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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): January 27, 1997
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SFX BROADCASTING, INC.
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(Exact name of registrant as specified in charter)
Delaware 0-22486 13-3649750
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(State or Other (Commission File No.) (IRS Employer
Jurisdiction Identification No.)
of Incorporation)
150 East 58th Street, 19th Floor, New York, New York 10155
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (212) 407-9191
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N/A
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(Former name or former address, if changed since last report)
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ITEM 5. OTHER EVENTS.
Sale of Series E Preferred Stock
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On January 23, 1997, SFX Broadcasting, Inc. (the "Company") consummated the
public offering of 2,225,000 shares of 12 5/8% Series E Cumulative Exchangeable
Preferred Stock, par value $0.01 per share, for an aggregate offering price
of $225,000,000. BT Securities Corporation, Goldman Sachs & Co. and Lehman
Brothers Inc. underwrote the offering. The Certificate of Designations, stock
certificate and press release related to the offering are attached hereto as
Exhibits 4.1, 4.2 and 99.1, respectively.
Amendment to Secret Communications Agreement
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On January 21, 1997, the Company entered into an amendment to its agreement to
purchase certain radio stations from Secret Communications Limited Partnership.
The amendment is attached hereto as Exhibit 10.1.
Amendment to Senior Credit Facility
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On January 22, 1997, the Company entered into an amendment to its senior credit
facility. The amendment is attached hereto as Exhibit 10.2.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(c) Exhibits
4.1 Certificate of Designations Preferences and Relative, Participating,
Optional and other Special Rights of Preferred Stock and
Qualifications, Limitations and Restrictions thereof of 125/8% Series
E Cumulative Exchangeable Preferred Stock due October 31, 2006 of SFX
Broadcasting, Inc.
4.2 Stock Certificate of 125/8% Series E Cumulative Exchangeable Preferred
Stock of SFX Broadcasting, Inc.
10.1 Amendment No. 1, dated January 21, 1997, to Asset Purchase Agreement,
dated October 15, 1996, by and between Secret Communications Limited
Partnership and SFX Broadcasting, Inc.
10.2 First Amendment to the Second Amended and Restated Credit Agreement,
dated as of January 22, 1997, by and among SFX Broadcasting, Inc.,
certain subsidiaries of SFX Broadcasting, Inc., and The Bank of New
York, individually and as Agent for the additional lenders.
99.1 Press release issued by SFX Broadcasting, Inc., dated January 17, 1997.
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SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned thereto duly authorized.
SFX BROADCASTING, INC.
By: /s/ Howard J. Tytel
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Name: Howard J. Tytel
Title: Executive Vice President
and Secretary
Date: January 27, 1997
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CERTIFICATE OF DESIGNATIONS, PREFERENCES
AND RELATIVE, PARTICIPATING, OPTIONAL AND
OTHER SPECIAL RIGHTS OF PREFERRED
STOCK AND QUALIFICATIONS, LIMITATIONS
AND RESTRICTIONS THEREOF
OF
125/8% SERIES E CUMULATIVE EXCHANGEABLE PREFERRED
STOCK DUE OCTOBER 31, 2006
OF
SFX BROADCASTING, INC.
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Pursuant to Section 151 of the
General Corporation Law of the State of Delaware
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SFX Broadcasting, Inc. (the "Corporation"), a corporation
organized and existing under the General Corporation Law of the State of
Delaware, certifies that pursuant to the authority contained in Article 6 of
its Restated Certificate of Incorporation (the "Certificate of Incorporation")
and in accordance with the provisions of Section 151 of the General Corporation
Law of the State of Delaware, the Board of Directors of the Corporation by
unanimous written consent dated January 17, 1997 duly approved and adopted the
following resolution which resolution remains in full force and effect on the
date hereof:
RESOLVED, that pursuant to the authority vested in the Board
of Directors by its Certificate of Incorporation, the Board of Directors does
hereby designate, create, authorize and provide for the issue of 125/8% Series
E Cumulative Exchangeable Preferred Stock due October 31, 2006 (the "Series E
Preferred Stock"), par value $0.01 per share, with a liquidation preference of
$100.00 per share, consisting of 4,150,000 shares, having the following voting
powers, preferences and relative, participating, optional and other special
rights, and qualifications, limitations and restrictions thereof as follows:
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1. Certain Definitions.
Unless the context otherwise requires, the terms defined in
this Section 1 shall have, for all purposes of this resolution, the meanings
herein specified (with terms defined in the singular having comparable meanings
when used in the plural).
Acquired Debt. The term "Acquired Debt" shall mean, with
respect to any specified Person, (i) Indebtedness of any other Person existing
at the time such other Person is merged with or into or became a Subsidiary of
such specified Person, including, without limitation, Indebtedness incurred in
connection with, or in contemplation of, such other Person merging with or into
or becoming a Subsidiary of such specified Person, and (ii) Indebtedness
secured by a Lien encumbering any asset acquired by such specified Person.
Advertising Business. The term "Advertising Business" shall
mean any business deriving substantially all of its revenues from the (i) sale
of advertisements and (ii) sale of products or provision of services to any
business described in clause (i) above.
Applicable Redemption Price. The term "Applicable Redemption
Price" shall mean a price per share equal to the following redemption prices
(expressed as a percentage of the Liquidation Preference thereof) during the
twelve-month periods commencing on January 15 of the years indicated:
2002..........................................106.313%
2003..........................................104.734%
2004..........................................103.156%
2005..........................................101.578%
2006 and thereafter ..........................100.000%
in each case, together with accrued and unpaid dividends (if any) thereon to
the Redemption Date.
Affiliate. The term "Affiliate" of any specified Person shall
mean any other Person directly or indirectly controlling or controlled by or
under direct or indirect common control with such specified Person. For
purposes of this definition, "control" (including, with correlative meanings,
the terms "controlling," "controlled by" and "under common control with"), as
used with respect to any Person, shall mean the possession, directly or
indirectly, of the power to direct or cause the direction of the management or
policies of such Person, whether through the ownership of voting securities, by
agreement or otherwise; provided that beneficial ownership of 10% or more of
the voting securities of a Person shall be deemed to be control.
Affiliate Transaction. The term "Affiliate Transaction"
shall have the meaning set forth in Section 8(d) below.
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Asset Sale. The term "Asset Sale" shall mean (i) the sale,
lease, conveyance or other disposition of any assets (including without
limitation, by way of a sale and leaseback or pursuant to an LMA or similar
arrangement); provided that the sale, lease, conveyance or other disposition of
all or substantially all of the assets of the Corporation and its Subsidiaries
taken as a whole will be governed by the Sections 7 and 8(c) hereof and (ii)
the issue or sale by the Corporation or any of its Subsidiaries of Equity
Interests of any of the Corporation's Subsidiaries, in the case of either
clause (i) or (ii), whether in a single transaction or a series of related
transactions (a) that have a Fair Market Value in excess of $5.0 million or (b)
for aggregate net proceeds in excess of $5.0 million. Notwithstanding the
foregoing: (i) the Pending Dispositions, the Chancellor Exchange and the CBS
Exchange, in each case as described in the Prospectus Supplement dated January
17, 1997, in all material respects, (ii) a transfer of assets by the
Corporation to a Wholly Owned Subsidiary or by a Wholly Owned Subsidiary to the
Corporation or to another Wholly Owned Subsidiary, (iii) an issuance of Equity
Interests by a Wholly Owned Subsidiary to the Corporation or to another Wholly
Owned Subsidiary, (iv) a Restricted Payment that is permitted under Section
8(a) hereof and (v) sales of obsolete equipment in the ordinary course of
business, will not be deemed to be Asset Sales.
Attributable Debt. The term "Attributable Debt" in respect of
a sale and leaseback transaction shall mean, at the time of determination, the
present value (discounted at the rate of interest implicit in such transaction,
determined in accordance with GAAP) of the obligation of the lessee for net
rental payments during the remaining term of the lease included in such sale
and leaseback transaction (including any period for which such lease has been
extended or may, at the option of the lessor, be extended).
Bank Facilities. The term "Bank Facilities" shall mean, with
respect to the Corporation, one or more debt facilities (including, without
limitation, the Credit Agreement) or commercial paper facilities with banks or
other institutional lenders providing for revolving credit loans, term loans,
receivables financing (including through the sale of receivables to such
lenders or to special purpose entities formed to borrow from such lenders
against such receivables) or letters of credit, in each case, as amended,
restated, modified, renewed, refunded, replaced or refinanced in whole or in
part from time to time. Indebtedness under Bank Facilities outstanding on the
date on which the Series E Preferred Stock is first issued under the
Certificate of Designations shall be deemed to have been incurred on such date
in reliance on the exception provided by clause (i) under Section 8(b).
Broadcast Business. The term "Broadcast Business" shall
mean any business, the majority of whose revenues are derived from the
broadcast of radio programming.
Business Day. The term "Business Day" shall mean a day other
than a Saturday or Sunday or any federal holiday.
Capital Lease Obligation. The term "Capital Lease
Obligation" shall mean, at the time any determination thereof is to be made,
the amount of the liability in respect of a capital
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lease that would at such time be required to be capitalized on a balance sheet
in accordance with GAAP.
Capital Stock. The term "Capital Stock" shall mean (i) in the
case of a corporation, corporate stock, (ii) in the case of an association or
business entity, any and all shares, interests, participations, rights or other
equivalents (however designated) of corporate stock, (iii) in the case of a
partnership, partnership interests (whether general or limited) and (iv) any
other interest or participation that confers on a Person the right to receive a
share of the profits and losses of, or distributions of assets of, the issuing
Person.
CBS Exchange. The term "CBS Exchange" shall mean the pending
exchange by the Corporation of radio station WHFS-FM, operating in Washington,
D.C./Baltimore, Maryland, for KTXQ-FM and KRRW-FM, both operating in Dallas,
Texas, and owned by CBS, Inc.
Chancellor Exchange. The term "Chancellor Exchange" shall
mean the pending exchange of the Corporation's radio stations WBAB-FM, WHFM-FM,
WBLI-FM and WGBB-AM, each operating on Long Island, New York, for WFYV-FM and
WAPE-FM, both operating in Jacksonville, Florida, and a payment to the
Corporation of $11.0 million in cash.
Cash Equivalents. The term "Cash Equivalents" shall mean (i)
United States dollars, (ii) securities issued or directly and fully guaranteed
or insured by the United States government or any agency or instrumentality
thereof having maturities of not more than six months from the date of
acquisition, (iii) certificates of deposit and eurodollar time deposits with
maturities of six months or less from the date of acquisition, bankers'
acceptances with maturities not exceeding six months and overnight bank
deposits, in each case with any lender party to the Credit Agreement or with
any domestic commercial bank having capital and surplus in excess of $500.0
million and a Thomson Bank Watch Rating of "B" or better, (iv) repurchase
obligations with a term of not more than seven days for underlying securities
of the types described in clauses (ii) and (iii) above entered into with any
financial institution meeting the qualifications specified in clause (iii)
above and (v) commercial paper having the highest rating obtainable from
Moody's Investors Service, Inc. or Standard & Poor's Corporation and in each
case maturing within six months after the date of acquisition.
Change of Control. The term "Change of Control" shall mean
the occurrence of any of the following: (i) the sale, lease, transfer,
conveyance or other disposition (other than by way of merger or consolidation),
in one or a series of related transactions, of all or substantially all of the
assets of the Corporation and its Subsidiaries taken as a whole to any "person"
(as such term is used in Section 13(d)(3) of the Exchange Act) other than the
Principal or his Related Parties (as defined below), (ii) the adoption of a
plan relating to the liquidation or dissolution of the Corporation, (iii) the
consummation of any transaction (including, without limitation, any merger or
consolidation) the result of which is that any "person" (as defined above),
other than the Principal and his Related Parties, becomes the "beneficial
owner" (as such term is defined in Rule 13d-3 and Rule 13d-5 under the Exchange
Act, except that a person shall be deemed to have "beneficial ownership" of all
securities that such person has the right to acquire, whether such
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right is exercisable immediately or only after the passage of time, upon the
happening of an event or otherwise), directly or indirectly, of Voting Stock of
the Corporation having more than 35% of the combined voting power of all
classes of Voting Stock of the Corporation then outstanding or (iv) the first
day on which a majority of the members of the Board of Directors of the
Corporation are not Continuing Directors.
Change of Control Offer. The term "Change of Control Offer"
shall have the meaning set forth in Section 7(a) below.
Change of Control Payment. The term "Change of Control
Payment" shall have the meaning set forth in Section 7(a) below.
Change of Control Payment Date. The term "Change of Control
Payment Date" shall have the meaning set forth in Section 7(d)(ii) below.
Class A Common Stock. The term "Class A Common Stock" shall
mean the Class A Common Stock, par value $.01 per share, of the Corporation.
Class B Common Stock. The term "Class B Common Stock" shall
mean the Class B Common Stock, par value $.01 per share, of the Corporation.
Common Equity. The term "Common Equity" shall mean all shares
now or hereafter authorized of any class of common stock of the Corporation,
including the Class A Common Stock and Class B Common Stock, and any other
stock of the Corporation, howsoever designated, authorized after the Initial
Issue Date, that have the right (subject always to prior rights of any class or
series of preferred stock) to participate in the distribution of the assets and
earnings of the Corporation without limit as to per share amount.
Consolidated Cash Flow. The term "Consolidated Cash Flow"
shall mean, with respect to any Person for any period, the Consolidated Net
Income of such Person for such period plus (i) an amount equal to any
extraordinary loss plus any net loss realized in connection with an Asset Sale
by such Person or any of its Subsidiaries during such period (to the extent
such losses were deducted in computing such Consolidated Net Income), plus (ii)
provision for taxes based on income or profits of such Person and its
Subsidiaries for such period, to the extent that such provision for taxes was
included in computing such Consolidated Net Income, plus (iii) Consolidated
Interest Expense of such Person for such period to the extent any such
Consolidated Interest Expense was deducted in computing such Consolidated Net
Income, plus (iv) depreciation, amortization (including amortization of
goodwill and other intangibles but excluding amortization of prepaid cash
expenses that were paid in a prior period) and other non-cash charges
(excluding any such non-cash charge to the extent that it represents an accrual
of or reserve for cash charges in any future period) of such Person and its
Subsidiaries for such period to the extent that such depreciation, amortization
and other non-cash charges were deducted in computing such Consolidated Net
Income, less (v) all non-cash items increasing Consolidated Net
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Income for such period (excluding any such non-cash income to the extent it
represents an accrual of cash income in any future period), in each case, on a
consolidated basis and determined in accordance with GAAP.
Consolidated Indebtedness. The term "Consolidated
Indebtedness" of any Person as of any date of determination shall mean the sum
(without duplication) of (i) the total amount of Indebtedness and Attributable
Debt of such Person and its Subsidiaries, plus (ii) the total amount of other
Indebtedness shown on the balance sheet of the primary obligor on such
Indebtedness, to the extent that such Indebtedness has been Guaranteed by such
Person or one of its Subsidiaries, plus (iii) the aggregate liquidation value
or redemption amount (if larger) of all Disqualified Stock of such Person and
all preferred stock of Subsidiaries of such Person, in each case, determined on
a consolidated basis in accordance with GAAP.
Consolidated Interest Expense. The term "Consolidated
Interest Expense" shall mean, with respect to any Person for any period, the
sum of (i) the consolidated interest expense of such Person and its
Subsidiaries for such period, whether paid or accrued (including, without
limitation, amortization of original issue discount, non-cash interest
payments, the interest component of any deferred payment obligations, the
interest component of all payments associated with Capital Lease Obligations,
imputed interest with respect to Attributable Debt, commissions, discounts and
other fees and charges incurred in respect of letter of credit or bankers'
acceptance financings, and net payments (if any) pursuant to Hedging
Obligations) and (ii) the consolidated interest expense of such Person and its
Subsidiaries that was capitalized during such period, and (iii) any interest
expense on Indebtedness of another Person that is guaranteed by such Person or
one of its Subsidiaries or secured by a Lien on assets of such Person or one of
its Subsidiaries (whether or not such Guarantee or Lien is called upon) and
(iv) the product of (a) all cash dividend payments (and non-cash dividend
payments in the case of a Person that is a Subsidiary) on any series of
preferred stock of such Person, times (b) a fraction, the numerator of which is
one and the denominator of which is one minus the then current combined
federal, state and local statutory tax rate of such Person, expressed as a
decimal, in each case, on a consolidated basis and in accordance with GAAP.
Consolidated Net Income. The term "Consolidated Net Income"
shall mean, with respect to any Person for any period, the aggregate of the Net
Income of such Person and its Subsidiaries for such period, determined on a
consolidated basis in accordance with GAAP; provided that (i) the Net Income
(but not loss) of any Person that is not a Subsidiary or that is accounted for
by the equity method of accounting shall be included only to the extent of the
amount of dividends or distributions paid in cash to the referent Person or to
a Wholly Owned Subsidiary thereof, (ii) the Net Income of any Subsidiary shall
be excluded to the extent that the declaration or payment of dividends or
similar distributions by that Subsidiary of that Net Income is not at the date
of determination permitted without any prior governmental approval (that has
not been obtained) or, directly or indirectly, by operation of the terms of its
charter or any agreement, instrument, judgment, decree, order, statute, rule or
governmental regulation applicable to that Subsidiary or its stockholders,
(iii) the Net Income of any Person acquired in a pooling
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of interests transaction for any period prior to the date of such acquisition
shall be excluded and (iv) the cumulative effect of a change in accounting
principles shall be excluded.
Consolidated Net Worth. The term "Consolidated Net Worth"
shall mean, with respect to any Person as of any date, the sum of (i) the
consolidated equity of the common stockholders of such Person and its
consolidated Subsidiaries as of such date plus (ii) the respective amounts
reported on such Person's balance sheet as of such date with respect to any
series of preferred stock (other than Disqualified Stock) that by its terms is
not entitled to the payment of dividends unless such dividends may be declared
and paid only out of net earnings in respect of the year of such declaration
and payment, but only to the extent of any cash received by such Person upon
issuance of such preferred stock, less (x) all write-ups (other than write-ups
resulting from foreign currency translations and write-ups of tangible assets
of a going concern business made within 12 months after the acquisition of such
business) subsequent to the date of the Certificate of Designations in the book
value of any asset owned by such Person or a consolidated Subsidiary of such
Person, (y) all investments as of such date in unconsolidated Subsidiaries and
in Persons that are not Subsidiaries (except, in each case, Permitted
Investments), and (z) all unamortized debt discount and expense and unamortized
deferred charges as of such date, all of the foregoing determined in accordance
with GAAP.
Continuing Directors. The term "Continuing Directors" shall
mean, as of any date of determination, any member of the Board of Directors of
the Corporation who (i) was a member of such Board of Directors on the Initial
Issue Date or (ii) was nominated for election or elected to such Board of
Directors with the approval of a majority of the Continuing Directors who were
members of such Board at the time of such nomination or election.
Credit Agreement. The term "Credit Agreement" shall mean that
certain credit agreement by and among the Corporation, the Corporation's
Subsidiaries, as guarantors, The Bank of New York, as agent, and the lenders
party thereto, providing for $225 million of revolving credit borrowings,
including any related notes, guarantees, collateral documents, and other
agreements executed in connection therewith, and in each case as amended,
modified, renewed, refunded, replaced or refinanced from time to time.
Debt to Cash Flow Ratio. The term "Debt to Cash Flow Ratio"
shall mean, as of any date of determination, the ratio of (a) the Consolidated
Indebtedness as of such date to (b) the Consolidated Cash Flow of the
Corporation and its Subsidiaries on a consolidated basis for the four most
recent full fiscal quarters ending immediately prior to such date for which
internal financial statements are available. For purposes of calculating
Consolidated Cash Flow for the computation referred to above, (i) acquisitions
that have been made by the Corporation or any of its Subsidiaries, including
through mergers or consolidations and including any related financing
transactions, during the four-quarter reference period or subsequent to such
reference period and on or prior to the date on which such Ratio is being
calculated (the "Calculation Date") shall be deemed to have occurred on the
first day of the four-quarter reference period and Consolidated Cash Flow for
such reference period shall be calculated without giving effect to
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clause (iii) of the proviso set forth in the definition of Consolidated Net
Income, and (ii) the Consolidated Cash Flow attributable to discontinued
operations, as determined in accordance with GAAP, and operations or businesses
disposed of prior to the Calculation Date, shall be excluded.
Default. The term "Default" shall mean any event that is or
with the passage of time or the giving of notice or both would be an Event
of Default.
Disqualified Stock. The term "Disqualified Stock" shall mean
any Capital Stock that, by its terms (or by the terms of any security into
which it is convertible or for which it is exchangeable at the option of the
holder thereof), or upon the happening of any event, matures or is mandatorily
redeemable, pursuant to a sinking fund obligation or otherwise, or redeemable
at the option of the holder thereof, in whole or in part, on or prior to the
date that is 91 days after the mandatory redemption date of the Series E
Preferred Stock.
Dividend Payment Date. The term "Dividend Payment Date"
shall have the meaning set forth in Section 2(a) below.
Dividend Period. The term "Dividend Period" shall mean the
period from, and including, the Initial Issue Date to, but not including, the
first Dividend Payment Date and thereafter, each period from, and including,
the preceding Dividend Payment Date to, but not including the next Dividend
Payment Date.
Equity Interests. The term "Equity Interests" shall mean
Capital Stock and all warrants, options or other rights to acquire Capital
Stock (but excluding any debt security that is convertible into, or
exchangeable for, Capital Stock).
Exchange Date. The term "Exchange Date" shall have the
meaning set forth in Section 5(b) below.
Exchange Debentures. The term "Exchange Debentures" shall
mean the Corporations's 125/8% Senior Subordinated Exchange Debentures due
October 31, 2006 issuable in exchange for the Corporation's Series E Preferred
Stock.
Exchange Indenture. The term "Exchange Indenture" shall mean
that certain indenture under which the Exchange Debentures would be issued and
which shall be substantially in the form attached as Annex A hereto.
Executive Officer. The term "Executive Officer" shall mean
any officer of the Corporation that would be deemed to be an "executive
officer" within meaning of the rules and regulations of the Securities and
Exchange Commission.
Existing Indebtedness. The term "Existing Indebtedness" shall
mean all Indebtedness of the Corporation and its Subsidiaries (other than
Indebtedness under the Credit Agreement) in existence on the Initial Issue
Date, until such amounts are repaid.
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Existing MMR Indebtedness. The term "Existing MMR
Indebtedness" shall mean all Indebtedness of MMR and its Subsidiaries in
existence at the closing of the MMR Merger, until such amounts are repaid.
Fair Market Value. The term "Fair Market Value" shall mean,
with respect to any asset or property, the sale value that would be obtained in
an arm's length transaction between an informed and willing seller under no
compulsion to sell and an informed and willing buyer under no compulsion to
buy.
GAAP. The term "GAAP" shall mean generally accepted
accounting principles set forth in the opinions and pronouncements of the
Accounting Principles Board of the American Institute of Certified Public
Accountants and statements and pronouncements of the Financial Accounting
Standards Board or in such other statements by such other entity as have been
approved by a significant segment of the accounting profession, which are in
effect on the Initial Issue Date.
Government Securities. The term "Government Securities" shall
mean direct obligations of, or obligations guaranteed by, the United States of
America for the payment of which obligations or guarantee the full faith and
credit of the United States of America is pledged.
Guarantee. The term "Guarantee" shall mean a guarantee (other
than by endorsement of negotiable instruments for collection in the ordinary
course of business), direct or indirect, in any manner (including, without
limitation, letters of credit and reimbursement agreements in respect thereof),
of all or any part of any Indebtedness.
Hedging Obligations. The term "Hedging Obligations" shall
mean, with respect to any Person, the obligations of such Person under (i)
interest rate swap agreements, interest rate cap agreements and interest rate
collar agreements and (ii) other agreements or arrangements designed to protect
such Person against fluctuations in interest rates.
Holder. The term "Holder" shall mean the record holder of one
or more shares of Series E Preferred Stock, as shown on the books and records
of the Transfer Agent.
Indebtedness. The term "Indebtedness" shall mean, with
respect to any Person, any indebtedness of such Person, whether or not
contingent, in respect of borrowed money or evidenced by bonds, notes,
debentures or similar instruments or letters of credit (or reimbursement
agreements in respect thereof) or banker's acceptances or representing Capital
Lease Obligations or the balance deferred and unpaid of the purchase price of
any property or payment obligations under an LMA or representing any Hedging
Obligations, except any such balance that constitutes an accrued expense or
trade payable, if and to the extent any of the foregoing (other than letters of
credit and Hedging Obligations) would appear as a liability upon a balance
sheet of such Person prepared in accordance with GAAP, as well as all
indebtedness of others secured by a Lien on any asset of such Person (whether
or not such indebtedness is
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assumed by such Person) and, to the extent not otherwise included, the
Guarantee by such Person of any indebtedness of any other Person.
Initial Issue Date. The term "Initial Issue Date" shall mean
the date that shares of Series E Preferred Stock are first issued by the
Corporation.
Investments. The term "Investments" shall mean, with respect
to any Person, all investments by such Person in other Persons (including
Affiliates) in the form of direct or indirect loans (including guarantees of
Indebtedness or other obligations), advances or capital contributions
(excluding commission, travel and similar advances to officers and employees
made in the ordinary course of business), purchases or other acquisitions for
consideration of Indebtedness, Equity Interests or other securities, together
with all items that are or would be classified as investments on a balance
sheet prepared in accordance with GAAP; provided that an acquisition of assets,
Equity Interests or other securities by the Corporation for consideration
consisting of Common Equity shall not be deemed to be an Investment. If the
Corporation or any Subsidiary of the Corporation sells or otherwise disposes of
any Equity Interests of any direct or indirect Subsidiary of the Corporation
such that, after giving effect to any such sale or disposition, such Person is
no longer a Subsidiary of the Corporation, the Corporation shall be deemed to
have made an Investment on the date of any such sale or disposition equal to
the Fair Market Value of the Equity Interests of such Subsidiary not sold or
disposed of.
Junior Securities. The term "Junior Securities" shall mean
any class of stock ranking junior to the Series E Preferred Stock as to the
payment of dividends and as to rights in liquidation, dissolution or winding up
of the affairs of the Corporation. The Corporation's Series A Preferred Stock,
Series B Preferred Stock and Series C Preferred Stock are expressly defined and
included as Junior Securities.
Lien. The term "Lien" shall mean, with respect to any asset,
any mortgage, lien, pledge, charge, security interest or encumbrance of any
kind in respect of such asset, whether or not filed, recorded or otherwise
perfected under applicable law (including any conditional sale or other title
retention agreement, any lease in the nature thereof, any option or other
agreement to sell or give a security interest in and any filing of or agreement
to give any financing statement under the Uniform Commercial Code (or
equivalent statutes) of any jurisdiction).
Liquidation Preference. The term "Liquidation Preference"
shall mean $100 per share of Series E Preferred Stock.
Local Marketing Agreement or LMA. The terms "Local Marketing
Agreement" or "LMA" shall mean a local marketing arrangement, sale agreement,
time brokerage agreement, management agreement or similar arrangement pursuant
to which a Person, subject to customary preemption rights and other limitations
(i) obtains the right to sell at least a majority of the advertising inventory
of a radio station of which a third party is the licensee, (ii) obtains the
right to broadcast programming and sell advertising time during a majority of
the air time of a radio
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station or (iii) manages the selling operations of a radio station with respect
to at least a majority of the advertising inventory of such station.
Management Termination Agreements. The term "Management
Termination Agreements" shall mean each of (i) the termination agreement
between the Corporation and R. Steven Hicks, dated April 16, 1996, and (ii) the
amendment to the employment agreement between the Corporation and D. Geoffrey
Armstrong, effective as of April 15, 1996, in each case, as in effect on the
Initial Issue Date.
Mandatory Redemption Date. The term "Mandatory Redemption
Date" shall have the meaning set forth in Section 4(a) below.
Material Broadcast License. The term "Material Broadcast
License" shall mean 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 Corporation and its Subsidiaries taken as a
whole.
MMR. The term "MMR" shall mean Multi-Market Radio, Inc.,
a Delaware corporation.
MMR Merger. The term "MMR Merger" shall mean the merger of
SFX Merger Company, a Wholly Owned Subsidiary of the Corporation, with and into
MMR, pursuant to which MMR became a Wholly Owned Subsidiary of the Corporation.
Net Income. The term "Net Income" shall mean, with respect to
any Person, the net income (loss) of such Person, determined in accordance with
GAAP and before any reduction in respect of preferred stock dividends,
excluding, however, (i) any gain (but not loss), together with any related
provision for taxes on such gain (but not loss), realized in connection with
(a) any Asset Sale (including, without limitation, dispositions pursuant to
sale and leaseback transactions) or (b) the disposition of any securities by
such Person or any of its Subsidiaries or the extinguishment of any
Indebtedness of such person or any of its Subsidiaries and (ii) any
extraordinary or nonrecurring gain (but not loss), together with any related
provision for taxes on such extraordinary or nonrecurring gain (but not loss).
Net Proceeds. The term "Net Proceeds" shall mean the
aggregate cash proceeds received by the Corporation or any of its Subsidiaries
in respect of any Asset Sale (including, without limitation, any cash received
upon the sale or other disposition of any non-cash consideration received in
any Asset Sale), net of the direct costs relating to such Asset Sale
(including, without limitation, legal, accounting and investment banking fees,
and sales commissions) and any relocation expenses incurred as a result
thereof, taxes paid or payable as a result thereof (after taking into account
any available tax credits or deductions and any tax sharing arrangements),
amounts required to be applied to the repayment of Indebtedness (other than
Senior Debt) secured by a Lien on the asset or assets that were the subject of
such Asset
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Sale and any reserve for adjustment in respect of the sale price of such asset
or assets established in accordance with GAAP.
New Note Indenture. The term "New Note Indenture" shall mean
the indenture governing the Corporation's 10 3/4% Senior Subordinated Notes due
2006.
New Notes. The term "New Notes" shall mean the Corporation's
10 3/4% Senior Subordinated Notes due 2006.
Obligations. The term "Obligations" shall mean 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.
Officers' Certificate. The term "Officers' Certificate" shall
mean a certificate signed on behalf of the Corporation by two officers of the
Corporation, one of whom must be the Chief Executive Officer, the Chief
Financial Officer, the Treasurer or the principal accounting officer of the
Corporation that meets the requirements of Section 10 hereof.
Pari Passu Debt. The term "Pari Passu Debt" shall mean (i)
the New Notes and (ii) all other Indebtedness that ranks pari passu in right of
payment with the Exchange Debentures.
Parity Securities. The term "Parity Securities" shall mean
any class or series of stock of the Corporation authorized after the Initial
Issue Date that is entitled to receive payment of dividends and to receive
assets upon liquidation, dissolution or winding up of the affairs of the
Corporation on a parity with the Series E Preferred Stock.
Pending Dispositions. The term "Pending Dispositions" shall
mean, collectively, (i) the pending sale of KOLL-FM, operating in Little Rock,
Arkansas, and (ii) the pending sale of WYAK-FM and WMYB-FM, both operating in
Myrtle Beach, South Carolina.
Permitted Investments. The term "Permitted Investments" shall
mean (a) any Investment in the Corporation or any Subsidiary of the
Corporation; (b) any Investment in Cash Equivalents; (c) any Investment by the
Corporation or any Subsidiary of the Corporation in a Person, if after such
Investment (i) such Person becomes a Subsidiary of the Corporation or (ii) such
Person is merged, consolidated or amalgamated with or into, or transfers or
conveys substantially all of its assets to, or is liquidated into, the
Corporation or a Subsidiary of the Corporation; (d) any Restricted Investment
made as a result of the receipt of non-cash consideration from an Asset Sale
that was made pursuant to and in compliance with the Corporation's debt
agreements; (e) obligations or shares of Capital Stock received in connection
with or as a result of a bankruptcy, workout or reorganization of the issuer of
such obligations or shares of Capital Stock; (f) any Investment received
involuntarily; (g) Investments in any Person (other than an Affiliate of the
Corporation that is not also a Subsidiary of the Corporation)
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engaged in a Broadcast Business or an Advertising Business which Investments
have an aggregate Fair Market Value (measured on the date each such Investment
was made and without giving effect to subsequent changes in value), when taken
together with all other Investments made pursuant to this clause (g) that are
at the time outstanding, not to exceed $20.0 million and (h) other Investments
in any Person (other than an Affiliate of the Corporation that is not also a
Subsidiary of the Corporation) having an aggregate Fair Market Value (measured
on the date each such Investment was made and without giving effect to
subsequent changes in value), when taken together with all other Investments
made pursuant to this clause (h) that are at the time outstanding, not to
exceed $15.0 million.
Permitted Liens. The term "Permitted Liens" shall mean (i)
Liens securing Senior Debt of the Corporation or securing Indebtedness of any
Subsidiary that, in either case, was permitted by the terms of the Exchange
Indenture to be incurred; (ii) Liens in favor of the Corporation; (iii) Liens
on property of a Person existing at the time such Person is merged into or
consolidated with the Corporation or any Subsidiary of the Corporation;
provided that such Liens were in existence prior to the contemplation of such
merger or consolidation and do not extend to any assets other than those of the
Person merged into or consolidated with the Corporation; (iv) Liens on property
existing at the time of acquisition thereof by the Corporation or any
Subsidiary of the Corporation, provided that such Liens were in existence prior
to the contemplation of such acquisition and do not extend to any assets other
than such assets so acquired; (v) Liens existing on the Initial Issue Date;
(vi) Liens for taxes, assessments or governmental charges or claims that are
not yet delinquent or that are being contested in good faith by appropriate
proceedings promptly instituted and diligently concluded, provided that any
reserve or other appropriate provision as shall be required in conformity with
GAAP shall have been made therefor; and (vii) Liens incurred in the ordinary
course of business of the Corporation or any Subsidiary of the Corporation with
respect to obligations that do not exceed $10.0 million at any one time
outstanding and that (a) are not incurred in connection with the borrowing of
money or the obtaining of advances or credit (other than trade credit in the
ordinary course of business) and (b) do not in the aggregate materially detract
from the value of the property or materially impair the use thereof in the
operation of business by the Corporation or such Subsidiary.
Permitted Refinancing Debt. The term "Permitted Refinancing
Debt" shall mean any Indebtedness of the Corporation or any of its Subsidiaries
issued in exchange for, or the net proceeds of which are used to extend,
refinance, renew, replace, defease or refund other Indebtedness of the
Corporation or any of its Subsidiaries; provided that: (i) the principal amount
(or accreted value, if applicable) of such Permitted Refinancing Indebtedness
does not exceed the principal amount (or accreted value, if applicable) of the
Indebtedness so extended, refinanced, renewed, replaced, defeased or refunded
(plus the amount of reasonable expenses incurred in connection therewith); (ii)
such Permitted Refinancing Debt has a final maturity date later than the final
maturity date of, and has a Weighted Average Life to Maturity equal to or
greater than the Weighted Average Life to Maturity of, the Indebtedness being
extended, refinanced, renewed, replaced, defeased or refunded; (iii) if the
Indebtedness being extended, refinanced, renewed,
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replaced, defeased or refunded is subordinated in right of payment to the
Exchange Debentures, such Permitted Refinancing Debt has a final maturity date
later than the final maturity date of, and is subordinated in right of payment
to, the Exchange Debentures on terms at least as favorable to the Holders of
Exchange Debenture as those contained in the documentation governing the
Indebtedness being extended, refinanced, renewed, replaced, defeased or
refunded; and (iv) such Permitted Refinancing Debt is incurred either by the
Corporation or by the Subsidiary who was the obligor on the Indebtedness being
extended, refinanced, renewed, replaced, defeased or refunded.
Preferred Stock. The term "Preferred Stock," of any Person,
shall mean Capital Stock of such Person of any class or series (however
designated) that ranks prior, as to payment of dividends or as to the
distribution of assets upon any voluntary or involuntary liquidation,
dissolution or winding up of such Person, to shares of Capital Stock of any
other class or series of such Person.
Principal. The term "Principal" shall mean Robert F.X. Sillerman.
Record Date. The term "Record Date" shall have the meaning
set forth in Section 2(a) below.
Redemption Date. The term "Redemption Date" shall have the
meaning set forth in Section 4(e) below.
Related Party. The term "Related Party" with respect to the
Principal shall mean (A) any spouse or immediate family member (in the case of
an individual) of the Principal or (B) any trust, corporation, partnership or
other entity, the beneficiaries, stockholders, partners, owners or persons (as
defined in "Change of Control") beneficially holding an 80% or more controlling
interest of which consist of the Principal and/or such other persons referred
to in the immediately preceding clause (A).
Restricted Investments. The term "Restricted Investment"
shall mean an Investment other than a Permitted Investment.
SCMC. The term "SCMC" shall mean Sillerman Communications
Management Corporation, a Delaware corporation.
Securities Act. The term "Securities Act" shall mean the
Securities Act of 1933, as amended.
Senior Securities. The term "Senior Securities" shall mean
(i) the Series D Preferred Stock and (ii) any class or series of stock of the
Corporation authorized after the Initial Issue Date ranking senior to the
Series E Preferred Stock in respect of the right to receive dividends and in
respect of the right to participate in any distribution upon liquidation,
dissolution or winding up of the affairs of the Corporation.
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Series D Exchange Notes. The term "Series D Exchange Notes"
shall mean the Corporation's 6 1/2% Subordinated Convertible Exchange Notes due
2007 issuable in exchange for the Corporation's Series D Preferred Stock.
Series D Exchange Note Indenture. The term "Series D Exchange
Note Indenture" shall mean the indenture governing the Corporation's 6 1/2%
Subordinated Convertible Exchange Notes due 2007 issuable in exchange for the
Corporation's Series D Preferred Stock.
Series D Preferred Stock. The term Series D Preferred Stock
shall mean the Corporation's 6 1/2 Series D Cumulative Convertible Exchangeable
Preferred Stock due May 31, 2007.
SFX Merger Company. The term "SFX Merger Company" shall mean
SFX Merger Company, a Delaware corporation.
Shared Facilities Agreement. The term "Shared Facilities
Agreement" shall mean the Shared Facilities Agreement between the Corporation
and SCMC, as in effect on the Initial Issue Date.
Significant Subsidiary. The term "Significant Subsidiary"
shall mean any Subsidiary that would be a "significant subsidiary" as defined
in Article 1, Rule 1-02 of Regulation S-X, promulgated pursuant to the
Securities Act, as such Regulation is in effect on the date hereof.
