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As filed with the Securities and Exchange Commission on November 27, 1996
Registration No. 333-
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-3
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
SFX BROADCASTING, INC.
(Exact Name of Registrant as Specified in Its Charter)
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150 EAST 58TH STREET, 19TH FLOOR
NEW YORK, NEW YORK 10155
(212) 407-9191
DELAWARE (Address, Including Zip Code, and Telephone Number, 13-3649750
(State or Other Jurisdiction of Including Area Code, of Registrant's (I.R.S. Employer
Incorporation or Organization) Principal Executive Offices) Identification No.)
ROBERT F.X. SILLERMAN
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:
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HOWARD M. BERKOWER, ESQ. KIRK A. DAVENPORT, ESQ.
BAKER & MCKENZIE LATHAM & WATKINS
805 THIRD AVENUE 885 THIRD AVENUE
NEW YORK, NEW YORK 10122 NEW YORK, NEW YORK 10022
(212) 751-5700 (212) 906-1200
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon
as practicable after this Registration Statement becomes effective.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, check the following box.
[ ]
If any of the securities being registered on this form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities
Act of 1933, other than securities offered only in connection with dividend
or interest reinvestment plans, please check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
CALCULATION OF REGISTRATION FEE
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- -----------------------------------------------------------------------------
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AMOUNT TO PROPOSED MAXIMUM PROPOSED MAXIMUM
BE AGGREGATE PRICE AGGREGATE OFFERING AMOUNT OF
TITLE OF SHARES TO BE REGISTERED REGISTERED(1) PER UNIT(2) PRICE(2) REGISTRATION FEE
- ----------------------------------------- -------------- ---------------- ------------------ ----------------
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Debt Securities
Preferred Stock, par value $.01 per share
Class A Common Stock, par value $.01
per share ............................... $500,000,000 100% $500,000,000 $151,515.15
- ----------------------------------------- -------------- ---------------- ------------------ ----------------
Total ........................................................................................ $151,515.15
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(1) Such indeterminate number or amount of Debt Securities, Preferred Stock
or Class A Common Stock as may from time to time be issued at
indeterminate prices in an aggregate public offering price for all
securities of $500,000,000. No separate consideration will be received
for any Debt Securities, Preferred Stock or Class A Common Stock
issuable upon conversion of or in exchange for Debt Securities or
Preferred Stock. Such amount is exclusive of accrued interest or
dividends, if any.
(2) Estimated solely for purposes of calculating the registration fee
pursuant to Rule 457(o) under the Securities Act of 1933.
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.
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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 NOVEMBER 27, 1996
PROSPECTUS
$500,000,000
#############################################################################
GRAPHIC OMITTED
IGT: "SFXLOGO"
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DEBT SECURITIES, PREFERRED STOCK AND CLASS A COMMON STOCK
SFX Broadcasting, Inc. (the "Company") may from time to time offer,
together or separately, its (i) debt securities (the "Debt Securities") which
may be either senior debt securities (the "Senior Debt Securities") or
subordinated debt securities (the "Subordinated Debt Securities"), (ii)
shares of its preferred stock, par value $.01 per share (the "Preferred
Stock"), and (iii) shares of its Class A Common Stock, par value $.01 per
share (the "Class A Common Stock"), in amounts, at prices and on terms to be
determined at the time of the offering. The Debt Securities, Preferred Stock
and Class A Common Stock are collectively called the "Securities."
The Securities offered pursuant to this Prospectus may be issued in one or
more series or issuances and will be limited to $500,000,000 in aggregate
initial public offering price. Certain specific terms of the particular
Securities in respect of which this Prospectus is being delivered will be set
forth in an accompanying Prospectus Supplement (the "Prospectus Supplement"),
including, where applicable, (i) in the case of Debt Securities, the specific
title, aggregate principal amount, the denomination, maturity, premium, if
any, the interest, if any (which may be at a fixed or variable rate), the
time and method of calculating payment of interest, if any, the place or
places where principal of (and premium, if any) and interest, if any, on such
Debt Securities will be payable, any terms of redemption at the option of the
Company or the holder, any sinking fund provisions, terms for any conversion
into Class A Common Stock, the initial public offering price, listing (if
any) on a securities exchange or quotation (if any) on an automated quotation
system, acceleration, if any, and other terms and (ii) in the case of
Preferred Stock, the specific title, the aggregate number of shares offered,
any dividend (including the method of calculating payment of dividends),
liquidation, redemption, voting and other rights, any terms for any
conversion or exchange into Class A Common Stock or Debt Securities, the
initial public offering price, listing (if any) on a securities exchange or
quotation (if any) on an automated quotation system and other terms. If so
specified in the applicable Prospectus Supplement, Debt Securities of a
series may be issued in whole or in part in the form of one or more temporary
or permanent global securities.
The Class A Common Stock is quoted on the Nasdaq National Market under the
trading symbol "SFXBA." Any Class A Common Stock sold pursuant to a
Prospectus Supplement will be quoted on the Nasdaq National Market, subject
to official notice of issuance.
Unless otherwise specified in a Prospectus Supplement, the Senior Debt
Securities, when issued, will be unsecured and will rank equally with all
other unsecured and unsubordinated indebtedness of the Company. The
Subordinated Debt Securities, when issued, will be subordinated in right of
payment to all Senior Debt (as defined in the applicable Prospectus
Supplement) of the Company.
The Prospectus Supplement will contain information concerning certain
United States federal income tax considerations, if applicable to the
Securities offered.
This Prospectus may not be used to consummate sales of Securities unless
accompanied by a Prospectus Supplement relating to such Securities. Any
statement contained in this Prospectus will be deemed to be modified or
superseded by any inconsistent statement contained in an accompanying
Prospectus Supplement.
SEE "RISK FACTORS," BEGINNING ON PAGE 4, FOR A DISCUSSION OF CERTAIN RISK
FACTORS THAT SHOULD BE CONSIDERED BY INVESTORS.
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 Securities will be sold directly, through agents, underwriters or
dealers as designated from time to time, or through a combination of such
methods. If agents of the Company or any dealers or underwriters are involved
in the sale of the Securities in respect of which this Prospectus is being
delivered, the names of such agents, dealers or underwriters and any
applicable commissions or discounts will be set forth in or may be calculated
from the Prospectus Supplement with respect to such Securities. See "Plan of
Distribution" for possible indemnification arrangements with agents, dealers
and underwriters.
The date of this Prospectus is , 1996.
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IN CONNECTION WITH THE OFFERING OF CERTAIN SECURITIES, THE UNDERWRITERS
MAY OVER-ALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET
PRICES OF SUCH SECURITIES, OTHER SECURITIES OF THE COMPANY OR ANY SECURITIES
THE PRICES OF WHICH MAY BE USED TO DETERMINE PAYMENTS ON SUCH SECURITIES AT
LEVELS ABOVE THOSE WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH
TRANSACTIONS MAY BE EFFECTED ON THE NASDAQ NATIONAL MARKET OR OTHERWISE. SUCH
STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
No person is authorized to give any information or to make any
representations other than those contained in this Prospectus or a Prospectus
Supplement in connection with the offering described herein and therein, and
any information or representations not contained herein or therein must not
be relied upon as having been authorized by the Company or by any
underwriter, dealer or agent. This Prospectus may not be used to consummate
sales of Securities unless accompanied by a Prospectus Supplement relating to
such Securities. Neither this Prospectus nor any Prospectus Supplement shall
constitute an offer to sell or a solicitation of an offer to buy any of the
Securities covered by this Prospectus in any jurisdiction to any person to
whom it is unlawful to make such offer of solicitation in such jurisdiction.
The delivery of this Prospectus and the applicable Prospectus Supplement at
any time does not imply that the information herein is correct as of any time
subsequent to the date hereof.
AVAILABLE INFORMATION
The Company has filed with the Securities and Exchange Commission (the
"Commission") a Registration Statement on Form S-3 under the Securities Act
of 1933, as amended (the "Securities Act"), with respect to the Securities
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 securities 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 informational 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, 13th Floor, New York, New York 10048 and the Northwestern
Atrium Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661.
Copies of such documents can also 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. The Company is an electronic filer
under the EDGAR (Electronic Data Gathering, Analysis and Retrieval) system
maintained by the Commission. The Commission maintains a Web site
(http://www.sec.gov) on the Internet that contains reports, proxy and
information statements and other information regarding companies that file
electronically with the Commission. In addition, documents filed by the
Company can be inspected at the offices of The Nasdaq Stock Market, Inc.,
Reports Section, 1735 K Street, N.W., Washington, D.C. 20006.
2
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INCORPORATION BY REFERENCE
The following documents, which have been filed by the Company with the
Commission, are incorporated herein by reference:
(i) the Company's Annual Report on Form 10-K, as amended, for the
year ended December 31, 1995;
(ii) the Company's Quarterly Reports on Form 10-Q for the quarterly
periods ended March 31, 1996, June 30, 1996, and September 30,
1996;
(iii) the Company's Current Reports on Form 8-K dated April 18, 1996,
May 8, 1996, May 16, 1996, May 29, 1996, June 21, 1996, July
10, 1996 (as amended), August 8, 1996, October 3, 1996, October
30, 1996, November 1, 1996, and November 27, 1996; and
(iv) the description of the Company's Class A Common Stock contained
in the Company's Registration Statement on Form 8-A (File No.
0-22486) filed with the Commission on September 27, 1993, as
amended.
All documents and reports filed by the Company pursuant to Sections 13(a),
13(c), 14 or 15(d) of the Exchange Act after the date of this Prospectus and
prior to the termination of the offering of Securities 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 which is, or is 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 the
previous statement. Any statement so modified or superseded shall not be
deemed, except as so modified or superseded, to constitute a part of this
Prospectus.
The Company will provide without charge to each person to whom this
Prospectus is delivered, upon written or oral request of such person, a copy
of any document incorporated by reference in this Prospectus, other than
exhibits to any such document not specifically described above. Request for
such documents should be directed to SFX Broadcasting, Inc., 150 East 58th
Street, 19th Floor, New York, New York 10155, Attention: Timothy Klahs,
Director of Investor Relations; telephone number (212) 407-9191.
3
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RISK FACTORS
In addition to the other information contained or incorporated by
reference in this Prospectus or any Prospectus Supplement, the following
factors should be considered carefully by prospective investors in evaluating
the Company before purchasing any of the securities offered hereby. The
information contained or incorporated by reference in this Prospectus or any
Prospectus Supplement includes forward-looking statements that involve risks
and uncertainties, a number of which are identified in this "Risk Factors"
section. These risks and uncertainties include, without limitation, the
consummation of acquisitions and dispositions, integration of acquired
stations, leverage, limitations on the payment of dividends, regulation of
radio broadcasting and other factors. The Company's actual results may differ
materially from the results discussed in the forward-looking statements, due
to such risks and uncertainties.
RISKS RELATED TO PENDING ACQUISITIONS AND DISPOSITIONS
Consummation of the Company's pending acquisitions and dispositions is
subject to a number of factors, certain of which are beyond the Company's
control. In particular, consummation of the acquisitions and the dispositions
is subject to the prior approval by the Federal Communications Commission
(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. As a
result of the elimination of the national ownership limits and the
liberalization of the local ownership limits effected by the
Telecommunications Act of 1996 (the "Recent Legislation"), acquisitions and
dispositions will be subject to antitrust review by the Federal Trade
Commission and the Department of Justice, Antitrust Division (the "Antitrust
Agencies"). The Antitrust Agencies have indicated their intention to review
matters related to the concentration of ownership within markets even when
the ownership in question is in compliance with the provisions of the Recent
Legislation. See "--Extensive Regulation of Radio Broadcasting."
The Company will also require financing in order to consummate the pending
acquisitions, which the Company may obtain through the issuance of
Securities, borrowings under the senior credit facility and proceeds from
dispositions. The ability of the Company to issue certain Securities or
borrow under the senior credit facility will be subject to meeting certain
financial tests. In addition, consummation of certain acquisitions is subject
to the prior approval of the Lenders under Company's senior credit facility
entered into on November 22, 1996. There can be no assurance that the
Company's existing stations, and the stations which the Company will acquire,
will achieve the cash flow levels required to issue certain Securities or
borrow under the senior credit facility.
RISKS ASSOCIATED WITH INTEGRATION OF THE STATIONS
As of January 1, 1996, the Company owned and operated, provided
programming to or sold advertising on behalf of 22 radio stations located in
eight markets. Since that time, the number of stations has more than tripled.
The Company's plans with respect to radio stations it has acquired and plans
to acquire 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 net revenues 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 operation of the radio
stations to be acquired. The integration of the newly acquired 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. The Company
currently anticipates realizing certain cost savings and elimination of
non-recurring expenses as a result of the acquisitions. While management
believes that such cost savings and the elimination of non-recurring expenses
are reasonably achievable, the Company's ability to achieve such cost savings
and to eliminate such non-recurring expenses is subject to numerous factors,
many of which are beyond the Company's control. There can be no assurance
that the Company will realize any such cost savings.
4
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EXTENSIVE REGULATION OF RADIO BROADCASTING
Adoption of the Recent Legislation in February 1996 eliminated the
national limits and liberalized the local limits on radio station ownership
by a single company. However, the Antitrust Agencies are increasingly
scrutinizing acquisitions of radio stations and the entering into of joint
sales agreements ("JSAs") and local market agreements ("LMAs"). There can be
no assurance that policy and rule-making activities of the Antitrust Agencies
will not impact the Company's operations (including existing stations or
markets), expansion strategy or its ability to realize the benefits which
management had anticipated obtaining following the adoption of the Recent
Legislation.
The radio broadcasting industry is subject to extensive regulation by the
FCC. In particular, the Company's business depends on its continuing to hold,
and, in connection with acquisitions of radio stations, on it obtaining prior
FCC consent to assignments or transfers of control of broadcasting station
operating licenses issued by the FCC. There can be no assurance that the
Company's licenses will be renewed or that the FCC will approve future
acquisitions or dispositions. 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. The issuance of shares of Class A Common
Stock, including those issuable pursuant to the conversion of other
securities of the Company and pursuant to all other rights, options or
warrants to purchase Class A Common Stock, that would cause Robert F.X.
Sillerman, the Executive Chairman of the Company, to hold directly voting
stock of the Company representing less than 50% of the total voting power of
the Company will require the Company to seek and obtain the consent of the
FCC. The Company intends to seek such consent.
The Congress and/or the FCC have under consideration, and in the future
may consider and adopt, new laws, regulations and policies regarding a wide
variety of matters that could affect, directly or indirectly, the operation,
ownership and profitability of the Company's radio broadcast stations, result
in the loss of audience share and advertising revenues for the Company's
radio broadcast stations, and affect the ability of the Company to acquire
additional radio broadcast stations or finance such acquisitions. In
particular, as of November 25, 1996, the FCC has outstanding a notice of
proposed rulemaking 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, (ii) increasing the amount of
stock an investment company can own without attribution, (iii) attributing,
under certain circumstances, certain interests such as non-voting stock or
debt, and (iv) attributing, under certain circumstances, JSAs.
SUBSTANTIAL LEVERAGE; INABILITY TO SERVICE OBLIGATIONS
In connection with acquisitions, the Company has incurred and will incur
significant amounts of indebtedness. Subject to certain restrictions
contained in the Company's debt instruments, 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."
The degree to which the Company is and may become 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 capital stock and will not be available for other
purposes, (iii) the agreements governing the Company's debt contain or are
expected to 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 and (iv) the Company's level of indebtedness could make it more
vulnerable to economic downturns, limit its ability to withstand competitive
pressures and limit its flexibility in reacting to changes in its industry
and general economic conditions. Certain of the Company's competitors operate
on a less leveraged basis, and have significantly greater operating and
financial flexibility, than the Company.
5
<PAGE>
The Company's ability to make scheduled payments of principal of, to pay
interest on or to refinance, its debt and to make dividend and redemption
payments on its capital 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 these stations into the Company's operations. The Company's borrowings
under the senior credit facility will be, and other future borrowings may be,
at variable rates of interest, which will result in higher interest expense
in the event of increases in interest rates. There can be no assurance that
the Company's business will generate sufficient cash flow from operations or
that future working capital borrowings will be available in an amount which
enables the Company to service its debt, to make dividend, conversion and
redemption payments and to make necessary capital or other expenditures. The
Company may be required to refinance a portion of the principal amount of its
debt or the aggregate liquidation preference of the outstanding preferred
stock prior to their 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.
LIMITATIONS ON ABILITY TO PAY DIVIDENDS
The Company has never paid, and does not anticipate that in the
foreseeable future it will pay, any dividends on its Common Stock. Certain of
the Company's debt instruments include covenants restricting the Company's
ability to pay dividends or to make certain other distributions to
stockholders. In connection with the offering of any dividend-paying
Preferred Stock hereby, the applicable Prospectus Supplement will set forth
the amount available for distribution as of the end of the most recent fiscal
period under the Company's debt instruments.
In addition to the above restrictions imposed on the payment of dividends,
under Delaware law the Company is permitted to pay cash dividends on its
capital stock, only out of its surplus or, in the event that it has no
surplus, out its net profits for the year in which a dividend is declared or
for the immediately preceding fiscal year. Surplus is defined as the excess
of a company's total assets over the sum of its total liabilities plus the
par value of its outstanding capital stock. In order to pay dividends in
cash, the Company must have surplus or net profits equal to the full amount
of the cash dividend at the time such dividend is declared. In determining
the Company's ability to pay dividends, Delaware law permits the board of
directors of the Company to revalue the Company's assets and liabilities from
time to time to their fair market values in order to create surplus. The
Company cannot predict what the value of its assets or the amount of its
liabilities will be in the future and, accordingly, there can be no assurance
that the Company will be able to pay cash dividends on new issues of capital
stock.
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 $45.3 million, $4.4 million
and $17.8 million for the nine months ended September 30, 1996, and the years
ended December 31, 1995 and 1993, respectively. Depreciation and amortization
relating to past acquisitions and future acquisitions, interest expenses
under the Company's debt and dividend payments will continue to affect the
Company's net income (loss) in the future. There is no assurance that losses
will not continue or that the Company will become profitable in the future.
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
will rely principally on dividends or advances from its subsidiaries to
provide the funds necessary for, among other things, the payment of dividends
and redemption payments on Preferred Stock and principal of and any interest
or premium on any Debt Securities and other indebtedness of the Company. The
Company's subsidiaries are subject to state-law restrictions on their ability
to pay dividends to the Company, such as those set forth with respect to the
Company in "--Limitations on Ability to Pay
6
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Dividends." Any right of the holders of the Debt Securities to participate in
the assets of any of the subsidiaries upon such subsidiary's liquidation or
recapitalization will be effectively subordinated to the claims of such
subsidiary's creditors and preferred stockholders (if any), except to the
extent the Company is itself recognized as a creditor of such subsidiary.
CHANGE OF CONTROL
Upon the occurrence of a change of control (as defined in the applicable
document) of the Company, the holders of certain preferred stock or certain
debt instruments will have the right, subject to certain conditions and
restrictions, to require the Company to repurchase their securities at a
price equal to 101% of the aggregate liquidation preference or the aggregate
principal amount thereof, as applicable, plus accrued and unpaid dividends or
interest, as applicable, to the date of repurchase. The repurchase price is
payable in cash. In addition, a change of control may constitute a default
under the Company's senior credit facility. If a change of control were to
occur, due to the highly leveraged nature of the Company, the Company might
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. 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 "--Extensive Regulation of Radio Broadcasting" and
"--Substantial Leverage; Inability to Service Obligations."
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, there can be no
assurance that the Company will consummate any 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 certain acquisitions will be subject to
the prior approval of the lenders under the Company's senior credit facility.
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 such acquisitions and financings, could be
restricted by the terms of certain debt instruments and preferred stock.
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 "--Extensive Regulation of Radio Broadcasting" and
"--Risks Associated with Integration of the Stations."
COMPETITION
The radio broadcasting industry is highly competitive and the Company's
stations are located in highly competitive markets. 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 its
respective market. 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.
The Company's audience ratings and market share are subject to change, and
any adverse change in audience rating or market share in any particular
market could have a material and adverse effect on the Company's net
revenues. Although the Company competes with other radio stations with
comparable programming formats in most of its markets, if another station in
the market were to convert its programming format to a format similar to one
of the Company's radio stations, if a new radio station were to adopt a
competitive format, or if an existing competitor were to strengthen its
operations, the Company's stations could suffer a reduction in ratings or
advertising revenue and could require the Company to incur increased
promotional and other expenses. In addition, certain of the Company's
stations compete, and in the future other stations may compete, with groups
of stations in a market operated by a single operator. As a result of the
Recent Legislation, the radio broadcasting industry has
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become increasingly consolidated, resulting in the existence of radio
broadcasting companies which are significantly larger, with greater financial
resources, than the Company. Furthermore, the Recent Legislation will permit
other radio broadcasting companies to enter the markets in which the Company
operates or may operate in the future. 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 its current audience ratings and advertising revenue market
share. 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. The Company cannot
predict the effect, if any, that any of these new technologies may have on
the radio broadcasting industry.
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 affect 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. These 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; (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.
CONTROL BY MANAGEMENT
As of November 25, 1996, Mr. Sillerman, a Director and the Company's
Executive Chairman, may be deemed to be the beneficial owner of approximately
56.4% of the combined voting power of the Company, and Mr. Sillerman and
other members of the Company's management may be deemed to be the beneficial
owners of approximately 58.1% of the combined voting power of the Company.
The 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 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 are entitled to elect, by a class vote, two-sevenths (2/7ths) of
the Company's directors (or if such number of directors is not a whole
number, the next higher whole number), (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
the Class B Common Stock vote as a single class, with each share of Class A
Common Stock and of Class B Common Stock entitled to one vote per share and
(iii) as otherwise provided by law. In addition, if dividends on the 6-1/2%
Series D Cumulative Convertible Exchangeable Preferred Stock due May 31, 2007
("Series D Preferred Stock") are unpaid in an aggregate amount equal to six
full quarterly dividends and in certain other circumstances, the holders of
the Series D Preferred Stock, will be entitled to elect two additional
members of the Board of Directors of the Company. The control of the Company
by management may have the effect of discouraging certain types of
change-of-control transactions, including transactions in which the holders
of capital stock of the Company might otherwise receive a premium for their
shares over the then-current market price.
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 Triathlon Broadcasting Company
("Triathlon"), a publicly-traded company which owns and operates radio
stations, including stations which are in the same market as certain of the
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Company's 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 "--Extensive
Regulation of Radio Broadcasting." Pursuant to a consulting and marketing
agreement with Triathlon, Sillerman Communications Management Corporation
("SCMC"), an affiliate of Mr. Sillerman and Howard J. Tytel, a Director and
Executive Vice President of the Company, is obligated to offer to Triathlon
any radio broadcasting opportunities that come to its attention in medium and
small markets located west of the Mississippi River. The Company does not
intend to pursue acquisitions in the medium and small markets in the Midwest
and Western regions of the United States on which Triathlon primarily
focuses, except for three radio stations owned by the Company in the Wichita,
Kansas market, a market in which Triathlon has radio station ownership
interests. The Company has entered into a JSA with Triathlon whereby
Triathlon sells advertising time on the Company's stations operating in the
Wichita market. On April 15, 1996, the Company and SCMC entered into an
agreement (the "SCMC Termination Agreement"), pursuant to which SCMC assigned
to the Company its rights to receive fees for consulting and marketing
services payable by Triathlon, except for fees relating to certain
transactions pending at the date of such agreement, and the Company and SCMC
terminated an arrangement pursuant to which SCMC performed financial
consulting services for the Company.
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 Triathlon, which may seek to participate in business
opportunities which may be suitable for the Company.
RELIANCE ON KEY PERSONNEL
The Company's business is dependent to a significant extent upon the
performance of certain key individuals, including Mr. Sillerman, Michael G.
Ferrel and D. Geoffrey Armstrong. The Company has entered into a five-year
employment agreement with each of Messrs. Sillerman and Armstrong, effective
as of April 1, 1995. It is anticipated that the Company will enter into an
employment agreement with Mr. Ferrel. 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. Pursuant to Mr. Armstrong's
employment agreement, he has the right to terminate the agreement under
certain circumstances, entitling him to receive substantial payments. Messrs.
Sillerman's and Armstrong's employment agreements 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. The loss of the services of Messrs. Sillerman, Armstrong or
Ferrel could have a material adverse effect on the Company.
In addition, the Company has entered into employment agreements with
certain of the high-profile on-air personalities. However, there can be no
assurance that the Company will be able to retain any of these employees or
prevent them from competing with the Company in the event of their departure.
NO TRANSFER OF CAPITAL STOCK TO ALIENS
The Company's Restated Certificate of Incorporation, as amended (the
"Certificate of Incorporation"), restricts the ownership, voting and transfer
of the Company's capital stock in accordance with the Communications Act of
1934, as amended (the "Communications Act"), and the rules of the FCC to
prohibit ownership of more than 25% of the Company's outstanding capital
stock, or more than 25% of the voting rights it represents (this percentage,
however, is 20% in the case of those subsidiaries of the Company that are
direct holders of FCC licenses), by or for the account of non-U.S. citizens
or their representatives or a foreign government or a representative thereof
or a corporation organized under the laws of a foreign country ("Aliens") or
corporations otherwise subject to domination or control by Aliens. As of
November 25, 1996, based upon reports filed with the Commission, the Company
believes that there are 1,071,429 shares of Class A Common Stock held by
Nomura Holdings America, Inc. ("Nomura"),
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representing 13.3% of the outstanding shares of Class A Common Stock and 5.7%
of the combined voting power of the Company. Because a substantial portion of
the common stock of Nomura is owned and voted by Aliens, the Company, in
order to comply with the requirements of the Communications Act and the rules
and regulations of the FCC promulgated thereunder, may decide not to permit
or recognize any issuance or transfer of its common stock to an Alien.
Failure to comply with these rules and regulations could result in the
imposition of penalties on the Company. This restriction on transfers to
Aliens may adversely affect the market for the Company's securities. In
addition, the Certificate of Incorporation provides that shares of capital
stock of the Company determined by the Board of Directors to be owned
beneficially by an Alien shall always be subject to redemption by the Company
by action of the Board of Directors to the extent necessary, in the judgment
of the Board of Directors, to comply with the alien ownership restrictions of
the Communications Act, and the FCC rules and regulations. See "Description
of Equity Securities--Certain Provisions of Certificate of Incorporation,
Bylaws and Statute--Foreign Ownership."
THE COMPANY
The Company is one of the largest radio station groups in the United
States and, as of November 25, 1996, owns and operates, provides programming
to or sells advertising on behalf of 69 radio stations in 20 markets. The
Company is diverse in terms of format and geographic markets. The Company was
organized in 1992 by Mr. Sillerman, the Executive Chairman and principal
stockholder of the Company, along with others. The principal executive
offices of the Company are located at 150 East 58th Street, 19th Floor, New
York, New York 10155 and its telephone number is (212) 407-9191.
USE OF PROCEEDS
Except as otherwise set forth in a Prospectus Supplement, the net proceeds
from the sale of the Securities will be used for future acquisitions (some of
which may already be contemplated) and other general corporate purposes,
including working capital, the repayment of existing debt and/or the
repurchase of securities of the Company. The precise amounts and timing of
the application of such net proceeds for such purposes will depend upon a
variety of factors, including the Company's funding requirements and the
availability of alternative sources of funding. The Company routinely reviews
acquisition opportunities. Any proposal to use proceeds from any offering of
Securities will be disclosed in the Prospectus Supplement relating to such
offering.
RATIOS OF EARNINGS TO FIXED CHARGES AND EARNINGS TO
COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDENDS
The following table sets forth the Company's ratios (deficiencies) of
earnings to fixed charges and earnings to combined fixed charges and
preferred stock dividends for each of the periods set forth below.
<TABLE>
<CAPTION>
NINE MONTHS ENDED FISCAL YEARS ENDED
SEPTEMBER 30, DECEMBER 31,
----------------------- -------------------------------------------
1996 1995 1995 1994 1993 1992
----------- ---------- ---------- ------ ----------- ----------
(ALL AMOUNTS, EXCEPT RATIOS, IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
Ratio (Deficiency) of Earnings to Fixed
Charges ............................... $(30,084) $(3,802) $(4,396) 1.3x $(14,919) $(2,208)
Ratio (Deficiency) of Earnings to
Combined Fixed Charges and Preferred
Stock Dividends ....................... (33,635) (4,021) (4,687) 1.3x (15,476) (2,593)
</TABLE>
For purposes of computing the ratio (deficiency) of earnings to fixed
charges and the ratio of earnings to combined fixed charges and preferred
stock dividends, "earnings" consist of pretax income from continuing
operations plus fixed charges (excluding capitalized interest). "Fixed
charges" represent interest incurred (whether expensed or capitalized),
amortization of debt expense, and that portion of rental expense on operating
leases deemed to be the equivalent of interest.
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DESCRIPTION OF DEBT SECURITIES
GENERAL
Debt Securities Offered
Debt Securities may be issued from time to time under one or more
indentures, each dated as of a date on or prior to the issuance of the Debt
Securities to which it relates. Senior Debt Securities and Subordinated Debt
Securities may be issued pursuant to separate indentures (respectively, a
"Senior Indenture" and a "Subordinated Indenture"), in each case between the
Company and a trustee (a "Trustee"), which may be the same Trustee, and in
the form that has been filed as an exhibit to the Registration Statement of
which this Prospectus is a part, subject to such amendments or supplements as
may be adopted from time to time. The Senior Indenture and the Subordinated
Indenture, as amended or supplemented from time to time, are sometimes
referred to individually as an "Indenture" and collectively as the
"Indentures." Each Indenture will be subject to and governed by the Trust
Indenture Act of 1939, as amended (the "TIA"). The statements made hereunder
relating to the Debt Securities and the Indentures are summaries of the
anticipated provisions thereof, do not purport to be complete and are subject
to, and are qualified in their entirety by reference to, all of the
provisions of the applicable Indenture, including the definitions therein of
certain terms and those terms made part of such Indenture by reference to the
TIA, as in effect on the date of such Indenture, and to such Debt Securities.
Copies of the forms of the Indentures are filed as exhibits to the
Registration Statement of which this Prospectus is a part. See "Available
Information." Certain capitalized terms used below and not defined have the
respective meanings assigned to them in the applicable Indenture.
Existing Indebtedness
Certain of the Company's existing debt instruments impose, and future debt
instruments may impose, certain restrictions on the Company, including
restrictions on the payment of dividends, incurrence of debt and consummation
of certain acquisitions and dispositions, and require the Company to maintain
certain financial ratios. The Company's 10 3/4% Senior Subordinated Notes Due
2006 (the "1996 Notes") are general unsecured obligations of the Company and
are subordinated in right of payment to certain other debt of the Company.
The indenture governing the 1996 Notes contains certain covenants which
restrict the ability of the Company to make certain payments, incur
additional indebtedness, pay dividends, make other distributions, incur
certain liens, merge, consolidate, transfer substantially all of its assets,
enter into certain transactions with affiliates, engage in sale and leaseback
transactions, issue or sell capital stock of a subsidiary and engage in
certain business activities. As of November 25, 1996, the Company has
outstanding $450.0 million in aggregate principal amount of 1996 Notes.
The Company's senior credit facility, as in effect on November 25, 1996,
provides the Company with the ability to borrow up to $225.0 million under
certain circumstances. The senior credit facility is secured by a pledge of
all of the capital stock of the Company's subsidiaries and by a security
interest in substantially all of the assets of the Company and its
subsidiaries. Certain covenants in the senior credit facility restrict the
Company's ability to make offerings of equity or debt securities, pay
dividends, consolidate, merge, effect certain asset sales and enter new lines
of business. In addition, the Company is obligated to comply with certain
financial ratios. Borrowings under the senior credit facility bear interest
at a variable rate. As of November 25, 1996, the Company has outstanding
borrowings under the senior credit facility of $15.0 million, which currently
bear interest at an annual rate of 9.75%.
TERMS
The Debt Securities will be unsecured obligations of the Company. The
Indebtedness (as such term is defined in the applicable Prospectus
Supplement) represented by (i) Senior Debt Securities will rank pari passu in
right of payment with all other unsecured and unsubordinated Indebtedness of
the Company and (ii) Subordinated Debt Securities will be subordinated in
right of payment to the prior payment in full of all Senior Debt of the
Company. See "--Ranking." The particular terms of the Debt Securities offered
by a Prospectus Supplement will be described in such Prospectus Supplement,
along with any applicable modifications of or additions to the general terms
of the Debt Securities as described herein and in the
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applicable Indenture and any applicable United States federal income tax
considerations. Accordingly, for a description of the terms of any series of
Debt Securities, reference must be made to both the Prospectus Supplement
relating thereto and the description of the Debt Securities set forth in this
Prospectus.
Each Indenture will provide for the issuance by the Company from time to
time of its Debt Securities in one or more series. The aggregate principal
amount of Debt Securities which may be issued under each Indenture will be
unlimited and each Indenture will set forth the specific terms of any series
of Debt Securities or provide that such terms shall be set forth in, or
determined pursuant to, an authorizing resolution and/or a supplemental
indenture, if any, relating to such series.
The specific terms of each series of Debt Securities will be set forth in
the applicable Prospectus Supplement relating thereto, including, without
limitation, the following, as applicable:
1. the title of such Debt Securities (which shall distinguish the Debt
Securities of that particular series from securities of any other series) and
whether such Debt Securities are Senior Debt Securities or Subordinated Debt
Securities;
2. the aggregate principal amount of such Debt Securities and any limit on
such aggregate principal amount that may be authenticated and delivered under
an Indenture;
3. the price or prices (expressed as a percentage of the principal amount
thereof) at which such Debt Securities will be issued and, if other than the
principal amount thereof, the portion of the principal amount thereof payable
upon declaration of acceleration of the maturity thereof, or, if applicable,
the portion of the principal amount of such Debt Securities that is
convertible into Class A Common Stock or the method by which any such portion
shall be determined;
4. if convertible into Class A Common Stock, the terms on which such Debt
Securities are convertible, including the initial conversion price, the
conversion period, any events requiring an adjustment of the applicable
conversion price and any requirements relating to the reservation of such
shares of Class A Common Stock for purposes of conversion;
5. the date or dates on which the principal of such Debt Securities will
be payable and, if applicable, the terms on which such maturity may be
extended;
6. the rate or rates (which may be fixed or variable) at which such Debt
Securities will bear interest, if any;
7. the date or dates from which any such interest will accrue, the dates
on which any such interest will be payable, the record dates for such
interest payment dates, the persons to whom such interest shall be payable,
and the basis upon which interest shall be calculated if other than that of a
360-day year of twelve 30-day months;
8. the place or places where the principal of and interest, if any, on
such Debt Securities will be payable, where such Debt Securities may be
surrendered for registration of transfer, conversion or exchange and where
notices or demands to or upon the Company in respect of such Debt Securities
and the applicable Indenture may be served;
9. the period or periods, if any, within which, the price or prices at
which and the other terms and conditions upon which such Debt Securities may,
pursuant to any optional or mandatory redemption provisions, be redeemed, as
a whole or in part, at the option of the Company;
10. the dates, if any, on which, and the price or prices at which, the
Debt Securities of the series will be repurchased by the Company at the
option at the Holders thereof and other detailed terms and provisions of such
repurchase obligations;
11. the denominations in which the Debt Securities of the series shall be
issuable;
12. the obligation, if any, of the Company to redeem, repay or purchase
such Debt Securities pursuant to any Sinking Fund (as defined in the
applicable Indenture) or analogous provision or at the option of a holder
thereof, and the period or periods within which, the price or prices at which
and the other terms and conditions upon which such Debt Securities will be
redeemed, repaid or purchased, as a whole or in part, pursuant to such
obligations;
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13. whether the payments of principal of or interest, if any, on such Debt
Securities may be determined with reference to an index, formula or other
method and the manner in which such amounts shall be determined;
14. whether the Debt Securities are issued at a discount below their
principal amount and provide for less than the entire principal amount
thereof to be payable upon declaration of acceleration of the maturity
thereof ("Original Issue Discount Debt Securities") and material United
States federal income tax, accounting and other considerations applicable to
such Original Issue Discount Debt Securities;
15. whether the interest, if any, on the Debt Securities is to be payable,
at the election of the Company or a holder thereof, in cash or additional
Debt Securities of such series ("PIK Debt Securities") and the period or
periods within which, and the terms and conditions upon which, such election
may be made, and material United States federal income tax, accounting and
other considerations applicable to such PIK Debt Securities;
16. provisions, if any, granting special rights to the holders of Debt
Securities of any series upon the occurrence of such events as may be
specified;
17. any deletions from, modifications of or additions to the Events of
Default (as defined below) of the Company with respect to Debt Securities of
any series, whether or not such Events of Default are consistent with the
Events of Default described herein;
18. whether Debt Securities of any series are to be issuable initially in
temporary global form and whether any Debt Securities of any series are to be
issuable in permanent global form and, if so, whether beneficial owners of
interests in any such security in permanent global form may exchange such
interests for Debt Securities of such series and of like tenor of any
authorized form and denomination and the circumstances under which any such
exchanges may occur, if other than in the manner provided in the applicable
Indenture, and, if Debt Securities of the series are to be issuable as a
Global Debt Security (as defined below), the identity of the depository for
such series;
19. the applicability, if any, of the legal defeasance and covenant
defeasance provisions of the applicable Indenture to the Debt Securities of
such series;
20. any additions to or changes in the covenants set forth herein that
apply to Debt Securities of the series; and
21. any other terms of the series (which terms shall not be inconsistent
with the provisions of the Indenture under which the Debt Securities are
issued).
