated Notes due 2006, Series A (the "Series A Notes") of which $450.0
million in aggregate principal amount are outstanding as of the date hereof.
The Exchange Offer is being made in order to satisfy certain obligations of
the Company contained in the Registration Rights Agreement dated May 31, 1996
among the Company and BT Securities Corporation, Goldman, Sachs & Co., and
Lehman Brothers Inc. (the "Initial Purchasers").
We are requesting that you contact your clients for whom you hold
Series A Notes regarding the Exchange Offer. For your information and for
forwarding to your clients for whom you hold Series A Notes registered in your
name or in the name of your nominee, or who hold Series A Notes registered in
their own names, we are enclosing the following documents:
1. Prospectus dated _____________________, 1996;
2. The Letter of Transmittal for your use and for the information
of your clients;
3. A Notice of Guaranteed Delivery to be used to accept the Exchange
Offer, if certificates for Series A Notes are not immediately available, or
time will not permit all required documents to reach the Exchange Agent prior
to the Expiration Date (as defined below), or if the procedure for book-entry
transfer cannot be completed on a timely basis;
4. A form of letter which may be sent to your clients for whose
account you hold Series A Notes registered in your name or the name of your
nominee, with space provided for obtaining such clients' instructions with
regard to the Exchange Offer;
5. Guidelines for Certification of Taxpayer Identification Number
on Substitute Form W-9; and
6. Return envelopes addressed to Chemical Bank, Exchange Agent for
the Series A Notes.
Your prompt action is requested. The Exchange Offer will expire at
5:00 p.m., New York City time, on _______________, 1996, unless extended,
provided it may not be extended beyond ______________, 1996.
To participate in the Exchange Offer, a duly executed and properly
completed Letter of Transmittal (or facsimile thereof), with any required
signature guarantees and any other required documents, should be sent to the
Exchange Agent, and certificates representing the Series A Notes should be
delivered to the Exchange Agent, all in accordance with the instructions set
forth in the Letter of Transmittal and the Prospectus.
<PAGE>
If holders of Series A Notes wish to tender, but it is impracticable
for them to forward their certificates for Series A Notes prior to the
expiration of the Exchange Offer or to comply with the book-entry transfer
procedures on a timely basis, a tender may be effected by following the
guaranteed delivery procedures described in the Prospectus under "The Exchange
Offer--Guaranteed Delivery Procedures."
The Company will, upon request, reimburse brokers, dealers,
commercial banks and trust companies for reasonable and necessary costs and
expenses incurred by them in forwarding the Prospectus and the related
documents to the beneficial owners of Series A Notes held by them as nominee
or in a fiduciary capacity. The Company will pay or cause to be paid all stock
transfer taxes applicable to the exchange of Series A Notes pursuant to the
Exchange Offer, except as set forth in Instruction 6 of the Letter of
Transmittal.
Any inquiries you may have with respect to the Exchange Offer, or
requests for additional copies of the enclosed materials, should be directed
to Chemical Bank, the Exchange Agent for the Series A Notes, at its address
and telephone number set forth on the front of the Letter of Transmittal.
Very truly yours,
SFX BROADCASTING, INC.
NOTHING HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU OR
ANY PERSON AS AN AGENT OF HOLDINGS OR THE EXCHANGE AGENT, OR AUTHORIZE YOU OR
ANY OTHER PERSON TO USE ANY DOCUMENT OR MAKE ANY STATEMENTS OF BEHALF OF
EITHER OF THEM WITH RESPECT TO THE EXCHANGE OFFER, EXCEPT FOR STATEMENTS
EXPRESSLY MADE IN THE PROSPECTUS OR THE LETTER OF TRANSMITTAL.
Enclosures
SFX BROADCASTING, INC.
OFFER TO EXCHANGE
10 3/4% SENIOR SUBORDINATED NOTES DUE 2006, SERIES B
FOR ANY AND ALL OF ITS OUTSTANDING
10 3/4% SENIOR SUBORDINATED NOTES DUE 2006, SERIES A
TO OUR CLIENTS:
Enclosed for your consideration is a Prospectus, dated _________,
1996 (the "Prospectus"), and the related Letter of Transmittal (the "Letter of
Transmittal"), relating to the offer (the "Exchange Offer") of SFX
Broadcasting, Inc. (the "Company") to exchange (the "Exchange Offer") $1,000
principal amount of its 10 3/4% Senior Subordinated Notes due 2006, Series B
(the "Series B Notes"), which exchange has been registered under the
Securities Act of 1933, as amended, pursuant to a registration statement of
which the Prospectus is part for each $1,000 principal amount of its
outstanding 10 3/4% Senior Subordinated Notes due 2006, Series A (the "Series
A Notes") of which $450.0 million in aggregate principal amount are
outstanding as of the date hereof. The Exchange Offer is made upon the terms
and subject to the conditions described in the Prospectus and the Letter of
Transmittal. The Exchange Offer is being made in order to satisfy certain
obligations of the Company contained in the Registration Rights Agreement
dated May 31, 1996, among the Company and BT Securities Corporation, Goldman,
Sachs & Co. and Lehman Brothers, Inc. (the "Initial Purchasers").