Subsidiary. The term "Subsidiary" shall mean, with respect to
any person, (i) any corporation, association or other business entity of which
more than 50% of the total voting power of shares of Voting Stock thereof is at
the time owned or controlled, directly or indirectly, by such person or one or
more of the other Subsidiaries of that person (or a combination thereof) and
(ii) any partnership (a) the sole general partner or the managing general
partner of which is such person or a Subsidiary of such person or (b) the only
general partners of which are such person or of one or more Subsidiaries of
such person (or any combination thereof).
Transfer Agent. The term "Transfer Agent" shall mean the
entity designated from time to time by the Corporation to act as the registrar
and transfer agent for the Series E Preferred Stock.
Voting Stock. The term "Voting Stock" shall mean with respect
to any specified Person, Capital Stock with voting power, under ordinary
circumstances and without regard to the occurrence of any contingency, to elect
the directors or other managers or trustees of such Person.
Voting Rights Trigger Event. The term "Voting Rights
Trigger Event" shall have the meaning set forth in Section 6(b) below.
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Weighted Average Life to Maturity. The term "Weighted Average
Life to Maturity" shall mean, when applied to any Indebtedness at any date, the
number of years obtained by dividing (i) the sum of the products obtained by
multiplying (a) the amount of each then remaining installment, sinking fund,
serial maturity or other required payments of principal, including payment at
final maturity, in respect thereof, by (b) the number of years (calculated to
the nearest one-twelfth) that will elapse between such date and the making of
such payment, by (ii) the then outstanding principal amount of such
Indebtedness.
Wholly Owned Subsidiary. The term "Wholly Owned Subsidiary"
of any Person means a Subsidiary of such Person all of the outstanding Capital
Stock or other ownership interests of which (other than directors' qualifying
shares) shall at the time be owned by such Person or by one or more Wholly
Owned Subsidiaries of such Person and one or more Wholly Owned Subsidiaries of
such Person.
2. Dividends.
(a) The Holders of shares of the Series E Preferred Stock
shall be entitled to receive, when, as and if dividends are declared by the
Board of Directors out of funds of the Corporation legally available therefor,
cumulative preferential dividends from the date such shares of Series E
Preferred Stock are issued accruing at the rate per share of $12.625 per annum,
payable semi-annually in arrears on January 15 and July 15 in each year or, if
any such date is not a Business Day, on the next succeeding Business Day (each,
a "Dividend Payment Date"), to the Holders of record as of the next preceding
January 1 and July 1 (each, a "Record Date"). Dividends will be payable in
cash, except that on each Dividend Payment Date occurring on or prior to
January 15, 2002, dividends may be paid, at the Corporation's option, by the
issuance of additional shares of Series E Preferred Stock (including fractional
shares) having a aggregate Liquidation Preference equal to the amount of such
dividends. The first dividend payment will be payable on July 15, 1997.
Dividends payable on the Series E Preferred Stock will be computed on the basis
of a 360-day year of twelve 30-day months and will be deemed to accrue on a
daily basis.
(b) Dividends on the Series E Preferred Stock shall accrue
whether or not the Corporation has earnings or profits, whether or not there
are funds legally available for the payment of such dividends and whether or
not dividends are declared. Dividends will accumulate to the extent they are
not paid on the Dividend Payment Date for the period to which they relate.
Accumulated unpaid dividends will bear interest at the rate of 125/8% per
annum. The Corporation shall take all actions required or permitted under
Delaware law to permit the payment of dividends on the Series E Preferred
Stock.
(c) No dividend whatsoever shall be declared or paid upon, or
any sum set apart for the payment of dividends upon, any outstanding Series E
Preferred Stock with respect to any dividend period unless all dividends for
all preceding dividend periods have been declared and paid upon, or declared
and a sufficient sum set apart for the payment of such dividend upon, all
outstanding shares of Series E Preferred Stock. Unless full cumulative
dividends on all
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outstanding shares of Series E Preferred Stock due for all past dividend
periods shall have been declared and paid, or declared and a sufficient sum for
the payment thereof set apart, then: (i) no dividend (other than a dividend
payable solely in shares of any Junior Securities) shall be declared or paid
upon, or any sum set apart for the payment of dividends upon, any shares of
Junior Securities; (ii) no other distribution shall be made upon or any sum set
apart for the payment of any distribution upon, any shares of Junior
Securities; (iii) no shares of Junior Securities shall be purchased, redeemed
or otherwise acquired or retired for value (excluding an exchange for shares of
other Junior Securities) by the Corporation or any of its Subsidiaries; and
(iv) no monies shall be paid into or set apart or made available for a sinking
or other like fund for the purchase, redemption or other acquisition or
retirement for value of any shares of Junior Securities by the Corporation or
any of its Subsidiaries. Holders of the Series E Preferred Stock will not be
entitled to any dividends, whether payable in cash, property or stock, in
excess of the full cumulative dividends as herein described.
3. Distributions Upon Liquidation, Dissolution or
Winding Up.
Upon any voluntary or involuntary liquidation, dissolution or winding
up of the affairs of the Corporation or reduction or decrease in its capital
stock resulting in a distribution of assets to the holders of any class or
series of the Corporation's Capital Stock (a "reduction or decrease in capital
stock"), each Holder of shares of the Series E Preferred Stock shall be
entitled to payment out of the assets of the Corporation available for
distribution of an amount equal to the Liquidation Preference per share of
Series E Preferred Stock held by such Holder, plus accrued and unpaid dividends
to the date fixed for liquidation, dissolution, winding up or reduction or
decrease in capital stock, before any distribution is made on any Junior
Securities, including, without limitation, Common Equity of the Corporation.
After payment in full of the Liquidation Preference and all accrued dividends
to which Holders of Series E Preferred Stock are entitled, such Holders will
not be entitled to any further participation in any distribution of assets of
the Corporation. However, neither the voluntary sale, conveyance, exchange or
transfer (for cash, shares of stock, securities or other consideration) of all
or substantially all of the property or assets of the Corporation nor the
consolidation or merger of the Corporation with or into one or more
corporations will be deemed to be a voluntary or involuntary liquidation,
dissolution or winding up of the Corporation or reduction or decrease in
capital stock, unless such sale, conveyance, exchange or transfer shall be in
connection with a liquidation, dissolution or winding up of the business of the
Corporation or reduction or decrease in capital stock.
4. Redemption by the Corporation
(a) On October 31, 2006 (the "Mandatory Redemption Date"),
the Corporation shall redeem (subject to the legal availability of funds
therefor) all outstanding shares of Series E Preferred Stock at a price in cash
equal to the Liquidation Preference thereof, plus accrued and unpaid dividends
to the date of redemption.
(b) Subject to Section 4(c) below, the Series E
Preferred Stock may not be redeemed at the option of the Corporation prior to
January 15, 2002. The Series E Preferred
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Stock may be redeemed, in whole or in part, at the option of the Corporation on
or after January 15, 2002, at the Applicable Redemption Price.
(c) In addition, prior to January 15, 2000, the Corporation
may, at its option, redeem up to 50% of the aggregate of (i) the Liquidation
Preference of the Series E Preferred Stock issued (whether initially issued or
issued in lieu of cash dividends) less the Liquidation Preference of Series E
Preferred Stock exchanged for Exchange Debentures and (ii) the principal amount
of Exchange Debentures issued (whether issued in exchange for Series E
Preferred Stock or in lieu of cash interest), with the net proceeds of one or
more Common Equity offerings received on or after the date of original issuance
of the Series E Preferred Stock at a redemption price of 112.625% of the
Liquidation Preference or principal amount, as the case may be, plus
accumulated and unpaid dividends in the case of Series E Preferred Stock and
accrued and unpaid interest in the case of Exchange Debentures; provided, that
after any such redemption, if any Series E Preferred Stock or Exchange
Debentures remain outstanding, at least $50 million in Liquidation Preference
or principal amount, as applicable, of the Series E Preferred Stock or Exchange
Debentures, as the case may be, remain outstanding; and provided further, that
any such redemption shall occur within 75 days of the date of closing of such
offering of Common Equity of the Corporation.
(d) In case of redemption of less than all of the shares of
Series E Preferred Stock at the time outstanding, the shares to be redeemed
shall be selected pro rata or by lot as determined by the Corporation in its
sole discretion.
(e) Notice of any redemption shall be sent by or on behalf of
the Corporation not more than 60 days nor less than 30 days prior to the date
specified for redemption in such notice (including the Mandatory Redemption
Date, the "Redemption Date"), by first class mail, postage prepaid, to all
Holders of record of the Series E Preferred Stock at their respective last
addresses as they shall appear on the books of the Corporation; provided,
however, that no failure to give such notice or any defect therein or in the
mailing thereof shall affect the validity of the proceedings for the redemption
of any shares of Series E Preferred Stock except as to the Holder to whom the
Corporation has failed to give notice or except as to the Holder to whom notice
was defective. In addition to any information required by law or by the
applicable rules of any exchange upon which Series E Preferred Stock may be
listed or admitted to trading, such notice shall state: (i) the paragraph of
this Certificate of Designations pursuant to which the redemption is made; (ii)
the Redemption Date; (iii) the Applicable Redemption Price; (iv) the number of
shares of Series E Preferred to be redeemed and, if less than all shares held
by such Holder are to be redeemed, the number of such shares to be redeemed;
(v) the place or places where certificates for such shares are to be
surrendered for payment of the Applicable Redemption Price, including any
procedures applicable to redemptions to be accomplished through book-entry
transfers; and (vi) that dividends on the shares to be redeemed will cease to
accrue on the Redemption Date. Upon the mailing of any such notice of
redemption, the Corporation shall become obligated to redeem at the time of
redemption specified thereon all shares called for redemption.
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(f) If notice has been mailed in accordance with Section 4(e)
above and provided that on or before the Redemption Date specified in such
notice, all funds necessary for such redemption shall have been set aside by
the Corporation, separate and apart from its other funds in trust for the pro
rata benefit of the Holders of the shares so called for redemption, so as to
be, and to continue to be available therefor, then, from and after the
Redemption Date, dividends on the shares of the Series E Preferred Stock so
called for redemption shall cease to accrue, and said shares shall no longer be
deemed to be outstanding and shall not have the status of shares of Series E
Preferred Stock, and all rights of the Holders thereof as stockholders of the
Corporation (except the right to receive from the Corporation the Applicable
Redemption Price) shall cease. Upon surrender, in accordance with said notice,
of the certificates for any shares so redeemed (properly endorsed or assigned
for transfer, if the Corporation shall so require and the notice shall so
state), such shares shall be redeemed by the Corporation at the Applicable
Redemption Price. In case fewer than all the shares represented by any such
certificate are redeemed, a new certificate or certificates shall be issued
representing the unredeemed shares without cost to the Holder thereof.
(g) Any funds deposited with a bank or trust company for the
purpose of redeeming Series E Preferred Stock shall be irrevocable except that:
(i) the Corporation shall be entitled to receive
from such bank or trust company the interest or other earnings, if
any, earned on any money so deposited in trust, and the Holders of any
shares redeemed shall have no claim to such interest or other
earnings; and
(ii) any balance of monies so deposited by the
Corporation and unclaimed by the Holders of the Series E Preferred
Stock entitled thereto at the expiration of two years from the
applicable Redemption Date shall be repaid, together with any interest
or other earnings earned thereon, to the Corporation, and after any
such repayment, the Holders of the shares entitled to the funds so
repaid to the Corporation shall look only to the Corporation for
payment without interest or other earnings.
(h) No Series E Preferred Stock may be redeemed except with
funds legally available for the purpose. The Corporation shall take all actions
required or permitted under Delaware Law to permit any such redemption.
(i) Notwithstanding the foregoing provisions of this Section
4, unless the full cumulative dividends on all outstanding shares of Series E
Preferred Stock shall have been paid or contemporaneously are declared and paid
for all past dividend periods, none of the shares of Series E Preferred Stock
shall be redeemed unless all outstanding shares of Series E Preferred Stock are
simultaneously redeemed.
(j) All shares of Series E Preferred Stock redeemed pursuant
to this Section 4 shall be restored to the status of authorized and unissued
shares of preferred stock, without
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designation as to series and may thereafter be reissued as shares of any series
of preferred stock other than shares of Series E Preferred Stock.
5. Exchange.
(a) The Corporation may, at its option on any Dividend
Payment Date, exchange, in whole or in part, on a pro rata basis, the then
outstanding Series E Preferred Stock for Exchange Debentures; provided that
immediately after giving effect to any partial exchange, there shall be
outstanding Series E Preferred Stock with an aggregate liquidation preference
of not less than $50.0 million and not less than $50.0 million in aggregate
principal amount of Exchange Debentures; and, provided further, that (i) on the
date of such exchange there are no accumulated and unpaid dividends on the
Series E Preferred Stock (including the dividend payable on such date) or other
contractual impediments to such exchange; (ii) there shall be legally available
funds sufficient therefor; (iii) such exchange would be permitted under the
terms of the Series D Preferred Stock, to the extent then outstanding, and,
immediately after giving effect to such exchange, no Default or Event of
Default (each as defined in the Exchange Indenture) would exist under the
Exchange Indenture, no default or event of default would exist under the Credit
Agreement, the New Note Indenture or the Series D Exchange Note Indenture and
no default or event of default under any material instrument governing
Indebtedness outstanding at the time would be caused thereby; (iv) the Exchange
Indenture has been qualified under the Trust Indenture Act, if such
qualification is required at the time of exchange; and (v) the Corporation
shall have delivered a written opinion to the Trustee (as defined herein) to
the effect that all conditions to be satisfied prior to such exchange have been
satisfied.
(b) The Exchange Debentures shall be issuable in all
appropriate denominations. Notice of the intention to exchange shall be sent by
or on behalf of the Corporation not more than 60 days nor less than 30 days
prior to the date fixed for the exchange (the "Exchange Date"), by first class
mail, postage prepaid, to each Holder of record of Series E Preferred Stock at
its respective last addresses as they shall appear on the books of the
Corporation; provided, however, that no failure to give such notice or any
defect therein or in the mailing thereof shall affect the validity of the
proceedings for the exchange of any shares of Series E Preferred Stock except
as to the Holder to whom the Corporation has failed to give notice or except as
to the Holder to whom notice was defective. In addition to any information
required by law or by the applicable rules of any exchange upon which Series E
Preferred Stock may be listed or admitted to trading, such notice shall state:
(i) the Exchange Date; (ii) the place or places where certificates for such
shares are to be surrendered for exchange, including any procedures applicable
to exchanges to be accomplished through book-entry transfers; and (iii) that
dividends on the shares of Series E Preferred Stock to be exchanged will cease
to accrue on the Exchange Date. Prior to giving the notice of intention to
exchange, the Corporation shall execute and deliver with a bank or trust
company (the "Trustee"), with capital, surplus and undivided profits of not
less than $100,000,000, selected by the Corporation, and qualify under the
Trust Indenture Act of 1939, as amended, the Exchange Indenture with such
changes as would not adversely affect any of the voting powers, preferences and
relative, participating, optional and
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other special rights of any holders of Series E Preferred Stock as may be
required by law or usage.
(c) A Holder delivering Series E Preferred Stock for exchange
will not be required to pay any taxes or duties in respect of the issue or
delivery of Exchange Debentures on exchange but will be required to pay any tax
or duty that may be payable in respect of any transfer involved in the issue or
delivery of the Exchange Debentures in a name other than that of the Holder of
the Series E Preferred Stock. Certificates representing Exchange Debentures
will not be issued or delivered unless all taxes and duties, if any, payable by
the Holder have been paid.
(d) If notice of any exchange has been properly given, and if
on or before the Exchange Date the Exchange Debentures have been duly executed
and authenticated and an amount in cash equal to all accrued and unpaid
dividends thereon to the Exchange Date has been deposited with the Transfer
Agent, then on or after the close of business on the Exchange Date, the shares
of Series E Preferred to be exchanged will no longer be deemed to be
outstanding and may thereafter be issued in the same manner as the other
authorized but unissued preferred stock, but not as Series E Preferred Stock,
and all rights of the Holders thereof as stockholders of the Corporation will
cease, except the right of the Holders to receive upon surrender of their
certificates the Exchange Debentures and all accrued and unpaid dividends
thereon to the Exchange Date.
(e) As a condition to the exercise of the exchange rights
described in this Section 5, the Corporation shall deliver an opinion to the
Trustee as to the due authorization, execution, delivery and enforceability of
both the Exchange Debentures and the Exchange Debenture Indenture.
6. Voting Rights.
(a) The Holders of record of shares of Series E Preferred
Stock shall not be entitled to any voting rights except as hereinafter provided
in this Section 6 or as otherwise provided by law.
(b) If and upon:
(i) the accumulation of accrued and unpaid dividends
on the outstanding Series E Preferred Stock in an amount equal to
three (3) full semi-annual dividends (whether or not consecutive);
(ii) the failure of the Corporation to satisfy any
mandatory redemption or repurchase obligation (including, without
limitation, pursuant to any required Change of Control Offer) with
respect to the Series E Preferred Stock;
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(iii) the failure of the Corporation to
make a Change of Control Offer on the terms and in accordance with the
provisions described below in Section 7 hereof;
(vi) the failure of the Corporation to comply with
any of the other covenants or agreements set forth in this Certificate
of Designations and the continuance of such failure for 60 consecutive
days or more; or
(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
Corporation or any of its Subsidiaries (or the payment of which is
guaranteed by the Corporation or any of its Subsidiaries) whether such
Indebtedness or guarantee now exists, or is created after the Initial
Issue Date, which default (i) 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 (ii) results in the
acceleration of such Indebtedness prior to its express maturity and,
in each case, the principal amount of any such Indebtedness, together
with the principal amount of any other such Indebtedness under which
there has been a Payment Default or the maturity of which has been so
accelerated, aggregates $25.0 million or more (each of the events
described in clauses 6(b)(i) through (v) being referred to herein as a
"Voting Rights Trigger Event");
then the authorized number of members of the Corporation's Board of Directors
will be immediately and automatically increased by two, and the Holders of a
majority of the outstanding shares of Series E Preferred Stock, voting
separately as a class, shall be entitled to elect two directors of the
Corporation.
(c) Whenever such voting right shall have vested, such right
may be exercised initially either at a special meeting of the Holders of Series
E Preferred Stock, called as hereinafter provided, or at any annual meeting of
stockholders held for the purpose of electing directors, and thereafter at such
annual meetings or by the written consent of the Holders of Series E Preferred
Stock. Such right of the Holders of Series E Preferred Stock to elect directors
may be exercised until (i) all dividends in arrears shall have been paid in
full and (ii) all other Voting Rights Trigger Events have been cured or waived,
at which time the right of the Holders of Series E Preferred Stock to elect
such number of directors shall cease, the term of such directors previously
elected shall thereupon terminate, and the authorized number of directors of
the Corporation shall thereupon return to the number of authorized directors
otherwise in effect, but subject always to the same provisions for the renewal
and divestment of such special voting rights in the case of any such future
dividend default or defaults or any such failure to make redemption payments.
(d) At any time when such voting right shall have vested in
the Holders of Series E Preferred Stock and if such right shall not already
have been initially exercised, a proper officer of the Corporation shall, upon
the written request of Holders of record of 10% or more of the Series E
Preferred Stock then outstanding, addressed to the Secretary of the
Corporation,
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call a special meeting of Holders of Series E Preferred Stock. Such meeting
shall be held at the earliest practicable date upon the notice required for
annual meetings of stockholders at the place for holding annual meetings of
stockholders of the Corporation or, if none, at a place designated by the
Secretary of the Corporation. If such meeting shall not be called by the proper
officers of the Corporation within 30 days after the personal service of such
written request upon the Secretary of the Corporation, or within 30 days after
mailing the same within the United States, by registered mail, addressed to the
Secretary of the Corporation at its principal office (such mailing to be
evidenced by the registry receipt issued by the postal authorities), then the
Holders of record of 10% of the shares of Series E Preferred Stock then
outstanding may designate in writing a Holder of Series E Preferred Stock to
call such meeting at the expense of the Corporation, and such meeting may be
called by such person so designated upon the notice required for annual
meetings of stockholders and shall be held at the place for holding annual
meetings of the Corporation or, if none, at a place designated by such Holder.
Any Holder of Series E Preferred Stock that would be entitled to vote at such
meeting shall have access to the stock books of the Corporation for the purpose
of causing a meeting of stockholders to be called pursuant to the provisions of
this Section. Notwithstanding the provisions of this paragraph, however, no
such special meeting shall be called if any such request is received less than
90 days before the date fixed for the next ensuing annual or special meeting of
stockholders.
(e) If the directors so elected by the Holders of Series E
Preferred Stock shall cease to serve as a director before his term shall
expire, the Holders of Series E Preferred Stock then outstanding may, at a
special meeting of the Holders called as provided above, elect a successor to
hold office for the unexpired term of the director whose place shall be vacant.
(f) The Corporation shall not, without the affirmative vote
or consent of the Holders of a majority of the then outstanding shares of
Series E Preferred Stock (with shares held by the Corporation or any of its
Affiliates not being considered to be outstanding for this purpose) amend or
otherwise alter its Certificate of Incorporation in any manner that adversely
affects the rights of Holders of Series E Preferred Stock.
(g) Without the consent of each Holder affected, an amendment
or waiver may not (with respect to any shares of Series E Preferred Stock held
by a non-consenting Holder):
(i) alter the voting rights with respect to the
Series E Preferred Stock or reduce the number of shares of Series E
Preferred Stock whose Holders must consent to an amendment, supplement
or waiver;
(ii) reduce the Liquidation Preference of or change
the Mandatory Redemption Date of any share of Series E Preferred Stock
or alter the provisions with respect to the redemption of the Series E
Preferred Stock (other than provisions relating to the covenant
described above in Section 7 hereof);
(iii) reduce the rate of or change the
time for payment of dividends on any share of Series E Preferred
Stock;
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(iv) waive a default or event of default
in the payment of dividends or on the Series E Preferred Stock;
(v) make any share of Series E Preferred Stock
payable in any form other than that stated in this Certificate of
Designations;
(vi) make any change in the provisions of this
Certificate of Designations relating to waivers of the rights of
Holders of Series E Preferred Stock to receive the Liquidation
Preference, dividends on the Series E Preferred Stock;
(vii) waive a redemption payment with respect to any
share of Series E Preferred Stock (other than a payment required by
the covenant described above in Section 7 hereof); or
(viii) make any change in the foregoing amendment
and waiver provisions.
(h) The Corporation shall not, without the consent of at
least 662/3% of the then outstanding shares of Series E Preferred Stock (with
shares held by the Corporation or its Affiliates not being considered to be
outstanding for this purpose), authorize, create (by way of reclassification or
otherwise) or issue any Senior Securities or any obligation or security
convertible or exchangeable into or evidencing a right to purchase, shares of
any class or series of Senior Securities.
(i) In addition, any amendment to the provisions of Section 7
hereof (including the related definitions) will require the consent of the
Holders of at least 75% of the shares of Series E Preferred Stock then
outstanding (with shares held by the Corporation or its Affiliates not being
considered to be outstanding for this purpose) if such amendment would
adversely affect the rights of Holders of Series E Preferred Stock.
(j) The Corporation in its sole discretion may without the
vote or consent of any Holders of the Series E Preferred Stock amend or
supplement this Certificate of Designations:
(i) to cure any ambiguity, defect or
inconsistency;
(ii) to provide for uncertificated Series E
Preferred Stock in addition to or in place of certificated Series E
Preferred Stock; or
(iii) to make any change that would provide any
additional rights or benefits to the Holders of the Series E Preferred
Stock or that does not adversely affect the legal rights or benefits
under this Certificate of Designations of any such Holder.
7. Change of Control.
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(a) Upon the occurrence of a Change of Control, each Holder
of Series E Preferred Stock shall have the right to require the Corporation to
repurchase all or any part of such Holder's shares of Series E Preferred Stock
(a "Change of Control Offer") at an offer price in cash equal to 101% of the
aggregate Liquidation Preference thereof plus accrued and unpaid dividends, if
any, thereon to the date of purchase (the "Change of Control Payment").
(b) The Change of Control Offer shall include all
instructions and materials necessary to enable Holders to tender their shares
of Series E Preferred Stock.
(c) The Corporation shall comply with the requirements of
Rule 14e-1 under the Exchange Act and any other securities laws and regulations
thereunder to the extent such laws and regulations are applicable in connection
with the repurchase of the shares of Series E Preferred Stock as a result of a
Change of Control.
(d) Within 30 days following any Change of Control, the
Corporation shall mail a notice to each Holder stating:
(i) that the Change of Control Offer is being
made pursuant to this Section 7 and that all shares of Series E
Preferred Stock tendered will be accepted for payment;
(ii) the purchase price and the purchase date,
which shall be no earlier than 30 days nor later than 60 days from
the date such notice is mailed (the "Change of Control Payment Date");
(iii) that any share of Series E Preferred Stock
not tendered will continue to accrue dividends;
(iv) that, unless the Corporation fails to pay the
Change of Control Payment, all shares of Series E Preferred Stock
accepted for payment pursuant to the Change of Control Offer shall
cease to accrue dividends after the Change of Control Payment Date;
(v) that Holders electing to have any shares of
Series E Preferred Stock purchased pursuant to a Change of Control
Offer will be required to surrender the shares of Series E Preferred
Stock, with the form entitled "Option of Holder to Elect Purchase"
which shall be included with the Notice of Change of Control
completed, to the Paying Agent at the address specified in the notice
prior to the close of business on the third Business Day preceding the
Change of Control Payment Date;
(vi) that Holders will be entitled to withdraw their
election if the Paying Agent receives, not later than the close of
business on the second Business Day preceding the Change of Control
Payment Date, a telegram, telex, facsimile transmission or letter
setting forth the name of the Holder, the number of shares of Series E
Preferred Stock
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delivered for purchase, and a statement that such Holder is
withdrawing his election to have such shares purchased; and
(vii) the circumstances and relevant facts regarding
such Change of Control (including, but not limited to, information
with respect to pro forma historical financial information after
giving effect to such Change of Control and information regarding the
Person or Persons acquiring control).
(e) On the Change of Control Payment Date, the Corporation
shall, to the extent lawful, (i) accept for payment all shares of Series E
Preferred Stock properly tendered pursuant to the Change of Control Offer, (ii)
deposit with the Paying Agent an amount equal to the Change of Control Payment
in respect of all shares of Series E Preferred Stock so tendered and (iii)
deliver or cause to be delivered to the Transfer Agent shares of Series E
Preferred Stock so accepted together with an Officers' Certificate stating the
aggregate Liquidation Preference of the shares of Series E Preferred Stock or
portions thereof being purchased by the Corporation. The Paying Agent shall
promptly mail to each Holder of Series E Preferred Stock so tendered the Change
of Control Payment for such Series E Preferred Stock and the Transfer Agent
will promptly authenticate and mail (or cause to be transferred by book-entry)
to each Holder a new certificate representing the shares of Series E Preferred
Stock equal in Liquidation Preference amount to any unpurchased portion of the
shares of Series E Preferred Stock surrendered, if any. The Corporation shall
publicly announce the results of the Change of Control Offer on or as soon as
practicable after the Change of Control Payment Date.
(f) Prior to complying with the provisions of this Section 7,
but in any event within 90 days following a Change of Control, the Corporation
shall either repay all outstanding Indebtedness or obtain the requisite
consents, if any, under all agreements governing outstanding Indebtedness, in
each case to the extent required to permit the repurchase of Series E Preferred
Stock required by this Section 7. If the Corporation fails to make such
repayment or obtain such consents within such time period, it will result in a
Voting Rights Triggering Event, but the obligation to commence and consummate a
Change of Control Offer will be suspended until such repayment is made or such
consents are obtained. If such consents are not obtained, the Corporation will
not repurchase any Series E Preferred Stock until the 91st day following the
retirement of the New Notes. The Corporation will publicly announce the results
of the Change of Control Offer on or as soon as practicable after the Change of
Control Payment Date.
(g) The Corporation shall not be required to make a Change of
Control Offer upon a Change of Control if a third party makes the Change of
Control Offer in the manner, at the times and otherwise in compliance with the
requirements set forth in this Section 7 applicable to a Change of Control
Offer made by the Corporation and purchases all shares of Series E Preferred
Stock validly tendered and not withdrawn under such Change of Control Offer.
8. Certain Covenants.
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(a) Restricted Payments. The Corporation shall not,
and shall not permit any of its Subsidiaries to, directly or indirectly:
(i) declare or pay any dividend or make any other payment or distribution on
account of the Corporation's Parity Securities or Junior Securities (including,
without limitation, any payment in connection with any merger or consolidation
involving the Corporation) or to the direct or indirect holders of the
Corporation's Parity Securities or Junior Securities in their capacity as such
(other than dividends or distributions payable in Capital Stock (other than
Disqualified Stock) of the Corporation); (ii) purchase, redeem or otherwise
acquire or retire for value any Parity Securities or Junior Securities of the
Corporation; (iii) make any payment on, or purchase, redeem, defease or
otherwise acquire or retire for value any Junior Securities, except payments of
the Liquidation Preference thereof at final maturity; or (iv) make any
Restricted Investment (all such payments and other actions set forth in clauses
(i) through (iv) above being collectively referred to as "Restricted
Payments"), unless, at the time of and after giving effect to such Restricted
Payment:
(a) no Voting Rights Triggering Event shall
have occurred and be continuing or would occur as a
consequence thereof; and
(b) the Corporation would, at the time of such
Restricted Payment and after giving pro forma effect thereto
as if such Restricted Payment had been made at the beginning
of the applicable four-quarter period, have been permitted to
incur at least $1.00 of additional Indebtedness (other than
Permitted Debt) pursuant to the Debt to Cash Flow Ratio test
set forth below under Section 8(b) hereof; and
(c) such Restricted Payment, together with the
aggregate amount of all other Restricted Payments declared or
made after the Initial Issue Date (other than Restricted
Payments permitted by clauses (2), (5), (6) or (10) of the
following paragraph) shall not exceed, at the date of
determination, the sum of (1) an amount equal to the
Corporation's Consolidated Cash Flow from the Initial Issue
Date to the end of the Corporation's most recently ended full
fiscal quarter for which internal financial statements are
available, taken as a single accounting period, less the
product of 1.4 times the Corporation's Consolidated Interest
Expense from the Initial Issue Date to the end of the
Corporation's most recently ended full fiscal quarter for
which internal financial statements are available, taken as a
single accounting period, plus (2) an amount equal to the net
cash proceeds received by the Corporation from the issue or
sale after the Initial Issue Date of Equity Interests of the
Corporation (other than (i) sales of Disqualified Stock and
(ii) Equity Interests sold to any of the Corporation's
Subsidiaries) or of debt securities or Disqualified Stock
(other than the Series D Preferred Stock) of the Corporation
issued after the Initial Issue Date that have been converted
into such Equity Interests plus (3) to the extent that any
Restricted Investment that was made after the Initial Issue
Date is sold for cash or otherwise liquidated or repaid for
cash, the lesser of (A) the cash return of capital with
respect to such Restricted Investment (less the cost of
disposition, if any) and (B) the initial amount of such
Restricted Investment.
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If no Voting Rights Triggering Event shall have occurred and be
continuing as a result thereof, the foregoing provisions will not prohibit: (1)
the payment of any dividend within 60 days after the date of declaration
thereof, if at said date of declaration such payment would have complied with
the provisions of this Certificate of Designations; (2) the redemption,
repurchase, retirement or other acquisition of any Equity Interests of the
Corporation in exchange for, or out of the proceeds of, the substantially
concurrent sale (other than to a Subsidiary of the Corporation) of other Equity
Interests of the Corporation (other than any Disqualified Stock); provided that
the amount of any such net cash proceeds that are utilized for any such
redemption, repurchase, retirement or other acquisition shall be excluded from
clause (c)(2) of the preceding paragraph; (3) cash payments made in respect of
fractional shares of Capital Stock not to exceed $100,000 in the aggregate in
any fiscal year; (4) the payment of dividends on the shares of Series D
Preferred Stock in accordance with the terms thereof as in effect on the
Initial Issue Date; (5) the issuance of Series D Exchange Notes in exchange for
the Series D Preferred Stock; provided that such issuance is permitted by
Section 8(b) hereof; (6) the issuance of Exchange Debentures in exchange for
the Series E Preferred Stock; provided that such issuance is permitted by
Section 8(b) hereof; (7) in the event that the Corporation elects to issue the
Series D Exchange Notes in exchange for the Series D Preferred Stock, cash
payments made in lieu of the issuance of Series D Exchange Notes having a face
amount less than $50 and any cash payments representing accrued and unpaid
dividends in respect thereof, not to exceed $100,000 in the aggregate in any
fiscal year; (8) in the event that the Corporation elects to issue Exchange
Debentures in exchange for Series E Preferred Stock, cash payments made in lieu
of the issuance of Exchange Debentures having a face amount less than $1,000
and any cash payments representing accrued and unpaid dividends in respect
thereof, not to exceed $100,000 in the aggregate in any fiscal year; (9)
payments made by the Corporation to SCMC for facilities maintenance and other
services and reimbursements pursuant to the Shared Facilities Agreement, as
amended from time to time, to the extent that such payments do not exceed the
amount of payments which would have been due if calculated in accordance with
the terms of the Shared Facilities Agreement as in effect on the Initial Issue
Date; (10) payments by the Corporation pursuant to the Management Termination
Agreements in accordance with the terms thereof as in effect on the Initial
Issue Date; (11) the redemption by the Corporation of its Series C Preferred
Stock in accordance with the terms thereof as in effect on the Initial Issue
Date; and (12) the redemption by the Corporation of its Series B Preferred
Stock in accordance with the terms thereof as in effect on the Initial Issue
Date; provided that payments made by the Corporation to redeem the Series B
Preferred Stock shall not exceed $1.0 million in any fiscal year or $2.0
million in the aggregate since the Initial Issue Date.
The amount of all Restricted Payments (other than cash) shall be the
Fair Market Value (evidenced by a resolution of the Board of Directors set
forth in an Officers' Certificate delivered to the Board of Directors) on the
date of the Restricted Payment of the asset(s) or securities proposed to be
transferred by the Corporation or such Subsidiary, as the case may be, pursuant
to the Restricted Payment. Not later than the date of making any Restricted
Payment, the Corporation shall deliver to the Board of Directors an Officers'
Certificate stating that such Restricted Payment is permitted and setting forth
the basis upon which the calculations required
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by this covenant were computed, which calculations may be based upon the
Corporation's latest available financial statements.
(b) Incurrence of Indebtedness and Issuance of Preferred
Stock. The Corporation shall not, and shall not permit any of its Subsidiaries
to, directly or indirectly, create, incur, issue, assume, guarantee or
otherwise become directly or indirectly liable, contingently or otherwise, with
respect to (collectively, "incur") any Indebtedness (including Acquired Debt)
and that the Corporation will not issue any Disqualified Stock and will not
permit any of its Subsidiaries to issue any shares of Preferred Stock;
provided, however, that (i) the Corporation may incur Indebtedness (including
Acquired Debt) or issue shares of Disqualified Stock and (ii) (A) the
Subsidiaries may guarantee Senior Debt and (B) the Subsidiaries may issue
Preferred Stock other than Disqualified Stock if, in either case, the
Corporation's Debt to Cash Flow Ratio at the time of incurrence of such
Indebtedness or the issuance of such Disqualified Stock or the Guarantee of
such Senior Debt or the issuance of such Preferred Stock, as the case may be,
after giving pro forma effect to such incurrence or issuance or Guarantee as of
such date and to the use of proceeds therefrom as if the same had occurred at
the beginning of the most recently ended four full fiscal quarter period of the
Corporation for which internal financial statements are available, would have
been no greater than 7.0 to 1.
The foregoing provisions will not apply to the incurrence of any of
the following Indebtedness (collectively, "Permitted Debt"):
(i) the incurrence by the Corporation and its Subsidiaries of
Indebtedness pursuant to one or more Bank Facilities, so long as the aggregate
principal amount of all Indebtedness outstanding under all Bank Facilities does
not, at the time of incurrence, exceed an amount equal to $225.0 million;
(ii) the incurrence by the Corporation and its
Subsidiaries of the Existing Indebtedness;
(iii) Indebtedness under the Exchange Debentures;
(iv) the issuance of Disqualified Stock by the Corporation that by
its terms would not require or permit any payment of dividends or other
distributions that would violate the covenant Section 8(a) above;
(v) the incurrence by the Corporation or any of its Subsidiaries of
Indebtedness in connection with the acquisition of assets or a new Subsidiary;
provided that such Indebtedness was incurred by the prior owner of such assets
or such Subsidiary prior to such acquisition by the Corporation or one of its
Subsidiaries and was not incurred in connection with, or in contemplation of,
such acquisition by the Corporation or one of its Subsidiaries; and provided
further that, after giving pro forma effect to such incurrence of Indebtedness
as of such date and to the use of proceeds therefrom as if the same had
occurred at the beginning of the most recently
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ended four full fiscal quarter period for which internal financial statements
are available, the Corporation's Debt to Cash Flow Ratio would have been no
greater than 7.0 to 1;
(vi) the incurrence by the Corporation or any of its Subsidiaries of
Permitted Refinancing Debt in exchange for, or the net proceeds of which are
used to extend, refinance, renew, replace, defease or refund, Indebtedness that
was permitted by this Certificate of Designation to be incurred;
(vii) the incurrence by the Corporation or any of its Subsidiaries of
intercompany Indebtedness between or among the Corporation and any of its
Subsidiaries; provided, however, that (i) if the Corporation is the obligor on
such Indebtedness, such Indebtedness is expressly subordinate to the payment in
full of all Obligations with respect to the Exchange Debentures and (ii)(A) any
subsequent issuance or transfer of Equity Interests that results in any such
Indebtedness being held by a Person other than the Corporation or a Subsidiary
and (B) any sale or other transfer of any such Indebtedness to a Person that is
not either the Corporation or a Subsidiary shall be deemed, in each case, to
constitute an incurrence of such Indebtedness by the Corporation or such
Subsidiary, as the case may be;
(viii) the incurrence by the Corporation or any of its Subsidiaries of
Hedging Obligations that are incurred for the purpose of fixing or hedging
interest rate risk with respect to any floating rate Indebtedness that is
permitted by the terms of this Certificate of Designations to be outstanding;
and
(ix) the incurrence by the Corporation and any of its Subsidiaries of
Indebtedness (in addition to Indebtedness permitted by any other clause of this
paragraph) in an aggregate principal amount (or accreted value, as applicable)
at any time outstanding not to exceed $10.0 million.