Reference is made to the applicable Prospectus Supplement for information
with respect to any deletions from, modifications of or additions to the
Events of Default or covenants of the Company that are described below,
including any addition of a covenant or other provision providing event risk
or similar protection.
PRINCIPAL, MATURITY AND INTEREST
Unless otherwise described in the applicable Prospectus Supplement, the
Debt Securities of each series will be issued only in registered form,
without coupons, in all appropriate denominations as may be set forth in the
applicable Indenture or specified in, or pursuant to, an authorizing
resolution and/or supplemental indenture, if any, relating to such series of
Debt Securities.
Subject to certain limitations imposed upon Debt Securities issued in
book-entry form, the Debt Securities of any series will be exchangeable for
any authorized denomination of other Debt Securities of the same series and
of a like aggregate principal amount and tenor upon surrender of such Debt
Securities at the corporate trust office of the applicable Trustee or at the
office of any registrar designated by the Company for such purpose. In
addition, subject to certain limitations imposed upon Debt Securities issued
in book-entry form, the Debt Securities of any series may be surrendered for
registration of transfer or exchange thereof at the corporate trust office of
the applicable Trustee or at the office of any
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<PAGE>
registrar designated by the Company for such purpose. No service charge will
be made for any registration of transfer or exchange, but the Company may
require payment of a sum sufficient to cover any tax or other governmental
charge payable in connection with certain transfers and exchanges. The
Company may change any registrar without notice.
RANKING
Senior Debt Securities
The Senior Debt Securities will constitute unsecured senior obligations of
the Company and will rank pari passu in right of payment with all other
unsecured senior obligations of the Company. However, the Senior Debt
Securities will be effectively subordinated in right of payment to all
secured Indebtedness of the Company to the extent of the value of the assets
securing such Indebtedness and will be effectively subordinated to all
indebtedness and other liabilities (including trade payables) of the
Company's Subsidiaries. In addition, substantially all of the assets of the
Company are owned by its subsidiaries. Therefore, the Company's rights and
the rights of its creditors, including holders of Debt Securities, to
participate in the assets of any Subsidiary upon the Subsidiary's liquidation
or recapitalization will be subject to the prior claims of the Subsidiary's
creditors, including the lenders under the Company's senior credit facilty.
See "Risk Factors--Holding Company Structure; Dependence Upon Operations of
Subsidiaries."
Subordinated Debt Securities
Unless otherwise provided in the applicable Prospectus Supplement, the
payment of principal of, premium on, if any, and interest on any Subordinated
Debt Securities will be subordinated in right of payment, as set forth in the
applicable Subordinated Indenture, to the prior payment in full of all Senior
Debt, whether outstanding on the date of the Subordinated Indenture or
thereafter incurred.
Unless otherwise provided in the applicable Prospectus Supplement, 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 marshalling of Company's
assets and liabilities, the holders of Senior Debt will be entitled to
receive payment in full of principal (and premium, if any) and interest, if
any, 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
Subordinated Debt Securities will be entitled to receive any payment with
respect to the Subordinated Debt Securities; and until the principal (and
premium, if any) and interest, if any, with respect to Senior Debt are paid
in full, any distribution to which the Holders of Subordinated Debt
Securities would be entitled will be made to the Holders of Senior Debt
(except that, in either case, Holders of Subordinated Debt Securities may
receive (i) securities that are subordinated at least to the same extent as
the Subordinated Debt Securities 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").
Unless otherwise provided in the applicable Prospectus Supplement, the
Company also may not make any payment upon or in respect of the Subordinated
Debt Securities (except as described above) if (i) a default in the payment
of the principal of, premium, if any, or interest on Designated Senior Debt
(as such term is defined in the applicable Prospectus Supplement) 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
Subordinated Debt Securities may and shall be resumed (i) in the case of a
payment default, upon the date on which such default is cured or waived and
(ii) 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
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commenced unless and until (i) 360 days have elapsed since the effectiveness
of the immediately prior Payment Blockage Notice and (ii) all scheduled
payments of principal of, premium on, if any, and interest on the
Subordinated Debt Securities 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 Subordinated Indenture will further require that the Company promptly
notify the holders of Senior Debt if payment of the Subordinated Debt
Securities 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 of Subordinated Debt Securities 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. Unless otherwise specified in the applicable Prospectus
Supplement, the Subordinated Indenture will not limit the amount of
additional Indebtedness, including Senior Debt, that the Company and its
Subsidiaries may incur. In addition, substantially all of the assets of the
Company are owned by its subsidiaries. Therefore, the Company's rights and
the rights of its creditors, including holders of Debt Securities, to
participate in the assets of any subsidiary upon the subsidiary's liquidation
or recapitalization will be subject to the prior claims of the subsidiary's
creditors, including the lenders under the Company's senior credit facility.
See "Risk Factors--Holding Company Structure; Dependence Upon Operations of
Subsidiaries."
CONVERSION
The terms and conditions, if any, upon which any series of Debt Securities
will be convertible into Class A Common Stock will be set forth in the
Prospectus Supplement relating thereto. Such terms will include the
conversion price (or manner of calculation thereof), the conversion period,
provisions as to whether conversion will be at the option of the Holders of
such series of Debt Securities or at the option of the Company, the events
requiring an adjustment of the conversion price and provisions affecting
conversion in the event of the redemption of such series of Debt Securities.
CERTAIN COVENANTS
The applicable Prospectus Supplement will describe any material covenants
in respect of any series of Debt Securities.
EVENTS OF DEFAULT AND REMEDIES
Unless otherwise provided in the applicable Prospectus Supplement, each
Indenture will provide that each of the following constitutes an "Event of
Default": (i) default for 30 days in the payment when due of interest on any
Debt Securities of such series (whether or not prohibited by the
subordination provisions, if any, of such Indenture); (ii) default in payment
when due of the principal of or premium, if any, on any Debt Securities of
such series (whether or not prohibited by the subordination provisions, if
any, of such Indenture); (iii) failure by the Company to comply with the
certain enumerated covenants and provisions that will be described in the
applicable Prospectus Supplement; (iv) failure by the Company for 60 days
after notice to comply with any of its other agreements in such Indenture or
any Debt Securities of such series; (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 such 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 an amount in excess of the amount specified in the
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applicable Prospectus Supplement; (vi) failure by the Company or any of its
Subsidiaries to pay final judgments aggregating in an amount in excess of the
amount specified in the applicable Prospectus Supplement, which judgments are
not paid, discharged or stayed for a period of 60 days; and (vii) certain
events of bankruptcy or insolvency with respect to the Company, any of its
Significant Subsidiaries (as such term is defined in the applicable
Prospectus Supplement) or any group of Subsidiaries that, taken together,
would constitute a Significant Subsidiary.
If any Event of Default with respect to a series of Debt Securities occurs
and is continuing, the Trustee or the Holders of at least 25% in principal
amount of the then outstanding Debt Securities of such series may declare all
the Debt Securities of such series 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 Debt Securities
will become due and payable without further action or notice. Holders of any
Debt Securities of a particular series may not enforce the Indenture pursuant
to which they were issued or the applicable Debt Securities except as
provided in such Indenture. Subject to certain limitations, Holders of a
majority in principal amount of the then outstanding Debt Securities of a
particular series may direct the Trustee in its exercise of any trust or
power. The Trustee may withhold from Holders of the Debt Securities 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 had elected to redeem any Debt Securities of such
series pursuant to any 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 Debt Securities. If
an Event of Default occurs prior to certain dates to be designated in the
Indenture 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 any Debt Securities of such series prior to such date or
dates, then any premium shall also become immediately due and payable to the
extent permitted by law upon the acceleration of any Debt Securities of such
series.
The Holders of a majority in aggregate principal amount of any Debt
Securities of a particular series then outstanding may by notice to the
Trustee on behalf of the Holders of all of such Debt Securities 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, any such Debt Securities.
The Company will be required to deliver to the Trustee annually a
statement regarding compliance with the Indenture, and the Company will be
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 or stockholder of the Company, as such,
shall have any liability for any obligations of the Company under any Debt
Securities of any series or any Indenture or for any claim based on, in
respect of, or by reason of, such obligations or their creation. Each Holder
of Debt Securities by accepting a Debt Security waives and releases all such
liability. The waiver and release are part of the consideration for issuance
of the Debt 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.
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
Unless otherwise provided in the Prospectus Supplement, the Company may,
at its option and at any time, elect to have all of its obligations
discharged with respect to the outstanding Debt Securities of any series
("Legal Defeasance") except for (i) the rights of Holders of outstanding Debt
Securities of such
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series to receive payments in respect of the principal of, premium, if any,
and interest on such Debt Securities when such payments are due from the
trust referred to below, (ii) the Company's obligations with respect to the
issuance of temporary Debt Securities, registration of Debt Securities,
replacement of mutilated, destroyed, lost or stolen Debt Securities and
maintenance of an office or agency for payment and of money for security
payments held in trust, (iii) the rights, powers, trusts, duties and
immunities of the Trustee, and the Trustee'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 Debt Securities. In the event Covenant
Defeasance occurs, certain events (not including non-payment, bankruptcy,
receivership, rehabilitation and insolvency events) described under "--Events
of Default and Remedies" will no longer constitute an Event of Default with
respect to the Debt Securities.
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 Debt Securities to be defeased, cash in U.S.
Dollars, non-callable Government Securities (as such term is defined in the
applicable Prospectus Supplement), 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 on the outstanding Debt Securities to be defeased (in the case of
Legal Defeasance) and all Debt Securities (in the case of Covenant
Defeasance) on the stated maturity or on the applicable redemption date, as
the case may be, and the Company must specify whether the Debt Securities are
being defeased to maturity or to a particular redemption date; (ii) in the
case of Legal Defeasance, the Company must deliver 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 Debt Securities to
be defeased 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 must deliver to the Trustee an
opinion of counsel in the United States reasonably acceptable to the Trustee
confirming that the Holders of the outstanding Debt Securities 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 with respect to the series to be defeased 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 or instrument (other than the Indenture) to which the
Company is a party or by which the Company 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 Debt Securities, 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 Debt Securities 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 (as such term is defined
in the applicable Indenture) stating that the deposit was not made by the
Company with the intent of preferring the Holders of Debt Securities over the
other creditors of the Company with the intent of defeating, hindering,
delaying or
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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
Unless otherwise provided in the Prospectus Supplement, a Holder may
transfer or exchange Debt Securities in accordance with the applicable
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 other government charges
required by law or permitted by the applicable Indenture. The Company is not
required to transfer or exchange any Debt Security selected for redemption.
Also, the Company is not required to transfer or exchange any Debt Security
for a period of 15 days before a selection of Debt Securities to be redeemed.
AMENDMENT, SUPPLEMENT AND WAIVER
Unless otherwise provided in the Prospectus Supplement and except as
provided in the next two succeeding paragraphs, the Indenture or the Debt
Securities may be amended or supplemented with the consent of the Holders of
at least a majority in principal amount of such Debt Securities then
outstanding (including, without limitation, consents obtained in connection
with a purchase of, or tender offer or exchange offer for, Debt Securities),
and any existing default or compliance with any provision of the Indenture or
the Debt Securities may be waived with the consent of the Holders of a
majority in principal amount of such then-outstanding Debt Securities
(including consents obtained in connection with a purchase of, or tender
offer or exchange offer for, such Debt Securities).
Without the consent of each Holder affected, an amendment or waiver may
not (with respect to any Debt Securities held by a non-consenting Holder):
(i) reduce the principal amount of Debt Securities whose Holders must consent
to an amendment, supplement or waiver, (ii) reduce the principal of or change
the fixed maturity of any Debt Security or alter the provisions with respect
to the redemption of the Debt Securities (other than provisions relating to
repurchase at the option of the holder), (iii) reduce the rate of or change
the time for payment of interest on any Debt Security, (iv) waive a Default
or Event of Default in the payment of principal of or premium, if any, or
interest on the Debt Securities (except a rescission of acceleration of a
particular series of Debt Securities by the Holders of at least a majority in
aggregate principal amount of the outstanding Debt Securities of such series
and a waiver of the payment default that resulted from such acceleration),
(v) make any Debt Security payable other than as stated in the Debt
Securities, (vi) make any change in the provisions of the applicable
Indenture relating to waivers of past Defaults or the rights of Holders of
Debt Securities to receive payments of principal of or premium, if any, or
interest on the Debt Securities, (vii) waive a redemption payment with
respect to any Debt Security (other than a payment required pursuant to a
repurchase at the option of the holder) or (viii) make any change in the
foregoing amendment and waiver provisions. In addition, any amendment to (a)
any provisions of the applicable Indenture which relate to subordination and
(b) the any covenants relating to a repurchase at the option of the holder
including, in each case, the related definitions, will require the consent of
the Holders of at least 75% in aggregate principal amount of the Debt
Securities of such series then outstanding if such amendment would adversely
affect the rights of Holders of Debt Securities of such series.
Notwithstanding the foregoing, without the consent of any Holder of Debt
Securities, the Company and the Trustee may amend or supplement the Indenture
or the Debt Securities to cure any ambiguity, defect or inconsistency, to
provide for uncertificated Debt Securities in addition to or in place of
certificated Debt Securities, to provide for the assumption of the Company's
obligations to Holders of Debt Securities in the case of a merger or
consolidation, to make any change that would provide any additional rights or
benefits to the Holders of Debt Securities 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 maintain the qualification of the
Indenture under the TIA.
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THE TRUSTEE
The Trustee for each series of Debt Securities will be identified in the
applicable Prospectus Supplement. Each Indenture will contain certain
limitations on the right of a Trustee thereunder, as 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 holders of a majority in principal amount of all outstanding Debt
Securities of a series (or if more than one series is affected thereby, of
all series so affected, voting as a single class) will have the right to
direct the time, method and place of conducting any proceeding for exercising
any remedy or power available to the Trustee for such series.
In case an Event of Default shall occur (and shall not be cured) under any
Indenture relating to a series of Debt Securities and is known to the Trustee
under such Indenture, such Trustee shall exercise such of the rights and
powers vested in it by such Indenture and use the same degree of care and
skill in its exercise as a prudent person would exercise or use under the
circumstances in the conduct of his own affairs. Subject to such provisions,
no Trustee will be under any obligation to exercise any of its rights or
powers under the applicable Indenture at the request of any of the Holders of
Debt Securities unless they shall have offered to such Trustee security and
indemnity satisfactory to it.
GOVERNING LAW
Unless otherwise stated in the applicable Prospectus Supplement, the
Indenture and the Debt Securities will be governed by the laws of the State
of New York.
BOOK-ENTRY, DELIVERY AND FORM
The specific terms of the depositary arrangement with respect to any
portion of a series of Debt Securities to be represented by a global Debt
Security (the "Global Debt Security") will be described in the Prospectus
Supplement relating to that series. The Company anticipates that the
following provisions will apply to all depositary arrangements.
Any such Global Debt Security will be deposited on the date of the closing
of the sale of such series of Debt Securities (each, a "Closing Date") with,
or on behalf of, The Depositary 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 Debt Security 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, 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 through the
Depositary's Participants or the Depositary's Indirect Participants.
Unless otherwise provided in the Prospectus Supplement, the Company
expects that pursuant to procedures established by the Depositary (i) upon
deposit of the Global Debt Security, the Depositary will credit the accounts
of Participants designated by the underwriters, if any, with portions of the
principal amount of the Global Debt Security and (ii) ownership of the Debt
Securities evidenced by the Global Debt Security 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 Debt Securities evidenced by the Global Debt Security will be
limited to such extent.
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So long as the Global Debt Security Holder is the registered owner of any
Debt Securities, the Global Debt Security Holder will be considered the sole
Holder under the Indenture of any series of Debt Securities evidenced by such
Global Debt Security. Beneficial owners of Debt Securities evidenced by such
Global Debt Security will 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 will have 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 Debt Securities.
Payments in respect of the principal of, premium, if any, and interest on
any Debt Securities registered in the name of the Global Debt Security Holder
on the applicable record date will be payable by the Trustee to or at the
direction of the Global Debt Security 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 Debt Securities,
including the Global Debt Security, 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 Debt Securities. The Depositary will
credit 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 Debt Securities 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
Unless otherwise provided in the Prospectus Supplement, subject to certain
conditions, any person having a beneficial interest in the Global Debt
Security may, upon request to the Trustee, exchange such beneficial interest
for Debt Securities 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).
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 Debt Securities in the form of Certificated Securities
under the Indenture, then, upon surrender by the Global Debt Security Holder
of its Global Debt Security, Debt Securities in such form will be issued to
each person that the Global Debt Security Holder and the Depositary identify
as being the beneficial owner of the related Debt Securities.
Neither the Company nor the Trustee will be liable for any delay by the
Global Debt Security Holder or the Depositary in identifying the beneficial
owners of Debt Securities and the Company and the Trustee may conclusively
rely on, and will be protected in relying on, instructions from the Global
Debt Security Holder or the Depositary for all purposes.
Same-Day Settlement and Payment
Unless otherwise provided in the Prospectus Supplement, the Indenture will
require that payments in respect of the Debt Securities (excluding non-cash
payments in respect of PIK Debt Securities) represented by the Global Debt
Security (including principal, premium, if any, and interest) be made by wire
transfer of immediately available funds to the accounts specified by the
Global Debt Security Holder. Any series of Debt Securities represented by the
Global Debt Security are expected to trade in the Depositary's Same-Day Funds
Settlement System, and any permitted secondary market trading activity in
such Debt Securities will, therefore, be required by the Depositary to be
settled in immediately available funds. The Company expects that any
secondary trading in the Certificated Securities will also be settled in
immediately available funds.
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DESCRIPTION OF EQUITY SECURITIES
GENERAL
The Certificate of Incorporation provides that the aggregate number of
shares of all classes of stock that the Company has authority to issue is
121,210,000 shares, consisting of 111,200,000 shares of common stock, par
value $.01 per share, and 10,010,000 shares of preferred stock, par value
$.01 per share. The Company's authorized shares of common stock consist of
100,000,000 shares of Class A Common Stock, 10,000,000 shares of Class B
Common Stock and 1,200,000 shares of Class C Common Stock, par value $.01 per
Share ("Class C Common Stock"). Of the Company's 10,010,000 authorized shares
of preferred stock, 4,000 shares have been designated as Series B Redeemable
Preferred Stock ("Series B Preferred Stock"), 2,000 shares have been
designated as Series C Redeemable Convertible Preferred Stock ("Series C
Preferred Stock") and 2,990,000 shares have been designated as 6 1/2% Series
D Cumulative Convertible Exchangeable Preferred Stock due May 31, 2007
("Series D Preferred Stock").
As of November 25, 1996, the issued and outstanding common stock and
preferred stock of the Company was approximately as follows:
<TABLE>
<CAPTION>
NUMBER OF
CLASS OF STOCK SHARES
- ------------------------ -----------
<S> <C>
Series B Preferred Stock 1,000
Series C Preferred Stock 2,000
Series D Preferred Stock 2,990,000
Class A Common Stock ... 8,063,347
Class B Common Stock ... 1,064,936
</TABLE>
All issued and outstanding shares are fully-paid and non-assessable.
The shares of Series B Preferred Stock are entitled to a liquidation
preference of $1,000 per share, ranking senior to the Company's common stock,
and are not entitled to receive dividends or to vote, except as otherwise
required by law. The Company is obligated to redeem the outstanding shares of
Series B Preferred Stock in October 1997 at a price per share equal to the
liquidation preference.
The shares of Series C Preferred Stock are entitled to a liquidation
preference of $1,000 per share and cumulative annual dividends of 6.0% of
their liquidation preference, as to both of which they rank senior to the
Company's common stock and the Series B Preferred Stock. The Series C
Preferred Stock does not have any voting rights, except as otherwise required
by law. The Company is entitled to redeem the Series C Preferred Stock prior
to September 1998, and the holders of Series C Preferred Stock are entitled
after September 2000 to cause the Company to purchase their Series C
Preferred Stock in whole or in part, at a price per share equal to the
liquidation preference, plus accrued and unpaid dividends. If an event of
default under the Certificate of Designations of the Series C Preferred Stock
occurs and is not timely cured, the holders of Series C Preferred Stock may
convert their shares into a number of shares of Class A Common Stock equal to
the quotient of (i) the number of shares of Series C Preferred Stock then
outstanding, divided by (ii) 75% of the average closing bid and ask price per
share of Class A Common Stock for the immediately prior 30-day period.
The shares of Series D Preferred Stock are entitled to a liquidation
preference of $50 per share and cumulative annual dividends of 6.5% of their
liquidation preference, as to both of which they rank senior to the Company's
common stock, the Series B Preferred Stock and the Series C Preferred Stock.
The Series D Preferred Stock does not have any voting rights, except as
required by law and except that, upon the Company's failure to meet certain
obligations to the holders of Series D Preferred Stock, the holders thereof
will be entitled to elect two additional members to the Company's Board of
Directors. The Series D Preferred Stock is subject to mandatory redemption in
May 2007, at a price per share equal to the liquidation preference, plus
accrued and unpaid dividends. The Series D Preferred Stock is redeemable at
the Company's option after June 1999 at the redemption prices set forth in
the Certificate of Designations of the Series D Preferred Stock. The holders
of Series D Preferred Stock may convert each such share into 1.0987 shares of
Class A Common Stock at any time prior to their redemption. At the
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Company's option, the Series D Preferred Stock is exchangeable into 6 1/2%
Convertible Subordinated Exchange Notes due 2007, which will contain
substantially the same terms, covenants and conditions as the Series D
Preferred Stock, as well as customary events of default provisions. Upon a
Change of Control (as defined in the Certificate of Designations of the
Series D Preferred Stock), the holders of Series D Preferred Stock may,
subject to certain conditions and restrictions, require the Company to
repurchase their shares at 101% of their liquidation preference, plus accrued
and unpaid dividends, payable in cash or in shares of Class A Common Stock.
The Certificate of Designations of the Series D Preferred Stock contains
certain convenants which, among other things, limit the ability of the
Company and its subsidiaries to engage in transactions with their affiliates.
PREFERRED STOCK
Terms
The following description of the Preferred Stock summarizes certain
general terms and provisions of each series of Preferred Stock to which any
Prospectus Supplement may relate. Certain other terms of a particular series
of Preferred Stock will be summarized in the Prospectus Supplement relating
to such series. The summaries of the terms of the Preferred Stock below and
in any Prospectus Supplement do not, and will not, purport to be complete and
are subject to, and qualified in their entirety by reference to, the
Company's Certificate of Incorporation (as it may be amended from time to
time) and the certificate of designations establishing a series of Preferred
Stock (each, a "Certificate of Designations"), which will be filed with the
Commission as an exhibit to or incorporated by reference in the Registration
Statement of which this Prospectus forms a part, at or prior to the time of
the issuance of such series of Preferred Stock.
The Board of Directors is authorized (without further stockholder action)
to provide for issuance of the Preferred Stock of the Company from time to
time, in one or more series, and to fix the dividend rate, conversion or
exchange rights, voting rights, terms of redemption, redemption price or
prices, liquidation preferences and qualifications, limitations and
restrictions thereof with respect to each series.
An applicable Prospectus Supplement will set forth or describe other
specific terms regarding each series of Preferred Stock offered thereby,
including, without limitation:
1. the title and stated value of such Preferred Stock;
2. the number of shares of such Preferred Stock offered, the liquidation
preference per share and the initial offering price of such Preferred Stock;
3. the dividend rate, period and/or payment date applicable to such
Preferred Stock;
4. the date from which dividends on such Preferred Stock shall accumulate,
if applicable;
5. whether the shares of Preferred Stock may be issued at a discount below
their liquidation preference ("Original Issue Discount Preferred Stock"), and
material United States federal income tax, accounting and other
considerations applicable to Original Issue Discount Preferred Stock.
6. whether the dividends, if any, on the Preferred Stock are to be
payable, at the election of the Company or a holder thereof, in cash or in
additional shares of Preferred Stock ("PIK Preferred Stock") and the period
or periods within which, and the terms and conditions upon which, such
election may be made, and material United States federal income tax,
accounting and other considerations applicable to such PIK Preferred Stock;
7. the provision for a sinking fund, if any, for such Preferred Stock;
8. the provision for redemption, if applicable, of such Preferred Stock;
9. any listing of such Preferred Stock on any securities exchange or any
quotation on an automated quotation system;
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10. the terms and conditions, if applicable, upon which such Preferred
Stock will be convertible into Class A Common Stock or exchangeable for Debt
Securities, including the conversion price or exchange rate, as the case may
be (or the manner of calculation thereof);
11. a discussion of federal tax considerations applicable to such
Preferred Stock;
12. the relative ranking and preference of such Preferred Stock as to
dividend rights and rights upon liquidation, dissolution or winding up of the
affairs of the Company;
13. any limitations on issuance of any series of Preferred Stock ranking
senior to or on a parity with such series or Preferred Stock as to dividend
rights and rights upon liquidation, dissolution or winding up of the affairs
of the Company;
14. the voting powers, if any, of such Preferred Stock, in addition to
those set forth below; and
15. any other specific terms, preferences, rights, limitations or
restrictions of such Preferred Stock.
The Preferred Stock will have no preemptive rights. All of the Preferred
Stock, upon payment in full therefor, will be fully-paid and nonassessable.
Dividends
Unless otherwise set forth in an applicable Prospectus Supplement, the
holders of the Preferred Stock of each series shall be entitled to receive,
when, as and if declared by the Board of Directors of the Company, out of the
funds of the Company legally available therefor, dividends at such rate and
on such dates and on such terms as shall be set forth in the Prospectus
Supplement relating to such series. Different series of the Preferred Stock
may be entitled to dividends at different rates or based upon different
methods of determination. Such rate may be fixed or variable or both. Each
such dividend will be payable to the holders of record as they appear on the
stock books of the Company on such record dates as will be fixed by the Board
of Directors of the Company or a duly authorized committee thereof. Dividends
on any series of the Preferred Stock may be cumulative or noncumulative, as
provided in the Prospectus Supplement relating thereto.
Ranking
The Preferred Stock to which any Prospectus Supplement may relate, except
as set forth in such Prospectus Supplement, will rank junior in right of
payment to the Series D Preferred Stock of the Company as to dividends and
upon liquidation, dissolution or winding up of the Company. The Preferred
Stock will rank senior in right of payment to the Company's common stock as
to dividends and upon liquidation, dissolution or winding up of the Company,
except as set forth in the Prospectus Supplement relating thereto.
Conversion
The terms and conditions, if any, upon which any series of Preferred Stock
will be convertible into Class A Common Stock will be set forth in the
Prospectus Supplement relating thereto. Such terms will include the
conversion price (or manner of calculation thereof), the conversion period,
provisions as to whether conversion will be at the option of the holders of
such series of Preferred Stock or at the option of the Company, the events
requiring an adjustment of the conversion price and provisions affecting
conversion in the event of the redemption of such series of Preferred Stock.
Exchange
The Prospectus Supplement may provide that the Company may, at its option,
exchange, in whole or in part, any series of Preferred Stock for Debt
Securities. The terms, notice and procedures for any such exchange will be
set forth in the applicable Prospectus Supplement.
Voting Rights
Unless otherwise provided in the applicable Prospectus Supplement, holders
of record of each series of Preferred Stock will have no voting rights,
except as required by law and as provided in the applicable Certificate of
Designations.
23
<PAGE>
Redemption Provisions
The Preferred Stock of each series will have such optional or mandatory
redemption terms, if any, as shall be set forth in the applicable Prospectus
Supplement.
Certain Covenants
The applicable Prospectus Supplement will describe any material covenants
in respect of any series of Preferred Stock.
Transfer Agent and Registrar
The transfer agent, registrar and dividend disbursement agent for the
Preferred Stock will be designated in the applicable Prospectus Supplement.
The registrar for shares of Preferred Stock will send notices to stockholders
of any meetings at which holders of the Preferred Stock have the right to
elect directors of the Company or to vote on any other matter.
COMMON STOCK
Dividends
No dividends have ever been paid on the Company's common stock, and none
are anticipated to be paid in the foreseeable future. However, holders of
common stock are entitled to receive such dividends as may be declared by the
Board of Directors out of funds legally available for such purpose. No
dividend may be declared or paid in cash or property on any share of any
class of common stock, unless the same dividend is simultaneously declared or
paid on each share of the other classes of common stock. In the case of any
stock dividend, holders of shares of Class A Common Stock are entitled to
receive the same percentage dividend (payable in shares of Class A Common
Stock) as the holders of shares of Class B Common Stock (payable in shares of
Class B Common Stock) and the holders of shares of Class C Common Stock
(payable in shares of Class C Common Stock). The Company's ability to pay
dividends is limited by the terms of its senior credit facility. See "Risk
Factors--Limitations on Ability to Pay Dividends."
Voting Rights
Holders of Class A Common Stock and Class B Common Stock vote as a single
class on all matters submitted to a vote of the stockholders, with each share
of Class A Common Stock entitled to one vote and each share of Class B Common
Stock entitled to ten votes, except (i) for the election of directors, (ii)
with respect to any "going private" transaction between the Company and Mr.
Sillerman or any of his affiliates and (iii) as otherwise provided by law.
In the election of directors, the holders of Class A Common Stock, voting
as a separate class, are entitled to elect two-sevenths (currently three) of
the Company's directors (each, a "Class A Director"). Any person nominated by
the Board of Directors for election by the holders of Class A Common Stock as
a director of the Company must be qualified to be an Independent Director (as
defined in the Certificate of Incorporation). In the event of the death,
removal or resignation of a director elected by the holders of Class A Common
Stock prior to the expiration of his term, the vacancy on the Board of
Directors created thereby may be filled by a person appointed by a majority
of the directors then in office, although less than a quorum. Any person
appointed to fill any such vacancy must, however, be qualified to be an
Independent Director. The holders of Class A Common Stock and Class B Common
Stock voting as a single class, with each share of Class A Common Stock
entitled to one vote and each share of Class B Common Stock entitled to ten
votes, are entitled to elect the remaining directors. The holders of common
stock are not entitled to cumulative votes in the election of directors. Each
of Mr. Sillerman and SCMC has agreed to abstain, and has agreed to cause each
of his and its respective affiliated transferees to abstain, from voting in
any election of Class A Directors.
24
<PAGE>
The holders of the Class A Common Stock and Class B Common Stock vote as a
single class with respect to any proposed "going private" transaction with
Mr. Sillerman or any of his affiliates, with each share of Class A Common
Stock and Class B Common Stock entitled to one vote. Except as required by
law, the holders of Class C Common Stock have no voting rights.
Under Delaware law, the affirmative vote of the holders of a majority of
the outstanding shares of any class of common stock is required to approve,
among other things, a change in the designations, preferences or limitations
of such class of common stock.
Liquidation Rights
Upon liquidation, dissolution, or winding-up of the Company, the holders
of Class A Common Stock are entitled to share ratably with the holders of
Class B Common Stock and Class C Common Stock all assets available for
distribution after payment in full of creditors.
Other Provisions
Each share of Class B Common Stock is convertible, subject to compliance
with FCC rules and regulations, at the option of its holder, into one share
of Class A Common Stock at any time. Each share of Class B Common Stock and
Class C Common Stock converts automatically into one share of Class A Common
Stock upon its sale or other transfer to a party not affiliated with the
Company, subject (as are all conversions of the Company's capital stock) to
compliance with FCC rules and regulations. The holders of common stock are
not entitled to preemptive or subscription rights. The shares of common stock
presently outstanding are validly issued, fully-paid and nonassessable. In
any merger, consolidation or business combination, the consideration to be
received per share by holders of Class A Common Stock must be identical to
that received by holders of Class B Common Stock and Class C Common Stock,
except that in any such transaction in which shares of common stock are
distributed, such shares may differ as to voting rights to the extent that
voting rights now differ among the classes of common stock. No class of
common stock may be subdivided, consolidated, reclassified or otherwise
changed unless concurrently the other classes of common stock are subdivided,
consolidated, reclassified or otherwise changed in the same proportion and in
the same manner.
Transfer Agent and Registrar
The transfer agent and registrar for the Class A Common Stock and Class B
Common Stock is Chase Mellon Shareholder Services LLC.
The foregoing descriptions of the preferred stock and common stock are
summaries, and reference is herein made to the detailed provisions of the
Certificate of Incorporation (including, without limitation, the Certificate
of Designations relating to any series of preferred stock, filed hereafter
and incorporated by reference herein) and the Company's Bylaws, copies of
which are incorporated by reference herein.
CERTAIN PROVISIONS OF CERTIFICATE OF INCORPORATION, BYLAWS AND STATUTE
Limitation of Directors' Liability and Indemnification
The General Corporation Law of the State of Delaware (the "DGCL") provides
that a corporation may limit the liability of each director to the
corporation or its stockholders for monetary damages except for liability (i)
for any breach of the directors duty of loyalty to the corporation or its
stockholders, (ii) for acts or omissions not in good faith or that involve
intentional misconduct or a knowing violation of law, (iii) in respect of
certain unlawful dividend payments or stock redemptions or repurchases and
(iv) for any transaction from which the director derives an improper personal
benefit. The Certificate of Incorporation provides for the elimination and
limitation of the personal liability of directors of the Company for monetary
damages to the fullest extent permitted by the DGCL. In addition, the
Certificate of Incorporation provides that if the DGCL is amended to
authorize the further elimination or limitation of the liability of a
director, then the liability of the directors shall be eliminated or limited
to the fullest extent permitted by the DGCL, as so amended. The effect of
this provision is to eliminate the rights of
25
<PAGE>
the Company and its stockholders (through stockholders' derivative suits on
behalf of the Company) to recover monetary damages against a director for
breach of the fiduciary duty of care as a director (including breaches
resulting from negligent or grossly negligent behavior) except in the
situations described in clauses (i) through (iv) above. This provision does
not limit or eliminate the rights of the Company or any stockholder to seek
non-monetary relief such as an injunction or rescission in the event of a
breach of a director's duty of care. In addition, the Certificate of
Incorporation and the Bylaws provide for indemnification of directors by the
Company in certain circumstances.
