<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): March 27, 1997
- --------------------------------------------------------------------------------
Spanish Broadcasting System, Inc.
- --------------------------------------------------------------------------------
(Exact name of the Registrant as specified in charter)
Delaware
- --------------------------------------------------------------------------------
(State or other jurisdiction of incorporation)
33-82114 13-3827791
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(Commission File Number) (IRS Employer Identification No.)
26 West 56th Street, New York, New York 10019
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(Address of principal executive offices) (Zip Code)
Company's telephone number, including area code: (212) 541-9200
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Not Applicable
- --------------------------------------------------------------------------------
(Former name or former address, if changed since last report)
See List of Additional Registrants
<PAGE> 2
<TABLE>
<CAPTION>
PRIMARY
STANDARD I.R.S.
STATE OR OTHER INDUSTRIAL EMPLOYER
JURISDICTION OF CLASSIFICATION IDENTIFICATION
NAME INCORPORATION NUMBER NUMBER
<S> <C> <C> <C>
Spanish Broadcasting System, Inc............................... New Jersey 4832 13-3181941
Spanish Broadcasting System of California, Inc................. California 4832 92-3952357
Spanish Broadcasting System of Florida, Inc.................... Florida 4832 58-1700848
Alarcon Holdings, Inc.......................................... New York 6512 13-3475833
Spanish Broadcasting System Network, Inc....................... New York 4899 13-3511101
SBS Promotions, Inc............................................ New York 7999 13-3456128
SBS of Greater New York, Inc................................... New York 4832 13-3888732
</TABLE>
Item 1. Changes in Control of the Company.
Not applicable.
Item 2. Acquisition or Disposition of Assets.
On March 27, 1997, Spanish Broadcasting System, Inc., a
Delaware corporation (the "Company"), acquired (a) from Infinity Holding Corp.
of Orlando ("Infinity") substantially all of the tangible and intangible assets
owned or held by Infinity and used or useful in the business or operations of
radio station WYSY-FM, serving the Chicago metropolitan area, for a purchase
price of $33.0 million, including a $3.0 million seller note (the "Chicago
Acquisition") and (b) from New Age Broadcasting Inc. and The Seventies
Broadcasting Corporation (together, the "Miami Sellers") all of the tangible and
intangible assets owned or held by the Miami Sellers and used or useful in the
business or operations of radio stations WRMA-FM and WXDJ-FM, serving the Miami
metropolitan area, for a cash purchase price of $111.0 million (the "Miami
Acquisitions," and together with the Chicago Acquisition, the "Acquisitions").
The assets acquired in connection with the Acquisitions included, among other
things: (i) personal property, including studio and transmission equipment; (ii)
licenses, permits and other authorizations including those licenses issued by
the Federal Communications Commission (the "FCC") in connection with the
business and operations of such radio stations; (iii) leaseholds, including the
leasehold for the transmitter site for such radio stations; (iv) assumed
contracts; and (v) intangibles. The Company intends to use such assets in the
same manner as the previous owners. The purchase prices for the Acquisitions
were determined by arms-length negotiations between the respective parties,
which, other than the Miami Sellers, are not affiliated with each other. In
connection with the Miami Acquisitions, in September 1996, the Company entered
into an employment agreement with Russell Oasis, one of the owners and operators
of the Miami Sellers. The Acquisitions were financed with the proceeds of
offerings (the "Offerings") made by the Company in reliance upon the exemption
provided in Section 4(2) of the Securities Act of 1933, as amended (the "Act").
See "Item 5 -- Other Events."
2
<PAGE> 3
Item 3. Bankruptcy or Receivership.
Not Applicable.
Item 4. Changes in Company's Certifying Accountant.
Not Applicable.
Item 5. Other Events.
On March 27, 1997, the Company completed offerings of (a)
175,000 units (the "Units Offering") comprised of 175,000 shares of the
Company's Series A Senior Exchangeable Preferred Stock, liquidation preference
$1,000 per share, and warrants to purchase 74,900 shares of the Company's Class
A Common Stock, par value $.01 per share ("Common Stock"), and (b) $75.0 million
aggregate principal amount of the Company's 11% Senior Notes due 2004 (the
"Senior Notes") (the "Notes Offering") in transactions not registered under the
Act, in reliance upon the exemption provided in Section 4(2) of the Act.
Concurrently with the consummation of the Offerings, the
Company effected a series of transactions including (i) the Acquisitions, and
(ii) the redemption (the "Redemption") of the Company's Senior Secured Notes due
2001 (the "Senior Secured Notes") and Senior Exchangeable Preferred Stock,
Series A (the "Old Preferred Stock") and the repurchase (the "Repurchase") of
related warrants to purchase an aggregate of 6.0% of the Company's Common Stock,
on a fully-diluted basis (the "Primary Warrants"). In addition, simultaneously
with the consummation of the Offerings, the Company announced its intention to
declare a dividend of up to $4 million in the aggregate (the "Distribution") to
its stockholders and existing warrantholders who elected to receive their pro
rata portion of the Distribution in lieu of the anti-dilution adjustment they
would otherwise have been entitled to as a result of the Distribution.
In connection with the Offerings, the Company obtained the
consents (the "Consent Solicitation") from the holders of the Company's 12.5%
Senior Notes due 2002 to permit (i) the issuance of the Senior Notes, (ii) the
issuance of the $3 million seller note in connection with the Chicago
Acquisition, (iii) the repurchase of the Primary Warrants and (iv) the payment
of the Distribution.
The Offerings, the Redemption, the Repurchase, the
Distribution and the Consent Solicitation, together with the Acquisitions, are
collectively referred to herein as the "Transactions."
3
<PAGE> 4
The net proceeds to the Company from the Offerings (together
with cash on hand) were used to finance the Transactions as follows:
<TABLE>
<S> <C>
Purchase of WRMA-FM and WXDJ-FM $111,000,000
Purchase of WYSY-FM(1) 30,000,000
Redemption/Repurchase of Senior
Secured Notes, Old Preferred Stock
and Primary Warrants 90,595,000
</TABLE>
The net proceeds to the Company from the Offerings (together
with cash on hand) were used to finance the Transactions as follows:
<TABLE>
<S> <C>
Purchase of WRMA-FM and WXDJ-FM $111,000,000
Purchase of WYSY-FM(1) 30,000,000
Redemption/Repurchase of Senior
Secured Notes, Old Preferred Stock
and Primary Warrants 90,595,000
</TABLE>
<TABLE>
<S> <C>
Distribution 4,000,000
Consent Solicitation Fee 2,600,000
</TABLE>
----------
(1) Represents the cash portion of the purchase price and
excludes the $3 million seller note.
Item 6. Resignation of Company's Directors.
Not Applicable.
Item 7. Financial Statements, Pro Forma Financial Information and
Exhibits.
(a) Financial Statements of Businesses Acquired.
NEW AGE BROADCASTING, INC.:
AUDITED FINANCIAL STATEMENTS
Report of Voynow, Bayard and Company, independent auditors
Balance Sheet at September 30, 1994
Statement of Income and Retained Earnings for the year ended
September 30, 1994
Statement of Cash Flows for the year ended September 30, 1994
Notes to Financial Statements
NEW AGE BROADCASTING, INC. AND THE SEVENTIES
BROADCASTING CORPORATION:
AUDITED FINANCIAL STATEMENTS
Report of Voynow, Bayard and Company, independent auditors
Combined Balance Sheet at September 30, 1995
Combined Statement of Income and Retained Earnings for the
year ended September 30, 1995
Combined Statement of Cash Flows for the year ended September
30, 1995
Notes to Combined Financial Statements
4
<PAGE> 5
NEW AGE BROADCASTING, INC. AND THE SEVENTIES BROADCASTING CORPORATION:
AUDITED FINANCIAL STATEMENTS
Report of KPMG Peat Marwick LLP, independent auditors
Combined Balance Sheet at September 30, 1996
Combined Statement of Income for the year ended September 30, 1996
Combined Statement of Cash Flows for the year ended September 30, 1996
Combined Statement of Changes in Stockholders' Equity for the year ended
September 30, 1996
Notes to Combined Financial Statements
UNAUDITED FINANCIAL STATEMENTS
Condensed Combined Balance Sheet at December 31, 1996
Condensed Combined Statements of Operations for the three months ended
December 31, 1995 and 1996
Condensed Combined Statements of Cash Flows for the three months ended
December 31, 1995 and 1996
Notes to Combined Financial Statements
(b) Pro Forma Financial Information PRO FORMA COMBINED FINANCIAL
STATEMENTS
Pro Forma Combined Balance Sheet at December 29, 1996 (Unaudited)
Notes to Pro Forma Combined Balance Sheet (Unaudited)
Pro Forma Combined Statement of Operations for Fiscal Year Ended
September 29, 1996 (Unaudited) and Three Months Ended December 29,
1996 (Unaudited)
Notes to Pro Forma Combined Statement of Operations (Unaudited)
(c) Exhibits
5
<PAGE> 6
Sequential
Page No.
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1.1 Financial Advisory Agreement dated March 4, 1997
between the Company and CIBC Wood Gundy Securities
Corp., as financial advisor.
3.1 Certificate of Elimination of Exchangeable Preferred
Stock, Series A, filed March 27, 1997.
3.2 Certificate of Designation of Senior Exchangeable
Preferred Stock, Series A, filed March 27, 1997.
4.1 Second Supplemental Indenture dated as of March 21,
1997 to Indenture dated as of June 29, 1994 among the
Company, the Guarantors named therein and IBJ
Schroder Bank & Trust Company Trustee.
4.2 Indenture dated as of March 15, 1997, among the Company,
the Guarantors named therein, IBJ Schroder Bank & Trust
Company, as Trustee, and CIBC Wood Gundy Securities
Corp., as Initial Purchaser.
4.3 Exchange Debenture Indenture dated as of March 15, 1997,
among the Company, the Guarantors named therein, U.S.
Trust Company of New York, as Trustee, and CIBC Wood Gundy
Securities Corp., as Initial Purchaser.
10.1 Securities Purchase Agreement dated as of March 24,
1997 by and among the Company, the Guarantors named therein
and CIBC Wood Gundy Securities Corp., as Initial Purchaser.
10.2 Unit Agreement dated as of March 15, 1997 among the Company,
the Guarantors and IBJ Schroder Bank & Trust Company,
as Trustee.
10.3 Warrant Agreement dated as of March 15, 1997 by and among the
Company and IBJ Schroder Bank & Trust Company, as Warrant Agent.
10.4 Common Stock Registration Rights and Stockholders Agreement dated
as of March 15, 1997 among the Company, certain Management
Stockholders named therein and CIBC Wood Gundy Securities Corp.
10.5 Notes Registration Rights Agreement dated as of March 15, 1997
among the Company, the Guarantors named therein and CIBC Wood
Gundy Securities Corp.
10.6 Preferred Stock Registration Rights Agreement dated as of
March 15, 1997 among the Company, the Guarantors named therein
and CIBC Wood Gundy Securities Corp.
6
<PAGE> 7
Sequential
Page No.
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10.7 National Radio Sales Representation Agreement dated
as of February 3, 1997 between Caballero Spanish Media,
L.L.C. and the Company.
10.8 Employment Agreement dated as of March 4, 1997 between
Raul Alarcon, Jr. and the Company.
10.9 Employment Agreement dated September 27, 1996 between
Russell Oasis and the Company. Incorporated herein by
reference to Exhibit 10.42 of the Company's Annual
Report on Form 10-K for the Year Ended September
29, 1996.
10.10 Asset Purchase Agreement dated September 16, 1996 among
Raul Alarcon, Jr., New Age Broadcasting, Inc., The
Seventies Broadcasting Corporation and the Company,
and with respect only to Section 9.3 thereof, Alan Potamkin
Russell Oasis and Robert Potamkin. Incorporated herein by
reference to Exhibit 10.43 of the Company's Annual Report
on Form 10-K for the Year Ended September 29, 1996.
10.11 First Amendment to Asset Purchase Agreement dated December 26,
1996 among Raul Alarcon, Jr., New Age Broadcasting, Inc., The
Seventies Broadcasting Corporation and the Company, and with
respect only to Section 9.3 thereof, Alan Potamkin, Russell Oasis
and Robert Potamkin.
10.12 Second Amendment to Asset Purchase Agreement dated
February 28, 1997 among Raul Alarcon, Jr., New Age
Broadcasting, Inc., The Seventies Broadcasting Corporation
and the Company, and with respect only to Section 9.3
thereof, Alan Potamkin, Russell Oasis and Robert Potamkin.
10.13 Asset Purchase Agreement dated August 22, 1996 between
Infinity Holdings Corp. of Orlando and the Company.
Incorporated herein by reference to Exhibit 10.44 of the
Company's Annual Report on Form 10-K for the Year Ended
September 29, 1996.
10.14 Letter Agreement dated January 13, 1997 between the
Company and Caballero Spanish Media, LLC.
Item 8. Change in Fiscal Year.
Not Applicable.
Item 9. Sales of Equity Securities Pursuant to Regulation S.
Not Applicable.
7
<PAGE> 8
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, as amended, each of SPANISH BROADCASTING SYSTEM, INC., a Delaware
corporation, SPANISH BROADCASTING SYSTEM, INC., a New Jersey corporation,
SPANISH BROADCASTING SYSTEM OF FLORIDA, INC., SPANISH BROADCASTING SYSTEM
NETWORK, INC., SBS PROMOTIONS, INC., ALARCON HOLDINGS, INC., SBS OF GREATER NEW
YORK, INC. and SPANISH BROADCASTING SYSTEM OF CALIFORNIA, INC., has duly caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized in the City of New York, New York as of the 11th day of April, 1997.
SPANISH BROADCASTING SYSTEM, INC., a Delaware corporation,
SPANISH BROADCASTING SYSTEM, INC., a New Jersey corporation
SPANISH BROADCASTING SYSTEM OF FLORIDA, INC.
SPANISH BROADCASTING SYSTEM NETWORK, INC.
SBS PROMOTIONS, INC.
ALARCON HOLDINGS, INC.
SBS OF GREATER NEW YORK, INC.
SPANISH BROADCASTING SYSTEM OF CALIFORNIA, INC.
By: /s/ Joseph A. Garcia
-----------------------------------
Joseph A. Garcia,
Vice President
8
<PAGE> 9
INDEX TO FINANCIAL STATEMENTS
Description Seq. Page No.
- ----------- -------------
(a) Financial Statements of Business Acquired
NEW AGE BROADCASTING, INC.:
AUDITED FINANCIAL STATEMENTS
Report of Voynow, Bayard and Company, independent
auditors
Balance Sheet at September 30, 1994
Statement of Income and Retained Earnings for the year
ended September 30, 1994
Statement of Cash Flows for the year ended September 30,
1994
Notes to Financial Statements
NEW AGE BROADCASTING, INC. AND THE SEVENTIES
BROADCASTING CORPORATION:
AUDITED FINANCIAL STATEMENTS
Report of Voynow, Bayard and Company, independent
auditors
Combined Balance Sheet at September 30, 1995
Combined Statement of Income and Retained Earnings for
the year ended September 30, 1995
Combined Statement of Cash Flows for the year ended
September 30, 1995
Notes to Combined Financial Statements
9
<PAGE> 10
NEW AGE BROADCASTING, INC. AND THE
SEVENTIES BROADCASTING CORPORATION:
AUDITED FINANCIAL STATEMENTS
Report of KPMG Peat Marwick LLP, independent auditors
Combined Balance Sheet at September 30, 1996
Combined Statement of Income for the year ended
September 30, 1996
Combined Statement of Cash Flows for the year ended
September 30, 1996
Combined Statement of Changes in Stockholders' Equity
for the year ended September 30, 1996
Notes to Combined Financial Statements
UNAUDITED FINANCIAL STATEMENTS
Condensed Combined Balance Sheet at December 31, 1996
Condensed Combined Statements of Operations for the
three months ended December 31, 1995 and 1996
Condensed Combined Statements of Cash Flows for the
three months ended December 31, 1995 and 1996
Notes to Combined Financial Statements
PRO FORMA COMBINED FINANCIAL STATEMENTS
Pro Forma Combined Balance Sheet at December 29, 1996 (Unaudited)
Notes to Pro Forma Combined Balance Sheet (Unaudited)
Pro Forma Combined Statement of Operations for Fiscal Year Ended
September 29, 1996 (Unaudited) and Three Months Ended December 29, 1996
(Unaudited)
Notes to Pro Forma Combined Statement of Operations (Unaudited)
10
<PAGE> 11
INDEPENDENT AUDITORS' REPORT
The Shareholders
New Age Broadcasting, Inc.
Miami, Florida 33145
Gentlemen:
We have audited the accompanying balance sheet of New Age Broadcasting,
Inc. (an S corporation) as of September 30, 1994 and the related statements of
income, retained earnings and cash flows for the year then ended. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatements. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion the financial statements referred to above present fairly in
all material respects, the financial position of New Age Broadcasting, Inc. as
of September 30, 1994, and the results of its operations and its cash flows for
the year then ended in conformity with generally accepted accounting principles.
VOYNOW, BAYARD AND COMPANY
Certified Public Accountants
Ft. Lauderdale, Florida
December 2, 1994
F-1
<PAGE> 12
NEW AGE BROADCASTING, INC.
BALANCE SHEET
SEPTEMBER 30, 1994
<TABLE>
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash (Note 6F)....................................................... $ 209,618
Cash, restricted funds (Note 2)...................................... 100,000
Accounts receivable:
Trade (net of allowance for doubtful accounts of $111,626)........ 1,343,103
Barter (Note 1E).................................................. 86,436 1,429,539
---------
Prepaid expenses..................................................... 58,742
---------
Total Current Assets......................................... 1,797,899
PLANT, PROPERTY AND EQUIPMENT (Note 1C)
Technical equipment, studio and tower................................ 546,091
Office equipment and fixtures, and transportation equipment.......... 275,021
---------
821,112
Accumulated depreciation............................................. 539,886
---------
Net Plant, Property and Equipment................................. 281,226
OTHER ASSETS (Note 1F)
Transmitter site leasehold interest, trademark, FCC license and
goodwill (net of amortization of $1,324,485)...................... 6,464,036
Deferred financing costs (net of amortization of $48,534)............ 78,077
Lease costs (net of amortization of $1,925).......................... 2,713
Deposits............................................................. 265,009
---------
Total Other Assets........................................... 6,809,835
---------
TOTAL ASSETS................................................. $8,888,960
=========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Current portion of long-term debt (Note 3)........................... $ 655,249
Accounts payable:
Trade............................................................. 42,694
Barter (Note 1E).................................................. 15,855
Accrued expenses..................................................... 119,342
---------
Total Current Liabilities.................................... 833,140
LONG-TERM DEBT
Notes payable (Note 3)
AT&T Commercial Finance Company................................... 3,427,000
Transportation equipment financing................................ 28,531
Stockholders (Note 3C)............................................ 217,345
---------
Total........................................................ 3,672,876
Less: Current portion................................................ 655,249
---------
Total Long-Term Debt......................................... 3,017,627
---------
TOTAL LIABILITIES............................................ 3,850,767
COMMITMENTS AND CONTINGENCIES (Note 6)
STOCKHOLDERS' EQUITY
Capital stock (par value $10; 1,000 shares authorized, 180 shares
issued and outstanding) (Note 5).................................. 1,800
Additional paid in capital........................................... 998,200
Retained earnings.................................................... 4,038,193
---------
Net Stockholders' Equity.......................................... 5,038,193
---------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY................... $8,888,960
=========
</TABLE>
See independent auditors' report.
The accompanying notes are an integral part of the financial statements.
F-2
<PAGE> 13
NEW AGE BROADCASTING, INC.
STATEMENT OF INCOME AND RETAINED EARNINGS
YEAR ENDED SEPTEMBER 30, 1994
<TABLE>
<S> <C> <C>
GROSS BROADCASTING REVENUES......................................... $ 8,339,045
Less agency commissions........................................... (1,029,036)
NET REVENUE......................................................... 7,310,009
OPERATING EXPENSES
Technical......................................................... 765,129
Sales............................................................. 1,475,112
General and administrative........................................ 423,845
---------
Total Operating Expenses.................................. 2,664,086
---------
INCOME FROM OPERATIONS.............................................. 4,645,923
OTHER INCOME, (EXPENSES)
Interest income................................................... 57,771
Officer compensation.............................................. (220,000)
Interest expense, bank............................................ (314,252)
Interest expense, shareholders.................................... (152,599)
Amortization...................................................... (229,305)
Depreciation...................................................... (98,946)
---------
Net Other Expenses........................................ 957,331
---------
NET INCOME................................................ 3,688,592
RETAINED EARNINGS, BEGINNING........................................ 349,601
---------
RETAINED EARNINGS, ENDING........................................... $ 4,038,193
=========
</TABLE>
See independent auditors' report.
The accompanying notes are an integral part of the financial statements.
F-3
<PAGE> 14
NEW AGE BROADCASTING, INC.
STATEMENT OF CASH FLOWS
YEAR ENDED SEPTEMBER 30, 1994
<TABLE>
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
NET INCOME........................................................ $ 3,688,592
ADJUSTMENTS TO RECONCILE NET INCOME TO NET CASH PROVIDED BY
OPERATING ACTIVITIES:
Add (deduct) expenses not using cash
Depreciation and amortization................................ 328,251
Increase in bad debt allowance............................... 90,186
Changes in assets and liabilities
(Increase) decrease in:
Accounts receivable........................................ (373,497)
Prepaid expenses........................................... 14,230
(Decrease) in:
Accounts payable and accrued expenses...................... (251,382)
----------
Total Adjustments....................................... (192,212)
----------
Net Cash Provided by Operating Activities............... 3,496,380
CASH FLOWS FROM INVESTING ACTIVITIES
Expenditures for property and equipment......................... (95,703)
Expenditures for trademark acquisition.......................... (35,432)
----------
Net Cash Used in Investing Activities................... (131,135)
CASH FLOWS FROM FINANCING ACTIVITIES
Acquisition of new financing, equipment......................... 17,623
Repayment of bank debt.......................................... (409,334)
Repayment of shareholder debt................................... (3,697,401)
----------
Net Cash Used in Financing Activities................... (4,089,112)
----------
NET DECREASE IN CASH.............................................. (723,867)
CASH, BEGINNING................................................... 1,033,485
----------
CASH, ENDING...................................................... $ 309,618
==========
SUPPLEMENTAL INFORMATION
Interest paid................................................... $ 453,224
==========
</TABLE>
See independent auditors' report.
The accompanying notes are an integral part of the financial statements.
F-4
<PAGE> 15
NEW AGE BROADCASTING, INC.
NOTES TO THE FINANCIAL STATEMENTS
SEPTEMBER 30, 1994
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A. Organization
New Age Broadcasting, Inc. was incorporated on November 19, 1987 under the
laws of the State of Florida. Its principal office and place of business is in
the Miami, Florida area.
B. Operations
The corporation is engaged in the business of operating an FM radio
station, WXDJ-FM. Revenue is gained from the sale of commercial time to third
parties.
C. Plant, Property and Equipment
All plant, property and equipment accounts are stated at cost; additions
and major improvements are capitalized; expenditures for maintenance, repairs
and minor renewals are expensed as incurred. Any gain or loss on disposition of
assets is reflected in the statement of income. Depreciation of assets is
computed by use of the straight-line method over the estimated useful lives of
the respective assets, ranging from 5 to 7 years.
D. Station Acquisition
The corporation acquired the operating assets of WXDJ-FM on December 1,
1987 for a purchase price of $8,100,000. The total purchase price was allocated
to the assets in proportion to their relative estimated fair market values based
on independent appraisals obtained by management. The allocation of the purchase
price is summarized, as follows:
<TABLE>
<S> <C>
Station furniture, fixtures and equipment...................... $ 472,210
Transmitter site leasehold interest, FCC license and
goodwill..................................................... 7,627,790
----------
Total Allocated Purchase Price................................. $8,100,000
=========
</TABLE>
E. Barter Transactions
Reciprocal trade agreement transactions for advertising time are recorded
at fair market value of the merchandise or services received and are included in
broadcast revenues and expenses. Any uncompleted transactions are recorded in
accounts receivable and payable as appropriate.
F-5
<PAGE> 16
NEW AGE BROADCASTING, INC.
NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED)
F. Intangible Assets
Costs of acquiring the leasehold interest and FCC license, as well as
financing and organization costs, are capitalized. These intangible assets are
being amortized over the following estimated lives on a straight-line basis:
<TABLE>
<CAPTION>
AMORTIZATION
EXPENSE FISCAL
YEAR ENDED
SEPTEMBER 30,
ASSET COST LIFE 1994
------------------------------------------------- ---------- -------- --------------
<S> <C> <C> <C>
Transmitter site leasehold, FCC license and
goodwill....................................... $7,753,090 40 years $202,835
Trademark........................................ 35,431 14 years 221
Deferred financing costs......................... 126,612 5 years 25,322
Lease costs, new tower........................... 4,638 5 years 927
--------
$229,305
========
</TABLE>
2. CASH, RESTRICTED FUNDS
The company has placed $100,000 in a restricted bank account to comply with
State of Florida regulation related to a current promotional contest. The
restriction is expected to be removed from these funds at the contest conclusion
during the next quarter.
3. FINANCING ARRANGEMENTS
A. Notes Payable, AT&T Commercial Finance Corporation
A term note was secured on October 29, 1992 from AT&T Commercial Finance
Corporation in the original amount of $4,150,000. Monthly principal payments are
required under the loan agreements as follows:
<TABLE>
<S> <C>
03/1/93 through 11/1/93............................................ $40,000
12/1/93 through 11/1/94............................................ 33,000
12/1/94 through 11/1/95............................................ 36,000
12/1/95 through 11/1/96............................................ 40,000
12/1/96 through 10/1/97............................................ 44,000
</TABLE>
The remaining balance of the debt is due in full on November 1, 1997.
Interest is due monthly on the debt calculated at a rate based on the prime
rate plus two percent. At September 30, 1994 this rate was 9.75%.
Substantially all corporate assets have been pledged to secure this
obligation. In addition, the stockholders have pledged their stock and have
given their personal guarantees to secure the obligation. The debt agreements
include stipulations limiting capital expenditures, compensation, investments
and dividends and for maintenance of a minimum level of working capital.
B. Notes Payable, Transportation Equipment
The company has secured financing for station vehicles in 1993 and 1994
from a local commercial bank. Forty-eight monthly payments of $742 are due
including interest. The debts are secured by the vehicles financed, as well as
by the personal guarantees of certain stockholders.
F-6
<PAGE> 17
NEW AGE BROADCASTING, INC.
NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED)
C. Notes Payable, Stockholders
Financing has been arranged from the stockholders on a demand basis. The
original amount of this financing was $3,510,000 with the related accrued,
unpaid interest amounting to $1,944,746 as of October 1, 1993. Due to
stipulations contained in the AT&T Commercial Finance Corporation loan
agreements described above, this debt and the related accrued, unpaid interest
has previously been classified as long term obligations of the company. By
agreement between the parties in fiscal year 1994, the company was permitted to
use excess cash to repay stockholder debt. As of September 30, 1994, $217,345
remained due to the stockholders and was repaid in October, 1994.
D. The notes mature over the next three years as follows:
<TABLE>
<CAPTION>
YEAR ENDING SEPTEMBER 30
---------------------------------------------------------------
<S> <C>
1995........................................................... $ 655,249
1996........................................................... 484,905
1997........................................................... 2,532,722
---------
$3,672,876
=========
</TABLE>
4. INCOME TAXES
Effective March 1, 1988, the company elected to be taxed under the
provisions of Subchapter S of the Internal Revenue Code and the State of Florida
Code with a fiscal year ending on September 30. Under these provisions, the
company does not pay federal or state corporate income taxes on its income. The
individual stockholders are liable for federal and state income taxes on their
respective shares of the company's taxable income.
From inception to February 29, 1988, the company was taxed under provisions
Subchapter C of the Internal Revenue Code which taxes the company directly on
its income. The company had incurred net operating losses of $360,260, for tax
purposes, which are available to be carried over to offset taxable income in
future years up to 2002 should "C" status be elected at some future date prior
to 2002.
5. CAPITAL STOCK
The company is authorized to issue 1,000 shares of common stock with a par
value of $10. At the time of issuance, this stock is designated to be either
voting or nonvoting by action of the Board of Directors. On February 29, 1988,
the company issued and has outstanding 180 shares of common stock, which consist
of 49 voting shares and 131 nonvoting shares.
6. COMMITMENTS AND CONTINGENCIES
A. Office Space Lease
The company has secured office space in Miami, Florida under a lease which
commenced May 21, 1991. The company has exercised its second renewal option
under that lease for the period June 1, 1994 through May 31, 1996.
B. Antenna Tower Lease
The company has secured antenna tower space at a facility in Miami and is
currently operating at that site under a temporary FCC operating permit. The
lease covering these facilities is for a five-year period, with six five-year
renewal periods, commencing September 1, 1992 with monthly rents of $3,500 plus
sales tax.
F-7
<PAGE> 18
NEW AGE BROADCASTING, INC.
NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED)
The antenna facility lease contains provisions allowing for the subletting
of the facility subject to typical landlord approval policies. The company is in
the process of obtaining a new site for its permanent transmitter facility. In
the event that the company relocates its antenna facility prior to the
expiration of the lease term, a duplicate rental payment would be expected if a
suitable replacement tenant cannot be located for the existing facility.
C. Minimum rents are required under the above leases as follows:
<TABLE>
<CAPTION>
OFFICE ANTENNA
YEAR ENDING SEPTEMBER 30, SPACE TOWER TOTAL
--------------------------------------------------- -------- -------- --------
<S> <C> <C> <C>
1995............................................... $ 60,472 $ 44,940 $105,412
1996............................................... 42,190 44,940 87,130
1997............................................... -- 41,195 41,195
------- ------- -------
$102,662 $131,075 $233,737
======= ======= =======
</TABLE>
Rent expense for the year ended September 30,1994 amounted to $108,783.
D. The company has obtained office equipment under the terms of a lease which
has been recorded as a capitalized lease transaction. In this transaction, both
the asset and the corresponding liability have been recorded. The terms of the
lease agreement require the payment of 60 monthly installments of $141 including
interest.
E. Temporary Operating Permit
The company is broadcasting from the facility in Miami, Florida under the
authority of a special temporary authorization granted by the FCC. This
authorization was necessary due to the destruction of the permanent tower by
Hurricane Andrew. This special temporary authorization expires on February 14,
1995. The company has filed an application of extension, which is being reviewed
by the FCC. Although an extension has not yet been granted and the company has
not returned to its original facility, management expects no interruption in
operations due to its continuing efforts in obtaining a permanent transmitter
facility.
F. The company had bank deposits of $109,618 at September 30, 1994 in excess
of federally insured limits.
7. RELATED PARTY TRANSACTIONS
Affiliated companies will utilize the station as part of their promotional
programming from time to time. Rates and terms for these spots are similar to
those offered to other customers. During the fiscal year, these cash spots
amounted to $58,775 of gross billings.
8. SUBSEQUENT EVENT
An agreement has been made by the owners of the corporation to acquire the
assets and operations of another radio station in the South Florida area. The
acquisition will actually be undertaken by a new corporation with identical
ownership as the company. It is expected that the acquisition financing
arrangements will involve a refinancing of the debt discussed in note 3A, with
the new loan balance secured by the assets of both companies.
F-8
<PAGE> 19
INDEPENDENT AUDITORS' REPORT
The Shareholders
New Age Broadcasting, Inc. and
The Seventies Broadcasting Corporation
Miami, Florida 33145
Gentlemen:
We have audited the accompanying combined balance sheet of New Age
Broadcasting, Inc. and the Seventies Broadcasting Corporation (both S
corporations) as of September 30, 1995 and the related combined statements of
income, retained earnings and cash flows for the year then ended. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatements. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion the financial statements referred to above present fairly in
all material respects, the financial position of New Age Broadcasting, Inc. and
The Seventies Broadcasting Corporation as of September 30, 1995, and the results
of its operations and its cash flows for the year then ended in conformity with
generally accepted accounting principles.
VOYNOW, BAYARD AND COMPANY
Certified Public Accountants
Ft. Lauderdale, Florida
November 7, 1995
F-9
<PAGE> 20
NEW AGE BROADCASTING, INC.
AND
THE SEVENTIES BROADCASTING CORPORATION
COMBINED BALANCE SHEET
SEPTEMBER 30, 1995
<TABLE>
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash and cash equivalents (Note 6F).............................. $ 1,413,127
Accounts receivable:
Trade (net of allowance for doubtful accounts of $64,757)..... 2,326,187
Barter (Note 1D).............................................. 52,484
----------
2,378,671
Prepaid expenses................................................. 117,220
----------
3,909,018
PLANT, PROPERTY AND EQUIPMENT (Note 1E)
Technical equipment, studio and tower............................ 1,757,993
Office equipment and fixtures, and transportation equipment...... 503,188
Capitalized tower lease (Note 3)................................. 643,686
----------
2,904,867
Accumulated depreciation......................................... 913,455
----------
1,991,412
OTHER ASSETS (Note 1F)
Transmitter site leasehold interests, trademark, FCC licenses and
goodwill (net of amortization of $1,848,071).................. 25,739,435
Deferred financing costs (net of amortization of $66,139)........ 429,891
Lease costs (net of amortization of $2,849)...................... 1,789
Deposits......................................................... 273,035
----------
26,444,150
----------
TOTAL ASSETS............................................. $32,344,580
==========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Current portion of long-term debt (Notes 2 and 3) $ 1,500,713
Accounts payable, Trade.......................................... 210,398
Accrued expenses................................................. 283,401
----------
1,994,512
LONG-TERM DEBT
Notes payable (Note 2):
AT&T Commercial Finance Corporation........................... 23,435,921
Transportation equipment financing............................ 19,628
Stockholders (Note 2C)........................................ 1,450,000
Capital lease obligation (Note 3)............................. 641,523
----------
25,547,072
Less: Current portion............................................ 1,500,713
----------
24,046,359
----------
TOTAL LIABILITIES........................................ 26,040,871
COMMITMENTS AND CONTINGENCIES (Note 6)
STOCKHOLDERS' EQUITY
Capital stock (Note 5)........................................... 1,080,000
Retained earnings................................................ 5,223,709
----------
Total Stockholders' Equity............................... 6,303,709
----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY............... $32,344,580
==========
</TABLE>
See independent auditors' report.
The accompanying notes are an integral part of the financial statements.
F-10
<PAGE> 21
NEW AGE BROADCASTING, INC.
AND
THE SEVENTIES BROADCASTING CORPORATION
COMBINED STATEMENT OF INCOME AND RETAINED EARNINGS
YEAR ENDED SEPTEMBER 30, 1995
<TABLE>
<S> <C> <C>
GROSS BROADCASTING REVENUES........................................ $13,414,345
Less: agency commissions......................................... (1,793,697)
NET REVENUE........................................................ 11,620,648
OPERATING EXPENSES
Technical........................................................ 1,591,184
Sales............................................................ 2,203,143
General and administrative....................................... 923,126
----------
4,717,453
----------
INCOME FROM OPERATIONS............................................. 6,903,195
OTHER INCOME (EXPENSES)
Interest income.................................................. 46,667
Officer compensation............................................. (347,500)
Interest expense, bank........................................... (2,000,679)
Amortization..................................................... (669,832)
Depreciation..................................................... (363,590)
Abandonment loss................................................. (110,527)
----------
(3,445,461)
----------
NET INCOME............................................... 3,457,734
RETAINED EARNINGS, BEGINNING....................................... 4,006,630
----------
7,464,364
LESS: DISTRIBUTIONS................................................ 2,240,655
----------
RETAINED EARNINGS, ENDING.......................................... $ 5,223,709
==========
</TABLE>
See independent auditors' report.
The accompanying notes are an integral part of the financial statements.
F-11
<PAGE> 22
NEW AGE BROADCASTING, INC.
AND
THE SEVENTIES BROADCASTING CORPORATION
COMBINED STATEMENT OF CASH FLOWS
YEAR ENDED SEPTEMBER 30, 1995
<TABLE>
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
NET INCOME....................................................... $ 3,457,734
ADJUSTMENTS TO RECONCILE NET INCOME TO NET CASH PROVIDED BY
OPERATING ACTIVITIES:
Add (deduct) expenses not using cash
Depreciation and amortization............................... 1,043,401
Loss on abandonment of assets............................... 110,527
Decrease in bad debt allowance.............................. (46,869)
Changes in assets and liabilities
(Increase) decrease in:
Accounts receivable....................................... (831,486)
Prepaid expenses.......................................... (1,802)
Deposit................................................... (8,026)
Increase in:
Accounts payable and accrued expenses..................... 219,853
----------
485,598
----------
Net Cash Provided by Operating Activities................... 3,943,332
CASH FLOWS FROM INVESTING ACTIVITIES
Cash purchase of property and equipment........................ (1,541,440)
Expenditures for license acquisition........................... (18,548,970)
Expenditures for trademark..................................... (1,120)
Expenditures for loan costs.................................... (447,210)
----------
Net Cash (Used in) Investing Activities..................... (20,538,740)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds of bank loan, net..................................... 22,137,858
Repayment of shareholder debt.................................. (117,345)
Distributions paid............................................. (2,240,655)
Repayment of bank debt......................................... (2,140,000)
----------
Net Cash Provided by Financing Activities................... 17,639,858
----------
NET INCREASE IN CASH AND CASH EQUIVALENTS........................ 1,044,450
CASH AND CASH EQUIVALENTS, BEGINNING............................. 368,677
----------
CASH AND CASH EQUIVALENTS, ENDING................................ $ 1,413,127
==========
SUPPLEMENTAL INFORMATION
Interest paid.................................................. $ 1,908,049
==========
</TABLE>
See independent auditors' report.
The accompanying notes are an integral part of the financial statements.
F-12
<PAGE> 23
NEW AGE BROADCASTING, INC.
AND
THE SEVENTIES BROADCASTING CORPORATION
NOTES TO THE COMBINED FINANCIAL STATEMENTS
SEPTEMBER 30, 1995
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A. Organization and Operations
New Age Broadcasting, Inc. and The Seventies Broadcasting Corporation are
incorporated under the laws of the State of Florida with principal offices and
places of business in the Miami, Florida area. The corporations are engaged in
the business of operating FM radio stations, WXDJ-FM and WRMA-FM. Revenue is
earned from the sale of commercial time.
B. Principles of Combination
The financial statements of the two corporations have been presented on a
combined basis, as of September 30, 1995, because of their identical operation,
management and ownership. In addition, a common sales staff offers commercial
advertisements to customers from either one or both stations. All material
intercompany transactions and balances are eliminated in combination.
C. Station Acquisitions
New Age Broadcasting, Inc. acquired the operating assets of WXDJ-FM on
December 1, 1987 for a purchase price of $8,100,000. The Seventies Broadcasting
Corporation acquired the operating assets of WRMA-FM on January 26, 1995 for a
purchase price of $21,250,000. The total purchase price was allocated to the
assets acquired in proportion to their relative estimated fair market values
based on independent appraisals obtained by management. The allocations are
summarized as follows:
<TABLE>
<CAPTION>
WXDJ WRMA
----------- ------------
<S> <C> <C>
Station furniture, fixtures and equipment.................. $ 472,210 $ 1,451,030
Transmitter site leasehold interest, FCC license and
goodwill................................................. 7,627,790 19,798,970
---------- -----------
Total Purchase Price....................................... $ 8,100,000 $ 21,250,000
========== ===========
</TABLE>
D. Barter Transactions
Reciprocal trade agreement transactions for advertising time are recorded
at the fair market value of the merchandise or services received and are
included in broadcast revenues and expenses. Any incomplete transactions are
recorded in accounts receivable or payable where appropriate.
E. Plant, Property and Equipment
Plant, property and equipment is stated at cost; additions and major
improvements are capitalized; expenditures for maintenance, repairs and minor
renewals are expensed as incurred. Any gain or loss on disposition of assets is
reflected in the statement of income. Depreciation of assets is computed by use
of the straight-line method over the estimated useful lives of the respective
assets, ranging from 5 to 10 years.
F-13
<PAGE> 24
NEW AGE BROADCASTING, INC.
AND
THE SEVENTIES BROADCASTING CORPORATION
NOTES TO THE COMBINED FINANCIAL STATEMENTS -- CONTINUED
F. Intangible Assets
Costs of acquiring the leasehold interest and FCC license, as well as
financing costs, are capitalized. These intangible assets are being amortized
over the following estimated lives on a straight-line basis:
<TABLE>
<CAPTION>
AMORTIZATION
EXPENSE YEAR ENDED
ASSET COST LIFE SEPTEMBER 30, 1995
------------------------------------------ ------------ --------- ------------------
<S> <C> <C> <C>
Transmitter site leaseholds, FCC licenses
and goodwill............................ $27,552,060 40 years $523,807
Trademark................................. 35,431 14 years 885
Deferred financing costs.................. 496,040 5 years 144,216*
Lease costs, new tower.................... 4,638 5 years 924
-------
$669,832
=======
</TABLE>
- ---------------
*Includes $39,755 of unexpired cost on old debt at time of refinancing.
G. Statement of Cash Flows
For purposes of the statement of cash flows, the companies consider all
highly liquid debt instruments purchased with a maturity of three months or less
to be cash equivalents.
2. FINANCING ARRANGEMENTS
A. Note Payable, AT&T Commercial Finance Corporation
A term note was secured on January 26, 1995 from AT&T Commercial Finance
Corporation with the original principal amount of approximately $25,400,000. The
financing was used in the acquisition of the assets of WRMA-FM and the
refinancing of the remaining debt balance of WXDJ-FM, amounting to $3,322,000.
Monthly principal payments are required under the loan agreement as follows:
<TABLE>
<S> <C>
03/01/95 through 02/01/96......................... $ 80,000
03/01/96 through 02/01/97......................... 150,000
03/01/97 through 02/01/98......................... 165,000
03/01/98 through 02/01/99......................... 180,000
03/01/99 through 01/01/2000....................... 200,000
</TABLE>
The remaining balance of the debt is due in full on February 1, 2000.
Interest is due monthly on the debt calculated at a rate based on the
commercial paper rate plus four percent. At September 30, 1995 this rate was
9.86%.
Substantially all corporate assets have been pledged to secure this
obligation. In addition, the stockholders have extended their personal
guarantees in the aggregate amount of $5,000,000. The debt agreements include
stipulations limiting capital expenditures, compensation, investments, dividends
and for the maintenance of minimum levels of working capital.
B. Notes Payable, Transportation Equipment
The company has secured financing for station vehicles in 1993 and 1994
from a local commercial bank. Forty-eight monthly payments of $742 are due
including interest. The debts are secured by the vehicles financed, as well as
by the personal guarantees of certain stockholders.
F-14
<PAGE> 25
NEW AGE BROADCASTING, INC.
AND
THE SEVENTIES BROADCASTING CORPORATION
NOTES TO THE COMBINED FINANCIAL STATEMENTS -- CONTINUED
C. Notes Payable, Stockholders
Financing has been arranged from the stockholders on a demand basis in the
amount of $1,450,000. Annual interest has been accrued at the rate of six
percent. This debt has been subordinated to the AT&T Commercial Finance
Corporation obligation.
D. The notes mature over the next five years as follows:
<TABLE>
<CAPTION>
YEAR ENDING SEPTEMBER 30
------------------------------------------------
<S> <C>
1996............................................ $ 1,458,903
1997............................................ 1,913,903
1998............................................ 2,086,822
1999............................................ 2,300,000
2000............................................ 17,245,921
----------
$25,005,549
==========
</TABLE>
3. CAPITAL LEASE
As part of the acquisition of WRMA-FM, the company assumed the obligation
of a lease for space on the transmission tower. The lease is for a fifty year
term which commenced February 1, 1988. Based on the provisions of Financial
Accounting Standards Board Statement No. 13, the lease meets the criteria of a
capital lease and, accordingly, has been recorded as an asset with a capitalized
cost of $643,686. Depreciation of $9,979 and interest of $25,700, related to
this asset, have been charged to operations and included in technical expenses
on the income statement.
In the initial year of the lease the annual base rent amounted to $36,100
payable monthly. The rent increases annually by the U.S. Department of Labor
Consumer Price Index but never by more than 10%.
Future minimum lease payments inclusive of CPI increases to date, under the
capitalized lease are as follows:
<TABLE>
<CAPTION>
YEAR ENDING SEPTEMBER 30
-----------------------------------------------------------------
<S> <C>
1996............................................................. $ 44,576
1997............................................................. 44,576
1998............................................................. 44,576
1999............................................................. 44,576
2000............................................................. 44,576
Thereafter....................................................... 1,663,872
---------
Total.................................................. 1,886,752
Less amount representing interest assuming an implicit effective
rate of 6%..................................................... 1,245,231
---------
Present value of minimum lease payments.......................... $ 641,521
=========
</TABLE>
4. INCOME TAXES
Both New Age Broadcasting, Inc., effective March 1, 1988, and The Seventies
Broadcasting Corporation, effective July 8, 1994 have elected to be taxed under
the provisions of Subchapter S of the Internal Revenue Code and the State of
Florida Code with fiscal years ending on September 30 and December 31,
respectively. Under these provisions, the company does not pay federal or state
corporate income taxes on its income. The
F-15
<PAGE> 26
NEW AGE BROADCASTING, INC.
AND
THE SEVENTIES BROADCASTING CORPORATION
NOTES TO THE COMBINED FINANCIAL STATEMENTS -- CONTINUED
individual stockholders are liable for federal and state income taxes on their
respective shares of the company's taxable income.
From inception to February 29, 1988, New Age Broadcasting, Inc. was taxed
under provisions of Subchapter C of the Internal Revenue Code in which the
company is taxed directly on its income. The company had incurred net operating
losses of $360,260, for tax purposes, which are available to be carried over to
offset taxable income in future years up to year 2002 should "S" status be
terminated at some future date prior to year 2002.
5. CAPITAL STOCK
New Age Broadcasting, Inc. is authorized to issue 1,000 shares of common
stock with a par value of $10. At the time of issuance, this stock was
designated to be either voting or nonvoting by action of the Board of Directors.
The company issued on February 29, 1988 and has outstanding 180 shares,
consisting of 49 voting shares and 131 nonvoting shares.
Seventies Broadcasting Corporation is authorized to issue 7,500 shares of
common stock with a par value of $.01. The company issued on July 8, 1994 and
has outstanding 1,000 shares.
6. COMMITMENTS AND CONTINGENCIES
A. Office Space Leases
Each company has secured office space in Miami, Florida under a five-year
lease which expires on April 30, 2000 with a five year renewal option
exercisable at that time.
B. Antenna Tower Lease
New Age Broadcasting, Inc. has secured antenna tower space at a facility in
Miami and is currently operating at that site under a temporary FCC operating
permit. The lease covering these facilities is for a five-year period, with six
five-year renewal periods, commencing September 1, 1992 with monthly rents of
$3,500 plus sales tax.
The antenna facility lease contains provisions allowing for the subletting
of the facility subject to typical landlord approval policies. The company is in
the process of obtaining a new site for its permanent transmitter facility. In
the event that the company relocates its antenna facility prior to the
expiration of the lease term, a duplicate rental payment would be expected if a
suitable replacement tenant cannot be located for the existing facility.
The Seventies Broadcasting Corporation antenna tower facility arrangement
is detailed in Note 3.
C. Minimum rentals required under the above noncancellable operating leases
are as follows:
<TABLE>
<CAPTION>
ANTENNA
OFFICE SPACE TOWER
------------------- -------
YEAR ENDING SEPTEMBER 30, WXDJ WRMA WXDJ TOTAL
--------------------------------- ------- ------- ------- --------
<S> <C> <C> <C> <C>
1996............................. $64,332 $70,875 $42,000 $177,207
1997............................. 66,444 70,875 42,000 179,319
1998............................. 66,444 70,875 38,500 175,819
1999............................. 66,444 70,875 137,319
2000............................. 22,150 23,625 45,775
</TABLE>
Rent expense for the year ended September 30, 1995 amounted to $239,249.
F-16
<PAGE> 27
NEW AGE BROADCASTING, INC.
AND
THE SEVENTIES BROADCASTING CORPORATION
NOTES TO THE COMBINED FINANCIAL STATEMENTS -- CONTINUED
D. Station Vehicles
The Seventies Broadcasting Corporation has assumed vehicle leases acquired
in the acquisition. Remaining payments on these leases which expire in 1996 are
$5,695.
E. Temporary Operating Permit
New Age Broadcasting, Inc. is broadcasting from the facility in Miami,
Florida under the authority of a special temporary authorization granted by the
FCC. This authorization was necessary due to the destruction of the permanent
tower by Hurricane Andrew. This special temporary authorization expires on
February 14, 1996. Although an extension has not yet been granted and the
company has not returned to its original facility, management expects no
interruption in operations due to a construction permit granted by the FCC for a
new antenna and tower location and a pending application for a city of license
change which would allow WXDJ to remain at the existing temporary tower location
on a permanent basis.
F. The companies have bank deposits of $74,537 at September 30, 1995 in
excess of federally insured limits. The companies at September 30, 1995 have
$1,178,295 on deposit with the Merrill Lynch Institutional Fund (an uninsured
fund).
G. Litigation
The Seventies Broadcasting Corporation is involved in a lawsuit over a
lease for office space occupied by the company when it acquired WRMA. Management
believes that the lease is unenforceable and the company has since relocated
from these premises. Management believes that it will prevail in this legal
action and has, accordingly, made no provision in the financial statements for
any amounts under the lease obligation.
7. RELATED PARTY TRANSACTIONS
Affiliated companies will occasionally utilize the stations as part of
their promotional programming. Rates and terms for these spots are similar to
those offered to other customers. During the fiscal year, revenue from these
cash spots amounted to $273,680.
F-17
<PAGE> 28
INDEPENDENT AUDITORS' REPORT
The Stockholders
New Age Broadcasting Inc.
and The Seventies Broadcasting Corporation:
We have audited the accompanying combined balance sheet of New Age
Broadcasting Inc. and The Seventies Broadcasting Corporation as of September 30,
1996 and the related combined statements of income, changes in stockholders'
equity and cash flows for the year then ended. These combined financial
statements are the responsibility of the Companies' management. Our
responsibility is to express an opinion on these combined financial statements
based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the combined financial statements referred to above present
fairly, in all material respects, the financial position of New Age Broadcasting
Inc. and The Seventies Broadcasting Corporation as of September 30, 1996, and
the results of their operations and their cash flows for the year ended
September 30, 1996, in conformity with generally accepted accounting principles.
KPMG Peat Marwick LLP
New York, New York
November 15, 1996
F-18
<PAGE> 29
NEW AGE BROADCASTING INC. AND
THE SEVENTIES BROADCASTING CORPORATION
COMBINED BALANCE SHEET
SEPTEMBER 30, 1996
<TABLE>
<S> <C>
ASSETS (NOTES 2 AND 6)
Current assets:
Cash and cash equivalents..................................................... $ 535,243
Receivables, net of allowance for doubtful accounts of $47,669................ 2,468,932
Prepaid expenses and other current assets..................................... 113,360
-----------
Total current assets.................................................. 3,117,535
Property and equipment, net of accumulated depreciation of $1,299,069 (note
4)............................................................................ 1,751,679
Intangible assets, net of accumulated amortization of $2,705,959 (note 5)....... 25,382,210
Other assets.................................................................... 306,722
-----------
$30,558,146
===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt (note 6).................................... 1,912,594
Current portion of capital lease obligation (note 8).......................... 3,621
Accounts payable.............................................................. 56,122
Accrued expenses (note 9)..................................................... 550,948
Unearned revenue.............................................................. 62,878
-----------
Total current liabilities............................................. 2,586,163
Long-term debt, less current portion (note 6)................................... 20,462,743
Capital lease obligation, less current portion (note 8)......................... 635,336
Commitments and contingencies (notes 2, 8 and 9)
Stockholders' equity:
New Age Broadcasting common stock, $10 par value. Authorized 1,000 shares; 180
shares issued and outstanding.............................................. 1,800
The Seventies Broadcasting Corporation common stock, $.01 par value.
Authorized 7,500 shares; 1,000 shares issued and outstanding............... 10
Additional paid-in-capital.................................................... 1,078,190
Retained earnings............................................................. 5,793,904
-----------
Total stockholders' equity............................................ 6,873,904
-----------
$30,558,146
===========
</TABLE>
See accompanying notes to combined financial statements.
F-19
<PAGE> 30
NEW AGE BROADCASTING INC. AND
THE SEVENTIES BROADCASTING CORPORATION
COMBINED STATEMENT OF INCOME
YEAR ENDED SEPTEMBER 30, 1996
<TABLE>
<S> <C>
Gross revenues (note 7)......................................................... $16,070,961
Less agency commissions......................................................... (2,110,537)
-----------
Net revenues.......................................................... 13,960,424
-----------
Operating expenses (notes 8 and 9):
Selling....................................................................... 1,524,965
General and administrative.................................................... 1,521,784
Programming................................................................... 1,360,601
Advertising and promotion..................................................... 581,510
Engineering................................................................... 245,943
Officers' salaries............................................................ 275,000
Depreciation and amortization................................................. 1,076,224
-----------
6,586,027
-----------
Operating income...................................................... 7,374,397
Interest expense, net of interest income of $43,864 (note 7).................... (2,261,202)
-----------
Net income............................................................ $ 5,113,195
===========
</TABLE>
See accompanying notes to combined financial statements.
F-20
<PAGE> 31
NEW AGE BROADCASTING INC. AND
THE SEVENTIES BROADCASTING CORPORATION
COMBINED STATEMENT OF CASH FLOWS
YEAR ENDED SEPTEMBER 30, 1996
<TABLE>
<S> <C>
Cash flows from operating activities:
Net income.................................................................... $ 5,113,195
Adjustments to reconcile net income to net cash provided by operating
activities:
Depreciation and amortization.............................................. 1,076,224
Change in allowance for doubtful accounts.................................. (17,088)
Amortization of deferred financing costs................................... 99,205
Changes in operating assets and liabilities:
Increase in receivables.................................................. (73,173)
Increase in prepaid expenses and other current assets.................... (33,687)
Decrease in other assets................................................. (3,860)
Decrease in accounts payable............................................. (154,276)
Increase in accrued expenses............................................. 337,172
Decrease in unearned revenue............................................. (6,747)
-----------
Total adjustments..................................................... 1,231,490
-----------
Net cash provided by operating activities............................. 6,344,685
-----------
Cash flows from investing activities:
Additions to property and equipment........................................... (145,881)
Additions to intangible assets................................................ (910)
-----------
Net cash used in investing activities................................. (146,791)
-----------
Cash flows from financing activities:
Repayments of long-term debt.................................................. (1,080,212)
Repayment of stockholders' loans.............................................. (1,450,000)
Payments of capital lease obligation.......................................... (2,566)
Distributions to stockholders................................................. (4,543,000)
-----------
Net cash used in financing activities................................. (7,075,778)
-----------
Net decrease in cash and cash equivalents............................. (877,884)
Cash and cash equivalents at beginning of year.................................. 1,413,127
-----------
Cash and cash equivalents at end of year........................................ $ 535,243
===========
Supplemental cash flow information:
Cash paid for interest........................................................ $ 2,298,491
===========
</TABLE>
See accompanying notes to combined financial statements.
F-21
<PAGE> 32
NEW AGE BROADCASTING INC. AND
THE SEVENTIES BROADCASTING CORPORATION
COMBINED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
YEAR ENDED SEPTEMBER 30, 1996
<TABLE>
<CAPTION>
NEW AGE BROADCASTING INC. THE SEVENTIES BROADCASTING CORP.
----------------------------------------- --------------------------------------
COMBINED
COMMON STOCK COMMON STOCK ---------------------------------------
---------------- ADDITIONAL --------------- ADDITIONAL ADDITIONAL
NO. OF PAR PAID-IN RETAINED NO. OF PAR PAID-IN RETAINED PAID-IN RETAINED STOCKHOLDERS'
SHARES VALUE CAPITAL EARNINGS SHARES VALUE CAPITAL EARNINGS CAPITAL EARNINGS EQUITY
------ ------ ---------- ----------- ------ ----- ---------- --------- ----------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Balance
at
September
30,
1995... 180 $1,800 $ 998,200 $ 4,991,242 1,000 $10 $ 79,990 $ 232,467 $ 1,078,190 $ 5,223,709 $ 6,303,709
Distributions
to
stockholders... -- -- -- (3,683,000) -- -- -- (860,000) -- (4,543,000) (4,543,000)
Net
income... -- -- -- 4,260,991 -- -- -- 852,204 -- 5,113,195 5,113,195
--- ------ ------- ---------- ----- --- ------- ------- --------- ---------- ----------
Balance
at
September
30,
1996... 180 $1,800 $ 998,200 $ 5,569,233 1,000 $10 $ 79,990 $ 224,671 $ 1,078,190 $ 5,793,904 $ 6,873,904
=== ====== ======= ========== ===== === ======= ======= ========= ========== ==========
</TABLE>
See accompanying notes to combined financial statements.
F-22
<PAGE> 33
NEW AGE BROADCASTING INC. AND
THE SEVENTIES BROADCASTING CORPORATION
NOTES TO COMBINED FINANCIAL STATEMENTS
SEPTEMBER 30, 1996
(1) ORGANIZATION AND NATURE OF BUSINESS
New Age Broadcasting Inc. ("New Age") and The Seventies Broadcasting
Corporation ("SBC") (collectively, the "Companies") are each incorporated under
the laws of the State of Florida and have their principal places of business in
the Miami, Florida area. The Companies are owned by the same principal
stockholders and are engaged in the business of operating radio stations. New
Age owns and operates radio station WXDJ-FM and SBC owns and operates radio
station WRMA-FM, both serving the greater Miami area.
(2) DISPOSITION OF ASSETS
In September 1996, the Companies entered into an agreement to sell
substantially all of the Companies' collective assets used or useful in the
operation of its radio stations for approximately $111 million, subject to
adjustments based on broadcast cash flow, as defined in the agreement.
Completion of the transaction is pending FCC approval, among other things. Under
the terms of the agreement, the buyer has delivered a $10 million letter of
credit to the Companies. The Companies may draw upon the letter of credit if an
event of default occurs, as defined in the agreement. If an event of default
occurs, liquidated damages are limited to $30 million, as defined in the
agreement.
(3) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(A) BASIS OF PRESENTATION
The combined financial statements include the accounts of both New Age and
SBC. All significant intercompany balances and transactions have been eliminated
in combination.
(B) REVENUE RECOGNITION
Revenues are recognized when advertisements are aired.
(C) PROPERTY AND EQUIPMENT
Property and equipment are stated at cost. The Company depreciates the cost
of its office and radio station equipment and furniture and fixtures using the
straight-line method over estimated useful lives, which range from five to ten
years. Leasehold improvements are amortized on a straight-line basis over the
shorter of the remaining life of the lease or the useful life of the
improvements.
(D) INTANGIBLE ASSETS
Intangible assets consist of the excess of cost over the aggregate fair
value of the net assets acquired, as well as the values attributed to
identifiable intangibles. Such costs are being amortized on a straight-line
basis over the respective estimated useful lives, which range from five to 40
years. In evaluating the recoverability of intangible assets, management gives
consideration to a number of factors, including the operating performance of its
stations and dispositions of other radio properties in specific markets, among
other things.
(E) USE OF ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenue and expenses during the reporting
period. Actual results could differ from those estimates.
F-23
<PAGE> 34
NEW AGE BROADCASTING INC. AND
THE SEVENTIES BROADCASTING CORPORATION
NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)
(F) BARTER TRANSACTIONS
The Company records barter transactions at the fair value of goods or
services received.
(G) INCOME TAXES
New Age and SBC have elected to be taxed as S corporations, with fiscal
years ending on September 30 and December 31, respectively, under the Internal
Revenue Code and the State of Florida Code. Accordingly, the Companies do not
pay Federal or state income taxes, as their stockholders will include their
pro-rata share of taxable income or loss in their individual income tax returns.
New Age has $278,885 on deposit with the Internal Revenue Service relating to
the difference in taxes that would be payable for its stockholders on a calendar
year basis versus a fiscal year basis. This amount is classified as other assets
in the accompanying combined balance sheet.
From inception to February 29, 1988, New Age was taxed under the provisions
of subchapter C of the Internal Revenue Code. During that period, the Company
incurred net operating losses of $360,260 for tax purposes, which are available
to be carried forward to offset taxable income in future years up to 2002,
should S corporation status be terminated before then.
(H) FAIR VALUE OF FINANCIAL INSTRUMENTS
The carrying amounts reported in the accompanying combined balance sheet
for cash and cash equivalents, receivables, accounts payable and accrued
expenses approximate fair values.
(I) CASH EQUIVALENTS
The Companies consider all highly liquid instruments purchased with a
maturity of three months or less to be cash equivalents.
(4) PROPERTY AND EQUIPMENT
Property and equipment consist of the following at September 30, 1996:
<TABLE>
<S> <C>
Transmitter equipment........................................... $ 1,059,548
Studio and technical equipment.................................. 792,826
Capitalized tower lease......................................... 643,686
Furniture and fixtures.......................................... 378,515
Leasehold improvements.......................................... 61,894
Vehicles........................................................ 46,346
Computer equipment.............................................. 28,448
Construction in progress........................................ 39,485
-----------
3,050,748
Less accumulated depreciation................................... (1,299,069)
-----------
$ 1,751,679
===========
</TABLE>
F-24
<PAGE> 35
NEW AGE BROADCASTING INC. AND
THE SEVENTIES BROADCASTING CORPORATION
NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)
(5) INTANGIBLE ASSETS
Intangible assets consist of the following at September 30, 1996:
<TABLE>
<S> <C>
FCC licenses.................................................... $27,552,060
Loan acquisition costs.......................................... 496,040
Trademarks...................................................... 35,431
Tower lease costs............................................... 4,638
-----------
28,088,169
Less accumulated amortization................................... (2,705,959)
-----------
$25,382,210
==========
</TABLE>
(6) LONG-TERM DEBT
Long-term debt consists of the following at September 30, 1996:
<TABLE>
<S> <C>
AT&T Commercial Finance Corporation note, payable in monthly
installments plus interest at the 30-day commercial paper rate
plus 3.75%(a)................................................. $22,365,921
Barnett Bank note, payable in monthly installments of
$375, including interest at 7.75%(b).......................... 3,284
Barnett Bank note, payable in monthly installments of
$367, including interest at 6.25%(b).......................... 6,132
-----------
22,375,337
Less current portion............................................ (1,912,594)
-----------
$20,462,743
==========
</TABLE>
(a) A term note was secured on January 26, 1995 from AT&T Commercial
Finance Corporation. The original principal amount of approximately
$25,400,000 was used to finance the purchase of the operating assets of
WRMA-FM by SBC in January 1995 and to refinance existing debt of New
Age in the amount of $3,322,000.
The term note was amended on February 16, 1995 and August 1, 1996 to
remove or replace certain provisions of the original loan agreement.
The Companies may elect to defer principal payments in the event that
certain criteria are met, including adherence to certain financial
ratio covenants and the existence of no events of default. In July
1996, the Company elected to defer principal payments under this
provision, totalling $450,000.
Interest is due monthly in arrears on the balance of principal
outstanding at the beginning of each month, at a rate based on the
30-day commercial paper rate plus 3.75%. At September 30, 1996, this
rate was 9.15%.
Substantially all of the Companies' assets have been pledged as
security under this agreement. In addition, the stockholders of the
companies have personally guaranteed the obligation in an aggregate
amount of $3,000,000. The agreement contains covenants and
stipulations, including limits on capital expenditures, directors'
compensation, investment and distributions, and the maintenance of
various financial ratios, among other things.
F-25
<PAGE> 36
NEW AGE BROADCASTING INC. AND
THE SEVENTIES BROADCASTING CORPORATION
NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)
The loan agreement requires monthly principal payments according to the
following schedule:
<TABLE>
<S> <C>
March 1, 1995 through February 1, 1996................................ $ 80,000
March 1, 1996 through February 1, 1997................................ 150,000
March 1, 1997 through February 1, 1998................................ 165,000
March 1, 1998 through February 1, 1999................................ 180,000
March 1, 1999 through February 1, 2000................................ 200,000
</TABLE>
The remaining principal balance is due on February 1, 2000. At
September 30, 1996, the carrying value of this indebtedness
approximates market value.
(b) The Companies also secured financing from Barnett Bank of South Florida
for station vehicles purchased in 1993 and 1994. These obligations are
secured by the vehicles that were financed and by the personal
guarantees of certain stockholders.
The scheduled maturities of long-term debt are as follows at September 30, 1996:
<TABLE>
<CAPTION>
FISCAL YEAR
ENDING
SEPTEMBER 30,
--------------------------------------------------------------------
<S> <C>
1997............................................................. $ 1,912,594
1998............................................................. 2,086,822
1999............................................................. 2,300,000
2000............................................................. 16,075,921
-----------
$ 22,375,337
===========
</TABLE>
(7) RELATED PARTY TRANSACTIONS
The Companies have had transactions in the normal course of business with
entities whose owners are also stockholders of the Companies. The Companies have
sold commercial air time to entities owned by the Companies' stockholders at
varying rates, which were consistent with market rates. Revenue from the sale of
air time to entities owned by stockholders of the Companies during 1996 amounted
to $71,430. At September 30, 1996, receivables included $19,975 due from such
related parties.
The Companies had subordinated loans payable to stockholders in the
aggregate amount of $1,450,000 at September 30, 1995, which bore interest at 6%
per annum. The AT&T loan agreement was amended during 1996 to allow these loans
to be repaid in full during 1996. Interest expense related to these loans
payable included in the accompanying combined statement of income totalled
$30,750 for fiscal 1996.
(8) COMMITMENTS
(A) LEASES
The Company leases office space and facilities, and certain equipment under
operating leases that expire at various dates through 2000. Certain leases
provide for base rental payments plus escalation charges for real estate taxes
and operating expenses.
New Age is broadcasting from its antenna tower facility in Miami, Florida
under the authority of a special temporary authorization granted by the FCC and
has been granted a construction permit by the FCC to construct a new antenna by
January 3, 1997 related to its pending city of license change. This matter is a
direct result of the destruction of New Age's permanent tower in Homestead,
Florida by Hurricane Andrew in
F-26
<PAGE> 37
NEW AGE BROADCASTING INC. AND
THE SEVENTIES BROADCASTING CORPORATION
NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)
1992. Management has requested an extension of this deadline, and believes that
its request will be granted by the FCC with no interuption of operations.
The Company leases transmission tower space under a capital lease agreement
that expires in February 2038. The amount capitalized under this lease agreement
and included in property and equipment at September 30, 1996 is $643,686, net of
accumulated depreciation of $24,949.
At September 30, 1996, future minimum lease payments under such leases are
as follows:
<TABLE>
<CAPTION>
CAPITAL OPERATING
FISCAL YEAR LEASE LEASES
---------------------------------------------------------- ----------- ---------
<S> <C> <C>
1997...................................................... $ 44,576 $ 229,968
1998...................................................... 44,576 224,004
1999...................................................... 44,576 185,504
2000...................................................... 44,576 92,685
2001...................................................... 44,576 19,992
Thereafter................................................ 1,619,296 --
----------- -------
Total minimum lease payments......................... 1,842,176 $ 752,153
=======
Less interest at 6%.................................. (1,203,219)
-----------
Present value of minimum lease payments.............. 638,957
Less current portion................................. 3,621
-----------
$ 635,336
===========
</TABLE>
Total rent expense for the fiscal year ended September 30, 1996 amounted to
$578,683, which includes a contingent liability arising from litigation (see
note 9).
(B) EMPLOYMENT CONTRACTS
At September 30, 1996, the Company had employment contracts for certain
on-air talent, general managers and other employees expiring through February
1999. Future payments under such contracts are as follows at September 30, 1996:
<TABLE>
<CAPTION>
FISCAL YEAR
--------------------------------------------------------------------------
<S> <C>
1997...................................................................... $810,534
1998...................................................................... 169,058
1999...................................................................... 5,000
--------
$984,592
========
</TABLE>
Certain contracts contain provisions for severance and provisions whereby
employees terminated without cause are entitled to the remaining payments due
under the contract. The Companies' minimum liability under such contracts was
$462,273 at September 30, 1996.
(C) STANDBY LETTER OF CREDIT
In connection with the litigation discussed in note 9, the Companies have
been required to maintain a standby letter of credit in the amount of $325,000.
It is anticipated that this amount will approximate the monetary value of the
final settlement of the litigation.
F-27
<PAGE> 38
NEW AGE BROADCASTING INC. AND
THE SEVENTIES BROADCASTING CORPORATION
NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)
(9) LITIGATION
SBC is involved in litigation relating to an alleged breach of a studio
lease plus interest and attorneys' fees and costs. An adverse judgment delivered
by the Bankruptcy Court is currently in appeal. While management is vigorously
contesting the findings of the Bankruptcy Court, the likelihood of success of
the pending appeal is considered uncertain, and therefore SBC has accrued
$350,000, which is included in accrued expenses in the accompanying combined
balance sheet, in connection with this matter.
F-28
<PAGE> 39
NEW AGE BROADCASTING INC. AND THE SEVENTIES BROADCASTING CORPORATION
CONDENSED COMBINED BALANCE SHEET
(UNAUDITED)
<TABLE>
<CAPTION>
DECEMBER
31,
1996
-----------
<S> <C>
ASSETS
Current assets:
Cash and cash equivalents..................................................... $ 416,111
Receivables................................................................... 3,147,708
Less allowance for doubtful accounts........................................ (47,669)
-----------
Net receivables.......................................................... 3,100,039
Other current assets.......................................................... 68,326
-----------
Total current assets................................................ 3,584,476
-----------
Property and equipment, net................................................... 1,679,188
Franchise costs, net.......................................................... 25,181,010
Other assets.................................................................. 306,722
-----------
$30,751,396
==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long term debt............................................. $ 1,961,355
Accounts payable and accrued expenses......................................... 504,092
Unearned revenue.............................................................. 64,045
-----------
Total current liabilities................................................ 2,529,492
Long-term debt, less current portion.......................................... 21,050,128
Stockholders' equity:
New Age Broadcasting common stock,
$10 par value. Authorized 1,000 shares;
issued and outstanding 180 shares........................................ 1,800
The Seventies Broadcasting Corporation
common stock, $.01 par value. Authorized
7,500 shares; issued and outstanding 1,000 shares........................ 10
Additional paid in capital.................................................. 1,078,190
Retained earnings........................................................... 6,091,776
-----------
Total stockholders' equity............................................... 7,171,776
-----------
$30,751,396
==========
</TABLE>
See accompanying notes to unaudited condensed combined financial statements.
F-29
<PAGE> 40
NEW AGE BROADCASTING INC. AND THE SEVENTIES BROADCASTING CORPORATION
CONDENSED COMBINED STATEMENTS OF OPERATIONS
THREE MONTHS ENDED DECEMBER 31, 1995 AND 1996
(UNAUDITED)
<TABLE>
<CAPTION>
1995 1996
--------- ---------
<S> <C> <C>
Gross broadcasting revenues............................................. 4,350,351 4,375,411
Less: agency commissions.............................................. 552,212 585,844
--------- ---------
Net broadcasting revenues.......................................... 3,798,139 3,789,567
--------- ---------
Operating expenses
Engineering........................................................... 50,975 59,403
Program............................................................... 309,873 361,115
Selling............................................................... 560,002 417,082
General and Administrative............................................ 248,639 231,656
Corporate expenses.................................................... 62,500 68,750
Depreciation & Amortization........................................... 246,063 246,063
--------- ---------
1,478,052 1,384,069
--------- ---------
Operating income................................................... 2,320,087 2,405,498
--------- ---------
Other expense:
Interest expense, net................................................. 615,456 557,626
--------- ---------
Net income.............................................................. 1,704,631 1,847,872
========= =========
</TABLE>
See accompanying notes to unaudited condensed combined financial statement
F-30
<PAGE> 41
NEW AGE BROADCASTING INC. AND THE SEVENTIES BROADCASTING CORPORATION
CONDENSED COMBINED STATEMENTS OF CASH FLOWS
THREE MONTHS ENDED DECEMBER 31, 1995 AND 1996
(UNAUDITED)
<TABLE>
<CAPTION>
1995 1996
---------- -----------
<S> <C> <C>
Cash flows from operating activities:
Net income......................................................... $1,704,631 $ 1,847,872
---------- -----------
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation and amortization.................................... 246,063 246,063
Amortization of deferred financing costs......................... 33,283 33,283
Changes in operating assets and liabilities:
Increase in receivables....................................... (410,526) (631,107)
Decrease in prepaid expenses and other current assets......... 24,196 45,034
Decrease in accounts payable and accrued expenses............. (98,713) (102,978)
(Decrease) increase in unearned revenue....................... (9,737) 1,167
---------- -----------
Total adjustments........................................ (215,434) (408,538)
---------- -----------
Net cash provided by operating activities..................... 1,489,197 1,439,334
---------- -----------
Cash flows from investing activities:
Additions to property and equipment................................ (37,840) (5,655)
---------- -----------
Net cash used in investing activities......................... (37,840) (5,655)
---------- -----------
Cash flows from financing activities:
Distributions to stockholders...................................... 0 (1,550,000)
Repayments of long-term debt....................................... (245,918) (2,811)
---------- -----------
Net cash used in financing activities......................... (245,918) (1,552,811)
---------- -----------
Net increase (decrease) in cash and cash equivalents............... 1,205,439 (119,132)
Cash and cash equivalents at beginning of period................... 1,413,127 535,243
---------- -----------
Cash and cash equivalents at end of period......................... $2,618,566 $ 416,111
========== ===========
Cash paid for:
Interest......................................................... $ 598,949 $ 476,093
========== ===========
</TABLE>
See accompanying notes to unaudited condensed combined financial statements.
F-31
<PAGE> 42
NEW AGE BROADCASTING INC. AND
THE SEVENTIES BROADCASTING CORPORATION
NOTES TO CONDENSED COMBINED FINANCIAL STATEMENTS
DECEMBER 31, 1995 AND 1996
(UNAUDITED)
1) BASIS OF PRESENTATION
The condensed combined financial statements include the accounts of New Age
Broadcasting Inc. and the Seventies Broadcasting Corporation (the "Companies").
All significant intercompany balances and transactions have been eliminated in
combination. The accompanying unaudited condensed combined financial statements
for the three month periods ended December 31, 1995 and 1996 do not contain all
disclosures required by generally accepted accounting principles. These
condensed combined financial statements should be read in conjunction with the
combined financial statements of the Companies as of and for the fiscal year
ended September 30, 1996.
In the opinion of management of the Companies, the accompanying unaudited
condensed combined financial statements contain all adjustments, which are all
of a normal, recurring nature, necessary for a fair presentation of the results
of the interim periods. The results of operations for the three month period
ended December 31, 1996 are not necessarily indicative of the results for a full
year.
2) DISPOSITION OF ASSETS
In September 1996, the Companies entered into an agreement to sell
substantially all of the Companies' collective assets used or useful in the
operation of its radio stations for approximately $111 million, subject to
adjustments based on broadcast cash flow, as defined in the agreement. Under the
terms of the agreement, the buyer has delivered a $10 million letter of credit
to the Companies. The Companies may draw upon the letter of credit if an event
of default occurs, as defined in the agreement. If an event of default occurs,
liquidated damages are limited to $30 million, as defined in the agreement.
F-32
<PAGE> 43
PRO FORMA COMBINED FINANCIAL STATEMENTS
The unaudited pro forma combined statement of operations data for the
fiscal year ended September 29, 1996 and the three months ended December 29,
1996 are presented to give effect to the Transactions and the acquisition by the
Company of the assets of radio station WPAT-FM New York, which was consummated
in March 1996, as if such events had occurred at the beginning of each period.
The results of WYSY-FM have not been included in the pro forma statement of
operations because the Company believes that such acquisition does not meet the
significance test set forth in Section 3-05 of Regulation S-X for presentation
of pro forma information and would not be meaningful to an understanding of the
Company's pro forma results of operations because WYSY-FM is being reformatted
from an English-language to a Spanish-language station. The pro forma balance
sheet data at December 29, 1996 is presented as if, at such date, the
Transactions, including the acquisition of WYSY-FM, had occurred. As a result,
the pro forma statement of operations data excludes the actual and expected
operating results of WYSY-FM, however, the pro forma balance sheet data, and pro
forma interest expense, reflects the funding of the purchase of WYSY-FM.
The purchase prices of WYSY-FM, WXDJ-FM and WRMA-FM were determined
based upon arms-length negotiations between the Company and the sellers. The
purchase price for the Acquisitions have been allocated primarily to a franchise
costs and other intangibles. This preliminary allocation of purchase price may
change upon final appraisal of the fair market value of the net assets acquired.
In the opinion of management, all adjustments necessary to present
fairly this pro forma information have been made.
These pro forma combined financial statements should be read in
conjunction with the Company's consolidated financial statements and the notes
thereto as of and for the fiscal year ended September 29, 1996, included in the
Company's Annual Report on Form 10-K for the fiscal year ended September 29,
1996, and the three months ended December 29, 1996, included in the Company's
Quarterly Report on Form 10-Q for the quarter ended December 29, 1996, and with
the combined financial statements and the notes thereto of New Age Broadcasting,
Inc. and The Seventies Broadcasting Corporation for the year ended September 30,
1996 and the three months ended December 31, 1996 included elsewhere in this
Current Report on Form 8-K. THE PRO FORMA INFORMATION IS NOT NECESSARILY
INDICATIVE OF THE RESULTS THAT WOULD HAVE BEEN REPORTED HAD SUCH EVENTS ACTUALLY
OCCURRED ON THE DATES SPECIFIED, NOR IS IT INDICATIVE OF THE COMPANY'S FUTURE
RESULTS.
F-33
<PAGE> 44
PRO FORMA COMBINED BALANCE SHEET
AT DECEMBER 29, 1996
(IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
HISTORICAL
---------------------
THE WXDJ/WRMA
COMPANY (A) ADJUSTMENTS PRO FORMA
-------- --------- ----------- ---------
<S> <C> <C> <C> <C>
ASSETS
Current assets.................................... $ 16,564 $ 3,584 $ (3,584)(b) $ 17,582
1,018(c)
Property and equipment, net....................... 19,319 1,679 (1,679)(b) 19,319
Franchise costs and other intangible assets,
net............................................. 133,033 25,181 33,500(d) 279,033
(25,181)(b)
112,500(e)
Other assets...................................... 6,636 307 3,675(f) 8,937
(307)(b)
(1,374)(g)
-------- ------- -------- --------
Total assets.................................. $175,552 $30,751 $ 118,568 $324,871
======== ======= ======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY)
Current liabilities............................... $ 5,906 $ 2,529 $ (2,529)(b) $ 5,906
Long-term debt:
Senior Secured Notes, net of unamortized
discount...................................... 36,773 (36,773)(c) --
Old Notes, net of unamortized discount.......... 100,799 100,799
Notes offered hereby............................ 75,000(f) 75,000
Other long-term debt............................ 1,031 21,050 (21,050)(b) 4,031
3,000(d)
Series A Preferred Stock.......................... 37,509 (37,509)(c) --
Senior Preferred Stock offered hereby............. 158,375(f) 148,050
(10,325)(f)
Stockholders' equity (deficiency)................. (6,466) 7,172 (7,172)(b) (8,915)
(4,000)(c)
(13,700)(c)
(1,374)(g)
16,625(f)
-------- ------- -------- --------
Total liabilities and stockholders'
deficiency.................................. $175,552 $30,751 $ 118,568 $324,871
======== ======= ======== ========
(see notes on following pages)
</TABLE>
F-34
<PAGE> 45
NOTES TO PRO FORMA COMBINED BALANCE SHEET
(IN THOUSANDS)
(UNAUDITED)
(a) To reflect historical balance sheet data for WXDJ-FM/WRMA-FM as of December
31, 1996 as reflected in the unaudited financial statements of New Age
Broadcasting Inc. and The Seventies Broadcasting Corporation which were
acquired as part of the Transactions.
(b) To eliminate assets and liabilities and stockholders' equity of
WXDJ-FM/WRMA-FM not purchased or assumed in the WXDJ-FM/WRMA-FM
acquisitions.
(c) To reflect the use of proceeds for the following:
<TABLE>
<S> <C>
Redemption of Senior Secured Notes at par:
Carrying value at December 29, 1996...................................... $36,773
Redemption price over carrying value which would be charged to earnings
as
an extraordinary item................................................. 1,612
-------
$38,385
=======
Redemption of Series A Preferred Stock at par:
Carrying value at December 29, 1996...................................... $37,509
Redemption price over carrying value charged to stockholders' equity
(deficiency).......................................................... 3,765
-------
$41,274
=======
Redemption of Primary Warrants, charged to stockholders' equity
(deficiency)............................................................. $ 8,323
=======
Distribution to common shareholders and holders of Old Warrants............ $ 4,000
=======
Excess proceeds as of December 29, 1996. The amounts required to redeem the
Senior Secured Notes and the Series A Preferred Stock will increase after
December 29, 1996 as a result of additional interest and dividends
accruing which would be payable in additional Senior Secured Notes and
Series A Preferred Stock, respectively. Consequently a significant
portion of these excess proceeds will be needed to redeem the Senior
Secured Notes and Series A Preferred Stock............................... $ 3,018
=======
</TABLE>
(d) To reflect the acquisition of the assets of WYSY-FM, consisting primarily of
franchise costs and other intangibles. The preliminary allocation of the
purchase price may change upon final appraisal of the fair market value of
the net assets acquired.
<TABLE>
<S> <C>
Cash consideration to the seller of WYSY-FM................................ $30,000
Note payable to seller of WYSY-FM.......................................... 3,000
Estimated fees and expenses attributable to the acquisition of WYSY-FM..... 500
-------
Purchase price........................................................ $33,500
=======
</TABLE>
(e) To reflect the allocation of purchase price of WXDJ-FM/WRMA-FM to the assets
acquired, primarily franchise costs and other intangibles. The preliminary
allocation of the purchase price may change upon final appraisal of the fair
market value of the net assets acquired.
<TABLE>
<S> <C>
Cash consideration to the Miami Sellers................................... $111,000
Estimated fees and expenses attributable to the acquisition of
WXDJ-FM/WRMA-FM......................................................... 1,500
--------
Purchase price....................................................... $112,500
========
</TABLE>
F-35
<PAGE> 46
(f) To reflect the Offerings and related estimated transaction fees as set forth
below:
<TABLE>
<S> <C>
Notes..................................................................... $ 75,000
Units consisting of
Series A Preferred Stock, at initial estimated value................. 158,375
Warrants, at initial estimated value................................. 16,625
--------
Fees associated with the Notes Offering................................... (3,675)
Fees associated with the Units Offering................................... (10,325)
--------
$236,000
========
</TABLE>
(g) To reflect the write-off of deferred financing costs relating to the Senior
Secured Notes.
F-36
<PAGE> 47
PRO FORMA COMBINED STATEMENT OF OPERATIONS
(IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
FISCAL YEAR ENDED SEPTEMBER 29, 1996
--------------------------------------------------------------
HISTORICAL
----------------------------------
THE WPAT WXDJ/WRMA PRO FORMA
COMPANY (A) (B) ADJUSTMENTS (N)
----------- -------- --------- ----------- ---------
<S> <C> <C> <C> <C> <C>
Gross broadcasting revenues....................................... $55,338 $ 4,315 $16,071 $ (1,421)(c) $ 74,303
Less: agency commissions.......................................... (6,703) (316) (2,111) (9,130)
------- ------- ------- -------
Net revenues.................................................... 48,635 3,999 13,960 65,173
Station operating expenses........................................ 27,876 2,635 5,235 (579)(d) 35,167
Corporate expenses................................................ 3,748 114 275 61(e) 4,198
Depreciation and amortization..................................... 4,556 530 1,076 2,286(f) 8,448
------- ------- ------- -------
Operating income (loss)......................................... 12,455 720 7,374 17,360
Interest expense, net............................................. 16,533 5,311 2,261 (1,358)(g) 23,082
335(h)
Other expense (income) net........................................ 1,574 (43,641) -- 43,641(i) 1,574
------- ------- ------- -------
Income (loss) before income taxes............................... (5,652) 39,050 5,113 (7,296)
Income tax expense (benefit)...................................... (1,166) 12,704 -- (12,704)(j) (1,166)
------- ------- ------- -------
Income (loss) before extraordinary items........................ (4,486) $ 26,346 $ 5,113 (6,130)
======= =======
Dividends on preferred stock.................................... (2,452) (23,374)(k) (25,826)
------- -------
Income (loss) applicable to common stock before extraordinary
items........................................................... $(6,938) $(31,956)
======= =======
Ratio of earnings to fixed charges(m)............................. -- --
EBITDA reconciliation:
Operating income (loss)......................................... $12,455 $ 17,360
Depreciation and amortization................................... 4,556 8,448
------- -------
EBITDA.......................................................... $17,011 $ 25,808
======= =======
</TABLE>
<TABLE>
<CAPTION>
THREE MONTHS ENDED DECEMBER 29, 1996
--------------------------------------------------
HISTORICAL
-----------------------
THE WXDJ/WRMA
COMPANY (B) ADJUSTMENTS PRO FORMA
----------- --------- ----------- ----------
<S> <C> <C> <C> <C>
Gross broadcasting revenues.................................................. $13,995 $ 4,375 $ 18,370
Less: agency commissions..................................................... (1,629) (586) (2,215)
------- ------- -------
Net revenues............................................................... 12,366 3,789 16,155
Station operating expenses................................................... 7,083 1,070 8,153
Corporate expenses........................................................... 994 68 $ (68)(e) 994
Depreciation and amortization................................................ 1,395 246 457(f) 2,098
------- ------- -------
Operating income (loss).................................................... 2,894 2,405 4,910
Interest expense, net........................................................ 5,007 557 179(g) 5,743
Other expense (income), net.................................................. 27 -- 27
------- ------- -------
Income (loss) before income taxes.......................................... (2,140) 1,848 -- (860)
Income tax expense (benefit)................................................. (814) -- 487(l) (327)
------- ------- -------
Income (loss) before extraordinary items................................... (1,326) $ 1,848 (533)
=======
Dividends on preferred stock................................................. (1,325) (4,910)(k) (6,235)
------- -------
Income (loss) applicable to common stock before extraordinary items.......... $(2,651) $ (6,768)
======= =======
Ratio of earnings to fixed charges(m)........................................ -- --
EBITDA reconciliation:
Operating income (loss).................................................... $ 2,894 $ 4,910
Depreciation and amortization.............................................. 1,395 2,098
------- -------
EBITDA..................................................................... $ 4,289 $ 7,008
======= =======
</TABLE>
(see notes on following pages)
F-37
<PAGE> 48
NOTES TO PRO FORMA COMBINED STATEMENT OF OPERATIONS
(IN THOUSANDS)
(UNAUDITED)
(a) To reflect the historical operating results for WPAT-FM and WPAT-AM from
October 1, 1995 through March 31, 1996 based upon unaudited financial
statements. The Company began operating WPAT-FM under a local marketing
agreement on January 20, 1996. The fiscal year end for WPAT-FM and WPAT-AM
was December 31 under the ownership of Park Radio of Greater New York, Inc.
(b) To reflect the historical operating results for WXDJ-FM and WRMA-FM for the
period indicated based upon unaudited financial statements. The fiscal year
end for WXDJ-FM and WRMA-FM was September 30, and throughout the periods
presented, WXDJ-FM and WRMA-FM were under the ownership of the sellers, New
Age Broadcasting, Inc. and The Seventies Broadcasting Corporation,
respectively.
(c) To adjust gross broadcasting revenues for the elimination of the revenue
derived from WPAT-AM programming which was not acquired by the Company.
(d) To eliminate expenses of WXDJ-FM and WRMA-FM relating to an unsuccessful
prior sale.
(e) To reflect adjustment to corporate expense for the elimination of corporate
expenses which would not be incurred following the WPAT-FM and
WXDJ-FM/WRMA-FM acquisitions and for additional salaries to be paid to Mr.
Russell Oasis, a WXDJ-FM/WRMA-FM officer, based on his employment agreement
with the Company.
<TABLE>
<CAPTION>
YEAR ENDED THREE MONTHS
SEPTEMBER 29, ENDED
1996 DECEMBER 29, 1996
----------------- -----------------
<S> <C> <C>
Elimination of corporate expenses of WPAT-FM prior to
acquisition........................................ $(114) $ --
Elimination of corporate expenses of WXDJ-FM/WRMA-FM
prior to acquisition............................... (275) (68)
Additional salary to Mr. Russell Oasis............... 450 --
------- -------
Pro forma adjustment............................... $ 61 $ (68)
============= =============
</TABLE>
(f) To reflect additional pro forma depreciation and amortization related to the
acquisitions of WPAT-FM based upon the final purchase price and to the
acquisitions of WXDJ-FM, WRMA-FM and WYSY-FM based upon a preliminary
allocation of the total consideration and related amortization reflected as
follows:
<TABLE>
<CAPTION>
WPAT WXDJ/WRMA TOTAL
------- --------- --------
<S> <C> <C> <C>
Franchise costs and other intangible assets, net..... $86,359 $112,500 $198,859
Year ended September 29, 1996
Pro forma amortization............................... $ 1,079 $ 2,813 $ 3,892
Less: depreciation and amortization - historical..... (530) (1,076) (1,606)
------- -------- --------
Pro forma adjustment............................... $ 549 $ 1,737 $ 2,286
======= ======== ========
Three months ended December 29, 1996
Pro forma amortization............................... $ 703 $ 703
Less: depreciation and amortization - historical..... (246) (246)
-------- --------
Pro forma adjustment............................... $ 457 $ 457
======== ========
</TABLE>
F-38
<PAGE> 49
(g) To reflect adjustments to interest expense as a result of the Transactions:
<TABLE>
<CAPTION>
THREE MONTHS
YEAR ENDED ENDED
SEPTEMBER 29, 1996 DECEMBER 29, 1996
------------------ -----------------
<S> <C> <C>
Pro forma interest on the Notes at 11% per annum..... $ 8,250 $ 2,063
Pro forma interest on the seller note to Infinity
(assumed interest rate of 10% per annum)........... 300 75
Pro forma amortization of debt issuance costs of the
Notes.............................................. 525 131
Interest expense, including amortization of debt
issuance costs, on the Senior Secured Notes being
retired in the Transactions........................ (2,861) (1,533)
Interest expense -- WPAT-FM-historical............... (5,311) --
Interest expense -- WXDJ-FM/WRMA-FM-historical....... (2,261) (557)
------- -------
Pro forma adjustment................................. $ (1,358) $ 179
======= =======
</TABLE>
(h) To eliminate interest income on the approximately $17.2 million down payment
of cash used to finance the acquisition of WPAT-FM based upon the average
interest rate of 3.9% earned by the Company during the six months ended
March 31, 1996.
(i) To adjust for other income of WPAT-FM resulting from the sale of its assets
prior to its acquisition by the Company which would not have been realized
by the Company.
(j) To eliminate income tax expense of Park Radio of Greater New York, Inc.
prior to the acquisition of radio station WPAT-FM by the Company which would
not have been incurred by the Company.
(k) To reflect adjustments to preferred stock dividends as a result of the
Transactions:
<TABLE>
<CAPTION>
THREE MONTHS
YEAR ENDED ENDED
SEPTEMBER 29, 1996 DECEMBER 29, 1996
------------------ -----------------
<S> <C> <C>
Elimination of dividends on Series A Preferred
Stock.............................................. $ 2,452 $ 1,325
Assumed dividends on Senior Preferred Stock at
14 1/4% per annum.................................. (25,826) (6,235)
------- -------
Pro forma adjustment................................. $(23,374) $ (4,910)
======= =======
</TABLE>
(l) To reflect income tax effect of the above items.
(m) For purposes of this computation, earnings are defined as earnings or loss
before extraordinary items and fixed charges. Fixed charges are the sum of
(i) interest costs, (ii) amortization of deferred financing costs, (iii) the
portion of operating lease rental expense that is representative of the
interest factor (deemed to be one third) and (iv) dividends on preferred
stock. Historical and pro forma earnings were inadequate to cover fixed
charges by $6,938 and $31,956, respectively, for the fiscal year ended
September 29, 1996 and $2,651 and $6,768 for the three months ended December
29, 1996.
F-39
<PAGE> 50
INDEX TO EXHIBITS Sequential
Page No.
----------
1.1 Financial Advisory Agreement dated March 4, 1997
between the Company and CIBC Wood Gundy Securities
Corp., as financial advisor.
3.1 Certificate of Elimination of Exchangeable Preferred
Stock, Series A, filed March 27, 1997.
3.2 Certificate of Designation of Senior Exchangeable
Preferred Stock, Series A, filed March 27, 1997.
4.1 Second Supplemental Indenture dated as of March 21,
1997 to Indenture dated as of June 29, 1994 among the
Company, the Guarantors named therein and IBJ
Schroder Bank & Trust Company, as Trustee.
4.2 Indenture dated as of March 15, 1997, among the
Company, the Guarantors named therein, IBJ Schroder
Bank & Trust Company, as Trustee, and CIBC Wood Gundy
Securities Corp., as Initial Purchaser.
4.3 Exchange Debenture Indenture dated as of March 15,
1997, among the Company, the Guarantors named
therein, U.S. Trust Company of New York, as Trustee,
and CIBC Wood Gundy Securities Corp., as Initial
Purchaser.
10.1 Securities Purchase Agreement dated as of March 24,
1997 by and among the Company, the Guarantors named
therein and CIBC Wood Gundy Securities Corp., as
Initial Purchaser.
10.2 Unit Agreement dated as of March 15, 1997 among the
Company, the Guarantors and IBJ Schroder Bank & Trust
Company, as Trustee.
10.3 Warrant Agreement dated as of March 15, 1997 by and
among the Company and IBJ Schroder Bank & Trust
Company, as Warrant Agent.
10.4 Common Stock Registration Rights and Stockholders
Agreement dated as of March 15, 1997 among the
Company, certain Management Stockholders named therein
and CIBC Wood Gundy Securities Corp.
10.5 Notes Registration Rights Agreement dated as of March
15, 1997 among the Company, the Guarantors named
therein and CIBC Wood Gundy Securities Corp.
<PAGE> 51
Sequential
Page No.
----------
10.6 Preferred Stock Registration Rights Agreement dated
as of March 15, 1997 among the Company, the
Guarantors named therein and CIBC Wood Gundy
Securities Corp.
10.7 National Radio Sales Representation Agreement dated
as of February 3, 1997 between Caballero Spanish
Media, L.L.C. and the Company.
10.8 Employment Agreement dated as of March 4, 1997
between Raul Alarcon, Jr. and the Company.
10.9 Employment Agreement dated September 27, 1996 between
Russell Oasis and the Company. Incorporated herein by
reference to Exhibit 10.42 of the Company's Annual
Report on Form 10-K for the Fiscal Year Ended
September 29, 1996.
10.10 Asset Purchase Agreement dated September 16, 1996
among Raul Alarcon, Jr., New Age Broadcasting, Inc.,
The Seventies Broadcasting Corporation and the
Company, and with respect only to Section 9.3
thereof, Alan Potamkin, Russell Oasis and Robert
Potamkin. Incorporated herein by reference to Exhibit
10.43 of the Company's Annual Report on Form 10-K for
the Fiscal Year Ended September 29, 1996.
10.11 First Amendment to Asset Purchase Agreement
dated December 26, 1996 among Raul Alarcon, Jr., New
Age Broadcasting, Inc., The Seventies Broadcasting
Corporation and the Company, and with respect only to
Section 9.3 thereof, Alan Potamkin, Russell Oasis and
Robert Potamkin.
10.12 Second Amendment to Asset Purchase Agreement
dated February 28, 1997 among Raul Alarcon, Jr., New
Age Broadcasting, Inc., The Seventies Broadcasting
Corporation and the Company, and with respect only to
Section 9.3 thereof, Alan Potamkin, Russell Oasis and
Robert Potamkin.
10.13 Asset Purchase Agreement dated August 22, 1996
between Infinity Holdings Corp. of Orlando and the
Company. Incorporated herein by reference to Exhibit
10.44 of the Company's Annual Report on Form 10-K
for the Year Ended September 29, 1996.
10.14 Letter Agreement dated January 13, 1997 between the
Company and Caballero Spanish Media, LLC.
<PAGE> 1
Exhibit 1.1
FINANCIAL ADVISORY AGREEMENT
March 4, 1997
Ladies and Gentlemen:
Spanish Broadcasting System, Inc., a Delaware corporation (the "Company"),
proposes to solicit consents (the "Consent Solicitation") from holders of its
12 1/2% Senior Notes due 2002 (the "Notes") to amendments (the "Proposed
Amendments") to certain of the provisions in the indenture governing the Notes
(the "Indenture"), as described in the Company's Consent Solicitation Statement
of even date herewith (the "Solicitation Statement"). Upon receipt of the
Requisite Consents from holders of the Notes ("Holders") and satisfaction of the
conditions set forth in the Solicitation Statement, the Company, the Guarantors
(as defined in the Indenture) and the trustee under the Indenture (the
"Trustee") will enter into an amendment and/or supplement to the Indenture (the
"Supplemental Indenture") which will give effect to the Proposed Amendments.
Capitalized terms used herein and not otherwise defined shall have the meanings
set forth in the Solicitation Statement.
The Company hereby confirms its agreement with you as follows:
1. Consent Solicitation Materials. The Company agrees to furnish you at
its own expense with as many copies as you may reasonably request of the
Solicitation Statement, the Consent relating thereto, Broker/Dealer Letters,
Client Letters, Taxpayer Guidelines and the Company's Preliminary Offering
Memorandum dated March 3, 1997 relating to proposed offerings of Senior Notes
and Units consisting of Senior Preferred Stock and Warrants to purchase common
stock (such materials, as the same may be amended, modified or supplemented from
time to time in accordance with the terms hereof and thereof, are herein
collectively referred to as the "Consent Solicitation Materials").
The date or dates on which the Consent Solicitation Materials are first
mailed or otherwise distributed to Holders are hereinafter referred to as the
"Commencement Date."
2. Retention. (a) The Company hereby retains you to act as exclusive
financial advisor (the "Financial Advisor") to the Company in connection with
the Consent Solicitation, until the earlier of December 31, 1997 or the date on
which both the Effective Date and the Expiration Date (each as defined in the
Solicitation Statement) have occurred (such date, the "Closing Date"). As
Financial Advisor, you agree, in accordance with customary practice, to perform
those services in connection with the Consent Solicitation as are customarily
performed by investment banking concerns acting in a financial advisory role in
connection with consent solicitations of a like nature, including primarily
providing advice to the Company with respect to the terms and timing of the
Consent Solicitation and assisting the Company in the preparation of the Consent
Solicitation Materials to the extent that such documents relate to the terms of
the Consent Solicitation.
(b) Subject to the last sentence of this clause (b), the Company agrees
that any reference to the Financial Advisor in any Consent Solicitation
Materials or in any press release or other document or communication related to
the Consent Solicitation or your activities in connection therewith is subject
to the Financial Advisor's prior approval (which shall not be unreasonably
withheld). If the Financial Advisor resigns or its engagement hereunder is
terminated prior to the dissemination of the Consent Solicitation Materials or
any other release or communication, no reference shall be made therein to the
Financial Advisor. In the event that applicable law requires a reference to any
Financial Advisor, the Company agrees to provide the Financial Advisor with
prompt notice of such requirement to provide the Financial Advisor a reasonable
opportunity to seek an appropriate protective order or other remedy.
3. Other Activities of the Financial Advisor. The Financial Advisor
understands that if and to the extent that the Consent Solicitation results in
any offering or sale of a security under the Securities Act of 1933, as amended
(together with the rules and regulations of the Securities and Exchange
Commission (the "Commission") promulgated thereunder, the ("Securities Act"),
such offering and sale would be made in
<PAGE> 2
reliance upon the exemption from the registration requirements of the Securities
Act afforded by Section 3(a)(9) of the Securities Act. Accordingly, you agree
that you will not act in a manner that will render such exemption unavailable in
connection with the Consent Solicitation. Without limiting the generality of the
foregoing, you agree that (i) neither the Financial Advisor nor any of its
agents, employees, officers or directors will express any opinion or statement
as to the merits or risks of the Consent Solicitation to Holders or make any
recommendation to such Holders with respect to acceptance or rejection of the
Consent Solicitation or, directly or indirectly, solicit Consents (as defined in
the Solicitation Statement) by Holders for cash and (ii) in connection with
unsolicited requests from Holders to the Financial Advisor or its agents,
employees, officers, directors or controlling persons for advice with respect to
the Consent Solicitation, the Financial Advisor or its agents, employees,
officers, directors or controlling persons will advise such Holders to contact
appropriate officers or employees of the Company or their own advisors, refer
such Holders to the Consent Solicitation Materials or answer certain questions
with the appropriate reference to information contained in the Consent
Solicitation Materials.
4. Certain Covenants. The Company covenants with you as follows:
(a) The Company will give the Financial Advisor notice of its
intention to amend or supplement any Consent Solicitation Materials, will
furnish the Financial Advisor with copies of such amendment or supplement,
and will not use any such amendment or supplement to which the Financial
Advisor or counsel for the Financial Advisor shall reasonably object in
writing.
(b) If, during the Consent Solicitation, any event occurs as a result
of which it shall, in the reasonable judgment of the Company or its counsel
or the Financial Advisor or its counsel, be necessary to amend or
supplement any of the Consent Solicitation Materials in order to make the
statements therein, in light of the circumstances under which they were
made, not misleading, or, if for any other reason it is necessary, in the
reasonable judgment of any such person, at any time to amend or supplement
any of the Consent Solicitation Materials to comply in all material
respects with the Securities Act, the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), and the rules and regulations of the
Commission promulgated thereunder or any other law, rule or regulation,
such person shall promptly inform the Company and the Financial Advisor,
and (subject to Section 4(a) above) the Company shall promptly prepare and
furnish copies to you of such amendments or supplements to such Consent
Solicitation Materials, so that either (i) the statements in the Consent
Solicitation Materials, as so amended or supplemented, will not, in light
of the circumstances under which they were made, be misleading or (ii) such
compliance is effected.
(c) The Company shall comply in all material respects with the
applicable provisions of the Securities Act, the Exchange Act, and the
Trust Indenture Act of 1939, as amended, and the rules and regulations of
the Commission promulgated thereunder (the "Trust Indenture Act"), in
connection with the Consent Solicitation Materials, the Consent
Solicitation and the transactions contemplated hereby and thereby; the
Company will take on a timely basis all actions reasonably necessary or
legally required in relation to the Consent Solicitation and all other
actions contemplated by this Agreement and by the Consent Solicitation
Materials; and the Company will take all necessary corporate action to
authorize any amendments to or modifications of the Consent Solicitation.
(d) The Company will notify you, not less than two hours prior
thereto, of the time when it proposes to commence the Consent Solicitation
or, after commencement, to extend the Consent Solicitation; and will notify
you as promptly as practicable following expiration of the Consent
Solicitation on the Expiration Date (as defined in the Consent Solicitation
Materials), of the aggregate principal amount of Notes in respect of which
a consent has been verified to be in proper form, a consent has been
rejected or a consent is being processed. The Company shall promptly give
you notice of changes in Expiration Dates with respect to the Consent
Solicitation.
(e) The Company shall advise you promptly of (i) the occurrence of any
event, or the discovery of any fact, which could reasonably be expected to
cause the Company to amend, withdraw or terminate the Consent Solicitation,
(ii) the occurrence of any event, or the discovery of any fact, which could
reasonably be expected to cause any representation or warranty contained in
this Agreement to be untrue
2
<PAGE> 3
or inaccurate in any material respect, (iii) the issuance of any comment or
order or the taking of any other action by the Commission or any other
governmental or regulatory agency with respect to the Consent Solicitation
(and, if in writing, will promptly furnish you a copy thereof), (iv) the
occurrence of any event, or the discovery of any fact, which could
reasonably be expected to cause the Company to amend or supplement any of
the Consent Solicitation Materials, (v) the issuance or the threatened
issuance of any order or the taking of any other action by any
administrative or judicial tribunal or governmental agency or
instrumentality concerning the Consent Solicitation (and, if in writing,
will promptly furnish you a copy thereof) and (vi) any other information
relating to the Consent Solicitation which you may from time to time
reasonably request.
5. Fees and Expenses. The Company agrees to reimburse the Financial
Advisor for its reasonable out-of-pocket expenses and to pay all costs and
expenses (including fees and expenses of counsel to the Financial Advisor)
incident to the performance of its obligations under this Agreement, whether or
not the transactions contemplated herein are consummated or this Agreement is
terminated pursuant to Section 9 hereof, including, but not limited to, all
costs and expenses incident to (i) the printing, word processing or other
production of documents with respect to such transactions, including any costs
of printing the Consent Solicitation Materials, the Supplemental Indenture and
all other agreements related to the Consent Solicitation or the distribution of
any legal investment memoranda, (ii) all arrangements relating to the delivery
to the Financial Advisor of copies of the foregoing documents, (iii) the fees
and disbursements of counsel, accountants and any other experts or advisors
retained by the Company, (iv) the fees and disbursements of the Trustee and (v)
any meetings with Holders relating to the Consent Solicitation.