(c) Merger, Consolidation or Sale of Assets. The Corporation
shall not consolidate or merge with or into (whether or not the Corporation is
the surviving corporation), or sell, assign, transfer, lease, convey or
otherwise dispose of all or substantially all of its properties or assets in
one or more related transactions, to another corporation, Person or entity
unless (i) the Corporation is the surviving corporation or the entity or the
Person formed by or surviving any such consolidation or merger (if other than
the Corporation) or to which such sale, assignment, transfer, lease, conveyance
or other disposition shall have been made is a corporation organized or
existing under the laws of the United States, any states, any state thereof or
the District of Columbia; (ii) the Series E Preferred Stock shall be converted
into or exchanged for and shall become shares of such successor, transferee or
resulting Person, having in respect of such successor, transferee or resulting
Person the same powers, preferences and relative participating, optional or
other special rights and the qualifications, limitations or restrictions
thereon, that the Series E Preferred Stock had immediately prior to such
transaction; (iii) immediately after such transaction no Voting Rights
Triggering Event exists; (iv) such transaction will not result in the loss or
suspension or material impairment of any Material Broadcast License; and (v)
except in the case of a merger of the Corporation with or into a Wholly Owned
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Subsidiary of the Corporation, the Corporation or the entity or Person formed
by or surviving any such consolidation or merger (if other than the
Corporation), or to which such sale, assignment, transfer, lease, conveyance or
other disposition shall have been made (A) will have Consolidated Net Worth
immediately after the transaction equal to or greater than the Consolidated Net
Worth of the Corporation immediately preceding the transaction and (B) will, at
the time of such transaction and after giving pro forma effect thereto as if
such transaction had occurred at the beginning of the applicable four-quarter
period, be permitted to incur at least $1.00 of additional Indebtedness
pursuant to the Debt to Cash Flow Ratio test set forth in Section 8(b) hereof.
(d) Transactions with Affiliates. The Corporation shall not,
and shall not permit any of its Subsidiaries to, make any payment to, or sell,
lease, transfer or otherwise dispose of any of its properties or assets to, or
purchase any property or assets from, or enter into or make or amend any
contract, agreement, understanding, loan, advance or guarantee with, or for the
benefit of, any Affiliate (each of the foregoing, an "Affiliate Transaction"),
unless (i) such Affiliate Transaction is on terms that are no less favorable to
the Corporation or the relevant Subsidiary than those that would have been
obtained in a comparable transaction by the Corporation or such Subsidiary with
an unrelated Person and (ii) the Corporation delivers to the Holders (a) with
respect to any Affiliate Transaction or series of related Affiliate
Transactions involving aggregate consideration in excess of $1.0 million, a
resolution of the Board of Directors set forth in an Officers' Certificate
certifying that such Affiliate Transaction complies with clause (i) above and
that such Affiliate Transaction has been approved by a majority of the members
of the Board of Directors that are disinterested as to such Affiliate
Transaction and (b) with respect to any Affiliate Transaction or series of
related Affiliate Transactions involving aggregate consideration in excess of
$5.0 million, an opinion as to the fairness to the Holders of such Affiliate
Transaction from a financial point of view issued by an accounting, appraisal
or investment banking firm of national standing; provided that (1) transactions
between or among the Corporation and/or its Wholly-Owned Subsidiaries, (2) the
redemption or repurchase of the Existing MMR Indebtedness, (3) transactions and
agreements specifically contemplated by the Termination and Assignment
Agreement between the Corporation and SCMC as in effect on the Initial Issue
Date, (4) payments required by the terms of the joint lease among the
Corporation, SCMC and the landlord thereunder for the Corporation's corporate
headquarters located at 150 East 58th Street, New York, New York and any
agreements directly related thereto, in each case, as the same are in effect on
the Initial Issue Date, (5) payments made by the Corporation to SCMC for the
facilities maintenance and other services and reimbursements pursuant to the
Shared Facilities Agreement, (6) payments and other transactions by the
Corporation pursuant to the Management Termination Agreements and (7) any
Restricted Payments that are permitted by Section 8(a) hereof and any Permitted
Investments, in each case, shall not be deemed to be Affiliate Transactions.
(e) Payments for Consent. Neither the Corporation nor any of
its Subsidiaries shall, directly or indirectly, pay or cause to be paid any
consideration, whether by way of dividend or other distribution, fee or
otherwise, to any Holder of any Series E Preferred Stock for or as an
inducement to any consent, waiver or amendment of any of the terms or
provisions of this Certificate of Designations or the Series E Preferred Stock
unless such consideration is
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offered to be paid and is paid to all Holders of the Series E Preferred Stock
that consent, waive or agree to amend in the time frame set forth in the
solicitation documents relating to such consent, waiver or agreement.
(f) Reports.
(i) Whether or not required by the rules and
regulations of the Securities and Exchange Commission (the
"Commission"), so long as any shares of Series E Preferred Stock are
outstanding, the Corporation shall furnish to the Holders of Series E
Preferred Stock (i) all quarterly and annual financial information
that would be required to be contained in a filing with the Commission
on Forms 10-Q and 10-K if the Corporation were required to file such
Forms, including "Management's Discussion and Analysis of Financial
Condition and Results of Operations" and, with respect to the annual
information only, a report thereon by the Corporation's certified
independent accountants and (ii) all current reports that would be
required to be filed with the Commission on Form 8-K if the
Corporation were required to file such reports. In addition, whether
or not required by the rules and regulations of the Commission, the
Corporation shall file a copy of all such information and reports with
the Commission for public availability (unless the Commission will not
accept such a filing) and make such information available to
securities analysts and prospective investors upon request.
(ii) The Corporation shall deliver to the Holders,
within 90 days after the end of each fiscal year, an Officers'
Certificate stating that a review of the activities of the Corporation
and its Subsidiaries during the preceding fiscal year has been made
under the supervision of the signing officers with a view to
determining whether the Corporations has kept, observed, performed and
fulfilled its obligations under this Certificate of Designations and
further stating, as to each such officer signing such certificate,
that to the best of his or her knowledge the Corporation has kept,
observed, performed and fulfilled each and every covenant contained in
this Certificate of Designations and is not in default in the
performance or observance of any of the terms, provisions and
conditions of this Certificate of Designations (or, if any such
default shall have occurred, describing all such defaults of which he
or she may have knowledge and what action the Corporation is taking or
proposes to take with respect thereto) and that to the best of his or
her knowledge no event has occurred and remains in existence by reason
of which payments on account of the Liquidation Preference of or
dividends, if any, on the Series E Preferred Stock is prohibited or if
such event has occurred, a description of the event and what action
the Corporation is taking or proposes to take with respect thereto.
(iii) So long as not contrary to the then current
recommendations of the American Institute of Certified Public
Accountants, the year-end financial statements delivered pursuant to
Section 8(f)(i) above shall be accompanied by a written statement of
the Corporation's independent public accountants (who shall be a firm
of established national reputation) that in making the examination
necessary for certification of such
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financial statements, nothing has come to their attention that would
lead them to believe that the Corporation has violated any provisions
of this Certificate of Designations or, if any such violation has
occurred, specifying the nature and period of existence thereof, it
being understood that such accountants shall not be liable directly or
indirectly to any Person for any failure to obtain knowledge of any
such violation.
(iv) The Corporation shall, so long as any of the
shares of Series E Preferred Stock are outstanding, deliver to the
Holders, forthwith upon any Executive Officer of the Corporation
becoming aware of any default under this Certificate of Designations,
an Officers' Certificate specifying such default and what action the
Corporation is taking or proposes to take with respect thereto.
(g) Conflicts with By-laws. If any provisions of the
Corporation's By-laws conflict in any way with this Certificate of
Designations, the Corporation shall, so long as any of the shares of Series E
Preferred Stock are outstanding, take all necessary actions to amend such
By-laws and thereby resolve the conflict.
9. Payment.
(a) All amounts payable in cash with respect to the Series E
Preferred Stock shall be payable in United States dollars at the office or
agency of the Corporation maintained for such purpose within the City and State
of New York or, at the option of the Corporation, payment of dividends may be
made by check mailed to the Holders of the Series E Preferred Stock at their
respective addresses set forth in the register of Holders of Series E Preferred
Stock maintained by the Transfer Agent, provided that all cash payments with
respect to the Global Shares (as defined below) and shares of Series E
Preferred Stock the Holders of which have given wire transfer instructions to
the Corporation will be required to be made by wire transfer of immediately
available funds to the accounts specified by the Holders thereof. Unless
otherwise designated by the Corporation, the Corporation's office or agency in
New York shall be the office of the Paying Agent maintained for such purpose.
(b) Any payment on the Series E Preferred Stock due on any
day that is not a Business Day need not be made on such day, but may be made on
the next succeeding Business Day with the same force and effect as if made on
such due date.
(c) The Corporation has initially appointed the Transfer
Agent to act as the Paying Agent. The Corporation may at any time terminate the
appointment of any Paying Agent and appoint additional or other Paying Agents,
provided that until the Series E Preferred Stock has been delivered to the
Corporation for cancellation, or moneys sufficient to pay the Liquidation
Preference and accrued dividends on the Series E Preferred Stock have been made
available for payment and either paid or returned to the Corporation as
provided in this Certificate of Designations, it shall maintain an office or
agency in the Borough of Manhattan, The City of New York for surrender of
Series E Preferred Stock.
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(d) Dividends payable on the Series E Preferred Stock on any
redemption date or repurchase date that is a Dividend Payment Date will be paid
to the Holders of record as of the immediately preceding Record Date.
(e) All moneys deposited with any Paying Agent or then held
by the Corporation in trust for the payment of the Liquidation Preference and
dividends on any shares of Series E Preferred Stock which remain unclaimed at
the end of two years after such payment has become due and payable will be
repaid to the Corporation, and the Holder of such shares of Series E Preferred
Stock will thereafter look only to Corporation for payment thereof.
10. Officers' Certificate.
Each Officers' Certificate provided for in this Certificate
of Designations shall include:
(a) a statement that the officer making such
certificate or opinion has read such covenant or condition;
(b) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(c) a statement that, in the opinion of such officer,
he or she has made such examination or investigation as is necessary
to enable him to express an informed opinion as to whether or not such
covenant or condition has been satisfied; and
(d) a statement as to whether or not, in the opinion of
such officer, such condition or covenant has been satisfied.
11. Exclusion of Other Rights.
Except as may otherwise be required by law, the shares of
Series E Preferred Stock shall not have any voting powers, preferences and
relative, participating, optional or other special rights, other than those
specifically set forth in this Certificate of Designations (as such Certificate
of Designations may be amended from time to time) and in the Certificate of
Incorporation. The shares of Series E Preferred Stock shall have no preemptive
or subscription rights.
12. Headings of Subdivisions.
The headings of the various subdivisions hereof are for
convenience of reference only and shall not affect the interpretation of any of
the provisions hereof.
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13. Severability of Provisions.
If any voting powers, preferences and relative,
participating, optional and other special rights of the Series E Preferred
Stock and qualifications, limitations and restrictions thereof set forth in
this resolution (as such resolution may be amended from time to time) is
invalid, unlawful or incapable of being enforced by reason of any rule of law
or public policy, all other voting powers, preferences and relative,
participating, optional and other special rights of Series E Preferred Stock
and qualifications, limitations and restrictions thereof set forth in this
resolution (as so amended) which can be given effect without the invalid,
unlawful or unenforceable voting powers, preferences and relative,
participating, optional and other special rights of Series E Preferred Stock
and qualifications, limitations and restrictions thereof shall, nevertheless,
remain in full force and effect, and no voting powers, preferences and
relative, participating, optional or other special rights of Series E Preferred
Stock and qualifications, limitations and restrictions thereof herein set forth
shall be deemed dependent upon any other such voting powers, preferences and
relative, participating, optional or other special rights of Series E Preferred
Stock and qualifications, limitations and restrictions thereof unless so
expressed herein.
14. Form of Securities.
(a) The Series E Preferred Stock shall initially be issued in
the form of one or more Global Preferred Shares (the "Global Shares"). The
Global Shares shall be deposited on the Initial Issue Date with, or on behalf
of, The Depository Trust Company (the "Depository") and registered in the name
of Cede & Co., as nominee of the Depository (such nominee being referred to as
the "Global Share Holder").
(b) So long as the Global Share Holder is the registered
owner of any Series E Preferred Stock, the Global Share Holder will be
considered the sole Holder under this Certificate of Designations of any shares
of Series E Preferred Stock evidenced by the Global Shares. Beneficial owners
of shares of Series E Preferred Stock evidenced by the Global Shares shall not
be considered the owners or Holders thereof under this Certificate of
Designations for any purpose. The Corporation shall not have any responsibility
or liability for any aspect of the records of the Depositary relating to the
Series E Preferred Stock.
(c) Payments in respect of the Liquidation Preference,
dividends on any Series E Preferred Stock registered in the name of the Global
Share Holder on the applicable record date shall be payable by the Corporation
to or at the direction of the Global Share Holder in its capacity as the
registered Holder under this Certificate of Designations. The Corporation may
treat the persons in whose names Series E Preferred Stock, including the Global
Shares, are registered as the owners thereof for the purpose of receiving such
payments. The Corporation does not have nor will have any responsibility or
liability for the payments of such amounts to beneficial holders of Series E
Preferred Stock.
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(d) Any person having a beneficial interest in a Global Share
may, upon request to the Corporation, exchange such beneficial interest for
Series E Preferred Stock in the form of registered definitive certificates
("Certificated Securities"). Upon any such issuance, the Corporation shall
register such Certificated Securities in the name of, and cause the same to be
delivered to, such person or persons (or the nominee of any thereof). If (i)
the Corporation notifies the Holders in writing that the Depositary is no
longer willing or able to act as a depositary and the Corporation is unable to
locate a qualified successor within 90 days or (ii) the Corporation, at its
option, notifies the Holders in writing that it elects to cause the issuance of
Series E Preferred Stock in the form of Certificated Securities, then, upon
surrender by the Global Share Holder of its Global Shares, Series E Preferred
Stock in such form will be issued to each person that the Global Share Holder
and the Depositary identify as being the beneficial owner of the related Series
E Preferred Stock.
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IN WITNESS WHEREOF, the Corporation has caused this
certificate to be duly executed by Robert F.X. Sillerman, Executive Chairman,
and attested by Howard J. Tytel, its secretary, this 23rd day of January, 1997.
SFX BROADCASTING, INC.
By: /s/ Robert F.X. Sillerman
-------------------------
Robert F.X. Sillerman
Executive Chairman
ATTEST:
By: /s/ Howard J. Tytel
------------------------
Howard J. Tytel
Secretary
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INDENTURE dated as of _______ __, ____ among SFX Broadcasting, Inc.,
a Delaware corporation (the "Company") and ____________________, a __________
banking corporation, as trustee (the "Trustee").
The Company and the Trustee agree as follows for the benefit of each
other and for the equal and ratable benefit of the Holders of the 125/8% Senior
Subordinated Exchange Debentures due 2006 of the Company:
ARTICLE 1
DEFINITIONS AND INCORPORATION
BY REFERENCE
SECTION 1.01. DEFINITIONS.
"Acquired Debt" means, with respect to any specified Person, (i)
Indebtedness of any other Person existing at the time such other Person is
merged with or into or became a Subsidiary of such specified Person, including,
without limitation, Indebtedness incurred in connection with, or in
contemplation of, such other Person merging with or into or becoming a
Subsidiary of such specified Person, and (ii) Indebtedness secured by a Lien
encumbering any asset acquired by such specified Person.
"Advertising Business" means any business deriving substantially all
of its revenues from the (i) sale of advertisements and (ii) sale of products
or provision of services to any business described in clause (i) above.
"Affiliate" of any specified Person means any other Person directly
or indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For purposes of this definition, "control"
(including, with correlative meanings, the terms "controlling," "controlled by"
and "under common control with"), as used with respect to any Person, shall
mean the possession, directly or indirectly, of the power to direct or cause
the direction of the management or policies of such Person, whether through the
ownership of voting securities, by agreement or otherwise; provided that
beneficial ownership of 10% or more of the voting securities of a Person shall
be deemed to be control.
"Agent" means any Registrar, Paying Agent or co-registrar.
"Asset Sale" means (i) the sale, lease, conveyance or other
disposition of any assets (including without limitation, by way of a sale and
leaseback or pursuant to an LMA or similar arrangement); provided that the
sale, lease, conveyance or other disposition of all or substantially all of the
assets of the Company and its Subsidiaries taken as a whole will be governed by
Section 4.11 hereof and/or Section 5.01 hereof and not by Section 4.13 hereof
and (ii) the issue or sale by the Company or any of its Subsidiaries of Equity
Interests of any of the Company's Subsidiaries, in the case of either clause
(i) or (ii), whether in a single transaction or a series of related
transactions (a) that have a Fair Market Value in excess of $5.0 million or (b)
for aggregate net proceeds in excess of $5.0 million. Notwithstanding the
foregoing: (i) the Pending Dispositions, the Chancellor Exchange and the CBS
Exchange, in each case as described in the Prospectus Supplement dated January
17, 1997, in all material respects, (ii) a transfer
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of assets by the Company to a Wholly Owned Subsidiary or by a Wholly Owned
Subsidiary to the Company or to another Wholly Owned Subsidiary, (iii) an
issuance of Equity Interests by a Wholly Owned Subsidiary to the Company or to
another Wholly Owned Subsidiary, (iv) a Restricted Payment that is permitted by
Section 4.07 hereof and (v) sales of obsolete equipment in the ordinary course
of business, will not be deemed to be Asset Sales.
"Attributable Debt" in respect of a sale and leaseback transaction
means, at the time of determination, the present value (discounted at the rate
of interest implicit in such transaction, determined in accordance with GAAP)
of the obligation of the lessee for net rental payments during the remaining
term of the lease included in such sale and leaseback transaction (including
any period for which such lease has been extended or may, at the option of the
lessor, be extended).
"Bank Facilities" means, with respect to the Company, one or more
debt facilities (including, without limitation, the Credit Agreement) or
commercial paper facilities with banks or other institutional lenders providing
for revolving credit loans, term loans, receivables financing (including
through the sale of receivables to such lenders or to special purpose entities
formed to borrow from such lenders against such receivables ) or letters of
credit, in each case, as amended, restated, modified, renewed, refunded,
replaced or refinanced in whole or in part from time to time. Indebtedness
under Bank Facilities outstanding on the date on which the Series E Preferred
Stock is first issued under the Certificate of Designations relating to the
Series E Preferred Stock shall be deemed to have been incurred on such date in
reliance on the exception provided by clause (i) under Section 8(b) of such
Certificate of Designations.
"Bankruptcy Law" means Title 11, U.S. Code or any similar federal
or state law for the relief of debtors.
"Board" or "Board of Directors" means the Board of Directors of the
Company, the members of which are elected by the equity holders of the Company.
"Broadcast Business" means any business, the majority of whose
revenues are derived from the broadcast of radio programming.
"Business Day" means each Monday, Tuesday, Wednesday, Thursday and
Friday which is not a Legal Holiday.
"Capital Lease Obligation" means, at the time any determination
thereof is to be made, the amount of the liability in respect of a capital
lease that would at such time be required to be capitalized on a balance sheet
in accordance with GAAP.
"Capital Stock" means (i) in the case of a corporation, corporate
stock, (ii) in the case of an association or business entity, any and all
shares, interests, participations, rights or other equivalents (however
designated) of corporate stock, (iii) in the case of a partnership, partnership
interests (whether general or limited) and (iv) any other interest or
participation that confers on a Person the right to receive a share of the
profits and losses of, or distributions of assets of, the issuing Person.
"Cash Equivalents" means (i) United States dollars, (ii) securities
issued or directly and fully guaranteed or insured by the United States
government or any agency or instrumentality thereof having maturities of not
more than six months from the date of acquisition, (iii) certificates of
deposit and
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<PAGE>
eurodollar and time deposits with maturities of six months or less from the
date of acquisition, bankers' acceptances with maturities not exceeding six
months and overnight bank deposits, in each case with any lender party to the
Credit Agreement or with any domestic commercial bank having capital and
surplus in excess of $500.0 million and a Thomson Bank Watch Rating of "B" or
better, (iv) repurchase obligations with a term of not more than seven days for
underlying securities of the types described in clauses (ii) and (iii) above
entered into with any financial institution meeting the qualifications
specified in clause (iii) above and (v) commercial paper having the highest
rating obtainable from Moody's Investors Service, Inc. or Standard & Poor's
Corporation and in each case maturing within six months after the date of
acquisition.
"CBS Exchange" means the pending exchange by the Company of radio
station WHFS-FM, operating in Washington, D.C./Baltimore, Maryland, for KTXQ-FM
and KRRW-FM, both operating in Dallas, Texas, and owned by CBS, Inc.
"Chancellor Exchange" means the pending exchange of the Company's
radio stations WBAB- FM, WHFM-FM, WBLI-FM and WGBB-AM, each operating on Long
Island, New York, for WFYV-FM and WAPE-FM, both operating in Jacksonville,
Florida, and a payment to the Company of $11.0 million in cash.
"Change of Control" means the occurrence of any of the following:
(i) the sale, lease, transfer, conveyance or other disposition (other than by
way of merger or consolidation), in one or a series of related transactions, of
all or substantially all of the assets of the Company and its Subsidiaries
taken as a whole to any "person" (as such term is used in Section 13(d)(3) of
the Exchange Act) other than the Principal or his Related Parties, (ii) the
adoption of a plan relating to the liquidation or dissolution of the Company,
(iii) the consummation of any transaction (including, without limitation, any
merger or consolidation) the result of which is that any "person" (as defined
above), other than the Principal and his Related Parties, becomes the
"beneficial owner" (as such term is defined in Rule 13d-3 and Rule 13d-5 under
the Exchange Act, except that a person shall be deemed to have "beneficial
ownership" of all securities that such person has the right to acquire, whether
such right is exercisable immediately or only after the passage of time, upon
the happening of an event or otherwise), directly or indirectly, of Voting
Stock of the Company having more than 35% of the combined voting power of all
classes of Voting Stock of the Company then outstanding, or (iv) the first day
on which a majority of the members of the Board of Directors of the Company are
not Continuing Directors.
"Class A Common Stock" means the Class A Common Stock, par value
$.01 per share, of the Company.
"Class B Common Stock" means the Class B Common Stock, par value
$.01 per share, of the Company.
"Closing Date" means the date on which the shares of Series E
Preferred Stock are first issued.
"Common Equity" means all shares now or hereafter authorized of any
class of common stock of the Company, including the Class A Common Stock and
Class B Common Stock, and any other stock of the Company, howsoever designated,
authorized after the Closing Date, that have the right (subject always to prior
rights of any class or series of preferred stock) to participate in the
distribution of the assets and earnings of the Company without limit as to per
share amount.
3
<PAGE>
"Company" means SFX Broadcasting, Inc., a Delaware corporation.
"Consolidated Cash Flow" means, with respect to any Person for any
period, the Consolidated Net Income of such Person for such period plus (i) an
amount equal to any extraordinary loss plus any net loss realized in connection
with an Asset Sale by such Person or any of its Subsidiaries during such period
(to the extent such losses were deducted in computing such Consolidated Net
Income), plus (ii) provision for taxes based on income or profits of such
Person and its Subsidiaries for such period, to the extent that such provision
for taxes was included in computing such Consolidated Net Income, plus (iii)
Consolidated Interest Expense of such Person for such period to the extent any
such Consolidated Interest Expense was deducted in computing such Consolidated
Net Income, plus (iv) depreciation, amortization (including amortization of
goodwill and other intangibles but excluding amortization of prepaid cash
expenses that were paid in a prior period) and other non-cash charges
(excluding any such non-cash charge to the extent that it represents an accrual
of or reserve for cash charges in any future period) of such Person and its
Subsidiaries for such period to the extent that such depreciation, amortization
and other non-cash charges were deducted in computing such Consolidated Net
Income, less (v) all non-cash items increasing Consolidated Net Income for such
period (excluding any such non-cash income to the extent it represents an
accrual of cash income in any future period), in each case, on a consolidated
basis and determined in accordance with GAAP.
"Consolidated Indebtedness" of any Person as of any date of
determination means the sum (without duplication) of (i) the total amount of
Indebtedness and Attributable Debt of such Person and its Subsidiaries, plus
(ii) the total amount of other Indebtedness shown on the balance sheet of the
primary obligor on such Indebtedness, to the extent that such Indebtedness has
been Guaranteed by such Person or one of its Subsidiaries, plus (iii) the
aggregate liquidation value or redemption amount (if larger) of all
Disqualified Stock of such Person and all preferred stock of Subsidiaries of
such Person, in each case, determined on a consolidated basis in accordance
with GAAP.
"Consolidated Interest Expense" means, with respect to any Person
for any period, the sum of (i) the consolidated interest expense of such Person
and its Subsidiaries for such period, whether paid or accrued (including,
without limitation, amortization of original issue discount, non-cash interest
payments, the interest component of any deferred payment obligations, the
interest component of all payments associated with Capital Lease Obligations,
imputed interest with respect to Attributable Debt, commissions, discounts and
other fees and charges incurred in respect of letter of credit or bankers'
acceptance financings, and net payments (if any) pursuant to Hedging
Obligations) and (ii) the consolidated interest expense of such Person and its
Subsidiaries that was capitalized during such period, and (iii) any interest
expense on Indebtedness of another Person that is guaranteed by such Person or
one of its Subsidiaries or secured by a Lien on assets of such Person or one of
its Subsidiaries (whether or not such Guarantee or Lien is called upon) and
(iv) the product of (a) all cash dividend payments (and non-cash dividend
payments in the case of a Person that is a Subsidiary) on any series of
preferred stock of such Person, times (b) a fraction, the numerator of which is
one and the denominator of which is one minus the then current combined
federal, state and local statutory tax rate of such Person, expressed as a
decimal, in each case, on a consolidated basis and in accordance with GAAP.
"Consolidated Net Income" means, with respect to any Person for any
period, the aggregate of the Net Income of such Person and its Subsidiaries for
such period, determined on a consolidated basis in accordance with GAAP;
provided that (i) the Net Income (but not loss) of any Person that is not a
Subsidiary or that is accounted for by the equity method of accounting shall be
included only to the extent
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<PAGE>
of the amount of dividends or distributions paid in cash to the referent Person
or to a Wholly Owned Subsidiary thereof, (ii) the Net Income of any Subsidiary
shall be excluded to the extent that the declaration or payment of dividends or
similar distributions by that Subsidiary of that Net Income is not at the date
of determination permitted without any prior governmental approval (that has
not been obtained) or, directly or indirectly, by operation of the terms of its
charter or any agreement, instrument, judgment, decree, order, statute, rule or
governmental regulation applicable to that Subsidiary or its stockholders,
(iii) the Net Income of any Person acquired in a pooling of interests
transaction for any period prior to the date of such acquisition shall be
excluded and (iv) the cumulative effect of a change in accounting principles
shall be excluded.
"Consolidated Net Worth" means, with respect to any Person as of any
date, the sum of (i) the consolidated equity of the common stockholders of such
Person and its consolidated Subsidiaries as of such date plus (ii) the
respective amounts reported on such Person's balance sheet as of such date with
respect to any series of Preferred Stock (other than Disqualified Stock) that
by its terms is not entitled to the payment of dividends unless such dividends
may be declared and paid only out of net earnings in respect of the year of
such declaration and payment, but only to the extent of any cash received by
such Person upon issuance of such Preferred Stock, less (x) all write-ups
(other than write-ups resulting from foreign currency translations and
write-ups of tangible assets of a going concern business made within 12 months
after the acquisition of such business) subsequent to the date hereof in the
book value of any asset owned by such Person or a consolidated Subsidiary of
such Person, (y) all investments as of such date in unconsolidated Subsidiaries
and in Persons that are not Subsidiaries (except, in each case, Permitted
Investments) and (z) all unamortized debt discount and expense and unamortized
deferred charges as of such date, all of the foregoing determined in accordance
with GAAP.
"Continuing Directors" means, as of any date of determination, any
member of the Board of Directors of the Company who (i) was a member of such
Board of Directors on the date hereof or (ii) was nominated for election or
elected to such Board of Directors with the approval of a majority of the
Continuing Directors who were members of such Board at the time of such
nomination or election.
"Corporate Trust Office of the Trustee" shall be at the address of
the Trustee specified in Section 11.02 hereof or such other address as to which
the Trustee may give notice to the Company.
"Credit Agreement" means that certain credit agreement by and among
the Company, the Company's Subsidiaries, as guarantors, The Bank of New York,
as agent, and the lenders party thereto, providing for $225 million of
revolving credit borrowings, including any related notes, guarantees,
collateral documents, and other agreements executed in connection therewith,
and in each case as amended, modified, renewed, refunded, replaced or
refinanced from time to time.
"Debt to Cash Flow Ratio" means, as of any date of determination,
the ratio of (a) the Consolidated Indebtedness as of such date to (b) the
Consolidated Cash Flow of the Company and its Subsidiaries on a consolidated
basis for the four most recent full fiscal quarters ending immediately prior to
such date for which internal financial statements are available. For purposes
of calculating Consolidated Cash Flow for the computation referred to above,
(i) acquisitions that have been made by the Company or any of its Subsidiaries,
including through mergers or consolidations and including any related financing
transactions, during the four-quarter reference period or subsequent to such
reference period and on or prior to the date on which such Ratio is being
calculated (the "Calculation Date") shall be deemed to have occurred on the
first day of the four-quarter reference period and Consolidated Cash Flow for
such reference period shall be calculated without giving effect to clause (iii)
of the proviso set forth in the
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definition of Consolidated Net Income, and (ii) the Consolidated Cash Flow
attributable to discontinued operations, as determined in accordance with GAAP,
and operations or businesses disposed of prior to the Calculation Date, shall
be excluded.
"Default" means any event that is or with the passage of time or the
giving of notice or both would be an Event of Default.
"Depositary" means, with respect to the Exchange Debentures issuable
or issued in whole or in part in global form, the Person specified in Section
2.03 hereof as the Depositary with respect to the Exchange Debentures, until a
successor shall have been appointed and become such pursuant to the applicable
provision of this Indenture, and, thereafter, "Depositary" shall mean or
include such successor.
"Disqualified Stock" means any Capital Stock that, by its terms (or
by the terms of any security into which it is convertible or for which it is
exchangeable at the option of the holder thereof), or upon the happening of any
event, matures or is mandatorily redeemable, pursuant to a sinking fund
obligation or otherwise, or redeemable at the option of the holder thereof, in
whole or in part, on or prior to the date that is 91 days after the date on
which the Exchange Debentures mature.
"Equity Interests" means Capital Stock and all warrants, options or
other rights to acquire Capital Stock (but excluding any debt security that is
convertible into, or exchangeable for, Capital Stock).
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exchange Debenture Custodian" means the Trustee, as custodian with
respect to the Exchange Debentures in global form, or any successor entity
thereto.
"Exchange Debentures" means the Company's Senior 125/8% Subordinated
Exchange Debentures due 2006 issuable in exchange for the Company's Series E
Preferred Stock.
"Existing Indebtedness" means all Indebtedness of the Company and
its Subsidiaries (other than Indebtedness under the Credit Agreement) in
existence on the Closing Date, until such amounts are repaid.
"Existing MMR Indebtedness" means all Indebtedness of MMR and its
Subsidiaries in existence at the closing of the MMR Merger, until such amounts
are repaid.
"Fair Market Value" means, with respect to any asset or property,
the sale value that would be obtained in an arm's length transaction between an
informed and willing seller under no compulsion to sell and an informed and
willing buyer under no compulsion to buy.
"GAAP" means generally accepted accounting principles set forth in
the opinions and pronouncements of the Accounting Principles Board of the
American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as have been approved by a significant segment
of the accounting profession, which are in effect on the date hereof.
"Global Exchange Debenture" means an Exchange Debenture that
contains the additional language referred to in footnote 1 to the form of the
Exchange Debenture attached hereto as Exhibit A.
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"Government Securities" means direct obligations of, or obligations
guaranteed by, the United States of America for the payment of which
obligations or guarantee the full faith and credit of the United States of
America is pledged.
"Guarantee" means a guarantee (other than by endorsement of
negotiable instruments for collection in the ordinary course of business),
direct or indirect, in any manner (including, without limitation, letters of
credit and reimbursement agreements in respect thereof), of all or any part of
any Indebtedness.
"Hedging Obligations" means, with respect to any Person, the
obligations of such Person under (i) interest rate swap agreements, interest
rate cap agreements and interest rate collar agreements and (ii) other
agreements or arrangements designed to protect such Person against fluctuations
in interest rates.
"Holder" means a Person in whose name an Exchange Debenture is
registered.
"Indebtedness" means, with respect to any Person, without
duplication, any indebtedness of such Person, whether or not contingent, in
respect of borrowed money or evidenced by bonds, notes, debentures or similar
instruments or letters of credit (or reimbursement agreements in respect
thereof) or banker's acceptances or representing Capital Lease Obligations or
the balance deferred and unpaid of the purchase price of any property or
payment obligations under an LMA or representing any Hedging Obligations,
except any such balance that constitutes an accrued expense or trade payable,
if and to the extent any of the foregoing (other than letters of credit and
Hedging Obligations) would appear as a liability upon a balance sheet of such
Person prepared in accordance with GAAP, as well as all indebtedness of others
secured by a Lien on any asset of such Person (whether or not such indebtedness
is assumed by such Person) and, to the extent not otherwise included, the
Guarantee by such Person of any indebtedness of any other Person.
"Indenture" means this Indenture, as amended or supplemented from
time to time.
"Investments" means, with respect to any Person, all investments by
such Person in other Persons (including Affiliates) in the form of direct or
indirect loans (including guarantees of Indebtedness or other obligations),
advances or capital contributions (excluding commission, travel and similar
advances to officers and employees made in the ordinary course of business),
purchases or other acquisitions for consideration of Indebtedness, Equity
Interests or other securities, together with all items that are or would be
classified as investments on a balance sheet prepared in accordance with GAAP;
provided that an acquisition of assets, Equity Interests or other securities by
the Company for consideration consisting of common equity securities of the
Company shall not be deemed to be an Investment. If the Company or any
Subsidiary of the Company sells or otherwise disposes of any Equity Interests
of any direct or indirect Subsidiary of the Company such that, after giving
effect to any such sale or disposition, such Person is no longer a Subsidiary
of the Company, the Company shall be deemed to have made an Investment on the
date of any such sale or disposition equal to the Fair Market Value of the
Equity Interests of such Subsidiary not sold or disposed of.
"Legal Holiday" means a Saturday, a Sunday or a day on which banking
institutions in the City of New York or at a place of payment are authorized by
law, regulation or executive order to remain closed. If a payment date is a
Legal Holiday at a place of payment, payment may be made at that place
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on the next succeeding day that is not a Legal Holiday, and no interest shall
accrue for the intervening period.
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset,
whether or not filed, recorded or otherwise perfected under applicable law
(including any conditional sale or other title retention agreement, any lease
in the nature thereof, any option or other agreement to sell or give a security
interest in and any filing of or agreement to give any financing statement
under the Uniform Commercial Code (or equivalent statutes) of any
jurisdiction).
"Local Marketing Agreement" or "LMA" means a local marketing
arrangement, sale agreement, time brokerage agreement, management agreement or
similar arrangement pursuant to which a Person, subject to customary preemption
rights and other limitations (i) obtains the right to sell at least a majority
of the advertising inventory of a radio station of which a third party is the
licensee, (ii) obtains the right to broadcast programming and sell advertising
time during a majority of the air time of a radio station or (iii) manages the
selling operations of a radio station with respect to at least a majority of
the advertising inventory of such station.
"Management Termination Agreements" means each of (i) the
termination agreement between the Company and R. Steven Hicks, dated April 16,
1996, and (ii) the amendment to the employment agreement between the Company
and D. Geoffrey Armstrong, effective as of April 15, 1996, in each case, as in
effect on the Closing Date.
"Material Broadcast License" means one or more authorizations issued
by the Federal Communications Commission for the operation of AM or FM radio
stations that individually or collectively are material to the financial
condition, results of operations or prospects of the Company and its
Subsidiaries taken as a whole.
"MMR" means Multi-Market Radio, Inc., a Delaware corporation.
"MMR Merger" means the merger of SFX Merger Company, a Wholly Owned
Subsidiary of the Company, with and into MMR, pursuant to which MMR became a
Wholly Owned Subsidiary of the Company.
"Net Income" means, with respect to any Person, the net income
(loss) of such Person, determined in accordance with GAAP and before any
reduction in respect of preferred stock dividends, excluding, however, (i) any
gain (but no loss), together with any related provision for taxes on such gain
(but not loss), realized in connection with (a) any Asset Sale (including,
without limitation, dispositions pursuant to sale and leaseback transactions)
or (b) the disposition of any securities by such Person or any of its
Subsidiaries or the extinguishment of any Indebtedness of such person or any of
its Subsidiaries and (ii) any extraordinary or nonrecurring gain (but not
loss), together with any related provision for taxes on such extraordinary or
nonrecurring gain (but not loss).
"Net Proceeds" means the aggregate cash proceeds received by the
Company or any of its Subsidiaries in respect of any Asset Sale (including,
without limitation, any cash received upon the sale or other disposition of any
non-cash consideration received in any Asset Sale), net of the direct costs
relating to such Asset Sale (including, without limitation, legal, accounting
and investment banking fees, and sales commissions) and any relocation expenses
incurred as a result thereof, taxes paid or payable as
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a result thereof (after taking into account any available tax credits or
deductions and any tax sharing arrangements), amounts required to be applied to
the repayment of Indebtedness (other than Senior Debt) secured by a Lien on the
asset or assets that were the subject of such Asset Sale and any reserve for
adjustment in respect of the sale price of such asset or assets established in
accordance with GAAP.
"Obligations" means any principal, interest, penalties, fees
(including, but not limited to, reasonable fees of counsel), indemnifications,
reimbursements, damages and other liabilities payable under the documentation
governing any Indebtedness.
"Officer" means, (a) with respect to any Person that is a
corporation, the Chairman of the Board, the Chief Executive Officer, the
President, the Chief Operating Officer, the Chief Financial Officer, the
Treasurer, any Assistant Treasurer, the Controller, the Secretary or any
Vice-President of such Person and (b) with respect to any other Person, the
individuals selected by the Board of such Person to perform functions similar
to those of the officers listed in clause (a).
"Officers' Certificate" means a certificate signed on behalf of the
Company by two Officers of the Company, one of whom must be the Chief Executive
Officer, President or Vice President and one of whom must be the Chief
Financial Officer, the Treasurer or the controller of the Company that meets
the requirements of Section 11.05 hereof.
"Opinion of Counsel" means an opinion from legal counsel who is
reasonably acceptable to the Trustee, that meets the requirements of Section
11.05 hereof. The counsel may be an employee of or counsel to the Company, any
Subsidiary of the Company or the Trustee.
"Pari Passu Debt" means (i) the Senior Subordinated Notes and (ii)
all of the Indebtedness that ranks pari passu in right of payment with the
Exchange Debentures.