Section 203 of the DGCL
The Company is subject to the "business combination" statute of the DGCL,
an anti-takeover law enacted in 1988. In general, Section 203 of the DGCL
prohibits a publicly-held Delaware corporation from engaging in a "business
combination" with an "interested stockholder," for a period of three years
after the date of the transaction in which a person became an "interested
stockholder," unless (i) prior to such date the board of directors of the
corporation approved either the "business combination" or the transaction
which resulted in the stockholder becoming an "interested stockholder," (ii)
upon consummation of the transaction which resulted in the stockholder
becoming an "interested stockholder," the "interested stockholder" owned at
least 85% of the voting stock of the corporation outstanding at the time the
transaction commenced, excluding for purposes of determining the number of
shares outstanding those shares owned (1) by persons who are directors and
also officers and (2) employee stock plans in which employee participants do
not have the right to determine confidentially whether shares held subject to
the plan will be tendered in a tender or exchange offer, or (iii) on or
subsequent to such date the "business combination" is approved by the board
of directors and authorized at an annual or special meeting of stockholders
by the affirmative vote of at least 66% of the outstanding voting stock which
is not owned by the "interested stockholder." A "business combination"
includes mergers, stock or asset sales and other transactions resulting in a
financial benefit to the "interested stockholders." An "interested
stockholder" is a person who, together with affiliates and associates, owns
(or within three years, did own) 15% or more of the corporation's voting
stock. Although Section 203 permits the Company to elect not to be governed
by its provisions, the Company to date has not made this election. As a
result of the application of Section 203, potential acquirers of the Company
may be discouraged from attempting to effect an acquisition transaction with
the Company, thereby possibly depriving holders of the Company's securities
of certain opportunities to sell or otherwise dispose of such securities at
above-market prices pursuant to such transactions.
Foreign Ownership
The Certificate of Incorporation restricts the ownership, voting and
transfer of the capital stock of the Company, in accordance with the
Communications Act, and the rules of the FCC, to prohibit ownership of more
than 25% of the Company's outstanding capital stock, or more than 25% of the
voting rights it represents (such percentage, however, is 20% in the case of
those subsidiaries that are direct holders of FCC licenses), by or for the
account of Aliens or corporations otherwise subject to domination or control
by Aliens. The Company has determined that, because of the ownership by
Nomura of a significant amount of Class A Common Stock and the fact that
Aliens own a substantial portion of Nomura's own voting common stock, the
Company may prohibit acquisitions by Aliens of additional shares of the
Company's equity securities, including the Class A Common Stock, in light of
the provisions of the Communications Act, the rules of the FCC and the
Certificate of Incorporation. In addition, the Certificate of Incorporation
provides that capital stock of the Company determined by the Board of
Directors to be owned beneficially by an Alien shall always be subject to
redemption by the Company by action of the Board of Directors to the extent
necessary, in the judgment of the Board of Directors, to comply with the
alien ownership restrictions of the Communications Act and the FCC rules and
regulations.
The Certificate of Incorporation authorizes the Board of Directors of the
Company to adopt such provisions as it deems necessary to enforce these
prohibitions. The Company established certain procedures and controls
designed to implement the aforesaid prohibitions. Specifically, at the time
the
26
<PAGE>
Company's equity securities are presented for transfer, the Company's
transfer agent inquires as to whether the shares are to be transferred to or
for the account of an Alien, an entity with Alien ownership or an entity that
would be considered Alien by the FCC. If so, the proposed transfer may not be
permitted.
PLAN OF DISTRIBUTION
The Company may sell Securities to one or more underwriters, which may
include, without limitation, Goldman, Sachs & Co., Lehman Brothers Inc.
and BT Securities Corporation, for public offering and sale by them, and also
may sell Securities directly to investors or to other purchasers or through
dealers or agents. Any such underwriter, dealer or agent involved in the
offer and sale of the Securities will be named in an applicable Prospectus
Supplement.
The distribution of the Securities may be effected from time to time in
one or more transactions at a fixed price or prices, which may be changed, or
at market prices prevailing at the time of sale, at prices related to such
prevailing market prices or at negotiated prices. Sales of Class A Common
Stock offered hereby may be effected from time to time in one or more
transactions on the Nasdaq National Market or in negotiated transactions or a
combination of such methods of sale.
In connection with distributions of Class A Common Stock or otherwise, the
Company may enter into hedging transactions with broker-dealers in connection
with which such broker-dealers may sell Class A Common Stock registered
hereunder in the course of hedging through short sales the positions they
assume with the Company.
In connection with the sale of Securities, underwriters, dealers or agents
may receive compensation from the Company or from purchasers of Securities
for whom they may act as agents in the form of discounts, concessions or
commissions. Underwriters may sell Securities to or through dealers, and such
dealers may receive compensation in the form of discounts, concessions or
commissions from the underwriters and/or commissions from the purchasers for
whom they may act as agents. Underwriters, dealers and agents who participate
in the distribution of Securities may be deemed to be underwriters, and any
discounts or commissions received by them from the Company and any profit on
the resale of Securities by them may be deemed to be underwriting discounts
and commissions, under the Securities Act. Any such underwriter, dealer or
agent will be identified, and any such compensation received from the Company
will be described, in the Prospectus Supplement. Unless otherwise indicated
in a Prospectus Supplement, an agent will be acting on a best effort basis
and a dealer will purchase Securities as a principal, and may then resell
such Securities at varying prices to be determined by the dealer.
Under agreements which may be entered into by the Company, underwriters,
dealers and agents who participate in the distribution of Securities may be
entitled to indemnification by the Company against and contribution toward
certain civil liabilities, including liabilities under the Securities Act,
and to reimbursement by the Company for certain expenses.
If so indicated in a Prospectus Supplement, the Company will authorize
agents and underwriters or dealers to solicit offers by certain purchasers to
purchase Securities from the Company at the public offering price set forth
in the Prospectus Supplement pursuant to delayed delivery contracts providing
for payment and delivery on a specified date in the future. Such contracts
will be subject to only those conditions set forth in the Prospectus
Supplement, and the Prospectus Supplement will set forth the commission
payable for solicitation of such offers.
Certain of the underwriters, dealers or agents and their associates may
engage in transactions with and perform services for the Company in the
ordinary course of business.
The Securities may or may not be listed on a national securities exchange
or quoted on an automated quotation system (other than the Class A Common
Stock, which is quoted on the Nasdaq National Market). Any Class A Common
Stock sold pursuant to a Prospectus Supplement will be listed on the Nasdaq
National Market, subject to official notice of issuance. Any underwriters to
whom Securities are
27
<PAGE>
sold by the Company for public offering and sale may make a market in such
Securities, but such underwriters will not be obligated to do so and may
discontinue any market-making activities at any time without notice. No
assurances can be given that there will be an active trading market for the
Securities.
Each of Goldman, Sachs & Co., Lehman Brothers Inc. and BT Securities
Corporation have provided, and continue to provide, investment banking
services to the Company for which they have received customary fees.
LEGAL MATTERS
The validity of the Securities offered hereby will be passed upon for the
Company by Baker & McKenzie, New York, New York. Mr. Tytel, 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 LLP,
Washington D.C., has represented the Company with respect to legal matters
under the Communications Act and the rules and regulations promulgated
thereunder by the FCC. The validity of the Securities offered hereby will be
passed upon for any underwriters or agents by Latham & Watkins, New York, New
York.
EXPERTS
The consolidated financial statements of the Company and its subsidiaries
at December 31, 1995 and 1994, and for each of the three years in the period
ended December 31, 1995, the financial statements of KKRW-FM (a division of
CBS, Inc.) at December 31, 1995 and 1994, and for the years then ended, the
consolidated financial statements of MMR at December 31, 1995 and 1994, and
for the years then ended, the financial statements of WKSS 95.7-FM (a
division of Precision Media Corporation) at December 31, 1995 and 1994, and
for the years then ended and the financial statements of KTXQ-FM and KRRW-FM
(divisions of CBS Inc.) at December 31, 1995 and 1994, and for the years then
ended, incorporated by reference herein, have been audited by Ernst & Young
LLP, independent auditors, as set forth in their reports with respect
thereto, and are incorporated by reference herein in reliance upon such
reports 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 and
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, incorporated by reference herein, have been audited by
Coopers & Lybrand L.L.P., independent accountants, as set forth in their
reports with respect thereto, and are incorporated by reference herein in
reliance upon such reports 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, incorporated by reference herein, have been audited by KPMG Peat
Marwick L.L.P., independent certified public accountants, to the extent and
for the period indicated in their report with respect thereto and are
incorporated by reference herein 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 for the year then ended, incorporated by reference herein, have
been audited by Cheely Burcham Eddins Rokenbrod & Carroll, independent
auditors, as set forth in their report with respect thereto, and are
incorporated by reference herein in reliance upon such report given upon the
authority of such firm as experts in accounting and auditing.
The financial statements of Texas Coast Broadcasters, Inc. at December 31,
1995 and 1994, and for the years then ended, incorporated by reference
herein, have been audited by Mohle, Adams, Till, Guidry & Wallace, LLP,
independent auditors, as set forth in their report with respect thereto, and
are incorporated by reference herein in reliance upon such report given upon
the authority of such firm as experts in accounting and auditing.
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<PAGE>
The combined balance sheets of the Secret Communications Stations:
Cleveland, Ohio, Indianapolis, Indiana, and Pittsburgh, Pennsylvania at June
30, 1996 and 1995, and the related combined statements of operations and cash
flows for the year ended June 30, 1996, and the eleven-month period ended
June 30, 1995, incorporated by reference herein, have been audited by Arthur
Andersen LLP, independent public accountants, as indicated in their report
with respect thereto, and are incorporated by reference in reliance upon the
authority of said firm as experts in giving said reports.
29
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following sets forth the best estimate of the Company as to its
anticipated expenses and costs (other than underwriting discounts and
commissions) expected to be incurred in connection with the issuance and
distribution of the securities registered hereby (except for the Commission
registration fee, all amounts are estimates):
<TABLE>
<CAPTION>
<S> <C>
Commission registration fee .... $ 151,515.15
Nasdaq listing fee .............. 20,000
Printing and engraving expenses 200,000
Legal fees and expenses ......... 375,000
Accounting fees and expenses ... 150,000
Blue sky fees and expenses ..... 25,000
Trustee's fees and expenses .... 50,000
Miscellaneous ................... 28,484.85
-------------
Total ......................... $1,000,000
</TABLE>
ITEM 15. 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. A Delaware corporation may indemnify officers and directors
against expenses (including attorneys' fees) in an action by or in the right
of the corporation under similar conditions, except that no indemnification
is permitted without judicial approval if the officer or director is adjudged
to be liable to the corporation. 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.
The Certificate of Incorporation provides that no director of the Company
shall be personally liable to the Company 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 the Company 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.
The Company's Bylaws provide that the Company 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
the Company) by reason of the fact that he is, was or has agreed to become a
director or officer of the Company, or is or was serving or has agreed to
serve at the request of the Company 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
II-1
<PAGE>
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 the Company, 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 the Company, and,
with respect to any criminal action or proceeding, had reasonable cause to
believe that his conduct was unlawful.
The Bylaws also provide that the Company 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 the Company 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 the Company, or is or was serving
at the request of the Company 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 the Company 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 the Company 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.
The Bylaws state that, to the extent that a director or officer of the
Company 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 Bylaws further provide that any indemnification (unless ordered by a
court) shall be paid by the Company 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 Bylaws 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 Bylaws. Such
determination shall be made (i) by the Board of Directors of the Company 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.
The Bylaws further require that expenses incurred by an officer or
director in defending a civil or criminal action, suit or proceeding shall be
paid by the Company 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 the Company as authorized in the Bylaws.
The Bylaws require the Board of Directors of the Company to purchase and
maintain insurance on behalf of any person who is or was or has agreed to
become a director or officer of the Company, or is or was serving at the
request of the Company 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 the Company
would have the power to indemnify him against such liability under the
provisions of the Bylaws, 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 Bylaws also provide that the indemnification and advancement of
expenses provided by, or granted pursuant to, the Bylaws 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.
II-2
<PAGE>
ITEM 16. EXHIBITS.
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
- ----------- -----------------------------------------------------------------------------------------
<S> <C>
*1.1 Form of Underwriting Agreement.
*4.1 Form of Certificate of Designations of Preferred Stock.
4.2 Form of Senior Debt Securities Indenture.
4.3 Form of Subordinated Debt Securities Indenture.
4.4 Form of Class A Common Stock certificate (incorporated by reference to Exhibit 4.1 to
Amendment No. 3 to Registration Statement on Form S-1 (File No. 33-65442)).
5.1 Opinion of Baker & McKenzie.
12.1 Statement regarding computation of ratios.
23.1 Consent of Baker & McKenzie (included in Exhibit 5.1).
23.2 Consent of Ernst & Young LLP.
23.3 Consent of KPMG Peat Marwick L.L.P.
23.4 Consent of Cheely Burcham Edding Rokenbrod & Carroll.
23.5 Consent of Coopers & Lybrand L.L.P. with respect to HMW Communications, Inc.
23.6 Consent of Coopers & Lybrand L.L.P. with respect to Liberty Broadcasting, Inc.
23.7 Consent of Mohle, Adams, Till, Guidry & Wallace, LLP.
23.8 Consent of Arthur Andersen LLP.
23.9 Consent of Fisher Wayland Cooper Leader & Zaragoza LLP.
24.1 Powers of Attorney (included on page II-6).
*25.1 Statement of eligibility of trustee under the Senior Debt Securities on Form T-1.
*25.2 Statement of eligibility of trustee under the Subordinated Debt Securities on Form T-1.
</TABLE>
- ------------
* To be filed by amendment or by a report on Form 8-K pursuant to Item 601
of Regulations S-K.
ITEM 17. UNDERTAKINGS.
(a) 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 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.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
registrant's annual report pursuant to Section 13(a)
II-3
<PAGE>
or 15(d) of the Exchange Act (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Exchange Act) 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.
(c) The undersigned registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act,
the information omitted from the form of prospectus filed as part of
this Registration Statement in reliance upon Rule 430A and contained
in a form of prospectus filed by the registrant pursuant to Rule
424(b)(1) or (4), or 497(h) under the Securities Act shall be deemed
to be part of this Registration Statement as of the time it was
declared effective.
(2) For the purposes of determining any liability under the Securities
Act, each post-effective amendment that contains a form of prospectus
shall be determined 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.
(d) The undersigned 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;
(ii) To reflect in the Prospectus any facts of 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. Notwithstanding the
foregoing, any increase or decrease in volume of securities
offered (if the total dollar value of securities offered would not
exceed that which was registered) and any deviation from the low
or high end of the estimated maximum offering range may be
reflected in the form of prospectus filed with the Commission
pursuant to Rule 424(b) if, in the aggregate, the charges in
volume and price represent no more than a 20% change in the
maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective 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.
Provided, however, that paragraphs (1) (i) and (1) (ii) do not apply if
the information required to be included in a post-effective amendment
by those paragraphs is contained in periodic reports filed by the
Registrant pursuant to section 13 or section 15(d) of the Exchange Act
that are incorporated by reference 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 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.
(e) The undersigned registrant hereby undertakes to file an application for
the purpose of determining the eligibility of the trustee to act under
subsection (a) of Section 310 of the Trust Indenture Act in accordance
with the rules and regulations prescribed by the Commission under
Section 305(b)(2) of the Trust Indenture Act.
II-4
<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 27th day of November, 1996.
SFX BROADCASTING, INC.
By: /s/ Robert F.X. Sillerman
-------------------------------
Robert F.X. Sillerman,
Executive Chairman and
Director
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 Robert F.X. Sillerman or
Howard J. Tytel as his attorney-in-fact to sign on his behalf, individually
and in the capacities stated below, and to file (i) any and all amendments
and post-effective amendments to this Registration Statement and (ii) any
registration statement relating to the same offering pursuant to Rule 462(b)
under the Securities Act of 1933, which amendment or amendments or
registration statement may make such changes and additions as such
attorney-in-fact may deem necessary or appropriate.
<TABLE>
<CAPTION>
<S> <C> <C>
Signature Title Date
- ----------------------------- ---------------------------------------- ---------------------
/s/ Robert F.X. Sillerman Executive Chairman and Director November 27, 1996
----------------------------- (principal executive officer)
Roert F.X. Sillerman
/s/ Michael G. Ferrel Chief Executive Officer and Director November 27, 1996
- ------------------------------
Michael G. Ferrel
/s/ D. Geoffrey Armstrong Chief Operating Officer, Executive Vice November 27, 1996
----------------------------- President and Director
D. Geoffrey Armstrong
/s/ Thomas P. Benson Chief Financial Officer, Treasurer and November 27, 1996
----------------------------- Director (principal financial and
Thomas P. Benson accounting officer)
/s/ Howard J. Tytel Executive Vice President, Secretary and November 27, 1996
----------------------------- Director
Howard J. Tytel
/s/ James F. O'Grady, Jr. Director November 27, 1996
- ------------------------------
James F. O'Grady, Jr.
/s/ Paul Kramer Director November 27, 1996
- ------------------------------
Paul Kramer
/s/ Richard A. Liese Director November 27, 1996
- ------------------------------
Richard A. Liese
/s/ Edward F. Dugan Director November 27, 1996
- ------------------------------
Edward F. Dugan
</TABLE>
II-5
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT PAGE
- ----------- ------------------------------------------------------------------------------------ --------
<S> <C> <C>
*1.1 Form of Underwriting Agreement.
*4.1 Form of Certificate of Designations of Preferred Stock.
4.2 Form of Senior Debt Securities Indenture.
4.3 Form of Subordinated Debt Securities Indenture.
4.4 Form of Class A Common Stock certificate (incorporated by reference to Exhibit 4.1
to Amendment No. 3 to Registration Statement on Form S-1 (File No. 33-65442)).
5.1 Opinion of Baker & McKenzie.
12.1 Statement regarding computation of ratios.
23.1 Consent of Baker & McKenzie (included in Exhibit 5.1).
23.2 Consent of Ernst & Young LLP.
23.3 Consent of KPMG Peat Marwick L.L.P.
23.4 Consent of Cheely Burcham Edding Rokenbrod & Carroll.
23.5 Consent of Coopers & Lybrand L.L.P. with respect to HMW Communications, Inc.
23.6 Consent of Coopers & Lybrand L.L.P. with respect to Liberty Broadcasting, Inc.
23.7 Consent of Mohle, Adams, Till, Guidry & Wallace, LLP.
23.8 Consent of Arthur Andersen LLP.
23.9 Consent of Fisher Wayland Cooper Leader & Zaragoza LLP.
24.1 Powers of Attorney (included on page II-6).
*25.1 Statement of eligibility of trustee under the Senior Debt Securities on Form T-1.
*25.2 Statement of eligibility of trustee under the Subordinated Debt Securities on Form
T-1.
</TABLE>
- ------------
* To be filed by amendment or by a report on Form 8-K pursuant to Item 601
of Regulations S-K.
SFX BROADCASTING, INC.
----------------------
SENIOR INDENTURE
Dated as of ________________________ __, 199_
----------------------------
----------------------------
Trustee
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
ARTICLE I. DEFINITIONS AND INCORPORATION BY REFERENCE...........................................................1
SECTION 1.1 DEFINITIONS.................................................................................1
SECTION 1.2 OTHER DEFINITIONS...........................................................................6
SECTION 1.3 INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT...........................................6
SECTION 1.4 RULES OF CONSTRUCTION.......................................................................6
ARTICLE II. THE SECURITIES......................................................................................7
SECTION 2.1 ISSUABLE IN SERIES..........................................................................7
SECTION 2.2 ESTABLISHMENT OF TERMS OF SERIES OF SECURITIES..............................................7
SECTION 2.3 EXECUTION AND AUTHENTICATION...............................................................10
SECTION 2.4 REGISTRAR AND PAYING AGENT.................................................................11
SECTION 2.5 PAYING AGENT TO HOLD MONEY IN TRUST........................................................12
SECTION 2.6 SECURITYHOLDER LISTS.......................................................................12
SECTION 2.7 TRANSFER AND EXCHANGE......................................................................13
SECTION 2.8 MUTILATED, DESTROYED, LOST AND STOLEN SECURITIES...........................................13
SECTION 2.9 OUTSTANDING SECURITIES.....................................................................14
SECTION 2.10 TREASURY SECURITIES.......................................................................14
SECTION 2.11 TEMPORARY SECURITIES......................................................................15
SECTION 2.12 CANCELLATION..............................................................................15
SECTION 2.13 DEFAULTED INTEREST........................................................................15
SECTION 2.14 GLOBAL SECURITIES.........................................................................15
SECTION 2.15 CUSIP NUMBERS.............................................................................20
<PAGE>
ARTICLE III. REDEMPTION........................................................................................20
SECTION 3.1 NOTICE TO TRUSTEE..........................................................................20
SECTION 3.2 SELECTION OF SECURITIES TO BE REDEEMED.....................................................20
SECTION 3.3 NOTICE OF REDEMPTION.......................................................................21
SECTION 3.4 EFFECT OF NOTICE OF REDEMPTION.............................................................21
SECTION 3.5 DEPOSIT OF REDEMPTION PRICE................................................................21
SECTION 3.6 SECURITIES REDEEMED IN PART................................................................22
ARTICLE IV. COVENANTS..........................................................................................22
SECTION 4.1 PAYMENT OF SECURITIES .....................................................................22
SECTION 4.2 REPORTS....................................................................................22
SECTION 4.3 COMPLIANCE CERTIFICATE.....................................................................23
SECTION 4.4 STAY, EXTENSION AND USURY LAWS.............................................................23
SECTION 4.5 CONTINUED EXISTENCE........................................................................24
SECTION 4.6 TAXES......................................................................................24
ARTICLE V. SUCCESSORS..........................................................................................24
SECTION 5.1 MERGER, CONSOLIDATION, OR SALE OF ASSETS...................................................24
SECTION 5.2 SUCCESSOR CORPORATION SUBSTITUTED..........................................................24
ARTICLE VI. DEFAULTS AND REMEDIES..............................................................................25
SECTION 6.1 EVENTS OF DEFAULT..........................................................................25
SECTION 6.2 ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT.........................................27
SECTION 6.3 [INTENTIONALLY LEFT BLANK].................................................................28
ii
<PAGE>
SECTION 6.4 TRUSTEE MAY FILE PROOFS OF CLAIM...........................................................28
SECTION 6.5 TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF SECURITIES................................28
SECTION 6.6 APPLICATION OF MONEY COLLECTED.............................................................29
SECTION 6.7 LIMITATION ON SUITS........................................................................29
SECTION 6.8 UNCONDITIONAL RIGHT OF HOLDERS TO RECEIVE PRINCIPAL AND INTEREST...........................30
SECTION 6.9 RESTORATION OF RIGHTS AND REMEDIES.........................................................30
SECTION 6.10 RIGHTS AND REMEDIES CUMULATIVE............................................................30
SECTION 6.11 DELAY OR OMISSION NOT WAIVER..............................................................31
SECTION 6.12 CONTROL BY HOLDERS........................................................................31
SECTION 6.13 WAIVER OF PAST DEFAULTS...................................................................31
SECTION 6.14 UNDERTAKING FOR COSTS.....................................................................32
ARTICLE VII. TRUSTEE...........................................................................................32
SECTION 7.1 DUTIES OF TRUSTEE..........................................................................32
SECTION 7.2 RIGHTS OF TRUSTEE..........................................................................33
SECTION 7.3 INDIVIDUAL RIGHTS OF TRUSTEE...............................................................34
SECTION 7.4 TRUSTEE'S DISCLAIMER.......................................................................34
SECTION 7.5 NOTICE OF DEFAULTS.........................................................................35
SECTION 7.6 REPORTS BY TRUSTEE TO HOLDERS..............................................................35
SECTION 7.7 COMPENSATION AND INDEMNITY.................................................................35
SECTION 7.8 REPLACEMENT OF TRUSTEE.....................................................................36
SECTION 7.9 SUCCESSOR TRUSTEE BY MERGER, ETC...........................................................37
SECTION 7.10 ELIGIBILITY; DISQUALIFICATION.............................................................37
SECTION 7.11 PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY.........................................37
iii
<PAGE>
ARTICLE VIII. LEGAL DEFEASEANCE AND COVENANT DEFEASANCE........................................................38
SECTION 8.1 OPTION TO EFFECT LEGAL DEFEASANCE OR COVENANT DEFEASANCE...................................38
SECTION 8.2 LEGAL DEFEASANCE AND DISCHARGE.............................................................38
SECTION 8.3 COVENANT DEFEASANCE........................................................................38
SECTION 8.4 CONDITIONS TO LEGAL OR COVENANT DEFEASANCE.................................................39
SECTION 8.5 DEPOSITED MONEY AND GOVERNMENT SECURITIES TO BE HELD IN TRUST;
OTHER MISCELLANEOUS PROVISIONS....................................................................41
SECTION 8.6 REPAYMENT TO THE COMPANY...................................................................41
SECTION 8.7 REINSTATEMENT..............................................................................42
ARTICLE IX. AMENDMENTS AND WAIVERS.............................................................................42
SECTION 9.1 WITHOUT CONSENT OF HOLDERS.................................................................42
SECTION 9.2 WITH CONSENT OF HOLDERS....................................................................43
SECTION 9.3 LIMITATIONS................................................................................43
SECTION 9.4 COMPLIANCE WITH TRUST INDENTURE ACT........................................................44
SECTION 9.5 REVOCATION AND EFFECT OF CONSENTS..........................................................44
SECTION 9.6 NOTATION ON OR EXCHANGE OF SECURITIES......................................................44
SECTION 9.7 TRUSTEE PROTECTED..........................................................................45
ARTICLE X. MISCELLANEOUS.......................................................................................45
SECTION 10.1 TRUST INDENTURE ACT CONTROLS..............................................................45
SECTION 10.2 NOTICES...................................................................................45
SECTION 10.3 COMMUNICATION BY HOLDERS WITH OTHER HOLDERS...............................................46
SECTION 10.4 CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT........................................46
iv
<PAGE>
SECTION 10.5 STATEMENTS REQUIRED IN CERTIFICATE OR OPINION.............................................46
SECTION 10.6 RULES BY TRUSTEE AND AGENTS...............................................................47
SECTION 10.7 LEGAL HOLIDAYS............................................................................47
SECTION 10.8 NO RECOURSE AGAINST OTHERS................................................................47
SECTION 10.9 COUNTERPARTS..............................................................................47
SECTION 10.10 GOVERNING LAWS...........................................................................47
SECTION 10.11 NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS............................................48
SECTION 10.12 SUCCESSORS...............................................................................48
SECTION 10.13 SEVERABILITY.............................................................................48
SECTION 10.14 TABLE OF CONTENTS, HEADINGS, ETC.........................................................48
ARTICLE XI. SINKING FUNDS......................................................................................48
SECTION 11.1 APPLICABILITY OF ARTICLE..................................................................48
SECTION 11.2 SATISFACTION OF SINKING FUND PAYMENTS WITH SECURITIES.....................................49
SECTION 11.3 REDEMPTION OF SECURITIES FOR SINKING FUND.................................................49
v
<PAGE>
Indenture dated as of __________ __, 199_ between SFX
Broadcasting, Inc., a Delaware corporation ("Company"), and ________________, a
_____________ corporation ("Trustee").
Each party agrees as follows for the benefit of the other
party and for the equal and ratable benefit of the Holders of the Securities
issued under this Indenture.
ARTICLE I.
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.1 Definitions.
"Affiliate" of any specified person means any other person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified person. For the purposes of this definition,
"control" (including, with correlative meanings, the terms "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 or 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 Service Agent.
"Board of Directors" means the Board of Directors of the
Company or any duly authorized committee thereof.
"Board Resolution" means a copy of a resolution certified by
the Secretary or an Assistant Secretary of the Company to have been adopted by
the Board of Directors or pursuant to authorization by the Board of Directors
and to be in full force and effect on the date of the certificate and delivered
to the Trustee.
"Business Day" means, unless otherwise provided by Board
Resolution, Officers' Certificate or supplemental indenture hereto for a
particular Series, any day except a Saturday, a Sunday or a Legal Holiday in
the City of New York on which banking institutions are authorized or required
by law, regulation or executive order to close.
"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
<PAGE>
confers on a person the right to receive a share of the profits and losses of,
or distributions of assets of, the issuing person.
"Certificated Securities" means Securities in definitive form,
excluding any Global Security.
"Company" means the party named as such above until a
successor replaces it and thereafter means the successor.
"Company Order" means a written order signed in the name of
the Company by two Officers, one of whom must be the Company's principal
executive officer, principal financial officer or principal accounting officer.
"Company Request" means a written request signed in the name
of the Company by its Chairman of the Board, a President or a Vice President,
and by its Treasurer, an Assistant Treasurer, its Secretary or an Assistant
Secretary, and delivered to the Trustee.
"Corporate Trust Office" means the office of the Trustee at
which at any particular time its corporate trust business shall be principally
administered.
"Custodian" means any receiver, trustee, assignee, liquidator
or similar official under any Bankruptcy Law.
"Debt" of any person as of any date means, without
duplication, all indebtedness of such person in respect of borrowed money,
including all interest, fees and expenses owed in respect thereto (whether or
not the recourse of the lender is to the whole of the assets of such person or
only to a portion thereof), or evidenced by bonds, notes, debentures or similar
instruments.
"Default" means any event that is or with the passage of time
or giving of notice or both would be an Event of Default.
"Depository" means, with respect to the Securities of any
Series issuable or issued in whole or in part in the form of one or more Global
Securities, the person designated as Depository for such Series by the Company,
which Depository shall be a clearing agency registered under the Exchange Act;
and if at any time there is more than one such person, "Depository" as used
with respect to the Securities of any Series shall mean the Depository with
respect to the Securities of such Series.
"Discount Security" means any Security that provides for an
amount less than the stated principal amount thereof to be due and payable upon
declaration of acceleration of the maturity thereof pursuant to Section 6.2.
2
<PAGE>
"Dollars" means the currency of The United States of America.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Global Security" or "Global Securities" means a Security or
Securities, as the case may be, in the form established pursuant to Section 2.1
evidencing all or part of a Series of Securities, issued to the Depository for
such Series or its nominee, and registered in the name of such Depository or
nominee.
"Government Securities" means securities which are (i) direct
obligations of the United States of America for the payment of which its full
faith and credit is pledged or (ii) obligations of a person controlled or
supervised by and acting as an agency or instrumentality of the United States
of America, the payment of which is unconditionally guaranteed as a full faith
and credit obligation by the United States of America which are not callable or
redeemable at the option of the issuer thereof, and shall also include a
Depository receipt issued by a bank or trust company as custodian with respect
to any such Government Securities or a specific payment of interest on or
principal of any such Government Securities held by such custodian for the
account of the holder of a Depository receipt, provided that (except as
required by law) such custodian is not authorized to make any deduction from
the amount payable to the holder of such Depository receipt from any amount
received by the custodian in respect of the Government Securities evidenced by
such Depository receipt.
"Holder" or "Securityholder" means a person in whose name a
Security is registered.
"Indenture" means this Indenture as amended from time to time
and shall include the form and terms of particular Series of Securities
established or contemplated hereunder.
"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.
"Maturity," when used with respect to any Security or
installment of principal thereof, means the date on which the principal of such
Security or such installment of principal becomes due and payable as therein or
herein provided, whether at the Stated Maturity or by declaration of
acceleration, call for redemption or otherwise.
"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 (as such term
3
<PAGE>
is defined in the Board Resolution, Officers' Certificate or supplemental
indenture used to issue a Series of Securities).
"Officer" means the Chairman of the Board, any President, any
Vice-President, the Treasurer, the Secretary, any Assistant Treasurer or any
Assistant Secretary of the Company.
"Officers' Certificate" means a certificate signed by two
Officers, one of whom must be the Company's principal executive officer,
principal financial officer or principal accounting officer.
"Opinion of Counsel" means a written opinion of legal counsel
who is acceptable to the Trustee. The counsel may be an employee of or counsel
to the Company.
"person" means any individual, corporation, partnership,
joint venture, association, joint-stock company, trust, unincorporated
organization, limited liability company, other entity or government or any
agency or political subdivision thereof.
"PIK Securities" means any Series of Securities where
interest is payable, at the election of the Company or a holder of such
Security, in additional Securities.
"principal" of a Security means the principal of the Security
plus, when appropriate, the premium, if any, on the Security.
"Responsible Officer" when used with respect to the Trustee,
means the chairman or the vice-chairman of the board of directors or trustees,
the chairman or vice-chairman of the executive committee of the board of
directors or trustees, the president, any vice-president, the treasurer, the
secretary, any trust officer, any second or assistant vice-president or any
officer or assistant officer of the Trustee other than those specifically above
mentioned customarily performing functions similar to those performed by the
persons who at the time shall be such officers, respectively, or to whom any
corporate trust matter is referred because of his knowledge of and familiarity
with a particular subject.
"SEC" means the Securities and Exchange Commission.
"Securities" means the debentures, notes or other debt
instruments of the Company of any Series authenticated and delivered under this
Indenture.
"Security Custodian" means the Trustee, as custodian with
respect to the Securities in global form, or any successor entity thereto.
"Senior Securities" means any Series of Securities that by
their terms are not expressly subordinated in right of payment to the prior
payment in full of all senior debt.
4
<PAGE>
"Series" or "Series of Securities" means each series of
debentures, notes or other debt instruments of the Company created pursuant to
Sections 2.1 and 2.2 hereof.
"Significant Subsidiary" means (i) any direct or indirect
Subsidiary of the Company 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, or (ii) any group of direct or indirect Subsidiaries of the Company
that, taken together as a group, 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,
"Stated Maturity" when used with respect to any Security or
any installment of principal thereof or interest thereon, means the date
specified in such Security as the fixed date on which the principal of such
Security or such installment of principal or interest is due and payable.
"Subordinated Securities" means any Series of Securities that
by their terms are expressly subordinated in right of payment to the prior
payment in full of all senior debt.
"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 one or more Subsidiaries of such person (or any combination
thereof).
"TIA" means the Trust Indenture Act of 1939 (15 U.S. Code
ss.ss. 77aaa-77bbbb) as in effect on the date of this Indenture; provided,
however, that in the event the Trust Indenture Act of 1939 is amended after
such date, "TIA" means, to the extent required by any such amendment, the Trust
Indenture Act as so amended.
"Trustee" means the person named as the "Trustee" in the
first paragraph of this instrument until a successor Trustee shall have become
such pursuant to the applicable provisions of this Indenture, and thereafter
"Trustee" shall mean or include each person who is then a Trustee hereunder,
and if at any time there is more than one such person, "Trustee" as used with
respect to the Securities of any Series shall mean the Trustee with respect to
Securities of that Series.
"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.
5
<PAGE>
SECTION 1.2 Other Definitions.