This material is being forwarded to you as the beneficial owner of
the Series A Notes carried by us in your account but not registered in your
name. A tender of such Series A Notes may only be made by us as the holder of
record and pursuant to your instructions.
Accordingly, we request instructions as to whether you wish us to
tender on your behalf the Series A Notes held by us for your account, pursuant
to the terms and conditions set forth in the enclosed Prospectus and Letter of
Transmittal.
Your instructions should be forwarded to us as promptly as possible
in order to permit us to tender the Series A Notes on your behalf in
accordance with the provisions of the Exchange Offer. The Exchange Offer will
expire at 5:00 p.m., New York City time, on __________, 1996. Series A Notes
tendered pursuant to the Exchange Offer may be withdrawn at any time before
the Expiration Date.
Your attention is directed to the following:
1. The Exchange Offer is for any and all of the outstanding
Series A Notes.
2. The Exchange Offer is subject to certain conditions set
forth in the Prospectus in the section captioned "The Exchange Offer--Certain
Conditions to the Exchange Offer."
3. Any transfer taxes incident to the transfer of Series A Notes from
the holder to the Company will be paid by the Company, except as otherwise
provided in the Instructions in the Letter of Transmittal.
4. The Exchange Offer expires at 5:00 p.m., New York City time, on
__________, 1996, unless extended by the Company, provided it may not be
extended beyond _________, 1996.
If you wish to have us tender your Series A Notes, please so instruct
us by completing, executing and returning to us the instruction form on the
back of this letter. THE LETTER OF TRANSMITTAL IS FURNISHED TO YOU FOR
INFORMATION ONLY AND MAY NOT BE USED DIRECTLY BY YOU TO TENDER SERIES A NOTES.
<PAGE>
INSTRUCTIONS WITH RESPECT TO
THE EXCHANGE OFFER
The undersigned acknowledge(s) receipt of your letter and the
enclosed material referred to therein relating to the Exchange Offer made by
SFX Broadcasting, Inc. with respect to its Series A Notes.
This will instruct you to tender the Series A Notes held by you for
the account of the undersigned, upon and subject to the terms and conditions
set forth in the Prospectus and the related Letter of Transmittal.
Please tender the Series A Notes held by you for my account as
indicated below:
<TABLE>
<S> <C>
PRINCIPAL AMOUNT OF
SERIES A NOTES
10 3/4% Senior Subordinated Notes due
2006, Series A......................... ______________________________________________
[ ] Please do not tender any Series A Notes
held by you for my account.
Dated:_____________________________, 1996 __________________________________________________
--------------------------------------------------
Signature(s)
--------------------------------------------------
--------------------------------------------------
--------------------------------------------------
Please print name(s) here
--------------------------------------------------
--------------------------------------------------
Address(es)
--------------------------------------------------
--------------------------------------------------
Area Code and Telephone Number
--------------------------------------------------
Tax Identification or Social Security No(s).
</TABLE>
None of the Series A Notes held by us for your account will be
tendered unless we receive written instructions from you to do so. Unless a
specific contrary instruction is given in the space provided, your
signature(s) hereon shall constitute an instruction to us to tender all the
Series A Notes held by us for your account.
NOTICE OF GUARANTEED DELIVERY FOR
SFX BROADCASTING, INC.