"Pending Dispositions" means, collectively, (i) the pending sale of
KOLL-FM, operating in Little Rock, Arkansas, and (ii) the pending sale of
WYAK-FM and WMYB-FM, both operating in Myrtle Beach, South Carolina.
"Permitted Investments" means (a) any Investment in the Company or
in a Subsidiary of the Company; (b) any Investment in Cash Equivalents; (c) any
Investment by the Company or any Subsidiary of the Company in a Person, if
after such Investment (i) such Person becomes a Subsidiary of the Company or
(ii) such Person is merged, consolidated or amalgamated with or into, or
transfers or conveys substantially all of its assets to, or is liquidated into,
the Company or a Subsidiary of the Company; (d) any Restricted Investment made
as a result of the receipt of non-cash consideration from an Asset Sale that
was made pursuant to and in compliance with Section 4.13 hereof; (e) any
obligations or shares of Capital Stock received in connection with or as a
result of a bankruptcy, workout or reorganization of the issuer of such
obligations or shares of Capital Stock; (f) any Investment received
involuntarily; (g) Investments in any Person (other than an Affiliate of the
Company that is not also a Subsidiary of the Company) engaged in a Broadcast
Business or an Advertising Business which Investments have an aggregate Fair
Market Value (measured on the date each such Investment was made and without
giving effect to subsequent changes in value), when taken together with all
other Investments made pursuant to this clause (g) that are at the time
outstanding, not to exceed $20.0 million and (h) other Investments in any
Person (other than an Affiliate of the Company that is not also a Subsidiary of
the Company) having an aggregate Fair Market Value (measured on the date each
such Investment was made and without giving
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effect to subsequent changes in value), when taken together with all other
Investments made pursuant to this clause (h) that are at the time outstanding,
not to exceed $15.0 million.
"Permitted Liens" means (i) Liens securing Senior Debt of the
Company or securing Indebtedness of any Subsidiary that, in either case, was
permitted by the terms of this Indenture to be incurred; (ii) Liens in favor of
the Company; (iii) Liens on property of a Person existing at the time such
Person is merged into or consolidated with the Company or any Subsidiary of the
Company; provided that such Liens were in existence prior to the contemplation
of such merger or consolidation and do not extend to any assets other than
those of the Person merged into or consolidated with the Company; (iv) Liens on
property existing at the time of acquisition thereof by the Company or any
Subsidiary of the Company, provided that such Liens were in existence prior to
the contemplation of such acquisition and do not extend to any assets other
than such assets so acquired; (v) Liens existing on the Closing Date; (vi)
Liens for taxes, assessments or governmental charges or claims that are not yet
delinquent or that are being contested in good faith by appropriate proceedings
promptly instituted and diligently concluded, provided that any reserve or
other appropriate provision as shall be required in conformity with GAAP shall
have been made therefor; and (vii) Liens incurred in the ordinary course of
business of the Company or any Subsidiary of the Company with respect to
obligations that do not exceed $10.0 million at any one time outstanding and
that (a) are not incurred in connection with the borrowing of money or the
obtaining of advances or credit (other than trade credit in the ordinary course
of business) and (b) do not in the aggregate materially detract from the value
of the property or materially impair the use thereof in the operation of
business by the Company or such Subsidiary.
"Permitted Refinancing Debt" means any Indebtedness of the Company
or any of its Subsidiaries issued in exchange for, or the net proceeds of which
are used to extend, refinance, renew, replace, defease or refund other
Indebtedness of the Company or any of its Subsidiaries; provided that: (i) the
principal amount (or accreted value, if applicable) of such Permitted
Refinancing Indebtedness does not exceed the principal amount (or accreted
value, if applicable) of the Indebtedness so extended, refinanced, renewed,
replaced, defeased or refunded (plus the amount of reasonable expenses incurred
in connection therewith); (ii) such Permitted Refinancing Debt has a final
maturity date later than the final maturity date of, and has a Weighted Average
Life to Maturity equal to or greater than the Weighted Average Life to Maturity
of, the Indebtedness being extended, refinanced, renewed, replaced, defeased or
refunded; (iii) if the Indebtedness being extended, refinanced, renewed,
replaced, defeased or refunded is subordinated in right of payment to the
Exchange Debentures, such Permitted Refinancing Debt has a final maturity date
later than the final maturity date of, and is subordinated in right of payment
to, the Exchange Debentures on terms at least as favorable to the Holders of
Exchange Debenture as those contained in the documentation governing the
Indebtedness being extended, refinanced, renewed, replaced, defeased or
refunded; and (iv) such Permitted Refinancing Debt is incurred either by the
Company or by the Subsidiary who was the obligor on the Indebtedness being
extended, refinanced, renewed, replaced, defeased or refunded.
"Person" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization
or government or agency or political subdivision thereof (including any
subdivision or ongoing business of any such entity or substantially all of the
assets of any such entity, subdivision or business).
"Preferred Stock," of any Person, means Capital Stock of such Person
of any class or series (however designated) that ranks prior, as to payment of
dividends or as to the distribution of assets upon
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any voluntary or involuntary liquidation, dissolution or winding up of such
Person, to shares of Capital Stock of any other class or series of such Person.
"Preferred Stock Offering" means the public offering of $225,000,000
in aggregate liquidation preference of the Series E Preferred Stock.
"Principal" means Robert F.X. Sillerman.
"Related Party" with respect to the Principal means (A) any spouse
or immediate family member (in the case of an individual) of the Principal or
(B) or trust, corporation, partnership or other entity, the beneficiaries,
stockholders, partners, owners or Persons beneficially holding an 80% or more
controlling interest of which consist of the Principal and/or such other
Persons referred to in the immediately preceding clause (A).
"Responsible Officer," when used with respect to the Trustee, means
any officer within the Corporate Trust Administration department of the Trustee
(or any successor group of the Trustee) or any other officer of the Trustee
customarily performing functions similar to those performed by any of the above
designated officers and also means, with respect to a particular corporate
trust matter, any other officer to whom such matter is referred because of his
knowledge of and familiarity with the particular subject.
"Restricted Investment" means an Investment other than a Permitted
Investment.
"SCMC" means Sillerman Communications Management Company, a Delaware
corporation.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Senior Subordinated Note Indenture" means the indenture governing
the Company's 10 3/4% Senior Subordinated Notes due 2006.
"Senior Subordinated Notes" means the Company's 10 3/4% Senior
Subordinated Notes due 2006.
"Series D Exchange Notes" means the Company's 6 1/2% Subordinated
Convertible Exchange Notes due 2007 issuable in exchange for the Company's
Series D Preferred Stock.
"Series D Exchange Note Indenture" means the indenture governing the
Company's 6 1/2% Subordinated Convertible Exchange Notes due 2007 issuable in
exchange for the Company's Series D Preferred Stock.
"Series D Preferred Stock" means the Company's 6 1/2% Series D
Cumulative Convertible Exchangeable Preferred Stock due May 31, 2007.
"Series E Preferred Stock" means the Company's 125/8 Series E
Cumulative Exchangeable Preferred Stock due October 31, 2006.
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"SFX Merger Company" means SFX Merger Company, a Delaware
corporation.
"Shared Facilities Agreement" means the Shared Facilities Agreement
between the Company and SCMC, as in effect on the Closing Date.
"Significant Subsidiary" means any Subsidiary that would be a
"significant subsidiary" as defined in Article 1, Rule 1-02 of Regulation S-X,
promulgated pursuant to the Securities Act, as such Regulation is in effect on
the date hereof.
"Subsidiary" means, with respect to any Person, (i) any corporation,
association or other business entity of which more than 50% of the total voting
power of shares of Voting Stock thereof is at the time owned or controlled,
directly or indirectly, by such Person or one or more of the other Subsidiaries
of that Person (or a combination thereof) and (ii) any partnership (a) the sole
general partner or the managing general partner of which is such Person or a
Subsidiary of such Person or (b) the only general partners of which are such
Person or of one or more Subsidiaries of such Person (or any combination
thereof).
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. ss.ss.
77aaa-77bbbb) as amended as in effect on the date of this Indenture.
"Trustee" means the party named as such above until a successor
replaces it in accordance with the applicable provisions of this Indenture and
thereafter means the successor serving hereunder.
"Voting Stock" means with respect to any specified Person, Capital
Stock with voting power, under ordinary circumstances and without regard to the
occurrence of any contingency, to elect the directors or other managers or
trustees of such Person.
"Weighted Average Life to Maturity" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing (i) the sum
of the products obtained by multiplying (a) the amount of each then remaining
installment, sinking fund, serial maturity or other required payments of
principal, including payment at final maturity, in respect thereof, by (b) the
number of years (calculated to the nearest one-twelfth) that will elapse
between such date and the making of such payment, by (ii) the then outstanding
principal amount of such Indebtedness.
"Wholly Owned Subsidiary" of any Person means a Subsidiary of such
Person all of the outstanding Capital Stock or other ownership interests of
which (other than directors' qualifying shares) shall at the time be owned by
such Person or by one or more Wholly Owned Subsidiaries of such Person and one
or more Wholly Owned Subsidiaries of such Person.
SECTION 1.02. OTHER DEFINITIONS.
Defined in
Term Section
"Affiliate Transaction"............................ 4.09
"Asset Sale Offer"................................. 4.13
"Change of Control Offer".......................... 4.11
"Change of Control Payment"........................ 4.11
"Change of Control Payment Date"................... 4.11
"Covenant Defeasance".............................. 8.03
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"Custodian"......................................... 6.01
"Designated Senior Debt"............................ 10.02
"distribution"...................................... 10.02
"DTC"............................................... 2.03
"Event of Default".................................. 6.01
"Excess Proceeds"................................... 4.13
"incur"............................................. 4.08
"Legal Defeasance" ................................. 8.02
"Notice of Default"................................. 6.01
"Offer Amount"...................................... 3.09
"Offer Period"...................................... 3.09
"Outstanding"....................................... 8.02
"Paying Agent"...................................... 2.03
"Payment Blockage Notice"........................... 10.04
"Payment Default"................................... 6.01
"Permitted Debt".................................... 4.08
"Purchase Date"..................................... 3.09
"Registrar"......................................... 2.03
"Representative" ................................... 10.02
"Restricted Payments" .............................. 4.07
"Senior Bank Debt".................................. 10.02
"Senior Debt"....................................... 10.02
SECTION 1.03. INCORPORATION BY REFERENCE OF TRUST
INDENTURE ACT.
Whenever this Indenture refers to a provision of the TIA, the
provision is incorporated by reference in and made a part of this Indenture.
The following TIA terms used in this Indenture have the following
meanings:
"indenture securities" means the Exchange Debentures;
"indenture security Holder" means a Holder of an Exchange Debenture;
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means the Trustee;
"obligor" on the Exchange Debentures means the Company and any
successor obligor upon the Exchange Debentures.
All other terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by SEC rule under the
TIA have the meanings so assigned to them.
SECTION 1.04. RULES OF CONSTRUCTION.
Unless the context otherwise requires:
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(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning
assigned to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and in the plural
include the singular;
(5) provisions apply to successive events and transactions; and
(6) references to sections of or rules under the Securities Act
shall be deemed to include substitute, replacement of successor sections
or rules adopted by the SEC from time to time.
ARTICLE 2
THE EXCHANGE DEBENTURES
SECTION 2.01. FORM AND DATING.
The Exchange Debentures and the Trustee's certificate of
authentication shall be substantially in the form of Exhibit A hereto. The
Exchange Debentures may have notations, legends or endorsements required by
law, stock exchange rule or usage. Each Exchange Debenture shall be dated the
date of its authentication. The Exchange Debentures shall be in all appropriate
denominations.
The terms and provisions contained in the Exchange Debentures shall
constitute, and are hereby expressly made, a part of this Indenture and the
Company and the Trustee, by their execution and delivery of this Indenture,
expressly agree to such terms and provisions and to be bound thereby.
Exchange Debentures issued in global form shall be substantially in
the form of Exhibit A attached hereto (including the text referred to in
footnote 1 thereto). Exchange Debentures issued in certificated form shall be
substantially in the form of Exhibit A attached hereto (but without including
the text referred to in footnote 1 thereto). Each Global Exchange Debenture
shall represent such of the outstanding Exchange Debentures as shall be
specified therein and each shall provide that it shall represent the aggregate
amount of outstanding Exchange Debentures from time to time endorsed thereon
and that the aggregate amount of outstanding Exchange Debentures represented
thereby may from time to time be reduced or increased, as appropriate, to
reflect exchanges and redemptions. Any endorsement of a Global Exchange
Debenture to reflect the amount of any increase or decrease in the amount of
outstanding Exchange Debentures represented thereby shall be made by the
Trustee or the Exchange Debenture Custodian, at the direction of the Trustee,
in accordance with instructions given by the Holder thereof.
SECTION 2.02. EXECUTION AND AUTHENTICATION.
An Officer of the Company shall sign the Exchange Debentures for the
Company by manual or facsimile signature.
If an Officer whose signature is on an Exchange Debenture no longer
holds that office at the time an Exchange Debenture is authenticated, the
Exchange Debenture shall nevertheless be valid.
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An Exchange Debenture shall not be valid until authenticated by the
manual signature of the Trustee. The signature shall be conclusive evidence
that the Exchange Debenture has been authenticated under this Indenture.
The Trustee shall, upon a written order of the Company signed by two
Officers of the Company, authenticate Exchange Debentures for original issue up
to the aggregate principal amount stated in paragraph 4 of the Exchange
Debentures. The aggregate principal amount of Exchange Debentures outstanding
at any time may not exceed such amount.
The Trustee may appoint an authenticating agent acceptable to the
Company to authenticate the Exchange Debentures. An authenticating agent may
authenticate Exchange Debentures whenever the Trustee may do so. Each reference
in this Indenture to authentication by the Trustee includes authentication by
such agent. An authenticating agent has the same rights as an Agent to deal
with the Company or an Affiliate of the Company.
SECTION 2.03. REGISTRAR AND PAYING AGENT.
The Company shall maintain an office or agency where Exchange
Debentures may be presented for registration of transfer or for exchange
("Registrar") and an office or agency where Exchange Debentures may be
presented for payment ("Paying Agent"). The Registrar shall keep a register of
the Exchange Debentures and of their transfer and exchange. The Company may
appoint one or more co-registrars and one or more additional paying agents. The
term "Registrar" includes any co-registrar and the term "Paying Agent" includes
any additional paying agent. The Company may change any Paying Agent or
Registrar without notice to any Holder. The Company shall notify the Trustee in
writing of the name and address of any Agent not a party to this Indenture. If
the Company fails to appoint or maintain another entity as Registrar or Paying
Agent, the Trustee shall act as such. The Company may act as Paying Agent or
Registrar.
The Company initially appoints The Depository Trust Company ("DTC")
to act as Depositary with respect to the Global Exchange Debentures.
The Company initially appoints the Trustee to act as the Registrar
and Paying Agent and to act as Exchange Debenture Custodian with respect to the
Global Exchange Debentures.
SECTION 2.04. PAYING AGENT TO HOLD MONEY IN TRUST.
The Company shall require each Paying Agent other than the Trustee
to agree in writing that the Paying Agent will hold in trust for the benefit of
Holders or the Trustee all money held by the Paying Agent for the payment of
principal, premium or interest on the Exchange Debentures, and will notify the
Trustee of any default by the Company in making any such payment. While any
such default continues, the Trustee may require a Paying Agent to pay all money
held by it to the Trustee. The Company at any time may require a Paying Agent
to pay all money held by it to the Trustee. Upon payment over to the Trustee,
the Paying Agent (if other than the Company) shall have no further liability
for the money. If the Company acts as Paying Agent, it shall segregate and hold
in a separate trust fund for the benefit of the Holders all money held by it as
Paying Agent. Upon any bankruptcy or reorganization proceedings relating to the
Company, the Trustee shall serve as Paying Agent for the Exchange Debentures.
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SECTION 2.05. HOLDER LISTS.
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
all Holders and shall otherwise comply with TIA ss. 312(a). If the Trustee is
not the Registrar, the Company shall furnish to the Trustee at least seven
Business Days before each interest payment date and at such other times as the
Trustee may request in writing, a list in such form and as of such date as the
Trustee may reasonably require of the names and addresses of the Holders of
Exchange Debentures and the Company shall otherwise comply with TIA ss. 312(a).
SECTION 2.06. REPLACEMENT EXCHANGE DEBENTURES.
If any mutilated Exchange Debenture is surrendered to the Trustee or
either of the Company or the Trustee receives evidence to its satisfaction of
the destruction, loss or theft of any Exchange Debenture, the Company shall
issue and the Trustee, upon the written order of the Company signed by two
Officers of the Company, shall authenticate a replacement Exchange Debenture if
the Trustee's requirements are met. If required by the Trustee or the Company,
an indemnity bond must be supplied by the Holder that is sufficient in the
judgment of the Trustee and the Company to protect the Company, the Trustee,
any Agent and any authenticating agent from any loss that any of them may
suffer if a Exchange Debenture is replaced. The Company may charge for its
expenses in replacing an Exchange Debenture.
Every replacement Exchange Debenture is an additional obligation of
the Company and shall be entitled to all of the benefits of this Indenture
equally and proportionately with all other Exchange Debentures duly issued
hereunder.
SECTION 2.07. OUTSTANDING EXCHANGE DEBENTURES.
The Exchange Debentures outstanding at any time are all the Exchange
Debentures authenticated by the Trustee except for those cancelled by it, those
delivered to it for cancellation, those reductions in the interest in a Global
Exchange Debenture effected by the Trustee in accordance with the provisions
hereof, and those described in this Section 2.07 as not outstanding. Except as
set forth in Section 2.08 hereof, a Exchange Debenture does not cease to be
outstanding because the Company or an Affiliate of the Company holds the
Exchange Debenture.
If an Exchange Debenture is replaced pursuant to Section 2.06
hereof, it ceases to be outstanding unless the Trustee receives proof
satisfactory to it that the replaced Exchange Debenture is held by a bona fide
purchaser.
If the principal amount of any Exchange Debenture is considered paid
under Section 4.01 hereof, it ceases to be outstanding and interest on it
ceases to accrue.
If the Paying Agent (other than the Company, a Subsidiary or an
Affiliate of any thereof) holds, by 10:00 a.m. Eastern Time on a redemption
date or maturity date, money sufficient to pay the Exchange Debentures payable
on that date, then on and after that date such Exchange Debentures shall be
deemed to be no longer outstanding and shall cease to accrue interest.
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SECTION 2.08. TREASURY EXCHANGE DEBENTURES.
In determining whether the Holders of the required principal amount
of Exchange Debentures have concurred in any direction, waiver or consent,
Exchange Debentures owned by the Company or by any Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with the Company, shall be considered as though not outstanding, except
that for the purposes of determining whether the Trustee shall be protected in
relying on any such direction, waiver or consent, only Exchange Debentures that
the Trustee knows are so owned shall be so disregarded. The Company agrees to
notify the Trustee of the existence of any Exchange Debentures owned by the
Company or any Person directly or indirectly controlling or controlled by or
under direct or indirect common control with the Company.
SECTION 2.09. TEMPORARY EXCHANGE DEBENTURES.
Until Certificated Exchange Debentures are ready for delivery, the
Company may prepare and the Trustee shall authenticate temporary Exchange
Debentures upon a written order of the Company signed by two Officers of the
Company. Temporary Exchange Debentures shall be substantially in the form of
Certificated Exchange Debentures but may have variations that the Company
considers appropriate for temporary Exchange Debentures and as shall be
reasonably acceptable to the Trustee. Without unreasonable delay, the Company
shall prepare and the Trustee shall authenticate Certificated Exchange
Debentures in exchange for temporary Exchange Debentures.
Holders of temporary Exchange Debentures shall be entitled to all of
the benefits of this Indenture.
SECTION 2.10. CANCELLATION.
The Company at any time may deliver Exchange Debentures to the
Trustee for cancellation. The Registrar and Paying Agent shall forward to the
Trustee any Exchange Debentures surrendered to them for registration of
transfer, exchange or payment. The Trustee and no one else shall cancel all
Exchange Debentures surrendered for registration of transfer, exchange,
payment, replacement or cancellation and shall destroy cancelled Exchange
Debentures (subject to the record retention requirement of the Exchange Act).
Certification of the destruction of all cancelled Exchange Debentures shall be
delivered to the Company unless the Company directs the Trustee to return the
Exchange Debentures to the Company upon written order signed by an Officer of
the Company. The Company may not issue new Exchange Debentures to replace
Exchange Debentures that have been paid or that have been delivered to the
Trustee for cancellation.
SECTION 2.11. DEFAULTED INTEREST.
If the Company defaults in a payment of interest on the Exchange
Debentures, they shall pay the defaulted interest in any lawful manner plus, to
the extent lawful, interest payable on the defaulted interest, to the Persons
who are Holders on a subsequent special record date, in each case at the rate
provided in the Exchange Debentures and in Section 4.01 hereof. The Company
shall notify the Trustee in writing of the amount of defaulted interest
proposed to be paid on each Exchange Debenture and the date of the proposed
payment. The Company shall fix or cause to be fixed each such special record
date and payment date, provided that no such special record date shall be less
than 10 days prior to the related payment date for such defaulted interest. At
least 15 days before the special record date, the Company
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(or, upon the written request of the Company, the Trustee in the name and at
the expense of the Company) shall mail or cause to be mailed to Holders a
notice that states the special record date, the related payment date and the
amount of such interest to be paid. Notwithstanding the foregoing, such
interest may be paid at any time in any other lawful manner not inconsistent
with the requirements of any securities exchange on which the Exchange
Debentures may be listed, and upon such notice as may be required by such
exchange.
ARTICLE 3
REDEMPTION AND PREPAYMENT
SECTION 3.01. NOTICES TO TRUSTEE.
If the Company redeems Exchange Debentures pursuant to the optional
redemption provisions of Section 3.07 hereof, it shall furnish to the Trustee,
at least 45 days (unless a shorter period may be satisfactory to the Trustee)
but not more than 60 days before a redemption date, an Officers' Certificate
setting forth (i) the clause of this Indenture pursuant to which the redemption
shall occur, (ii) the redemption date, (iii) the principal amount of Exchange
Debentures to be redeemed and (iv) the redemption price.
If the Company is required to make an offer to purchase Exchange
Debentures pursuant to the provisions of Section 3.09 or 4.11 hereof, it shall
furnish to the Trustee an Officers' Certificate setting forth (i) the Section
of this Indenture pursuant to which the purchase shall occur, (ii) the purchase
date, (iii) the principal amount of Exchange Debentures to be purchased, (iv)
the purchase price and (v) a statement to the effect that (a) the Company has
effected an Asset Sale and the conditions set forth in Sections 3.09 and 4.13
have been satisfied or (b) a Change of Control has occurred and the conditions
set forth in Section 4.11 have been satisfied, as applicable.
SECTION 3.02. SELECTION OF EXCHANGE DEBENTURES TO BE
REDEEMED.
If less than all of the Exchange Debentures are to be redeemed at
any time, the Trustee shall select the Exchange Debentures to be redeemed among
the Holders of the Exchange Debentures in compliance with the requirements of
the principal national securities exchange, if any, on which the Exchange
Debentures are listed or, if the Exchange Debentures are not so listed, on a
pro rata basis, by lot or in accordance with any other method the Trustee deems
fair and appropriate. In the event of partial redemption by lot, the particular
Exchange Debentures to be redeemed shall be selected, unless otherwise provided
herein, not less than 30 nor more than 60 days prior to the redemption date by
the Trustee from the outstanding Exchange Debentures not previously called for
redemption.
The Trustee shall promptly notify the Company in writing of the
Exchange Debentures selected for redemption and, in the case of any Exchange
Debenture selected for partial redemption, the principal amount thereof to be
redeemed. Exchange Debentures and portions of Exchange Debentures selected
shall be in amounts of $1000 or whole multiples of $1000; except that if all of
the Exchange Debentures of a Holder are to be redeemed, the entire outstanding
amount of Exchange Debentures held by such Holder, even if not a multiple of
$1000, shall be redeemed. Except as provided in the preceding sentence,
provisions of this Indenture that apply to Exchange Debentures called for
redemption also apply to portions of Exchange Debentures called for redemption.
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SECTION 3.03. NOTICE OF REDEMPTION.
Subject to the provisions of Section 3.09 hereof, at least 30 days
but not more than 60 days before a redemption date, the Company shall mail or
cause to be mailed, by first class mail, a notice of redemption to each Holder
whose Exchange Debentures are to be redeemed at its registered address.
The notice shall identify the Exchange Debentures to be redeemed and
shall state:
(a) the redemption date;
(b) the redemption price;
(c) if any Exchange Debenture is being redeemed in part, the portion
of the principal amount of such Exchange Debenture to be redeemed and
that, after the redemption date upon surrender of such Exchange
Debenture, a new Exchange Debenture or Exchange Debentures in principal
amount equal to the unredeemed portion shall be issued upon cancellation
of the original Exchange Debenture;
(d) the name and address of the Paying Agent;
(e) that Exchange Debentures called for redemption must be
surrendered to the Paying Agent to collect the redemption price;
(f) that, unless the Company defaults in making such redemption
payment and interest on Exchange Debentures called for redemption ceases
to accrue on and after the redemption date;
(g) the paragraph of the Exchange Debentures and/or Section
of this Indenture pursuant to which the Exchange Debentures called for
redemption are being redeemed; and
(h) that no representation is made as to the correctness or accuracy
of the CUSIP number, if any, listed in such notice or printed on the
Exchange Debentures.
At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at its expense; provided, however, that
the Company shall have delivered to the Trustee, at least 45 days prior to the
redemption date, an Officers' Certificate requesting that the Trustee give such
notice and setting forth the information to be stated in such notice as
provided in the preceding paragraph.
SECTION 3.04. EFFECT OF NOTICE OF REDEMPTION.
Once notice of redemption is mailed in accordance with Section 3.03
hereof, Exchange Debentures called for redemption become irrevocably due and
payable on the redemption date at the redemption price. A notice of redemption
may not be conditional.
SECTION 3.05. DEPOSIT OF REDEMPTION OR PURCHASE PRICE.
On or prior to 10:00 a.m. Eastern Time on the redemption date or the
date upon which the Exchange Debentures must be accepted for purchase pursuant
to Section 3.09 or 4.11 hereof, the Company shall deposit with the Trustee or
with the Paying Agent money sufficient to pay the redemption or
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purchase price of and accrued interest on all Exchange Debentures to be
redeemed or purchased on that date. The Trustee or the Paying Agent shall
promptly return to the Company any money deposited with the Trustee or the
Paying Agent by the Company in excess of the amounts necessary to pay the
redemption or purchase price of, and accrued interest, if any, on all Exchange
Debentures to be redeemed or purchased.
If Exchange Debentures called for redemption or tendered in an Asset
Sale Offer or a Change of Control Offer are paid or if the Company has
deposited with the Trustee or Paying Agent money sufficient to pay the
redemption or purchase price of, and unpaid and accrued interest on all
Exchange Debentures to be redeemed or purchased, on and after the applicable
redemption or purchase date, interest ceases to accrue on the Exchange
Debentures or the portions of Exchange Debentures called for redemption or
tendered and not withdrawn in an Asset Sale Offer or a Change of Control Offer
(regardless of whether certificates for such Exchange Debentures are actually
surrendered). If an Exchange Debenture is redeemed or purchased on or after an
interest record date but on or prior to the related interest payment date, then
any accrued and unpaid interest shall be paid to the Person in whose name such
Exchange Debenture was registered at the close of business on such record date.
If any Exchange Debenture called for redemption or subject to an Asset Sale
Offer or a Change of Control Offer shall not be so paid upon surrender for
redemption or purchase because of the failure of the Company to comply with the
preceding paragraph, interest shall be paid on the unpaid principal, from the
redemption or purchase date until such principal is paid, and to the extent
lawful on any interest not paid on such unpaid principal, in each case, at the
rate provided in the Exchange Debentures and in Section 4.01 hereof.
SECTION 3.06. EXCHANGE DEBENTURES REDEEMED OR PURCHASED
IN PART.
Upon surrender of an Exchange Debenture that is redeemed or
purchased in part, the Company shall issue and, upon the Company's written
request, the Trustee shall authenticate for the Holder at the expense of the
Company a new Exchange Debenture equal in principal amount to the unredeemed or
unpurchased portion of the Exchange Debenture surrendered.
SECTION 3.07. OPTIONAL REDEMPTION.
(a) Subject to Section 3.07(b) below, the Exchange Debentures are
not redeemable, in whole or in part, at the Company's option prior to January
15, 2002. On or after January 15, 2002, the Company may redeem all or any
portion of the Exchange Debentures at a redemption price (expressed as a
percentage of the principal amount thereof), as set forth in the immediately
succeeding paragraph, plus accrued and unpaid interest to the redemption date.
The redemption price as a percentage of the principal amount shall
be as follows, if the Exchange Debentures are redeemed during the 12-month
period commencing on January 15 of the year set forth below, plus, in each
case, accrued interest thereon to the redemption date:
YEAR PERCENTAGE
2002........................................... 106.313%
2003........................................... 104.734%
2004........................................... 103.156%
2005........................................... 101.578%
2006 and thereafter............................ 100.000%
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(b) In addition, prior to January 15, 2000, the Company may, at its
option, redeem up to 50% of the aggregate of (i) the liquidation preference of
the Series E Preferred Stock issued (whether initially issued or issued in lieu
of cash dividends) less the liquidation preference of Series E Preferred Stock
exchanged for Exchange Debentures and (ii) the principal amount of Exchange
Debentures issued (whether issued in exchange for Series E Preferred Stock of
in lieu of cash interest), with the net proceeds of one or more Common Equity
offerings received on or after the date of original issuance of the Series E
Preferred Stock at a redemption price of 112.625% of the liquidation preference
or principal amount, as the case may be, plus accumulated and unpaid dividends
in the case of Series E Preferred Stock and accrued and unpaid interest in the
case of Exchange Debentures; provided, that after any such redemption, if any
Series E Preferred Stock or Exchange Debentures remain outstanding, at least
$50 million in liquidation preference or principal amount, as applicable, of
the Series E Preferred Stock or Exchange Debentures, as the case may be, remain
outstanding; and provided further, that any such redemption shall occur within
75 days of the date of closing of such offering of Common Equity of the
Company.
SECTION 3.08. MANDATORY REDEMPTION.
The Company shall not be required to make mandatory redemption payments
with respect to the Exchange Debentures.
SECTION 3.09. OFFER TO PURCHASE BY APPLICATION OF
EXCESS PROCEEDS.
In the event that, pursuant to Section 4.13 hereof, the Company
shall be required to commence an Asset Sale Offer, it shall follow the
procedures specified below.
The Asset Sale Offer shall remain open for a period of 20 Business
Days following its commencement, except to the extent that a longer period is
required by applicable law (the "Offer Period"). No later than five Business
Days after the termination of the Offer Period (the "Purchase Date"), the
Company shall purchase the principal amount of Exchange Debentures required to
be purchased pursuant to Section 4.13 hereof (the "Offer Amount") or, if less
than the Offer Amount has been tendered, all Exchange Debentures tendered in
response to the Asset Sale Offer. Payment for any Exchange Debentures so
purchased shall be made in the same manner as interest payments are made.
If the Purchase Date is on or after an interest record date and on
or before the related interest payment date, any accrued and unpaid interest
shall be paid to the Person in whose name an Exchange Debenture is registered
at the close of business on such record date, and no additional interest shall
be payable to Holders who tender Exchange Debentures pursuant to the Asset Sale
Offer.
Upon the commencement of an Asset Sale Offer, the Company shall
send, by first class mail, a notice to the Trustee and each of the Holders. The
notice shall contain all instructions and materials necessary to enable such
Holders to tender Exchange Debentures pursuant to the Asset Sale Offer. The
Asset Sale Offer shall be made to all Holders. The notice, which shall govern
the terms of the Asset Sale Offer, shall state:
(a) that the Asset Sale Offer is being made pursuant to
Sections 3.09 and 4.13 hereof and the length of the Offer Period;
(b) the Offer Amount, the purchase price and the
Purchase Date;
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(c) that any Exchange Debenture not tendered or
accepted for payment shall continue to accrue interest;
(d) that, unless the Company defaults in making such payment,
any Exchange Debenture accepted for payment pursuant to the Asset Sale
Offer shall cease to accrue interest, if any after the Purchase Date;
(e) that Holders electing to have an Exchange Debenture
purchased pursuant to an Asset Sale Offer may only elect to have all of
such Exchange Debenture purchased and may not elect to have only a
portion of such Exchange Debenture purchased;
(f) that Holders electing to have an Exchange Debenture
purchased pursuant to any Asset Sale Offer shall be required to surrender
the Exchange Debenture, with the form entitled "Option of Holder to Elect
Purchase" on the reverse of the Exchange Debenture completed, or transfer
by book-entry transfer, to the Company, a depositary, if appointed by the
Company, or a Paying Agent at the address specified in the notice at
least three days before the Purchase Date;
(g) that Holders shall be entitled to withdraw their election
if the Company, the Depositary or the Paying Agent, as the case may be,
receives, not later than the expiration of the Offer Period, a telegram,
facsimile transmission or letter setting forth the name of the Holder,
the principal amount of the Exchange Debenture the Holder delivered for
purchase and a statement that such Holder is withdrawing his election to
have such Exchange Debenture purchased;
(h) that, if the aggregate principal amount of Exchange
Debentures and Pari Passu Debt surrendered by Holders exceeds the Offer
Amount, the Company shall select the Exchange Debentures to be purchased
on a pro rata basis (with such adjustments as may be deemed appropriate
by the Company so that only Exchange Debentures in denominations of
$1,000, or integral multiples thereof, shall be purchased); and
(i) that Holders whose Exchange Debentures were purchased only
in part shall be issued new Exchange Debentures equal in principal amount
to the unpurchased portion of the Exchange Debentures surrendered (or
transferred by book-entry transfer).
On or before the Purchase Date, the Company shall, to the extent
lawful, accept for payment, on a pro rata basis to the extent necessary, the
Offer Amount of Exchange Debentures or portions thereof tendered pursuant to
the Asset Sale Offer, or if less than the Offer Amount has been tendered, all
Exchange Debentures tendered, and shall deliver to the Trustee an Officers'
Certificate stating that such Exchange Debentures or portions thereof were
accepted for payment by the Company in accordance with the terms of this
Section 3.09. The Company, the Depositary or the Paying Agent, as the case may
be, shall promptly (but in any case not later than five days after the Purchase
Date) mail or deliver to each tendering Holder an amount equal to the purchase
price of the Exchange Debentures tendered by such Holder and accepted by the
Company for purchase, and the Company shall promptly issue a new Exchange
Debenture, and the Trustee, upon written request from the Company shall
authenticate and mail or deliver such new Exchange Debenture to such Holder, in
a principal amount equal to any unpurchased portion of the Exchange Debenture
surrendered. Any Exchange Debenture not so accepted shall be promptly mailed or
delivered by the Company to the Holder thereof. The Company shall publicly
announce the results of the Asset Sale Offer on the Purchase Date. The Company
shall comply with the requirements of Rule 14e-1 under the Exchange Act and any
other securities laws and regulations
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thereunder to the extent such laws and regulations are applicable in connection
with the repurchase of Exchange Debentures in an Asset Sale Offer.
Other than as specifically provided in this Section 3.09, any
purchase pursuant to this Section 3.09 shall be made pursuant to the provisions
of Sections 3.01 through 3.06 hereof.
ARTICLE 4
COVENANTS
SECTION 4.01. PAYMENT OF EXCHANGE DEBENTURES.
The Company shall pay or cause to be paid the principal of, premium,
if any, and interest on the Exchange Debentures on the dates and in the manner
provided in the Exchange Debentures. Principal, premium, if any, and interest
shall be considered paid on the date due if the Paying Agent, if other than the
Company, holds as of 10:00 a.m. Eastern Time on the due date money deposited by
the Company in immediately available funds and designated for and sufficient to
pay all principal, premium, if any, and interest then due.
The Company shall pay interest (including post-petition interest in
any proceeding under any Bankruptcy Law) on overdue principal at the rate equal
to 1% per annum in excess of the then applicable interest rate on the Exchange
Debentures to the extent lawful; it shall pay interest (including post-petition
interest in any proceeding under any Bankruptcy Law) on overdue installments of
interest (without regard to any applicable grace period) at the same rate to
the extent lawful.
SECTION 4.02. MAINTENANCE OF OFFICE OR AGENCY.
The Company shall maintain in the Borough of Manhattan, the City of
New York, an office or agency (which may be an office of the Trustee or an
affiliate of the Trustee, Registrar or co-registrar) where Exchange Debentures
may be surrendered for registration of transfer or for exchange and where
notices and demands to or upon the Company in respect of the Exchange
Debentures and this Indenture may be served. The Company shall give prompt
written notice to the Trustee of the location, and any change in the location,
of such office or agency. If at any time the Company shall fail to maintain any
such required office or agency or shall fail to furnish the Trustee with the
address thereof, such presentations, surrenders, notices and demands may be
made or served at the Corporate Trust Office of the Trustee.
The Company may also from time to time designate one or more other
offices or agencies where the Exchange Debentures may be presented or
surrendered for any or all such purposes and may from time to time rescind such
designations; provided, however, that no such designation or rescission shall
in any manner relieve the Company of its obligation to maintain an office or
agency in the Borough of Manhattan, the City of New York for such purposes. The
Company shall give prompt written notice to the Trustee of any such designation
or rescission and of any change in the location of any such other office or
agency.
The Company hereby designates the Corporate Trust Office of the
Trustee as one such office or agency of the Company in accordance with Section
2.03 hereof. The Trustee may resign such agency
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at any time by giving written notice to the Company no later than 30 days prior
to the effective date of such resignation.
SECTION 4.03. REPORTS.
Whether or not required by the rules and regulations of the SEC, so
long as any Exchange Debentures are outstanding, the Company shall furnish to
the Trustee and to the Holders of Exchange Debentures (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.
SECTION 4.04. COMPLIANCE CERTIFICATE.
(a) The Company shall deliver to the Trustee, within 90 days after
the end of each fiscal year (which fiscal year, as of the date hereof, ends on
December 31), an Officers' Certificate stating that a review of the activities
of the Company and its Subsidiaries during the preceding fiscal year has been
made under the supervision of the signing Officers with a view to determining
whether the Company has kept, observed, performed and fulfilled their
obligations under this Indenture, and further stating, as to each such Officer
signing such certificate, that to the best of his or her knowledge the Company
has kept, observed, performed and fulfilled each and every covenant contained
in this Indenture and are not in default in the performance or observance of
any of the terms, provisions and conditions of this Indenture (or, if a Default
or Event of Default shall have occurred, describing all such Defaults or Events
of Default of which he or she may have knowledge and what action the Company is
taking or proposes to take with respect thereto) and that to the best of his or
her knowledge no event has occurred and remains in existence by reason of which
payments on account of the principal of or interest on the Exchange Debentures
is prohibited or if such event has occurred, a description of the event and
what action the Company is taking or proposes to take with respect thereto.