</TABLE>
<TABLE>
<CAPTION>
DEFINED IN TERM SECTION
--------------
<S> <C>
"Bankruptcy Law" 6.1
"Event of Default" 6.1
"Legal Holiday" 10.7
"mandatory sinking fund payment" 11.1
"Notice of Default" 6.1
"optional sinking fund payment" 11.1
"Paying Agent" 2.4
"Payment Default" 6.1
"Registrar" 2.4
"Service Agent" 2.4
</TABLE>
SECTION 1.3 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:
"Commission" means the SEC.
"indenture securities" means the Securities.
"indenture security holder" means a
Securityholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee"
means the Trustee.
"obligor" on the indenture securities means the
Company and any successor obligor upon the Securities.
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 and not otherwise defined herein are used herein as so defined.
SECTION 1.4 Rules of Construction.
Unless the context otherwise requires:
6
<PAGE>
(a) a term has the meaning assigned to it;
(b) an accounting term not otherwise defined has the
meaning assigned to it in accordance with generally accepted
accounting principles;
(c) references to "generally accepted accounting principles"
shall mean generally accepted accounting principles in effect as of
the time when and for the period as to which such accounting
principles are to be applied;
(d) "or" is not exclusive;
(e) words in the singular include the plural, and in the
plural include the singular; and
(f) provisions apply to successive events and
transactions.
ARTICLE II.
THE SECURITIES
SECTION 2.1 Issuable in Series.
The aggregate principal amount of Securities that may be
authenticated and delivered under this Indenture is unlimited. The Securities
may be issued in one or more Series. All Securities of a Series shall be
identical except as may be provided in a Board Resolution, Officers'
Certificate or a supplemental indenture hereto detailing the adoption of the
terms thereof pursuant to the Board Resolution, Officers' Certificate or a
supplemental indenture hereto. In the case of Securities of a Series to be
issued from time to time, the Officers' Certificate may provide for the method
by which specified terms (such as interest rate, maturity date, record date or
date from which interest should accrue) are to be determined. Securities may
differ between Series in respect of any matters, provided that all Series of
Securities shall be equally and ratably entitled to the benefits of the
Indenture.
SECTION 2.2 Establishment of Terms of Series of Securities.
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At or prior to the issuance of any Securities within a
Series, the following shall be established (as to the Series generally, in the
case of Subsections 2.2.1 and 2.2.2, and either as to such Securities within
the Series or as to the Series generally in the case of Subsections 2.2.3
through 2.2.21) by a Board Resolution, a supplemental indenture hereto or an
Officers' Certificate pursuant to authority granted under a Board Resolution:
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2.2.1 the title of the Series (which shall distinguish the
Securities of that particular Series from the Securities of any other Series)
and whether such Securities are Senior Securities or Subordinated Securities;
2.2.2 the aggregate principal amount of such Securities and
any limit on such aggregate principal amount that may be authenticated and
delivered under this Indenture (except for Securities authenticated and
delivered upon registration of transfer of, or in exchange for, or in lieu of,
other Securities of the Series pursuant to Section 2.7, 2.8, 2.11, 3.6 or 9.6);
2.2.3 the price or prices (expressed as a percentage of the
principal amount thereof) at which such Securities will be issued and, if other
than the principal amount thereof, the portion of the principal amount payable
upon declaration or acceleration of maturity thereof, or, if applicable, the
portion of the principal amount of such Securities that is convertible into
Class A Common Stock or the method by which any such portion shall be
determined;
2.2.4 if convertible into Class A Common Stock, the terms on
which such Securities are convertible, including the initial conversion price,
the conversion period, any events requiring an adjustment of the applicable
conversion price and any requirements relating to the reservation of such
shares of Class A Common Stock for purposes of conversion;
2.2.5 the date or dates on which the principal amount of such
Securities will be payable and, if applicable, the terms on which such maturity
may be extended;
2.2.6 the rate or rates (which may be fixed or variable)
at which such Securities will bear interest, if any;
2.2.7 the date or dates from which any such interest will
accrue, the dates on which any such interest will be payable, the record dates
for such interest payment dates, the persons to whom such interest shall be
payable, and the basis upon which interest shall be calculated if other than
that of a 360-day year of twelve 30-day months;
2.2.8 the place or places where the principal of and
interest, if any, on such Securities will be payable, where such Securities may
be surrendered for registration of transfer, conversion or exchange and where
notices or demands to or upon the Company in respect of such Securities may be
served;
2.2.9 the period or periods, if any, within which, the price
or prices at which and the other terms and conditions upon which such
Securities may, pursuant to any optional or mandatory redemption provisions, be
redeemed, as a whole or in part, at the Option of the Company;
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2.2.10 the dates, if any, on which and the price or prices at
which the Securities of the Series will be repurchased by the Company at the
option of the Holders thereof and other detailed terms and provisions of such
repurchase obligations;
2.2.11 the denominations in which the Securities of the
Series shall be issuable;
2.2.12 the obligation, if any, of the Company to redeem,
repay or purchase such Securities pursuant to any Sinking Fund or analogous
provision or at the option of a holder thereof, and the period or periods
within which, the price or prices at which and the other terms and conditions
upon which such Securities will be redeemed, repaid or purchased, as a whole or
in part, pursuant to such obligations;
2.2.13 whether the payments of principal of or interest, if
any, on such Security may be determined with reference to an index, formula or
other method and the manner in which such amounts shall be determined
2.2.14 whether the Securities are issued as Discount
Securities, and all material U.S. federal income tax, accounting and other
considerations applicable to such Original Issue Discount Securities;
2.2.15 whether the interest, if any, on the Securities is to
be payable, at the election of the Company or a holder thereof, in cash or in
PIK Securities and the period or periods within which, and the terms and
conditions upon which, such election may be made, and all material U.S. federal
income tax, accounting and other considerations applicable to such PIK
Securities;
2.2.16 provisions, if any, granting special rights to the
holders of Securities of any Series upon the occurrence of such events as may
be specified;
2.2.17 any deletions from, modifications of or additions to
the Events of Default of the Company with respect to Securities of any Series,
whether or not such Events of Default are consistent with the Events of Default
described in Article VI;
2.2.18 whether Securities of any Series are to be issuable
initially in temporary global form and whether any Securities of any Series are
to be issuable in permanent global form and, if so, whether beneficial owners
of interests in any such Security in permanent form may exchange such interest
for Securities of such Series and of like tenor of any authorized form and
denomination and the circumstances under which any such exchanges may occur, if
other than in the manner provided herein, and, if Securities of such Series are
to issuable as a Global Security, the identity of the Depository for such
Series;
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2.2.19 the applicability, if any, of the legal defeasance
and covenant defeasance provisions hereof to the Securities of such series;
2.2.20 any addition to or change in the covenants set
forth in Article IV that applies to Securities of the Series; and
2.2.21 any other terms of the Securities of the Series (which
terms shall not be inconsistent with the provisions of this Indenture, except
as permitted by Section 9.1, but which may modify or delete any provision of
this Indenture insofar as it applies to such Series); and
All Securities of any one Series need not be issued at the
same time and may be issued from time to time, consistent with the terms of
this Indenture, if so provided by or pursuant to the Board Resolution or
Officers' Certificate referred to above or as set forth in a supplemental
indenture hereto, and the authorized principal amount of any Series may not be
increased to provide for issuances of additional Securities of such Series,
unless otherwise provided in the Board Resolution, Officers' Certificate or a
supplemental indenture hereto.
SECTION 2.3 Execution and Authentication.
Two Officers shall sign the Securities for the Company by
manual or facsimile signature.
If an Officer whose signature is on a Security no longer
holds that office at the time the Security is authenticated, the Security shall
nevertheless be valid.
A Security shall not be valid until authenticated by the
manual signature of the Trustee or an authenticating agent. The signature shall
be conclusive evidence that the Security has been authenticated under this
Indenture.
The Trustee shall at any time, and from time to time,
authenticate Securities for original issue in the principal amount provided in
the Board Resolution or Officers' Certificate detailing the adoption of terms
pursuant to the Board Resolution, Officers' Certificate or a supplemental
indenture hereto, upon receipt by the Trustee of a Company Order. If provided
for in such procedures, such Company Order may authorize authentication and
delivery pursuant to oral or electronic instructions from the Company or its
duly authorized agent or agents, which oral instructions shall be promptly
confirmed in writing. Each Security shall be dated the date of its
authentication unless otherwise provided by Board Resolution, Officers'
Certificates or a supplemental indenture hereto.
The aggregate principal amount of Securities of any Series
outstanding at any time may not exceed any limit upon the maximum principal
amount for such Series set forth in the
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Board Resolution or Officers' Certificate or supplemental indenture hereto
delivered pursuant to Section 2.2, except as provided in Section 2.8.
Prior to the issuance of Securities of any Series, the
Trustee shall have received and (subject to Section 7.2) shall be fully
protected in relying on: (a) the Board Resolution, Officers' Certificate or a
supplemental indenture hereto detailing the adoption of terms pursuant to the
Board Resolution, Officers' Certificate or a supplemental indenture hereto
establishing the form of the Securities of that Series or of Securities within
that Series and the terms of the Securities of that Series or of Securities
within that Series, (b) an Officers' Certificate complying with Section 10.4,
and (c) an Opinion of Counsel complying with Section 10.4.
The Trustee shall have the right to decline to authenticate
and deliver any Securities of such Series: (a) if the Trustee, being advised by
counsel, determines that such action may not lawfully be taken; or (b) if the
Trustee in good faith by its board of directors or trustees, executive
committee or a trust committee of directors and/or vice-presidents shall
determine that such action would expose the Trustee to personal liability to
Holders of any then outstanding Series of Securities.
The Trustee may appoint an authenticating agent acceptable to
the Company to authenticate Securities. An authenticating agent may
authenticate Securities 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.
SECTION 2.4 Registrar and Paying Agent.
The Company shall maintain, with respect to each Series of
Securities, at the place or places specified with respect to such Series
pursuant to Section 2.2, an office or agency where Securities of such Series
may be presented or surrendered for payment ("Paying Agent"), where Securities
of such Series may be surrendered for registration of transfer or exchange
("Registrar") and where notices and demands to or upon the Company in respect
of the Securities of such Series and this Indenture may be served ("Service
Agent"). The Registrar shall keep a register with respect to each Series of
Securities and to their transfer and exchange. The Company will give prompt
written notice to the Trustee of the name and address, and any change in the
name or address, of each Registrar, Paying Agent or Service Agent. If at any
time the Company shall fail to maintain any such required Registrar, Paying
Agent or Service Agent or shall fail to furnish the Trustee with the name and
address thereof, such presentations, surrenders, notices and demands may be
made or served at the Corporate Trust Office of the Trustee, and the Company
hereby appoints the Trustee as its agent to receive all such presentations,
surrenders, notices and demands.
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The Company may also from time to time designate one or more
co-registrars, additional paying agents or additional service agents 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
obligations to maintain a Registrar, Paying Agent and Service Agent in each
place so specified pursuant to Section 2.2 for Securities of any Series for
such purposes. The Company may change any Registar without notice. The Company
will give prompt written notice to the Trustee of any such designation or
rescission and of any change in the name or address of any such co-registrar,
additional paying agent or additional service agent. The term "Registrar"
includes any co-registrar; the term "Paying Agent" includes any additional
paying agent; and the term "Service Agent" includes any additional service
agent.
The Company hereby appoints the Trustee the initial
Registrar, Paying Agent and Service Agent for each Series unless another
Registrar, Paying Agent or Service Agent, as the case may be, is appointed
prior to the time Securities of that Series are first issued.
SECTION 2.5 Paying Agent to Hold Money in Trust.
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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 Securityholders of any Series of Securities, or the Trustee, all
money held by the Paying Agent for the payment of principal of or interest on
the Series of Securities, 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 or a Subsidiary) shall have no further liability for the
money. If the Company or a Subsidiary acts as Paying Agent, it shall segregate
and hold in a separate trust fund for the benefit of Securityholders of any
Series of Securities all money held by it as Paying Agent.
SECTION 2.6 Securityholder Lists.
The Trustee shall preserve in as current a form as is
reasonably practicable the most recent list available to it of the names and
addresses of Securityholders of each Series of Securities 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 ten 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 Securityholders of each Series of Securities.
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SECTION 2.7 Transfer and Exchange.
Where Securities of a Series are presented to the Registrar
or a co-registrar with a request to register a transfer or to exchange them for
an equal principal amount of Securities of the same Series, the Registrar shall
register the transfer or make the exchange if its requirements for such
transactions are met. To permit registrations of transfers and exchanges, the
Trustee shall authenticate Securities at the Registrar's request. No service
charge shall be made for any registration of transfer or exchange (except as
otherwise expressly permitted herein), 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 tax or similar
governmental charge payable upon exchanges pursuant to Sections 2.11, 3.6 or
9.6).
Neither the Company nor the Registrar shall be required (a)
to issue, register the transfer of, or exchange Securities of any Series for
the period beginning at the opening of business fifteen days immediately
preceding the mailing of a notice of redemption of Securities of that Series
selected for redemption and ending at the close of business on the day of such
mailing, or (b) to register the transfer of or exchange Securities of any
Series selected, called or being called for redemption as a whole or the
portion being redeemed of any such Securities selected, called or being called
for redemption in part.
SECTION 2.8 Mutilated, Destroyed, Lost and Stolen Securities.
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If any mutilated Security is surrendered to the Trustee, the
Company shall execute and the Trustee shall authenticate and deliver in
exchange therefor a new Security of the same Series and of like tenor and
principal amount and bearing a number not contemporaneously outstanding.
If there shall be delivered to the Company and the Trustee
(i) evidence to their satisfaction of the destruction, loss or theft of any
Security and (ii) such security or indemnity as may be required by them to save
each of them and any agent of either of them harmless, then, in the absence of
notice to the Company or the Trustee that such Security has been acquired by a
bona fide purchaser, the Company shall execute and upon its request the Trustee
shall authenticate and make available for delivery, in lieu of any such
destroyed, lost or stolen Security, a new Security of the same Series and of
like tenor and principal amount and bearing a number not contemporaneously
outstanding.
In case any such mutilated, destroyed, lost or stolen
Security has become or is about to become due and payable, the Company in its
discretion may, instead of issuing a new Security, pay such Security.
Upon the issuance of any new Security under this Section, the
Company may require the payment of a sum sufficient to cover any tax or other
governmental charge that may
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be imposed in relation thereto and any other expenses (including the fees and
expenses of the Trustee) connected therewith.
Every new Security of any Series issued pursuant to this
Section in lieu of any destroyed, lost or stolen Security shall constitute an
original additional contractual obligation of the Company, whether or not the
destroyed, lost or stolen Security shall be at any time enforceable by anyone,
and shall be entitled to all the benefits of this Indenture equally and
proportionately with any and all other Securities of that Series duly issued
hereunder.
The provisions of this Section are exclusive and shall
preclude (to the extent lawful) all other rights and remedies with respect to
the replacement or payment of mutilated, destroyed, lost or stolen Securities.
SECTION 2.9 Outstanding Securities.
The Securities outstanding at any time are all the Securities
authenticated by the Trustee except for those canceled by it, those delivered
to it for cancellation, those reductions in the interest on a Global Security
effected by the Trustee in accordance with the provisions hereof and those
described in this Section as not outstanding. See, however, Section 2.10.
If a Security is replaced pursuant to Section 2.8, it ceases
to be outstanding until the Trustee receives proof satisfactory to it that the
replaced Security is held by a bona fide purchaser.
If the Paying Agent (other than the Company, a Subsidiary or
an Affiliate of any thereof) holds on the Maturity of Securities of a Series
money sufficient to pay such Securities payable on that date, then on and after
that date such Securities of the Series cease to be outstanding and interest on
them ceases to accrue.
A Security does not cease to be outstanding because the
Company or an Affiliate holds the Security.
In determining whether the Holders of the requisite principal
amount of outstanding Securities have given any request, demand, authorization,
direction, notice, consent or waiver hereunder, the principal amount of a
Discount Security that shall be deemed to be outstanding for such purposes
shall be the amount of the principal thereof that would be due and payable as
of the date of such determination upon a declaration of acceleration of the
Maturity thereof pursuant to Section 6.2.
SECTION 2.10 Treasury Securities.
In determining whether the Holders of the required principal
amount of Securities of a Series have concurred in any direction, waiver or
consent, Securities of a Series owned by
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the Company or an Affiliate shall be disregarded, except that for the purposes
of determining whether the Trustee shall be protected in relying on any such
direction, waiver or consent, only Securities of a Series that the Trustee
knows are so owned shall be so disregarded.
SECTION 2.11 Temporary Securities.
Until definitive Securities are ready for delivery, the
Company may prepare and the Trustee shall authenticate temporary Securities
upon a Company Order. Temporary Securities shall be substantially in the form
of definitive Securities but may have variations that the Company considers
appropriate for temporary Securities. Without unreasonable delay, the Company
shall prepare and the Trustee upon request shall authenticate definitive
Securities of the same Series and date of maturity in exchange for temporary
Securities. Until so exchanged, temporary securities shall have the same rights
under this Indenture as the definitive Securities.
SECTION 2.12 Cancellation.
The Company at any time may deliver Securities to the Trustee
for cancellation. The Registrar and the Paying Agent shall forward to the
Trustee any Securities surrendered to them for registration of transfer,
exchange or payment. The Trustee shall cancel all Securities surrendered for
transfer, exchange, payment, replacement or cancellation and shall destroy such
canceled Securities (subject to the record retention requirement of the
Exchange Act) and deliver a certificate of such destruction to the Company,
unless the Company otherwise directs. The Company may not issue new Securities
to replace Securities that it has paid or delivered to the Trustee for
cancellation.
SECTION 2.13 Defaulted Interest.
If the Company defaults in a payment of interest on a Series
of Securities, it shall pay the defaulted interest, plus, to the extent
permitted by law, any interest payable on the defaulted interest, to the
persons who are Securityholders of the Series on a subsequent special record
date. The Company shall fix the record date and payment date. At least 30 days
before the record date, the Company shall mail to the Trustee and to each
Securityholder of the Series a notice that states the record date, the payment
date and the amount of interest to be paid. The Company may pay defaulted
interest in any other lawful manner.
SECTION 2.14 Global Securities.
2.14.1 Terms of Securities. A Board Resolution, an Officers'
Certificate or supplemental indenture hereto detailing the adoption of terms
pursuant to the Board Resolution shall establish whether the Securities of a
Series shall be issued in whole or in part in the form of one or more Global
Securities and shall specify the Depository for such Global Security or
Securities.
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2.14.2 Transfer and Exchange. (a) Transfer and
Exchange of Certificated Securities. When Certificated Securities are
presented by a Holder to the Registrar with a request:
(x) to register the transfer of the Certificated
Securities; or
(y) to exchange such Certificated Securities for an
equal principal amount of Certificated ecurities 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 Securities presented or surrendered
for register of transfer or exchange 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.
(b) Transfer of a Certificated Security for a Beneficial
Interest in a Global Security. A Certificated Security may not be exchanged for
a beneficial interest in a Global Security except upon satisfaction of the
requirements set forth below. Upon receipt by the Trustee of a Certificated
Security, duly endorsed or accompanied by appropriate instruments of transfer,
in form satisfactory to the Trustee, together with written instructions from
the Holder thereof directing the Trustee to make, or to direct the Security
Custodian to make, an endorsement on the Global Security of such Series to
reflect an increase in the aggregate principal amount of the Securities of such
Series represented by the Global Security, in which case the Trustee shall
cancel such Certificated Security in accordance with Section 2.12 hereof and
cause, or direct the Security Custodian to cause, in accordance with the
standing instructions and procedures existing between the Depository and the
Security Custodian, the aggregate principal amount of Securities of such Series
represented by the Global Security to be increased accordingly. If no Global
Securities are then outstanding, the Company shall issue and, upon receipt of a
written order in accordance with Section 2.3 hereof, the Trustee shall
authenticate a new Global Security for such Series in the appropriate principal
amount.
(c) Transfer and Exchange of Global Securities. The transfer
and exchange of Global Securities or beneficial interests therein shall be
effected through the Depository, in accordance with this Indenture and the
procedures of the Depository therefor.
(d) Transfer of a Beneficial Interest in a Global
Security for a Certificated Security.
(i) Any person having a beneficial interest in a
Global Security may upon request exchange such beneficial interest for
a Certificated Security. Upon receipt by the Trustee of written
instructions or such other form of instructions as is customary for
the Depository, from the Depository or its nominee on behalf of any
person having a beneficial interest in a Global Security (all of which
may be submitted by facsimile) the Trustee or the
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Security Custodian, at the direction of the Trustee, shall, in
accordance with the standing instructions and procedures existing
between the Depository and the Security Custodian, cause the aggregate
principal amount of Global Securities to be reduced accordingly and,
following such reduction, the Company shall execute and, upon receipt
of a written order in accordance with Section 2.3 hereof, the Trustee
shall authenticate and deliver to the transferee a Certificated
Security in the appropriate principal amount.
(ii) Certificated Securities issued in exchange for
a beneficial interest in a Global Security pursuant to this Section
2.14.2(d) shall be registered in such names and in such authorized
denominations as the Depository, pursuant to instructions from its
direct or indirect participants or otherwise, shall instruct the
Trustee. The Trustee shall deliver such Certificated Securities to the
persons in whose names such Securities are so registered.
(e) Restrictions on Transfer and Exchange of Global
Securities. Notwithstanding any other provision of this Indenture (other than
the provisions set forth in subsection (f) of this Section 2.14.2), a Global
Security may not be transferred as a whole except by the Depository to a
nominee of the Depository or by a nominee of the Depository to the Depository
or another nominee of the Depository or by the Depository or any such nominee
to a successor Depository or a nominee of such successor Depository.
(f) Authentication of Certificated Securities in Absence
of Depository. If at any time:
(i) the Depository for the Securities notifies the
Company that the Depository is unwilling or unable to continue as
Depository for the Global Securities and a successor Depository for
the Global Securities 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 Securities under this Indenture,
then the Company shall execute, and the Trustee shall, upon receipt of
a written order in accordance with Section 2.3 hereof, authenticate and deliver,
Certificated Securities in an aggregate principal amount equal to the principal
amount of the Global Securities in exchange for such Global Securities.
(g) Cancellation and/or Adjustment of Global Securities. At
such time as all beneficial interests in Global Securities have been exchanged
for Certificated Securities, redeemed, repurchased or canceled, all Global
Securities shall be returned to or retained and canceled by the Trustee in
accordance with Section 2.12 hereof. At any time prior to such cancellation, if
any beneficial interest in a Global Security is exchanged for Certificated
Securities, redeemed, repurchased or canceled, the principal amount of
Securities represented by
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such Global Security shall be reduced accordingly and an endorsement shall be
made on such Global Security, by the Trustee or the Security Custodian, at the
direction of the Trustee, to reflect such reduction.
(h) 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 Securities and Global Securities 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).
(iii) The Registrar shall not be required to
register the transfer of or exchange any Security selected for
redemption in whole or in part, except the unredeemed portion of any
Security being redeemed in part.
(iv) All Certificated Securities and Global
Securities issued upon any registration of transfer or exchange of
Certificated Securities or Global Securities shall be the valid
obligations of the Company, evidencing the same debt, and entitled to
the same benefits under this Indenture, as the Certificated Securities
or Global Securities 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 Securities during a period beginning at the
opening of business 15 days before the day of any selection
of Securities for redemption and ending at the close of
business on the day of selection; or
(B) to register the transfer of or to
exchange any Security so selected for redemption, in whole or
in part, except the unredeemed portion of any Security being
redeemed in part; or
(C) to register the transfer of or to
exchange a Security between a record date and the next
succeeding interest payment date.
(vi) Prior to due presentment for the registration
of a transfer of any Security, the Trustee, any Agent and the Company
may deem and treat the person in
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whose name any Security is registered as the absolute owner of
such Security for the purpose of receiving payment of principal of
and interest, if any, on such Security, and none of the Trustee, any
Agent or the Company shall be affected by notice to the contrary.
(vii) The Trustee shall authenticate Certificated
Securities and Global Securities in accordance with the provisions of
Section 2.3 hereof.
2.14.3 Legend. Any Global Security issued hereunder shall
bear a legend in substantially the following form:
"This Security is a Global Security within the meaning of the
Indenture hereinafter referred to and is registered in the name of the
Depository or a nominee of the Depository. This Security is exchangeable for
Securities registered in the name of a person other than the Depository or its
nominee only in the limited circumstances described in the Indenture, and may
not be transferred except as a whole by the Depository to a nominee of the
Depository, by a nominee of the Depository to the Depository or another nominee
of the Depository or by the Depository or any such nominee to a successor
Depository or a nominee of such a successor Depository."
2.14.4 Acts of Holders. The Depository, as a Holder, may
appoint agents and otherwise authorize participants to give or take any
request, demand, authorization, direction, notice, consent, waiver or other
action which a Holder is entitled to give or take under the Indenture.
2.14.5 Payments. Notwithstanding the other provisions of this
Indenture, unless otherwise specified as contemplated by Section 2.2, payment
of the principal of and interest, if any, on any Global Security shall be made
to the person specified therein.
2.14.6 Consents, Declaration and Directions. Except as
provided in Section 2.14.5, the Company, the Trustee and any Agent shall treat
a person as the Holder of such principal amount of outstanding Securities of
such Series represented by a Global Security as shall be specified in a written
statement of the Depository with respect to such Global Security, for purposes
of obtaining any consents, declarations or directions required to be given by
the Holders pursuant to this Indenture.
2.14.7 Liability for Delay. Neither the Company nor the
Trustee shall be liable for any delay by the Security Custodian or the
Depository in identifying the beneficial owners of Securities and the Company
and the Trustee may conclusively rely on, and will be protected in relying on,
instructions from the Security Custodian or the Depository for all purposes.
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SECTION 2.15 CUSIP Numbers.
The Company in issuing the Securities may use "CUSIP" numbers
(if then generally in use), and, if so, the Trustee shall use "CUSIP" numbers
in notices of redemption as a convenience to Holders; provided that any such
notice may state that no representation is made as to the correctness of such
numbers either as printed on the Securities or as contained in any notice of a
redemption and that reliance may be placed only on the other elements of
identification printed on the Securities, and any such redemption shall not be
affected by any defect in or omission of such numbers.
ARTICLE III.
REDEMPTION
SECTION 3.1 Notice to Trustee.
The Company may, with respect to any Series of Securities,
reserve the right to redeem and pay the Series of Securities or may covenant to
redeem and pay the Series of Securities or any part thereof prior to the Stated
Maturity thereof at such time and on such terms as are provided for in such
Securities. If a Series of Securities is redeemable and the Company wants or is
obligated to redeem prior to the Stated Maturity thereof all or part of the
Series of Securities pursuant to the terms of such Securities, it shall notify
the Trustee of the redemption date and the principal amount of Series of
Securities to be redeemed. The Company shall give the notice at least 45 days
before the redemption date (or such shorter notice as may be acceptable to the
Trustee).
SECTION 3.2 Selection of Securities to be Redeemed.
--------------------------------------
Unless otherwise indicated for a particular Series by Board
Resolution, Officers' Certificate or by a supplemental indenture hereto, if
less than all the Securities of a Series are to be redeemed, the Trustee shall
select the Securities of the Series to be redeemed in any manner that the
Trustee deems fair and appropriate. The Trustee shall make the selection from
Securities of the Series outstanding not previously called for redemption. The
Trustee may select for redemption portions of the principal of Securities of
the Series that have denominations larger than $1,000. Securities of the Series
and portions of them it selects shall be in amounts of $1,000 or whole
multiples of $1,000 or, with respect to Securities of any Series issuable in
other denominations pursuant to Section 2.2.10, the minimum principal
denomination for each Series and integral multiples thereof. Provisions of this
Indenture that apply to Securities of a Series called for redemption also apply
to portions of Securities of that Series called for redemption.
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SECTION 3.3 Notice of Redemption.
Unless otherwise indicated for a particular Series by Board
Resolution, Officers' Certificate or by a supplemental indenture hereto, at
least 30 days but not more than 60 days before a redemption date, the Company
shall mail a notice of redemption by first-class mail to each Holder whose
Securities are to be redeemed.
The notice shall identify the Securities of the Series to be
redeemed and shall state:
(a) the redemption date;
(b) the redemption price;
(c) the name and address of the Paying Agent;
(d) that Securities of the Series called for redemption
must be surrendered to the Paying Agent to collect the redemption
price;
(e) that interest on Securities of the Series called
for redemption ceases to accrue on and after the redemption date; and
(f) any other information as may be required by the
terms of the particular Series or the Securities of a Series being
redeemed.
At the Company's request, the Trustee shall give the notice
of redemption in the Company's name and at its expense.
SECTION 3.4 Effect of Notice of Redemption.
------------------------------
Once notice of redemption is mailed or published as provided
in Section 3.3, Securities of a Series called for redemption become due and
payable on the redemption date and at the redemption price. A notice of
redemption may not be conditional. Upon surrender to the Paying Agent, such
Securities shall be paid at the redemption price plus accrued interest to the
redemption date.
SECTION 3.5 Deposit of Redemption Price.
On or before the redemption date, the Company shall deposit
with the Paying Agent money sufficient to pay the redemption price of and
accrued interest, if any, on all Securities to be redeemed on that date.
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SECTION 3.6 Securities Redeemed in Part.
Upon surrender of a Security that is redeemed in part, the
Trustee shall authenticate for the Holder a new Security of the same Series and
the same maturity equal in principal amount to the unredeemed portion of the
Security surrendered.
ARTICLE IV.
COVENANTS
SECTION 4.1 Payment of Securities.
The Company shall pay or cause to be paid the principal of,
premium, if any, and interest on each Series of Securities on the dates and in
the manner provided in such Series. 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 date due 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 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 Series of Securities to the extent lawful; it shall pay interest
(including post-petition interest in any proceeding under any Bankruptcy Law)
on overdue installments of interest, if any, (without regard to any applicable
grace period) at the same rate to the extent lawful.
SECTION 4.2 Reports.
Whether or not required by the rules and regulations of the
SEC, so long as any Securities are outstanding, the Company shall furnish to
the Trustee and to the Holders of Securities (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.
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SECTION 4.3 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 its
obligations under the Securities of such Series and further stating, as to each
such Officer signing such certificate, that to the best of his or her knowledge
the Company have kept, observed, performed and fulfilled each and every
covenant contained in this Indenture and the Securities of such Series 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, if any, on the Securities 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 4.2 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, each as amended, modified or supplemented 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 Securities 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 4.4 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
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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 4.5 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 its 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 its 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 Subsidiaries, taken as a whole, and that the loss
thereof is not adverse in any material respect to the Holders of the
Securities.
SECTION 4.6 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 Securities.
ARTICLE V.
SUCCESSORS
SECTION 5.1 Merger, Consolidation, or Sale of Assets
----------------------------------------
The Company shall indicate the covenant regarding merger,
consolidation or sale of assets for a particular Series of Securities by Board
Resolution, Officers' Certificate or by a supplemental indenture hereto.
SECTION 5.2 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 5.1 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,
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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, if any, on the Securities except in the case of a sale of all of the
Company's assets that meets the requirements of Section 5.1 hereof.
ARTICLE VI.
DEFAULTS AND REMEDIES
SECTION 6.1 Events of Default.
"Event of Default," wherever used herein with respect to
Securities of any Series, means any one of the following events, unless in the
establishing Board Resolution, Officers' Certificate or supplemental indenture
hereto, it is provided that such Series shall not have the benefit of said
Event of Default:
(a) a default for 30 days in the payment when due of
interest on the Securities;
(b) a default in payment when due of the principal
of or premium, if any, on the Securities;
(c) the failure by the Company for 60 days after
notice to comply with any of its other agreements in this Indenture
or the Securities;
(d) 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 an
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amount in excess of an amount specified by a Board Resolution, an
Officers' Certificate or a supplemental indenture hereto.
(e) the failure by the Company or any of its Subsidiaries to
pay final judgments aggregating in excess of an amount specified by a
Board Resolution, an Officers' Certificate or a supplemental indenture
hereto, which judgments are not paid, discharged or stayed for a
period of 60 days;
(f) 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:
(i) commences a voluntary case,
(ii) consents to the entry of an order for relief
against it in an involuntary case,
(iii) consents to the appointment of a Custodian of
it or for all or substantially all of its property,
(iv) makes a general assignment for the benefit of
its creditors, or
(v) generally is not paying its debts as they become
due;
(g) 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; or
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(i) any other Event of Default provided with respect to
Securities of that Series, which is specified in a Board Resolution, a
supplemental indenture hereto or an Officers' Certificate, in
accordance with Section 2.2.17.
An Event of Default shall not be deemed to have occurred
under clause (d) of this Section 6. 1 until the Trustee notifies the Company,
or the Holders of at least 25% in principal amount of the then outstanding
Series of such Securities 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. 1 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 Securities of such Series
pursuant to any optional redemption provisions, an equivalent premium shall
also become and be immediately due and payable to the extent permitted by law
upon the acceleration of the Securities, anything in this Indenture or in such
Series of Securities to the contrary notwithstanding.
No Event of Default with respect to a particular Series of
Securities (except with respect to subsections (f) and (g) above) necessarily
constitutes an Event of Default with respect to any other Series of Securities.
The term "Bankruptcy Law" means title 11, U.S. Code or any
similar Federal or State law for the relief of debtors.
SECTION 6.2 Acceleration of Maturity; Rescission and Annulment. If any
Event of Default (other than an Event of Default specified in clauses (f) and
(g) of Section 6.1 hereof) occurs and is continuing, the Trustee or the Holders
of at least 25% in principal amount of the then outstanding Securities of such
Series may declare all the Securities of such Series to be due and payable
immediately. Upon any such declaration, the Securities of such Series shall
become due and payable immediately. Notwithstanding the foregoing, if an Event
of Default specified in clauses (f) or (g) of Section 6.1 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
Securities of such Series 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 with respect to such
Series (except
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nonpayment of principal or interest that has become due solely because of
the acceleration) have been cured or waived.
SECTION 6.3 [Intentionally left blank]
SECTION 6.4 Trustee May File Proofs of Claim.
--------------------------------
In case of the pendency of any receivership, insolvency,
liquidation, bankruptcy, reorganization, arrangement, adjustment, composition
or other judicial proceeding relative to the Company or any other obligor upon
the Securities or the property of the Company or of such other obligor or their
creditors, the Trustee (irrespective of whether the principal of the Securities
shall then be due and payable as therein expressed or by declaration or
otherwise and irrespective of whether the Trustee shall have made any demand on
the Company for the payment of overdue principal or interest) shall be entitled
and empowered, by intervention in such proceeding or otherwise,
(a) to file and prove a claim for the whole amount of
principal and interest owing and unpaid in respect of the Securities
and to file such other papers or documents as may be necessary or
advisable in order to have the claims of the Trustee (including any
claim for the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel) and of the Holders
allowed in such judicial proceeding, and
(b) to collect and receive any moneys or other property
payable or deliverable on any such claims and to distribute the same,
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Holder to make such payments to the Trustee and, in the event that the
Trustee shall consent to the making of such payments directly to the Holders,
to pay to the Trustee any amount due it for the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel,
and any other amounts due the Trustee under Section 7.7.
Nothing herein contained shall be deemed to authorize the
Trustee to authorize or consent to or accept or adopt on behalf of any Holder
any plan of reorganization, arrangement, adjustment or composition affecting
the Securities or the rights of any Holder thereof or to authorize the Trustee
to vote in respect of the claim of any Holder in any such proceeding.
SECTION 6.5 Trustee May Enforce Claims Without Possession of
Securities.