6. Representations and Warranties. The Company represents and warrants to
and agrees with you that as of the Commencement Date and the Closing Date:
(i) The Consent Solicitation Materials, as amended and supplemented
from time to time, do not, as of their respective dates, contain any untrue
statement of a material fact or omit to state a material fact necessary in
order to make the statements made therein, in light of the circumstances
under which they are made, not misleading.
(ii) The Company has all the necessary corporate power and authority
to execute and deliver this Agreement, to perform its obligations hereunder
and to consummate the transactions contemplated hereby and by the Consent
Solicitation Materials. The Company has taken all necessary corporate
action to authorize the Consent Solicitation and the execution, delivery
and performance of this Agreement and, as to the Closing Date only, the
Supplemental Indenture.
(iii) The consummation of the Consent Solicitation, as contemplated by
the Consent Solicitation Materials, complies in all material respects with
all applicable provisions of the Securities Act, the Exchange Act and the
Trust Indenture Act, and with all applicable rules or regulations of any
governmental or regulatory authority or body, including applicable "Blue
Sky" or similar state securities laws or statutes; and no consent or
approval of, or filing with, any governmental or regulatory authority or
body will be required by the Company in connection with the commencement or
consummation of the Consent Solicitation.
(iv) The Company has been duly incorporated and is validly existing in
good standing as a corporation under the laws of its jurisdiction of
incorporation, with all requisite corporate power and authority (corporate
or otherwise) under such laws, and has all necessary authorizations,
approvals, orders, licenses, franchises, consents, certificates and permits
of and from regulatory or governmental officials, bodies and tribunals to
own or lease its properties and conduct its businesses as now conducted as
described in the Consent Solicitation Materials, and is duly qualified to
do business as a foreign corporation in good standing in all other
jurisdictions where the ownership or leasing of its properties or the
conduct of its businesses requires such qualification, except where failure
to be so qualified would not have a Material Adverse Effect.
(v) This Agreement has been duly authorized, executed and delivered by
the Company and constitutes the valid and legally binding obligation of the
Company enforceable against it in accordance with its terms. Except as
described in the Consent Solicitation Materials, no consent, approval,
3
<PAGE> 4
authorization or order of or filing with any court or governmental agency
or body is required for the performance of this Agreement or the
Supplemental Indenture by the Company or the consummation by the Company of
any of the transactions contemplated hereby or thereby or by the Consent
Solicitation Materials, except such as have been obtained and are in full
force and effect or made, or are contemplated to be obtained or made by the
Consent Solicitation Materials and such as may be required under securities
or "Blue Sky" laws in connection with the Consent Solicitation or any of
such other transactions. The Company is not (i) in violation of its
certificate of incorporation or bylaws, (ii) in violation of any statute,
judgment, decree, order, rule or regulation applicable to it or any of its
respective properties or assets or (iii) in default in the performance or
observance of (including any default arising after notice or lapse of time
or both) any obligation, agreement, covenant or condition contained in any
contract, indenture, mortgage, deed of trust, loan agreement, note, lease,
license franchise agreement, permit, certificate or other agreement or
instrument to which it is subject, which default would singly or in the
aggregate have a material adverse effect on the Company and its
subsidiaries, taken as a whole (a "Material Adverse Effect").
The execution, delivery and performance by the Company of this
Agreement and the Supplemental Indenture and the consummation by the
Company of the transactions contemplated hereby and thereby and by the
Consent Solicitation Materials will not conflict with or constitute or
result in a breach or violation by the Company of any of (x) the terms or
provisions of, or constitute a default (including any default arising after
notice or lapse of time or both) by the Company under, any indenture,
mortgage, deed of trust, loan agreement, note, lease, license, franchise
agreement, or other agreement or instrument to which it is a party or to
which any of its respective properties is subject, which conflict, breach,
violation or default would singly or in the aggregate have a Material
Adverse Effect, (y) the certificate of incorporation or bylaws of the
Company, or (z) any statute, judgment, decree, order, rule or regulation of
any court or governmental agency or other body applicable to the Company or
any of its respective properties, which conflict, breach, violation or
default would singly or in the aggregate have a Material Adverse Effect.
(vi) Except as described in the Consent Solicitation Materials, there
is not pending or, to the knowledge of the Company, threatened, any action,
suit, proceeding, inquiry or investigation to which it or to which its
property is subject, before or brought by any court or governmental agency
or body, which singly or in the aggregate could reasonably be expected to
have a Material Adverse Effect.
(vii) Except as stated in the Consent Solicitation Materials and as
provided herein, the Company has not agreed to pay and does not know of any
outstanding material claims in the nature of a finder's fee, financial
advisory fee, origination fee or similar fee to be paid by it with respect
to the transactions contemplated hereby.
7. Conditions of the Financial Advisor Obligations. Your obligations to
act and to continue to act (as the case may be) as Financial Advisor shall be
subject to the accuracy in all material respects of the representations and
warranties contained herein as of the Commencement Date as if made on and as of
such date (except as expressly provided herein), to the performance in all
material respects by the Company of its covenants and agreements hereunder and
to the following additional conditions:
(a) There shall not have been any legal action, order, decree or other
administrative proceeding instituted or threatened against the Company or
any of its subsidiaries or against you relating to the Consent Solicitation
and your activities in connection therewith or any of the other
transactions contemplated by the Consent Solicitation Materials.
(b) The proceedings taken at or prior to the Closing Date in
connection with the Consent Solicitation and any other transactions
contemplated by the Consent Solicitation Materials shall be in form and
substance reasonably satisfactory to you and your counsel.
(c) Neither the Consent Solicitation nor any of the other transactions
contemplated by the Consent Solicitation Materials shall be enjoined
(temporarily or permanently) and no restraining order or other injunctive
order shall have been issued or any action, suit or proceeding shall have
been commenced with
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<PAGE> 5
respect to the Consent Solicitation, this Agreement, the Supplemental
Indenture, or any of the other transactions contemplated by the Consent
Solicitation Materials, before any court or governmental authority.
(d) On the Effective Date, there shall have been delivered to the
Financial Advisor, on behalf of the Company, a certificate of the Chairman
of the Board, President or any Vice President and Chief Financial Officer
of the Company (in their capacities as such), dated as of the Closing Date,
and stating that the representations and warranties set forth in Section 6
hereof are accurate in all material respects on such date.
(e) On the Commencement Date, the Financial Advisor shall have
received an opinion, dated as of such date, of Kaye, Scholer, Fierman, Hays
& Handler, LLP., counsel for the Company, to the effect that:
(i) the Company has been duly incorporated and is validly existing
as a corporation under the laws of the State of Delaware;
(ii) the Company has all requisite corporate power to enter into
this Agreement and to carry out all the terms and provisions hereof to
be carried out by it;
(iii) the execution and delivery of this Agreement has been duly
authorized by all necessary corporate action of the Company, and this
Agreement has been duly executed and delivered by the Company;
(iv) this Agreement is a legal, valid, binding and enforceable
agreement of the Company, subject to applicable bankruptcy, insolvency,
moratorium, reorganization and similar laws affecting creditors' rights
generally and general principles of equity (whether considered in a
proceeding at law or in equity) and except that rights of indemnity or
contribution or both may be limited by applicable securities laws and
principles of public policy;
(v) the execution and delivery by the Company of this Agreement and
the performance by the Company of its obligations under this Agreement
and the making of the Consent Solicitation by the Company, each in
accordance with its terms, do not conflict with the certificate of
incorporation or by-laws of the Company; and
(vi) none of (i) the execution or delivery of this Agreement by the
Company, (ii) performance by the Company of its obligations under this
Agreement or (iii) the making of the Consent Solicitation by the Company
(assuming the accuracy and adequacy of the disclosures therein) violates
any Federal or New York State statute, law, rule or regulation known to
such counsel or any judgment, decree, order, rule or regulation of any
court or other governmental authority applicable to the Company or any
of its subsidiaries known to such counsel.
In rendering any such opinion, such counsel may rely, as to matters of
fact, to the extent such counsel deems proper, on certificates of
responsible officers of the Company and public officials.
(f) On the Effective Date, the Financial Advisor shall have received
an opinion, dated as of such date, of Kaye, Scholer, Fierman, Hays &
Handler, LLP, counsel for the Company, confirming each of the opinions of
such counsel delivered on the Commencement Date and to the effect that:
(i) the Company is in good standing under the laws of the State of
Delaware;
(ii) the execution and delivery of the Supplemental Indenture has
been duly authorized by all necessary corporate action of the Company
and the Guarantors, and the Supplemental Indenture has been duly
executed and delivered by the Company and the Guarantors;
(iii) the Indenture, as amended by the Supplemental Indenture,
complies with the Trust Indenture Act; and
(iv) the execution and delivery of the Supplemental Indenture by
the Company and the Guarantors, the execution, delivery and performance
of this Agreement and the making of the Consent Solicitation by the
Company do not (A) require the consent, approval, authorization,
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<PAGE> 6
registration or qualification of or with any governmental authority, or
(B) conflict with or result in a breach or violation of any of the terms
and provisions of, or constitute a default (or an event that with the
passage of time, notice or both would constitute a default) or result in
the creation or imposition of any lien, charge or encumbrance on the
property or assets of the Company or its subsidiaries under any contract
known to such counsel, or the certificate of incorporation or by-laws of
the Company or any of its subsidiaries or any statute or any judgment,
decree, order, rule or regulation of any court or other governmental
authority or any arbitrator known to such counsel and applicable to the
Company or any of its subsidiaries.
In addition, such counsel shall state that such counsel have
participated in conferences with officers and other representatives of the
Company and representatives of the Financial Advisor at which the contents
of the Consent Solicitation Materials were discussed and, although such
counsel is not passing upon and does not assume any responsibility for the
accuracy, completeness or fairness of the statements contained in the
Consent Solicitation Materials, on the basis of the foregoing, no facts
have come to the attention of such counsel that lead them to believe that
the Consent Solicitation Materials, at the time Requisite Consents (as
defined in the Offering Materials) were received, at the Expiration Date
(as defined in the Consent Solicitation Materials) or as of the Closing
Date, contained an untrue statement of a material fact or omitted to state
a material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading (it being
understood that such counsel need express no view with respect to the
financial statements and schedules and other financial and statistical data
included in the Consent Solicitation Materials).
In rendering any such opinion, such counsel may rely, as to matters of
fact, to the extent such counsel deems proper, on certificates of
responsible officers of the Company and public officials.
In the event that any of the foregoing conditions is not met when
required to be met, then you shall be entitled to withdraw as Financial
Advisor in connection with the Consent Solicitation without any liability
or penalty to you or any other "indemnified party" (as defined in Section
8) and without loss of any right to the payment of all expenses payable
under this Agreement.
8. Indemnification. The Company agrees to indemnify and hold harmless the
Financial Advisor and the respective affiliates, the directors, officers,
agents, representatives and employees of the Financial Advisor or its affiliates
and each other person, if any, controlling the Financial Advisor and its
affiliates (each an "indemnified party") from and against any and all losses,
actions, claims, damages or liabilities, and will reimburse any indemnified
party for all reasonable out-of-pocket costs and expenses (including counsel
fees) as they are incurred by such indemnified party in connection with
investigating, preparing to defend or defending any such action or claim caused
by or arising out of, or in connection with, the Consent Solicitation (whether
or not consummated), including, but not limited to, actions, claims, liabilities
or expenses arising out of or based upon any breach of any agreement or
representation of the Company contained in this Agreement, the structuring of
the Consent Solicitation, an untrue statement or alleged untrue statement of a
material fact in any of the Consent Solicitation Materials or an omission or an
alleged omission to state a material fact in any of the Consent Solicitation
Materials necessary to make the statements therein not misleading, or the
transmittal of the Consent Solicitation Materials to Holders, or which arise out
of or are based upon any failure to accept consents properly tendered pursuant
to the Consent Solicitation; provided, however, that the Company will not be
liable to the Financial Advisor or its Related Parties (as defined below) to the
extent that any claims, liabilities, losses, damages, costs or expenses are
finally judicially determined by a court of competent jurisdiction to have
resulted primarily from the gross negligence or willful misconduct of the
Financial Advisor or any of its Related Parties. For purposes of this Section 8,
each affiliate of the Financial Advisor and the directors, officers, agents,
representatives and employees of the Financial Advisor or its affiliates and
each other person controlling the Financial Advisor and its affiliates is
hereinafter referred to as a "Related Party" with respect to the Financial
Advisor.
The Company will not, without the prior written consent of the Financial
Advisor, settle or compromise or consent to the entry of any judgment in any
pending or threatened claim, action, suit or proceeding in respect of which
indemnification is or may be sought by an indemnified party hereunder (whether
or not any
6
<PAGE> 7
indemnified party is a party to such claim, action, suit or proceeding), unless
such settlement, compromise or consent includes an unconditional written release
(in form and substance reasonably satisfactory to the indemnified parties) of
the indemnified parties from all liability arising out of such claim, action,
suit or proceeding.
Promptly after receipt by an indemnified party under this Section 8 of
notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the Company under this Section 8,
notify the Company of the commencement thereof; but the omission so to notify
the Company will not relieve the Company from any liability which it may have to
an indemnified party otherwise than under this Section 8 except to the extent
that the indemnifying party is materially prejudiced by such omission. In case
any such action is brought against any indemnified party, and it notifies the
Company of the commencement thereof, the Company will be entitled to participate
therein and, to the extent it may wish, to assume the defense thereof, with
counsel reasonably satisfactory to such indemnified party; provided, however,
that if the defendants in any such action include both the indemnified party and
any indemnifying party and the indemnified party shall have reasonably concluded
that there may be one or more legal defenses available to it and/or other
indemnified parties that are different from or additional to those available to
any such indemnifying party such that representation of both the indemnified
parties and the indemnifying parties by the same counsel is inappropriate, then
the indemnifying parties shall not have the right to assume or direct the
defense of such action on behalf of such indemnified party or parties and such
indemnified party or parties shall have the right to select separate counsel to
defend such action on behalf of such indemnified party or parties. After notice
from the indemnifying parties to such indemnified party of its election so to
assume the defense thereof and approval by such indemnified party of counsel
appointed to defend such action, the indemnifying parties will not be liable to
such indemnified party under this Section 8 for any legal or other expenses,
other than reasonable costs of investigation, subsequently incurred by such
indemnified party in connection with the defense thereof, unless (i) the
indemnified party shall have employed separate counsel in accordance with the
proviso to the immediately preceding sentence (it being understood, however,
that in connection with such action the indemnifying parties shall not be liable
for the expenses of more than one separate counsel (in addition to local
counsel) in any one action or separate but substantially similar actions in the
same jurisdiction arising out of the same general allegations or circumstances,
designated by the Financial Advisor, representing the indemnified parties, who
are parties to such action or actions) or (ii) the indemnifying parties have
authorized the employment of counsel for the indemnified party at the expense of
the indemnifying parties. After such notice from the indemnifying parties to
such indemnified party, the indemnifying parties will not be liable for the
costs and expenses of any settlement of such action effected by such indemnified
party without the consent of the indemnifying parties (which consent will not be
unreasonably delayed or withheld), unless such indemnified party waived all of
its rights under this Section 8, in which case the indemnified party may effect
such a settlement without such consent.
In circumstances in which the indemnity agreement provided for in the
preceding paragraph of this Section 8 is unavailable or insufficient to hold
harmless an indemnified party in respect of any losses, claims, damages or
liabilities (or actions in respect thereof), each indemnifying party, in order
to provide for just and equitable contribution, shall contribute to the amount
paid or payable by such indemnified party as a result of such losses, claims,
damages or liabilities (or actions in respect thereof) in such proportion as is
appropriate to reflect (i) the relative Benefits received by the indemnifying
party or parties on the one hand and the indemnified party on the other from the
Consent Solicitation or (ii) if the allocation provided by the foregoing clause
(i) is not permitted by applicable law, not only such relative benefits but also
the relative fault of the indemnifying party or parties on the one hand and the
indemnified party on the other in connection with such losses, claims, damages
or liabilities (or actions in respect thereof). The relative benefits received
by the Company, on the one hand, and the Financial Advisor, on the other, shall
be deemed to be in the same proportion as the aggregate principal amount of
Outstanding Notes bears to the fees received by the Financial Advisor pursuant
to Section 5 hereof. The indemnity, reimbursement and contribution obligations
of the Company under this Agreement shall be in addition to any rights that the
Financial Advisor or any other indemnified party may have at common law or
otherwise. The Company and the Financial Advisor agree that it would not be
equitable if the amount of such contribution were determined by pro rata or per
capita allocation (even if the Company on the one hand and the indemnified
parties on the other hand were treated
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<PAGE> 8
as one entity for such purpose) or by any other method of allocation that does
not take into account the equitable considerations referred to in the first
sentence of this paragraph. Notwithstanding any other provision of this Section
8, the Financial Advisor shall not be obligated to make contributions hereunder
that in the aggregate exceed the total amount of fees received by the Financial
Advisor pursuant to Section 5 hereof, less the aggregate amount of any damages
that the Financial Advisor has otherwise been required to pay in connection with
any action or claim caused by or arising out of, or in connection with, the
Consent Solicitation. For purposes of this paragraph, each person, if any, who
controls the Financial Advisor within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act shall have the same rights to
contribution as the Financial Advisor.
9. Termination. (a) This Agreement may be terminated (i) by the Financial
Advisor at any time upon notice to the Company if (A) the Company shall mail or
otherwise distribute or propose to mail or otherwise distribute any supplement
to any Consent Solicitation Materials to which the Financial Advisor shall
reasonably object or which shall be reasonably disapproved by its counsel, (B)
at any time prior to the Closing Date, the Consent Solicitation is terminated or
withdrawn for any reason or any restraining order or other injunctive order
shall have been issued or any action, suit or proceeding shall have been
commenced with respect to the Consent Solicitation, this Agreement or any of the
other transactions contemplated by the Consent Solicitation Materials, before
any court or governmental authority which makes it inadvisable for the Financial
Advisor, in its discretion, to continue to act as Financial Advisor hereunder or
(C) there is a good faith disagreement between the Financial Advisor and the
Company with respect to a material term or condition of the Consent Solicitation
or the Consent Solicitation Materials, or (ii) by the Company upon notice to the
Financial Advisor, if there is a good faith disagreement between the Financial
Advisor and the Company with respect to a material term or condition of the
Consent Solicitation or the Consent Solicitation Materials.
(b) Termination of this Agreement pursuant to this Section 9 shall be
without liability of any party to any other party except as provided in Section
11 hereof.
10. Notices. Any notices required to be given in writing pursuant to any
of the provisions of this Agreement shall be mailed, air couriered or delivered
(a) to the Company:
Spanish Broadcasting System, Inc.
26 West 56 Street
New York, New York 10019
Attention: President, Chief Executive Officer
with a copy to:
Kaye, Scholer, Fierman, Hays & Handler, LLP
425 Park Avenue
New York, New York 10022
Attention: William E. Wallace, Jr.
or (b) to the Financial Advisor:
CIBC Wood Gundy Securities Corp.
425 Lexington Avenue
New York, New York 10017
Attention: Walter McLallen
with a copy to:
Cahill Gordon & Reindel
80 Pine Street
New York, New York 10005
Attention: Roger Meltzer, Esq.
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<PAGE> 9
Any such notice may be made by telecopier or telephone, but if so made shall be
subsequently confirmed in writing.
11. Survival. The provisions of Section 5 hereof, the indemnity and
contribution agreements contained in Section 8 hereof and the representations
and warranties set forth in Section 6 hereof shall remain operative and in full
force and effect regardless of (i) any investigation made by or on behalf of the
Financial Advisor, or by or on behalf of any affiliate of the Financial Advisor
or any person controlling the Financial Advisor or affiliate, (ii) consummation
of the Consent Solicitation or (iii) any termination of this Agreement or of the
Financial Advisor's engagement hereunder, and shall be binding upon and shall
inure to the benefit of any successors, assigns, heirs and personal
representatives of the Company, the Financial Advisor and the indemnified
parties referred to in Section 8 hereof.
12. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same instrument.
13. Headings. The section headings in this Agreement have been inserted as
a matter of convenience of reference only and are not a part hereof.
14. Governing Law. This Agreement shall be deemed to be a contract made
under the laws of the State of New York, and for all purposes shall be construed
in accordance with the laws of said State, without regard to principles of
conflicts of law.
15. Entire Agreement. This Agreement constitutes the entire agreement
between the parties hereto with respect to the subject matter hereof and
supersedes all prior agreements, understandings and arrangements, oral or
written, among the parties hereto with respect to the subject matter hereof.
If the foregoing correctly sets forth our understanding, please indicate
your acceptance thereof in the space provided below for that purpose, whereupon
this letter shall constitute a binding agreement between the Company and the
Financial Advisor.
Very truly yours,
SPANISH BROADCASTING SYSTEM, INC.
By: /s/ Joseph Garcia
----------------------------------
Name: Joseph Garcia
Title: Vice President and
Chief Financial Officer
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
CIBC WOOD GUNDY SECURITIES CORP.
By: /s/ Walter McLallen
-------------------------------
Name: Walter McLallen
Title: Managing Director
9
<PAGE> 1
EXHIBIT 3.1
CERTIFICATE OF ELIMINATION
OF
SENIOR EXCHANGEABLE PREFERRED STOCK, SERIES A
OF
SPANISH BROADCASTING SYSTEM, INC.
Spanish Broadcasting System, Inc., a corporation organized and existing
under the General Corporation Law of the State of Delaware (the "Company"),
DOES HEREBY CERTIFY:
FIRST: That the Board of Directors by unanimous written consent of its
members, duly adopted resolutions setting forth the proposed elimination of the
Senior Exchangeable Preferred Stock, Series A, par value $.01 per share ("Series
A Preferred Stock"), as set forth herein:
RESOLVED, that no shares of the Series A Preferred Stock are
outstanding and none will be issued.
FURTHER RESOLVED, that a Certificate of Elimination be
executed, which shall have the effect when filed and recorded
in Delaware of eliminating from the Amended and Restated
Certificate of Incorporation of the Company all reference to
the Series A Preferred Stock.
SECOND: None of the authorized shares of the Series A Preferred Stock
are outstanding and none will be issued.
THIRD: In accordance with the provision of Section 151 of the General
Corporation Law of the State of Delaware, the Certificate of Incorporation is
hereby amended to eliminate all reference to the Series A Preferred Stock.
IN WITNESS WHEREOF, the Company has caused this certificate to be
signed by its duly appointed officer, this 27th day of March, 1997.
SPANISH BROADCASTING SYSTEM, INC.
By: \s\ Raul Alarcon, Jr.
---------------------------------------
Name: Raul Alarcon, Jr.
Title: President & Chief Executive
Officer
<PAGE> 1
Exhibit 3.2
CERTIFICATE OF DESIGNATION OF THE POWERS,
PREFERENCES AND RELATIVE, PARTICIPATING,
OPTIONAL AND OTHER SPECIAL RIGHTS OF 14%
SENIOR EXCHANGEABLE PREFERRED STOCK, SERIES A, AND
QUALIFICATIONS, LIMITATIONS AND RESTRICTIONS THEREOF
Pursuant to Section 151 of the
General Corporation Law of the State of Delaware
Spanish Broadcasting System, Inc. (the "Corporation"), a corporation
organized and existing under the General Corporation Law of the State of
Delaware, does hereby certify that, pursuant to authority conferred upon the
board of directors of the Corporation (the "Board of Directors") by its
Certificate of Incorporation, as amended (hereinafter referred to as the
"Certificate of Incorporation"), and pursuant to the provisions of Section 151
of the General Corporation Law of the State of Delaware, said Board of
Directors, by unanimous written consent dated March 27, 1997, duly approved and
adopted the following resolution (the "Resolution"):
RESOLVED, that, pursuant to the authority vested in the Board of
Directors by its Certificate of Incorporation, the Board of Directors does
hereby create, authorize and provide for the issuance of 14% Senior
Exchangeable Preferred Stock, Series A, par value $.01 per share, with a
stated value of $1,000.00 per share, consisting of 413,930 shares, having
the designations, preferences, relative, participating, optional and other
special rights and the qualifications, limitations and restrictions thereof
that are set forth in the Certificate of Incorporation and in this
Resolution as follows:
(a) Designation. There is hereby created out of the authorized and
unissued shares of Preferred Stock of the Corporation a class of Preferred Stock
designated as the "14% Senior Exchangeable Preferred Stock Series A." The
number of shares constituting such class shall be 413,930 and are referred to
herein as the "Senior Preferred Stock." 175,000 shares of
<PAGE> 2
Senior Preferred Stock shall be initially issued with an additional 238,930
shares reserved for issuance in accordance with paragraph (c)(i) hereof. The
liquidation preference of the Senior Preferred Stock shall be $1,000.00 per
share.
(b) The Senior Preferred Stock shall, with respect to dividends and
distributions upon liquidation, winding-up and dissolution of the Corporation,
rank (i) senior to all classes of Common Stock of the Corporation and to each
other class of Capital Stock of the Corporation or series of Preferred Stock of
the Corporation hereafter created (collectively referred to as "Junior Stock").
The Corporation may not issue any class or series of Capital Stock that ranks
(x) on a parity with the Senior Preferred Stock as to dividends and
distributions upon liquidation, winding-up and dissolution (collectively
referred to as "Parity Stock") that was not approved by the Holders in
accordance with paragraph (f)(ii)(A) hereof (to the extent such approval is
required) or (y) senior to the Senior Preferred Stock as to dividends and
distributions upon liquidation, winding-up and dissolution of the Corporation
(collectively referred to as "Senior Stock") that was not approved by the
Holders in accordance with paragraph (f)(ii)(B) hereof.
(c) Dividends and Contingent Class A Share Issuances.
(i) Beginning on the Issue Date, the Holders of the outstanding
shares of Senior Preferred Stock shall be entitled to receive, when, as
and if declared by the Board of Directors, out of funds legally available
therefor, dividends (the "Regular Dividends") on each share of Senior
Preferred Stock, at a rate per annum equal to 14% of the liquidation
preference per share of the Senior Preferred Stock, payable semi-annually;
provided that so long as a Voting Rights Triggering Event shall have
occurred and be continuing, the Regular Dividend rate per annum shall
equal 16% of the liquidation preference per share of the Senior
Preferred Stock, payable semi-annually; and provided, further, that the
Regular Dividend rate per annum is subject to increase as provided for in
clause (vii) below. All Regular Dividends shall be cumulative, whether or
not earned or declared, on a daily basis from the date of issuance of the
Senior Preferred Stock and shall be payable semi-annually in arrears on
each Regular Dividend Payment
2
<PAGE> 3
Date, commencing on the first Regular Dividend Payment Date after the
Issue Date. Regular Dividends (including Additional Dividends, if any)
accumulating on or prior to March 15, 2002 may be paid, at the
Corporation's option, either in cash or by the issuance of additional
shares of Senior Preferred Stock (including fractional shares) having an
aggregate liquidation preference equal to the amount of such Regular
Dividends (but not less than $1.00). In the event that on or prior to
March 15, 2002 Regular Dividends are declared and paid through the
issuance of additional shares of Senior Preferred Stock as provided in the
previous sentence, such Regular Dividends shall be deemed paid in full and
shall not accumulate. Regular Dividends accumulating after March 15, 2002
must be paid in cash. Each Regular Dividend shall be payable to the
Holders of record as they appear on the stock books of the Corporation on
the Regular Dividend Record Date immediately preceding the related Regular
Dividend Payment Date. Regular Dividends shall cease to accumulate in
respect of the Senior Preferred Stock exchanged for Exchange Debentures on
the applicable Exchange Date or on the date of their earlier redemption
unless the Corporation shall have failed to issue the appropriate
aggregate principal amount of Exchange Debentures in respect of the Senior
Preferred Stock to be exchanged on such Exchange Date or shall have failed
to pay the relevant redemption price on Senior Preferred Stock to be
redeemed on the date fixed for redemption.
(ii) All Regular Dividends paid with respect to shares of the
Senior Preferred Stock pursuant to paragraph (c)(i) shall be paid pro rata
to the Holders entitled thereto.
(iii) (A) If the Corporation has not (x) consummated Asset Sales
including the FCC broadcast licenses of WXLX-AM, New York, KXMG-AM, Los
Angeles, and WCMQ-AM, Miami, and applied the lesser of (1) $15.0 million
of the Asset Sale Proceeds with respect to such Asset Sales or (2) the
excess of the Asset Sale Proceeds with respect to such Asset Sales above
$25.0 million, to repurchase, repay or redeem Notes or Old Notes, (y)
received Net Proceeds from issuances of its Capital Stock (other than
Disqualified Capital Stock) after the Issue Date in an amount equal to or
greater than $45.0
3
<PAGE> 4
million or (z) utilized $40.0 million of Asset Sale Proceeds from any
Asset Sale(s) after the Issue Date to repurchase, repay or redeem Notes or
Old Notes, in each case on or prior to the AM Stations Asset Sale Date,
then, subject to paragraphs (c)(iii)(F), (G) and (H), the Corporation
shall issue to the Holders of record of the then outstanding shares of
Senior Preferred Stock on the AM Stations Asset Sale Date validly issued,
fully paid and non-assessable shares of Class A Common Stock, par value
$0.01 per share ("Class A Common Stock"), of the Corporation at a rate per
$1,000 liquidation preference of Senior Preferred Stock equal to (I) that
number of shares Class A Common Stock equal to 1.5% of Class A Common
Stock and Class B Common Stock, par value $0.01 per share (the "Class B
Common Stock" and together with the Class A Common Stock, the "Corporation
Common Stock"), of the Corporation on a Fully Diluted Basis as of the AM
Stations Asset Sale Date divided by (II) the number obtained by dividing
(aa) the sum of (xx) the aggregate liquidation preference of shares of
Senior Preferred Stock, Exchange Preferred Stock and Private Exchange
Preferred Stock outstanding on the AM Stations Asset Sale Date and (yy)
the aggregate principal amount of Exchange Debentures outstanding on the
AM Stations Asset Sale Date by (bb) $1,000.
(B) If, as of any anniversary of the AM Stations Asset Sale
Date, the Corporation shall not have either (x) received Net Proceeds from
issuances of its Capital Stock (other than Disqualified Capital Stock)
after the Issue Date in an amount equal to or greater than $45.0 million
or (y) utilized $40.0 million of Asset Sale Proceeds from any Asset
Sale(s) after the Issue Date to repurchase, redeem or repay Notes or Old
Notes, then, subject to paragraphs (c)(iii) (F), (G) and (H), the
Corporation shall issue to Holders of record of the then outstanding
shares of Senior Preferred Stock on such anniversary of the AM Stations
Asset Sale Date validly issued, fully paid and non-assessable shares of
Class A Common Stock at a rate per $1,000 liquidation preference of Senior
Preferred Stock equal to (I) that number of shares of Class A Common Stock
equal to 1.5% of the Corporation Common Stock on a Fully Diluted Basis as
of such anniversary of AM Stations Asset Sale Date divided by (II) the
number obtained by dividing (aa) the sum of (xx)
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the aggregate liquidation preference of shares of Senior Preferred Stock,
Exchange Preferred Stock and Private Exchange Preferred Stock outstanding
as of such anniversary of the AM Stations Asset Sale Date and (yy) the
aggregate principal amount of Exchange Debentures outstanding as of such
anniversary of the AM Stations Asset Sale Date by (bb) $1,000.
(C) If, on any Regular Dividend Payment Date commencing with the March 15,
2000 Regular Dividend Payment Date, the sum of (x) the Net Proceeds
received by the Corporation from issuances of its Capital Stock (other
than Disqualified Capital Stock) after the Issue Date, (y) the aggregate
liquidation preference of Senior Preferred Stock, Exchange Preferred Stock
and Private Exchange Preferred Stock redeemed or repurchased by the
Corporation (other than Senior Preferred Stock repurchased pursuant to the
Exchange Offer) and (z) the aggregate liquidation preference of Senior
Preferred Stock, Exchange Preferred Stock and Private Exchange Preferred
Stock exchanged for Exchange Debentures does not equal or exceed $50.0
million, then, subject to paragraphs (c)(iii)(F), (G) and (H), the
Corporation shall issue to the Holders of record of the then outstanding
shares of Senior Preferred Stock on such Regular Dividend Payment Date
validly issued, fully paid and non-assessable shares of Class A common
Stock at a rate per $1,000 liquidation preference of the Senior Preferred
Stock equal to (I) that number of shares of Class A Common Stock equal to
1% of the Corporation Common Stock on a Fully Diluted Basis as of such
Regular Dividend Payment Date divided by (II) the number obtained by
dividing (aa) the aggregate liquidation preference of the shares of Senior
Preferred Stock, Exchange Preferred Stock and Private Exchange Preferred
Stock outstanding as of such Regular Dividend Payment Date by (bb) $1,000.
(D) Upon the occurrence of each Voting Rights Triggering
Event, then, subject to paragraphs (c)(iii)(F), (G) and (H), the
Corporation shall issue to the Holders of record of the then outstanding
shares of Senior Preferred Stock on the day of such occurrence validly
issued, fully paid and non-assessable shares of Class A Common Stock at a
rate per $1,000 liquidation preference of Senior Preferred
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Stock equal to (I) that number of shares of Class A Common Stock equal to
2% of the Corporation Common Stock on a Fully Diluted Basis as of the day
of the occurrence of such Voting Rights Triggering Event divided by (II)
the number obtained by dividing (aa) the aggregate liquidation preference
of the shares of Senior Preferred Stock, Exchange Preferred Stock and
Private Exchange Preferred Stock outstanding as of the day of the
occurrence of such Voting Rights Triggering Event by (bb) $1,000.
(E) If, on any Regular Dividend Payment Date after the
occurrence of a Voting Rights Triggering Event, any Voting Rights
Triggering Event shall be continuing, then, subject to paragraphs
(c)(iii)(F), (G) and (H), the Corporation shall issue to the Holders of
record of the then outstanding shares of Senior Preferred Stock on such
Regular Dividend Payment Date validly issued, fully paid and
non-assessable shares of Class A Common Stock at a rate per $1,000
liquidating preference of the Senior Preferred Stock equal to (I) the
product of (aa) that number of shares of Class A Common Stock equal to 2%
of the Corporation Common Stock on a Fully Diluted Basis as of such
Regular Dividend Payment Date and (bb) a fraction, the numerator of which
is the number of days (not to exceed 180 days) during the Dividend Period
ending on such Regular Dividend Payment Date that a Voting Rights
Triggering Event shall have occurred and been continuing, and the
denominator of which is 180, divided by (II) the number obtained by
dividing (aa) the aggregate liquidation preference of the shares of Senior
Preferred Stock, Exchange Preferred Stock and Private Exchange Preferred
Stock as of such Regular Dividend Payment Date by (bb) $1,000.
(F) If, in the opinion of counsel for the Corporation,
approval of the FCC is required before the Corporation may issue shares of
Class A Common Stock pursuant to the provisions of paragraphs (c)(iii)(A),
(B), (C), (D) or (E) ("Contingent Class A Shares"), the Corporation may
defer the issuance of such Contingent Class A Shares (an "FCC Deferral")
until such time as approval of the FCC is obtained or no longer required.
Any such deferral (including the entire period during which such deferral
is permitted pursuant to the terms of this subparagraph) shall
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<PAGE> 7
not be deemed to be a default of the Corporation's obligations to issue
Contingent Class A Shares and shall not constitute a Voting Rights
Triggering Event. The Corporation shall promptly mail notice to the
Holders of any event which requires it to suspend the issuance of
Contingent Class A Shares and of the termination of any such suspension.
Upon receipt of any such approval, or such approval no longer being
required, the Corporation shall promptly issue to the Holders all
Contingent Class A Shares to which they are entitled pursuant to
paragraphs (c)(iii)(A), (B), (C), (D) and (E). The Corporation agrees to
promptly commence any proceedings before the FCC required to permit the
issuance of Contingent Class A Shares and to use its best efforts to
obtain any order of the FCC or similar approval necessary to permit the
issuance of Contingent Class A Shares and maintain such approval in full
force and effect.
(G) If, at any time, the Corporation shall not have sufficient
authorized shares of Class A Common Stock to permit it to issue Contingent
Class A Shares, the Corporation may defer the issuance of such Contingent
Class A Shares (an "Authorization Deferral") until such time as it has
sufficient authorized shares of Class A Common Stock. Any such deferral
(including the entire period during which such deferral is permitted
pursuant to the terms of this subparagraph) shall not be deemed to be a
default of the Corporation's obligations to issue Contingent Class A
Shares and shall not constitute a Voting Rights Triggering Event. The
Corporation shall use its best efforts (including, without limitation,
calling special meetings of its stockholders to increase its authorized
shares of Class A Common Stock) to reserve and keep available shares of
Class A Common Stock, free from preemptive rights, out of its authorized
but unissued shares of Class A Common Stock or its authorized and issued
Class A Common Stock held in its treasury, for the purposes of enabling it
to satisfy any obligation to issue Contingent Class A Shares which may be
issuable in respect of outstanding shares of Senior Preferred Stock.
(H) If, at any time, the Corporation shall have issued
4,000,000 shares of Class A Common Stock in the
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<PAGE> 8
aggregate pursuant to the Contingent Class A Share provisions of this
Certificate of Designation, the analogous provisions of the certificate of
designation governing the Exchange Preferred Stock and the Private
Exchange Preferred Stock and Section 4.17 of the Indenture (as defined
herein), the Corporation shall mail notice of such event to the Holders
(by first class mail, postage pre-paid) at their respective addresses in
the stock records of the Corporation, which notice shall state that prior
to the Corporation being obligated to issue any additional Contingent
Class A Shares pursuant to the terms of this Certificate of Designation,
each Holder must pay to the Corporation the par value of the Contingent
Class A Shares to which each such Holder is thereafter entitled. In
addition, the Corporation shall use its best efforts to legend each
certificate representing Senior Preferred Stock to the effect of such
notice. If, after the Corporation shall have issued such 4,000,000 shares
of Class A Common Stock, an event occurs which entitles the Holders to
receive additional Contingent Class A Shares, the Corporation shall mail a
notice of such event (an "Issuance Notice") to each Holder (by first class
mail, postage prepaid) within one day of such event setting forth the
number of Contingent Class A Shares issuable to such Holder, the par value
of such Contingent Class A Shares and stating that the Corporation agrees
to issue to such Holder such Contingent Class A Shares upon payment to the
Corporation of the par value of such Contingent Class A Shares, at its
principal place of business to be set forth in such notice, in cash or by
certified check to the order of the Corporation. Notwithstanding any other
provision of this Certificate of Designation, the right of the Holders to
receive Contingent Class A Shares pursuant to, and in the manner
contemplated by, any Issuance Notice shall remain in effect and shall not
be terminated by redemption, repurchase or retirement of the Senior
Preferred Stock or otherwise. Upon receipt of any such payment of such par
value, the Corporation shall promptly issue to the applicable Holder the
applicable number of Contingent Class A Shares, which issuance shall
satisfy and be deemed to have paid in full the applicable obligation to
issue Contingent Class A Shares. For the avoidance of doubt, Contingent
Class A Shares subject to purchase pursuant to an Issuance Notice shall
not be deemed
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<PAGE> 9
to be "issuable but unissued Contingent Class A Shares" for any purpose of
this Certificate of Designation. The Corporation shall not increase the
par value of the Class A Common Stock so long as any shares of Senior
Preferred, Exchange Preferred Stock or Private Exchange Preferred remain
outstanding or any Contingent Class A Shares may be purchased pursuant to
an Issuance Notice.
(iv) Regular Dividends accruing after March 15, 2002 on the Senior
Preferred Stock for any past Dividend Period and Regular Dividends in
connection with any optional redemption pursuant to paragraph (e)(i) may
be declared and paid at any time, without reference to any Regular
Dividend Payment Date, to Holders of record on such date, not more than
forty-five (45) days prior to the payment thereof, as may be fixed by the
Board of Directors of the Corporation.
(v) So long as any share of the Senior Preferred Stock is
outstanding, the Corporation shall not declare, pay or set apart for
payment any dividend on any Junior Stock or Parity Stock or make any
payment on account of, or set apart for payment money for a sinking or
other similar fund for, the purchase, redemption or other retirement of,
any Junior Stock or Parity Stock or any warrants, rights, calls or options
exercisable for or convertible into any Junior Stock or Parity Stock
whether in cash, obligations or shares of the Corporation or other
property (other than dividends in Junior Stock to the holders of Junior
Stock or Parity Stock), and shall not permit any corporation or other
entity directly or indirectly controlled by the Corporation to purchase or
redeem any Junior Stock or Parity Stock or any such warrants, rights,
calls or options unless full cumulative dividends determined in accordance
herewith on the Senior Preferred Stock have been paid (or are deemed paid)
in full.
(vi) Regular Dividends payable on the Senior Preferred Stock for
any period less than a year shall be computed on the basis of a 360-day
year of twelve 30-day months and the actual number of days elapsed in the
period for which payable. The amount of Additional Dividends will be
determined consistent with the preceding sentence and by multiplying the
applicable Additional Dividends by a
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<PAGE> 10
fraction, the numerator of which is the number of days (not to exceed 180)
such rate was applicable during any Dividend Period and the denominator of
which is 180.
(vii) Additional Dividends shall become due and payable with respect
to the Senior Preferred Stock as set forth in the Registration Rights
Agreement.
(d) Liquidation Preference.
(i) In the event of any voluntary or involuntary liquidation,
dissolution or winding up of the affairs of the Corporation, the Holders
of shares of Senior Preferred Stock then outstanding shall be entitled to
be paid out of the assets of the Corporation available for distribution to
its stockholders an amount in cash equal to the liquidation preference for
each share outstanding, plus, without duplication, (x) an amount in cash
equal to accumulated and unpaid Regular Dividends thereon to the date
fixed for liquidation, dissolution or winding up (including an amount
equal to a prorated Regular Dividend for the period from the last Dividend
Payment Date to the date fixed for liquidation, dissolution or winding up)
and (y) an amount in cash equal to the Fair Market Value on the date fixed
for liquidation, dissolution or winding up, as the case may be, of the
issuable but unissued Contingent Class A Shares (including Contingent
Class A Shares not issued as a result of an FCC Deferral or an
Authorization Deferral) with respect to each share, to the date fixed for
liquidation, dissolution or winding up before any payment shall be made or
any assets distributed to the holders of any of the Junior Stock
including, without limitation, common stock of the Corporation. Except as
provided in the preceding sentence, Holders of Senior Preferred Stock
shall not be entitled to any distribution in the event of any liquidation,
dissolution or winding up of the affairs of the Corporation. If the assets
of the Corporation are not sufficient to pay in full the liquidation
payments payable to the Holders of outstanding shares of the Senior
Preferred Stock and all Parity Stock, then the holders of all such shares
shall share equally and ratably in such distribution of assets in
proportion to the full liquidation preference to which each is entitled
until such preferences are paid in
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<PAGE> 11
full, and then in proportion to their respective amounts of accumulated
but unpaid dividends.
(ii) For the purposes of this paragraph (d), neither the 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 entities shall be deemed to be a liquidation,
dissolution or winding up of the affairs of the Corporation.
(e) Redemption.
(i) Optional Redemption. (A) The Corporation may, at the option of
the Board of Directors, redeem at any time or from time to time on or
after March 15, 2002, subject to contractual and other restrictions with
respect thereto and from any source of funds legally available therefor,
in whole or in part, in the manner provided for in paragraph (e)(iii)
hereof, any or all of the shares of the Senior Preferred Stock, at the
redemption prices in cash (expressed as a percentage of the liquidation
preference) set forth below plus, without duplication, (x) an amount in
cash equal to all accumulated and unpaid Regular Dividends (including
Additional Dividends, if any) per share (including an amount in cash equal
to a prorated Regular Dividend for the period from the Regular Dividend
Payment Date immediately prior to the Redemption Date to the Redemption
Date) and (y) an amount in cash equal to the Fair Market Value on the date
notice of redemption is mailed of the issuable but unissued Contingent
Class A Shares (including Contingent Class A Shares not issued as a result
of an FCC Deferral or an Authorization Deferral) with respect to each
share if redeemed during the 12-month period beginning March 15 of each of
the years set forth below:
2002 ..................................... 107.00%
2003 ..................................... 105.00%
2004 and thereafter....................... 100.00%
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provided that (x) if a Change of Control occurs on or after March 15,
2004, the redemption price as a percentage of liquidation preference
referenced in the table above shall be 101.00% after such Change of
Control and (y) no redemption pursuant to this paragraph (e)(i)(A) shall
be authorized or made unless prior thereto full accumulated and unpaid
Regular Dividends (including Additional Dividends, if any) are declared
and paid in full, or declared and a sum in cash is set apart sufficient
for such payment, on the Senior Preferred Stock, Exchange Preferred Stock
and Private Exchange Preferred Stock for all Regular Dividend Periods
terminating on or prior to the Redemption Date.
(B) The Corporation may, at the option of the Board of Directors,
redeem any or all of the shares of Senior Preferred Stock at any time or
from time to time on or prior to March 15, 2000, subject to contractual
and other restrictions with respect thereto and from any source of funds
legally available therefor, in the manner provided in paragraph (e)(iii)
hereof at a redemption price in cash of 105% of the liquidation preference
thereof, plus, without duplication, (x) an amount in cash equal to all
accumulated and unpaid Regular Dividends (including Additional Dividends,
if any) per share (including an amount in cash equal to a prorated Regular
Dividend for the period from the Regular Dividend Payment Date immediately
prior to the Redemption Date to the Redemption Date) and (y) an amount in
cash equal to the Fair Market Value on the date the notice of redemption
is mailed of the issuable but unissued Contingent Class A Shares
(including Contingent Class A Shares not issued as a result of an FCC
Deferral or an Authorization Deferral) with respect to each share,
provided, that no redemption pursuant to this paragraph (e)(i)(B) shall be
authorized or made unless prior thereto full accumulated and unpaid
Regular Dividends (including Additional Dividends, if any) are declared
and paid in full, or declared and a sum in cash is set apart sufficient
for such payment, on the Senior Preferred Stock, Exchange Preferred Stock
and Private Exchange Preferred Stock for all Dividend Periods terminating
on or prior to the Redemption Date.
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(C) The Senior Preferred Stock is not redeemable after March 15,
2000 and prior to March 15, 2002.
(D) In the event of a redemption pursuant to paragraph (e)(i)(A)
or (B) hereof of only a portion of the then outstanding shares of the
Senior Preferred Stock, the Corporation shall effect such redemption on a
pro rata basis according to the number of shares held by each Holder of
the Senior Preferred Stock, Exchange Preferred Stock and Private Exchange
Preferred Stock, except that the Corporation may redeem such shares held
by Holders of fewer than ten shares (or shares held by Holders who would
hold less than ten shares as a result of such redemption), as may be
determined by the Corporation.
(ii) Mandatory Redemption. On March 15, 2005, the Corporation shall
redeem, subject to contractual and other restrictions and to the extent of
funds legally available therefor, in the manner provided for in paragraph
(e)(iii) hereof, all of the shares of the Senior Preferred Stock then
outstanding at a redemption price equal to 100% of the liquidation
preference per share, plus, without duplication, (x) an amount in cash
equal to all accumulated and unpaid Regular Dividends (including
Additional Dividends, if any) per share (including an amount equal to a
prorated Regular Dividend for the period from the Regular Dividend Payment
Date immediately prior to the Redemption Date to the Redemption Date) and
(y) an amount in cash equal to the Fair Market Value on the date the
notice of redemption is mailed of the issuable but unissued Contingent
Class A Shares (including Contingent Class A Shares not issued as a result
of an FCC Deferral or an Authorization Deferral) with respect to such
shares.
(iii) Procedures for Redemption. (A) At least thirty (30) days and
not more than sixty (60) days prior to the date fixed for any redemption
of the Senior Preferred Stock, written notice (the "Redemption Notice")
shall be given by first class mail, postage prepaid, to each Holder of
record on the record date fixed for such redemption of the Senior
Preferred Stock at such Holder's address as it appears on the stock books
of the Corporation, provided that no failure to give such notice nor any
deficiency therein shall affect
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the validity of the procedure for the redemption of any shares of Senior
Preferred Stock to be redeemed except as to the Holder or Holders to whom
the Corporation has failed to give said notice or except as to the Holder
or Holders whose notice was defective. The Redemption Notice shall state:
(1) whether the redemption is pursuant to paragraph
(e)(i)(A) or (B) or (e)(ii) hereof;
(2) the redemption price;
(3) whether all or less than all the outstanding shares of
the Senior Preferred Stock are to be redeemed and the total number
of shares of the Senior Preferred Stock being redeemed;
(4) the date fixed for redemption;
(5) that the Holder is to surrender to the Corporation, in
the manner, at the place or places and at the price designated, his
certificate or certificates representing the shares of Senior
Preferred Stock to be redeemed; and
(6) that dividends on the shares of the Senior Preferred
Stock to be redeemed shall cease to accumulate on such Redemption
Date unless the Corporation defaults in the payment of the
redemption price.
(B) Each Holder of Senior Preferred Stock shall surrender
the certificate or certificates representing such shares of Senior
Preferred Stock to the Corporation, duly endorsed (or otherwise in
proper form for transfer, as determined by the Corporation), in the
manner and at the place designated in the Redemption Notice, and on
the Redemption Date the full redemption price for such shares shall
be payable in cash to the Person whose name appears on such
certificate or certificates as the owner thereof, and each
surrendered certificate shall be canceled and retired. In the event
that less than all of the shares represented by any such certificate
are redeemed, a new certificate shall be issued representing the
unredeemed shares.
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(C) On and after the Redemption Date, unless the Corporation
defaults in the payment in full of the applicable redemption price,
dividends on the Senior Preferred Stock called for redemption shall
cease to accumulate on the Redemption Date, and all rights of the
Holders of redeemed shares shall terminate with respect thereto on
the Redemption Date, other than the right to receive the redemption
price; provided, however, that if a notice of redemption shall have
been given as provided in paragraph (iii)(A) above and the funds
necessary for redemption (including an amount in cash in respect of
all dividends that will accumulate to the Redemption Date) shall
have been irrevocably deposited in trust for the equal and ratable
benefit for the Holders of the shares to be redeemed, then, at the
close of business on the day on which such funds are segregated and
set aside, the Holders of the shares to be redeemed shall cease to
be stockholders of the Corporation and shall be entitled only to
receive the redemption price.
(f) Voting Rights.
(i) The Holders of Senior Preferred Stock, except as otherwise
required under Delaware law or as set forth in paragraphs (ii), (iii) and
(iv) below, shall not be entitled or permitted to vote on any matter
required or permitted to be voted upon by the stockholders of the
Corporation.
(ii) (A) So long as any shares of the Senior Preferred Stock are
outstanding, the Corporation shall not authorize or issue any class of
Parity Stock without the affirmative vote or consent of Holders of at
least a majority of the then outstanding shares of Senior Preferred Stock,
Exchange Preferred Stock and Private Exchange Preferred Stock, voting or
consenting, as the case may be, as one class, given in person or by proxy,
either in writing or by resolution adopted at an annual or special
meeting; provided, however, that no such vote or consent shall be
necessary in connection with (i) issuance of additional shares of Senior
Preferred Stock pursuant to the provisions of paragraph (c) of this
Certificate of Designation, or (ii) the authorization and issuance of that
number of shares of Exchange Preferred Stock and/or the Private Exchange
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Preferred Stock not in excess of 413,930 shares less the sum of (x) that
number of shares of Senior Preferred Stock not exchanged in the Exchange
Offer and/or Private Exchange Offer and (y) that number of shares of
Senior Preferred Stock payable as dividends on such other shares of Senior
Preferred Stock referred to in clause (x), assuming accumulation of the
maximum number of Additional Dividends payable and assuming a Voting
Rights Triggering Event had occurred and would remain continuing until
March 15, 2002.
(B) So long as any shares of the Senior Preferred Stock are
outstanding, the Corporation shall not authorize or issue any class
of Senior Stock without the affirmative vote or consent of Holders
of at least a majority of the outstanding shares of Senior Preferred
Stock, Exchange Preferred Stock and Private Exchange Preferred
Stock, voting or consenting, as the case may be, as one class, given
in person or by proxy, either in writing or by resolution adopted at
an annual or special meeting.
(C) So long as any shares of the Senior Preferred Stock are
outstanding, the Corporation shall not amend this Certificate of
Designation so as to affect adversely the specified rights,
preferences, privileges or voting rights of holders of shares of
Senior Preferred Stock without the affirmative vote or consent of
Holders of at least a majority of the issued and outstanding shares
of (x) Senior Preferred Stock, Exchange Preferred Stock and Private
Exchange Preferred Stock, voting or consenting, as the case may be,
as one class, given in person or by proxy, either in writing or by
resolution adopted at an annual or special meeting, if a
corresponding amendment is to be made to the certificate of
designation governing the Exchange Preferred Stock and Private
Exchange Preferred Stock which amendment, together with such
amendment to this Certificate of Designation, affects the Senior
Preferred Stock, Exchange Preferred Stock and Private Exchange
Preferred Stock identically in all material respects (a
"Corresponding Amendment") or (y) Senior Preferred Stock, voting or
consenting, as the case may be, as one class, given in person or by
proxy, either
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<PAGE> 17
in writing or by resolution adopted at an annual or special meeting,
if such amendment is not a Corresponding Amendment.
(D) Prior to the exchange of all outstanding shares of
Senior Preferred Stock, Exchange Preferred Stock and Private
Exchange Preferred Stock for Exchange Debentures, the Corporation
shall not amend or modify the Indenture for the Exchange Debentures
in the form as executed on the Issue Date (the "Indenture") (except
as expressly provided therein in respect of amendments without the
consent of Holders of Exchange Debentures) without the affirmative
vote or consent of holders of at least a majority of the aggregate
liquidation preference and principal amount, as the case may be, of
shares of Senior Preferred Stock, Exchange Preferred Stock and
Private Exchange Preferred Stock and Exchange Debentures then
outstanding, voting or consenting, as the case may be, together as
one class, given in person or by proxy, either in writing or by
resolution adopted at an annual or special meeting.
(iii) Without the affirmative vote or consent of Holders of a
majority of the issued and outstanding shares of Senior Preferred Stock,
Exchange Preferred Stock and Private Exchange Preferred stock, voting or
consenting, as the case may be, as a separate class, given in person or by
proxy, either in writing or by resolution adopted at an annual or special
meeting, the Corporation shall not, in a single transaction or series of
related transactions, consolidate with or merge with or into, or sell,
assign, transfer, lease, convey or otherwise dispose of all or
substantially all of its assets to, another Person or adopt a plan of
liquidation unless: (A) either (1) the Corporation is the surviving or
continuing Person or (2) the Person (if other than the Corporation) formed
by such consolidation or into which the Corporation is merged or the
Person that acquires by conveyance, transfer or lease the properties and
assets of the Corporation substantially as an entirety or in the case of a
plan of liquidation, the Person to which assets of the Corporation have
been transferred, shall be a corporation organized and existing under the
laws of the United States or any State thereof or the District of
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Columbia; (B) if the Corporation is not the surviving Person, the Senior
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
Senior Preferred Stock had immediately prior to such transaction; (C)
immediately after giving effect to such transaction and the use of the
proceeds therefrom (on a pro forma basis, including giving effect to any
Indebtedness incurred or anticipated to be incurred in connection with
such transaction), the Corporation (in the case of clause (1) of the
foregoing clause (A)) or such Person (in the case of clause (2) of the
foregoing clause (A)) shall be able to incur at least $1.00 of additional
Indebtedness (other than Permitted Indebtedness) under paragraph (l)(i)
hereof; and (D) immediately after giving effect to such transactions, no
Voting Rights Triggering Event shall have occurred or be continuing.
For purposes of the foregoing, the transfer (by lease, assignment,
sale or otherwise, in a single transaction or series of related
transactions) of all or substantially all of the properties or assets of
one or more Subsidiaries of the Corporation, the Capital Stock of which
constitutes all or substantially all of the properties and assets of the
Corporation shall be deemed to be the transfer of all or substantially all
of the properties and assets of the Corporation.
(iv) (A) If (1) after March 15, 2002 cash dividends on the Senior
Preferred Stock are in arrears and unpaid for two or more semi-annual
Dividend Periods (whether or not consecutive) (a "Dividend Default"); (2)
the Corporation fails to redeem all of the then outstanding shares of
Senior Preferred Stock on or before March 15, 2005 or otherwise fails to
discharge any redemption obligation with respect to the Senior Preferred
Stock; (3) the Corporation fails to make a Change of Control Offer
following a Change of Control if such Change of Control Offer is required
by paragraph (h) hereof or fails to purchase shares of Senior Preferred
Stock
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<PAGE> 19
from Holders who elect to have such shares purchased pursuant to the
Change of Control Offer; (4) the Corporation breaches or violates one of
the provisions set forth in paragraph (l) hereof and the breach or
violation continues for a period of 60 days or more after the Corporation
receives notice thereof specifying the default from the holders of at
least 25% of the shares of Senior Preferred Stock, Exchange Preferred
Stock and Private Exchange Preferred Stock then outstanding; (5) the
Corporation breaches or violates one of the provisions set forth in
paragraph (c)(iii); or (6) the Corporation fails to pay at the final
stated maturity (giving effect to any extensions thereof) the principal
amount of any Indebtedness of the Corporation or any Restricted Subsidiary
of the Corporation, or the final stated maturity of any such Indebtedness
is accelerated, if the aggregate principal amount of such Indebtedness,
together with the aggregate principal amount of any other such
Indebtedness in default for failure to pay principal at the final stated
maturity (giving effect to any extensions thereof) or that has been
accelerated, aggregates $3,000,000 or more at any time, in each case,
after a 20-day period during which such default shall not have been cured
or such acceleration rescinded, then in the case of any of clauses
(1)-(6), the number of directors constituting the Board of Directors shall
be adjusted by the number, if any, necessary to permit the Holders of
Senior Preferred Stock, Exchange Preferred Stock and Private Exchange
Preferred Stock, voting separately and as one class, to elect the lesser
of two directors or that number of directors constituting at least 25% of
the Board of Directors; provided, that, in the event more than one of the
above defaults occurs, at the same or at different times, the maximum
number of directors that such Holders shall be entitled to elect is the
lesser of 2 directors and that number of directors constituting 25% of the
Board of Directors. Each such event described in clauses (1), (2), (3),
(4), (5) and (6) is a "Voting Rights Triggering Event"; provided, however,
that if the same event or set of facts causes the Corporation to breach or
violate more than one of the provisions set forth in paragraph (l) hereof,
all such breaches or violations together shall not constitute more than
one Voting Rights Triggering Event pursuant to clause (4) of this
subparagraph; provided, further, however, that,
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in the event a Voting Rights Triggering Event occurs pursuant to clause
(5) of this subparagraph as a result of a breach or violation of paragraph
(c)(iii)(D) hereof, a subsequent breach or violation of paragraph
(c)(iii)(D) in connection with such Voting Rights Triggering Event shall
not itself constitute a Voting Rights Triggering Event pursuant to clause
(5) of this subparagraph. Holders of a majority of the issued and
outstanding shares of Senior Preferred Stock, Exchange Preferred Stock and
Private Exchange Preferred Stock, voting separately and as one class,
shall have the exclusive right to elect the lesser of two directors or 25%
of the members of the Board of Directors at a meeting therefor called upon
occurrence of such Voting Rights Triggering Event, and at every subsequent
meeting at which the terms of office of the directors so elected by the
Holders of the Senior Preferred Stock, Exchange Preferred Stock and
Private Exchange Preferred Stock expire (other than as described in
(f)(iv)(B) below). The voting rights provided herein and the issuance of
Contingent Class A Shares pursuant to paragraph (c)(iii) hereof shall be
the exclusive remedy at law or in equity of the holders of the Senior
Preferred Stock for any Voting Rights Triggering Event.
(B) The right of the Holders of Senior Preferred Stock,
Exchange Preferred Stock and Private Exchange Preferred Stock voting
together as a separate class to elect members of the Board of
Directors as set forth in subparagraph (f)(iv)(A) above shall
continue until such time as (x) in the event such right arises due
to a Dividend Default, all accumulated dividends that are in arrears
on the Senior Preferred Stock, Exchange Preferred Stock and Private
Exchange Preferred Stock are paid in full in cash; and (y) in all
other cases, the failure, breach or default giving rise to such
Voting Rights Triggering Event is remedied, cured or waived by the
holders of at least a majority of the shares of Senior Preferred
Stock, Exchange Preferred Stock and Private Exchange Preferred Stock
then outstanding and entitled to vote thereon, at which time (1) the
special right of the Holders of Senior Preferred Stock, Exchange
Preferred Stock and Private Exchange Preferred Stock so to vote as a
class for the
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election of directors and (2) the term of office of the directors
elected by the Holders of the Senior Preferred Stock, Exchange
Preferred Stock and Private Exchange Preferred Stock shall each
terminate and the directors elected by the holders of Common Stock
or Capital Stock (other than the Senior Preferred Stock, Exchange
Preferred Stock and Private Exchange Preferred Stock) shall
constitute the entire Board of Directors. At any time after voting
power to elect directors shall have become vested and be continuing
in the Holders of Senior Preferred Stock, Exchange Preferred Stock
and Private Exchange Preferred Stock pursuant to paragraph (f)(iv)
hereof, or if vacancies shall exist in the offices of directors
elected by the Holders of Senior Preferred Stock, Exchange Preferred
Stock and Private Exchange Preferred Stock, a proper officer of the
Corporation may, and upon the written request of the Holders of
record of at least twenty-five percent (25%) of the shares of Senior
Preferred Stock, Exchange Preferred Stock and Private Exchange
Preferred Stock then outstanding addressed to the secretary of the
Corporation shall, call a special meeting of the Holders of Senior
Preferred Stock, Exchange Preferred Stock and Private Exchange
Preferred Stock, for the purpose of electing the directors which
such Holders are entitled to elect. If such meeting shall not be
called by a proper officer of the Corporation within twenty (20)
days after personal service of said written request upon the
secretary of the Corporation, or within twenty (20) days after
mailing the same within the United States by certified mail,
addressed to the secretary of the Corporation at its principal
executive offices, then the Holders of record of at least
twenty-five percent (25%) of the outstanding shares of Senior
Preferred Stock, Exchange Preferred Stock and Private Exchange
Preferred Stock may designate in writing one of their number to call
such meeting at the expense of the Corporation, and such meeting may
be called by the Person so designated upon the notice required for
the annual meetings of stockholders of the Corporation and shall be
held at the place for holding the annual meetings of stockholders.
Any Holder of Senior Preferred Stock, Exchange Preferred Stock or
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Private Exchange Preferred Stock so designated shall have, and the
Corporation shall provide, access to the lists of stockholders to be
called pursuant to the provisions hereof.
(C) At any meeting held for the purpose of electing
directors at which the Holders of Senior Preferred Stock, Exchange
Preferred Stock and Private Exchange Preferred Stock shall have the
right, voting together as a separate class, to elect directors as
aforesaid, the presence in person or by proxy of the Holders of at
least a majority of the outstanding shares of Senior Preferred
Stock, Exchange Preferred Stock and Private Exchange Preferred Stock
entitled to vote thereat shall be required to constitute a quorum of
such Senior Preferred Stock, Exchange Preferred Stock and Private
Exchange Preferred Stock.
(D) Any vacancy occurring in the office of a director
elected by the Holders of Senior Preferred Stock, Exchange Preferred
Stock and Private Exchange Preferred Stock may be filled by the
remaining director elected by the Holders of Senior Preferred Stock,
Exchange Preferred Stock and Private Exchange Preferred Stock unless
and until such vacancy shall be filled by the Holders of Senior
Preferred Stock, Exchange Preferred Stock and Private Exchange
Preferred Stock.
(v) In any case in which the Holders of Senior Preferred Stock
shall be entitled to vote pursuant to this paragraph (f) or pursuant to
Delaware law, each Holder of Senior Preferred Stock entitled to vote with
respect to such matter shall be entitled to one vote for each share of
Senior Preferred Stock held.
(g) Exchange.
(i) Requirements. The outstanding shares of Senior Preferred Stock
are exchangeable, in whole or in part, at the option of the Corporation,
at any time or from time to time on any Regular Dividend Payment Date for
the Corporation's 14% Exchange Debentures due 2005 (the "Exchange
Debentures") to be substantially in the form of
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Exhibit A to the Indenture, a copy of which is on file with the secretary
of the Corporation; provided that immediately after giving effect to any
exchange in part, there shall be outstanding (x) Senior Preferred Stock,
Exchange Preferred Stock and Private Exchange Preferred Stock with an
aggregate liquidation preference of at least $75,000,000 and (y) at least
$50,000,000 aggregate principal amount of Exchange Debentures; and
provided, further, that any such exchange may only be made if on or prior
to the date of such exchange (i) the Corporation has paid (or is deemed to
have paid) all accumulated Regular Dividends (including Additional
Dividends, if any) on the Senior Preferred Stock, Exchange Preferred Stock
and Private Exchange Preferred Stock (including the dividends payable on
the date of exchange) and there shall be no contractual impediment to such
exchange; (ii) if there are any Contingent Class A Shares issuable but
unissued with respect to any share of Senior Preferred Stock to be
exchanged, the Corporation shall have entered into a legally valid and
binding agreement with each applicable Holder agreeing to issue to such
Holder such unissued Contingent Class A Shares on terms identical in all
material respects to the provisions of paragraph (c)(iii) hereof; (iii)
there shall be funds legally available sufficient therefor; and (iv)
immediately after giving effect to such exchange, no Default or Event of
Default (each as defined in the Indenture) would exist under the Indenture
and no default or event of default would exist under the Old Indenture or
the Notes Indenture. The exchange rate shall be $1.00 principal amount of
Exchange Debentures for each $1.00 of liquidation preference of Senior
Preferred Stock, including, to the extent necessary, Exchange Debentures
in principal amounts less than $1,000, provided that the Corporation shall
have the right, at its option, to pay cash in an amount equal to the
principal amount of that portion of any Exchange Debenture that is not an
integral multiple of $1,000 instead of delivering an Exchange Debenture in
a denomination of less than $1,000.
(ii) Procedure for Exchange. (A) At least thirty (30) days and not
more than sixty (60) days prior to any date fixed for exchange, written
notice (the "Exchange Notice") shall be given by first-class mail, postage
prepaid, to each Holder of record on the record date fixed for such
exchange
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<PAGE> 24
of the Senior Preferred Stock at such Holder's address as the same appears
on the stock books of the Corporation, provided that no failure to give
such notice nor any deficiency therein shall affect the validity of the
procedure for the exchange of any shares of Senior Preferred Stock to be
exchanged except as to the Holder or Holders to whom the Corporation has
failed to give said notice or except as to the Holder or Holders whose
notice was defective. The Exchange Notice shall state:
(1) the date fixed for exchange;
(2) that the Holder is to surrender to the
Corporation, in the manner and at the place or places
designated, his certificate or certificates representing the
shares of Senior Preferred Stock to be exchanged;
(3) that dividends on the shares of Senior Preferred
Stock to be exchanged shall cease to accumulate on such
Exchange Date whether or not certificates for shares of Senior
Preferred Stock are surrendered for exchange on such Exchange
Date unless the corporation shall default in the delivery of
Exchange Debentures; and
(4) that interest on the Exchange Debentures shall
accrue from the Exchange Date whether or not certificates for
shares of Senior Preferred Stock are surrendered for exchange
on such Exchange Date.
(B) On or before the Exchange Date, each Holder of shares of
Senior Preferred Stock to be exchanged shall surrender certificates
representing such shares of Senior Preferred Stock, in the manner
and at the place designated in the Exchange Notice. The Corporation
shall cause the Exchange Debentures to be executed on the Exchange
Date and, upon surrender in accordance with the Exchange Notice of
the certificates for any shares of Senior Preferred Stock so
exchanged, duly endorsed (or otherwise in proper form for transfer,
as determined by the Corporation), such shares shall be exchanged by
the Corporation into
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<PAGE> 25
Exchange Debentures. The Corporation shall pay interest on the
Exchange Debentures at the rate and on the dates specified therein
from the Exchange Date.
(C) If notice has been mailed as aforesaid, and if before
the Exchange Date specified in such notice all Exchange Debentures
necessary for such exchange shall have been duly executed by the
Corporation and delivered to the trustee under the Indenture with
irrevocable instructions to authenticate the Exchange Debentures
necessary for such exchange, then the rights of the Holders of
Senior Preferred Stock so exchanged as stockholders of the
Corporation shall cease (except the right to receive Exchange
Debentures, an amount in cash equal to the amount of accrued and
unpaid Regular Dividends (including Additional Dividends, if any) to
the Exchange Date and, if the Corporation so elects, cash in lieu of
any Exchange Debenture not an integral multiple of $1,000), and the
Person or Persons entitled to receive the Exchange Debentures
issuable upon exchange shall be treated for all purposes as the
registered Holder or Holders of such Exchange Debentures as of the
Exchange Date.
(iii) No Exchange in Certain Cases. Notwithstanding the foregoing
provisions of this paragraph (g), the Corporation shall not be entitled or
required to exchange the Senior Preferred Stock for Exchange Debentures if
such exchange, or any term or provision of the Indenture or the Exchange
Debentures, or the performance of the Corporation's obligations under the
Indenture or the Exchange Debentures, shall materially violate or conflict
with any applicable law or agreement or instrument then binding on the
Corporation or if, at the time of such exchange, the Corporation is
insolvent or if it would be rendered insolvent by such exchange.
(h) Change of Control.
(i) Within 20 days of the occurrence of a Change of Control, the
Corporation shall make an offer to purchase (the "Change of Control
Offer") the outstanding Senior Preferred Stock at a purchase price equal
to 101% of the
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liquidation preference thereof plus, without duplication, (x) an amount in
cash equal to all accumulated and unpaid Regular Dividends (including
Additional Dividends, if any) thereon (including an amount in cash equal
to a prorated Regular Dividend for the period from the immediately
preceding Regular Dividend Payment Date to the Change of Control Payment
Date) and (y) an amount in cash equal to the Fair Market Value on the date
of the occurrence of the Change of Control of the issuable but unissued
Contingent Class A Shares (including Contingent Class A Shares not issued
as a result of an FCC Deferral or an Authorization Deferral) with respect
to each share (such applicable purchase price being hereinafter referred
to as the "Change of Control Purchase Price") in accordance with the
procedures set forth in this paragraph (h).
(ii) Within 20 days of the occurrence of a Change of Control, the
Corporation also shall (i) cause a notice of the Change of Control to be
sent at least once to the Dow Jones News Service or similar business news
service in the United States and (ii) send by first-class mail, postage
prepaid, to each holder of Senior Preferred Stock, at the address
appearing on the stock books of the Corporation, a notice stating:
(1) that the Change of Control Offer is being made pursuant
to this paragraph (h) and that all Senior Preferred Stock tendered
will be accepted for payment, and otherwise subject to the terms and
conditions set forth herein;
(2) the Change of Control Purchase Price and the purchase
date (which shall be a Business Day no earlier than 20 Business Days
from the date such notice is mailed (the "Change of Control Payment
Date"));
(3) that any Senior Preferred Stock not tendered will
continue to accumulate dividends;
(4) that, unless the Corporation defaults in the payment of
the Change of Control Purchase Price, any Senior Preferred Stock
accepted for payment pursuant to the Change of Control Offer shall
cease to
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accumulate dividends after the Change of Control Payment Date;
(5) that holders accepting the offer to have their Senior
Preferred Stock purchased pursuant to a Change of Control Offer will
be required to surrender their certificates representing Senior
Preferred Stock to the Corporation at the address specified in the
notice prior to the close of business on the Business Day preceding
the Change of Control Payment Date;
(6) that holders will be entitled to withdraw their
acceptance if the Corporation receives, not later than the close of
business on the third 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 Senior
Preferred Stock delivered for purchase, and a statement that such
holder is withdrawing his election to have such Senior Preferred
Stock purchased;
(7) that holders whose Senior Preferred Stock is being
purchased only in part will be issued new certificates representing
the number of shares of Senior Preferred Stock equal to the
unpurchased portion of the certificates surrendered; and
(8) any other procedures that a holder must follow to accept
a Change of Control Offer or effect withdrawal of such acceptance.
(iii) The Corporation will comply with any securities laws and
regulations, to the extent such laws and regulations are applicable to the
redemption of the Senior Preferred Stock in connection with a Change of
Control Offer.
(iv) On the Change of Control Payment Date, the Corporation shall
(A) accept for payment the shares of Senior Preferred Stock validly
tendered pursuant to the Change of Control Offer, (B) promptly mail to the
Holders of shares so accepted the Change of Control Purchase Price
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therefor and (C) cancel and retire each surrendered certificate and
execute a new Senior Preferred Stock certificate equal to any unpurchased
shares represented by a certificate surrendered. Unless the Corporation
defaults in the payment for the shares of Senior Preferred Stock tendered
pursuant to the Change of Control Offer, dividends shall cease to accrue
with respect to the shares of Senior Preferred Stock tendered and all
rights of Holders of such tendered shares shall terminate, except for the
right to receive payment therefor, on the Change of Control Payment Date.
(v) If the repurchase of the Senior Preferred Stock would violate
or constitute a default or be otherwise prohibited under any Indebtedness
of the Corporation then outstanding, then, notwithstanding anything to the
contrary contained above, prior to complying with the foregoing
provisions, but in any event within 20 days following the date the Change
of Control occurs, the Corporation shall, to the extent required to permit
the repurchase of Senior Preferred Stock required by this paragraph (h),
either (A) repay in full all such Indebtedness (and terminate all
commitments) or (B) obtain the requisite consents, if any, under such
Indebtedness required to permit the repurchase of Senior Preferred Stock
required by this paragraph (h). Until the requirements of the immediately
preceding sentence are satisfied, the Corporation shall not make, and
shall not be obligated to make, any Change of Control Offer; provided that
the Corporation's failure to comply with the provisions of this paragraph
(h)(v) shall constitute a Voting Rights Triggering Event.
(i) Conversion or Exchange. The Holders of shares of Senior
Preferred Stock shall not have any rights hereunder to convert such shares into
or exchange such shares for shares of any other class or classes or of any other
series of any class or classes of Capital Stock of the Corporation other than
the Exchange Preferred Stock and the Private Exchange Preferred Stock as
provided in the Registration Rights Agreement.
(j) Reissuance of Senior Preferred Stock. Shares of Senior
Preferred Stock that have been issued and reacquired in any manner, including
shares purchased or redeemed or exchanged,
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shall (upon compliance with any applicable provisions of the laws of Delaware)
have the status of authorized and unissued shares of Preferred Stock
undesignated as to series and may be redesignated and reissued as part of any
series of Preferred Stock, provided that any issuance of such shares of
Preferred Stock must be in compliance with the terms hereof.
(k) Business Day. If any payment, redemption or exchange shall be
required by the terms hereof to be made on a day that is not a Business Day,
such payment, redemption or exchange shall be made on the immediately succeeding
Business Day.
(l) Certain Additional Provisions.
(i) Limitation on Additional Indebtedness. The Corporation will
not, and will not permit any Restricted Subsidiary of the Corporation to,
directly or indirectly, incur any Indebtedness (including Acquired
Indebtedness), provided that the Corporation may incur Indebtedness and
any Restricted Subsidiary created after the Issue Date may incur
Acquisition Indebtedness if (a) after giving effect to the incurrence of
such Indebtedness and the receipt and application of the proceeds thereof,
the ratio of the Corporation's total consolidated Indebtedness to the
Corporation's EBITDA (determined on a pro forma basis for the last four
fiscal quarters of the Corporation for which financial statements are
available at the date of determination) is less than 6.75 to 1; provided,
however, that if the Indebtedness which is the subject of a determination
under this provision is Acquired Indebtedness or Acquisition Indebtedness,
then such ratio shall be determined by giving effect to (on a pro forma
basis as if the transaction had occurred at the beginning of the
four-quarter period) both the incurrence or assumption of such Acquired
Indebtedness or Acquisition Indebtedness by the Corporation or a
Restricted Subsidiary, as the case may be, and the inclusion in the
Corporation's EBITDA of the EBITDA of the acquired Person, business,
property or assets, and (b) no Voting Rights Triggering Event shall have
occurred and be continuing at the time or as a consequence of the
incurrence of such Indebtedness.
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Notwithstanding the foregoing, the Corporation and its
Restricted Subsidiaries may incur Permitted Indebtedness; provided that
the Corporation shall not incur any Permitted Indebtedness that ranks
junior in right of payment to the Exchange Debentures that has a maturity
or mandatory sinking fund payment prior to the maturity of the Exchange
Debentures.
(ii) Limitation on Restricted Payments. The Corporation will not
make, and will not permit any of its Restricted Subsidiaries to, directly
or indirectly, make any Restricted Payments, unless:
(A) no Voting Rights Triggering Event shall have occurred
and be continuing at the time of or after giving effect to such
Restricted Payment;
(B) immediately after giving effect to such Restricted
Payment, (i) the Corporation could incur $1.00 of additional
Indebtedness (other than Permitted Indebtedness) under
paragraph(l)(i) and (ii) the ratio of the Corporation's EBITDA
(determined on a pro forma basis for the last four fiscal quarters
of the Corporation for which financial statements are available at
the date of determination) to the Corporation's Consolidated
Interest Expense (determined on a pro forma basis for the last four
fiscal quarters of the Corporation for which financial statements
are available) is equal to or greater than 1.4 to 1; and
(c) immediately after giving effect to such Restricted
Payment, the aggregate of all Restricted Payments declared or made
after the Issue Date does not exceed the sum of (1) 100% of the
Corporation's EBITDA from the Issue Date to the date of
determination minus 1.4 times the Corporation's Consolidated
Interest Expense from the Issue Date to
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the date of determination (or in the event such amount shall be a
deficit, minus 100% of such deficit), (2) 100% of the aggregate Net
Proceeds and the fair market value of marketable securities or other
property received by the Corporation from the issue or sale, after
the Issue Date, of Capital Stock (other than Disqualified Capital
Stock, Capital Stock of the Corporation issued to any Subsidiary of
the Corporation and the proceeds from the issuance of Capital Stock
pursuant to the Warrants or the Old Warrants) of the Corporation or
any Indebtedness or other securities of the Corporation convertible
into or exercisable or exchangeable for Capital Stock (other than
Disqualified Capital Stock) of the Corporation which has been so
converted or exercised or exchanged, as the case may be. For
purposes of determining under this clause (c) the amount expended
for Restricted Payments, cash distributed shall be
valued at the face amount thereof and property other than cash shall
be valued at its fair market value.
The provisions of this covenant shall not prohibit (i) the payment
of any distribution within 60 days after the date of declaration thereof,
if at such date of declaration such
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payment would comply with the provisions of this Certificate of
Designation, (ii) so long as no Voting Rights Triggering Event shall have
occurred and be continuing, the retirement of any shares of Capital Stock
of the Corporation or Indebtedness subordinated to the Exchange Debentures
by conversion into, or by or in exchange for, shares of Capital Stock
(other than Disqualified Capital Stock) of the Corporation, or out of the
Net Proceeds of the substantially concurrent sale (other than to a
Subsidiary of the Corporation) of other shares of Capital Stock of the
Corporation (other than Disqualified Capital Stock), (iii) so long as no
Voting Rights Triggering Event shall have occurred and be continuing, the
redemption or retirement of Indebtedness of the Corporation subordinated
to the Exchange Debentures in exchange for, by conversion into, or out of
the Net Proceeds of, a substantially concurrent sale or incurrence of
Indebtedness (other than any Indebtedness owed to a Subsidiary) of the
Corporation that is contractually subordinated in right of payment to the
Exchange Debentures to at least the same extent as the subordinated
Indebtedness being redeemed or retired, (iv) so long as no Voting Rights
Triggering Event shall have occurred and be continuing, the retirement of
any shares of Disqualified Capital Stock by conversion into, or by
exchange for, shares of Disqualified Capital Stock, or out of the Net
Proceeds of the substantially concurrent sale (other than to a Subsidiary
of the Corporation) of other shares of Disqualified Capital Stock;
provided that (a) such Disqualified Capital Stock is not subject to
mandatory redemption earlier than the maturity of the Exchange Debentures,
(b) such Disqualified Capital Stock is in an aggregate liquidation
preference that is equal to or less than the sum of (x) the aggregate
liquidation preference of the Disqualified Capital Stock being retired,
(y) the amount of accrued and unpaid dividends, if any, and premiums owed,
if any, on the Disqualified Capital Stock being retired and (z) the amount
of customary fees, expenses and costs related to the incurrence of such
Disqualified Capital Stock and (c) such Disqualified Capital Stock is
incurred by the same Person that initially incurred the Disqualified
Capital Stock being retired, except that the Corporation may incur
Disqualified Capital Stock to refund or refinance Disqualified Capital
Stock of any Wholly-Owned Restricted Subsidiary of the Corporation, (v)
the payment of dividends (whether or not in cash) on the Senior Preferred
Stock, Exchange Preferred Stock and Private Exchange Preferred Stock in
the manner provided in this Certificate of
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Designation or the certificate of designation relating to the Exchange
Preferred Stock and Private Exchange Preferred Stock, (vi) so long as no
Voting Rights Triggering Event shall have occurred and be continuing, the
payment of dividends and distributions to the stockholders and
warrantholders of the Corporation on or after the Issue Date in an amount
not to exceed $4,000,000 in the aggregate, (vii) the exchange of Senior
Preferred Stock, Exchange Preferred Stock and Private Exchange Preferred
Stock for Exchange Debentures and (viii) so long as no Voting Rights
Triggering Event shall have occurred and be continuing, other Restricted
Payments in an aggregate amount not to exceed $3,000,000. In determining
the aggregate amount of Restricted Payments made subsequent to the Issue
Date in accordance with clause (c) of the immediately preceding paragraph,
amounts expended pursuant to clauses (i) (excluding dividends and
distributions pursuant to clause (vi)) (ii) and (viii) shall be included
in such calculation.
(iii) Limitation on Transactions with Affiliates. The Corporation
will not, and will not permit any of its Restricted Subsidiaries to,
directly or indirectly, enter into any transaction or series of related
transactions (including, without limitation, the sale, purchase, exchange
or lease of assets, property or services) with any Affiliate (including
entities in which the Corporation or any of its Restricted Subsidiaries
own a minority interest) or holder of 10% or more of the Corporation's
Common Stock (an "Affiliate Transaction") or extend, renew, waive or
otherwise modify the terms of any Affiliate Transaction entered into prior
to the Issue Date unless (i) such Affiliate Transaction is between or
among the Corporation and its Wholly-Owned Subsidiaries or (ii) the terms
of such Affiliate Transaction are fair and reasonable to the Corporation
or such Restricted Subsidiary, as the case may be, and the terms of such
Affiliate Transaction are at least as favorable as the terms which could
be obtained by the Corporation or such Restricted Subsidiary, as the case
may be, in a comparable transaction made on an arm's-length basis between
unaffiliated parties. In any Affiliate Transaction involving an amount or
having a value in excess of $1,000,000 which is not permitted under clause
(i) above, such Affiliate Transaction(s) must be approved by a majority of
the Board of Directors (including a majority of the disinterested
directors). In transactions with a value in excess of $3,000,000 which are
not permitted under clause (i) above, in
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addition to the requirements set forth in the immediately preceding
sentence, the Corporation must obtain a written opinion as to the fairness
of such a transaction from a nationally recognized expert with experience
in appraising the terms or conditions of the type of business or
transaction or series of transactions for which approval is required.
The foregoing provisions will not apply to (i) any Restricted
Payment that is not prohibited by the provisions described under paragraph
(l)(ii) or (ii) any transaction approved by the Board of Directors, with
an officer or director of the Corporation or of any Subsidiary of the
Corporation in his or her capacity as officer or director entered into in
the ordinary course of business, including compensation and employee
benefit arrangements with any officer or director of the Corporation or of
any Subsidiary of the Corporation that are customary for public companies
in the radio broadcasting industry.
(iv) Limitation on Preferred Stock of Restricted Subsidiaries. The
Corporation will not permit any Restricted Subsidiary of the Corporation
to issue any Preferred Stock (except Preferred Stock to the Corporation or
a Restricted Subsidiary) or permit any Person (other than the Corporation
or a Restricted Subsidiary) to hold any such Preferred Stock unless the
Corporation or such Restricted Subsidiary would be entitled to incur or
assume Indebtedness under the covenant described under paragraph (l)(i) in
the aggregate principal amount equal to the aggregate liquidation value of
the Preferred Stock to be issued.
(v) Reports. Whether or not the Corporation is required to file
such reports with the Commission, so long as any shares of Senior
Preferred Stock are outstanding, the Corporation will provide to the
holders of Senior Preferred Stock, within 15 days after it files them with
the Commission, copies of the annual reports and of the information,
documents and other reports (or copies of such portions of any of the
foregoing as the Commission may by rules and regulations prescribe) which
the Corporation files (or would be required to file) with the Commission
pursuant to Section 13 or 15(d) of the Exchange Act.
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(vi) Exchange. Subject to the satisfaction of the requirements set
forth in paragraphs (g)(i) and (g)(iii), the Corporation agrees to
exchange all outstanding shares of Senior Preferred Stock for Exchange
Debentures within 60 days after such exchange is permitted without the
Corporation obtaining any waiver, consent, approval or authorization under
any instrument governing Indebtedness of the Corporation or its Restricted
Subsidiaries outstanding at such time.
(m) Definitions. As used in this Certificate of Designation, the
following terms shall have the following meanings (with terms defined in
the singular having comparable meanings when used in the plural and vice
versa), unless the context otherwise requires:
"Acquired Indebtedness" means Indebtedness of a Person (including an
Unrestricted Subsidiary) existing at the time such Person becomes a
Restricted Subsidiary or assumed in connection with the acquisition of
assets from such Person.
"Acquisition Indebtedness" means Indebtedness incurred by the
Corporation or by a Restricted Subsidiary the proceeds of which are used
for the acquisition of a media business and related facilities and assets
or for the construction of a facility pursuant to a construction permit
issued by the FCC.
"Additional Dividends" has the meaning set forth in the Registration
Rights Agreement.
"Affiliate" of any specified Person means any other Person which
directly or indirectly through one or more intermediaries controls, or is
controlled by, or is under common control with, such specified Person. For
the 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, means 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 (a)
beneficial ownership of at least 10% of the voting securities of a Person
shall be deemed to be control and (b) for purposes of paragraph (1)(iii),
for so long
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as Raul Alarcon Sr., Raul Alacron Jr. or Jose Grimalt are directors,
officers or shareholders of the Corporation, they, their respective
spouses, lineal descendants and any Person controlled by any of them shall
be Affiliates of the Corporation and its Subsidiaries.
"Affiliate Transaction" shall have the meaning ascribed to it in
paragraph 1(iii) hereof.
"AM Stations Asset Sale Date" means April 1, 1998; provided that if,
on April 1, 1998, the Corporation shall have entered into a legally
binding sale agreement or agreements for the sale of the FCC broadcast
licenses of WXLX-AM, KXMG-AM and WCMQ-AM, and the only condition to the
closing of such Asset Sales is the granting by the FCC of final approval
of the transfer of such licenses, the AM Stations Asset Sale Date shall be
the earlier of (a) the 60th day after the FCC approves the transfer of
such licences or (b) the day the FCC denies approval of any such transfer
or any such sale agreement shall have been terminated or ceased to be a
legally binding agreement of the parties thereto.
"Asset Sale" means the sale, transfer or other disposition (other
than to the Corporation or any of its Restricted Subsidiaries) in any
single transaction or series of transactions of (a) any Capital Stock of
or other equity interest in any Restricted Subsidiary of the Corporation,
(b) all or substantially all of the assets of the Corporation or of any
Restricted Subsidiary thereof, or (c) all or substantially all of the
assets of any radio station, or part thereof, owned by the Corporation or
any Restricted Subsidiary thereof, or a division, line of business or
comparable business segment of the Corporation or any Restricted
Subsidiary thereof; provided that Asset Sales shall not include sales,
leases, conveyances, transfers or other dispositions to the Corporation or
to a Restricted Subsidiary or to any other Person if after giving effect
to such sale, lease, conveyance, transfer or other disposition such other
Person becomes a Restricted Subsidiary.
"Asset Sale Proceeds" means, with respect to any Asset Sale, (i)
cash received by the Corporation or any Restricted Subsidiary of the
Corporation from such Asset Sale (including cash received as consideration
for the assumption of
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liabilities incurred in connection with or in anticipation of such Asset
Sale), after (a) provision for all income or other taxes measured by or
resulting from such Asset Sale, (b) payment of all brokerage commissions,
underwriting and other fees and expenses related to such Asset Sale, (c)
provision for minority interest holders in any Restricted Subsidiary of
the Corporation as a result of such Asset Sale and (d) deduction of
appropriate amounts to be provided by the Corporation or any such
Restricted Subsidiary as a reserve, in accordance with GAAP, against any
liabilities associated with the assets sold or disposed in such Asset Sale
and retained by the Corporation or any such Restricted Subsidiary after
such Asset Sale, including, without limitation, pension and other post
employment benefit liabilities and liabilities related to environmental
matters or against any indemnification obligations associated with the
assets sold or disposed of in such Asset Sale, and (ii) promissory notes
and other noncash consideration received by the Corporation or any such
Restricted Subsidiary from such Assets Sale or other disposition upon the
liquidation or conversion of such notes or noncash consideration into
cash.
"Bank Indebtedness" means (i) Indebtedness of the Corporation
incurred in accordance with this Certificate of Designation owing to one
or more commercial banking institutions that are members of the Federal
Reserve System and (ii) any guarantee by a Guarantor of any Indebtedness
of the Corporation of the type set forth in clause (i) of this definition.
"Board of Directors" shall have the meaning ascribed to it in the
first paragraph of this Certificate of Designation.
"Business Day" means any day except a Saturday, a Sunday, or any day
on which banking institutions in New York, New York are required or
authorized by law or other governmental action to be closed.
"Capital Stock" means, with respect to any Person, any and all
shares or other equivalents (however designated) of capital stock,
partnership interests or any other participation, right or other interest
in the nature of an equity interest in such Person or any option, warrant
or other security convertible into any of the foregoing.
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"Capitalized Lease Obligations" means Indebtedness represented by
obligations under a lease that is required to be capitalized for financial
reporting purposes in accordance with GAAP, and the amount of such
Indebtedness shall be the capitalized amount of such obligations
determined in accordance with GAAP.
"Certificate of Designation" means this Certificate of Designation
creating the Senior Preferred Stock.
A "Change of Control" of the Corporation will be deemed to have
occurred at such time as (i) any Person (including a Person's Affiliates
and associates), other than a Permitted Holder, becomes the beneficial
owner (as defined under Rule 13d-3 or any successor rule or regulation
promulgated under the Exchange Act) of 50% or more of the total voting
power of the Corporation's Common Stock, (ii) prior to a Public Equity
Offering, Permitted Holders shall cease to own beneficially at least 40%
of the total voting power of the Corporation's Common Stock, (iii) any
Person (including a Person's Affiliates and associates), other than a
Permitted Holder, becomes the beneficial owner of more than 30% of the
total voting power of the Corporation's Common Stock, and the Permitted
Holders beneficially own, in the aggregate, a lesser percentage of the
total voting power of the Common Stock of the Corporation than such other
Person and do not have the right or ability by voting power, contract or
otherwise to elect or designate for election a majority of the Board of
Directors, (iv) there shall be consummated any consolidation or merger of
the Corporation in which the Corporation is not the continuing or
surviving corporation or pursuant to which the Common Stock of the
Corporation would be converted into cash, securities or other property,
other than a merger or consolidation of the Corporation in which the
holders of the Capital Stock of the Corporation outstanding immediately
prior to the consolidation or merger hold, directly or indirectly, at
least a majority of the Common Stock of the surviving corporation
immediately after such consolidation or merger, or (v) during any period
of two consecutive years, individuals who at the beginning of such period
constituted the Board of Directors (together with any new directors whose
election by the Board of Directors or whose nomination for election by the
shareholders of the Corporation has been approved by 66 2/3% of the
directors then still in
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office who either were directors at the beginning of such period or whose
election or recommendation for election was previously so approved) cease
to constitute a majority of the Board of Directors.
"Class A Common Stock" shall have the meaning ascribed to it in
paragraph (c).
"Class B Common Stock" shall have the meaning ascribed to it in
paragraph (c).
"Commission" means the Securities and Exchange Commission.
"Common Stock" of any Person means all Capital Stock of such Person
that is generally entitled to (i) vote in the election of directors of
such Person or (ii) if such Person is not a corporation, vote or otherwise
participate in the selection of the governing body, partners, managers or
others that will control the management and policies of such Person.
"Consolidated Interest Expense" means, with respect to any Person,
for any period, the aggregate amount of interest which, in conformity with
GAAP, would be set forth opposite the caption "interest expense" or any
like caption on an income statement for such Person and its Subsidiaries
on a consolidated basis (including but not limited to, cash dividends paid
on Preferred Stock, imputed interest included in Capitalized Lease
Obligations, all commissions, discounts and other fees and charges owed
with respect to letters of credit and bankers' acceptance financing, the
net costs associated with hedging obligations, amortization of other
financing fees and expenses, the interest portion of any deferred payment
obligation, amortization of discount or premium, if any, and all other
non-cash interest expense (other than interest amortized to cost of
sales)) plus, without duplication, all net capitalized interest for such
period and all interest incurred or paid under any guarantee of
Indebtedness (including a guarantee of principal, interest or any
combination thereof) of any Person, plus the amount of all dividends or
distributions paid on Disqualified Capital Stock (other than dividends
paid or payable in shares of Capital Stock of the Corporation.
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"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, on a consolidated basis, determined in
accordance with GAAP; provided, however, that (a) the Net Income of any
Person (the "other Person") in which the Person in question or any of its
Subsidiaries has less than a 100% interest (which interest does not cause
the net income of such other Person to be consolidated into the net income
of the Person in question in accordance with GAAP) shall be included only
to the extent of the amount of dividends or distributions paid to the
Person in question or the Subsidiary, (b) the Net Income of any Subsidiary
of the Person in question that is subject to any restriction or limitation
on the payment of dividends or the making of other distributions (other
than pursuant to the Exchange Debentures or the Indenture) shall be
excluded to the extent of such restriction or limitation, (c)(i) the Net
Income of any Person acquired in a pooling of interests transaction for
any period prior to the date of such acquisition and (ii) any net gain
(but not loss) resulting from an Asset Sale by the Person in question or
any of its Subsidiaries other than in the ordinary course of business
shall be excluded, and (d) extraordinary gains and losses shall be
excluded.
"Contingent Class A Shares" shall have the meaning ascribed to it in
paragraph (c).
"Corporation Common Stock" shall have the meaning ascribed to it in
paragraph (c).
"Credit Facility" means Indebtedness of the Corporation and its
Restricted Subsidiaries under a revolving credit facility in an aggregate
principal amount not to exceed the greater of (a) $10,000,000 or (b) 75%
of the net book value of the Corporation's accounts receivable.
"Disqualified Capital Stock" means any Capital Stock of the
Corporation or a Restricted Subsidiary thereof which, 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), or upon the happening of any
event, matures or is mandatorily redeemable, pursuant to a sinking fund
obligation or otherwise, or is redeemable at the option of the holder
thereof, in whole or in part, on or prior to the maturity date of the
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Exchange Debentures, for cash or securities constituting Indebtedness.
Without limitation of the foregoing, Disqualified Capital Stock shall be
deemed to include (i) any Preferred Stock of a Restricted Subsidiary of
the Corporation and (ii) any Preferred Stock of the Corporation with
respect to either of which, under the terms of such Preferred Stock, by
agreement or otherwise, such Restricted Subsidiary or the Corporation is
obligated to pay current dividends or distributions in cash during the
period prior to March 15, 2005; provided, however, that Preferred Stock of
the Corporation or any Restricted Subsidiary thereof that is issued with
the benefit of provisions requiring a change of control offer to be made
for such Preferred Stock in the event of a change of control of the
Corporation or such Restricted Subsidiary, which provisions have
substantially the same effect as paragraph (h) hereof shall not be deemed
to be Disqualified Capital Stock solely by virtue of such provisions; and
provided, further, that the Senior Preferred Stock, Exchange Preferred
Stock and Private Exchange Preferred Stock shall be deemed not to be
Disqualified Capital Stock.
"Dividend Period" means the Initial Dividend Period and, thereafter,
each semi-annual dividend period.
"EBITDA" means, for any Person, for any period, an amount equal to
(a) the sum of (i) Consolidated Net Income for such period, plus (ii) the
provision for taxes for such period based on income or profits to the
extent such income or profits were included in computing Consolidated Net
Income and any provision for taxes utilized in computing net loss under
clause (i) hereof, plus (iii) Consolidated Interest Expense for such
Period (but only including Redeemable Dividends in the calculation of such
Consolidated Interest Expense to the extent that such Redeemable Dividends
have not been excluded in the calculation of Consolidated Net Income),
plus (iv) depreciation for such period on a consolidated basis, plus (v)
amortization of intangibles for such period on a consolidated basis, plus
(vi) any other non-cash items reducing Consolidated Net Income for such
period, minus (b) all non-cash items increasing Consolidated Net Income
for such period, all for such Person and its Subsidiaries determined in
accordance with GAAP, except that with respect to the Corporation each of
the foregoing items shall be determined on a consolidated basis with
respect to the Corporation and its Restricted Subsidiaries only, provided,
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however, that, for purposes of calculating EBITDA during any fiscal
quarter, cash income from a particular Investment of such Person shall be
included only (x) if cash income has been received by such Person with
respect to such Investment during each of the previous four fiscal
quarters, or (y) if the cash income derived from such Investment is
attributable to Temporary Cash Investments.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder.
"Exchange Date" means a date on which shares of Senior Preferred
Stock are exchanged by the Corporation for Exchange Debentures.
"Exchange Debentures" shall have the meaning ascribed to it in
paragraph (g) hereof.
"Exchange Notice" shall have the meaning ascribed to it in paragraph
(g) hereof.
"Exchange Offer" means a registered offer to exchange any and all
shares of the Senior Preferred Stock for a like number of shares (with a
liquidation preference equal to that of the surrendered shares) of another
series of the Corporation's senior exchangeable preferred stock that has
terms identical in all material respects to the Senior Preferred Stock
except that the Exchange Preferred Stock shall have been registered
pursuant to an effective registration statement under the Securities Act
and the certificates therefor shall contain no restrictive legends
thereon.
"Exchange Preferred Stock" means the series of the Corporation's
senior exchangeable preferred stock publicly offered in exchange for the
Senior Preferred Stock as contemplated by the Registration Rights
Agreement and having terms identical in all material respects to the
Senior Preferred Stock.
"Fair Market Value" of a Contingent Class A Share as of any date
means the value thereof as determined by a nationally recognized
investment bank and set forth in a written opinion of
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such investment bank mailed to each Holder with the notice of redemption
or notice of Change of Control Offer or upon the liquidation, dissolution
or winding up of the Corporation, as the case may be.
"FCC" means the Federal Communications Commission.
"Fully Diluted Basis" means, as of any date of determination, in
determining the number of shares of Common Stock deemed to be outstanding
as of such date, the sum of (i) the number of shares of Class A Common
Stock outstanding as of such date, (ii) the number of shares of Class A
Common Stock into which the outstanding shares of Class B Common Stock
outstanding as of such date may be converted and (iii) the number of
shares of Class A Common Stock and Class B Common Stock (assuming
conversion of such shares of Class B Common Stock into shares of Class A
Common Stock) into or for which rights, options, warrants or other
securities outstanding as of such date are exercisable or convertible,
after giving effect to any anti-dilution adjustment pursuant to any
agreement governing any such right, option, warrant or security relating
to any issuance of Class A Common Stock pursuant to paragraph (c)(iii)
hereof on such date.
"GAAP" means generally accepted accounting principles as in effect
on the Issue Date.
"Guarantee" means a guarantee of the Exchange Debentures.
"Guarantor" means a guarantor under the Indenture.
"Holder" means a holder of shares of Senior Preferred Stock,
Exchange Preferred Stock or Private Exchange Preferred Stock, as the
context requires, as reflected in
the stock books of the Corporation.
"incur" means, with respect to any Indebtedness or other obligations
of any Person, to create, issue, incur (by conversion, exchange or
otherwise), assume, guarantee or otherwise become liable in respect of
such Indebtedness or other obligation or the recording, as required
pursuant to GAAP or otherwise, of any such Indebtedness or other
obligation on the balance sheet of such Person (and "incurrence,"
"incurred,"
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"incurable," and "incurring" shall have meanings correlative to the
foregoing); provided that a change in GAAP that results in an obligation
of such Person that exists at such time becoming Indebtedness shall not be
deemed an incurrence of such Indebtedness.
"Indebtedness" means (without duplication), with respect to any
Person, any indebtedness at any time outstanding, secured or unsecured,
contingent or otherwise, which is for borrowed money (whether or not the
recourse of the lender is to the whole of the assets of such Person or
only to a portion thereof), or evidenced by bonds, notes, debentures or
similar instruments or representing the balance deferred and unpaid of the
purchase price of any property (excluding, without limitation, any
balances that constitute accounts payable or trade payables, and other
accrued liabilities arising in the ordinary course of business) if and to
the extent any of the foregoing indebtedness would appear as a liability
upon a balance sheet of such Person prepared in accordance with GAAP, and
shall also include, to the extent not otherwise included (i) any
Capitalized Lease Obligations, (ii) obligations secured by a lien to which
the property or assets owned or held by such Person is subject, whether or
not the obligation or obligations secured thereby shall have been assumed,
(iii) guarantees of items of other Persons which would be included within
this definition for such other Persons (whether or not such items would
appear upon the balance sheet of the guarantor), (iv) all obligations for
the reimbursement of any obligor on any letter of credit, banker's
acceptance or similar credit transaction, (v) in the case of the
Corporation, Disqualified Capital Stock of the Corporation or any
Restricted Subsidiary thereof, and (vi) obligations of any such Person
under any Interest Rate Agreement applicable to any of the foregoing (if
and to the extent such Interest Rate Agreement obligations would appear as
a liability upon a balance sheet of such Person prepared in accordance
with GAAP). The amount of Indebtedness of any Person at any date shall be
the outstanding balance at such date of all unconditional obligations as
described above and, with respect to contingent obligations, the maximum
liability upon the occurrence of the contingency giving rise to the
obligation, provided (i) that the amount outstanding at any time of any
Indebtedness issued with original issue discount, including the Old Notes,
is the principal amount of such Indebtedness less the remaining
unamortized portion of the
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original issue discount of such Indebtedness at such time as determined in
conformity with GAAP and (ii) that Indebtedness shall not include any
liability for federal, state, local or other taxes. Notwithstanding any
other provision of the foregoing definition, any trade payable arising
from the purchase of goods or materials or for services obtained in the
ordinary course of business shall not be deemed to be "Indebtedness" of
the Corporation or any Restricted Subsidiaries for purposes of this
definition. Furthermore, guarantees of (or obligations with respect to
letters of credit supporting) Indebtedness otherwise included in the
determination of such amount shall not also be included.
"Infinity Note" means the $3,000,000 aggregate principal amount of
Indebtedness issued by the Corporation to Infinity Holding Corp. of
Orlando on the Issue Date.
"Initial Dividend Period" means the dividend period commencing on
the Issue Date and ending on the first Regular Dividend Payment Date to
occur thereafter.
"Indenture" shall have the meaning ascribed to it in paragraph (f)
hereof.
"Interest Rate Agreement" means, for any Person, any interest rate
swap agreement, interest rate cap agreement, interest rate collar
agreement or other similar agreement designed to protect the party
indicated therein against fluctuations in interest rates.
"Investments" means, directly or indirectly, any advance, account
receivable (other than an account receivable arising in the ordinary
course of business), loan or capital contribution to (by means of
transfers of property to others, payments for property or services for the
account or use of others or otherwise), the purchase of any stock, bonds,
notes, debentures, partnership or joint venture interests or other
securities of, the acquisition, by purchase or otherwise, of all or
substantially all of the business or assets or stock or other evidence of
beneficial ownership of, any Person or the making of any investment in any
Person. Investments shall exclude extensions of trade credit on
commercially reasonable terms in accordance with normal trade practices.
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"Issue Date" means the date of original issuance of the Senior
Preferred Stock.
"Junior Stock" shall have the meaning ascribed to it in paragraph
(b) hereof.
"Mandatory Redemption Price" shall have the meaning ascribed to it
in paragraph (e) hereof.
"Moody's" means Moody's Investors Services, Inc. and its successors.
"Net Income" means, with respect to any Person for any period, the
net income (loss) of such Person determined in accordance with GAAP.