(b) So long as not contrary to the then current recommendations of
the American Institute of Certified Public Accountants, the year-end financial
statements delivered pursuant to Section 4.03 above shall be accompanied by a
written statement of the Company's independent public accountants (who shall be
a firm of established national reputation) that in making the examination
necessary for certification of such financial statements, nothing has come to
their attention that would lead them to believe that the Company has violated
any provisions of Article Four or Article Five hereof or, if any such violation
has occurred, specifying the nature and period of existence thereof, it being
understood that such accountants shall not be liable directly or indirectly to
any Person for any failure to obtain knowledge of any such violation.
(c) The Company shall, so long as any of the Exchange Debentures 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.
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SECTION 4.05. TAXES.
The Company shall pay, and shall cause each of its Subsidiaries to
pay, prior to delinquency, all material taxes, assessments, and governmental
levies except such as are contested in good faith and by appropriate
proceedings or where the failure to effect such payment is not adverse in any
material respect to the Holders of the Exchange Debentures.
SECTION 4.06. STAY, EXTENSION AND USURY LAWS.
The Company covenants (to the extent that it may lawfully do so)
that it shall not at any time insist upon, plead, or in any manner whatsoever
claim or take the benefit or advantage of, any stay, extension or usury law
wherever enacted, now or at any time hereafter in force, that may affect the
covenants or the performance of this Indenture; and the Company (to the extent
that it may lawfully do so) hereby expressly waives all benefit or advantage of
any such law, and covenants that it shall not, by resort to any such law,
hinder, delay or impede the execution of any power herein granted to the
Trustee, but shall suffer and permit the execution of every such power as
though no such law has been enacted.
SECTION 4.07. RESTRICTED PAYMENTS.
The Company shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly: (i) declare or pay any dividend or make any other
payment or distribution on account of the Company's Equity Interests
(including, without limitation, any payment in connection with any merger or
consolidation involving the Company) or to the direct or indirect holders of
the Company's Equity Interests in their capacity as such (other than dividends
or distributions payable in Capital Stock (other than Disqualified Stock) of
the Company); (ii) purchase, redeem or otherwise acquire or retire for value
any Equity Interests of the Company or any direct or indirect parent of the
Company; (iii) make any principal payment on, or purchase, redeem, defease or
otherwise acquire or retire for value any Indebtedness that is subordinated to
the Exchange Debentures, except at final maturity; or (iv) make any Restricted
Investment (all such payments and other actions set forth in clauses (i)
through (iv) above being collectively referred to as "Restricted Payments"),
unless, at the time of and after giving effect to such Restricted Payment:
(a) no Default or Event of Default shall have occurred and
be continuing or would occur as a consequence thereof, and
(b) the Company would, at the time of such Restricted Payment and
after giving pro forma effect thereto as if such Restricted Payment had
been made at the beginning of the applicable four-quarter period, have
been permitted to incur at least $1.00 of additional Indebtedness (other
than Permitted Debt) pursuant to the Debt to Cash Flow Ratio test set
forth in the first paragraph of Section 4.08 hereof; and
(c) such Restricted Payment, together with the aggregate amount of
all other Restricted Payments declared or made after the Closing Date
(other than Restricted Payments permitted by clauses (2), (5), (7), (8),
(10) or (12) of the following paragraph) shall not exceed, at the date of
determination, the sum of (1) an amount equal to the Company's
Consolidated Cash Flow from the Closing Date to the end of the Company's
most recently ended full fiscal quarter for which internal financial
statements are available, taken as a single accounting period, less the
product of 1.4 times the Company's Consolidated Interest Expense from the
Closing Date to the end of the Company's
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most recently ended full fiscal quarter for which internal financial
statements are available, taken as a single accounting period, plus (2)
an amount equal to the net cash proceeds received by the Company from the
issue or sale after the Closing Date of Equity Interests of the Company
(other than (i) sales of Disqualified Stock and (ii) Equity Interests
sold to any of the Company's Subsidiaries) or of debt securities or
Disqualified Stock (other than the Series D Preferred Stock) of the
Company issued after the Closing Date that have been converted into such
Equity Interests plus (3) to the extent that any Restricted Investment
that was made after the Closing Date is sold for cash or otherwise
liquidated or repaid for cash, the lesser of (A) the cash return of
capital with respect to such Restricted Investment (less the cost of
disposition, if any) and (B) the initial amount of such Restricted
Investment.
If no Default or Event of Default shall have occurred and be continuing
as a result thereof, the foregoing provisions will not prohibit: (1) the
payment of any dividend within 60 days after the date of declaration thereof,
if at said date of declaration such payment would have complied with the
provisions of this Indenture; (2) the redemption, repurchase, retirement or
other acquisition of any Equity Interests of the Company in exchange for, or
out of the proceeds of, the substantially concurrent sale (other than to a
Subsidiary of the Company) of other Equity Interests of the Company (other than
any Disqualified Stock); provided that the amount of any such net cash proceeds
that are utilized for any such redemption, repurchase, retirement or other
acquisition shall be excluded from clause (c)(2) of the preceding paragraph;
(3) cash payments made in respect of fractional shares of Capital Stock not to
exceed $100,000 in the aggregate in any fiscal year; (4) the payment of
dividends on the Series D Preferred Stock in accordance with the terms thereof
as in effect on the Closing Date; (5) the issuance of Series D Exchange Notes
in exchange for the Series D Preferred Stock; provided that such issuance is
permitted by Section 4.08 hereof; (6) in the event that the Company elects to
issue the Series D Exchange Notes in exchange for the Series D Preferred Stock,
cash payments made in lieu of the issuance of Series D Exchange Notes having a
face amount less than $50 and any cash payments representing accrued and unpaid
dividends in respect thereof, not to exceed $100,000 in the aggregate in any
fiscal year; (7) the payment of dividends on the Series E Preferred Stock in
accordance with the terms thereof as in effect on the Closing Date; (8) the
issuance of additional Exchange Debentures in exchange for the Series E
Preferred Stock; provided that such issuance is permitted by Section 4.08
hereof; (9) in the event that the Company elects to issue Exchange Debentures
in exchange for Series E Preferred Stock, cash payments made in lieu of the
issuance of Exchange Debentures having a face amount less than $1,000 and any
cash payments representing accrued and unpaid dividends in respect thereof, not
to exceed $100,000 in the aggregate in any fiscal year; (10) the defeasance,
redemption or repurchase of subordinated Indebtedness with the net cash
proceeds from an incurrence of Permitted Refinancing Debt or the substantially
concurrent sale (other than to a Subsidiary of the Company) of Equity Interests
of the Company (other than Disqualified Stock); provided that the amount of any
such net cash proceeds that are utilized for any such redemption, repurchase,
retirement or other acquisition shall be excluded from clause (c)(2) of the
preceding paragraph; (11) payments made by the Company to SCMC for facilities
maintenance and other services and reimbursements pursuant to the Shared
Facilities Agreement, as amended from time to time, to the extent that such
payments do not exceed the amount of payments which would have been due if
calculated in accordance with the terms of the Shared Facilities Agreement as
in effect on the Closing Date; (12) payments by the Company pursuant to the
Management Termination Agreements in accordance with the terms thereof as in
effect on the Closing Date; (13) the redemption by the Company of its Series C
Preferred Stock in accordance with the terms thereof as in effect on the
Closing Date; and (14) the redemption by the Company of its Series B Preferred
Stock in accordance with the terms thereof as in effect on the Closing Date;
provided that payments made by the Company to redeem the Series B
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Preferred Stock shall not exceed $1.0 million in any fiscal year or $2.0
million in the aggregate since the Closing Date.
The amount of all Restricted Payments (other than cash) shall be the Fair
Market Value (evidenced by a resolution of the Board of Directors set forth in
an Officers' Certificate delivered to the Trustee on the date of the Restricted
Payment of the asset(s) or securities proposed to be transferred by the Company
or such Subsidiary, as the case may be, pursuant to the Restricted Payment. Not
later than the date of making any Restricted Payment, the Company shall deliver
to the Trustee an Officers' Certificate stating that such Restricted Payment is
permitted and setting forth the basis upon which the calculations required by
this covenant were computed, which calculations may be based upon the Company's
latest available financial statements.
SECTION 4.08. INCURRENCE OF INDEBTEDNESS AND ISSUANCE
OF PREFERRED STOCK.
The Company shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, create, incur, issue, assume, guarantee or otherwise
become directly or indirectly liable, contingently or otherwise, with respect
to (collectively, "incur") any Indebtedness (including Acquired Debt) and that
the Company will not issue any Disqualified Stock and will not permit any of
its Subsidiaries to issue any shares of Preferred Stock; provided, however,
that (i) the Company may incur Indebtedness (including Acquired Debt) or issue
shares of Disqualified Stock and (ii) (A) the Subsidiaries may Guarantee Senior
Debt and (B) the Subsidiaries may issue Preferred Stock (other than
Disqualified Stock) if, in either case, the Company's Debt to Cash Flow Ratio
at the time of incurrence of such Indebtedness or the issuance of such
Disqualified Stock or the Guarantee of such Senior Debt or the issuance of such
Preferred Stock, as the case may be, after giving pro forma effect to such
incurrence or issuance or Guarantee as of such date and to the use of proceeds
therefrom as if the same had occurred at the beginning of the most recently
ended four full fiscal quarter period of the Company for which internal
financial statements are available, would have been no greater than 7.0 to 1.
The foregoing provisions will not apply to the incurrence of any of the
following Indebtedness (collectively, "Permitted Debt"):
(i) the incurrence by the Company and its Subsidiaries of Indebtedness
pursuant to one or more Bank Facilities, so long as the aggregate principal
amount of all Indebtedness outstanding under all Bank Facilities does not, at
the time of incurrence, exceed an amount equal to $225.0 million;
(ii) the incurrence by the Company and its Subsidiaries of
the Existing Indebtedness;
(iii) Indebtedness under the Exchange Debentures;
(iv) the issuance of Disqualified Stock by the Company that by its terms
would not require or permit any payment of dividends or other distributions
that would violate Section 4.07 hereof;
(v) the incurrence by the Company or any of its Subsidiaries of
Indebtedness in connection with the acquisition of assets or a new Subsidiary;
provided that such Indebtedness was incurred by the prior owner of such assets
or such Subsidiary prior to such acquisition by the Company or one of its
Subsidiaries and was not incurred in connection with, or in contemplation of,
such acquisition by the Company or one of its Subsidiaries; and provided
further that, after giving pro forma effect to such incurrence of Indebtedness
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as of such date and to the use of proceeds therefrom as if the same had
occurred at the beginning of the most recently ended four full fiscal quarter
period for which internal financial statements are available, the Company's
Debt to Cash Flow Ratio would have been no greater than 7.0 to 1;
(vi) the incurrence by the Company or any of its Subsidiaries of
Permitted Refinancing Debt in exchange for, or the net proceeds of which are
used to extend, refinance, renew, replace, defease or refund, Indebtedness that
was permitted by the terms of this Indenture to be incurred;
(vii) the incurrence by the Company or any of its Subsidiaries of
intercompany Indebtedness between or among the Company and any of its
Subsidiaries; provided, however, that (i) if the Company is the obligor on such
Indebtedness, such Indebtedness is expressly subordinate to the payment in full
of all Obligations with respect to the Exchange Debentures and (ii)(A) any
subsequent issuance or transfer of Equity Interests that results in any such
Indebtedness being held by a Person other than the Company or a Subsidiary and
(B) any sale or other transfer of any such Indebtedness to a Person that is not
either the Company or a Subsidiary shall be deemed, in each case, to constitute
an incurrence of such Indebtedness by the Company or such Subsidiary, as the
case may be;
(viii) the incurrence by the Company or any of its Subsidiaries of
Hedging Obligations that are incurred for the purpose of fixing or hedging
interest rate risk with respect to any floating rate Indebtedness that is
permitted by the terms of this Indenture to be outstanding; and
(ix) the incurrence by the Company and any of its Subsidiaries of
Indebtedness (in addition to Indebtedness permitted by any other clause of this
paragraph) in an aggregate principal amount (or accreted value, as applicable)
at any time outstanding not to exceed $10.0 million.
SECTION 4.09. TRANSACTIONS WITH AFFILIATES.
The Company shall not, and shall not permit any of its Subsidiaries
to, make any payment to, or sell, lease, transfer or otherwise dispose of any
of its properties or assets to, or purchase any property or assets from, or
enter into or make or amend any contract, agreement, understanding, loan,
advance or guarantee with, or for the benefit of, any Affiliate (each of the
foregoing, an "Affiliate Transaction"), unless (i) such Affiliate Transaction
is on terms that are no less favorable to the Company or the relevant
Subsidiary than those that would have been obtained in a comparable transaction
by the Company or such Subsidiary with an unrelated Person and (ii) the Company
delivers to the Trustee (a) with respect to any Affiliate Transaction or series
of related Affiliate Transactions involving aggregate consideration in excess
of $1.0 million, a resolution of the Board of Directors set forth in an
Officers' Certificate certifying that such Affiliate Transaction complies with
clause (i) above and that such Affiliate Transaction has been approved by a
majority of the members of the Board of Directors that are disinterested as to
such Affiliate Transaction and (b) with respect to any Affiliate Transaction or
series of related Affiliate Transactions involving aggregate consideration in
excess of $5.0 million, an opinion as to the fairness to the Holders of
Exchange Debentures of such Affiliate Transaction from a financial point of
view issued by an accounting, appraisal or investment banking firm of national
standing; provided that (1) transactions between or among the Company and/or
its Wholly Owned Subsidiaries, (2) the redemption or repurchase of the Existing
MMR Indebtedness, (3) transactions and agreements specifically contemplated by
the Termination and Assignment Agreement between the Company and SCMC as in
effect on the Closing Date, (4) payments required by the terms of the joint
lease among the Company, SCMC and the landlord thereunder for the Company's
corporate headquarters located at 150 East 58th Street, New York, New York and
any agreements directly related thereto, in each case, as the same are in
effect on the Closing
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Date, (5) payments made by the Company to SCMC for facilities maintenance and
other services and reimbursements pursuant to the Shared Facilities Agreements,
(6) payments and other transactions by the Company pursuant to the Management
Termination Agreements and (7) any Restricted Payments that are permitted by
Section 4.07 hereof and any Permitted Investments, in each case, shall not be
deemed to be Affiliate Transactions.
SECTION 4.10. CONTINUED EXISTENCE.
Subject to Article 5 hereof, the Company shall do or cause to be
done all things necessary to preserve and keep in full force and effect (i) its
corporate, partnership, limited liability company or other existence, and the
corporate, partnership, limited liability company or other existence of each of
its Subsidiaries, in accordance with the respective organizational documents
(as the same may be amended from time to time) of the Company or any such
Subsidiary and (ii) the rights (charter and statutory), licenses and franchises
of the Company and any of their respective Subsidiaries; provided, however,
that the Company shall not be required to preserve any such right, license or
franchise, or the corporate, partnership or other existence of any of their
Subsidiaries, if the respective Board of Directors shall determine that the
preservation thereof is no longer desirable in the conduct of the business of
the Company and its respective Subsidiaries, taken as a whole, and that the
loss thereof is not adverse in any material respect to the Holders of the
Exchange Debentures.
SECTION 4.11. OFFER TO REPURCHASE UPON CHANGE OF CONTROL.
(a) Upon the occurrence of a Change of Control, each Holder of
Exchange Debentures shall have the right to require the Company to repurchase
all or any part of such Holder's Exchange Debentures pursuant to the offer
described below (the "Change of Control Offer") at an offer price in cash equal
to 101% of the principal amount thereof plus, accrued and unpaid interest, if
any, thereon to the date of purchase (the "Change of Control Payment").
(b) Within 10 days following any Change of Control, the Company
shall mail a notice to each Holder, with a copy to the Trustee, stating: (1)
that the Change of Control Offer is being made pursuant to this Section 4.11
and that all Exchange Debentures tendered shall be accepted for payment; (2)
the purchase price and the purchase date, which shall be no later than 30
Business Days from the date such notice is mailed (the "Change of Control
Payment Date"); (3) that any Exchange Debenture not tendered shall continue to
accrue interest; (4) that, unless the Company defaults in the payment of the
Change of Control Payment, all Exchange Debentures accepted for payment
pursuant to the Change of Control Offer shall cease to accrue interest, after
the Change of Control Payment Date; (5) that Holders electing to have any
Exchange Debentures purchased pursuant to a Change of Control Offer shall be
required to surrender the Exchange Debentures, with the form entitled "Option
of Holder to Elect Purchase" on the reverse of the Exchange Debentures
completed, to the Paying Agent at the address specified in the notice prior to
the close of business on the third Business Day preceding the Change of Control
Payment Date; and (6) that Holders whose Exchange Debentures are being
purchased only in part shall be issued new Exchange Debentures equal in
principal amount to the unpurchased portion of the Exchange Debentures
surrendered, which unpurchased portion must be equal to $1,000 in principal
amount or an integral multiple thereof. The Company shall comply with the
requirements of Rule 14e-1 under the Exchange Act and any other securities laws
and regulations thereunder to the extent such laws and regulations are
applicable in connection with the repurchase of Exchange Debentures in
connection with a Change of Control.
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(c) On or prior to 10:00 a.m. Eastern Time on the Change of Control
Payment Date, the Company shall, to the extent lawful, (1) accept for payment
all Exchange Debentures or portions thereof properly tendered pursuant to the
Change of Control Offer, (2) deposit with the Paying Agent an amount equal to
the Change of Control Payment in respect of all Exchange Debentures or portions
thereof so tendered and (3) deliver or cause to be delivered to the Trustee the
Exchange Debentures so accepted together with an Officers' Certificate stating
the aggregate principal amount of Exchange Debentures or portions thereof being
purchased by the Company. The Paying Agent shall promptly mail to each Holder
of Exchange Debentures so tendered the Change of Control Payment for such
Exchange Debentures, and the Trustee shall promptly authenticate and mail (or
cause to be transferred by book entry) to each Holder a new Exchange Debenture
equal in principal amount to any unpurchased portion of the Exchange Debentures
surrendered, if any. Prior to complying with the provisions of this Section
4.11, but in any event within 90 days following a Change of Control, the
Company shall either repay all outstanding Senior Debt or obtain the requisite
consents, if any, under all agreements governing outstanding Senior Debt, in
each case to the extent required to permit the repurchase of Exchange
Debentures required by this Section 4.11. The Company shall publicly announce
the results of the Change of Control Offer on or as soon as practicable after
the Change of Control Payment Date.
(d) The Company shall not be required to make a Change of Control
Offer upon a Change of Control if a third party makes the Change of Control
Offer in the manner, at the times and otherwise in compliance with the
requirements set forth in this Indenture applicable to a Change of Control
Offer made by the Company, and purchases all Exchange Debentures validly
tendered and not withdrawn under such Change of Control Offer.
SECTION 4.12. PAYMENTS FOR CONSENT.
Neither the Company nor any of its Subsidiaries shall, directly or
indirectly, pay or cause to be paid any consideration, whether by way of
interest, fee or otherwise, to any Holder of any Exchange Debentures for or as
an inducement to any consent, waiver or amendment of any of the terms or
provisions of this Indenture or the Exchange Debentures unless such
consideration is offered to be paid or is paid to all Holders of the Exchange
Debentures that consent, waive or agree to amend in the time frame set forth in
the solicitation documents relating to such consent, waiver or agreement.
SECTION 4.13. ASSET SALES.
The Company shall not, and shall not permit any of its Subsidiaries to,
engage in any Asset Sale unless (i) the Company (or the Subsidiary, as the case
may be) receives consideration at the time of such Asset Sale at least equal to
the Fair Market Value (evidenced by a resolution of the Board of Directors set
forth in an Officers' Certificate delivered to the Trustee) of the assets or
Equity Interests issued or sold or otherwise disposed of and (ii) at least 75%
of the consideration therefor received by the Company or such Subsidiary is in
the form of cash; provided that the amount of (x) any liabilities (as shown on
the Company's or such Subsidiary's most recent balance sheet), of the Company
or any Subsidiary (other than contingent liabilities and liabilities that are
by their terms subordinated to the Exchange Debentures or any guarantee
thereof) that are assumed by the transferee of any such assets pursuant to a
customary novation agreement that releases the Company or such Subsidiary from
further liability and (y) any notes or other obligations received by the
Company or any such Subsidiary from such transferee that are immediately
converted by the Company or such Subsidiary into cash (to the extent of the
cash received), shall be deemed to be cash for purposes of this provision.
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Within 360 days after the receipt of any Net Proceeds from an Asset Sale,
the Company may apply such Net Proceeds, at its option, (a) to permanently
reduce Senior Debt (and to correspondingly reduce commitments with respect
thereto, in the case of Senior Debt that is revolving debt), or (b) to the
acquisition of a controlling interest in another business, the making of a
capital expenditure or the acquisition of other long-term assets, in each case,
in the Broadcast Business or businesses reasonably related thereto. Pending the
final application of any such Net Proceeds, the Company may temporarily reduce
Senior Debt or otherwise invest such Net Proceeds in any manner that is not
prohibited by this Indenture. Any Net Proceeds from Asset Sales that are not
applied or invested as provided in the first sentence of this paragraph will be
deemed to constitute "Excess Proceeds." Within fifteen Business Days of each
date on which the aggregate amount of Excess Proceeds exceeds $10.0 million,
the Company will be required to make an offer to all Holders of Exchange
Debentures, in accordance with the procedures set forth in Section 3.09 hereof,
and the holders of Pari Passu Debt, to the extent required by the terms thereof
(an "Asset Sale Offer"), to purchase the maximum principal amount of Exchange
Debentures and any such Pari Passu Debt that may be purchased out of the Excess
Proceeds, at an offer price in cash in an amount equal to 100% of the principal
amount thereof plus accrued and unpaid interest thereon to the date of
purchase, in accordance with the procedures set forth in this Indenture or the
agreements governing Pari Passu Debt, as applicable; provided, however, that
the Company may only purchase Pari Passu Debt in an Asset Sale Offer that was
issued pursuant to an indenture having a provision substantially similar to the
Asset Sale Offer provision contained in this Indenture. To the extent that the
aggregate amount of Exchange Debentures and Pari Passu Debt tendered pursuant
to an Asset Sale Offer is less than the Excess Proceeds, the Company may use
any remaining Excess Proceeds for general corporate purposes. If the aggregate
principal amount of Exchange Debentures and Pari Passu Debt surrendered exceeds
the amount of Excess Proceeds, the Trustee shall select the Exchange Debentures
and Pari Passu Debt to be purchased on a pro rata basis, based upon the
principal amount thereof surrendered in such Asset Sale Offer. Upon completion
of such offer to purchase, the amount of Excess Proceeds shall be reset at
zero.
Notwithstanding the immediately preceding paragraph, the Company and its
Subsidiaries will be permitted to consummate an Asset Sale without complying
with such paragraph if (i) the Company or the applicable Subsidiary, as the
case may be, receives consideration at the time of such Asset Sale at least
equal to the Fair Market Value of the assets or other property sold, issued or
otherwise dispose of (as evidenced by a resolution of the Company's Board of
Directors set forth in an Officers' Certificate delivered to the Trustee) and
(ii) at least 75% of the consideration for such Asset Sale constitutes assets
or other property of a kind usable by the Company and its Subsidiaries in the
business of the Company and its Subsidiaries as conducted by the Company and
its Subsidiaries on the date of this Indenture; provided that any consideration
not constituting assets or property of a kind usable by the Company and its
Subsidiaries in the business conducted by them on the date of such Asset Sale
received by the Company or any of its Subsidiaries in connection with any Asset
Sale permitted to be consummated under this paragraph shall constitute Net
Proceeds subject to the provisions of the two succeeding paragraphs.
SECTION 4.14 LIENS.
The Company shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, create, incur, assume or suffer to exist any Lien
securing Indebtedness (other than Senior Debt) on any asset now owned or
hereafter acquired, or on any income or profits therefrom, except Permitted
Liens.
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SECTION 4.15 DIVIDEND AND OTHER PAYMENT RESTRICTIONS
AFFECTING SUBSIDIARIES.
The Company shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, create or otherwise cause or suffer to exist or become
effective any encumbrance or restriction on the ability of any Subsidiary to
(i)(x) pay dividends or make any other distributions to the Company or any of
its Subsidiaries (1) on its Capital Stock or (2) with respect to any other
interest or participation in, or measured by, its profits, or (y) pay any
indebtedness owed to the Company or any of its Subsidiaries, (ii) make loans or
advances to the Company or any of its Subsidiaries or (iii) transfer any of its
properties or assets to the Company or any of its Subsidiaries, except for such
encumbrances or restrictions existing under or by reason of (a) Existing
Indebtedness as in effect on the Closing Date, (b) the Credit Agreement as in
effect as of the Closing Date, and any amendments, modifications, restatements,
renewals, increases, supplements, refundings, replacements or refinancings
thereof, and any other agreement governing or relating to Senior Debt, provided
that all such amendments, modifications, restatements, renewals, increases,
supplements, refundings, replacement or refinancings and other agreements are
no more restrictive with respect to such dividend and other payment
restrictions than those contained in the Credit Agreement as in effect on the
Closing Date, (c) the Senior Subordinated Note Indenture, the Senior
Subordinated Notes and the subsidiary guarantees thereof, in each case, as in
effect on the Closing Date, (d) this Indenture and the Exchange Debentures, (e)
applicable law, (f) any instrument governing Indebtedness or Capital Stock of a
Person acquired by the Company or any of its Subsidiaries as in effect at the
time of such acquisition (except to the extent such Indebtedness was incurred
in connection with or in contemplation of such acquisition), which encumbrance
or restriction is not applicable to any Person, or the properties or assets of
any Person, other than the Person, or the property or assets of the Person, so
acquired, provided that, in the case of Indebtedness, such Indebtedness was
permitted by the terms of this Indenture to be incurred, (g) by reason of
customary non-assignment provisions in leases entered into in the ordinary
course of business and consistent with past practices, or (h) Permitted
Refinancing Debt, provided that the restrictions contained in the agreements
governing such Permitted Refinancing Debt are no more restrictive than those
contained in the agreements governing the Indebtedness being refinanced.
SECTION 4.16 NO SENIOR SUBORDINATED DEBT.
The Company shall not incur, create, issue, assume, Guarantee or
otherwise become liable for any Indebtedness that is subordinate or junior in
right of payment to any Senior Debt and senior in any respect in right of
payment to the Exchange Debentures.
SECTION 4.17 SALE AND LEASEBACK TRANSACTIONS.
The Company shall not, and shall not permit any of its Subsidiaries to,
enter into any sale and leaseback transaction; provided that the Company may
enter into a sale and leaseback transaction if (i) the Company could have (a)
incurred Indebtedness (other than Permitted Debt) in an amount equal to the
Attributable Debt relating to such sale and leaseback transaction pursuant to
the Debt to Cash Flow Ratio test set forth in the first paragraph of Section
4.08 hereof and (b) incurred a Lien to secure such Indebtedness pursuant to
Section 4.14 hereof, (ii) the gross cash proceeds of such sale and leaseback
transaction are at least equal to the Fair Market Value (as determined in good
faith by the Board of Directors and set forth in an Officers' Certificate
delivered to the Trustee) of the property that is the subject of such sale and
leaseback transaction and (iii) the transfer of assets in such sale and
leaseback transaction is permitted by, and the Company applies the proceeds of
such transaction in compliance with Section 4.13 hereof.
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SECTION 4.18 LIMITATION ON ISSUANCES AND SALES OF CAPITAL
STOCK OF WHOLLY OWNED SUBSIDIARIES.
The Company (i) shall not, and will not permit any Wholly Owned
Subsidiary of the Company to, transfer, convey, sell, lease or otherwise
dispose of any Capital Stock of any Wholly Owned Subsidiary of the Company to
any Person (other than the Company or a Wholly Owned Subsidiary of the
Company), unless (a) such transfer, conveyance, sale, lease or other
disposition is of all the Capital Stock of such Wholly Owned Subsidiary and (b)
the cash Net Proceeds from such transfer, conveyance, sale, lease or other
disposition are applied in accordance with Section 4.13 hereof and (ii) will
not permit any Wholly Owned Subsidiary of the Company to issue any of its
Equity Interests (other than, if necessary, shares of its Capital Stock
constituting directors' qualifying shares) to any Person other than to the
Company or a Wholly Owned Subsidiary of the Company; provided that the
Subsidiaries of the Company may issue Preferred Stock (other than Disqualified
Stock) in accordance with Section 4.08 hereof.
SECTION 4.19 BUSINESS ACTIVITIES.
The Company shall not, and shall not permit any Subsidiary to, engage in
any business other than (i) the Broadcast Business and such business activities
as are incidental or related thereto and (ii) such other businesses as the
Company or its Subsidiaries are engaged in on the Closing Date.
ARTICLE 5
SUCCESSORS
SECTION 5.01. MERGER, CONSOLIDATION, OR SALE OF ASSETS.
The Company shall not consolidate or merge with or into (whether or
not the Company is the surviving corporation), or sell, assign, transfer,
lease, convey or otherwise dispose of all or substantially all of its
properties or assets in one or more related transactions, to another
corporation, Person or entity unless (i) the Company is the surviving entity or
the entity or the Person formed by or surviving any such consolidation or
merger (if other than the Company) or to which such sale, assignment, transfer,
lease, conveyance or other disposition shall have been made is a corporation
organized or existing under the laws of the United States, any state thereof or
the District of Columbia; (ii) the entity or Person formed by or surviving any
such consolidation or merger (if other than the Company) or the entity or
Person to which such sale, assignment, transfer, lease, conveyance or other
disposition shall have been made assumes all the Obligations of the Company
under the Exchange Debentures and this Indenture pursuant to a supplemental
indenture in a form reasonably satisfactory to the Trustee; (iii) immediately
after such transaction no Default or Event of Default exists; (iv) such
transaction will not result in the loss or suspension or material impairment of
any Material Broadcast License; and (v) except in the case of a merger of the
Company with or into a Wholly Owned Subsidiary of the Company, the Company or
the entity or Person formed by or surviving any such consolidation or merger
(if other than the Company), or to which such sale, assignment, transfer,
lease, conveyance or other disposition shall have been made (A) shall have a
Consolidated Net Worth immediately after the transaction equal to or greater
than the Consolidated Net Worth of the Company immediately preceding the
transaction; and (B) will, at the time of such transaction and after giving pro
forma effect thereto as if such transaction had occurred at the beginning of
the applicable four-quarter period, be permitted to incur at least $1.00 of
additional Indebtedness pursuant to the Debt to Cash Flow Ratio test set forth
in the first paragraph of the covenant described under Section 4.08 hereof.
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SECTION 5.02. SUCCESSOR CORPORATION SUBSTITUTED.
Upon any consolidation or merger, or any sale, assignment, transfer,
lease, conveyance or other disposition of all or substantially all of the
assets of the Company in accordance with Section 5.01 hereof, the successor
corporation formed by such consolidation or into or with which the Company is
merged or to which such sale, assignment, transfer, lease, conveyance or other
disposition is made shall succeed to, and be substituted for (so that from and
after the date of such consolidation, merger, sale, lease, conveyance or other
disposition, the provisions of this Indenture referring to the "Company" shall
refer instead to the successor corporation and not to the Company), and may
exercise every right and power of the Company under this Indenture with the
same effect as if such successor Person had been named as the Company herein;
provided, however, that the predecessor Company shall not be relieved from the
obligation to pay the principal of and interest and , if any, on the Exchange
Debentures except in the case of a sale of all of the Company's assets that
meets the requirements of Section 5.01 hereof.
ARTICLE 6
DEFAULTS AND REMEDIES
SECTION 6.01. EVENTS OF DEFAULT.
Each of the following constitutes an "Event of Default":
(i) a default for 30 days in the payment when due of interest
on, the Exchange Debentures (whether or not prohibited by Article 10
hereof);
(ii) a default in payment when due of the principal of or
premium, if any, on the Exchange Debentures (whether or not
prohibited by Article 10 hereof);
(iii) the failure by the Company to comply with the provisions
described under Sections 3.09, 4.07, 4.08, 4.11, 4.13 and 5.01
hereof;
(iv) the failure by the Company for 60 days after notice to
comply with any of its other agreements in this Indenture or the
Exchange Debentures;
(v) a default under any mortgage, indenture or instrument under
which there may be issued or by which there may be secured or
evidenced any Indebtedness for money borrowed by the Company or any
of its Subsidiaries (or the payment of which is guaranteed by the
Company or any of its Subsidiaries) whether such Indebtedness or
guarantee now exists, or is created after the date hereof, which
default (a) is caused by a failure to pay principal of or premium,
if any, or interest on such Indebtedness prior to the expiration of
the grace period provided in such Indebtedness on the date of such
default (a "Payment Default") or (b) results in the acceleration of
such Indebtedness prior to its express maturity and, in each case,
the principal amount of any such Indebtedness, together with the
principal amount of any other such Indebtedness under which there
has been a payment default or the maturity of which has been so
accelerated, aggregates $25.0 million or more;
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(vi) the failure by the Company or any of its Subsidiaries to
pay final judgments aggregating in excess of $10.0 million, which
judgments are not paid, discharged or stayed for a period of 60
days;
(vii) the Company, any Significant Subsidiary of the Company or
any group of Subsidiaries that, taken together, would constitute a
Significant Subsidiary pursuant to or within the meaning of
Bankruptcy Law:
(a) commences a voluntary case,
(b) consents to the entry of an order for relief
against it in an involuntary case,
(c) consents to the appointment of a Custodian of
it or for all or substantially all of its property,
(d) makes a general assignment for the benefit of
its creditors, or
(e) generally is not paying its debts as they
become due; or
(viii) a court of competent jurisdiction enters
an order or decree under any Bankruptcy Law that:
(a) is for relief against the Company, any of its
Significant Subsidiaries or any group of its Subsidiaries that,
taken together, would constitute a Significant Subsidiary in an
involuntary case;
(b) appoints a Custodian of the Company, any of its
Significant Subsidiaries, or any group of its Subsidiaries
that, taken together, would constitute a Significant Subsidiary
or for all or substantially all of the property of the Company,
any of its Significant Subsidiaries or any group of its
Subsidiaries that, taken together, would constitute a
Significant Subsidiary; or
(c) orders the liquidation of the Company, any of
its Significant Subsidiaries or any group of its Subsidiaries
that, taken together, would constitute a Significant
Subsidiary;
and the order or decree remains unstayed and in effect for 60
consecutive days.
The term "Custodian" means any receiver, trustee, assignee,
liquidator or similar official under any Bankruptcy Law.
An Event of Default shall not be deemed to have occurred under clause
(iv) of this Section 6.01 until the Trustee notifies the Company, or the
Holders of at least 25% in principal amount of the then outstanding Exchange
Debentures notify the Company and the Trustee, of the Default and the Company
does not cure the Default within 60 days after receipt of the notice. The
notice must specify the Default, demand that it be remedied and state that the
notice is a "Notice of Default."
In the case of any Event of Default pursuant to the provisions of this
Section 6.01 occurring by reason of any willful action (or inaction) taken (or
not taken) by or on behalf of the Company with the
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intention of avoiding payment of the premium that the Company would have had to
pay if the Company then had elected to redeem the Exchange Debentures pursuant
to Section 3.07 hereof, an equivalent premium shall also become and be
immediately due and payable to the extent permitted by law upon the
acceleration of the Exchange Debentures, anything in this Indenture or in the
Exchange Debentures to the contrary notwithstanding. If an Event of Default
occurs prior to January 15, 2002 by reason of any action (or inaction)
willfully taken (or not taken) by or on behalf of the Company with the
intention of avoiding the prohibition on redemption of the Exchange Debentures
prior to January 15, 2002, then the premium payable for purposes of this
paragraph for each of the years beginning on January 15 of the years set forth
below shall be as set forth in the following table expressed as a percentage of
the amount that would otherwise be due but for the provisions of this sentence,
plus accrued interest, to the date of payment:
Year Percentage
1997...................................... 114.202%
1998...................................... 112.624%
1999...................................... 111.046%
2000...................................... 109.468%
2001...................................... 107.890%
SECTION 6.02. ACCELERATION.
If any Event of Default (other than an Event of Default specified in
clauses (vii) or (viii) of Section 6.01 hereof) occurs and is continuing, the
Trustee or the Holders of at least 25% in principal amount of the then
outstanding Exchange Debentures may declare all the Exchange Debentures to be
due and payable immediately. Upon any such declaration, the Exchange Debentures
shall become due and payable immediately. Notwithstanding the foregoing, if an
Event of Default specified in clauses (vii) or (viii) of Section 6.01 hereof
occurs with respect to the Company, any of its Significant Subsidiaries or any
group of its Subsidiaries that, taken together, would constitute a Significant
Subsidiary, such an amount shall ipso facto become and be immediately due and
payable without any declaration or other act on the part of the Trustee or any
Holder. The Holders of a majority in principal amount of the then outstanding
Exchange Debentures by written notice to the Trustee may rescind an
acceleration and its consequences if the rescission would not conflict with any
judgment or decree and if all existing Events of Default (except nonpayment of
principal or interest that has become due solely because of the acceleration)
have been cured or waived.
In addition, the Company shall promptly notify holders of Senior
Debt if payment of the Exchange Debentures is accelerated because of an Event
of Default.
SECTION 6.03. OTHER REMEDIES.
If an Event of Default occurs and is continuing, the Trustee may
pursue any available remedy to collect the payment of principal, premium and
interest on the Exchange Debentures or to enforce the performance of any
provision of the Exchange Debentures or this Indenture.
The Trustee may maintain a proceeding even if it does not possess
any of the Exchange Debentures or does not produce any of them in the
proceeding. A delay or omission by the Trustee or any Holder of a Exchange
Debentures in exercising any right or remedy accruing upon an Event of
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Default shall not impair the right or remedy or constitute a waiver of or
acquiescence in the Event of Default. All remedies are cumulative to the extent
permitted by law.
SECTION 6.04. WAIVER OF PAST DEFAULTS.
Holders of not less than a majority in aggregate principal amount of
the then outstanding Exchange Debentures may by notice to the Trustee on behalf
of the Holders of all of the Exchange Debentures waive an existing Default or
Event of Default and its consequences hereunder, except a continuing Default or
Event of Default in the payment of the principal of, premium or interest on,
the Exchange Debentures (including in connection with an offer to purchase)
(provided, however, that the Holders of a majority in aggregate principal
amount of the then outstanding Exchange Debentures may rescind an acceleration
and its consequences, including any related payment default that resulted from
such acceleration). Upon any such waiver, such Default shall cease to exist,
and any Event of Default arising therefrom shall be deemed to have been cured
for every purpose of this Indenture; but no such waiver shall extend to any
subsequent or other Default or impair any right consequent thereon.