All rights of action and claims under this Indenture or the
Securities may be prosecuted and enforced by the Trustee without the possession
of any of the Securities or the
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production thereof in any proceeding relating thereto, and any such proceeding
instituted by the Trustee shall be brought in its own name as trustee of an
express trust, and any recovery of judgment shall, after provision for the
payment of the reasonable compensation, expenses, disbursements and advances
of the Trustee, its agents and counsel, be for the ratable benefit of the
Holders of the Securities in respect of which such judgment has been
recovered.
SECTION 6.6 Application of Money Collected.
Any money collected by the Trustee pursuant to this Article
shall be applied in the following order, at the date or dates fixed by the
Trustee and, in case of the distribution of such money on account of principal
or interest, upon presentation of the Securities and the notation thereon of
the payment if only partially paid and upon surrender thereof if fully paid:
First: To the payment of all amounts due the
Trustee under Section 7.7; and
Second: To the payment of the amounts then due and unpaid for
principal of and interest on the Securities in respect of which or for the
benefit of which such money has been collected, ratably, without preference or
priority of any kind, according to the amounts due and payable on such
Securities for principal and interest, respectively; and
Third: To the Company.
SECTION 6.7 Limitation on Suits.
No Holder of any Security of any Series shall have any right
to institute any proceeding, judicial or otherwise, with respect to this
Indenture, or for the appointment of a receiver or trustee, or for any other
remedy hereunder, unless
(a) such Holder has previously given written notice to the Trustee
of a continuing Event of Default with respect to the Securities of that
Series;
(b) the Holders of not less than 25% in principal amount of the
outstanding Securities of that Series shall have made written request to
the Trustee to institute proceedings in respect of such Event of Default
in its own name as Trustee hereunder;
(c) such Holder or Holders have offered to the Trustee reasonable
indemnity against the costs, expenses and liabilities to be incurred in
compliance with such request;
(d) the Trustee for 60 days after its receipt of such notice,
request and offer of indemnity has failed to institute any such
proceeding; and
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(e) no direction inconsistent with such written request has been
given to the Trustee during such 60-day period by the Holders of a
majority in principal amount of the outstanding Securities of that
Series;
it being understood and intended that no one or more of such Holders shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture to affect, disturb or prejudice the rights of any other of
such Holders, or to obtain or to seek to obtain priority or preference over any
other of such Holders or to enforce any right under this Indenture, except in
the manner herein provided and for the equal and ratable benefit of all such
Holders.
SECTION 6.8 Unconditional Right of Holders to Receive
Principal and Interest.
-------------------------------------------------
Notwithstanding any other provision in this Indenture, the
Holder of any Security shall have the right, which is absolute and
unconditional, to receive payment of the principal of and interest, if any, on
such Security on the Stated Maturity or Stated Maturities expressed in such
Security (or, in the case of redemption, on the redemption date) and to
institute suit for the enforcement of any such payment, and such rights shall
not be impaired without the consent of such Holder.
SECTION 6.9 Restoration of Rights and Remedies.
----------------------------------
If the Trustee or any Holder has instituted any proceeding to
enforce any right or remedy under this Indenture and such proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to
the Trustee or to such Holder, then and in every such case, subject to any
determination in such proceeding, the Company, the Trustee and the Holders
shall be restored severally and respectively to their former positions
hereunder and thereafter all rights and remedies of the Trustee and the Holders
shall continue as though no such proceeding had been instituted.
SECTION 6.10 Rights and Remedies Cumulative.
Except as otherwise provided with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Securities in Section 2.8,
no right or remedy herein conferred upon or reserved to the Trustee or to the
Holders is intended to be exclusive of any other right or remedy, and every
right and remedy shall, to the extent permitted by law, be cumulative and in
addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.
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SECTION 6.11 Delay or Omission Not Waiver.
No delay or omission of the Trustee or of any Holder of any
Securities to exercise any right or remedy accruing upon any Event of Default
shall impair any such right or remedy or constitute a waiver of any such Event
of Default or an acquiescence therein. Every right and remedy given by this
Article or by law to the Trustee or to the Holders may be exercised from time
to time, and as often as may be deemed expedient, by the Trustee or by the
Holders, as the case may be.
SECTION 6.12 Control by Holders.
The Holders of a majority in principal amount of the
outstanding Securities of any Series shall have the right to direct the time,
method and place of conducting any proceeding for any remedy available to the
Trustee, or exercising any trust or power conferred on the Trustee, with
respect to the Securities of such Series, provided that:
(a) such direction shall not be in conflict with any rule of law or
with this Indenture,
(b) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction, and
(c) subject to the provisions of Section 6.1, the Trustee shall have
the right to decline to follow any such direction if the Trustee in good
faith shall, by a Responsible Officer of the Trustee, determine that the
proceeding so directed would involve the Trustee in personal liability.
SECTION 6.13 Waiver of Past Defaults.
The Holders of not less than a majority in principal amount
of the outstanding Securities of any Series may on behalf of the Holders of all
the Securities of such Series waive any past Default hereunder with respect to
such Series and its consequences, except a Default in the payment of the
principal of or interest on any Security of such Series (provided, however,
that the Holders of a majority in a principal amount of the outstanding
Securities of any Series 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.
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SECTION 6.14 Undertaking for Costs.
All parties to this Indenture agree, and each Holder of any
Security by his acceptance thereof shall be deemed to have agreed, that any
court may in its discretion require, 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, suffered or omitted by it as Trustee, the filing by any party
litigant in such suit of an undertaking to pay the costs of such suit, and that
such court may in its discretion assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in such suit, having due regard to
the merits and good faith of the claims or defenses made by such party
litigant; but the provisions of this Section shall not apply to any suit
instituted by the Company, to any suit instituted by the Trustee, to any suit
instituted by any Holder, or group of Holders, holding in the aggregate more
than 10% in principal amount of the outstanding Securities of any Series, or to
any suit instituted by any Holder for the enforcement of the payment of the
principal of or interest on any Security on or after the Stated Maturity or
Stated Maturities expressed in such Security (or, in the case of redemption, on
or after the redemption date).
ARTICLE VII.
TRUSTEE
SECTION 7.1 Duties of Trustee.
(a) If an Event of Default has occurred and is continuing, the
Trustee shall exercise the rights and powers vested in it by this
Indenture and use the same degree of care and skill in their exercise 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 Trustee need perform only those duties that are
specifically set forth in this Indenture and no others.
(ii) In the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon Officers'
Certificates or Opinions of Counsel furnished to the Trustee and
conforming to the requirements of this Indenture; however, in the
case of any such Officers' Certificates or Opinions of Counsel which
by any provisions hereof are specifically required to be furnished
to the Trustee, the Trustee shall examine such Officers'
Certificates and Opinions of Counsel to determine whether or not
they conform to the requirements of this Indenture.
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(c) The Trustee may not be relieved from liability for its own
negligent action, its own 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.
(iii) The Trustee shall not be liable with respect to any
action taken, suffered or omitted to be taken by it with respect to
Securities of any Series in good faith in accordance with the
direction of the Holders of a majority in principal amount of the
outstanding Securities of such Series relating to the time, method
and place of conducting any proceeding for any remedy available to
the Trustee, or exercising any trust or power conferred upon the
Trustee, under this Indenture with respect to the Securities of such
Series.
(d) Every provision of this Indenture that in any way relates to the
Trustee is subject to paragraph (a), (b) and (c) of this Section.
(e) The Trustee may refuse to perform any duty or exercise any right
or power unless it receives indemnity satisfactory to it against any
loss, liability or expense.
(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.
(g) No provision of this Indenture shall require the Trustee to risk
its own funds or otherwise incur any financial liability in the
performance of any of its duties, or in the exercise of any of its rights
or powers, if it shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk is not
reasonably assured to it.
(h) The Paying Agent, the Registrar and any authenticating agent
shall be entitled to the protections, immunities and standard of care as
are set forth in paragraphs (a), (b) and (c) of this Section with respect
to the Trustee.
SECTION 7.2 Rights of Trustee.
(a) The Trustee may rely on 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
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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. 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.
(c) The Trustee may act through agents and shall not be responsible
for the misconduct or negligence of any agent appointed with due care. No
Depository shall be deemed an agent of the Trustee and the Trustee shall
not be responsible for any act or omission by any Depository.
(d) The Trustee shall not be liable for any action it takes or omits
to take in good faith which it believes to be authorized or within its
rights or powers.
(e) The Trustee may consult with counsel and the advice of such
counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken, suffered or
omitted by it hereunder in good faith and in reliance thereon.
(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 of Securities unless such Holders shall
have offered to the Trustee reasonable security or indemnity against the
costs, expenses and liabilities which might be incurred by it in
compliance with such request or direction.
SECTION 7.3 Individual Rights of Trustee.
The Trustee in its individual or any other capacity may
become the owner or pledgee of Securities and may otherwise deal with the
Company or an Affiliate with the same rights it would have if it were not
Trustee. Any Agent may do the same with like rights. The Trustee is also
subject to Sections 7.10 and 7.11.
SECTION 7.4 Trustee's Disclaimer.
The Trustee makes no representation as to the validity or
adequacy of this Indenture or the Securities, it shall not be accountable for
the Company's use of the proceeds from the Securities, and it shall not be
responsible for any statement in the Securities other than its authentication.
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SECTION 7.5 Notice of Defaults.
If a Default or Event of Default occurs and is continuing
with respect to the Securities of any Series and if it is known to a
Responsible Officer of the Trustee, the Trustee shall mail to each
Securityholder of the Securities of that Series notice of a Default or Event of
Default within 90 days after it occurs or, if later, after a Responsible
Officer of the Trustee has knowledge of such Default or Event of Default.
Except in the case of a Default or Event of Default in payment of principal of
interest on any Security of any Series, the Trustee may withhold the notice if
and so long as its corporate trust committee or a committee of its Responsible
Officers in good faith determines that withholding the notice is in the
interests of Securityholders of that Series.
SECTION 7.6 Reports by Trustee to Holders.
-----------------------------
Within 60 days after ________ in each year, the Trustee shall
transmit by mail to all Securityholders, as their names and addresses appear on
the Security Register a brief report dated as of such ________, in accordance
with, and to the extent required under, TIA ss. 313.
A copy of each report at the time of its mailing to
Securityholders of any Series shall be filed with the SEC and each stock
exchange on which the Securities of that Series are listed. The Company shall
promptly notify the Trustee when Securities of any Series are listed on any
stock exchange.
SECTION 7.7 Compensation and Indemnity.
The Company shall pay to the Trustee from time to time
reasonable compensation for its services. The Trustee's compensation shall not
be limited by any law on compensation of a trustee of an express trust. The
Company shall reimburse the Trustee upon request for all reasonable
out-of-pocket expenses incurred by it. Such expenses shall include the
reasonable compensation and expenses of the Trustee's agents and counsel.
The Company shall indemnify the Trustee (including the cost
of defending itself) against any loss, liability or expense incurred by it
except as set forth in the next paragraph in the performance of its duties
under this Indenture as Trustee or Agent. The Trustee shall notify the Company
promptly of any claim for which it may seek indemnity. The Company shall defend
the claim and the Trustee shall cooperate in the defense. 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 its
consent, which consent shall not be unreasonably withheld. This indemnification
shall apply to officers, directors, employees, shareholders and agents of the
Trustee.
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The Company need not reimburse any expense or indemnify
against any loss or liability incurred by the Trustee or by any officer,
director, employee, shareholder or agent of the Trustee through negligence or
bad faith.
To secure the Company's payment obligations in this Section,
the Trustee shall have a lien prior to the Securities of any Series on all
money or property held or collected by the Trustee, except that held in trust
to pay principal and interest on particular Securities of that Series.
When the Trustee incurs expenses or renders services after an
Event of Default specified in Section 6.1(f) or (g) occurs, the expenses and
the compensation for the services are intended to constitute expenses of
administration under any Bankruptcy Law.
SECTION 7.8 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 with respect to the Securities of one
or more Series by so notifying the Company. The Holders of a majority in
principal amount of the Securities of any Series may remove the Trustee with
respect to that Series by so notifying the Trustee and the Company. The Company
may remove the Trustee with respect to Securities of one or more Series if:
(a) the Trustee fails to comply with Section 7.10;
(b) the Trustee is adjudged a bankrupt or an insolvent or an order
for relief is entered with respect to the Trustee under any Bankruptcy
Law;
(c) a Custodian or public officer takes charge of the Trustee or its
property; 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
Securities may appoint a successor Trustee to replace the successor Trustee
appointed by the Company.
If a successor Trustee with respect to the Securities of any
one or more Series does not take office within 60 days after the retiring
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Trustee resigns or is removed, the retiring Trustee, the Company or the Holders
of at least 10% in principal amount of the Securities of the applicable Series
may petition any court of competent jurisdiction for the appointment of a
successor Trustee.
If the Trustee with respect to the Securities of any one or
more Series fails to comply with Section 7.10, any Securityholder of the
applicable Series 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. Immediately after that,
the retiring Trustee shall transfer all property held by it as Trustee to the
successor Trustee subject to the lien provided for in Section 7.7, 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
with respect to each Series of Securities for which it is acting as Trustee
under this Indenture. A successor Trustee shall mail a notice of its succession
to each Securityholder of each such Series. Notwithstanding replacement of the
Trustee pursuant to this Section 7.8, the Company's obligations under Section
7.7 hereof shall continue for the benefit of the retiring trustee with respect
to expenses and liabilities incurred by it prior to such replacement.
SECTION 7.9 Successor Trustee by Merger, etc.
--------------------------------
If the Trustee consolidates with, 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.
This Indenture shall always have a Trustee who satisfies the
requirements of TIA ss. 310(a)(1), (2) and (5). The Trustee shall always have a
combined capital and surplus of at least $25,000,000 as set forth in its most
recent published annual report of condition. The Trustee shall comply with 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.
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ARTICLE VIII.
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
SECTION 8.1 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. 2 or 8. 3 hereof be applied to all outstanding
Securities upon compliance with the conditions set forth below in this Article
8.
SECTION 8.2 Legal Defeasance and Discharge.
Upon the Company's exercise under Section 8.1 hereof of the
option applicable to this Section 8.2, the Company shall, subject to the
satisfaction of the conditions set forth in Section 8.4 hereof, be deemed to
have been discharged from its obligations with respect to all outstanding
Securities of any Series 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 Securities of such Series, which
shall thereafter be deemed to be "outstanding" only for the purposes of Section
8.5 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 Securities
of such Series 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
Securities to receive solely from the trust fund described in Section 8.4
hereof, and as more fully set forth in such Section, payments in respect of the
principal of, premium, if any, and interest, if any, on such Securities when
such payments are due, (b) the Company's obligations with respect to such
Securities under Article 2 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 8.2 notwithstanding the
prior exercise of its option under Section 8.3 hereof.
SECTION 8.3 Covenant Defeasance.
Upon the Company's exercise under Section 8.1 hereof of the
option applicable to this Section 8.3, the Company shall, subject to the
satisfaction of the conditions set forth in Section 8.4 hereof, be released
from their obligations under the covenants contained in Articles 4 and 5 hereof
with respect to the outstanding Securities on and after the date the conditions
set forth below are satisfied (hereinafter, "Covenant Defeasance"), and the
Securities shall thereafter be deemed not "outstanding" for the purposes of any
direction, waiver, consent or declaration or
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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 Securities shall not be
deemed "outstanding" for accounting purposes). For this purpose, Covenant
Defeasance means that, with respect to the outstanding Securities, 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 6.1(c) hereof, but,
except as specified above, the remainder of this Indenture and such Securities
shall be unaffected thereby. In addition, upon the Company's exercise under
Section 8.1 hereof of the option applicable to this Section 8.3, subject to
the satisfaction of the conditions set forth in Section 8.4 hereof, Sections
6.1(d) through 6.1(g) hereof shall not constitute Events of Default.
SECTION 8.4 Conditions to Legal or Covenant Defeasance.
------------------------------------------
The following shall be the conditions to the application of either
Section 8.2 or 8.3 hereof to the outstanding Securities:
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 Securities,
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,
if any, on the outstanding Securities 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 Securities are being defeased to
maturity or to a particular redemption date;
(b) in the case of an election under Section 8.2
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 Securities 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 8.3
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 Securities 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 6.1(f) or (g) 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 Securities 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 Securities 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.
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SECTION 8.5 Deposited Money and Government Securities to be Held
------------------------------------------------------
in Trust; Other Miscellaneous Provisions
-----------------------------------------
Subject to Section 8.6 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
8.5, the "Trustee") pursuant to Section 8.4 hereof in respect of the
outstanding Securities shall be held in trust and applied by the Trustee, in
accordance with the provisions of such Securities 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
Securities of all sums due and to become due thereon in respect of principal,
premium and interest, if any, 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 8.4 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 Securities.
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 8.4 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 8.4(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 8.6 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 interest on any Security and remaining unclaimed for two years after such
principal, and premium 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 Security 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 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,
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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 8.7 Reinstatement.
If the Trustee or Paying Agent is unable to apply any United
States dollars or non-callable Government Securities in accordance with Section
8.2 or 8.3 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 Securities shall be revived and reinstated as though no
deposit had occurred pursuant to Section 8.2 or 8.3 hereof until such time as
the Trustee or Paying Agent is permitted to apply all such money in accordance
with Section 8.2 or 8.3 hereof, as the case may be; provided, however, that, if
either the Company makes any payment of principal of, premium or interest on
any Security following the reinstatement of its obligations, the Company shall
be subrogated to the rights of the Holders of such Securities to receive such
payment from the money held by the Trustee or Paying Agent.
ARTICLE IX.
AMENDMENTS AND WAIVERS
SECTION 9.1 Without Consent of Holders.
The Company and the Trustee may amend or supplement this
Indenture or the Securities of one or more Series without the consent of any
Securityholder:
(a) to cure any ambiguity, defect or inconsistency;
(b) to comply with Article V;
(c) to provide for uncertificated Securities in
addition to or in place of certificated Securities;
(d) to make any change that does not adversely affect
the rights of any Securityholder;
(e) to provide for the issuance of and establish the
form and terms and conditions of Securities of any Series as
permitted by this Indenture;
(f) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to the Securities of one
or more Series and to add to or change any of the provisions of this
Indenture as shall be necessary to provide for or facilitate the
administration of the trusts hereunder by more than one Trustee; or
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(g) to comply with requirements of the SEC in
order to effect or maintain the qualification of this Indenture
under the TIA.
SECTION 9.2 With Consent of Holders.
The Company and the Trustee may enter into a supplemental
indenture with the written consent of the Holders of at least a majority in
principal amount of the outstanding Securities of each Series affected by such
supplemental indenture (including consents obtained in connection with a
purchase of, or tender offer or exchange offer for the securities of such
Series), for the purpose of adding any provisions to or changing in any manner
or eliminating any of the provisions of this Indenture or of any supplemental
indenture or of modifying in any manner the rights of the Securityholders of
each such Series. Except as provided in Section 6.13, the Holders of at least a
majority in principal amount of the outstanding Securities of each Series
affected by such waiver by notice to the Trustee (including consents obtained
in connection with a purchase of, or tender offer or exchange offer for the
securities of such Series) may waive compliance by the Company with any
provision of this Indenture or the Securities with respect to such Series.
It shall not be necessary for the consent of the Holders of
Securities under this Section 9.2 to approve the particular form of any
proposed supplemental indenture or waiver, but it shall be sufficient if such
consent approves the substance thereof. After a supplemental indenture or
waiver under this section becomes effective, the Company shall mail to the
Holders of Securities affected thereby a notice briefly describing the
supplemental indenture or waiver. Any failure by the Company to mail or publish
such notice, or any defect therein, shall not, however, in any way impair or
affect the validity of any such supplemental indenture or waiver.
SECTION 9.3 Limitations.
Without the consent of each Securityholder affected, an
amendment or waiver may not:
(a) change the amount of Securities whose Holders must consent to an
amendment, supplement or waiver;
(b) reduce the rate of or extend the time for payment of interest
(including default interest) on any Security;
(c) reduce the principal or change the Stated Maturity of any
Security or reduce the amount of, or postpone the date fixed for, the
payment of any sinking fund or analogous obligation;
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(d) reduce the principal amount of Discount Securities payable upon
acceleration of the maturity thereof;
(e) waive a Default or Event of Default in the payment of the
principal of or interest, if any, on any Security (except a rescission of
acceleration of the Securities of any Series by the Holders of at least a
majority in principal amount of the outstanding Securities of such Series
and a waiver of the payment default that resulted from such
acceleration);
(f) make the principal of or interest, if any, on any Security
payable in any currency other than that stated in the Security;
(g) make any change in Sections 6.8, 6.13, or 9.3 (this sentence);
or
(h) waive a redemption payment with respect to any Security or
change any of the provisions with respect to the redemption of any
Securities.
SECTION 9.4 Compliance with Trust Indenture Act.
-----------------------------------
Every amendment to this Indenture or the Securities of one or
more Series shall be set forth in a supplemental indenture hereto that complies
with the TIA as then in effect.
SECTION 9.5 Revocation and Effect of Consents.
---------------------------------
Until an amendment or waiver becomes effective, a consent to
it by a Holder of a Security is a continuing consent by the Holder and every
subsequent Holder of a Security or portion of a Security that evidences the
same debt as the consenting Holder's Security, even if notation of the consent
is not made on any Security. However, any such Holder or subsequent Holder may
revoke the consent as to his Security or portion of a Security if the Trustee
receives the notice of revocation before the date the amendment or waiver
becomes effective.
Any amendment or waiver once effective shall bind every
Securityholder of each Series affected by such amendment or waiver unless it is
of the type described in any of clauses (a) through (g) of Section 9.3. In that
case, the amendment or waiver shall bind each Holder of a Security who has
consented to it and every subsequent Holder of a Security or portion of a
Security that evidences the same debt as the consenting Holder's Security.
SECTION 9.6 Notation on or Exchange of Securities.
-------------------------------------
The Trustee may place an appropriate notation about an
amendment or waiver on any Security of any Series thereafter authenticated. The
Company in exchange for Securities of that Series may issue and the Trustee
shall authenticate upon request new Securities of that Series that reflect the
amendment or waiver.
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SECTION 9.7 Trustee Protected.
In executing, or accepting the additional trusts created by,
any supplemental indenture permitted by this Article or the modifications
thereby of the trusts created by this Indenture, the Trustee shall be entitled
to receive, and (subject to Section 7.1) shall be fully protected in relying
upon, an Opinion of Counsel stating that the execution of such supplemental
indenture is authorized or permitted by this Indenture. The Trustee shall sign
all supplemental indentures, except that the Trustee need not sign any
supplemental indenture that adversely affects its rights.
ARTICLE X.
MISCELLANEOUS
SECTION 10.1 Trust Indenture Act Controls.
If any provision of this Indenture limits, qualifies, or
conflicts with another provision which is required or deemed to be included in
this Indenture by the TIA, such required or deemed provision shall control.
SECTION 10.2 Notices.
Any notice or communication by the Company or the Trustee to
the other is duly given if in writing and delivered in person or mailed by
first-class mail:
if to the Company:
SFX Broadcasting, Inc.
150 East 58th Street, 19th Floor
New York, New York
Attention: General Counsel
if to the Trustee:
----------------
----------------
----------------
The Company or the Trustee by notice to the other may
designate additional or different addresses for subsequent notices or
communications.
Any notice or communication to a Securityholder shall be
mailed by first-class mail to his address shown on the register kept by the
Registrar. Failure to mail a notice or
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communication to a Securityholder of any Series or any defect in it shall not
affect its sufficiency with respect to other Securityholders of that or any
other Series.
If a notice or communication is mailed or published in the
manner provided above, within the time prescribed, it is duly given, whether or
not the Securityholder receives it.
If the Company mails a notice or communication to
Securityholders, it shall mail a copy to the Trustee and each Agent at the same
time.
SECTION 10.3 Communication by Holders with Other Holders.
Securityholders of any Series may communicate pursuant to TIA
ss. 312(b) with other Securityholders of that Series or any other Series with
respect to their rights under this Indenture or the Securities of that Series
or all Series. The Company, the Trustee, the Registrar and anyone else shall
have the protection of TIA ss. 312(c).
SECTION 10.4 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 stating that, in the opinion of
the signers, all conditions precedent, if any, provided for in this
Indenture relating to the proposed action have been complied with; and
(b) an Opinion of Counsel stating that, in the opinion of
such counsel, all such conditions precedent have been complied with.
SECTION 10.5 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;
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(c) a statement that, in the opinion of such person, he 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 complied with; and
(d) a statement as to whether or not, in the opinion of such person,
such condition or covenant has been complied with.
SECTION 10.6 Rules by Trustee and Agents.
The Trustee may make reasonable rules for action by or a
meeting of Securityholders of one or more Series. Any Agent may make reasonable
rules and set reasonable requirements for its functions.
SECTION 10.7 Legal Holidays.
Unless otherwise provided by Board Resolution, Officers'
Certificate or supplemental indenture hereto for a particular Series, a "Legal
Holiday" is any day that is not a Business Day. 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.
SECTION 10.8 No Recourse Against Others.
A director, officer, employee or stockholder, as such, of the
Company shall not have any liability for any obligations of the Company under
the Securities or the Indenture or for any claim based on, in respect of or by
reason of such obligations or their creation. Each Securityholder by accepting
a Security waives and releases all such liability. The waiver and release are
part of the consideration for the issue of the Securities.
SECTION 10.9 Counterparts.
This Indenture 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.
SECTION 10.10 Governing Laws.
THE INTERNAL LAWS OF THE STATE OF NEW YORK SHALL GOVERN THIS
INDENTURE AND THE SECURITIES.
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SECTION 10.11 No Adverse Interpretation of Other Agreements.
This Indenture may not be used to interpret another
indenture, loan or debt agreement of the Company or a Subsidiary. Any such
indenture, loan or debt agreement may not be used to interpret this Indenture.
SECTION 10.12 Successors.
All agreements of the Company in this Indenture and the
Securities shall bind its successor. All agreements of the Trustee in this
Indenture shall bind its successor.
SECTION 10.13 Severability.
In case any provision in this Indenture or in the Securities
shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.
SECTION 10.14 Table of Contents, Headings, Etc.
The Table of Contents, Cross-Reference Table, and headings of
the Articles and Sections of this Indenture have been inserted for convenience
of reference only, are not to be considered a part hereof, and shall in no way
modify or restrict any of the terms or provisions hereof.
ARTICLE XI.
SINKING FUNDS
SECTION 11.1 Applicability of Article.
The provisions of this Article shall be applicable to any
sinking fund for the retirement of the Securities of a Series, except as
otherwise permitted or required by any form of Security of such Series issued
pursuant to this Indenture.
The minimum amount of any sinking fund payment provided for
by the terms of the Securities of any Series is herein referred to as a
"mandatory sinking fund payment" and any other amount provided for by the terms
of Securities of such Series is herein referred to as an "optional sinking fund
payment." If provided for by the terms of Securities of any Series, the cash
amount of any sinking fund payment may be subject to reduction as provided in
Section 11.2. Each sinking fund payment shall be applied to the redemption of
Securities of any Series as provided for by the terms of the Securities of such
Series.
48
<PAGE>
SECTION 11.2 Satisfaction of Sinking Fund Payments with
Securities.
The Company may, in satisfaction of all or any part of any
sinking fund payment with respect to the Securities of such Series to be made
pursuant to the terms of such Securities (1) deliver outstanding Securities of
such Series to which such sinking fund payment is applicable (other than any of
such Securities previously called for mandatory sinking fund redemption) and
(2) apply as credit Securities of such Series to which such sinking fund
payment is applicable and which have been redeemed either at the election of
the Company pursuant to the terms of such Series of Securities (except pursuant
to any mandatory sinking fund) or through the application of permitted optional
sinking fund payments or other optional redemptions pursuant to the terms of
such Securities, provided that such Securities have not been previously so
credited. Such Securities shall be received by the Trustee, together with an
Officers' Certificate with respect thereto, not later than 15 days prior to the
date on which the Trustee begins the process of selecting Securities for
redemption, and shall be credited for such purpose by the Trustee at the price
specified in such Securities for redemption through operation of the sinking
fund and the amount of such sinking fund payment shall be reduced accordingly.
If as a result of the delivery or credit of Securities in lieu of cash payments
pursuant to this Section 11.2, the principal amount of Securities of such
Series to be redeemed in order to exhaust the aforesaid cash payment shall be
less than $100,000, the Trustee need not call Securities of such Series for
redemption, except upon receipt of a Company Order that such action be taken,
and such cash payment shall be held by the Trustee or a Paying Agent and
applied to the next succeeding sinking fund payment, provided, however, that
the Trustee or such Paying Agent shall from time to time upon receipt of a
Company Order pay over and deliver to the Company any cash payment so being
held by the Trustee or such Paying Agent upon delivery by the Company to the
Trustee of Securities of that Series purchased by the Company having an unpaid
principal amount equal to the cash payment required to be released to the
Company.
SECTION 11.3 Redemption of Securities for Sinking Fund.
Not less than 45 days (unless otherwise indicated in the
Board Resolution, Officers' Certificate or supplemental indenture in respect of
a particular Series of Securities) prior to each sinking fund payment date for
any Series of Securities, the Company will deliver to the Trustee an Officers'
Certificate specifying the amount of the next ensuing mandatory sinking fund
payment for that Series pursuant to the terms of that Series, the portion
thereof, if any, which is to be satisfied by payment of cash and the portion
thereof, if any, which is to be satisfied by delivering and crediting of
Securities of that Series pursuant to Section 11.2, and the optional amount, if
any, to be added in cash to the next ensuing mandatory sinking fund payment,
and the Company shall thereupon be obligated to pay the amount therein
specified. Not less than 30 days (unless otherwise indicated in the Board
Resolution, Officers' Certificate or supplemental indenture in respect of a
particular Series of Securities) before each such sinking fund payment date the
Trustee shall select the Securities to be redeemed upon such sinking fund
49
<PAGE>
payment date in the manner specified in Section 3.2 and cause notice of the
redemption thereof to be given in the name of and at the expense of the Company
in the manner provided in Section 3.3. Such notice having been duly given, the
redemption of such Securities shall be made upon the terms and in the manner
stated in Sections 3.4, 3.5 and 3.6.
50
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Indenture to be duly executed and attested, all as of the day and year first
above written.
Attest: SFX Broadcasting, Inc.
By:_____________________________________
Robert F.X. Sillerman
Chief Executive Officer
[Trustee_________________________]
By:____________________________________
____________________________________
____________________________________
51
<PAGE>
SFX BROADCASTING, INC.
Reconciliation and tie between Trust Indenture Act of 1939 and
Indenture, dated as of ______________ __, 199_
<TABLE>
<CAPTION>
<S> <C>
SS.310(A)(1) ...................................................................... 7.10
(A)(2) ...................................................................... 7.10
(A)(3) ...................................................................... NOT APPLICABLE
(A)(4) ...................................................................... NOT APPLICABLE
(A)(5) ...................................................................... 7.10
(B) ...................................................................... 7.10
SS.311(A) ...................................................................... 7.11
(B) ...................................................................... 7.11
(C) ...................................................................... NOT APPLICABLE
SS.312(A) ...................................................................... 2.6
(B) ...................................................................... 10.3
(C) ...................................................................... 10.3
SS.313(A) ...................................................................... 7.6
(B)(1) ...................................................................... 7.6
(B)(2) ...................................................................... 7.6
(C)(1) ...................................................................... 7.6
(D) ...................................................................... 7.6
SS.314(A) ...................................................................... 4.2, 4.3
(B) ...................................................................... NOT APPLICABLE
(C)(1) ...................................................................... 10.4
(C)(2) ...................................................................... 10.4
52
<PAGE>
(C)(3) ...................................................................... NOT APPLICABLE
(D) ...................................................................... NOT APPLICABLE
(E) ...................................................................... 10.5
(F) ...................................................................... NOT APPLICABLE
SS.315(A) ...................................................................... 7.1
(B) ...................................................................... 7.5
(C) ...................................................................... 7.1
(D) ...................................................................... 7.1
(E) ...................................................................... 6.14
SS.316(A) ...................................................................... 2.10, 6.2
(A)(1)(A) ...................................................................... 6.12
(A)(1)(B) ...................................................................... 6.13
(B) ...................................................................... 6.8
SS.317(A)(1) ...................................................................... 6.3
(A)(2) ...................................................................... 6.4
(B) ...................................................................... 2.5
SS.318(A) ...................................................................... 10.1
</TABLE>
- ------------------------------------
Note: This reconciliation and tie shall not, for any purpose, be
deemed to be part of the Indenture.
53
- --------------------------------------------------------------------------------
SFX BROADCASTING, INC.