"Net Proceeds" means (a) in the case of any sale of Capital Stock by
the Corporation or any of its Restricted Subsidiaries, the aggregate net
proceeds received by the Corporation or such Restricted Subsidiary, after
payment of expenses, commissions and the like incurred in connection
therewith, whether such proceeds are in cash or in property (valued at the
fair market value thereof, as determined in good faith by the Board of
Directors, at the time of receipt) and (b) in the case of any exchange,
exercise, conversion or surrender of outstanding securities of any kind
for or into shares of Capital Stock of the Corporation or any of its
Restricted Subsidiaries which is not Disqualified Capital Stock, the net
book value of such outstanding securities on the date of such exchange,
exercise, conversion or surrender (plus any additional amount required to
be paid by the holder to the Corporation or such Restricted Subsidiary
upon such exchange, exercise, conversion or surrender, less any and all
payments made to the holders, e.g., on account of fractional shares and
less all expenses incurred by the Corporation in connection therewith).
For the avoidance of doubt, the issuance of Senior Preferred Stock,
Exchange Preferred Stock and Private Exchange Preferred Stock as dividends
on Senior Preferred Stock, Exchange Preferred Stock or Private Exchange
Preferred Stock, as the case may be, shall be deemed to result in no Net
Proceeds received by the Corporation from any such issuance.
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"Notes" means the $75,000,000 aggregate principal amount of 11%
Senior Notes issued by the Corporation on the Issue Date.
"Notes Indenture" means the indenture governing the Notes.
"Old Indenture" means the indenture under which the Old Notes were
issued.
"Old Notes" means the $107,059,000 aggregate principal amount of 12
1/2% Senior Notes due 2002 of the Corporation.
"Old Warrants" means Warrants issued pursuant to the Warrant
Agreement dated as of June 29, 1994 between the Corporation and IBJ
Schroder Bank & Trust Company, as
Warrant Agent.
"Parity Stock" shall have the meaning ascribed to it in paragraph
(b) hereof.
"Permitted Holders" means (i) Raul Alarcon Jr., (ii) the heirs,
executors, administrators testamentary, trustees, legatees or
beneficiaries of the Person described in (i) and (iii) a trust, the
beneficiaries of which include only persons described in (i) and (ii) and
their respective spouses and lineal descendants.
"Permitted Indebtedness" means:
(i) Indebtedness of the Corporation or any Restricted Subsidiary
arising under or in connection with the Credit Facility;
(ii) Indebtedness under the Notes and the guarantees thereof;
(iii) Indebtedness not covered by any other
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clause of this definition which is outstanding on the Issue Date
(including under the Old Notes and guarantees thereof and the
Infinity Note);
(iv) Indebtedness of the Corporation to any Restricted Subsidiary
and Indebtedness of any Restricted Subsidiary to the Corporation or
another Restricted Subsidiary;
(v) Purchase Money Indebtedness and Capitalized Lease Obligations
incurred to acquire property in the ordinary course of business
which Indebtedness and Capitalized Lease Obligations do not in the
aggregate exceed 5% of the Corporation's consolidated total assets;
(vi) Refinancing Indebtedness;
(vii) Indebtedness represented by any guarantee by a Guarantor of
Indebtedness of the Corporation permitted to be incurred under this
Certificate of Designation;
(viii) other Indebtedness of the Corporation not to exceed
$2,000,000 at any one time outstanding; and
(ix) Indebtedness under the Exchange Debentures and the
Guarantees.
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"Permitted Investments" means, for any Person, Investments made on
or after the Issue Date consisting of
(i) Investments by the Corporation, or by a Restricted
Subsidiary thereof, in the Corporation or a Restricted
Subsidiary;
(ii) Temporary Cash Investments;
(iii) Investments by the Corporation, or by a Restricted
Subsidiary thereof, in a Person, if as a result of such
Investment (a) such Person becomes a Restricted Subsidiary of
the Corporation or (b) 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 Restricted Subsidiary thereof; and
(iv) an Investment that is made by the Corporation or a
Restricted Subsidiary thereof in the form of any stock, bonds,
notes, debentures, partnership or joint venture interests or
other securities that are issued by a third party to the
Corporation or Restricted Subsidiary solely as partial
consideration for the consummation of an Asset Sale that is
otherwise permitted under this
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Certificate of Designation.
"Person" means an individual, partnership, corporation,
limited liability company, unincorporated organization, trust or joint
venture, or a governmental agency or political subdivision thereof.
"Preferred Stock" means any Capital Stock of a Person, however
designated, which entitles the holder thereof to a preference with respect
to dividends, distributions or liquidation proceeds of such Person over
the holders of other Capital Stock issued by such Person.
"Private Exchange Preferred Stock" means a series of the
Corporation's senior exchangeable preferred stock contemplated by the
Registration Rights Agreement issued under the same certificate of
designation as the Exchange Preferred Stock and having terms identical in
all material respects to the Senior Preferred Stock.
"pro forma" means, unless otherwise provided herein, with
respect to any calculation made or required to be made pursuant hereto, a
calculation in accordance with Article II of Regulation S-X under the
Securities Act.
"Public Equity Offering" means an underwritten public offering
of Common Stock of the Corporation pursuant to a registration statement
filed with and declared effective by the Commission in accordance with the
Securities Act.
"Purchase Money Indebtedness" means any Indebtedness incurred
in the ordinary course of business by a Person to finance the cost
(including the cost of construction) of an item of property, the principal
amount of which Indebtedness does not exceed the sum of (i) 100% of such
cost and (ii) reasonable fees and expenses of such Person incurred in
connection therewith.
"Redeemable Dividend" means, for any dividend or distribution
with regard to Disqualified Capital Stock, the quotient of the dividend or
distribution divided by the difference between one and the maximum
statutory federal income tax rate (expressed as a decimal number between 1
and 0) applicable to the issuer of such Disqualified Capital Stock.
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"Redemption Date", with respect to any shares of Senior
Preferred Stock, means the date on which such shares of Senior Preferred
Stock are redeemed by the Corporation.
"Redemption Notice" shall have the meaning ascribed to it in
paragraph (e) hereof.
"Refinancing Indebtedness" means Indebtedness that refunds,
refinances or extends any Indebtedness of the Corporation outstanding on
the Issue Date or other Indebtedness permitted to be incurred by the
Corporation or its Restricted Subsidiaries (other than pursuant to clause
(iv) of the definition of "Permitted Indebtedness") pursuant to the terms
of this Certificate of Designation but only to the extent that (i) the
Refinancing Indebtedness is subordinated to the Exchange Debentures to at
least the same extent as the Indebtedness being refunded, refinanced or
extended, if at all, (ii) the Refinancing Indebtedness is scheduled to
mature either (a) no earlier than the Indebtedness being refunded,
refinanced or extended, or (b) after the maturity date of the Exchange
Debentures, (iii) the portion, if any, of the Refinancing Indebtedness
that is scheduled to mature on or prior to the maturity date of the
Exchange Debentures has a weighted average life to maturity at the time
such Refinancing Indebtedness is incurred that is equal to or greater than
the weighted average life to maturity of the portion of the Indebtedness
being refunded, refinanced or extended that is scheduled to mature on or
prior to the maturity date of the Exchange Debentures, (iv) such
Refinancing Indebtedness is in an aggregate principal amount that is equal
to or less than the sum of (a) the aggregate principal amount then
outstanding under the Indebtedness being refunded, refinanced or extended,
(b) the amount of accrued and unpaid interest, if any, and premiums owed,
if any, not in excess of preexisting prepayment provisions on such
Indebtedness being refunded, refinanced or extended and (c) the amount of
customary fees, expenses and costs related to the incurrence of such
Refinancing Indebtedness and (v) such Refinancing Indebtedness is incurred
by the same Person that initially incurred the Indebtedness being
refunded, refinanced or extended, except that the Corporation may incur
Refinancing Indebtedness to refund, refinance or extend Indebtedness of
any Wholly-Owned Subsidiary of the Corporation.
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"Registration Rights Agreement" means the Preferred Stock
Registration Rights Agreement dated as of the Issue Date among the
Corporation, the Guarantors and CIBC Wood Gundy Securities Corporation.
"Regular Dividend Payment Date" means March 15, and September 15 of
each year.
"Regular Dividend Record Date" means March 1 and September 1 of each
year.
"Restricted Payment" means any of the following: (i) the declaration
or payment of any dividend or any other distribution or payment on Capital
Stock of the Corporation or any Restricted Subsidiary of the Corporation
or any payment made to the direct or indirect holders (in their capacities
as such) of Capital Stock of the Corporation or any Restricted Subsidiary
of the Corporation (other than (x) dividends or distributions payable
solely in Capital Stock (other than Disqualified Capital Stock) or in
options, warrants or other rights to purchase Capital Stock (other than
Disqualified Capital Stock) and (y) in the case of Restricted Subsidiaries
of the Corporation, dividends or distributions payable to the Corporation
or to a Wholly-Owned Restricted Subsidiary of the Corporation), (ii) the
purchase, redemption or other acquisition or retirement for value of any
Capital Stock of the Corporation or any of its Restricted Subsidiaries
(other than (i) Senior Preferred Stock, Exchange Preferred Stock and
Private Exchange Preferred Stock and (ii) Capital Stock owned by the
Corporation), (iii) the making of any principal payment on, or the
purchase, defeasance, repurchase, redemption or other acquisition or
retirement for value, prior to any scheduled maturity, scheduled repayment
or scheduled sinking fund payment, of any Indebtedness which is
subordinated in right of payment to the Exchange Debentures or a Guarantee
(other than any such subordinated Indebtedness acquired in anticipation of
satisfying a scheduled sinking fund obligation, principal installment or
final maturity, in each case due within one year of the date of
acquisition), (iv) the making of any Investment or guarantee of any
Investment in any Person other than a Permitted Investment, (v) any
designation of a Restricted Subsidiary as an Unrestricted Subsidiary and
(vi) forgiveness of any Indebtedness of an Affiliate of the Corporation to
the Corporation or a Restricted Subsidiary existing on the Issue Date.
52
<PAGE> 53
"Restricted Subsidiary" means a Subsidiary of the Corporation other
than an Unrestricted Subsidiary and includes all of the Subsidiaries of
the Corporation existing as of the Issue Date. The Board of Directors may
designate any Unrestricted Subsidiary or any Person that is to become a
Subsidiary as a Restricted Subsidiary if immediately after giving effect
to such action (and treating any Acquired Indebtedness as having been
incurred at the time of such action), the Corporation could have incurred
at least $1.00 of additional Indebtedness (other than Permitted
Indebtedness) pursuant to Paragraph (l)(i).
"Securities Act" means the Securities Act of 1933, as amended, and
the rules and regulations promulgated thereunder.
"Senior Stock" shall have the meaning ascribed to it in paragraph
(b) hereof.
"Subsidiary" of any specified Person means any corporation,
partnership, joint venture, association or other business entity, whether
now existing or hereafter organized or acquired, (i) in the case of a
corporation, of which more than 50% of the total voting power of the
Capital Stock entitled (without regard to the occurrence of any
contingency) to vote in the election of directors, officers or trustees
thereof is held by such first-named Person or any of its Subsidiaries, or
(ii) in the case of a partnership, joint venture, association or other
business entity, with respect to which such first-named Person or any of
its Subsidiaries has the power to direct or cause the direction of the
management and policies of such entity by contract or otherwise or if in
accordance with generally accepted accounting principles such entity is
consolidated with the first-named Person for financial statement purposes.
"Temporary Cash Investments" means (i) Investments in marketable,
direct obligations issued or guaranteed by the United States of America,
or of any governmental agency or political subdivision thereof, maturing
within 365 days of the date of purchase; (ii) Investments in certificates
of deposit issued by a bank organized under the laws of the United States
of America or any state thereof or the District of Columbia, in each case
having capital, surplus and undivided profits totaling more than
$500,000,000 and rated at least A by Standard & Poor's Corporation and A-2
by Moody's Investors Service, Inc., maturing
53
<PAGE> 54
within 365 days of purchase; or (iii) Investments not exceeding 365 days
in duration in money market funds that invest substantially all of such
funds' assets in the Investments described in the preceding clauses (i)
and (ii).
"Unrestricted Subsidiary" means (a) any Subsidiary of an
Unrestricted Subsidiary and (b) any Subsidiary of the Corporation which is
classified after the Issue Date as an Unrestricted Subsidiary by a
resolution adopted by the Board of Directors; provided that a Subsidiary
organized or acquired after the Issue Date may be so classified as an
Unrestricted Subsidiary only if such classification is in compliance with
paragraph (l)(i).
"Voting Rights Triggering Event" shall have the meaning ascribed to
it in paragraph f hereof.
"Warrants" means the Warrants issued pursuant to the Warrant
Agreement dated as of March 15, 1997 between the Corporation and IBJ
Schroder Bank & Trust Company, as Warrant Agent.
"Wholly Owned Restricted Subsidiary" means any Restricted Subsidiary
which is a Wholly-Owned Subsidiary.
"Wholly-Owned Subsidiary" means any Subsidiary of the Corporation,
all of the outstanding voting securities (other than directors' qualifying
shares) of which are owned, directly or indirectly, by the Corporation.
IN WITNESS WHEREOF, said Spanish Broadcasting System, Inc., has
caused this Certificate of Designation to be signed by Raul Alarcon, Jr. its
President and Chief Executive Officer, this 17th day of March, 1997.
54
<PAGE> 55
SPANISH BROADCASTING SYSTEM, INC.
By: /s/ Raul Alarcon, Jr.
---------------------
Name: Raul Alarcon, Jr.
Title: President
55
<PAGE> 1
Exhibit 4.1
SECOND SUPPLEMENTAL INDENTURE
This Second Supplemental Indenture (the "Supplemental
Indenture") is made and entered into as of the 2lst day of March, 1997 by and
among Spanish Broadcasting System, Inc., a Delaware corporation (the "Company"),
Spanish Broadcasting System, Inc., a New Jersey corporation, Spanish
Broadcasting System of California, Inc., a California corporation, Spanish
Broadcasting System of Florida, Inc., a Florida corporation, Spanish
Broadcasting System Network, Inc., a New York corporation, SBS Promotions, Inc.,
a New York corporation, Alarcon Holdings, Inc., a New York corporation, and SBS
of Greater New York, Inc., a New York corporation (each individually, a
"Guarantor" and collectively, the "Guarantors"), and IBJ Schroder Bank & Trust
Company, as trustee (the "Trustee")
WHEREAS, on February 21, 1997, Spanish Broadcasting System of
New York, Inc. ("SBS of New York"), a Guarantor, merged into Spanish
Broadcasting System, Inc., a New Jersey corporation ("SBS-NJ"), with SBS-NJ as
the surviving corporation (the "Merger");
WHEREAS, the Company, the Guarantors and the Trustee have
heretofore executed and delivered an Indenture dated as of June 29, 1994 (as
supplemented by the First Supplemental Indenture dated as of March 26, 1996,
the "Indenture") providing for the issuance by the Company of $107,059,000
aggregate principal amount of 12 1/2% Senior Notes Due 2002 (the "Notes");
WHEREAS, the Company and the Guarantors desire to amend the
Indenture as set forth in this Supplemental Indenture for the purpose of
changing certain provisions of the Indenture as hereinafter set forth;
WHEREAS, all of the conditions set forth in Article 8 of the
Indenture with respect to the execution, delivery, and validity of this
Supplemental Indenture have been performed and fulfilled and the execution and
delivery hereof have been in all respects duly authorized;
NOW, THEREFORE, the Company, the Guarantors and the Trustee
hereby agree as follows:
<PAGE> 2
ARTICLE I
AMENDMENTS PURSUANT TO
SECTION 8.02. OF THE INDENTURE
Section 1.1. Amendments of Section 1.01 of the Indenture.
(a) Effective as of the Operative Date (as defined in Section
2.1), Section 1.01 of the Indenture shall be amended by replacing the definition
of "Permitted Indebtedness" in Section 1.01 of the Indenture in its entirety
with the following:
"Permitted Indebtedness" means:
(i) Indebtedness of the Company or any Restricted
Subsidiary arising under or in connection with the
Credit Facility;
(ii) Indebtedness under the Notes and the Guarantees;
(iii) Indebtedness not covered by any other clause of
this definition which is outstanding on the date
of the Indenture;
(iv) Indebtedness of the Company to any Restricted
Subsidiary and Indebtedness of any Restricted
Subsidiary to the Company or another Restricted
Subsidiary;
(v) Purchase Money Indebtedness and Capitalized Lease
Obligations incurred to acquire property in the
ordinary course of business which Indebtedness and
Capitalized Lease Obligations do not in the aggregate
exceed 5% of the Company's consolidated total assets;
(vi) Refinancing Indebtedness;
(vii) Indebtedness under the New Notes and the New Notes
Guarantees; provided that New Notes and related New
Notes Guarantees issued upon exchange of Series A
Preferred Stock shall constitute Permitted
Indebtedness only to the extent the principal amount
thereof does not exceed the
2
<PAGE> 3
principal amount of Notes redeemed or otherwise
retired after the date of original issuance of the
New Notes and Series A Preferred Stock;
(viii) the Series A Preferred Stock and all dividends
with respect thereto;
(ix) Indebtedness under the New Senior Notes and the
New Senior Notes Guarantees; and
(x) Indebtedness under the Infinity Note.
(b) Effective as of the Operative Date, Section 1.01 of the
Indenture shall be amended by adding the following definitions to Section 1.01
of the Indenture:
"Infinity Note" means the $3,000,000 aggregate principal
amount of Indebtedness issued by the Company to Infinity Holding Corp. of
Orlando in connection with the acquisition of radio station WYSY-FM in Chicago.
"New Senior Notes" means securities issued under the Indenture
(the "New Senior Notes Indenture") dated as of March 15, 1997 by and among the
Company, the Guarantors named therein and IBJ Schroder Bank & Trust Company, as
Trustee, not to exceed $75,000,000 aggregate principal amount at any one time
outstanding.
"New Senior Note Guarantees" means the guarantees of the New
Senior Notes issued by Subsidiaries of the Company pursuant to the New Senior
Notes Indenture.
"Primary Warrants" means the 45,557 warrants to purchase
Class A Common Stock of the Company issued pursuant to the Warrant Agreement
dated as of March 25, 1996 between the Company and IBJ Schroder Bank & Trust
Company, as Warrant Agent.
Section 1.2. Amendment of Section 4.09 of the Indenture.
Effective as of the Operative Date, Section 4.09 of the
Indenture shall be amended by replacing Section 4.09 in the Indenture in its
entirety with the following:
3
<PAGE> 4
Section 4.09. Limitation on Restricted Payments.
The Company will not make, and will not permit any of its
Restricted Subsidiaries to, directly or indirectly, make, any Restricted
Payment, unless:
(a) no Default or Event of Default shall have occurred and be
continuing at the time of or after giving effect to such Restricted
Payment;
(b) immediately after giving effect to such Restricted
Payment, the Company could incur $1.00 of additional Indebtedness
(other than Permitted Indebtedness) under Section 4.06: and
(i) immediately after giving effect to such Restricted
Payment, the aggregate of all Restricted Payments declared or made
after the Issue Date does not exceed the sum of (1) 50% of the
Company's cumulative Consolidated Net Income (or in the event such
Consolidated Net Income shall be a deficit, minus 100% of such deficit)
after June 26, 1994, and (2) 100% of the aggregate Net Proceeds and the
fair market value of marketable securities or other property received
by the Company from the issue or sale, after the Issue Date, of Capital
Stock (other than Disqualified Capital Stock, Series A Preferred Stock,
Capital Stock of the Company sold to any Subsidiary of the Company and
the proceeds from the issuance of capital stock pursuant to the
Warrants or Warrants issued in connection with the original issuance of
the New Notes and the Series A Preferred Stock) of the Company or any
Indebtedness or other securities of the Company convertible into,
exercisable or exchangeable for Capital Stock (other than Disqualified
Capital Stock) of the Company which has been so converted or exercised
or exchanged, as the case may be. For purposes of determining under
this clause (c) the amount expended for Restricted Payments, cash
distributed shall be valued at the face amount thereof and property
other than cash shall be valued at its fair market value.
The provisions of this Section 4.09 shall not prohibit (1) the payment
of any distribution within 60 days after the date of declaration thereof, if at
such date of declaration such payment would comply with the provisions of the
Indenture, (ii)
4
<PAGE> 5
the retirement of any shares of Capital Stock of the Company or subordinated
Indebtedness by conversion into, or by or in exchange for, shares of Capital
Stock (other than Disqualified Capital Stock or Series A Preferred Stock), or
out of, the Net Proceeds of the substantially concurrent sale (other than to a
Subsidiary of the Company) of other shares of Capital Stock of the Company
(other than Disqualified Capital Stock or Series A Preferred Stock), (iii) the
redemption or retirement of Indebtedness of the Company subordinated to the
Notes in exchange for, by conversion into, or out of the Net Proceeds of, a
substantially concurrent sale or incurrence of Indebtedness which qualifies as
Refinancing Indebtedness (other than any Indebtedness owed to a Subsidiary),
(iv) the retirement of any shares of Disqualified Capital Stock or Series A
Preferred Stock by conversion into, or by exchange for, shares of Disqualified
Capital Stock, or out of the Net Proceeds of the substantially concurrent sale
(other than to a Subsidiary of the Company) of other shares of Disqualified
Capital Stock; provided that (a) such Disqualified Capital Stock is not subject
to mandatory redemption earlier than either the maturity of the Notes, the
Disqualified Capital Stock or the Series A Preferred Stock being so refunded or
refinanced, (b) the portion, if any, of the Disqualified Capital Stock that is
subject to mandatory redemption on or prior to the maturity date of the Notes
has a weighted average life to mandatory redemption at the time such
Disqualified Capital Stock is incurred that is equal to or greater than the
weighted average life to mandatory redemption of the portion of the Disqualified
Capital Stock or the Series A Preferred Stock being refunded or refinanced that
is subject to mandatory redemption on or prior to the maturity date of the
Notes, (c) such Disqualified Capital Stock is in an aggregate liquidation
preference that is equal to or less than the sum of (x) the aggregate
liquidation preference of Disqualified Capital Stock or Series A Preferred Stock
being refunded, refinanced or extended, (y) the amount of accrued and unpaid
dividends, if any, and premiums owed, if any, on the Disqualified Capital Stock
or Series A Preferred Stock being refunded or refinanced and (z) the amount of
customary fees, expenses and costs related to the incurrence of such
Disqualified Capital Stock or Series A Preferred Stock and (d) such Disqualified
Capital Stock is incurred by the same Person that initially incurred the
Disqualified Capital Stock or Series A Preferred Stock being refunded,
refinanced or extended, except that the Company may incur Disqualified Capital
Stock to refund or refinance
5
<PAGE> 6
Disqualified Capital Stock of any Wholly-Owned Restricted Subsidiary of the
Company, (v) the payment of dividends (whether in cash or in shares of Series A
Preferred Stock) on shares of Series A Preferred Stock in accordance with the
terms of the Certificate of Designation, the mandatory or optional redemption of
shares of Series A Preferred Stock in accordance with the terms of the
Certificate of Designation, the mandatory or optional redemption of shares of
Series A Preferred Stock in accordance with the terms of the Certificate of
Designation or the exchange of Series A Preferred Stock for New Notes in
accordance with the terms of the Certificate of Designation, provided that, for
purposes of calculating the amount of Restricted Payments previously made for
purposes of clause (c) of the preceding paragraph, (a) the amount of cash
dividends and the liquidation preference of Series A Preferred Stock dividends
paid on shares of Series A Preferred Stock, (b) the redemption price paid for
any redemption of Series A Preferred Stock and (c) the principal amount of any
New Notes issued in exchange for Series A Preferred Stock shall be included as
Restricted Payments in such calculation (x) for as long as any Series A
Preferred Stock remains outstanding, to the extent of such amounts, and (b) if
no Series A Preferred Stock shall remain outstanding, to the extent that such
amounts, in the aggregate, exceed $37,500,000, (vi) the repurchase by the
Company of the Primary Warrants in accordance with the terms thereof or (vii) so
long as no Default or Event of Default shall have occurred and be continuing,
the payment of dividends and distributions to the stockholders and
warrantholders of the Company in an amount not to exceed $4,000,000 in the
aggregate.
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 Section 4.09 were computed, which calculations may
be based upon the Company's latest available financial statements, and that no
Default or Event of Default exists and is continuing and no Default or Event of
Default will result from making the Restricted Payment.
6
<PAGE> 7
Section 1.3. Amendments to Section 4.10 of the Indenture.
Effective as of the Operative Date, Section 4.10 of the Indenture
shall be amended by replacing Section 4.10 in the Indenture in its entirety with
the following:
Section 4.10. Limitations on Certain Asset Sales.
(a) The Company will not, and will not permit any of its
Restricted Subsidiaries to, consummate an Asset Sale unless (i) the Company or
its Restricted Subsidiaries, as the case may be, receive consideration at the
time of such sale or other disposition at least equal to the fair market value
thereof (as determined in good faith by the Company's Board of Directors, and
evidenced by a Board Resolution); (ii) not less than 85% of the consideration
received by the Company or its Subsidiaries, as the case may be, is in the form
of cash or instruments included in the definition of Temporary Cash Investments;
and (iii) the Asset Sale Proceeds received by the Company or such Restricted
Subsidiary are applied (A) first, (1) to repay Indebtedness incurred in
compliance with this Indenture secured by Permitted Liens on assets or property
acquired after June 29, 1994 which are subject to such Asset Sale, to the extent
such payment is required by the terms of the agreements governing such
Indebtedness, or (2) to the extent the Company elects, to an investment in
assets (including Capital Stock or other securities purchased in connection with
the acquisition of Capital Stock or property of another person) used or useful
in the radio, television, publishing, programming or business related thereto,
provided that such investment occurs or the Company or a Restricted Subsidiary
enters into contractual commitments to make such investment, subject only to
customary conditions (other than the obtaining of financing), on or prior to the
181st day following receipt of such Asset Sale Proceeds (the "Reinvestment
Date") and Asset Sale Proceeds contractually committed are so applied within 360
days following the receipt of such Asset Sale Proceeds; and (B) second, if on
the Reinvestment Date with respect to any Asset Sale, the Available Asset Sale
Proceeds exceed $5 million, the Company shall apply an amount equal to the
Available Asset Sale Proceeds to an offer to repurchase the Notes, at a purchase
price in cash equal to 100% of the Accreted Value of the Notes, if the date of
purchase is prior to June 15, 1997, and 100% of the principal amount thereof, if
the date of purchase is on or after June 15, 1997, in each case plus accrued
7
<PAGE> 8
and unpaid interest, if any, to the date of repurchase (an "Excess Proceeds
Offer"). Notwithstanding the foregoing, (x) Asset Sale Proceeds received from an
Asset Sale including the radio broadcast licenses for the station operated as
WSKQ-FM, New York, or KLAX-FM, Los Angeles, on the Issue Date may not be applied
pursuant to clause (iii)(A) of the preceding sentence and the Reinvestment Date
with respect to such Asset Sale Proceeds shall be the date of receipt thereof
and (y) the greater of $25.0 million, the aggregate, of, or 50% of, the Asset
Sale Proceeds received from Asset Sales including the radio broadcast licenses
for the stations operated as WXLX-AM, New York, KXMG-AM, Los Angeles, and
WCMQ-AM, Miami, may not be applied pursuant to clause (iii)(A) of the preceding
sentence, the Reinvestment Date with respect to such Asset Sale Proceeds shall
be the date of receipt thereof and the purchase price with respect to the
applicable Excess Proceeds Offer with such Asset Sale Proceeds shall be 110% of
the Accreted Value of the Notes, if the date of purchase is prior to June 15,
1997, and 110% of the principal amount of the Notes, if the date of purchase is
on or after June 15, 1997, in each case plus accrued and unpaid interest, if
any, to the date of purchase. If an Excess Proceeds Offer is not fully
subscribed, the Company may retain the portion of the Available Asset Sale
proceeds not required to repurchase Notes.
Section 1.4. Merger.
Pursuant to the Merger, SBS-NJ hereby assumes all of the obligations
of SBS of New York under the Note and the In denture. The obligations under the
Indenture shall remain in full force and effect. The provisions of this Section
1.4 shall be effective as of the date hereof.
ARTICLE II
OPERATIVE DATE
Section 2.1. Operative Date.
(a) Other than in connection with Section 1.4 hereof, as used
in this Supplemental Indenture, the term "Operative Date" means the date on
which the Company delivers to the Trustee an Officers' Certificate (as defined
in the Indenture) certifying
8
<PAGE> 9
that the acquisitions of radio stations WYSY-FM in Chicago, Illinois and WRMA-FM
and WXDJ-FM in Miami, Florida have been consummated by the Company.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
Section 3.1. Representations of the Company and the Guarantors.
The Company and the Guarantors jointly and severally, represent and
warrant that:
(a) This Supplemental Indenture has been duly authorized by
each of the Company and the Guarantors, and, assuming due authorization,
execution and delivery by the Trustee, will be a legal, valid and binding
agreement of each of the Company and the Guarantors enforceable against each of
the Company and the Guarantors in accordance with its terms, except as (1) the
enforceability thereof may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in effect
affecting creditors' rights generally, (ii) the availability of equitable
remedies may be limited by equitable principles of general applicability
(regardless of whether in a proceeding in equity or at law) and as may be
limited by the discretion of the court before which any proceeding therefor may
be brought and (iii) rights to indemnity and contribution may be limited by
state or Federal laws relating to securities or by policies underlying such
laws;
(b) The execution, delivery and performance by the Company and
the Guarantors of this Supplemental Indenture, and the consummation of the
transactions contemplated hereby, will not (i) conflict with or result in a
breach or violation of any of the terms or provisions of, or constitute a
default under, any Indenture, mortgage, deed of trust, bank loan or credit
agreement, lease or other agreement or instrument to which the Company or any
Guarantor is a party or by which the Company or any of the Guarantors is bound
or to which any of the property or assets of the Company or any of the
Guarantors is subject, (ii) result in any violation of the provisions of the
Certificate
9
<PAGE> 10
of Incorporation or the By-laws, in each case as amended, of the Company or any
of the Guarantors or any statute or any order, rule or regulation of any court
or governmental agency or body having jurisdiction over the Company or any of
the Guarantors or any of their properties, (iii) result in or require the
creation or imposition of any Lien (as defined in the Indenture) upon or with
respect to any of the properties of the Company or any of the Guarantors, or
(iv) constitute a default under any ordinance, license or permit, except, in the
case of the events specified clauses (i), (iii) and (iv) above, for such
conflicts, violations or defaults which would not have a material adverse effect
upon the business, assets, condition (financial or otherwise), results of
operations or prospects of the Company and the Guarantors, taken as a whole, or
on the ability of each of the Company and the Guarantors to perform its
respective obligations under the Indenture; and
(c) No consent, approval, authorization, order, registration
or qualification of or with any court or governmental agency or body is required
for the consummation of the transactions contemplated by this Supplemental
Indenture; and each of the Company and the Guarantors has full power and
authority to enter into and perform its respective obligations under this
Supplemental Indenture.
Section 3.2. Representations of the Trustee.
The Trustee represents that it is duly authorized to execute and
deliver this Supplemental Indenture and perform its obligations hereunder and
that the statements made by it in a Statement of Eligibility on Form T-l, if
any, supplied to the Company are true and accurate subject to the qualifications
set forth therein.
ARTICLE IV
MISCELLANEOUS
Section 4.1. As amended by this Supplemental Indenture, the Indenture is in all
respects ratified and confirmed, and all the terms, conditions and provisions
thereof shall remain in full force and effect.
10
<PAGE> 11
Section 4.2. This Supplemental Indenture and the rights and obligations
hereunder shall be governed by, and construed in accordance with, the laws of
the State of New York but without giving effect to applicable principles of
conflicts of law to the extent that the application of the laws of another
jurisdiction would be required thereby.
Section 4.3. This Supplemental Indenture may be executed in any number of
counterparts each of which shall be an original, but such counterparts shall
together constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Second
Supplemental Indenture to be duly executed as of this 21st day of March, 1997.
SPANISH BROADCASTING SYSTEM, INC.,
for itself and as successor by merger
to Spanish Broadcasting System of New
York, Inc.
By: /s/ Raul Alarcon, Jr.
-------------------------
Name: Raul Alarcon, Jr.
Time: President
By: /s/ Joseph Garcia
-------------------------
Name: Joseph Garcia
Time: Executive V.P. and
Chief Financial Officer
11
<PAGE> 12
Guarantors:
SPANISH BROADCASTING SYSTEM
OF FLORIDA, INC.
SPANISH BROADCASTING SYSTEM
NETWORK, INC.
SPANISH BROADCASTING SYSTEM,
INC. (a New Jersey
corporation)
SBS PROMOTIONS, INC.
ALARCON HOLDINGS, INC.
SBS OF GREATER NEW YORK, INC.
By: /s/ Raul Alarcon, Jr.
-----------------------
Name: Raul Alarcon, Jr.
Title: President
By: /s/ Joseph Garcia
-----------------------
Name: Joseph Garcia
Title: Executive V.P. and
Chief Financial Officer
12
<PAGE> 13
Guarantor:
SPANISH BROADCASTING
SYSTEM OF CALIFORNIA, INC.
By: /s/ Raul Alarcon, Jr.
------------------------
Name: Raul Alarcon, Jr.
Title: President
By: /s/ Joseph Garcia
------------------------
Name: Joseph Garcia
Title: Executive V.P. and
Chief Financial Officer
IBJ SCHRODER BANK & TRUST
COMPANY, as Trustee
By: /s/ James Freeman
------------------------
Name: James Freeman
Title: Assistant Vice President
13
<PAGE> 1
Exhibit 4.2
INDENTURE
Dated as of March 15, 1997
among
SPANISH BROADCASTING SYSTEM, INC.,
as Issuer,
SPANISH BROADCASTING SYSTEM, INC.
(a New Jersey corporation),
SPANISH BROADCASTING SYSTEM OF CALIFORNIA, INC.,
SPANISH BROADCASTING SYSTEM OF FLORIDA, INC.,
SPANISH BROADCASTING SYSTEM NETWORK, INC.,
SBS PROMOTIONS, INC.,
ALARCON HOLDINGS, INC. and
SBS OF GREATER NEW YORK, INC.,
as Guarantors,
and
IBJ SCHRODER BANK & TRUST COMPANY,
as Trustee
----------------
$75,000,000
11% Senior Notes due 2004, Series A
11% Senior Notes due 2004, Series B
<PAGE> 2
CROSS-REFERENCE TABLE
<TABLE>
<CAPTION>
TIA 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)............................................. 7.08; 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).......................................... 7.06
(b)(2).......................................... 7.06; 7.07
(c)............................................. 7.05; 7.06; 11.02
(d)............................................. 7.06
314(a)............................................. 4.08; 4.10; 11.02
(b)............................................. N.A.
(c)(1).......................................... 4.08; 11.04
(c)(2).......................................... 11.04
(c)(3).......................................... 4.08; 11.04
(d)............................................. N.A.
(e)............................................. 11.05
(f)............................................. N.A.
315(a)............................................. 7.01(b)
(b)............................................. 7.05; 11.02
(c)............................................. 7.01(a)
(d)............................................. 7.01(c)
(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; 9.04
(c)............................................. 9.04
317(a)(1).......................................... 6.08
(a)(2).......................................... 6.09
(b)............................................. 2.04
</TABLE>
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<TABLE>
<S> <C>
318(a)............................................. 11.01
(c)............................................. 11.01
</TABLE>
"N.A." means Not Applicable.
NOTE: This Cross-Reference Table shall not, for any purpose,
be deemed to be a part of the Indenture.
3
<PAGE> 4
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C> <C>
ARTICLE ONE
DEFINITIONS AND INCORPORATION
BY REFERENCE
Section 1.01 Definitions...................................... 11
Section 1.02 Incorporation by Reference of TIA................ 35
Section 1.03 Rules of Construction............................ 36
ARTICLE TWO
THE SECURITIES
Section 2.01 Form and Dating.................................. 36
Section 2.02 Execution and Authentication..................... 37
Section 2.03 Registrar and Paying Agent....................... 38
Section 2.04 Paying Agent To Hold Assets in
Trust.......................................... 39
Section 2.05 Securityholder Lists............................. 39
Section 2.06 Transfer and Exchange............................ 40
Section 2.07 Replacement Securities........................... 41
Section 2.08 Outstanding Securities........................... 41
Section 2.09 Treasury Securities.............................. 42
Section 2.10 Temporary Securities............................. 42
Section 2.11 Cancellation..................................... 42
Section 2.12 Defaulted Interest............................... 43
</TABLE>
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<TABLE>
<CAPTION>
<S> <C> <C>
Section 2.13 CUSIP Number..................................... 43
Section 2.14 Deposit of Moneys................................ 44
Section 2.15 Book-Entry Provisions for Global
Securities..................................... 44
Section 2.16 Registration of Transfers and
Exchanges...................................... 45
ARTICLE THREE
REDEMPTION
Section 3.01 Notices to Trustee............................... 52
Section 3.02 Selection of Securities To Be
Redeemed....................................... 52
Section 3.03 Notice of Redemption............................. 53
Section 3.04 Effect of Notice of Redemption................... 54
Section 3.05 Deposit of Redemption Price...................... 54
Section 3.06 Securities Redeemed in Part...................... 54
ARTICLE FOUR
COVENANTS
Section 4.01 Payment of Securities............................ 55
Section 4.02 Maintenance of Office or Agency.................. 55
Section 4.03 Limitation on Additional
Indebtedness................................... 55
Section 4.04 Limitation on Restricted Payments................ 56
Section 4.05 Corporate Existence.............................. 59
Section 4.06 Payment of Taxes and Other Claims................ 59
</TABLE>
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<TABLE>
<S> <C> <C>
Section 4.07 Maintenance of Properties and
Insurance...................................... 59
Section 4.08 Compliance Certificate; Notice of
Default........................................ 60
Section 4.09 Compliance with Laws............................. 61
Section 4.10 SEC Reports...................................... 62
Section 4.11 Waiver of Stay, Extension or Usury
Laws........................................... 62
Section 4.12 Limitation on Certain Asset Sales................ 63
Section 4.13 Limitation on Investments........................ 66
Section 4.14 Limitation on Preferred Stock of
Restricted Subsidiaries........................ 66
Section 4.15 Limitation on Liens.............................. 66
Section 4.16 [Intentionally Omitted].......................... 67
Section 4.17 [Intentionally Omitted].......................... 67
Section 4.18 Limitation on Transactions with
Affiliates..................................... 67
Section 4.19 Limitation on Creation of
Subsidiaries................................... 68
Section 4.20 Limitation on Capital Stock of
Restricted Subsidiaries........................ 68
Section 4.21 Lines of Business................................ 69
Section 4.22 Payments for Consent............................. 69
Section 4.23 Limitation on Sale and Lease-Back
Transactions................................... 69
Section 4.24 Change of Control................................ 69
ARTICLE FIVE
SUCCESSOR CORPORATION
Section 5.01 Mergers, Consolidations and Sales
of Assets...................................... 72
</TABLE>
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<TABLE>
<S> <C> <C>
Section 5.02 Successor Corporation Substituted................ 74
ARTICLE SIX
DEFAULT AND REMEDIES
Section 6.01 Events of Default................................ 75
Section 6.02 Acceleration..................................... 77
Section 6.03 Other Remedies................................... 78
Section 6.04 Waiver of Past Defaults.......................... 79
Section 6.05 Control by Majority.............................. 79
Section 6.06 Limitation on Suits.............................. 80
Section 6.07 Rights of Holders To Receive
Payment........................................ 80
Section 6.08 Collection Suit by Trustee....................... 80
Section 6.09 Trustee May File Proofs of Claim................. 81
Section 6.10 Priorities....................................... 82
Section 6.11 Undertaking for Costs............................ 82
ARTICLE SEVEN
TRUSTEE
Section 7.01 Duties of Trustee................................ 83
Section 7.02 Rights of Trustee................................ 84
Section 7.03 Individual Rights of Trustee..................... 86
Section 7.04 Trustee's Disclaimer............................. 86
</TABLE>
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<TABLE>
<CAPTION>
<S> <C> <C>
Section 7.05 Notice of Default................................ 86
Section 7.06 Reports by Trustee to Holders.................... 87
Section 7.07 Compensation and Indemnity....................... 87
Section 7.08 Replacement of Trustee........................... 89
Section 7.09 Successor Trustee by Merger, Etc................. 90
Section 7.10 Eligibility; Disqualification.................... 90
Section 7.11 Preferential Collection of Claims
Against Company................................ 91
ARTICLE EIGHT
SATISFACTION AND DISCHARGE OF INDENTURE
Section 8.01 Legal Defeasance and Covenant
Defeasance..................................... 91
Section 8.02 Satisfaction and Discharge....................... 95
Section 8.03 Survival of Certain Obligations.................. 96
Section 8.04 Acknowledgment of Discharge by
Trustee........................................ 96
Section 8.05 Application of Trust Assets...................... 97
Section 8.06 Repayment to the Company or
Guarantors; Unclaimed Money.................... 97
Section 8.07 Reinstatement.................................... 98
ARTICLE NINE
AMENDMENTS, SUPPLEMENTS AND WAIVERS
Section 9.01 Without Consent of Holders....................... 99
Section 9.02 With Consent of Holders.......................... 99
</TABLE>
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<TABLE>
<CAPTION>
<S> <C> <C>
Section 9.03 Compliance with TIA.............................. 101
Section 9.04 Revocation and Effect of Consents................ 101
Section 9.05 Notation on or Exchange of
Securities..................................... 102
Section 9.06 Trustee To Sign Amendments, Etc.................. 102
ARTICLE TEN
GUARANTEES
Section 10.01 Unconditional Guarantee.......................... 103
Section 10.02 Severability..................................... 104
Section 10.03 Release of a Guarantor........................... 104
Section 10.04 Limitation of a Guarantor's
Liability...................................... 105
Section 10.05 Contribution..................................... 105
Section 10.06 Waiver of Subrogation............................ 106
Section 10.07 Execution of Guarantees.......................... 106
Section 10.08 Waiver of Stay, Extension or Usury
Laws........................................... 107
ARTICLE ELEVEN
MISCELLANEOUS
Section 11.01 TIA Controls..................................... 108
Section 11.02 Notices.......................................... 108
Section 11.03 Communications by Holders with
Other Holders.................................. 109
Section 11.04 Certificate and Opinion as to
Conditions Precedent........................... 109
Section 11.05 Statements Required in Certificate
or Opinion..................................... 109
</TABLE>
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<TABLE>
<S> <C> <C>
Section 11.06 Rules by Trustee, Paying Agent,
Registrar...................................... 110
Section 11.07 Legal Holidays................................... 110
Section 11.08 Governing Law.................................... 110
Section 11.09 No Adverse Interpretation of Other
Agreements..................................... 111
Section 11.10 No Recourse Against Others....................... 111
Section 11.11 Successors....................................... 111
Section 11.12 Duplicate Originals.............................. 111
Section 11.13 Severability..................................... 111
Signatures....................................... 112
</TABLE>
Exhibit A - Form of Series A Security
Exhibit B - Form of Series B Security
Exhibit C - Form of Legend for Global
Securities
Exhibit D - Transfer Certificate
Exhibit E - Transferee Certificate for
Institutional Accredited
Investors
Exhibit F - Transferee Certificate for
Regulation S Transfers
Exhibit G - Form of Guarantee
Note: This Table of Contents shall not, for any purpose, be
deemed to be a part of the Indenture.
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<PAGE> 11
INDENTURE dated as of March 15, 1997, among SPANISH BROADCASTING
SYSTEM, INC., a Delaware corporation (the "Company"), as Issuer, SPANISH
BROADCASTING SYSTEM, INC., a New Jersey corporation, SPANISH BROADCASTING SYSTEM
OF CALIFORNIA, INC., a California corporation, SPANISH BROADCASTING SYSTEM OF
FLORIDA, INC., a Florida corporation, SPANISH BROADCASTING SYSTEM NETWORK, INC.,
a New York corporation, SBS PROMOTIONS, INC., a New York corporation, ALARCON
HOLDINGS, INC., a New York corporation, and SBS OF GREATER NEW YORK, INC., a New
York corporation, as Guarantors, and IBJ SCHRODER BANK & TRUST COMPANY, as
Trustee (the "Trustee").
The Company has duly authorized the creation of an issue of 11%
Senior Notes due 2004, Series A, and 11% Senior Notes due 2004, Series B, to be
issued in exchange for the 11% Senior Notes due 2004, Series A, pursuant to the
Registration Rights Agreement and, to provide therefor, the Company has duly
authorized the execution and delivery of this Indenture. All things necessary to
make the Securities, when duly issued and executed by the Company and
authenticated and delivered hereunder, the valid and binding obligations of the
Company and to make this Indenture a valid and binding agreement of the Company
have been done.
Each party hereto agrees as follows for the benefit of each other
party and for the equal and ratable benefit of the Holders of the Securities:
ARTICLE ONE
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. Definitions.
"Acquired Indebtedness" means Indebtedness of a Person (including an
Unrestricted Subsidiary) existing at the time such Person becomes a Restricted
Subsidiary or assumed in connection with the acquisition of assets from such
Person.
"Acquisition Indebtedness" means Indebtedness incurred by the
Company or by a Restricted Subsidiary the proceeds of which are used for the
acquisition of a media
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<PAGE> 12
business and related facilities and assets or for the construction of a facility
pursuant to a construction permit issued by the FCC.
"Adjusted Net Assets" of a Guarantor at any date shall mean the
lesser of the amount by which (x) the fair value of the property of such
Guarantor exceeds the total amount of liabilities, including, without
limitation, contingent liabilities (after giving effect to all other fixed and
contingent liabilities), but excluding liabilities under the Guarantee, of such
Guarantor at such date and (y) the present fair ratable value of the assets of
such Guarantor at such date exceeds the amount that will be required to pay the
probable liability of such Guarantor on its debts (after giving effect to all
other fixed and contingent liabilities and after giving effect to any collection
from any Subsidiary of such Guarantor in respect of the obligations of such
Subsidiary under the Guarantee), excluding Indebtedness in respect of the
Guarantee, as they become absolute and matured.
"Affiliate" of any specified Person means any other Person which
directly or indirectly through one or more intermediaries controls, or is
controlled by, or is under common control with, such specified Person. For the
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, means 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 (a) beneficial ownership of at least 10% of the voting
securities of a Person shall be deemed to be control and (b) for purposes of
Section 4.18, for so long as Raul Alarcon Sr., Raul Alarcon Jr. or Jose Grimalt
are directors, officers or shareholders of the Company, they, their respective
spouses, lineal descendants and any Person controlled by any of them shall be
Affiliates of the Company and its Subsidiaries.
"Affiliate Transaction" has the meaning provided in Section 4.18.
"Agent" means any Registrar, Paying Agent or co-Registrar.
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<PAGE> 13
"Asset Sale" means the sale, transfer or other disposition (other
than to the Company or any of its Restricted Subsidiaries) in any single
transaction or series of transactions of (a) any Capital Stock of or other
equity interest in any Restricted Subsidiary of the Company, (b) all or
substantially all of the assets of the Company or of any Restricted Subsidiary
thereof, or (c) all or substantially all of the assets of any radio station, or
part thereof, owned by the Company or any Restricted Subsidiary thereof, or a
division, line of business or comparable business segment of the Company or any
Restricted Subsidiary thereof; provided that Asset Sales shall not include
sales, leases, conveyances, transfers or other dispositions to the Company or to
a Restricted Subsidiary or to any other Person if after giving effect to such
sale, lease, conveyance, transfer or other disposition such other Person becomes
a Restricted Subsidiary.
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<PAGE> 14
"Asset Sale Proceeds" means, with respect to any Asset Sale, (i)
cash received by the Company or any Restricted Subsidiary of the Company from
such Asset Sale (including cash received as consideration for the assumption of
liabilities incurred in connection with or in anticipation of such Asset Sale),
after (a) provision for all income or other taxes measured by or resulting from
such Asset Sale, (b) payment of all brokerage commissions, underwriting and
other fees and expenses related to such Asset Sale, (c) provision for minority
interest holders in any Restricted Subsidiary of the Company as a result of such
Asset Sale and (d) deduction of appropriate amounts to be provided by the
Company or any such Restricted Subsidiary as a reserve, in accordance with GAAP,
against any liabilities associated with the assets sold or disposed of in such
Asset Sale and retained by the Company or any such Restricted Subsidiary after
such Asset Sale, including, without limitation, pension and other post
employment benefit liabilities and liabilities related to environmental matters
or against any indemnification obligations associated with the assets sold or
disposed of in such Asset Sale, and (ii) promissory notes and other noncash
consideration received by the Company or any such Restricted Subsidiary from
such Asset Sale or other disposition upon the liquidation or conversion of such
notes or noncash consideration into cash.
"Attributable Debt" in respect of a Sale and Lease-Back Transaction
means, as at the time of determination, the greater of (i) the fair value of the
property subject to such arrangement (as determined by the board of directors of
the Company) and (ii) the present value (discounted at the interest rate
implicit in such transaction) of the total obligations of the lessee for rental
payments during the remaining term of the lease included in such Sale and
Lease-Back Transaction (including any period for which such lease has been
extended).
"Available Asset Sale Proceeds" means, with respect to any Asset
Sale, the aggregate Asset Sale Proceeds from such Asset Sales that have not been
applied in accordance with clauses (iii)(a) or (iii)(b), and that have not been
the basis for an Excess Proceeds Offer in accordance with clause (iii)(b) of the
first paragraph of Section 4.12.
"Bank Indebtedness" means (i) Indebtedness of the Company incurred
in accordance with this Indenture owing to one
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<PAGE> 15
or more commercial banking institutions that are members of the Federal Reserve
System and (ii) any guarantee by a Guarantor of any Indebtedness of the Company
of the type set forth in clause (i) of this definition.
"Bankruptcy Law" means Title 11, U.S. Code or any similar Federal,
state or foreign law for the relief of debtors.
"Board of Directors" means, as to any Person, the board of directors
of such Person or any duly authorized committee thereof.
"Board Resolution" means, with respect to any Person, a copy of a
resolution certified by the Secretary or an Assistant Secretary of such Person
to have been duly adopted by the Board of Directors of such Person and to be in
full force and effect on the date of such certification, and delivered to the
Trustee.
"Business Day" means any day other than a Saturday, Sunday or any
other day on which banking institutions in the City of New York are required or
authorized by law or other governmental action to be closed.
"Capital Stock" means, with respect to any Person, any and all
shares or other equivalents (however designated) of capital stock, partnership
interests or any other participation, right or other interest in the nature of
an equity interest in such Person or any option, warrant or other security
convertible into any of the foregoing.
"Capitalized Lease Obligations" means Indebtedness represented by
obligations under a lease that is required to be capitalized for financial
reporting purposes in accordance with GAAP, and the amount of such Indebtedness
shall be the capitalized amount of such obligations determined in accordance
with GAAP.
"Certificate of Designation" means the Certificate of Designation
creating the Senior Preferred Stock, as in effect on the Issue Date and any
certificate of designation creating Exchange Preferred Stock (as defined in such
certificate of designation) and Private Exchange Preferred Stock (as defined
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<PAGE> 16
in such Certificate of Designation).
A "Change of Control" of the Company will be deemed to have occurred
at such time as (i) any Person (including a Person's Affiliates and associates),
other than a Permitted Holder, becomes the beneficial owner (as defined under
Rule 13d-3 or any successor rule or regulation promulgated under the Exchange
Act) of 50% or more of the total voting power of the Company's Common Stock,
(ii) prior to a Public Equity Offering, Permitted Holders shall cease to own
beneficially at least 40% of the total voting power of the Company's Common
Stock, (iii) any Person (including a Person's Affiliates and associates), other
than a Permitted Holder, becomes the beneficial owner of more than 30% of the
total voting power of the Company's Common Stock, and the Permitted Holders
beneficially own, in the aggregate, a lesser percentage of the total voting
power of the Common Stock of the Company than such other Person and do not have
the right or ability by voting power, contract or otherwise to elect or
designate for election a majority of the board of directors of the Company, (iv)
there shall be consummated any consolidation or merger of the Company in which
the Company is not the continuing or surviving corporation or pursuant to which
the Common Stock of the Company would be converted into cash, securities or
other property, other than a merger or consolidation of the Company in which the
holders of the Common Stock of the Company outstanding immediately prior to the
consolidation or merger hold, directly or indirectly, at least a majority of the
Common Stock of the surviving corporation immediately after such consolidation
or merger, or (v) during any period of two consecutive years, individuals who at
the beginning of such period constituted the board of directors of the Company
(together with any new directors whose election by such board of directors or
whose nomination for election by the shareholders of the Company has been
approved by 66 2/3% of the directors then still in office who either were
directors at the beginning of such period or whose election or recommendation
for election was previously so approved) cease to constitute a majority of the
board of directors of the Company.
"Change of Control Offer" has the meaning provided in Section 4.24.
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<PAGE> 17
"Change of Control Payment Date" has the meaning provided in Section
4.24.
"Commission" means the Securities and Exchange Commission.
"Common Stock" of any Person means all Capital Stock of such Person
that is generally entitled to (i) vote in the election of directors of such
Person or (ii) if such Person is not a corporation, vote or otherwise
participate in the selection of the governing body, partners, managers or others
that will control the management and policies of such Person.
"Company" means the party named as such in the preamble to this
Indenture until a successor replaces it pursuant to this Indenture and
thereafter means such successor.
"Consolidated Interest Expense" means, with respect to any Person,
for any period, the aggregate amount of interest which, in conformity with GAAP,
would be set forth opposite the caption "interest expense" or any like caption
on an income statement for such Person and its Subsidiaries on a consolidated
basis (including, but not limited to, cash dividends paid on Preferred Stock,
imputed interest included in Capitalized Lease Obligations, all commissions,
discounts and other fees and charges owed with respect to letters of credit and
bankers' acceptance financing, the net costs associated with hedging
obligations, amortization of other financing fees and expenses, the interest
portion of any deferred payment obligation, amortization of discount or premium,
if any, and all other non-cash interest expense (other than interest amortized
to cost of sales)) plus, without duplication, all net capitalized interest for
such period and all interest incurred or paid under any guarantee of
Indebtedness (including a guarantee of principal, interest or any combination
thereof) of any Person, plus the amount of all dividends or distributions paid
on Disqualified Capital Stock (other than dividends paid or payable in shares of
Capital Stock of the Company).
"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, on a consolidated basis, determined in accordance with GAAP;
provided, however,
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<PAGE> 18
that (a) the Net Income of any Person (the "other Person") in which the Person
in question or any of its Subsidiaries has less than a 100% interest (which
interest does not cause the net income of such other Person to be consolidated
into the net income of the Person in question in accordance with GAAP) shall be
included only to the extent of the amount of dividends or distributions paid to
the Person in question or the Subsidiary, (b) the Net Income of any Subsidiary
of the Person in question that is subject to any restriction or limitation on
the payment of dividends or the making of other distributions (other than
pursuant to the Securities or this Indenture) shall be excluded to the extent of
such restriction or limitation, (c) (i) the Net Income of any Person acquired in
a pooling of interests transaction for any period prior to the date of such
acquisition and (ii) any net gain (but not loss) resulting from an Asset Sale by
the Person in question or any of its Subsidiaries other than in the ordinary
course of business shall be excluded, and (d) extraordinary gains and losses
shall be excluded.
"Covenant Defeasance" has the meaning provided in Section 8.01.
"Credit Facility" means Indebtedness of the Company and its
Restricted Subsidiaries under a revolving credit facility in an aggregate
principal amount not to exceed the greater of (a) $10,000,000 or (b) 75% of the
net book value of the Company's accounts receivable.
"Custodian" means any receiver, trustee, assignee, liquidator,
sequestrator or similar official under any Bankruptcy Law.
"Default" means an event or condition the occurrence of which is, or
with the lapse of time or the giving of notice or both would be, an Event of
Default.
"Depository" means, with respect to the Securities issued in the
form of one or more Global Securities, The Depository Trust Company or another
Person designated as Depository by the Company, which must be a clearing agency
registered under the Exchange Act.
"Disqualified Capital Stock" means any Capital Stock
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<PAGE> 19
of the Company or a Restricted Subsidiary thereof which, 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), or upon the happening of any event,
matures or is mandatorily redeemable, pursuant to a sinking fund obligation or
otherwise, or is redeemable at the option of the holder thereof, in whole or in
part, on or prior to the Final Maturity Date, for cash or securities
constituting Indebtedness. Without limitation of the foregoing, Disqualified
Capital Stock shall be deemed to include (i) any Preferred Stock of a Restricted
Subsidiary of the Company and (ii) any Preferred Stock of the Company, with
respect to either of which, under the terms of such Preferred Stock, by
agreement or otherwise, such Restricted Subsidiary or the Company is obligated
to pay current dividends or distributions in cash during the period prior to
March 15, 2004; provided, however, that Preferred Stock of the Company or any
Restricted Subsidiary thereof that is issued with the benefit of provisions
requiring a change of control offer to be made for such Preferred Stock in the
event of a change of control of the Company or such Restricted Subsidiary, which
provisions have substantially the same effect as the provisions of Section 4.24,
shall not be deemed to be Disqualified Capital Stock solely by virtue of such
provisions; and provided, further that the Senior Preferred Stock shall be
deemed not to be Disqualified Capital Stock.
"EBITDA" means, for any Person, for any period, an amount equal to
(a) the sum of (i) Consolidated Net Income for such period, plus (ii) the
provision for taxes for such period based on income or profits to the extent
such income or profits were included in computing Consolidated Net Income and
any provision for taxes utilized in computing net loss under clause (i) hereof,
plus (iii) Consolidated Interest Expense for such Period (but only including
Redeemable Dividends in the calculation of such Consolidated Interest Expense to
the extent that such Redeemable Dividends have not been excluded in the
calculation of Consolidated Net Income), plus (iv) depreciation for such period
on a consolidated basis, plus (v) amortization of intangibles for such period on
a consolidated basis, plus (vi) any other non-cash items reducing Consolidated
Net Income for such period, minus (b) all non-cash items increasing Consolidated
Net Income for such period, all for such Person and its Subsidiaries determined
in accordance with GAAP, except that with respect to the Company each of the
foregoing items
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shall be determined on a consolidated basis with respect to the Company and its
Restricted Subsidiaries only, provided, however, that, for purposes of
calculating EBITDA during any fiscal quarter, cash income from a particular
Investment of such Person shall be included only (x) if cash income has been
received by such Person with respect to such Investment during each of the
previous four fiscal quarters, or (y) if the cash income derived from such
Investment is attributable to Temporary Cash Investments.
"Event of Default" has the meaning provided in Section 6.01.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, or any successor statute or statutes thereto.
"Exchange Debentures" means 14 1/4% Exchange Debentures due 2005 of
the Company issuable in exchange for Senior Preferred Stock.
"fair market value" means, with respect to any asset or property,
the price which could be negotiated in an arm's-length, free market transaction,
for cash, between a willing seller and a willing and able buyer, neither of whom
is under undue pressure or compulsion to complete the transaction. Fair market
value shall be determined by the Board of Directors of the Company acting
reasonably and in good faith and shall be evidenced by a Board Resolution of the
Company delivered to the Trustee.
"FCC" means the Federal Communications Commission.
"Final Maturity Date" means March 15, 2004.
"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 may be approved by a significant segment of
the accounting profession of the United States, which are in effect as of the
Issue Date.
"Global Security" means a security evidencing all or
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a part of the Securities issued to the Depository in accordance with Section
2.01 and bearing the legend prescribed in Exhibit C.
"Guarantee" has the meaning provided in Section 4.19.
"Guarantor" means (i) each of Spanish Broadcasting System, Inc., a
New Jersey corporation, Spanish Broadcasting System of California, Inc., a
California corporation, Spanish Broadcasting System of Florida, Inc., a Florida
corporation, Spanish Broadcasting System Network, Inc., a New York corporation,
SBS Promotions, Inc., a New York corporation, Alarcon Holdings, Inc., a New York
corporation, and SBS of Greater New York, Inc., a New York corporation, and (ii)
each Person that in the future executes a Guarantee pursuant to Section 4.19 or
otherwise; provided that any Person constituting a Guarantor as described above
shall cease to constitute a Guarantor when its Guarantee is released in
accordance with the terms of this Indenture.
"Holder" or "Securityholder" means a Person in whose name a Security
is registered on the Registrar's books.
"incur" means, with respect to any Indebtedness or other obligation
of any Person, to create, issue, incur (by conversion, exchange or otherwise),
assume, guarantee or otherwise become liable in respect of such Indebtedness or
other obligation or the recording, as required pursuant to GAAP or otherwise, of
any such Indebtedness or other obligation on the balance sheet of such Person
(and "incurrence," "incurred," "incurrable," and "incurring" shall have meanings
correlative to the foregoing); provided that a change in GAAP that results in an
obligation of such Person that exists at such time becoming Indebtedness shall
not be deemed an incurrence of such Indebtedness.
"Indebtedness" means (without duplication), with respect to any
Person, any indebtedness at any time outstanding, secured or unsecured,
contingent or otherwise, which is for borrowed money (whether or not the
recourse of the lender is to the whole of the assets of such Person or only to a
portion thereof), or evidenced by bonds, notes, debentures or similar
instruments or representing the balance deferred and unpaid of the purchase
price of any property (excluding,
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without limitation, any balances that constitute accounts payable or trade
payables, and other accrued liabilities arising in the ordinary course of
business) if and to the extent any of the foregoing indebtedness would appear as
a liability upon a balance sheet of such Person prepared in accordance with
GAAP, and shall also include, to the extent not otherwise included (i) any
Capitalized Lease Obligations, (ii) obligations secured by a lien to which the
property or assets owned or held by such Person is subject, whether or not the
obligation or obligations secured thereby shall have been assumed, (iii)
guarantees of items of other Persons which would be included within this
definition for such other Persons (whether or not such items would appear upon
the balance sheet of the guarantor), (iv) all obligations for the reimbursement
of any obligor on any letter of credit, banker's acceptance or similar credit
transaction, (v) in the case of the Company, Disqualified Capital Stock of the
Company or any Restricted Subsidiary thereof, and (vi) obligations of any such
Person under any Interest Rate Agreement applicable to any of the foregoing (if
and to the extent such Interest Rate Agreement obligations would appear as a
liability upon a balance sheet of such Person prepared in accordance with GAAP).
The amount of Indebtedness of any Person at any date shall be the outstanding
balance at such date of all unconditional obligations as described above and,
with respect to contingent obligations, the maximum liability upon the
occurrence of the contingency giving rise to the obligation, provided (i) that
the amount outstanding at any time of any Indebtedness issued with original
issue discount, including the Old Notes, is the principal amount of such
Indebtedness less the remaining unamortized portion of the original issue
discount of such Indebtedness at such time as determined in conformity with GAAP
and (ii) that Indebtedness shall not include any liability for federal, state,
local or other taxes. Notwithstanding any other provision of the foregoing
definition, any trade payable arising from the purchase of goods or materials or
for services obtained in the ordinary course of business shall not be deemed to
be "Indebtedness" of the Company or any Restricted Subsidiaries for purposes of
this definition. Furthermore, guarantees of (or obligations with respect to
letters of credit supporting) Indebtedness otherwise included in the
determination of such amount shall not also be included.
"Indenture" means this Indenture, as amended or
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supplemented from time to time in accordance with the terms hereof.
"Independent" when used with respect to any specified Person means
such a Person who (a) is in fact independent; (b) does not have any direct
financial interest or any material indirect financial interest in the Company or
any of its Subsidiaries, or in any Affiliate of the Company or any of its
Subsidiaries; and (c) is not an officer, employee, promoter, underwriter,
trustee, partner, director or Person performing similar functions for the
Company or any of its Subsidiaries. Whenever it is provided in this Indenture
that any Independent Person's opinion or certificate shall be furnished to the
Trustee, such Person shall be appointed by the Company, and such opinion or
certificate shall state that the signer has read this definition and that the
signer is Independent within the meaning hereof.
"Independent Financial Advisor" means a firm (a) which does not, and
whose directors, officers and employees or Affiliates do not, have a direct or
indirect financial interest in the Company and (b) which, in the judgment of the
Board of Directors of the Company, is otherwise independent and qualified to
perform the task for which it is to be engaged.
"Infinity Note" means the $3,000,000 aggregate
principal amount of Indebtedness issued by the Company to
Infinity Holding Corp. of Orlando on the Issue Date.
"Initial Purchaser" means CIBC Wood Gundy Securities Corp.
"Institutional Accredited Investor" means an institution that is an
"accredited investor" as that term is defined in Rule 501(a)(1), (2), (3) or (7)
under the Securities Act.
"Interest Payment Date" means the stated maturity of an installment
of interest on the Securities.
"Interest Rate Agreement" means, for any Person, any interest rate
swap agreement, interest rate cap agreement, interest rate collar agreement or
other similar agreement designed to protect the party indicated therein against
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fluctuations in interest rates.
"Investments" means, directly or indirectly, any advance, account
receivable (other than an account receivable arising in the ordinary course of
business), loan or capital contribution to (by means of transfers of property to
others, payments for property or services for the account or use of others or
otherwise), the purchase of any stock, bonds, notes, debentures, partnership or
joint venture interests or other securities of, the acquisition, by purchase or
otherwise, of all or substantially all of the business or assets or stock or
other evidence of beneficial ownership of, any Person or the making of any
investment in any Person. Investments shall exclude extensions of trade credit
on commercially reasonable terms in accordance with normal trade practices.
"Issue Date" means the date Securities are first issued by the
Company and authenticated by the Trustee under this Indenture.
"Legal Defeasance" has the meaning provided in Section 8.01.
"Lien" means with respect to any property or assets of any Person,
any mortgage or deed of trust, pledge, hypothecation, assignment, deposit
arrangement, security interest, lien, charge, easement, encumbrance, preference,
priority, or other security agreement or preferential arrangement of any kind or
nature whatsoever on or with respect to such property or assets (including
without limitation, any Capitalized Lease Obligation, conditional sales, or
other title retention, agreement having substantially the same economic effect
as any of the foregoing).
"Net Income" means, with respect to any Person for any period, the
net income (loss) of such Person determined in accordance with GAAP.
"Net Proceeds" means (a) in the case of any sale of Capital Stock by
the Company or any of its Restricted Subsidiaries, the aggregate net proceeds
received by the Company or such Restricted Subsidiary, after payment of
expenses, commissions and the like incurred in connection therewith, whether
such proceeds are in cash or in property
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(valued at the fair market value thereof, as determined in good faith by the
board of directors of the Company, at the time of receipt) and (b) in the case
of any exchange, exercise, conversion or surrender of outstanding securities of
any kind for or into shares of Capital Stock of the Company or any of its
Restricted Subsidiaries which is not Disqualified Capital Stock, the net book
value of such outstanding securities on the date of such exchange, exercise,
conversion or surrender (plus any additional amount required to be paid by the
holder to the Company or such Restricted Subsidiary upon such exchange,
exercise, conversion or surrender, less any and all payments made to the
holders, e.g., on account of fractional shares and less all expenses incurred by
the Company in connection therewith). For the avoidance of doubt, the issuance
of Senior Preferred Stock as payment of dividends on Senior Preferred Stock
shall be deemed to result in no Net Proceeds received by the Company from any
such issuance.
"Officers' Certificate" means, with respect to any person, a
certificate signed by the Chairman of the Board of Directors, the President or
any Vice President and the Treasurer or any assistant Treasurer of such person
that shall comply with applicable provisions of the Indenture.
"Old Notes" means the $107,059,000 aggregate principal amount of
12>% Senior Notes due 2002 of the Company.
"Old Warrants" means Warrants issued pursuant to the Warrant
Agreement dated as of June 29, 1994 between the Company and IBJ Schroder Bank &
Trust Company, as Warrant Agent.
"Opinion of Counsel" means a written opinion from legal counsel
which and who are acceptable to the Trustee.
"Participants" has the meaning provided in Section 2.15.
"Paying Agent" has the meaning provided in Section 2.03.
"Permitted Holders" means (i) Raul Alarcon Jr., (ii) the heirs,
executors, administrators testamentary, trustees, legatees or beneficiaries of
the Person described in (i) and (iii) a trust, the beneficiaries of which
include only
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Persons described in (i) and (ii) and their respective spouses and
lineal descendants.
"Permitted Indebtedness" means:
(i) Indebtedness of the Company or any Restricted Subsidiary arising
under or in connection with the Credit Facility;
(ii) Indebtedness under the Securities and the Guarantees;
(iii) Indebtedness not covered by any other clause of this
definition which is outstanding on the Issue Date (including the Old Notes
and guarantees thereof and the Infinity Note);
(iv) Indebtedness of the Company to any Restricted Subsidiary and
Indebtedness of any Restricted Subsidiary to the Company or another
Restricted Subsidiary;
(v) Purchase Money Indebtedness and Capitalized Lease Obligations
incurred to acquire property in the ordinary course of business which
Indebtedness and Capitalized Lease Obligations do not in the aggregate
exceed 5% of the Company's consolidated total assets;;
(vi) Refinancing Indebtedness;
(vii) Indebtedness represented by any guarantee by a Guarantor of
Indebtedness of the Company permitted to be incurred under this Indenture;
and
(viii) other Indebtedness of the Company not to exceed $2,000,000 at
any one time outstanding.
"Permitted Investments" means, for any Person, Investments made on
or after the date of the Issue Date consisting of:
(i) Investments by the Company, or by a Restricted Subsidiary
thereof, in the Company or a Restricted Subsidiary;
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(ii) Temporary Cash Investments;
(iii) Investments by the Company, or by a Restricted Subsidiary
thereof, in a Person, if as a result of such Investment (a) such Person
becomes a Restricted Subsidiary of the Company or (b) 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 Restricted Subsidiary thereof;
(iv) an Investment that is made by the Company or a Restricted
Subsidiary thereof in the form of any stock, bonds, notes, debentures,
partnership or joint venture interests or other securities that are issued
by a third party to the Company or Restricted Subsidiary solely as partial
consideration for the consummation of an Asset Sale that is otherwise
permitted under Section 4.12;
(v) Investments by the Company or any of its Restricted Subsidiaries
in any other Person pursuant to the terms of a "local marketing agreement"
or similar arrangement relating to a radio station owned or licensed by
such Person; and
(vi) other Investments not to exceed $3,000,000 at any one time
outstanding.
"Permitted Liens" means (i) Liens on property or assets of, or any
shares of stock of or secured debt of, any corporation existing at the time such
corporation becomes a Restricted Subsidiary of the Company or at the time such
corporation is merged into the Company or any of its Restricted Subsidiaries;
provided that such Liens are not incurred in connection with, or in
contemplation of, such corporation becoming a Restricted Subsidiary of the
Company or merging into the Company or any of its Restricted Subsidiaries, (ii)
Liens securing Ratio Indebtedness, (iii) Liens securing Refinancing
Indebtedness; provided that any such Lien does not extend to or cover any
Property, shares or debt other than the Property, shares or debt securing the
Indebtedness so refunded, refinanced or extended, (iv) Liens in favor of the
Company or any of its Restricted Subsidiaries, (v) Liens securing industrial
revenue bonds, (vi) Liens to secure Purchase Money Indebtedness that is
otherwise permitted under this Indenture,
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provided that (a) any such Lien is created solely for the purpose of securing
Indebtedness representing, or incurred to finance, refinance or refund, the cost
(including sales and excise taxes, installation and delivery charges and other
direct costs of, and other direct expenses paid or charged in connection with,
such purchase or construction) of such Property, (b) the principal amount of the
Indebtedness secured by such Lien does not exceed 100% of such costs, and (c)
such Lien does not extend to or cover any Property other than such item of
Property and any improvements on such item, (vii) Liens on Capital Stock of
Restricted Subsidiaries and accounts receivable, the proceeds thereof and
related records to secure the Credit Facility, (viii) Liens securing Bank
Indebtedness, (ix) statutory liens or landlords', carriers', warehouseman's,
mechanics', suppliers', materialmen's, repairmen's or other like Liens arising
in the ordinary course of business, which do not secure any Indebtedness and
with respect to amounts not yet delinquent or being contested in good faith by
appropriate proceedings, if a reserve or other appropriate provision, if any, as
shall be required in conformity with GAAP shall have been made therefor, (x)
other Liens securing obligations incurred in the ordinary course of business
which obligations do not exceed $500,000 in the aggregate at any one time
outstanding, (xi) Liens securing Acquisition Indebtedness, provided that such
Liens do not extend to or cover any Property other than the Property acquired
with the proceeds of such Acquisition Indebtedness and any improvements thereto,
and (xii) any extensions, substitutions, replacements or renewals of the
foregoing.
"Person" means an individual, partnership, corporation,
unincorporated organization, trust or joint venture, or a governmental agency or
political subdivision thereof.
"Physical Securities" has the meaning provided in Section 2.01.
"Preferred Stock" means any Capital Stock of a Person, however
designated, which entitles the holder thereof to a preference with respect to
dividends, distributions or liquidation proceeds of such Person over the holders
of other Capital Stock issued by such Person.
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"Private Placement Legend" means the legend initially set forth on
the Securities in the form set forth on Exhibit A.
"pro forma" means, with respect to any calculation made or required
to be made pursuant to the terms of this Indenture, a calculation in accordance
with Article 11 of Regulation S-X under the Securities Act as interpreted by the
Company's Board of Directors in consultation with its independent certified
public accountants.
"Property" of any Person means all types of real, Personal,
tangible, intangible or mixed property owned by such Person whether or not
included in the most recent consolidated balance sheet of such Person and its
Subsidiaries under GAAP.
"Public Equity Offering" has the meaning provided in Paragraph 6 of
the Securities.
"Purchase Agreement" means the securities purchase agreement dated
as of March 24, 1997 by and among the Company, the Guarantors and the Initial
Purchaser.
"Purchase Money Indebtedness" means any Indebtedness incurred in the
ordinary course of business by a Person to finance the cost (including the cost
of construction) of an item of property, the principal amount of which
Indebtedness does not exceed the sum of (i) 100% of such cost and (ii)
reasonable fees and expenses of such Person incurred in connection therewith.
"Qualified Institutional Buyer" or "QIB" shall have the meaning
specified in Rule 144A under the Securities Act.
"Ratio Indebtedness" means (i) Indebtedness of the Company incurred
pursuant to the first paragraph of Section 4.03 which is not Refinancing
Indebtedness and (ii) any guarantee by a Guarantor of any Indebtedness of the
Company of the type set forth in clause (i) of this definition.
"Record Date" means the Record Dates specified in the Securities;
provided that if any such date is not a Business Day, the Record Date shall be
the first day immediately preceding such specified day that is a Business Day.
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"Redeemable Dividend" means, for any dividend or distribution with
regard to Disqualified Capital Stock, the quotient of the dividend or
distribution divided by the difference between one and the maximum statutory
federal income tax rate (expressed as a decimal number between 1 and 0) then
applicable to the issuer of such Disqualified Capital Stock.
"Redemption Date," when used with respect to any Security to be
redeemed, means the date fixed for such redemption pursuant to this Indenture
and the Securities.
"Redemption Price," when used with respect to any Security to be
redeemed, means the price fixed for such redemption, payable in immediately
available funds, pursuant to this Indenture and the Securities.
"Refinancing Indebtedness" means Indebtedness that refunds,
refinances or extends any Indebtedness of the Company outstanding on the Issue
Date or other Indebtedness permitted to be incurred by the Company or its
Restricted Subsidiaries (other than pursuant to clause (iv) of the definition of
"Permitted Indebtedness") pursuant to the terms of this Indenture, but only to
the extent that (i) the Refinancing Indebtedness is subordinated to the
Securities to at least the same extent as the Indebtedness being refunded,
refinanced or extended, if at all, (ii) the Refinancing Indebtedness is
scheduled to mature either (a) no earlier than the Indebtedness being refunded,
refinanced or extended, or (b) after the Final Maturity Date, (iii) the portion,
if any, of the Refinancing Indebtedness that is scheduled to mature on or prior
to the Final Maturity Date has a weighted average life to maturity at the time
such Refinancing Indebtedness is incurred that is equal to or greater than the
weighted average life to maturity of the portion of the Indebtedness being
refunded, refinanced or extended that is scheduled to mature on or prior to the
Final Maturity Date, (iv) such Refinancing Indebtedness is in an aggregate
principal amount that is equal to or less than the sum of (a) the aggregate
principal amount then outstanding under the Indebtedness being refunded,
refinanced or extended, (b) the amount of accrued and unpaid interest, if any,
and premiums owed, if any, not in excess of preexisting prepayment provisions on
such Indebtedness being refunded, refinanced or extended and (c) the amount of
customary fees, expenses and costs related to the incurrence of such Refinancing
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Indebtedness, and (v) such Refinancing Indebtedness is incurred by the same
Person that initially incurred the Indebtedness being refunded, refinanced or
extended, except that the Company may incur Refinancing Indebtedness to refund,
refinance or extend Indebtedness of any Wholly-Owned Subsidiary of the Company.
"Registrar" has the meaning provided in Section 2.03.
"Registration Rights Agreement" means the Notes Registration Rights
Agreement dated as of the Issue Date between the Company and the Initial
Purchaser.
"Regulation S" means Regulation S under the Securities Act.
"Responsible Officer" shall mean, when used with respect to the
Trustee, any officer in the Corporate Trust Administration of the Trustee
including any vice president, assistant vice president, assistant secretary,
treasurer, assistant treasurer, or any other officer of the Trustee who
customarily performs functions similar to those performed by the Persons who at
the time shall be such officers, respectively, or to whom any corporate trust
matter is referred because of such officer's knowledge of and familiarity with
the particular subject.
"Restricted Payment" means any of the following: (i) the declaration
or payment of any dividend or any other distribution or payment on Capital Stock
of the Company or any Restricted Subsidiary of the Company or any payment made
to the direct or indirect holders (in their capacities as such) of Capital Stock
of the Company or any Restricted Subsidiary of the Company (other than (x)
dividends or distributions payable solely in Capital Stock (other than
Disqualified Capital Stock) or in options, warrants or other rights to purchase
Capital Stock (other than Disqualified Capital Stock), and (y) in the case of
Restricted Subsidiaries of the Company, dividends or distributions payable to
the Company or to a Wholly-Owned Restricted Subsidiary of the Company), (ii) the
purchase, redemption or other acquisition or retirement for value of any Capital
Stock of the Company or any of its Restricted Subsidiaries (other than Capital
Stock owned by the Company or a Wholly-Owned Restricted Subsidiary of the
Company), (iii) the
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making of any principal payment on, or the purchase, defeasance, repurchase,
redemption or other acquisition or retirement for value, prior to any scheduled
maturity, scheduled repayment or scheduled sinking fund payment, of any
Indebtedness which is subordinated in right of payment to the Securities or a
Guarantee (other than subordinated Indebtedness acquired in anticipation of
satisfying a scheduled sinking fund obligation, principal installment or final
maturity, in each case due within one year of the date of acquisition), (iv) the
making of any Investment or guarantee of any Investment in any Person other than
a Permitted Investment, (v) any designation of a Restricted Subsidiary as an
Unrestricted Subsidiary and (vi) forgiveness of any Indebtedness of an Affiliate
of the Company to the Company or a Restricted Subsidiary existing on the Issue
Date.
"Restricted Security" has the meaning set forth in Rule 144(a)(3)
under the Securities Act; provided that the Trustee shall be entitled to request
and conclusively rely upon an Opinion of Counsel with respect to whether any
Security is a Restricted Security.
"Restricted Subsidiary" means a Subsidiary of the Company other than
an Unrestricted Subsidiary and includes all of the Subsidiaries of the Company
existing as of the Issue Date. The board of directors of the Company may
designate any Unrestricted Subsidiary or any Person that is to become a
Subsidiary as a Restricted Subsidiary if immediately after giving effect to such
action (and treating any Acquired Indebtedness as having been incurred at the
time of such action), the Company could have incurred at least $1.00 of
additional Indebtedness (other than Permitted Indebtedness) pursuant to Section
4.03.
"Rule 144A" means Rule 144A under the Securities Act.
"Sale and Leaseback Transaction" means any arrangement with any
Person providing for the leasing by the Company or any Restricted Subsidiary of
the Company of any real or tangible Personal property, which property has been
or is to be sold or transferred by the Company or such Restricted Subsidiary to
such Person in contemplation of such leasing.
"SEC" means the Securities and Exchange Commission.
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"Securities" means the Series A Securities and the Series B
Securities treated as a single class of securities, as amended or supplemented
from time to time in accordance with the terms hereof, that are issued pursuant
to this Indenture.
"Securities Act" means the Securities Act of 1933, as amended, and
the rules and regulations of the SEC promulgated thereunder.
"Senior Preferred Stock" means the 14 1/4% Senior Exchangeable
Preferred Stock of the Company and any Exchange Preferred Stock and Private
Exchange Preferred Stock.
"Series A Securities" means the 11% Senior Notes due 2004, Series A,
of the Company issued pursuant to this Indenture and sold pursuant to the
Purchase Agreement.
"Series B Securities" means the 11% Senior Notes due 2004, Series B,
of the Company to be issued in exchange for the Series A Securities pursuant to
the Registered Exchange Offer and the Registration Rights Agreement.
"Subsidiary" of any specified Person means any corporation,
partnership, joint venture, association or other business entity, whether now
existing or hereafter organized or acquired, (i) in the case of a corporation,
of which more than 50% of the total voting power of the Capital Stock entitled
(without regard to the occurrence of any contingency) to vote in the election of
directors, officers or trustees thereof is held by such first-named Person or
any of its Subsidiaries; or (ii) in the case of a partnership, joint venture,
association or other business entity, with respect to which such first-named
Person or any of its Subsidiaries has the power to direct or cause the direction
of the management and policies of such entity by contract or otherwise or if in
accordance with generally accepted accounting principles such entity is
consolidated with the first-named Person for financial statement purposes.
"Surviving Entity" has the meaning provided in Section 5.01.
"Temporary Cash Investments" means (i) Investments in marketable,
direct obligations issued or guaranteed by the
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United States of America, or of any governmental agency or political subdivision
thereof, maturing within 365 days of the date of purchase; (ii) Investments in
certificates of deposit issued by a bank organized under the laws of the United
States of America or any state thereof or the District of Columbia, in each case
having capital, surplus and undivided profits totaling more than $500,000,000
and rated at least A by Standard & Poor's Corporation and A-2 by Moody's
Investors Service, Inc. maturing within 365 days of purchase; or (iii)
Investments not exceeding 365 days in duration in money market funds that invest
substantially all of such funds' assets in the Investments described in the
preceding clauses (i) and (ii).
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. {{
77aaa-77bbbb), as amended, as in effect on the date of the execution of this
Indenture until such time as this Indenture is qualified under the TIA, and
thereafter as in effect on the date on which this Indenture is qualified under
the TIA, except as otherwise provided in Section 9.03.
"Trustee" means the party named as such in this Indenture until a
successor replaces it in accordance with the provisions of this Indenture and
thereafter means such successor.
"Unrestricted Subsidiary" means (a) any Subsidiary of an
Unrestricted Subsidiary and (b) any Subsidiary of the Company which is
classified after the Issue Date as an Unrestricted Subsidiary by a resolution
adopted by the board of directors of the Company; provided that a Subsidiary
organized or acquired after the Issue Date may be so classified as an
Unrestricted Subsidiary only if such classification is in compliance with
Section 4.04. The Trustee shall be given prompt notice by the Company of each
resolution adopted by the board of directors of the Company under this
provision, together with a copy of each such resolution adopted.
"U.S. Government Obligations" shall have the meaning
provided in Section 8.01.
"U.S. Legal Tender" means such coin or currency of
the United States of America as at the time of payment shall be
legal tender for the payment of public and private debts.
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"U.S. Physical Securities" shall have the meaning set forth in
Section 2.01.
"Warrants" means the Warrants issued pursuant to the Warrant
Agreement dated as of March 15, 1997 between the Company and IBJ Schroder Bank &
Trust Company, as Warrant Agent.
"Wholly Owned Restricted Subsidiary" means any
Restricted Subsidiary which is a Wholly-Owned Subsidiary.
"Wholly Owned Subsidiary" means any Subsidiary of the Company, all
of the outstanding voting securities (other than directors' qualifying shares)
of which are owned, directly or indirectly, by the Company.
SECTION 1.02. Incorporation by Reference of TIA.
Whenever this Indenture refers to a provision of the TIA, such
provision is incorporated by reference in, and made a part of, this Indenture.
The following TIA terms used in this Indenture have the following meanings:
"Commission" means the SEC.
"indenture securities" means the Securities.
"indenture security holder" means a Holder or a Securityholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
"obligor" on the indenture securities means the Company, any
Guarantor and any other obligor on the Securities.
All other TIA terms used in this Indenture that are defined by the
TIA, defined by TIA reference to another statute
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or defined by SEC rule and not otherwise defined herein have the meanings
assigned to them therein.
SECTION 1.03. Rules of Construction.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning
assigned to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and words in the
plural include the singular;
(5) provisions apply to successive events and transactions; and
(6) "herein," "hereof" and other words of similar import refer to
this Indenture as a whole and not to any particular Article, Section or
other subdivision.
ARTICLE TWO
THE SECURITIES
SECTION 2.01. Form and Dating.
The Series A Securities and the Trustee's certificate of
authentication thereof shall be substantially in the form of Exhibit A annexed
hereto, which is hereby incorporated in and expressly made a part of this
Indenture. The Series B Securities and the Trustee's certificate of
authentication thereof shall be substantially in the form of Exhibit B annexed
hereto, which is hereby incorporated in and expressly made a part of this
Indenture. The Securities may have notations, legends or endorsements
(including notations relating to any Guarantees, stock exchange rule or usage).
The Company and the Trustee shall approve the form of the Securities and any
notation, legend or endorsement (including notations relating
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to any Guarantees) on them. Each Security shall be dated the date of its
issuance and shall show the date of its authentication.
Securities offered and sold in reliance on Rule 144A shall be issued
initially in the form of one or more permanent Global Securities in registered
form, substantially in the form set forth in Exhibit A, deposited with the
Trustee, as custodian for the Depository, and shall bear the legend set forth on
Exhibit C. The aggregate principal amount of any Global Security may from time
to time be increased or decreased by adjustments made on the records of the
Trustee, as custodian for the Depository, as hereinafter provided.
Securities offered and sold in offshore transactions in reliance on
Regulation S shall be issued in the form of certificated Securities in
registered form in substantially the form set forth in Exhibit A (the "Offshore
Physical Securities"). Securities offered and sold in reliance on any other
exemption from registration under the Securities Act other than as described in
the preceding paragraph shall be issued, and Securities offered and sold in
reliance on Rule 144A may be issued, in the form of certificated Securities in
registered form in substantially the form set forth in Exhibit A (the "U.S.
Physical Securities"). The Offshore Physical Securities and the U.S. Physical
Securities are sometimes collectively herein referred to as the "Physical
Securities."
SECTION 2.02. Execution and Authentication.
Two Officers, or an Officer and an Assistant Secretary, shall sign,
or one Officer shall sign and one Officer or an Assistant Secretary (each of
whom shall, in each case, have been duly authorized by all requisite corporate
actions) shall attest to, the Securities for the Company by manual or facsimile
signature. The Company's seal shall also be reproduced on the Securities.
If an Officer or Assistant Secretary whose signature is on a
Security was an Officer or Assistant Secretary at the time of such execution but
no longer holds that office at the time the Trustee authenticates the Security,
the Security shall be valid nevertheless. Each Guarantor shall execute its
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Guarantee in the manner set forth in Section 10.07.
A Security shall not be valid until an authorized signatory of the
Trustee manually signs the certificate of authentication on the Security. The
signature shall be conclusive evidence that the Security has been authenticated
under this Indenture.
The Trustee shall authenticate (i) Series A Securities for original
issue in the aggregate principal amount not to exceed $75,000,000 and (ii)
Series B Securities from time to time for issue only in exchange for a like
principal amount of Series A Securities, in each case upon a written order of
the Company in the form of an Officers' Certificate and an Opinion of Counsel in
a form reasonably required by the Trustee as to the compliance with applicable
law of the exchange of Series B Notes for Series A Notes. The Officers'
Certificate shall specify the amount of Securities to be authenticated, the
series of Securities and the date on which the Securities are to be
authenticated. The aggregate principal amount of Securities outstanding at any
time may not exceed $75,000,000, except as provided in Section 2.07. Upon
receipt of a written order of the Company in the form of an Officers'
Certificate, the Trustee shall authenticate Securities in substitution for
Securities originally issued to reflect any name change of the Company.
The Trustee may appoint an authenticating agent reasonably
acceptable to the Company to authenticate Securities. Unless otherwise provided
in the appointment, an authenticating agent may authenticate Securities whenever
the Trustee may do so. Each reference in this Indenture to authentication by the
Trustee includes authentication by such agent. An authenticating agent has the
same rights as an Agent to deal with the Company and Affiliates of the Company.
The Securities shall be issuable only in registered form without
coupons in denominations of $1,000 and any integral multiple thereof.
SECTION 2.03. Registrar and Paying Agent.
The Company shall maintain an office or agency in the Borough of
Manhattan, The City of New York, where (a) Secu-
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rities may be presented or surrendered for registration of transfer or for
exchange ("Registrar"), (b) Securities may be presented or surrendered for
payment ("Paying Agent") and (c) notices and demands in respect of the
Securities and this Indenture may be served. The Registrar shall keep a register
of the Securities and of their transfer and exchange. The Company, upon written
notice to the Trustee, may have one or more co-Registrars and one or more
additional Paying Agents reasonably acceptable to the Trustee. The term
"Registrar" includes each additional Registrar or Co-Registrar. The term "Paying
Agent" includes any additional Paying Agent. The Company initially appoints the
Trustee as Registrar and Paying Agent until such time as the Trustee has
resigned or a successor has been appointed. Neither the Company nor any
Affiliate of the Company may act as Paying Agent except as otherwise expressly
provided in the form of the Security.
SECTION 2.04. Paying Agent To Hold Assets in Trust.
The Company shall require each Paying Agent other than the Trustee
to agree in writing that each Paying Agent shall hold in trust for the benefit
of Holders or the Trustee all assets held by the Paying Agent for the payment of
principal of, or interest on, the Securities, and shall notify the Trustee in
writing of any Default by the Company in making any such payment. To the extent
the Company makes such payments directly to the Holders, the Company shall
simultaneously notify the Trustee thereof in writing. The Company at any time
may require a Paying Agent to distribute all assets held by it to the Trustee
and account for any assets disbursed and the Trustee may at any time, but shall
be under no obligation to, during the continuance of any payment Default, upon
written request to a Paying Agent, require such Paying Agent to distribute all
assets held by it to the Trustee and to account for any assets distributed. Upon
distribution to the Trustee of all assets that shall have been delivered by the
Company to the Paying Agent, the Paying Agent shall have no further liability
for such assets.
SECTION 2.05. Securityholder Lists.
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
Holders. If the Trustee is not the
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Registrar, the Company shall furnish to the Trustee before each Record Date and
at such other times as the Trustee may request in writing a list as of such date
and in such form as the Trustee may reasonably require of the names and
addresses of Holders, which list may be conclusively relied upon by the Trustee.
SECTION 2.06. Transfer and Exchange.
Subject to the provisions of Sections 2.15 and 2.16, when Securities
are presented to the Registrar or a co-Registrar with a request to register the
transfer of such Securities or to exchange such Securities for an equal
principal amount of Securities of other authorized denominations of the same
series, the Registrar or co-Registrar shall register the transfer or make the
exchange as requested if its requirements for such transaction are met;
provided, however, that the Securities surrendered for transfer or exchange
shall be duly endorsed or accompanied by a written instrument of transfer in
form satisfactory to the Company and the Registrar or co-Registrar, duly
executed by the Holder thereof or his attorney duly authorized in writing. To
permit registrations of transfers and exchanges, the Company shall execute and
the Trustee shall authenticate Securities at the Registrar's or co-Registrar's
written request. No service charge shall be made for any registration of
transfer or exchange, but the Company may require payment of a sum sufficient to
cover any transfer tax or similar governmental charge payable in connection
therewith (other than any such transfer taxes or other governmental charge
payable upon exchanges or transfers pursuant to Section 2.02, 2.10, 3.06, 4.12,
4.24 or 9.05). The Registrar or co-Registrar shall not be required to register
the transfer of or exchange of any Security (i) during a period beginning at the
opening of business 15 days before the mailing of a notice of redemption of
Securities and ending at the close of business on the day of such mailing and
(ii) selected for redemption in whole or in part pursuant to Article Three,
except the unredeemed portion of any Security being redeemed in part.
Any Holder of a Global Security shall, by acceptance of such Global
Security, agree that transfers of beneficial interests in such Global Security
may be effected only through a book-entry system maintained by the Depository
(or its
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agent), and that ownership of a beneficial interest in a Global Security shall
be required to be reflected in a book entry system.
SECTION 2.07. Replacement Securities.
If a mutilated Security is surrendered to the Trustee or if the
Holder of a Security claims that the Security has been lost, destroyed or
wrongfully taken, the Company shall issue and the Trustee shall authenticate
upon written notice from the Company a replacement Security if the Trustee's
requirements are met. If required by the Trustee or the Company, such Holder
must provide an indemnity bond or other indemnity, sufficient in the judgment of
both the Company and the Trustee, to protect the Company, the Trustee and any
Agent from any loss which any of them may suffer if a Security is replaced. The
Company may charge such Holder for its reasonable out-of-pocket expenses in
replacing a Security, including reasonable fees and expenses of counsel. Every
replacement Security is an additional obligation of the Company.
SECTION 2.08. Outstanding Securities.
Securities outstanding at any time are all the Securities that have
been authenticated by the Trustee except those cancelled by it, those delivered
to it for cancellation and those described in this Section as not outstanding.
Subject to Section 2.09, a Security does not cease to be outstanding because the
Company or any of its Affiliates holds the Security.
If a Security is replaced pursuant to Section 2.07 (other than a
mutilated Security surrendered for replacement), it ceases to be outstanding
unless the Trustee receives proof satisfactory to it that the replaced Security
is held by a bona fide purchaser. A mutilated Security ceases to be outstanding
upon surrender of such Security and replacement thereof pursuant to Section
2.07.
If on a Redemption Date or the Final Maturity Date the Paying Agent
holds U.S. Legal Tender or U.S. Government Obligations sufficient to pay all of
the principal and interest due on the Securities payable on that date, then on
and after
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that date such Securities cease to be outstanding and interest on them
ceases to accrue.
SECTION 2.09. Treasury Securities.
In determining whether the Holders of the required principal amount
of Securities have concurred in any direction, waiver or consent, Securities
owned by the Company, any Guarantor or any of their respective Affiliates shall
be disregarded, except that, for the purposes of determining whether the Trustee
shall be protected in relying on any such direction, waiver or consent, only
Securities that a Responsible Officer of the Trustee actually knows are so owned
shall be disregarded. Securities so owned which have been pledged in good faith
shall not be disregarded if the pledgee establishes to the satisfaction of the
Trustee the pledgee's right so to act with respect to the Securities and that
the pledgee is not the Company, a Guarantor or any other Obligor upon the Notes
or any person directly or indirectly controlling or controlled by or under
direct or indirect common control with the Company, a Guarantor or such obligor.
The Trustee may require an Officers' Certificate listing Securities
owned by the Company, any Guarantor or any of their respective Affiliates.
SECTION 2.10. Temporary Securities.
Until definitive Securities are ready for delivery, the Company may
prepare and the Trustee shall authenticate temporary Securities upon receipt of
a written order of the Company in the form of an Officers' Certificate. The
Officers' Certificate shall specify the amount of temporary Securities to be
authenticated and the date on which the temporary Securities are to be
authenticated. Temporary Securities shall be substantially in the form of
definitive Securities but may have variations that the Company considers
appropriate for temporary Securities. Without unreasonable delay, the Company
shall prepare and the Trustee shall authenticate upon receipt of a written order
of the Company pursuant to Section 2.02 definitive Securities in exchange for
temporary Securities.
SECTION 2.11. Cancellation.
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The Company at any time may deliver Securities to the Trustee for
cancellation. The Registrar and the Paying Agent shall forward to the Trustee
any Securities surrendered to them for transfer, exchange or payment. The
Trustee, or at the direction of the Trustee, the Registrar or the Paying Agent,
and no one else, shall cancel and, at the written direction of the Company, the
Trustee shall dispose of all Securities surrendered for transfer, exchange,
payment or cancellation. Subject to Section 2.07, the Company may not issue new
Securities to replace Securities that it has paid or delivered to the Trustee
for cancellation. If the Company or any Guarantor shall acquire any of the
Securities, such acquisition shall not operate as a redemption or satisfaction
of the Indebtedness represented by such Securities unless and until the same are
surrendered to the Trustee for cancellation pursuant to this Section 2.11.
SECTION 2.12. Defaulted Interest.
If the Company defaults in a payment of interest on the Securities,
it shall pay interest on overdue principal and on overdue installments of
interest (without grace periods) from time to time on demand at the rate of 2%
per annum in excess of the rate shown on the Security. The Company shall pay
such defaulted interest to the persons who are Securityholders on a subsequent
special record date. The Company shall fix the special record date and payment
date in a manner satisfactory to the Trustee. At least 15 days before the
special record date, the Company shall mail or cause to be mailed to each
Securityholder at such Securityholder's address as it appears on the Security
register maintained by the Registrar a notice that states the special record
date, the payment date (which shall be not less than five or more than ten days
after the special record date), and the amount to be paid. In lieu of the
foregoing procedures, the Company may pay defaulted interest in any other lawful
manner satisfactory to the Trustee.
SECTION 2.13. CUSIP Number.
The Company in issuing the Securities will use a "CUSIP" number, and
if so, the Trustee shall use the CUSIP number in notices of redemption or
exchange as a convenience to Holders; provided that any such notice may state
that no representation is made as to the correctness or accuracy of the
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CUSIP number printed in the notice or on the Securities, and that reliance may
be placed only on the other identification numbers printed on the Securities.
SECTION 2.14. Deposit of Moneys.
Prior to 10:00 a.m. New York City time on each Interest Payment Date
and the Final Maturity Date, the Company shall have either delivered by wire
transfer or check such interest or principal and interest, as the case may be to
Holders at such Holders registered address or deposited with the Paying Agent in
immediately available funds money sufficient to make cash payments, if any, due
on such Interest Payment Date or the Final Maturity Date, as the case may be, in
a timely manner which permits the Paying Agent to remit payment to the Holders
on such Interest Payment Date or the Final Maturity Date, as the case may be. If
the Company is to deliver funds by wire transfer, it shall give the Trustee
fifteen (15) days prior written notice.
SECTION 2.15. Book-Entry Provisions for Global Securities.
(a) The Global Securities initially shall (i) be registered in the
name of the Depository or the nominee of such Depository, (ii) be delivered to
the Trustee as custodian for such Depository and (iii) bear legends as set forth
in Exhibit C.
Members of, or participants in, the Depository ("Participants")
shall have no rights under this Indenture with respect to any Global Security
held on their behalf by the Depository, or the Trustee as its custodian, or
under the Global Security, and the Depository may be treated by the Company, the
Trustee and any agent of the Company or the Trustee as the absolute owner of the
Global Security for all purposes whatsoever. Notwithstanding the foregoing,
nothing herein shall prevent the Company, the Trustee or any agent of the
Company or the Trustee from giving effect to any written certification, proxy or
other authorization furnished by the Depository or impair, as between the
Depository and Participants, the operation of customary practices governing the
exercise of the rights of a Holder of any Security.
(b) Transfers of Global Securities shall be limited
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to transfers in whole, but not in part, to the Depository, its successors or
their respective nominees. Interests of beneficial owners in the Global
Securities may be transferred or exchanged for Physical Securities in accordance
with the rules and procedures of the Depository and the provisions of Section
2.16. In addition, Physical Securities shall be transferred to all beneficial
owners in exchange for their beneficial interests in Global Securities if (i)
the Depository notifies the Company that it is unwilling or unable to continue
as Depository for any Global Security and a successor depositary is not
appointed by the Company within 90 days of such notice or (ii) an Event of
Default has occurred and is continuing and the Registrar has received a request
from the Depository to issue Physical Securities.
(c) In connection with the transfer of Global Securities as an
entirety to beneficial owners pursuant to paragraph (b) of this Section 2.15,
the Global Securities shall be deemed to be surrendered to the Trustee for
cancellation, and the Company shall execute, and the Trustee shall, upon written
instructions from the Company, authenticate and deliver to each beneficial owner
identified by the Depository in exchange for its beneficial interest in the
Global Securities, an equal aggregate principal amount of Physical Securities of
authorized denominations.
(d) Any Physical Security constituting a Restricted Security
delivered in exchange for an interest in a Global Security pursuant to paragraph
(b) or (c) of this Section 2.15 shall, except as otherwise provided by Section
2.16, bear the Private Placement Legend.
(e) The Holder of any Global Security may grant proxies and
otherwise authorize any Person, including Participants and Persons that may hold
interests through Participants, to take any action which a Holder is entitled to
take under this Indenture or the Securities.
SECTION 2.16. Registration of Transfers and Exchanges.
(a) Transfer and Exchange of Physical Securities. When Physical
Securities are presented to the Registrar with a request:
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(i) to register the transfer of the Physical Securities; or
(ii) to exchange such Physical Securities for an equal number of Physical
Securities of other authorized denominations,
the Registrar shall register the transfer or make the exchange as requested if
the requirements under this Indenture as set forth in this Section 2.16 for such
transactions are met; provided, however, that the Physical Securities presented
or surrendered for registration of transfer or exchange:
(I) shall be duly endorsed or accompanied by a written instrument of
transfer in form satisfactory to the Registrar, duly executed by the
Holder thereof or his attorney duly authorized in writing; and
(II) in the case of Physical Securities the offer and sale of which have
not been registered under the Securities Act, such Physical
Securities shall be accompanied, in the sole discretion of the
Company, by the following additional information and documents, as
applicable:
(A) if such Physical Security is being delivered to the Registrar
by a Holder for registration in the name of such Holder,
without transfer, a certification from such Holder to that
effect (in substantially the form of Exhibit D hereto); or
(B) if such Physical Security is being transferred to a Qualified
Institutional Buyer in accordance with Rule 144A under the
Securities Act, a certification to that effect (in
substantially the form of Exhibit D hereto); or
(C) if such Physical Security is being transferred to an
Institutional Accredited Investor, delivery of a certification
to that effect (in substantially the form of Exhibit D hereto)
and
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a Transferee Certificate for Institutional Accredited
Investors in substantially the form of Exhibit E hereto; or
(D) if such Physical Security is being transferred
in reliance on Regulation S, delivery of a
certification to that effect (in substantially
the form of Exhibit D hereto) and a Transferee
Certificate for Regulation S Transfers in
substantially the form of Exhibit F hereto and
an Opinion of Counsel reasonably satisfactory to
the Company to the effect that such transfer is
in compliance with the Securities Act; or
(E) if such Physical Security is being transferred
in reliance on Rule 144 under the Securities
Act, delivery of a certification to that effect
(in substantially the form of Exhibit D hereto)
and an Opinion of Counsel reasonably
satisfactory to the Company to the effect that
such transfer is in compliance with the
Securities Act; or
(F) if such Physical Security is being transferred
in reliance on another exemption from the
registration requirements of the Securities Act,
a certification to that effect (in substantially
the form of Exhibit D hereto) and an Opinion of
Counsel reasonably satisfactory to the Company
to the effect that such transfer is in
compliance with the Securities Act.
(b) Restrictions on Transfer of a Physical Security for a Beneficial
Interest in a Global Security. A Physical Security may not be exchanged for a
beneficial interest in a Global Security except upon satisfaction of the
requirements set forth below. Upon receipt by the Registrar of a Physical
Security, duly endorsed or accompanied by appropriate instruments of transfer,
in form satisfactory to the Registrar, together with:
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<PAGE> 48
(A) a certification, in substantially the form of Exhibit D
hereto, that such Physical Security is being transferred to a
Qualified Institutional Buyer; and
(B) written instructions directing the Registrar to make, or to
direct the Depository to make, an endorsement on the Global
Security to reflect an increase in the aggregate amount of the
Securities represented by the Global Security,
then the Registrar shall cancel such Physical Security and cause, or direct the
Depository to cause, in accordance with the standing instructions and procedures
existing between the Depository and the Registrar, the number of Securities
represented by the Global Security to be increased accordingly. If no Global
Security is then outstanding, the Company shall issue and the Trustee shall upon
written instructions from the Company authenticate a new Global Security in the
appropriate amount.
(c) Transfer and Exchange of Global Securities. The transfer and
exchange of Global Securities or beneficial interests therein shall be effected
through the Depository, in accordance with this Indenture (including the
restrictions on transfer set forth herein) and the procedures of the Depository
therefor.
(d) Transfer of a Beneficial Interest in a Global Security for a
Physical Security.