SECTION 6.05. CONTROL BY MAJORITY.
Holders of a majority in principal amount of the then outstanding
Exchange Debentures may direct the time, method and place of conducting any
proceeding for exercising any remedy available to the Trustee or exercising any
trust or power conferred on it. However, the Trustee may refuse to follow any
direction that conflicts with law or this Indenture that the Trustee determines
may be unduly prejudicial to the rights of other Holders of Exchange Debentures
or that may involve the Trustee in personal liability and shall be entitled to
the benefit of Section 7.01(c)(iii) hereof.
SECTION 6.06. LIMITATION ON SUITS.
A Holder of a Exchange Debentures may pursue a remedy with respect
to this Indenture or the Exchange Debentures only if:
(a) the Holder of a Exchange Debentures gives to the Trustee
written notice of a continuing Event of Default;
(b) the Holders of at least 25% in principal amount of the
then outstanding Exchange Debentures make a written request to the
Trustee to pursue the remedy;
(c) such Holder of a Exchange Debentures or Holders of Exchange
Debentures offer and, if requested, provide to the Trustee indemnity
satisfactory to the Trustee against any loss, liability or expense;
(d) the Trustee does not comply with the request within
60 days after receipt of the request and the offer and, if requested,
the provision of indemnity; and
(e) during such 60-day period the Holders of a majority in principal
amount of the then outstanding Exchange Debentures do not give the
Trustee a direction inconsistent with the request.
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A Holder of a Exchange Debentures may not use this Indenture to prejudice the
rights of another Holder of a Exchange Debentures or to obtain a preference or
priority over another Holder of a Exchange Debentures.
SECTION 6.07. RIGHTS OF HOLDERS OF EXCHANGE DEBENTURES
TO RECEIVE PAYMENT.
Notwithstanding any other provision of this Indenture, the right of
any Holder of a Exchange Debentures to receive payment of principal, premium
and interest on the Exchange Debentures, on or after the respective due dates
expressed in the Exchange Debentures (including in connection with an offer to
purchase), or to bring suit for the enforcement of any such payment on or after
such respective dates, shall not be impaired or affected without the consent of
such Holder.
SECTION 6.08. COLLECTION SUIT BY TRUSTEE.
If an Event of Default specified in Section 6.01(i) or (ii) hereof
occurs and is continuing, the Trustee is authorized to recover judgment in its
own name and as trustee of an express trust against the Company for the whole
amount of principal of, premium and interest remaining unpaid on the Exchange
Debentures and interest on overdue principal and, to the extent lawful,
interest and such further amount as shall be sufficient to cover the costs and
expenses of collection, including the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel.
SECTION 6.09. TRUSTEE MAY FILE PROOFS OF CLAIM.
The Trustee is authorized to file such proofs of claim and other
papers or documents as may be necessary or advisable in order to have the
claims of the Trustee (including any claim for the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents (including
accountants, experts or such other professionals as the Trustee deems
necessary, advisable or appropriate) and counsel (including the allocated costs
of inside counsel)) and the Holders of the Exchange Debentures allowed in any
judicial proceedings relative to the Company (or any other obligor upon the
Exchange Debentures), its creditors or its property and shall be entitled and
empowered to collect, receive and distribute any money or other property
payable or deliverable on any such claims and any custodian in any such
judicial proceeding is hereby authorized by each Holder to make such payments
to the Trustee, and in the event that the Trustee shall consent to the making
of such payments directly to the Holders, to pay to the Trustee any amount due
to it for the reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel, and any other amounts due the Trustee
under Section 7.07 hereof. To the extent that the payment of any such
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, and any other amounts due the Trustee under Section 7.07 hereof
out of the estate in any such proceeding, shall be denied for any reason,
payment of the same shall be secured by a Lien on, and shall be paid out of,
any and all distributions, dividends, money, securities and other properties
that the Holders may be entitled to receive in such proceeding whether in
liquidation or under any plan of reorganization or arrangement or otherwise.
Nothing herein contained shall be deemed to authorize the Trustee to authorize
or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Exchange
Debentures or the rights of any Holder, or to authorize the Trustee to vote in
respect of the claim of any Holder in any such proceeding.
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SECTION 6.10. PRIORITIES.
If the Trustee collects any money pursuant to this Article 6, it
shall pay out the money in the following order:
First: to the Trustee, its agents and attorneys for amounts due
under Section 7.07 hereof, including payment of all compensation, expense and
liabilities incurred, and all advances made, by the Trustee and the costs and
expenses of collection;
Second: to Holders of Exchange Debentures for amounts due and unpaid
on the Exchange Debentures for principal, premium and interest, ratably, without
preference or priority of any kind, according to the amounts due and payable on
the Exchange Debentures for principal, premium and interest, respectively; and
Third: to the Company or to such party as a court of competent
jurisdiction shall direct.
The Trustee may fix a record date and payment date for any payment
to Holders of Exchange Debentures pursuant to this Section 6.10.
SECTION 6.11. UNDERTAKING FOR COSTS.
In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or omitted by
it as a Trustee, a court in its discretion may require the filing by any party
litigant in the suit of an undertaking to pay the costs of the suit, and the
court in its discretion may assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in the suit, having due regard to
the merits and good faith of the claims or defenses made by the party litigant.
This Section 6.11 does not apply to a suit by the Trustee, a suit by a Holder
of a Exchange Debentures pursuant to Section 6.07 hereof, or a suit by Holders
of more than 10% in principal amount of the then outstanding Exchange
Debentures.
ARTICLE 7
TRUSTEE
SECTION 7.01. DUTIES OF TRUSTEE.
(a) If an Event of Default has occurred and is continuing, the
Trustee shall exercise such of the rights and powers vested in it by this
Indenture, and use the same degree of care and skill in its exercise thereof,
as a prudent man would exercise or use under the circumstances in the conduct
of his own affairs.
(b) Except during the continuance of an Event of Default:
(i) the duties of the Trustee shall be determined solely by the
express provisions of this Indenture and the TIA and the Trustee need
perform only those duties that are specifically set forth in this
Indenture and no others, and no implied covenants or obligations shall be
read into this Indenture or the TIA against the Trustee; and
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(ii) in the absence of bad faith on its part, the Trustee may
conclusively rely, without investigation, as to the truth of the
statements and the correctness of the opinions expressed therein, upon
any statements, certificates or opinions furnished to the Trustee and
conforming to the requirements of this Indenture. However, the Trustee
shall examine the certificates and opinions to determine whether or not
they conform on their face to the requirements of this Indenture.
(c) The Trustee may not be relieved from liabilities for its own
gross negligent action, its own gross negligent failure to act, or its own
willful misconduct, except that:
(i) this paragraph does not limit the effect of paragraph
(b) of this Section;
(ii) the Trustee shall not be liable for any error of judgment made
in good faith by a Responsible Officer, unless it is proved that the
Trustee was negligent in ascertaining the pertinent facts; and
(iii) the Trustee shall not be liable with respect to any action it
takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.05 hereof.
(d) Whether or not therein expressly so provided, every provision of
this Indenture that in any way relates to the Trustee is subject to this
Section 7.01.
(e) No provision of this Indenture shall require the Trustee to
expend or risk its own funds or incur any liability. The Trustee shall be under
no obligation to exercise any of its rights and powers under this Indenture at
the request of any Holders, unless such Holder shall have offered to the
Trustee security and indemnity satisfactory to it against any loss, liability
or expense which might be incurred by it in compliance with such request or
direction.
(f) The Trustee shall not be liable for interest on any money
received by it except as the Trustee may agree in writing with the Company.
Money held in trust by the Trustee need not be segregated from other funds
except to the extent required by law.
SECTION 7.02. RIGHTS OF TRUSTEE.
(a) The Trustee may conclusively rely and shall be protected in
acting or refraining from acting upon any document believed by it to be genuine
and to have been signed or presented by the proper Person. The Trustee need not
investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may require
an Officers' Certificate or an Opinion of Counsel or both. The Trustee shall
not be liable for any action it takes or omits to take in good faith in
reliance on such Officers' Certificate or Opinion of Counsel. The Trustee may
consult with counsel and the written advice of such counsel or any Opinion of
Counsel shall be full and complete authorization and protection from liability
in respect of any action taken, suffered or omitted by it hereunder in good
faith and in reliance thereon.
(c) The Trustee may act through its attorneys, accountants, experts
and such other professionals as the Trustee deems necessary, advisable or
appropriate and shall not be responsible for the misconduct or negligence of
any attorney, accountant, expert or other such professional appointed with due
care.
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(d) The Trustee shall not be liable for any action it takes or omits
to take in good faith that it believes to be authorized or within the rights or
powers conferred upon it by this Indenture.
(e) Unless otherwise specifically provided in this Indenture, any
demand, request, direction or notice from the Company shall be sufficiently
evidenced by a written order signed by an Officer of the Company issuing such
demand, request, direction or notice.
(f) The Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction of
any of the Holders unless such Holders shall have offered to the Trustee
reasonable security or indemnity against the costs, expenses and liabilities
that might be incurred by it in compliance with such request or direction.
SECTION 7.03. INDIVIDUAL RIGHTS OF TRUSTEE.
The Trustee in its individual or any other capacity may become the
owner or pledgee of Exchange Debentures and may otherwise deal with the Company
or any Affiliate of the Company with the same rights it would have if it were
not Trustee. However, in the event that the Trustee acquires any conflicting
interest within the meaning of the TIA it must eliminate such conflict within
90 days, apply to the SEC for permission to continue as trustee or resign. Any
Agent may do the same with like rights and duties. The Trustee is also subject
to Sections 7.10 and 7.11 hereof.
SECTION 7.04. TRUSTEE'S DISCLAIMER.
The Trustee shall not be responsible for and makes no representation
as to the validity or adequacy of this Indenture or the Exchange Debentures, it
shall not be accountable for the Company's use of the proceeds from the
Exchange Debentures or any money paid to the Company or upon the Company's
direction under any provision of this Indenture, it shall not be responsible
for the use or application of any money received by any Paying Agent other than
the Trustee, and it shall not be responsible for any statement or recital
herein or any statement in the Exchange Debentures or any other document in
connection with the sale of the Exchange Debentures or pursuant to this
Indenture other than its certificate of authentication.
SECTION 7.05. NOTICE OF DEFAULTS.
If a Default or Event of Default occurs and is continuing and if it
is known to the Trustee, the Trustee shall mail to Holders of Exchange
Debentures a notice of the Default or Event of Default within 90 days after it
occurs. Except in the case of a Default or Event of Default in payment of
principal of, premium or interest on any Exchange Debentures, the Trustee may
withhold the notice if and so long as a committee of its Responsible Officers
in good faith determines that withholding the notice is in the interests of the
Holders of the Exchange Debentures.
SECTION 7.06. REPORTS BY TRUSTEE TO HOLDERS OF THE
EXCHANGE DEBENTURES.
Within 60 days after each July 1 beginning with the July 1 following
the date of this Indenture, and for so long as Exchange Debentures remain
outstanding, the Trustee shall mail to the Holders of the Exchange Debentures a
brief report dated as of such reporting date that complies with TIA ss. 313(a)
(but if no event described in TIA ss. 313(a) has occurred within the twelve
months preceding the reporting date,
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no report need be transmitted). The Trustee also shall comply with TIA ss.
313(b)(2). The Trustee shall also transmit by mail all reports as required by
TIA ss. 313(c).
A copy of each report at the time of its mailing to the Holders of
Exchange Debentures shall be mailed to the Company and filed with the SEC and
each stock exchange on which the Exchange Debentures are listed in accordance
with TIA ss. 313(d). The Company shall promptly notify the Trustee when the
Exchange Debentures are listed on any stock exchange.
SECTION 7.07. COMPENSATION, REIMBURSEMENT AND INDEMNITY.
The Company shall pay to the Trustee from time to time reasonable
compensation for its acceptance of this Indenture and the rendering by it of
the services required hereunder. The Trustee's compensation shall not be
limited by any law on compensation of a trustee of an express trust. The
Company shall reimburse the Trustee promptly upon request for all reasonable
disbursements, advances and expenses incurred or made by or on behalf of it in
addition to the compensation for its services. Such expenses shall include the
reasonable compensation, disbursements and expenses of the Trustee's attorneys,
accountants, experts and such other professionals as the Trustee deems
reasonably necessary, advisable or appropriate.
The Company shall indemnify the Trustee against any and all losses,
liabilities or expenses incurred by it arising out of or in connection with the
acceptance or administration of its duties under this Indenture (including its
duties under Section 9.06 hereof), including the costs and expenses of
enforcing this Indenture against the Company (including this Section 7.07
hereof) and defending itself against or investigating any claim (whether
asserted by the Company or any Holder or any other person) or liability in
connection with the exercise or performance of any of its powers or duties
hereunder, except to the extent any such loss, liability or expense may be
attributable to its gross negligence or willful misconduct. The Trustee shall
notify the Company promptly of any claim for which it may seek indemnity.
Failure by the Trustee to so notify the Company shall not relieve the Company
of its obligations hereunder. The Company shall defend any claim or threatened
claim asserted against the Trustee, and the Trustee shall cooperate in the
defense thereof. The Trustee may have separate counsel and the Company shall
pay the reasonable fees and expenses of such counsel. The Company need not pay
for any settlement made without their consent, which consent shall not be
unreasonably withheld.
The obligations of the Company under this Section 7.07 shall survive
the satisfaction and discharge of this Indenture.
To secure the Company's payment obligations in this Section 7.07,
the Trustee shall have a Lien prior to the Exchange Debentures on all money or
property held or collected by the Trustee, except any money held in trust to
pay principal and interest on particular Exchange Debentures. Such Lien shall
survive the satisfaction and discharge of this Indenture.
When the Trustee incurs expenses or renders services after an Event
of Default specified in Section 6.01 (vii) or (viii) or (ix) hereof occurs, the
expenses and the compensation for the services (including the fees and expenses
of its agents and counsel) are intended to constitute expenses of
administration under any Bankruptcy Law.
The Trustee shall comply with the provisions of TIA ss. 313(b)(2) to
the extent applicable.
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SECTION 7.08. REPLACEMENT OF TRUSTEE.
A resignation or removal of the Trustee and appointment of a
successor Trustee shall become effective only upon the successor Trustee's
acceptance of appointment as provided in this Section.
The Trustee may resign in writing at any time and be discharged from
the trust hereby created by so notifying the Company. The Holders of Exchange
Debentures of a majority in principal amount of the then outstanding Exchange
Debentures may remove the Trustee by so notifying the Trustee and the Company
in writing. The Company may remove the Trustee if:
(a) the Trustee fails to comply with Section 7.10 hereof;
(b) the Trustee is adjudged a bankrupt or an insolvent or an
order for relief is entered with respect to the Trustee under any
applicable Bankruptcy Law;
(c) a Custodian or public officer takes charge of the Trustee
or its property for the purpose of rehabilitation, conservation or
liquidation; or
(d) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Company shall promptly appoint a
successor Trustee. Within one year after the successor Trustee takes office,
the Holders of a majority in principal amount of the then outstanding Exchange
Debentures may appoint a successor Trustee to replace the successor Trustee
appointed by the Company.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company, or
the Holders of Exchange Debentures of at least 10% in principal amount of the
then outstanding Exchange Debentures may petition any court of competent
jurisdiction for the appointment of a successor Trustee.
If the Trustee, after written request by any Holder of a Exchange
Debentures who has been a Holder of a Exchange Debentures for at least six
months, fails to comply with Section 7.10 hereof, such Holder of a Exchange
Debentures may petition any court of competent jurisdiction for the removal of
the Trustee and the appointment of a successor Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon, the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. The Company shall mail a notice of its succession to
Holders of the Exchange Debentures. The retiring Trustee shall promptly
transfer all property held by it as Trustee to the successor Trustee, provided
all sums owing to the Trustee hereunder have been paid and subject to the Lien
provided for in Section 7.07 hereof. Notwithstanding replacement of the Trustee
pursuant to this Section 7.08, the Company's obligations under Section 7.07
hereof shall continue for the benefit of the retiring Trustee.
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SECTION 7.09. SUCCESSOR TRUSTEE BY MERGER, ETC.
If the Trustee consolidates, merges or converts into, or transfers
all or substantially all of its corporate trust business to, another
corporation, the successor corporation without any further act shall be the
successor Trustee.
SECTION 7.10. ELIGIBILITY; DISQUALIFICATION.
There shall at all times be a Trustee hereunder that is a
corporation organized and doing business under the laws of the United States of
America or of any state thereof that is authorized under such laws to exercise
corporate trustee power, that is subject to supervision or examination by
federal or state authorities and that has a combined capital and surplus of at
least $100 million as set forth in its most recent published annual report of
condition.
This Indenture shall always have a Trustee who satisfies the
requirements of TIA ss. 310(a)(1), (2) and (5). The Trustee is subject to TIA
ss. 310(b).
SECTION 7.11. PREFERENTIAL COLLECTION OF CLAIMS AGAINST
COMPANY.
The Trustee is subject to TIA ss. 311(a), excluding any creditor
relationship listed in TIA ss. 311(b). A Trustee who has resigned or been
removed shall be subject to TIA ss. 311(a) to the extent indicated therein.
ARTICLE 8
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
SECTION 8.01. OPTION TO EFFECT LEGAL DEFEASANCE OR
COVENANT DEFEASANCE.
The Company may, at the option of its Board of Directors evidenced
by a resolution set forth in an Officers' Certificate, at any time, elect to
have either Section 8.02 or 8.03 hereof be applied to all outstanding Exchange
Debentures upon compliance with the conditions set forth below in this Article
8.
SECTION 8.02. LEGAL DEFEASANCE AND DISCHARGE.
Upon the Company's exercise under Section 8.01 hereof of the option
applicable to this Section 8.02, the Company shall, subject to the satisfaction
of the conditions set forth in Section 8.04 hereof, be deemed to have been
discharged from their obligations with respect to all outstanding Exchange
Debentures on the date the conditions set forth below are satisfied
(hereinafter, "Legal Defeasance"). For this purpose, Legal Defeasance means
that the Company shall be deemed to have paid and discharged the entire
Indebtedness represented by the outstanding Exchange Debentures, which shall
thereafter be deemed to be "outstanding" only for the purposes of Section 8.05
hereof and the other Sections of this Indenture referred to in (a) and (b)
below, and to have satisfied all of its other Obligations under such Exchange
Debentures and this Indenture (and the Trustee, on demand of and at the expense
of the Company, shall execute proper instruments acknowledging the same),
except for the following provisions which shall survive until otherwise
terminated or discharged hereunder: (a) the rights of Holders of outstanding
Exchange Debentures to receive solely from the trust fund described in Section
8.04 hereof, and as more fully set forth in such Section, payments in respect
of the principal of, premium, if any, and interest on
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such Exchange Debentures when such payments are due, (b) the Company's
obligations with respect to such Exchange Debentures under Article 2 and
Section 4.02 hereof, (c) the rights, powers, trusts, duties and immunities of
the Trustee hereunder and the Company's obligations in connection therewith and
(d) this Article 8. Subject to compliance with this Article 8, the Company may
exercise its option under this Section 8.02 notwithstanding the prior exercise
of its option under Section 8.03 hereof.
SECTION 8.03. COVENANT DEFEASANCE.
Upon the Company's exercise under Section 8.01 hereof of the option
applicable to this Section 8.03, the Company shall, subject to the satisfaction
of the conditions set forth in Section 8.04 hereof, be released from their
obligations under the covenants contained in Sections 3.09, 4.07, 4.08, 4.09,
4.10, 4.11, 4.13, 4.14, 4.15, 4.16, 4.17, 4.18, 4.19 and 5.01 hereof with
respect to the outstanding Exchange Debentures on and after the date the
conditions set forth below are satisfied (hereinafter, "Covenant Defeasance"),
and the Exchange Debentures shall thereafter be deemed not "outstanding" for
the purposes of any direction, waiver, consent or declaration or act of Holders
(and the consequences of any thereof) in connection with such covenants, but
shall continue to be deemed "outstanding" for all other purposes hereunder (it
being understood that such Exchange Debentures shall not be deemed outstanding
for accounting purposes). For this purpose, Covenant Defeasance means that,
with respect to the "outstanding" Exchange Debentures, the Company may omit to
comply with and shall have no liability in respect of any term, condition or
limitation set forth in any such covenant, whether directly or indirectly, by
reason of any reference elsewhere herein to any such covenant or by reason of
any reference in any such covenant to any other provision herein or in any
other document and such omission to comply shall not constitute a Default or an
Event of Default under Section 6.01 (iii) or (iv) hereof, but, except as
specified above, the remainder of this Indenture and such Exchange Debentures
shall be unaffected thereby. In addition, upon the Company's exercise under
Section 8.01 hereof of the option applicable to this Section 8.03, subject to
the satisfaction of the conditions set forth in Section 8.04 hereof, Sections
6.01(iii) through 6.01(vii) hereof shall not constitute Events of Default.
SECTION 8.04. CONDITIONS TO LEGAL OR COVENANT DEFEASANCE.
The following shall be the conditions to the application of either
Section 8.02 or 8.03 hereof to the outstanding Exchange Debentures:
In order to exercise either Legal Defeasance or Covenant Defeasance:
(a) the Company must irrevocably deposit with the
Trustee, in trust, for the benefit of the Holders of the Exchange
Debentures, 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 on the outstanding Exchange Debentures on the
stated date for payment thereof or on the applicable redemption
date, as the case may be, and the Company must specify whether the
Exchange Debentures are being defeased to maturity or to a
particular redemption date;
(b) in the case of an election under Section 8.02 hereof,
the Company shall have delivered to the Trustee an Opinion of
Counsel in the United States reasonably acceptable to the Trustee
confirming that (A) the Company has received from, or there has been
published by, the Internal Revenue Service a ruling or (B) since the
date of this Indenture, there has been a change
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in the applicable federal income tax law, in either case to the
effect that, and based thereon such Opinion of Counsel shall confirm
that, the Holders of the outstanding Exchange Debentures will not
recognize income, gain or loss for federal income tax purposes as a
result of such Legal Defeasance and will be subject to federal
income tax on the same amounts, in the same manner and at the same
times as would have been the case if such Legal Defeasance had not
occurred;
(c) in the case of an election under Section 8.03 hereof,
the Company shall have delivered to the Trustee an Opinion of
Counsel in the United States reasonably acceptable to the Trustee
confirming that the Holders of the outstanding Exchange Debentures
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 Sections 6.01 (vii) and
(viii) 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 Exchange Debentures and (B)
assuming no intervening bankruptcy of the Company between the date
of deposit and the 91st day following the deposit, the trust funds
will not be subject to the effects of any applicable bankruptcy,
insolvency, reorganization or similar laws affecting creditors'
rights generally under any applicable United States or state law;
(g) the Company shall have delivered to the Trustee an
Officers' Certificate stating that the deposit was not made by the
Company with the intent of preferring the Holders of Exchange
Debentures over the other creditors of the Company, or with the
intent of defeating, hindering, delaying or defrauding any other
creditors of the Company or others; and
(h) the Company shall have delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, each stating that
all conditions precedent provided for or relating to the Legal
Defeasance or the Covenant Defeasance have been complied with.
SECTION 8.05. DEPOSITED MONEY AND GOVERNMENT SECURITIES
TO BE HELD IN TRUST; OTHER
MISCELLANEOUS PROVISIONS.
Subject to Section 8.06 hereof, all money and non-callable
Government Securities (including the proceeds thereof) deposited with the
Trustee (or other qualifying trustee, collectively for purposes of this Section
8.05, the "Trustee") pursuant to Section 8.04 hereof in respect of the
outstanding Exchange
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Debentures shall be held in trust and applied by the Trustee, in accordance
with the provisions of such Exchange Debentures and this Indenture, to the
payment, either directly or through any Paying Agent (including the Company
acting as Paying Agent) as the Trustee may determine, to the Holders of such
Exchange Debentures of all sums due and to become due thereon in respect of
principal, premium and interest, but such money need not be segregated from
other funds except to the extent required by law.
The Company shall pay and indemnify the Trustee against any tax, fee
or other charge imposed on or assessed against the cash or non-callable
Government Securities deposited pursuant to Section 8.04 hereof or the
principal and interest received in respect thereof other than any such tax, fee
or other charge which by law is for the account of the Holders of the
outstanding Exchange Debentures.
Anything in this Article 8 to the contrary notwithstanding, the
Trustee shall deliver or pay to the Company from time to time upon the request
of the Company any money or non-callable Government Securities held by it as
provided in Section 8.04 hereof which, in the opinion of a nationally
recognized firm of independent public accountants expressed in a written
certification thereof delivered to the Trustee (which may be the opinion
delivered under Section 8.04(a) hereof), are in excess of the amount thereof
that would then be required to be deposited to effect an equivalent Legal
Defeasance or Covenant Defeasance.
SECTION 8.06. REPAYMENT TO THE COMPANY.
Any money deposited with the Trustee or any Paying Agent, or then
held by the Company, in trust for the payment of the principal of, premium or
interest on any Exchange Debentures 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 Exchange Debentures shall
thereafter, as a secured creditor, look only to the Company for payment
thereof, and all liability of the Trustee or such Paying Agent with respect to
such trust money, and all liability of the Company as trustee thereof, shall
thereupon cease; provided, however, that the Trustee or such Paying Agent,
before being required to make any such repayment, may at the expense of the
Company cause to be published once, in the New York Times and The Wall Street
Journal (national editions), notice that such money remains unclaimed and that,
after a date specified therein, which shall not be less than 30 days from the
date of such notification or publication, any unclaimed balance of such money
then remaining will be repaid to the Company.
SECTION 8.07. REINSTATEMENT.
If the Trustee or Paying Agent is unable to apply any United States
dollars or non-callable Government Securities in accordance with Section 8.02
or 8.03 hereof, as the case may be, by reason of any order or judgment of any
court or governmental authority enjoining, restraining or otherwise prohibiting
such application, then the obligations of the Company under this Indenture and
the Exchange Debentures, as applicable, shall be revived and reinstated as
though no deposit had occurred pursuant to Section 8.02 or 8.03 hereof until
such time as the Trustee or Paying Agent is permitted to apply all such money
in accordance with Section 8.02 or 8.03 hereof, as the case may be; provided,
however, that, if the Company makes any payment of principal of, premium or
interest on any Exchange Debentures following the reinstatement of its
obligations, the Company shall be subrogated to the rights of the Holders of
such Exchange Debentures to receive such payment from the money held by the
Trustee or Paying Agent.
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ARTICLE 9
AMENDMENT, SUPPLEMENT AND WAIVER
SECTION 9.01. WITHOUT CONSENT OF HOLDERS OF EXCHANGE
DEBENTURES.
Notwithstanding Section 9.02 of this Indenture, the Company and the
Trustee may amend or supplement this Indenture or the Exchange Debentures
without the consent of any Holder of a Exchange Debentures:
(a) to cure any ambiguity, defect or inconsistency;
(b) to provide for uncertificated Exchange Debentures in addition to
or in place of certificated Exchange Debentures;
(c) to provide for the assumption of the Company's obligations to
the Holders of the Exchange Debentures in the case of a merger or
consolidation pursuant to Article 5 hereof, as applicable;
(d) to make any change that would provide any additional rights or
benefits to the Holders of the Exchange Debentures or that does not
adversely affect the legal rights hereunder of any Holder of Exchange
Debentures; or
(e) to comply with the requirements of the SEC in order to effect or
maintain the qualification of this Indenture under the TIA.
Upon the request of the Company accompanied by a resolution of the
Board of Directors of the Company authorizing the execution of any such amended
or supplemental Indenture, and upon receipt by the Trustee of the documents
described in Section 7.02 hereof, the Trustee shall join with the Company in
the execution of any amended or supplemental Indenture authorized or permitted
by the terms of this Indenture and to make any further appropriate agreements
and stipulations that may be therein contained, but the Trustee shall not be
obligated to enter into such amended or supplemental Indenture that affects its
own rights, duties or immunities under this Indenture or otherwise.
SECTION 9.02. WITH CONSENT OF HOLDERS OF EXCHANGE
DEBENTURES.
Except as provided below in this Section 9.02, the Company and the
Trustee may amend or supplement this Indenture and the Exchange Debentures may
be amended or supplemented with the consent of the Holders of at least a
majority in principal amount of the Exchange Debentures then outstanding
(including consents obtained in connection with a purchase of, or tender offer
or exchange offer for the Exchange Debentures), and, subject to Sections 6.04
and 6.07 hereof, any existing Default or Event of Default (other than a Default
or Event of Default in the payment of the principal of, premium or , if any, or
interest on the Exchange Debentures) or compliance with any provision of this
Indenture or the Exchange Debentures may be waived with the consent of the
Holders of a majority in principal amount of the then outstanding Exchange
Debentures (including consents obtained in connection with a purchase of, or
tender offer or exchange offer for the Exchange Debentures). Any amendment to
(a) the provisions of Article 10 hereof and (b) Sections 3.09, 4.11 and 4.13
including the related definitions will require the consent of the Holders of at
least 75% in aggregate principal amount of the Exchange Debentures then
outstanding if such amendment would adversely affect the rights of Holders of
Exchange Debentures.
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Upon the request of the Company accompanied by a resolution of the
Board of Directors of the Company authorizing the execution of any such amended
or supplemental Indenture, and upon the filing with the Trustee of evidence
satisfactory to the Trustee of the consent of the Holders of Exchange
Debentures as aforesaid, and upon receipt by the Trustee of the documents
described in Section 7.02 hereof, the Trustee shall join with the Company in
the execution of such amended or supplemental Indenture unless such amended or
supplemental Indenture affects the Trustee's own rights, duties or immunities
under this Indenture or otherwise, in which case the Trustee may in its
discretion, but shall not be obligated to, enter into such amended or
supplemental Indenture.
It shall not be necessary for the consent of the Holders of Exchange
Debentures under this Section 9.02 to approve the particular form of any
proposed amendment or waiver, but it shall be sufficient if such consent
approves the substance thereof.
After an amendment, supplement or waiver under this Section 9.02
becomes effective, the Company shall mail to the Holders of Exchange Debentures
affected thereby a notice briefly describing the amendment, supplement or
waiver. Any failure of the Company to mail such notice, or any defect therein,
shall not, however, in any way impair or affect the validity of any such
amended or supplemental Indenture or waiver. Subject to Sections 6.04 and 6.07
hereof, the Holders of a majority in aggregate principal amount of the Exchange
Debentures then outstanding may waive compliance in a particular instance by
the Company with any provision of this Indenture or the Exchange Debentures.
However, without the consent of each Holder affected, an amendment or waiver
may not (with respect to any Exchange Debentures held by a non-consenting
Holder):
(a) reduce the principal amount of Exchange Debentures whose Holders
must consent to an amendment, supplement or waiver;
(b) reduce the principal of or change the fixed maturity of any
Exchange Debentures or alter or waive any of the provisions with respect
to the redemption of the Exchange Debentures (except as provided above
with respect to Sections 3.09, 4.11 and 4.13 hereof);
(c) reduce the rate of or change the time for payment of interest,
including default interest, on any Exchange Debentures;
(d) waive a Default or Event of Default in the payment of principal
of or premium or interest on the Exchange Debentures (except a rescission
of acceleration of the Exchange Debentures by the Holders of at least a
majority in aggregate principal amount of the then outstanding Exchange
Debentures and a waiver of the payment default that resulted from such
acceleration);
(e) make any Exchange Debentures payable in money other than that
stated in the Exchange Debentures;
(f) make any change in the provisions of this Indenture relating to
waivers of past Defaults or the rights of Holders of Exchange Debentures
to receive payments of principal of or premium, if any, or interest on
the Exchange Debentures;
(g) waive a redemption payment with respect to any Exchange
Debentures (except as provided above with respect to Sections 3.09, 4.11
and 4.13 hereof); or
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(h) make any change in Section 6.04 or 6.07 hereof or in the
foregoing amendment and waiver provisions.
SECTION 9.03. COMPLIANCE WITH TRUST INDENTURE ACT.
Every amendment or supplement to this Indenture or the Exchange
Debentures shall be set forth in a amended or supplemental Indenture that
complies with the TIA as then in effect.
SECTION 9.04. REVOCATION AND EFFECT OF CONSENTS.
Until an amendment, supplement or waiver becomes effective, a
consent to it by a Holder of a Exchange Debentures is a continuing consent by
the Holder of a Exchange Debentures and every subsequent Holder of a Exchange
Debentures or portion of a Exchange Debentures that evidences the same debt as
the consenting Holder's Exchange Debentures, even if notation of the consent is
not made on any Exchange Debentures. However, any such Holder of a Exchange
Debentures or subsequent Holder of a Exchange Debentures may revoke the consent
as to its Exchange Debentures if the Trustee receives written notice of
revocation before the date the waiver, supplement or amendment becomes
effective. An amendment, supplement or waiver becomes effective in accordance
with its terms and thereafter binds every Holder.
SECTION 9.05. NOTATION ON OR EXCHANGE OF EXCHANGE
DEBENTURES.
The Trustee may place an appropriate notation about an amendment,
supplement or waiver on any Exchange Debentures thereafter authenticated. The
Company in exchange for all Exchange Debentures may issue and the Trustee shall
authenticate new Exchange Debentures that reflect the amendment, supplement or
waiver.
Failure to make the appropriate notation or to issue a new Exchange
Debentures shall not affect the validity and effect of such amendment,
supplement or waiver.
SECTION 9.06. TRUSTEE TO SIGN AMENDMENTS, ETC.
The Trustee shall sign any amendment or supplemental Indenture authorized
pursuant to this Article 9 if the amendment does not adversely affect the
rights, duties, liabilities or immunities of the Trustee. If it does, the
Trustee may, but need not, sign it. In signing or refusing to sign such
amendment or supplemental Indenture, the Trustee shall be entitled to receive
and, subject to Section 7.01 hereof, shall be fully protected in relying upon,
an Officers' Certificate and an Opinion of Counsel as conclusive evidence that
such amendment or supplemental Indenture is authorized or permitted by this
Indenture, that it is not inconsistent herewith, and that it will be valid and
binding upon the Company in accordance with its terms. The Company may not sign
an amendment or supplemental Indenture until their respective Board of
Directors approves it.
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ARTICLE 10
SUBORDINATION
SECTION 10.01. AGREEMENT TO SUBORDINATE.
The Company agree, and each Holder by accepting a Exchange
Debentures agrees, that the Indebtedness evidenced by the Exchange Debentures
is subordinated in right of payment, to the extent and in the manner provided
in this Article 10, to the prior payment in full of all Senior Debt (whether
outstanding on the date hereof or hereafter created, incurred, assumed or
guaranteed), and that the subordination is for the benefit of the holders of
Senior Debt.
SECTION 10.02. CERTAIN DEFINITIONS.
"Designated Senior Debt" means (i) so long as any Senior Bank Debt
is outstanding, the Senior Bank Debt and (ii) thereafter, any other Senior Debt
permitted hereunder, the principal amount of which is $25.0 million or more and
that has been designated by the Company as "Designated Senior Debt."
A "distribution" may consist of cash, securities or other property,
by set-off or otherwise.
"Representative" means the indenture trustee or other trustee, agent
or representative for any Senior Debt.
"Senior Bank Debt" means any Indebtedness outstanding under, and any
other Obligations with respect to, Bank Facilities, to the extent that any such
Indebtedness and other Obligations are permitted by this Indenture to be
incurred.
"Senior Debt" means (a) the Senior Bank Debt, (b) all additional
Indebtedness that is permitted under this Indenture that is not by its terms
pari passu with or subordinated to the Exchange Debentures, (c) all Obligations
of the Company with respect to the foregoing clauses (a) and (b), including
post-petition interest and (d) all (including all subsequent) renewals,
extensions, amendments, refinancings, repurchases or redemptions,
modifications, replacements or refundings thereto (whether or not coincident
therewith) that are permitted by this Indenture. Notwithstanding anything to
the contrary in the foregoing, Senior Debt shall not include (i) any
Indebtedness of the Company to any of its Subsidiaries, (ii) any Indebtedness
incurred for the purchase of goods or materials or for services obtained in the
ordinary course of business (other than with the proceeds of borrowings from
banks or other financial institutions), (iii) the Series D Exchange Notes or
(iv) any Indebtedness incurred in violation of this Indenture. Notwithstanding
the foregoing, the Exchange Debentures shall be pari passu with the Senior
Subordinated Notes (and the Senior Subordinated Notes shall not constitute
Senior Debt hereunder).
SECTION 10.03. LIQUIDATION; DISSOLUTION; BANKRUPTCY.
Upon any distribution to creditors of the Company in a liquidation
or dissolution of the Company in a bankruptcy, reorganization, insolvency,
receivership or similar proceeding relating to the Company or its respective
property, or in an assignment for the benefit of creditors or any marshalling
of the Company's assets and liabilities:
(1) holders of Senior Debt shall be entitled to receive payment in
full of all Obligations due in respect of such Senior Debt (including
interest after the commencement of any such proceeding
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at the rate specified in the applicable Senior Debt, whether or not an
allowable claim) before the Holders of Exchange Debentures shall be
entitled to receive any payment with respect to the Exchange Debentures
(except that Holders may receive (i) securities that are subordinated to
at least the same extent as the Exchange Debentures to (a) Senior Debt
and (b) any securities issued in exchange for Senior Debt and (ii)
payments and other distributions made from any defeasance trust created
pursuant to Section 8.01 hereof); and
(2) until all Obligations with respect to Senior Debt (as provided
in subsection (1) above) are paid in full, any distribution to which the
Holders of Exchange Debentures would be entitled but for this Article 10
shall be made to holders of Senior Debt (except that Holders may receive
(i) securities that are subordinated to at least the same extent as the
Exchange Debentures to (a) Senior Debt and (b) any securities issued in
exchange for Senior Debt and (ii) payments and other distributions made
from any defeasance trust created pursuant to Section 8.01 hereof), as
their interests may appear.
SECTION 10.04. DEFAULT ON DESIGNATED SENIOR DEBT.