----------------------
SUBORDINATED INDENTURE
Dated as of ________________ __, 199_
------------------------
------------------------
Trustee
- -------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
ARTICLE I. DEFINITIONS AND INCORPORATION BY REFERENCE...........................................................1
SECTION 1.1 DEFINITIONS.................................................................................1
SECTION 1.2 OTHER DEFINITIONS...........................................................................6
SECTION 1.3 INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT...........................................6
SECTION 1.4 RULES OF CONSTRUCTION.......................................................................6
ARTICLE II. THE SECURITIES......................................................................................7
SECTION 2.1 ISSUABLE IN SERIES..........................................................................7
SECTION 2.2 ESTABLISHMENT OF TERMS OF SERIES OF SECURITIES..............................................7
SECTION 2.3 EXECUTION AND AUTHENTICATION...............................................................10
SECTION 2.4 REGISTRAR AND PAYING AGENT.................................................................11
SECTION 2.5 PAYING AGENT TO HOLD MONEY IN TRUST........................................................12
SECTION 2.6 SECURITYHOLDER LISTS.......................................................................12
SECTION 2.7 TRANSFER AND EXCHANGE......................................................................13
SECTION 2.8 MUTILATED, DESTROYED, LOST AND STOLEN SECURITIES...........................................13
SECTION 2.9 OUTSTANDING SECURITIES.....................................................................14
SECTION 2.10 TREASURY SECURITIES.......................................................................14
SECTION 2.11 TEMPORARY SECURITIES......................................................................15
SECTION 2.12 CANCELLATION..............................................................................15
SECTION 2.13 DEFAULTED INTEREST........................................................................15
SECTION 2.14 GLOBAL SECURITIES.........................................................................15
SECTION 2.15 CUSIP NUMBERS.............................................................................20
i
<PAGE>
ARTICLE III. REDEMPTION........................................................................................20
SECTION 3.1 NOTICE TO TRUSTEE..........................................................................20
SECTION 3.2 SELECTION OF SECURITIES TO BE REDEEMED.....................................................20
SECTION 3.3 NOTICE OF REDEMPTION.......................................................................21
SECTION 3.4 EFFECT OF NOTICE OF REDEMPTION.............................................................21
SECTION 3.5 DEPOSIT OF REDEMPTION PRICE................................................................21
SECTION 3.6 SECURITIES REDEEMED IN PART................................................................22
ARTICLE IV. COVENANTS..........................................................................................22
SECTION 4.1 PAYMENT OF SECURITIES .....................................................................22
SECTION 4.2 REPORTS....................................................................................22
SECTION 4.3 COMPLIANCE CERTIFICATE.....................................................................23
SECTION 4.4 STAY, EXTENSION AND USURY LAWS.............................................................23
SECTION 4.5 CONTINUED EXISTENCE........................................................................24
SECTION 4.6 TAXES......................................................................................24
ARTICLE V. SUCCESSORS..........................................................................................24
SECTION 5.1 MERGER, CONSOLIDATION, OR SALE OF ASSETS...................................................24
SECTION 5.2 SUCCESSOR CORPORATION SUBSTITUTED..........................................................24
ARTICLE VI. DEFAULTS AND REMEDIES..............................................................................25
SECTION 6.1 EVENTS OF DEFAULT..........................................................................25
SECTION 6.2 ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT.........................................27
SECTION 6.3 [INTENTIONALLY LEFT BLANK].................................................................28
ii
<PAGE>
SECTION 6.4 TRUSTEE MAY FILE PROOFS OF CLAIM...........................................................28
SECTION 6.5 TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF SECURITIES................................29
SECTION 6.6 APPLICATION OF MONEY COLLECTED.............................................................29
SECTION 6.7 LIMITATION ON SUITS........................................................................29
SECTION 6.8 UNCONDITIONAL RIGHT OF HOLDERS TO RECEIVE PRINCIPAL AND INTEREST...........................30
SECTION 6.9 RESTORATION OF RIGHTS AND REMEDIES.........................................................30
SECTION 6.10 RIGHTS AND REMEDIES CUMULATIVE............................................................30
SECTION 6.11 DELAY OR OMISSION NOT WAIVER..............................................................31
SECTION 6.12 CONTROL BY HOLDERS........................................................................31
SECTION 6.13 WAIVER OF PAST DEFAULTS...................................................................31
SECTION 6.14 UNDERTAKING FOR COSTS.....................................................................32
ARTICLE VII. TRUSTEE...........................................................................................32
SECTION 7.1 DUTIES OF TRUSTEE..........................................................................32
SECTION 7.2 RIGHTS OF TRUSTEE..........................................................................33
SECTION 7.3 INDIVIDUAL RIGHTS OF TRUSTEE...............................................................34
SECTION 7.4 TRUSTEE'S DISCLAIMER.......................................................................34
SECTION 7.5 NOTICE OF DEFAULTS.........................................................................35
SECTION 7.6 REPORTS BY TRUSTEE TO HOLDERS..............................................................35
SECTION 7.7 COMPENSATION AND INDEMNITY.................................................................35
SECTION 7.8 REPLACEMENT OF TRUSTEE.....................................................................36
SECTION 7.9 SUCCESSOR TRUSTEE BY MERGER, ETC...........................................................37
SECTION 7.10 ELIGIBILITY; DISQUALIFICATION.............................................................37
SECTION 7.11 PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY.........................................37
iii
<PAGE>
ARTICLE VIII. LEGAL DEFEASEANCE AND COVENANT DEFEASANCE........................................................38
SECTION 8.1 OPTION TO EFFECT LEGAL DEFEASANCE OR COVENANT DEFEASANCE...................................38
SECTION 8.2 LEGAL DEFEASANCE AND DISCHARGE.............................................................38
SECTION 8.3 COVENANT DEFEASANCE........................................................................38
SECTION 8.4 CONDITIONS TO LEGAL OR COVENANT DEFEASANCE.................................................39
SECTION 8.5 DEPOSITED MONEY AND GOVERNMENT SECURITIES TO BE HELD IN TRUST;
OTHER MISCELLANEOUS PROVISIONS....................................................................41
SECTION 8.6 REPAYMENT TO THE COMPANY...................................................................41
SECTION 8.7 REINSTATEMENT..............................................................................42
ARTICLE IX. AMENDMENTS AND WAIVERS.............................................................................42
SECTION 9.1 WITHOUT CONSENT OF HOLDERS.................................................................42
SECTION 9.2 WITH CONSENT OF HOLDERS....................................................................43
SECTION 9.3 LIMITATIONS................................................................................43
SECTION 9.4 COMPLIANCE WITH TRUST INDENTURE ACT........................................................44
SECTION 9.5 REVOCATION AND EFFECT OF CONSENTS..........................................................44
SECTION 9.6 NOTATION ON OR EXCHANGE OF SECURITIES......................................................44
SECTION 9.7 TRUSTEE PROTECTED..........................................................................45
ARTICLE X. MISCELLANEOUS.......................................................................................45
SECTION 10.1 TRUST INDENTURE ACT CONTROLS..............................................................45
SECTION 10.2 NOTICES...................................................................................45
SECTION 10.3 COMMUNICATION BY HOLDERS WITH OTHER HOLDERS...............................................46
SECTION 10.4 CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT........................................46
iv
<PAGE>
SECTION 10.5 STATEMENTS REQUIRED IN CERTIFICATE OR OPINION.............................................46
SECTION 10.6 RULES BY TRUSTEE AND AGENTS...............................................................47
SECTION 10.7 LEGAL HOLIDAYS............................................................................47
SECTION 10.8 NO RECOURSE AGAINST OTHERS................................................................47
SECTION 10.9 COUNTERPARTS..............................................................................47
SECTION 10.10 GOVERNING LAWS...........................................................................47
SECTION 10.11 NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS............................................48
SECTION 10.12 SUCCESSORS...............................................................................48
SECTION 10.13 SEVERABILITY.............................................................................48
SECTION 10.14 TABLE OF CONTENTS, HEADINGS, ETC.........................................................48
ARTICLE XI. SINKING FUNDS......................................................................................48
SECTION 11.1 APPLICABILITY OF ARTICLE..................................................................48
SECTION 11.2 SATISFACTION OF SINKING FUND PAYMENTS WITH SECURITIES.....................................49
SECTION 11.3 REDEMPTION OF SECURITIES FOR SINKING FUND.................................................49
ARTICLE XII. SUBORDINATION.....................................................................................50
SECTION 12.1 AGREEMENT TO SUBORDINATE..................................................................50
SECTION 12.2 CERTAIN DEFINITIONS.......................................................................50
SECTION 12.3 LIQUIDATION; DISSOLUTION; BANKRUPTCY......................................................50
SECTION 12.4 DEFAULT ON DESIGNATED SENIOR DEBT.........................................................51
SECTION 12.5 ACCELERATION OF SECURITIES................................................................52
SECTION 12.6 WHEN DISTRIBUTION MUST BE PAID OVER.......................................................52
SECTION 12.7 NOTICE BY COMPANY.........................................................................53
v
<PAGE>
SECTION 12.8 SUBROGATION...............................................................................53
SECTION 12.9 RELATIVE RIGHTS...........................................................................53
SECTION 12.10 SUBORDINATION MAY NOT BE IMPAIRED BY COMPANY.............................................54
SECTION 12.11 DISTRIBUTION OR NOTICE TO REPRESENTATIVE.................................................54
SECTION 12.12 RIGHTS OF TRUSTEE AND PAYING AGENT.......................................................54
SECTION 12.13 AUTHORIZATION TO EFFECT SUBORDINATION....................................................55
SECTION 12.14 AMENDMENTS...............................................................................55
</TABLE>
vi
<PAGE>
Indenture dated as of __________ __, 199_ between SFX
Broadcasting, Inc., a Delaware corporation ("Company"), and ________________, a
_____________ corporation ("Trustee").
Each party agrees as follows for the benefit of the other
party and for the equal and ratable benefit of the Holders of the Securities
issued under this Indenture.
ARTICLE I.
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.1 Definitions.
"Affiliate" of any specified person means any other person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified person. For the purposes of this definition,
"control" (including, with correlative meanings, the terms "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 or 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 Service Agent.
"Board of Directors" means the Board of Directors of the
Company or any duly authorized committee thereof.
"Board Resolution" means a copy of a resolution certified by
the Secretary or an Assistant Secretary of the Company to have been adopted by
the Board of Directors or pursuant to authorization by the Board of Directors
and to be in full force and effect on the date of the certificate and delivered
to the Trustee.
"Business Day" means, unless otherwise provided by Board
Resolution, Officers' Certificate or supplemental indenture hereto for a
particular Series, any day except a Saturday, a Sunday or a Legal Holiday in
the City of New York on which banking institutions are authorized or required
by law, regulation or executive order to close.
"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
<PAGE>
confers on a person the right to receive a share of the profits and losses of,
or distributions of assets of, the issuing person.
"Certificated Securities" means Securities in definitive form,
excluding any Global Security.
"Company" means the party named as such above until a
successor replaces it and thereafter means the successor.
"Company Order" means a written order signed in the name of
the Company by two Officers, one of whom must be the Company's principal
executive officer, principal financial officer or principal accounting officer.
"Company Request" means a written request signed in the name
of the Company by its Chairman of the Board, a President or a Vice President,
and by its Treasurer, an Assistant Treasurer, its Secretary or an Assistant
Secretary, and delivered to the Trustee.
"Corporate Trust Office" means the office of the Trustee at
which at any particular time its corporate trust business shall be principally
administered.
"Custodian" means any receiver, trustee, assignee, liquidator
or similar official under any Bankruptcy Law.
"Debt" of any person as of any date means, without
duplication, all indebtedness of such person in respect of borrowed money,
including all interest, fees and expenses owed in respect thereto (whether or
not the recourse of the lender is to the whole of the assets of such person or
only to a portion thereof), or evidenced by bonds, notes, debentures or similar
instruments.
"Default" means any event that is or with the passage of time
or giving of notice or both would be an Event of Default.
"Depository" means, with respect to the Securities of any
Series issuable or issued in whole or in part in the form of one or more Global
Securities, the person designated as Depository for such Series by the Company,
which Depository shall be a clearing agency registered under the Exchange Act;
and if at any time there is more than one such person, "Depository" as used
with respect to the Securities of any Series shall mean the Depository with
respect to the Securities of such Series.
"Discount Security" means any Security that provides for an
amount less than the stated principal amount thereof to be due and payable upon
declaration of acceleration of the maturity thereof pursuant to Section 6.2.
2
<PAGE>
"Dollars" means the currency of The United States of America.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Global Security" or "Global Securities" means a Security or
Securities, as the case may be, in the form established pursuant to Section
2.1 evidencing all or part of a Series of Securities, issued to the Depository
for such Series or its nominee, and registered in the name of such Depository
or nominee.
"Government Securities" means securities which are (i) direct
obligations of the United States of America for the payment of which its full
faith and credit is pledged or (ii) obligations of a person controlled or
supervised by and acting as an agency or instrumentality of the United States
of America, the payment of which is unconditionally guaranteed as a full faith
and credit obligation by the United States of America which are not callable
or redeemable at the option of the issuer thereof, and shall also include a
Depository receipt issued by a bank or trust company as custodian with respect
to any such Government Securities or a specific payment of interest on or
principal of any such Government Securities held by such custodian for the
account of the holder of a Depository receipt, provided that (except as
required by law) such custodian is not authorized to make any deduction from
the amount payable to the holder of such Depository receipt from any amount
received by the custodian in respect of the Government Securities evidenced by
such Depository receipt.
"Holder" or "Securityholder" means a person in whose name a Security
is registered.
"Indenture" means this Indenture as amended from time to time and
shall include the form and terms of particular Series of Securities
established or contemplated hereunder.
"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.
"Maturity," when used with respect to any Security or installment of
principal thereof, means the date on which the principal of such Security or
such installment of principal becomes due and payable as therein or herein
provided, whether at the Stated Maturity or by declaration of acceleration,
call for redemption or otherwise.
"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 (as such term
3
<PAGE>
is defined in the Board Resolution, Officers' Certificate or supplemental
indenture used to issue a Series of Securities).
"Officer" means the Chairman of the Board, any President, any
Vice-President, the Treasurer, the Secretary, any Assistant Treasurer or any
Assistant Secretary of the Company.
"Officers' Certificate" means a certificate signed by two
Officers, one of whom must be the Company's principal executive officer,
principal financial officer or principal accounting officer.
"Opinion of Counsel" means a written opinion of legal counsel
who is acceptable to the Trustee. The counsel may be an employee of or counsel
to the Company.
"person" means any individual, corporation, partnership,
joint venture, association, joint-stock company, trust, unincorporated
organization, limited liability company, other entity or government or any
agency or political subdivision thereof.
"PIK Securities" means any Series of Securities where
interest is payable, at the election of the Company or a holder of such
Security, in additional Securities.
"principal" of a Security means the principal of the Security
plus, when appropriate, the premium, if any, on the Security.
"Responsible Officer" when used with respect to the Trustee,
means the chairman or the vice-chairman of the board of directors or trustees,
the chairman or vice-chairman of the executive committee of the board of
directors or trustees, the president, any vice-president, the treasurer, the
secretary, any trust officer, any second or assistant vice-president or any
officer or assistant officer of the Trustee other than those specifically above
mentioned customarily performing functions similar to those performed by the
persons who at the time shall be such officers, respectively, or to whom any
corporate trust matter is referred because of his knowledge of and familiarity
with a particular subject.
"SEC" means the Securities and Exchange Commission.
"Securities" means the debentures, notes or other debt
instruments of the Company of any Series authenticated and delivered under this
Indenture.
"Security Custodian" means the Trustee, as custodian with
respect to the Securities in global form, or any successor entity thereto.
"Senior Securities" means any Series of Securities that by
their terms are not expressly subordinated in right of payment to the prior
payment in full of all senior debt.
4
<PAGE>
"Series" or "Series of Securities" means each series of
debentures, notes or other debt instruments of the Company created pursuant to
Sections 2.1 and 2.2 hereof.
"Significant Subsidiary" means (i) any direct or indirect
Subsidiary of the Company 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, or (ii) any group of direct or indirect Subsidiaries of the Company
that, taken together as a group, 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,
"Stated Maturity" when used with respect to any Security or
any installment of principal thereof or interest thereon, means the date
specified in such Security as the fixed date on which the principal of such
Security or such installment of principal or interest is due and payable.
"Subordinated Securities" means any Series of Securities that
by their terms are expressly subordinated in right of payment to the prior
payment in full of all senior debt.
"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 one or more Subsidiaries of such person (or any combination
thereof).
"TIA" means the Trust Indenture Act of 1939 (15 U.S. Code
ss.ss. 77aaa-77bbbb) as in effect on the date of this Indenture; provided,
however, that in the event the Trust Indenture Act of 1939 is amended after
such date, "TIA" means, to the extent required by any such amendment, the Trust
Indenture Act as so amended.
"Trustee" means the person named as the "Trustee" in the
first paragraph of this instrument until a successor Trustee shall have become
such pursuant to the applicable provisions of this Indenture, and thereafter
"Trustee" shall mean or include each person who is then a Trustee hereunder,
and if at any time there is more than one such person, "Trustee" as used with
respect to the Securities of any Series shall mean the Trustee with respect to
Securities of that Series.
"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.
5
<PAGE>
SECTION 1.2 Other Definitions.
<TABLE>
<CAPTION>
DEFINED IN TERM SECTION
- ---------- -------------
<S> <C>
"Bankruptcy Law" 6.1
"Event of Default" 6.1
"Legal Holiday" 10.7
"mandatory sinking fund payment" 11.1
"Notice of Default" 6.1
"optional sinking fund payment" 11.1
"Paying Agent" 2.4
"Payment Default" 6.1
"Registrar" 2.4
"Service Agent" 2.4
</TABLE>
SECTION 1.3 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:
"Commission" means the SEC.
"indenture securities" means the Securities.
"indenture security holder" means a Securityholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
"obligor" on the indenture securities means the Company and any
successor obligor upon the Securities.
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 and not otherwise defined herein are used herein as so defined.
SECTION 1.4 Rules of Construction.
Unless the context otherwise requires:
6
<PAGE>
(a) a term has the meaning assigned to it;
(b) an accounting term not otherwise defined has the meaning
assigned to it in accordance with generally accepted accounting
principles;
(c) references to "generally accepted accounting principles" shall
mean generally accepted accounting principles in effect as of the time
when and for the period as to which such accounting principles are to be
applied;
(d) "or" is not exclusive;
(e) words in the singular include the plural, and in the plural
include the singular; and
(f) provisions apply to successive events and transactions.
ARTICLE II.
THE SECURITIES
SECTION 2.1 Issuable in Series.
The aggregate principal amount of Securities that may be
authenticated and delivered under this Indenture is unlimited. The Securities
may be issued in one or more Series. All Securities of a Series shall be
identical except as may be provided in a Board Resolution, Officers'
Certificate or a supplemental indenture hereto detailing the adoption of the
terms thereof pursuant to the Board Resolution, Officers' Certificate or a
supplemental indenture hereto. In the case of Securities of a Series to be
issued from time to time, the Officers' Certificate may provide for the method
by which specified terms (such as interest rate, maturity date, record date or
date from which interest should accrue) are to be determined. Securities may
differ between Series in respect of any matters, provided that all Series of
Securities shall be equally and ratably entitled to the benefits of the
Indenture.
SECTION 2.2 Establishment of Terms of Series of Securities.
At or prior to the issuance of any Securities within a
Series, the following shall be established (as to the Series generally, in the
case of Subsections 2.2.1 and 2.2.2, and either as to such Securities within
the Series or as to the Series generally in the case of Subsections 2.2.3
through 2.2.21) by a Board Resolution, a supplemental indenture hereto or an
Officers' Certificate pursuant to authority granted under a Board Resolution:
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2.2.1 the title of the Series (which shall distinguish the
Securities of that particular Series from the Securities of any other Series)
and whether such Securities are Senior Securities or Subordinated Securities;
2.2.2 the aggregate principal amount of such Securities and
any limit on such aggregate principal amount that may be authenticated and
delivered under this Indenture (except for Securities authenticated and
delivered upon registration of transfer of, or in exchange for, or in lieu of,
other Securities of the Series pursuant to Section 2.7, 2.8, 2.11, 3.6 or 9.6);
2.2.3 the price or prices (expressed as a percentage of the
principal amount thereof) at which such Securities will be issued and, if other
than the principal amount thereof, the portion of the principal amount payable
upon declaration or acceleration of maturity thereof, or, if applicable, the
portion of the principal amount of such Securities that is convertible into
Class A Common Stock or the method by which any such portion shall be
determined;
2.2.4 if convertible into Class A Common Stock, the terms on
which such Securities are convertible, including the initial conversion price,
the conversion period, any events requiring an adjustment of the applicable
conversion price and any requirements relating to the reservation of such
shares of Class A Common Stock for purposes of conversion;
2.2.5 the date or dates on which the principal amount of such
Securities will be payable and, if applicable, the terms on which such maturity
may be extended;
2.2.6 the rate or rates (which may be fixed or variable)
at which such Securities will bear interest, if any;
2.2.7 the date or dates from which any such interest will
accrue, the dates on which any such interest will be payable, the record dates
for such interest payment dates, the persons to whom such interest shall be
payable, and the basis upon which interest shall be calculated if other than
that of a 360-day year of twelve 30-day months;
2.2.8 the place or places where the principal of and
interest, if any, on such Securities will be payable, where such Securities may
be surrendered for registration of transfer, conversion or exchange and where
notices or demands to or upon the Company in respect of such Securities may be
served;
2.2.9 the period or periods, if any, within which, the price
or prices at which and the other terms and conditions upon which such
Securities may, pursuant to any optional or mandatory redemption provisions, be
redeemed, as a whole or in part, at the Option of the Company;
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2.2.10 the dates, if any, on which and the price or prices
at which the Securities of the Series will be repurchased by the Company at
the option of the Holders thereof and other detailed terms and provisions of
such repurchase obligations;
2.2.11 the denominations in which the Securities of the
Series shall be issuable;
2.2.12 the obligation, if any, of the Company to redeem,
repay or purchase such Securities pursuant to any Sinking Fund or analogous
provision or at the option of a holder thereof, and the period or periods
within which, the price or prices at which and the other terms and conditions
upon which such Securities will be redeemed, repaid or purchased, as a whole
or in part, pursuant to such obligations;
2.2.13 whether the payments of principal of or interest,
if any, on such Security may be determined with reference to an index, formula
or other method and the manner in which such amounts shall be determined
2.2.14 whether the Securities are issued as Discount
Securities, and all material U.S. federal income tax, accounting and other
considerations applicable to such Original Issue Discount Securities;
2.2.15 whether the interest, if any, on the Securities is
to be payable, at the election of the Company or a holder thereof, in cash or
in PIK Securities and the period or periods within which, and the terms and
conditions upon which, such election may be made, and all material U.S.
federal income tax, accounting and other considerations applicable to such PIK
Securities;
2.2.16 provisions, if any, granting special rights to the
holders of Securities of any Series upon the occurrence of such events as may
be specified;
2.2.17 any deletions from, modifications of or additions
to the Events of Default of the Company with respect to Securities of any
Series, whether or not such Events of Default are consistent with the Events
of Default described in Article VI;
2.2.18 whether Securities of any Series are to be issuable
initially in temporary global form and whether any Securities of any Series
are to be issuable in permanent global form and, if so, whether beneficial
owners of interests in any such Security in permanent form may exchange such
interest for Securities of such Series and of like tenor of any authorized
form and denomination and the circumstances under which any such exchanges may
occur, if other than in the manner provided herein, and, if Securities of such
Series are to issuable as a Global Security, the identity of the Depository
for such Series;
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2.2.19 the applicability, if any, of the legal defeasance
and covenant defeasance provisions hereof to the Securities of such series;
2.2.20 any addition to or change in the covenants set
forth in Article IV that applies to Securities of the Series; and
2.2.21 any other terms of the Securities of the Series
(which terms shall not be inconsistent with the provisions of this Indenture,
except as permitted by Section 9.1, but which may modify or delete any
provision of this Indenture insofar as it applies to such Series); and
All Securities of any one Series need not be issued at the
same time and may be issued from time to time, consistent with the terms of
this Indenture, if so provided by or pursuant to the Board Resolution or
Officers' Certificate referred to above or as set forth in a supplemental
indenture hereto, and the authorized principal amount of any Series may not be
increased to provide for issuances of additional Securities of such Series,
unless otherwise provided in the Board Resolution, Officers' Certificate or a
supplemental indenture hereto.
SECTION 2.3 Execution and Authentication.
Two Officers shall sign the Securities for the Company by
manual or facsimile signature.
If an Officer whose signature is on a Security no longer
holds that office at the time the Security is authenticated, the Security shall
nevertheless be valid.
A Security shall not be valid until authenticated by the
manual signature of the Trustee or an authenticating agent. The signature shall
be conclusive evidence that the Security has been authenticated under this
Indenture.
The Trustee shall at any time, and from time to time,
authenticate Securities for original issue in the principal amount provided in
the Board Resolution or Officers' Certificate detailing the adoption of terms
pursuant to the Board Resolution, Officers' Certificate or a supplemental
indenture hereto, upon receipt by the Trustee of a Company Order. If provided
for in such procedures, such Company Order may authorize authentication and
delivery pursuant to oral or electronic instructions from the Company or its
duly authorized agent or agents, which oral instructions shall be promptly
confirmed in writing. Each Security shall be dated the date of its
authentication unless otherwise provided by Board Resolution, Officers'
Certificates or a supplemental indenture hereto.
The aggregate principal amount of Securities of any Series
outstanding at any time may not exceed any limit upon the maximum principal
amount for such Series set forth in the
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Board Resolution or Officers' Certificate or supplemental indenture hereto
delivered pursuant to Section 2.2, except as provided in Section 2.8.
Prior to the issuance of Securities of any Series, the
Trustee shall have received and (subject to Section 7.2) shall be fully
protected in relying on: (a) the Board Resolution, Officers' Certificate or a
supplemental indenture hereto detailing the adoption of terms pursuant to the
Board Resolution, Officers' Certificate or a supplemental indenture hereto
establishing the form of the Securities of that Series or of Securities within
that Series and the terms of the Securities of that Series or of Securities
within that Series, (b) an Officers' Certificate complying with Section 10.4,
and (c) an Opinion of Counsel complying with Section 10.4.
The Trustee shall have the right to decline to authenticate
and deliver any Securities of such Series: (a) if the Trustee, being advised by
counsel, determines that such action may not lawfully be taken; or (b) if the
Trustee in good faith by its board of directors or trustees, executive
committee or a trust committee of directors and/or vice-presidents shall
determine that such action would expose the Trustee to personal liability to
Holders of any then outstanding Series of Securities.
The Trustee may appoint an authenticating agent acceptable to
the Company to authenticate Securities. An authenticating agent may
authenticate Securities 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.
SECTION 2.4 Registrar and Paying Agent.
The Company shall maintain, with respect to each Series of
Securities, at the place or places specified with respect to such Series
pursuant to Section 2.2, an office or agency where Securities of such Series
may be presented or surrendered for payment ("Paying Agent"), where Securities
of such Series may be surrendered for registration of transfer or exchange
("Registrar") and where notices and demands to or upon the Company in respect
of the Securities of such Series and this Indenture may be served ("Service
Agent"). The Registrar shall keep a register with respect to each Series of
Securities and to their transfer and exchange. The Company will give prompt
written notice to the Trustee of the name and address, and any change in the
name or address, of each Registrar, Paying Agent or Service Agent. If at any
time the Company shall fail to maintain any such required Registrar, Paying
Agent or Service Agent or shall fail to furnish the Trustee with the name and
address thereof, such presentations, surrenders, notices and demands may be
made or served at the Corporate Trust Office of the Trustee, and the Company
hereby appoints the Trustee as its agent to receive all such presentations,
surrenders, notices and demands.
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The Company may also from time to time designate one or more
co-registrars, additional paying agents or additional service agents 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
obligations to maintain a Registrar, Paying Agent and Service Agent in each
place so specified pursuant to Section 2.2 for Securities of any Series for
such purposes. The Company may change any Registar without notice. The Company
will give prompt written notice to the Trustee of any such designation or
rescission and of any change in the name or address of any such co-registrar,
additional paying agent or additional service agent. The term "Registrar"
includes any co-registrar; the term "Paying Agent" includes any additional
paying agent; and the term "Service Agent" includes any additional service
agent.
The Company hereby appoints the Trustee the initial
Registrar, Paying Agent and Service Agent for each Series unless another
Registrar, Paying Agent or Service Agent, as the case may be, is appointed
prior to the time Securities of that Series are first issued.
SECTION 2.5 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 Securityholders of any Series of Securities, or the Trustee, all
money held by the Paying Agent for the payment of principal of or interest on
the Series of Securities, 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 or a Subsidiary) shall have no further liability for the
money. If the Company or a Subsidiary acts as Paying Agent, it shall segregate
and hold in a separate trust fund for the benefit of Securityholders of any
Series of Securities all money held by it as Paying Agent.
SECTION 2.6 Securityholder Lists.
The Trustee shall preserve in as current a form as is
reasonably practicable the most recent list available to it of the names and
addresses of Securityholders of each Series of Securities 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 ten 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 Securityholders of each Series of Securities.
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SECTION 2.7 Transfer and Exchange.
Where Securities of a Series are presented to the Registrar
or a co-registrar with a request to register a transfer or to exchange them for
an equal principal amount of Securities of the same Series, the Registrar shall
register the transfer or make the exchange if its requirements for such
transactions are met. To permit registrations of transfers and exchanges, the
Trustee shall authenticate Securities at the Registrar's request. No service
charge shall be made for any registration of transfer or exchange (except as
otherwise expressly permitted herein), 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 tax or similar
governmental charge payable upon exchanges pursuant to Sections 2.11, 3.6 or
9.6).
Neither the Company nor the Registrar shall be required (a)
to issue, register the transfer of, or exchange Securities of any Series for
the period beginning at the opening of business fifteen days immediately
preceding the mailing of a notice of redemption of Securities of that Series
selected for redemption and ending at the close of business on the day of such
mailing, or (b) to register the transfer of or exchange Securities of any
Series selected, called or being called for redemption as a whole or the
portion being redeemed of any such Securities selected, called or being called
for redemption in part.
SECTION 2.8 Mutilated, Destroyed, Lost and Stolen Securities.
If any mutilated Security is surrendered to the Trustee, the
Company shall execute and the Trustee shall authenticate and deliver in
exchange therefor a new Security of the same Series and of like tenor and
principal amount and bearing a number not contemporaneously outstanding.
If there shall be delivered to the Company and the Trustee
(i) evidence to their satisfaction of the destruction, loss or theft of any
Security and (ii) such security or indemnity as may be required by them to save
each of them and any agent of either of them harmless, then, in the absence of
notice to the Company or the Trustee that such Security has been acquired by a
bona fide purchaser, the Company shall execute and upon its request the Trustee
shall authenticate and make available for delivery, in lieu of any such
destroyed, lost or stolen Security, a new Security of the same Series and of
like tenor and principal amount and bearing a number not contemporaneously
outstanding.
In case any such mutilated, destroyed, lost or stolen
Security has become or is about to become due and payable, the Company in its
discretion may, instead of issuing a new Security, pay such Security.
Upon the issuance of any new Security under this Section, the
Company may require the payment of a sum sufficient to cover any tax or other
governmental charge that may
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be imposed in relation thereto and any other expenses (including the fees and
expenses of the Trustee) connected therewith.
Every new Security of any Series issued pursuant to this
Section in lieu of any destroyed, lost or stolen Security shall constitute an
original additional contractual obligation of the Company, whether or not the
destroyed, lost or stolen Security shall be at any time enforceable by anyone,
and shall be entitled to all the benefits of this Indenture equally and
proportionately with any and all other Securities of that Series duly issued
hereunder.
The provisions of this Section are exclusive and shall
preclude (to the extent lawful) all other rights and remedies with respect to
the replacement or payment of mutilated, destroyed, lost or stolen Securities.
SECTION 2.9 Outstanding Securities.
The Securities outstanding at any time are all the Securities
authenticated by the Trustee except for those canceled by it, those delivered
to it for cancellation, those reductions in the interest on a Global Security
effected by the Trustee in accordance with the provisions hereof and those
described in this Section as not outstanding. See, however, Section 2.10.
If a Security is replaced pursuant to Section 2.8, it ceases
to be outstanding until the Trustee receives proof satisfactory to it that the
replaced Security is held by a bona fide purchaser.
If the Paying Agent (other than the Company, a Subsidiary or
an Affiliate of any thereof) holds on the Maturity of Securities of a Series
money sufficient to pay such Securities payable on that date, then on and after
that date such Securities of the Series cease to be outstanding and interest on
them ceases to accrue.
A Security does not cease to be outstanding because the
Company or an Affiliate holds the Security.
In determining whether the Holders of the requisite principal
amount of outstanding Securities have given any request, demand, authorization,
direction, notice, consent or waiver hereunder, the principal amount of a
Discount Security that shall be deemed to be outstanding for such purposes
shall be the amount of the principal thereof that would be due and payable as
of the date of such determination upon a declaration of acceleration of the
Maturity thereof pursuant to Section 6.2.
SECTION 2.10 Treasury Securities.
In determining whether the Holders of the required principal
amount of Securities of a Series have concurred in any direction, waiver or
consent, Securities of a Series owned by
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the Company or an Affiliate shall be disregarded, except that for the purposes
of determining whether the Trustee shall be protected in relying on any such
direction, waiver or consent, only Securities of a Series that the Trustee
knows are so owned shall be so disregarded.
SECTION 2.11 Temporary Securities.
Until definitive Securities are ready for delivery, the
Company may prepare and the Trustee shall authenticate temporary Securities
upon a Company Order. Temporary Securities shall be substantially in the form
of definitive Securities but may have variations that the Company considers
appropriate for temporary Securities. Without unreasonable delay, the Company
shall prepare and the Trustee upon request shall authenticate definitive
Securities of the same Series and date of maturity in exchange for temporary
Securities. Until so exchanged, temporary securities shall have the same rights
under this Indenture as the definitive Securities.
SECTION 2.12 Cancellation.
The Company at any time may deliver Securities to the Trustee
for cancellation. The Registrar and the Paying Agent shall forward to the
Trustee any Securities surrendered to them for registration of transfer,
exchange or payment. The Trustee shall cancel all Securities surrendered for
transfer, exchange, payment, replacement or cancellation and shall destroy such
canceled Securities (subject to the record retention requirement of the
Exchange Act) and deliver a certificate of such destruction to the Company,
unless the Company otherwise directs. The Company may not issue new Securities
to replace Securities that it has paid or delivered to the Trustee for
cancellation.
SECTION 2.13 Defaulted Interest.
If the Company defaults in a payment of interest on a Series
of Securities, it shall pay the defaulted interest, plus, to the extent
permitted by law, any interest payable on the defaulted interest, to the
persons who are Securityholders of the Series on a subsequent special record
date. The Company shall fix the record date and payment date. At least 30 days
before the record date, the Company shall mail to the Trustee and to each
Securityholder of the Series a notice that states the record date, the payment
date and the amount of interest to be paid. The Company may pay defaulted
interest in any other lawful manner.
SECTION 2.14 Global Securities.
2.14.1 Terms of Securities. A Board Resolution, an Officers'
Certificate or supplemental indenture hereto detailing the adoption of terms
pursuant to the Board Resolution shall establish whether the Securities of a
Series shall be issued in whole or in part in the form of one or more Global
Securities and shall specify the Depository for such Global Security or
Securities.
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2.14.2 Transfer and Exchange. (a) Transfer and Exchange of
Certificated Securities. When Certificated Securities are presented by a
Holder to the Registrar with a request:
(x) to register the transfer of the Certificated
Securities; or
(y) to exchange such Certificated Securities for an equal
principal amount of Certificated Securities 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 Securities presented or surrendered
for register of transfer or exchange 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.
(b) Transfer of a Certificated Security for a Beneficial
Interest in a Global Security. A Certificated Security may not be exchanged for
a beneficial interest in a Global Security except upon satisfaction of the
requirements set forth below. Upon receipt by the Trustee of a Certificated
Security, duly endorsed or accompanied by appropriate instruments of transfer,
in form satisfactory to the Trustee, together with written instructions from
the Holder thereof directing the Trustee to make, or to direct the Security
Custodian to make, an endorsement on the Global Security of such Series to
reflect an increase in the aggregate principal amount of the Securities of such
Series represented by the Global Security, in which case the Trustee shall
cancel such Certificated Security in accordance with Section 2.12 hereof and
cause, or direct the Security Custodian to cause, in accordance with the
standing instructions and procedures existing between the Depository and the
Security Custodian, the aggregate principal amount of Securities of such Series
represented by the Global Security to be increased accordingly. If no Global
Securities are then outstanding, the Company shall issue and, upon receipt of a
written order in accordance with Section 2.3 hereof, the Trustee shall
authenticate a new Global Security for such Series in the appropriate principal
amount.
(c) Transfer and Exchange of Global Securities. The transfer
and exchange of Global Securities or beneficial interests therein shall be
effected through the Depository, in accordance with this Indenture and the
procedures of the Depository therefor.
(d) Transfer of a Beneficial Interest in a Global Security
for a Certificated Security.
(i) Any person having a beneficial interest in a
Global Security may upon request exchange such beneficial interest for
a Certificated Security. Upon receipt by the Trustee of written
instructions or such other form of instructions as is customary for
the Depository, from the Depository or its nominee on behalf of any
person having a beneficial interest in a Global Security (all of which
may be submitted by facsimile) the Trustee or the
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Security Custodian, at the direction of the Trustee, shall, in
accordance with the standing instructions and procedures existing
between the Depository and the Security Custodian, cause the
aggregate principal amount of Global Securities to be reduced
accordingly and, following such reduction, the Company shall execute
and, upon receipt of a written order in accordance with Section 2.3
hereof, the Trustee shall authenticate and deliver to the transferee
a Certificated Security in the appropriate principal amount.
(ii) Certificated Securities issued in exchange for
a beneficial interest in a Global Security pursuant to this Section
2.14.2(d) shall be registered in such names and in such authorized
denominations as the Depository, pursuant to instructions from its
direct or indirect participants or otherwise, shall instruct the
Trustee. The Trustee shall deliver such Certificated Securities to the
persons in whose names such Securities are so registered.