(i) Any Person having a beneficial interest in a Global Security may
upon request exchange such beneficial interest for a Physical
Security. Upon receipt by the Registrar of written instructions or
such other form of instructions as is customary for the Depository
from the Depository or its nominee on behalf of any Person having a
beneficial interest in a Global Security and upon receipt by the
Trustee of a written order or such other form of instructions as is
customary for the Depository or the Person
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designated by the Depository as having such a beneficial interest
containing registration instructions and, in the case of any such
transfer or exchange of a beneficial interest in Securities the
offer and sale of which have not been registered under the
Securities Act, the following additional information and documents:
(A) if such beneficial interest is being transferred to the Person
designated by the Depository as being the beneficial owner, a
certification from such Person to that effect (in
substantially the form of Exhibit D hereto); or
(B) if such beneficial interest is being transferred to a
Qualified Institutional Buyer in accordance with Rule 144A
under the Securities Act, a certification to that effect (in
substantially the form of Exhibit D hereto); or
(C) if such beneficial interest is being transferred to an
Institutional Accredited Investor, delivery of a certification
to that effect (in substantially the form of Exhibit D hereto)
and a Certificate for Institutional Accredited Investors in
substantially the form of Exhibit E hereto; or
(D) if such beneficial interest is being transferred in reliance
on Regulation S, delivery of a certification to that effect
(in substantially the form of Exhibit D hereto) and a
Transferee Certificate for Regulation S Transfers in
substantially the form of Exhibit F hereto and an Opinion of
Counsel reasonably satisfactory to
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the Company to the effect that such transfer is in compliance
with the Securities Act; or
(E) if such beneficial interest is being transferred
in reliance on Rule 144 under the Securities Act, delivery of
a certification to that effect (in substantially the form of
Exhibit D hereto) and an Opinion of Counsel reasonably
satisfactory to the Company to the effect that such transfer
is in compliance with the Securities Act; or
(F) if such beneficial interest is being transferred
in reliance on another exemption from the registration
requirements of the Securities Act, a certification to that
effect (in substantially the form of Exhibit D hereto) and
an Opinion of Counsel reasonably satisfactory to the Company
to the effect that such transfer is in compliance with the
Securities Act,
then the Registrar will cause, in accordance with the standing
instructions and procedures existing between the Depository and the
Registrar, the aggregate amount of the Global Security to be reduced
and, following such reduction, the Company will execute and, upon
receipt of an authentication order in the form of an Officers'
Certificate, the Trustee will authenticate and deliver to the
transferee a Physical Security.
(ii) Physical Securities issued in exchange for a beneficial interest in
a Global Security pursuant to this Section 2.16(d) shall be
registered in such names and in such authorized denominations as the
Depository, pursuant to instructions from its direct or indirect
participants or otherwise, shall instruct the Registrar in writing.
The Registrar shall deliver such Physical Securities to the Persons
in whose names such Physical Securities are
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so registered.
(e) Restrictions on Transfer and Exchange of Global Securities.
Notwithstanding any other provisions of this Indenture, a Global Security may
not be transferred as a whole except by the Depository to a nominee of the
Depository or by a nominee of the Depository to the Depository or another
nominee of the Depository or by the Depository or any such nominee to a
successor Depository or a nominee of such successor Depository.
(f) Private Placement Legend. Upon the transfer, exchange or
replacement of Securities not bearing the Private Placement Legend, the
Registrar shall deliver only Securities that do not bear the Private Placement
Legend. Upon the transfer, exchange or replacement of Securities bearing the
Private Placement Legend, the Registrar shall deliver only Securities that bear
the Private Placement Legend unless, and the Trustee is hereby authorized to
deliver Securities without the Private Placement Legend if, (i) there is
delivered to the Trustee an Opinion of Counsel reasonably satisfactory to the
Company and the Trustee to the effect that neither such legend nor the related
restrictions on transfer are required in order to maintain compliance with the
provisions of the Securities Act or (ii) such Security has been sold pursuant to
an effective registration statement under the Securities Act.
(g) General. By its acceptance of any Security bearing the Private
Placement Legend, each Holder of such a Security acknowledges the restrictions
on transfer of such Security set forth in this Indenture and in the Private
Placement Legend and agrees that it will transfer such Security only as provided
in this Indenture.
The Registrar shall retain copies of all letters, notices and other
written communications received pursuant to Section 2.15 or this Section 2.16.
The Company shall have the right to inspect and make copies of all such letters,
notices or other written communications at any reasonable time upon the giving
of reasonable written notice to the Registrar.
ARTICLE THREE
REDEMPTION
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SECTION 3.01. Notices to Trustee.
If the Company elects to redeem Securities pursuant to Paragraph 5
or Paragraph 6 of the Securities, it shall notify the Trustee in writing of the
Redemption Date, the Redemption Price and the principal amount of Securities to
be redeemed. The Company shall give notice, or cause to be given, of redemption
to Trustee at least 30 days but not more than 60 days before the Redemption Date
(unless a shorter notice shall be agreed to by the Trustee in writing), together
with an Officers' Certificate stating that such redemption will comply with the
conditions contained herein.
SECTION 3.02. Selection of Securities To Be Redeemed.
If fewer than all of the Securities are to be redeemed, the Trustee
shall select the Securities to be redeemed in compliance with the requirements
of the principal national securities exchange, if any, on which the Securities
are listed or, if the Securities are not listed on a national securities
exchange, on a pro rata basis, by lot or by such method as the Trustee shall
deem fair and appropriate; provided, however, that if the Securities are
redeemed pursuant to Paragraph 6 of the Securities, the Securities shall be
redeemed solely on a pro rata basis or on as nearly a pro rata basis as is
practicable (subject to the procedures of the Depository) unless the securities
exchange, if any, on which the Securities are listed requires a different
method. If the Securities are listed on any national securities exchange, the
Company shall notify the Trustee in writing of the requirements of such exchange
in respect of any redemption. The Trustee shall make the selection from the
Securities outstanding and not previously called for redemption and shall
promptly notify the Company in writing of the Securities selected for redemption
and, in the case of any Security selected for partial redemption, the principal
amount thereof to be redeemed. Securities in denominations of less than $1,000
may be redeemed only in whole. The Trustee may select for redemption portions
(equal to $1,000 or any integral multiple thereof) of the principal of
Securities that have denominations larger than $1,000. Provisions of this
Indenture that apply to Securities called for redemption also apply to portions
of Securities called for redemption.
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SECTION 3.03. Notice of Redemption.
At least 30 days but not more than 60 days before a Redemption Date,
the Company shall mail or cause to be mailed a notice of redemption by
first-class mail, postage prepaid, to each Holder whose Securities are to be
redeemed. At the Company's written request, the Trustee shall give the notice of
redemption in the Company's name and at the Company's expense. Each notice for
redemption shall identify the Securities to be redeemed and shall state:
(1) the Redemption Date;
(2) the Redemption Price and the amount of accrued interest, if any,
to be paid;
(3) the name and address of the Paying Agent;
(4) that Securities called for redemption must be surrendered to the
Paying Agent to collect the Redemption Price plus accrued interest, if
any;
(5) that, unless the Company defaults in making the redemption
payment, interest on Securities called for redemption ceases to accrue on
and after the Redemption Date, and the only remaining right of the Holders
of such Securities is to receive payment of the Redemption Price and
accrued interest, if any, to the Redemption Date upon surrender to the
Paying Agent of the Securities redeemed;
(6) if any Security is being redeemed in part, the portion of the
principal amount of such Security to be redeemed and that, after the
Redemption Date, and upon surrender of such Security, a new Security or
Securities in aggregate principal amount equal to the unredeemed portion
thereof will be issued;
(7) if fewer than all the Securities are to be redeemed, the
identification of the particular Securities (or portion thereof) to be
redeemed, as well as the aggregate principal amount of Securities to be
redeemed and the aggregate principal amount of Securities to be
outstanding after such partial redemption; and
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(8) the Paragraph of the Securities pursuant to which the Securities
are to be redeemed.
SECTION 3.04. Effect of Notice of Redemption.
Once notice of redemption is mailed in accordance with Section 3.03,
Securities called for redemption become due and payable on the Redemption Date
and at the Redemption Price plus accrued interest, if any. Upon surrender to the
Paying Agent, such Securities called for redemption shall be paid at the
Redemption Price (which shall include accrued interest thereon to the Redemption
Date), but installments of interest, the maturity of which is on or prior to the
Redemption Date, shall be payable to Holders of record at the close of business
on the relevant Record Dates.
SECTION 3.05. Deposit of Redemption Price.
On or before 10:00 A.M., New York City time on the Redemption Date,
the Company shall deposit with the Paying Agent U.S. Legal Tender sufficient to
pay the Redemption Price plus accrued interest, if any, of all Securities to be
redeemed on that date.
If the Company complies with the preceding paragraph, then, unless
the Company defaults in the payment of such Redemption Price plus accrued
interest, if any, interest on the Securities to be redeemed will cease to accrue
on and after the applicable Redemption Date, whether or not such Securities are
presented for payment.
SECTION 3.06. Securities Redeemed in Part.
Upon surrender of a Security that is to be redeemed in part, the
Trustee shall upon written instruction from the Company authenticate for the
Holder a new Security or Securities equal in principal amount to the unredeemed
portion of the Security surrendered.
ARTICLE FOUR
COVENANTS
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SECTION 4.01. Payment of Securities.
The Company shall pay the principal of and interest on the
Securities in the manner provided in the Securities. An installment of principal
of or interest on the Securities shall be considered paid on the date it is due
if the Trustee or Paying Agent holds on that date U.S. Legal Tender designated
for and sufficient to pay the installment.
The Company shall pay, to the extent such payments are lawful,
interest on overdue principal and it shall pay interest on overdue installments
of interest (without regard to any applicable grace periods) from time to time
on demand at the rate borne by the Securities plus 2% per annum. Interest will
be computed on the basis of a 360-day year comprised of twelve 30-day months.
SECTION 4.02. Maintenance of Office or Agency.
The Company shall maintain in the Borough of Manhattan, The City of
New York, the office or agency required under Section 2.03. 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 address of the Trustee set forth in Section 11.02.
The Company hereby initially designates the office of the Trustee at One State
Street Plaza, Corporate Trust Administration, New York, New York 10004, as its
office or agency in the Borough of Manhattan, The City of New York.
SECTION 4.03. Limitation on Additional Indebtedness.
The Company will not, and will not permit any Restricted Subsidiary
of the Company to, directly or indirectly, incur any Indebtedness (including
Acquired Indebtedness), provided that the Company may incur Indebtedness and any
Restricted Subsidiary created after the Issue Date may incur Acquisition
Indebtedness if (a) after giving effect to the incurrence of such Indebtedness
and the receipt and application of the proceeds thereof, the ratio of the
Company's total consolidated Indebtedness to the Company's EBITDA
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<PAGE> 56
(determined on a pro forma basis for the last four fiscal quarters of the
Company for which financial statements are available at the date of
determination) is less than 6.75 to 1 if the Indebtedness is incurred on or
prior to March 15, 2000 and 6.25 to 1 if the Indebtedness is incurred
thereafter; provided, however, that if the Indebtedness which is the subject of
a determination under this provision is Acquired Indebtedness or Acquisition
Indebtedness, then such ratio shall be determined by giving effect to (on a pro
forma basis as if the transaction had occurred at the beginning of the
four-quarter period) to both the incurrence or assumption of such Acquired
Indebtedness or Acquisition Indebtedness by the Company or a Restricted
Subsidiary, as the case may be, and the inclusion in the Company's EBITDA of the
EBITDA of the acquired Person, business, property or assets, and (b) no Default
or Event of Default shall have occurred and be continuing at the time or as a
consequence of the incurrence of such Indebtedness.
Notwithstanding the foregoing, the Company and its Restricted
Subsidiaries may incur Permitted Indebtedness; provided that the Company shall
not incur any Permitted Indebtedness that ranks junior in right of payment to
the Securities that has a maturity or mandatory sinking fund payment prior to
the maturity of the Securities.
SECTION 4.04. Limitation on Restricted Payments.
The Company will not make, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, make, any Restricted Payment, unless:
(a) no Default or Event of Default shall have occurred and be
continuing at the time of or after giving effect to such Restricted
Payment;
(b) immediately after giving effect to such Restricted Payment, the
Company could incur $1.00 of additional Indebtedness (other than Permitted
Indebtedness) under Section 4.03; and
(c) immediately after giving effect to such Restricted Payment, the
aggregate of all Restricted Payments declared or made after the Issue Date
does not
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exceed the sum of (1) 100% of the Company's EBITDA from the Issue Date to
the date of determination minus 1.4 times the Company's Consolidated
Interest Expense from the Issue Date to the date of determination (or in
the event such amount shall be a deficit, minus 100% of such deficit), (2)
100% of the aggregate Net Proceeds and the fair market value of marketable
securities or other property received by the Company from the issue or
sale, after the Issue Date, of Capital Stock (other than Disqualified
Capital Stock, Capital Stock of the Company issued to any Subsidiary of
the Company and the proceeds from the issuance of Capital Stock pursuant
to the Warrants or the Old Warrants) of the Company or any Indebtedness or
other securities of the Company convertible into or exercisable or
exchangeable for Capital Stock (other than Disqualified Capital Stock) of
the Company which has been so converted or exercised or exchanged, as the
case may be. For purposes of determining under this clause (c) the amount
expended for Restricted Payments, cash distributed shall be valued at the
face amount thereof and property other than cash shall be valued at its
fair market value.
The provisions of this covenant shall not prohibit (i) the payment
of any distribution within 60 days after the date of declaration thereof, if at
such date of declaration such payment would comply with the provisions of this
Indenture, (ii) so long as no Default or Event of Default shall have occurred
and be continuing, the retirement of any shares of Capital Stock of the Company
or subordinated Indebtedness by conversion into, or by or in exchange for,
shares of Capital Stock (other than Disqualified Capital Stock) of the Company,
or out of, the Net Proceeds of the substantially concurrent sale (other than to
a Subsidiary of the Company) of other shares of Capital Stock of the Company
(other than Disqualified Capital Stock), (iii) so long as no Default or Event of
Default shall have occurred and be continuing, the redemption or retirement of
Indebtedness of the Company subordinated to the Securities in exchange for, by
conversion into, or out of the Net Proceeds of, a substantially concurrent sale
or incurrence of Indebtedness (other than any Indebtedness owed to a Subsidiary)
of the Company that is contractually subordinated in right of payment to the
Securities to at least the same extent as the subordinated Indebtedness being
redeemed or
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retired, (iv) so long as no Default or Event of Default shall have occurred and
be continuing, the retirement of any shares of Disqualified Capital Stock by
conversion into, or by exchange for, shares of Disqualified Capital Stock, or
out of the Net Proceeds of the substantially concurrent sale (other than to a
Subsidiary of the Company) of other shares of Disqualified Capital Stock;
provided that (a) such Disqualified Capital Stock is not subject to mandatory
redemption earlier than the maturity of the Securities, (b) such Disqualified
Capital Stock is in an aggregate liquidation preference that is equal to or less
than the sum of (x) the aggregate liquidation preference of the Disqualified
Capital Stock being retired, (y) the amount of accrued and unpaid dividends, if
any, and premiums owed, if any, on the Disqualified Capital Stock being retired
and (z) the amount of customary fees, expenses and costs related to the
incurrence of such Disqualified Capital Stock and (c) such Disqualified Capital
Stock is incurred by the same Person that initially incurred the Disqualified
Capital Stock being retired, except that the Company may incur Disqualified
Capital Stock to refund or refinance Disqualified Capital Stock of any
Wholly-Owned Restricted Subsidiary of the Company, (v) the payment of cash
dividends on the Senior Preferred Stock when such dividends are required to be
paid in cash in accordance with the Certificate of Designation, (vi) as long as
no Default or Event of Default shall have occurred and be continuing, the
payment of dividends and distributions to the stockholders and warrantholders of
the Company on or after the Issue Date in an amount not to exceed $4,000,000 in
the aggregate, (vii) the exchange of Senior Preferred Stock for Exchange
Debentures and (viii) so long as no Default or Event of Default shall have
occurred and be continuing, other Restricted Payments in an aggregate amount not
to exceed $3,000,000. In determining the aggregate amount of Restricted Payments
made subsequent to the Issue Date in accordance with clause (c) of the
immediately preceding paragraph, amounts expended pursuant to clauses (i)
(excluding dividends and distributions pursuant to clause (vi), (ii), (v) and
(viii) shall be included in such calculation.
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 Section 4.04 were computed, which calculations
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may be based upon the Company's latest available financial statements, and that
no Default or Event of Default will result from making the Restricted Payment.
SECTION 4.05. Corporate Existence.
Except as otherwise permitted by Article Five, the Company shall do
or cause to be done all things necessary to preserve and keep in full force and
effect its corporate existence and the corporate, partnership or other existence
of each of the Restricted Subsidiaries in accordance with the respective
organizational documents of each Restricted Subsidiary and the rights (charter
and statutory) and material franchises of the Company and each of its Restricted
Subsidiaries; provided, however, that the Company shall not be required to
preserve any such right or franchise, or the corporate existence of any
Restricted Subsidiary, if the Board of Directors of the Company shall determine
that the preservation thereof is no longer desirable in the conduct of the
business of the Company and its Restricted Subsidiaries, taken as a whole, and
that the loss thereof is not, and will not be, adverse in any material respect
to the Holders.
SECTION 4.06. Payment of Taxes and Other Claims.
The Company shall pay or discharge or cause to be paid or
discharged, before the same shall become delinquent, (i) all material taxes,
assessments and governmental charges levied or imposed upon it or any of the
Restricted Subsidiaries or upon the income, profits or property of it or any of
the Restricted Subsidiaries and (ii) all lawful claims for labor, materials and
supplies which, in each case, if unpaid, might by law become a material
liability or Lien upon the property of it or any of the Restricted Subsidiaries;
provided, however, that the Company shall not be required to pay or discharge or
cause to be paid or discharged any such tax, assessment, charge or claim whose
amount, applicability or validity is being contested in good faith by
appropriate proceedings and for which appropriate provision has been made.
SECTION 4.07. Maintenance of Properties and Insurance.
(1) The Company shall cause all material properties owned by or
leased by it or any of the Restricted Subsidiaries
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used or useful to the conduct of its business or the business of any of the
Restricted Subsidiaries to be improved or maintained and kept in normal
condition, repair and working order and supplied with all necessary equipment
and shall cause to be made all necessary repairs, renewals, replacements,
betterments and improvements thereof, all as in its judgment may be necessary,
so that the business carried on in connection therewith may be properly and
advantageously conducted at all times; provided, however, that nothing in this
Section 4.07 shall prevent the Company or any of the Restricted Subsidiaries
from discontinuing the use, operation or maintenance of any of such properties,
or disposing of any of them, if such discontinuance or disposal is, in the
judgment of the Board of Directors of the Company or of the Board of Directors
of any Restricted Subsidiary, or of an officer (or other agent employed by the
Company or of any of the Restricted Subsidiaries) of the Company or any of its
Restricted Subsidiaries having managerial responsibility for any such property,
desirable in the conduct of the business of the Company or any Restricted
Subsidiary, and if such discontinuance or disposal is not adverse in any
material respect to the Holders.
(2) The Company shall maintain, and shall cause the Restricted
Subsidiaries to maintain, insurance with responsible carriers against such risks
and in such amounts, and with such deductibles, retentions, self-insured amounts
and co-insurance provisions, as are customarily carried by similar businesses of
similar size, including property and casualty loss, workers' compensation and
interruption of business insurance.
SECTION 4.08. Compliance Certificate; Notice of Default.
(1) The Company shall deliver to the Trustee, within 100 days after
the close of each fiscal year and within 50 days after the close of each of its
first three fiscal quarters an Officers' Certificate stating that a review of
the activities of the Company has been made under the supervision of the signing
officers with a view to determining whether it has kept, observed, performed and
fulfilled its obligations under this Indenture and further stating, as to each
such Officer signing such certificate, that to the best of his knowledge the
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Company during such preceding fiscal year or fiscal quarter, as the case may be,
has kept, observed, performed and fulfilled each and every such covenant and no
Default or Event of Default occurred during such fiscal year or fiscal quarter,
as the case may be, and at the date of such certificate no Default or Event of
Default has occurred and is continuing or, if such signers do know of such
Default or Event of Default, the certificate shall describe its status with
particularity. The Officers' Certificate shall also notify the Trustee should
the Company elect to change the manner in which it fixes its fiscal year end.
(2) The annual financial statements delivered pursuant to Section
4.10 shall be accompanied by a written report of the Company's independent
accountants (who shall be a firm of established national reputation) that in
conducting their audit 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, Five or Six of this Indenture insofar as they relate
to accounting matters 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.
(3) The Company shall deliver to the Trustee, within ten days of
becoming aware of any Default or Event of Default in the performance of any
covenant, agreement or condition contained in this Indenture, an Officers'
Certificate specifying the Default or Event of Default and describing its status
with particularity.
SECTION 4.09. Compliance with Laws.
The Company shall comply, and shall cause each of the Restricted
Subsidiaries to comply, with all applicable statutes, rules, regulations, orders
and restrictions of the United States of America, all states and municipalities
thereof, and of any governmental department, commission, board, regulatory
authority, bureau, agency and instrumentality of the foregoing, in respect of
the conduct of their respective businesses and the ownership of their respective
properties, except for such noncompliances as would not in the aggregate
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have a material adverse effect on the financial condition or results of
operations of the Company and the Restricted Subsidiaries taken as a whole.
SECTION 4.10. SEC Reports.
(1) The Company will file with the SEC all information documents and
reports to be filed with the SEC pursuant to Section 13 or 15(d) of the Exchange
Act, whether or not the Company is subject to such filing requirements so long
as the SEC will accept such filings. The Company (at its own expense) will file
with the Trustee within 15 days after it files them with the SEC, copies of the
annual reports and of the information, documents and other reports (or copies of
such portions of any of the foregoing as the SEC may by rules and regulations
prescribe) which the Company files with the SEC pursuant to Section 13 or 15(d)
of the Exchange Act. Upon qualification of this Indenture under the TIA, the
Company shall also comply with the provisions of TIA { 314(a).
(2) At the Company's expense, regardless of whether the Company is
required to furnish such reports to its stockholders pursuant to the Exchange
Act, the Company shall cause its consolidated financial statements, comparable
to that which would have been required to appear in annual or quarterly reports,
to be delivered to the Trustee and the Holders. The Company will also make such
reports available to prospective purchasers of the Securities, securities
analysts and broker-dealers upon their request.
(3) For so long as any of the Securities remain outstanding the
Company will make available to any prospective purchaser of the Securities or
beneficial owner of the Securities in connection with any sale thereof the
information required by Rule 144A(d)(4) under the Securities Act during any
period when the Company is not subject to Section 13 or 15(d) under the Exchange
Act.
SECTION 4.11. Waiver of Stay, Extension or 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 or extension law or any
usury law or
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other law that would prohibit or forgive the Company from paying all or any
portion of the principal of and/or interest on the Securities as contemplated
herein, wherever enacted, now or at any time hereafter in force, or which may
affect the covenants or the performance of this Indenture, and (to the extent
that it may lawfully do so) the Company hereby expressly waives all benefit or
advantage of any such law, and covenants that it will not hinder, delay or
impede the execution of any power herein granted to the Trustee, but will suffer
and permit the execution of every such power as though no such law had been
enacted.
SECTION 4.12. Limitation on Certain Asset Sales.
The Company will not, and will not permit any of the Restricted
Subsidiaries to, consummate an Asset Sale unless (i) the Company or its
Restricted Subsidiary, as the case may be, receives consideration at the time of
such sale or other disposition at least equal to the fair market value thereof
(as determined in good faith by the Company's board of directors, and evidenced
by a board resolution); (ii) not less than 85% of the consideration received by
the Company or its Restricted Subsidiaries, as the case may be, is in the form
of cash or cash equivalents (those equivalents allowed under "Temporary Cash
Investments"); and (iii) the Asset Sale Proceeds received by the Company or any
such Restricted Subsidiary are applied (a) to the extent the Company elects, (x)
to an investment in assets (including Capital Stock or other securities
purchased in connection with the acquisition of Capital Stock or property of
another Person) used or useful in media businesses, provided that such
investment occurs or the Company or a Restricted Subsidiary enters into
contractual commitments to make such investment, subject only to customary
conditions (other than the obtaining of financing), on or prior to the 181st day
following receipt of such Asset Sale Proceeds (the "Reinvestment Date") and
Asset Sale Proceeds contractually committed are so applied within 360 days
following the receipt of such Asset Sale Proceeds or (y) to repay, repurchase or
redeem any Indebtedness of the Company or a Guarantor incurred in compliance
with this Indenture which is not subordinate in right of payment to the
Securities or the Guarantee of such Guarantor, as the case may be; and (b) to
the extent not applied pursuant to clause (iii)(a), if on the Reinvestment Date
with respect to any Asset Sale, the Available Asset Sale
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Proceeds exceed $10,000,000, the Company shall apply an amount equal to such
Available Asset Sale Proceeds to an offer to repurchase the Securities, at a
purchase price in cash equal to 100% of the principal amount thereof, plus
accrued and unpaid interest, if any, to the date of repurchase (an "Excess
Proceeds Offer").
In the event of the transfer of substantially all (but not all) of
the property and assets of the Company and the Restricted Subsidiaries as an
entirety to a Person in a transaction permitted under Section 5.01, the
successor corporation shall be deemed to have sold the properties and assets of
the Company and the Restricted Subsidiaries not so transferred for purposes of
this covenant, and shall comply with the provisions of this covenant with
respect to such deemed sale as if it were an Asset Sale. In addition, the fair
market value of such properties and assets of the Company or the Restricted
Subsidiaries deemed to be sold shall be deemed to be Asset Sale Proceeds for
purposes of this covenant.
Notice of each Excess Proceeds Offer pursuant to this Section 4.12
will be mailed or caused to be mailed, by first class mail, by the Company
within 30 days following the Reinvestment Date to all Holders at their last
registered addresses, with a copy to the Trustee. The notice shall contain all
instructions and materials necessary to enable such Holders to tender Securities
pursuant to the Excess Proceeds Offer and shall state the following terms:
(1) that the Excess Proceeds Offer is being made pursuant to this
Section 4.12 and that all Securities tendered in whole or in part in
integral multiples of $1,000 will be accepted for payment; provided,
however, that if the principal amount of Securities tendered in an Excess
Proceeds Offer exceeds the aggregate amount of the Available Asset Sale
Proceeds, the Company shall select the Securities to be purchased on a pro
rata basis;
(2) the purchase price (including the amount of accrued interest, if
any) and the purchase date (which shall be no earlier than 30 days and not
later than 60 days from the date of mailing of notice of such Excess
Proceeds Offer, or such longer period as required by law);
(3) that any Security not tendered will continue to
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accrue interest;
(4) that, unless the Company defaults in making payment therefor,
any Security accepted for payment pursuant to the Excess Proceeds Offer
shall cease to accrue interest after the purchase date;
(5) that Holders electing to have a Security purchased pursuant to
an Excess Proceeds Offer will be required to surrender the Security, with
the form entitled "Option of Holder to Elect Purchase" on the reverse of
the Security completed, to the Paying Agent at the address specified in
the notice prior to the close of business on the purchase date;
(6) that Holders will be entitled to withdraw their election if the
Paying Agent receives, not later than the third Business Day prior to the
purchase date, a facsimile transmission or letter setting forth the name
of the Holder, the principal amount of the Security the Holder delivered
for purchase and a statement that such Holder is withdrawing his election
to have such Security purchased;
(7) that Holders whose Securities are purchased only
in part will be
issued new Securities in a principal amount equal to the unpurchased
portion of the Securities surrendered; and
(8) the calculation used in determining the amount of Available
Asset Sale Proceeds to be applied to the repurchase of Securities.
On or before the purchase date, the Company shall (i) accept for
payment Securities or portions thereof tendered pursuant to the Excess Proceeds
Offer which are to be purchased in accordance with item (1) above, (ii) deposit
with the Paying Agent in accordance with Section 2.14 U.S. Legal Tender
sufficient to pay the purchase price plus accrued interest, if any, of all
Securities to be purchased and (iii) deliver to the Trustee Securities so
accepted together with an Officers' Certificate stating the Securities or
portions thereof being purchased by the Company. The Paying Agent shall promptly
mail to the Holders of Securities so accepted payment in an amount
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equal to the purchase price plus accrued interest, if any. For purposes of this
Section 4.12, the Trustee shall act as the Paying Agent.
The Company shall and shall cause its Subsidiaries to comply with
all tender offer rules under state and Federal securities laws, including, but
not limited to, Section 14(e) under the Exchange Act and Rule 14e-1 thereunder,
to the extent applicable to such offer. To the extent that the provisions of any
securities laws or regulations conflict with the foregoing provisions of this
Indenture, the Company shall comply with the applicable securities laws and
regulations and shall not be deemed to have breached its obligations under the
foregoing provisions of this Indenture by virtue thereof.
SECTION 4.13. Limitation on Investments.
The Company will not, and will not permit any of its Restricted
Subsidiaries to, make any Investment other than (i) a Permitted Investment or
(ii) an Investment that is made as a Restricted Payment in compliance with
Section 4.04, after the Issue Date.
SECTION 4.14. Limitation on Preferred Stock of Restricted Subsidiaries.
The Company will not permit any Restricted Subsidiary of the Company
to issue any Preferred Stock (except Preferred Stock to the Company or a
Restricted Subsidiary) or permit any Person (other than the Company or a
Restricted Subsidiary) to hold any such Preferred Stock unless the Company or
such Restricted Subsidiary would be entitled to incur or assume Indebtedness
under Section 4.03 in the aggregate principal amount equal to the aggregate
liquidation value of the Preferred Stock to be issued.
SECTION 4.15. Limitation on Liens.
The Company will not, and will not permit any of its Restricted
Subsidiaries to, create, incur or otherwise cause or suffer to exist or become
effective any Liens of any kind upon any property or asset of the Company or any
of its Restricted Subsidiaries or any shares of stock or debt of any of its
Restricted Subsidiaries which owns property or assets, now
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owned or hereafter acquired, other than Permitted Liens.
SECTION 4.16. [Intentionally Omitted]
SECTION 4.17. [Intentionally Omitted]
SECTION 4.18. Limitations on Transactions with Affiliates.
The Company will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, enter into any transaction or series of
related transactions (including, without limitation, the sale, purchase,
exchange or lease of assets, property or services) with any Affiliate (including
entities in which the Company or any of its Restricted Subsidiaries own a
minority interest) or holder of 10% or more of the Company's Common Stock (an
"Affiliate Transaction") or extend, renew, waive or otherwise modify the terms
of any Affiliate Transaction entered into prior to the Issue Date unless (i)
such Affiliate Transaction is between or among the Company and its Wholly-Owned
Subsidiaries; or (ii) the terms of such Affiliate Transaction are fair and
reasonable to the Company or such Restricted Subsidiary, as the case may be, and
the terms of such Affiliate Transaction are at least as favorable as the terms
which could be obtained by the Company or such Restricted Subsidiary, as the
case may be, in a comparable transaction made on an arm's-length basis between
unaffiliated parties. In any Affiliate Transaction involving an amount or having
a value in excess of $1,000,000 which is not permitted under clause (i) above,
such Affiliate Transaction(s) must be approved by a majority of the board of
directors of the Company (including a majority of the disinterested directors).
In transactions with a value in excess of $3,000,000 which are not permitted
under clause (i) above, in addition to the requirements set forth in the
immediately preceding sentence, the Company must obtain a written opinion as to
the fairness of such a transaction from a nationally recognized expert with
experience in appraising the terms of conditions of the type of business or
transaction or series of transactions for which approval is required.
The foregoing provisions will not apply to (i) any Restricted
Payment that is not prohibited by the provisions of Section 4.04 or (ii) any
transaction approved by the Board of Directors of the Company, with an officer
or director of the Company or of any Subsidiary of the Company in his or her
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capacity as officer or director entered into in the ordinary course of business,
including compensation and employee benefit arrangements with any officer or
director of the Company or of any Subsidiary of the Company that are customary
for public companies in the radio broadcasting industry.
SECTION 4.19. Limitation on Creation of Subsidiaries.
The Company shall not create or acquire, nor permit any of its
Restricted Subsidiaries to create or acquire, any Subsidiary other than (i) a
Restricted Subsidiary existing as of the Issue Date, (ii) a Restricted
Subsidiary that is acquired in connection with the acquisition by the Company of
a radio station or radio broadcast license (and which Restricted Subsidiary was
not expressly created in contemplation of such acquisition); (iii) a Restricted
Subsidiary created after the Issue Date; or (iv) an Unrestricted Subsidiary;
provided, however, that each Restricted Subsidiary acquired or created pursuant
to clause (ii) or (iii) shall have executed an unconditional guarantee (a
"Guarantee") of all of the Company's obligations under the Securities and this
Indenture on the terms set forth in Article Ten, satisfactory in form and
substance to the Trustee (and with such documentation relating thereto as the
Trustee shall require, including, without limitation a supplement or amendment
to this Indenture and Opinions of Counsel as to the enforceability of such
Guarantee), pursuant to which such Restricted Subsidiary shall become a
Guarantor.
SECTION 4.20. Limitation on Capital Stock of Restricted Subsidiaries.
The Company will not (i) sell, pledge, hypothecate or otherwise
convey or dispose of any Capital Stock of a Restricted Subsidiary of the
Company, other than Capital Stock of a Restricted Subsidiary of the Company
which owns or holds only property or assets acquired by the Company and its
Restricted Subsidiaries after the Issue Date, or (ii) permit any of its
Restricted Subsidiaries to issue any Capital Stock, other than to the Company or
a Wholly-Owned Restricted Subsidiary of the Company. The foregoing restrictions
shall not apply to (a) an Asset Sale made in compliance with Section 4.12, (b)
the issuance of Preferred Stock in compliance with Section 4.14 or (c) a pledge
or hypothecation or other
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Lien on Capital Stock of a Restricted Subsidiary pursuant to a Permitted Lien
securing Bank Indebtedness.
SECTION 4.21. Lines of Business.
The Company and the Restricted Subsidiaries will not engage in any
businesses which are not either (i) the same, similar or related to the
businesses in which the Company and the Restricted Subsidiaries are engaged on
the Issue Date or (ii) Permitted Investments.
SECTION 4.22. 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 Securities for or as an
inducement to any consent, waiver or amendment of any of the terms or provisions
of this Indenture, the Securities or any Guarantees unless such consideration is
offered to be paid or agreed to be paid to all holders of the Securities who so
consent, waive or agree to amend in the time frame set forth in solicitation
documents relating to such consent, waiver or agreement.
SECTION 4.23. Limitation on Sale and Lease-Back Transactions.
The Company will not, and will not permit any Restricted Subsidiary
of the Company to, enter into any Sale and Lease-Back Transaction unless (i) the
consideration received in such Sale and Lease-Back Transaction is at least equal
to the fair market value of the property sold, as determined by a board
resolution of the Company and (ii) the Company could incur the Attributable Debt
in respect of such Sale and Lease-Back Transaction in compliance with Section
4.03.
SECTION 4.24. Change of Control.
Within 20 days of the occurrence of a Change of Control, the Company
shall notify the Trustee in writing of such occurrence and shall make an offer
to purchase (the "Change of Control Offer") the outstanding Securities at a
purchase price equal to 101% of the principal amount thereof
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plus any accrued and unpaid interest thereon to the Change of Control Payment
Date (such applicable purchase price being hereinafter referred to as the
"Change of Control Purchase Price") in accordance with the procedures set forth
in this Section 4.24.
Within 20 days of the occurrence of a Change of Control, the Company
also shall (i) cause a notice of the Change of Control Offer to be sent at least
once to the Dow Jones News Service or similar business news service in the
United States and (ii) send by first-class mail, postage prepaid, to the Trustee
and to each holder of the Securities, at the address appearing in the register
maintained by the Registrar of the Securities, a notice stating:
(1) that the Change of Control Offer is being made pursuant to this
Section 4.24 and that all Securities tendered will be accepted for
payment, and otherwise subject to the terms and conditions set forth
herein;
(2) the Change of Control Purchase Price and the purchase date
(which shall be a Business Day no earlier than 20 business days from the
date such notice is mailed (the "Change of Control Payment Date"));
(3) that any Securities not tendered will continue to accrue
interest;
(4) that, unless the Company defaults in the payment of the Change
of Control Purchase Price, any Securities 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 accepting the offer to have their Securities
purchased pursuant to a Change of Control Offer will be required to
surrender the Securities to the Paying Agent at the address specified in
the notice prior to the close of business on the Business Day preceding
the Change of Control Payment Date;
(6) that holders will be entitled to withdraw their acceptance if
the Paying Agent receives, not later than the close of business on the
third Business Day preceding
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the Change of Control Payment Date, a telegram, telex, facsimile
transmission or letter setting forth the name of the holder, the principal
amount of the Securities delivered for purchase, and a statement that such
holder is withdrawing his election to have such Securities purchased;
(7) that holders whose Securities are being purchased only in part
will be issued new Securities equal in principal amount to the unpurchased
portion of the Securities surrendered, provided that each Security
purchased and each such new Security issued shall be in an original
principal amount in denominations of $1,000 and integral multiples
thereof;
(8) any other procedures that a holder must follow to accept a
Change of Control Offer or effect withdrawal of such acceptance; and
(9) the name and address of the Paying Agent.
On or before the Change of Control Payment Date, the Company shall
(i) accept for payment Securities or portions thereof tendered pursuant to the
Change of Control Offer, (ii) deposit with the Paying Agent in accordance with
Section 2.14 U.S. Legal Tender sufficient to pay the purchase price plus accrued
interest, if any, of all Securities so tendered and (iii) deliver to the Trustee
Securities so accepted together with an Officers' Certificate stating the
Securities or portions thereof being purchased by the Company. Upon receipt by
the Paying Agent of the monies specified in clause (ii) above and a copy of the
Officers' Certificate specified in clause (iii) above, the Paying Agent shall
promptly mail to the Holders of Securities so accepted payment in an amount
equal to the purchase price plus accrued but unpaid interest, if any, and the
Trustee shall promptly authenticate and mail to such Holders new Securities
equal in principal amount to any unpurchased portion of the Securities
surrendered; provided that only such new Security shall be issued in an original
principal amount in denominations of $1,000 and integral multiples thereof. Any
Securities not so accepted shall be promptly mailed by the Company to the Holder
thereof. For purposes of this Section 4.24, the Trustee shall act as the Paying
Agent.
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Any amounts remaining after the purchase of all validly tendered and
not validly withdrawn Securities pursuant to a Change of Control Offer shall be
returned by the Trustee to the Company.
If the Company or any Restricted Subsidiary thereof has issued any
outstanding (i) Indebtedness that is subordinated in right of payment to the
Securities or any Guarantee or (ii) Preferred Stock, and the Company or such
Subsidiary is required to repay, repurchase, redeem or to make a distribution
with respect to such subordinated Indebtedness or Preferred Stock in the event
of a Change of Control, the Company shall not, and shall not permit any of its
Restricted Subsidiaries to, consummate any such repayment, repurchase,
redemption or distribution with respect to such subordinated Indebtedness or
Preferred Stock until such time as the Company shall have paid the Change of
Control Purchase Price in full to the holders of Securities that have accepted
the Company's Change of Control Offer and shall otherwise have consummated the
Change of Control Offer made to holders of the Securities.
The Company shall and shall cause its Subsidiaries to comply with
all tender offer rules under state and Federal securities laws, including, but
not limited to, Section 14(e) under the Exchange Act and Rule 14e-1 thereunder,
to the extent applicable to such offer. To the extent that the provisions of any
securities laws or regulations conflict with this Section 4.24, the Company
shall comply with the applicable securities laws and regulations and shall not
be deemed to have breached its obligations under this Section 4.24 by virtue
thereof.
ARTICLE FIVE
SUCCESSOR CORPORATION
SECTION 5.01. Mergers, Consolidations and Sales of Assets.
(a) The Company will not, in a single transaction or series of
related transactions, consolidate or merge with or into any Person, or sell,
assign, transfer, lease, convey or otherwise dispose of (or cause or permit any
Restricted
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Subsidiary to sell, assign, transfer, lease, convey or otherwise dispose of) all
or substantially all of the Company's assets (determined on a consolidated basis
for the Company and the Company's Restricted Subsidiaries), whether as an
entirety or substantially as an entirety, to any Person unless: (i) either (1)
the Company shall be the surviving or continuing corporation or (2) the Person
(if other than the Company) formed by such consolidation or into which the
Company is merged or the Person which acquires by sale, assignment, transfer,
lease, conveyance or other disposition the properties and assets of the Company
and of the Restricted Subsidiaries substantially as an entirety (the "Surviving
Entity") (x) shall be a corporation organized and validly existing under the
laws of the United States or any state thereof or the District of Columbia and
(y) shall expressly assume, by supplemental indenture (in form and substance
satisfactory to the Trustee), executed and delivered to the Trustee, the due and
punctual payment of the principal of, and premium, if any, and interest on all
of the Securities and the performance of every covenant of the Securities, this
Indenture and the Registration Rights Agreement on the part of the Company to be
performed or observed; (ii) immediately after giving effect to such transaction
and the assumption contemplated by clause (i)(2)(y) above (including giving
effect to any Indebtedness incurred or anticipated to be incurred in connection
with or in respect of such transaction), the Company or such Surviving Entity,
as the case may be, shall be able (on a pro forma basis) to incur at least $1.00
of additional Indebtedness (other than Permitted Indebtedness) pursuant to
Section 4.03 hereof; (iii) immediately before and immediately after giving
effect to such transaction and the assumption contemplated by clause (i)(2)(y)
above (including, without limitation, giving effect to any Indebtedness and
Acquired Indebtedness incurred or anticipated to be incurred and any Lien
granted in connection with or in respect of the transaction) no Default or Event
of Default shall have occurred or be continuing; and (iv) the Company or the
Surviving Entity, as the case may be, shall have delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, each stating that such
consolidation, merger, sale, assignment, transfer, lease, conveyance or other
disposition and, if a supplemental indenture is required in connection with such
transaction, such supplemental indenture comply with the applicable provisions
of this Indenture and that all conditions precedent in this Indenture relating
to
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such transaction have been satisfied.
(b) For purposes of the foregoing, the transfer (by lease,
assignment, sale or otherwise, in a single transaction or series of
transactions) of all or substantially all of the properties or assets of one or
more Restricted Subsidiaries, the Capital Stock of which constitutes all or
substantially all of the properties and assets of the Company, shall be deemed
to be the transfer of all or substantially all of the properties and assets of
the Company.
(c) No Guarantor (other than any Guarantor whose Guarantee is to be
released in accordance with the terms of the Guarantee and this Indenture in
connection with any transaction complying with the provisions of Section 4.12)
will, and the Company will not cause or permit any Guarantor to, consolidate
with or merge with or into any Person other than the Company or any other
Guarantor unless: (i) the entity formed by or surviving any such consolidation
or merger (if other than the Guarantor) is a corporation organized and existing
under the laws of the United States or any State thereof or the District of
Columbia; (ii) such entity assumes by supplemental indenture all of the
obligations of the Guarantor on the Guarantee; (iii) immediately after giving
effect to such transaction, no Default or Event of Default shall have occurred
and be continuing; (iv) immediately after giving effect to such transaction and
the use of any net proceeds therefrom on a pro forma basis, the Company could
satisfy the provisions of clause (a)(ii) of this Section 5.01; and (v) the
Company shall have delivered to the Trustee an Officers' Certificate and Opinion
of Counsel, each stating that such consolidation or merger and, if a
supplemental indenture is required in connection with such transaction, such
supplemental indenture comply with the applicable provisions of this Indenture
and that all conditions precedent in this Indenture relating to such transaction
have been satisfied. Any merger or consolidation of a Guarantor with and into
the Company (with the Company being the surviving entity) or another Guarantor
need only comply with subclause (v) of this clause (c).
SECTION 5.02. Successor Corporation Substituted.
In accordance with the foregoing, upon any such consolidation,
merger, conveyance, lease or transfer of all or
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substantially all of the assets of the Company in which the Company is not the
continuing corporation, the Surviving Entity formed by such consolidation or
into which the Company is merged or to which such conveyance, lease or transfer
is made shall succeed to, and be substituted for, and may exercise every right
and power of, the Company under this Indenture and the Securities with the same
effect as if such successor had been named as the Company herein, and thereafter
(except in the case of a sale, assignment, transfer, lease, conveyance or other
disposition) the predecessor corporation will be relieved of all further
obligations and covenants under this Indenture, the Securities and the
Registration Rights Agreement; provided that solely for purposes of computing
amounts described in subclause (iii) of Section 4.04, any such Surviving Entity
shall only be deemed to have succeeded to and be substituted for the Company
with respect to periods subsequent to the effective time of such merger,
consolidation or transfer of assets.
ARTICLE SIX
DEFAULT AND REMEDIES
SECTION 6.01. Events of Default.
An "Event of Default" occurs if:
(1) the Company fails to pay interest on any Security for a period
of 30 days after the same becomes due and payable; or
(2) the Company fails to pay the principal of any Security, when
such principal becomes due and payable, whether at maturity, upon
redemption or otherwise (including the failure to make a payment to
purchase Securities tendered pursuant to a Change of Control Offer or
Excess Proceeds Offer); or
(3) the Company or any Guarantor defaults in the observance or
performance of any other covenant or agreement contained in this
Indenture, the Securities or any Guarantee, which default continues for a
period of 60 days after (x) the Company receives written notice specifying
the default and requiring the Company to remedy
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the same from the Trustee or (y) the Company and the Trustee receive such
a notice from Holders of at least 25% in principal amount of outstanding
Securities (except in the case of a default with respect to Article Five,
which will constitute an Event of Default with such notice requirement but
without such passage of time requirement); or
(4) the Company or a Restricted Subsidiary defaults under any
mortgage, indenture or instrument under which there may be issued or by
which there may be secured or evidenced any Indebtedness of the Company or
of any Restricted Subsidiary (or the payment of which is guaranteed by the
Company or any Restricted Subsidiary) which default (a) is caused by a
failure to pay interest, premium or principal of such Indebtedness which
failure shall not be cured, waived or postponed pursuant to an agreement
with the holders of such Indebtedness within 30 days after notice of such
Default is given hereunder (a "payment default"), or (b) results in the
acceleration of such Indebtedness prior to its express maturity and such
acceleration shall not be rescinded or annulled within 10 days after
notice of such Default is given hereunder 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 at least
$3,000,000; or
(5) the Company or any of its Restricted Subsidiaries (A) admits in
writing its inability to pay its debts generally as they become due, (B)
commences a voluntary case or proceeding under any Bankruptcy Law with
respect to itself, (C) consents to the entry of a judgment, decree or
order for relief against it in an involuntary case or proceeding under any
Bankruptcy Law, (D) consents to the appointment of a Custodian of it or
for substantially all of its property, (E) consents to or acquiesces in
the institution of a bankruptcy or an insolvency proceeding against it,
(F) makes a general assignment for the benefit of its creditors, or (G)
takes any corporate action to authorize or effect any of the foregoing; or
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(6) a court of competent jurisdiction enters a judgment, decree or
order for relief in respect of the Company or any Restricted Subsidiary in
an involuntary case or proceeding under any Bankruptcy Law, which shall
(A) approve as properly filed a petition seeking reorganization,
arrangement, adjustment or composition in respect of the Company or any
Restricted Subsidiary, (B) appoint a Custodian of the Company or any
Restricted Subsidiary or for substantially all of any of their property or
(C) order the winding-up or liquidation of its affairs; and such judgment,
decree or order shall remain unstayed and in effect for a period of 60
consecutive days; or
(7) one or more judgments, orders or decrees of any court or
regulatory or administrative agency of competent jurisdiction for the
payment of money in excess of $3,000,000, either individually or in the
aggregate, shall be entered against the Company or any Restricted
Subsidiary of the Company or any of their respective properties and shall
not be discharged or fully bonded and there shall have been a period of 60
days after the date on which any period for appeal has expired and during
which a stay of enforcement of such judgment, order or decree shall not be
in effect; or
(8) any Guarantee ceases to be in full force and effect, or any
Guarantee is declared to be null and void and unenforceable or any
Guarantee is found to be invalid or any Guarantor denies its liability
under its Guarantee (other than by reason of release of a Guarantor in
accordance with the terms of this Indenture).
SECTION 6.02. Acceleration.
If an Event of Default (other than an Event of Default specified in
clause (5) or (6) above) occurs and is continuing, then the Trustee or the
Holders of not less than 25% in aggregate principal amount of the then
outstanding Securities may declare the unpaid principal of, premium, if any, and
accrued and unpaid interest on, all the Securities then outstanding to be
immediately due and payable, by a notice in writing to the Company (and to the
Trustee, if given by Holders) specifying the respective Event(s) of Default and
that
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it is a "notice of acceleration" and upon such declaration such principal
amount, premium, if any, and accrued and unpaid interest will become immediately
due and payable. If an Event of Default specified in clause (5) or (6) above
occurs, all unpaid principal of, and premium, if any, and accrued and unpaid
interest on, the Securities then outstanding will ipso facto become and be
immediately due and payable without any declaration or other act on the part of
the Trustee or any Holder.
At any time after a declaration of acceleration with respect to the
Securities as described in the preceding paragraph, the Holders of a majority in
principal amount of the Securities then outstanding may rescind and cancel such
declaration and its consequences (a) if the rescission would not conflict with
any judgment or decree, (b) if all existing Events of Default have been cured or
waived except nonpayment of principal or interest that has become due solely
because of the acceleration, (c) to the extent the payment of such interest is
lawful, interest on overdue installments of interest and overdue principal,
which has become due otherwise than by such declaration of acceleration, has
been paid, (d) if the Company has paid the Trustee its reasonable compensation
and reimbursed the Trustee for its expenses, disbursements and advances and (e)
in the event of the cure or waiver of an Event of Default of the type described
in clauses (5) and (6) of the description of Events of Default above, the
Trustee shall have received an Officers' Certificate and an Opinion of Counsel
that such Event of Default has been cured or waived. No such rescission shall
affect any subsequent Default or impair any right consequent thereto.
SECTION 6.03. Other Remedies.
If an Event of Default occurs and is continuing, the Trustee may
pursue any available remedy by proceeding at law or in equity to collect the
payment of principal of or interest on the Securities or to enforce the
performance of any provision of the Securities, this Indenture or any Guarantee
and may take any necessary action requested of it as Trustee to settle,
compromise, adjust or otherwise conclude any proceedings to which it is a party.
The Trustee may maintain a proceeding even if it does
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not possess any of the Securities or does not produce any of them in the
proceeding. A delay or omission by the Trustee or any Securityholder in
exercising any right or remedy accruing upon an Event of Default shall not
impair the right or remedy or constitute a waiver of or acquiescence in the
Event of Default. No remedy is exclusive of any other remedy. All available
remedies are cumulative to the extent permitted by law.
SECTION 6.04. Waiver of Past Defaults.
Subject to Sections 6.07 and 9.02, the Holders of not less than a
majority in principal amount of the outstanding Securities by written notice to
the Trustee may waive an existing Default or Event of Default and its
consequences, except a Default in the payment of principal of, premium or
interest on any Security as specified in clauses (1) and (2) of Section 6.01.
The Company shall deliver to the Trustee an Officers' Certificate stating that
the requisite percentage of Holders have consented to such waiver and attaching
copies of such consents upon which the Trustee may conclusively rely. When a
Default or Event of Default is waived, it is cured and ceases.
SECTION 6.05. Control by Majority.
The Holders of not less than a majority in principal amount of the
outstanding Securities may direct the time, method and place of conducting any
proceeding for any remedy available to the Trustee or exercising any trust or
power conferred on it. Subject to Section 7.01, however, the Trustee may refuse
to follow any direction that conflicts with any law or this Indenture, that the
Trustee determines may be unduly prejudicial to the rights of another
Securityholder, or that may involve the Trustee in Personal liability; provided
that the Trustee may take any other action deemed proper by the Trustee which is
not inconsistent with such direction.
In the event the Trustee takes any action or follows any direction
pursuant to this Indenture, the Trustee shall be entitled to indemnification
from the Company satisfactory to it in its sole discretion against any loss,
liability, cost or expense caused by taking such action or following such
direction.
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SECTION 6.06. Limitation on Suits.
A Securityholder may not pursue any remedy with respect to this
Indenture, the Securities or any Guarantee unless:
(1) the Holder gives to the Trustee written notice of a continuing
Event of Default;
(2) the Holder or Holders of at least 25% in principal amount of the
outstanding Securities make a written request to the Trustee to pursue the
remedy;
(3) such Holder or Holders offer and, if requested, provide to the
Trustee indemnity satisfactory to the Trustee against any loss, liability
or expense;
(4) 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
(5) during such 60-day period the Holder or Holders of a majority in
principal amount of the outstanding Securities do not give the Trustee a
direction which, in the opinion of the Trustee, is inconsistent with the
request.
A Securityholder may not use this Indenture to prejudice the rights
of another Securityholder or to obtain a preference or priority over such other
Securityholder.
SECTION 6.07. Rights of Holders To Receive Payment.
Notwithstanding any other provision of this Indenture, the right of
any Holder to receive payment of principal of, premium and interest on a
Security, on or after the respective due dates expressed in such Security, 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 the Holder.
SECTION 6.08. Collection Suit by Trustee.
If an Event of Default in payment of principal, premium or interest
specified in clause (1) or (2) of
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Section 6.01 occurs and is continuing, the Trustee may recover judgment in its
own name and as trustee of an express trust against the Company or any other
obligor on the Securities for the whole amount of principal and accrued interest
remaining unpaid, together with interest on overdue principal and, to the extent
that payment of such interest is lawful, interest on overdue installments of
interest, in each case at the rate per annum borne by the Securities 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 may 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, legal
fees, disbursements and advances of the Trustee, its agents, nominees,
custodians, counsel, accountants and experts) and the Securityholders allowed in
any judicial proceedings relating to the Company, its creditors or its property
and shall be entitled and empowered to collect and receive any monies or other
property payable or deliverable on any such claims and to distribute the same,
and any Custodian in any such judicial proceedings is hereby authorized by each
Securityholder 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
Securityholders, to pay to the Trustee any amount due to it for the reasonable
compensation, expenses, legal fees, disbursements and advances of the Trustee,
its agents, nominees, custodians and counsel, and any other amounts due the
Trustee or any predecessor under Section 7.07. 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 or any predecessor
Trustee under Section 7.07 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, monies, securities
and other properties which the Holders of the Securities 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
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accept or adopt on behalf of any Securityholder any plan of reorganization,
arrangement, adjustment or composition affecting the Securities or the rights of
any Holder thereof, or to authorize the Trustee to vote in respect of the claim
of any Securityholder in any such proceeding.
SECTION 6.10. Priorities.
If the Trustee collects any money or property pursuant to this
Article Six, it shall pay out the money or property in the following order:
First: to the Trustee for amounts due under Section 7.07;
Second: if the Holders are forced to proceed against the Company, a
Guarantor or any other obligor on the Securities directly without the
Trustee, to Holders for their collection costs;
Third: to Holders for amounts due and unpaid on the Securities for
principal, premium and interest, ratably, without preference or priority
of any kind, according to the amounts due and payable on the Securities
for principal, premium and interest, respectively; and
Fourth: to the Company or any Guarantors, as their respective
interests may appear.
The Trustee, upon prior notice to the Company, may fix a record date
and payment date for any payment to Securityholders 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 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 and expenses, against any party litigant in the suit, having due
regard to the merits and good faith of the claims or defenses made by the party
litigant. This Section 6.11 does not apply to a suit by the
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Trustee, a suit by a Holder pursuant to Section 6.07, or a suit by a Holder or
Holders of more than 10% in principal amount of the outstanding Securities.
ARTICLE SEVEN
TRUSTEE
SECTION 7.01. Duties of Trustee.
(a) If an Event of Default actually known to a Responsible Officer
of the Trustee 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 their exercise as a prudent Person would exercise or use
under the circumstances in the conduct of his own affairs. Subject to such
provisions, the Trustee shall be under no obligation to exercise any of its
rights or powers under this Indenture at the request of any of the holders of
Securities, unless they shall have offered to the Trustee security and indemnity
satisfactory to it in its sole discretion.
(b) Except during the continuance of an Event of Default actually
known to a Responsible Officer of the Trustee:
(1) The Trustee need perform only those duties as are specifically
set forth herein and no others and no implied covenants or obligations
shall be read into this Indenture against the Trustee.
(2) In the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness
of the opinions expressed therein, upon certificates or opinions and such
other documents delivered to it pursuant to Section 11.04 hereof furnished
to the Trustee and conforming to the requirements of this Indenture.
However, the Trustee shall examine the certificates and opinions to
determine
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whether or not they conform to the requirements of this
Indenture.
(c) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(1) This paragraph does not limit the effect of paragraph (b) of
this Section 7.01.
(2) The Trustee shall not be liable for any error of judgment made
in good faith by a Responsible Officer of the Trustee, unless it is proved
that the Trustee was negligent in ascertaining the pertinent facts.
(3) 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.
(d) No provision of this Indenture shall require the Trustee to
expend or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder or to take or omit to take any action
under this Indenture or take any action at the request or direction of Holders
if it shall have reasonable grounds for believing that repayment of such funds
is not assured to it or it does not receive an indemnity satisfactory to it in
its sole discretion against such risk, liability, loss, fee or expense which
might be incurred by it in compliance with such request or direction.
(e) Every provision of this Indenture that in any way relates to the
Trustee is subject to this Section 7.01.
(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.
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Subject to Section 7.01:
(a) The Trustee may conclusively rely and shall be protected in
acting or refraining from acting on 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 and an Opinion of Counsel, which shall conform to
the provisions of Section 11.05. The Trustee shall not be liable for any
action it takes or omits to take in good faith in reliance on such
certificate or opinion.
(c) The Trustee may act through its attorneys, agents, custodians
and nominees and shall not be responsible for the misconduct or negligence
of any attorney, agent, custodian or nominee (other than such a Person who
is an employee of the Trustee) appointed with due care.
(d) The Trustee shall not be liable for any action it takes or omits
to take in good faith which it reasonably believes to be authorized or
within its rights or powers.
(e) The Trustee may consult with counsel and the advice or opinion
of such counsel as to matters of law shall be full and complete
authorization and protection from liability in respect of any action
taken, omitted or suffered by it hereunder in good faith and in accordance
with the advice or opinion of such counsel.
(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, order or
direction of any of the Holders pursuant to the provisions of this
Indenture, unless such Holders shall have offered to the Trustee
reasonable security or indemnity against the costs, expenses and
liabilities which may be incurred therein or thereby.
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(g) The Trustee shall not be deemed to have notice or knowledge of
any matter unless a Responsible Officer assigned to and working in the
Trustee's Corporate Trust Administration has actual knowledge thereof or
unless written notice thereof is received by the Trustee, attention:
Corporate Trust Administration and such notice references the Securities
generally, the Company or this Indenture.
SECTION 7.03. Individual Rights of Trustee.
The Trustee in its individual or any other capacity may become the
owner or pledgee of Securities and may otherwise deal with the Company, its
Subsidiaries, any Guarantors and their respective Affiliates with the same
rights it would have if it were not Trustee. Any Agent may do the same with like
rights. However, the Trustee must comply with Sections 7.10 and 7.11.
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 Securities, it shall not
be accountable for the Company's use of the proceeds from the Securities, and it
shall not be responsible for any statement of the Company in this Indenture or
any document issued in connection with the sale of Securities or any statement
in the Securities other than the Trustee's certificate of authentication. The
Trustee makes no representations with respect to the effectiveness or adequacy
of this Indenture. The Trustee shall not be responsible for independently
ascertaining or maintaining such validity, if any, and shall be fully protected
in relying upon certificates and opinions delivered to it in accordance with the
terms of this Indenture.
SECTION 7.05. Notice of Default.
If a Default or an Event of Default occurs and is continuing and a
Responsible Officer of the Trustee receives actual notice of such event, the
Trustee shall mail to each Securityholder, as their names and addresses appear
on the Securityholder list described in Section 2.05, notice of the uncured
Default or Event of Default within 90 days after the occurrence thereof. Except
in the case of a Default or an
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Event of Default in payment of principal of, premium or interest on, any
Security, including the failure to make payment on (i) the Change of Control
Payment Date pursuant to a Change of Control Offer or (ii) the Excess Proceeds
Payment Date pursuant to an Asset Sale Offer, the Trustee may withhold the
notice if and so long as the board of directors, the executive committee, or a
trust committee of directors, of the Trustee in good faith determines that
withholding the notice is in the interest of the Securityholders.
SECTION 7.06. Reports by Trustee to Holders.
This Section 7.06 shall not be operative as a part of this Indenture
until this Indenture is qualified under the TIA, and, until such qualification,
this Indenture shall be construed as if this Section 7.06 were not contained
herein.
Within 60 days after each May 15 of each year beginning with 1997,
the Trustee shall, to the extent that any of the events described in TIA {
313(a) occurred within the previous twelve months, but not otherwise, mail to
each Securityholder a brief report dated as of such date that complies with TIA
{ 313(a). The Trustee also shall comply with TIA {{ 313(b), 313(c) and 313(d).
A copy of each report at the time of its mailing to Securityholders
shall be mailed to the Company and filed with the SEC and each securities
exchange, if any, on which the Securities are listed.
The Company shall notify a Responsible Officer of the Trustee if the
Securities become listed on any securities exchange or of any delisting thereof.
SECTION 7.07. Compensation and Indemnity.
The Company and the Guarantors shall pay to the Trustee from time to
time reasonable compensation for its services hereunder. The Trustee's
compensation shall not be limited by any law on compensation of a trustee of an
express trust. The Company and the Guarantors shall reimburse the Trustee upon
request for all reasonable disbursements, expenses and advances (including
reasonable fees and expenses of counsel) incurred or made by it in addition to
the compensation for its services, except any such disbursements, expenses and
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advances as may be attributable to the Trustee's negligence or bad faith. Such
expenses shall include the reasonable compensation, legal fees, disbursements
and expenses of the Trustee's agents, accountants, experts, nominees, custodians
and counsel and any taxes or other expenses incurred by a trust created pursuant
to Section 8.01 hereof.
The Company and the Guarantors shall indemnify the Trustee, its
directors, officers and employees and each predecessor trustee for, and hold it
harmless against, any loss, liability or expense incurred by the Trustee without
negligence or bad faith on its part arising out of or in connection with the
administration of this trust and its duties under this Indenture, including the
reasonable expenses and attorneys' fees of defending itself against any claim of
liability arising hereunder. The Trustee shall notify the Company promptly of
any claim asserted against the Trustee for which it may seek indemnity. However,
the failure by the Trustee to so notify the Company shall not relieve the
Company of its obligations hereunder. The Company shall, if requested by the
Trustee, defend the claim and the Trustee shall cooperate in the defense (and
may employ its own counsel) at the Company's expense. The Company need not
reimburse any expense or indemnify against any loss or liability incurred by the
Trustee as a result of the violation of this Indenture by the Trustee if such
violation arose from the Trustee's negligence or bad faith.
To secure the Company's payment obligations in this Section 7.07,
the Trustee shall have a senior claim prior to the Securities against all money
or property held or collected by the Trustee, in its capacity as Trustee.
When the Trustee incurs expenses or renders services after an Event
of Default specified in clause (5) or (6) of Section 6.01 occurs, the expenses
(including the reasonable fees and expenses of its agents and counsel) and the
compensation for the services shall be preferred over the status of the Holders
in a proceeding under any Bankruptcy Law and are intended to constitute expenses
of administration under any Bankruptcy Law. The Company's obligations under this
Section 7.07 and any claim arising hereunder shall survive the resignation or
removal of any Trustee, the discharge of the Company's obligations pursuant to
Article Eight and any
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rejection or termination under any Bankruptcy Law.
SECTION 7.08. Replacement of Trustee.
The Trustee may resign at any time by so notifying the Company in
writing. The Holders of a majority in principal amount of the outstanding
Securities may remove the Trustee by so notifying the Company and the Trustee in
writing and may appoint a successor trustee with the Company's consent. The
Company may remove the Trustee if:
(1) the Trustee fails to comply with Section 7.10;
(2) the Trustee is adjudged a bankrupt or an insolvent;
(3) a receiver or other public officer takes charge of the Trustee
or its property; or
(4) the Trustee becomes legally incapable of acting with respect to
its duties hereunder.
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Company shall notify each Holder of such
event and 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 Securities may appoint a successor Trustee to replace the successor Trustee
appointed by the Company.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Immediately after that,
the retiring Trustee shall transfer, after payment of all sums then owing to the
Trustee pursuant to Section 7.07, all property held by it as Trustee to the
successor Trustee, subject to the lien provided in Section 7.07, 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; provided, however, that no Trustee under this Indenture shall be
liable for any act or omission of any successor Trustee. A successor Trustee
shall mail notice of its succession to each Securityholder.
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If a successor Trustee does not take office within 30 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company or the
Holders of at least 10% in principal amount of the outstanding Securities may
petition any court of competent jurisdiction for the appointment of a successor
Trustee.
If the Trustee fails to comply with Section 7.10, any Securityholder
may petition any court of competent jurisdiction for the removal of the Trustee
and the appointment of a successor Trustee.
Notwithstanding replacement of the Trustee pursuant to this Section
7.08, the Company's obligations under Section 7.07 shall continue for the
benefit of the retiring Trustee and the Company shall pay to any such replaced
or removed Trustee all amounts owed under Section 7.07 upon such replacement or
removal.
SECTION 7.09. Successor Trustee by Merger, Etc.
If the Trustee consolidates with, merges or converts into, or
transfers all or substantially all of its corporate trust business to, another
corporation, the resulting, surviving or transferee corporation without any
further act shall, if such resulting, surviving or transferee corporation is
otherwise eligible hereunder, be the successor Trustee. In case any Securities
shall have been authenticated, but not delivered, by the Trustee then in office,
any successor by merger, conversion or consolidation to such authenticating
Trustee may adopt such authentication and deliver the Securities so
authenticated with the same effect as if such successor Trustee had itself
authenticated such Securities.
SECTION 7.10. Eligibility; Disqualification.
This Indenture shall always have a Trustee who satisfies the
requirement of TIA {{ 310(a)(1) and 310(a)(5). The Trustee shall have a combined
capital and surplus of at least $50,000,000 as set forth in its most recent
published annual report of condition. The Trustee shall comply with TIA {
310(b); provided, however, that there shall be excluded from the operation of
TIA { 310(b)(1) any indenture or indentures under which other securities, or
certificates of interest or
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participation in other securities, of the Company are outstanding, if the
requirements for such exclusion set forth in TIA { 310(b)(1) are met.
SECTION 7.11. Preferential Collection of Claims Against Company.___
The Trustee, in its capacity as Trustee hereunder, shall comply with
TIA { 311(a), excluding any creditor relationship listed in TIA { 311(b). A
Trustee who has resigned or been removed shall be subject to TIA { 311(a) to the
extent indicated.
ARTICLE EIGHT
SATISFACTION AND DISCHARGE OF INDENTURE
SECTION 8.01. Legal Defeasance and Covenant Defeasance.
(a) The Company may, at its option by Board Resolution, at any time,
with respect to the Securities, elect to have either paragraph (b) or paragraph
(c) below be applied to the outstanding Securities upon compliance with the
conditions set forth in paragraph (d).
(b) Upon the Company's exercise under paragraph (a) of the option
applicable to this paragraph (b), the Company shall be deemed to have been
released and discharged from its obligations with respect to the outstanding
Securities on the date the conditions set forth below are satisfied
(hereinafter, "Legal Defeasance"). For this purpose, such Legal Defeasance means
that the Company shall be deemed to have paid and discharged the entire
indebtedness represented by the outstanding Securities, which shall thereafter
be deemed to be "outstanding" only for the purposes of the Sections and matters
under this Indenture referred to in (i) and (ii) below, and to have satisfied
all its other obligations under such Securities and this Indenture insofar as
such Securities are concerned, except for the following and those specified in
Section 8.03, which shall survive until otherwise terminated or discharged
hereunder: (i) the rights of the Holders of outstanding Securities to receive
payment in respect of the principal of, premium, if any, and interest on such
Securities when such payments are due, (ii) the Company's obligations to issue
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temporary Securities, register the transfer or exchange of any Securities,
replace mutilated, destroyed, lost or stolen Securities and maintain an office
or agency for payments in respect of the Securities, (iii) the rights, powers,
trusts, duties and immunities of the Trustee (including the claims of, or
payments to, the Trustee under or pursuant to Section 7.07), and (iv) the
defeasance provisions of this Indenture. The Company may exercise its option
under this paragraph (b) notwithstanding the prior exercise of its option under
paragraph (c) below with respect to the Securities.
(c) Upon the Company's exercise under paragraph (a) of the option
applicable to this paragraph (c), the Company shall be released and discharged
from its obligations under any covenant contained in Article Five and in
Sections 4.03 through 4.24 with respect to the outstanding Securities on and
after the date the conditions set forth below are satisfied (hereinafter,
"Covenant Defeasance"), and the Securities shall thereafter be deemed to be not
"outstanding" for the purpose 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. For this purpose, such Covenant Defeasance means that, with respect
to the outstanding Securities, the Company and any Guarantor 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(3), nor shall any event referred to in Section 6.01(4) or (7)
thereafter constitute a Default or an Event of Default thereunder but, except as
specified above, the remainder of this Indenture and such Securities shall be
unaffected thereby.
(d) The following shall be the conditions to application of either
paragraph (b) or paragraph (c) above to the outstanding Securities:
(1) The Company shall have irrevocably deposited in trust with the
Trustee, pursuant to an irrevocable trust and security agreement in form
and substance satisfactory
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to the Trustee, U.S. Legal Tender or direct non-callable obligations of,
or non-callable obligations guaranteed by, the United States of America
for the payment of which obligation or guarantee the full faith and credit
of the United States of America is pledged ("U.S. Government Obligations")
maturing as to principal and interest in such amounts and at such times as
are sufficient, without consideration of the reinvestment of such interest
and principal and after payment of all Federal, state and local taxes or
other charges or assessments in respect thereof payable by the Trustee, in
the opinion of a nationally recognized firm of Independent public
accountants expressed in a written certification thereof (in form and
substance reasonably satisfactory to the Trustee) delivered to the
Trustee, to pay the principal of, premium, if any, and interest on all the
outstanding Securities on the dates on which any such payments are due and
payable in accordance with the terms of this Indenture and of the
Securities;
(2) Such deposits shall not cause the Trustee to have a
conflicting interest as defined in and for purposes of the TIA;
(3) The Trustee shall have received Officers' Certificates stating
that No Default of Event of Default or event which with notice or lapse of
time or both would become a Default or an Event of Default with respect to
the Securities shall have occurred and be continuing on the date of such
deposit or, insofar as Section 6.01(5) or (6) is concerned, at any time
during the period ending on the 91st day after the date of such deposit
(it being understood that this condition shall not be deemed satisfied
until the expiration of such period);
(4) The Trustee shall have received Officers' Certificates stating
that such deposit will not result in a Default under this Indenture or a
breach or violation of, or constitute a default under, any other material
instrument or agreement to which the Company or any of its Subsidiaries is
a party or by which it or its property is bound;
(5) (i) In the event the Company elects paragraph
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(b) hereof, the Company shall deliver to the Trustee an Opinion of
Counsel, in form and substance reasonably satisfactory to the Trustee to
the effect that (A) the Company has received from, or there has been
published by, the Internal Revenue Service a ruling or (B) since the Issue
Date, there has been a change in the applicable federal income tax law, in
either case to the effect that, and based thereon such Opinion of Counsel
shall state that Holders of the Securities will not recognize income gain
or loss for Federal income tax purposes as a result of such deposit and
the defeasance contemplated hereby and will be subject to Federal income
taxes in the same manner and at the same times as would have been the case
of such deposit and defeasance had not occurred, or (ii) in the event the
Company elects paragraph (c) hereof, the Company shall deliver to the
Trustee an Opinion of Counsel, in form and substance reasonably
satisfactory to the Trustee, to the effect that, Holders of the Securities
will not recognize income, gain or loss for Federal income tax purposes as
a result of such deposit and the defeasance contemplated hereby and will
be subject to Federal income tax in the same amounts and in the same
manner and at the same times as would have been the case if such deposit
and defeasance had not occurred;
(6) The deposit shall not result in the Company, the Trustee or the
trust becoming or being deemed to be an "investment company" under the
Investment Company Act of 1940, as amended;
(7) The Company shall have delivered to the Trustee an Officers'
Certificate, in form and substance reasonably satisfactory to the Trustee,
stating that the deposit under clause (1) was not made by the Company, a
Guarantor or any Subsidiary of the Company with the intent of defeating,
hindering, delaying or defrauding any other creditors of the Company, a
Guarantor, or any Subsidiary of the Company or others;
(8) The Company shall have delivered to the Trustee an Opinion of
Counsel, in form and substance reasonably satisfactory to the Trustee, to
the effect that, (A) the
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trust funds will not be subject to the rights of holders of Indebtedness
of the Company or any Guarantor other than the Securities and (B) assuming
no intervening bankruptcy of the Company between the date of deposit and
the 91st day following the deposit and that no Holder of Securities is an
insider of the Company, after the passage of 90 days following the
deposit, the trust funds will not be subject to any applicable bankruptcy,
insolvency, reorganization or similar law affecting creditors' rights
generally; and
(9) The Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent specified herein relating to the defeasance contemplated by this
Section 8.01 have been complied with; provided, however, that no deposit
under clause (1) above shall be effective to terminate the obligations of
the Company under the Securities or this Indenture prior to 90 days
following any such deposit.
In the event all or any portion of the Securities are to be redeemed
through such irrevocable trust, the Company must make arrangements satisfactory
to the Trustee, at the time of such deposit, for the giving of the notice of
such redemption or redemptions by the Trustee in the name and at the expense of
the Company.
SECTION 8.02. Satisfaction and Discharge.
In addition to the Company's rights under Section 8.01, the Company
may terminate all of its obligations under this Indenture (subject to Section
8.03) when:
(1) all Securities theretofore authenticated and delivered (other
than Securities which have been destroyed, lost or stolen and which have
been replaced or paid as provided in Section 2.07) have been delivered to
the Trustee for cancellation; or
(2) all Securities not theretofore delivered to the Trustee for
cancellation (except lost, stolen or destroyed Securities which have been
replaced or paid) have been called for redemption pursuant to the terms of
the Securities or have otherwise become due and payable and
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the Company has irrevocably deposited or caused to be deposited with the
Trustee funds in an amount sufficient to pay and discharge the entire
Indebtedness on the Securities not theretofore delivered to the Trustee
for cancellation, for principal of, premium, if any, and interest on the
Securities to the date of deposit together with irrevocable instructions
from the Company directing the Trustee to apply such funds to the payment
thereof at maturity or redemption, as the case may be; and
(3) the Company has paid or caused to be paid all other sums payable
hereunder and under the Securities by the Company; and
(4) there exists no Default or Event of Default under this
Indenture; and
(5) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent specified herein relating to the satisfaction and discharge of
this Indenture have been complied with.
SECTION 8.03. Survival of Certain Obligations.
Notwithstanding the satisfaction and discharge of this Indenture and
of the Securities referred to in Section 8.01 or 8.02, the respective
obligations of the Company and the Trustee under Sections 2.02, 2.03, 2.04,
2.05, 2.06, 2.07, 2.10, 2.12, 2.13, 4.01, 4.02 and 6.07, Article Seven and
Sections 8.05, 8.06 and 8.07 shall survive until the Securities are no longer
outstanding, and thereafter the obligations of the Company and the Trustee under
Sections 7.07, 8.05, 8.06 and 8.07 shall survive. Nothing contained in this
Article Eight shall abrogate any of the rights, obligations or duties of the
Trustee under this Indenture.
SECTION 8.04. Acknowledgment of Discharge by Trustee.
Subject to Section 8.07, after (i) the conditions of Section 8.01 or
8.02 have been satisfied, (ii) the Company has paid or caused to be paid all
other sums payable hereunder by the Company and (iii) the Company has delivered
to the Trustee an Officers' Certificate and an Opinion of Counsel, each stating
that all conditions precedent referred to in clause (i)
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above relating to the satisfaction and discharge of this Indenture have been
complied with, the Trustee upon written request shall acknowledge in writing the
discharge of the Company's obligations under this Indenture except for those
surviving obligations specified in Section 8.03.
SECTION 8.05. Application of Trust Assets.
The Trustee shall hold any U.S. Legal Tender or U.S. Government
Obligations deposited with it in the irrevocable trust established pursuant to
Section 8.01. The Trustee shall apply the deposited U.S. Legal Tender or the
U.S. Government Obligations, together with earnings thereon, through the Paying
Agent, in accordance with this Indenture and the terms of the irrevocable trust
agreement established pursuant to Section 8.01, to the payment of principal of
and interest on the Securities. The U.S. Legal Tender or U.S. Government
Obligations so held in trust and deposited with the Trustee in compliance with
Section 8.01 shall not be part of the trust estate under this Indenture, but
shall constitute a separate trust fund for the benefit of all Holders entitled
thereto. The Company and the Guarantors shall pay and indemnify the Trustee
against any tax, fee or other charge imposed on or assessed against the U.S.
Government Obligations deposited pursuant to Section 8.01 or the principal,
premium, if any, and interest received in respect thereof other than any such
tax, fee or other charge which by law is for the account of the Holders of the
outstanding Securities.
SECTION 8.06. Repayment to the Company or Guarantors; Unclaimed Money.
Subject to Sections 7.07 and 8.01, the Trustee shall promptly pay to
the Company, or if deposited with the Trustee by any Guarantor, to such
Guarantor, upon receipt by the Trustee of an Officers' Certificate (together
with an opinion from a nationally recognized firm of independent public accounts
expressed in a written certification thereof delivered to the Trustee), any
excess money, determined in accordance with Section 8.01, held by it at any
time. The Trustee and the Paying Agent shall pay to the Company or any
Guarantor, as the case may be, upon receipt by the Trustee or the Paying Agent,
as the case may be, of an Officers' Certificate, any money held by it for the
payment of principal, premium, if any, or
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interest that remains unclaimed for two years after payment to the Holders is
required; provided, however, that the Trustee and the Paying Agent before being
required to make any payment may, but need not, at the expense of the Company
cause to be published once in a newspaper of general circulation in the City of
New York or mail to each Holder entitled to such money notice that such money
remains unclaimed and that after a date specified therein, which shall be at
least 2 years from the date of such publication or mailing, any unclaimed
balance of such money then remaining will be repaid to the Company. After
payment to the Company or any Guarantor, as the case may be, Security holders
entitled to money must look solely to the Company for payment as general
creditors unless an applicable abandoned property law designates another Person,
and all liability of the Trustee or Paying Agent with respect to such money
shall thereupon cease.
SECTION 8.07. Reinstatement.
If the Trustee or Paying Agent is unable to apply any money or U.S.
Government Obligations in accordance with this Indenture by reason of any legal
proceeding or by reason of any order or judgment of any court or governmental
authority enjoining, restraining or otherwise prohibiting such application, then
and only then the Company's and each Guarantor's, if any, obligations under this
Indenture and the Securities shall be revived and reinstated as though no
deposit had been made pursuant to this Indenture until such time as the Trustee
is permitted to apply all such money or U.S. Government Obligations in
accordance with this Indenture; provided, however, that if the Company or the
Guarantors, as the case may be, have made any payment of principal of, premium,
if any, or interest on any Securities because of the reinstatement of their
obligations, the Company or the Guarantors, as the case may be, shall be,
subrogated to the rights of the holders of such Securities to receive such
payment from the money or U.S. Government Obligations held by the Trustee or
Paying Agent.
ARTICLE NINE
AMENDMENTS, SUPPLEMENTS AND WAIVERS
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SECTION 9.01. Without Consent of Holders.
The Company and any Guarantors (when authorized by Board
Resolutions), and the Trustee, together, may amend or supplement this Indenture
or the Securities without notice to or consent of any Securityholder:
(1) to cure any ambiguity, defect or inconsistency;
(2) to evidence the succession in accordance with Article Five
hereof of another Person to the Company or a Guarantor and the assumption
by any such successor of the covenants of the Company or a Guarantor
herein and in the Securities or a Guarantee, as the case may be;
(3) to provide for uncertificated Securities in addition to or in
place of certificated Securities;
(4) to make any other change that does not materially adversely
affect the rights of any Securityholders hereunder; or
(5) to comply with any requirements of the SEC in connection with
the qualification of this Indenture under the TIA; or
(6) to add or release any Guarantor pursuant to the terms of this
Indenture;
provided that each of the Company and any Guarantors has delivered to the
Trustee an Opinion of Counsel and an Officers' Certificate, each stating that
such amendment or supplement complies with the provisions of this Section 9.01.
SECTION 9.02. With Consent of Holders.
Subject to Section 6.07, the Company and any Guarantors (when
authorized by Board Resolutions) and the Trustee, together, with the written
consent of the Holder or Holders of at least a majority in aggregate principal
amount of the outstanding Securities, may amend or supplement this Indenture,
the Securities and any Guarantees without notice to any other Securityholders.
Subject to Section 6.07, the Holder or Holders of a majority in aggregate
principal amount of the
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outstanding Securities may waive compliance by the Company with any provision
of this Indenture or the Securities without notice to any other Securityholder.
Without the consent of each Securityholder affected, however, no amendment,
supplement or waiver, including a waiver pursuant to Section 6.04, may:
(1) reduce the principal amount of Securities whose Holders must
consent to an amendment, supplement or waiver of any provision of this
Indenture, the Securities or any Guarantees;
(2) reduce the rate or change or have the effect of changing the
time for payment of interest, including default interest, on any Security;
(3) reduce the principal amount, of or premium on any Security;
(4) change or have the effect of changing the Final Maturity Date of
any Security, change the amount or time of any payment required by the
Securities or reduce the premium payable upon any redemption of
Securities, or change the time when any such redemption may be made or
otherwise alter the redemption or repurchase provisions contained in this
Indenture or the Securities in a manner adverse to any Holder;
(5) make any change in provisions of this Indenture protecting the
right of each Holder to receive payment of principal of and interest on
such Security on or after the due date thereof or to bring suit to enforce
such payment, or permitting Holders of a majority in principal amount of
the Securities to waive Defaults or Events of Default;
(6) make any changes in Section 6.04, 6.07 or this
Section 9.02;
(7) make the principal of, premium or the interest on any Security
payable in money other than as provided for in this Indenture as in effect
on the date hereof or change the place of payment from New York, New York;
(8) affect the ranking of the Securities or any Guarantee, in each
case in a manner adverse to the
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Holders;
(9) amend, modify or change the obligation of the Company to make or
consummate a Change of Control Offer, an Excess Proceeds Offer or waive
any default in the performance thereof or modify any of the provisions or
definitions with respect to any such offers; or
(10) release any Guarantor from any of its obligations under its
Guarantee or this Indenture otherwise than in accordance with the terms of
this Indenture.
It shall not be necessary for the consent of the Holders under this
Section 9.02 to approve the particular form of any proposed amendment,
supplement 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 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 supplemental indenture.
SECTION 9.03. Compliance with TIA.
From the date on which this Indenture is qualified under the TIA,
every amendment, waiver or supplement of this Indenture or the Securities shall
comply with the TIA as then in effect.
SECTION 9.04. Revocation and Effect of Consents.
Until an amendment, waiver or supplement becomes effective, a
consent to it by a Holder is a continuing consent by the Holder and every
subsequent Holder of a Security or portion of a Security that evidences the same
debt as the consenting Holder's Security, even if notation of the consent is not
made on any Security. However, any such Holder or subsequent Holder may revoke
the consent as to his Security or portion of his Security by notice to the
Trustee or the Company received before the date on which the Trustee receives an
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Officers' Certificate certifying that the Holders of the requisite principal
amount of Securities have consented (and not theretofore revoked such consent)
to the amendment, supplement or waiver.
The Company may, but shall not be obligated to, fix a record date
for the purpose of determining the Holders entitled to consent to any amendment,
supplement or waiver. If a record date is fixed, then notwithstanding the last
sentence of the immediately preceding paragraph, those Persons who were Holders
at such record date (or their duly designated proxies), and only those Persons,
shall be entitled to revoke any consent previously given, whether or not such
Persons continue to be Holders after such record date. No such consent shall be
valid or effective for more than 90 days after such record date.
After an amendment, supplement or waiver becomes effective, it shall
bind every Securityholder, unless it makes a change described in any of clauses
(1) through (10) of Section 9.02, in which case, the amendment, supplement or
waiver shall bind only each Holder of a Security who has consented to it and
every subsequent Holder of a Security or portion of a Security that evidences
the same debt as the consenting Holder's Security; provided that any such waiver
shall not impair or affect the right of any Holder to receive payment of
principal of and interest on a Security, on or after the respective due dates
expressed in such Security, or to bring suit for the enforcement of any such
payment on or after such respective dates without the consent of such Holder.
SECTION 9.05. Notation on or Exchange of Securities.
If an amendment, supplement or waiver changes the terms of a
Security, the Trustee may require the Holder of the Security to deliver it to
the Trustee. The Trustee may place an appropriate notation on the Security about
the changed terms and return it to the Holder. Alternatively, if the Company or
the Trustee so determines, the Company in exchange for the Security shall issue
and the Trustee shall authenticate a new Security that reflects the changed
terms.
SECTION 9.06. Trustee To Sign Amendments, Etc.
The Trustee shall execute any amendment, supplement or waiver
authorized pursuant to this Article Nine; provided
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that the Trustee may, but shall not be obligated to, execute any such amendment,
supplement or waiver which affects the Trustee's own rights, duties or
immunities under this Indenture. The Trustee shall be entitled to receive, and
shall be fully protected in relying upon, an Opinion of Counsel and an Officers'
Certificate each stating that the execution of any amendment, supplement or
waiver authorized pursuant to this Article Nine is authorized or permitted by
this Indenture and constituted the legal, valid and binding obligations of the
Company enforceable in accordance with its terms. Such Opinion of Counsel shall
be at the expense of the Company, and the Trustee shall have a lien under
Section 7.07 for any such expense.
ARTICLE TEN
GUARANTEE
SECTION 10.01. Unconditional Guarantee.
Each Guarantor agrees to unconditionally, jointly and severally,
guarantee to each Holder of a Security authenticated and delivered by the
Trustee, and to the Trustee and its successors and assigns, that: (i) the
principal of, premium and interest on the Securities will be promptly paid in
full when due, subject to any applicable grace period, whether at maturity, by
acceleration or otherwise and interest on the overdue principal, if any, and
interest on any interest, to the extent lawful, of the Securities and all other
Obligations of the Company to the Holders or the Trustee hereunder or thereunder
will be promptly paid in full or performed, all in accordance with the terms
hereof and thereof; and (ii) in case of any extension of time of payment or
renewal of any Securities or of any such other Obligations, the same will be
promptly paid in full when due or performed in accordance with the terms of the
extension or renewal, subject to any applicable grace period, whether at stated
maturity, by acceleration or otherwise, subject, however, in the case of clauses
(i) and (ii) above, to the limitations set forth in Section 10.03. Each
Guarantor agrees that its obligations hereunder shall be unconditional,
irrespective of the validity, regularity or enforceability of the Securities or
this Indenture, the absence of any action to enforce the same, any
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waiver or consent by any Holder of the Securities with respect to any provisions
hereof or thereof, the recovery of any judgment against the Company, any action
to enforce the same or any other circumstance which might otherwise constitute a
legal or equitable discharge or defense of a Guarantor. Each Guarantor waives
diligence, presentment, demand of payment, filing of claims with a court in the
event of insolvency or bankruptcy of the Company, any right to require a
proceeding first against the Company, protest, notice and all demands whatsoever
and covenants that its Guarantee will not be discharged except by complete
performance of the obligations contained in the Securities, this Indenture and
each Guarantee. If any Securityholder or the Trustee is required by any court or
otherwise to return to the Company, any Guarantor or any custodian, trustee,
liquidator or other similar official acting in relation to the Company or any
Guarantor, any amount paid by the Company or any Guarantor to the Trustee or
such Securityholder, each Guarantee to the extent theretofore discharged, shall
be reinstated in full force and effect. Each Guarantor further agrees that, as
between each Guarantor, on the one hand, and the Holders and the Trustee, on the
other hand, (x) the maturity of the obligations guaranteed hereby may be
accelerated as provided in Article Six for the purposes of each Guarantee
notwithstanding any stay, injunction or other prohibition preventing such
acceleration in respect of the obligations guaranteed hereby, and (y) in the
event of any acceleration of such obligations as provided in Article Six, such
obligations (whether or not due and payable) shall forthwith become due and
payable by each Guarantor for the purpose of its Guarantee.
SECTION 10.02. Severability
In case any provision of a Guarantee shall be invalid, illegal or
unenforceable, the validity, legality, and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
SECTION 10.03. Release of a Guarantor.
If all of the assets of any Guarantor or all of the Capital Stock of
any Guarantor is sold (including by issuance or otherwise) by the Company or any
of its Subsidiaries in a transaction constituting an Asset Sale, and if the Net
Cash
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<PAGE> 105
Proceeds from such Asset Sale are used in accordance with Section 4.12,
then such Guarantor (in the event of a sale or other disposition of all of the
Capital Stock of such Guarantor) or the corporation or other entity acquiring
such assets (in the event of a sale or other disposition of all or substantially
all of the assets of such Guarantor) shall be released and discharged of its
Obligations under its Guarantee.
The Trustee shall deliver an appropriate instrument evidencing such
release upon receipt of a request by the Company accompanied by an Officers'
Certificate and Opinion of Counsel certifying as to the compliance with this
Section 10.03. Any Guarantor not so released remains liable for the full amount
of principal of an interest on the Securities as provided in this Article Ten.
SECTION 10.04. Limitation of a Guarantor's Liability.
Each Guarantor and, by its acceptance hereof, each Holder hereby
confirms that it is the intention of all such parties that the guarantee by such
Guarantor pursuant to its Guarantee not constitute a fraudulent transfer or
conveyance for purposes of any Bankruptcy Law, the Uniform Fraudulent Conveyance
Act, the Uniform Fraudulent Transfer Act or any similar Federal or state law. To
effectuate the foregoing intention, the Holders and each Guarantor irrevocably
agree that the obligations of each Guarantor under its Guarantee shall be
limited to the maximum amount as will, after giving effect to all other
contingent and fixed liabilities of such Guarantor, and after giving effect to
any collections from or payments made by or on behalf of any other Guarantor in
respect of the obligations of such other Guarantor under its Guarantee, or
pursuant to Section 10.05, result in the obligations of such Guarantor under its
Guarantee not constituting such fraudulent transfer or conveyance.
SECTION 10.05. Contribution.
In order to provide for just and equitable contribution among the
Guarantors, the Guarantors agree, inter se, that in the event any payment or
distribution is made by any Guarantor (a "Funding Guarantor") under its
Guarantee, such Funding Guarantor shall be entitled to a contribution from all
other Guarantors in a pro rata amount based on the Adjusted Net
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<PAGE> 106
Assets of each Guarantor (including the Funding Guarantor) for all payments,
damages and expenses incurred by that Funding Guarantor in discharging the
Company's obligations with respect to the Securities or any other Guarantor's
obligations with respect to its Guarantee.
SECTION 10.06. Waiver of Subrogation.
Until all Guarantee Obligations are paid in full, each Guarantor
hereby irrevocably waives any claims or other rights which it may now or
hereafter acquire against the Company that arise from the existence, payment,
performance or enforcement of such Guarantor's obligations under its Guarantee
and this Indenture, including, without limitation, any right of subrogation,
reimbursement, exoneration, indemnification, and any right to participate in any
claim or remedy of any Holder of Securities against the Company, whether or not
such claim, remedy or right arises in equity, or under contract, statute or
common law, including, without limitation, the right to take or receive from the
Company, directly or indirectly, in cash or other property or by set-off or in
any other manner, payment or security on account of such claim or other rights.
If any amount shall be paid to any Guarantor in violation of the preceding
sentence and the Securities shall not have been paid in full, such amount shall
have been deemed to have been paid to such Guarantor for the benefit of, and
held in trust for the benefit of, the Holders of the Securities, and shall
forthwith be paid to the Trustee for the benefit of such Holders to be credited
and applied upon the Securities, in accordance with the terms of this Indenture.
Each Guarantor acknowledges that it will receive direct and indirect benefits
from the financing arrangements contemplated by this Indenture and that the
waiver set forth in this Section 10.06 is knowingly made in contemplation of
such benefits.
SECTION 10.07. Execution of Guarantees.
To evidence its guarantee to the Securityholders set forth in this
Article Ten, each Guarantor shall execute a Guarantee in substantially the form
of Exhibit G attached hereto, which shall be endorsed on each Security ordered
to be authenticated and delivered by the Trustee. Each Guarantor agrees that its
Guarantee set forth in this Article Ten shall remain in full force and effect
notwithstanding any failure to
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<PAGE> 107
endorse on each Security a notation of such Guarantee. Each such Guarantee shall
be signed on behalf of each Guarantor by two Officers, or an Officer and an
Assistant Secretary or one Officer shall sign and one Officer or an Assistant
Secretary (each of whom shall, in each case, have been duly authorized by all
requisite corporate actions) shall attest to such Guarantee prior to the
authentication of the Security on which it is endorsed, and the delivery of such
Security by the Trustee, after the authentication thereof hereunder, shall
constitute due delivery of such Guarantee on behalf of such Guarantor. Such
signatures upon the Guarantee may be by manual or facsimile signature of such
officers and may be imprinted or otherwise reproduced on the Guarantee, and in
case any such officer who shall have signed the Guarantee shall cease to be such
officer before the Security on which such Guarantee is endorsed shall have been
authenticated and delivered by the Trustee or disposed of by the Company, such
Security nevertheless may be authenticated and delivered or disposed of as
though the Person who signed the Guarantee had not ceased to be such officer of
the Guarantor.
SECTION 10.08. Waiver of Stay, Extension or Usury Laws.
Each Guarantor convenants (to the extent that it may lawfully do so)
that it will not at any time insist upon, plead, or in any manner whatsoever
claim or take the benefit or advantage of, any stay or extension law or any
usury law or other law that would prohibit or forgive each such Guarantor from
performing its Guarantee as contemplated herein, wherever enacted, now or at any
time hereafter in force, or which may affect the covenants or the performance of
this Indenture; and (to the extent that it may lawfully do so) each such
Guarantor hereby expressly waives all benefit or advantage of any such law, and
covenants that it will not hinder, delay or impede the execution of any power
herein granted to the Trustee, but will suffer and permit the execution of every
such power as though no such law had been enacted.
ARTICLE ELEVEN
MISCELLANEOUS
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SECTION 11.01. TIA Controls.
If any provision of this Indenture limits, qualifies, or conflicts
with the duties imposed by operation of Section 318(c) of the TIA, the imposed
duties shall control.
SECTION 11.02. Notices.
Any notices or other communications required or permitted hereunder
shall be in writing, and shall be sufficiently given if made by hand delivery,
by telex, by telecopier or registered or certified mail, postage prepaid, return
receipt requested, addressed as follows:
if to the Company or a Guarantor:
Spanish Broadcasting System, Inc.
26 West 56th Street
New York, New York 10019
Attention: Joseph Garcia
Facsimile: (212) 541-9200
Telephone: (212) 541-9236
if to the Trustee:
IBJ Schroder Bank & Trust Company
One State Street Plaza
New York, New York 10004
Attention: Corporate Trust Administration
Facsimile: (212) 858-2952
Telephone: (212) 858-2000
Each of the Company and the Trustee by written notice to each other
such Person may designate additional or different addresses for notices to such
Person. Any notice or communication to the Company or a Guarantor or the
Trustee, shall be deemed to have been given or made as of the date so delivered
if Personally delivered; when answered back, if telexed; when receipt is
acknowledged, if telecopied; and five (5) calendar days after mailing if sent by
registered or certified mail, postage prepaid (except that a notice of change
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<PAGE> 109
of address shall not be deemed to have been given until actually received by the
addressee).
Any notice or communication mailed to a Security-holder shall be
mailed to him by first class mail or other equivalent means at his address as it
appears on the registration books of the Registrar and shall be sufficiently
given to him if so mailed within the time prescribed.
Failure to mail a notice or communication to a Securityholder or any
defect in it shall not affect its sufficiency with respect to other
Securityholders. If a notice or communication is mailed in the manner provided
above, it is duly given, whether or not the addressee receives it.
SECTION 11.03. Communications by Holders with Other Holders.
Securityholders may communicate pursuant to TIA { 312(b) with other
Securityholders with respect to their rights under this Indenture, the
Securities or any Guarantees. The Company, the Trustee, the Registrar and any
other Person shall have the protection of TIA { 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
at the request of the Trustee:
(1) an Officers' Certificate, in form and substance satisfactory to
the Trustee, stating that, in the opinion of the signers, all conditions
precedent, if any, provided for in this Indenture relating to the proposed
action have been complied with; and
(2) an Opinion of Counsel stating that, in the opinion of such
counsel, all such conditions precedent have been complied with.
SECTION 11.05. Statements Required in Certificate or Opinion.
Each certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture, other than the Officers'
Certificate required by
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<PAGE> 110
Section 4.08, shall include:
(1) a statement that the Person making such certificate or opinion
has read such covenant or condition;
(2) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of such Person, he has made
such examination or investigation as is necessary to enable him to express
an informed opinion as to whether or not such covenant or condition has
been complied with; and
(4) a statement as to whether or not, in the opinion of each such
Person, such condition or covenant has been complied with; provided,
however, that with respect to matters of fact an Opinion of Counsel may
rely on an Officers' Certificate or certificates of public officials.
SECTION 11.06. Rules by Trustee, Paying Agent, Registrar.
The Trustee, Paying Agent or Registrar may make reasonable rules for
its functions and the Trustee may make reasonable rules for action by or
meetings of Securityholders.
SECTION 11.07. Legal Holidays.
If a payment date is not a Business Day, payment may be made on the
next succeeding day that is a Business Day with the same force and effect as if
made on such payment date.
SECTION 11.08. Governing Law.
THIS INDENTURE, THE SECURITIES AND ANY GUARANTEES SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AS
APPLIED TO CONTRACTS MADE AND PERFORMED WITHIN THE STATE OF NEW YORK, WITHOUT
REGARD TO PRINCIPLES OF CONFLICTS OF LAW. Each of the parties hereto agrees to
submit to the jurisdiction of the courts of the State of New York in any action
or proceeding arising out of or relating to this Indenture.
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<PAGE> 111
SECTION 11.09. No Adverse Interpretation of Other Agreements.
This Indenture may not be used to interpret another indenture, loan
or debt agreement of any of the Company or any of its Subsidiaries or any
Guarantor. Any such indenture, loan or debt agreement may not be used to
interpret this Indenture.
SECTION 11.10. No Recourse Against Others.
A director, officer, employee, stockholder or incorporator, as such,
of the Company or any of its Subsidiaries or any Guarantor shall not have any
liability for any obligations of the Company or any Guarantor under the
Securities, this Indenture or any Guarantee or for any claim based on, in
respect of or by reason of such obligations or their creations. Each
Securityholder by accepting a Security waives and releases all such liability.
Such waiver and release are part of the consideration for the issuance of the
Securities.
SECTION 11.11. Successors.
All agreements of the Company and any Guarantors in this Indenture,
the Securities and any Guarantees shall bind their respective successors. All
agreements of the Trustee in this Indenture shall bind its successor.
SECTION 11.12. Duplicate Originals.
All parties may sign any number of copies of this Indenture. Each
signed copy or counterpart shall be an original, but all of them together shall
represent the same agreement.
SECTION 11.13. Severability.
In case any one or more of the provisions in this Indenture, in the
Securities or in any Guarantee shall be held invalid, illegal or unenforceable,
in any respect for any reason, the validity, legality and enforceability of any
such provision in every other respect and of the remaining provisions shall not
in any way be affected or impaired thereby, it being intended that all of the
provisions hereof shall be enforceable to the full extent permitted by law.
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<PAGE> 112
SIGNATURES
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed as of the date first written above.
SPANISH BROADCASTING SYSTEM, INC.,
a Delaware corporation
By: /s/ Raul Alarcon, Jr.
____________________________________
Name: Raul Alarcon, Jr.
Title: President and Chief
Executive Officer
By: /s/ Joseph Garcia
____________________________________
Name: Joseph Garcia
Title: Exec. VP and Chief
Financial Officer
SPANISH BROADCASTING SYSTEM, INC.,
a New Jersey corporation
By: /s/ Raul Alarcon, Jr.
____________________________________
Name: Raul Alcaron, Jr.
Title: President and Chief
Executive Officer
By: /s/ Joseph Garcia
____________________________________
Name: Joseph Garcia
Title: Exec. VP and Chief
Financial Officer
SPANISH BROADCASTING SYSTEM OF
CALIFORNIA, INC.
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<PAGE> 113
By: /s/ Raul Alarcon, Jr.
____________________________________
Name: Raul Alarcon, Jr.
Title: President and Chief
Executive Officer
By: /s/ Joseph Garcia
____________________________________
Name: Joseph Garcia
Title: Exec. VP and Chief
Financial Officer
SPANISH BROADCASTING SYSTEM OF
FLORIDA, INC.
By: /s/ Raul Alcaron, Jr.
____________________________________
Name: Raul Alcaron, Jr.
Title: President and Chief
Executive Officer
By: /s/ Joseph Garcia
____________________________________
Name: Joseph Garcia
Title: Exec. VP and Chief
Financial Officer
SPANISH BROADCASTING SYSTEM
NETWORK, INC.
By: /s/ Raul Alarcon, Jr.
____________________________________
Name: Raul Alarcon, Jr.
Title: President and Chief
Executive Officer
By: /s/ Joseph Garcia
____________________________________
Name: Joseph Garcia
Title: Exec. VP and Chief
Financial Officer
SBS PROMOTIONS, INC.
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<PAGE> 114
By: /s/ Raul Alarcon, Jr.
____________________________________
Name: Raul Alarcon, Jr.
Title: President and Chief
Executive Officer
By: /s/ Joseph Garcia
____________________________________
Name: Joseph Garcia
Title: Exec. VP and Chief
Financial Officer
ALARCON HOLDINGS, INC.
By: /s/ Raul Alarcon, Jr.
____________________________________
Name: Raul Alarcon, Jr.
Title: President and Chief
Executive Officer
By: /s/ Joseph Garcia
____________________________________
Name: Joseph Garcia
Title: Exec. VP and Chief
Financial Officer
SBS OF GREATER NEW YORK, INC.
By: /s/ Raul Alarcon, Jr.
____________________________________
Name: Raul Alarcon, Jr.
Title: President and Chief
Executive Officer
By: /s/ Joseph Garcia
____________________________________
Name: Joseph Garcia
Title: Exec. VP and Chief
Financial Officer
IBJ SCHRODER BANK & TRUST
COMPANY, as Trustee
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<PAGE> 115
By: /s/ James P. Freeman
____________________________________
Name: James P. Freeman
Title: Assistant Vice President
EXHIBIT A
[FORM OF SERIES A SECURITY]
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD
EXCEPT AS SET FORTH BELOW. BY ITS ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS
THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER
THE SECURITIES ACT) OR (B) IT IS AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS
DEFINED IN RULE 501(a)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT) (AN
"ACCREDITED INVESTOR") OR (C) IT IS NOT A U.S. PERSON AND IS ACQUIRING THIS
SECURITY IN AN OFFSHORE TRANSACTION, (2) AGREES THAT IT WILL NOT WITHIN TWO
YEARS AFTER THE ORIGINAL ISSUANCE OF THIS SECURITY RESELL OR OTHERWISE TRANSFER
THIS SECURITY EXCEPT (A) TO THE ISSUER OR ANY SUBSIDIARY THEREOF, (B) INSIDE THE
UNITED STATES TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A
UNDER THE SECURITIES ACT, (C) INSIDE THE UNITED STATES TO AN ACCREDITED INVESTOR
THAT, PRIOR TO SUCH TRANSFER, FURNISHES TO THE TRUSTEE A SIGNED LETTER
CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS (THE FORM OF WHICH LETTER CAN
BE OBTAINED FROM THE TRUSTEE), (D) OUTSIDE THE UNITED STATES TO PERSONS OTHER
THAN U.S. PERSONS IN OFFSHORE TRANSACTIONS MEETING THE REQUIREMENTS OF RULE 904
UNDER REGULATION S UNDER THE SECURITIES ACT, (E) PURSUANT TO THE EXEMPTION FROM
REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE), OR
(F) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND
(3) AGREES THAT IT WILL GIVE TO EACH PERSON TO WHOM THIS SECURITY IS TRANSFERRED
A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. AS USED HEREIN, THE TERMS
"OFFSHORE TRANSACTION," "UNITED STATES" AND "U.S. PERSON" HAVE THE RESPECTIVE
MEANINGS GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT.
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<PAGE> 116
SPANISH BROADCASTING SYSTEM, INC.
11% Senior Notes
due March 15, 2004, Series A
CUSIP No.: [ ]
No. [ ] $[ ]
SPANISH BROADCASTING SYSTEM, INC., a Delaware corporation (the
"Company", which term includes any successor corporation), for value received
promises to pay to [ ] or registered assigns, the principal sum of $[ ] Dollars,
on March 15, 2004.
Interest Payment Dates: March 15 and September 15, commencing
September 15, 1997
Record Dates: March 1 and September 1
Reference is made to the further provisions of this Security
contained herein, which will for all purposes have the same effect as if set
forth at this place.
IN WITNESS WHEREOF, the Company has caused this Security to be
signed manually or by facsimile by its duly authorized officers.
Dated:
SPANISH BROADCASTING SYSTEM, INC.