(a) The Company may not make any payment or distribution to the
Trustee or any Holder in respect of the Exchange Debentures and may not acquire
from the Trustee or any Holder any Exchange Debentures for cash or property
(other than (1) securities that are subordinated to at least the same extent as
the Exchange Debentures to (A) Senior Debt and (B) any securities issued in
exchange for Senior Debt and (2) payments and other distributions made from any
defeasance trust created pursuant to Section 8.01 hereof) until all principal
and other Obligations with respect to the Senior Debt have been paid in full
if:
(i) a default in the payment of the principal of, premium, if any,
or interest on Designated Senior Debt occurs and is continuing beyond any
applicable grace period in the agreement, indenture or other document
governing such Designated Senior Debt; or
(ii) a default, other than a default specified in Section
10.04(a)(i) hereof, on Designated Senior Debt occurs and is continuing
with respect to Designated Senior Debt that then permits holders of the
Designated Senior Debt as to which such default relates to accelerate its
maturity and the Trustee receives a notice of the default (a "Payment
Blockage Notice") from a Person who may give it pursuant to Section 10.12
hereof. If the Trustee receives any such Payment Blockage Notice, no
subsequent Payment Blockage Notice shall be effective for purposes of
this Section 10.04 unless and until (I) at least 360 days shall have
elapsed since the effectiveness of the immediately prior Payment Blockage
Notice and (II) all scheduled payments of principal, premium and interest
on the Exchange Debentures that have come due (other than by reason of
acceleration) have been paid in full in cash. No default described in
this paragraph (ii) that existed or was continuing on the date of
delivery of any Payment Blockage Notice to the Trustee shall be, or be
made, the basis for a subsequent Payment Blockage Notice.
(b) The Company may and shall resume payments on and distributions
in respect of the Exchange Debentures and may acquire them (a) in the case of a
default described in Section 10.04(a)(i) hereof, upon the date on which the
default is cured or waived and (b) in the case of a default described in
section 10.04(a)(ii), 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.
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SECTION 10.05. ACCELERATION OF EXCHANGE DEBENTURES.
If payment of the Exchange Debentures is accelerated because of an
Event of Default, the Company shall promptly notify holders of Senior Debt of
the acceleration.
SECTION 10.06. WHEN DISTRIBUTION MUST BE PAID OVER.
In the event that the Trustee or any Holder receives any payment of
any Obligations with respect to the Exchange Debentures at a time when the
Trustee or such Holder, as applicable, has actual knowledge that such payment
is prohibited by Section 10.04 hereof, such payment shall be held by the
Trustee or such Holder, in trust for the benefit of, and shall be paid
forthwith over and delivered, upon written request, to, the holders of Senior
Debt as their interests may appear or their Representative under the indenture
or other agreement (if any) pursuant to which Senior Debt may have been issued,
as their respective interests may appear, for application to the payment of all
Obligations with respect to Senior Debt remaining unpaid to the extent
necessary to pay such Obligations in full in accordance with their terms, after
giving effect to any concurrent payment or distribution to or for the holders
of Senior Debt.
With respect to the holders of Senior Debt, the Trustee undertakes
to perform only such obligations on the part of the Trustee as are specifically
set forth in this Article 10, and no implied covenants or obligations with
respect to the holders of Senior Debt shall be read into this Indenture against
the Trustee. The Trustee shall not be deemed to owe any fiduciary duty to the
holders of Senior Debt, and shall not be liable to any such holders if the
Trustee shall pay over or distribute to or on behalf of Holders or the Company
or any other Person money or assets to which any holders of Senior Debt shall
be entitled by virtue of this Article 10, except if such payment is made as a
result of the willful misconduct or gross negligence of the Trustee.
SECTION 10.07. NOTICE BY COMPANY.
The Company shall promptly notify the Trustee and the Paying Agent
of any facts known to the Company that would cause a payment of any Obligations
with respect to the Exchange Debentures to violate this Article 10, but failure
to give such notice shall not affect the subordination of the Exchange
Debentures to the Senior Debt as provided in this Article 10.
SECTION 10.08. SUBROGATION.
After all Senior Debt is paid in full and until the Exchange
Debentures are paid in full, Holders shall be subrogated (equally and ratably
with all other Indebtedness pari passu with the Exchange Debentures) to the
rights of holders of Senior Debt to receive distributions applicable to Senior
Debt to the extent that distributions otherwise payable to the Holders have
been applied to the payment of Senior Debt. A distribution made under this
Article 10 to holders of Senior Debt that otherwise would have been made to
Holders of Exchange Debentures is not, as between the Company and Holders of
Exchange Debentures, a payment by the Company on the Senior Debt.
SECTION 10.09. RELATIVE RIGHTS.
This Article 10 defines the relative rights of Holders of Exchange
Debentures and holders of Senior Debt. Nothing in this Indenture shall:
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(1) impair, as between the Company and Holders of Exchange
Debentures, the obligation of the Company, which is absolute and
unconditional, to pay principal of and interest on the Exchange
Debentures in accordance with their terms;
(2) affect the relative rights of Holders of Exchange Debentures 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 Exchange Debentures from
exercising its available remedies upon a Default or Event of Default,
subject to the rights of holders and owners of Senior Debt to receive
distributions and payments otherwise payable to Holders of Exchange
Debentures.
If the Company fails because of this Article 10 to pay principal of
or interest or , if any, on a Exchange Debentures on the due date, the failure
is still a Default or Event of Default.
SECTION 10.10. SUBORDINATION MAY NOT BE IMPAIRED BY COMPANY.
No right of any holder of Senior Debt to enforce the subordination
of the Indebtedness evidenced by the Exchange Debentures shall be impaired by
any act or failure to act by the Company or any Holder of Exchange Debentures
or by the failure of the Company or any Holder of Exchange Debentures to comply
with this Indenture.
SECTION 10.11. DISTRIBUTION OR NOTICE TO REPRESENTATIVE.
Whenever a distribution is to be made or a notice given to holders
of Senior Debt, the distribution may be made and the notice given to their
Representative.
Upon any payment or distribution of assets of the Company referred
to in this Article 10, the Trustee and the Holders of Exchange Debentures shall
be entitled to rely upon any order or decree made by any court of competent
jurisdiction or upon any certificate of such Representative or of the
liquidating trustee or agent or other Person making any distribution to the
Trustee or to the Holders of Exchange Debentures for the purpose of
ascertaining the Persons entitled to participate in such distribution, the
holders of the Senior Debt and other Indebtedness of the Company, the amount
thereof or payable thereon, the amount or amounts paid or distributed thereon
and all other facts pertinent thereto or to this Article 10.
SECTION 10.12. RIGHTS OF TRUSTEE AND PAYING AGENT.
Notwithstanding the provisions of this Article 10 or any other
provision of this Indenture, the Trustee shall not be charged with knowledge of
the existence of any facts that would prohibit the making of any payment or
distribution by the Trustee, and the Trustee and the Paying Agent may continue
to make payments on the Exchange Debentures, 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 Exchange Debentures to violate this Article
10. Only the Company or a Representative may give such notice. Nothing in this
Article 10 shall impair the claims of, or payments to, the Trustee under or
pursuant to Section 7.07 hereof.
The Trustee in its individual or any other capacity may hold Senior
Debt with the same rights it would have if it were not the Trustee. Any Agent
may do the same with like rights.
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SECTION 10.13. AUTHORIZATION TO EFFECT SUBORDINATION.
Each Holder of a Exchange Debenture by the Holder's acceptance
thereof authorizes and directs the Trustee on the Holder's behalf to take such
action as may be necessary or appropriate to effectuate the subordination as
provided in this Article 10, and appoints the Trustee to act as the Holder's
attorney-in-fact for any and all such purposes. If the Trustee does not file a
proper proof of claim or proof of debt in the form required in any proceeding
referred to in Section 6.09 hereof at least 30 days before the expiration of
the time to file such claim, the agent under the Credit Agreement (or in the
absence of such agent, the lender) is hereby authorized to file an appropriate
claim for and on behalf of the Holders of the Exchange Debentures.
SECTION 10.14. AMENDMENTS.
The provisions of this Article 10 shall not be amended or modified
without the written consent of the holders of all Senior Debt.
ARTICLE 11
MISCELLANEOUS
SECTION 11.01. TRUST INDENTURE ACT CONTROLS.
If any provision hereof limits, qualifies or conflicts with a
provision of the TIA or another provision that would be required or deemed
under the TIA to be part of and govern this Indenture if this Indenture were
subject thereto, the latter provision shall control. If any provision of this
Indenture modifies or excludes any provision of the TIA that may be so modified
or excluded, the latter provision shall be deemed to apply to this Indenture as
so modified or to be excluded, as the case may be.
SECTION 11.02. NOTICES.
Any notice or communication by the Company or the Trustee to others
is duly given if in writing and delivered in Person or mailed by first class
mail (registered or certified, return receipt requested), telex, telecopier or
overnight air courier guaranteeing next day delivery, to the others' address:
If to the Company:
SFX Broadcasting, Inc.
150 East 58th Street
New York, New York 10155
Telecopier No.: (212) 753-3188
Attention: Howard J. Tytel, Esq.
With a copy to:
Baker & McKenzie
805 Third Avenue
New York, New York 10022
Telecopier No.: (212) 759-9133
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Attention: Howard Berkower, Esq.
If to the Trustee:
The Company or the Trustee, by notice to the others may designate
additional or different addresses for subsequent notices or communications.
All notices and communications (other than those sent to Holders of
Exchange Debenture) shall be deemed to have been duly given: at the time
delivered by hand, if personally delivered; five Business Days after being
deposited in the mail, postage prepaid, if mailed; when answered back, if
telexed; when receipt acknowledged, if telecopied; and the next Business Day
after timely delivery to the courier, if sent by overnight air courier
guaranteeing next day delivery.
Any notice or communication to a Holder of Exchange Debentures shall
be mailed by first class mail, certified or registered, return receipt
requested, or by overnight air courier guaranteeing next day delivery to its
address shown on the register kept by the Registrar. Any notice or
communication shall also be so mailed to any Person described in TIA ss.
313(c), to the extent required by the TIA. Failure to mail a notice or
communication to a Holder of Exchange Debentures or any defect in it shall not
affect its sufficiency with respect to other Holders of Exchange Debentures.
If a notice or communication is mailed in the manner provided above
within the time prescribed, it is duly given, whether or not the addressee
receives it.
If the Company mails a notice or communication to Holders of
Exchange Debentures, it shall mail a copy to the Trustee and each Agent at the
same time.
SECTION 11.03. COMMUNICATION BY HOLDERS OF EXCHANGE
DEBENTURES WITH OTHER HOLDERS OF
EXCHANGE DEBENTURES.
Holders of Exchange Debentures may communicate pursuant to TIA ss.
312(b) with other HolderS of Exchange Debentures with respect to their rights
under this Indenture or the Exchange Debentures. The Company, the Trustee, the
Registrar and anyone else shall have the protection of TIA ss. 312(c).
SECTION 11.04. CERTIFICATE AND OPINION AS TO CONDITIONS
PRECEDENT.
Upon any request or application by the Company to the Trustee to
take any action under this Indenture, the Company shall furnish to the Trustee:
(a) an Officers' Certificate in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set forth
in Section 11.05 hereof) stating that, in the opinion of the signers, all
conditions precedent and covenants, if any, provided for in this
Indenture relating to the proposed action have been satisfied; and
56
<PAGE>
(b) an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set forth
in Section 11.05 hereof) stating that, in the opinion of such counsel,
all such conditions precedent and covenants have been satisfied.
SECTION 11.05. STATEMENTS REQUIRED IN CERTIFICATE OR OPINION.
Each certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture (other than a certificate
provided pursuant to TIA ss. 314(a)(4)) shall comply with the provisions of TIA
ss. 314(e) and shall include:
(a) a statement that the Person making such certificate or opinion
has read such covenant or condition;
(b) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(c) a statement that, in the opinion of such Person, he or she has
made such examination or investigation as is necessary to enable him to
express an informed opinion as to whether or not such covenant or
condition has been satisfied; and
(d) a statement as to whether or not, in the opinion of such Person,
such condition or covenant has been satisfied.
SECTION 11.06. RULES BY TRUSTEE AND AGENTS.
The Trustee may make reasonable rules for action by or at a meeting
of Holders of Exchange Debentures. The Registrar or Paying Agent may make
reasonable rules and set reasonable requirements for its functions.
SECTION 11.07. NO PERSONAL LIABILITY OF DIRECTORS,
OFFICERS, EMPLOYEES AND STOCKHOLDERS.
No director, officer, employee, incorporator or stockholder of the
Company, as such, shall have any liability for any obligations of the Company,
as applicable, under the Exchange Debentures, this Indenture or for any claim
based on, in respect of, or by reason of, such obligations or their creation.
Each Holder of Exchange Debentures by accepting a Exchange Debenture waives and
releases all such liability. The waiver and release are part of the
consideration for issuance of the Exchange Debentures.
SECTION 11.08. GOVERNING LAW.
THE INTERNAL LAW OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED
TO CONSTRUE THIS INDENTURE AND THE EXCHANGE DEBENTURES.
SECTION 11.09. NO ADVERSE INTERPRETATION OF OTHER
AGREEMENTS.
This Indenture may not be used to interpret any other indenture,
loan or debt agreement of the Company or its Subsidiaries or of any other
Person. Any such indenture, loan or debt agreement may not be used to interpret
this Indenture.
57
<PAGE>
SECTION 11.10. SUCCESSORS.
All agreements of the Company in this Indenture and the Exchange
Debentures shall bind their successors. All agreements of the Trustee in this
Indenture shall bind its successors.
SECTION 11.11. SEVERABILITY.
In case any provision in this Indenture or the Exchange Debentures
shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.
SECTION 11.12. COUNTERPART ORIGINALS.
The parties may sign any number of copies of this Indenture. Each
signed copy shall be an original, but all of them together represent the same
agreement.
SECTION 11.13. TABLE OF CONTENTS, HEADINGS, ETC.
The Table of Contents, Cross-Reference Table and Headings of the
Articles and Sections of this Indenture, which have been inserted for
convenience of reference only, are not to be considered a part of this
Indenture and shall in no way modify or restrict any of the terms or provisions
hereof.
[Signatures on following page]
58
<PAGE>
SIGNATURES
IN WITNESS WHEREOF, the parties have executed this Indenture as of the
date first written above.
Very truly yours,
SFX BROADCASTING, INC.
By:
Name:
Title:
[TRUSTEE]
By:
Name:
Title:
59
<PAGE>
EXHIBIT A
(Face of Exchange Debenture)
125/8% Senior Subordinated Exchange Debentures due 2006
CUSIP:
No. $______________
SFX Broadcasting, Inc.
promise to pay to ________________ or registered assigns, the principal sum of
__________________ Dollars on October 31, 2006.
Interest Payment Dates: January 15 and July 15
Record Dates: January 1 and July 1
Dated:
SFX BROADCASTING, INC.
By:___________________________
Name:
Title:
This is one of the Exchange Debentures referred to in within-mentioned
Indenture:
- ------------------------- ,
as Trustee
By:__________________________________
A-1
<PAGE>
(Back of Exchange Debenture)
125/8% Senior Subordinated Exchange Debentures due 2006
[Unless and until it is exchanged in whole or in part for Exchange
Debentures in definitive form, this Exchange Debenture may not be transferred
except as a whole by the Depositary to a nominee of the Depositary or by a
nominee of the Depositary to the Depositary or another nominee of the
Depositary or by the Depositary or any such nominee to a successor Depositary
or a nominee of such successor Depositary. Unless this certificate is presented
by an authorized representative of The Depository Trust Company (55 Water
Street, New York, New York) ("DTC"), to the issuers or their agent for
registration of transfer, exchange or payment, and any certificate issued is
registered in the name of Cede & Co. or such other name as may be requested by
an authorized representative of DTC (and any payment is made to Cede & Co. or
such other entity as may be requested by an authorized representative of DTC),
ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY
PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an
interest herein.]1
Capitalized terms used herein shall have the meanings assigned to them
in the Indenture referred to below unless otherwise indicated.
1. INTEREST. SFX Broadcasting, Inc., a Delaware corporation (the
"Company") promises to pay interest on the principal amount of this Exchange
Debenture at 125/8% per annum from the date hereof until maturity. The Company
will pay interest semi-annually on January 15 and July 15 of each year, or if
any such day is not a Business Day, on the next succeeding Business Day (each
an "Interest Payment Date"). Interest on the Exchange Debentures will accrue
from the most recent date to which interest has been paid or, if no interest
has been paid, from the date of issuance. The Company shall pay interest
(including post-petition interest in any proceeding under any Bankruptcy Law)
on overdue principal and premium, if any, from time to time on demand at a rate
that is 1% per annum in excess of the rate then in effect; it shall pay
interest (including post-petition interest in any proceeding under any
Bankruptcy Law) on overdue installments of interest (without regard to any
applicable grace periods) from time to time on demand at the same rate to the
extent lawful. Interest will be computed on the basis of a 360-day year of
twelve 30-day months.
2. METHOD OF PAYMENT. The Company will pay interest on the Exchange
Debentures (except defaulted interest) to the Persons who are registered
Holders of Exchange Debentures at the close of business on the January 1 or
July 1 next preceding the Interest Payment Date, even if such Exchange
Debentures are cancelled after such record date and on or before such Interest
Payment Date, except as provided in Section 2.11 of the Indenture with respect
to defaulted interest. Any such interest installment not punctually paid or
duly provided for shall forthwith cease to be payable to the registered Holders
on such Interest Payment Date, and may be paid to the registered Holders at the
close of business on a special interest payment date to be fixed by the Trustee
for the payment of such defaulted interest, notice whereof shall be given to
the registered Holders not less than 15 days prior to such special interest
payment date, or may be paid at any time in any other lawful manner not
inconsistent with the requirements of any securities exchange on which the
Exchange Debentures may be listed, and upon such
- --------
1. To be included only if the Exchange Debenture is issued in Global form.
A-2
<PAGE>
notice as may be required by such exchange, all as more fully provided in the
Indenture. The Exchange Debentures will be payable as to principal, premium and
interest at the office or agency of the Company maintained for such purpose
within or without the City and State of New York, or, at the option of the
Company, payment of interest may be made by check mailed to the Holders at
their addresses set forth in the register of Holders, and provided that payment
by wire transfer of immediately available funds will be required with respect
to principal of and interest and premium on, all Global Exchange Debentures and
all other Exchange Debentures the Holders of which shall have provided wire
transfer instructions to the Company or the Paying Agent. Such payment shall be
in such coin or currency of the United States of America as at the time of
payment is legal tender for payment of public and private debts.
3. PAYING AGENT AND REGISTRAR. Initially, ____________, the Trustee
under the Indenture, will act as Paying Agent and Registrar. The Company may
change any Paying Agent or Registrar without notice to any Holder. The Company
may act in any such capacity.
4. INDENTURE. The Company issued the Exchange Debentures under an
Indenture dated as of _________, ____ (the "Indenture") between the Company and
the Trustee. The terms of the Exchange Debentures include those stated in the
Indenture and those made part of the Indenture by reference to the Trust
Indenture Act of 1939, as amended (15 U.S. Code ss.ss. 77aaa-77bbbb). The
Exchange Debentures are subject to all such terms, and Holders are referred to
the Indenture and such Act for a statement of such terms. The Exchange
Debentures are general obligations of the Company limited to $415,000,000
million in aggregate principal amount. Capitalized terms used herein but not
defined herein shall have the meanings assigned to them in the Indenture.
5. OPTIONAL REDEMPTION.
(a) Except as provided in paragraph 5(b) below, the Exchange
Debentures will not be redeemable at the Company's option prior to January 15,
2002. Thereafter, the Exchange Debentures will be subject to redemption at the
option of the Company, in whole or in part, upon not less than 30 nor more than
60 days' notice, at the redemption prices (expressed as percentages of
principal amount) set forth below plus accrued and unpaid interest thereon to
the applicable redemption date, if redeemed during the twelve-month period
beginning on January 15, 2002 of the years indicated below:
YEAR PERCENTAGE
2002................................................ 106.313%
2003................................................ 104.734%
2004................................................ 103.156%
2005................................................ 101.578%
2006 and thereafter................................. 100.000%
(b) In addition, prior to January 15, 2000, the Company may, at its
option, redeem up to 50% of the aggregate of (i) the liquidation preference of
the Series E Preferred Stock issued (whether initially issued or issued in lieu
of cash dividends) less the liquidation preference of Series E Preferred Stock
exchanged for Exchange Debentures and (ii) the principal amount of Exchange
Debentures issued (whether issued in exchange for Series E Preferred Stock of
in lieu of cash interest), with the net proceeds of one or more Common Equity
offerings received on or after the date of original issuance of the Series
A-3
<PAGE>
E Preferred Stock at a redemption price of 112.625% of the liquidation
preference or principal amount, as the case may be, plus accumulated and unpaid
dividends in the case of Series E Preferred Stock and accrued and unpaid
interest in the case of Exchange Debentures; provided, that after any such
redemption, if any Series E Preferred Stock or Exchange Debentures remain
outstanding, at least $50 million in liquidation preference or principal
amount, as applicable, of the Series E Preferred Stock or Exchange Debentures,
as the case may be, remain outstanding; and provided further, that any such
redemption shall occur within 75 days of the date of closing of such offering
of Common Equity of the Company.
6. MANDATORY REDEMPTION. Except as set forth in Paragraph 7 below, the
Company shall not be required to make mandatory redemption payments with
respect to the Exchange Debentures.
7. REPURCHASE AT OPTION OF HOLDER.
(a) If there is a Change of Control, the Company shall be required
to make an offer (a "Change of Control Offer") to repurchase all or any part of
each Holder's Exchange Debentures at a purchase price equal to 101% of the
principal amount thereof plus, in each case, accrued and unpaid interest and ,
if any, to the date of purchase (in either case, the "Change of Control
Payment"). Within 10 days following any Change of Control, the Company shall
mail a notice to each Holder setting forth the procedures governing the Change
of Control Offer as required by the Indenture.
(b) If the Company consummates any Asset Sale, within fifteen
Business Days of each date on which the aggregate amount of Excess Proceeds
exceeds $10.0 million, the Company shall commence an offer to all Holders of
Exchange Debentures and the holders of Pari Passu Debt to the extent required
by the terms thereof (an "Asset Sale Offer") pursuant to Section 3.09 of the
Indenture to purchase the maximum principal amount of Exchange Debentures and
any such Pari Passu Debt that may be purchased out of the Excess Proceeds at an
offer price in cash in an amount equal to 100% of the principal amount thereof
plus accrued and unpaid interest to the date fixed for the closing of such
offer, in accordance with the procedures set forth in the Indenture or the
agreements governing Pari Passu Debt, as applicable. To the extent that the
aggregate amount of Exchange Debentures and Pari Passu Debt tendered pursuant
to an Asset Sale Offer is less than the Excess Proceeds, the Company may use
such deficiency for general corporate purposes. If the aggregate principal
amount of Exchange Debentures and Pari Passu Debt surrendered by Holders
thereof exceeds the amount of Excess Proceeds, the Trustee shall select the
Exchange Debentures and Pari Passu Debt to be purchased on a pro rata basis.
Holders of Exchange Debentures that are the subject of an offer to purchase
will receive an Asset Sale Offer from the Company prior to any related purchase
date and may elect to have such Exchange Debentures purchased by completing the
form entitled "Option of Holder to Elect Purchase" on the reverse of the
Exchange Debentures.
8. NOTICE OF REDEMPTION. Notice of redemption will be mailed at least 30
days but not more than 60 days before the redemption date to each Holder whose
Exchange Debentures are to be redeemed at its registered address. Exchange
Debentures in denominations larger than $1000 may be redeemed in part but only
in whole multiples of $1000, unless all of the Exchange Debentures held by a
Holder are to be redeemed. On and after the redemption date interest ceases to
accrue on Exchange Debentures or portions thereof called for redemption.
A-4
<PAGE>
9. SUBORDINATION. Each Holder by accepting an Exchange Debenture agrees
that the payment of principal of, premium and interest on each Exchange
Debenture is subordinated in right of payment, to the extent and in the manner
provided in Article 10 of the Indenture, to the prior payment in full of all
Senior Debt (whether outstanding on the date of the Indenture or thereafter
created, incurred, assumed or guaranteed), and that the subordination is for
the benefit of the holders of Senior Debt.
10. DENOMINATIONS, TRANSFER, EXCHANGE. The Exchange Debentures are in
registered form without coupons in all appropriate denominations. The transfer
of Exchange Debentures may be registered and Exchange Debentures may be
exchanged as provided in the Indenture. The Registrar and the Trustee may
require a Holder, among other things, to furnish appropriate endorsements and
transfer documents and the Company may require a Holder to pay any taxes and
fees required by law or permitted by the Indenture. The Company need not
exchange or register the transfer of any Exchange Debenture or portion of a
Exchange Debenture selected for redemption, except for the unredeemed portion
of any Exchange Debenture being redeemed in part. Also, it need not exchange or
register the transfer of any Exchange Debentures for a period of 15 days before
a selection of Exchange Debentures to be redeemed or during the period between
a record date and the corresponding Interest Payment Date.
11. PERSONS DEEMED OWNERS. The registered Holder of an Exchange Debenture
may be treated as its owner for all purposes.
12. AMENDMENT, SUPPLEMENT AND WAIVER. Subject to certain exceptions, the
Indenture or the Exchange Debentures may be amended or supplemented with the
consent of the Holders of at least a majority in principal amount of the then
outstanding Exchange Debentures, and any existing default or compliance with
any provision of the Indenture or the Exchange Debentures may be waived with
the consent of the Holders of a majority in principal amount of the then
outstanding Exchange Debentures. Without the consent of any Holder of an
Exchange Debenture, the Indenture or the Exchange Debentures may be amended or
supplemented to cure any ambiguity, defect or inconsistency, to provide for
uncertificated Exchange Debentures in addition to or in place of certificated
Exchange Debentures, to provide for the assumption of the Company's obligations
to Holders of the Exchange Debentures in case of a merger or consolidation, to
make any change that would provide any additional rights or benefits to the
Holders of the Exchange Debentures or that does not adversely affect the legal
rights under the Indenture of any such Holder, or to comply with the
requirements of the SEC in order to effect or maintain the qualification of the
Indenture under the Trust Indenture Act. Any amendment to the provisions of
Article 10 of the Indenture and Sections 3.09, 4.11 and 4.13 including, in each
case, the related definitions will require the consent of the Holders of at
least 75% in aggregate principal amount of the Exchange Debentures then
outstanding if such amendment would adversely affect the rights of Holders of
Exchange Debentures.
13. DEFAULTS AND REMEDIES. Events of Default include: (i) a default for
30 days in the payment when due of interest on the Exchange Debentures (whether
or not prohibited by Article 10 of the Indenture); (ii) a default in payment
when due of the principal of or premium, if any, on the Exchange Debentures
(whether or not prohibited by Article 10 of the Indenture); (iii) the failure
by the Company to comply with the provisions described under Sections 3.09,
4.07, 4.08, 4.11, 4.11 and 4.13 of the Indenture; (iv) the failure by the
Company for 60 days after notice to comply with any of its other agreements in
the Indenture or the Exchange Debentures; (v) a default under any mortgage,
indenture or instrument under which there may be issued or by which there may
be secured or evidenced any Indebtedness for money borrowed by the Company or
any of its Subsidiaries (or the payment of which
A-5
<PAGE>
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 $25.0 million or more; (vi) the failure by the
Company or any of its Subsidiaries to pay final judgments aggregating in excess
of $10.0 million, which judgments are not paid, discharged or stayed for a
period of 60 days; (vii) certain events of bankruptcy or insolvency with
respect to the Company or any of its Significant Subsidiaries or a group of
Subsidiaries that, taken as a whole, would constitute a Significant Subsidiary.
If any Event of Default occurs and is continuing, the Trustee or the Holders of
at least 25% in principal amount of the then outstanding Exchange Debentures
may declare all the Exchange Debentures to be due and payable. Notwithstanding
the foregoing, in the case of an Event of Default arising from certain events
of bankruptcy or insolvency, all outstanding Exchange Debentures will become
due and payable without further action or notice. Holders may not enforce the
Indenture or the Exchange Debentures except as provided in the Indenture.
Subject to certain limitations, Holders of a majority in principal amount of
the then outstanding Exchange Debentures may direct the Trustee in its exercise
of any trust or power. The Trustee may withhold from Holders of the Exchange
Debentures notice of any continuing Default or Event of Default (except a
Default or Event of Default relating to the payment of principal or interest)
if it determines that withholding notice is in their interest. The Holders of a
majority in aggregate principal amount of the Exchange Debentures then
outstanding by notice to the Trustee may on behalf of the Holders of all of the
Exchange Debentures waive any existing Default or Event of Default and its
consequences under the Indenture except a continuing Default or Event of
Default in the payment of interest or the principal of, the Exchange
Debentures. The Company is required to deliver to the Trustee annually a
statement regarding compliance with the Indenture, and the Company is required
upon becoming aware of any Default or Event of Default, to deliver to the
Trustee a statement specifying such Default or Event of Default.
15. TRUSTEE DEALINGS WITH THE COMPANY. The Trustee, in its individual or
any other capacity, may make loans to, accept deposits from, and perform
services for its Company or its Affiliates, and may otherwise deal with the
Company or its Affiliates, as if it were not the Trustee.
16. NO RECOURSE AGAINST OTHERS. A director, officer, employee,
incorporator or stockholder, of the Company, as such, shall not have any
liability for any obligations of the Company under the Exchange Debentures or
the Indenture, as applicable, or for any claim based on, in respect of, or by
reason of, such obligations or their creation. Each Holder by accepting an
Exchange Debenture waives and releases all such liability. The waiver and
release are part of the consideration for the issuance of the Exchange
Debentures.
17. AUTHENTICATION. This Exchange Debenture shall not be valid until
authenticated by the manual signature of the Trustee or an authenticating
agent.
18. ABBREVIATIONS. Customary abbreviations may be used in the name of a
Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (=
tenants by the entireties), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts
to Minors Act).
A-6
<PAGE>
19. CUSIP NUMBERS. Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Company has caused
CUSIP numbers to be printed on the Exchange Debentures and the Trustee may use
CUSIP numbers in notices of redemption as a convenience to Holders. No
representation is made as to the accuracy of such numbers either as printed on
the Exchange Debentures or as contained in any notice of redemption and
reliance may be placed only on the other identification numbers placed thereon.
The Company will furnish to any Holder upon written request and without
charge a copy of the Indenture. Requests may be made to:
SFX Broadcasting, Inc.
150 East 58th Street
New York, New York 10155
Attention: Howard J. Tytel
A-7
<PAGE>
ASSIGNMENT FORM
To assign this Exchange Debenture, fill in the form below: (I) or (we)
assign and transfer this Exchange Debenture to
(Insert assignee's soc. sec. or tax I.D. no.)
(Print or type assignee's name, address and zip code)
and irrevocably appoint
to transfer this Exchange Debenture on the books of the Company. The agent may
substitute another to act for him.
Date:
Your Signature:
(Sign exactly as your name appears on the face of this Exchange Debenture)
Signature Guarantee:
A-8
<PAGE>
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Exchange Debenture purchased by
the Company pursuant to Section 4.11 or 4.13 of the Indenture, check the box
below:
Section 4.11 Section 4.13
If you want to elect to have only part of the Exchange Debenture
purchased by the Company pursuant to Section 4.11 of the Indenture, state the
amount you elect to have purchased: $___________
Date: Your Signature:
(Sign exactly as your name appears on the Exchange Debenture)
Tax Identification No.:
Signature Guarantee:
A-9
<PAGE>
SCHEDULE OF EXCHANGES OF CERTIFICATED EXCHANGE DEBENTURES
The following exchanges of a part of this Global Exchange Debenture
for Certificated Exchange Debentures have been made:
<TABLE>
<CAPTION>
Principal Amount of this
Amount of decrease in Amount of increase in Global Exchange Signature of )
Principal Amount of Principal Amount of Debenture following authorized officer of )
this Global Exchange this Global Exchange such decrease (or Trustee or Exchange )
Date of Exchange Debenture Debenture increase ) Debenture Custodian )
- ---------------------- ----------- ----------- ---------- -------------------
<S> <C> <C> <C>
</TABLE>
A-10
<PAGE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
ANNEX A
SFX BROADCASTING, INC.
125/8% SENIOR SUBORDINATED EXCHANGE DEBENTURES DUE 2006
-----------------
INDENTURE
Dated as of ______ __, ____
-----------------
-----------------
-----------------
Trustee
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>
CROSS-REFERENCE TABLE*
<TABLE>
<CAPTION>
Trust Indenture
Act Section Indenture Section
<S> <C>
310 (a)(1).................................................................... 7.10
(a)(2).................................................................... 7.10
(a)(3) ................................................................... N.A.
(a)(4).................................................................... N.A.
(a)(5).................................................................... 7.10
(b) ...................................................................... 7.10
(c) ...................................................................... N.A.
311 (a) ...................................................................... 7.11
(b) ...................................................................... 7.11
(c) ...................................................................... N.A.
312 (a) ...................................................................... 2.05
(b) ...................................................................... 11.03
(c) ...................................................................... 11.03
313 (a) ...................................................................... 7.06
(b)(1) ................................................................... N.A.
(b)(2) ................................................................... 7.06
(c) ...................................................................... 7.06;11.02
(d) ...................................................................... 7.06
314 (a) ...................................................................... 4.03;4.04
(b) ...................................................................... N.A.
(c)(1) ................................................................... 11.04
(c)(2) ................................................................... 11.04
(c)(3) ................................................................... N.A.
(d) ...................................................................... N.A.
(e) ...................................................................... 11.05
(f) ...................................................................... N.A.
315 (a) ...................................................................... 7.02,11.02
(b) ...................................................................... 7.05,11.02
(c) ...................................................................... 7.01
(d) ...................................................................... 7.01
(e) ...................................................................... 6.11
316 (a)(last sentence) ....................................................... 2.09
(a)(1)(A) ................................................................ 6.05
(a)(1)(B) ................................................................ 6.04
(a)(2) ................................................................... N.A.
(b) ...................................................................... 6.07
(c) ...................................................................... N.A.
317 (a)(1) ................................................................... 6.08
(a)(2).................................................................... 6.09
(b) ...................................................................... 2.04
318 (a) ...................................................................... 11.01
(b) ...................................................................... N.A.
(c) ...................................................................... 11.01
</TABLE>
N.A. means not applicable.
*This Cross-Reference Table is not part of the Indenture.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
ARTICLE 1
DEFINITIONS AND INCORPORATION
BY REFERENCE
Section 1.01. Definitions....................................................... 1
Section 1.02. Other Definitions................................................. 12
Section 1.03. Incorporation by Reference of Trust Indenture Act................. 13
Section 1.04. Rules of Construction............................................. 13
ARTICLE 2
THE EXCHANGE DEBENTURES
Section 2.01. Form and Dating................................................... 14
Section 2.02. Execution and Authentication...................................... 14
Section 2.03. Registrar and Paying Agent........................................ 15
Section 2.04. Paying Agent to Hold Money in Trust............................... 15
Section 2.05. Holder Lists...................................................... 16
............................................................................ 16
Section 2.06. Replacement Exchange Debentures................................... 16
Section 2.07. Outstanding Exchange Debentures................................... 16
Section 2.08. Treasury Exchange Debentures...................................... 17
Section 2.09. Temporary Exchange Debentures..................................... 17
Section 2.10. Cancellation...................................................... 17
Section 2.11. Defaulted Interest................................................ 17
ARTICLE 3
REDEMPTION AND PREPAYMENT
Section 3.01. Notices to Trustee................................................ 18
Section 3.02. Selection of Exchange Debentures to Be Redeemed................... 18
Section 3.03. Notice of Redemption.............................................. 19
Section 3.04. Effect of Notice of Redemption.................................... 19
Section 3.05. Deposit of Redemption or Purchase Price........................... 19
Section 3.06. Exchange Debentures Redeemed or Purchased in Part................. 20
Section 3.07. Optional Redemption............................................... 20
Section 3.08. Mandatory Redemption.............................................. 21
Section 3.09. Offer to Purchase by Application of Excess Proceeds............... 21
ARTICLE 4
COVENANTS
Section 4.01. Payment of Exchange Debentures.................................... 23
Section 4.02. Maintenance of Office or Agency................................... 23
Section 4.03. Reports........................................................... 24
Section 4.04. Compliance Certificate............................................ 24
Section 4.05. Taxes............................................................. 25
Section 4.06. Stay, Extension and Usury Laws.................................... 25
Section 4.07. Restricted Payments............................................... 25
Section 4.08. Incurrence of Indebtedness and Issuance of Preferred
Stock............................................................. 27
Section 4.09. Transactions with Affiliates...................................... 28
Section 4.10. Continued Existence............................................... 29
i
<PAGE>
Section 4.11. Offer to Repurchase Upon Change of Control........................ 29
Section 4.12. Payments For Consent.............................................. 30
Section 4.13. Asset Sales....................................................... 30
Section 4.14 Liens............................................................. 31
Section 4.15 Dividend and Other Payment Restrictions Affecting
Subsidiaries.
Section 4.16 No Senior Subordinated Debt.