(e) Restrictions on Transfer and Exchange of Global
Securities. Notwithstanding any other provision of this Indenture (other than
the provisions set forth in subsection (f) of this Section 2.14.2), a Global
Security may not be transferred as a whole except by the Depository to a
nominee of the Depository or by a nominee of the Depository to the Depository
or another nominee of the Depository or by the Depository or any such nominee
to a successor Depository or a nominee of such successor Depository.
(f) Authentication of Certificated Securities in Absence
of Depository. If at any time:
(i) the Depository for the Securities notifies the Company that
the Depository is unwilling or unable to continue as Depository for
the Global Securities and a successor Depository for the Global
Securities 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
Securities under this Indenture,
then the Company shall execute, and the Trustee shall,
upon receipt of a written order in accordance with Section 2.3 hereof,
authenticate and delive r, Certificated Securities in an aggregate principal
amount equal to the principal amount of the Global Securities in exchange for
such Global Securities.
(g) Cancellation and/or Adjustment of Global Securities.
At such time as all beneficial interests in Global Securities have been
exchanged for Certificated Securities, redeemed, repurchased or canceled, all
Global Securities shall be returned to or retained and canceled by the Trustee
in accordance with Section 2.12 hereof. At any time prior to such
cancellation, if any beneficial interest in a Global Security is exchanged for
Certificated Securities, redeemed, repurchased or canceled, the principal
amount of Securities represented by
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such Global Security shall be reduced accordingly and an endorsement shall be
made on such Global Security, by the Trustee or the Security Custodian, at the
direction of the Trustee, to reflect such reduction.
(h) 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 Securities and Global Securities 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).
(iii) The Registrar shall not be required to
register the transfer of or exchange any Security selected for
redemption in whole or in part, except the unredeemed portion of any
Security being redeemed in part.
(iv) All Certificated Securities and Global
Securities issued upon any registration of transfer or exchange of
Certificated Securities or Global Securities shall be the valid
obligations of the Company, evidencing the same debt, and entitled to
the same benefits under this Indenture, as the Certificated Securities
or Global Securities 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 Securities during a period beginning at the
opening of business 15 days before the day of any selection
of Securities for redemption and ending at the close of
business on the day of selection; or
(B) to register the transfer of or to
exchange any Security so selected for redemption, in whole or
in part, except the unredeemed portion of any Security being
redeemed in part; or
(C) to register the transfer of or to
exchange a Security between a record date and the next
succeeding interest payment date.
(vi) Prior to due presentment for the registration
of a transfer of any Security, the Trustee, any Agent and the Company
may deem and treat the person in
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whose name any Security is registered as the absolute owner of
such Security for the purpose of receiving payment of principal of
and interest, if any, on such Security, and none of the Trustee, any
Agent or the Company shall be affected by notice to the contrary.
(vii) The Trustee shall authenticate Certificated
Securities and Global Securities in accordance with the provisions of
Section 2.3 hereof.
2.14.3 Legend. Any Global Security issued hereunder shall
bear a legend in substantially the following form:
"This Security is a Global Security within the meaning of the
Indenture hereinafter referred to and is registered in the name of the
Depository or a nominee of the Depository. This Security is exchangeable for
Securities registered in the name of a person other than the Depository or its
nominee only in the limited circumstances described in the Indenture, and may
not be transferred except as a whole by the Depository to a nominee of the
Depository, by a nominee of the Depository to the Depository or another nominee
of the Depository or by the Depository or any such nominee to a successor
Depository or a nominee of such a successor Depository."
2.14.4 Acts of Holders. The Depository, as a Holder, may
appoint agents and otherwise authorize participants to give or take any
request, demand, authorization, direction, notice, consent, waiver or other
action which a Holder is entitled to give or take under the Indenture.
2.14.5 Payments. Notwithstanding the other provisions of this
Indenture, unless otherwise specified as contemplated by Section 2.2, payment
of the principal of and interest, if any, on any Global Security shall be made
to the person specified therein.
2.14.6 Consents, Declaration and Directions. Except as
provided in Section 2.14.5, the Company, the Trustee and any Agent shall treat
a person as the Holder of such principal amount of outstanding Securities of
such Series represented by a Global Security as shall be specified in a written
statement of the Depository with respect to such Global Security, for purposes
of obtaining any consents, declarations or directions required to be given by
the Holders pursuant to this Indenture.
2.14.7 Liability for Delay. Neither the Company nor the
Trustee shall be liable for any delay by the Security Custodian or the
Depository in identifying the beneficial owners of Securities and the Company
and the Trustee may conclusively rely on, and will be protected in relying on,
instructions from the Security Custodian or the Depository for all purposes.
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SECTION 2.15 CUSIP Numbers.
The Company in issuing the Securities may use "CUSIP" numbers
(if then generally in use), and, if so, the Trustee shall use "CUSIP" numbers
in notices of redemption as a convenience to Holders; provided that any such
notice may state that no representation is made as to the correctness of such
numbers either as printed on the Securities or as contained in any notice of a
redemption and that reliance may be placed only on the other elements of
identification printed on the Securities, and any such redemption shall not be
affected by any defect in or omission of such numbers.
ARTICLE III.
REDEMPTION
SECTION 3.1 Notice to Trustee.
The Company may, with respect to any Series of Securities,
reserve the right to redeem and pay the Series of Securities or may covenant to
redeem and pay the Series of Securities or any part thereof prior to the Stated
Maturity thereof at such time and on such terms as are provided for in such
Securities. If a Series of Securities is redeemable and the Company wants or is
obligated to redeem prior to the Stated Maturity thereof all or part of the
Series of Securities pursuant to the terms of such Securities, it shall notify
the Trustee of the redemption date and the principal amount of Series of
Securities to be redeemed. The Company shall give the notice at least 45 days
before the redemption date (or such shorter notice as may be acceptable to the
Trustee).
SECTION 3.2 Selection of Securities to be Redeemed.
Unless otherwise indicated for a particular Series by Board
Resolution, Officers' Certificate or by a supplemental indenture hereto, if
less than all the Securities of a Series are to be redeemed, the Trustee shall
select the Securities of the Series to be redeemed in any manner that the
Trustee deems fair and appropriate. The Trustee shall make the selection from
Securities of the Series outstanding not previously called for redemption. The
Trustee may select for redemption portions of the principal of Securities of
the Series that have denominations larger than $1,000. Securities of the Series
and portions of them it selects shall be in amounts of $1,000 or whole
multiples of $1,000 or, with respect to Securities of any Series issuable in
other denominations pursuant to Section 2.2.10, the minimum principal
denomination for each Series and integral multiples thereof. Provisions of this
Indenture that apply to Securities of a Series called for redemption also apply
to portions of Securities of that Series called for redemption.
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SECTION 3.3 Notice of Redemption.
Unless otherwise indicated for a particular Series by Board
Resolution, Officers' Certificate or by a supplemental indenture hereto, at
least 30 days but not more than 60 days before a redemption date, the Company
shall mail a notice of redemption by first-class mail to each Holder whose
Securities are to be redeemed.
The notice shall identify the Securities of the Series to be
redeemed and shall state:
(a) the redemption date;
(b) the redemption price;
(c) the name and address of the Paying Agent;
(d) that Securities of the Series called for redemption must be
surrendered to the Paying Agent to collect the redemption price;
(e) that interest on Securities of the Series called for
redemption ceases to accrue on and after the redemption date; and
(f) any other information as may be required by the terms of
the particular Series or the Securities of a Series being redeemed.
At the Company's request, the Trustee shall give the
notice of redemption in the Company's name and at its expense.
SECTION 3.4 Effect of Notice of Redemption.
Once notice of redemption is mailed or published as provided
in Section 3.3, Securities of a Series called for redemption become due and
payable on the redemption date and at the redemption price. A notice of
redemption may not be conditional. Upon surrender to the Paying Agent, such
Securities shall be paid at the redemption price plus accrued interest to the
redemption date.
SECTION 3.5 Deposit of Redemption Price.
On or before the redemption date, the Company shall deposit
with the Paying Agent money sufficient to pay the redemption price of and
accrued interest, if any, on all Securities to be redeemed on that date.
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SECTION 3.6 Securities Redeemed in Part.
Upon surrender of a Security that is redeemed in part, the
Trustee shall authenticate for the Holder a new Security of the same Series and
the same maturity equal in principal amount to the unredeemed portion of the
Security surrendered.
ARTICLE IV.
COVENANTS
SECTION 4.1 Payment of Securities.
The Company shall pay or cause to be paid the principal of,
premium, if any, and interest on each Series of Securities on the dates and in
the manner provided in such Series. 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 date due 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 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 Series of Securities to the extent lawful; it shall pay interest
(including post-petition interest in any proceeding under any Bankruptcy Law)
on overdue installments of interest, if any, (without regard to any applicable
grace period) at the same rate to the extent lawful.
SECTION 4.2 Reports.
Whether or not required by the rules and regulations of the
SEC, so long as any Securities are outstanding, the Company shall furnish to
the Trustee and to the Holders of Securities (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.
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SECTION 4.3 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 its
obligations under the Securities of such Series and further stating, as to each
such Officer signing such certificate, that to the best of his or her knowledge
the Company have kept, observed, performed and fulfilled each and every
covenant contained in this Indenture and the Securities of such Series 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, if any, on the Securities 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 4.2 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, each as amended, modified or supplemented 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 Securities 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 4.4 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
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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 4.5 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 its 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 its 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 Subsidiaries, taken as a whole, and that the loss
thereof is not adverse in any material respect to the Holders of the
Securities.
SECTION 4.6 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 Securities.
ARTICLE V.
SUCCESSORS
SECTION 5.1 Merger, Consolidation, or Sale of Assets
The Company shall indicate the covenant regarding merger,
consolidation or sale of assets for a particular Series of Securities by Board
Resolution, Officers' Certificate or by a supplemental indenture hereto.
SECTION 5.2 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 5.1 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,
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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, if any,
on the Securities except in the case of a sale of all of the Company's assets
that meets the requirements of Section 5.1 hereof.
ARTICLE VI.
DEFAULTS AND REMEDIES
SECTION 6.1 Events of Default.
"Event of Default," wherever used herein with respect to
Securities of any Series, means any one of the following events, unless in the
establishing Board Resolution, Officers' Certificate or supplemental indenture
hereto, it is provided that such Series shall not have the benefit of said
Event of Default:
(a) a default for 30 days in the payment when due of interest
on the Securities (whether or not prohibited by Article 12 hereof);
(b) a default in payment when due of the principal of or
premium, if any, on the Securities (whether or not prohibited by
Article 12 hereof);
(c) the failure by the Company for 60 days after notice to
comply with any of its other agreements in this Indenture or the
Securities;
(d) 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 an
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amount in excess of an amount specified by a Board Resolution, an
Officers' Certificate or a supplemental indenture hereto.
(e) the failure by the Company or any of its Subsidiaries to
pay final judgments aggregating in excess of an amount specified by a
Board Resolution, an Officers' Certificate or a supplemental indenture
hereto, which judgments are not paid, discharged or stayed for a
period of 60 days;
(f) 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:
(i) commences a voluntary case,
(ii) consents to the entry of an order for relief
against it in an involuntary case,
(iii) consents to the appointment of a Custodian
of it or for all or substantially all of its property,
(iv) makes a general assignment for the benefit
of its creditors, or
(v) generally is not paying its debts as they
become due;
(g) 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; or
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(i) any other Event of Default provided with respect to
Securities of that Series, which is specified in a Board Resolution, a
supplemental indenture hereto or an Officers' Certificate, in
accordance with Section 2.2.17.
An Event of Default shall not be deemed to have occurred
under clause (d) of this Section 6. 1 until the Trustee notifies the Company,
or the Holders of at least 25% in principal amount of the then outstanding
Series of such Securities 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. 1 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 Securities of such Series
pursuant to any optional redemption provisions, an equivalent premium shall
also become and be immediately due and payable to the extent permitted by law
upon the acceleration of the Securities, anything in this Indenture or in such
Series of Securities to the contrary notwithstanding.
No Event of Default with respect to a particular Series of
Securities (except with respect to subsections (f) and (g) above) necessarily
constitutes an Event of Default with respect to any other Series of Securities.
The term "Bankruptcy Law" means title 11, U.S. Code or any
similar Federal or State law for the relief of debtors.
SECTION 6.2 Acceleration of Maturity; Rescission and Annulment. If any
Event of Default (other than an Event of Default specified in clauses (f) and
(g) of Section 6.1 hereof) occurs and is continuing, the Trustee or the Holders
of at least 25% in principal amount of the then outstanding Securities of such
Series may declare all the Securities of such Series to be due and payable
immediately. Upon any such declaration, the Securities of such Series shall
become due and payable immediately. Notwithstanding the foregoing, if an Event
of Default specified in clauses (f) or (g) of Section 6.1 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
Securities of such Series 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 with respect to such
Series (except
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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 Securities is accelerated because of an Event of
Default.
SECTION 6.3 [Intentionally left blank]
SECTION 6.4 Trustee May File Proofs of Claim.
In case of the pendency of any receivership, insolvency,
liquidation, bankruptcy, reorganization, arrangement, adjustment, composition
or other judicial proceeding relative to the Company or any other obligor upon
the Securities or the property of the Company or of such other obligor or their
creditors, the Trustee (irrespective of whether the principal of the Securities
shall then be due and payable as therein expressed or by declaration or
otherwise and irrespective of whether the Trustee shall have made any demand on
the Company for the payment of overdue principal or interest) shall be entitled
and empowered, by intervention in such proceeding or otherwise,
(a) to file and prove a claim for the whole amount of principal and
interest owing and unpaid in respect of the Securities and to file such
other papers or documents as may be necessary or advisable in order to
have the claims of the Trustee (including any claim for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its
agents and counsel) and of the Holders allowed in such judicial
proceeding, and
(b) to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same,
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Holder to make such payments to the Trustee and, in the event that the
Trustee shall consent to the making of such payments directly to the Holders,
to pay to the Trustee any amount due it for the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel,
and any other amounts due the Trustee under Section 7.7.
Nothing herein contained shall be deemed to authorize the
Trustee to authorize or consent to or accept or adopt on behalf of any Holder
any plan of reorganization, arrangement, adjustment or composition affecting
the Securities or the rights of any Holder thereof or to authorize the Trustee
to vote in respect of the claim of any Holder in any such proceeding.
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SECTION 6.5 Trustee May Enforce Claims Without Possession of
Securities.
All rights of action and claims under this Indenture or the
Securities may be prosecuted and enforced by the Trustee without the possession
of any of the Securities or the production thereof in any proceeding relating
thereto, and any such proceeding instituted by the Trustee shall be brought in
its own name as trustee of an express trust, and any recovery of judgment
shall, after provision for the payment of the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel, be
for the ratable benefit of the Holders of the Securities in respect of which
such judgment has been recovered.
SECTION 6.6 Application of Money Collected.
Any money collected by the Trustee pursuant to this Article
shall be applied in the following order, at the date or dates fixed by the
Trustee and, in case of the distribution of such money on account of principal
or interest, upon presentation of the Securities and the notation thereon of
the payment if only partially paid and upon surrender thereof if fully paid:
First: To the payment of all amounts due the Trustee under
Section 7.7; and
Second: To the payment of the amounts then due and unpaid
for principal of and interest on the Securities in respect of which or for the
benefit of which such money has been collected, ratably, without preference or
priority of any kind, according to the amounts due and payable on such
Securities for principal and interest, respectively; and
Third: To the Company.
SECTION 6.7 Limitation on Suits.
No Holder of any Security of any Series shall have any right
to institute any proceeding, judicial or otherwise, with respect to this
Indenture, or for the appointment of a receiver or trustee, or for any other
remedy hereunder, unless
(a) such Holder has previously given written notice to the Trustee
of a continuing Event of Default with respect to the Securities of that
Series;
(b) the Holders of not less than 25% in principal amount of the
outstanding Securities of that Series shall have made written request to
the Trustee to institute proceedings in respect of such Event of Default
in its own name as Trustee hereunder;
(c) such Holder or Holders have offered to the Trustee reasonable
indemnity against the costs, expenses and liabilities to be incurred in
compliance with such request;
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(d) the Trustee for 60 days after its receipt of such notice,
request and offer of indemnity has failed to institute any such
proceeding; and
(e) no direction inconsistent with such written request has been
given to the Trustee during such 60-day period by the Holders of a
majority in principal amount of the outstanding Securities of that
Series;
it being understood and intended that no one or more of such Holders shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture to affect, disturb or prejudice the rights of any other of
such Holders, or to obtain or to seek to obtain priority or preference over any
other of such Holders or to enforce any right under this Indenture, except in
the manner herein provided and for the equal and ratable benefit of all such
Holders.
SECTION 6.8 Unconditional Right of Holders to Receive
Principal and Interest.
Notwithstanding any other provision in this Indenture, the
Holder of any Security shall have the right, which is absolute and
unconditional, to receive payment of the principal of and interest, if any, on
such Security on the Stated Maturity or Stated Maturities expressed in such
Security (or, in the case of redemption, on the redemption date) and to
institute suit for the enforcement of any such payment, and such rights shall
not be impaired without the consent of such Holder.
SECTION 6.9 Restoration of Rights and Remedies.
If the Trustee or any Holder has instituted any proceeding to
enforce any right or remedy under this Indenture and such proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to
the Trustee or to such Holder, then and in every such case, subject to any
determination in such proceeding, the Company, the Trustee and the Holders
shall be restored severally and respectively to their former positions
hereunder and thereafter all rights and remedies of the Trustee and the Holders
shall continue as though no such proceeding had been instituted.
SECTION 6.10 Rights and Remedies Cumulative.
Except as otherwise provided with respect to the
replacement or payment of mutilated, destroyed, lost or stolen Securities in
Section 2.8, no right or remedy herein conferred upon or reserved to the
Trustee or to the Holders is intended to be exclusive of any other right or
remedy, and every right and remedy shall, to the extent permitted by law, be
cumulative and in addition to every other right and remedy given hereunder or
now or hereafter existing at law or in equity or otherwise. The assertion or
employment of any right or remedy hereunder, or otherwise, shall not prevent
the concurrent assertion or employment of any other appropriate right or
remedy.
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SECTION 6.11 Delay or Omission Not Waiver.
No delay or omission of the Trustee or of any Holder of any
Securities to exercise any right or remedy accruing upon any Event of Default
shall impair any such right or remedy or constitute a waiver of any such Event
of Default or an acquiescence therein. Every right and remedy given by this
Article or by law to the Trustee or to the Holders may be exercised from time
to time, and as often as may be deemed expedient, by the Trustee or by the
Holders, as the case may be.
SECTION 6.12 Control by Holders.
The Holders of a majority in principal amount of the
outstanding Securities of any Series shall have the right to direct the time,
method and place of conducting any proceeding for any remedy available to the
Trustee, or exercising any trust or power conferred on the Trustee, with
respect to the Securities of such Series, provided that
(a) such direction shall not be in conflict with any rule of law or
with this Indenture,
(b) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction, and
(c) subject to the provisions of Section 6.1, the Trustee shall have
the right to decline to follow any such direction if the Trustee in good
faith shall, by a Responsible Officer of the Trustee, determine that the
proceeding so directed would involve the Trustee in personal liability.
SECTION 6.13 Waiver of Past Defaults.
The Holders of not less than a majority in principal amount
of the outstanding Securities of any Series may on behalf of the Holders of all
the Securities of such Series waive any past Default hereunder with respect to
such Series and its consequences, except a Default in the payment of the
principal of or interest on any Security of such Series (provided, however,
that the Holders of a majority in a principal amount of the outstanding
Securities of any Series 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.
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SECTION 6.14 Undertaking for Costs.
All parties to this Indenture agree, and each Holder of any
Security by his acceptance thereof shall be deemed to have agreed, that any
court may in its discretion require, 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, suffered or omitted by it as Trustee, the filing by any party
litigant in such suit of an undertaking to pay the costs of such suit, and that
such court may in its discretion assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in such suit, having due regard to
the merits and good faith of the claims or defenses made by such party
litigant; but the provisions of this Section shall not apply to any suit
instituted by the Company, to any suit instituted by the Trustee, to any suit
instituted by any Holder, or group of Holders, holding in the aggregate more
than 10% in principal amount of the outstanding Securities of any Series, or to
any suit instituted by any Holder for the enforcement of the payment of the
principal of or interest on any Security on or after the Stated Maturity or
Stated Maturities expressed in such Security (or, in the case of redemption, on
or after the redemption date).
ARTICLE VII.
TRUSTEE
SECTION 7.1 Duties of Trustee.
(a) If an Event of Default has occurred and is continuing,
the Trustee shall exercise the rights and powers vested in it by this
Indenture and use the same degree of care and skill in their exercise
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 Trustee need perform only those duties that
are specifically set forth in this Indenture and no others.
(ii) In the absence of bad faith on its part, the
Trustee may conclusively rely, as to the truth of the
statements and the correctness of the opinions expressed
therein, upon Officers' Certificates or Opinions of Counsel
furnished to the Trustee and conforming to the requirements
of this Indenture; however, in the case of any such Officers'
Certificates or Opinions of Counsel which by any provisions
hereof are specifically required to be furnished to the
Trustee, the Trustee shall examine such Officers'
Certificates and Opinions of Counsel to determine whether or
not they conform to the requirements of this Indenture.
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(c) The Trustee may not be relieved from liability for its
own negligent action, its own 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.
(iii) The Trustee shall not be liable with respect to
any action taken, suffered or omitted to be taken by it
with respect to Securities of any Series in good faith in
accordance with the direction of the Holders of a majority
in principal amount of the outstanding Securities of such
Series relating to the time, method and place of
conducting any proceeding for any remedy available to the
Trustee, or exercising any trust or power conferred upon
the Trustee, under this Indenture with respect to the
Securities of such Series.
(d) Every provision of this Indenture that in any way
relates to the Trustee is subject to paragraph (a), (b) and
(c) of this Section.
(e) The Trustee may refuse to perform any duty or exercise
any right or power unless it receives indemnity satisfactory to it
against any loss, liability or expense.
(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.
(g) No provision of this Indenture shall require the
Trustee to risk its own funds or otherwise incur any financial
liability in the performance of any of its duties, or in the exercise
of any of its rights or powers, if it shall have reasonable grounds for
believing that repayment of such funds or adequate indemnity against
such risk is not reasonably assured to it.
(h) The Paying Agent, the Registrar and any authenticating
agent shall be entitled to the protections, immunities and standard of
care as are set forth in paragraphs (a), (b) and (c) of this Section
with respect to the Trustee.
SECTION 7.2 Rights of Trustee.
(a) The Trustee may rely on 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
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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. 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.
(c) The Trustee may act through agents and shall not be
responsible for the misconduct or negligence of any agent appointed
with due care. No Depository shall be deemed an agent of the Trustee
and the Trustee shall not be responsible for any act or omission by
any Depository.
(d) The Trustee shall not be liable for any action it takes or
omits to take in good faith which it believes to be authorized or
within its rights or powers.
(e) The Trustee may consult with counsel and the advice of such
counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken,
suffered or omitted by it hereunder in good faith and in reliance
thereon.
(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 of Securities unless such Holders
shall have offered to the Trustee reasonable security or indemnity
against the costs, expenses and liabilities which might be incurred
by it in compliance with such request or direction.
SECTION 7.3 Individual Rights of Trustee.
The Trustee in its individual or any other capacity may become
the owner or pledgee of Securities and may otherwise deal with the Company or
an Affiliate with the same rights it would have if it were not Trustee. Any
Agent may do the same with like rights. The Trustee is also subject to
Sections 7.10 and 7.11.
SECTION 7.4 Trustee's Disclaimer.
The Trustee makes no representation as to the validity or
adequacy of this Indenture or the Securities, it shall not be accountable for
the Company's use of the proceeds from the Securities, and it shall not be
responsible for any statement in the Securities other than its authentication.
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SECTION 7.5 Notice of Defaults.
If a Default or Event of Default occurs and is continuing
with respect to the Securities of any Series and if it is known to a
Responsible Officer of the Trustee, the Trustee shall mail to each
Securityholder of the Securities of that Series notice of a Default or Event of
Default within 90 days after it occurs or, if later, after a Responsible
Officer of the Trustee has knowledge of such Default or Event of Default.
Except in the case of a Default or Event of Default in payment of principal of
interest on any Security of any Series, the Trustee may withhold the notice if
and so long as its corporate trust committee or a committee of its Responsible
Officers in good faith determines that withholding the notice is in the
interests of Securityholders of that Series.
SECTION 7.6 Reports by Trustee to Holders.
Within 60 days after ________ in each year, the Trustee shall
transmit by mail to all Securityholders, as their names and addresses appear on
the Security Register a brief report dated as of such ________, in accordance
with, and to the extent required under, TIA ss. 313.
A copy of each report at the time of its mailing to
Securityholders of any Series shall be filed with the SEC and each stock
exchange on which the Securities of that Series are listed. The Company shall
promptly notify the Trustee when Securities of any Series are listed on any
stock exchange.
SECTION 7.7 Compensation and Indemnity.
The Company shall pay to the Trustee from time to time
reasonable compensation for its services. The Trustee's compensation shall not
be limited by any law on compensation of a trustee of an express trust. The
Company shall reimburse the Trustee upon request for all reasonable
out-of-pocket expenses incurred by it. Such expenses shall include the
reasonable compensation and expenses of the Trustee's agents and counsel.
The Company shall indemnify the Trustee (including the cost
of defending itself) against any loss, liability or expense incurred by it
except as set forth in the next paragraph in the performance of its duties
under this Indenture as Trustee or Agent. The Trustee shall notify the Company
promptly of any claim for which it may seek indemnity. The Company shall defend
the claim and the Trustee shall cooperate in the defense. 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 its
consent, which consent shall not be unreasonably withheld. This indemnification
shall apply to officers, directors, employees, shareholders and agents of the
Trustee.
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The Company need not reimburse any expense or indemnify
against any loss or liability incurred by the Trustee or by any officer,
director, employee, shareholder or agent of the Trustee through negligence or
bad faith.
To secure the Company's payment obligations in this Section,
the Trustee shall have a lien prior to the Securities of any Series on all
money or property held or collected by the Trustee, except that held in trust
to pay principal and interest on particular Securities of that Series.
When the Trustee incurs expenses or renders services after an
Event of Default specified in Section 6.1(f) or (g) occurs, the expenses and
the compensation for the services are intended to constitute expenses of
administration under any Bankruptcy Law.
SECTION 7.8 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 with respect to the Securities of one
or more Series by so notifying the Company. The Holders of a majority in
principal amount of the Securities of any Series may remove the Trustee with
respect to that Series by so notifying the Trustee and the Company. The Company
may remove the Trustee with respect to Securities of one or more Series if:
(a) the Trustee fails to comply with Section 7.10;
(b) the Trustee is adjudged a bankrupt or an insolvent or an
order for relief is entered with respect to the Trustee under any
Bankruptcy Law;
(c) a Custodian or public officer takes charge of the Trustee
or its property; 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
Securities may appoint a successor Trustee to replace the successor Trustee
appointed by the Company.
If a successor Trustee with respect to the Securities of any
one or more Series does not take office within 60 days after the retiring
Trustee resigns or is removed, the retiring
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Trustee, the Company or the Holders of at least 10% in principal amount of the
Securities of the applicable Series may petition any court of competent
jurisdiction for the appointment of a successor Trustee.
If the Trustee with respect to the Securities of any one or
more Series fails to comply with Section 7.10, any Securityholder of the
applicable Series 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. Immediately after that,
the retiring Trustee shall transfer all property held by it as Trustee to the
successor Trustee subject to the lien provided for in Section 7.7, 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
with respect to each Series of Securities for which it is acting as Trustee
under this Indenture. A successor Trustee shall mail a notice of its succession
to each Securityholder of each such Series. Notwithstanding replacement of the
Trustee pursuant to this Section 7.8, the Company's obligations under Section
7.7 hereof shall continue for the benefit of the retiring trustee with respect
to expenses and liabilities incurred by it prior to such replacement.
SECTION 7.9 Successor Trustee by Merger, etc.
If the Trustee consolidates with, 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.
This Indenture shall always have a Trustee who satisfies the
requirements of TIA ss. 310(a)(1), (2) and (5). The Trustee shall always have a
combined capital and surplus of at least $25,000,000 as set forth in its most
recent published annual report of condition. The Trustee shall comply with 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.
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ARTICLE VIII.
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
SECTION 8.1 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. 2 or 8. 3 hereof be applied to all outstanding
Securities upon compliance with the conditions set forth below in this Article
8.
SECTION 8.2 Legal Defeasance and Discharge.
Upon the Company's exercise under Section 8.1 hereof of the
option applicable to this Section 8.2, the Company shall, subject to the
satisfaction of the conditions set forth in Section 8.4 hereof, be deemed to
have been discharged from its obligations with respect to all outstanding
Securities of any Series 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 Securities of such Series, which
shall thereafter be deemed to be "outstanding" only for the purposes of Section
8.5 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 Securities
of such Series 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
Securities to receive solely from the trust fund described in Section 8.4
hereof, and as more fully set forth in such Section, payments in respect of the
principal of, premium, if any, and interest, if any, on such Securities when
such payments are due, (b) the Company's obligations with respect to such
Securities under Article 2 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 8.2 notwithstanding the
prior exercise of its option under Section 8.3 hereof.
SECTION 8.3 Covenant Defeasance.
Upon the Company's exercise under Section 8.1 hereof of the
option applicable to this Section 8.3, the Company shall, subject to the
satisfaction of the conditions set forth in Section 8.4 hereof, be released
from their obligations under the covenants contained in Articles 4 and 5 hereof
with respect to the outstanding Securities on and after the date the conditions
set forth below are satisfied (hereinafter, "Covenant Defeasance"), and the
Securities shall thereafter be deemed not "outstanding" for the purposes of any
direction, waiver, consent or declaration or
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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 Securities shall not be
deemed "outstanding" for accounting purposes). For this purpose, Covenant
Defeasance means that, with respect to the outstanding Securities, 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 6.1(c) hereof, but,
except as specified above, the remainder of this Indenture and such Securities
shall be unaffected thereby. In addition, upon the Company's exercise under
Section 8.1 hereof of the option applicable to this Section 8.3, subject to
the satisfaction of the conditions set forth in Section 8.4 hereof, Sections
6.1(d) through 6.1(g) hereof shall not constitute Events of Default.
SECTION 8.4 Conditions to Legal or Covenant Defeasance.
The following shall be the conditions to the application of
either Section 8.2 or 8.3 hereof to the outstanding Securities:
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 Securities,
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,
if any, on the outstanding Securities 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 Securities are being defeased to
maturity or to a particular redemption date;
(b) in the case of an election under Section 8.2
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 Securities 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 8.3
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 Securities 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 6.1(f) or (g) 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 Securities 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 Securities 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.
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SECTION 8.5 Deposited Money and Government Securities to be
Held in Trust; Other Miscellaneous Provisions.
Subject to Section 8.6 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
8.5, the "Trustee") pursuant to Section 8.4 hereof in respect of the
outstanding Securities shall be held in trust and applied by the Trustee, in
accordance with the provisions of such Securities 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
Securities of all sums due and to become due thereon in respect of principal,
premium and interest, if any, 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 8.4 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 Securities.
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 8.4 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 8.4(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 8.6 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 interest on any Security and remaining unclaimed for two years after such
principal, and premium 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 Security 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 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,
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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 8.7 Reinstatement.
If the Trustee or Paying Agent is unable to apply any United
States dollars or non-callable Government Securities in accordance with Section
8.2 or 8.3 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 Securities shall be revived and reinstated as though no
deposit had occurred pursuant to Section 8.2 or 8.3 hereof until such time as
the Trustee or Paying Agent is permitted to apply all such money in accordance
with Section 8.2 or 8.3 hereof, as the case may be; provided, however, that, if
either the Company makes any payment of principal of, premium or interest on
any Security following the reinstatement of its obligations, the Company shall
be subrogated to the rights of the Holders of such Securities to receive such
payment from the money held by the Trustee or Paying Agent.
ARTICLE IX.
AMENDMENTS AND WAIVERS
SECTION 9.1 Without Consent of Holders.
The Company and the Trustee may amend or supplement this
Indenture or the Securities of one or more Series without the consent of any
Securityholder:
(a) to cure any ambiguity, defect or inconsistency;
(b) to comply with Article V;
(c) to provide for uncertificated Securities in addition
to or in place of certificated Securities;
(d) to make any change that does not adversely affect the
rights of any Securityholder;
(e) to provide for the issuance of and establish the form
and terms and conditions of Securities of any Series as
permitted by this Indenture;
(f) to evidence and provide for the acceptance of
appointment hereunder by a successor Trustee with respect to
the Securities of one or more Series and to add to or change
any of the provisions of this Indenture as shall be necessary
to provide for or facilitate the administration of the trusts
hereunder by more than one Trustee; or
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(g) to comply with requirements of the SEC in order to
effect or maintain the qualification of this Indenture under
the TIA.
SECTION 9.2 With Consent of Holders.
The Company and the Trustee may enter into a supplemental
indenture with the written consent of the Holders of at least a majority in
principal amount of the outstanding Securities of each Series affected by such
supplemental indenture (including consents obtained in connection with a
purchase of, or tender offer or exchange offer for the securities of such
Series), for the purpose of adding any provisions to or changing in any manner
or eliminating any of the provisions of this Indenture or of any supplemental
indenture or of modifying in any manner the rights of the Securityholders of
each such Series. Except as provided in Section 6.13, the Holders of at least a
majority in principal amount of the outstanding Securities of each Series
affected by such waiver by notice to the Trustee (including consents obtained
in connection with a purchase of, or tender offer or exchange offer for the
securities of such Series) may waive compliance by the Company with any
provision of this Indenture or the Securities with respect to such Series.
It shall not be necessary for the consent of the Holders of
Securities under this Section 9.2 to approve the particular form of any
proposed supplemental indenture or waiver, but it shall be sufficient if such
consent approves the substance thereof. After a supplemental indenture or
waiver under this section becomes effective, the Company shall mail to the
Holders of Securities affected thereby a notice briefly describing the
supplemental indenture or waiver. Any failure by the Company to mail or publish
such notice, or any defect therein, shall not, however, in any way impair or
affect the validity of any such supplemental indenture or waiver.
SECTION 9.3 Limitations.
Without the consent of each Securityholder affected, an
amendment or waiver may not:
(a) change the amount of Securities whose Holders must
consent to an amendment, supplement or waiver;
(b) reduce the rate of or extend the time for payment of
interest (including default interest) on any Security;
(c) reduce the principal or change the Stated Maturity of
any Security or reduce the amount of, or postpone the date
fixed for, the payment of any sinking fund or analogous
obligation;
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(d) reduce the principal amount of Discount Securities
payable upon acceleration of the maturity thereof;
(e) waive a Default or Event of Default in the payment of
the principal of or interest, if any, on any Security (except a
rescission of acceleration of the Securities of any Series by
the Holders of at least a majority in principal amount of the
outstanding Securities of such Series and a waiver of the
payment default that resulted from such acceleration);
(f) make the principal of or interest, if any, on any
Security payable in any currency other than that stated in the
Security;
(g) make any change in Sections 6.8, 6.13, or 9.3 (this
sentence); or
(h) waive a redemption payment with respect to any
Security or change any of the provisions with respect to the
redemption of any Securities.
SECTION 9.4 Compliance with Trust Indenture Act.
Every amendment to this Indenture or the Securities of one or
more Series shall be set forth in a supplemental indenture hereto that complies
with the TIA as then in effect.
SECTION 9.5 Revocation and Effect of Consents.