By:____________________________________
Name:
Title:
By:____________________________________
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<PAGE> 117
Name:
Title:
[FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION]
This is one of the 11% Senior Notes due 2004, Series A, described in
the within-mentioned Indenture.
Dated: IBJ SCHRODER BANK & TRUST
COMPANY,
as Trustee
By
Authorized Signatory
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<PAGE> 118
(REVERSE OF SECURITY)
SPANISH BROADCASTING SYSTEM, INC.
11% Senior Notes
due March 15, 2004, Series A
1. Interest.
SPANISH BROADCASTING SYSTEM, INC., a Delaware corporation (the
"Company"), promises to pay interest on the principal amount of this Security at
the rate per annum shown above. The Company will pay interest semi-annually on
March 15 and September 15 of each year (an "Interest Payment Date"), commencing
September 15, 1997. Interest on the Securities will accrue from the most recent
date to which interest has been paid or, if no interest has been paid, from
March 27, 1997. Interest will be computed on the basis of a 360-day year of
twelve 30-day months.
The Company shall pay interest on overdue principal from time to
time on demand at the rate borne by the Securities plus 2% and on overdue
installments of interest (without regard to any applicable grace periods) to the
extent lawful.
2. Method of Payment.
The Company shall pay interest on the Securities (except defaulted
interest) to the Persons who are the registered Holders at the close of business
on the Record Date immediately preceding the Interest Payment Date even if the
Securities are cancelled on registration of transfer or registration of exchange
after such Record Date. Holders must surrender Securities to a Paying Agent to
collect principal payments. The Company shall pay principal and interest in
money of the United States that at the time of payment is legal tender for
payment of public and private debts ("U.S. Legal Tender"). However, the Company
may pay principal and interest by wire transfer of Federal funds, or interest by
check payable in such U.S. Legal Tender. The Company may deliver any such
interest payment to the Paying Agent or to a Holder at the Holder's registered
address.
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<PAGE> 119
3. Paying Agent and Registrar.
Initially, IBJ Schroder Bank & Trust Company (the "Trustee") will
act as Paying Agent and Registrar. The Company may change any Paying Agent,
Registrar or co-Registrar without notice to the Holders.
4. Indenture.
The Company issued the Securities under an Indenture, dated as of
March 15, 1997 (the "Indenture"), by and among the Company, the Guarantors named
therein and the Trustee. Capitalized terms herein are used as defined in the
Indenture unless otherwise defined herein. The terms of the Securities include
those stated in the Indenture and those made part of the Indenture by reference
to the Trust Indenture Act of 1939 (15 U.S.C. {{ 77aaa-77bbbb) (the "TIA"), as
in effect on the date of the Indenture until such time as the Indenture is
qualified under the TIA, and thereafter as in effect on the date on which the
Indenture is qualified under the TIA. Notwithstanding anything to the contrary
herein, the Securities are subject to all such terms, and Holders of Securities
are referred to the Indenture and the TIA for a statement of them. The
Securities are limited in aggregate principal amount to $75,000,000.
5. Optional Redemption.
The Securities will be redeemable, at the Company's option, in whole
at any time or in part from time to time, on and after March 15, 2001 at the
following redemption prices (expressed as percentages of the principal amount)
if redeemed during the twelve-month period commencing on March 15 of the years
set forth below, plus, in each case, accrued and unpaid interest thereon to the
date of redemption:
<TABLE>
<CAPTION>
Year Percentage
<S> <C>
2001............................. 105.50%
2002............................. 102.75%
2003 and thereafter.............. 100.000%
</TABLE>
6. Optional Redemption upon Public Equity Offering.
At any time, or from time to time, on or prior to
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<PAGE> 120
March 15, 2000, the Company may, at its option, use the Net Proceeds of one or
more Public Equity Offerings (as defined) to redeem up to $18,750,000 aggregate
principal amount of Securities at a redemption price equal to 110% of the
principal amount thereof plus accrued and unpaid interest, if any, to the date
of redemption; provided that at least $56,250,000 aggregate principal amount of
Securities remains outstanding immediately after giving effect to any such
redemption. In order to effect the foregoing redemption with the Net Proceeds of
a Public Equity Offering, the Company shall send the redemption notice not later
than 90 days after the consummation of such Public Equity Offering.
As used in the preceding paragraph, "Public Equity Offering" means
an underwritten public offering of Common Stock of the Company pursuant to a
registration statement filed with and declared effective by the SEC in
accordance with the Securities Act.
7. Notice of Redemption.
Notice of redemption will be mailed at least 30 days but not more
than 60 days before the Redemption Date to each Holder of Securities to be
redeemed at such Holder's registered address. Securities in denominations of
$1,000 may be redeemed only in whole. The Trustee may select for redemption
portions (equal to $1,000 or any integral multiple thereof) of the principal of
Securities that have denominations larger than $1,000.
If any Security is to be redeemed in part only, the notice of
redemption that relates to such Security shall state the portion of the
principal amount thereof to be redeemed. A new Security in a principal amount
equal to the unredeemed portion thereof will be issued in the name of the Holder
thereof upon cancellation of the original Security. On and after the Redemption
Date, interest will cease to accrue on Securities or portions thereof called for
redemption.
8. Change of Control Offer.
Upon the occurrence of a Change of Control, the Company will be
required to offer to purchase all of the outstanding Securities at a purchase
price equal to 101% of the
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<PAGE> 121
principal amount thereof plus accrued and unpaid interest, if any, to the date
of repurchase.
9. Limitation on Certain Asset Sales.
The Company is subject to certain conditions, obligated to make an
offer to purchase Securities at 100% of their principal amount plus accrued and
unpaid interest to the date of repurchase with certain net cash proceeds of
certain sales or other dispositions of assets in accordance with the Indenture.
10. Denominations; Transfer; Exchange.
The Securities are in registered form, without coupons, in
denominations of $1,000 and integral multiples of $1,000. A Holder shall
register the transfer of or exchange Securities in accordance with the
Indenture. The Registrar may require a Holder, among other things, to furnish
appropriate endorsements and transfer documents and to pay certain transfer
taxes or similar governmental charges payable in connection therewith as
permitted by the Indenture. The Registrar need not register the transfer of or
exchange any Securities or portions thereof selected for redemption, except the
unredeemed portion of any security being redeemed in part.
11. Persons Deemed Owners.
The registered Holder of a Security shall be treated as the owner of
it for all purposes.
12. Unclaimed Funds.
If funds for the payment of principal or interest remain unclaimed
for two years, the Trustee and the Paying Agent will repay the funds to the
Company at its request. After that, all liability of the Trustee and such Paying
Agent with respect to such funds shall cease.
13. Legal Defeasance and Covenant Defeasance.
The Company may be discharged from its obligations under the
Indenture and the Securities except for certain provisions thereof, and may be
discharged from its obligations to comply with certain covenants contained in
the Indenture and
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<PAGE> 122
the Securities, in each case upon satisfaction of certain conditions specified
in the Indenture.
14. Amendment; Supplement; Waiver.
Subject to certain exceptions, the Indenture or the Securities may
be amended or supplemented with the written consent of the Holders of at least a
majority in aggregate principal amount of the Securities then outstanding, and
any existing Default or Event of Default or compliance with any provision may be
waived with the consent of the Holders of a majority in aggregate principal
amount of the Securities then outstanding. Without notice to or consent of any
Holder, the parties thereto may amend or supplement the Indenture or the
Securities to, among other things, cure any ambiguity, defect or inconsistency,
provide for uncertificated Securities in addition to or in place of certificated
Securities or comply with any requirements of the SEC in connection with the
qualification of the Indenture under the TIA, or make any other change that does
not materially adversely affect the rights of any Holder of a Security.
15. Restrictive Covenants.
The Indenture contains certain covenants that, among other things,
limit the ability of the Company and certain of its subsidiaries to make
restricted payments, to incur indebtedness, to create liens, to issue preferred
or other capital stock of subsidiaries, to sell assets, to permit restrictions
on dividends and other payments by subsidiaries to the Company, to consolidate,
merge or sell all or substantially all of its assets, to engage in transactions
with affiliates or to engage in certain businesses. The limitations are subject
to a number of important qualifications and exceptions.
16. Defaults and Remedies.
If an Event of Default occurs and is continuing, the Trustee or the
Holders of at least 25% in aggregate principal amount of Securities then
outstanding may declare all the Securities to be due and payable immediately in
the manner and with the effect provided in the Indenture. Holders of Securities
may not enforce the Indenture or the Securities except as provided in the
Indenture. The Trustee is not obligated to enforce the Indenture or the
Securities unless it
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<PAGE> 123
has received indemnity satisfactory to it. The Indenture permits, subject to
certain limitations therein provided, Holders of a majority in aggregate
principal amount of the Securities then outstanding to direct the Trustee in its
exercise of any trust or power. The Trustee may withhold from Holders of
Securities notice of any continuing Default or Event of Default (except a
Default in payment of principal, premium or interest, including an accelerated
payment) if it determines that withholding notice is in their interest.
17. Trustee Dealings with Company.
The Trustee under the Indenture, in its individual or any other
capacity, may become the owner or pledgee of Securities and may otherwise deal
with the Company, its Subsidiaries, any Guarantor and their respective
Affiliates as if it were not the Trustee.
18. No Recourse Against Others.
No stockholder, director, officer, employee or incorporator, as
such, of the Company shall have any liability for any obligation of the Company
under the Securities or the Indenture or for any claim based on, in respect of
or by reason of, such obligations or their creation. Each Holder of a Security
by accepting a Security waives and releases all such liability. The waiver and
release are part of the consideration for the issuance of the Securities.
19. Authentication.
This Security shall not be valid until the Trustee or authenticating
agent signs the certificate of authentication on this Security.
20. Abbreviations and Defined Terms.
Customary abbreviations may be used in the name of a Holder of a
Security 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).
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<PAGE> 124
21. 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 Securities as a convenience to the Holders of the Securities. No
representation is made as to the accuracy of such numbers as printed on the
Securities and reliance may be placed only on the other identification numbers
printed hereon.
22. Registration Rights.
Pursuant to the Registration Rights Agreement, the Company will be
obligated upon the occurrence of certain events to consummate an exchange offer
pursuant to which the Holder of this Security shall have the right to exchange
this Series A Security for the Company's 11% Senior Notes due 2004, Series B
(the "Series B Securities"), which have been registered under the Securities
Act, in like principal amount and having terms identical in all material
respects as the Series A Securities. The Holders shall be entitled to receive
certain additional interest payments in the event such exchange offer is not
consummated and upon certain other conditions, all pursuant to and in accordance
with the terms of the Registration Rights Agreement.
The Company will furnish to any Holder of a Security upon written
request and without charge a copy of the Indenture. Requests may be made to:
Spanish Broadcasting System, Inc., 26 West 56th Street, New York, New York
10019, Attn: Joseph Garcia.
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<PAGE> 125
GUARANTEE
Each undersigned Guarantor (as defined in the Indenture referred to
in the Security upon which this notation is endorsed and each referred to as the
"Guarantor," which term includes any successor Person under the Indenture)
unconditionally guarantees on a senior basis (such guarantee by the Guarantor
being referred to herein as a "Guarantee") (i) the due and punctual payment of
the principal of and interest on the Securities, whether at maturity, by
acceleration or otherwise, the due and punctual payment of interest on the
overdue principal and interest, if any, on the Securities, to the extent lawful,
and the due and punctual performance of all other obligations of the Company to
the Holders or the Trustee all in accordance with the terms set forth in Article
Ten of the Indenture and (ii) in case of any extension of time of payment or
renewal of any Securities or any of such other obligations, that the same will
be promptly paid in full when due or performed in accordance with the terms of
the extension or renewal, whether at stated maturity, by acceleration or
otherwise.
No stockholder, officer, director or incorporator, as such, past,
present or future, of the Guarantor shall have any liability under the Guarantee
by reason of his or its status as such stockholder, officer, director or
incorporator.
The Guarantee shall not be valid or obligatory for any purpose until
the certificate of authentication on the Securities upon which the Guarantee is
noted shall have been executed by the Trustee under the Indenture by the manual
signature of one of its authorized officers.
SPANISH BROADCASTING SYSTEM, INC.,
a New Jersey corporation
By:________________________________
Name:
Title:
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<PAGE> 126
By:________________________________
Name:
Title:
SPANISH BROADCASTING SYSTEM OF
CALIFORNIA, INC.
By:________________________________
Name:
Title:
By:________________________________
Name:
Title:
SPANISH BROADCASTING SYSTEM OF
FLORIDA, INC.
By:________________________________
Name:
Title:
By:________________________________
Name:
Title:
SPANISH BROADCASTING SYSTEM
NETWORK, INC.
By:________________________________
Name:
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<PAGE> 127
Title:
By:________________________________
Name:
Title:
SBS PROMOTIONS, INC.
By:________________________________
Name:
Title:
By:________________________________
Name:
Title:
ALARCON HOLDINGS, INC.
By:________________________________
Name:
Title:
By:________________________________
Name:
Title:
SBS OF GREATER NEW YORK, INC.
By:________________________________
Name:
Title:
127
<PAGE> 128
By:________________________________
Name:
Title:
128
<PAGE> 129
ASSIGNMENT FORM
I or we assign and transfer this Security to
(Print or type name, address and zip code of assignee or transferee)
(Insert Social Security or other identifying number of assignee or transferee)
and irrevocably appoint
agent to transfer this Security on the books of the Company. The agent may
substitute another to act for him.
Dated: __________________ Signed: ____________________
(Sign exactly as
name appears on the
other side of this
Security)
Signature Guarantee:
Participant in a recognized Signature Guarantee
Medallion Program (or other signature guarantor
program reasonably acceptable to the Trustee)
129
<PAGE> 130
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the Company
pursuant to Section 4.12 or Section 4.24 of the Indenture, check the appropriate
box:
Section 4.12 [ ] Section 4.24 [ ]
If you want to elect to have only part of this Security purchased by
the Company pursuant to Section 4.12 or Section 4.24 of the Indenture, state the
amount:
$_______________
Date: _____________ Your Signature:______________________
(Sign exactly as
your name appears
on the other side
of this Security)
Signature Guarantee:
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<PAGE> 131
EXHIBIT B
[FORM OF SERIES B SECURITY]
SPANISH BROADCASTING SYSTEM, INC.
11% Senior Notes
due March 15, 2004, Series B
CUSIP No.: [ ]
No. [ ] $[ ]
SPANISH BROADCASTING SYSTEM, INC., a Delaware corporation (the
"Company", which term includes any successor corporation), for value received
promises to pay to [ ] or registered assigns, the principal sum of $[ ] Dollars,
on March 15, 2004.
Interest Payment Dates: March 15 and September 15, commencing
September 15, 1997
Record Dates: March 1 and September 1
Reference is made to the further provisions of this Security
contained herein, which will for all purposes have the same effect as if set
forth at this place.
IN WITNESS WHEREOF, the Company has caused this Security to be
signed manually or by facsimile by its duly authorized officers.
Dated:
SPANISH BROADCASTING SYSTEM, INC.
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<PAGE> 132
By: _______________________________
Name:
Title:
By:________________________________
Name:
Title:
132
<PAGE> 133
[FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION]
This is one of the 11% Senior Notes due 2004, Series B, described in
the within-mentioned Indenture.
Dated: IBJ SCHRODER BANK & TRUST
COMPANY,
as Trustee
By________________________________
Authorized Signatory
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<PAGE> 134
(REVERSE OF SECURITY)
SPANISH BROADCASTING SYSTEM, INC.
11% Senior Notes
due March 15, 2004, Series B
1. Interest.
SPANISH BROADCASTING SYSTEM, INC., a Delaware corporation (the
"Company"), promises to pay interest on the principal amount of this Security at
the rate per annum shown above. The Company will pay interest semi-annually on
March 15 and September 15 of each year (an "Interest Payment Date"), commencing
September 15, 1997. Interest on the Securities will accrue from the most recent
date to which interest has been paid or, if no interest has been paid, from
March 27, 1997. Interest will be computed on the basis of a 360-day year of
twelve 30-day months.
The Company shall pay interest on overdue principal from time to
time on demand at the rate borne by the Securities plus 2% and on overdue
installments of interest (without regard to any applicable grace periods) to the
extent lawful.
2. Method of Payment.
The Company shall pay interest on the Securities (except defaulted
interest) to the Persons who are the registered Holders at the close of business
on the Record Date immediately preceding the Interest Payment Date even if the
Securities are cancelled on registration of transfer or registration of exchange
after such Record Date. Holders must surrender Securities to a Paying Agent to
collect principal payments. The Company shall pay principal and interest in
money of the United States that at the time of payment is legal tender for
payment of public and private debts ("U.S. Legal Tender"). However, the Company
may pay principal and interest by wire transfer of Federal funds, or interest by
check payable in such U.S. Legal Tender. The Company may deliver any such
interest payment to the Paying Agent or to a Holder at the Holder's registered
address.
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<PAGE> 135
3. Paying Agent and Registrar.
Initially, IBJ Schroder Bank & Trust Company (the "Trustee") will
act as Paying Agent and Registrar. The Company may change any Paying Agent,
Registrar or co-Registrar without notice to the Holders.
4. Indenture.
The Company issued the Securities under an Indenture, dated as of
March 15, 1997 (the "Indenture"), by and among the Company, the Guarantors named
therein and the Trustee. Capitalized terms herein are used as defined in the
Indenture unless otherwise defined herein. The terms of the Securities include
those stated in the Indenture and those made part of the Indenture by reference
to the Trust Indenture Act of 1939 (15 U.S.C. {{ 77aaa-77bbbb) (the "TIA"), as
in effect on the date of the Indenture until such time as the Indenture is
qualified under the TIA, and thereafter as in effect on the date on which the
Indenture is qualified under the TIA. Notwithstanding anything to the contrary
herein, the Securities are subject to all such terms, and Holders of Securities
are referred to the Indenture and the TIA for a statement of them. The
Securities are limited in aggregate principal amount to $75,000,000.
5. Optional Redemption.
The Securities will be redeemable, at the Company's option, in whole
at any time or in part from time to time, on and after March 15, 2001 at the
following redemption prices (expressed as percentages of the principal amount)
if redeemed during the twelve-month period commencing on March 15 of the years
set forth below, plus, in each case, accrued and unpaid interest thereon to the
date of redemption:
<TABLE>
<CAPTION>
Year Percentage
<S> <C>
2001............................. 105.50%
2002............................. 102.75%
2003 and thereafter.............. 100.00%
</TABLE>
6. Optional Redemption upon Public Equity Offering.
At any time, or from time to time, on or prior to
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<PAGE> 136
March 15, 2000, the Company may, at its option, use the Net Proceeds of one or
more Public Equity Offerings (as defined) to redeem up to $18,750,000 aggregate
principal amount of Securities, at a redemption price equal to 110% of the
principal amount thereof plus accrued and unpaid interest, if any, to the date
of redemption; provided that at least $56,250,000 aggregate principal amount of
Securities remains outstanding immediately after giving effect to any such
redemption. In order to effect the foregoing redemption with the Net Proceeds of
a Public Equity Offering, the Company shall send the redemption notice not later
than 90 days after the consummation of such Public Equity Offering.
As used in the preceding paragraph, "Public Equity Offering" means
an underwritten public offering of Common Stock of the Company pursuant to a
registration statement filed with and declared effective by the SEC in
accordance with the Securities Act.
7. Notice of Redemption.
Notice of redemption will be mailed at least 30 days but not more
than 60 days before the Redemption Date to each Holder of Securities to be
redeemed at such Holder's registered address. Securities in denominations of
$1,000 may be redeemed only in whole. The Trustee may select for redemption
portions (equal to $1,000 or any integral multiple thereof) of the principal of
Securities that have denominations larger than $1,000.
If any Security is to be redeemed in part only, the notice of
redemption that relates to such Security shall state the portion of the
principal amount thereof to be redeemed. A new Security in a principal amount
equal to the unredeemed portion thereof will be issued in the name of the Holder
thereof upon cancellation of the original Security. On and after the Redemption
Date, interest will cease to accrue on Securities or portions thereof called for
redemption.
8. Change of Control Offer.
Upon the occurrence of a Change of Control, the Company will be
required to offer to purchase all of the outstanding Securities at a purchase
price equal to 101% of the
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<PAGE> 137
principal amount thereof plus accrued and unpaid interest, if any, to the date
of repurchase.
9. Limitation on Certain Asset Sales.
The Company is subject to certain conditions, obligated to make an
offer to purchase Securities at 100% of their principal amount plus accrued and
unpaid interest to the date of repurchase with certain net cash proceeds of
certain sales or other dispositions of assets in accordance with the Indenture.
10. Denominations; Transfer; Exchange.
The Securities are in registered form, without coupons, in
denominations of $1,000 and integral multiples of $1,000. A Holder shall
register the transfer of or exchange Securities in accordance with the
Indenture. The Registrar may require a Holder, among other things, to furnish
appropriate endorsements and transfer documents and to pay certain transfer
taxes or similar governmental charges payable in connection therewith as
permitted by the Indenture. The Registrar need not register the transfer of or
exchange any Securities or portions thereof selected for redemption, except the
unredeemed portion of any security being redeemed in part.
11. Persons Deemed Owners.
The registered Holder of a Security shall be treated as the owner of
it for all purposes.
12. Unclaimed Funds.
If funds for the payment of principal or interest remain unclaimed
for two years, the Trustee and the Paying Agent will repay the funds to the
Company at its request. After that, all liability of the Trustee and such Paying
Agent with respect to such funds shall cease.
13. Legal Defeasance and Covenant Defeasance.
The Company may be discharged from its obligations under the
Indenture and the Securities except for certain provisions thereof, and may be
discharged from its obligations to comply with certain covenants contained in
the Indenture and
137
<PAGE> 138
the Securities, in each case upon satisfaction of certain conditions specified
in the Indenture.
14. Amendment; Supplement; Waiver.
Subject to certain exceptions, the Indenture or the Securities may
be amended or supplemented with the written consent of the Holders of at least a
majority in aggregate principal amount of the Securities then outstanding, and
any existing Default or Event of Default or compliance with any provision may be
waived with the consent of the Holders of a majority in aggregate principal
amount of the Securities then outstanding. Without notice to or consent of any
Holder, the parties thereto may amend or supplement the Indenture or the
Securities to, among other things, cure any ambiguity, defect or inconsistency,
provide for uncertificated Securities in addition to or in place of certificated
Securities or comply with any requirements of the SEC in connection with the
qualification of the Indenture under the TIA, or make any other change that does
not materially adversely affect the rights of any Holder of a Security.
15. Restrictive Covenants.
The Indenture contains certain covenants that, among other things,
limit the ability of the Company and certain of its subsidiaries to make
restricted payments, to incur indebtedness, to create liens, to issue preferred
or other capital stock of subsidiaries, to sell assets, to permit restrictions
on dividends and other payments by subsidiaries to the Company, to consolidate,
merge or sell all or substantially all of its assets, to engage in transactions
with affiliates or to engage in certain businesses. The limitations are subject
to a number of important qualifications and exceptions.
16. Defaults and Remedies.
If an Event of Default occurs and is continuing, the Trustee or the
Holders of at least 25% in aggregate principal amount of Securities then
outstanding may declare all the Securities to be due and payable immediately in
the manner and with the effect provided in the Indenture. Holders of Securities
may not enforce the Indenture or the Securities except as provided in the
Indenture. The Trustee is not obligated to enforce the Indenture or the
Securities unless it has received indemnity satisfactory to it. The Indenture
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<PAGE> 139
permits, subject to certain limitations therein provided, Holders of a majority
in aggregate principal amount of the Securities then outstanding to direct the
Trustee in its exercise of any trust or power. The Trustee may withhold from
Holders of Securities notice of any continuing Default or Event of Default
(except a Default in payment of principal, premium or interest, including an
accelerated payment) if it determines that withholding notice is in their
interest.
17. Trustee Dealings with Company.
The Trustee under the Indenture, in its individual or any other
capacity, may become the owner or pledgee of Securities and may otherwise deal
with the Company, its Subsidiaries, any Guarantor and their respective
Affiliates as if it were not the Trustee.
18. No Recourse Against Others.
No stockholder, director, officer, employee or incorporator, as
such, of the Company shall have any liability for any obligation of the Company
under the Securities or the Indenture or for any claim based on, in respect of
or by reason of, such obligations or their creation. Each Holder of a Security
by accepting a Security waives and releases all such liability. The waiver and
release are part of the consideration for the issuance of the Securities.
19. Authentication.
This Security shall not be valid until the Trustee or authenticating
agent signs the certificate of authentication on this Security.
20. Abbreviations and Defined Terms.
Customary abbreviations may be used in the name of a Holder of a
Security 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).
139
<PAGE> 140
21. 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 Securities as a convenience to the Holders of the Securities. No
representation is made as to the accuracy of such numbers as printed on the
Securities and reliance may be placed only on the other identification numbers
printed hereon.
The Company will furnish to any Holder of a Security upon written
request and without charge a copy of the Indenture. Requests may be made to:
Spanish Broadcasting System, Inc., 26 West 56th Street, New York, New York
10019, Attn: Joseph Garcia.
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<PAGE> 141
GUARANTEE
Each undersigned Guarantor (as defined in the Indenture referred to
in the Security upon which this notation is endorsed and each referred to as the
"Guarantor," which term includes any successor Person under the Indenture)
unconditionally guarantees on a senior basis (such guarantee by the Guarantor
being referred to herein as a "Guarantee") (i) the due and punctual payment of
the principal of and interest on the Securities, whether at maturity, by
acceleration or otherwise, the due and punctual payment of interest on the
overdue principal and interest, if any, on the Securities, to the extent lawful,
and the due and punctual performance of all other obligations of the Company to
the Holders or the Trustee all in accordance with the terms set forth in Article
Ten of the Indenture and (ii) in case of any extension of time of payment or
renewal of any Securities or any of such other obligations, that the same will
be promptly paid in full when due or performed in accordance with the terms of
the extension or renewal, whether at stated maturity, by acceleration or
otherwise.
No stockholder, officer, director or incorporator, as such, past,
present or future, of the Guarantor shall have any liability under the Guarantee
by reason of his or its status as such stockholder, officer, director or
incorporator.
The Guarantee shall not be valid or obligatory for any purpose until
the certificate of authentication on the Securities upon which the Guarantee is
noted shall have been executed by the Trustee under the Indenture by the manual
signature of one of its authorized officers.
SPANISH BROADCASTING SYSTEM, INC.,
a New Jersey corporation
By:________________________________
Name:
Title:
141
<PAGE> 142
By:________________________________
Name:
Title:
SPANISH BROADCASTING SYSTEM OF
CALIFORNIA, INC.
By:________________________________
Name:
Title:
By:________________________________
Name:
Title:
SPANISH BROADCASTING SYSTEM OF
FLORIDA, INC.
By:________________________________
Name:
Title:
By:________________________________
Name:
Title:
SPANISH BROADCASTING SYSTEM
NETWORK, INC.
By:________________________________
Name:
142
<PAGE> 143
Title:
By:________________________________
Name:
Title:
SBS PROMOTIONS, INC.
By:________________________________
Name:
Title:
By:________________________________
Name:
Title:
ALARCON HOLDINGS, INC.
By:________________________________
Name:
Title:
By:________________________________
Name:
Title:
SBS OF GREATER NEW YORK, INC.
By:________________________________
Name:
Title:
143
<PAGE> 144
By:________________________________
Name:
Title:
ASSIGNMENT FORM
I or we assign and transfer this Security to
(Print or type name, address and zip code of assignee or transferee)
(Insert Social Security or other identifying number of assignee or transferee)
and irrevocably appoint agent to transfer this
Security on the books of the Company. The agent may substitute another to act
for him.
Dated: __________________ Signed: ____________________
(Sign exactly as
name appears on the
other side of this
Security)
Signature Guarantee:
Participant in a recognized Signature Guarantee
Medallion Program (or other signature guarantor
program reasonably
144
<PAGE> 145
acceptable to the Trustee)
145
<PAGE> 146
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the Company
pursuant to Section 4.12 or Section 4.24 of the Indenture, check the appropriate
box:
Section 4.12 [ ] Section 4.24 [ ]
If you want to elect to have only part of this Security purchased by
the Company pursuant to Section 4.12 or Section 4.24 of the Indenture, state the
amount: $___________
Date: ______________ Your Signature:_________________________________
(Sign exactly as
your name appears
on the other side
of this Security)
Signature Guarantee:
146
<PAGE> 147
EXHIBIT C
FORM OF LEGEND FOR GLOBAL SECURITIES
Any Global Security authenticated and delivered hereunder shall bear
a legend (which would be in addition to any other legends required in the case
of a Restricted Security) in substantially the following form:
THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE
INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A
DEPOSITORY OR A NOMINEE OF A DEPOSITORY OR A SUCCESSOR DEPOSITORY. THIS
SECURITY IS NOT EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A
PERSON OTHER THAN THE DEPOSITORY OR ITS NOMINEE EXCEPT IN THE LIMITED
CIRCUMSTANCES DESCRIBED IN THE INDENTURE, AND NO TRANSFER OF THIS SECURITY
(OTHER THAN A TRANSFER OF THIS SECURITY AS A WHOLE BY THE DEPOSITORY TO A
NOMINEE OF THE DEPOSITORY OR BY A NOMINEE OF THE DEPOSITORY TO THE
DEPOSITORY OR ANOTHER NOMINEE OF THE DEPOSITORY) MAY BE REGISTERED EXCEPT
IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE
ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT,
AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN
SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC
(AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS
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.
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EXHIBIT D
CERTIFICATE TO BE DELIVERED UPON EXCHANGE
OR REGISTRATION OF TRANSFER OF SECURITIES
Re: 11% Senior Notes
due 2004, Series A, and 11%
Senior Notes due 2004,
Series B (the "Securities"), of
Spanish Broadcasting System, Inc.
This Certificate relates to $_______ principal amount of Securities
held in the form of* ___ a beneficial interest in a Global Security or* _______
Physical Securities by ______ (the "Transferor").
The Transferor:*
/ / has requested by written order that the Registrar deliver in exchange
for its beneficial interest in the Global Security held by the Depositary a
Physical Security or Physical Securities in definitive, registered form of
authorized denominations and an aggregate number equal to its beneficial
interest in such Global Security (or the portion thereof indicated above); or
/ / has requested that the Registrar by written order to exchange or
register the transfer of a Physical Security or Physical Securities.
In connection with such request and in respect of each such
Security, the Transferor does hereby certify that the Transferor is familiar
with the Indenture relating to the above captioned Securities and the
restrictions on transfers thereof as provided in Section 2.16 of such Indenture,
and that the transfer of this Securities does not require registration under the
Securities Act of 1933, as amended (the "Act") because*:
/ / Such Security is being acquired for the Transferor's
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<PAGE> 149
own account, without transfer (in satisfaction of Section 2.16(a)(II)(A) or
Section 2.16(d)(i)(A) of the Indenture).
/ / Such Security is being transferred to a "qualified institutional
buyer" (as defined in Rule 144A under the Act), in reliance on Rule 144A.
/ / Such Security is being transferred to an institutional "accredited
investor" (within the meaning of subparagraphs (a)(1), (2), (3) or (7) of Rule
501 under the Act.
/ / Such Security is being transferred in reliance on
Regulation S under the Act
/ / Such Security is being transferred in reliance on Rule 144 under the
Act.
/ / Such Security is being transferred in reliance on and in compliance
with an exemption from the registration requirements of the Act other than Rule
144A or Rule 144 or Regulation S under the Act to a Person other than an
institutional "accredited investor."
_______________________________
[INSERT NAME OF TRANSFEROR]
By: _________________________
[Authorized Signatory]
Date: _____________
*Check applicable box.
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EXHIBIT E
Form of Certificate To Be
Delivered in Connection with
Transfers to Institutional Accredited Investors
- ---------------, ----
IBJ Schroder Bank & Trust
Company
One State Street Plaza
New York, New York 10004
Attention: Corporate Trust Administration
Re: Spanish Broadcasting System, Inc.
(the "Company")
Indenture (the "Indenture") relating to
11% Senior Notes due 2004,
Series A, or 11% Senior
Notes due 2004, Series B (the "Securities")
Ladies and Gentlemen:
In connection with our proposed purchase of Securities, of the
Company, we confirm that:
1. We have received such information as we deem necessary in order
to make our investment decision.
2. We understand that any subsequent transfer of the Securities is
subject to certain restrictions and conditions set forth in the Indenture and
the undersigned agrees to be bound by, and not to resell, pledge or otherwise
transfer the Securities except in compliance with, such restrictions and
conditions and the Securities Act of 1933, as amended (the "Securities Act").
3. We understand that the offer and sale of the Securities have not
been registered under the Securities Act,
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<PAGE> 151
and that the Securities may not be offered or sold within the United States or
to, or for the account or benefit of, U.S. Persons except as permitted in the
following sentence. We agree, on our own behalf and on behalf of any accounts
for which we are acting as hereinafter stated, that if we should sell any
Securities, we will do so only (A) to the Company or any subsidiary thereof, (B)
inside the United States in accordance with Rule 144A under the Securities Act
to a "qualified institutional buyer" (as defined therein), (C) inside the United
States to an institutional "accredited investor" (as defined below) that, prior
to such transfer, furnishes (or has furnished on its behalf by a U.S. broker-
dealer) to the Trustee a signed letter substantially in the form hereof, (D)
outside the United States in accordance with Regulations S under the Securities
Act, (E) pursuant to the exemption from registration provided by Rule 144 under
the Securities Act (if available), or (F) pursuant to an effective registration
statement under the Securities Act, and we further agree to provide to any
Person purchasing Securities from us a notice advising such purchaser that
resales of the Securities are restricted as stated herein.
4. We understand that, on any proposed resale of Securities, we will
be required to furnish to the Trustee and the Company, such certification, legal
opinions and other information as the Trustee and the Company may reasonably
require to confirm that the proposed sale complies with the foregoing
restrictions. We further understand that the Securities purchased by us will
bear a legend to the foregoing effect.
5. We are an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act) and have
such knowledge and experience in financial and business matters as to be capable
of evaluating the merits and risks of our investment in the Securities, and we
and any accounts for which we are acting are each able to bear the economic risk
of our or their investment, as the case may be.
6. We are acquiring the Securities purchased by us for our account
or for one or more accounts (each of which is an institutional "accredited
investor") as to each of which we exercise sole investment discretion.
151
<PAGE> 152
You and the Company are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceeding or official inquiry with respect
to the matters covered hereby.
Very truly yours,
[Name of Transferor]
By:_____________________________
[Authorized Signatory]
152
<PAGE> 153
EXHIBIT F
Form of Certificate To Be
Delivered in Connection
with Regulation S Transfers
- ---------------, ----
IBJ Schroder Bank & Trust
Company
One State Street Plaza
New York, New York 10004
Attention: Corporate Trust Administration
Re: Spanish Broadcasting System, Inc.
(the "Company") 11%
Senior Notes due 2004, Series A,
and 11% Senior Notes due 2004,
Series B (the "Securities")
Dear Sirs:
In connection with our proposed sale of $____________ aggregate
principal amount of the Securities, we confirm that such sale has been effected
pursuant to and in accordance with Regulation S under the Securities Act of
1933, as amended (the "Securities Act"), and, accordingly, we represent that:
(1) the offer of the Securities was not made to a Person in the
United States;
(2) either (a) at the time the buy offer was originated, the
transferee was outside the United States or we and any Person acting on
our behalf reasonably believed that the transferee was outside the United
States, or (b) the transaction was executed in, on or through the
facilities of a designated off-shore securities market and neither we nor
any Person acting on
153
<PAGE> 154
our behalf knows that the transaction has been prearranged with a buyer in
the United States;
(3) no directed selling efforts have been made in the United States
in contravention of the requirements of Rule 903(b) or Rule 904(b) of
Regulation S, as applicable;
(4) the transaction is not part of a plan or scheme to evade the
registration requirements of the Securities Act; and
(5) we have advised the transferee of the transfer restrictions
applicable to the Securities.
You and the Company are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceedings or official inquiry with
respect to the matters covered hereby. Defined terms used herein without
definition have the respective meanings provided in Regulation S.
Very truly yours,
[Name of Transferor]
By:__________________________________
[Authorized Signature]
154
<PAGE> 155
EXHIBIT G
[FORM OF GUARANTEE]
Each undersigned Guarantor (as defined in the Indenture referred to
in the Security upon which this notation is endorsed and each referred to as the
"Guarantor," which term includes any successor Person under the Indenture)
unconditionally guarantees on a senior basis (such guarantee by the Guarantor
being referred to herein as a "Guarantee") (i) the due and punctual payment of
the principal of and interest on the Securities, whether at maturity, by
acceleration or otherwise, the due and punctual payment of interest on the
overdue principal and interest, if any, on the Securities, to the extent lawful,
and the due and punctual performance of all other obligations of the Company to
the Holders or the Trustee all in accordance with the terms set forth in Article
Ten of the Indenture and (ii) in case of any extension of time of payment or
renewal of any Securities or any of such other obligations, that the same will
be promptly paid in full when due or performed in accordance with the terms of
the extension or renewal, whether at stated maturity, by acceleration or
otherwise.
No stockholder, officer, director or incorporator, as such, past,
present or future, of the Guarantor shall have any liability under the Guarantee
by reason of his or its status as such stockholder, officer, director or
incorporator.
The Guarantee shall not be valid or obligatory for any purpose until
the certificate of authentication on the Securities upon which the Guarantee is
noted shall have been executed by the Trustee under the Indenture by the manual
signature of one of its authorized officers.
155
<PAGE> 1
Exhibit 4.3
_____________________________________________________________________
INDENTURE
Dated as of March 15, 1997
among
SPANISH BROADCASTING SYSTEM, INC.,
as Issuer,
SPANISH BROADCASTING SYSTEM, INC.
(a New Jersey corporation),
SPANISH BROADCASTING SYSTEM OF CALIFORNIA, INC.,
SPANISH BROADCASTING SYSTEM OF FLORIDA, INC.,
SPANISH BROADCASTING SYSTEM NETWORK, INC.,
SBS PROMOTIONS, INC.,
ALARCON HOLDINGS, INC. and
SBS OF GREATER NEW YORK, INC.,
as Guarantors,
and
UNITED STATES TRUST COMPANY OF NEW YORK,
as Trustee
________________
$413,930,000
14 1/4% Exchange Debentures due 2005
_____________________________________________________________________
<PAGE> 2
CROSS-REFERENCE TABLE
TIA Indenture
Section Section
- ------- ---------
310(a)(1)........................................... 7.10
(a)(2).......................................... 7.10
(a)(3).......................................... N.A.
(a)(4).......................................... N.A.
(a)(5).......................................... 7.10
(b)............................................. 7.08; 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).......................................... 7.06
(b)(2).......................................... 7.06; 7.07
(c)............................................. 7.05; 7.06;
11.02
(d)............................................. 7.06
314(a).............................................. 4.08; 4.10;
11.02
(b)............................................. N.A.
(c)(1).......................................... 4.08; 11.04
(c)(2).......................................... 11.04
(c)(3).......................................... 4.08; 11.04
(d)............................................. N.A.
(e)............................................. 11.05
(f)............................................. N.A.
315(a).............................................. 7.01(b)
(b)............................................. 7.05; 11.02
(c)............................................. 7.01(a)
(d)............................................. 7.01(c)
(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; 9.04
(c)............................................. 9.04
317(a)(1)........................................... 6.08
(a)(2).......................................... 6.09
(b)............................................. 2.04
318(a).............................................. 11.01
(c)............................................. 11.01
______________________
"N.A." means Not Applicable.
NOTE: This Cross-Reference Table shall not, for any purpose,
be deemed to be a part of the Indenture.
<PAGE> 3
TABLE OF CONTENTS
Page
----
ARTICLE ONE
DEFINITIONS AND INCORPORATION
BY REFERENCE
Section 1.01 Definitions...................................... 1
Section 1.02 Incorporation by Reference of TIA................ 24
Section 1.03 Rules of Construction............................ 25
ARTICLE TWO
THE SECURITIES
Section 2.01 Form and Dating.................................. 25
Section 2.02 Execution and Authentication..................... 26
Section 2.03 Registrar and Paying Agent....................... 27
Section 2.04 Paying Agent To Hold Assets in
Trust......................................... 27
Section 2.05 Securityholder Lists............................. 28
Section 2.06 Transfer and Exchange............................ 28
Section 2.07 Replacement Securities........................... 29
Section 2.08 Outstanding Securities........................... 29
Section 2.09 Treasury Securities.............................. 29
Section 2.10 Temporary Securities............................. 30
Section 2.11 Cancellation..................................... 30
Section 2.12 Defaulted Interest............................... 31
Section 2.13 CUSIP Number..................................... 31
Section 2.14 Deposit of Moneys................................ 31
ARTICLE THREE
REDEMPTION
Section 3.01 Notices to Trustee............................... 32
Section 3.02 Selection of Securities To Be
Redeemed...................................... 32
Section 3.03 Notice of Redemption............................. 33
Section 3.04 Effect of Notice of Redemption................... 34
Section 3.05 Deposit of Redemption Price...................... 34
Section 3.06 Securities Redeemed in Part...................... 34
-i-
<PAGE> 4
Page
----
ARTICLE FOUR
COVENANTS
Section 4.01 Payment of Securities............................ 34
Section 4.02 Maintenance of Office or Agency.................. 35
Section 4.03 Limitation on Additional
Indebtedness.................................. 35
Section 4.04 Limitation on Restricted Payments................ 36
Section 4.05 Corporate Existence.............................. 38
Section 4.06 Payment of Taxes and Other Claims................ 39
Section 4.07 Maintenance of Properties and
Insurance..................................... 39
Section 4.08 Compliance Certificate; Notice of
Default....................................... 40
Section 4.09 Compliance with Laws............................. 41
Section 4.10 SEC Reports...................................... 41
Section 4.11 Waiver of Stay, Extension or Usury
Laws.......................................... 42
Section 4.12 Limitation on Certain Asset Sales................ 42
Section 4.13 Limitation on Investments........................ 45
Section 4.14 Limitation on Preferred Stock of
Restricted Subsidiaries....................... 46
Section 4.15 Limitation on Liens.............................. 46
Section 4.16 Limitation on Other Senior
Subordinated Debt............................. 46
Section 4.17 Sale of AM Stations.............................. 47
Section 4.18 Limitations on Transactions with
Affiliates.................................... 49
Section 4.19 Limitation on Creation of
Subsidiaries.................................. 50
Section 4.20 Limitation on Capital Stock of
Restricted Subsidiaries....................... 51
Section 4.21 Lines of Business................................ 51
Section 4.22 Payments for Consent............................. 51
Section 4.23 Limitation on Sale and Lease-Back
Transactions.................................. 52
Section 4.24 Change of Control................................ 52
ARTICLE FIVE
SUCCESSOR CORPORATION
Section 5.01 Mergers, Consolidations and Sales
of Assets..................................... 55
Section 5.02 Successor Corporation Substituted................ 57
-ii-
<PAGE> 5
Page
----
ARTICLE SIX
DEFAULT AND REMEDIES
Section 6.01 Events of Default................................ 58
Section 6.02 Acceleration..................................... 60
Section 6.03 Other Remedies................................... 61
Section 6.04 Waiver of Past Defaults.......................... 61
Section 6.05 Control by Majority.............................. 62
Section 6.06 Limitation on Suits.............................. 62
Section 6.07 Rights of Holders To Receive
Payment....................................... 63
Section 6.08 Collection Suit by Trustee....................... 63
Section 6.09 Trustee May File Proofs of Claim................. 63
Section 6.10 Priorities....................................... 64
Section 6.11 Undertaking for Costs............................ 65
ARTICLE SEVEN
TRUSTEE
Section 7.01 Duties of Trustee................................ 65
Section 7.02 Rights of Trustee................................ 67
Section 7.03 Individual Rights of Trustee..................... 68
Section 7.04 Trustee's Disclaimer............................. 68
Section 7.05 Notice of Default................................ 68
Section 7.06 Reports by Trustee to Holders.................... 69
Section 7.07 Compensation and Indemnity....................... 69
Section 7.08 Replacement of Trustee........................... 70
Section 7.09 Successor Trustee by Merger, Etc................. 72
Section 7.10 Eligibility; Disqualification.................... 72
Section 7.11 Preferential Collection of Claims
Against Company............................... 72
ARTICLE EIGHT
SATISFACTION AND DISCHARGE OF INDENTURE
Section 8.01 Legal Defeasance and Covenant
Defeasance.................................... 73
Section 8.02 Satisfaction and Discharge....................... 77
Section 8.03 Survival of Certain Obligations.................. 77
Section 8.04 Acknowledgment of Discharge by
Trustee....................................... 78
Section 8.05 Application of Trust Assets...................... 78
-iii-
<PAGE> 6
Page
----
Section 8.06 Repayment to the Company or
Guarantors; Unclaimed Money................... 78
Section 8.07 Reinstatement.................................... 79
ARTICLE NINE
AMENDMENTS, SUPPLEMENTS AND WAIVERS
Section 9.01 Without Consent of Holders....................... 80
Section 9.02 With Consent of Holders.......................... 80
Section 9.03 Compliance with TIA.............................. 82
Section 9.04 Revocation and Effect of Consents................ 82
Section 9.05 Notation on or Exchange of
Securities.................................... 83
Section 9.06 Trustee To Sign Amendments, Etc.................. 83
ARTICLE TEN
GUARANTEES
Section 10.01 Unconditional Guarantee.......................... 84
Section 10.02 Severability..................................... 85
Section 10.03 Release of a Guarantor........................... 85
Section 10.04 Limitation of a Guarantor's
Liability..................................... 86
Section 10.05 Contribution..................................... 86
Section 10.06 Waiver of Subrogation............................ 86
Section 10.07 Execution of Guarantees.......................... 87
Section 10.08 Waiver of Stay, Extension or Usury
Laws.......................................... 88
ARTICLE ELEVEN
MISCELLANEOUS
Section 11.01 TIA Controls..................................... 88
Section 11.02 Notices.......................................... 88
Section 11.03 Communications by Holders with
Other Holders................................. 89
Section 11.04 Certificate and Opinion as to
Conditions Precedent.......................... 90
Section 11.05 Statements Required in Certificate
or Opinion.................................... 90
Section 11.06 Rules by Trustee, Paying Agent,
Registrar..................................... 91
-iv-
<PAGE> 7
Section 11.07 Legal Holidays................................... 91
Section 11.08 Governing Law.................................... 91
Section 11.09 No Adverse Interpretation of Other
Agreements.................................... 91
Section 11.10 No Recourse Against Others....................... 91
Section 11.11 Successors....................................... 91
Section 11.12 Duplicate Originals.............................. 92
Section 11.13 Severability..................................... 92
ARTICLE TWELVE
SUBORDINATION
Section 12.01 Securities Subordinated to Senior
Debt; Guarantees Subordinated to
Guarantor Senior Debt......................... 92
Section 12.02 No Payment on Securities in
Certain Circumstances......................... 93
Section 12.03 Payment Over of Proceeds upon
Dissolution, Etc.............................. 95
Section 12.04 Payments May Be Paid Prior to
Dissolution................................... 97
Section 12.05 Subrogation...................................... 97
Section 12.06 Obligations of the Company
Unconditional................................. 98
Section 12.07 Notice to Trustee................................ 98
Section 12.08 Reliance on Judicial Order or
Certificate of Liquidating Agent.............. 99
Section 12.09 Trustee's Relation to Senior Debt
or Guarantor Senior Debt...................... 99
Section 12.10 Subordination Rights Not Impaired
by Acts or Omissions of the
Company or a Guarantor or
Holders of Senior Debt........................ 100
Section 12.11 Holders Authorize Trustee To
Effectuate Subordination of
Securities.................................... 101
Section 12.12 This Article Twelve Not To Prevent
Events of Default............................. 101
Section 12.13 Trustee's Compensation Not
Prejudiced.................................... 102
Signatures........................................................... 103
-v-
<PAGE> 8
Exhibit A - Form of Exchange Debenture
Exhibit B - Form of Guarantee
Note: This Table of Contents shall not, for any purpose, be
deemed to be a part of the Indenture.
-vi-
<PAGE> 9
INDENTURE dated as of March 15, 1997, among SPANISH
BROADCASTING SYSTEM, INC., a Delaware corporation (the
"Company"), as Issuer, SPANISH BROADCASTING SYSTEM, INC., a New
Jersey corporation, SPANISH BROADCASTING SYSTEM OF CALIFORNIA,
INC., a California corporation, SPANISH BROADCASTING SYSTEM OF
FLORIDA, INC., a Florida corporation, SPANISH BROADCASTING
SYSTEM NETWORK, INC., a New York corporation, SBS PROMOTIONS,
INC., a New York corporation, ALARCON HOLDINGS, INC., a New
York corporation, and SBS OF GREATER NEW YORK, INC., a New York
corporation, as Guarantors, and UNITED STATES TRUST COMPANY OF
NEW YORK, as Trustee (the "Trustee").
Each party hereto agrees as follows for the benefit
of each other party and for the equal and ratable benefit of
the Holders of the Securities:
ARTICLE ONE
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. Definitions.
"Acquired Indebtedness" means Indebtedness of a
Person (including an Unrestricted Subsidiary) existing at the
time such Person becomes a Restricted Subsidiary or assumed in
connection with the acquisition of assets from such Person.
"Acquisition Indebtedness" means Indebtedness
incurred by the Company or by a Restricted Subsidiary the
proceeds of which are used for the acquisition of a media
business and related facilities and assets or for the
construction of a facility pursuant to a construction permit
issued by the FCC.
"Adjusted Net Assets" of a Guarantor at any date
shall mean the lesser of the amount by which (x) the fair value
of the property of such Guarantor exceeds the total amount of
liabilities, including, without limitation, contingent
liabilities (after giving effect to all other fixed and
contingent liabilities), but excluding liabilities under the
Guarantee, of such Guarantor at such date and (y) the present
fair ratable value of the assets of such Guarantor at such date
exceeds the amount that will be required to pay the probable
liability of such Guarantor on its debts (after giving effect
to all other fixed and contingent liabilities and after giving
effect to any collection from any Subsidiary of such Guarantor
in respect of
<PAGE> 10
-2-
the obligations of such Subsidiary under the
Guarantee), excluding Indebtedness in respect of the Guarantee,
as they become absolute and matured.
"Affiliate" of any specified Person means any other
Person which directly or indirectly through one or more
intermediaries controls, or is controlled by, or is under
common control with, such specified Person. For the 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,
means 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
(a) beneficial ownership of at least 10% of the voting
securities of a Person shall be deemed to be control and
(b) for purposes of Section 4.18, for so long as Raul Alarcon
Sr., Raul Alarcon Jr. or Jose Grimalt are directors, officers
or shareholders of the Company, they, their respective spouses,
lineal descendants and any Person controlled by any of them
shall be Affiliates of the Company and its Subsidiaries.
"Affiliate Transaction" has the meaning provided in
Section 4.18.
"Agent" means any Registrar or Paying Agent.
"AM Stations Asset Sale Date" means April 1, 1998;
provided that if, on April 1, 1998, the Company shall have
entered into a legally binding sale agreement or agreements for
the sale of the FCC broadcast licenses of WXLX-AM, KXMG-AM and
WCMQ-AM, and the only condition to the closing of such Asset
Sales is the granting by the FCC of final approval of the
transfer of such licenses, the AM Stations Asset Sale Date
shall be the earlier of (a) the 60th day after the FCC approves
the transfer of such license or (b) the day the FCC denies
approval of any such transfer or any such sale agreement shall
have been terminated or ceased to be a legally binding
agreement of the parties thereto.
"Asset Sale" means the sale, transfer or other
disposition (other than to the Company or any of its Restricted
Subsidiaries) in any single transaction or series of
transactions of (a) any Capital Stock of or other equity
interest in any Restricted Subsidiary of the Company, (b) all
or substantially all of the assets of the Company or of any
Restricted
<PAGE> 11
-3-
Subsidiary thereof, or (c) all or substantially all
of the assets of any radio station, or part thereof, owned by
the Company or any Restricted Subsidiary thereof, or a
division, line of business or comparable business segment of
the Company or any Restricted Subsidiary thereof; provided that
Asset Sales shall not include sales, leases, conveyances,
transfers or other dispositions to the Company or to a
Restricted Subsidiary or to any other Person if after giving
effect to such sale, lease, conveyance, transfer or other
disposition such other Person becomes a Restricted Subsidiary.
"Asset Sale Proceeds" means, with respect to any
Asset Sale, (i) cash received by the Company or any Restricted
Subsidiary of the Company from such Asset Sale (including cash
received as consideration for the assumption of liabilities
incurred in connection with or in anticipation of such Asset
Sale), after (a) provision for all income or other taxes
measured by or resulting from such Asset Sale, (b) payment of
all brokerage commissions, underwriting and other fees and
expenses related to such Asset Sale, (c) provision for minority
interest holders in any Restricted Subsidiary of the Company as
a result of such Asset Sale and (d) deduction of appropriate
amounts to be provided by the Company or any such Restricted
Subsidiary as a reserve, in accordance with GAAP, against any
liabilities associated with the assets sold or disposed of in
such Asset Sale and retained by the Company or any such
Restricted Subsidiary after such Asset Sale, including, without
limitation, pension and other post employment benefit
liabilities and liabilities related to environmental matters or
against any indemnification obligations associated with the
assets sold or disposed of in such Asset Sale, and
(ii) promissory notes and other noncash consideration received
by the Company or any such Restricted Subsidiary from such
Asset Sale or other disposition upon the liquidation or
conversion of such notes or noncash consideration into cash.
"Attributable Debt" in respect of a Sale and Lease-
Back Transaction means, as at the time of determination, the
greater of (i) the fair value of the property subject to such
arrangement (as determined by the Board of Directors of the
Company) and (ii) the present value (discounted at the interest
rate implicit in such transaction) of the total obligations of
the lessee for rental payments during the remaining term of the
lease included in such Sale and Lease-Back Transaction
(including any period for which such lease has been extended).
<PAGE> 12
-4-
"Available Asset Sale Proceeds" means, with respect
to any Asset Sale, the aggregate Asset Sale Proceeds from such
Asset Sales that have not been applied in accordance with
clauses (iii)(a) or (iii)(b), and that have not been the basis
for an Excess Proceeds Offer in accordance with clause (iii)(b)
of the first paragraph of Section 4.12.
"Bank Indebtedness" means (i) Indebtedness of the
Company incurred in accordance with this Indenture owing to one
or more commercial banking institutions that are members of the
Federal Reserve System and (ii) any guarantee by a Guarantor of
any Indebtedness of the Company of the type set forth in
clause (i) of this definition.
"Bankruptcy Law" means Title 11, U.S. Code or any
similar Federal, state or foreign law for the relief of
debtors.
"Board of Directors" means, as to any Person, the
Board of Directors of such Person or any duly authorized
committee thereof.
"Board Resolution" means, with respect to any Person,
a copy of a resolution certified by the Secretary or an
Assistant Secretary of such Person to have been duly adopted by
the Board of Directors of such Person and to be in full force
and effect on the date of such certification, and delivered to
the Trustee.
"Business Day" means any day other than a Saturday,
Sunday or any other day on which banking institutions in the
City of New York are required or authorized by law or other
governmental action to be closed.
"Capital Stock" means, with respect to any Person,
any and all shares or other equivalents (however designated) of
capital stock, partnership interests or any other
participation, right or other interest in the nature of an
equity interest in such Person or any option, warrant or other
security convertible into any of the foregoing.
"Capitalized Lease Obligations" means Indebtedness
represented by obligations under a lease that is required to be
capitalized for financial reporting purposes in accordance with
GAAP, and the amount of such Indebtedness shall be the
capitalized amount of such obligations determined in accordance
with GAAP.
<PAGE> 13
-5-
"Certificate of Designation" means the Certificate of
Designation creating the Senior Preferred Stock, as in effect
on the Issue Date, and any certificate of designation creating
Exchange Preferred Stock (as defined in such Certificate of
Designation) and Private Exchange Preferred Stock (as defined
in such Certificate of Designation).
A "Change of Control" of the Company will be deemed
to have occurred at such time as (i) any Person (including a
Person's Affiliates and associates), other than a Permitted
Holder, becomes the beneficial owner (as defined under
Rule 13d-3 or any successor rule or regulation promulgated
under the Exchange Act) of 50% or more of the total voting
power of the Company's Common Stock, (ii) prior to a Public
Equity Offering, Permitted Holders shall cease to own
beneficially at least 40% of the total voting power of the
Company's Common Stock, (iii) any Person (including a Person's
Affiliates and associates), other than a Permitted Holder,
becomes the beneficial owner of more than 30% of the total
voting power of the Company's Common Stock, and the Permitted
Holders beneficially own, in the aggregate, a lesser percentage
of the total voting power of the Common Stock of the Company
than such other Person and do not have the right or ability by
voting power, contract or otherwise to elect or designate for
election a majority of the Board of Directors of the Company,
(iv) there shall be consummated any consolidation or merger of
the Company in which the Company is not the continuing or
surviving corporation or pursuant to which the Common Stock of
the Company would be converted into cash, securities or other
property, other than a merger or consolidation of the Company
in which the holders of the Common Stock of the Company
outstanding immediately prior to the consolidation or merger
hold, directly or indirectly, at least a majority of the Common
Stock of the surviving corporation immediately after such
consolidation or merger, or (v) during any period of two
consecutive years, individuals who at the beginning of such
period constituted the Board of Directors of the Company
(together with any new directors whose election by such Board
of Directors or whose nomination for election by the
shareholders of the Company has been approved by 66 2/3% of the
directors then still in office who either were directors at the
beginning of such period or whose election or recommendation
for election was previously so approved) cease to constitute a
majority of the Board of Directors of the Company.
"Change of Control Offer" has the meaning provided in
Section 4.24.
<PAGE> 14
-6-
"Change of Control Payment Date" has the meaning
provided in Section 4.24.
"Commission" means the Securities and Exchange
Commission.
"Common Stock" of any Person means all Capital Stock
of such Person that is generally entitled to (i) vote in the
election of directors of such Person or (ii) if such Person is
not a corporation, vote or otherwise participate in the
selection of the governing body, partners, managers or others
that will control the management and policies of such Person.
"Company" means the party named as such in the
preamble to this Indenture until a successor replaces it
pursuant to this Indenture and thereafter means such successor.
"Company Request" means any written request signed in
the name of the Company by any two of the following: the Chief
Executive Officer, Chief Operating Officer, the President, any
Vice President, the Chief Financial Officer, the Treasurer, the
Secretary, any Assistant Treasurer or Assistant Secretary, but
not both of the Secretary and any Assistant Secretary of the
Company.
"Consolidated Interest Expense" means, with respect
to any Person, for any period, the aggregate amount of interest
which, in conformity with GAAP, would be set forth opposite the
caption "interest expense" or any like caption on an income
statement for such Person and its Subsidiaries on a
consolidated basis (including, but not limited to, cash
dividends paid on Preferred Stock, imputed interest included in
Capitalized Lease Obligations, all commissions, discounts and
other fees and charges owed with respect to letters of credit
and bankers' acceptance financing, the net costs associated
with hedging obligations, amortization of other financing fees
and expenses, the interest portion of any deferred payment
obligation, amortization of discount or premium, if any, and
all other non-cash interest expense (other than interest
amortized to cost of sales)) plus, without duplication, all net
capitalized interest for such period and all interest incurred
or paid under any guarantee of Indebtedness (including a
guarantee of principal, interest or any combination thereof) of
any Person, plus the amount of all dividends or distributions
paid on Disqualified Capital Stock (other than dividends paid
or payable in shares of Capital Stock of the Company).
<PAGE> 15
-7-
"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, on a consolidated
basis, determined in accordance with GAAP; provided, however,
that (a) the Net Income of any Person (the "other Person") in
which the Person in question or any of its Subsidiaries has
less than a 100% interest (which interest does not cause the
net income of such other Person to be consolidated into the net
income of the Person in question in accordance with GAAP) shall
be included only to the extent of the amount of dividends or
distributions paid to the Person in question or the Subsidiary,
(b) the Net Income of any Subsidiary of the Person in question
that is subject to any restriction or limitation on the payment
of dividends or the making of other distributions (other than
pursuant to the Securities or this Indenture) shall be excluded
to the extent of such restriction or limitation, (c) (i) the
Net Income of any Person acquired in a pooling of interests
transaction for any period prior to the date of such
acquisition and (ii) any net gain (but not loss) resulting from
an Asset Sale by the Person in question or any of its
Subsidiaries other than in the ordinary course of business
shall be excluded, and (d) extraordinary gains and losses shall
be excluded.
"Corporate Trust Office" means the office of the
Trustee at which at any particular time its corporate trust
business shall be principally administered, which office at the
date of execution of this Indenture is located at 114 West 47th
Street, New York, New York 10036, Attention: Corporate Trust
and Agency Division.
"Covenant Defeasance" has the meaning provided in
Section 8.01.
"Credit Facility" means Indebtedness of the Company
and its Restricted Subsidiaries under a revolving credit
facility in an aggregate principal amount not to exceed the
greater of (a) $10,000,000 or (b) 75% of the net book value of
the Company's accounts receivable.
"Current Market Value" of a Contingent Class A Share
as of any date means the value thereof as determined by a
nationally recognized investment bank and set forth in a
written opinion of such investment bank mailed to each Holder
with the notice of redemption, notice of Change of Control
Offer, notice of Excess Proceeds Offer or on the Final Maturity
Date, as the case may be.
<PAGE> 16
-8-
"Custodian" means any receiver, trustee, assignee,
liquidator, sequestrator or similar official under any
Bankruptcy Law.
"Default" means an event or condition the occurrence
of which is, or with the lapse of time or the giving of notice
or both would be, an Event of Default.
"Designated Senior Debt" means any Indebtedness
constituting Senior Debt or Guarantor Senior Debt which, at the
time of determination, has an aggregate principal amount of at
least $10,000,000 (or accreted value in the case of
Indebtedness issued at a discount) and is specifically
designated in the instrument evidencing such Senior Debt or
Guarantor Senior Debt as "Designated Senior Debt" by the
Company.
"Disqualified Capital Stock" means any Capital Stock
of the Company or a Restricted Subsidiary thereof which, 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), or upon the happening of any event, matures or is
mandatorily redeemable, pursuant to a sinking fund obligation
or otherwise, or is redeemable at the option of the holder
thereof, in whole or in part, on or prior to the maturity date
of the Securities, for cash or securities constituting
Indebtedness. Without limitation of the foregoing,
Disqualified Capital Stock shall be deemed to include (i) any
Preferred Stock of a Restricted Subsidiary of the Company and
(ii) any Preferred Stock of the Company, with respect to either
of which, under the terms of such Preferred Stock, by agreement
or otherwise, such Restricted Subsidiary or the Company is
obligated to pay current dividends or distributions in cash
during the period prior to March 15, 2005; provided, however,
that Preferred Stock of the Company or any Restricted
Subsidiary thereof that is issued with the benefit of
provisions requiring a change of control offer to be made for
such Preferred Stock in the event of a change of control of the
Company or such Restricted Subsidiary, which provisions have
substantially the same effect as the provisions of
Section 4.24, shall not be deemed to be Disqualified Capital
Stock solely by virtue of such provisions; and provided,
further, that the Senior Preferred Stock shall be deemed not to
be Disqualified Capital Stock.
"EBITDA" means, for any Person, for any period, an
amount equal to (a) the sum of (i) Consolidated Net Income for
such period, plus (ii) the provision for taxes for such period
<PAGE> 17
-9-
based on income or profits to the extent such income or profits
were included in computing Consolidated Net Income and any
provision for taxes utilized in computing net loss under
clause (i) hereof, plus (iii) Consolidated Interest Expense for
such Period (but only including Redeemable Dividends in the
calculation of such Consolidated Interest Expense to the extent
that such Redeemable Dividends have not been excluded in the
calculation of Consolidated Net Income), plus (iv) depreciation
for such period on a consolidated basis, plus (v) amortization
of intangibles for such period on a consolidated basis, plus
(vi) any other non-cash items reducing Consolidated Net Income
for such period, minus (b) all non-cash items increasing
Consolidated Net Income for such period, all for such Person
and its Subsidiaries determined in accordance with GAAP, except
that with respect to the Company each of the foregoing items
shall be determined on a consolidated basis with respect to the
Company and its Restricted Subsidiaries only, provided,
however, that, for purposes of calculating EBITDA during any
fiscal quarter, cash income from a particular Investment of
such Person shall be included only (x) if cash income has been
received by such Person with respect to such Investment during
each of the previous four fiscal quarters, or (y) if the cash
income derived from such Investment is attributable to
Temporary Cash Investments.
"Event of Default" has the meaning provided in
Section 6.01.
"Exchange Act" means the Securities Exchange Act of
1934, as amended, or any successor statute or statutes thereto.
"fair market value" means, with respect to any asset
or property, the price which could be negotiated in an arm's-
length, free market transaction, for cash, between a willing
seller and a willing and able buyer, neither of whom is under
undue pressure or compulsion to complete the transaction. Fair
market value shall be determined by the Board of Directors of
the Company acting reasonably and in good faith and shall be
evidenced by a Board Resolution of the Company delivered to the
Trustee.
"FCC" means the Federal Communications Commission.
"Final Maturity Date" means March 15, 2005
"Fully Diluted Basis" means, as of any date of
determination, in determining the number of shares of Common
Stock
<PAGE> 18
-10-
deemed to be outstanding as of such date, the sum of
(i) the number of shares of Class A Common Stock outstanding as
of such date, (ii) the number of shares of Class A Common Stock
into which the outstanding shares of Class B Common Stock
outstanding as of such date may be converted and (iii) the
number of shares of Class A Common Stock and Class B Common
Stock (assuming conversion of such shares of Class B Common
Stock into shares of Class A Common Stock) into or for which
rights, options, warrants or other securities outstanding as of
such date are exercisable or convertible, after giving effect
to any anti-dilution adjustment pursuant to any agreement
governing any such right, option, warrant or security relating
to any issuance of Class A Common Stock pursuant to Section
4.17 hereof on such date.
"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 may be approved by a significant segment of the
accounting profession of the United States, which are in effect
as of the Issue Date.
"Guarantee" has the meaning provided in Section 4.19.
"Guarantor" means (i) each of Spanish Broadcasting
System, Inc., a New Jersey corporation, Spanish Broadcasting
System Of California, Inc., a California corporation, Spanish
Broadcasting System Of Florida, Inc., a Florida corporation,
Spanish Broadcasting System Network, Inc., a New York
corporation, SBS Promotions, Inc., a New York corporation,
Alarcon Holdings, Inc., a New York corporation, and SBS of
Greater New York, Inc., a New York corporation, and (ii) each
Person that in the future executes a Guarantee pursuant to
Section 4.19 or otherwise; provided that any Person
constituting a Guarantor as described above shall cease to
constitute a Guarantor when its Guarantee is released in
accordance with the terms of this Indenture.
"Guarantor Senior Debt" of any Guarantor means, the
principal of and premium, if any, and interest (including,
without limitation, interest accruing or that would have
accrued but for the filing of a bankruptcy, reorganization or
other insolvency proceeding whether or not such interest
constitutes an allowed claim in such proceeding) on, and any
and all other fees, expense reimbursement obligations,
indemnities
<PAGE> 19
-11-
and other amounts due pursuant to their terms of all agreements,
documents and instruments providing for, creating, securing or
evidencing or otherwise entered into in connection with (a) all
obligations of such Guarantor with respect to any Interest Rate
Agreement, (b) all obligations of such Person to reimburse any
bank or other Person in respect of amounts paid under letters of
credit, acceptances or other similar instruments, (c) all other
Indebtedness of such Guarantor which does not provide that it is
to rank pari passu with or subordinate to the Guarantee of such
Guarantor and (d) all deferrals, renewals, extensions and refundings
of, and amendments, modifications and supplements to, any of the
Guarantor Senior Debt described above. Notwithstanding anything to
the contrary in the foregoing, Guarantor Senior Debt will not
include (i) Indebtedness of such Guarantor to the Company to any of
its Subsidiaries, (ii) Indebtedness represented by the Guarantees,
(iii) any Indebtedness which by the express terms of the agreement
or instrument creating, evidencing or governing the same is junior
or subordinate in right of payment to any item of Guarantor Senior
Debt, (iv) any trade payable arising from the purchase of goods or
materials or for services obtained in the ordinary course of business
or (v) Indebtedness incurred in violation of this Indenture.
"Holder" or "Securityholder" means a Person in whose
name a Security is registered on the Registrar's books.
"incur" means, with respect to any Indebtedness or
other obligation of any Person, to create, issue, incur (by
conversion, exchange or otherwise), assume, guarantee or
otherwise become liable in respect of such Indebtedness or
other obligation or the recording, as required pursuant to GAAP
or otherwise, of any such Indebtedness or other obligation on
the balance sheet of such Person (and "incurrence," "incurred,"
"incurrable," and "incurring" shall have meanings correlative
to the foregoing); provided that a change in GAAP that results
in an obligation of such Person that exists at such time
becoming Indebtedness shall not be deemed an incurrence of such
Indebtedness.
"Indebtedness" means (without duplication), with
respect to any Person, any indebtedness at any time
outstanding, secured or unsecured, contingent or otherwise,
which is for borrowed money (whether or not the recourse of the
lender is to the whole of the assets of such Person or only to
a portion thereof), or evidenced by bonds, notes, debentures or
similar instruments or representing the balance deferred and
<PAGE> 20
-12-
unpaid of the purchase price of any property (excluding,
without limitation, any balances that constitute accounts
payable or trade payables, and other accrued liabilities
arising in the ordinary course of business) if and to the
extent any of the foregoing indebtedness would appear as a
liability upon a balance sheet of such Person prepared in
accordance with GAAP, and shall also include, to the extent not
otherwise included (i) any Capitalized Lease Obligations,
(ii) obligations secured by a lien to which the property or
assets owned or held by such Person is subject, whether or not
the obligation or obligations secured thereby shall have been
assumed, (iii) guarantees of items of other Persons which would
be included within this definition for such other Persons
(whether or not such items would appear upon the balance sheet
of the guarantor), (iv) all obligations for the reimbursement
of any obligor on any letter of credit, banker's acceptance or
similar credit transaction, (v) in the case of the Company,
Disqualified Capital Stock of the Company or any Restricted
Subsidiary thereof, and (vi) obligations of any such Person
under any Interest Rate Agreement applicable to any of the
foregoing (if and to the extent such Interest Rate Agreement
obligations would appear as a liability upon a balance sheet of
such Person prepared in accordance with GAAP). The amount of
Indebtedness of any Person at any date shall be the outstanding
balance at such date of all unconditional obligations as
described above and, with respect to contingent obligations,
the maximum liability upon the occurrence of the contingency
giving rise to the obligation, provided (i) that the amount
outstanding at any time of any Indebtedness issued with
original issue discount, including the Old Notes, is the
principal amount of such Indebtedness less the remaining
unamortized portion of the original issue discount of such
Indebtedness at such time as determined in conformity with GAAP
and (ii) that Indebtedness shall not include any liability for
federal, state, local or other taxes. Notwithstanding any
other provision of the foregoing definition, any trade payable
arising from the purchase of goods or materials or for services
obtained in the ordinary course of business shall not be deemed
to be "Indebtedness" of the Company or any Restricted
Subsidiaries for purposes of this definition. Furthermore,
guarantees of (or obligations with respect to letters of credit
supporting) Indebtedness otherwise included in the
determination of such amount shall not also be included.
"Indenture" means this Indenture, as amended or
supplemented from time to time in accordance with the terms
hereof.
<PAGE> 21
-13-
"Independent" when used with respect to any specified
Person means such a Person who (a) is in fact independent;
(b) does not have any direct financial interest or any material
indirect financial interest in the Company or any of its
Subsidiaries, or in any Affiliate of the Company or any of its
Subsidiaries; and (c) is not an officer, employee, promoter,
underwriter, trustee, partner, director or Person performing
similar functions for the Company or any of its Subsidiaries.
Whenever it is provided in this Indenture that any Independent
Person's opinion or certificate shall be furnished to the
Trustee, such Person shall be appointed by the Company, and
such opinion or certificate shall state that the signer has
read this definition and that the signer is Independent within
the meaning hereof.
"Independent Financial Advisor" means a firm
(a) which does not, and whose directors, officers and employees
or Affiliates do not, have a direct or indirect financial
interest in the Company and (b) which, in the judgment of the
Board of Directors of the Company, is otherwise independent and
qualified to perform the task for which it is to be engaged.
"Infinity Note" means the $3,000,000 aggregate
principal amount of Indebtedness issued by the Company to
Infinity Holding Corp. of Orlando on the Issue Date.
"Interest Payment Date" means the stated maturity of
an installment of interest on the Securities.
"Interest Rate Agreement" means, for any Person, any
interest rate swap agreement, interest rate cap agreement,
interest rate collar agreement or other similar agreement
designed to protect the party indicated therein against
fluctuations in interest rates.
"Investments" means, directly or indirectly, any
advance, account receivable (other than an account receivable
arising in the ordinary course of business), loan or capital
contribution to (by means of transfers of property to others,
payments for property or services for the account or use of
others or otherwise), the purchase of any stock, bonds, notes,
debentures, partnership or joint venture interests or other
securities of, the acquisition, by purchase or otherwise, of
all or substantially all of the business or assets or stock or
other evidence of beneficial ownership of, any Person or the
making of any investment in any Person. Investments shall
<PAGE> 22
-14-
exclude extensions of trade credit on commercially reasonable
terms in accordance with normal trade practices.
"Issue Date" means the date of original issuance of
the Senior Preferred Stock.
"Legal Defeasance" has the meaning provided in
Section 8.01.
"Lien" means with respect to any property or assets
of any Person, any mortgage or deed of trust, pledge,
hypothecation, assignment, deposit arrangement, security
interest, lien, charge, easement, encumbrance, preference,
priority, or other security agreement or preferential
arrangement of any kind or nature whatsoever on or with respect
to such property or assets (including without limitation, any
Capitalized Lease Obligation, conditional sales, or other title
retention, agreement having substantially the same economic
effect as any of the foregoing).
"Net Income" means, with respect to any Person for
any period, the net income (loss) of such Person determined in
accordance with GAAP.
"Net Proceeds" means (a) in the case of any sale of
Capital Stock by the Company or any of its Restricted
Subsidiaries, the aggregate net proceeds received by the
Company or such Restricted Subsidiary, after payment of
expenses, commissions and the like incurred in connection
therewith, whether such proceeds are in cash or in property
(valued at the fair market value thereof, as determined in good
faith by the Board of Directors of the Company, at the time of
receipt) and (b) in the case of any exchange, exercise,
conversion or surrender of outstanding securities of any kind
for or into shares of Capital Stock of the Company or any of
its Restricted Subsidiaries which is not Disqualified Capital
Stock, the net book value of such outstanding securities on the
date of such exchange, exercise, conversion or surrender (plus
any additional amount required to be paid by the holder to the
Company or such Restricted Subsidiary upon such exchange,
exercise, conversion or surrender, less any and all payments
made to the holders, e.g., on account of fractional shares and
less all expenses incurred by the Company in connection
therewith). For the avoidance of doubt, the issuance of Senior
Preferred Stock as payment of dividends on Senior Preferred
Stock shall be deemed to result in no Net Proceeds received by
the Company from any such issuance.
<PAGE> 23
-15-
"Non-Payment Event of Default" means any event (other
than a Payment Default) the occurrence of which entitles one or
more Persons to accelerate the maturity of any Designated
Senior Debt.
"Notes" means the $75,000,000 aggregate principal
amount of 11% Senior Notes issued by the Company on the Issue
Date.
"Obligations" means all obligations for principal,
premium, interest, penalties, fees, indemnifications,
reimbursements, damages and other liabilities payable under the
documentation governing, or otherwise relating to, any
Indebtedness.
"Officers' Certificate" means, with respect to any
Person, a certificate signed by the Chairman of the Board of
Directors, the President or any Vice President and the
Treasurer or any assistant Treasurer of such Person that shall
comply with applicable provisions of this Indenture.
"Old Notes" means the $107,059,000 aggregate
principal amount of 12>% Senior Notes due 2002 of the Company.
"Old Warrants" means Warrants issued pursuant to the
Warrant Agreement dated as of June 29, 1994 between the Company
and IBJ Schroder Bank & Trust Company, as Warrant Agent.
"Opinion of Counsel" means a written opinion from
legal counsel which and who are acceptable to the Trustee.
"Paying Agent" has the meaning provided in Section
2.03.
"Payment Default" means any default, whether or not
any requirement for the giving of notice, the lapse of time or
both, or any other condition to such default becoming an event
of default has occurred, in the payment of principal of (or
premium, if any) or interest on or any other amount payable in
connection with Designated Senior Debt.
"Permitted Holders" means (i) Raul Alarcon Jr.,
(ii) the heirs, executors, administrators testamentary,
trustees, legatees or beneficiaries of the Person described in
(i) and (iii) a trust, the beneficiaries of which include only
Persons described in (i) and (ii) and their respective spouses
and lineal descendants.
<PAGE> 24
-16-
"Permitted Indebtedness" means:
(i) Indebtedness of the Company or any Restricted
Subsidiary arising under or in connection with the Credit
Facility;
(ii) Indebtedness under the Notes and the guarantees
thereof;
(iii) Indebtedness not covered by any other clause of
this definition which is outstanding on the Issue Date
(including the Old Notes and guarantees thereof and the
Infinity Note);
(iv) Indebtedness of the Company to any Restricted
Subsidiary and Indebtedness of any Restricted Subsidiary
to the Company or another Restricted Subsidiary;
(v) Purchase Money Indebtedness and Capitalized
Lease Obligations incurred to acquire property in the
ordinary course of business which Indebtedness and
Capitalized Lease Obligations do not in the aggregate
exceed 5% of the Company's consolidated total assets;
(vi) Refinancing Indebtedness;
(vii) Indebtedness represented by any guarantee by a
Guarantor of Indebtedness of the Company permitted to be
incurred under this Indenture;
(viii) other Indebtedness of the Company not to exceed
$2,000,000 at any one time outstanding; and
(ix) Indebtedness under the Securities and the
Guarantees.
"Permitted Investments" means, for any Person,
Investments made on or after the date of the Issue Date
consisting of
(i) Investments by the Company, or by a Restricted
Subsidiary thereof, in the Company or a Restricted
Subsidiary;
(ii) Temporary Cash Investments;
<PAGE> 25
-17-
(iii) Investments by the Company, or by a Restricted
Subsidiary thereof, in a Person, if as a result of such
Investment (a) such Person becomes a Restricted Subsidiary
of the Company or (b) 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 Restricted Subsidiary thereof;
(iv) an Investment that is made by the Company or a
Restricted Subsidiary thereof in the form of any stock,
bonds, notes, debentures, partnership or joint venture
interests or other securities that are issued by a third
party to the Company or Restricted Subsidiary solely as
partial consideration for the consummation of an Asset
Sale that is otherwise permitted under Section 4.12;
(v) Investments by the Company or any of its
Restricted Subsidiaries in any other Person pursuant to
the terms of a "local marketing agreement" or similar
arrangement relating to a radio station owned or licensed
by such Person; and
(vi) other Investments not to exceed $3,000,000 at
any one time outstanding.
"Permitted Liens" means (i) Liens on property or
assets of, or any shares of stock of or secured debt of, any
corporation existing at the time such corporation becomes a
Restricted Subsidiary of the Company or at the time such
corporation is merged into the Company or any of its Restricted
Subsidiaries; provided that such Liens are not incurred in
connection with, or in contemplation of, such corporation
becoming a Restricted Subsidiary of the Company or merging into
the Company or any of its Restricted Subsidiaries, (ii) Liens
securing Refinancing Indebtedness, provided that any such Lien
does not extend to or cover any Property, shares or debt other
than the Property, shares or debt securing the Indebtedness so
refunded, refinanced or extended, (iii) Liens in favor of the
Company or any of its Restricted Subsidiaries, (iv) Liens
securing industrial revenue bonds, (v) Liens to secure Purchase
Money Indebtedness that is otherwise permitted under this
Indenture, provided that (a) any such Lien is created solely
for the purpose of securing Indebtedness representing, or
incurred to finance, refinance or refund, the cost (including
sales and excise taxes, installation and delivery charges and
other direct costs of, and other direct expenses paid or
charged in connection with, such purchase or construction) of
such Property, (b) the
<PAGE> 26
-18-
principal amount of the Indebtedness secured by such Lien
does not exceed 100% of such costs, and (c) such Lien does not
extend to or cover any Property other than such item of Property
and any improvements on such item, (vi) Liens on Capital
Stock of Restricted Subsidiaries and accounts receivable,
the proceeds thereof and related records to secure the
Credit Facility, (vii) statutory liens or landlords',
carriers', warehouseman's, mechanics', suppliers', materialmen's,
repairmen's or other like Liens arising in the ordinary
course of business, which do not secure any Indebtedness
and with respect to amounts not yet delinquent or being
contested in good faith by appropriate proceedings, if
a reserve or other appropriate provision, if any, as
shall be required in conformity with GAAP shall have
been made therefor, (viii) Liens securing Bank Indebtedness,
(ix) other Liens securing obligations incurred
in the ordinary course of business which obligations
do not exceed $500,000 in the aggregate at any one time
outstanding, (x) Liens securing Acquisition Indebtedness,
provided that such Liens do not extend to or cover any
Property other than the Property acquired with the
proceeds of such Acquisition Indebtedness and any
improvements thereto, and (xi) any extensions, substitutions,
replacements or renewals of the foregoing, and (xii) Liens on
Property or assets of the Company and its Restricted
Subsidiaries acquired after the Issue Date.
"Person" means an individual, partnership,
corporation, unincorporated organization, trust or joint
venture, or a governmental agency or political subdivision
thereof.
"Preferred Stock" means any Capital Stock of a
Person, however designated, which entitles the holder thereof
to a preference with respect to dividends, distributions or
liquidation proceeds of such Person over the holders of other
Capital Stock issued by such Person.
"pro forma" means, with respect to any calculation
made or required to be made pursuant to the terms of this
Indenture, a calculation in accordance with Article 11 of
Regulation S-X under the Securities Act as interpreted by the
Company's Board of Directors in consultation with its
independent certified public accountants.
"Property" of any Person means all types of real,
Personal, tangible, intangible or mixed property owned by such
Person whether or not included in the most recent consolidated
balance sheet of such Person and its Subsidiaries under GAAP.
<PAGE> 27
-19-
"Purchase Money Indebtedness" means any Indebtedness
incurred in the ordinary course of business by a Person to
finance the cost (including the cost of construction) of an
item of property, the principal amount of which Indebtedness
does not exceed the sum of (i) 100% of such cost and
(ii) reasonable fees and expenses of such Person incurred in
connection therewith.
"Ratio Indebtedness" means (i) Indebtedness of the
Company incurred pursuant to the first paragraph of Sec-
tion 4.03 which is not Refinancing Indebtedness and (ii) any
guarantee by a Guarantor of any Indebtedness of the Company of
the type set forth in clause (i) of this definition.
"Record Date" means the Record Dates specified in the
Securities.
"Redeemable Dividend" means, for any dividend or
distribution with regard to Disqualified Capital Stock, the
quotient of the dividend or distribution divided by the
difference between one and the maximum statutory federal income
tax rate (expressed as a decimal number between 1 and 0) then
applicable to the issuer of such Disqualified Capital Stock.
"Redemption Date," when used with respect to any
Security to be redeemed, means the date fixed for such
redemption pursuant to this Indenture and the Securities.
"Redemption Price," when used with respect to any
Security to be redeemed, means the price fixed for such
redemption, payable in immediately available funds, pursuant to
this Indenture and the Securities.
"Refinancing Indebtedness" means Indebtedness that
refunds, refinances or extends any Indebtedness of the Company
outstanding on the Issue Date or other Indebtedness permitted
to be incurred by the Company or its Restricted Subsidiaries
(other than pursuant to clause (iv) of the definition of
"Permitted Indebtedness") pursuant to the terms of this
Indenture, but only to the extent that (i) the Refinancing
Indebtedness is subordinated to the Securities to at least the
same extent as the Indebtedness being refunded, refinanced or
extended, if at all, (ii) the Refinancing Indebtedness is
scheduled to mature either (a) no earlier than the Indebtedness
being refunded, refinanced or extended, or (b) after the
maturity date of the Securities, (iii) the portion, if any, of
the Refinancing Indebtedness that is scheduled to mature on or
prior to the
<PAGE> 28
-20-
maturity date of the Securities has a weighted
average life to maturity at the time such Refinancing
Indebtedness is incurred that is equal to or greater than the
weighted average life to maturity of the portion of the
Indebtedness being refunded, refinanced or extended that is
scheduled to mature on or prior to the maturity date of the
Securities, (iv) such Refinancing Indebtedness is in an
aggregate principal amount that is equal to or less than the
sum of (a) the aggregate principal amount then outstanding
under the Indebtedness being refunded, refinanced or extended,
(b) the amount of accrued and unpaid interest, if any, and
premiums owed, if any, not in excess of preexisting prepayment
provisions on such Indebtedness being refunded, refinanced or
extended and (c) the amount of customary fees, expenses and
costs related to the incurrence of such Refinancing
Indebtedness, and (v) such Refinancing Indebtedness is incurred
by the same Person that initially incurred the Indebtedness
being refunded, refinanced or extended, except that the Company
may incur Refinancing Indebtedness to refund, refinance or
extend Indebtedness of any Wholly-Owned Subsidiary of the
Company.
"Registrar" has the meaning provided in Section 2.03.
"Responsible Officer" shall mean, when used with
respect to the Trustee, any officer in the Corporate Trust
Department of the Trustee including any vice president,
assistant vice president, assistant secretary, treasurer,
assistant treasurer, or any other officer of the Trustee who
customarily performs functions similar to those performed by
the Persons who at the time shall be such officers,
respectively, or to whom any corporate trust matter is referred
because of such officer's knowledge of and familiarity with the
particular subject.
"Restricted Payment" means any of the following:
(i) the declaration or payment of any dividend or any other
distribution or payment on Capital Stock of the Company or any
Restricted Subsidiary of the Company or any payment made to the
direct or indirect holders (in their capacities as such) of
Capital Stock of the Company or any Restricted Subsidiary of
the Company (other than (x) dividends or distributions payable
solely in Capital Stock (other than Disqualified Capital Stock)
or in options, warrants or other rights to purchase Capital
Stock (other than Disqualified Capital Stock), and (y) in the
case of Restricted Subsidiaries of the Company, dividends or
distributions payable to the Company or to a Wholly-Owned
Restricted Subsidiary of the Company), (ii) the purchase,
<PAGE> 29
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redemption or other acquisition or retirement for value of any
Capital Stock of the Company or any of its Restricted
Subsidiaries (other than (i) Senior Preferred Stock and (ii)
Capital Stock owned by the Company), (iii) the making of any
principal payment on, or the purchase, defeasance, repurchase,
redemption or other acquisition or retirement for value, prior
to any scheduled maturity, scheduled repayment or scheduled
sinking fund payment, of any Indebtedness which is subordinated
in right of payment to the Securities or a Guarantee (other
than any such subordinated Indebtedness acquired in
anticipation of satisfying a scheduled sinking fund obligation,
principal installment or final maturity, in each case due
within one year of the date of acquisition), (iv) the making of
any Investment or guarantee of any Investment in any Person
other than a Permitted Investment, (v) any designation of a
Restricted Subsidiary as an Unrestricted Subsidiary and
(vi) forgiveness of any Indebtedness of an Affiliate of the
Company to the Company or a Restricted Subsidiary existing on
the Issue Date.
"Restricted Subsidiary" means a Subsidiary of the
Company other than an Unrestricted Subsidiary and includes all
of the Subsidiaries of the Company existing as of the Issue
Date. The Board of Directors of the Company may designate any
Unrestricted Subsidiary or any Person that is to become a
Subsidiary as a Restricted Subsidiary if immediately after
giving effect to such action (and treating any Acquired
Indebtedness as having been incurred at the time of such
action), the Company could have incurred at least $1.00 of
additional Indebtedness (other than Permitted Indebtedness)
pursuant to Section 4.03.
"Sale and Leaseback Transaction" means any
arrangement with any Person providing for the leasing by the
Company or any Restricted Subsidiary of the Company of any real
or tangible Personal property, which property has been or is to
be sold or transferred by the Company or such Restricted
Subsidiary to such Person in contemplation of such leasing.
"SEC" means the Securities and Exchange Commission.
"Secondary Securities" has the meaning provided in
the Securities.
"Securities" means the Company's 14 1/4% Exchange
Debentures due 2005, including any Secondary Securities, as
amended or supplemented from time to time in accordance with
the terms hereof, that are issued pursuant to this Indenture.
<PAGE> 30
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"Securities Act" means the Securities Act of 1933, as
amended, and the rules and regulations of the SEC promulgated
thereunder.
"Senior Debt" of the Company means, the principal of
and premium, if any, and interest (including, without
limitation, interest accruing or that would have accrued but
for the filing of a bankruptcy, reorganization or other
insolvency proceeding whether or not such interest constitutes
an allowed claim in such proceeding) on, and any and all other
fees, expense reimbursement obligations, indemnities and other
amounts due pursuant to their terms of all agreements,
documents and instruments providing for, creating, securing or
evidencing or otherwise entered into in connection with (a) all
obligations of the Company with respect to any Interest Rate
Agreement, (b) all obligations of the Company to reimburse any
bank or other Person in respect of amounts paid under letters
of credit, acceptances or other similar instruments, (c) all
other Indebtedness of the Company which does not provide that
it is to rank pari passu with or subordinate to the Securities,
and (d) all deferrals, renewals, extensions and refundings of,
and amendments, modifications and supplements to, any of the
Senior Debt described above. Notwithstanding anything to the
contrary in the foregoing, Senior Debt will not include (i)
Indebtedness of the Company to any of its Subsidiaries, (ii)
Indebtedness represented by the Securities, (iii) any
Indebtedness which by the express terms of the agreement or
instrument creating, evidencing or governing the same is junior
or subordinate in right of payment to any item of Senior Debt,
(iv) any trade payable arising from the purchase of goods or
materials or for services obtained in the ordinary course of
business or (v) Indebtedness incurred in violation of this
Indenture.
"Senior Preferred Stock" means the 14 1/4% Senior
Exchangeable Preferred Stock of the Company and any Exchange
Preferred Stock and Private Exchange Preferred Stock.
"Subsidiary" of any specified Person means any
corporation, partnership, joint venture, association or other
business entity, whether now existing or hereafter organized or
acquired, (i) in the case of a corporation, of which more than
50% of the total voting power of the Capital Stock entitled
(without regard to the occurrence of any contingency) to vote
in the election of directors, officers or trustees thereof is
held by such first-named Person or any of its Subsidiaries; or
(ii) in the case of a partnership, joint venture, association
or other business entity, with respect to which such
<PAGE> 31
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first-named Person or any of its Subsidiaries has the power to
direct or cause the direction of the management and policies of
such entity by contract or otherwise or if in accordance with
generally accepted accounting principles such entity is
consolidated with the first-named Person for financial
statement purposes.
"Surviving Entity" has the meaning provided in
Section 5.01.
"Temporary Cash Investments" means (i) Investments in
marketable, direct obligations issued or guaranteed by the
United States of America, or of any governmental agency or
political subdivision thereof, maturing within 365 days of the
date of purchase; (ii) Investments in certificates of deposit
issued by a bank organized under the laws of the United States
of America or any state thereof or the District of Columbia, in
each case having capital, surplus and undivided profits
totaling more than $500,000,000 and rated at least A by
Standard & Poor's Corporation and A-2 by Moody's Investors
Service, Inc. maturing within 365 days of purchase; or
(iii) Investments not exceeding 365 days in duration in money
market funds that invest substantially all of such funds'
assets in the Investments described in the preceding
clauses (i) and (ii).
"TIA" means the Trust Indenture Act of 1939 (15
U.S.C. {{ 77aaa-77bbbb), as amended, as in effect on the date
of the execution of this Indenture until such time as this
Indenture is qualified under the TIA, and thereafter as in
effect on the date on which this Indenture is qualified under
the TIA, as amended from time to time, except as otherwise
provided in Section 9.03.
"Trustee" means the party named as such in this
Indenture until a successor replaces it in accordance with the
provisions of this Indenture and thereafter means such
successor.
"Unrestricted Subsidiary" means (a) any Subsidiary of
an Unrestricted Subsidiary and (b) any Subsidiary of the
Company which is classified after the Issue Date as an
Unrestricted Subsidiary by a resolution adopted by the Board of
Directors of the Company; provided that a Subsidiary organized
or acquired after the Issue Date may be so classified as an
Unrestricted Subsidiary only if such classification is in
compliance with Section 4.04. The Trustee shall be given
prompt notice by the Company of each resolution adopted by the
Board
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of Directors of the Company under this provision,
together with a copy of each such resolution adopted.
"U.S. Government Obligations" shall have the meaning
provided in Section 8.01.
"U.S. Legal Tender" means such coin or currency of
the United States of America as at the time of payment shall be
legal tender for the payment of public and private debts.
"Warrants" means the Warrants issued pursuant to the
Warrant Agreement dated as of March 15, 1997 between the
Company and IBJ Schroder Bank & Trust Company, as Warrant
Agent.
"Wholly Owned Restricted Subsidiary" means any
Restricted Subsidiary which is a Wholly-Owned Subsidiary.
"Wholly Owned Subsidiary" means any Subsidiary of the
Company, all of the outstanding voting securities (other than
directors' qualifying shares) of which are owned, directly or
indirectly, by the Company.
SECTION 1.02. Incorporation by Reference of TIA.
Whenever this Indenture refers to a provision of the
TIA, such provision is incorporated by reference in, and made a
part of, this Indenture. The following TIA terms used in this
Indenture have the following meanings:
"Commission" means the SEC.
"indenture securities" means the Securities.
"indenture security holder" means a Holder or a
Securityholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means
the Trustee.
"obligor" on the indenture securities means the
Company, any Guarantor and any other obligor on the Securities.
All other TIA terms used in this Indenture that are
defined by the TIA, defined by TIA reference to another statute
<PAGE> 33
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or defined by SEC rule and not otherwise defined herein have
the meanings assigned to them therein.
SECTION 1.03. Rules of Construction.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the
meaning assigned to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and
words in the plural include the singular;
(5) provisions apply to successive events and
transactions; and
(6) "herein," "hereof" and other words of similar
import refer to this Indenture as a whole and not to any
particular Article, Section or other subdivision.
ARTICLE TWO
THE SECURITIES
SECTION 2.01. Form and Dating.
The Securities and the Trustee's certificate of
authentication thereof shall be substantially in the form of
Exhibit A annexed hereto, which is hereby incorporated in and
expressly made a part of this Indenture. The Securities may
have notations, legends or endorsements (including notations
relating to any Guarantees, stock exchange rule or usage). The
Company and the Trustee shall approve the form of the
Securities and any notation, legend or endorsement (including
notations relating to any Guarantees) on them. Each Security
shall be dated the date of its issuance and shall show the date
of its authentication.
<PAGE> 34
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SECTION 2.02. Execution and Authentication.
Two Officers, or an Officer and an Assistant
Secretary, shall sign, or one Officer shall sign and one
Officer or an Assistant Secretary (each of whom shall, in each
case, have been duly authorized by all requisite corporate
actions) shall attest to, the Securities for the Company by
manual or facsimile signature. The Company's seal shall also
be reproduced on the Securities.
If an Officer or Assistant Secretary whose signature
is on a Security was an Officer or Assistant Secretary at the
time of such execution but no longer holds that office at the
time the Trustee authenticates the Security, the Security shall
be valid nevertheless. Each Guarantor shall execute its
Guarantee in the manner set forth in Section 10.07.
A Security shall not be valid until an authorized
signatory of the Trustee manually signs the certificate of
authentication on the Security. The signature shall be
conclusive evidence that the Security has been authenticated
under this Indenture.
The Trustee shall authenticate Securities for
original issue in the aggregate principal amount not to exceed
$413,930,000 upon receipt of a Company Request in the form of
an Officers' Certificate. The Company Request shall specify
the amount of Securities to be authenticated, the date on which
the Securities are to be authenticated and that such Securities
have either been registered under the Securities Act or may
issued by the Company without registration under the Securities
Act pursuant to an available exemption therefrom, provided that
if such issuance is being made pursuant to an exemption from
the registration requirements of the Securities Act, the
Trustee shall be entitled to receive an Opinion of Counsel with
respect to the availability of such exemption prior to any
authentication of Securities. The aggregate principal amount
of Securities outstanding at any time may not exceed
$413,930,000, except as provided in Section 2.07. Upon receipt
of a Company Request in the form of an Officers' Certificate,
the Trustee shall authenticate Securities in substitution for
Securities originally issued to reflect any name change of the
Company.
The Trustee may appoint an authenticating agent
reasonably acceptable to the Company to authenticate
Securities. Unless otherwise provided in the appointment, an
authenticating agent may authenticate Securities whenever the
Trustee may do so. Each reference in this Indenture to
authentication by the
<PAGE> 35
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Trustee includes authentication by such
agent. An authenticating agent has the same rights as an Agent
to deal with the Company and Affiliates of the Company.
The Securities shall be issuable in fully registered
form only, without coupons, in denominations of $1,000 and any
integral multiple thereof; provided, however, that Securities
may be issued in denominations of less than $1,000 (but not
less than $1.00) upon the exchange of the Senior Preferred
Stock for the Securities such that each holder of Senior
Preferred Stock shall receive Securities in a principal amount
equal to the full liquidation preference of the Senior
Preferred Stock on the date of exchange; provided, further,
however, that Secondary Securities may be issued in
denominations of less than $1,000 (but not less than $1.00).
SECTION 2.03. Registrar and Paying Agent.
The Company shall maintain an office or agency in the
Borough of Manhattan, The City of New York, where (a) Secu-
rities may be presented or surrendered for registration of
transfer or for exchange ("Registrar"), (b) Securities may be
presented or surrendered for payment ("Paying Agent") and
(c) notices and demands in respect of the Securities and this
Indenture may be served. The Registrar shall keep a register
of the Securities and of their transfer and exchange. The
Company, upon written notice to the Trustee, may have one or
more additional Paying Agents reasonably acceptable to the
Trustee. The term "Paying Agent" includes any additional
Paying Agent. The Company initially appoints the Trustee as
Registrar and Paying Agent until such time as the Trustee has
resigned or a successor has been appointed.
SECTION 2.04. Paying Agent To Hold Assets in Trust.
The Company shall require each Paying Agent other
than the Trustee to agree in writing that each Paying Agent
shall hold in trust for the benefit of Holders or the Trustee
all assets held by the Paying Agent for the payment of
principal of, or interest on, the Securities, and shall notify
the Trustee in writing of any Default by the Company in making
any such payment. To the extent the Company makes such
payments directly to the Holders, the Company shall
simultaneously notify the Trustee thereof in writing. The
Company at any time may require a Paying Agent to distribute
all assets held by it to the Trustee and account for any assets
disbursed and the
<PAGE> 36
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Trustee may at any time, but shall be under
no obligation to, during the continuance of any payment
Default, upon written request to a Paying Agent, require such
Paying Agent to distribute all assets held by it to the Trustee
and to account for any assets distributed. Upon distribution
to the Trustee of all assets that shall have been delivered by
the Company to the Paying Agent, the Paying Agent shall have no
further liability for such assets.
SECTION 2.05. Securityholder Lists.
The Trustee shall preserve in as current a form as is
reasonably practicable the most recent list available to it of
the names and addresses of Holders. If the Trustee is not the
Registrar, the Company shall furnish to the Trustee before each
Record Date and at such other times as the Trustee may request
in writing a list as of such date and in such form as the
Trustee may reasonably require of the names and addresses of
Holders, which list may be conclusively relied upon by the
Trustee.
SECTION 2.06. Transfer and Exchange.
When Securities are presented to the Registrar with a
request to register the transfer of such Securities or to
exchange such Securities for an equal principal amount of
Securities of other authorized denominations of the same
series, the Registrar shall register the transfer or make the
exchange as requested; provided, however, that the Securities
surrendered for transfer or exchange shall be duly endorsed or
accompanied by a written instrument of transfer in form
satisfactory to the Company and the Registrar, duly executed by
the Holder thereof or his attorney duly authorized in writing.
To permit registrations of transfers and exchanges, the Company
shall execute and the Trustee shall authenticate Securities at
the Registrar's written request. No service charge shall be
made for any registration of transfer or exchange, but the
Company may require payment of a sum sufficient to cover any
transfer tax or similar governmental charge payable in
connection therewith (other than any such transfer taxes or
other governmental charge payable upon exchanges or transfers
pursuant to Section 2.02, 2.10, 3.06, 4.12, 4.24 or 9.05). The
Registrar shall not be required to register the transfer of or
exchange of any Security (i) during a period beginning at the
opening of business 15 days before the mailing of a notice of
redemption of Securities and ending at the close of business on
the day of such mailing and (ii) selected for redemption in
whole or in part pursuant to Article Three, except the
unredeemed portion
<PAGE> 37
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of any Security being redeemed in part.
Neither the Trustee nor the Registrar shall have any duty to
monitor the Company's or any Guarantor's compliance with any
Federal or state securities laws.
SECTION 2.07. Replacement Securities.
If a mutilated Security is surrendered to the Trustee
or if the Holder of a Security claims that the Security has
been lost, destroyed or wrongfully taken, the Company shall
issue and the Trustee shall authenticate upon written notice
from the Company a replacement Security if the Trustee's
requirements are met. If required by the Trustee or the
Company, such Holder must provide an indemnity bond or other
indemnity, sufficient in the judgment of both the Company and
the Trustee, to protect the Company, the Trustee and any Agent
from any loss which any of them may suffer if a Security is
replaced. The Company may charge such Holder for its
reasonable out-of-pocket expenses in replacing a Security,
including reasonable fees and expenses of counsel. Every
replacement Security is an additional obligation of the
Company.
SECTION 2.08. Outstanding Securities.
Securities outstanding at any time are all the
Securities that have been authenticated by the Trustee except
those cancelled by it, those delivered to it for cancellation
and those described in this Section as not outstanding.
Subject to Section 2.09, a Security does not cease to be
outstanding because the Company or any of its Affiliates holds
the Security.
If a Security is replaced pursuant to Section 2.07
(other than a mutilated Security surrendered for replacement),
it ceases to be outstanding unless the Trustee receives proof
satisfactory to it that the replaced Security is held by a bona
fide purchaser. A mutilated Security ceases to be outstanding
upon surrender of such Security and replacement thereof
pursuant to Section 2.07.
If on a Redemption Date or the Final Maturity Date
the Paying Agent holds U.S. Legal Tender or U.S. Government
Obligations sufficient to pay all of the principal and interest
due on the Securities payable on that date, then on and after
that date such Securities cease to be outstanding and interest
on them ceases to accrue.
<PAGE> 38
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SECTION 2.09. Treasury Securities.
In determining whether the Holders of the required
principal amount of Securities have concurred in any direction,
waiver or consent, Securities owned by the Company, any
Guarantor or any of their respective Affiliates shall be
disregarded, except that, for the purposes of determining
whether the Trustee shall be protected in relying on any such
direction, waiver or consent, only Securities that a
Responsible Officer of the Trustee actually knows are so owned
shall be disregarded.
The Trustee may require an Officers' Certificate
listing Securities owned by the Company, any Guarantor or any
of their respective Affiliates.
SECTION 2.10. Temporary Securities.
Until definitive Securities are ready for delivery,
the Company may prepare and the Trustee shall authenticate
temporary Securities upon receipt of a written order of the
Company in the form of an Officers' Certificate. The Officers'
Certificate shall specify the amount of temporary Securities to
be authenticated and the date on which the temporary Securities
are to be authenticated. Temporary Securities shall be
substantially in the form of definitive Securities but may have
variations that the Company considers appropriate for temporary
Securities. Without unreasonable delay, the Company shall
prepare and the Trustee shall authenticate upon receipt of a
written order of the Company pursuant to Section 2.02
definitive Securities in exchange for temporary Securities.
SECTION 2.11. Cancellation.
The Company at any time may deliver Securities to the
Trustee for cancellation. The Registrar and the Paying Agent
shall forward to the Trustee any Securities surrendered to them
for transfer, exchange or payment. The Trustee, or at the
direction of the Trustee, the Registrar or the Paying Agent,
and no one else, shall cancel and, at the written direction of
the Company, the Trustee shall destroy all Securities
surrendered for transfer, exchange, payment or cancellation and
deliver a certificate of destruction. Subject to Section 2.07,
the Company may not issue new Securities to replace Securities
that it has paid or delivered to the Trustee for cancellation.
If the Company or any Guarantor shall acquire any of the
Securities, such acquisition shall not operate as a redemption
or satisfaction of the Indebtedness represented by such
Securities
<PAGE> 39
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unless and until the same are surrendered to the
Trustee for cancellation pursuant to this Section 2.11.
SECTION 2.12. Defaulted Interest.
If the Company defaults in a payment of interest on
the Securities, it shall pay interest on overdue principal and
on overdue installments of interest (without grace periods)
from time to time on demand at the rate of 2% per annum in
excess of the rate shown on the Security.