Section 4.18 Limitation on Issuances and Sales of Capital Stock of
Wholly Owned Subsidiaries......................................... 33
Section 4.19 Business Activities............................................... 33
ARTICLE 5
SUCCESSORS
Section 5.01. Merger, Consolidation, or Sale of Assets.......................... 33
Section 5.02. Successor Corporation Substituted................................. 34
ARTICLE 6
DEFAULTS AND REMEDIES
Section 6.01. Events of Default................................................. 34
Section 6.02. Acceleration...................................................... 36
Section 6.03. Other Remedies.................................................... 36
Section 6.04. Waiver of Past Defaults........................................... 37
Section 6.05. Control by Majority............................................... 37
Section 6.06. Limitation on Suits............................................... 37
Section 6.07. Rights of Holders of Exchange Debentures to Receive
Payment........................................................... 38
Section 6.08. Collection Suit by Trustee........................................ 38
Section 6.09. Trustee May File Proofs of Claim.................................. 38
Section 6.10. Priorities........................................................ 39
Section 6.11. Undertaking for Costs............................................. 39
ARTICLE 7
TRUSTEE
Section 7.01. Duties of Trustee................................................. 39
Section 7.02. Rights of Trustee................................................. 40
Section 7.03. Individual Rights of Trustee...................................... 41
Section 7.04. Trustee's Disclaimer.............................................. 41
Section 7.05. Notice of Defaults................................................ 41
Section 7.06. Reports by Trustee to Holders of the Exchange
Debentures........................................................ 41
Section 7.07. Compensation, Reimbursement and Indemnity......................... 42
Section 7.08. Replacement of Trustee............................................ 43
Section 7.09. Successor Trustee by Merger, etc.................................. 44
Section 7.10. Eligibility; Disqualification..................................... 44
Section 7.11. Preferential Collection of Claims Against Company................. 44
ii
<PAGE>
ARTICLE 8
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
Section 8.01. Option to Effect Legal Defeasance or Covenant
Defeasance........................................................ 44
Section 8.02. Legal Defeasance and Discharge.................................... 44
Section 8.03. Covenant Defeasance............................................... 45
Section 8.04. Conditions to Legal or Covenant Defeasance........................ 45
Section 8.05. Deposited Money and Government Securities to be
Held in Trust; Other Miscellaneous Provisions..................... 46
Section 8.06. Repayment to the Company.......................................... 47
Section 8.07. Reinstatement..................................................... 47
ARTICLE 9
AMENDMENT, SUPPLEMENT AND WAIVER
Section 9.01. Without Consent of Holders of Exchange Debentures................. 48
Section 9.02. With Consent of Holders of Exchange Debentures.................... 48
Section 9.03. Compliance with Trust Indenture Act............................... 50
Section 9.04. Revocation and Effect of Consents................................. 50
Section 9.05. Notation on or Exchange of Exchange Debentures.................... 50
Section 9.06. Trustee to Sign Amendments, etc................................... 50
ARTICLE 10
SUBORDINATION
Section 10.01. Agreement to Subordinate.......................................... 51
Section 10.02. Certain Definitions............................................... 51
Section 10.04. Default on Designated Senior Debt................................. 52
Section 10.06. When Distribution Must Be Paid Over............................... 53
Section 10.07. Notice by Company................................................. 53
Section 10.08. Subrogation....................................................... 53
Section 10.09. Relative Rights................................................... 53
Section 10.10. Subordination May Not Be Impaired by Company...................... 54
Section 10.11. Distribution or Notice to Representative.......................... 54
Section 10.12. Rights of Trustee and Paying Agent................................ 54
Section 10.13. Authorization to Effect Subordination............................. 55
Section 10.14. Amendments........................................................ 55
Section 11.01. Trust Indenture Act Controls...................................... 55
Section 11.02. Notices........................................................... 55
Section 11.03. Communication by Holders of Exchange Debentures
with Other Holders of Exchange Debentures......................... 56
Section 11.04. Certificate and Opinion as to Conditions Precedent................ 56
Section 11.05. Statements Required in Certificate or Opinion..................... 57
Section 11.06. Rules by Trustee and Agents....................................... 57
Section 11.07. No Personal Liability of Directors, Officers,
Employees and Stockholders........................................ 57
Section 11.08. Governing Law..................................................... 57
Section 11.09. No Adverse Interpretation of Other Agreements..................... 57
Section 11.10. Successors........................................................ 58
Section 11.11. Severability...................................................... 58
Section 11.12. Counterpart Originals............................................. 58
Section 11.13. Table of Contents, Headings, etc.................................. 58
</TABLE>
iii
<PAGE>
EXHIBITS
Exhibit A FORM OF EXCHANGE DEBENTURE
iv
<PAGE>
12 5/8% SERIES E CUMULATIVE 12 5/8% SERIES E CUMULATIVE
EXCHANGEABLE PREFERRED STOCK EXCHANGEABLE PREFERRED STOCK
NUMBER SHARES
E SFX BROADCASTING, INC.
INCORPORATED UNDER THE LAWS SEE REVERSE FOR
OF THE STATE OF DELAWARE CERTAIN DEFINITIONS
THIS IS TO CERTIFY THAT
SPECIMEN
IS THE OWNER OF
FULLY PAID AND NON-ASSESSABLE SHARES OF THE 12 5/8% SERIES E CUMULATIVE
EXCHANGEABLE PREFERRED STOCK, PAR VALUE $0.01 PER SHARE, OF
SFX BROADCASTING, INC.
CERTIFICATE OF STOCK
transferable only on the books of the Corporation by the holder hereof or by
its duly authorized attorney upon surrender of this Certificate properly
endorsed. Reference is made hereby to the further provisions of this
Certificate set forth on the reverse hereof and such further provisions shall
for all purposes have the same effect as though fully set forth at that place.
This Certificate is not valid until countersigned by the Transfer Agent and
registered by the Registrar.
Witness the seal of the Corporation and the signatures or the facsimile
thereof of its duly authorized officers.
Dated:
/s/ HOWARD J. TYTEL /s/ ROBERT F.X. SILLERMAN
- -------------------- -------------------------
SECRETARY EXECUTIVE CHAIRMAN
SFX BROADCASTING, INC.
CORPORATE
SEAL
1992
DELAWARE
AMERICAN BANK NOTE COMPANY
COUNTERSIGNED AND REGISTERED:
THE BANK OF NEW YORK
TRANSFER AGENT AND REGISTRAR
BY
AUTHORIZED SIGNATURE
<PAGE>
AMENDMENT NO. 1 TO ASSET PURCHASE AGREEMENT
This Amendment No.1 dated as of January 21, 1997 ("Amendment
No. 1") to the Asset Purchase Agreement (the "Asset Purchase Agreement") dated
as of October 15, 1996 between Secret Communications Limited Partnership, a
Delaware limited partnership ("Seller"), and SFX Broadcasting, Inc., a Delaware
corporation ("Buyer").
W I T N E S S E T H :
WHEREAS, Seller and Buyer each desire to amend the Asset
Purchase Agreement and enter into certain other agreements relating to the
Asset Purchase Agreement and the transactions contemplated thereby;
NOW, THEREFORE, in consideration of the mutual covenants and
agreements hereinafter set forth, it is hereby agreed between Seller and Buyer
as follows:
1. The first recital of the Asset Purchase Agreement
is hereby amended in its entirety to read as follows:
"WHEREAS, Seller is the licensee of and operates radio
stations WFBQ-FM, WRZX-FM and WNDE-AM in Indianapolis, Indiana and
WDVE-FM and WXDX-FM in Pittsburgh, Pennsylvania (the "Owned Stations")
and, upon the consummation of the transactions contemplated by the
Asset Exchange Agreement (the "Exchange Agreement") dated as of May
31, 1996 by and among Seller, Nationwide Communications, Inc. and
Entercom (as defined below), Seller will become the licensee of and
have the right to operate radio stations WDSY-FM and WJJJ-FM (formerly
WNRQ-FM) in Pittsburgh, Pennsylvania (the "Purchased Stations") (the
Owned Stations and the Purchased Stations being collectively referred
to herein as the "Stations");"
2. The third recital of the Asset Purchase Agreement
is hereby deleted.
3. Subsection (a) of Section 1.1 of the Asset
Purchase Agreement is hereby amended in its entirety to read as
follows:
"(a) The broadcast licenses for the Stations (including the right to
use the call letters "WFBQ-FM", "WRZX-FM", "WNDE- AM", "WDVE-FM",
"WXDX-FM", "WDSY-FM" and "WJJJ-FM") issued
<PAGE>
by the FCC and all other Governmental Permits listed in
Schedule 2.8;"
4. Section 1.3 of the Asset Purchase Agreement is
hereby amended in its entirety to read as follows:
"1.3. Purchase Price. The purchase price for the
Purchased Assets (the "Purchase Price") shall be equal to
$255,000,000."
5. Section 1.6 (a) of the Asset Purchase Agreement is
hereby amended in its entirety to read as follows:
"(a) The Closing shall be consummated on a date to be selected by the
Buyer and agreed upon by the Seller, which date shall be no later than
July 15, 1997 if the conditions to Closing set forth in Sections 6.4,
6.5, 6.8, 7.4, 7.5 and 7.6 of this Agreement have been satisfied as of
or prior to July 15, 1997; provided, however, that if any of the
conditions set forth in Sections 6.4, 6.5, 6.8, 7.4, 7.5 or 7.6 of
this Agreement have not been satisfied as of July 15, 1997 the Closing
shall be held on the fifth business day after all of such conditions
have been satisfied. The Closing shall be held at 10:00 A.M., local
time, at the offices of Buyer, 150 East 58th Street, New York, New
York 10155 or at such other place or time as shall be agreed upon by
Buyer and Seller (the date and time on which the Closing is actually
held being hereinafter referred to as the "Closing Date")."
6. Section 2.1 of the Asset Purchase Agreement is
hereby amended in its entirety to read as follows:
"2.1. Organization of Seller. Seller is a limited partnership
duly organized, validly existing and in good standing under the laws
of the State of Delaware and is duly qualified and in good standing as
a foreign limited partnership in the States of Indiana and
Pennsylvania. Seller has full partnership power and authority, or will
have full partnership power and authority upon consummation of the
transactions contemplated by the Exchange Agreement (the "Exchange
Transaction"), to own or lease and to operate and use the Purchased
Assets and to carry on the business of the Stations as now conducted."
7. Section 5.3 of the Asset Purchase Agreement is
hereby amended in its entirety to read as follows:
"5.3. Covenant Not to Compete. In furtherance of the sale
of the Purchased Assets to Buyer hereunder by
- 2 -
<PAGE>
virtue of the transactions contemplated hereby and more effectively to
protect the value and goodwill of the Stations, Seller covenants and
agrees that it will not directly or indirectly (whether as principal,
agent, independent contractor, partner or otherwise) own, manage,
operate, control or otherwise carry on for a period beginning on the
Closing Date and ending on the second anniversary thereafter, a radio
station business in the Indianapolis, Indiana or Pittsburgh,
Pennsylvania radio markets, each as determined by The Arbitron
Company.
Notwithstanding the foregoing, nothing set forth in Section
5.5 shall prohibit Seller from owning not in excess of 25% in the
aggregate of any class of capital stock of any corporation if such
stock is publicly traded and listed on any national or regional stock
exchange or quoted on the Nasdaq Stock Market."
8. Section 9.1(a)(iii) of the Asset Purchase
Agreement is hereby deleted.
9. Section 9.1(a)(v) of the Asset Purchase Agreement
is hereby amended in its entirety to read as follows:
"(v) by Buyer or Seller (A) if the Closing shall not have occurred on
or prior to July 15, 1997 and the conditions to Closing set forth in
Sections 6.4, 6.5, 6.8, 7.4, 7.5 and 7.6 have been satisfied on or
prior to such date or (B) if the Closing shall not have occurred on or
before September 30, 1997;"
10. Section 10.13 of the Asset Purchase Agreement is
hereby amended by deleting the definitions of "Aggregate 1996
Broadcast Cash Flow of the Stations", "Broadcast Cash Flow",
"Escrow Agent" and "Escrow Agreement."
11. All references to radio stations WTAM-AM and WLTF- FM in
Cleveland, Ohio (the "Cleveland Stations") and any information relating thereto
shall be deemed to be deleted from the Schedules to the Asset Purchase
Agreement.
12. The Escrow Agreement dated as of October 15, 1996
among Buyer, Seller and The First National Bank of Chicago, as
escrow agent, is hereby terminated.
13. The parties agree that if, on or before March 31, 1998,
Seller consummates the sale of all of the assets, business and property of the
Cleveland Stations to a non-affiliated third party for a purchase price of less
than $45,000,000, Buyer will pay to Seller by wire transfer of immediately
available funds
- 3 -
<PAGE>
within three business days of receipt of notice from Seller (in the form
contemplated by the Asset Purchase Agreement and specifying the appropriate
wire transfer instructions) of the consummation of such sale the difference
between $45,000,000 and the actual purchase price paid to Seller in respect of
the Cleveland Stations; provided, however, that in no event shall the liability
of Buyer pursuant to this Section 13 exceed $5,000,000. For purposes of this
Section 13, "purchase price" shall include cash and non-cash consideration,
including securities, property and the value of any noncompetition or similar
agreements benefitting Seller, and non-cash consideration shall be valued at
its fair market value on the date of consummation of the sale of the Cleveland
Stations.
14. Simultaneously with the execution of this Amendment No.
1, Buyer agrees to pay to Seller $10,000,000 in cash by wire transfer of
immediately available funds to the account specified by Seller. In addition,
simultaneously with the execution of this Amendment No. 1, Buyer is delivering
to Seller a letter of credit in the form attached hereto as Exhibit A in the
sum of $5,000,000 issued by Chase Manhattan, N.A. (the "Letter of Credit").
Pursuant to the terms of the Letter of Credit, Seller shall have the right on
or after May 30, 1997 to draw the amount of $5,000,000 on the Letter of Credit;
provided, however, that Seller agrees that it will not draw upon the Letter of
Credit if, prior to May 30, 1997, Buyer delivers to the account specified by
Seller by wire transfer of immediately available funds $5,000,000 in cash in
satisfaction of Buyer's obligation to cause $5,000,000 to be paid to Seller
pursuant to this sentence. If the Closing (as defined in the Asset Purchase
Agreement) occurs, the $15,000,000 to be paid to Seller pursuant to this
Section 14 shall be credited towards the Purchase Price (as defined in the
Asset Purchase Agreement) to be paid to Seller by Buyer at the Closing.
15. Each of Buyer and Seller covenant and agree to file with
the Federal Trade Commission and the Antitrust Division of the Department of
Justice within 10 days of the date hereof the notifications and other
information required to be filed by such party under the Improvements Act (as
defined in the Asset Purchase Agreement), or the rules and regulations
promulgated thereunder, with respect to this Amendment No. 1.
16. This Amendment No. 1 shall be governed by and
construed in accordance with the internal laws (as opposed to the
conflict of laws provisions) of the State of Illinois.
17. This Amendment No. 1 may be executed in one or
more counterparts, each of which shall be considered an original
instrument, but all of which shall be considered one and the same
- 4 -
<PAGE>
agreement, and shall become binding when one or more counterparts have been
signed by each of the parties and delivered to each of Seller and Buyer.
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment No. 1 to be executed as of the day and year first above written.
SECRET COMMUNICATIONS
LIMITED PARTNERSHIP
By: Broadcast Alchemy, L.P.,
a General Partner
By: Lane Broadcasting, Inc.
Its: General Partner
By: /s/
____________________________
Its: Secretary & General Counsel
____________________________
SFX BROADCASTING, INC.
By: ___________________________
Its: ___________________________
<PAGE>
agreement, and shall become binding when one or more counterparts have been
signed by each of the parties and delivered to each of Seller and Buyer.
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment No. 1 to be executed as of the day and year first above written.
SECRET COMMUNICATIONS
LIMITED PARTNERSHIP
By: Broadcast Alchemy, L.P.,
a General Partner
By: Lane Broadcasting, Inc.
Its: General Partner
By: ____________________________
Its: ____________________________
SFX BROADCASTING, INC.
By: /s/ Howard J. Tytel
___________________________
Its: EVP
___________________________
- 5 -
<PAGE>
EXHIBIT A
FORM OF LETTER OF CREDIT
<PAGE>
[CHASE LOGO]
THE CHASE MANHATTAN BANK
Global Trade Operations
P.O. Box 44, Church Street Station
New York, NY 10008-0044
ISSUE DATE: JANUARY 22, 1997
L/C NO: P-268255
APPLICANT:
************* DIRECT ************* SFX BROADCASTING, INC.
150 EAST 58TH STREET, 19TH FLOOR
NEW YORK, NY 10155
SECRET COMMUNICATIONS LIMITED AMOUNT: USD 5,000,000.00
PARTNERSHIP (FIVE MILLION AND 00/100
312 WALNUT STREET, SUITE 3550 UNITED STATES DOLLARS)
CINCINNATI, OHIO 45202
GENTLEMEN:
WE HEREBY ESTABLISH OUR IRREVOCABLE STANDBY LETTER OF CREDIT NO. P-268255 IN
YOUR FAVOR FOR AN AGGREGATE AMOUNT NOT TO EXCEED THE AMOUNT INDICATED ABOVE,
EXPIRING AT OUR COUNTERS IN NEW YORK WITH OUR CLOSE OF BUSINESS ON
JUNE 10, 1997.
THIS LETTER OF CREDIT IS AVAILABLE WITH THE CHASE MANHATTAN BANK, NEW YORK
AGAINST PRESENTATION OF YOUR DRAFT AT SIGHT DRAWN ON THE CHASE MANHATTAN
BANK, NEW YORK WHEN ACCOMPANIED BY THE DOCUMENTS INDICATED HEREIN.
BENEFICIARY'S DATED STATEMENT PURPORTEDLY SIGNED BY ONE OF ITS OFFICERS
READING: "THE AMOUNT OF THIS DRAWING USD......... UNDER THE CHASE MANHATTAN
BANK LETTER OF CREDIT NUMBER P-268255 REPRESENTS FUNDS TO BE PAID TO US
PURSUANT TO THE TERMS OF A CERTAIN ASSET PURCHASE AGREEMENT DATED OCTOBER 15,
1996, AS AMENDED, BY AND BETWEEN SECRET COMMUNICATIONS LIMITED PARTNERSHIP, AND
SFX BROADCASTING, INC."
ORIGINAL OF THIS LETTER OF CREDIT MUST ACCOMPANY ALL DRAWINGS.
ALL DRAFTS MUST INDICATE: "DRAWN UNDER THE CHASE MANHATTAN BANK, NEW YORK
LETTER OF CREDIT NO. P-268255."
ALL CORRESPONDENCE AND ANY DRAWINGS PRESENTED IN CONNECTION WITH THIS LETTER
OF CREDIT MUST ONLY BE PRESENTED TO US AT THE CHASE MANHATTAN BANK,
55 WATER ST., 17TH FLOOR, ROOM 1708, NEW YORK, NEW YORK 10041, ATT: STANDBY
LETTER OF CREDIT DEPARTMENT. CUSTOMER INQUIRY NUMBERS ARE (212) 638-3473 AND
(212) 638-3321.
EXCEPT AS OTHERWISE EXPRESSLY STATED HEREIN, THIS CREDIT IS SUBJECT TO THE
UNIFORM CUSTOMS AND PRACTICE FOR DOCUMENTARY CREDITS, 1993 REVISION, ICC
PUBLICATION NO. 500.
<PAGE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
FIRST AMENDMENT
TO THE
SECOND AMENDED AND RESTATED CREDIT AGREEMENT
AMONG
SFX BROADCASTING, INC.,
BORROWER
THE SUBSIDIARIES OF BORROWER
LISTED ON THE SIGNATURE PAGES HEREOF
THE BANK OF NEW YORK,
AS AGENT FOR THE LENDERS AND INDIVIDUALLY AS A LENDER
AND
THE LENDERS
LISTED ON THE SIGNATURE PAGES HEREOF
DATED AS OF JANUARY 22, 1997
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>
FIRST AMENDMENT TO THE
SECOND AMENDED AND RESTATED CREDIT AGREEMENT
THIS FIRST AMENDMENT TO THE SECOND AMENDED AND RESTATED
CREDIT AGREEMENT is entered into as of January 22, 1997 among SFX Broadcasting,
Inc., a Delaware corporation ("Borrower"), the Subsidiaries of SFX
Broadcasting, Inc. listed on the signature pages hereof, the Lenders listed on
the signature pages hereof and The Bank of New York, as Agent for the Lenders,
and amends the Second Amended and Restated Credit Agreement, dated November 22,
1996, among the Borrower, the Subsidiaries from time to time parties thereto,
the Lenders from time to time parties thereto and the Agent (the "Credit
Agreement"). Capitalized terms used herein and not otherwise defined have the
meaning assigned to them in the Credit Agreement.
W I T N E S S E T H
WHEREAS, pursuant to the Credit Agreement, the Lenders and
the Agent have made certain credit facilities available to Borrower on the
terms and subject to the conditions set forth therein; and
WHEREAS, Borrower desires to offer and issue $225,000,000 of
its 12-5/8% Series E Cumulative Exchangeable Preferred Stock (the "Series E
Preferred Stock") substantially on the terms set forth in the Prospectus
Supplement (to Prospectus dated December 10, 1996) filed by Borrower with the
Securities and Exchange Commission on January 17, 1997 (the "Prospectus
Supplement") and to pay dividends on the Series E Preferred Stock in accordance
with the terms described in such Prospectus Supplement;
WHEREAS, Borrower has requested that the Lenders and the
Agent amend the Credit Agreement to (i) permit such offering and issuance of
the Series E Preferred Stock substantially on the terms set forth in the
Prospectus Supplement, and (ii) to permit payment of dividends on the Series E
Preferred Stock on the terms described in the Prospectus Supplement; and
WHEREAS, the Lenders and the Agent have agreed to amend the
Credit Agreement as so requested.
NOW, THEREFORE, for and in consideration of the above
premises and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree
as follows:
<PAGE>
1. The Credit Agreement is hereby amended by deleting
Section 6.12 therein in its entirety and inserting
in lieu thereof the following:
Section 6.12 Restricted Payments. No Obligor shall
make a Restricted Payment, except (i) any Obligor
may make a Restricted Payment to Borrower and (ii)
so long as no Default or Event of Default would
exist before or after giving effect thereto,
Restricted Payments shall be permitted with respect
to: (i) cash dividends equal to 6% per annum of the
liquidation preference for the Series C Preferred
Stock in accordance with the terms thereof on the
date hereof, (ii) any cash dividends payable on the
Borrower's Series D Preferred Stock in accordance
with the terms thereof as in effect on the date
hereof, (iii) any cash dividends payable on the
Borrowers' Series E Preferred Stock in accordance
with the terms thereof described in the Prospectus
Supplement, (iv) redemptions of the Series C
Preferred Stock pursuant to the exercise of the put
rights maintained by the holder of such shares in
accordance with the terms of the Dallas Acquisition,
(v) scheduled redemptions of the Borrower's Series B
Preferred Stock in accordance with the terms thereof
as in effect on the date hereof, (vi) the redemption
of the MMR Warrants in an amount not to exceed
$250,000, (vii) any redemption of up to a 4%
minority interest held in ABS, (viii) the repurchase
of up to $150,000 of MMR stock options held by Bruce
Morrow and (ix) up to $25,000,000 in repurchases of
the Borrower's stock or warrants, other than any
stock specified in clauses (iv) and (v) above
provided that the Total Leverage Ratio is less than
or equal to 4.5 to 1.0 before and after giving
effect thereto.
2. The Credit Agreement is hereby amended by deleting
Section 6.13 therein in its entirety and inserting
in lieu thereof the following:
Section 6.13 Issuance of Securities. No Obligor
will, directly or indirectly, issue, sell or
otherwise dispose of (a) any of its shares of
capital stock or any other investment securities of
any class, (b) any securities convertible into or
exchangeable for any such shares or (c) any
warrants, options, rights to subscribe for or
purchase any such shares or other rights with
respect to such shares, except that, (i) Borrower
may issue from time to time securities to
-2-
<PAGE>
employees, officers, or directors of Borrower, or to
consultants providing bona fide services to Borrower
or a Subsidiary of Borrower on commercially
reasonable terms, in either case pursuant to any
stock option, stock bonus or other employee benefit
plan approved by the board of directors of Borrower,
unless, at the time when such plan is approved, or
at the time when rights under any such plan are
exercised, in either case on a fully diluted basis,
a Default or Event of Default would exist after
giving effect thereto and by reason thereof or after
giving effect to and by reason of the exercise by
such employees, officers or directors of their
respective rights thereunder (including, an Event of
Default of the nature described in Section 7.11),
(ii) Borrower may issue common equity provided no
Default or Event of Default would exist after giving
effect thereto and by reason thereof (including an
Event of Default of the nature described in Section
7.11) and (iii) Borrower may issue its Series E
Preferred Stock in accordance with the terms of the
Prospectus Supplement provided no Default or Event
of Default would exist after giving effect thereto
and by reason thereof (including an Event of Default
of the nature described in Section 7.11), and
thereafter pay dividends thereon in the form of
shares of the Series E Preferred Stock in accordance
with the terms of the Prospectus Supplement.
3. The Credit Agreement is hereby amended by deleting
therefrom the definition of "Fixed Charges" in
Section 1.1 in its entirety and inserting in lieu
thereof the following:
"Fixed Charges" means for the most recently
completed four fiscal quarters for the Borrower and
its subsidiaries on a consolidated basis, the sum of
the following paid during such fiscal period: (a)
Debt Service, (b) cash income taxes, (c) capital
expenditures, (d) all dividends with respect to the
Series C Preferred Stock, (e) all dividends with
respect to the Series D Preferred Stock and (f) all
cash dividends with respect to the Series E
Preferred Stock.
4. Representations and Warranties. Each Obligor
represents and warrants to the Agent and the
Lenders that (a) this First Amendment and each
other Loan Document executed by it in connection
-3-
<PAGE>
with this First Amendment has been duly authorized,
executed and delivered by such Obligor and the
Credit Agreement, as amended by this First
Amendment, and each such other Loan Document
constitutes a legal, valid, and binding obligation
of such Obligor, enforceable against such Obligor in
accordance with the terms thereof, (b) there exists
no Default or Event of Default under the Credit
Agreement, (c) the representations and warranties
set forth in the Credit Agreement and the other Loan
Documents to which it is a party are true and
correct as of the date hereof as though made on and
as of the date hereof, (d) it has complied with all
agreements and conditions to be complied with by it
on or before the date hereof under the Credit
Agreement and the other Loan Documents to which it
is a party, and (e) the Credit Agreement, as amended
hereby, the other Loan Documents and the financing
statements filed in connection therewith, remain in
full force and effect, and subject only to Permitted
Liens, are sufficient to grant a first priority
security interest, in and on all Collateral
described therein, securing payment and performance
of the Obligations of Obligors under the Loan
Documents, as amended hereby.
5. Ratification. The Credit Agreement, as amended by
this First Amendment, and the other Loan Documents
remain in full force and effect and are hereby
ratified and confirmed.
6. Counterparts. This First Amendment may be executed
in any number of counterparts, all of which taken
together constitute one and the same agreement. In
making proof hereof, it shall not be necessary to
produce or account for any counterpart other than
one signed by the party against which enforcement
is sought.
7. Governing Law. This First Amendment shall be
governed by, and construed in accordance with, the
law of the State of New York.
-4-
<PAGE>
8. Entire Agreement; Ratification. The Credit
Agreement, as amended by this First Amendment, and
the other Loan Documents represent the final
agreement between the parties with respect to the
subject matter hereof and may not be contradicted
by evidence of prior, contemporaneous or subsequent
oral agreement of the parties. There are no oral
agreements or understandings among the parties.
-5-
<PAGE>
EXECUTED as of the day and year first mentioned.
SFX BROADCASTING, INC., BORROWER
BY: /S/ HOWARD TYTEL
--------------------------------
NAME: HOWARD TYTEL
TITLE: EXECUTIVE VICE PRESIDENT
SFX BROADCASTING OF THE SOUTHWEST, INC.
SFX BROADCASTING OF TEXAS, INC.
SFX BROADCASTING OF TEXAS (KRLD), INC.
SFX BROADCASTING OF TEXAS (KRLD) LICENSEE,
INC.
SFX BROADCASTING OF TEXAS (TSN), INC.
SFX BROADCASTING OF TEXAS (TSN) LICENSEE,
INC.
KODA-FM LICENSEE, INC.
KJQY-FM LICENSEE, INC.
SFX BROADCASTING OF TEXAS (KTCK), INC.
SFX BROADCASTING OF TEXAS (KTCK) LICENSEE,
INC.
SFX BROADCASTING OF THE SOUTHEAST, INC.
SFX BROADCASTING OF CENTRAL NORTH CAROLINA,
INC.
SFX BROADCASTING OF SOUTH CAROLINA (WMYI),
INC.
SFX BROADCASTING OF SOUTH CAROLINA (WMYI)
LICENSEE, INC.
SFX BROADCASTING OF MISSISSIPPI, INC.
SFX BROADCASTING OF MISSISSIPPI LICENSEE,
INC.
SFX BROADCASTING OF SOUTH CAROLINA (WSSL),
INC.
-6-
<PAGE>
SFX BROADCASTING OF SOUTH CAROLINA (WSSL)
LICENSEE, INC.
SFX BROADCASTING OF TENNESSEE, INC.
SFX BROADCASTING OF TENNESSEE LICENSEE, INC.
SFX BROADCASTING OF JACKSON, INC.
SFX BROADCASTING OF JACKSON LICENSEE, INC.
SFX BROADCASTING OF NORTH CAROLINA, INC.
SFX BROADCASTING OF NORTH CAROLINA LICENSEE,
INC.
SFX BROADCASTING OF SAN DIEGO, INC.
PARKER BROADCASTING COMPANY
SFX BROADCASTING OF SAN DIEGO LICENSEE, INC.
SFX ACQUISITION CORPORATION.
LIBERTY ACQUISITION SUBSIDIARY CORPORATION
LIBERTY BROADCASTING, INC.
LIBERTY BROADCASTING GROUP INCORPORATED
BECK-ROSS COMMUNICATIONS, INC.
W.B.L.I., INC.
WBLI-FM, INC.
WHCN, INC.
WHCN-FM, INC.
WSNE, INC.
WSNE-FM, INC.
WPYX, INC.
WTRY, INC.
WYSR, INC.
WPOP, INC.
-7-
<PAGE>
WHJY, INC.
WHJJ, INC.
LIBERTY BROADCASTING OF NEW YORK INCORPORATED
WHFM, INC.
WBAB, INC.
WGBB, INC.
LIBERTY BROADCASTING OF ALBANY INCORPORATED
WGNA, INC.
WGNA-FM, INC.
LIBERTY BROADCASTING OF MARYLAND INCORPORATED
WHFS, INC.
LIBERTY BROADCASTING OF MARYLAND II
INCORPORATED
WMXB, INC.
WXTR, INC.
MUSICAL HEIGHTS, INC.
SFX BROADCASTING OF HARTFORD, INC.
WQSI, INC.
WZYQ, INC.
SFX MERGER COMPANY
MULTI-MARKET RADIO, INC.
SOUTHERN STARR OF MISSISSIPPI, INC.
SOUTHERN STARR BROADCASTING GROUP, INC.
GENERAL COMMUNICORP, INC.
GENERAL BROADCASTING OF CONNECTICUT, INC.
SOUTHERN STARR LIMITED PARTNERSHIP
-8-
<PAGE>
MULTI-MARKET RADIO OF AUGUSTA, INC.
MULTI-MARKET RADIO OF MYRTLE BEACH, INC.
MULTI-MARKET RADIO OF NORTHAMPTON, INC.
MULTI-MARKET RADIO OF HARTFORD, INC.
SOUTHERN STARR OF ARKANSAS, INC.
MULTI-MARKET RADIO OF SPRINGFIELD, INC.
SOUTHERN STARR COMMUNICATIONS, INC.
SOUTHERN STARR MANAGEMENT, INC.
GENERAL BROADCASTING OF FLORIDA, INC.
GENERAL BROADCASTING CORP.
BY: /S/ HOWARD TYTEL
------------------------------
NAME: HOWARD TYTEL
TITLE: EXECUTIVE VICE PRESIDENT
THE BANK OF NEW YORK,
AS THE AGENT, THE LETTER OF CREDIT
ISSUING BANK AND AS A LENDER
BY: /S/ JOSEPH P. MATTEO
----------------------------
NAME: JOSEPH P. MATTEO
TITLE: VICE PRESIDENT
-9-
<PAGE>
BANK OF TOKYO - MITSUBISHI TRUST COMPANY
BY: _____________________________
NAME:
TITLE:
BANKERS TRUST COMPANY
BY: /S/ GINA S. THOMPSON
_____________________________
NAME: GINA S. THOMPSON
TITLE: VICE PRESIDENT
BANK OF MONTREAL
BY: /S/ RENE ENCARNACION
_____________________________
NAME: RENE ENCARNACION
TITLE: DIRECTOR
BANQUE NATIONALE DE PARIS
BY: /S/ MARK WHITSON
_____________________________
NAME: MARK WHITSON
TITLE: VICE PRESIDENT
BY: /S/ PAMELA LUCASH
_____________________________
NAME: PAMELA LUCASH
TITLE: ASSISTANT TREASURER
CIBC, INC.
BY: /S/ MATTHEW B. JONES
____________________________
NAME: MATTHEW B. JONES
TITLE: AUTHORIZED SIGNATORY
-10-
<PAGE>
CORESTATES BANK N.A.
BY: /S/ CHRIS KALMBACH
_____________________________
NAME: CHRIS KALMBACH
TITLE: VICE PRESIDENT
THE FUJI BANK, LIMITED, NEW YORK BRANCH
BY: ______________________________
NAME:
TITLE:
LEHMAN COMMERCIAL PAPER INC.
BY: /S/ DENNIS J. DEE
______________________________
NAME: DENNIS J. DEE
TITLE: AUTHORIZED SIGNATORY
NATIONAL BANK OF CANADA
BY: /S/ THERESA WHITE
______________________________
NAME: THERESA WHITE
TITLE: VICE PRESIDENT
BY: /S/ JERRY SALESE
______________________________
NAME: JERRY SALESE
TITLE: VICE PRESIDENT
-11-
<PAGE>
NATIONAL CITY BANK
BY: /S/ ANDREW J. WALSHAW
___________________________
NAME: ANDREW J. WALSHAW
TITLE: ACCOUNT OFFICER
SOCIETE GENERALE
BY: /S/ MARK VIGIL
____________________________
NAME: MARK VIGIL
TITLE: VICE PRESIDENT
SOUTHERN PACIFIC THRIFT & LOAN ASSOCIATION
BY: /S/ CHARLES D. MARTORANO
_____________________________
NAME: CHARLES D. MARTORANO
TITLE: SENIOR VICE PRESIDENT
THE SUMITOMO BANK, LIMITED
BY: /S/ J.H. BROADLEY
_____________________________
NAME: J.H. BROADLEY
TITLE: VICE PRESIDENT-NEW YORK
OFFICE
BY: /S/ B.W. HENRY
______________________________
NAME: B.W. HENRY
TITLE: VICE PRESIDENT-NEW YORK
OFFICE
-12-
<PAGE>
SUNTRUST BANK, CENTRAL FLORIDA, N.A.
BY: /S/ CHRISTOPHER J. AGUILAR
____________________________
NAME: CHRISTOPHER J. AGUILAR
TITLE: FIRST VICE PRESIDENT
-13-
<PAGE>
[SFX BROADCASTING, INC. LOGO]
( BW) (SFX-BROADCASTING) (SFXBA) SFX BROADCASTING SELLS $225 MILLION OF
EXCHANGEABLE PIK PREFERRED; SECRET PURCHASE PRICE REDUCED TO $255 MILLION
NEW YORK--(BUSINESS WIRE)--Jan. 17, 1997--SFX Broadcasting, Inc. (NASDAQ:
SFXBA) today announced that it has sold $225 million of cumulative
exchangeable preferred stock to underwriters BT Securities Corporation,
Goldman, Sachs & Co. and Lehman Brothers Inc. The stock will pay dividends at
the rate of 12 5/8% per annum with an option by the company to pay such
dividends in additional preferred stock for the first five years. The company
also has the option to exchange the outstanding stock for senior subordinated
debentures. The shares were registered with the SEC through a shelf
registration statement which was originally filed November 27, 1996.
The proceeds from this transaction, along with partial borrowings on its
mostly undrawn $225 million line of credit, will be adequate to fund the
closing of all previously announced acquisitions and will leave the company
with additional borrowing capacity under its existing facility.
Separately, SFX and Secret Communications, L.P. today jointly announced
that they have agreed in principle to amend their purchase agreement which
was originally signed in October of last year. Secret Communications is an
owner/operator of nine radio stations in Pittsburgh, Indianapolis and
Cleveland. Under the terms of the new agreement in principle, Secret will
retain its two Cleveland stations, and SFX will now purchase the four
stations in Pittsburgh and the three in Indianapolis for $255 million,
reduced from the original price of $300 million. As indicated in the
information provided by Secret, the Cleveland stations had an annual
broadcast cash flow of less than $1.5 million for the latest year.
Robert F. X. Sillerman, Executive Chairman of SFX Broadcasting, said, "We
are pleased to take these important steps. This financing, together with the
funds available under our senior credit facility, will be sufficient to fund
all of our announced acquisitions and will leave SFX well positioned to
continue its active acquisition plans for the remainder of 1997. We are also
very happy to restructure the Secret transaction. Although the Cleveland
stations are attractive and have good potential, they do not fit our core
acquisition profile for value enhancement."
This press release shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of the 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.
Copies of the prospectus can be obtained from BT Securities Corporation, 130
Liberty Street, New York, NY 10006, Attention: Amy Nicholas.
With the anticipated consummation of all previously announced
transactions, SFX will own and operate or provide services to the following
76 radio stations in 22 markets.
150 East 58th Street
New York, New York 10155
212.407.9191
S o F o X
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
Dallas, TX Greensboro, NC Greenville-Spartanburg, SC
KTXQ-FM(c) WMAG-FM WMYI-FM
KRRW-FM(c) WHSL-FM WSSL-FM
WTCK-AM WROQ-FM
WMFR-AM WGVL-AM
Houston, TX Nashville, TN Tucson, Az
KKRW-FM WSIX-FM KWFM-FM
KODA-FM WRVW-FM KRQQ-FM
KQUE-FM(c) KNST-AM
KNUZ-AM(c) KCEE-AM
San Diego, CA Raleigh-Durham, NC Springfield/Northampton, MA
KPLN-FM WRSN-FM WHMP-FM
KYXY-FM WTRG-FM WPKX-FM
WDCG-FM WHMP-AM
WRDU-FM
Pittsburgh, PA Jacksonville, Fla. Wichita, Kansas
WDVE-FM(c) WFYV-FM(b) KRZZ-FM
WXDX-FM(c) WAPE-FM(b) KKRD-FM
WDSY-FM(c) WKQL-FM KNSS-AM
WJJJ-FM(c) WIVY-FM
WOKV-AM
WBWL-AM
Providence, RI Richmond, VA New Haven, Conn.
WSNE-FM WMXB-FM WPLR-FM
WHJY-FM WVGO-FM(c) WYBC-FM(a)
WHJJ-AM WLEE-FM(c)
WKHK-FM(c)
WBZU-FM(c)
Indianapolis, IN Albany, NY Daytona Beach, Fla.
WFBQ-FM(c) WGNA-FM WGNE-FM
WFBZ-FM(c) WPYX-FM
WRZX-FM(c) WTRY-FM Jackson, MS
lWNDE-AM(c) WGNA-AM WKTF-FM
WTRY-AM WMSI-FM
WSTZ-FM
WJDX-FM
Charlotte, NC WJDS-AM
WLYT-FM WZRX-AM
WTDR-FM Biloxi, MS
Hartford, CT WKNN-FM
Hartford, CT WMJY-FM
WHCN-FM
WMRQ-FM
WKSS-FM
WWYZ-FM(c)
WPOP-AM
</TABLE>
(a) Joint Selling Agreement (JSA)
(b) Local Marketing Agreement (LMA) with a contract to acquire
(c) Under contract to be acquired
Under contract to be sold or swapped by SFX are WHFM(FM), WBAB(FM), WBLI(FM)
and WGBB-AM in Long Island, NY; WHFS(FM) in Washington, DC/Baltimore, MD;
WYAK(FM) and WMYB(FM) in Myrtle Beach, SC; and KOLL(FM) in Little Rock, Ark.
CONTACT: SFX Broadcasting, Inc.
Timothy J. Klahs
Director, Investor Relations, 212/407-9126