Until an amendment or waiver becomes effective, a consent to
it by a Holder of a Security is a continuing consent by the Holder and every
subsequent Holder of a Security or portion of a Security that evidences the
same debt as the consenting Holder's Security, even if notation of the consent
is not made on any Security. However, any such Holder or subsequent Holder may
revoke the consent as to his Security or portion of a Security if the Trustee
receives the notice of revocation before the date the amendment or waiver
becomes effective.
Any amendment or waiver once effective shall bind every
Securityholder of each Series affected by such amendment or waiver unless it is
of the type described in any of clauses (a) through (g) of Section 9.3. In that
case, the amendment or waiver shall bind each Holder of a Security who has
consented to it and every subsequent Holder of a Security or portion of a
Security that evidences the same debt as the consenting Holder's Security.
SECTION 9.6 Notation on or Exchange of Securities.
The Trustee may place an appropriate notation about an
amendment or waiver on any Security of any Series thereafter authenticated. The
Company in exchange for Securities of that Series may issue and the Trustee
shall authenticate upon request new Securities of that Series that reflect the
amendment or waiver.
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SECTION 9.7 Trustee Protected.
In executing, or accepting the additional trusts created by,
any supplemental indenture permitted by this Article or the modifications
thereby of the trusts created by this Indenture, the Trustee shall be entitled
to receive, and (subject to Section 7.1) shall be fully protected in relying
upon, an Opinion of Counsel stating that the execution of such supplemental
indenture is authorized or permitted by this Indenture. The Trustee shall sign
all supplemental indentures, except that the Trustee need not sign any
supplemental indenture that adversely affects its rights.
ARTICLE X.
MISCELLANEOUS
SECTION 10.1 Trust Indenture Act Controls.
If any provision of this Indenture limits, qualifies, or
conflicts with another provision which is required or deemed to be included in
this Indenture by the TIA, such required or deemed provision shall control.
SECTION 10.2 Notices.
Any notice or communication by the Company or the Trustee to
the other is duly given if in writing and delivered in person or mailed by
first-class mail:
if to the Company:
SFX Broadcasting, Inc.
150 East 58th Street, 19th Floor
New York, New York
Attention: General Counsel
if to the Trustee:
--------------------------
--------------------------
--------------------------
The Company or the Trustee by notice to the other may
designate additional or different addresses for subsequent notices or
communications.
Any notice or communication to a Securityholder shall be
mailed by first-class mail to his address shown on the register kept by the
Registrar. Failure to mail a notice or
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communication to a Securityholder of any Series or any defect in it shall not
affect its sufficiency with respect to other Securityholders of that or any
other Series.
If a notice or communication is mailed or published in the
manner provided above, within the time prescribed, it is duly given, whether or
not the Securityholder receives it.
If the Company mails a notice or communication to
Securityholders, it shall mail a copy to the Trustee and each Agent at the same
time.
SECTION 10.3 Communication by Holders with Other Holders.
Securityholders of any Series may communicate pursuant to TIA
ss. 312(b) with other Securityholders of that Series or any other Series with
respect to their rights under this Indenture or the Securities of that Series
or all Series. The Company, the Trustee, the Registrar and anyone else shall
have the protection of TIA ss. 312(c).
SECTION 10.4 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 stating that, in the opinion of
the signers, all conditions precedent, if any, provided for in this
Indenture relating to the proposed action have been complied with; and
(b) an Opinion of Counsel stating that, in the opinion of
such counsel, all such conditions precedent have been complied with.
SECTION 10.5 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;
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(c) a statement that, in the opinion of such person, he
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 complied with; and
(d) a statement as to whether or not, in the opinion of
such person, such condition or covenant has been complied with.
SECTION 10.6 Rules by Trustee and Agents.
The Trustee may make reasonable rules for action by or a
meeting of Securityholders of one or more Series. Any Agent may make reasonable
rules and set reasonable requirements for its functions.
SECTION 10.7 Legal Holidays.
Unless otherwise provided by Board Resolution, Officers'
Certificate or supplemental indenture hereto for a particular Series, a "Legal
Holiday" is any day that is not a Business Day. 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.
SECTION 10.8 No Recourse Against Others.
A director, officer, employee or stockholder, as such, of the
Company shall not have any liability for any obligations of the Company under
the Securities or the Indenture or for any claim based on, in respect of or by
reason of such obligations or their creation. Each Securityholder by accepting
a Security waives and releases all such liability. The waiver and release are
part of the consideration for the issue of the Securities.
SECTION 10.9 Counterparts.
This Indenture 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.
SECTION 10.10 Governing Laws.
THE INTERNAL LAWS OF THE STATE OF NEW YORK SHALL GOVERN THIS
INDENTURE AND THE SECURITIES.
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SECTION 10.11 No Adverse Interpretation of Other Agreements.
This Indenture may not be used to interpret another
indenture, loan or debt agreement of the Company or a Subsidiary. Any such
indenture, loan or debt agreement may not be used to interpret this Indenture.
SECTION 10.12 Successors.
All agreements of the Company in this Indenture and the
Securities shall bind its successor. All agreements of the Trustee in this
Indenture shall bind its successor.
SECTION 10.13 Severability.
In case any provision in this Indenture or in the Securities
shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.
SECTION 10.14 Table of Contents, Headings, Etc.
The Table of Contents, Cross-Reference Table, and headings of
the Articles and Sections of this Indenture have been inserted for convenience
of reference only, are not to be considered a part hereof, and shall in no way
modify or restrict any of the terms or provisions hereof.
ARTICLE XI.
SINKING FUNDS
SECTION 11.1 Applicability of Article.
The provisions of this Article shall be applicable to any
sinking fund for the retirement of the Securities of a Series, except as
otherwise permitted or required by any form of Security of such Series issued
pursuant to this Indenture.
The minimum amount of any sinking fund payment provided for
by the terms of the Securities of any Series is herein referred to as a
"mandatory sinking fund payment" and any other amount provided for by the terms
of Securities of such Series is herein referred to as an "optional sinking fund
payment." If provided for by the terms of Securities of any Series, the cash
amount of any sinking fund payment may be subject to reduction as provided in
Section 11.2. Each sinking fund payment shall be applied to the redemption of
Securities of any Series as provided for by the terms of the Securities of such
Series.
48
<PAGE>
SECTION 11.2 Satisfaction of Sinking Fund Payments with Securities.
The Company may, in satisfaction of all or any part of any
sinking fund payment with respect to the Securities of such Series to be made
pursuant to the terms of such Securities (1) deliver outstanding Securities of
such Series to which such sinking fund payment is applicable (other than any of
such Securities previously called for mandatory sinking fund redemption) and
(2) apply as credit Securities of such Series to which such sinking fund
payment is applicable and which have been redeemed either at the election of
the Company pursuant to the terms of such Series of Securities (except pursuant
to any mandatory sinking fund) or through the application of permitted optional
sinking fund payments or other optional redemptions pursuant to the terms of
such Securities, provided that such Securities have not been previously so
credited. Such Securities shall be received by the Trustee, together with an
Officers' Certificate with respect thereto, not later than 15 days prior to the
date on which the Trustee begins the process of selecting Securities for
redemption, and shall be credited for such purpose by the Trustee at the price
specified in such Securities for redemption through operation of the sinking
fund and the amount of such sinking fund payment shall be reduced accordingly.
If as a result of the delivery or credit of Securities in lieu of cash payments
pursuant to this Section 11.2, the principal amount of Securities of such
Series to be redeemed in order to exhaust the aforesaid cash payment shall be
less than $100,000, the Trustee need not call Securities of such Series for
redemption, except upon receipt of a Company Order that such action be taken,
and such cash payment shall be held by the Trustee or a Paying Agent and
applied to the next succeeding sinking fund payment, provided, however, that
the Trustee or such Paying Agent shall from time to time upon receipt of a
Company Order pay over and deliver to the Company any cash payment so being
held by the Trustee or such Paying Agent upon delivery by the Company to the
Trustee of Securities of that Series purchased by the Company having an unpaid
principal amount equal to the cash payment required to be released to the
Company.
SECTION 11.3 Redemption of Securities for Sinking Fund.
Not less than 45 days (unless otherwise indicated in the
Board Resolution, Officers' Certificate or supplemental indenture in respect of
a particular Series of Securities) prior to each sinking fund payment date for
any Series of Securities, the Company will deliver to the Trustee an Officers'
Certificate specifying the amount of the next ensuing mandatory sinking fund
payment for that Series pursuant to the terms of that Series, the portion
thereof, if any, which is to be satisfied by payment of cash and the portion
thereof, if any, which is to be satisfied by delivering and crediting of
Securities of that Series pursuant to Section 11.2, and the optional amount, if
any, to be added in cash to the next ensuing mandatory sinking fund payment,
and the Company shall thereupon be obligated to pay the amount therein
specified. Not less than 30 days (unless otherwise indicated in the Board
Resolution, Officers' Certificate or supplemental indenture in respect of a
particular Series of Securities) before each such sinking fund payment date the
Trustee shall select the Securities to be redeemed upon such sinking fund
49
<PAGE>
payment date in the manner specified in Section 3.2 and cause notice of the
redemption thereof to be given in the name of and at the expense of the Company
in the manner provided in Section 3.3. Such notice having been duly given, the
redemption of such Securities shall be made upon the terms and in the manner
stated in Sections 3.4, 3.5 and 3.6.
ARTICLE 12
SUBORDINATION
SECTION 12.1. Agreement to Subordinate.
The Company agrees, and each Holder by accepting a Security
agrees, that the Indebtedness evidenced by the Security is subordinated in
right of payment, to the extent and in the manner provided in this Article 12,
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 12.2. Certain Definitions.
"Designated Senior Debt" will be defined by Board Resolution,
Officers' Certificate or supplemental indenture.
"Distribution" will be defined by Board Resolution, Officers'
Certificate or supplemental indenture.
"Representative" will be defined by Board Resolution, Officers'
Certificate or supplemental indenture.
"Senior Bank Debt" will be defined by Board Resolution,
Officers' Certificate or supplemental indenture.
"Senior Debt" will be defined by Board Resolution, Officers'
Certificate or supplemental indenture.
SECTION 12.3. Liquidation; Dissolution; Bankruptcy.
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
respective property, or in an assignment for the benefit of creditors or any
marshaling 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
50
<PAGE>
such proceeding at the rate specified in the applicable Senior Debt, whether
or not an allowable claim) before the Holders of Securities shall be entitled
to receive any payment with respect to the Securities (except that Holders may
receive (i) securities that are subordinated to at least the same extent as
the Securities 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 8.1 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 Securities would be entitled but for this Article 12 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 Securities 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 8.1 hereof), as their interests may appear.
Subject to Section 7.7, 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 12.4. 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 Securities and may not acquire from
the Trustee or any Holder any Securities for cash or property (other than (1)
securities that are subordinated to at least the same extent as the Securities
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 8.1 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 12.4(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
51
<PAGE>
"Payment Blockage Notice") from a Person who may give it
pursuant to Section 12.12 hereof. If the Trustee receives any such
Payment Blockage Notice, no subsequent Payment Blockage Notice shall
be effective for purposes of this Section 12.4 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 interest on the Securities 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 Securities and may acquire them:
(i) in the case of a default described in Section
12.4(a)(i) hereof, upon the date on which the default is cured
or waived, and
(ii) in the case of a default referred to in Section
12.4(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 12 otherwise permits the payment, distribution or
acquisition at the time of such payment or acquisition.
SECTION 12.5. Acceleration of Securities.
If payment of the Securities is accelerated because of an
Event of Default, the Company shall promptly notify holders of Senior Debt of
the acceleration.
SECTION 12.6. 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 Securities at a time when the
Trustee or such Holder, as applicable, has actual knowledge that such payment
is prohibited by Section 12.4 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.
52
<PAGE>
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 12, 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 12, except if such
payment is made as a result of the willful misconduct or gross negligence of
the Trustee.
SECTION 12.7. 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 Securities to violate this Article 12, but
failure to give such notice shall not affect the subordination of the
Securities to the Senior Debt as provided in this Article 12.
SECTION 12.8. Subrogation.
After all Senior Debt is paid in full and until the
Securities are paid in full, Holders shall be subrogated (equally and ratably
with all other Indebtedness pari passu with the Securities) 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
12 to holders of Senior Debt that otherwise would have been made to Holders of
Securities is not, as between the Company and Holders of Securities, a payment
by the Company on the Senior Debt.
SECTION 12.9. Relative Rights.
This Article 12 defines the relative rights of Holders of
Securities and holders of Senior Debt. Nothing in this Indenture shall:
(1) impair, as between the Company and Holders of
Securities, the obligation of the Company, which is absolute
and unconditional, to pay principal of and interest and
Liquidated Damages, if any, on the Securities in accordance
with their terms;
(2) affect the relative rights of Holders of Securities
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 Securities 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 Securities.
53
<PAGE>
If the Company fails because of this Article 12 to pay
principal of or interest on a Security on the due date, the failure is still a
Default or Event of Default.
SECTION 12.10. 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 Securities shall be impaired
by any act or failure to act by the Company or any Holder of Securities or by
the failure of the Company or any Holder of Securities to comply with this
Indenture.
SECTION 12.11. 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 12, the Trustee and the Holders of Securities 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 Securities 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 12.
SECTION 12.12. Rights of Trustee and Paying Agent.
Notwithstanding the provisions of this Article 12 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 Securities, 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 Securities to violate this Article 12. Only
the Company or a Representative may give such notice. Nothing in this Article
12 shall impair the claims of, or payments to, the Trustee under or pursuant to
Section 7.7 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.
54
<PAGE>
SECTION 12.13. Authorization to Effect Subordination.
Each Holder of a Security 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 12, 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 6.9 hereof at least 30 days before the expiration of the
time to file such claim, the agent under the Credit Agreement (as will be
defined by Board Resolution, officers' Certificate or supplemental indenture)
(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 Securities.
SECTION 12.14. Amendments.
The provisions of this Article 12 shall not be amended or
modified without the written consent of the holders of all Senior Debt.
55
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Indenture to be duly executed and attested, all as of the day and year first
above written.
Attest: SFX Broadcasting, Inc.
By:_______________________________
Robert F.X. Sillerman
Chief Executive Officer
[Trustee_________________________]
By: ________________________________
-------------------------------
-------------------------------
56
<PAGE>
SFX BROADCASTING, INC.
Reconciliation and tie between Trust Indenture Act of 1939 and
Indenture, dated as of ______________ __, 199_
<TABLE>
<CAPTION>
<S> <C>
SS.310 (A)(1) ...................................................................... 7.10
(A)(2) ...................................................................... 7.10
(A)(3) ...................................................................... NOT APPLICABLE
(A)(4) ...................................................................... NOT APPLICABLE
(A)(5) ...................................................................... 7.10
(B) ...................................................................... 7.10
SS.311 (A) ...................................................................... 7.11
(B) ...................................................................... 7.11
(C) ...................................................................... NOT APPLICABLE
SS.312 (A) ...................................................................... 2.6
(B) ...................................................................... 10.3
(C) ...................................................................... 10.3
SS.313 (A) ...................................................................... 7.6
(B)(1) ...................................................................... 7.6
(B)(2) ...................................................................... 7.6
(C)(1) ...................................................................... 7.6
(D) ...................................................................... 7.6
SS.314 (A) ...................................................................... 4.2, 4.3
(B) ...................................................................... NOT APPLICABLE
(C)(1) ...................................................................... 10.4
(C)(2) ...................................................................... 10.4
57
<PAGE>
(C)(3) ...................................................................... NOT APPLICABLE
(D) ...................................................................... NOT APPLICABLE
(E) ...................................................................... 10.5
(F) ...................................................................... NOT APPLICABLE
SS.315 (A) ...................................................................... 7.1
(B) ...................................................................... 7.5
(C) ...................................................................... 7.1
(D) ...................................................................... 7.1
(E) ...................................................................... 6.14
SS.316 (A) ...................................................................... 2.10, 6.2
(A)(1)(A) ...................................................................... 6.12
(A)(1)(B) ...................................................................... 6.13
(B) ...................................................................... 6.8
SS.317 (A)(1) ...................................................................... 6.3
(A)(2) ...................................................................... 6.4
(B) ...................................................................... 2.5
SS.318 (A) ...................................................................... 10.1
</TABLE>
- -----------------------
Note: This reconciliation and tie shall not, for any purpose, be
deemed to be part of the Indenture.
EXHIBIT 5.1
BAKER & MCKENZIE
805 THIRD AVENUE
NEW YORK, NEW YORK 10022
November 26, 1996
SFX Broadcasting, Inc.
150 East 58th Street, 19th Floor
New York, New York 10155
Re: Registration Statement on Form S-3
Dear Sirs:
We have acted as counsel to SFX Broadcasting, Inc., a
Delaware corporation (the "Company"), in connection with the preparation of the
Registration Statement on Form S-3 (the "Registration Statement") filed by the
Company with the Securities and Exchange Commission (the "Commission") on
November 26, 1996. The Registration Statement relates to the issuance and sale
from time to time, pursuant to Rule 415 of the General Rules and Regulations
promulgated under the Securities Act of 1933, as amended (the "Securities
Act"), of the following securities of the Company with an aggregate initial
public offering price of up to $500,000,000: (i) debt securities (the "Debt
Securities"), which may be either senior debt securities (the "Senior Debt
Securities") or subordinated debt securities (the "Subordinated Debt
Securities"); (ii) shares of preferred stock, $.01 par value per share (the
"Preferred Stock"); and (iii) shares of Class A Common Stock, $.01 par value
per share (the "Class A Common Stock"). The Debt Securities, Preferred Stock
and Class A Common Stock are collectively referred to herein as the
"Securities." The Senior Debt Securities may be issued under an Indenture (the
"Senior Indenture") to be entered into between the Company and a trustee to be
designated by the Company (the "Senior Indenture Trustee"). The Subordinated
Debt Securities may be issued under a separate Indenture (the "Subordinated
Indenture") to be entered into between the Company and a trustee to be
designated by the Company (the "Subordinated Indenture Trustee" and, together
with the Senior Indenture Trustee, the "Trustees"). The Senior Indenture and
the Subordinated Indenture are sometimes referred to herein individually as the
"Indenture" and collectively as the "Indentures."
We have examined (i) the form of Registration Statement
relating to the Securities; (ii) the form of Senior Indenture; (iii) the form
of Subordinated Indenture; (iv) the Restated Certificate of Incorporation of
the Company, as amended and currently in effect (the "Certificate of
<PAGE>
SFX Broadcasting, Inc.
November 26, 1996
Page 2
Incorporation"); (v) the Restated By-Laws of the Company as amended and
currently in effect (the "By-Laws"); and (vi) resolutions adopted by the Board
of Directors of the Company (the "Board") relating to the issuance of the
Securities (the "Board Resolutions"). We have also examined originals or
copies, certified or otherwise identified to our satisfaction, of such records
of the Company and such agreements, certificates of public officials,
certificates of officers or other representatives of the Company and others,
and such other documents, certificates and records as we have deemed necessary
or appropriate as a basis for the opinions set forth herein.
In our examination, we have assumed the legal capacity of all
natural persons, 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 a certified, conformed or photostatic copies and
the authenticity of the originals of such latter documents. In making our
examination of documents executed by parties other than the Company, we have
assumed that such parties had the power, corporate or otherwise, to enter into
and perform all obligations thereunder and have also assumed the due
authorization by all requisite action, corporate or other, and execution and
delivery by such parties of such documents and the validity and binding effect
thereof. As to any facts material to the opinions expressed herein which were
not independently established or verified, we have relied upon statements and
representations of officers and other representatives of the Company and
others. We have assumed that the Senior Indenture and the Subordinated
Indenture each will be duly authorized, executed and delivered by the Trustees,
respectively, and authorized officers of the applicable Trustee.
In rendering the following opinion, our examination of
matters of law has been limited to the laws of the State of New York, the
General Corporation Law of the State of Delaware (the "Delaware General
Corporation Law"), and the federal laws of the United States of America. The
Securities may be issued from time to time on a delayed or continuous basis,
but this opinion is limited to the laws, including the rules and regulations
thereunder, as in effect on the date hereof.
Based upon and subject to the foregoing, we are of the
opinion that:
1. Each of the Senior Indenture and the Subordinated Indenture
has been duly authorized by the Company and, when executed and delivered by
the Company, will be a valid and binding agreement of the Company, enforceable
against the Company in accordance with its terms, except to the extent that
enforcement thereof may be limited by (a) bankruptcy, insolvency,
reorganization, fraudulent transfer, moratorium or other similar laws now or
hereafter in effect relating to creditors' rights generally, (b) general
principles of equity (regardless of whether enforceability is considered in a
proceeding at law or in equity), and (c) public policy considerations which may
limit the rights of parties to obtain further remedies.
2. With respect to any series of Debt Securities (the
"Offered Debt Securities"), when (i) the Registration Statement, as finally
amended (including all necessary post-effective amendments and other filings in
lieu thereof), has become effective; (ii) an appropriate Prospectus Supplement
with respect to the Offered Debt Securities has been prepared, delivered and
filed in
<PAGE>
SFX Broadcasting, Inc.
November 26, 1996
Page 3
compliance with the Securities Act and the applicable rules and regulations
thereunder; (iii) if the Offered Debt Securities are to be sold pursuant to a
firm commitment underwritten offering, the Underwriting Agreement with respect
to the Offered Debt Securities in the form filed as an exhibit to the
Registration Statement, or any post-effective amendment thereto, or incorporated
by reference therein, has been duly authorized, executed and delivered by the
Company and the other parties thereto; (iv) the Board, including any appropriate
committee appointed thereby, and appropriate officers of the Company have taken
all necessary corporate action to approve the issuance and terms of the Offered
Debt Securities and related matters; (v) the terms of the Offered Debt
Securities and of their issuance and sale have been duly established in
conformity with the applicable Indenture so as not to violate any applicable
law, the Certificate of Incorporation or By-laws of the Company or result in a
default under or breach of any agreement or instrument binding upon the Company
and so as to comply with any requirement or restriction imposed by any court or
governmental body having jurisdiction over the Company; (vi) in the case of
Subordinated Debt Securities, the Subordinated Indenture, and in the case of the
Senior Debt Securities, the Senior Indenture, has respectively been qualified
under the Trust Indenture Act of 1939, as amended, and duly executed and
delivered by the Company to the Subordinated Indenture Trustee or the Senior
Indenture Trustee, as the case may be; and (vii) the Offered Debt Securities
have been duly executed and authenticated in accordance with the provisions of
the applicable Indenture and delivered to the purchasers thereof upon payment of
the agreed-upon consideration therefor and have been duly issued and sold in
respect to the Offered Debt Securities in the form filed as an exhibit to the
Registration Statement, or any post-effective amendment thereto, or incorporated
by reference therein, or any other duly authorized, executed and delivered
applicable valid and binding purchase agreement, or as otherwise contemplated by
the Registration Statement, or any post-effective amendment thereto, and any
Prospectus Supplement relating thereto, (1) the Offered Debt Securities
(including any Offered Debt Securities duly issued upon conversion or exchange
of any shares of Preferred Stock convertible or exchangeable into Offered Debt
Securities), will be valid and binding obligations of the Company, enforceable
against the Company in accordance with their respective terms, except to the
extent that enforcement thereof may be limited by (a) bankruptcy, insolvency,
reorganization, fraudulent transfer, moratorium or other similar laws now or
hereafter in effect relating to creditors' rights generally, (b) general
principles of equity (regardless of whether enforceability is considered in a
proceeding at law or in equity), and (c) public policy considerations which may
limit the rights of parties to obtain further remedies, and (2) if Class A
Common Stock or Preferred Stock is issuable upon conversion or exchange of any
convertible or exchangeable Offered Debt Securities, the Class A Common Stock or
Preferred Stock issuable upon conversion or exchange of such Offered Debt
Securities will be validly issued, fully paid and nonassessable assuming
conversion or exchange of the Offered Debt Securities in accordance with the
terms of the applicable Indenture relating thereto.
3. With respect to the shares of any series of Preferred
Stock (the "Offered Preferred Stock"), when (i) the Registration Statement, as
finally amended (including all necessary post-effective amendments and other
filings in lieu thereof), has become effective; (ii) an appropriate Prospectus
Supplement with respect to the Offered Preferred Stock has been
prepared, delivered and filed in compliance with the Securities Act and the
applicable rules and regulations thereunder; (iii) if the Offered Preferred
Stock is to be sold pursuant to a firm commitment underwritten offering, the
<PAGE>
SFX Broadcasting, Inc.
November 26, 1996
Page 4
Underwriting Agreement with respect to the Offered Preferred Stock in the form
filed as an exhibit to the Registration Statement, or any post-effective
amendment thereto, or incorporated by reference therein, has been duly
authorized, executed and delivered by the Company and the other parties
thereto; (iv) the Board, including any appropriate committee appointed thereby,
and appropriate officers of the Company have taken all necessary corporate
action to approve the issuance and terms of the shares of the Offered Preferred
Stock and related matters, including the adoption of a Certificate of
Designations for the Offered Preferred Stock in accordance with the applicable
provisions of the Delaware General Corporation Law (the "Certificate of
Designations"); (v) the filing of the Certificate of Designations with the
Secretary of State of the State of Delaware has duly occurred; (vi) the terms
of the Offered Preferred Stock and their issuance and sale have been duly
established in conformity with the Certificate of Incorporation, including the
Certificate of Designations relating to the Offered Preferred Stock, and the
By-laws of the Company so as not to violate any applicable law, the Certificate
of Incorporation or By-laws of the Company or result in default under or breach
of any agreement or instrument binding upon the Company and so as to comply
with any requirement or restriction imposed by any court or governmental body
having jurisdiction over the Company; and (vii) certificates representing the
shares of the Offered Preferred Stock are duly executed, countersigned,
registered and delivered upon payment of the agreed-upon consideration therefor
and have been duly issued and sold in accordance with the Underwriting
Agreement with respect to the Offered Preferred Stock in the form filed as an
exhibit to the Registration Statement, or any post-effective amendment thereto,
or incorporated by reference therein, or any other duly authorized, executed
and delivered, applicable, valid and binding purchase agreement, or as
otherwise contemplated by the Registration Statement, or any post-effective
amendment thereto, and any Prospectus Supplement relating thereto, (1) the
shares of the Offered Preferred Stock (including any Offered Preferred Stock
duly issued upon conversion or exchange of any Debt Securities convertible or
exchangeable into Offered Preferred Stock), will be duly authorized, validly
issued, fully paid and nonassessable, provided that the consideration therefor
is not less than the par value thereof; and (2) if the Offered Preferred Stock
is convertible or exchangeable into Class A Common Stock, the Class A Common
Stock issuable upon conversion or exchange of the Offered Preferred Stock will
be duly authorized, validly issued, fully paid and nonassessable, assuming the
execution, authentication, issuance and delivery of the Offered Preferred Stock
and conversion or exchange of the Offered Preferred Stock in accordance with
the terms of the Certificate of Designations.
4. With respect to any offering of Class A Common Stock, when
(i) the Registration Statement, as finally amended (including all necessary
post-effective amendments and filings in lieu thereof), has become effective;
(ii) an appropriate Prospectus Supplement with respect to the Class A Common
Stock has been prepared, delivered and filed in compliance with the Securities
Act and the applicable rules and regulations thereunder; (iii) if the Class A
Common Stock is to be sold pursuant to a firm commitment underwritten
offering, the Underwriting Agreement with respect to the Class A Common Stock
has been duly authorized, executed and delivered by the Company and the other
parties thereto; (iv) the Board, including any appropriate committee appointed
thereby, and appropriate officers of the Company have taken all necessary
corporate action to approve the issuance of the Class A Common Stock and
related matters; (v) the terms of the
<PAGE>
SFX Broadcasting, Inc.
November 26, 1996
Page 5
issuance and sale of the Class A Common Stock have been duly established in
conformity with the Certificate of Incorporation and By-laws so as not to
violate any applicable law, the Certificate of Incorporation or By-laws of the
Company or result in a default under or breach of any agreement or instrument
binding upon the Company and so as to comply with any restriction imposed by
any court or governmental body having jurisdiction over the Company; and (vi)
certificates representing the shares of Class A Common Stock are duly executed,
countersigned, registered and delivered upon payment of the agreed-upon
consideration therefor and have been duly issued and sold in accordance with
the Underwriting Agreement with respect to the Class A Common Stock, or any
other duly authorized, executed and delivered, applicable, valid and binding
purchase agreement, or as otherwise contemplated by the Registration Statement,
or any post-effective amendment thereto, and any Prospectus Supplement relating
thereto, the shares of Class A Common Stock (including any Class A Common Stock
duly issued upon conversion or exchange of any Debt Securities or shares of
Preferred Stock convertible or exchangeable into Class A Common Stock) will be
duly authorized, validly issued, fully paid and nonassessable.
We understand that prior to offering for sale any Securities
you will advise us in writing of the terms of such offering and of such
Securities, will afford us an opportunity to review the operative documents
(including the applicable Prospectus Supplement) pursuant to which the
Securities are to be offered, sold and issued, and will file as an exhibit to
the Registration Statement such supplement or amendment to this opinion (if
any) as we may reasonably consider necessary or appropriate by reason of the
terms of such Securities or any changes in the Company's capital structure or
other pertinent circumstances.
We hereby consent to the filing of this opinion with the
Commission as Exhibit 5.1 to the Registration Statement. We also consent to the
reference to our firm under the heading "Legal Matters" in the Registration
Statement. In giving this consent, we do not thereby admit that we are in the
category of persons whose consent is required under Section 7 of the Securities
Act or the rules and regulations of the Commission promulgated thereunder.
Very truly yours,
/s/ BAKER & McKENZIE
HMB/JHJB/NTD
EXHIBIT 12.1--STATEMENT RE: COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(IN THOUSANDS, EXCEPT RATIOS)
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
---------------------------------------------- NINE MONTHS ENDED
1992 1993 1994 1995 SEPTEMBER 30, 1996
---------- ----------- --------- ---------- ------------------
<S> <C> <C> <C> <C> <C>
Income (loss) before income taxes
and extraordinary items .............. $(2,208) $(14,919) $ 3,310 $(4,396) $(30,084)
Interest .............................. 3,610 7,351 9,332 12,903 22,169
Interest portion of rent expense ..... 260 260 387 502 593
---------- ----------- --------- ---------- ------------------
Earnings .............................. $ 1,662 $ (7,308) $13,029 $ 9,009 $ (7,322)
========== =========== ========= ========== ==================
Interest .............................. $ 3,610 $ 7,351 $ 9,332 $12,903 $ 22,169
Interest portion of rent expense ..... 260 260 387 502 593
---------- ----------- --------- ---------- ------------------
Fixed charges ......................... 3,870 7,611 9,719 13,405 22,762
Preferred stock dividend requirements 385 557 627 291 3,551
---------- ----------- --------- ---------- ------------------
Combined fixed charges and preferred
stock dividends ...................... $ 4,255 $ 8,168 $10,346 $13,696 $ 26,313
========== =========== ========= ========== ==================
Ratio of earnings to fixed charges (1) -- -- 1.3 -- --
========== =========== ========= ========== ==================
Ratio of earnings to combined fixed
charges and preferred stock
dividends (1) ........................ -- -- 1.3 -- --
========== =========== ========= ========== ==================
</TABLE>
- ------------
(1) Earnings were insufficient to cover combined fixed charges and
preferred stock dividends by $33,635,000, $4,687,000, $15,476,000 and
$2,593,000 for the nine months ended September 30, 1996, and the years
ended December 31, 1995, 1993, and 1992, respectively. Earnings were
insufficient to cover fixed charges by $30,084,000, $4,396,000,
$14,919,000 and $2,208,000 during the nine months ended September 30,
1996, and the years ended December 31, 1995, 1993 and 1992,
respectively.
Exhibit 23.2
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in the
Registration (Form S-3) and related Prospectus, to be filed on or about November
25, 1996 and to the incorporation by reference therein of our reports dated (i)
October 4, 1996 with respect to the combined financial statements of KTXQ-FM and
KRRW-FM (divisions of CBS, Inc.) at December 31, 1995 and for the year then
ended; (ii) September 20, 1996 with respect to the financial statements of WKSS
95.7-FM (a division of Precision Media Corporation) at December 31, 1995 and
1994, and for the years then ended; (iii) May 20, 1996 with respect to the
financial statements of KKRW-FM (a division of CBS Inc.) at December 31, 1995
and 1994, and for the years then ended; (iv) 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. and subsidiaries at December 31,
1995 and 1994, and each of the three years in the period ended December 31,
1995; (v) February 14, 1996, except for Note 10 as to which the date is
September 30, 1996 with respect to the consolidated financial statements of
Multi-Market Radio, Inc. at December 31, 1995 and 1994, and for the years there
ended.
/s/ Ernst & Young LLP
New York, New York
November 25, 1996
KPMG PEAT MARWICK LLP
Exhibit 23.3
INDEPENDENT ACCOUNTANTS' CONSENT
We consent to incorporation by reference in the registration statement filed on
Form S-3 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
November 25, 1996
Exhibit 23.4
CHEELY BURCHAM EDDINS
ROKENBROD & CARROLL
[LETTERHEAD]
INDEPENDENT ACCOUNTANTS' CONSENT
We consent to incorporation by reference in the registration statement filed on
Form S-3 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.
/s/ Cheely Burcham Eddins Rokenbrod & Carroll
Richmond, Virginia
November 26, 1996
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this registration statement of
SFX Broadcasting, Inc. on Form S-3 (No. 333- ) 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 year
ended December 31, 1995, and various periods from January 6, 1994 to December
31, 1994, all of which have been included in SFX Broadcasting, Inc.'s report on
Form 8-K dated May 8, 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.
Raleigh, North Carolina
November 25, 1996
<PAGE>
EXHIBIT 23.6
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the Registration Statement of
SFX Broadcasting, Inc. on Form S-3 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.'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
- ----------------------------------
COOPERS & LYBRAND L.L.P.
2400 Eleven Penn Center
Philadelphia, Pennsylvania
November 25, 1996
Exhibit 23.7
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement (Form S-3) of SFX Broadcasting, Inc. to be filed on or
about November 26, 1996 and to the incorporation by reference therein of our
report dated March 6, 1996 with respect to the financial statements of Texas
Coast Broadcasters, Inc. at December 31, 1995 and 1994 and for the years then
ended.
/s/ Mohle, Adams, Till, Guidry & Wallace, L.L.P.
------------------------------------------------
MOHLE, ADAMS, TILL, GUIDRY & WALLACE, L.L.P.
Houston, Texas
November 21, 1996
Exhibit 23.8
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this Form S-3 Registration Statement to our report dated October
28, 1996 relating to the combined financial statements of The Secret Stations:
Cleveland, Indianapolis, Pittsburgh, included in SFX Broadcasting Inc.'s Form 8-
K dated October 29, 1996 and to all references to our Firm included in this
Registration Statement for SFX Broadcasting, Inc.
/s/ Arthur Andersen L.L.P.
------------------------------------------------
Chicago, Illinois,
November 25, 1996
Exhibit 23.9
CONSENT
We hereby consent to the use of our firm name in SFX Broadcasting, Inc.'s
Registration Statement on Form S-3 and in the Prospectus forming a part of such
Registration Statement as filed with the Securities and Exchange Commission on
November , 1996. 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.
/s/ Fisher Wayland Cooper Leader
& Zaragoza L.L.P.
------------------------------------------
FISHER WAYLAND COOPER LEADER
& ZARAGOZA L.L.P.
Dated: November 25, 1996