The Company shall fix the special record date and
payment date in a manner satisfactory to the Trustee and
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provide the Trustee at least 20 days' notice of the proposed
amount of defaulted interest to be paid and the special payment
date, and at the same time the Company shall deposit with the
Trustee funds in an amount or deliver to the Trustee Secondary
Securities in principal amount, as the case may be, equal to
the aggregate amount proposed to be paid in respect of such
Defaulted Interest or shall make arrangements satisfactory to
the Trustee for such deposit or delivery prior to the date of
the proposed payment, such payment when deposited or delivered
to be held in trust for the benefit of the persons entitled to
such defaulted interest as provided in this Section.
SECTION 2.13. CUSIP Number.
The Company in issuing the Securities will use a
"CUSIP" number, and if so, the Trustee shall use the CUSIP
number in notices of redemption or exchange as a convenience to
Holders; provided that any such notice may state that no
representation is made as to the correctness or accuracy of the
CUSIP number printed in the notice or on the Securities, and
that reliance may be placed only on the other identification
numbers printed on the Securities.
SECTION 2.14. Deposit of Moneys.
Prior to 10:00 a.m. New York City time on each
Interest Payment Date and the Final Maturity Date, the Company
shall have either delivered by wire transfer or check such
interest or principal and interest, as the case may be to
Holders at such Holders registered address or deposited with
the Paying Agent in immediately available funds money or
Secondary Securities, as the case may be, sufficient to make
cash payments, if any, due on such Interest Payment Date or the
Final Maturity
<PAGE> 40
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Date, as the case may be, in a timely manner
which permits the Paying Agent to remit payment or Secondary
Securities, as the case may be, to the Holders on such Interest
Payment Date or the Final Maturity Date, as the case may be.
If the Company is to deliver funds by wire transfer, it shall
give the Trustee fifteen (15) days prior written notice.
ARTICLE THREE
REDEMPTION
SECTION 3.01. Notices to Trustee.
If the Company elects to redeem Securities pursuant
to Paragraph 5 of the Securities, it shall notify the Trustee
in writing of the Redemption Date, the Redemption Price and the
principal amount of Securities to be redeemed. The Company
shall give, or cause to be given, notice of redemption to
Trustee at least 30 days but not more than 60 days before the
Redemption Date (unless a shorter notice shall be agreed to by
the Trustee in writing), together with an Officers' Certificate
stating that such redemption will comply with the conditions
contained herein.
SECTION 3.02. Selection of Securities To Be Redeemed.
If fewer than all of the Securities are to be
redeemed, the Trustee shall select the Securities to be
redeemed in compliance with the requirements of the principal
national securities exchange, if any, on which the Securities
are listed or, if the Securities are not listed on a national
securities exchange, on a pro rata basis, by lot or by such
method as the Trustee shall deem fair and appropriate. If the
Securities are listed on any national securities exchange, the
Company shall notify the Trustee in writing of the requirements
of such exchange in respect of any redemption. The Trustee
shall make the selection from the Securities outstanding and
not previously called for redemption and shall promptly notify
the Company in writing of the Securities selected for
redemption and, in the case of any Security selected for
partial redemption, the principal amount thereof to be
redeemed. Securities in denominations of less than $1,000 may
be redeemed only in whole. The Trustee may select for
redemption portions (equal to $1,000 or any integral multiple
thereof) of the principal of Securities that have denominations
larger than $1,000.
<PAGE> 41
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Provisions of this Indenture that apply to Securities called
for redemption also apply to portions of Securities called
for redemption.
SECTION 3.03. Notice of Redemption.
At least 30 days but not more than 60 days before a
Redemption Date, the Company at its own expense shall mail or
cause to be mailed a notice of redemption by first-class mail,
postage prepaid, to each Holder whose Securities are to be
redeemed. At the Company's written request, the Trustee shall
give the notice of redemption in the Company's name and at the
Company's expense. Each notice for redemption shall identify
the Securities to be redeemed and shall state:
(1) the Redemption Date;
(2) the Redemption Price and the amount of accrued
interest, if any, to be paid;
(3) the name and address of the Paying Agent;
(4) that Securities called for redemption must be
surrendered to the Paying Agent to collect the Redemption
Price plus accrued interest, if any;
(5) that, unless the Company defaults in making the
redemption payment, interest on Securities called for
redemption ceases to accrue on and after the Redemption
Date, and the only remaining right of the Holders of such
Securities is to receive payment of the Redemption Price
and accrued interest, if any, to the Redemption Date upon
surrender to the Paying Agent of the Securities redeemed;
(6) if any Security is being redeemed in part, the
portion of the principal amount of such Security to be
redeemed and that, after the Redemption Date, and upon
surrender of such Security, a new Security or Securities
in aggregate principal amount equal to the unredeemed
portion thereof will be issued; and
(7) if fewer than all the Securities are to be
redeemed, the identification of the particular Securities
(or portion thereof) to be redeemed, as well as the
aggregate principal amount of Securities to be redeemed
and the aggregate principal amount of Securities to be
outstanding after such partial redemption.
<PAGE> 42
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SECTION 3.04. Effect of Notice of Redemption.
Once notice of redemption is mailed in accordance
with Section 3.03, Securities called for redemption become due
and payable on the Redemption Date and at the Redemption Price
plus accrued interest, if any. Upon surrender to the Paying
Agent, such Securities called for redemption shall be paid at
the Redemption Price (which shall include accrued interest
thereon to the Redemption Date), but installments of interest,
the maturity of which is on or prior to the Redemption Date,
shall be payable to Holders of record at the close of business
on the relevant Record Dates.
SECTION 3.05. Deposit of Redemption Price.
On or before the Redemption Date, the Company shall
deposit with the Paying Agent U.S. Legal Tender sufficient to
pay the Redemption Price plus accrued interest, if any, of all
Securities to be redeemed on that date.
If the Company complies with the preceding paragraph,
then, unless the Company defaults in the payment of such
Redemption Price plus accrued interest, if any, interest on the
Securities to be redeemed will cease to accrue on and after the
applicable Redemption Date, whether or not such Securities are
presented for payment.
SECTION 3.06. Securities Redeemed in Part.
Upon surrender of a Security that is to be redeemed
in part, the Trustee shall upon written instruction from the
Company authenticate for the Holder a new Security or
Securities equal in principal amount to the unredeemed portion
of the Security surrendered.
ARTICLE FOUR
COVENANTS
SECTION 4.01. Payment of Securities.
The Company shall pay the principal of and interest
on the Securities in the manner provided in the Securities. An
installment of principal of or interest on the Securities shall
be considered paid on the date it is due if the Trustee or
<PAGE> 43
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Paying Agent holds on that date U.S. Legal Tender designated
for and sufficient to pay the installment or, if interest is to
be paid in Secondary Securities, if the Trustee or Paying Agent
holds on that date duly authenticated Secondary Securities in
an aggregate principal amount equal to the applicable
installment of interest.
The Company shall pay, to the extent such payments
are lawful, interest on overdue principal and it shall pay
interest on overdue installments of interest (without regard to
any applicable grace periods) from time to time on demand at
the rate borne by the Securities plus 2% per annum. Interest
will be computed on the basis of a 360-day year comprised of
twelve 30-day months.
SECTION 4.02. Maintenance of Office or Agency.
The Company shall maintain in the Borough of
Manhattan, The City of New York, the office or agency required
under Section 2.03. 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 address of the Trustee set forth in Section
11.02. The Company hereby initially designates the office of
the Trustee at 114 West 47th Street, New York, New York 10036,
Attention: Corporate Trust and Agency Division, as its office
or agency in the Borough of Manhattan, The City of New York.
SECTION 4.03. Limitation on Additional Indebtedness.
The Company will not, and will not permit any
Restricted Subsidiary of the Company to, directly or
indirectly, incur (as defined) any Indebtedness (including
Acquired Indebtedness), provided that the Company may incur
Indebtedness and any Restricted Subsidiary created after the
Issue Date may incur Acquisition Indebtedness if (a) after
giving effect to the incurrence of such Indebtedness and the
receipt and application of the proceeds thereof, the ratio of
the Company's total consolidated Indebtedness to the Company's
EBITDA (determined on a pro forma basis for the last four
fiscal quarters of the Company for which financial statements
are available at the date of determination) is less than 7.0 to
1; provided, however, that if the Indebtedness which is the
subject of a determination under this provision is Acquired
Indebtedness or
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Acquisition Indebtedness, then such ratio shall
be determined by giving effect to (on a pro forma basis as if
the transaction had occurred at the beginning of the
four-quarter period) to both the incurrence or assumption of
such Acquired Indebtedness or Acquisition Indebtedness by the
Company or a Restricted Subsidiary, as the case may be, and the
inclusion in the Company's EBITDA of the EBITDA of the acquired
Person, business, property or assets, and (b) no Default or
Event of Default shall have occurred and be continuing at the
time or as a consequence of the incurrence of such
Indebtedness.
Notwithstanding the foregoing, the Company and its
Restricted Subsidiaries may incur Permitted Indebtedness;
provided that the Company shall not incur any Permitted
Indebtedness that ranks junior in right of payment to the
Securities that has a maturity or mandatory sinking fund
payment prior to the maturity of the Securities.
SECTION 4.04. Limitation on Restricted Payments.
The Company will not make, and will not permit any of
its Restricted Subsidiaries to, directly or indirectly, make,
any Restricted Payment, unless:
(a) no Default or Event of Default shall have
occurred and be continuing at the time of or after giving
effect to such Restricted Payment;
(b) immediately after giving effect to such
Restricted Payment, (i) the Company could incur $1.00 of
additional Indebtedness (other than Permitted
Indebtedness) under Section 4.03 and (ii) the ratio of the
Company's EBITDA (as determined on a pro forma basis for
the last four fiscal quarters of the Company for which
financial statements are available at the date of
determination) to the Company's Consolidated Interest
Expense (determined on a pro forma basis for the last four
fiscal quarters of the Company for which financial
statements are available) is equal to or greater than 1.4
to 1: and
(c) immediately after giving effect to such
Restricted Payment, the aggregate of all Restricted
Payments declared or made after the Issue Date does not
exceed the sum of (1) 100% of the Company's EBITDA from
the Issue Date to the date of determination minus 1.4
times the Company's Consolidated Interest Expense from the
Issue Date to the date of determination (or in the event
<PAGE> 45
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such amount shall be a deficit, minus 100% of such
deficit), (2) 100% of the aggregate Net Proceeds and the
fair market value of marketable securities or other
property received by the Company from the issue or sale,
after the Issue Date, of Capital Stock (other than
Disqualified Capital Stock, Capital Stock of the Company
issued to any Subsidiary of the Company and the proceeds
from the issuance of Capital Stock pursuant to the
Warrants or the Old Warrants) of the Company or any
Indebtedness or other securities of the Company
convertible into or exercisable or exchangeable for
Capital Stock (other than Disqualified Capital Stock) of
the Company which has been so converted or exercised or
exchanged, as the case may be. For purposes of
determining under this clause (c) the amount expended for
Restricted Payments, cash distributed shall be valued at
the face amount thereof and property other than cash shall
be valued at its fair market value.
The provisions of this covenant shall not prohibit
(i) the payment of any distribution within 60 days after the
date of declaration thereof, if at such date of declaration
such payment would comply with the provisions of this
Indenture, (ii) so long as no Default or Event of Default shall
have occurred and be continuing, the retirement of any shares
of Capital Stock of the Company or Indebtedness subordinated to
the Securities by conversion into, or by or in exchange for,
shares of Capital Stock (other than Disqualified Capital Stock)
of the Company, or out of, the Net Proceeds of the
substantially concurrent sale (other than to a Subsidiary of
the Company) of other shares of Capital Stock of the Company
(other than Disqualified Capital Stock), (iii) so long as no
Default or Event of Default shall have occurred and be
continuing, the redemption or retirement of Indebtedness of the
Company subordinated to the Securities in exchange for, by
conversion into, or out of the Net Proceeds of, a substantially
concurrent sale or incurrence of Indebtedness (other than any
Indebtedness owed to a Subsidiary) of the Company that is
contractually subordinated in right of payment to the
Securities to at least the same extent as the subordinated
Indebtedness being redeemed or retired, (iv) so long as no
Default or Event of Default shall have occurred and be
continuing, the retirement of any shares of Disqualified
Capital Stock by conversion into, or by exchange for, shares of
Disqualified Capital Stock, or out of the Net Proceeds of the
substantially concurrent sale (other than to a Subsidiary of
the Company) of other shares of Disqualified Capital Stock;
provided that (a) such Disqualified Capital Stock is not
subject to mandatory redemption earlier
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than the maturity of the Securities, (b) such Disqualified
Capital Stock is in an aggregate liquidation preference
that is equal to or less than the sum of (x) the aggregate
liquidation preference of the Disqualified Capital Stock
being retired, (y) the amount of accrued and unpaid
dividends, if any, and premiums owed, ifany, on the
Disqualified Capital Stock being retired and (z) the
amount of customary fees, expenses and costs related to
the incurrence of such Disqualified Capital Stock and (c) such
Disqualified Capital Stock is incurred by the same Person that
initially incurred the Disqualified Capital Stock being
retired, except that the Company may incur Disqualified Capital
Stock to refund or refinance Disqualified Capital Stock of any
Wholly-Owned Restricted Subsidiary of the Company, (v) the
payment of dividends (whether or not in cash) on the Senior
Preferred Stock in the manner provided in the Certificate of
Designation and (vi) so long as no Default or Event of Default
shall have occurred and by continuing, the payment of dividends
and distributions to the stockholders and warrantholders of the
Company on or after the Issue Date in an amount not to exceed
$4,000,000 (vii) the exchange of Senior Preferred Stock for
Securities and (viii) so long as no Default or Event of Default
shall have occurred and be continuing, other Restricted
Payments in an aggregate amount not to exceed $3,000,000. In
determining the aggregate amount of Restricted Payments made
subsequent to the Issue Date in accordance with clause (c) of
the immediately preceding paragraph, amounts expended pursuant
to clauses (i), (ii) and (viii) shall be included in such
calculation.
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 Section 4.04 were computed, which calculations may
be based upon the Company's latest available financial
statements, and that no Default or Event of Default will result
from making the Restricted Payment.
SECTION 4.05. Corporate Existence.
Except as otherwise permitted by Article Five, the
Company shall do or cause to be done all things necessary to
preserve and keep in full force and effect its corporate
existence and the corporate, partnership or other existence of
each of the Restricted Subsidiaries in accordance with the
respective organizational documents of each Restricted
Subsidiary and the rights (charter and statutory) and material
franchises of
<PAGE> 47
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the Company and each of its Restricted Subsidiaries;
provided, however, that the Company shall not be
required to preserve any such right or franchise, or the
corporate existence of any Restricted Subsidiary, if the Board
of Directors of the Company shall determine that the
preservation thereof is no longer desirable in the conduct of
the business of the Company and its Restricted Subsidiaries,
taken as a whole, and that the loss thereof is not, and will
not be, adverse in any material respect to the Holders.
SECTION 4.06. Payment of Taxes and Other Claims.
The Company shall pay or discharge or cause to be
paid or discharged, before the same shall become delinquent,
(i) all material taxes, assessments and governmental charges
levied or imposed upon it or any of the Restricted Subsidiaries
or upon the income, profits or property of it or any of the
Restricted Subsidiaries and (ii) all lawful claims for labor,
materials and supplies which, in each case, if unpaid, might by
law become a material liability or Lien upon the property of it
or any of the Restricted Subsidiaries; provided, however, that
the Company shall not be required to pay or discharge or cause
to be paid or discharged any such tax, assessment, charge or
claim whose amount, applicability or validity is being
contested in good faith by appropriate proceedings and for
which appropriate provision has been made.
SECTION 4.07. Maintenance of Properties and Insurance.
(1) The Company shall cause all material properties
owned by or leased by it or any of the Restricted Subsidiaries
used or useful to the conduct of its business or the business
of any of the Restricted Subsidiaries to be improved or
maintained and kept in normal condition, repair and working
order and supplied with all necessary equipment and shall cause
to be made all necessary repairs, renewals, replacements,
betterments and improvements thereof, all as in its judgment
may be necessary, so that the business carried on in connection
therewith may be properly and advantageously conducted at all
times; provided, however, that nothing in this Section 4.07
shall prevent the Company or any of the Restricted Subsidiaries
from discontinuing the use, operation or maintenance of any of
such properties, or disposing of any of them, if such
discontinuance or disposal is, in the judgment of the Board of
Directors of the Company or of the Board of Directors of any
Restricted Subsidiary, or of an officer (or other agent
employed by the Company or of any of the Restricted
Subsidiaries) of the Company or any
<PAGE> 48
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of its Restricted Subsidiaries having managerial
responsibility for any such property, desirable in the conduct
of the business of the Company or any Restricted Subsidiary,
and if such discontinuance or disposal is not adverse in
any material respect to the Holders.
(2) The Company shall maintain, and shall cause the
Restricted Subsidiaries to maintain, insurance with responsible
carriers against such risks and in such amounts, and with such
deductibles, retentions, self-insured amounts and co-insurance
provisions, as are customarily carried by similar businesses of
similar size, including property and casualty loss, workers'
compensation and interruption of business insurance.
SECTION 4.08. Compliance Certificate; Notice of Default.
(1) The Company shall deliver to the Trustee, within
100 days after the close of each fiscal year and within 50 days
after the close of each of its first three fiscal quarters an
Officers' Certificate stating that a review of the activities
of the Company has been made under the supervision of the
signing officers with a view to determining whether it has
kept, observed, performed and fulfilled its obligations under
this Indenture and further stating, as to each such Officer
signing such certificate, that to the best of his knowledge the
Company during such preceding fiscal year or fiscal quarter, as
the case may be, has kept, observed, performed and fulfilled
each and every such covenant and no Default or Event of Default
occurred during such fiscal year or fiscal quarter, as the case
may be, and at the date of such certificate no Default or Event
of Default has occurred and is continuing or, if such signers
do know of such Default or Event of Default, the certificate
shall describe its status with particularity. The Officers'
Certificate shall also notify the Trustee should the Company
elect to change the manner in which it fixes its fiscal year
end.
(2) The annual financial statements delivered
pursuant to Section 4.10 shall be accompanied by a written
report of the Company's independent accountants (who shall be a
firm of established national reputation) that in conducting
their audit 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, Five or
Six of this Indenture insofar as they relate to accounting
matters or, if any such violation has occurred, specifying the
nature and period of existence thereof, it being understood
that such
<PAGE> 49
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accountants shall not be liable directly or
indirectly to any Person for any failure to obtain knowledge of
any such violation.
(3) The Company shall deliver to the Trustee, within
ten days of becoming aware of any Default or Event of Default
in the performance of any covenant, agreement or condition
contained in this Indenture, an Officers' Certificate
specifying the Default or Event of Default and describing its
status with particularity.
SECTION 4.09. Compliance with Laws.
The Company shall comply, and shall cause each of the
Restricted Subsidiaries to comply, with all applicable
statutes, rules, regulations, orders and restrictions of the
United States of America, all states and municipalities
thereof, and of any governmental department, commission, board,
regulatory authority, bureau, agency and instrumentality of the
foregoing, in respect of the conduct of their respective
businesses and the ownership of their respective properties,
except for such noncompliances as would not in the aggregate
have a material adverse effect on the financial condition or
results of operations of the Company and the Restricted
Subsidiaries taken as a whole.
SECTION 4.10. SEC Reports.
(1) The Company will file with the SEC all
information documents and reports to be filed with the SEC
pursuant to Section 13 or 15(d) of the Exchange Act, whether or
not the Company is subject to such filing requirements so long
as the SEC will accept such filings. The Company (at its own
expense) will file with the Trustee within 15 days after it
files them with the SEC, copies of the annual reports and of
the information, documents and other reports (or copies of such
portions of any of the foregoing as the SEC may by rules and
regulations prescribe) which the Company files with the SEC
pursuant to Section 13 or 15(d) of the Exchange Act. Upon
qualification of this Indenture under the TIA, the Company
shall also comply with the provisions of TIA { 314(a).
(2) At the Company's expense, regardless of whether
the Company is required to furnish such reports to its
stockholders pursuant to the Exchange Act, the Company shall
cause its consolidated financial statements, comparable to that
which would have been required to appear in annual or quarterly
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reports, to be delivered to the Trustee and the Holders. The
Company will also make such reports available to prospective
purchasers of the Securities, securities analysts and
broker-dealers upon their request.
(3) For so long as any of the Securities remain
outstanding the Company will make available to any prospective
purchaser of the Securities or beneficial owner of the
Securities in connection with any sale thereof the information
required by Rule 144A(d)(4) under the Securities Act during any
period when the Company is not subject to Section 13 or 15(d)
under the Exchange Act. The delivery of such reports,
information and documents to the Trustee is for informational
purposes and the Trustee's receipt of such shall not constitute
constructive or actual notice of any information contained
therein or determination from information contained therein,
including, without limitation, the Company's or the Guarantors'
compliance with any of their covenants or agreements herein, as
to which the Trustee is entitled to conclusively rely on an
Officers' Certificate.
SECTION 4.11. Waiver of Stay, Extension or 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 or extension law or any usury law or
other law that would prohibit or forgive the Company from
paying all or any portion of the principal of and/or interest
on the Securities as contemplated herein, wherever enacted, now
or at any time hereafter in force, or which may affect the
covenants or the performance of this Indenture, and (to the
extent that it may lawfully do so) the Company hereby expressly
waives all benefit or advantage of any such law, and covenants
that it will not hinder, delay or impede the execution of any
power herein granted to the Trustee, but will suffer and permit
the execution of every such power as though no such law had
been enacted.
SECTION 4.12. Limitation on Certain Asset Sales.
The Company will not, and will not permit any of its
Restricted Subsidiaries to, consummate an Asset Sale unless
(i) the Company or its Restricted Subsidiary, as the case may
be, receives consideration at the time of such sale or other
disposition at least equal to the fair market value thereof (as
determined in good faith by the Company's Board of Directors,
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and evidenced by a Board resolution); (ii) not less than 85% of
the consideration received by the Company or its Restricted
Subsidiaries, as the case may be, is in the form of cash or
cash equivalents (those equivalents allowed under "Temporary
Cash Investments"); and (iii) the Asset Sale Proceeds received
by the Company or any such Restricted Subsidiary are applied
(a) to the extent the Company elects, (x) to an investment in
assets (including Capital Stock or other securities purchased
in connection with the acquisition of Capital Stock or property
of another person) used or useful in media businesses, provided
that such investment occurs or the Company or a Restricted
Subsidiary enters into contractual commitments to make such
investment, subject only to customary conditions (other than
the obtaining of financing), on or prior to the 181st day
following receipt of such Asset Sale Proceeds (the
"Reinvestment Date") and Asset Sale Proceeds contractually
committed are so applied within 360 days following the receipt
of such Asset Sale Proceeds or (y) to repay any Senior Debt of
the Company or a Guarantor Senior Debt of a Guarantor, and (b)
to the extent not applied pursuant to clause (iii)(a), if on
the Reinvestment Date with respect to any Asset Sale, the
Available Asset Sale Proceeds exceed $5 million, the Company
shall apply an amount equal to such Available Asset Sale
Proceeds to an offer to repurchase the Securities, at a
purchase price in cash equal to 100% of the principal amount
thereof, plus (x) accrued and unpaid interest, if any, to the
date of repurchase and (y) an amount in cash equal to the
Current Market Value on the date the notice of the Excess
Proceeds Offer is mailed of the issuable but unissued
Contingent Class A Shares (including Contingent Class A Shares
not issued as a result of an FCC Deferral or an Authorization
Deferral) with respect thereto, (an "Excess Proceeds Offer").
If an Excess Proceeds Offer is not fully subscribed, the
Company may retain the portion of the Available Asset Sale
Proceeds not required to repurchase Securities.
In the event of the transfer of substantially all
(but not all) of the property and assets of the Company and the
Restricted Subsidiaries as an entirety to a Person in a
transaction permitted under Section 5.01, the successor
corporation shall be deemed to have sold the properties and
assets of the Company and the Restricted Subsidiaries not so
transferred for purposes of this covenant, and shall comply
with the provisions of this covenant with respect to such
deemed sale as if it were an Asset Sale. In addition, the fair
market value of such properties and assets of the Company or
the Restricted Subsidiaries deemed to be sold shall be deemed
to be Asset Sale Proceeds for purposes of this covenant.
<PAGE> 52
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Notice of each Excess Proceeds Offer pursuant to this
Section 4.12 will be mailed or caused to be mailed, by first
class mail, by the Company within 30 days following the
Reinvestment Date to all Holders at their last registered
addresses, with a copy to the Trustee. The notice shall
contain all instructions and materials necessary to enable such
Holders to tender Securities pursuant to the Excess Proceeds
Offer and shall state the following terms:
(1) that the Excess Proceeds Offer is being made
pursuant to this Section 4.12 and that all Securities
tendered in whole or in part in integral multiples of
$1,000 will be accepted for payment; provided, however,
that if the principal amount of Securities tendered in an
Excess Proceeds Offer exceeds the aggregate amount of the
Available Asset Sale Proceeds, the Company shall select
the Securities to be purchased on a pro rata basis;
(2) the purchase price (including the amount of
accrued interest and amounts payable with respect to
Contingent Class A Shares, if any) and the purchase date
(which shall be no earlier than 30 days and not later than
60 days from the date of mailing of notice of such Excess
Proceeds Offer, or such longer period as required by law);
(3) that any Security not tendered will continue to
accrue interest;
(4) that, unless the Company defaults in making
payment therefor, any Security accepted for payment
pursuant to the Excess Proceeds Offer shall cease to
accrue interest after the purchase date;
(5) that Holders electing to have a Security
purchased pursuant to an Excess Proceeds Offer will be
required to surrender the Security, with the form entitled
"Option of Holder to Elect Purchase" on the reverse of the
Security completed, to the Paying Agent at the address
specified in the notice prior to the close of business on
the purchase date;
(6) that Holders will be entitled to withdraw their
election if the Paying Agent receives, not later than the
third Business Day prior to the purchase date, a facsimile
transmission or letter setting forth the name of the
Holder, the principal amount of the Security the Holder
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delivered for purchase and a statement that such Holder is
withdrawing his election to have such Security purchased;
(7) that Holders whose Securities are purchased only
in part will be issued new Securities in a principal
amount equal to the unpurchased portion of the Securities
surrendered; and
(8) the calculation used in determining the amount
of Available Asset Sale Proceeds to be applied to the
repurchase of Securities.
On or before the purchase date, the Company shall
(i) accept for payment Securities or portions thereof tendered
pursuant to the Excess Proceeds Offer which are to be purchased
in accordance with item (1) above, (ii) deposit with the Paying
Agent in accordance with Section 2.14 U.S. Legal Tender
sufficient to pay the purchase price plus accrued interest and
amounts payable with respect to Contingent Class A Shares, if
any, of all Securities to be purchased and (iii) deliver to the
Trustee Securities so accepted together with an Officers'
Certificate stating the Securities or portions thereof being
purchased by the Company. The Paying Agent shall promptly mail
to the Holders of Securities so accepted payment in an amount
equal to the purchase price plus accrued interest and amounts
payable with respect to Contingent Class A Shares, if any. For
purposes of this Section 4.12, the Trustee shall act as the
Paying Agent.
The Company shall and shall cause its Subsidiaries to
comply with all tender offer rules under state and Federal
securities laws, including, but not limited to, Section 14(e)
under the Exchange Act and Rule 14e-1 thereunder, to the extent
applicable to such offer. To the extent that the provisions of
any securities laws or regulations conflict with the foregoing
provisions of this Indenture, the Company shall comply with the
applicable securities laws and regulations and shall not be
deemed to have breached its obligations under the foregoing
provisions of this Indenture by virtue thereof.
SECTION 4.13. Limitation on Investments.
The Company will not, and will not permit any of its
Restricted Subsidiaries to, make any Investment other than
(i) a Permitted Investment or (ii) an Investment that is made
as a Restricted Payment in compliance with Section 4.04, after
the Issue Date.
<PAGE> 54
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SECTION 4.14. Limitation on Preferred Stock
of Restricted Subsidiaries.
The Company will not permit any Restricted Subsidiary
of the Company to issue any Preferred Stock (except Preferred
Stock to the Company or a Restricted Subsidiary) or permit any
Person (other than the Company or a Restricted Subsidiary) to
hold any such Preferred Stock unless the Company or such
Restricted Subsidiary would be entitled to incur or assume
Indebtedness under Section 4.03 in the aggregate principal
amount equal to the aggregate liquidation value of the
Preferred Stock to be issued.
SECTION 4.15. Limitation on Liens.
The Company will not, and will not permit any of its
Restricted Subsidiaries to, create, incur or otherwise cause or
suffer to exist or become effective any Liens of any kind upon
any property or asset of the Company or any of its Restricted
Subsidiaries or any shares of stock or debt of any of its
Restricted Subsidiaries which owns property or assets, now
owned or hereafter acquired, other than Liens securing Senior
Debt and Guarantor Senior Debt and Permitted Liens.
SECTION 4.16. Limitation on Other Senior Subordinated Debt.
The Company will not, and will not permit any
Guarantor to, directly or indirectly, incur, contingently or
otherwise, any Indebtedness that is both (i) subordinate in
right of payment to any Senior Debt of the Company or Guarantor
Senior Debt of such Guarantor, as the case may be, and (ii)
senior in right of payment to the Securities or the Guarantee
of such Guarantor, as the case may be. For purposes of this
Section 4.16, Indebtedness is deemed to be senior in right of
payment to the Securities and a Guarantee, as the case may be,
if it is not explicitly subordinate in right of payment to
Senior Debt or Guarantor Senior Debt at least to the same
extent as the Securities or the applicable Guarantee, as the
case may be, are subordinate to Senior Debt or Guarantor Senior
Debt.
SECTION 4.17. Sale of AM Stations.
(a) If the Company has not (x) consummated Asset
Sales including the FCC broadcast licenses of WXLX-AM, New
York, KXMG-AM, Los Angeles, and WCMQ-AM, Miami, and applied the
lesser of (1) $15.0 million of the Asset Sale Proceeds with
respect to such Asset Sales or (2) the excess of the Asset Sale
<PAGE> 55
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Proceeds with respect to such Asset Sales above $25.0 million,
to repurchase, repay or redeem Notes or Old Notes, (y) received
Net Proceeds from issuances of its Capital Stock (other than
Disqualified Capital Stock) after the Issue Date in an amount
equal to or greater than $45.0 million or (z) utilized $40.0
million of Asset Sale Proceeds from any Asset Sale(s) after the
Issue Date to repurchase, repay or redeem Notes or Old Notes,
in each case on or prior to the AM Stations Asset Sale Date,
then, subject to clauses (c), (d) and (e) of this Section 4.17,
the Company shall issue to the Holders of record of the then
outstanding Securities on the AM Stations Asset Sale Date
validly issued, fully paid and non-assessable shares of Class A
Common Stock, par value $0.01 per share ("Class A Common
Stock"), of the Company at a rate per $1,000 principal amount
of Securities equal to (I) that number of shares Class A Common
Stock equal to 1.5% of Class A Common Stock and Class B Common
Stock, par value $0.01 per share (the "Class B Common Stock"
and together with the Class A Common Stock, the "Corporation
Common Stock"), of the Company on a Fully Diluted Basis as of
the AM Stations Asset Sale Date divided by (II) the number
obtained by dividing (aa) the sum of (xx) the aggregate
liquidation preference of shares of Senior Preferred Stock
outstanding on the AM Stations Asset Sale Date and (yy) the
aggregate principal amount of Securities outstanding on the AM
Stations Asset Sale Date by (bb) $1,000.
(b) If, as of any anniversary of the AM Stations
Asset Sale Date, the Company shall not have either (x) received
Net Proceeds from issuances of its Capital Stock (other than
Disqualified Capital Stock) after the Issue Date in an amount
equal to or greater than $45.0 million or (y) utilized $40.0
million of Asset Sale Proceeds from any Asset Sale(s) after the
Issue Date to repurchase, redeem or repay Notes or Old Notes,
then, subject to clauses (c), (d) and (e) of this Section 4.17,
the Company shall issue to the Holders of record of the then
outstanding Securities on such anniversary of the AM Stations
Asset Sale Date validly issued, fully paid and non-assessable
shares of Class A Common Stock at a rate per $1,000 principal
amount of Securities equal to (I) that number of shares of
Class A Common Stock equal to 1.5% of the Corporation Common
Stock on a Fully Diluted Basis as of such anniversary of AM
Stations Asset Sale Date divided by (II) the number obtained by
dividing (aa) the sum of (xx) the aggregate liquidation
preference of shares of Senior Preferred Stock outstanding as
of such anniversary of the AM Stations Asset Sale Date and (yy)
the aggregate principal amount of Securities outstanding as of
such anniversary of the AM Stations Asset Sale Date by (bb)
$1,000.
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(c) If, in the opinion of counsel for the Company,
approval of the FCC is required before the Company may issue
shares of Class A Common Stock pursuant to the provisions in
clause (a) or (b) of this Section 4.17 ("Contingent Class A
Shares"), the Company may defer the issuance of such Contingent
Class A Shares (an "FCC Deferral") until such time as approval
of the FCC is obtained or no longer required. The Company
shall promptly mail notice to the Holders of any event which
requires it to suspend the issuance of Contingent Class A
Shares and of the termination of any such suspension. Upon
receipt of any such approval, or such approval no longer being
required, the Company shall promptly issue to the Holders all
Contingent Class A Shares to which they are entitled pursuant
to clauses (a) and (b) of this Section 4.17. The Company
agrees to promptly commence any proceedings before the FCC is
required to permit the issuance of Contingent Class A Shares
and to use its best efforts to obtain any order of the FCC or
similar approval necessary to permit the issuance of Contingent
Class A Shares and maintain such approval in full force and
effect.
(d) If, at any time, the Company shall not have
sufficient authorized shares of Class A Common Stock to permit
it to issue Contingent Class A Shares, the Company may defer
the issuance of such Contingent Class A Shares (an
"Authorization Deferral") until such time as it has sufficient
authorized shares of Class A Common Stock. The Company shall
use its best efforts (including, without limitation, calling
special meetings of its stockholders to increase its authorized
shares of Class A Common Stock) to reserve and keep available
shares of Class A Common Stock, free from preemptive rights,
out of its authorized but unissued shares of Class A Common
Stock or its authorized and issued Class A Common Stock held in
its treasury, for the purposes of enabling it to satisfy any
obligation to issue Contingent Class A Shares which may be
issuable in respect of outstanding Securities.
(e) If, at any time, the Company shall have issued
4,000,000 shares of Class A Common Stock in the aggregate
pursuant to this Section 4.17 or pursuant to the provisions of
the Certificate of Designation, the Company shall mail notice
of such event to the Holders (by first class mail, postage pre-
paid) and their respective addresses in the Securities
register, which notice shall state that prior to the Company
being obligated to issue any additional Contingent Class A
Shares pursuant to this Section 4.17, each Holder must pay to
the Company the par value of the Contingent Class A Shares to
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which each such Holder is thereafter entitled. In addition,
the Company shall use its best efforts to legend each
certificate representing Securities to the effect of such
notice. If, after the Company shall have issued such 4,000,000
shares of Class A Common Stock, an event occurs which entitles
the Holders to receive additional Contingent Class A Shares,
the Company shall mail a notice of such event (an "Issuance
Notice") to each Holder (by first class mail, postage pre-paid)
within one day of such event setting forth the number of
Contingent Class A Shares issuable to such Holder, the par
value of such Contingent Class A Shares and stating that the
Company agrees to issue to such Holder such Contingent Class A
Shares upon payment to the Company of the par value of such
Contingent Class A Shares, at its principal place of business
to be set forth in such notice, in cash or by certified check
to the order of the Company. Notwithstanding any other
provisions of this Indenture, the right of the Holders to
receive Contingent Class A Shares pursuant to, and in the
manner contemplated by, any Issuance Notice shall remain in
effect and shall not be terminated by redemption, repurchase or
retirement of the Securities or otherwise. Upon receipt of any
payment of such par value, the Company shall promptly issue to
the applicable Holder the applicable number of the Contingent
Class A Shares, which issuance shall satisfy and be deemed to
have paid in full the applicable obligation to issue Contingent
Class A Shares. For the avoidance of doubt, Contingent Class A
Shares subject to purchase pursuant to an Issuance Notice shall
not be deemed "issuable but unissued Contingent Class A Shares"
for any purpose of this Indenture or the Securities. The
Company shall not increase the par value of the Class A Common
Stock so long as any Contingent Class A Shares are issuable
pursuant to this Section 4.17 or may be purchased pursuant to
an Issuance Notice.
SECTION 4.18. Limitations on Transactions with Affiliates.
The Company will not, and will not permit any of its
Restricted Subsidiaries to, directly or indirectly, enter into
any transaction or series of related transactions (including,
without limitation, the sale, purchase, exchange or lease of
assets, property or services) with any Affiliate (including
entities in which the Company or any of its Restricted
Subsidiaries own a minority interest) or holder of 10% or more
of the Company's Common Stock (an "Affiliate Transaction") or
extend, renew, waive or otherwise modify the terms of any
Affiliate Transaction entered into prior to the Issue Date
unless (i) such Affiliate Transaction is between or among the
Company
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and its Wholly-Owned Subsidiaries; or (ii) the terms of
such Affiliate Transaction are fair and reasonable to the
Company or such Restricted Subsidiary, as the case may be, and
the terms of such Affiliate Transaction are at least as
favorable as the terms which could be obtained by the Company
or such Restricted Subsidiary, as the case may be, in a
comparable transaction made on an arm's-length basis between
unaffiliated parties. In any Affiliate Transaction involving
an amount or having a value in excess of $1,000,000 which is
not permitted under clause (i) above, such Affiliate
Transaction(s) must be approved by a majority of the Board of
Directors of the Company (including a majority of the
disinterested directors). In transactions with a value in
excess of $3,000,000 which are not permitted under clause (i)
above, in addition to the requirements set forth in the
immediately preceding sentence, the Company must obtain a
written opinion as to the fairness of such a transaction from a
nationally recognized expert with experience in appraising the
terms of conditions of the type of business or transaction or
series of transactions for which approval is required.
The foregoing provisions will not apply to (i) any
Restricted Payment that is not prohibited by the provisions of
Section 4.04 or (ii) any transaction approved by the Board of
Directors of the Company, with an officer or director of the
Company or of any Subsidiary of the Company in his or her
capacity as officer or director entered into in the ordinary
course of business, including compensation and employee benefit
arrangements with any officer or director of the Company or of
any Subsidiary of the Company that are customary for public
companies in the radio broadcasting industry.
SECTION 4.19. Limitation on Creation of Subsidiaries.
The Company shall not create or acquire, nor permit
any of its Restricted Subsidiaries to create or acquire, any
Subsidiary other than (i) a Restricted Subsidiary existing as
of the Issue Date, (ii) a Restricted Subsidiary that is
acquired in connection with the acquisition by the Company of a
radio station or radio broadcast license (and which Restricted
Subsidiary was not expressly created in contemplation of such
acquisition); (iii) a Restricted Subsidiary created after the
Issue Date; or (iv) an Unrestricted Subsidiary; provided,
however, that each Restricted Subsidiary acquired or created
pursuant to clause (ii) or (iii) shall have executed an
unconditional guarantee (a "Guarantee") of all of the Company's
obligations under the Securities and this Indenture on the
terms set forth in Article Ten, satisfactory in form and
substance to
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the Trustee (and with such documentation relating
thereto as the Trustee shall require, including, without
limitation a supplement or amendment to this Indenture and
Opinions of Counsel as to the enforceability of such
Guarantee), pursuant to which such Restricted Subsidiary shall
become a Guarantor.
SECTION 4.20. Limitation on Capital Stock of
Restricted Subsidiaries.
The Company will not (i) sell, pledge, hypothecate or
otherwise convey or dispose of any Capital Stock of a
Restricted Subsidiary of the Company, other than Capital Stock
of a Restricted Subsidiary of the Company which owns or holds
only property or assets acquired by the Company and its
Restricted Subsidiaries after the Issue Date, or (ii) permit
any of its Restricted Subsidiaries to issue any Capital Stock,
other than to the Company or a Wholly-Owned Restricted
Subsidiary of the Company. The foregoing restrictions shall
not apply to (a) an Asset Sale made in compliance with
Section 4.12, (b) the issuance of Preferred Stock in compliance
with Section 4.14 or (c) a pledge or hypothecation or other
Lien on Capital Stock of a Restricted Subsidiary pursuant to a
Permitted Lien securing Bank Indebtedness.
SECTION 4.21. Lines of Business.
The Company and the Restricted Subsidiaries will not
engage in any businesses which are not either (i) the same,
similar or related to the businesses in which the Company and
the Restricted Subsidiaries are engaged on the Issue Date or
(ii) Permitted Investments.
SECTION 4.22. 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 Securities for or as an inducement to any
consent, waiver or amendment of any of the terms or provisions
of this Indenture, the Securities or any Guarantees unless such
consideration is offered to be paid or agreed to be paid to all
holders of the Securities who so consent, waive or agree to
amend in the time frame set forth in solicitation documents
relating to such consent, waiver or agreement.
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SECTION 4.23. Limitation on Sale and
Lease-Back Transactions.
The Company will not, and will not permit any
Restricted Subsidiary of the Company to, enter into any Sale
and Lease-Back Transaction unless (i) the consideration
received in such Sale and Lease-Back Transaction is at least
equal to the fair market value of the property sold, as
determined by a board resolution of the Company and (ii) the
Company could incur the Attributable Debt in respect of such
Sale and Lease-Back Transaction in compliance with
Section 4.03.
SECTION 4.24. Change of Control.
Within 20 days of the occurrence of a Change of
Control, the Company shall notify the Trustee in writing of
such occurrence and shall make an offer to purchase (the
"Change of Control Offer") the outstanding Securities at a
purchase price equal to 101% of the principal amount thereof
plus (x) any accrued and unpaid interest thereon to the Change
of Control Payment Date and (y) an amount in cash equal to the
Current Market Value on the date of the occurrence of the
Change of Control of the issuable but unissued Contingent Class
A Shares (including Contingent Class A Shares not issued as a
result of an FCC Deferral or an Authorization Deferral) with
respect thereto (such applicable purchase price being
hereinafter referred to as the "Change of Control Purchase
Price") in accordance with the procedures set forth in this
Section 4.24.
Within 20 days of the occurrence of a Change of
Control, the Company also shall (i) cause a notice of the
Change of Control Offer to be sent at least once to the Dow
Jones News Service or similar business news service in the
United States and (ii) send by first-class mail, postage
prepaid, to the Trustee and to each holder of the Securities,
at the address appearing in the register maintained by the
Registrar of the Securities, a notice stating:
(1) that the Change of Control Offer is being made
pursuant to this Section 4.24 and that all Securities
tendered will be accepted for payment, and otherwise
subject to the terms and conditions set forth herein;
(2) the Change of Control Purchase Price and the
purchase date (which shall be a Business Day no earlier
than 20 business days from the date such notice is mailed
(the "Change of Control Payment Date"));
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(3) that any Securities not tendered will continue
to accrue interest;
(4) that, unless the Company defaults in the payment
of the Change of Control Purchase Price, any Securities
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 accepting the offer to have their
Securities purchased pursuant to a Change of Control Offer
will be required to surrender the Securities to the Paying
Agent at the address specified in the notice prior to the
close of business on the Business Day preceding the Change
of Control Payment Date;
(6) that holders will be entitled to withdraw their
acceptance if the Paying Agent receives, not later than
the close of business on the third Business Day preceding
the Change of Control Payment Date, a telegram, telex,
facsimile transmission or letter setting forth the name of
the holder, the principal amount of the Securities
delivered for purchase, and a statement that such holder
is withdrawing his election to have such Securities
purchased;
(7) that holders whose Securities are being
purchased only in part will be issued new Securities equal
in principal amount to the unpurchased portion of the
Securities surrendered, provided that each Security
purchased and each such new Security issued shall be in an
original principal amount in denominations of $1,000 and
integral multiples thereof;
(8) any other procedures that a holder must follow
to accept a Change of Control Offer or effect withdrawal
of such acceptance; and
(9) the name and address of the Paying Agent.
On or before the Change of Control Payment Date, the
Company shall (i) accept for payment Securities or portions
thereof tendered pursuant to the Change of Control Offer,
(ii) deposit with the Paying Agent in accordance with
Section 2.14 U.S. Legal Tender sufficient to pay the Change of
Control Purchase Price, of all Securities so tendered and
(iii) deliver to the Trustee Securities so accepted together
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with an Officers' Certificate stating the Securities or
portions thereof being purchased by the Company. Upon receipt
by the Paying Agent of the monies specified in clause (ii)
above and a copy of the Officers' Certificate specified in
clause (iii) above, the Paying Agent shall promptly mail to the
Holders of Securities so accepted payment in an amount equal to
the purchase price plus accrued but unpaid interest, if any,
and the Trustee shall promptly authenticate and mail to such
Holders new Securities equal in principal amount to any
unpurchased portion of the Securities surrendered; provided
that only such new Security shall be issued in an original
principal amount in denominations of $1,000 and integral
multiples thereof. Any Securities not so accepted shall be
promptly mailed by the Company to the Holder thereof. For
purposes of this Section 4.24, the Trustee shall act as the
Paying Agent.
Any amounts remaining after the purchase of all
validly tendered and not validly withdrawn Securities pursuant
to a Change of Control Offer shall be returned by the Trustee
to the Company.
If the Company or any Restricted Subsidiary thereof
has issued any outstanding (i) Indebtedness that is
subordinated in right of payment to the Securities or any
Guarantee or (ii) Preferred Stock (other than Senior Preferred
Stock), and the Company or such Subsidiary is required to
repay, repurchase, redeem or to make a distribution with
respect to such subordinated Indebtedness or Preferred Stock
(other than Senior Preferred Stock) in the event of a Change of
Control, the Company shall not, and shall not permit any of its
Restricted Subsidiaries to, consummate any such repayment,
repurchase, redemption or distribution with respect to such
subordinated Indebtedness or Preferred Stock (other than Senior
Preferred Stock) until such time as the Company shall have paid
the Change of Control Purchase Price in full to the holders of
Securities that have accepted the Company's Change of Control
Offer and shall otherwise have consummated the Change of
Control Offer made to holders of the Securities.
Prior to the mailing of the notice referred to above,
but in any event within 20 days following the date on which a
Change of Control occurs, the Company covenants that, if the
purchase of the Securities would violate or constitute a
default or be prohibited under any instrument governing
Indebtedness of the Company or any of its Subsidiaries
outstanding at the time, then the Company will, to the extent
needed to permit such purchase of Securities, either (i) repay
in full all
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Indebtedness under any such instrument, or (ii)
obtain the requisite consents under any such instrument, to
permit the purchase of the Securities as provided above. The
Company will first comply with the covenant in the preceding
sentence before it will be required to purchase Securities
pursuant to the provisions described above.
The Company shall and shall cause its Subsidiaries to
comply with all tender offer rules under state and Federal
securities laws, including, but not limited to, Section 14(e)
under the Exchange Act and Rule 14e-1 thereunder, to the extent
applicable to such offer. To the extent that the provisions of
any securities laws or regulations conflict with this Section
4.24, the Company shall comply with the applicable securities
laws and regulations and shall not be deemed to have breached
its obligations under this Section 4.24 by virtue thereof.
ARTICLE FIVE
SUCCESSOR CORPORATION
SECTION 5.01. Mergers, Consolidations and Sales of Assets.
(a) The Company will not, in a single transaction or
series of related transactions, consolidate or merge with or
into any Person, or sell, assign, transfer, lease, convey or
otherwise dispose of (or cause or permit any Restricted
Subsidiary to sell, assign, transfer, lease, convey or
otherwise dispose of) all or substantially all of the Company's
assets (determined on a consolidated basis for the Company and
the Company's Restricted Subsidiaries), whether as an entirety
or substantially as an entirety, to any Person unless:
(i) either (1) the Company shall be the surviving or continuing
corporation or (2) the Person (if other than the Company)
formed by such consolidation or into which the Company is
merged or the Person which acquires by sale, assignment,
transfer, lease, conveyance or other disposition the properties
and assets of the Company and of the Restricted Subsidiaries
substantially as an entirety (the "Surviving Entity") (x) shall
be a corporation organized and validly existing under the laws
of the United States or any state thereof or the District of
Columbia and (y) shall expressly assume, by supplemental
indenture (in form and substance satisfactory to the Trustee),
executed and delivered to the Trustee, the due and punctual
payment of the principal of, and premium, if any, and interest
on all of the
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Securities and the performance of every covenant
of the Securities, this Indenture and the Registration Rights
Agreement on the part of the Company to be performed or
observed; (ii) immediately after giving effect to such
transaction and the assumption contemplated by clause (i)(2)(y)
above (including giving effect to any Indebtedness incurred or
anticipated to be incurred in connection with or in respect of
such transaction), the Company or such Surviving Entity, as the
case may be, shall be able (on a pro forma basis) to incur at
least $1.00 of additional Indebtedness (other than Permitted
Indebtedness) pursuant to Section 4.03 hereof;
(iii) immediately before and immediately after giving effect to
such transaction and the assumption contemplated by clause
(i)(2)(y) above (including, without limitation, giving effect
to any Indebtedness and Acquired Indebtedness incurred or
anticipated to be incurred and any Lien granted in connection
with or in respect of the transaction) no Default or Event of
Default shall have occurred or be continuing; and (iv) the
Company or the Surviving Entity, as the case may be, shall have
delivered to the Trustee an Officers' Certificate and an
Opinion of Counsel, each stating that such consolidation,
merger, sale, assignment, transfer, lease, conveyance or other
disposition and, if a supplemental indenture is required in
connection with such transaction, such supplemental indenture
comply with the applicable provisions of this Indenture and
that all conditions precedent in this Indenture relating to
such transaction have been satisfied and that such Supplemental
Indenture constitutes the legal, valid and binding agreement of
the Surviving Entity, subject to customary exceptions.
(b) For purposes of the foregoing, the transfer (by
lease, assignment, sale or otherwise, in a single transaction
or series of transactions) of all or substantially all of the
properties or assets of one or more Restricted Subsidiaries,
the Capital Stock of which constitutes all or substantially all
of the properties and assets of the Company, shall be deemed to
be the transfer of all or substantially all of the properties
and assets of the Company.
(c) No Guarantor (other than any Guarantor whose
Guarantee is to be released in accordance with the terms of the
Guarantee and this Indenture in connection with any transaction
complying with the provisions of Section 4.12) will, and the
Company will not cause or permit any Guarantor to, consolidate
with or merge with or into any Person other than the Company or
any other Guarantor unless: (i) the entity formed by or
surviving any such consolidation or merger (if other than the
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Guarantor) is a corporation organized and existing under the
laws of the United States or any State thereof or the District
of Columbia; (ii) such entity assumes by supplemental indenture
all of the obligations of the Guarantor on the Guarantee;
(iii) immediately after giving effect to such transaction, no
Default or Event of Default shall have occurred and be
continuing; (iv) immediately after giving effect to such
transaction and the use of any net proceeds therefrom on a pro
forma basis, the Company could satisfy the provisions of clause
(a)(ii) of this Section 5.01; and (v) the Company shall have
delivered to the Trustee an Officers' Certificate and Opinion
of Counsel, each stating that such consolidation or merger and,
if a supplemental indenture is required in connection with such
transaction, such supplemental indenture comply with the
applicable provisions of this Indenture and that all conditions
precedent in this Indenture relating to such transaction have
been satisfied. Any merger or consolidation of a Guarantor
with and into the Company (with the Company being the surviving
entity) or another Guarantor need only comply with subclause
(v) of this clause (c).
SECTION 5.02. Successor Corporation Substituted.
In accordance with the foregoing, upon any such
consolidation, merger, conveyance, lease or transfer of all or
substantially all of the assets of the Company in which the
Company is not the continuing corporation, the Surviving Entity
formed by such consolidation or into which the Company is
merged or to which such conveyance, lease or transfer is made
shall succeed to, and be substituted for, and may exercise
every right and power of, the Company under this Indenture and
the Securities with the same effect as if such successor had
been named as the Company herein, and thereafter (except in the
case of a sale, assignment, transfer, lease, conveyance or
other disposition) the predecessor corporation will be relieved
of all further obligations and covenants under this Indenture,
the Securities and the Registration Rights Agreement; provided
that solely for purposes of computing amounts described in
subclause (iii) of Section 4.04, any such Surviving Entity
shall only be deemed to have succeeded to and be substituted
for the Company with respect to periods subsequent to the
effective time of such merger, consolidation or transfer of
assets.
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ARTICLE SIX
DEFAULT AND REMEDIES
SECTION 6.01. Events of Default.
An "Event of Default" occurs if:
(1) the Company fails to pay interest on any
Security for a period of 30 days after the same becomes
due and payable (whether or not such payment shall be
prohibited by Article Twelve); or
(2) the Company fails to pay the principal of any
Security, when such principal becomes due and payable,
whether at maturity, upon redemption or otherwise
(including the failure to make a payment to purchase
Securities tendered pursuant to a Change of Control Offer
or Excess Proceeds Offer) (whether or not such payment
shall be prohibited by Article Twelve); or
(3) the Company or any Guarantor defaults in the
observance or performance of any other covenant or
agreement contained in this Indenture, the Securities or
any Guarantee, which default continues for a period of
60 days after (x) the Company receives written notice
specifying the default and requiring the Company to remedy
the same from the Trustee or (y) the Company and the
Trustee receive such a notice from Holders of at least 25%
in principal amount of outstanding Securities (except in
the case of a default with respect to Article Five, which
will constitute an Event of Default with such notice
requirement but without such passage of time requirement);
or
(4) the Company or a Restricted Subsidiary defaults
under any mortgage, indenture or instrument under which
there may be issued or by which there may be secured or
evidenced any Indebtedness of the Company or of any
Restricted Subsidiary (or the payment of which is
guaranteed by the Company or any Restricted Subsidiary)
which default (a) is caused by a failure to pay interest,
premium or principal of such Indebtedness which failure
shall not be cured, waived or postponed pursuant to an
agreement with the holders of such Indebtedness within 30
days after notice of such Default is given hereunder (a
"payment default"), or (b) results in the acceleration of
such
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Indebtedness prior to its express maturity and such
acceleration shall not be rescinded or annulled within 10
days after notice of such Default is given hereunder 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 at least $3,000,000; or
(5) the Company or any of its Restricted
Subsidiaries (A) admits in writing its inability to pay
its debts generally as they become due, (B) commences a
voluntary case or proceeding under any Bankruptcy Law with
respect to itself, (C) consents to the entry of a
judgment, decree or order for relief against it in an
involuntary case or proceeding under any Bankruptcy Law,
(D) consents to the appointment of a Custodian of it or
for substantially all of its property, (E) consents to or
acquiesces in the institution of a bankruptcy or an insol-
vency proceeding against it, (F) makes a general assign-
ment for the benefit of its creditors, or (G) takes any
corporate action to authorize or effect any of the
foregoing; or
(6) a court of competent jurisdiction enters a
judgment, decree or order for relief in respect of the
Company or any Restricted Subsidiary in an involuntary
case or proceeding under any Bankruptcy Law, which shall
(A) approve as properly filed a petition seeking
reorganization, arrangement, adjustment or composition in
respect of the Company or any Restricted Subsidiary, (B)
appoint a Custodian of the Company or any Restricted
Subsidiary or for substantially all of any of their
property or (C) order the winding-up or liquidation of its
affairs; and such judgment, decree or order shall remain
unstayed and in effect for a period of 60 consecutive
days; or
(7) one or more judgments, orders or decrees of any
court or regulatory or administrative agency of competent
jurisdiction for the payment of money in excess of
$3,000,000, either individually or in the aggregate, shall
be entered against the Company or any Restricted
Subsidiary of the Company or any of their respective
properties and shall not be discharged or fully bonded and
there shall have been a period of 60 days after the date
on which any period for appeal has expired and during
which a stay of enforcement of such judgment, order or
decree shall not be in effect; or
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(8) any Guarantee ceases to be in full force and
effect, or any Guarantee is declared to be null and void
and unenforceable or any Guarantee is found to be invalid
or any Guarantor denies its liability under its Guarantee
(other than by reason of release of a Guarantor in
accordance with the terms of this Indenture).
The Trustee shall, within 30 days after receipt of
written notice of the occurrence of any Default by a
Responsible Officer of the Trustee, give to the holders of
Securities notice of such Default; provided that, except in the
case of a Default in the payment of principal of or interest on
any of the Securities, the Trustee shall be protected in
withholding such notice if and so long as a Responsible Officer
of the Trustee in good faith determines that the withholding of
such notice is in the interest of the Holders of Securities.
SECTION 6.02. Acceleration.
If an Event of Default (other than an Event of
Default specified in clause (5) or (6) above) occurs and is
continuing, then the Trustee or the Holders of not less than
25% in aggregate principal amount of the then outstanding
Securities may declare the unpaid principal of, premium, if
any, and accrued and unpaid interest on, all the Securities
then outstanding to be immediately due and payable, by a notice
in writing to the Company (and to the Trustee, if given by
Holders) specifying the respective Event(s) of Default and that
it is a "notice of acceleration" and upon such declaration such
principal amount, premium, if any, and accrued and unpaid
interest will become immediately due and payable. If an Event
of Default specified in clause (5) or (6) above occurs, all
unpaid principal of, and premium, if any, and accrued and
unpaid interest on, the Securities then outstanding will ipso
facto become and be immediately due and payable without any
declaration or other act on the part of the Trustee or any
Holder.
At any time after a declaration of acceleration with
respect to the Securities as described in the preceding
paragraph, the Holders of a majority in principal amount of the
Securities then outstanding may rescind and cancel such
declaration and its consequences (a) if the rescission would
not conflict with any judgment or decree, (b) if all existing
Events of Default have been cured or waived except nonpayment
of principal or interest that has become due solely because of
the acceleration, (c) to the extent the payment of such
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interest is lawful, interest on overdue installments of
interest and overdue principal, which has become due otherwise
than by such declaration of acceleration, has been paid, (d) if
the Company has paid the Trustee its reasonable compensation
and reimbursed the Trustee for its expenses, disbursements and
advances and (e) in the event of the cure or waiver of an Event
of Default of the type described in clauses (5) and (6) of the
description of Events of Default above, the Trustee shall have
received an Officers' Certificate and an Opinion of Counsel
that such Event of Default has been cured or waived. No such
rescission shall affect any subsequent Default or impair any
right consequent thereto.
SECTION 6.03. Other Remedies.
If an Event of Default occurs and is continuing, the
Trustee may pursue any available remedy by proceeding at law or
in equity to collect the payment of principal of or interest on
the Securities or to enforce the performance of any provision
of the Securities, this Indenture or any Guarantee.
The Trustee may maintain a proceeding even if it does
not possess any of the Securities or does not produce any of
them in the proceeding. A delay or omission by the Trustee or
any Securityholder in exercising any right or remedy accruing
upon an Event of Default shall not impair the right or remedy
or constitute a waiver of or acquiescence in the Event of
Default. No remedy is exclusive of any other remedy. All
available remedies are cumulative to the extent permitted by
law.
SECTION 6.04. Waiver of Past Defaults.
Subject to Sections 6.07 and 9.02, the Holders of not
less than a majority in principal amount of the outstanding
Securities by written notice to the Trustee may waive an
existing Default or Event of Default and its consequences,
except a Default in the payment of principal of, premium or
interest on any Security as specified in clauses (1) and (2) of
Section 6.01. The Company shall deliver to the Trustee an
Officers' Certificate stating that the requisite percentage of
Holders have consented to such waiver and attaching copies of
such consents upon which the Trustee may conclusively rely.
When a Default or Event of Default is waived, it is cured and
ceases.
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SECTION 6.05. Control by Majority.
The Holders of not less than a majority in principal
amount of the outstanding Securities may direct the time,
method and place of conducting any proceeding for any remedy
available to the Trustee or exercising any trust or power
conferred on it. Subject to Section 7.01, however, the Trustee
may refuse to follow any direction that conflicts with any law
or this Indenture, that the Trustee determines may be unduly
prejudicial to the rights of another Securityholder, or that
may involve the Trustee in Personal liability; provided that
the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction.
In the event the Trustee takes any action or follows
any direction pursuant to this Indenture, the Trustee shall be
entitled to indemnification from the Company satisfactory to it
in its sole discretion against any loss, liability, cost or
expense caused by taking such action or following such
direction.
SECTION 6.06. Limitation on Suits.
A Securityholder may not pursue any remedy with
respect to this Indenture, the Securities or any Guarantee
unless:
(1) the Holder gives to the Trustee written notice
of a continuing Event of Default;
(2) the Holder or Holders of at least 25% in
principal amount of the outstanding Securities make a
written request to the Trustee to pursue the remedy;
(3) such Holder or Holders offer and, if requested,
provide to the Trustee indemnity satisfactory to the
Trustee against any loss, liability or expense;
(4) the Trustee does not comply with the request
within 30 days after receipt of the request and the offer
and, if requested, the provision of indemnity; and
(5) during such 30-day period the Holder or Holders
of a majority in principal amount of the outstanding
Securities do not give the Trustee a direction which, in
the opinion of the Trustee, is inconsistent with the
request.
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A Securityholder may not use this Indenture to
prejudice the rights of another Securityholder or to obtain a
preference or priority over such other Securityholder.
SECTION 6.07. Rights of Holders To Receive Payment.
Notwithstanding any other provision of this
Indenture, the right of any Holder to receive payment of
principal of, premium and interest on a Security, on or after
the respective due dates expressed in such Security, 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 the Holder.
SECTION 6.08. Collection Suit by Trustee.
If an Event of Default in payment of principal,
premium or interest specified in clause (1) or (2) of
Section 6.01 occurs and is continuing, the Trustee may recover
judgment in its own name and as trustee of an express trust
against the Company or any other obligor on the Securities for
the whole amount of principal and accrued interest remaining
unpaid, together with interest on overdue principal and, to the
extent that payment of such interest is lawful, interest on
overdue installments of interest, in each case at the rate per
annum borne by the Securities 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 may 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, legal fees, disbursements
and advances of the Trustee, its agents, nominees, custodians,
counsel, accountants and experts) and the Securityholders
allowed in any judicial proceedings relating to the Company,
its creditors or its property and shall be entitled and
empowered to collect and receive any monies or other securities
or property payable or deliverable upon conversion or exchange
of the Securities or on any such claims and to distribute the
same, and any Custodian in any such judicial proceedings is
hereby authorized by each Securityholder 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 Securityholders,
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to pay to the Trustee any amount due to it for the reasonable
compensation, expenses, legal fees, disbursements and advances
of the Trustee, its agents, nominees, custodians and counsel,
and any other amounts due the Trustee under Section 7.07.
Nothing herein contained shall be deemed to authorize the
Trustee to authorize or consent to or accept or adopt on behalf
of any Securityholder any plan of reorganization, arrangement,
adjustment or composition affecting the Securities or the
rights of any Holder thereof, or to authorize the Trustee to
vote in respect of the claim of any Securityholder in any such
proceeding.
SECTION 6.10. Priorities.
If the Trustee collects any money or property
pursuant to this Article Six, it shall pay out the money or
property in the following order:
First: to the Trustee for amounts due under
Section 7.07;
Second: if the Holders are forced to proceed against
the Company, a Guarantor or any other obligor on the
Securities directly without the Trustee, to Holders for
their collection costs;
Third: to Holders for amounts due and unpaid on the
Securities for principal, premium and interest, ratably,
without preference or priority of any kind, according to
the amounts due and payable on the Securities for
principal, premium and interest, respectively; and
Fourth: to the Company or any Guarantors, as their
respective interests may appear.
The Trustee, upon prior notice to the Company, may
fix a record date and payment date for any payment to
Securityholders 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 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
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reasonable attorneys' fees and expenses, against any
party litigant in the suit, having due regard to the merits and
good faith of the claims or defenses made by the party
litigant. This Section 6.11 does not apply to a suit by the
Trustee, a suit by a Holder pursuant to Section 6.07, or a suit
by a Holder or Holders of more than 10% in principal amount of
the outstanding Securities.
ARTICLE SEVEN
TRUSTEE
SECTION 7.01. Duties of Trustee.
(a) If an Event of Default has occurred and is
continuing and a Responsible Officer of the Trustee receives
written notice that such Event of Default has occurred, 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 their exercise as a prudent Person would exercise or use
under the circumstances in the conduct of his own affairs.
Subject to such provisions, the Trustee shall be under no
obligation to exercise any of its rights or powers under this
Indenture at the request of any of the holders of Securities,
unless they shall have offered to the Trustee security and
indemnity satisfactory to it in its sole discretion.
(b) Except during the continuance of an Event of
Default actually known to a Responsible Officer of the Trustee:
(1) The Trustee need perform only those duties as
are specifically set forth herein and no others and no
implied covenants or obligations shall be read into this
Indenture against the Trustee.
(2) In the absence of bad faith on its part, the
Trustee may conclusively rely, as to the truth of the
statements and the correctness of the opinions expressed
therein, upon certificates or opinions and such other
documents delivered to it pursuant to Section 11.04 hereof
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 to the requirements of this
Indenture.
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(c) The Trustee may not be relieved from liability
for its own negligent action, its own negligent failure to act,
or its own willful misconduct, except that:
(1) This paragraph does not limit the effect of
paragraph (b) of this Section 7.01.
(2) The Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer of
the Trustee, unless it is proved that the Trustee was
negligent in ascertaining the pertinent facts.
(3) 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.
(d) No provision of this Indenture shall require the
Trustee to expend or risk its own funds or otherwise incur any
financial liability in the performance of any of its duties
hereunder or to take or omit to take any action under this
Indenture or take any action at the request or direction of
Holders if it shall have reasonable grounds for believing that
repayment of such funds is not assured to it or it does not
receive an indemnity satisfactory to it in its sole discretion
against such risk, liability, loss, fee or expense which might
be incurred by it in compliance with such request or direction.
(e) Every provision of this Indenture that in any
way relates to the Trustee is subject to this Section 7.01.
(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.
Subject to Section 7.01:
(a) The Trustee may conclusively rely and shall be
protected in acting or refraining from acting on 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.
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(b) Before the Trustee acts or refrains from acting,
it may require an Officers' Certificate and an Opinion of
Counsel, which shall conform to the provisions of Section
11.05. The Trustee shall not be liable for any action it
takes or omits to take in good faith in reliance on such
certificate or opinion.
(c) The Trustee may act through its attorneys,
agents, custodians and nominees and shall not be
responsible for the misconduct or negligence of any
attorney, agent, custodian or nominee (other than such a
Person who is an employee of the Trustee) appointed with
due care.
(d) The Trustee shall not be liable for any action
it takes or omits to take in good faith which it
reasonably believes to be authorized or within its rights
or powers.
(e) The Trustee may consult with counsel and the
advice or opinion of such counsel as to matters of law
shall be full and complete authorization and protection
from liability in respect of any action taken, omitted or
suffered by it hereunder in good faith and in accordance
with the advice or opinion of such counsel.
(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, order or direction of any of the
Holders pursuant to the provisions of this Indenture,
unless such Holders shall have offered to the Trustee
reasonable security or indemnity against the costs,
expenses and liabilities which may be incurred therein or
thereby.
(g) The Trustee shall not be deemed to have notice
or knowledge of any matter unless a Responsible Officer
assigned to and working in the Trustee's Corporate Trust
Administration has actual knowledge thereof or unless
written notice thereof is received by the Trustee,
attention: Corporate Trust and Agency Division and such
notice references the Securities generally, the Company or
this Indenture.
SECTION 7.03. Individual Rights of Trustee.
The Trustee in its individual or any other capacity
may become the owner or pledgee of Securities and may otherwise
deal with the Company, its Subsidiaries, any Guarantors and
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their respective Affiliates with the same rights it would have
if it were not Trustee. Any Agent may do the same with like
rights. However, the Trustee must comply with Sections 7.10
and 7.11.
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 Securities, it shall not be accountable for the
Company's use of the proceeds from the Securities, and it shall
not be responsible for any statement of the Company in this
Indenture or any document issued in connection with the sale of
Securities, the Guarantees or any statement in the Securities
other than the Trustee's certificate of authentication. The
Trustee makes no representations with respect to the
effectiveness or adequacy of this Indenture. The Trustee shall
not be responsible for independently ascertaining or
maintaining such validity, if any, and shall be fully protected
in relying upon certificates and opinions delivered to it in
accordance with the terms of this Indenture.
SECTION 7.05. Notice of Default.
If a Default or an Event of Default occurs and is
continuing and a Responsible Officer of the Trustee receives
actual notice of such event, the Trustee shall mail to each
Securityholder, as their names and addresses appear on the
Securityholder list described in Section 2.05, notice of the
uncured Default or Event of Default within 30 days after the
Trustee receives such notice. Except in the case of a Default
or an Event of Default in payment of principal of, premium or
interest on, any Security, including the failure to make
payment on (i) the Change of Control Payment Date pursuant to a
Change of Control Offer or (ii) the Excess Proceeds Payment
Date pursuant to an Asset Sale Offer, the Trustee may withhold
the notice if and so long as the Board of Directors, the
executive committee, or a trust committee of directors, of the
Trustee in good faith determines that withholding the notice is
in the interest of the Securityholders.
SECTION 7.06. Reports by Trustee to Holders.
This Section 7.06 shall not be operative as a part of
this Indenture until this Indenture is qualified under the TIA,
and, until such qualification, this Indenture shall be
construed as if this Section 7.06 were not contained herein.
Within 60 days after each May 15 of each year beginning
with 1997, the Trustee shall, to the extent that any of
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the events described in TIA { 313(a) occurred within the
previous twelve months, but not otherwise, mail to each
Securityholder a brief report dated as of such date that
complies with TIA { 313(a). The Trustee also shall comply with
TIA {{ 313(b), 313(c) and 313(d).
A copy of each report at the time of its mailing to
Securityholders shall be mailed to the Company and filed with
the SEC and each securities exchange, if any, on which the
Securities are listed.
The Company shall notify a Responsible Officer of the
Trustee if the Securities become listed on any securities
exchange or of any delisting thereof.
SECTION 7.07. Compensation and Indemnity.
The Company and the Guarantors, on a joint and
several basis, shall pay to the Trustee from time to time
reasonable compensation for its services hereunder. The
Trustee's compensation shall not be limited by any law on
compensation of a trustee of an express trust. The Company and
the Guarantors, on a joint and several basis, shall reimburse
the Trustee upon request for all reasonable disbursements,
expenses and advances (including reasonable fees and expenses
of counsel) incurred or made by it in addition to the
compensation for its services, except any such disbursements,
expenses and advances as may be attributable to the Trustee's
negligence or bad faith. Such expenses shall include the
reasonable compensation, legal fees, disbursements and expenses
of the Trustee and its agents, accountants, experts, nominees,
custodians and counsel and any taxes or other expenses incurred
by a trust created pursuant to Section 8.01 hereof.
The Company and the Guarantors, on a joint and
several basis, shall indemnify the Trustee and its agents,
directors, officers and employees and each predecessor trustee
for, and hold it harmless against, any loss, liability or
expense incurred by the Trustee without negligence or bad faith
on its part arising out of or in connection with the
administration of this trust and its duties under this
Indenture, including the reasonable expenses and attorneys'
fees of defending itself against any claim of liability arising
hereunder. The Trustee shall notify the Company promptly of
any claim asserted against the Trustee for which it may seek
indemnity. However, the failure by the Trustee to so notify
the Company shall not relieve the Company of its obligations
hereunder. The Company
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shall defend the claim and the Trustee shall
[cooperate in the defense (and may employ its own counsel)
at the Company's expense. The Company need not pay for any
settlement made without its written consent, which consent
shall not be unreasonably withheld or delayed. The Company
need not reimburse any expense or indemnify against any loss or
liability incurred by the Trustee as a result of the violation
of this Indenture by the Trustee if such violation arose from
the Trustee's negligence or bad faith.
To secure the Company's and the Guarantors' payment
obligations in this Section 7.07, the Trustee shall have a
senior claim prior to the Securities against all money or
property held or collected by the Trustee, in its capacity as
Trustee.
When the Trustee incurs expenses or renders services
after an Event of Default specified in clause (5) or (6) of
Section 6.01 occurs, the expenses (including the reasonable
fees and expenses of its agents and counsel) and the
compensation for the services shall be preferred over the
status of the Holders in a proceeding under any Bankruptcy Law
and are intended to constitute expenses of administration under
any Bankruptcy Law. The Company's and the Guarantors'
obligations under this Section 7.07 and any claim arising
hereunder shall survive the resignation or removal of any
Trustee, the discharge of the Company's and the Guarantors'
obligations pursuant to Article Eight and any rejection or
termination under any Bankruptcy Law.
SECTION 7.08. Replacement of Trustee.
The Trustee may resign at any time by so notifying
the Company in writing. The Holders of a majority in principal
amount of the outstanding Securities may remove the Trustee by
so notifying the Company and the Trustee in writing and may
appoint a successor trustee with the Company's consent. The
Company may remove the Trustee if:
(1) the Trustee fails to comply with Section 7.10;
(2) the Trustee is adjudged a bankrupt or an
insolvent;
(3) a receiver or other public officer takes charge
of the Trustee or its property; or
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(4) the Trustee becomes legally incapable of acting
with respect to its duties hereunder.
If the Trustee resigns or is removed or if a vacancy
exists in the office of Trustee for any reason, the Company
shall notify each Holder of such event and 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 Securities may appoint a successor
Trustee to replace the successor Trustee appointed by the
Company.
A successor Trustee shall deliver a written
acceptance of its appointment to the retiring Trustee and to
the Company. Immediately after that, the retiring Trustee
shall transfer, after payment of all sums then owing to the
Trustee pursuant to Section 7.07, all property held by it as
Trustee to the successor Trustee, subject to the lien provided
in Section 7.07, 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; provided, however, that no Trustee under this
Indenture shall be liable for any act or omission of any
successor Trustee. A successor Trustee shall mail notice of
its succession to each Securityholder.
If a successor Trustee does not take office within 30
days after the retiring Trustee resigns or is removed, the
retiring Trustee, the Company or the Holders of at least 10% in
principal amount of the outstanding Securities may petition any
court of competent jurisdiction for the appointment of a
successor Trustee.
If the Trustee fails to comply with Section 7.10, any
Securityholder may petition any court of competent jurisdiction
for the removal of the Trustee and the appointment of a
successor Trustee.
Notwithstanding replacement of the Trustee pursuant
to this Section 7.08, the Company's obligations under Section
7.07 shall continue for the benefit of the retiring Trustee and
the Company shall pay to any such replaced or removed Trustee
all amounts owed under Section 7.07 upon such replacement or
removal.
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SECTION 7.09. Successor Trustee by Merger, Etc.
If the Trustee consolidates with, merges or converts
into, or transfers all or substantially all of its corporate
trust business to, another corporation, the resulting,
surviving or transferee corporation without any further act
shall, if such resulting, surviving or transferee corporation
is otherwise eligible hereunder, be the successor Trustee. In
case any Securities shall have been authenticated, but not
delivered, by the Trustee then in office, any successor by
merger, conversion or consolidation to such authenticating
Trustee may adopt such authentication and deliver the
Securities so authenticated with the same effect as if such
successor Trustee had itself authenticated such Securities.
SECTION 7.10. Eligibility; Disqualification.
This Indenture shall always have a Trustee who
satisfies the requirement of TIA {{ 310(a)(1) and 310(a)(5).
The Trustee shall have a combined capital and surplus of at
least $50,000,000 as set forth in its most recent published
annual report of condition. The Trustee shall comply with TIA
{ 310(b); provided, however, that there shall be excluded from
the operation of TIA { 310(b)(1) any indenture or indentures
under which other securities, or certificates of interest or
participation in other securities, of the Company are
outstanding, if the requirements for such exclusion set forth
in TIA { 310(b)(1) are met.
SECTION 7.11. Preferential Collection of
Claims Against Company.___
The Trustee, in its capacity as Trustee hereunder,
shall comply with TIA { 311(a), excluding any creditor
relationship listed in TIA { 311(b). A Trustee who has
resigned or been removed shall be subject to TIA { 311(a) to
the extent indicated.
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ARTICLE EIGHT
SATISFACTION AND DISCHARGE OF INDENTURE
SECTION 8.01. Legal Defeasance and Covenant Defeasance.
(a) The Company may, at its option by Board
Resolution, at any time, with respect to the Securities, elect
to have either paragraph (b) or paragraph (c) below be applied
to the outstanding Securities upon compliance with the
conditions set forth in paragraph (d).
(b) Upon the Company's exercise under paragraph (a)
of the option applicable to this paragraph (b), the Company
shall be deemed to have been released and discharged from its
obligations with respect to the outstanding Securities on the
date the conditions set forth below are satisfied (hereinafter,
"Legal Defeasance"). For this purpose, such Legal Defeasance
means that the Company shall be deemed to have paid and
discharged the entire indebtedness represented by the
outstanding Securities, which shall thereafter be deemed to be
"outstanding" only for the purposes of the Sections and matters
under this Indenture referred to in (i) and (ii) below, and to
have satisfied all its other obligations under such Securities
and this Indenture insofar as such Securities are concerned,
except for the following, which shall survive until otherwise
terminated or discharged hereunder: (i) the rights of the
Holders of outstanding Securities to receive payment in respect
of the principal of, premium, if any, and interest on such
Securities when such payments are due, (ii) the Company's
obligations to issue temporary Securities, register the
transfer or exchange of any Securities, replace mutilated,
destroyed, lost or stolen Securities and maintain an office or
agency for payments in respect of the Securities, (iii) the
rights, powers, trusts, duties and immunities of the Trustee,
and (iv) the defeasance provisions of this Indenture. The
Company may exercise its option under this paragraph (b)
notwithstanding the prior exercise of its option under
paragraph (c) below with respect to the Securities.
(c) Upon the Company's exercise under paragraph (a)
of the option applicable to this paragraph (c), the Company
shall be released and discharged from its obligations under any
covenant contained in Article Five and in Sections 4.03 through
4.24 with respect to the outstanding Securities on and after
the date the conditions set forth below are satisfied
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(hereinafter, "Covenant Defeasance"), and the Securities shall
thereafter be deemed to be not "outstanding" for the purpose 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. For this purpose, such Covenant
Defeasance means that, with respect to the outstanding
Securities, the Company and any Guarantor 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(3), nor shall
any event referred to in Section 6.01(4) or (7) thereafter
constitute a Default or an Event of Default thereunder but,
except as specified above, the remainder of this Indenture and
such Securities shall be unaffected thereby.
(d) The following shall be the conditions to
application of either paragraph (b) or paragraph (c) above to
the outstanding Securities:
(1) The Company shall have irrevocably deposited in
trust with the Trustee, pursuant to an irrevocable trust
and security agreement in form and substance satisfactory
to the Trustee, U.S. Legal Tender or direct non-callable
obligations of, or non-callable obligations guaranteed by,
the United States of America for the payment of which
obligation or guarantee the full faith and credit of the
United States of America is pledged ("U.S. Government
Obligations") maturing as to principal and interest in
such amounts and at such times as are sufficient, without
consideration of the reinvestment of such interest and
principal and after payment of all Federal, state and
local taxes or other charges or assessments in respect
thereof payable by the Trustee, in the opinion of a
nationally recognized firm of Independent public
accountants expressed in a written certification thereof
(in form and substance reasonably satisfactory to the
Trustee) delivered to the Trustee, to pay the principal
of, premium, if any, and interest on all the outstanding
Securities on the dates on which any such payments are due
and payable in accordance with the terms of this Indenture
and of the Securities;
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(2) Such deposits shall not cause the Trustee to
have a conflicting interest as defined in and for purposes
of the TIA;
(3) The Trustee shall have received Officers'
Certificates stating that No Default of Event of Default
or event which with notice or lapse of time or both would
become a Default or an Event of Default with respect to
the Securities shall have occurred and be continuing on
the date of such deposit or, insofar as Section 6.01(5) or
(6) is concerned, at any time during the period ending on
the 91st day after the date of such deposit (it being
understood that this condition shall not be deemed
satisfied until the expiration of such period);
(4) The Trustee shall have received Officers'
Certificates stating that such deposit will not result in
a Default under this Indenture or a breach or violation
of, or constitute a default under, any other material
instrument or agreement to which the Company or any of its
Subsidiaries is a party or by which it or its property is
bound;
(5) (i) In the event the Company elects paragraph
(b) hereof, the Company shall deliver to the Trustee an
Opinion of Counsel, in form and substance reasonably
satisfactory to the Trustee to the effect that (A) the
Company has received from, or there has been published by,
the Internal Revenue Service a ruling or (B) since the
Issue Date, there has been a change in the applicable
federal income tax law, in either case to the effect that,
and based thereon such Opinion of Counsel shall state that
Holders of the Securities will not recognize income gain
or loss for Federal income tax purposes as a result of
such deposit and the defeasance contemplated hereby and
will be subject to Federal income taxes in the same manner
and at the same times as would have been the case of such
deposit and defeasance had not occurred, or (ii) in the
event the Company elects paragraph (c) hereof, the Company
shall deliver to the Trustee an Opinion of Counsel, in form
and substance reasonably satisfactory to the Trustee to the
effect that, Holders of the Securities will not recognize
income, gain or loss for Federal income tax purposes as a
result of such deposit and the defeasance contemplated
hereby and will be subject to Federal income tax in the
same amounts and in the same manner and at the same
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times as would have been the case if such deposit and
defeasance had not occurred;
(6) The deposit shall not result in the Company, the
Trustee or the trust becoming or being deemed to be an
"investment company" under the Investment Company Act of
1940, as amended;
(7) The Company shall have delivered to the Trustee
an Officers' Certificate, in form and substance reasonably
satisfactory to the Trustee, stating that the deposit
under clause (1) was not made by the Company, a Guarantor
or any Subsidiary of the Company with the intent of
defeating, hindering, delaying or defrauding any other
creditors of the Company, a Guarantor, or any Subsidiary
of the Company or others;
(8) The Company shall have delivered to the Trustee
an Opinion of Counsel, in form and substance reasonably
satisfactory to the Trustee, to the effect that, (A) the
trust funds will not be subject to the rights of holders
of Indebtedness of the Company or any Guarantor other than
the Securities and (B) assuming no intervening bankruptcy
of the Company between the date of deposit and the 91st
day following the deposit and that no Holder of Securities
is an insider of the Company, after the passage of 90 days
following the deposit, the trust funds will not be subject
to any applicable bankruptcy, insolvency, reorganization
or similar law affecting creditors' rights generally; and
(9) The Company has delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, each
stating that all conditions precedent specified herein
relating to the defeasance contemplated by this Section
8.01 have been complied with; provided, however, that no
deposit under clause (1) above shall be effective to
terminate the obligations of the Company under the
Securities or this Indenture prior to 90 days following
any such deposit.
In the event all or any portion of the Securities are
to be redeemed through such irrevocable trust, the Company must
make arrangements satisfactory to the Trustee, at the time of
such deposit, for the giving of the notice of such redemption
or redemptions by the Trustee in the name and at the expense of
the Company.
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SECTION 8.02. Satisfaction and Discharge.
In addition to the Company's rights under Section
8.01, the Company may terminate all of its obligations under
this Indenture (subject to Section 8.03) when:
(1) all Securities theretofore authenticated and
delivered (other than Securities which have been
destroyed, lost or stolen and which have been replaced or
paid as provided in Section 2.07) have been delivered to
the Trustee for cancellation; or
(2) all Securities not theretofore delivered to the
Trustee for cancellation (except lost, stolen or destroyed
Securities which have been replaced or paid) have been
called for redemption pursuant to the terms of the
Securities or have otherwise become due and payable and
the Company has irrevocably deposited or caused to be
deposited with the Trustee funds in an amount sufficient
to pay and discharge the entire Indebtedness on the
Securities not theretofore delivered to the Trustee for
cancellation, for principal of, premium, if any, and
interest on the Securities to the date of deposit together
with irrevocable instructions from the Company directing
the Trustee to apply such funds to the payment thereof at
maturity or redemption, as the case may be; and
(3) the Company has paid or caused to be paid all
other sums payable hereunder and under the Securities by
the Company; and
(4) there exists no Default or Event of Default
under this Indenture; and
(5) the Company has delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, each
stating that all conditions precedent specified herein
relating to the satisfaction and discharge of this
Indenture have been complied with.
SECTION 8.03. Survival of Certain Obligations.
Notwithstanding the satisfaction and discharge of
this Indenture and of the Securities referred to in Section
8.01 or 8.02, the respective obligations of the Company and the
Trustee under Sections 2.02, 2.03, 2.04, 2.05, 2.06, 2.07,
2.10, 2.12, 2.13, 4.01, 4.02 and 6.07, Article Seven and
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Sections 8.05, 8.06 and 8.07 shall survive until the Securities
are no longer outstanding, and thereafter the obligations of
the Company and the Trustee under Sections 7.07, 8.05, 8.06 and
8.07 shall survive. Nothing contained in this Article Eight
shall abrogate any of the rights, obligations or duties of the
Trustee under this Indenture.
SECTION 8.04. Acknowledgment of Discharge by Trustee.
Subject to Section 8.07, after (i) the conditions of
Section 8.01 or 8.02 have been satisfied, (ii) the Company has
paid or caused to be paid all other sums payable hereunder by
the Company and (iii) the Company has delivered to the Trustee
an Officers' Certificate and an Opinion of Counsel, each
stating that all conditions precedent referred to in clause (i)
above relating to the satisfaction and discharge of this
Indenture have been complied with, the Trustee upon written
request shall acknowledge in writing the discharge of the
Company's obligations under this Indenture except for those
surviving obligations specified in Section 8.03.
SECTION 8.05. Application of Trust Assets.
The Trustee shall hold any U.S. Legal Tender or U.S.
Government Obligations deposited with it in the irrevocable
trust established pursuant to Section 8.01. The Trustee shall
apply the deposited U.S. Legal Tender or the U.S. Government
Obligations, together with earnings thereon, through the Paying
Agent, in accordance with this Indenture and the terms of the
irrevocable trust agreement established pursuant to Section
8.01, to the payment of principal of and interest on the
Securities. The U.S. Legal Tender or U.S. Government
Obligations so held in trust and deposited with the Trustee in
compliance with Section 8.01 shall not be part of the trust
estate under this Indenture, but shall constitute a separate
trust fund for the benefit of all Holders entitled thereto.
SECTION 8.06. Repayment to the Company or
Guarantors; Unclaimed Money.
Subject to Sections 7.07 and 8.01, the Trustee shall
promptly pay to the Company, or if deposited with the Trustee
by any Guarantor, to such Guarantor, upon receipt by the
Trustee of an Officers' Certificate, any excess money, determined
in accordance with Section 8.01, held by it at any time. The
Trustee and the Paying Agent shall pay to the Company or any
Guarantor, as the case may be, upon receipt by the Trustee or
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the Paying Agent, as the case may be, of an Officers'
Certificate, any money held by it for the payment of
principal, premium, if any, or interest that remains unclaimed
for two years after payment to the Holders is required;
provided, however, that the Trustee and the Paying Agent before
being required to make any payment may, but need not, at the
expense of the Company cause to be published once in a
newspaper of general circulation in the City of New York or
mail to each Holder entitled to such money notice that such
money remains unclaimed and that after a date specified
therein, which shall be at least 2 years from the date of such
publication or mailing, any unclaimed balance of such money
then remaining will be repaid to the Company. After payment to
the Company or any Guarantor, as the case may be, Security
holders entitled to money must look solely to the Company for
payment as general creditors unless an applicable abandoned
property law designates another Person, and all liability of
the Trustee or Paying Agent with respect to such money shall
thereupon cease.
SECTION 8.07. Reinstatement.
If the Trustee or Paying Agent is unable to apply any
money or U.S. Government Obligations in accordance with this
Indenture by reason of any legal proceeding or by reason of any
order or judgment of any court or governmental authority
enjoining, restraining or otherwise prohibiting such
application, then and only then the Company's and each
Guarantor's, if any, obligations under this Indenture and the
Securities shall be revived and reinstated as though no deposit
had been made pursuant to this Indenture until such time as the
Trustee is permitted to apply all such money or U.S. Government
Obligations in accordance with this Indenture; provided,
however, that if the Company or the Guarantors, as the case may
be, have made any payment of principal of, premium, if any, or
interest on any Securities because of the reinstatement of
their obligations, the Company or the Guarantors, as the case
may be, shall be, subrogated to the rights of the holders of
such Securities to receive such payment from the money or U.S.
Government Obligations held by the Trustee or Paying Agent.
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ARTICLE NINE
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 9.01. Without Consent of Holders.
The Company and any Guarantors (when authorized by
Board Resolutions), and the Trustee, together, may amend or
supplement this Indenture or the Securities without notice to
or consent of any Securityholder:
(1) to cure any ambiguity, defect or inconsistency;
(2) to evidence the succession in accordance with
Article Five hereof of another Person to the Company or a
Guarantor and the assumption by any such successor of the
covenants of the Company or a Guarantor herein and in the
Securities or a Guarantee, as the case may be;
(3) to provide for uncertificated Securities in
addition to or in place of certificated Securities;
(4) to make any other change that does not
materially adversely affect the rights of any
Securityholders hereunder; or
(5) to comply with any requirements of the SEC in
connection with the qualification of this Indenture under
the TIA; or
(6) to add or release any Guarantor pursuant to the
terms of this Indenture;
provided that each of the Company and any Guarantors has
delivered to the Trustee an Opinion of Counsel and an Officers'
Certificate, each stating that such amendment or supplement
complies with the provisions of this Section 9.01.
SECTION 9.02. With Consent of Holders.
Subject to Section 6.07, the Company and any
Guarantors (when authorized by Board Resolutions) and the
Trustee, together, with the written consent of the Holder or
Holders of at least a majority in aggregate principal amount of
the outstanding Securities, may amend or supplement this
Indenture, the Securities and any Guarantees without notice to
any other
<PAGE> 89
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Securityholders. Subject to Section 6.07, the Holder
or Holders of a majority in aggregate principal amount of the
outstanding Securities may waive compliance by the Company with
any provision of this Indenture or the Securities without
notice to any other Securityholder. Without the consent of
each Securityholder affected, however, no amendment, supplement
or waiver, including a waiver pursuant to Section 6.04, may:
(1) reduce the principal amount of Securities whose
Holders must consent to an amendment, supplement or waiver
of any provision of this Indenture, the Securities or any
Guarantees;
(2) reduce the rate or change or have the effect of
changing the time for payment of interest, including
default interest, on any Security;
(3) reduce the principal amount, of or premium on
any Security;
(4) change or have the effect of changing the Final
Maturity Date of any Security, change the amount or time
of any payment required by the Securities or reduce the
premium payable upon any redemption of Securities, or
change the time when any such redemption may be made or
otherwise alter the redemption or repurchase provisions
contained in this Indenture or the Securities in a manner
adverse to any Holder;
(5) make any change in provisions of this Indenture
protecting the right of each Holder to receive payment of
principal of and interest on such Security on or after the
due date thereof or to bring suit to enforce such payment,
or permitting Holders of a majority in principal amount of
the Securities to waive Defaults or Events of Default;
(6) make any changes in Section 6.04, 6.07 or this
Section 9.02;
(7) make the principal of, premium or the interest
on any Security payable in money other than as provided
for in this Indenture as in effect on the date hereof or
change the place of payment from New York, New York;
(8) affect the ranking of the Securities or any
Guarantee, in each case in a manner adverse to the
Holders;
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(9) amend, modify or change the obligation of the
Company to make or consummate a Change of Control Offer,
an Excess Proceeds Offer or waive any default in the
performance thereof or modify any of the provisions or
definitions with respect to any such offers; or
(10) release any Guarantor from any of its
obligations under its Guarantee or this Indenture
otherwise than in accordance with the terms of this
Indenture.
It shall not be necessary for the consent of the
Holders under this Section 9.02 to approve the particular form
of any proposed amendment, supplement 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 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 supplemental
indenture.
SECTION 9.03. Compliance with TIA.
From the date on which this Indenture is qualified
under the TIA, every amendment, waiver or supplement of this
Indenture or the Securities shall comply with the TIA as then
in effect.
SECTION 9.04. Revocation and Effect of Consents.
Until an amendment, waiver or supplement becomes
effective, a consent to it by a Holder is a continuing consent
by the Holder and every subsequent Holder of a Security or
portion of a Security that evidences the same debt as the
consenting Holder's Security, even if notation of the consent
is not made on any Security. However, any such Holder or
subsequent Holder may revoke the consent as to his Security or
portion of his Security by notice to the Trustee or the Company
received before the date on which the Trustee receives an
Officers' Certificate certifying that the Holders of the
requisite principal amount of Securities have consented (and
not theretofore revoked such consent) to the amendment,
supplement or waiver.
The Company may, but shall not be obligated to, fix a
record date for the purpose of determining the Holders entitled
<PAGE> 91
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to consent to any amendment, supplement or waiver. If a record
date is fixed, then notwithstanding the last sentence of the
immediately preceding paragraph, those Persons who were Holders
at such record date (or their duly designated proxies), and
only those Persons, shall be entitled to revoke any consent
previously given, whether or not such Persons continue to be
Holders after such record date. No such consent shall be valid
or effective for more than 90 days after such record date.
After an amendment, supplement or waiver becomes
effective, it shall bind every Securityholder, unless it makes
a change described in any of clauses (1) through (10) of
Section 9.02, in which case, the amendment, supplement or
waiver shall bind only each Holder of a Security who has
consented to it and every subsequent Holder of a Security or
portion of a Security that evidences the same debt as the
consenting Holder's Security; provided that any such waiver
shall not impair or affect the right of any Holder to receive
payment of principal of and interest on a Security, on or after
the respective due dates expressed in such Security, or to
bring suit for the enforcement of any such payment on or after
such respective dates without the consent of such Holder.
SECTION 9.05. Notation on or Exchange of Securities.
If an amendment, supplement or waiver changes the
terms of a Security, the Trustee may in accordance with the
specific direction of the Company require the Holder of the
Security to deliver it to the Trustee. The Trustee may place
an appropriate notation on the Security about the changed terms
and return it to the Holder. Alternatively, if the Company or
the Trustee so determines, the Company in exchange for the
Security shall issue and the Trustee shall authenticate a new
Security that reflects the changed terms.
SECTION 9.06. Trustee To Sign Amendments, Etc.
The Trustee shall execute any amendment, supplement
or waiver authorized pursuant to this Article Nine; provided
that the Trustee may, but shall not be obligated to, execute
any such amendment, supplement or waiver which affects the
Trustee's own rights, duties or immunities under this
Indenture. The Trustee shall be entitled to receive, and shall
be fully protected in relying upon, an Opinion of Counsel and
an Officers' Certificate each stating that the execution of any
amendment, supplement or waiver authorized pursuant to this
Article Nine is authorized or permitted by this Indenture and
<PAGE> 92
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constituted the legal, valid and binding obligations of the
Company enforceable in accordance with its terms. Such Opinion
of Counsel shall be at the expense of the Company, and the
Trustee shall have a lien under Section 7.07 for any such
expense.
ARTICLE TEN
GUARANTEE
SECTION 10.01. Unconditional Guarantee.
Each Guarantor agrees to unconditionally, jointly and
severally, guarantee to each Holder of a Security authenticated
and delivered by the Trustee, and to the Trustee and its
successors and assigns, that: (i) the principal of, premium
and interest on the Securities will be promptly paid in full
when due, subject to any applicable grace period, whether at
maturity, by acceleration or otherwise and interest on the
overdue principal, if any, and interest on any interest, to the
extent lawful, of the Securities and all other Obligations of
the Company to the Holders or the Trustee hereunder or
thereunder will be promptly paid in full or performed, all in
accordance with the terms hereof and thereof; and (ii) in case
of any extension of time of payment or renewal of any
Securities or of any such other Obligations, the same will be
promptly paid in full when due or performed in accordance with
the terms of the extension or renewal, subject to any
applicable grace period, whether at stated maturity, by
acceleration or otherwise, subject, however, in the case of
clauses (i) and (ii) above, to the limitations set forth in
Section 10.03. Each Guarantor agrees that its obligations
hereunder shall be unconditional, irrespective of the validity,
regularity or enforceability of the Securities or this
Indenture, the absence of any action to enforce the same, any
waiver or consent by any Holder of the Securities with respect
to any provisions hereof or thereof, the recovery of any
judgment against the Company, any action to enforce the same or
any other circumstance which might otherwise constitute a legal
or equitable discharge or defense of a Guarantor. Each
Guarantor waives diligence, presentment, demand of payment,
filing of claims with a court in the event of insolvency or
bankruptcy of the Company, any right to require a proceeding
first against the Company, protest, notice and all demands
whatsoever and covenants that its Guarantee will not be
discharged except by complete performance of the obligations
contained in the Securities, this Indenture and each Guarantee.
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If any Securityholder or the Trustee is required by any court
or otherwise to return to the Company, any Guarantor or any
custodian, trustee, liquidator or other similar official acting
in relation to the Company or any Guarantor, any amount paid by
the Company or any Guarantor to the Trustee or such
Securityholder, each Guarantee to the extent theretofore
discharged, shall be reinstated in full force and effect. Each
Guarantor further agrees that, as between each Guarantor, on
the one hand, and the Holders and the Trustee, on the other
hand, (x) the maturity of the obligations guaranteed hereby may
be accelerated as provided in Article Six for the purposes of
each Guarantee notwithstanding any stay, injunction or other
prohibition preventing such acceleration in respect of the
obligations guaranteed hereby, and (y) in the event of any
acceleration of such obligations as provided in Article Six,
such obligations (whether or not due and payable) shall
forthwith become due and payable by each Guarantor for the
purpose of its Guarantee.
SECTION 10.02. Severability
In case any provision of a Guarantee shall be
invalid, illegal or unenforceable, the validity, legality, and
enforceability of the remaining provisions shall not in any way
be affected or impaired thereby.
SECTION 10.03. Release of a Guarantor.
If all of the assets of any Guarantor or all of the
Capital Stock of any Guarantor is sold (including by issuance
or otherwise) by the Company or any of its Subsidiaries in a
transaction constituting an Asset Sale, and if the Net Cash
Proceeds from such Asset Sale are used in accordance with
Section 4.12, then such Guarantor (in the event of a sale or
other disposition of all of the Capital Stock of such
Guarantor) or the corporation or other entity acquiring such
assets (in the event of a sale or other disposition of all or
substantially all of the assets of such Guarantor) shall be
released and discharged of its Obligations under its Guarantee.
The Trustee shall deliver an appropriate instrument
evidencing such release upon receipt of a request by the
Company accompanied by an Officers' Certificate and Opinion of
Counsel certifying as to the compliance with this Section
10.03. Any Guarantor not so released remains liable for the
full amount of principal of an interest on the Securities as
provided in this Article Ten.
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SECTION 10.04. Limitation of a Guarantor's Liability.
Each Guarantor and, by its acceptance hereof, each
Holder hereby confirms that it is the intention of all such
parties that the guarantee by such Guarantor pursuant to its
Guarantee not constitute a fraudulent transfer or conveyance
for purposes of any Bankruptcy Law, the Uniform Fraudulent
Conveyance Act, the Uniform Fraudulent Transfer Act or any
similar Federal or state law. To effectuate the foregoing
intention, the Holders and each Guarantor irrevocably agree
that the obligations of each Guarantor under its Guarantee
shall be limited to the maximum amount as will, after giving
effect to all other contingent and fixed liabilities of such
Guarantor, and after giving effect to any collections from or
payments made by or on behalf of any other Guarantor in respect
of the obligations of such other Guarantor under its Guarantee,
or pursuant to Section 10.05, result in the obligations of such
Guarantor under its Guarantee not constituting such fraudulent
transfer or conveyance.
SECTION 10.05. Contribution.
In order to provide for just and equitable
contribution among the Guarantors, the Guarantors agree, inter
se, that in the event any payment or distribution is made by
any Guarantor (a "Funding Guarantor") under its Guarantee, such
Funding Guarantor shall be entitled to a contribution from all
other Guarantors in a pro rata amount based on the Adjusted Net
Assets of each Guarantor (including the Funding Guarantor) for
all payments, damages and expenses incurred by that Funding
Guarantor in discharging the Company's obligations with respect
to the Securities or any other Guarantor's obligations with
respect to its Guarantee.
SECTION 10.06. Waiver of Subrogation.
Until all Guarantee Obligations are paid in full,
each Guarantor hereby irrevocably waives any claims or other
rights which it may now or hereafter acquire against the
Company that arise from the existence, payment, performance or
enforcement of such Guarantor's obligations under its Guarantee
and this Indenture, including, without limitation, any right of
subrogation, reimbursement, exoneration, indemnification, and
any right to participate in any claim or remedy of any Holder
of Securities against the Company, whether or not such claim,
remedy or right arises in equity, or under contract, statute or
common law, including, without limitation, the right to take or
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receive from the Company, directly or indirectly, in cash or
other property or by set-off or in any other manner, payment or
security on account of such claim or other rights. If any
amount shall be paid to any Guarantor in violation of the
preceding sentence and the Securities shall not have been paid
in full, such amount shall have been deemed to have been paid
to such Guarantor for the benefit of, and held in trust for the
benefit of, the Holders of the Securities, and shall forthwith
be paid to the Trustee for the benefit of such Holders to be
credited and applied upon the Securities, in accordance with
the terms of this Indenture. Each Guarantor acknowledges that
it will receive direct and indirect benefits from the financing
arrangements contemplated by this Indenture and that the waiver
set forth in this Section 10.06 is knowingly made in
contemplation of such benefits.
SECTION 10.07. Execution of Guarantees.
To evidence its guarantee to the Securityholders set
forth in this Article Ten, each Guarantor shall execute a
Guarantee in substantially the form of Exhibit B attached
hereto, which shall be endorsed on each Security ordered to be
authenticated and delivered by the Trustee. Each Guarantor
agrees that its Guarantee set forth in this Article Ten shall
remain in full force and effect notwithstanding any failure to
endorse on each Security a notation of such Guarantee. Each
such Guarantee shall be signed on behalf of each Guarantor by
two Officers, or an Officer and an Assistant Secretary or one
Officer shall sign and one Officer or an Assistant Secretary
(each of whom shall, in each case, have been duly authorized by
all requisite corporate actions) shall attest to such Guarantee
prior to the authentication of the Security on which it is
endorsed, and the delivery of such Security by the Trustee,
after the authentication thereof hereunder, shall constitute
due delivery of such Guarantee on behalf of such Guarantor.
Such signatures upon the Guarantee may be by manual or
facsimile signature of such officers and may be imprinted or
otherwise reproduced on the Guarantee, and in case any such
officer who shall have signed the Guarantee shall cease to be
such officer before the Security on which such Guarantee is
endorsed shall have been authenticated and delivered by the
Trustee or disposed of by the Company, such Security
nevertheless may be authenticated and delivered or disposed of
as though the Person who signed the Guarantee had not ceased to
be such officer of the Guarantor.
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SECTION 10.08. Waiver of Stay, Extension or Usury Laws.
Each Guarantor convenants (to the extent that it may
lawfully do so) that it will not at any time insist upon,
plead, or in any manner whatsoever claim or take the benefit or
advantage of, any stay or extension law or any usury law or
other law that would prohibit or forgive each such Guarantor
from performing its Guarantee as contemplated herein, wherever
enacted, now or at any time hereafter in force, or which may
affect the covenants or the performance of this Indenture; and
(to the extent that it may lawfully do so) each such Guarantor
hereby expressly waives all benefit or advantage of any such
law, and covenants that it will not hinder, delay or impede the
execution of any power herein granted to the Trustee, but will
suffer and permit the execution of every such power as though
no such law had been enacted.
ARTICLE ELEVEN
MISCELLANEOUS
SECTION 11.01. TIA Controls.
If any provision of this Indenture limits, qualifies,
or conflicts with the duties imposed by operation of Section
318(c) of the TIA, the imposed duties shall control.
SECTION 11.02. Notices.
Any notices or other communications required or
permitted hereunder shall be in writing, and shall be
sufficiently given if made by hand delivery, by telex, by
telecopier or registered or certified mail, postage prepaid,
return receipt requested, addressed as follows:
if to the Company or a Guarantor:
Spanish Broadcasting System, Inc.
26 West 56th Street
New York, New York 10019
Attention: Joseph Garcia
Facsimile: (212) 541-9200
Telephone: (212) 541-9236
<PAGE> 97
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if to the Trustee:
United States Trust Company of New York
114 West 47th Street
New York, New York 10036
Attention: Corporate Trust and Agency Division
Facsimile: (212) 852-1625
Telephone: (212) 852-1661
Each of the Company and the Trustee by written notice
to each other such Person may designate additional or different
addresses for notices to such Person. Any notice or
communication to the Company or a Guarantor or the Trustee,
shall be deemed to have been given or made as of the date so
delivered if Personally delivered; when answered back, if
telexed; when receipt is acknowledged, if telecopied; and five
(5) calendar days after mailing if sent by registered or
certified mail, postage prepaid (except that a notice of change
of address shall not be deemed to have been given until
actually received by the addressee).