This form or one substantially equivalent hereto must be used to
accept the Exchange Offer of SFX Broadcasting, Inc. (the "Company") made
pursuant to the Prospectus, dated ______________, 1996 (the "Prospectus"), if
certificates for 10 3/4% Senior Subordinated Notes due 2006, Series A
(the "Series A Notes") of the Company are not immediately available or if the
procedure for book-entry transfer cannot be completed on a timely basis or
time will not permit all required documents to reach the Company prior to 5:00
p.m., New York City time, on the Expiration Date of the Exchange Offer. Such
form may be delivered or transmitted by mail, hand or overnight courier to
Chemical Bank (the "Exchange Agent") as set forth below. In addition, in order
to utilize the guaranteed delivery procedure to tender the Series A Notes
pursuant to the Exchange Offer, a completed, signed and dated Letter of
Transmittal must also be received by the Exchange Agent prior to 5:00 p.m.,
New York City time, on the Expiration Date. Capitalized terms not defined
herein are defined in the Prospectus.
Delivery To: Chemical Bank, the Exchange Agent
<TABLE>
<S> <C> <C>
By Facsimile: By Mail, By Hand and Confirm by Telephone:
Overnight Courier:
(212) 638-7380 Chemical Bank Carlos Esteves
(212) 344-9387 Corporate Trust-Securities Window (212) 638-0828
Room 234-North Building
55 Water Street Sharon Lewis
New York, NY 10041 (212) 638-0454
</TABLE>
Delivery of this instrument to an address other than as set forth
above or transmission of instructions via a facsimile number other than the
one listed above will not constitute a valid delivery.
Ladies and Gentlemen:
Upon the terms and conditions set forth in the Prospectus and the
accompanying Letter of Transmittal, the undersigned hereby tenders to the
Company the Aggregate Principal amount of Series A Notes set forth below,
pursuant to the guaranteed delivery procedure described in "The Exchange
Offer--Guaranteed Delivery Procedures" section of the Prospectus.
<TABLE>
<S> <C>
Aggregate Principal Amount of Series A Notes
tendered:
$ ____________________________________________
Certificate Nos. (if available):
______________________________________________
Aggregate Principal Amount Represented by Old If Series A Notes will be delivered by book-entry
Certificates(s): transfer to The Depository Trust Company, provide
account number.
$_____________________________________________ Account Number __________________________________
</TABLE>
<PAGE>
All authority herein conferred or agreed to be conferred shall survive
the death or incapacity of the undersigned and every obligation of the
undersigned hereunder shall be binding upon the heirs, personal representatives,
successors and assigns of the undersigned.
- -------------------------------------------------------------------------------
PLEASE SIGN HERE
X ____________________________ ______________, 1996
X ____________________________ ______________, 1996
Signature(s) of Owners(s) or Date
Authorized Signatory
Area Code and Telephone
Number: _______________
Must be signed by the holder(s) of Series A Notes as their name(s)
appear(s) on certificates for Series A Notes or on a security position
listing, or by person(s) authorized to become registered holder(s) by
endorsement and documents transmitted with this Notice of Guaranteed Delivery.
If signature is by a trustee, executor, administrator, guardian,
attorney-in-fact, officer or other person acting in a fiduciary or
representative capacity, such person must set forth his or her full title
below.
PLEASE PRINT NAME(S) AND ADDRESS(ES)
Name(s): __________________________________________________________________
__________________________________________________________________
__________________________________________________________________
Capacity: __________________________________________________________________
Address(es):__________________________________________________________________
__________________________________________________________________
__________________________________________________________________
__________________________________________________________________
GUARANTEE
The undersigned, a member of a registered national securities
exchange, or a member of the National Association of Securities Dealers, Inc.,
or a commercial bank or trust company having an office or correspondent in the
United States, hereby guarantees that the certificates representing the
aggregate principal amount of Series A Notes tendered hereby in proper form
for transfer, or timely confirmation of the book-entry transfer of such Series
A Notes into the Exchange Agent's account at The Depository Trust Company
pursuant to the procedures set forth in "The Exchange Offer--Guaranteed
Delivery Procedures" section of the Prospectus, together with a properly
completed and duly executed Letter of Transmittal (or a manually signed
facsimile thereof) with any required signature guarantee and any other
documents required by the Letter of Transmittal, will be received by the
Exchange Agent at the address set forth above, no later than five New York
Stock Exchange trading days after the date of execution hereof.
______________________________________ __________________________________
Name of Firm Authorized Signature
______________________________________ __________________________________
Address Title
______________________________________ Name: ____________________________
Zip Code (Please Type or Print)
Area Code and Tel. No. _______________ Dated: ___________________________
NOTE: DO NOT SEND CERTIFICATES FOR SERIES A NOTES WITH THIS FORM.
CERTIFICATES FOR SERIES A NOTES SHOULD ONLY BE SENT WITH YOUR LETTER
OF TRANSMITTAL.