Any notice or communication mailed to a Security-
holder shall be mailed to him by first class mail or other
equivalent means at his address as it appears on the
registration books of the Registrar and shall be sufficiently
given to him if so mailed within the time prescribed.
Failure to mail a notice or communication to a
Securityholder or any defect in it shall not affect its
sufficiency with respect to other Securityholders. If a notice
or communication is mailed in the manner provided above, it is
duly given, whether or not the addressee receives it.
SECTION 11.03. Communications by Holders with Other Holders.
Securityholders may communicate pursuant to TIA
{ 312(b) with other Securityholders with respect to their
rights under this Indenture, the Securities or any Guarantees.
The Company, the Trustee, the Registrar and any other Person
shall have the protection of TIA { 312(c).
<PAGE> 98
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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 at the request of the Trustee:
(1) an Officers' Certificate, in form and substance
satisfactory to the Trustee, stating that, in the opinion
of the signers, all conditions precedent, if any, provided
for in this Indenture relating to the proposed action have
been complied with; and
(2) an Opinion of Counsel stating that, in the
opinion of such counsel, all such conditions precedent
have been complied with.
SECTION 11.05. Statements Required in Certificate or Opinion.
Each certificate or opinion with respect to
compliance with a condition or covenant provided for in this
Indenture, other than the Officers' Certificate required by
Section 4.08, shall include:
(1) a statement that the Person making such
certificate or opinion has read such covenant or
condition;
(2) a brief statement as to the nature and scope of
the examination or investigation upon which the statements
or opinions contained in such certificate or opinion are
based;
(3) a statement that, in the opinion of such Person,
he has made such examination or investigation as is
necessary to enable him to express an informed opinion as
to whether or not such covenant or condition has been
complied with; and
(4) a statement as to whether or not, in the opinion
of each such Person, such condition or covenant has been
complied with; provided, however, that with respect to
matters of fact an Opinion of Counsel may rely on an
Officers' Certificate or certificates of public officials.
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SECTION 11.06. Rules by Trustee, Paying Agent, Registrar.
The Trustee, Paying Agent or Registrar may make
reasonable rules for its functions.
SECTION 11.07. Legal Holidays.
If a payment date is not a Business Day, payment may
be made on the next succeeding day that is a Business Day with
the same force and effect as if made on such payment date.
SECTION 11.08. Governing Law.
THIS INDENTURE, THE SECURITIES AND ANY GUARANTEES
SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS
OF THE STATE OF NEW YORK, AS APPLIED TO CONTRACTS MADE AND
PERFORMED WITHIN THE STATE OF NEW YORK, WITHOUT REGARD TO
PRINCIPLES OF CONFLICTS OF LAW. Each of the parties hereto
agrees to submit to the jurisdiction of the courts of the State
of New York in any action or proceeding arising out of or
relating to this Indenture.
SECTION 11.09. No Adverse Interpretation of Other Agreements.
This Indenture may not be used to interpret another
indenture, loan or debt agreement of any of the Company or any
of its Subsidiaries or any Guarantor. Any such indenture, loan
or debt agreement may not be used to interpret this Indenture.
SECTION 11.10. No Recourse Against Others.
A director, officer, employee, stockholder or
incorporator, as such, of the Company or any of its
Subsidiaries or any Guarantor shall not have any liability for
any obligations of the Company or any Guarantor under the
Securities, this Indenture or any Guarantee or for any claim
based on, in respect of or by reason of such obligations or
their creations. Each Securityholder by accepting a Security
waives and releases all such liability. Such waiver and
release are part of the consideration for the issuance of the
Securities.
SECTION 11.11. Successors.
All agreements of the Company and any Guarantors in
this Indenture, the Securities and any Guarantees shall bind
their respective successors. All agreements of the Trustee in
this Indenture shall bind its successor.
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SECTION 11.12. Duplicate Originals.
All parties may sign any number of copies of this
Indenture. Each signed copy or counterpart shall be an
original, but all of them together shall represent the same
agreement.
SECTION 11.13. Severability.
In case any one or more of the provisions in this
Indenture, in the Securities or in any Guarantee shall be held
invalid, illegal or unenforceable, in any respect for any
reason, the validity, legality and enforceability of any such
provision in every other respect and of the remaining
provisions shall not in any way be affected or impaired
thereby, it being intended that all of the provisions hereof
shall be enforceable to the full extent permitted by law.
ARTICLE TWELVE
SUBORDINATION
SECTION 12.01. Securities Subordinated to Senior
Debt; Guarantees Subordinated to
Guarantor Senior Debt.
The Company and each Guarantor covenants and agrees,
and each Holder of the Securities, by its acceptance thereof,
likewise covenants and agrees, that all Securities and
Guarantees shall be issued subject to the provisions of this
Article Twelve; and each Person holding any Security, whether
upon original issue or upon transfer, assignment or exchange
thereof, accepts and agrees that the payment of all Obligations
on the Securities and Guarantees by the Company and any
Guarantors shall, to the extent and in the manner herein set
forth, be subordinated and junior in right of payment to the
prior payment in full in cash or Cash Equivalents (or such
payment shall be duly provided for to the satisfaction of the
holders of the Senior Debt and Guarantor Senior Debt, as the
case may be) of all Obligations on the Senior Debt and
Guarantor Senior Debt, as the case may be; that the
subordination is for the benefit of, and shall be enforceable
directly by, the holders of Senior Debt and Guarantor Senior
Debt, as the case may be, and that each holder of Senior Debt
and Guarantor Senior Debt, as the case may be, whether now
outstanding or hereafter
<PAGE> 101
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created, incurred, assumed or guaranteed shall be deemed to have
acquired Senior Debt and Guarantor Senior Debt, as the case may be,
in reliance upon the covenants and provisions contained in this
Indenture.
SECTION 12.02. No Payment on Securities in
Certain Circumstances._____
(a) If any default occurs and is continuing in the
payment when due, whether at maturity, upon any redemption, by
declaration or otherwise, of any principal of, interest on,
unpaid drawings for letters of credit issued in respect of, or
regularly accruing fees with respect to, any Senior Debt or
Guarantor Senior Debt, no payment of any kind or character
shall be made by or on behalf of the Company or any other
Person on its or their behalf with respect to any Obligations
on the Securities or to acquire any of the Securities for cash
or property or otherwise. In addition, if a Non-Payment Event
of Default occurs and is continuing with respect to any
Designated Senior Debt, and if the Representative for the
respective issue of Designated Senior Debt gives written notice
of the event of default to the Trustee (a "Default Notice"),
then neither the Company nor any other Person on its behalf
shall (x) make any payment of any kind or character with
respect to any Obligations on the Securities or (y) acquire any
of the Securities for cash or property or otherwise for a
period of time (the "Blockage Period") terminating on the
earliest to occur of (1) the date all events of default have
been cured or waived or shall have ceased to exist and the
Company and the Trustee receive written notice thereof from the
Representative for the applicable issue of Designated Senior
Debt, (2) the Trustee receives written notice from the
Representative for the applicable issue of Designated Senior
Debt terminating the Blockage Period or the benefits of this
sentence are waived by the Representative for the applicable
issue of Designated Senior Debt, (3) the applicable issue of
Designated Senior Debt is discharged or paid in full in cash or
Cash Equivalents or (4) the expiration of the 180-day
consecutive period commencing on the date of the giving of such
Default Notice. Upon the termination of such Blockage Period,
the Company shall (to the extent not otherwise prohibited by
this Article Twelve) promptly resume making all payments on the
Securities, including all payments not made during such
Blockage Period. Notwithstanding any other provisions of this
Indenture, no Non-Payment Event of Default with respect to
Designated Senior Debt which existed or was continuing on the
date of the commencement of any Blockage Period initiated by
the Representative shall be, or be made,
<PAGE> 102
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the basis for the commencement of a second Payment Blockage
Period initiated by the Representative unless such event of
default shall have been cured or waived for a period of not
less than 90 consecutive days. In no event shall a Blockage
Period extend beyond 179 days from the date of the receipt
by the Trustee of the Default Notice (the "Initial Blockage
Period"). Any number of additional Blockage Periods may be
commenced during the Initial Blockage Period; provided, however,
that no such additional Blockage Period shall extend beyond
the Initial Blockage Period. After the expiration of the
Initial Blockage Period, no Blockage Period may be commenced
until at least 180 consecutive days have elapsed from the last
day of the Initial Blockage Period.
(b) In the event that, notwithstanding the
foregoing, any payment shall be received by the Trustee or any
Holder when such payment is prohibited by Section 12.02(a),
such payment shall be held in trust for the benefit of, and
shall be paid over or delivered to, the holders of Senior Debt
or Guarantor Senior Debt, as the case may be, (pro rata to such
holders on the basis of the respective amount of Senior Debt or
Guarantor Senior Debt, as the case may be, held by such
holders) as their respective interests may appear. The Trustee
shall be entitled to rely on information regarding amounts then
due and owing on the Senior Debt or Guarantor Senior Debt, as
the case may be, if any, received from the holders of Senior
Debt (or their Representatives) or Guarantor Senior Debt, as
the case may be, or, if such information is not received from
such holders or their Representatives, from the Company and
only amounts included in the information provided to the
Trustee shall be paid to the holders of Senior Debt or
Guarantor Senior Debt, as the case may be. The Company shall
keep complete and accurate records of the names, addresses and
amounts owed to all holders of Senior Debt and Guarantor Senior
Debt, shall produce such records to the Trustee upon request
and the Trustee shall be absolutely protected in relying on
such records in paying over or delivering moneys pursuant to
this Article Twelve.
Nothing contained in this Article Twelve shall limit
or compromise the right of the Trustee or the Holders to take
any action to accelerate the maturity of the Securities
pursuant to Section 6.02 or to pursue any rights or remedies
hereunder or otherwise; provided, however, that all Senior Debt
and Guarantor Senior Debt thereafter due or declared to be due
shall first be paid in full in cash or Cash Equivalents before
<PAGE> 103
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the Holders are entitled to receive any payment of any kind or
character with respect to Obligations on the Securities.
SECTION 12.03. Payment Over of Proceeds
upon Dissolution, Etc.__
(a) Upon any payment or distribution of assets of
the Company or a Guarantor of any kind or character, whether in
cash, property or securities to creditors upon any liquidation,
dissolution, winding-up, reorganization, assignment for the
benefit of creditors or marshaling of assets of the Company or
a Guarantor or in a bankruptcy, reorganization, insolvency,
receivership or other similar proceeding relating to the
Company or its property or a Guarantor or its property, whether
voluntary or involuntary, all Obligations due or to become due
upon all Senior Debt or Guarantor Senior Debt of such
Guarantor, as the case may be, shall first be paid in full in
cash or Cash Equivalents, or such payment shall be duly
provided for to the satisfaction of the holders of Senior Debt
or Guarantor Senior Debt of such Guarantor, as the case may be,
before any payment or distribution of any kind or character is
made on account of any Obligations on the Securities or the
Guarantee or such Guarantor, or for the acquisition of any of
the Securities for cash or property or otherwise. Upon any
such dissolution, winding-up, liquidation, reorganization,
receivership or similar proceeding, any payment or distribution
of assets of the Company or a Guarantor of any kind or
character, whether in cash, property or securities, to which
the Holders or the Trustee under this Indenture would be
entitled, except for the provisions hereof, shall be paid by
the Company or such Guarantor or by any receiver, trustee in
bankruptcy, liquidating trustee, agent or other Person making
such payment or distribution, or by the Holders or by the
Trustee under this Indenture if received by them, directly to
the holders of Senior Debt or Guarantor Senior Debt of such
Guarantor, as the case may be (pro rata to such holders on the
basis of the respective amounts of Senior Debt or Guarantor
Senior Debt of such Guarantor, as the case may be, held by such
holders) or their respective Representatives, or to the trustee
or trustees under any indenture pursuant to which any of such
Senior Debt or Guarantor Senior Debt of such Guarantor, as the
case may be, may have been issued, as their respective
interests may appear, for application to the payment of Senior
Debt or Guarantor Senior Debt of such Guarantor, as the case
may be, remaining unpaid until all such Senior Debt or
Guarantor Senior Debt of such Guarantor, as the case may be,
has been paid in full in cash or Cash Equivalents after giving
effect to any concurrent payment,
<PAGE> 104
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distribution or provision therefor to or for the holders of
Senior Debt or Guarantor Senior Debt of such Guarantor, as
the case may be.
(b) To the extent any payment of Senior Debt or
Guarantor Senior Debt (whether by or on behalf of the Company
or a Guarantor, as proceeds of security or enforcement of any
right of setoff or otherwise) is declared to be fraudulent or
preferential, set aside or required to be paid to any receiver,
trustee in bankruptcy, liquidating trustee, agent or other
similar Person under any bankruptcy, insolvency, receivership,
fraudulent conveyance or similar law, then, if such payment is
recovered by, or paid over to, such receiver, trustee in
bankruptcy, liquidating trustee, agent or other similar Person,
the Senior Debt or Guarantor Senior Debt or part thereof
originally intended to be satisfied shall be deemed to be
reinstated and outstanding as if such payment had not occurred.
(c) In the event that, notwithstanding the
foregoing, any payment or distribution of assets of the Company
or a Guarantor of any kind or character, whether in cash,
property or securities, shall be received by any Holder when
such payment or distribution is prohibited by Section 12.03(a),
such payment or distribution shall be held in trust for the
benefit of, and shall be paid over or delivered to, the holders
of Senior Debt or Guarantor Senior Debt of such Guarantor, as
the case may be (pro rata to such holders on the basis of the
respective amount of Senior Debt or Guarantor Senior Debt of
such Guarantor, as the case may be, held by such holders) or
their respective Representatives, or to the trustee or trustees
under any indenture pursuant to which any of such Senior Debt
or Guarantor Senior Debt of such Guarantor, as the case may be,
may have been issued, as their respective interests may appear,
for application to the payment of Senior Debt or Guarantor
Senior Debt of such Guarantor, as the case may be, remaining
unpaid until all such Senior Debt or Guarantor Senior Debt of
such Guarantor, as the case may be, has been paid in full in
cash or Cash Equivalents, after giving effect to any concurrent
payment, distribution or provision therefor to or for the
holders of such Senior Debt or Guarantor Senior Debt of such
Guarantor, as the case may be.
(d) The consolidation of the Company with, or the
merger of the Company with or into, another corporation or the
liquidation or dissolution of the Company following the
conveyance or transfer of all or substantially all of its
assets, to another corporation upon the terms and conditions
provided in
<PAGE> 105
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Article Five hereof shall not be deemed a dissolution, winding-up,
liquidation or reorganization for the purposes of this Section if,
in the event the Company is not the surviving corporation, such
other corporation shall, as a part of such consolidation, merger,
conveyance or transfer, assume the Company's obligations hereunder
in accordance with Article Five hereof.
SECTION 12.04. Payments May Be Paid
Prior to Dissolution.
Nothing contained in this Article Twelve or elsewhere
in this Indenture shall prevent (i) the Company, except under
the conditions described in Sections 12.02 and 12.03, from
making payments at any time for the purpose of making payments
of principal of and interest on the Securities, or from
depositing with the Trustee any monies for such payments, or
(ii) in the absence of actual knowledge by the Trustee that a
given payment would be prohibited by Section 12.02 or 12.03,
the application by the Trustee of any monies deposited with it
for the purpose of making such payments of principal of, and
interest on, the Securities to the Holders entitled thereto
unless at least one Business Day prior to the date upon which
such payment would otherwise become due and payable, the
Trustee shall have received the written notice provided for in
Section 12.02(a) or in Section 12.07. The Company shall give
prompt written notice to the Trustee of any dissolution,
winding-up, liquidation or reorganization of the Company.
SECTION 12.05. Subrogation.
Subject to the payment in full in cash or Cash
Equivalents of all Senior Debt and Guarantor Senior Debt, the
Holders shall be subrogated to the rights of the holders of
Senior Debt and Guarantor Senior Debt to receive payments or
distributions of cash, property or securities of the Company
and such Guarantor applicable to the Senior Debt and Guarantor
Senior Debt until the Securities shall be paid in full; and,
for the purposes of such subrogation, no such payments or
distributions to the holders of the Senior Debt and Guarantor
Senior Debt by or on behalf of the Company or any Guarantor or
by or on behalf of the Holders by virtue of this Article Twelve
which otherwise would have been made to the Holders shall, as
between the Company or any Guarantor and the Holders, be deemed
to be a payment by the Company or any Guarantor to or on
account of the Senior Debt or Guarantor Senior Debt, as the
case may be, it being understood that the provisions of this
Article Twelve are
<PAGE> 106
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and are intended solely for the purpose of defining the relative
rights of the Holders, on the one hand, and the holders of the
Senior Debt or Guarantor Senior Debt, as the case may be, on
the other hand.
SECTION 12.06. Obligations of the Company Unconditional.
Nothing contained in this Article Twelve or elsewhere
in this Indenture or in the Securities or Guarantees is
intended to or shall impair, as among the Company, any
Guarantor, their respective creditors other than the holders of
Senior Debt or Guarantor Senior Debt, and the Holders, the
obligation of the Company and any Guarantors, which is absolute
and unconditional, to pay to the Holders the principal of and
any interest on the Securities as and when the same shall
become due and payable in accordance with their terms, or is
intended to or shall affect the relative rights of the Holders
and creditors of the Company and any Guarantors other than the
holders of any Senior Debt or Guarantor Senior Debt, nor shall
anything herein or therein prevent the Holder or the Trustee on
its behalf from exercising all remedies otherwise permitted by
applicable law upon default under this Indenture, subject to
the rights, if any, under this Article Twelve of the holders of
Senior Debt or Guarantor Senior Debt in respect of cash,
property or securities of the Company or any Guarantor received
upon the exercise of any such remedy.
SECTION 12.07. Notice to Trustee.
The Company shall give prompt written notice to a
Responsible Officer of the Trustee of any fact known to the
Company which would prohibit the making of any payment to or by
the Trustee in respect of the Securities pursuant to the
provisions of this Article Twelve. Regardless of anything to
the contrary contained in this Article Twelve or elsewhere in
this Indenture, the Trustee shall not be charged with knowledge
of the existence of any default or event of default with
respect to any Senior Debt or Guarantor Senior Debt or of any
other facts which would prohibit the making of any payment to
or by the Trustee unless and until the Trustee shall have
received notice in writing from the Company, or from a holder
of Senior Debt or Guarantor Senior Debt or a Representative
therefor, and, prior to the receipt of any such written notice,
the Trustee shall be entitled to assume (in the absence of
actual knowledge to the contrary) that no such facts exist.
<PAGE> 107
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In the event that the Trustee determines in good
faith that any evidence is required with respect to the right
of any Person as a holder of Senior Debt or Guarantor Senior
Debt to participate in any payment or distribution pursuant to
this Article Twelve, the Trustee may request such Person to
furnish evidence to the reasonable satisfaction of the Trustee
as to the amounts of Senior Debt or Guarantor Senior Debt held
by such Person, the extent to which such Person is entitled to
participate in such payment or distribution and any other facts
pertinent to the rights of such Person under this
Article Twelve, and if such evidence is not furnished the
Trustee may defer any payment to such Person pending judicial
determination as to the right of such Person to receive such
payment.
SECTION 12.08. Reliance on Judicial Order or
Certificate of Liquidating Agent.
Upon any payment or distribution of assets of the
Company or Guarantor referred to in this Article Twelve, the
Trustee, subject to the provisions of Article Seven hereof, and
the Holders shall be entitled to rely upon any order or decree
made by any court of competent jurisdiction in which
bankruptcy, dissolution, winding-up, liquidation or
reorganization proceedings are pending, or upon a certificate
of the receiver, trustee in bankruptcy, liquidating trustee,
agent or other Person making such payment or distribution,
delivered to the Trustee or the Holders, for the purpose of
ascertaining the Persons entitled to participate in such
distribution, the holders of the Senior Debt or Guarantor
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 Twelve.
SECTION 12.09. Trustee's Relation to Senior Debt
or Guarantor Senior Debt.________
The Trustee and any agent of the Company or the
Trustee shall be entitled to all the rights set forth in this
Article Twelve with respect to any Senior Debt or Guarantor
Senior Debt which may at any time be held by it in it
individual or any other or Guarantor capacity to the same
extent as any other holder of Senior Debt and nothing in this
Indenture shall deprive the Trustee or any such agent of any of
its rights as such holder.
<PAGE> 108
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With respect to the holders of Senior Debt or
Guarantor Senior Debt, the Trustee undertakes to perform or to
observe only such of its covenants and obligations as are
specifically set forth in this Article Twelve, and no implied
covenants or obligations with respect to the holders of Senior
Debt or Guarantor 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 or Guarantor
Senior Debt.
Whenever a distribution is to be made or a notice
given to holders or owners of Senior Debt or Guarantor Senior
Debt, the distribution may be made and the notice may be given
to their Representative, if any.
SECTION 12.10. Subordination Rights Not Impaired
by Acts or Omissions of the Company
or a Guarantor or Holders of
Senior Debt._______________________
No right of any present or future holders of any
Senior Debt or Guarantor Senior Debt to enforce subordination
as provided herein shall at any time in any way be prejudiced
or impaired by any act or failure to act on the part of the
Company or a Guarantor or by any act or failure to act, in good
faith, by any such holder, or by any noncompliance by the
Company or a Guarantor with the terms of this Indenture,
regardless of any knowledge thereof which any such holder may
have or otherwise be charged with.
Without in any way limiting the generality of the
foregoing paragraph, the holders of Senior Debt or a Guarantor
may, at any time and from time to time, without the consent of
or notice to the Trustee, without incurring responsibility to
the Trustee or the Holders and without impairing or releasing
the subordination provided in this Article Twelve or the
obligations hereunder of the Holders to the holders of the
Senior Debt or Guarantor Senior Debt, do any one or more of the
following: (i) change the manner, place or terms of payment or
extend the time of payment of, or renew or alter, Senior Debt
or Guarantor Senior Debt, or otherwise amend or supplement in
any manner Senior Debt or Guarantor Senior Debt, or any
instrument evidencing the same or any agreement under which
Senior Debt or Guarantor Senior Debt is outstanding; (ii) sell,
exchange, release or otherwise deal with any property pledged,
mortgaged otherwise securing Senior Debt or Guarantor Senior
Debt; (iii) release any Person liable in any manner for the
<PAGE> 109
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payment or collection of Senior Debt or Guarantor Senior Debt;
and (iv) exercise or refrain from exercising any rights against
the Company or a Guarantor or any other Person.
SECTION 12.11. Holders Authorize Trustee To
Effectuate Subordination of
Securities._________________
Each Holder by its acceptance of them authorizes and
expressly directs the Trustee on its behalf to take such action
as may be necessary or appropriate to effectuate, as between
the holders of Senior Debt or Guarantor Senior Debt and the
Holders, the subordination provided in this Article Twelve, and
appoints the Trustee its attorney-in-fact for such purposes,
including, in the event of any dissolution, winding-up,
liquidation or reorganization of the Company or a Guarantor
(whether in bankruptcy, insolvency, receivership,
reorganization or similar proceedings or upon an assignment for
the benefit of creditors or otherwise) tending towards
liquidation of the business and assets of the Company or a
Guarantor, the filing of a claim for the unpaid balance of its
Securities and accrued interest in the form required in those
proceedings.
If the Trustee does not file a proper claim or proof
of debt in the form required in such proceeding prior to 30
days before the expiration of the time to file such claim or
claims, then the holders of the Senior Debt or Guarantor Senior
Debt or their Representative are or is hereby authorized to
have the right to file and are or is hereby authorized to file
an appropriate claim for and on behalf of the Holders of said
Securities. Nothing herein contained shall be deemed to
authorize the Trustee or the holders of Senior Debt or
Guarantor Senior Debt or their Representative to authorize or
consent to or accept or adopt on behalf of any Holder any plan
of reorganization, arrangement, adjustment or composition
affecting the Securities or the rights of any Holder thereof,
or to authorize the Trustee or the holders of Senior Debt or
Guarantor Senior Debt or their Representative to vote in
respect of the claim of any Holder in any such proceeding.
SECTION 12.12. This Article Twelve Not To
Prevent Events of Default.
The failure to make a payment on account of principal
of or interest on the Securities by reason of any provision of
this Article Twelve will not be construed as preventing the
occurrence of an Event of Default.
<PAGE> 110
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SECTION 12.13. Trustee's Compensation Not Prejudiced.
Nothing in this Article Twelve will apply to amounts
due to the Trustee pursuant to other Sections in this
Indenture.
<PAGE> 111
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SIGNATURES
IN WITNESS WHEREOF, the parties hereto have caused
this Indenture to be duly executed as of the date first written
above.
SPANISH BROADCASTING SYSTEM, INC.,
a Delaware corporation
By: /s/ Raul Alarcon Jr.
--------------------------------------------
Name: Raul Alarcon Jr.
Title: President and Chief Executive Officer
By: /s/ Joseph Garcia
-------------------------------------------
Name: Joseph Garcia
Title: Exec. VP and Chief Financial Officer
SPANISH BROADCASTING SYSTEM, INC.,
a New Jersey corporation
By: /s/ Raul Alarcon Jr.
--------------------------------------------
Name: Raul Alarcon Jr.
Title: President and Chief Executive Officer
By: /s/ Joseph Garcia
-------------------------------------------
Name: Joseph Garcia
Title: Exec. VP and Chief Financial Officer
SPANISH BROADCASTING SYSTEM OF
CALIFORNIA, INC.
By: /s/ Raul Alarcon Jr.
--------------------------------------------
Name: Raul Alarcon Jr.
Title: President and Chief Executive Officer
By: /s/ Joseph Garcia
-------------------------------------------
Name: Joseph Garcia
Title: Exec. VP and Chief Financial Officer
<PAGE> 112
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SPANISH BROADCASTING SYSTEM OF
FLORIDA, INC.
By: /s/ Raul Alarcon Jr.
--------------------------------------------
Name: Raul Alarcon Jr.
Title: President and Chief Executive Officer
By: /s/ Joseph Garcia
-------------------------------------------
Name: Joseph Garcia
Title: Exec. VP and Chief Financial Officer
SPANISH BROADCASTING SYSTEM
NETWORK, INC.
By: /s/ Raul Alarcon Jr.
--------------------------------------------
Name: Raul Alarcon Jr.
Title: President and Chief Executive Officer
By: /s/ Joseph Garcia
-------------------------------------------
Name: Joseph Garcia
Title: Exec. VP and Chief Financial Officer
SBS PROMOTIONS, INC.
By: /s/ Raul Alarcon Jr.
--------------------------------------------
Name: Raul Alarcon Jr.
Title: President and Chief Executive Officer
By: /s/ Joseph Garcia
-------------------------------------------
Name: Joseph Garcia
Title: Exec. VP and Chief Financial Officer
<PAGE> 113
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ALARCON HOLDINGS, INC.
By: /s/ Raul Alarcon Jr.
--------------------------------------------
Name: Raul Alarcon Jr.
Title: President and Chief Executive Officer
By: /s/ Joseph Garcia
-------------------------------------------
Name: Joseph Garcia
Title: Exec. VP and Chief Financial Officer
SBS OF GREATER NEW YORK, INC.
By: /s/ Raul Alarcon Jr.
--------------------------------------------
Name: Raul Alarcon Jr.
Title: President and Chief Executive Officer
By: /s/ Joseph Garcia
-------------------------------------------
Name: Joseph Garcia
Title: Exec. VP and Chief Financial Officer
UNITED STATES TRUST COMPANY
OF NEW YORK, as Trustee
By: /s/ Cynthia Chaney
--------------------------------------------
Name: Cynthia Chaney
Title: Assistant Vice President
<PAGE> 114
EXHIBIT A
SPANISH BROADCASTING SYSTEM, INC.
0 14 1/4% Exchange Debentures
due March 15, 2005
CUSIP No.: [ ]
No. [ ] $[ ]
SPANISH BROADCASTING SYSTEM, INC., a Delaware
corporation (the "Company", which term includes any successor
corporation), for value received promises to pay to [ ]
or registered assigns, the principal sum of $[ ]
Dollars, together with an amount in cash equal to the Current
Market Value on the Maturity Date of the issuable but unissued
Contingent Class A Shares (including Contingent Class A Shares
not issued as a result of an FCC Deferral or an Authorization
Deferral) with respect to such principal sum, on March 15,
2005.
Interest Payment Dates: March 15 and September 15.
Record Dates: March 1 and September 1
Reference is made to the further provisions of this
Security contained herein, which will for all purposes have the
same effect as if set forth at this place.
IN WITNESS WHEREOF, the Company has caused this
Security to be signed manually or by facsimile by its duly
authorized officers.
Dated:
SPANISH BROADCASTING SYSTEM, INC.
By: ___________________________
Name:
Title:
By: ___________________________
Name:
Title:
<PAGE> 115
-2-
[FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION]
This is one of the 14 1/4% Exchange Debentures due
2005, described in the within-mentioned Indenture.
Dated: UNITED STATES TRUST COMPANY
OF NEW YORK, as Trustee
By ____________________________
Authorized Signatory
<PAGE> 116
-3-
(REVERSE OF SECURITY)
SPANISH BROADCASTING SYSTEM, INC.
14 1/4% Exchange Debentures
due March 15, 2005
1. Interest.
SPANISH BROADCASTING SYSTEM, INC., a Delaware
corporation (the "Company"), promises to pay interest on the
principal amount of this Security at the rate per annum shown
above. Interest on this Security will accrue and be payable at
a rate of 2% in excess of the rate per annum shown above so
long as a Default or Event of Default shall have occurred and
be continuing. The Company will pay interest semi-annually on
March 15 and September 15 of each year (an "Interest Payment
Date"), commencing the Interest Payment Date following the date
of issuance of this Security. Interest on the Securities 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 of this Security. Interest will be computed on the
basis of a 360-day year of twelve 30-day months.
Notwithstanding anything herein to the contrary, on
each Interest Payment Date through and including March 15,
2002, the entire amount of the interest payment on the Securi-
ties may be paid, at the option of the Company, in additional
Securities ("Secondary Securities") (valued at 100% of the
principal amount thereof). The Company may, at its option, pay
cash in lieu of issuing any Secondary Security to the extent
the principal amount such Secondary Security is not an integral
multiple of $1,000. The Company shall notify the Trustee of
the Company's election to pay interest in Secondary Securities
not less than 10 days prior to the Record Date for an Interest
Payment Date. On each such Interest Payment Date, the Trustee
shall authenticate Secondary Securities for original issuance
to each holder of Securities on the preceding Record Date, as
shown on the register of the Securities, in the amount required
to pay such interest. For purposes of determining the
principal amount of Secondary Securities to be issued in
payment of interest, the Company shall be entitled to aggregate
as to each holder the principal amount of all Securities
(including Secondary Securities) held of record by such holder.
<PAGE> 117
-4-
The Company shall pay interest on overdue principal
from time to time on demand at the rate borne by the Securities
plus 2% and on overdue installments of interest (without regard
to any applicable grace periods) to the extent lawful.
2. Method of Payment.
The Company shall pay interest on the Securities
(except defaulted interest) to the Persons who are the
registered Holders at the close of business on the Record Date
immediately preceding the Interest Payment Date even if the
Securities are cancelled on registration of transfer or
registration of exchange after such Record Date. Holders must
surrender Securities to a Paying Agent to collect principal
payments. The Company shall pay principal and interest (to the
extent not paid in Secondary Securities) in money of the United
States that at the time of payment is legal tender for payment
of public and private debts ("U.S. Legal Tender"). However,
the Company may pay principal and interest by wire transfer of
Federal funds, or interest by check payable in such U.S. Legal
Tender. The Company may deliver any such interest payment
(including any indirect payment made in Secondary Securities)
to the Paying Agent or to a Holder at the Holder's registered
address.
3. Paying Agent and Registrar.
Initially, United States Trust Company of New York
(the "Trustee") will act as Paying Agent and Registrar. The
Company may change any Paying Agent, Registrar or co-Registrar
without notice to the Holders.
4. Indenture.
The Company issued the Securities under an Indenture,
dated as of March 15, 1997 (the "Indenture"), by and among the
Company, the Guarantors named therein and the Trustee.
Capitalized terms herein are used as defined in the Indenture
unless otherwise defined herein. The terms of the Securities
include those stated in the Indenture and those made part of
the Indenture by reference to the Trust Indenture Act of 1939
(15 U.S.C. {{ 77aaa-77bbbb) (the "TIA"), as in effect on the
date of the Indenture until such time as the Indenture is
qualified under the TIA, and thereafter as in effect on the
date on which the Indenture is qualified under the TIA.
Notwithstanding anything to the contrary herein, the Securities
are subject to all such terms, and Holders of Securities are
referred to
<PAGE> 118
-5-
the Indenture and the TIA for a statement of them. The Securities
are limited in aggregate principal amount to $413,930,000.
5. Optional Redemption.
The Securities will be redeemable, at the Company's
option, in whole at any time or in part from time to time on or
prior to March 15, 2000 at a redemption price in cash equal to
105% of the principal amount thereof, plus (x) accrued interest
thereon to the date of redemption and (y) an amount in cash
equal to the Current Market Value on the date the notice of
redemption is mailed of the issuable but unissued Contingent
Class A Shares (including Contingent Class A Shares not issued
as a result of an FCC Deferral or an Authorization Deferral)
with respect to the Securities redeemed. The Securities are
not redeemable after March 15, 2000 and prior to March 15,
2002. On and after March 15, 2002, the Securities will be
redeemable, at the Company's option, in whole at any time or in
part from time to time, at the following redemption prices
(expressed as percentages of the principal amount) if redeemed
during the twelve-month period commencing on March 15 of the
years set forth below, plus, in each case, (x) accrued interest
thereon to the date of redemption and (y) an amount in cash
equal to the Current Market Value on the date the notice of
redemption is mailed of the issuable but unissued Contingent
Class A Shares (including Contingent Class A Shares not issued
as a result of an FCC Deferral or an Authorization Deferral)
with respect to the Securities redeemed:
Year Percentage
2002............................. 107.00%
2003............................. 105.00%
2004 and thereafter.............. 100.00%
6. Notice of Redemption.
Notice of redemption will be mailed at least 30 days
but not more than 60 days before the Redemption Date to each
Holder of Securities to be redeemed at such Holder's registered
address. Securities in denominations of $1,000 or less may be
redeemed only in whole. The Trustee may select for redemption
portions (equal to $1,000 or any integral multiple thereof) of
the principal of Securities that have denominations larger than
$1,000.
<PAGE> 119
-6-
If any Security is to be redeemed in part only, the
notice of redemption that relates to such Security shall state
the portion of the principal amount thereof to be redeemed. A
new Security in a principal amount equal to the unredeemed
portion thereof will be issued in the name of the Holder
thereof upon cancellation of the original Security. On and
after the Redemption Date, interest will cease to accrue on
Securities or portions thereof called for redemption.
7. Change of Control Offer.
Upon the occurrence of a Change of Control, the
Company will be required, subject to certain limitations, to
offer to purchase all of the outstanding Securities at a
purchase price equal to 101% of the principal amount thereof
plus accrued and unpaid interest, if any, to the date of
repurchase.
8. Limitation on Certain Asset Sales.
The Company is subject to certain conditions,
obligated to make an offer to purchase Securities at 100% of
their principal amount plus accrued and unpaid interest to the
date of repurchase with certain net cash proceeds of certain
sales or other dispositions of assets in accordance with the
Indenture.
9. Denominations; Transfer; Exchange.
The Securities are in registered form, without
coupons, in denominations of $1,000 and integral multiples of
$1,000; provided, however, that Secondary Securities and
Securities issued in exchange for the Senior Preferred Stock
may be issued in denominations of less than $1,000 (but not
less than $1.00). A Holder shall register the transfer of or
exchange Securities in accordance with the Indenture. The
Registrar may require a Holder, among other things, to furnish
appropriate endorsements and transfer documents and to pay
certain transfer taxes or similar governmental charges payable
in connection therewith as permitted by the Indenture. The
Registrar need not register the transfer of or exchange any
Securities during a period beginning 15 days before the mailing
of a redemption notice for any Securities or portions thereof
selected for redemption.
<PAGE> 120
-7-
10. Persons Deemed Owners.
The registered Holder of a Security shall be treated
as the owner of it for all purposes.
11. Unclaimed Funds.
If funds for the payment of principal or interest
remain unclaimed for two years, the Trustee and the Paying Agent
will repay the funds to the Company at its request. After that,
all liability of the Trustee and such Paying Agent with respect
to such funds shall cease.
12. Legal Defeasance and Covenant Defeasance.
The Company may be discharged from its obligations
under the Indenture and the Securities except for certain
provisions thereof, and may be discharged from its obligations
to comply with certain covenants contained in the Indenture and
the Securities, in each case upon satisfaction of certain conditions
specified in the Indenture.
13. Amendment; Supplement; Waiver.
Subject to certain exceptions, the Indenture or the
Securities may be amended or supplemented with the written consent
of the Holders of at least a majority in aggregate principal amount
of the Securities then outstanding, and any existing Default or Event
of Default or compliance with any provision may be waived with the
consent of the Holders of a majority in aggregate principal amount
of the Securities then outstanding. Without notice to or consent of
any Holder, the parties thereto may amend or supplement the Indenture
or the Securities to, among other things, cure any ambiguity, defect
or inconsistency, provide for uncertificated Securities in
addition to or in place of certificated Securities or comply
with any requirements of the SEC in connection with the
qualification of the Indenture under the TIA, or make any other
change that does not materially adversely affect the rights of
any Holder of a Security.
14. Restrictive Covenants.
The Indenture contains certain covenants that, among
other things, limit the ability of the Company and certain of
its subsidiaries to make restricted payments, to incur
indebtedness, to create liens, to issue preferred or other
capital
<PAGE> 121
-8-
stock of subsidiaries, to sell assets, to permit restrictions on
dividends and other payments by subsidiaries to the Company, to
consolidate, merge or sell all or substantially all of its assets,
to engage in transactions with affiliates or to engage in certain
businesses. The limitations are subject to a number of important
qualifications and exceptions.
15. Defaults and Remedies.
If an Event of Default occurs and is continuing, the
Trustee or the Holders of at least 25% in aggregate principal
amount of Securities then outstanding may declare all the
Securities to be due and payable immediately in the manner and
with the effect provided in the Indenture. Holders of
Securities may not enforce the Indenture or the Securities
except as provided in the Indenture. The Trustee is not
obligated to enforce the Indenture or the Securities unless it
has received indemnity satisfactory to it. The Indenture
permits, subject to certain limitations therein provided,
Holders of a majority in aggregate principal amount of the
Securities then outstanding to direct the Trustee in its
exercise of any trust or power. The Trustee may withhold from
Holders of Securities notice of any continuing Default or Event
of Default (except a Default in payment of principal, premium
or interest, including an accelerated payment) if it determines
that withholding notice is in their interest.
16. Trustee Dealings with Company.
The Trustee under the Indenture, in its individual or
any other capacity, may become the owner or pledgee of
Securities and may otherwise deal with the Company, its
Subsidiaries, any Guarantor and their respective Affiliates as
if it were not the Trustee.
17. No Recourse Against Others.
No stockholder, director, officer, employee or
incorporator, as such, of the Company shall have any liability
for any obligation of the Company under the Securities or the
Indenture or for any claim based on, in respect of or by reason
of, such obligations or their creation. Each Holder of a
Security by accepting a Security waives and releases all such
liability. The waiver and release are part of the
consideration for the issuance of the Securities.
<PAGE> 122
-9-
18. Authentication.
This Security shall not be valid until the Trustee or
authenticating agent signs the certificate of authentication on
this Security.
19. Abbreviations and Defined Terms.
Customary abbreviations may be used in the name of a
Holder of a Security 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).
20. CUSIP Numbers.
Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the
Company has caused CUSIP numbers to be printed on the
Securities as a convenience to the Holders of the Securities.
No representation is made as to the accuracy of such numbers as
printed on the Securities and reliance may be placed only on
the other identification numbers printed hereon.
21. Subordination.
The Indebtedness evidenced by the Securities and the
Guarantees is, to the extent and in the manner provided in the
Indenture, subordinated and subject in right of payment to the
prior payment in full of all Senior Debt and Guarantor Senior
Debt, respectively, and this Security is issued subject to such
provisions. Each Holder of this Security, by accepting the
same, (a) agrees to and shall be bound by such provisions,
(b) authorizes and directs the Trustee, on behalf of such
Holder, to take such action as may be necessary or appropriate
to effectuate the subordination as provided in the Indenture
and (c) appoints the Trustee attorney-in-fact of such Holder
for such purpose.
The Company will furnish to any Holder of a Security
upon written request and without charge a copy of the
Indenture. Requests may be made to: Spanish Broadcasting
System, Inc., 26 West 56th Street, New York, New York 10019,
Attn: Joseph Garcia.
<PAGE> 123
GUARANTEE
Each undersigned Guarantor (as defined in the
Indenture referred to in the Security upon which this notation
is endorsed and each referred to as the "Guarantor," which term
includes any successor Person under the Indenture)
unconditionally guarantees on a senior subordinated basis as
set forth in Article Twelve of the Indenture (such guarantee by
the Guarantor being referred to herein as a "Guarantee")
(i) the due and punctual payment of the principal of and
interest on the Securities, whether at maturity, by
acceleration or otherwise, the due and punctual payment of
interest on the overdue principal and interest, if any, on the
Securities, to the extent lawful, and the due and punctual
performance of all other obligations of the Company to the
Holders or the Trustee all in accordance with the terms set
forth in Article Ten of the Indenture and (ii) in case of any
extension of time of payment or renewal of any Securities or
any of such other obligations, that the same will be promptly
paid in full when due or performed in accordance with the terms
of the extension or renewal, whether at stated maturity, by
acceleration or otherwise.
No stockholder, officer, director or incorporator, as
such, past, present or future, of the Guarantor shall have any
liability under the Guarantee by reason of his or its status as
such stockholder, officer, director or incorporator.
The Guarantee shall not be valid or obligatory for
any purpose until the certificate of authentication on the
Securities upon which the Guarantee is noted shall have been
executed by the Trustee under the Indenture by the manual
signature of one of its authorized officers.
SPANISH BROADCASTING SYSTEM, INC.,
a New York corporation
By: ______________________________
Name:
Title:
By: _____________________________
Name:
Title:
<PAGE> 124
-2-
SPANISH BROADCASTING SYSTEM OF
CALIFORNIA, INC.
By: _______________________________
Name:
Title:
By: _______________________________
Name:
Title:
SPANISH BROADCASTING SYSTEM OF
FLORIDA, INC.
By: _______________________________
Name:
Title:
By: _______________________________
Name:
Title:
SPANISH BROADCASTING SYSTEM
NETWORK, INC.
By: _______________________________
Name:
Title:
By: _______________________________
Name:
Title:
<PAGE> 125
-3-
SBS PROMOTIONS, INC.
By: _______________________________
Name:
Title:
By: _______________________________
Name:
Title:
ALARCON HOLDINGS, INC.
By: _______________________________
Name:
Title:
By: _______________________________
Name:
Title:
SBS OF GREATER NEW YORK, INC.
By: _______________________________
Name:
Title:
By: _______________________________
Name:
Title:
<PAGE> 126
ASSIGNMENT FORM
I or we assign and transfer this Security to
___________________________________________________________________________
___________________________________________________________________________
(Print or type name, address and zip code of assignee or
transferee)
____________________________________________________________________________
(Insert Social Security or other identifying number of assignee
or transferee)
and irrevocably appoint ____________________________________________________
agent to transfer this Security on the books of the Company.
The agent may substitute another to act for him.
Dated: __________________ Signed: ____________________
(Sign exactly as
name appears on the
other side of this
Security)
Signature Guarantee: __________________________________________________
Participant in a recognized Signature
Guarantee Medallion Program (or other
signature guarantor program reasonably
acceptable to the Trustee)
<PAGE> 127
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased
by the Company pursuant to Section 4.12 or Section 4.24 of the
Indenture, check the appropriate box:
Section 4.12 [ ] Section 4.24 [ ]
If you want to elect to have only part of this
Security purchased by the Company pursuant to Section 4.12 or
Section 4.24 of the Indenture, state the amount:
$_____________
Date: _______________ Your Signature: ______________________
(Sign exactly as
your name appears
on the other side
of this Security)
Signature Guarantee: ___________________________________________________
<PAGE> 128
EXHIBIT B
[FORM OF GUARANTEE]
Each undersigned Guarantor (as defined in the
Indenture referred to in the Security upon which this notation
is endorsed and each referred to as the "Guarantor," which term
includes any successor Person under the Indenture)
unconditionally guarantees on a senior subordinated basis as
set forth in Article Twelve of the Indenture (such guarantee by
the Guarantor being referred to herein as a "Guarantee")
(i) the due and punctual payment of the principal of and
interest on the Securities, whether at maturity, by
acceleration or otherwise, the due and punctual payment of
interest on the overdue principal and interest, if any, on the
Securities, to the extent lawful, and the due and punctual
performance of all other obligations of the Company to the
Holders or the Trustee all in accordance with the terms set
forth in Article Ten of the Indenture and (ii) in case of any
extension of time of payment or renewal of any Securities or
any of such other obligations, that the same will be promptly
paid in full when due or performed in accordance with the terms
of the extension or renewal, whether at stated maturity, by
acceleration or otherwise.
No stockholder, officer, director or incorporator, as
such, past, present or future, of the Guarantor shall have any
liability under the Guarantee by reason of his or its status as
such stockholder, officer, director or incorporator.
The Guarantee shall not be valid or obligatory for
any purpose until the certificate of authentication on the
Securities upon which the Guarantee is noted shall have been
executed by the Trustee under the Indenture by the manual
signature of one of its authorized officers.
<PAGE> 1
Exhibit 10.1
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES PURCHASE AGREEMENT
by and among
SPANISH BROADCASTING SYSTEM, INC.,
(a Delaware corporation)
as Issuer
SPANISH BROADCASTING SYSTEM, INC.
(a New Jersey corporation),
SPANISH BROADCASTING SYSTEM OF CALIFORNIA, INC.,
SPANISH BROADCASTING SYSTEM OF FLORIDA, INC.,
SPANISH BROADCASTING SYSTEM NETWORK, INC.,
SBS PROMOTIONS, INC.,
ALARCON HOLDINGS, INC. and
SBS OF GREATER NEW YORK, INC.,
as Guarantors,
and
CIBC WOOD GUNDY SECURITIES CORP.,
as Initial Purchaser
---------------------------------
Dated as of March 24, 1997
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE> 2
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS
Section 1.1. Definitions ...................................... 4
Section 1.2. Accounting Terms; Financial
Statements ..................................... 10
ARTICLE II
ISSUE OF SECURITIES; PURCHASE AND SALE OF
SECURITIES; RIGHTS OF HOLDERS OF SECURITIES;
OFFERING BY INITIAL PURCHASER
Section 2.1. Issue of Securities .............................. 11
Section 2.2. Purchase, Sale and Delivery of
Securities...................................... 11
Section 2.3. Registration Rights of Holders of
Securities...................................... 12
Section 2.4. Offering by the Initial Purchaser ................ 13
ARTICLE III
REPRESENTATIONS AND WARRANTIES; RESALE OF SECURITIES
Section 3.1. Representations and Warranties of
the Company and the Guarantors.................. 13
Section 3.2. Resale of Shares ................................. 28
ARTICLE IV
CONDITIONS PRECEDENT TO CLOSING
Section 4.1. Conditions Precedent to Obligations
of the Initial Purchaser ....................... 29
ARTICLE V
COVENANTS
Section 5.1. Covenants ........................................ 32
ARTICLE VI
FEES
Section 6.1 Costs, Expenses and Taxes ........................ 35
ARTICLE VII
INDEMNITY
Section 7.1. Indemnity ........................................ 36
Section 7.2. Contribution ..................................... 40
2
<PAGE> 3
Section 7.3. Registration Rights .............................. 41
ARTICLE VIII
MISCELLANEOUS
Section 8.1. Survival of Provisions ........................... 41
Section 8.2. Termination ...................................... 41
Section 8.3. No Waiver; Modifications in
Writing ........................................ 43
Section 8.4 Information Supplied by the Initial
Purchaser ...................................... 43
Section 8.5. Communications ................................... 44
Section 8.6. Execution in Counterparts ........................ 44
Section 8.7. Successors ....................................... 44
Section 8.8. Governing Law .................................... 45
Section 8.9. Severability of Provisions ....................... 45
Section 8.10. Headings ......................................... 45
SIGNATURE PAGE
EXHIBITS
Exhibit 1 Form of Opinion of Kaye, Scholer, Fierman, Hayes & Handler,
LLP
Exhibit 2 Form of Opinion of Lowenthal, Landau, Fischer & Bring
3
<PAGE> 4
SECURITIES PURCHASE AGREEMENT, dated as of March 24, 1997 (the
"Agreement"), by and among SPANISH BROADCASTING SYSTEM, INC., a Delaware
corporation (the "Company"), the Guarantors party hereto and CIBC WOOD GUNDY
SECURITIES CORP. (the "Initial Purchaser").
In consideration of the mutual covenants and agreements set forth
herein and for good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1. Definitions. As used in this Agreement, and unless the
context requires a different meaning, the following terms have the meanings
indicated:
"Accredited Investor" has the meaning provided therefor in Section
3.2 of this Agreement.
"Act" means the Securities Act of 1933, as amended, and the rules
and regulations of the Commission thereunder.
"Affiliate" means, with respect to any Person, any other Person
which directly or indirectly through one or more intermediaries controls, or is
controlled by, or is under common control with, the Person in question. 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, means the possession, directly or indirectly,
of the power to direct or cause the direction of the management and policies of
such Person, whether through the ownership of voting securities, by agreement or
otherwise; provided, however, that beneficial ownership of at least 10% of the
voting securities of a Person shall be deemed to be control.
"Agreement" means this Agreement, as the same may be amended,
supplemented or modified in accordance with the terms hereof.
4
<PAGE> 5
"Basic Documents" means, collectively, the Indenture, the Notes, the
Guarantees, the Notes Registration Rights Agreement, the Certificate of
Designation, the Shares, the Debenture Indenture, the Preferred Stock
Registration Rights Agreement, the Warrant Agreement, the Warrants, the Common
Stock Registration Rights Agreement, the Unit Agreement, the Units and this
Agreement.
"Business Day" means each Monday, Tuesday, Wednesday, Thursday and
Friday which is not a day on which banking institutions in the City of New York
are authorized or obligated by law to close.
"Certificate of Designation" means the certificate of designation
under which the Shares will be issued.
"Certificate of Incorporation" means the certificate of
incorporation of the Company.
"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" has the meaning set forth in Section 2.2(b)
of this Agreement.
"Code" means the Internal Revenue Code of 1986, as
amended.
"Commission" means the Securities and Exchange Commission or any
similar agency then having jurisdiction to enforce the Act.
"Common Stock Registration Rights Agreement" means the Common Stock
Registration Rights Agreement dated as of March 15, 1997 among the Company, the
Management Stockholders party thereto and the Initial Purchaser.
"Commonly Controlled Entity" has the meaning set forth in Section
3.1(z) of this Agreement.
5
<PAGE> 6
"Debenture Guarantees" means the guarantees of the Debentures and
the In-kind Debentures issued under the Debenture Indenture.
"Debenture Indenture" means the indenture dated as of March 15, 1997
among the Company, the Guarantors and the Debenture Trustee.
"Debenture Trustee" means United States Trust Company of New York,
as trustee under the Debenture Indenture.
"Debentures" has the meaning set forth in Section 2.1 of this
Agreement.
"Default" means any event, act or condition which, with notice or
lapse of time or both, would constitute an Event of Default under the Indenture.
"Dividend Shares" has the meaning set forth in Section 3.1(l) of
this Agreement.
"Enforceability Exceptions" has the meaning set forth in Section
3.1(e).
"Environmental Law" has the meaning set forth in Section 3.1(hh) of
this Agreement.
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended.
"Event of Default" means any event defined as an Event of Default in
the Indenture.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the Commission thereunder.
"Exchange Guarantees" means the guarantees of the Exchange Notes
issued under the Indenture.
"Exchange Notes" has the meaning set forth in the Notes Registration
Rights Agreement.
6
<PAGE> 7
"Exchange Preferred Stock" has the meaning set forth in the
Preferred Stock Registration Rights Agreement.
"Final Memorandum" has the meaning set forth in Section 2.1 of this
Agreement.
"Foreign Plans" has the meaning set forth in Section 3.1(z) of this
Agreement.
"Guarantees" means the guarantees of the Notes issued under the
Indenture.
"Guarantors" means Spanish Broadcasting System, Inc., a New Jersey
corporation, Spanish Broadcasting System of California, Inc., Spanish
Broadcasting System of Florida, Inc., Spanish Broadcasting System Network, Inc.,
SBS Promotions, Inc., Alarcon Holdings, Inc. and SBS of Greater New York, Inc.
"Indemnified Party" has the meaning set forth in Section 7.1(c) of
this Agreement.
"Indemnifying Party" has the meaning set forth in Section 7.1(c) of
this Agreement.
"Indenture" means the indenture dated as of March 15, 1997 by and
among the Company, the Guarantors and the Trustee under which the Notes will be
issued.
"In-kind Debentures" has the meaning set forth in Section 3.1(q) of
this Agreement.
"Initial Purchaser" has the meaning set forth in the introductory
paragraph of this Agreement.
"Lien" means, with respect to any property or assets of any Person,
any mortgage or deed of trust, pledge, hypothecation, assignment, deposit
arrangement, security interest, lien, charge, easement, encumbrance, preference,
priority or other security agreement or preferential arrangement of any kind or
nature whatsoever on or with respect to such property or assets, conditional
sales, or other title retention agreement having substantially the same economic
effect as any of the foregoing).
7
<PAGE> 8
"Material Adverse Effect" means, with respect to the Company and its
Subsidiaries, a material adverse effect on the business, condition (financial or
otherwise), results of operations or prospects of the Company and its
Subsidiaries, taken as a whole, or a material adverse effect on the ability of
the Company or a Guarantor to perform its obligations under the Basic Documents
to which it is a party, including this Agreement.
"Memoranda" has the meaning set forth in Section 2.1 of this
Agreement.
"Notes" means the $75,000,000 aggregate principal amount of 11%
Senior Notes due 2004 of the Company to be issued under the Indenture.
"Notes Registration Rights Agreement" means the Notes Registration
Rights Agreement dated as of March 15, 1997 by and among the Company, the
Guarantors and the Initial Purchaser.
"Offering Materials" has the meaning provided therefor in Section
7.1(a) of this Agreement.
"Person" means any individual, corporation, limited liability
company, partnership, joint venture, incorporated or unincorporated association,
joint-stock company, trust, government (or an agency or political subdivision
thereof) or other entity of any kind.
"PORTAL" means the Private Offerings, Resales and Trading through
Automated Linkages Market.
"Preferred Stock Registration Rights Agreement" means the Preferred
Stock Registration Rights Agreement dated as of March 15, 1997 by and among the
Company, the Guarantors and the Initial Purchaser relating to the Shares, the
Debentures and the Debenture Guarantees.
"Preliminary Memorandum" has the meaning set forth in Section 2.1 of
this Agreement.
"Private Exchange Notes" has the meaning set forth in the Notes
Registration Rights Agreement.
8
<PAGE> 9
"Private Exchange Shares" has the meaning set forth in the Preferred
Stock Registration Rights Agreement.
"Proceeding" has the meaning set forth in Section 7.1(c) of this
Agreement.
"QIB" has the meaning set forth in Section 3.2 of this Agreement.
"Regulation S" has the meaning set forth in Section 3.1(ll) of this
Agreement.
"Securities" has the meaning set forth in Section 2.1 of this
Agreement.
"Shares" has the meaning set forth in Section 2.1 of this Agreement.
"State" means each of the states of the United States, the District
of Columbia and the Commonwealth of Puerto Rico.
"State Commission" means any agency of any State having jurisdiction
to enforce such State's securities laws.
"Subsidiaries" means, with respect to any Person, any corporation,
partnership, joint venture, association or other business entity, whether now
existing or hereafter organized or acquired, (i) in the case of a corporation,
of which more than 50% of the total voting power of the capital stock entitled
(without regard to the occurrence of any contingency) to vote in the election of
directors, officers or trustees thereof is held by such first-named Person or
any of its Subsidiaries; or (ii) in the case of a partnership, joint venture,
association or other business entity, with respect to which such first-named
Person or any of its Subsidiaries has the power to direct or cause the direction
of the management and policies of such entity by contract or otherwise or if in
accordance with generally accepted accounting principles such entity is
consolidated with the first-named Person for financial statement purposes;
provided, however, that Alarcon Investments, Inc., a New Jersey corporation,
shall not constitute a Subsidiary of the Company or of any Subsidiary of the
Company.
9
<PAGE> 10
"Supplement" has the meaning set forth in Section 2.1
of this Agreement.
"Taxes" has the meaning set forth in Section 3.1(cc) of this
Agreement.
"Time of Purchase" has the meaning set forth in Section 2.2(b) of
this Agreement.
"Trustee" means IBJ Schroder Bank & Trust Company, as trustee under
the Indenture.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as
amended, and the rules and regulations of the Commission thereunder.
"Unit Agent" means IBJ Schroder Bank & Trust Company, as Unit Agent
under the Unit Agreement.
"Unit Agreement" means the Unit Agreement dated as of March 15, 1997
between the Company and the IBJ Schroder Bank & Trust Company, as Unit Agent.
"Units" means the 175,000 Units issued under the Unit Agreement,
each Unit consisting of one Share and one Warrant.
"Voting Rights Triggering Event" means any event defined as a Voting
Rights Triggering Event under the Certificate of Designation.
"Warrant Agent" means IBJ Schroder Bank & Trust Company, as Warrant
Agent under the Warrant Agreement.
"Warrant Agreement" means the Warrant Agreement dated as of March
15, 1997 between the Company and the Warrant Agent.
"Warrants" means the 175,000 warrants, each to purchase .428 shares
Class A Common Stock, to be issued under the Warrant Agreement.
Section 1.2. Accounting Terms; Financial Statements. All accounting
terms used herein not expressly defined in this Agreement shall have the
respective meanings given to them in
10
<PAGE> 11
accordance with generally accepted accounting principles in the United States as
the same may be in effect from time to time.
ARTICLE II
ISSUE OF SECURITIES; PURCHASE AND SALE
OF SECURITIES; RIGHTS OF HOLDERS OF SECURITIES;
_________OFFERING BY INITIAL PURCHASER
Section 2.1. Issue of Securities. The Company has authorized the
issuance of (a) $75,000,000 aggregate principal amount of Notes and (b) 175,000
Units, consisting of 175,000 shares of 14-1/4% Senior Exchangeable Preferred
Stock, par value $.01 per share (the "Shares"), and 175,000 Warrants. The Shares
are exchangeable, at the option of the Company, in whole or in part, for the
Company's 14-1/4% Exchange Debentures due 2005 (the "Debentures") on any
dividend payment date. The Debentures are to be issued under the Debenture
Indenture. The Notes, the Units, the Shares, the Guarantees and the Warrants are
referred to herein as the "Securities."
The Securities have not been registered under the Act, and will be
offered and sold to the Initial Purchaser in reliance on exemptions therefrom.
In connection with the sale of the Securities, the Company has
prepared a preliminary offering memorandum dated March 3, 1997 (including the
information incorporated by reference therein, the "Preliminary Memorandum") and
prepared a final offering memorandum dated March 24, 1997 (including the
information incorporated by reference therein, the "Final Memorandum" and,
together with the Preliminary Memorandum, the "Memoranda") setting forth or
including a description of the terms of the Securities and the Debentures, a
description of the Company and any material developments relating to the Company
occurring after the date of the most recent financial statements included
therein.
Section 2.2. Purchase, Sale and Delivery of Securities.
(a) On the basis of the representations, warranties,
agreements and covenants herein contained and subject to the terms
and conditions herein set forth, the Company agrees that it will
sell to the Initial Purchaser, and the Initial
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<PAGE> 12
Purchaser agrees that it will purchase from the Company at the Time
of Purchase (i) the Notes at a purchase price of $970 per $1,000
principal amount thereof and (ii) the Units at a price of $960 per
Unit.
(b) The purchase, sale and delivery of the Securities will
take place at a closing (the "Closing") at the offices of Cahill
Gordon & Reindel, 80 Pine Street, New York, New York, at 9:00 A.M.,
New York time, on March 27, 1997, or such later date and time, if
any, as the Initial Purchaser and the Company shall agree. The time
at which such Closing (and the concurrent closing of the
Acquisitions, the Refinancing and the Consent Solicitation (each as
defined in the Final Memorandum)) is concluded is herein called the
"Time of Purchase."
(c) Certificates in definitive form for the Securities that
the Initial Purchaser has agreed to purchase hereunder, and in such
denominations and registered in such name or names as the Initial
Purchaser requests upon notice to the Company at least 48 hours
prior to the Closing, shall be delivered by or on behalf of the
Company to the Initial Purchaser, against payment by or on behalf of
the Initial Purchaser of the purchase price therefor by wire
transfer of immediately available funds wired in accordance with the
written instructions of the Company. The Company will make such
certificates for the Securities available for checking and packaging
by the Initial Purchaser at the offices of the Initial Purchaser, or
such other place as the Initial Purchaser may designate, at least 24
hours prior to the Closing.
Section 2.3. Registration Rights of Holders of Securities. The
Initial Purchaser and its direct and indirect transferees of (a) the Notes will
have such rights with respect to the registration of the Notes and Exchange
Notes under the Act as set forth in the Notes Registration Rights Agreement,
(ii) the Shares will have such rights with respect to the registration of the
Shares, the Exchange Preferred Stock and Debentures under the Act as set forth
in the Preferred Stock Registration Rights Agreement and (iii) the Warrants will
have such rights with respect to the registration of the Class A Common Stock
issuable upon exercise of the Warrants as set forth in the Common Stock
Registration Rights Agreement.
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<PAGE> 13
Section 2.4. Offering by the Initial Purchaser. The Initial
Purchaser proposes to make an offering of the Securities at the prices and upon
the terms set forth in the Final Memorandum and solely to the persons described
in Section 3.2(c) hereof, as soon as practicable after this Agreement is entered
into and as in the judgment of the Initial Purchaser is advisable.
ARTICLE III
REPRESENTATIONS AND WARRANTIES; RESALE OF SECURITIES
Section 3.1. Representations and Warranties of the Company and the
Guarantors. The Company and the Guarantors jointly and severally represent and
warrant to and agree with the Initial Purchaser as follows:
(a) The Final Memorandum, as of its date and at the Time of
Purchase, will not contain any untrue statement of a material fact
or omit to state a material fact necessary to make the statements
therein, in the light of the circumstances under which they were
made, not misleading, except that the representations and warranties
set forth in this Section 3.1(a) do not apply to statements or
omissions made in reliance upon and in conformity with information
relating to the Initial Purchaser furnished to the Company or a
Guarantor in writing by the Initial Purchaser expressly for use in
the Final Memorandum or any amendment or supplement thereto or
relating to the manner of sale of the Securities by the Initial
Purchaser.
(b) The consolidated financial statements of the Company
included or incorporated by reference in the Final Memorandum
present fairly the consolidated financial position, results of
operations and cash flows of the Company and, its consolidated
Subsidiaries at the dates and for the periods to which they relate
(as applicable) and have been prepared in accordance with generally
accepted accounting principles applied on a consistent basis, except
as otherwise stated therein. To the knowledge of the Company, the
financial statements of New Age Broadcasting, Inc. ("New Age")
included in the Final Memorandum present fairly the financial
position, results of operations and
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<PAGE> 14
cash flow of New Age at the dates and for the periods to which they
relate (as applicable) and have been prepared in accordance with
generally accepted accounting principles, applied on a consistent
basis, except as otherwise stated therein. To the knowledge of the
Company, the combined financial statements of New Age and the
Seventies Broadcasting Corporation ("Seventies") included in the
Final Memorandum present fairly the financial position, results of
operations and cash flow of New Age and Seventies at the dates and
for the periods to which they relate (as applicable) and have been
prepared in accordance with generally accepted accounting principles
applied on a consistent basis, except as otherwise stated therein.
To the knowledge of the Company, the financial statements of Park
Radio of Greater New York, Inc. ("WPAT") to the extent included or
incorporated by reference in the Final Memorandum present fairly the
financial position, results of operations and cash flows of WPAT at
the dates and for the periods to which they relate (as applicable)
and have been prepared in accordance with generally accepted
accounting principles applied on a consistent basis, except as
otherwise stated therein. The summary and selected historical
financial data in the Final Memorandum present fairly in all
material respects the financial information shown therein and have
been prepared and compiled on a basis consistent with the applicable
financial statements included therein, except as otherwise stated
therein. Each of KPMG Peat Marwick LLP and Voynow, Bayard and
Company is an independent public accounting firm within the meaning
of the Act and the rules and regulations promulgated thereunder. The
pro forma financial statements (including the notes thereto) and the
summary pro forma financial information included or incorporated by
reference in the Final Memorandum have been prepared using
reasonable assumptions and in accordance with the applicable
requirements of the Act and include all adjustments necessary to
present fairly the pro forma financial information included within
the Final Memorandum at the respective dates and for the respective
periods indicated.
(c) The Company is a corporation duly organized, validly
existing and in good standing under the laws of the State of
Delaware. Each Subsidiary of the Company is a corporation duly
incorporated or organized, validly existing
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<PAGE> 15
and in good standing under the laws of the state or other
jurisdiction of its incorporation or organization. Each of the
Company and its Subsidiaries is duly qualified and in good standing
as a foreign corporation and is authorized to do business in each
jurisdiction in which the ownership or leasing of any property or
the character of its operations makes such qualification necessary,
except where the failure to be so qualified would not have a
Material Adverse Effect.
(d) As of the date hereof, the Company's authorized capital
stock consists of 5,000,000 shares of Class A Common Stock, 200,000
shares of Class B Common Stock and 500,000 shares of preferred
stock. As of the Time of Purchase (on a pro forma basis as described
in the Final Memorandum), 558,135 shares of Class A Common Stock,
48,533 shares of Class B Common Stock and 175,000 Shares will be
outstanding. All of the issued and outstanding shares of capital
stock of the Company and its Subsidiaries are validly issued, all of
such capital stock is fully paid and nonassessable and none of such
shares or interests were issued in violation of any preemptive or
similar rights. The Company has no Subsidiaries other than the
Guarantors. Except as set forth in the Final Memorandum, at the Time
of Purchase (i) all of the capital stock of each Subsidiary of the
Company is owned directly by the Company or another Subsidiary of
the Company, free and clear of any Liens, (ii) there are no
outstanding subscriptions, options, warrants, rights, convertible
securities or other binding agreements or commitments of any
character obligating the Company or its Subsidiaries to issue any
securities and (iii) there is no agreement, understanding or
arrangement among the Company or its Subsidiaries and their
respective stockholders or any other Person relating to the
ownership or disposition of any capital stock in the Company or any
of its Subsidiaries, the election of directors of the Company or any
of its Subsidiaries or the governance of the Company's or any of its
Subsidiaries' affairs, and such agreements, arrangements or
understandings will not be breached or violated as a result of the
execution and delivery of, or the consummation of the transactions
contemplated by, this Agreement and the other Basic Documents.
(e) This Agreement has been duly authorized, executed and
delivered by each of the Company and the Guarantors and
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<PAGE> 16
(assuming the due authorization, execution and delivery by the
Initial Purchaser) is a valid and legally binding agreement of each
of the Company and the Guarantors, enforceable in accordance with
its terms except (i) that the enforcement hereof may be subject to
bankruptcy, insolvency, reorganization, fraudulent conveyance,
moratorium or other similar laws now or hereafter in effect relating
to creditors' rights generally, and to general principles of equity
and the discretion of the court before which any proceeding therefor
may be brought (the "Enforceability Exceptions") and (ii) as any
rights to indemnity or contribution hereunder may be limited by
federal and state securities laws and public policy considerations.
(f) The Indenture has been duly authorized by each of the
Company and the Guarantors and, when duly executed and delivered by
each of the Company and the Guarantors (assuming the due
authorization, execution and delivery by the Trustee), will
constitute a valid and legally binding agreement of each of the
Company and the Guarantors, enforceable in accordance with its
terms, subject to the Enforceability Exceptions.
(g) The Notes and the Guarantees have been duly authorized by
the Company and the Guarantors, respectively, and, when issued and
delivered by the Company and the Guarantors against payment therefor
by the Initial Purchaser in accordance with the terms of this
Agreement (and, in the case of the Notes, assuming the due
authentication thereof by the Trustee in accordance with the
Indenture), will constitute valid and binding obligations of the
Company and the Guarantors, respectively, enforceable in accordance
with their respective terms, subject to the Enforceability
Exceptions. The Exchange Notes and Private Exchange Notes have been
duly authorized by the Company and, when executed, issued and
delivered by the Company in accordance with the terms of the
Indenture and the Exchange Offer contemplated by the Notes
Registration Rights Agreement (and assuming the due authentication
thereof by the Trustee in accordance with the Indenture), will
constitute valid and binding obligations of the Company, enforceable
in accordance with their respective terms, subject to the
Enforceability Exceptions.
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<PAGE> 17
(h) The Unit Agreement has been duly authorized by the Company
and, when executed and delivered by the Company (assuming the due
authorization, execution and delivery by the Unit Agent), will
constitute a valid and legally binding agreement of the Company,
enforceable in accordance with its terms, subject to the
Enforceability Exceptions.
(i) The Units have been duly authorized by the Company and,
when issued and delivered by the Company against payment therefor by
the Initial Purchaser in accordance with the terms of this Agreement
(assuming due authentication, execution and delivery thereof by the
Unit Agent in accordance with the Unit Agreement), will constitute a
valid and binding obligation of the Company, enforceable against the
Company in accordance with its terms, subject to the Enforceability
Exceptions.
(j) The Warrant Agreement has been duly authorized by the
Company and, when executed and delivered by the Company (assuming
the due authorization, execution and delivery thereof by the Warrant
Agent), will constitute a valid and legally binding agreement of the
Company, enforceable in accordance with its terms, subject to the
Enforceability Exceptions.
(k) The Warrants have been duly authorized by the Company and,
when issued and delivered by the Company against payment therefor by
the Initial Purchaser in accordance with the terms of this Agreement
(assuming the due authentication thereof by the Warrant Agent in
accordance with the Warrant Agreement), will constitute valid and
legally binding obligations of the Company, enforceable in
accordance with their terms, subject to the Enforceability
Exceptions.
(l) The Certificate of Designation relating to the Shares and
any additional Shares issued as dividends in accordance with the
terms of the Certificate of Designation (the "Dividend Shares") has
been duly authorized by the Company. The Shares and the Dividend
Shares have been duly authorized and, when issued and delivered by
the Company against payment therefor in accordance with the
provisions of this Agreement, in the case of the Shares, and in
accordance with the terms of the Certificate of Designation,
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<PAGE> 18
in the case of the Dividend Shares, will be validly issued, fully
paid and nonassessable and free of any preemptive or similar rights;
the certificates for the Shares and the Dividend Shares are in due
and proper form; and the holders of such Shares and Dividend Shares
will not be subject to personal liability by reason of being such
holders. The Company has reserved for issuance, and duly authorized
the issuance of, the maximum number of Shares and Dividend Shares
issuable as dividends pursuant to the terms of the Certificate of
Designation. The Certificate of Incorporation of the Company, by
virtue of the Certificate of Designation, sets forth the rights,
preferences and priorities of the Shares and the Dividend Shares.
The Exchange Preferred Stock and the Private Exchange Preferred
Stock have been duly authorized and, when issued and delivered by
the Company in accordance with the provisions of the Exchange Offer
contemplated by the Preferred Stock Registration Rights Agreement,
will be validly issued, fully paid and nonassessable and free of any
preemptive or similar rights.
(m) The Debenture Indenture has been duly authorized by the
Company and, when executed and delivered by the Company (assuming
the due authorization, execution and delivery by the Debenture
Trustee), will constitute a valid and legally binding agreement of
the Company, enforceable against the Company in accordance with its
terms, subject to the Enforceability Exceptions.
(n) The Notes Registration Rights Agreement has been duly
authorized by each of the Company and the Guarantors and, when
executed and delivered by each of the Company and the Guarantors
(assuming due authorization, execution and delivery by the Initial
Purchaser), will constitute a valid and legally binding agreement of
each of the Company and the Guarantors, enforceable in accordance
with its terms, subject to the Enforceability Exceptions and as any
rights to indemnity or contribution thereunder may be limited by
federal and state securities laws and public policy considerations.
(o) The Common Stock Registration Rights Agreement has been
duly authorized by the Company and, when executed and delivered by
the Company (assuming due authorization,
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<PAGE> 19
execution and delivery by each other party thereto), will constitute
a valid and legally binding agreement of the Company, enforceable in
accordance with its terms, subject to the Enforceability Exceptions
and as any rights to indemnity or contribution thereunder may be
limited by federal and state securities laws and public policy
considerations.
(p) The Preferred Stock Registration Rights Agreement has been
duly authorized by each of the Company and the Guarantors and, when
executed and delivered by each of the Company and the Guarantors
(assuming the due authorization, execution and delivery by the
Initial Purchaser), will constitute a valid and legally binding
agreement of each of the Company and the Guarantors, enforceable in
accordance with its terms, subject to the Enforceability Exceptions
and as any rights to indemnity or contribution thereunder may be
limited by federal and state securities laws and public policy
considerations.
(q) The Debentures and any additional Debentures issued as
interest in accordance with the provisions of the Indenture (the
"In-kind Debentures") and the Debenture Guarantees have been duly
authorized by the Company and the Guarantors, respectively. The
Debentures and the In-kind Debentures and the Debenture Guarantees,
when executed by the Company and the Guarantors, respectively
(assuming, in the case of the Debenture and In-kind Debentures, due
authentication by the Debenture Trustee in accordance with the
Debenture Indenture) and delivered upon the exchange of the Shares
and/or the Dividend Shares, if any, in accordance with the
Certificate of Designation relating to the Shares and the Dividend
Shares in the case of the Exchange Debentures, or as interest on
outstanding Debentures in accordance with the Debenture Indenture,
in the case of the In-kind Debentures, will have been duly executed,
issued and delivered and will constitute valid and binding
obligations of the Company and the Guarantors, respectively,
enforceable in accordance with their respective terms, subject to
the Enforceability Exception.
(r) Immediately after the consummation of the transactions
contemplated by this Agreement (including the use of proceeds from
the sale of the Securities at the Time
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<PAGE> 20
of Purchase), the present fair saleable value of the assets of the
Company (on a consolidated basis) will exceed the sum of its stated
liabilities and identified contingent liabilities; the Company (on a
consolidated basis) will not be, after giving effect to the
execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated hereby (including the
use of proceeds from the sale of the Securities at the Time of
Purchase), (i) left with unreasonably small capital with which to
carry on its business as it is proposed to be conducted, (ii) unable
to pay its debts (contingent or otherwise) as they mature or (iii)
otherwise insolvent.
(s) Each of the Company and the Guarantors has all requisite
corporate power and authority to execute, deliver and perform its
obligations under each of the Basic Documents to which it is a party
and to consummate the transactions contemplated hereby and thereby.
(t) Subsequent to the date as of which information is given in
the Final Memorandum to the date hereof, except as contemplated in
the Final Memorandum, there has not been (i) any event or condition
that has had or that could reasonably be expected to have a Material
Adverse Effect, (ii) any transaction entered into by the Company or
any of its Subsidiaries that is material to the Company and its
Subsidiaries, taken as a whole, other than in the ordinary course of
business, or (iii) any dividend or distribution of any kind
declared, paid or made by the Company on its common stock.
(u) Except as set forth in the Final Memorandum, there is no
action, suit, investigation or proceeding, governmental or
otherwise, pending or, to the best knowledge of the Company,
threatened to which the Company or any of its Subsidiaries is or
would be a party or of which the properties or assets of the Company
or its Subsidiaries are or may be subject, that (i) seeks to
restrain, enjoin, prevent the consummation of or otherwise challenge
the issuance and sale of the Securities by the Company or any of the
other transactions contemplated by the Basic Documents, (ii)
questions the legality or validity of any such transactions or seeks
to recover damages or obtain other relief in connection with any
such transactions or (iii)
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could reasonably be expected to have a Material Adverse Effect.
(v) The execution, delivery and performance by the Company and
the Guarantors of the Basic Documents to which they are a party, the
issuance and sale by the Company and the Guarantors of the
Securities to be issued by them, the execution, delivery and
performance by the Company and the Guarantors of all other
agreements and instruments to be executed by them and delivered
pursuant hereto or thereto or in connection herewith or therewith or
in connection with any of the transactions contemplated hereby or
thereby, and compliance by the Company and the Guarantors with the
terms and provisions hereof and thereof, and consummation of the
other Transactions (as defined in the Final Memorandum) do not and
will not (i) violate any provision of any law, rule or regulation
(including, without limitation, Regulation G, T, U or X of the Board
of Governors of the Federal Reserve System), order, writ, judgment,
decree, determination or award presently in effect or in effect at
the Time of Purchase having applicability to the Company or any of
its Subsidiaries, (ii) assuming simultaneous consummation of the
Refinancing, conflict with or result in a breach of or constitute a
default under the certificate of incorporation or by-laws (or
similar organizational document) of the Company or any of its
Subsidiaries, or, as of the Time of Purchase, any indenture or loan
or credit agreement, or any other material agreement or instrument,
to which the Company or any of its Subsidiaries is a party or by
which the Company or any of its Subsidiaries or any of their
respective properties or assets may be bound or affected, or (iii)
result in, or require the creation or imposition of, any Lien upon
or with respect to any of the properties or assets now owned or
hereafter acquired by the Company or any of its Subsidiaries,
except, in each case, where such violation, conflict, default or
creation or imposition of any Lien would not (individually or in the
aggregate) be reasonably likely to have a Material Adverse Effect.
(w) Neither the Company nor any of its Subsidiaries is
currently or, after giving effect to the consummation of the
transactions contemplated by this Agreement and the other
Transactions, will be (i) in violation of its respective certificate
of incorporation or by-laws (or similar
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organizational document), (ii) in default (nor will an event occur
which with notice or passage of time or both would constitute such a
default) under or in violation of any indenture or loan or credit
agreement or any other material agreement or instrument to which it
is a party or by which it or any of its properties or assets may be
bound or affected, (iii) in violation of any order of any court,
arbitrator or governmental body, or (iv) in violation of or will
have violated any statute, rule or regulation of any governmental
authority, except in each case, which default or violation
(individually or in the aggregate) could not reasonably be expected
to (x) affect the legality, validity or enforceability of any of the
Basic Documents in any material respect or (y) have a Material
Adverse Effect.
(x) Except as set forth in the Final Memorandum, and assuming
the accuracy of the Initial Purchaser's representations and
warranties set forth in Section 3.2 hereof, and the due performance
by the Initial Purchaser of the covenants and agreements set forth
in Section 3.2 hereof, no authorization, consent, approval, license,
qualification or formal exemption from, nor any filing, declaration
or registration with, any court, governmental agency or regulatory
authority or any securities exchange is required in connection with
the execution, delivery or performance by the Company or any of the
Guarantors (to the extent they are a party thereto) of any of the
Basic Documents or consummation of any of the transactions
contemplated thereby or consummation of any of the other
Transactions, except (i) as may be required under state securities
or "blue sky" laws or the laws of any foreign jurisdiction, (ii)
such as have been obtained or made, (iii) as may be required under
the Act, the Exchange Act and the Trust Indenture Act in connection
with the performance of obligations under the Notes Registration
Rights Agreement, the Preferred Stock Registration Rights Agreement
and the Common Stock Registration Rights Agreement, (iv) as may be
required under the Exchange Act after the Time of Purchase or (v) as
would not (individually or in the aggregate) be reasonably likely to
have a Material Adverse Effect. All such authorizations, consents,
approvals, licenses, qualifications, exemptions, filings,
declarations and registrations set forth in the Final Memorandum
(other than as disclosed therein) which are required to have been
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obtained by the date hereof have been obtained or made, as the case
may be, and are in full force and effect and not the subject of any
pending or, to the knowledge of the Company, threatened attack by
appeal or direct proceeding or otherwise.
(y) The Company is not, and immediately after the Time of
Purchase will not be, an "investment company" or a company
"controlled" by an "investment company" within the meaning of the
Investment Company Act of 1940, as amended.
(z) The execution and delivery of this Agreement and the other
Basic Documents and the sale of the Securities to the Initial
Purchaser will not involve any non-exempt prohibited transaction
within the meaning of Section 406 of ERISA, or Section 4975 of the
Code on the part of the Company or any of its Subsidiaries. No
Reportable Event (as defined in Section 4043 of ERISA) has occurred
during the five-year period prior to the date on which this
representation is made or deemed made with respect to any Employee
Benefit Plan (as defined in Section 3(3) of ERISA), and the Company
and its Subsidiaries have complied in all material respects with the
applicable provisions of ERISA and the Code in connection with each
Employee Benefit Plan. The present value of all benefits vested
under each Employee Benefit Plan maintained by the Company or any
person or entity treated with the Company as a single employer under
Section 414 of ERISA (a "Commonly Controlled Entity") (based on the
current liability, interest rate and other assumptions used in
preparation of the plan's Form 5500 Annual Report) did not, as of
the last annual valuation date prior to the date on which this
representation is made or deemed made, exceed the value of the
assets of such plan allocable to such accrued benefits. Neither the
Company nor any Commonly Controlled Entity has had a complete or
partial withdrawal from any Multiemployer Plan (as defined in
ERISA), and neither the Company nor any Commonly Controlled Entity
would become subject to any liability under ERISA if the Company or
any such Commonly Controlled Entity were to withdraw completely from
all Multiemployer Plans as of the valuation date most closely
preceding the date on which such representation is made or deemed
made. No such Multiemployer Plan is in reorganization or insolvent.
There are no material liabilities of the Company or any Commonly
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Controlled Entity for post-retirement benefits to be provided to
their current and former employees under Plans which are welfare
benefit plans (as described in Section 3(1) of ERISA). To the best
of the Company's knowledge, the Company and its Subsidiaries are
substantially and in all material respects in compliance with all
applicable laws with respect to all employee benefit plans
maintained or contributed to in respect of employees other than
those employed in the United States ("Foreign Plans"). There are no
material unfunded liabilities in respect of the Foreign Plans.
(aa) The Company and each of its Subsidiaries have good and
valid title to, or valid and enforceable leasehold interests in, all
properties and assets identified in the Final Memorandum as owned or
leased, respectively, by each of them which are material to the
business of the Company and its Subsidiaries, taken as a whole, free
and clear of all Liens, except (i) such Liens as are described in
the Final Memorandum or (ii) Liens created in the ordinary course of
business which are Permitted Liens (as defined in the Indenture).
All of the leases material to the business of the Company or any of
its Subsidiaries and under which the Company or any of its
Subsidiaries, as the case may be, holds properties described in the
Final Memorandum, are valid and binding as leased by them, with such
exceptions as are not material and do not interfere with the use
made and proposed to be made of such properties by the Company or
any of its Subsidiaries, as the case may be.
(bb) No form of general solicitation or general advertising
was used by the Company, any of its Subsidiaries or any of their
respective representatives in connection with the offer and sale of
the Securities. Neither the Company, any of its Subsidiaries nor any
Person authorized to act for any of them has, either directly or
indirectly, sold or offered for sale any of the Securities, or
solicited any offers to buy any thereof from, or has otherwise
approached or negotiated in respect thereof with, any Person or
Persons other than with or through the Initial Purchaser; and the
Company agrees that neither it, any of its Subsidiaries nor any
Person acting on its or their behalf will sell or offer for sale any
Securities to, or solicit any offers to buy any Securities from, or
otherwise approach
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or negotiate in respect thereof with, any Person or Persons so as
thereby to bring the issuance or sale of any of the Securities
within the provisions of Section 5 of the Act.
(cc) All tax returns required to be filed by the Company or
any of its Subsidiaries in any jurisdiction (including foreign
jurisdictions) have been duly filed and all taxes, assessments, fees
and other charges including, without limitation, withholding taxes,
penalties, and interest ("Taxes") due or claimed to be due have been
paid, other than those Taxes being contested in good faith and for
which adequate reserves or accruals have been established in
accordance with generally accepted accounting principles, except
where the failure to file such returns or to pay such Taxes is not
reasonably likely to have, singly or in the aggregate, a Material
Adverse Effect. The Company knows of no actual or proposed
additional tax assessments for any fiscal period against the Company
or any of its Subsidiaries that, individually or in the aggregate,
is reasonably likely to have a Material Adverse Effect.
(dd) The Company and its Subsidiaries are the owners or
licensees of all trade names, unregistered trademarks and service
marks, brand names, patents, registered and unregistered copyrights,
registered trademarks and service marks, and all applications for
any of the foregoing, and all permits, grants and licenses or other
rights with respect thereto, the absence of which could reasonably
be expected to have a Material Adverse Effect. Except as set forth
in the Final Memorandum, neither the Company nor any of its
Subsidiaries has been charged with any material infringement of any
intangible property of the character described above or been
notified or advised of any material claim of any other Person
relating to any of the intangible property, which infringements or
claims (individually or in the aggregate) would be reasonably likely
to have a Material Adverse Effect.
(ee) The Notes, Guarantees, Indenture, Warrants, Warrant
Agreement, the Class A Common Stock, Shares, Certificate of
Designation, Debentures, Debenture Indenture, Debenture Guarantees,
Preferred Stock Registration Rights Agreement, Notes Registration
Rights Agreement and Common Stock Registration Rights Agreement
conform in all material
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respects to the descriptions thereof in the Final Memorandum.
(ff) Assuming the accuracy of the Initial Purchaser's
representations and warranties set forth in Section 3.2 hereof, and
the due performance by the Initial Purchaser of the covenants and
agreements set forth in Section 3.2 hereof, the offer and sale of
the Securities to the Initial Purchaser in the manner contemplated
by this Agreement and the Memorandum does not require registration
under the Act.
(gg) Except as described in the Final Memorandum, each of the
Company and its Subsidiaries is in compliance with all federal,
state, local and foreign laws, and any rules, regulations, orders,
decrees, judgments or injunctions issued or promulgated thereunder
relating to pollution and protection of public and employee health
and the environment ("Environmental Law") and with the terms and
conditions of any permit, license or approval required thereunder in
connection with the ownership, operation or use of its business,
property and assets where the failure to be in such compliance could
reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect; except as disclosed in the Final
Memorandum, and to the knowledge of the Company, none of the Company
or any of its Subsidiaries is subject to any liability, absolute or
contingent, under any Environmental Law which liability would,
individually or in the aggregate, be reasonably likely to result in
a Material Adverse Effect; except as disclosed in the Final
Memorandum, there is no civil, criminal or administrative action,
suit, demand, hearing, notice of violation or deficiency,
investigation, proceeding or notice of potential responsibility or
liability or demand letter or request for information pending or, to
the knowledge of the Company, threatened against the Company or any
of its Subsidiaries under any Environmental Law which, if determined
adversely to the Company or any such Subsidiary, would, individually
or in the aggregate, be reasonably likely to result in a Material
Adverse Effect.
(hh) Except as set forth in the Final Memorandum, there is no
strike, labor dispute, slowdown or work stoppage with the employees
of the Company or any of its Subsidiaries
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which is pending or, to the best knowledge of the Company,
threatened.
(ii) Each of the Company and its Subsidiaries carries
insurance (including self insurance) in such amounts and covering
such risks as in its reasonable determination is adequate for the
conduct of its business and the value of its properties.
(jj) No securities of the Company or any of its Subsidiaries
are of the same class (within the meaning of Rule 144A under the
Act) as any of the Securities and listed on a national securities
exchange registered under Section 6 of the Exchange Act, or quoted
in a U.S. automated inter-dealer quotation system.
(kk) None of the Company or its Subsidiaries has taken, nor
will any of them take, directly or indirectly, any action designed
to, or that might be reasonably expected to, cause or result in
stabilization or manipulation of the price of any of the Securities.
(ll) None of the Company, its Subsidiaries, any of their
respective Affiliates or any person acting on its or their behalf
(other than the Initial Purchaser) has engaged in any directed
selling efforts (as that term is defined in Regulation S under the
Act ("Regulation S") with respect to any of the Securities and the
Company, its Subsidiaries and their respective Affiliates and any
person acting on its or their behalf (other than the Initial
Purchaser) have acted in accordance with the offering restrictions
requirement of Regulation S.
(mm) The statistical and market-related data included in the
Final Memorandum are based on or derived from sources which the
Company believes to be reliable and accurate in all material
respects or represents the Company's good faith estimates that are
made on the basis of data derived from such sources.
(nn) Except as stated in the Final Memorandum, the Company
does not know of any claims for services, either in the nature of a
finder's fee or financial advisory fee, with
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respect to the offering of the Securities and the transactions
contemplated by the Final Memorandum.
(oo) No securities of the same class as any of the Securities
have been offered or issued and sold by the Company within the
six-month period immediately prior to the date hereof.
Section 3.2. Resale of Shares. The Initial Purchaser represents and
warrants that it is a "qualified institutional buyer" as defined in Rule 144A
under the Act ("QIB"). The Initial Purchaser agrees with the Company that (a) it
has not and will not, directly or indirectly, solicit offers for, or offer or
sell, any of the Securities by any form of general solicitation or general
advertising (as those terms are used in Regulation D under the Act) or in any
manner involving a public offering within the meaning of Section 4(2) of the
Act; (b) has not and will not, directly or indirectly, engage in any "directed
selling efforts" (as defined in Regulation S under the Act); and (c) it has and
will solicit offers for the Securities only from, and will offer the Securities
only to (A) in the case of offers inside the United States, (i) Persons whom the
Initial Purchaser reasonably believes to be QIBs or, if any such Person is
buying for one or more institutional accounts for which such Person is acting as
fiduciary or agent, only when such Person has represented to the Initial
Purchaser that each such account is a QIB, to whom notice has been given that
such sale or delivery is being made in reliance on Rule 144A, and, in each case,
in transactions under Rule 144A or (ii) a limited number of other institutional
investors reasonably believed by the Initial Purchaser to be "Accredited
Investors" (as defined in Rule 501(a)(1), (2), (3) or (7) of the Act) that,
prior to their purchase of any of the Securities, deliver to the Initial
Purchaser a letter containing the representations and agreements set forth in
Annex A to the Final Memorandum and (B) in the case of offers outside the United
States, to Persons other than U.S. Persons ("foreign purchasers," which term
shall include dealers or other professional fiduciaries in the United States
acting on a discretionary basis for foreign beneficial owners (other than an
estate or trust)); provided, however, that, in the case of this clause (B), in
purchasing such Securities such Persons are deemed to have represented and
agreed as provided under the caption "Notice to Investors" contained in the
Final Memorandum.
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ARTICLE IV
CONDITIONS PRECEDENT TO CLOSING
Section 4.1. Conditions Precedent to Obligations of the Initial
Purchaser. The obligation of the Initial Purchaser to purchase the Securities to
be purchased by it hereunder is subject to the satisfaction of the following
conditions:
(a) The Initial Purchaser shall have received an opinion,
addressed to the Initial Purchaser in form and substance
satisfactory to counsel to the Initial Purchaser and dated the Time
of Purchase, from each of (i) Kaye, Scholer, Fierman, Hayes &
Handler LLP, counsel to the Company, in substantially the form set
forth in Exhibit 1 hereto, and (ii) Lowenthal, Landau, Fischer &
Bring, special counsel to the Company, in substantially the form set
forth in Exhibit 2 hereto.
(b) The Initial Purchaser shall have received an opinion,
addressed to the Initial Purchaser in form and substance
satisfactory to the Initial Purchaser and dated the Time of
Purchase, of Cahill Gordon & Reindel, counsel to the Initial
Purchaser, as to such matters as the Initial Purchaser shall
reasonably request.
In rendering such opinions in accordance with Sections 4.1(a)
and (b), each such counsel may rely as to factual matters upon
certificates or other documents furnished by officers and directors
of the Company and representations of the Initial Purchaser and by
government officials, and upon such other documents as such counsel
deem appropriate as a basis for their opinion. Each such counsel may
specify the jurisdictions in which it is admitted to practice and
that it is not admitted to practice in any other jurisdiction or an
expert in the law of any other jurisdiction. To the extent such
opinion concerns the laws of any other such jurisdiction such
counsel may rely upon the opinion of counsel (satisfactory to the
Initial Purchaser) admitted to practice in such jurisdiction. Any
opinion relied upon by such counsel as aforesaid shall be delivered
to the Initial Purchaser together with the opinion of such counsel,
which
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opinion shall state that such counsel believes that their and the
Initial Purchaser's reliance thereon is justified.
(c) The Initial Purchaser shall have received from KPMG Peat
Marwick LLP a comfort letter or letters dated the date hereof and
the Time of Purchase in form and substance satisfactory to counsel
to the Initial Purchaser.
(d) The representations and warranties made by the Company
herein shall be true and correct in all material respects (except
for changes expressly provided for in this Agreement) on and as of
the Time of Purchase with the same effect as though such
representations and warranties had been made on and as of the Time
of Purchase; the Company and the Guarantors shall have complied in
all material respects with all agreements as set forth in or
contemplated hereunder and in the other Basic Documents required to
be performed by the Company at or prior to the Time of Purchase.
(e) Subsequent to the date of the Final Memorandum, (i) there
shall not have been any change which has had or could be reasonably
likely to have a Material Adverse Effect, and (ii) the Company and
its Subsidiaries shall have conducted their respective businesses
only in the ordinary course.
(f) At the Time of Purchase, after giving effect to the
consummation of the transactions contemplated by this Agreement and
the other Basic Documents and the other Transactions, there shall
exist no Default or Event of Default and no Voting Rights Triggering
Event.
(g) The purchase of and payment for the Securities by the
Initial Purchaser hereunder shall not be prohibited or enjoined
(temporarily or permanently) by any applicable law or governmental
regulation (including, without limitation, Regulation G, T, U or X
of the Board of Governors of the Federal Reserve System).
(h) At the Time of Purchase, the Initial Purchaser shall have
received a certificate, dated the Time of Purchase, from the Company
stating that the conditions specified in Sections 4.1(d), (e), (f)
and (k) have been satisfied or duly waived at the Time of Purchase.
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(i) Each of the Basic Documents shall be satisfactory in form
and substance to the Initial Purchaser and shall have been executed
and delivered by all the respective parties thereto and shall be in
full force and effect.
(j) All proceedings taken in connection with the issuance of
the Securities and the transactions contemplated by this Agreement,
the other Basic Documents and all documents and papers relating
thereto shall be satisfactory to the Initial Purchaser and counsel
to the Initial Purchaser. The Initial Purchaser and counsel to the
Initial Purchaser shall have received copies of such papers and
documents as they may reasonably request in connection therewith,
all in form and substance reasonably satisfactory to them.
(k) The issuance and sale of the Securities hereunder shall
not have been enjoined (temporarily or permanently) at the Time of
Purchase.
(l) There shall not have been any announcement by any
"nationally recognized statistical rating organization," as defined
for purposes of Rule 436(g) under the Act, that (A) it is
downgrading its rating assigned to any debt securities of the
Company, or (B) it is reviewing its rating assigned to any debt
securities of the Company with a view to possible downgrading, or
with negative implications, or direction not determined.
(m) The Initial Purchaser shall have sold the Securities in
accordance with the provisions of Section 3.2 hereof.
(n) The Company shall have received the Requisite Consents (as
defined in Supplement No. 1 to Consent Solicitation Statement of the
Company dated March 14, 1997 (the "Consent Solicitation Statement"))
and the Proposed Amendments (as defined in Consent Solicitation
Statement) shall have become operative.
(o) The Acquisitions (as defined in the Final Memorandum)
shall be consummated on the terms set forth in the respective
acquisition agreements as in effect of the date hereof.
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(p) The Company shall redeem or repurchase all of its
outstanding 12 1/4% Senior Secured Notes due 2001 and all of its
outstanding shares of Senior Exchangeable Preferred Stock, Series A,
at the Time of Purchase.
On or before the Time of Purchase, the Initial Purchaser and counsel
to the Initial Purchaser shall have received such further documents, opinions,
certificates and schedules or other instruments relating to the business,
corporate, legal and financial affairs of the Company and its Subsidiaries as
they may reasonably request.
ARTICLE V
COVENANTS
Section 5.1. Covenants. The Company and the Guarantors, as the
case may be, covenant and agree with the Initial Purchaser that:
(a) The Company will not amend or supplement the Final
Memorandum or any amendment or supplement thereto of which the
Initial Purchaser shall not previously have been advised and
furnished a copy for a reasonable period of time prior to the
proposed amendment or supplement and as to which the Initial
Purchaser shall not have given its consent, which consent shall not
be unreasonably withheld. The Company will promptly, upon the
reasonable request of the Initial Purchaser or counsel to the
Initial Purchaser, make any amendments or supplements to the
Preliminary Memorandum or the Final Memorandum that may be necessary
or advisable in the opinion of the Initial Purchaser or counsel to
the Initial Purchaser in connection with the resale of the
Securities by the Initial Purchaser.
(b) The Company will cooperate with the Initial Purchaser in
arranging for the qualification of the Securities for offering and
sale under the securities or "blue sky" laws of such jurisdictions
as the Initial Purchaser may designate and will continue such
qualifications in effect for as long as may be reasonably necessary
to complete the resale of the Securities; provided, however, that in
connection therewith, the Company
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shall not be required to qualify as a foreign corporation or to
execute a general consent to service of process in any jurisdiction
or subject itself to service of process in suits or taxation in
excess of a nominal dollar amount in any such jurisdiction where it
is not then so subject.
(c) If, at any time prior to the completion of the
distribution by the Initial Purchaser of the Securities, any event
occurs or information becomes known as a result of which the Final
Memorandum as then amended or supplemented would include any untrue
statement of a material fact, or omit to state a material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or if for
any other reason it is necessary at any time to amend or supplement
the Final Memorandum to comply with applicable law, the Company will
promptly notify the Initial Purchaser thereof (who thereafter will
not use such Final Memorandum until appropriately amended or
supplemented) and will prepare, at the expense of the Company, an
amendment or supplement to the Final Memorandum that corrects such
statement or omission or effects such compliance; provided, however,
that the Company's obligation hereunder shall not be applicable to
the extent resale by the Initial Purchaser may be accomplished
pursuant to a registration statement filed by the Company pursuant
to the Notes Registration Rights Agreement or Preferred Stock
Registration Rights Agreement.
(d) The Company will, without charge, provide to the Initial
Purchaser and to counsel to the Initial Purchaser as many copies of
the Preliminary Memorandum and the Final Memorandum or any amendment
or supplement thereto as the Initial Purchaser may reasonably
request.
(e) The Company will apply the net proceeds from the sale of
the Securities as set forth under "Use of Proceeds" in the Final
Memorandum.
(f) For and during the period ending on the date no Securities
are outstanding, the Company will furnish to the Initial Purchaser
copies of all reports and other communications (financial or
otherwise) furnished by the Company to the holders of its securities
generally and, promptly after available, copies of any reports or
financial
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statements furnished to or filed by the Company with the Commission
or any national securities exchange on which any class of securities
of the Company may be listed.
(g) Prior to the Time of Purchase, the Company will furnish to
the Initial Purchaser, as soon as they have been prepared, a copy of
any unaudited interim financial statements of the Company for any
period subsequent to the period covered by the most recent financial
statements appearing in the Final Memorandum.
(h) None of the Company or any of its Affiliates will sell,
offer for sale or solicit offers to buy or otherwise negotiate in
respect of any "security" (as defined in the Act) which could be
integrated with the sale of any of the Securities in a manner which
would require the registration under the Act of any of the
Securities.
(i) The Company will not, and will not permit any of its
Subsidiaries to, solicit any offer to buy or offer to sell the
Securities by means of any form of general solicitation or general
advertising (as those terms are used in Regulation D under the Act)
or in any manner involving a public offering within the meaning of
Section 4(2) of the Act.
(j) For so long as any of the Securities remain outstanding
and are "restricted securities" within the meaning of Rule 144(a)(3)
under the Act and not salable in full under Rule 144 under the Act
(or any successor provision), the Company will make available, upon
request, to any seller of such Securities the information specified
in Rule 144A(d)(4) under the Act, unless the Company is then subject
to Section 13 or 15(d) of the Exchange Act.
(k) The Company will use its best efforts to (i) permit the
Securities to be included for quotation on PORTAL and (ii) permit
the Securities to be eligible for clearance and settlement through
The Depository Trust Company.
(l) The Company and the Guarantors will use their best efforts
to do and perform all things required to be done and performed by
them under this Agreement and the other Basic Documents prior to or
after the Closing and to satisfy all
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conditions precedent on their part to the obligations of the Initial
Purchaser to purchase and accept delivery of the Securities.
ARTICLE VI
FEES
Section 6.1. Costs, Expenses and Taxes. The Company agrees to pay
all costs and expenses incident to the performance of its obligations under this
Agreement, whether or not the transactions contemplated herein are consummated
or this Agreement is terminated pursuant to Section 8.2 hereof, including, but
not limited to, all costs and expenses incident to (i) its negotiation,
preparation, printing, typing, reproduction, execution and delivery of this
Agreement and each of the other Basic Documents, any amendment or supplement to
or modification of any of the foregoing and any and all other documents
furnished pursuant hereto or thereto or in connection herewith or therewith,
(ii) any costs of printing the Preliminary Memorandum and the Final Memorandum
and any amendment or supplement thereto, any other marketing related materials
and any "blue sky" memoranda (which shall include the reasonable disbursements
of counsel to the Initial Purchaser in respect thereof), (iii) all arrangements
relating to the delivery to the Initial Purchaser of copies of the foregoing
documents, (iv) the fees and disbursements of the counsel, the accountants and
any other experts or advisors retained by the Company, (v) the fees and expenses
of counsel to the Initial Purchaser, (vi) preparation (including printing),
issuance and delivery to the Initial Purchaser of the Securities, including
transfer agent fees, (vii) the qualification of the Securities under state
securities and "blue sky" laws, including filing fees and reasonable fees and
disbursements of counsel to the Initial Purchaser relating thereto, (viii) its
respective expenses and the cost of any private or chartered jets in connection
with any meetings with prospective investors in the Securities, (ix) fees and
expenses of the Trustee, Debenture Trustee, Warrant Agent, Unit Agent and
transfer agent for the Shares including fees and expenses of counsel to the
Trustee, Debenture Trustee, Warrant Agent, Unit Agent and transfer agent for the
Shares, (x) all expenses and listing fees incurred in connection with the
application for quotation of the Securities on PORTAL, (xi) any fees charged by
investment rating agencies for the rating of the Securities and
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(xii) except as limited by Article VII, all costs and expenses (including,
without limitation, reasonable attorneys' fees and expenses), if any, in
connection with the enforcement of this Agreement, the Securities or any other
agreement furnished pursuant hereto or thereto or in connection herewith or
therewith. In addition, the Company shall pay any and all stamp, transfer and
other similar taxes (but excluding any income, franchise, personal property, ad
valorem or gross receipts taxes) payable or determined to be payable in
connection with the execution and delivery of this Agreement, any of the other
Basic Documents or the issuance of the Securities, and shall save and hold the
Initial Purchaser harmless from and against any and all liabilities with respect
to or resulting from any delay in paying, or omission to pay, such taxes (other
than if such delay is caused by the Initial Purchaser).
ARTICLE VII
INDEMNITY
Section 7.1. Indemnity.
(a) Indemnification by the Company and the Guarantors. The
Company and the Guarantors agree and covenant to jointly and
severally hold harmless and indemnify the Initial Purchaser and any
director, officer, employee, agent or controlling Person of any of
the foregoing from and against any losses, claims, damages,
liabilities and expenses (including expenses of investigation) to
which the Initial Purchaser and such Affiliates of the Initial
Purchaser may become subject arising out of or based upon any untrue
statement or alleged untrue statement of any material fact contained
in the Memoranda and any amendments or supplements thereto, any
documents filed with the Commission or any State Commission
(collectively, the "Offering Materials") or arising out of or based
upon the omission or alleged omission to state in any of the
Offering Materials a material fact required to be stated therein or
necessary to make the statements therein not misleading; provided,
however, that the Company and the Guarantors shall not be liable
under this paragraph (a) to the extent that such losses, claims,
damages or liabilities arose out of or are based upon an untrue
statement or omission or alleged untrue statement or omission made
in any of the documents referred
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to in this paragraph (a) in reliance upon and in conformity with the
information relating to the Initial Purchaser furnished in writing
by the Initial Purchaser for inclusion therein (or for a breach by
the Initial Purchaser of any representation or warranty contained in
this Agreement); provided, further, that the Company and the
Guarantors shall not be liable under this paragraph (a) to the
extent that such losses, claims, damages or liabilities arose out of
or are based upon an untrue statement or omission or alleged untrue
statement or omission made in any Memoranda that is corrected in the
Final Memorandum (or any amendment or supplement thereto) if the
person asserting such loss, claim, damage or liability purchased
Shares from the Initial Purchaser in reliance on such Memorandum but
was not given the Final Memorandum (or any amendment or supplement
thereto) on or prior to the confirmation of the sale of such Shares.
The Company and the Guarantors further agree jointly and severally
to reimburse the Initial Purchaser for any reasonable legal and
other expenses as they are incurred by it in connection with
investigating, preparing to defend or defending any lawsuits, claims
or other proceedings or investigations for which indemnification may
be sought under this paragraph (a); provided that if the Company and
the Guarantors reimburse the Initial Purchaser hereunder for any
expenses incurred in connection with a lawsuit, claim or other
proceeding for which indemnification is sought, the Initial
Purchaser hereby agrees to refund such reimbursement of expenses to
the extent that the losses, claims, damages or liabilities arise out
of or are based upon an untrue statement or omission or alleged
untrue statement or omission made in any of the documents referred
to in this paragraph (a) in reliance upon and in conformity with the
information relating to the Initial Purchaser furnished in writing
by the Initial Purchaser for inclusion therein (or for a breach by
the Initial Purchaser of any representation or warranty contained in
this Agreement). The Company and the Guarantors further agree that
the indemnification, contribution and reimbursement commitments set
forth in this Article VII shall apply whether or not the Initial
Purchaser is a formal party to any such lawsuits, claims or other
proceedings. The indemnity, contribution and expense reimbursement
obligations of the Company and the Guarantors under this Article VII
shall be in addition to any liability the Company may otherwise
have.
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(b) Indemnification by the Initial Purchaser. The Initial
Purchaser agrees and covenants to hold harmless and indemnify the
Company and the Guarantors and any director, officer, employee,
agent or controlling Person of any of the foregoing from and against
any losses, claims, damages, liabilities and expenses insofar as
such losses, claims, damages, liabilities or expenses arise out of
or are based upon any untrue statement or alleged untrue statement
of any material fact contained in the Offering Materials, or any
omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements
therein not misleading, in each case to the extent, but only to the
extent, that such untrue statement or omission was made in reliance
upon and in conformity with the information relating to the Initial
Purchaser furnished in writing by the Initial Purchaser for
inclusion therein. The Initial Purchaser agrees to reimburse the
Company and the Guarantors for any reasonable legal and other
expenses as they are incurred by them in connection with
investigating, preparing to defend or defending any lawsuits, claims
or other proceedings or investigations for which indemnification may
be sought under this paragraph (b). The indemnity, contribution and
expense reimbursement obligations of the Initial Purchaser under
this Article VII shall be in addition to any liability the Initial
Purchaser may otherwise have.
(c) Procedure. If any Person shall be entitled to indemnity
hereunder (each an "Indemnified Party"), such Indemnified Party
shall give prompt written notice to the party or parties from which
such indemnity is sought (each an "Indemnifying Party") of the
commencement of any action, suit, investigation or proceeding,
governmental or otherwise (a "Proceeding"), with respect to which
such Indemnified Party seeks indemnification or contribution
pursuant hereto; provided, however, that the failure so to notify
the Indemnifying Parties shall not relieve the Indemnifying Parties
from any obligation or liability except to the extent that the
Indemnifying Parties have been prejudiced materially by such
failure. The Indemnifying Parties shall have the right, exercisable
by giving written notice to an Indemnified Party promptly after the
receipt of written notice from such Indemnified Party of such
Proceeding, to assume, at the Indemnifying Parties' expense, the
defense of
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any such Proceeding, with counsel reasonably satisfactory to such
Indemnified Party; provided, however, that an Indemnified Party or
Parties (if more than one such Indemnified Party is named in any
Proceeding) shall have the right to employ separate counsel in any
such Proceeding and to participate in the defense thereof, but the
fees and expenses of such counsel shall be at the expense of such
Indemnified Party or parties unless: (1) the Indemnifying Parties
agree to pay such fees and expenses; or (2) the Indemnifying Parties
fail promptly to assume the defense of such Proceeding or fail to
employ counsel reasonably satisfactory to such Indemnified Party or
Parties; or (3) the named parties to any such Proceeding (including
any impleaded parties) include both such Indemnified Party or
Parties and the Indemnifying Party or an Affiliate of the
Indemnifying Party and such Indemnified Parties, and the Indemnified
Parties shall have been advised in writing by counsel that there may
be one or more legal defenses available to such Indemnified Party or
Parties that are different from or additional to those available to
the Indemnifying Parties and in the reasonable judgment of such
counsel it is advisable for such Indemnified Parties to employ
separate counsel, in which case, if such Indemnified Party or
Parties notifies the Indemnifying Parties in writing that it elects
to employ separate counsel at the expense of the Indemnifying
Parties, the Indemnifying Parties shall not have the right to assume
the defense thereof with respect to the Indemnified Parties and such
counsel shall be at the expense of the Indemnifying Parties, it
being understood, however, that the Indemnifying Parties shall not,
in connection with any one such Proceeding or separate but
substantially similar or related Proceedings in the same
jurisdiction, arising out of the same general allegations or
circumstances, be liable for the fees and expenses of more than one
separate firm of attorneys (together with appropriate local counsel)
at any time for such Indemnified Party or Parties (which firm (and
local counsel, if any) shall be designated in writing by such
Indemnified Party or Parties), or for fees and expenses that are not
reasonable. No Indemnified Party or Parties will settle any
Proceeding without the consent of the Indemnifying Party or Parties
(but such consent shall not be unreasonably withheld). Each
Indemnified Party shall use its best efforts to cooperate with the
Indemnifying Parties
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in the defense of any such Proceeding. No Indemnifying Party shall,
without the prior written consent of the Indemnified Party, effect
any settlement of any pending or threatened Proceeding in respect of
which any Indemnified Party is or could have been or a party and
indemnity could have been sought hereunder by such Indemnified
Party, unless such settlement includes an unconditional release of
such Indemnified Party from all liability or claims that are the
subject of such Proceeding.
Section 7.2. Contribution. If for any reason the indemnification
provided for in Section 7.1 of this Agreement is unavailable to an Indemnified
Party, or insufficient to hold it harmless, in respect of any losses, claims,
damages, liabilities or expenses referred to therein, then each applicable
Indemnifying Party, in lieu of indemnifying such Indemnified Party, shall
contribute to the amount paid or payable by such Indemnified Party as a result
of such losses, claims, damages or liabilities in such proportion as is
appropriate to reflect not only the relative benefits received by the
Indemnifying Party on the one hand and the Indemnified Party on the other from
the offering of the Securities, but also the relative fault of the Indemnifying
and Indemnified Parties in connection with the statements or omissions which
resulted in such losses, claims, damages or liabilities, as well as any other
relevant equitable considerations. The relative benefits received by the
Indemnifying and Indemnified Parties shall be deemed to be in the same
proportion as the total proceeds from the offering of the Securities (net of
discounts but before deducting expenses) received by the Company bear to the
total discounts and commissions received by the Initial Purchaser. The relative
fault of the Indemnifying and Indemnified Parties shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Indemnifying or Indemnified Parties and
the parties' relative intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission. The amount paid or payable by
a party as a result of the losses, claims, damages and liabilities referred to
above shall be deemed to include any legal or other fees or expenses reasonably
incurred by such party in connection with investigating or defending any such
claim.
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The Company and the Guarantors, on the one hand, and the Initial
Purchaser, on the other hand, agree that it would not be just and equitable if
contribution pursuant to the immediately preceding paragraph were determined pro
rata or per capita or by any other method of allocation which does not take into
account the equitable considerations referred to in such paragraph.
Notwithstanding any other provision of this Section 7.2, the Initial Purchaser
shall not be obligated to make contributions hereunder that in the aggregate
exceed the total discounts, commissions and other compensation received by the
Initial Purchaser under this Agreement, less the aggregate amount of any damages
that the Initial Purchaser has otherwise been required to pay by reason of the
untrue or alleged untrue statements or a breach of a representation or warranty
or the omissions or alleged omissions to state a material fact. No Person guilty
of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any Person who was not guilty of such
fraudulent misrepresentation.
Section 7.3. Registration Rights. Notwithstanding anything to the
contrary in this Article VII, the indemnification and contribution provisions of
the Notes Registration Rights Agreement and the Preferred Stock Registration
Rights Agreement shall govern any claim with respect thereto.
ARTICLE VIII
MISCELLANEOUS
Section 8.1. Survival of Provisions. The representations, warranties
and covenants of the Company, the Guarantors and their respective officers and
the Initial Purchaser made herein, the indemnity and contribution agreements
contained herein and each of the provisions of Articles VI, VII and VIII shall
remain operative and in full force and effect regardless of (a) the
investigation made by or on behalf of the Company or a Guarantor, the Initial
Purchaser or any Indemnified Party, (b) acceptance of any of the Securities and
payment therefor, (c) any termination of this Agreement or (d) disposition of
the Securities by the Initial Purchaser whether by redemption, exchange, sale or
otherwise.
Section 8.2. Termination. (a) This Agreement may be terminated by
the Initial Purchaser by notice to the Company given prior to the Time of
Purchase in the event that the Company
41
<PAGE> 42
shall have failed, refused or been unable to perform all obligations and satisfy
all conditions on its part to be performed or satisfied hereunder at or prior
thereto or, if at or prior to the Closing:
(i) the Company or any of its Subsidiaries shall have
sustained any loss or interference with respect to its
businesses or properties from fire, flood, hurricane, accident
or other calamity, whether or not covered by insurance, or
from any strike, labor dispute, slow down or work stoppage or
any legal or governmental proceeding, which loss or
interference, in the sole judgment of the Initial Purchaser,
has had or has a Material Adverse Effect, or there shall have
been any event or development that, individually or in the
aggregate, has or could be reasonably likely to have a
Material Adverse Effect (including without limitation a change
in control of the Company or any of its Subsidiaries), except
in each case as described in the Final Memorandum (exclusive
of any amendment or supplement thereto);
(ii) trading in securities of the Company or in
securities generally on the New York Stock Exchange, American
Stock Exchange or the Nasdaq National Market shall have been
suspended or minimum or maximum prices shall have been
established on any such exchange or market;
(iii) a banking moratorium shall have been declared by
New York or United States authorities;
(iv) there shall have been (A) an outbreak or escalation
of hostilities between the United States and any foreign
power, or (B) an outbreak or escalation of any other
insurrection or armed conflict involving the United States or
any other national or international calamity or emergency, or
(C) any material change in the financial markets of the United
States which, in the case of (A), (B) or (C) above and in the
sole judgment of the Initial Purchaser, makes it impracticable
or inadvisable to proceed with the offering or the delivery of
the Securities as contemplated by the Final Memorandum; or
42
<PAGE> 43
(v) any securities of the Company shall have been
downgraded or placed on any "watch list" for possible
downgrading by any nationally recognized statistical rating
organization.
(b) Termination of this Agreement pursuant to this Section 8.2
shall be without liability of any party to any other party except as
provided in Section 8.1 hereof.
Section 8.3. No Waiver; Modifications in Writing. No failure or
delay on the part of the Company, a Guarantor or the Initial Purchaser in
exercising any right, power or remedy hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right, power or
remedy preclude any other or further exercise thereof or the exercise of any
other right, power or remedy. The remedies provided for herein are cumulative
and are not exclusive of any remedies that may be available to the Company, a
Guarantor or the Initial Purchaser at law or in equity or otherwise. No waiver
of or consent to any departure by the Company, a Guarantor or the Initial
Purchaser from any provision of this Agreement shall be effective unless signed
in writing by the party entitled to the benefit thereof, provided that notice of
any such waiver shall be given to each party hereto as set forth below. Except
as otherwise provided herein, no amendment, modification or termination of any
provision of this Agreement shall be effective unless signed in writing by or on
behalf of each of the Company, the Guarantors and the Initial Purchaser. Any
amendment, supplement or modification of or to any provision of this Agreement,
any waiver of any provision of this Agreement, and any consent to any departure
by the Company, a Guarantor or the Initial Purchaser from the terms of any
provision of this Agreement, shall be effective only in the specific instance
and for the specific purpose for which made or given. Except where notice is
specifically required by this Agreement, no notice to or demand on the Company
or a Guarantor in any case shall entitle the Company or a Guarantor to any other
or further notice or demand in similar or other circumstances.
Section 8.4. Information Supplied by the Initial Purchaser. The
statements set forth in the third paragraph, the third sentence of the fifth
paragraph and the seventh paragraph under the heading "Plan of Distribution" in
the Final Memorandum (to the extent such statements relate to the Initial
Purchaser)
43
<PAGE> 44
constitute the only information furnished by the Initial Purchaser to the
Company for the purposes of Sections 3.1(a) and 7.1(a) and (b) hereof.
Section 8.5. Communications. All notices, demands and other
communications provided for hereunder shall be in writing, and, (a) if to the
Initial Purchaser, shall be given by registered or certified mail, return
receipt requested, telex, telegram, telecopy, courier service or personal
delivery, addressed to CIBC Wood Gundy Securities Corp., 425 Lexington Avenue,
3rd Floor, New York, New York 10017, Attention: Andrew Heyer, with a copy to
Cahill Gordon & Reindel, 80 Pine Street, New York, New York 10005, Attention:
Roger Meltzer, Esq., and (b) if to the Company or a Guarantor, shall be given by
similar means to Spanish Broadcasting System, Inc., 26 West 6th Street, New
York, NY 10019, Attention: Joseph Garcia, Chief Financial Officer, with a copy
to Kaye, Scholer, Fierman, Hays & Handler, LLP, Attention: William Wallace, Esq.
In each case notices, demands and other communications shall be deemed given
when received.
Section 8.6. Execution in Counterparts. This Agreement may be
executed in any number of counterparts and by different parties hereto on
separate counterparts, each of which counterparts, when so executed and
delivered, shall be deemed to be an original and all of which counterparts,
taken together, shall constitute but one and the same Agreement.
Section 8.7. Successors. This Agreement shall inure to the benefit
of and be binding upon the Initial Purchaser, the Company, the Guarantors and
their respective successors and legal representatives, and nothing expressed or
mentioned in this Agreement is intended or shall be construed to give any other
Person any legal or equitable right, remedy or claim under or in respect of this
Agreement, or any provisions herein contained; this Agreement and all conditions
and provisions hereof being intended to be and being for the sole and exclusive
benefit of such Persons and for the benefit of no other Person except that (i)
the indemnities of the Company and the Guarantors contained in Section 7.1(a) of
this Agreement shall also be for the benefit of the directors, officers,
employees and agents of the Initial Purchaser and any Person or Persons who
control the Initial Purchaser within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act and (ii) the indemnities of the Initial Purchaser
contained in Section 7.1(b) of this Agreement shall
44
<PAGE> 45
also be for the benefit of the Company, the Guarantors, their respective
directors, officers, employees and agents and any Person or Persons who control
the Company or a Guarantor within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act. No purchaser of any Securities from the Initial
Purchaser will be deemed a successor because of such purchase.
Section 8.8. Governing Law. THIS AGREEMENT SHALL BE DEEMED TO BE A
CONTRACT MADE UNDER THE LAWS OF THE STATE OF NEW YORK, AND FOR ALL PURPOSES
SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF SAID STATE, WITHOUT REGARD TO
PRINCIPLES OF CONFLICTS OF LAW.
Section 8.9. Severability of Provisions. Any provision of this
Agreement which is prohibited or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof or
affecting the validity or enforceability of such provision in any other
jurisdiction.
Section 8.10. Headings. The Article and Section headings and Table
of Contents used or contained in this Agreement are for convenience of reference
only and shall not affect the construction of this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the date first written above.
SPANISH BROADCASTING SYSTEM, INC.
By: /s/ Raul Alarcon, Jr.
---------------------------------
Name: Raul Alarcon, Jr.
Title: President and
Chief Executive Officer
SPANISH BROADCASTING SYSTEM, INC.
a New Jersey corporation
By: /s/ Raul Alarcon, Jr.
---------------------------------
Name: Raul Alarcon, Jr.
Title: President and
Chief Executive Officer
45
<PAGE> 46
SPANISH BROADCASTING SYSTEM OF
CALIFORNIA, INC.
By: /s/ Raul Alarcon, Jr.
---------------------------------
Name: Raul Alarcon, Jr.
Title: President and
Chief Executive Officer
SPANISH BROADCASTING SYSTEM OF
FLORIDA, INC.
By: /s/ Raul Alarcon, Jr.
---------------------------------
Name: Raul Alarcon, Jr.
Title: President and
Chief Executive Officer
SPANISH BROADCASTING SYSTEM
NETWORK, INC.
By: /s/ Raul Alarcon, Jr.
---------------------------------
Name: Raul Alarcon, Jr.
Title: President and
Chief Executive Officer
SBS PROMOTIONS, INC.
By: /s/ Raul Alarcon, Jr.
---------------------------------
Name: Raul Alarcon, Jr.
Title: President and
Chief Executive Officer
ALARCON HOLDINGS, INC.
By: /s/ Raul Alarcon, Jr.
---------------------------------
Name: Raul Alarcon, Jr.
Title: President and
Chief Executive Officer
SBS OF GREATER NEW YORK, INC.
By: /s/ Raul Alarcon, Jr.
---------------------------------
Name: Raul Alarcon, Jr.
Title: President and
Chief Executive Officer
46
<PAGE> 47
The foregoing Agreement is hereby
confirmed and accepted as of the
date first written above
CIBC WOOD GUNDY SECURITIES CORP.
By: /s/ Walter McLallen
----------------------------
Name: Walter McLallen
Title: Managing Director
47
<PAGE> 1
Exhibit 10.2
UNIT AGREEMENT
Between
SPANISH BROADCASTING SYSTEM, INC.
and
IBJ SCHRODER BANK & TRUST COMPANY
Dated as of March 15, 1997
UNIT AGREEMENT dated as of March 15, 1997 between Spanish Broadcasting
System, Inc., a Delaware corporation (the "Company"), and IBJ Schroder Bank &
Trust Company, a bank and trust company organized and existing under the laws of
the State of New York.
WHEREAS, the Company proposes to issue 175,000 shares of its 14 1/4%
Senior Exchangeable Preferred Stock (the "Senior Preferred Stock") and warrants
(the "Warrants") to purchase 74,900 shares of its Class A Common Stock, par
value $.01 per share (the "Class A Common Stock"), in the form of 175,000 units
(the "Units"), with each Unit consisting of one share of Senior Preferred Stock
and one Warrant, each to purchase .428 shares of Class A Common Stock.
WHEREAS, the Company and IBJ Schroder Bank & Trust Company, in its
capacity as warrant agent for the Warrants (the "Warrant Agent") and transfer
agent for the Senior Preferred
<PAGE> 2
Stock (the "Transfer Agent") desire to appoint IBJ Schroder Bank & Trust Company
to act as their agent for the purpose of issuing certificates ("Unit
Certificates") representing the Units and registration of transfers and
exchanges thereof. IBJ Schroder Bank & Trust Company in such capacity is
referred to herein as the "Unit Agent".
WHEREAS, the Units will be exchangeable for the Senior Preferred Stock
and Warrants represented thereby upon the earliest to occur of: (i) June 1,
1997; (ii) the date a registration statement under the Securities Act of 1933,
as amended (the "Act"), with respect to a registered exchange offer for the
Senior Preferred Stock is declared effective under the Act; (iii) the date
notice of a Change of Control (as defined in the Certificate of Designation
governing the Senior Preferred Stock) is mailed by the Company to holders of the
Senior Preferred Stock as required by the Certificate of Designation governing
the Senior Preferred Stock; or (iv) such earlier date as may be determined by
CIBC Wood Gundy Securities Corp. with the consent of the Company. The date on
which an event listed in the preceding sentence occurs is referred to as the
"Separability Date."
NOW THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties hereto agree as follows:
SECTION 1. Appointment of Unit Agent. (a) The Company hereby appoints
the Unit Agent to act as agent for the Company in accordance with the
instructions set forth hereinafter in this Agreement, and the Unit Agent hereby
accepts such appointment.
(b) The Transfer Agent and the Company hereby appoint the Unit
Agent as a co-transfer agent for the Senior Preferred Stock for so long as the
Senior Preferred Stock is represented by the Units. In its capacity as a
co-transfer agent, the Unit Agent shall have the rights and obligations provided
for a transfer agent in the Certificate of Designation governing the Senior
Preferred Stock.
(c) The Warrant Agent and the Company hereby appoint the Unit
Agent as an agent of the Warrant Agent for the
2
<PAGE> 3
purposes of maintaining a register of the registered owners of and the
registration of transfers and exchanges of the Warrants represented by the
Units.
SECTION 2. Unit Certificates. The Units will initially be issued either
in global form (the "Global Units"), or in registered form as definitive Unit
certificates ("Physical Units") substantially in the form of Exhibit A attached
hereto. Any certificates evidencing the Global Units to be delivered pursuant to
this Agreement shall be substantially in the form set forth in Exhibit A
attached hereto, and shall bear the legend set forth in Exhibit B attached
hereto. Such Global Units shall represent such of the outstanding Units as shall
be specified therein and each shall provide that it shall represent the
aggregate Units from time to time endorsed thereon and that the aggregate amount
of outstanding Units represented thereby may from time to time be reduced or
increased, as appropriate. Any endorsement of a Global Unit to reflect the
amount of any increase or decrease in the amount of outstanding Units
represented thereby shall be made by the Unit Agent and Depository (as defined
below) in accordance with instructions given by the holder thereof. The
Depository Trust Company shall act as the Depository with respect to the Global
Units until a successor shall be appointed by the Company and the Unit Agent.
Upon written request, a Unit holder may receive from the Depository and Unit
Agent Physical Units as set forth in Section 5 below. SECTION 3. Execution of
Unit Certificates. Each Unit Certificate shall be signed on behalf of the
Company by its Chairman of the Board or its President, Chief Executive Officer,
Treasurer, Chief Financial Officer or a Vice President and by its Secretary or
an Assistant Secretary. Each such signature upon the Unit Certificates may be in
the form of a facsimile signature of the present or any future Chairman of the
Board, President, Vice President, Chief Financial Officer, Treasurer, Secretary
or Assistant Secretary and may be imprinted or otherwise reproduced on the Unit
Certificates and for that purpose the Company may adopt and use the facsimile
signature of any person who shall have been Chairman of the Board, President,
Chief Executive Officer, Vice President, Treasurer, Chief Financial Officer,
Secretary or Assistant Secretary, notwithstanding the fact that at the time the
Unit Certificates shall be countersigned and delivered or disposed of he shall
have ceased to hold such office.
3
<PAGE> 4
In case any officer of the Company who shall have signed any of the
Unit Certificates shall cease to be such officer before the Unit Certificates so
signed shall have been countersigned by the Unit Agent, or disposed of by the
Company, such Unit Certificates nevertheless may be countersigned and delivered
or disposed of as though such person had not ceased to be such officer of the
Company; and any Unit Certificate may be signed on behalf of the Company by any
person who, at the actual date of the execution of such Unit Certificate, shall
be a proper officer of the Company to sign such Unit Certificate, although at
the date of the execution of this Unit Agreement any such person was not such
officer.
Unit Certificates shall be dated the date of counter-signature by the
Unit Agent.
SECTION 4. Registration and Countersignature. The Unit Agent, on behalf
of the Company, shall number and register the Unit Certificates in a register as
they are issued by the Company.
Unit Certificates shall be manually countersigned by the Unit Agent and
shall not be valid for any purpose unless so countersigned. The Unit Agent
shall, upon written instructions of the Chairman of the Board, the President,
Chief Executive Officer, a Vice President, Chief Financial Officer, Treasurer,
the Secretary or an Assistant Secretary of the Company, initially countersign
and deliver not more than 175,000 Units and shall thereafter countersign and
deliver Units as otherwise provided in this Agreement.
The Company and the Unit Agent may deem and treat the registered
holder(s) of the Unit Certificates as the absolute owner(s) thereof
(notwithstanding any notation of ownership or other writing thereon made by
anyone) for all purposes, and neither the Company nor the Unit Agent shall be
affected by any notice to the contrary.
SECTION 5. Registration of Transfers and Exchanges. The Unit Agent
shall register the transfer or exchange of any Unit Certificate or the exchange
of any Unit Certificate or the exchange of Physical Units for Global Units only
if all the conditions applicable to such transaction set forth in the
Certificate of Designation with respect to the Senior Preferred
4
<PAGE> 5
Stock and in the Warrant Agreement as to the Warrants have been complied with.
SECTION 6. Separation of the Senior Preferred Stock and Warrants. After
the Separability Date, the Senior Preferred Stock and the Warrants represented
by the Units shall be separately transferable. Upon presentation after the
Separability Date of any Unit Certificate for exchange for Senior Preferred
Stock and Warrants or for registration of transfer or otherwise, (i) the Unit
Agent shall notify the Transfer Agent and the Warrant Agent of the number of
Units so presented, the registered owner thereof, such owner's registered
address, the nature of any legends or restrictive endorsements set forth on such
Unit Certificate and any other information provided by the holder thereof in
connection therewith, (ii) the Transfer Agent, if the requirements of the
Certificate of Designation with respect to the Senior Preferred Stock for such
transaction are met, shall promptly register, authenticate and deliver a new
Senior Preferred Stock Certificate equal in number of shares of Senior Preferred
Stock represented by such Unit Certificate in accordance with the direction of
such holder and (iii) the Warrant Agent, if its requirements for such
transactions are met, shall promptly countersign, register and deliver a new
Warrant certificate for the number of Warrants previously represented by such
Unit Certificate in accordance with the directions of such holder. The Warrant
Agent and the Transfer Agent will notify the Unit Agent of any additional
requirements in connection with a particular transfer or exchange.
Following the Separability Date, no Unit Certificates shall be issued
upon transfer or exchange of Unit Certificates, or otherwise.
SECTION 7. Rights of Unit Holders. The registered owner of a Unit
Certificate shall have all the rights and privileges of a registered owner of
the number of shares of Senior Preferred Stock represented thereby and the
number of Warrants represented thereby and shall be treated as the registered
owner thereof for all purposes. The Company agrees that it shall be bound by all
provisions of the Certificate of Designation governing the Senior Preferred
Stock, the Senior Preferred Stock, the Warrants and the Warrant Agreement and
that the Senior Preferred Stock and Warrants represented by
5
<PAGE> 6
each Unit Certificate shall be deemed valid and obligatory obligations of the
Company.
SECTION 8. Unit Agent. The Unit Agent undertakes the duties and
obligations imposed by this Agreement upon the following terms and conditions,
by all of which the Company and the holders of Units, by their acceptance
thereof, shall be bound:
(a) The statements contained herein and in the Unit
Certificates shall be taken as statements of the Company, and the Unit Agent
assumes no responsibility for the correctness of any of the same except such as
describe the Unit Agent or action taken or to be taken by it. The Unit Agent
assumes no responsibility with respect to the distribution of the Unit
Certificates except as herein otherwise provided.
(b) The Unit Agent shall not be responsible for any failure of
the Company to comply with any of the covenants in this Agreement or in the Unit
Certificates to be complied with by the Company.
(c) The Unit Agent may consult at any time with counsel
satisfactory to it (who may be counsel for the Company) and the Unit Agent shall
incur no liability or responsibility to the Company or to any holder of any Unit
Certificate in respect of any action taken, suffered or omitted by it hereunder
in good faith and in accordance with the opinion or the advice of such counsel.
(d) The Unit Agent shall incur no liability or responsibility
to the Company or to any holder of any Unit Certificate for any action taken in
reliance on any Unit Certificate, certificate of shares, notice, resolution,
waiver, consent, order, certificate or other paper, document or instrument
believed by it to be genuine and to have been signed, sent or presented by the
proper party or parties.
(e) The Company agrees to pay to the Unit Agent reasonable
compensation for all services rendered by the Unit Agent in the execution of
this Agreement, to reimburse the Unit Agent for all expenses, taxes and
governmental charges and other charges of any kind and nature incurred by the
Unit Agent in the execution of this Agreement and to indemnify the Unit
6
<PAGE> 7
Agent and save it harmless against any and all liabilities, including judgments,
costs and counsel fees and actual expenses, for anything done or omitted by the
Unit Agent in the execution of this Agreement except as a result of its gross
negligence of bad faith.
(f) The Unit Agent shall be under no obligation to institute
any action, suit or legal proceeding or to take any other action unless the
Company or one or more registered holders of Unit Certificates shall furnish the
Unit Agent with security and indemnity for any costs and expenses which may be
incurred acceptable to the Unit Agent. This provision shall not affect the power
of the Unit Agent to take such action as it may consider proper, whether with or
without any such security or indemnity. All rights of action under this
Agreement or under any of the Units may be enforced by the Unit Agent without
the possession of any of the Unit Certificates or the production thereof at any
trial or other proceeding relative thereto, and any such action, suit or
proceeding instituted by the Unit Agent shall be brought in its name as Unit
Agent and any recovery of judgment shall be for the ratable benefit of the
registered holders of the Units, as their respective rights or interests may
appear.
(g) The Unit Agent, and any stockholder, director, officer or
employee of it, may buy, sell or deal in any of the securities of the Company or
become pecuniarily interested in any transaction in which the Company may be
interested, or contract with or lend money to the Company or otherwise act as
fully and freely as though it were not Unit Agent under this Agreement. Nothing
herein shall preclude the Unit Agent from acting in any other capacity for the
Company or for any other legal entity.
(h) The Unit Agent shall act hereunder solely as agent for the
Company, the Transfer Agent and the Warrant Agent, and its duties shall be
determined solely by the provisions hereof. The Unit Agent shall not be liable
for anything which it may do or refrain from doing in connection with this
Agreement except for its own gross negligence or bad faith or willful
misconduct.
7
<PAGE> 8
(i) Before the Unit Agent acts or refrains from acting with
respect to any matter contemplated by this Unit Agreement, it may require:
(1) an officers' certificate stating that, in the
opinion of the signers, all conditions precedent, if any, provided for in this
Unit Agreement relating to the proposed action have been complied with; and
(2) an opinion of counsel for the Company stating
that, in the opinion of such counsel, all such conditions precedent have been
complied with.
Each officers' certificate or opinion of counsel with respect
to compliance with a condition or covenant provided for in this Unit Agreement
shall include:
(1) a statement that the person making such
certificate or opinion has read such covenant or condition;
(2) a brief statement as to the nature and scope of
the examination or investigation upon which the statements or opinions contained
in such certificate or opinion are based;
(3) a statement that, in the opinion of such person,
he has made such examination or investigation as is necessary to enable him to
express an informed opinion as to whether or not such covenant or condition has
been complied with; and
(4) a statement as to whether or not, in the opinion
of such person, such condition or covenant has been complied with.
The Unit Agent shall not be liable for any action it takes or omits to
take in good faith in reliance on any such certificate or opinion.
(j) In the absence of bad faith on its part, the Unit Agent
may conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon certificates or opinions furnished to the
Unit Agent and conforming to the requirements of this Unit Agreement. How-
8
<PAGE> 9
ever, the Unit Agent shall examine the certificates and opinions to determine
whether or not they conform to the requirements of this Unit Agreement.
(k) The Unit Agent may rely and shall be fully protected in
relying upon any document believed by it to be genuine and to have been signed
or presented by the proper person. The Unit Agent need not investigate any fact
or matter stated in the document.
(l) The Unit Agent may act through agents and shall not be
responsible for the misconduct or negligence of any agent appointed with due
care.
SECTION 9. Notices to Company and Unit Agent, Transfer Agent and
Warrant Agent. Any notice or demand authorized by this Agreement to be given or
made to or on the Company shall be sufficiently given or made when and if
deposited in the mail, first class or registered, postage paid, addressed
If to the Company:
Spanish Broadcasting System, Inc.
26 West 56th Street
New York, NY 10019
Attention: Chief Financial Officer
Facsimile: (212) 541-6904
with a copy to:
Kaye, Scholer, Fierman, Hays & Handler LLP
425 Park Avenue
New York, New York 10022
Attention: William E. Wallace, Jr., Esq.
If to the Unit Agent, Warrant Agent or the Transfer Agent:
IBJ Schroder Bank & Trust Company
One State Street
New York, NY 10004
Attention: Corporate Trust Agency &
Administration
9
<PAGE> 10
The parties hereto by notice to the other parties may designate
additional or different addresses for subsequent communications or notice.
Any notice to be mailed to a holder of Units shall be mailed to him or
her at the address that appears on the register of Units maintained by the Unit
Agent. Copies of any such communication shall also be mailed to the Unit Agent,
Transfer Agent and Warrant Agent. The Unit Agent shall furnish the Company, the
Transfer Agent or the Warrant Agent promptly when requested with a list of
registered holders of Units for the purpose of mailing any notice or
communication to the holders of the Senior Preferred Stock or Warrants and at
such other times as may be reasonably requested.
SECTION 10. Supplements and Amendments. The Company, the Transfer
Agent, the Warrant Agent and the Unit Agent may from time to time supplement or
amend this Agreement without the approval of any holders of Unit Certificates in
order to cure any ambiguity or to correct or supplement any provision contained
herein which may be defective or inconsistent with any other provision herein,
or to make any other provisions in regard to matters or questions arising
hereunder which the Company, the Transfer Agent, the Warrant Agent and the Unit
Agent may deem necessary or desirable and which shall not in any way adversely
affect the interests of the holders of Unit Certificates. Any amendment or
supplement to this Agreement that has a material adverse effect on the interests
of Unit holders shall require the written consent of registered holders of a
majority of the then outstanding Units.
SECTION 11. Successors. All covenants and provisions of this Agreement
by or for the benefit of the Company, the Transfer Agent, the Warrant Agent or
the Unit Agent shall bind and inure to the benefit of their respective
successors and assigns hereunder.
SECTION 12. Governing Law. THIS AGREEMENT AND EACH UNIT CERTIFICATE
ISSUED HEREUNDER SHALL BE DEEMED TO BE A CONTRACT MADE UNDER THE LAWS OF THE
STATE OF NEW YORK AND SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF SAID STATE, WITHOUT REGARD TO THE CONFLICT OF LAW RULES THEREOF.
10
<PAGE> 11
SECTION 13. Benefits of This Agreement. Nothing in this Agreement shall
be construed to give to any person or corporation other than the Company, the
Transfer Agent, the Warrant Agent, the Unit Agent and the registered holders of
the Unit Certificates any legal or equitable right, remedy or claim under this
Agreement, but this Agreement shall be for the sole and exclusive benefit of the
Company, the Transfer Agent, the Warrant Agent, the Unit Agent and the
registered holders of the Unit Certificates.
SECTION 14. Counterparts. This Agreement may be executed in any number
of counterparts and each of such counterparts shall for all purposes be deemed
to be an original, and all such counterparts shall together constitute but one
and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed, as of the day and year first above written.
SPANISH BROADCASTING SYSTEM, INC.
(a Delaware corporation)
By: /s/ Raul Alarcon, Jr.
-----------------------
Name: Raul Alarcon, Jr.
Title: President and Chief
Executive Officer
IBJ SCHRODER BANK & TRUST
COMPANY, as Transfer Agent,
Warrant Agent and Unit Agent
By: /s/ James P. Freeman
------------------------
Name: James P. Freeman
Title: Assistant Vice President
11
<PAGE> 12
EXHIBIT A
[FORM OF SECURITY]
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD
EXCEPT AS SET FORTH BELOW. BY ITS ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS
THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER
THE SECURITIES ACT) OR (B) IT IS AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS
DEFINED IN RULE 501(a)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT) (AN
"ACCREDITED INVESTOR") OR (C) IT IS NOT A U.S. PERSON AND IS ACQUIRING THIS
SECURITY IN AN OFFSHORE TRANSACTION, (2) AGREES THAT IT WILL NOT WITHIN TWO
YEARS AFTER THE ORIGINAL ISSUANCE OF THIS SECURITY RESELL OR OTHERWISE TRANSFER
THIS SECURITY EXCEPT (A) TO THE ISSUER OR ANY SUBSIDIARY THEREOF, (B) INSIDE THE
UNITED STATES TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A
UNDER THE SECURITIES ACT, (C) INSIDE THE UNITED STATES TO AN ACCREDITED INVESTOR
THAT, PRIOR TO SUCH TRANSFER, FURNISHES TO THE UNIT AGENT A SIGNED LETTER
CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS (THE FORM OF WHICH LETTER CAN
BE OBTAINED FROM THE UNIT AGENT), (D) OUTSIDE THE UNITED STATES TO PERSONS OTHER
THAN U.S. PERSONS IN OFFSHORE TRANSACTIONS MEETING THE REQUIREMENTS OF RULE 904
UNDER REGULATION S UNDER THE SECURITIES ACT, (E) PURSUANT TO THE EXEMPTION FROM
REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE), OR
(F) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND
(3) AGREES THAT IT WILL GIVE TO EACH PERSON TO WHOM THIS SECURITY IS TRANSFERRED
A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. AS USED HEREIN, THE TERMS
"OFFSHORE TRANSACTION," "UNITED STATES" AND "U.S. PERSON" HAVE THE RESPECTIVE
MEANINGS GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT.
SPANISH BROADCASTING SYSTEM, INC.
Units Consisting of 175,000 Shares of
14 1/4% Senior Exchangeable Preferred Stock
and 175,000 Warrants, each to Purchase
.428 Shares of Class A Common Stock
No. CUSIP No. [ ]
SPANISH BROADCASTING SYSTEM, INC., a Delaware corpo-
12
<PAGE> 13
ration (the "Company"), which term includes any successor corporation), hereby
certifies that [ ] is the owner of [ ] Units as described
above, transferable only on the books of the Company by the holder thereof in
person or by his or her duly authorized attorney on surrender of this
Certificate properly endorsed. Each Unit consists of one share of 14 1/4% Senior
Exchangeable Preferred Stock ("Senior Preferred Stock") and one Warrant to
purchase .428 shares of Class A Common Stock, par value $.01 per share, of the
Company (the "Warrants"). This Unit is issued pursuant to the Unit Agreement
(the "Unit Agreement") dated as of March 15, 1997 among the Company and IBJ
Schroder Bank & Trust Company, as Unit Agent (the "Unit Agent"), Transfer Agent
and Warrant Agent, and is subject to the terms and provision contained therein,
to all of which terms and provisions the holder of this Unit Certificate
consents by acceptance hereof. The terms of the Senior Preferred Stock are
governed by a Certificate of Designation filed with the Secretary of State of
Delaware on March 27, 1997 (the "Certificate of Designation"), and are subject
to the terms and provisions contained therein, to all of which terms and
provisions the holder of this Unit Certificate consents by acceptance hereof.
Reference is made to the further provisions of this Unit Certificate
contained herein, which will for all purposes have the same effect as if set
forth at this place. Reference is also made to the Warrant Agreement (the
"Warrant Agreement") dated as of March 15, 1997 between the Company and IBJ
Schroder Bank & Trust Company, as Warrant Agent, which governs the terms of the
Warrants, to all of which terms and provisions the holder of this Unit
Certificate consents by acceptance hereof. Copies of the Unit Agreement,
Certificate of Designation and Warrant Agreement are on file at the office of
IBJ Schroder Bank & Trust Company at One State Street, New York, New York 10004,
Attention: Corporate Trust Agency & Administration, and are available to any
holder on written request and without cost.
The Senior Preferred Stock and Warrants of the Company represented by
this Unit Certificate shall be nondetachable and not separately transferable
until the earliest to occur of (i) June 1, 1997, (ii) such earlier date as may
be determined by CIBC Wood Gundy Securities Corp. with the consent of the
Company, (iii) in the event of a Change of Control (as
13
<PAGE> 14
defined in the Certificate of Designation), the date the Company mails notice
thereof to holders of the Senior Preferred Stock and (iv) the date a
registration statement with respect to a registered exchange offer for the
Senior Preferred Stock is declared effective under the Securities Act of 1933,
as amended.
Dated:
SPANISH BROADCASTING SYSTEM, INC.
By:_________________________
Name:
Title:
By:_________________________
Name:
Title:
Countersigned:
IBJ SCHRODER BANK & TRUST COMPANY,
as Unit Agent
By:______________________________
Authorized Signatory
14
<PAGE> 15
EXHIBIT B
[FORM OF LEGEND FOR GLOBAL SECURITIES]
Any Global Security authenticated and delivered hereunder shall bear a
legend (which would be in addition to any other legends required in the case of
a Restricted Security) in substantially the following form:
THIS SECURITY IS A GLOBAL UNIT WITHIN THE MEANING OF THE UNIT AGREEMENT
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITORY OR A
NOMINEE OF A DEPOSITORY OR A SUCCESSOR DEPOSITORY. THIS SECURITY IS NOT
EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE
DEPOSITORY OR ITS NOMINEE EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE
UNIT AGREEMENT, AND NO TRANSFER OF THIS SECURITY (OTHER THAN A TRANSFER OF THIS
SECURITY AS A WHOLE BY THE DEPOSITORY TO A NOMINEE OF THE DEPOSITORY OR BY A
NOMINEE OF THE DEPOSITORY TO THE DEPOSITORY OR ANOTHER NOMINEE OF THE
DEPOSITORY) MAY BE REGISTERED EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN
THE UNIT AGREEMENT.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER OR
ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS 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.
Footnote continued from previous page.
Footnote continued on next page.
15
<PAGE> 1
Exhibit 10.3
WARRANT AGREEMENT
Between
SPANISH BROADCASTING SYSTEM, INC.
and
IBJ SCHRODER BANK & TRUST COMPANY
as
Warrant Agent
-------------------------
Dated as of March 15, 1997
<PAGE> 2
WARRANT AGREEMENT (the "Agreement"), dated as of March 15, 1997,
between Spanish Broadcasting System, Inc., a Delaware corporation (together with
any successors and assigns, the "Company"), and IBJ Schroder Bank & Trust
Company, a New York banking corporation, as Warrant Agent (the "Warrant Agent").
WHEREAS, the Company proposes, among other things, to issue and sell
pursuant to a Securities Purchase Agreement, dated as of March 24, 1997, among
the Company, the Guarantors named therein and CIBC Wood Gundy Securities Corp.,
as Initial Purchaser (the "Purchase Agreement"), 175,000 shares of its 14-Less
than% Senior Exchangeable Preferred Stock (the "Senior Preferred Stock"), along
with Warrants (each a "Warrant", and collectively, the "Warrants"), for the
purchase of 74,900 shares of its Class A Common Stock, par value $.01 per share
(the "Class A Common Stock," and the shares of Class A Common Stock issuable
upon exercise of the Warrants being referred to herein as the "Warrant Shares").
The Senior Preferred Stock and Warrants will be sold in units (the "Units"),
each Unit consisting of one share of Preferred Stock and one Warrant, each to
purchase .428 shares of Class A Common Stock.
WHEREAS, the Company wishes the Warrant Agent to act on behalf of the
Company and the Warrant Agent is willing to act in connection with the issuance,
division, transfer, exchange and exercise of Warrants as provided herein;
WHEREAS, the holders of Warrants and Warrant Shares shall, from time to
time, have certain rights and obligations with respect thereto as set forth in
the Common Stock Registration Rights and Stockholders Agreement, dated as of
March 15, 1997, among the Company and the other parties named therein;
NOW, THEREFORE, in consideration of the premises and mutual agreements
herein, the Company and the Warrant Agent hereby agree as follows:
SECTION 1. Appointment of Warrant Agent. The Company hereby appoints
the Warrant Agent to act as agent for the Company in accordance with the
instructions hereinafter set forth in this Agreement, and the Warrant Agent
hereby accepts such appointment.
<PAGE> 3
SECTION 2. Warrant Certificates. The Warrants will initially be issued
either in global form (the "Global Warrants"), substantially in the form of
Exhibit A (including footnote 1 thereto) or in registered form as physical
Warrant certificates (the "Physical Warrants"). Any certificates (the "Warrant
Certificates") evidencing the Global Warrants or the Physical Warrants to be
delivered pursuant to this Agreement shall be substantially in the form set
forth in Exhibit A attached hereto. Such Global Warrants shall represent such of
the outstanding Warrants as shall be specified therein and each shall provide
that it shall represent the aggregate amount of outstanding Warrants from time
to time endorsed thereon and that the aggregate amount of outstanding Warrants
represented thereby may from time to time be reduced or increased, as
appropriate. Any endorsement of a Global Warrant to reflect the amount of any
increase or decrease in the amount of outstanding Warrants represented thereby
shall be made by the Warrant Agent and Depositary (as defined below) in
accordance with instructions given by the holder thereof. The Depository Trust
Company shall act as the Depositary with respect to the Global Warrants until a
successor shall be appointed by the Company and the Warrant Agent. Upon written
request, a Warrant holder may receive from the Depositary and Warrant Agent
Physical Warrants as set forth in Section 6 below.
SECTION 3. Execution of Warrant Certificates. Warrant Certificates
shall be signed on behalf of the Company by its Chairman of the Board or its
President or a Vice President and by its Secretary or an Assistant Secretary
under its corporate seal. Each such signature upon the Warrant Certificates may
be in the form of a facsimile signature of the present or any future Chairman of
the Board, President, Chief Executive Officer, Vice President, Treasurer, Chief
Financial Officer, Secretary or Assistant Secretary and may be imprinted or
otherwise reproduced on the Warrant Certificates and for that purpose the
Company may adopt and use the facsimile signature of any person who shall have
been Chairman of the Board, President, Chief Executive Officer, Vice President,
Treasurer, Chief Financial Officer, Secretary or Assistant Secretary,
notwithstanding the fact that at the time the Warrant Certificates shall be
countersigned and delivered or disposed of he shall have ceased to hold such
office. The seal of the Company may be in the form of a facsimile thereof and
may be impressed, affixed, imprinted or otherwise reproduced on the Warrant
Certificates.
2
<PAGE> 4
In case any officer of the Company who shall have signed any of the
Warrant Certificates shall cease to be such officer before the Warrant
Certificates so signed shall have been countersigned by the Warrant Agent, or
disposed of by the Company, such Warrant Certificates nevertheless may be
countersigned and delivered or disposed of as though such person had not ceased
to be such officer of the Company; and any Warrant Certificate may be signed on
behalf of the Company by any person who, at the actual date of the execution of
such Warrant Certificate, shall be a proper officer of the Company to sign such
Warrant Certificate, although at the date of the execution of this Warrant
Agreement any such person was not such officer.
Warrant Certificates shall be dated the date of countersignature by
the Warrant Agent.
SECTION 4. Registration and Countersignature. The Warrants shall be
numbered and shall be registered on the books of the Company maintained at the
principal office of the Warrant Agent in the Borough of Manhattan, city of New
York (the "Warrant Register") as they are issued.
Warrant Certificates shall be manually countersigned by the Warrant
Agent and shall not be valid for any purpose unless so countersigned. The
Warrant Agent shall, upon written instructions of the Chairman of the Board, the
President, Chief Executive Officer, a Vice President, the Treasurer, Chief
Financial Officer or an Assistant Secretary of the Company, initially
countersign and deliver Warrants entitling the holders thereof to purchase not
more than the number of Warrant Shares referred to above in the first recital
hereof and shall thereafter countersign and deliver Warrants as otherwise
provided in this Agreement.
The Company and the Warrant Agent may deem and treat the registered
holders (the "Holders") of the Warrant Certificates as the absolute owners
thereof (notwithstanding any notation of ownership or other writing thereon made
by anyone) for all purposes, and neither the Company nor the Warrant Agent shall
be affected by any notice to the contrary.
SECTION 5. Transfer and Exchange of Warrants. The Warrant Agent
shall from time to time, subject to the limitations of Section 6, register the
transfer of any outstanding Warrants
3
<PAGE> 5
upon the records to be maintained by it for that purpose, upon surrender thereof
duly endorsed or accompanied (if so required by it) by a written instrument or
instruments of transfer in form satisfactory to the Warrant Agent, duly executed
by the registered Holder or Holders thereof or by the duly appointed legal
representative thereof or by a duly authorized attorney. Subject to the terms of
this Agreement, each Warrant Certificate may be exchanged for another
certificate or certificates entitling the Holder thereof to purchase a like
aggregate number of Warrant Shares as the certificate or certificates
surrendered then entitle each Holder to purchase. Any Holder desiring to
exchange a Warrant Certificate or Certificates shall make such request in
writing delivered to the Warrant Agent, and shall surrender, duly endorsed or
accompanied (if so required by the Warrant Agent) by a written instrument or
instruments of transfer in form satisfactory to the Warrant Agent, the Warrant
Certificate or Certificates to be so exchanged.
Upon registration of transfer, the Warrant Agent shall countersign and
deliver by certified mail a new Warrant Certificate or Certificates to the
persons entitled thereto. The Warrant Certificates may be exchanged at the
option of the Holder thereof, when surrendered at the office or agency of the
Company maintained for such purpose, which initially will be the corporate trust
office of the Warrant Agent in New York, New York for another Warrant
Certificate, or other Warrant Certificates of different denominations, of like
tenor and representing in the aggregate the right to purchase a like number of
Warrant Shares.
No service charge shall be made for any exchange or registration of
transfer of Warrant Certificates, but the Company may require payment of a sum
sufficient to cover any stamp or other tax or other governmental charge that is
imposed in connection with any such exchange or registration of transfer.
SECTION 6. Registration of Transfers and Exchanges.
(a) Transfer and Exchange of Physical Warrants. When Physical
Warrants are presented to the Warrant Agent with a request:
(i) to register the transfer of the Physical Warrants; or
4
<PAGE> 6
(ii) to exchange such Physical Warrants for an equal number of
Physical Warrants of other authorized denominations,
the Warrant Agent shall register the transfer or make the exchange as requested
if the requirements under this Agreement as set forth in this Section 6 for such
transactions are met; provided, however, that the Physical Warrants presented or
surrendered for registration of transfer or exchange:
(I) shall be duly endorsed or accompanied by a written instrument
of transfer in form satisfactory to the Warrant Agent, duly
executed by the Holder thereof or his attorney duly authorized
in writing; and
(II) in the case of Physical Warrants the offer and sale of which
have not been registered under the Securities Act of 1933, as
amended (the "Security Act"), such Physical Warrants shall be
accompanied, in the sole discretion of the Company, by the
following additional information and documents, as applicable:
(A) if such Physical Warrants are being delivered to the
Warrant Agent by a holder for registration in the
name of such holder, without transfer, a
certification from such holder to that effect (in
substantially the form of Exhibit B hereto);
or
(B) if such Physical Warrants are being transferred to a
"qualified Institutional buyer" (as defined in Rule
144A under the Securities Act (a "Qualified
Institutional Buyer")) in accordance with Rule 144A
under the Securities Act, a certification to that
effect (in substantially the form of Exhibit B
hereto); or
(C) if such Physical Warrants are being transferred to an
institutional "accredited investor" (as defined in
Rule 501(a)(1), (2),
5
<PAGE> 7
(3) or (7) under the Securities Act (an
"Institutional Accredited Investor")) delivery of a
certification to that effect (in substantially the
form of Exhibit B hereto) and a Transferee
Certificate for Institutional Accredited Investors in
substantially the form of Exhibit C hereto; or
(D) if such Physical Warrants are being transferred in
reliance on Regulation S under the Securities Act
("Regulation S"), delivery of a certification to that
effect (in substantially the form of Exhibit B
hereto) and a Transferee Certificate for Regulation S
Transfers in substantially the form of Exhibit D
hereto and an Opinion of Counsel reasonably
satisfactory to the Company to the effect that such
transfer is in compliance with the Securities Act; or
(E) if such Physical Warrants are being transferred in
reliance on Rule 144 under the Securities Act,
delivery of a certification to that effect (in
substantially the form of Exhibit B hereto) and an
opinion of counsel reasonably satisfactory to the
Company to the effect that such transfer is in
compliance with the Securities Act; or
(F) if such Physical Warrants are being transferred in
reliance on another exemption from the registration
requirements of the Securities Act, a certification
to that effect (in substantially the form of Exhibit
B hereto) and an opinion of counsel reasonably
satisfactory to the Company to the effect that such
transfer is in compliance with the Securities Act.
(b) Restrictions on Transfer of Physical Warrants for a Beneficial
Interest in a Global Warrant. A Physical Warrant may not be exchanged for a
beneficial interest in a Global Warrant except upon satisfaction of the
requirements set forth
6
<PAGE> 8
below. Upon receipt by the Warrant Agent of a Physical Warrant, duly endorsed or
accompanied by appropriate instruments of transfer, in form satisfactory to the
Warrant Agent, together with:
(A) a certification, in substantially the form of Exhibit
B hereto, that such Physical Warrant is being
transferred to a Qualified Institutional Buyer; and
(B) written instructions directing the Warrant Agent to
make, or to direct the Depositary to make, an
endorsement on the Global Warrant to reflect an
increase in the aggregate amount of the Warrants
represented by the Global Warrant,
then the Warrant Agent shall cancel such Physical Warrant and cause, or direct
the Depositary to cause, in accordance with the standing instructions and
procedures existing between the Depositary and the Warrant Agent, the number of
Warrants represented by the Global Warrant to be increased accordingly. If no
Global Warrant is then outstanding, the Company shall issue and the Warrant
Agent shall upon written instructions from the Company authenticate a new Global
Warrant in the appropriate amount.
(c) Transfer and Exchange of Global Warrants. The transfer and
exchange of Global Warrants or beneficial interests therein shall be effected
through the Depositary, in accordance with this Agreement (including the
restrictions on transfer set forth herein) and the procedures of the Depositary
therefor.
(d) Transfer of a Beneficial Interest in a Global Warrant for a
Physical Warrant.
(i) Any person having a beneficial interest in a Global Warrant
may upon request exchange such beneficial interest for a
Physical Warrant. Upon receipt by the Warrant Agent of written
instructions or such other form of instructions as is
customary for the Depositary from the Depositary or its
nominee on behalf of any person having a beneficial interest
in a Global Warrant
7
<PAGE> 9
and upon receipt by the Warrant Agent of a written order or
such other form of instructions as is customary for the
Depositary or the person designated by the Depositary as
having such a beneficial interest containing registration
instructions and, in the case of any such transfer or exchange
of a beneficial interest in a Global Warrant the offer and
sale of which have not been registered under the Securities
Act, the following additional information and documents:
(A) if such beneficial interest is being transferred to the person
designated by the Depositary as being the beneficial owner, a
certification from such person to that effect (in
substantially the form of Exhibit B hereto); or
(B) if such beneficial interest is being transferred to a
Qualified Institutional Buyer in accordance with Rule 144A
under the Securities Act, a certification to that effect (in
substantially the form of Exhibit B hereto); or
(C) if such beneficial interest is being transferred to an
Institutional Accredited Investor, delivery of a certification
to that effect (in substantially the form of Exhibit B hereto)
and a Certificate for Institutional Accredited Investors in
substantially the form of Exhibit C hereto; or
(D) if such beneficial interest is being transferred in reliance
on Regulation S, delivery of a certification to that effect
(in substantially the form of Exhibit B hereto) and a
Transferee Certificate for Regulation S Transfers in
substantially the form of Exhibit D hereto and an opinion of
counsel reasonably satisfactory to the Company to the effect
that such transfer is in compliance with the Securities Act;
or
8
<PAGE> 10
(E) if such beneficial interest is being transferred in
reliance on Rule 144 under the Securities Act,
delivery of a certification to that effect (in
substantially the form of Exhibit B hereto) and an
opinion of counsel reasonably satisfactory to the
Company to the effect that such transfer is in
compliance with the Securities Act; or
(F) if such beneficial interest is being transferred in
reliance on another exemption from the registration
requirements of the Securities Act, a certification
to that effect (in substantially the form of Exhibit
B hereto) and an opinion of counsel reasonably
satisfactory to the Company to the effect that such
transfer is in compliance with the Securities Act,
then the Warrant Agent will cause, in accordance with the
standing instructions and procedures existing between the
Depositary and the Warrant Agent, the aggregate amount of the
Global Warrant to be reduced and, following such reduction,
the Company will execute and, upon receipt of an
authentication order in the form of an Officers' Certificate,
the Warrant Agent will authenticate and deliver to the
transferee a Physical Warrant.
(ii) Physical Warrants issued in exchange for a beneficial interest
in a Global Warrant pursuant to this Section 6(d) shall be
registered in such names and in such authorized denominations
as the Depositary, pursuant to instructions from its direct or
indirect participants or otherwise, shall instruct the Warrant
Agent in writing. The Warrant Agent shall deliver such
Physical Warrants to the persons in whose names such Physical
Warrants are so registered.
(e) Restrictions on Transfer and Exchange of Global Warrants.
Notwithstanding any other provisions of this Agreement, a Global Warrant may not
be transferred as a whole except by the Depositary to a nominee of the
Depositary or by a
9
<PAGE> 11
nominee of the Depositary to the Depositary or another nominee of the Depositary
or by the Depositary or any such nominee to a successor Depositary or a nominee
of such successor Depositary.
(f) Authentication of Definitive Warrants in Absence of
Depositary. If at any time:
(i) the Depositary for the Warrants notifies the Company that the
Depositary is unwilling or unable to continue as Depositary
for the Global Warrants and a successor Depositary for the
Global Warrants is not appointed by the Company within 90 days
after delivery of such notice; or
(ii) the Company, at its sole discretion, notifies the Warrant
Agent in writing that it elects to cause the issuance of
Physical Warrants under this Warrant Agreement,
then the Company will execute, and the Warrant Agent, upon written instructions
from the Company requesting the authentication and delivery of Physical
Warrants, will authenticate and deliver Physical Warrants, in an aggregate
number equal to the aggregate number of warrants represented by the Global
Warrants, in exchange for such holder's beneficial interest in Global Warrants.
(g) Legends.
(i) For so long as transfer of a Warrant is not permitted without
registration under the Securities Act, each Warrant
Certificate evidencing such Warrant (and all Warrants issued
in exchange therefor or substitution thereof) shall bear a
legend substantially to the following effect:
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED
OR SOLD EXCEPT AS SET FORTH BELOW. BY ITS ACQUISITION HEREOF, THE
HOLDER (1) REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER"
(AS DEFINED IN RULE 144A
10
<PAGE> 12
UNDER THE SECURITIES ACT) OR (B) IT IS AN INSTITUTIONAL "ACCREDITED
INVESTOR" (AS DEFINED IN RULE 501(a)(1), (2), (3) OR (7) UNDER THE
SECURITIES ACT) (AN "ACCREDITED INVESTOR") OR (C) IT IS NOT A U.S.
PERSON AND IS ACQUIRING THIS SECURITY IN AN OFFSHORE TRANSACTION, (2)
AGREES THAT IT WILL NOT WITHIN TWO YEARS AFTER THE ORIGINAL ISSUANCE OF
THIS SECURITY RESELL OR OTHERWISE TRANSFER THIS SECURITY EXCEPT (A) TO
THE ISSUER OR ANY SUBSIDIARY THEREOF, (B) INSIDE THE UNITED STATES TO A
QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE
SECURITIES ACT, (C) INSIDE THE UNITED STATES TO AN ACCREDITED INVESTOR
THAT, PRIOR TO SUCH TRANSFER, FURNISHES TO THE WARRANT AGENT A SIGNED
LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS (THE FORM OF
WHICH LETTER CAN BE OBTAINED FROM THE WARRANT AGENT), (D) OUTSIDE THE
UNITED STATES TO PERSONS OTHER THAN U.S. PERSONS IN OFFSHORE
TRANSACTIONS MEETING THE REQUIREMENTS OF RULE 904 UNDER REGULATION S
UNDER THE SECURITIES ACT, (E) PURSUANT TO THE EXEMPTION FROM
REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF
AVAILABLE), OR (F) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT AND (3) AGREES THAT IT WILL GIVE TO EACH
PERSON TO WHOM THIS SECURITY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO
THE EFFECT OF THIS LEGEND. AS USED HEREIN, THE TERMS "OFFSHORE
TRANSACTION," "UNITED STATES" AND "U.S. PERSON" HAVE THE RESPECTIVE
MEANINGS GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT.
(ii) Until the Separability Date (as defined) each Warrant shall
bear a legend substantially to the following effect:
THESE SECURITIES HAVE BEEN OFFERED AS PART OF A UNIT. EACH OF THE UNITS
CONSISTS OF ONE SHARE OF 14-LESS THAN% SENIOR EXCHANGEABLE PREFERRED
11
<PAGE> 13
STOCK (THE "SENIOR PREFERRED STOCK") OF THE COMPANY AND ONE WARRANT,
EACH WARRANT INITIALLY EXERCISABLE TO PURCHASE .428 SHARES OF CLASS A
COMMON STOCK OF THE COMPANY. THE SENIOR PREFERRED STOCK AND WARRANTS
WILL NOT BE TRANSFERABLE BY A HOLDER THEREOF SEPARATELY FROM EACH OTHER
UNTIL THE "SEPARABILITY DATE," WHICH SHALL BE THE EARLIEST OF (i) JUNE
1, 1997; (ii) THE DATE A REGISTRATION STATEMENT WITH RESPECT TO A
REGISTERED EXCHANGE OFFER FOR THE SENIOR PREFERRED STOCK IS DECLARED
EFFECTIVE UNDER THE SECURITIES ACT; (iii) THE DATE NOTICE OF A CHANGE
OF CONTROL (AS DEFINED IN THE CERTIFICATE OF DESIGNATION GOVERNING THE
SENIOR PREFERRED STOCK) IS MAILED BY THE COMPANY TO HOLDERS OF THE
SENIOR PREFERRED STOCK AS REQUIRED BY THE CERTIFICATE OF DESIGNATION
GOVERNING THE SENIOR PREFERRED STOCK; OR (iv) SUCH EARLIER DATE AS MAY
BE DETERMINED BY CIBC WOOD GUNDY SECURITIES CORP. WITH THE CONSENT OF
THE COMPANY.
(h) Cancellation and/or Adjustment of a Global Warrant. At such
time as all beneficial interests in a Global Warrant have either been exchanged
for Physical Warrants, redeemed, repurchased or cancelled, such Global Warrant
shall be returned to or retained and cancelled by the Warrant Agent. At any time
prior to such cancellation, if any beneficial interest in a Global Warrant is
exchanged for Physical Warrants, redeemed, repurchased or cancelled, the number
of Warrants represented by such Global Warrant shall be reduced and an
endorsement shall be made on such Global Warrant, by the Warrant Agent to
reflect such reduction.
(i) Obligations with Respect to Transfers and Exchanges of
Physical Warrants.
(i) To permit registrations of transfers and exchanges, the
Company shall execute, at the Warrant Agent's request, and the
Warrant Agent shall authenticate Physical Warrants and Global
Warrants.
12
<PAGE> 14
(ii) All Physical Warrants and Global Warrants issued upon any
registration, transfer or exchange of Physical Warrants or
Global Warrants shall be the valid obligations of the Company,
entitled to the same benefits under this Agreement as the
Physical Warrants or Global Warrants surrendered upon the
registration of transfer or exchange.
(iii) Prior to due presentment for registration of transfer of any
Warrant, the Warrant Agent and the Company may deem and treat
the person in whose name any Warrant is registered as the
absolute owner of such Warrant, and neither the Warrant Agent
nor the Company shall be affected by notice to the contrary.
SECTION 7. Separation of Warrants; Terms of Warrants; Exercise of
Warrants. The Senior Preferred Stock and Warrants will not be separately
transferable until the "Separability Date," which shall be the earliest of (i)
June 1, 1997; (ii) the date a registration statement with respect to a
registered exchange offer for the Senior Preferred Stock is declared effective
under the Securities Act; (iii) the date notice of a change of control (as
defined in the Certificate of Designation governing the Senior Preferred Stock)
is mailed by the Company to holders of the Senior Preferred Stock as required by
the Certificate of Designation governing the Senior Preferred Stock; or (iv)
such earlier date as may be determined by CIBC Wood Gundy Securities Corp. with
consent of the Company. Notwithstanding the foregoing, in the event a Change of
Control occurs and the Company mails the related notice thereof to holders of
Senior Preferred Stock prior to the Separability Date as determined by the
preceding sentence, the Separability Date shall be such earlier date of mailing.
The Company shall give written notice to the Warrant Agent of any such mailing
on the date of such mailing.
Subject to the terms of this Agreement, each Warrant holder shall
have the right, which may be exercised commencing on or after the Exercisability
Date and until 5:00 p.m., New York City time, on June 30, 1999 (the "Expiration
Date"), to receive from the Company the number of fully paid and nonassessable
Warrant Shares which the holder may at the time be entitled to receive on
exercise of such Warrants and payment of the Exercise
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<PAGE> 15
Price (as defined) then in effect for such Warrant Shares; provided, that, if in
the opinion of counsel to the Company approval of the Federal Communications
Commission (the "FCC") is required before the Company may issue Warrant Shares
upon the exercise of any Warrant, the Company may defer the issuance of such
Warrant Shares until such time as approval of the FCC is obtained or is no
longer required. The Company shall promptly notify in writing the Warrant Agent
of any event which requires it to suspend exercise of Warrants pursuant to the
proviso of the preceding sentence and of the termination of any such suspension.
Subject to the next paragraph of this Section, each Warrant not exercised prior
to the Expiration Date shall become void and all rights thereunder and all
rights in respect thereof under this Agreement shall cease as of such time. No
adjustments as to dividends will be made upon exercise of the Warrants.
The Company agrees to promptly commence any proceeding before the FCC
required to permit the exercise of the outstanding Warrants and to use its best
efforts to obtain any order of the FCC or similar approval necessary to permit
such exercise and maintain such approval in full force and effect. In the event
that at the Expiration Date, the exercise of Warrants has been suspended such
that the Warrants have not been exercised for a period of one full year, the
Expiration Date shall be extended to such date as is necessary so that the
Warrant will have been exercisable for one full year prior to the Expiration
Date.
"Exercisability Date" shall mean the date of occurrence of both an
Exercise Event and the Separability Date. The term "Exercise Event" shall mean
the earliest of: (1) a Change of Control (as defined below) shall have occurred
or, (2) seven days prior to consummation of a Public Equity Offering (as defined
below), (3) the date on which any class of equity securities of the Company is
listed on a national securities exchange or authorized for quotation on the
National Association of Securities Dealers, Inc. Automated Quotation System, (4)
the making of any adjustment to the Exercise Rate pursuant to Section 12 after
which the Warrants are exercisable solely for cash or (5) June 29, 1998.
As used in the immediately preceding paragraph, "Change of Control"
shall mean (i) an event whereby at any time any "person" or "group" (within the
meaning of Section 13(d) and 14(d)(2) of the Exchange Act of 1934, as amended
(the "Exchange
14
<PAGE> 16
Act")), acquires, in one or more transactions, (a) beneficial ownership (within
the meaning of Rule 13d-3 under the Exchange Act) of more than 50 percent of the
total voting power represented by all then outstanding capital stock of the
Company ordinarily (and apart from rights exercisable under certain
circumstances) having the right to vote in the election of directors or (b) the
power to elect a majority of the board of directors of the Company or (ii) so
long as the Senior Preferred Stock remain outstanding, the occurrence of a
"Change of Control" as such term is defined in the Certificate of Designation
governing such Senior Preferred Stock (or the Certificate of Designation
governing the Exchange Preferred Stock and Private Exchange Preferred Stock
(each as defined in such Certificate of Designation)).
"Public Equity Offering" shall mean a public offering by the Company
of shares of its common stock (however designated and whether voting or
non-voting) and any and all rights, warrants or options to acquire such common
stock.
The initial price per .428 shares at which Warrant Shares shall be
purchasable upon exercise of Warrants (the "Exercise Price") shall be $.01,
subject to adjustment. A Warrant may be exercised upon surrender at the office
or agency of the Company maintained for such purpose, which initially will be
the corporate trust office of the Warrant Agent in New York, New York, of the
certificate or certificates evidencing the Warrants to be exercised with the
form of election to purchase on the reverse thereof duly filled in and signed,
which signature shall be guaranteed by a participant in a recognized Signature
Guarantee Medallion Program, and upon payment to the Warrant Agent for the
account of the Company of the Exercise Price, as adjusted as herein provided,
for the number of Warrant Shares in respect of which such Warrants are then
exercised. Payment of the aggregate Exercise Price shall be made in cash or by
certified or official bank check to the order of the Company in New York
Clearing House Funds.
Subject to the provisions of Section 6 hereof, upon such surrender
of Warrants and payment of the Exercise Price, the Company shall issue and cause
to be delivered with all reasonable dispatch to or upon the written order of the
holder and in such name or names as the Warrant holder may designate a
certificate or certificates for the number of Warrant Shares issuable upon
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<PAGE> 17
the exercise of such Warrants together with cash as provided in Section 12;
provided, however, that if any consolidation, merger or lease or sale of assets
is proposed to be effected by the Company as described in subsection (j) of
Section 12 hereof, or a tender offer or an exchange offer for shares of Common
Stock of the Company shall be made, upon such surrender of Warrants and payment
of the Exercise Price as aforesaid, the Company shall, as soon as possible, but
in any event not later than 2 days, other than a Saturday or Sunday or a day on
which banking institutions in the State of New York are not open for business
("Business Day") thereafter, issue and cause to be delivered the number of
Warrant Shares issuable upon the exercise of such Warrants in the manner
described in this sentence together with cash as provided in Section 12. Such
certificate or certificates shall be deemed to have been issued and any person
so designated to be named therein shall be deemed to have become a holder of
record of such Warrant Shares as of the date of the surrender of such Warrants
and payment of the Exercise Price.
The Warrants shall be exercisable, at the election of the holders
thereof, either in full or from time to time in part and, in the event that a
certificate evidencing Warrants is exercised in respect of fewer than all of the
Warrant Shares issuable on such exercise at any time prior to the date of
expiration of the Warrants, a new certificate evidencing the remaining Warrant
or Warrants will be issued, and the Warrant Agent is hereby irrevocably
authorized to countersign and to deliver the required new Warrant Certificate or
Certificates pursuant to the provisions of this Section and of Section 3 hereof,
and the Company, whenever required by the Warrant Agent, will promptly supply
the Warrant Agent with Warrant Certificates duly executed on behalf of the
Company for such purpose.
All Warrant Certificates surrendered upon exercise of Warrants shall
be cancelled by the Warrant Agent. Such cancelled Warrant Certificates shall
then be disposed of by the Warrant Agent in a manner consistent with the Warrant
Agent's customary procedure for such disposal and in a manner reasonably
satisfactory to the Company. The Warrant Agent shall account promptly to the
Company with respect to Warrants exercised and concurrently pay to the Company
all monies received by the Warrant Agent for the purchase of the Warrant Shares
through the exercise of such Warrants.
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<PAGE> 18
The Warrant Agent shall keep copies of this Agreement and any notices
given or received hereunder available for inspection by the holders during
normal business hours at its office. The Company shall supply the Warrant Agent
from time to time with such numbers of copies of this Agreement as the Warrant
Agent may request.
SECTION 8. Payment of Taxes. The Company will pay all documentary stamp
taxes attributable to the initial issuance of Warrant Shares upon the exercise
of Warrants; provided, however, that the Company shall not be required to pay
any tax or taxes which may be payable in respect of any transfer involved in the
issue of any Warrant Certificates or any certificates for Warrant Shares in a
name other than that of the registered holder of a Warrant Certificate
surrendered upon the exercise of a Warrant, and the Company shall not be
required to issue or deliver such Warrant Certificates unless or until the
person or persons requesting the issuance thereof shall have paid to the Company
the amount of such tax or shall have established to the satisfaction of the
Company that such tax has been paid.
SECTION 9. Mutilated or Missing Warrant Certificates. In case any of
the Warrant Certificates shall be mutilated, lost, stolen or destroyed, the
Company may in its discretion issue and the Warrant Agent may countersign, in
exchange and substitution for and upon cancellation of the mutilated Warrant
Certificate, or in lieu of and substitution for the Warrant Certificate lost,
stolen or destroyed, a new Warrant Certificate of like tenor and representing an
equivalent number of Warrants, but only upon receipt of evidence satisfactory to
the Company and the Warrant Agent of such loss, theft or destruction of such
Warrant Certificate and indemnity also satisfactory to them. Applicants for such
substitute Warrant Certificates shall also comply with such other reasonable
regulations and pay such other reasonable charges as the Company or the Warrant
Agent may prescribe.
SECTION 10. Reservation of Warrant Shares. The Company will at all
times reserve and keep available, free from preemptive rights, out of the
aggregate of its authorized but unissued Class A Common Stock or its authorized
and issued Class A Common Stock held in its treasury, for the purpose of
enabling it to satisfy any obligation to issue Warrant Shares upon exercise of
Warrants, the maximum number of shares of Class A
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<PAGE> 19
Common Stock which may then be deliverable upon the exercise of all outstanding
Warrants.
The Company or, if appointed, the transfer agent for the Class A Common
Stock (the "Transfer Agent") and every subsequent transfer agent for any shares
of the Company's capital stock issuable upon the exercise of any of the rights
of purchase aforesaid will be irrevocably authorized and directed at all times
to reserve such number of authorized shares as shall be required for such
purpose. The Company will keep a copy of this Agreement on file with the
Transfer Agent and with every subsequent transfer agent for any shares of the
Company's capital stock issuable upon the exercise of the rights of purchase
represented by the Warrants. The Warrant Agent is hereby irrevocably authorized
to requisition from time to time from such Transfer Agent the stock certificates
required to honor outstanding Warrants upon exercise thereof in accordance with
the terms of this Agreement. The Company will supply such Transfer Agent with
duly executed certificates for such purposes and will provide or otherwise make
available any cash which may be payable as provided in Section 12. The Company
will furnish such Transfer Agent a copy of all notices of adjustments and
certificates related thereto transmitted to each holder pursuant to Section 14
hereof.
The Company covenants that all Warrant Shares which may be issued upon
exercise of Warrants made in accordance with the terms of this Agreement will,
upon payment of the Exercise Price therefor and issue, be validly authorized and
issued, fully paid, nonassessable, free of preemptive rights and free from all
taxes, liens, charges and security interests with respect to the issuance
thereof. The Company will take no action to increase the par value of the Class
A Common Stock to an amount in excess of the Exercise Price, and the Company
will not enter into any agreements inconsistent with the rights of Holders
hereunder. The Company will use its best efforts to obtain all such
authorizations, exemptions or consents from any public regulatory body having
jurisdiction thereof as may be necessary to enable the Company to perform its
obligations under this Agreement. The Company shall not take any action
reasonably within its control, including the hiring of a broker to solicit
exercises, which would render unavailable an exemption from registration under
the Securities Act which might otherwise be available with respect to the
issuance of Warrant Shares upon exercise of any Warrants.
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<PAGE> 20
SECTION 11. Obtaining Stock Exchange Listings. The Company
will from time to time take all action which may be necessary so that the
Warrant Shares, immediately upon their issuance upon the exercise of Warrants,
will be listed on the principal securities exchanges and markets within the
United States of America (including the NASDAQ National Market System), if any,
on which other shares of Class A Common Stock are then listed. In the event
that, at any time during the period in which the Warrants are exercisable, the
Class A Common Stock is not listed on any principal securities or exchanges or
markets within the United States of America, the Company will use its best
efforts to permit the Warrant Shares to be designated PORTAL securities in
accordance with the rules and regulations adopted by the National Association of
Securities Dealers, Inc. relating to trading in the Private Offering, Resales
and Trading through Automated Linkages market.
SECTION 12. Adjustment of Number of Warrant Shares Issuable.
The number of shares of Class A Common Stock issuable upon the exercise of each
Warrant (the "Exercise Rate") is subject to adjustment from time to time upon
the occurrence of the events enumerated in this Section 12.
(a) Adjustment for Change in Capital Stock. If the
Company:
(1) pays a dividend or makes a distribution on
its Common Stock (as defined in Section 12(l)) in shares of its Common
Stock or other capital stock of the Company;
(2) subdivides, combines or reclassifies its
outstanding shares of Common Stock;
(3) makes a distribution to all holders of its
Common Stock of rights, warrants or options to purchase Common Stock of
the Company at a price per share less than the Current Market Value (as
defined in Section 12(d)) at the Time of Determination (as defined
below); and
(4) makes distributions to stockholders of
Common Stock of the Company or rights, warrants or options to purchase
Common Stock of the Company;
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<PAGE> 21
then the Exercise Rate in effect immediately prior to such action shall be
proportionately adjusted so that the holder of any Warrant thereafter exercised
may receive the aggregate number and kind of shares of capital stock of the
Company which he would have owned immediately following such action if such
Warrant had been exercised immediately prior to such action; provided, however,
that notwithstanding the foregoing, upon the occurrence of an event described in
any of paragraphs (1), (3) or (4) above, which otherwise would have given rise
to an adjustment, no adjustment shall be made if the Company includes the
holders of Warrants in such distribution pro rata to the number of shares of
Common Stock issued and outstanding (after giving effect to the Warrant Shares
and the Old Warrant Shares (as hereinafter defined) as if they were issued and
outstanding).
The adjustment shall become effective immediately after the record
date in the case of a dividend or distribution (the "Time of Determination") and
immediately after the effective date in the case of a subdivision, combination
or reclassification.
If after an adjustment a holder of a Warrant upon exercise of it may
receive shares of two or more classes of capital stock of the Company, the Board
of Directors of the Company shall determine the allocation of the adjusted
Exercise Price between the classes of capital stock. After such allocation, the
exercise privilege and the Exercise Price of each class of capital stock shall
thereafter be subject to adjustment on terms comparable to those applicable to
Common Stock in this Section.
Such adjustment shall be made successively whenever any event listed
above shall occur.
(b) Adjustment for Certain Issuances of Common Stock.
Subject to Section 12(a), if the Company issues or sells shares of
its Common Stock (other than shares of Common Stock ("Old Warrant Shares")
issued upon exercise of the warrants ("Old Warrants") issued pursuant to the
Warrant Agreement dated as of June 29, 1994 between the Company and IBJ Schroder
Bank & Trust Company, as Warrant Agent) or distributes any rights, options or
warrants to all holders of its Common Stock entitling them to purchase shares of
Common Stock, or securities convertible into or exchangeable for Common Stock,
at a price per
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<PAGE> 22
share less than the Current Market Value at the Time of Determination, the
Exercise Rate shall be adjusted in accordance with the formula:
E' = E x O + N
O + N x P
M where:
E' = the adjusted Exercise Rate.
E = the Exercise Rate immediately prior to the Time of
Determination for any such distribution.
O = the number of Fully Diluted Shares (as defined in Section
12(1)) outstanding on the Time of Determination for any such
issuance, sale or distribution.
N = the number of additional shares of Common Stock issued, sold
or issuable upon exercise of such rights, options or warrants.
P = the price received in the case of any issuance or sale of
Common Stock or exercise price per share of such rights,
options or warrants.
M = the Current Market Value per share of Common Stock on the
Time of Determination for any such issuance, sale or
distribution.
The adjustment shall be made successively whenever any such rights,
options or warrants are issued and shall become effective immediately after the
record date for the determination of stockholders entitled to receive the
rights, options or warrants. If at the end of the period during which any such
rights, options or warrants are exercisable, not all rights, options or warrants
shall have been exercised, the Warrant shall be immediately readjusted to what
it would have been if "N" in the above formula had been the number of shares
actually issued.
(c) Adjustment for Other Distribution
Subject to Section 12(a), if the Company distributes to all holders of
its Common Stock (i) any evidences of indebtedness
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<PAGE> 23
of the Company or any of its subsidiaries, (ii) any assets of the Company or any
of its subsidiaries (other than cash dividends or other cash distributions or
distributions from current or retained earnings other than any Extraordinary
Cash Dividend), or (iii) any rights, options or warrants to acquire any of the
foregoing or to acquire any other securities of the Company, the Exercise Rate
shall be adjusted in accordance with the formula:
E' = E x M
M - F
where:
E' = the adjusted Exercise Rate.
E = the current Exercise Rate on the record date mentioned
below.
M = the Current Market Value per share of Common Stock on the
record date mentioned below.
F = the fair market value on the record date mentioned below of
the indebtedness, assets, rights, options or warrants
distributable to one share of Common Stock.
The adjustment shall be made successively whenever any such
distribution is made and shall become effective immediately after the record
date for the determination of stockholders entitled to receive the distribution.
If an adjustment is made pursuant to clause (iii) above of this subsection (c)
as a result of the issuance of rights, options or warrants and at the end of the
period during which any such rights, options or warrants are exercisable, not
all such rights, options or warrants shall have been exercised, the Warrant
shall be immediately readjusted as if "F" in the above formula was the fair
market value on the record date of the indebtedness or assets actually
distributed upon exercise of such rights, options or warrants divided by the
number of shares of Common Stock outstanding on the record date. Notwithstanding
the foregoing, provisions of this Section 12(c), (x) an event which would
otherwise give rise to an adjustment pursuant to this Section 12(c) shall not
give rise to such an adjustment if the Company includes the holders of the
Warrants in such distribution pro rata to the number of shares of Common
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<PAGE> 24
Stock issued and outstanding after giving effect to the Warrant Shares and the
Old Warrant Shares as if they were issued and outstanding and (y) no adjustment
shall be made pursuant to this Section 12(c) with respect to the first $4.0
million of cash dividends and distributions paid to stockholders and holders of
Old Warrants on or after March 27, 1997.
This subsection does not apply to rights, options or warrants
referred to in subsection (b) of this Section 11.
(d) Current Market Value.
"Current Market Value" per share of Common Stock or of any
other security (herein collectively referred to as a "Security") at any date
shall be:
(1) if the Security is not registered under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), (i)
the value of the Security determined in good faith by the Board of
Directors of the Company and certified in a board resolution, based on
the most recently completed arm's length transaction between the
Company and a person other than an Affiliate of the Company in which
such determination is necessary and the closing of which occurs on such
date or shall have occurred within the three months preceding such
date, (ii) if no such transaction shall have occurred on such date or
within such three-month period, the value of the Security most recently
determined as of a date within the three months preceding such date by
an Independent Financial Expert or (iii) if neither clause (i) nor (ii)
is applicable, the value of the Security determined as of such date by
an Independent Financial Expert, or
(2) if the Security is registered under the
Exchange Act, the average of the daily market prices for each business
day during the period commencing 15 business days before such date and
ending on the date one day prior to such date or, if the Security has
been registered under the Exchange Act for less than 15 consecutive
business days before such date, then the average of the daily market
prices for all of the business days before such date for which daily
market prices are available. If the market price is not determinable
for at least 10 business days in such period, the Current Market Value
of the Security shall
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<PAGE> 25
be determined as if the Security was not registered under the Exchange
Act.
The "market price" for any Security on each business day
means: (A) if such Security is listed or admitted to trading on any securities
exchange, the closing price, regular way, on such day on the principal exchange
on which such Security is traded, or if no sale takes place on such day, the
average of the closing bid and asked prices on such day, (B) if such Security is
not then listed or admitted to trading on any securities exchange, the last
reported sale price on such day, or if there is no such last reported sale price
on such day, the average of the closing bid and the asked prices on such day, as
reported by a reputable quotation source designated by the Company, or (C) if
neither clause (A) nor (B) is applicable, the average of the reported high bid
and low asked prices on such day, as reported by a reputable quotation service,
or a newspaper of general circulation in the Borough of Manhattan, City of New
York, customarily published on each business day, designated by the Company. If
there are no such prices on a business day, then the market price shall not be
determinable for such business day.
"Independent Financial Expert" shall mean (a) CIBC Wood Gundy
Securities Corp. (or any successor) or (b) another nationally recognized
investment banking firm reasonably acceptable to the Warrant Agent (i) that does
not (and whose directors, officers, employees and Affiliates do not) have a
direct or indirect material financial interest in the Company, (ii) that has not
been, and, at the time it is called upon to serve as an Independent Financial
Expert under this Agreement is not (and none of whose directors, officers,
employees or Affiliates is) a promoter, director or officer of the Company,
(iii) that has not been retained by the Company for any purpose, other than to
perform an equity valuation, within the preceding twelve months, and (iv) that,
in the reasonable judgment of the Board of Directors of the Company (certified
by a board resolution), is otherwise qualified to serve as an independent
financial advisor. Any such person may receive customary compensation and
indemnification by the Company for opinions or services it provides as an
Independent Financial Expert.
"Affiliate" shall mean, with respect to any person, any other
person directly or indirectly controlling or controlled by or under direct or
indirect common control with such person. For
24
<PAGE> 26
the purposes of this definition, "control" when used with respect to any person,
means the power to direct the management and policies of such person, directly
or indirectly, whether through the ownership of voting securities, by contract
or otherwise; and the terms "controlling" and "controlled" have meanings
correlative to the foregoing.
"Extraordinary Cash Dividend" means cash dividends, subject to the
sentence below, with respect to the Common Stock the aggregate amount of which
in any fiscal year exceeds the greater of (i) 20% of the net income of the
Company and its subsidiaries for the fiscal year immediately preceding the
payment of such dividend or (ii) $250,000.
(e) When De Minimis Adjustment May Be Deferred
No adjustment in the Exercise Rate need be made unless the adjustment
would require an increase or decrease of at least .5% in the Exercise Rate.
Notwithstanding the foregoing, any adjustments that are not made shall be
carried forward and taken into account in any subsequent adjustment, provided
that no such adjustment shall be deferred beyond the date on which a Warrant is
exercised.
All calculations under this Section 10 shall be made to the nearest
cent or to the nearest 1/100th of a share, as the case may be.
(f) When No Adjustment Required
If an adjustment is made upon the establishment of a record date for a
distribution subject to subsections (a), (b) or (c) hereof and such distribution
is subsequently cancelled, the Exercise Rate then in effect shall be readjusted,
effective as of the date when the Board of Directors determines to cancel such
distribution, to that which would have been in effect if such record date had
not been fixed.
To the extent the Warrants become convertible into cash, no adjustment
need be made thereafter as to the amount of cash into which such Warrants are
exercisable. Interest will not accrue on the cash.
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<PAGE> 27
(g) Notice of Adjustment
Whenever the Exercise Rate or Exercise Price is adjusted, the Company
shall provide the notices required by Section 14 hereof.
(h) Voluntary Reduction
The Company from time to time may increase the Exercise Rate by any
amount for any period of time (including, without limitation, permanently) if
the period is at least 20 business days.
An increase of the Exercise Rate under this Subsection (h) (other than
a permanent increase) does not change or adjust the Exercise Rate otherwise in
effect for purposes of subsections (a), (b) or (c) of this Section 12.
(i) When Issuance or Payment May Be Deferred
In any case in which this Section 12 shall require that an adjustment
in the Exercise Rate be made effective as of a record date for a specified
event, the Company may elect to defer until the occurrence of such event (i)
issuing to the Holder of any Warrant exercised after such record date the
Warrant Shares and other capital stock of the Company, if any, issuable upon
such exercise over and above the Warrant Shares and other capital stock of the
Company, if any, issuable upon such exercise on the basis of the Exercise Rate
prior to such adjustment, and (ii) paying to such Holder any amount in cash in
lieu of a fractional share pursuant to Section 13; provided, however, that the
Company shall deliver to the Warrant Agent and shall cause the Warrant Agent, on
behalf of and at the expense of the Company, to deliver to such Holder a due
bill or other appropriate instrument evidencing such Holder's right to receive
such additional Warrant Shares, other capital stock and cash upon the occurrence
of the event requiring such adjustment.
(j) Reorganizations
In case of any capital reorganization, other than in the cases referred
to in Sections 12(a), (b) or (c) hereof, or the consolidation or merger of the
Company with or into another corporation (other than a merger or consolidation
in which the
26
<PAGE> 28
Company is the continuing corporation and which does not result in any
reclassification of the outstanding shares of Common Stock into shares of other
stock or other securities or property), or the sale of the property of the
Company as an entirety or substantially as an entirety (collectively such
actions being hereinafter referred to as "Reorganizations"), there shall
thereafter be deliverable upon exercise of any Warrant (in lieu of the number of
shares of Common Stock theretofore deliverable) the number of shares of stock or
other securities or property to which a holder of the number of shares of Common
Stock that would otherwise have been deliverable upon the exercise of such
Warrant would have been entitled upon such Reorganization if such Warrant had
been exercised in full immediately prior to such Reorganization. In case of any
Reorganization, appropriate adjustment, as determined in good faith by the Board
of Directors of the Company, whose determination shall be described in a duly
adopted resolution certified by the Company's Secretary or Assistant Secretary,
shall be made in the application of the provisions herein set forth with respect
to the rights and interests of Holders so that the provisions set forth herein
shall thereafter be applicable, as nearly as possible, in relation to any shares
or other property thereafter deliverable upon exercise of Warrants.
The Company shall not effect any such Reorganization unless prior to or
simultaneously with the consummation thereof the successor corporation (if other
than the Company) resulting from such Reorganization or the corporation
purchasing or leasing such assets or other appropriate corporation or entity
shall (i) expressly assume, by a supplemental Warrant Agreement or other
acknowledgment executed and delivered to the Warrant Agent the obligation to
deliver to the Warrant Agent and to cause the Warrant Agent to deliver to each
such Holder such shares of stock, securities or assets as, in accordance with
the foregoing provisions, such Holder may be entitled to purchase, and all other
obligations and liabilities under this Agreement and (ii) enter into an
agreement providing to the Holders rights and benefits substantially similar to
those enjoyed by the Holders under the Registration Rights and Stockholders
Agreement of even date herewith.
The foregoing provisions of this Section 12(j) shall apply to
successive Reorganization transactions.
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<PAGE> 29
(k) Form of Warrants
Irrespective of any adjustments in the number or kind of shares
purchasable upon the exercise of the Warrants, Warrants theretofore or
thereafter issued may continue to express the same price and number and kind of
shares as are stated in the Warrants initially issuable pursuant to this
Agreement.
(l) Miscellaneous
For purpose of this Section 12 the term "Common Stock" shall mean (i)
shares of the classes of stock designated as the Class A Common Stock and Class
B Common Stock, par value $.01 per share of the Company (the "Class B Common
Stock") as of the date of this Agreement, and (ii) shares of any other class of
stock resulting from successive changes or reclassification of such shares
consisting solely of changes in par value, or from par value to no par value, or
from no par value to par value. For purposes of this Section 12 the term "Fully
Diluted Shares" shall mean (i) the shares of Common Stock outstanding as of a
specified date, and (ii) shares of Common Stock into or for which rights,
options, warrants or other securities outstanding as of such date are
exercisable or convertible (other than the Warrants). In the event that at any
time, as a result of an adjustment made pursuant to this Section 12, the holders
of Warrants shall become entitled to purchase any securities of the Company
other than, or in addition to, shares of Common Stock, thereafter the number or
amount of such other securities so purchasable upon exercise of each Warrant
shall be subject to adjustment from time to time in a manner and on terms as
nearly equivalent as practicable to the provisions with respect to the Warrant
Shares contained in subsections (a) through (l) of this Section 12, inclusive,
and the provisions of Sections 7, 8, 10 and 13 with respect to the Warrant
Shares or the Common Stock shall apply on like terms to any such other
securities.
SECTION 13. Fractional Interests. The Company shall not be required to
issue fractional Warrant Shares on the exercise of Warrants. If more than one
Warrant shall be presented for exercise in full at the same time by the same
holder, the number of full Warrant Shares which shall be issuable upon the
exercise thereof shall be computed on the basis of the aggregate number of
Warrant Shares purchasable on exercise of the Warrants so presented. If any
fraction of a Warrant Share would,
28
<PAGE> 30
except for the provisions of this Section 13, be issuable on the exercise of any
Warrants (or specified portion thereof), the Company shall pay an amount in cash
equal to the Current Market Value on the day immediately preceding the date the
Warrant is presented for exercise, multiplied by such fraction.
SECTION 14. Notices to Warrant Holders. Upon any adjustment
pursuant to Section 12 hereof, the Company shall give prompt written notice of
such adjustment to the Warrant Agent and shall cause the Warrant Agent, on
behalf of and at the expense of the Company, within 10 days after such
adjustment, to mail by first class mail, postage prepaid, to each Holder a
notice of such adjustment(s) and shall deliver to the Warrant Agent a
certificate of the Chief Financial Officer of the Company, accompanied by the
report thereon by a firm of independent public accountants selected by the Board
of Directors of the Company (who may be the regular accountants for the
Company), setting forth in reasonable detail (i) the number of Warrant Shares
purchasable upon the exercise of each Warrant and the Exercise Price of such
Warrant after such adjustment(s), (ii) a brief statement of the facts requiring
such adjustment(s) and (iii) the computation by which such adjustment(s) was
made. Where appropriate, such notice may be given in advance and included as a
part of the notice required under the other provisions of this Section 14.
In case:
(a) the Company shall authorize the issuance to all
holders of shares of Common Stock of rights, options or warrants to
subscribe for or purchase shares of Common Stock or of any other
subscription rights or warrants; or
(b) the Company shall authorize the distribution to
all holders of shares of Common Stock of evidences of its indebtedness
or assets; or
(c) of any consolidation or merger to which the
Company is a party and for which approval of any shareholders of the
Company is required, or of the conveyance or transfer of the properties
and assets of the Company substantially as an entirety, or of any
reclassification or change of Common Stock issuable upon exercise of
the Warrants (other than a change in par value,
29
<PAGE> 31
or from par value to no par value, or from no par value to par value,
or as a result of a subdivision or combination), or a tender offer or
exchange offer for shares of Common Stock; or
(d) of the voluntary or involuntary dissolution,
liquidation or winding up of the Company; or
(e) the Company proposes to take any action that
would require an adjustment to the Exercise Rate or the Exercise Price
pursuant to Section 12 hereof;
then the Company shall give prompt written notice to the Warrant Agent and shall
cause the Warrant Agent, on behalf of and at the expense of the Company to give
to each of the registered holders of the Warrant Certificates at his or its
address appearing on the Warrant register, at least 30 days (or 20 days in any
case specified in clauses (a) or (b) above) prior to the applicable record date
hereinafter specified, or the date of the event in the case of events for which
there is no record date, by first-class mail, postage prepaid, a written notice
stating (i) the date as of which the holders of record of shares of Common Stock
to be entitled to receive any such rights, options, warrants or distribution are
to be determined, or (ii) the initial expiration date set forth in any tender
offer or exchange offer for shares of Common Stock, or (iii) the date on which
any such consolidation, merger, conveyance, transfer, dissolution, liquidation
or winding up is expected to become effective or consummated, and the date as of
which it is expected that holders of record of shares of Common Stock shall be
entitled to exchange such shares for securities or other property, if any,
deliverable upon such reclassification, consolidation, merger, conveyance,
transfer, dissolution, liquidation or winding up. The failure by the Company or
the Warrant Agent to give such notice or any defect therein shall not affect the
legality or validity of any distribution, right, option, warrant, consolidation,
merger, conveyance, transfer, dissolution, liquidation or winding up, or the
vote upon any action.
The Company shall give prompt written notice to the Warrant Agent
and shall cause the Warrant Agent, on behalf of and at the expense of the
Company to give to each Holder written notice of any determination to make a
distribution or dividend to the holders of its Common Stock of any assets
(including cash),
30
<PAGE> 32
debt securities, preferred stock, or any rights or warrants to purchase debt
securities, preferred stock, assets or other securities (other than Common
Stock, or rights, options, or warrants to purchase Common Stock) of the Company,
which notice shall state the nature and amount of such planned dividend or
distribution and the record date therefor, and shall be received by the Holders
at least 30 days prior to such record date therefor.
Nothing contained in this Agreement or in any Warrant Certificate shall
be construed as conferring upon the Holders the right to vote or to consent or
to receive notice as shareholders in respect of the meetings of shareholders or
the election of Directors of the Company or any other matter, or any rights
whatsoever as shareholders of the Company.
SECTION 15. Notices to the Company and Warrant Agent. Any notice or
demand authorized by this Agreement to be given or made by the Warrant Agent or
by any Holder to or on the Company shall be sufficiently given or made when
received at the office of the Company expressly designated by the Company as its
office for purposes of this Agreement (until the Warrant Agent is otherwise
notified in accordance with this Section 13 by the Company), as follows:
Spanish Broadcasting System, Inc.
26 West 56th Street
New York, New York 10019
Attention: Joseph Garcia
with a copy to:
Kaye, Scholer, Fierman, Hays & Handler, LLP
425 Park Avenue
New York, New York 10022
Attention: William E. Wallace, Jr., Esq.
Any notice pursuant to this Agreement to be given by the Company or by
any Holder(s) to the Warrant Agent shall be sufficiently given when received by
the Warrant Agent at the address appearing below (until the Company is otherwise
notified in accordance with this Section by the Warrant Agent).
31
<PAGE> 33
IBJ Schroder Bank & Trust Company
One State Street
New York, New York 10004
Attention: Corporate Trust Agency &
Administration
SECTION 16. Supplements and Amendments. The Company and the
Warrant Agent may from time to time supplement or amend this Agreement without
the approval of any holders of Warrants in order to cure any ambiguity or to
correct or supplement any provision contained herein which may be defective or
inconsistent with any other provision herein, or to make any other provisions in
regard to matters or questions arising hereunder which the Company and the
Warrant Agent may deem necessary or desirable and which shall not in any way
adversely affect the interests of any holder of Warrants.
SECTION 17. Concerning the Warrant Agent. The Warrant Agent
undertakes the duties and obligations imposed by this Agreement upon the
following terms and conditions, by all of which the Company and the Holders, by
their acceptance of Warrants, shall be bound:
(a) The statements contained herein and in the Warrant
Certificate shall be taken as statements of the Company, and the
Warrant Agent assumes no responsibility for the correctness of any of
the same except such as describe the Warrant Agent or any action taken
by it. The Warrant Agent assumes no responsibility with respect to the
distribution of the Warrants except as herein otherwise provided.
(b) The Warrant Agent shall not be responsible for any failure
of the Company to comply with the covenants contained in this Agreement
or in the Warrants to be complied with by the Company.
(c) The Warrant Agent may execute and exercise any of the
rights or powers hereby vested in it or perform any duty hereunder
either itself (through its employees) or by or through its attorneys or
agents (which shall not include its employees) and shall not be
responsible for the misconduct of any agent appointed with due care.
32
<PAGE> 34
(d) The Warrant Agent may consult at any time with legal
counsel satisfactory to it (who may be counsel for the Company), and
the Warrant Agent shall incur no liability or responsibility to the
Company or to any Holder in respect of any action taken, suffered or
omitted by it hereunder in good faith and in accordance with the
opinion or the advice of such counsel.
(e) Whenever in the performance of its duties under this
Agreement the Warrant Agent shall deem it necessary or desirable that
any fact or matter (including the occurrence of the Resale Restriction
Termination Date) be proved or established by the Company prior to
taking or suffering any action hereunder, such fact or matter (unless
such evidence in respect thereof be herein specifically prescribed) may
be deemed conclusively to be proved and established by a certificate
signed by the Chairman of the Board, the President, one of the Vice
Presidents, the Treasurer or the Secretary of the Company and delivered
to the Warrant Agent; and such certificate shall be full authorization
to the Warrant Agent for any action taken or suffered in good faith by
it under the provisions of this Agreement in reliance upon such
certificate. Without limiting the foregoing, the Company shall notify
the Warrant Agent of the occurrence of the Resale Restriction
Termination Date, the Exercisability Date and the Separability Date on
the Date it occurs, and until receipt of such notice the Warrant Agent
may be entitled to assume that any such date has not occurred.
(f) The Company agrees to pay the Warrant Agent reasonable
compensation for all services rendered by the Warrant Agent in the
performance of its duties under this Agreement, to reimburse the
Warrant Agent for all expenses, taxes and governmental charges and
other charges of any kind and nature incurred by the Warrant Agent in
the performance of its duties under this Agreement, and to indemnify
the Warrant Agent and save it harmless against any and all liabilities,
including judgments, costs and counsel fees, for anything done or
omitted by the Warrant Agent in the performance of its duties under
this Agreement, except as a result of the Warrant Agent's negligence or
bad faith.
(g) The Warrant Agent shall be under no obligation to
institute any action, suit or legal proceeding or to take
33
<PAGE> 35
any other action likely to involve expense unless the Company or one or
more Holders shall furnish the Warrant Agent with reasonable security
and indemnity for any costs and expenses which may be incurred, but
this provision shall not affect the power of the Warrant Agent to take
such action as the Warrant Agent may consider proper, whether with or
without any such security or indemnity. All rights of action under this
Agreement or under any of the Warrants may be enforced by the Warrant
Agent without the possession of any of the Warrants or the production
thereof at any trial or other proceeding relative thereto, and any such
action, suit or proceeding instituted by the Warrant Agent shall be
brought in its name as Warrant Agent, and any recovery of judgment
shall be for the ratable benefit of the Holders, as their respective
rights or interests may appear.
(h) The Warrant Agent and any stockholder, director, officer
or employee of the Warrant Agent may buy, sell or deal in any of the
Warrants or other securities of the Company or become pecuniarily
interested in any transactions in which the Company may be interested,
or contract with or lend money to the Company or otherwise act as fully
and freely as though it were not Warrant Agent under this Agreement or
such director, officer or employee. Nothing herein shall preclude the
Warrant Agent from acting in any other capacity for the Company or for
any other legal entity including, without limitation, acting as
Transfer Agent or as a lender to the Company or an affiliate thereof.
(i) The Warrant Agent shall act hereunder solely as agent, and
its duties shall be determined solely by the provisions hereof. The
Warrant Agent shall not be liable for anything which it may do or
refrain from doing in connection with this Agreement except for its own
negligence or bad faith.
(j) The Warrant Agent will not incur any liability or
responsibility to the Company or to any Holder for any action taken in
reliance on any notice, resolution, waiver, consent, order,
certificate, or other paper, document or instrument reasonably believed
by it to be genuine and to have been signed, sent or presented by the
proper party or parties.
34
<PAGE> 36
(k) The Warrant Agent shall not be under any responsibility in
respect of the validity of this Agreement or the execution and delivery
hereof (except the due execution hereof by the Warrant Agent) or in
respect of the validity or execution of any Warrant (except its
countersignature thereof); nor shall the Warrant Agent by any act
hereunder be deemed to make any representation or warranty as to the
authorization or reservation of any Warrant Shares (or other stock) to
be issued pursuant to this Agreement or any Warrant, or as to whether
any Warrant Shares (or other stock) will, when issued, be validly
issued, fully paid and nonassessable, or as to the Exercise Price or
the number or amount of Warrant Shares or other securities or other
property issuable upon exercise of any Warrant.
(l) The Warrant Agent is hereby authorized and directed to
accept instructions with respect to the performance of its duties
hereunder from the Chairman of the Board, the President, any Vice
President or the Secretary of the Company, and to apply to such
officers for advice or instructions in connection with its duties, and
shall not be liable for any action taken or suffered to be taken by it
in good faith and without negligence in accordance with instructions of
any such officer or officers.
SECTION 18. Change of Warrant Agent. The Warrant Agent may
resign and be discharged from its duties under this Agreement by giving to the
Company 30 days' notice in writing. The Warrant Agent may be removed by like
notice to the Warrant Agent from the Company. If the Warrant Agent shall resign
or be removed or shall otherwise become incapable of acting, the Company shall
appoint a successor to the Warrant Agent. If the Company shall fail to make such
appointment within a period of 30 days after such removal or after it has been
notified in writing of such resignation or incapacity by the resigning or
incapacitated Warrant Agent or by any Holder (who shall with such notice submit
his Warrant for inspection by the Company), then any Holder may apply to any
court of competent jurisdiction for the appointment of a successor to the
Warrant Agent. Pending appointment of a successor warrant agent, either by the
Company or by such court, the duties of the Warrant Agent shall be carried out
by the Company. Any successor warrant agent, whether appointed by the Company or
such a court, shall be a bank or
35
<PAGE> 37
trust company in good standing, incorporated under the laws of the United States
of America or any State thereof or the District of Columbia and having at the
time of its appointment as warrant agent a combined capital and surplus of at
least $10,000,000. After appointment, the successor warrant agent shall be
vested with the same powers, rights, duties and responsibilities as if it had
been originally named as Warrant Agent without further act or deed; but the
former Warrant Agent shall deliver and transfer to the successor warrant agent
any property at the time held by it hereunder, and execute and deliver any
further assurance, conveyance, act or deed necessary for such purpose. Failure
to file any notice provided for in this Section 18, however, or any defect
therein, shall not affect the legality or validity of the resignation or removal
of the Warrant Agent or the appointment of the successor warrant agent, as the
case may be. In the event of such resignation or removal, the Company or the
successor warrant agent shall mail by first class mail, postage prepaid, to each
Holder, written notice of such removal or resignation and the name and address
of such successor warrant agent.
SECTION 19. Identity of Transfer Agent. Forthwith upon the appointment
of any Transfer Agent for the Common Stock, or any other shares of the Company's
capital stock issuable upon the exercise of the Warrants, the Company shall file
with the Warrant Agent a statement setting forth the name and address of such
Transfer Agent.
SECTION 20. Registration Rights. The Holders shall be entitled to all
of the benefits of that certain Common Stock Registration Rights and
Stockholders Agreement among the Company and the parties named therein dated as
of March 15, 1997, in connection with the Common Stock to be issued in
connection with the exercise of the Warrants.
SECTION 21. Successors. All the covenants and provisions of this
Agreement by or for the benefit of the Company, the Warrant Agent or any holder
of Warrants shall bind and inure to the benefit of their respective successors
and assigns hereunder.
SECTION 22. Termination. This Agreement shall terminate on the
Expiration Date. Notwithstanding the foregoing, this Agreement will terminate on
any earlier date if all Warrants have been exercised or redeemed pursuant to
this Agreement.
36
<PAGE> 38
SECTION 23. Governing Law. This Agreement and each Warrant Certificate
issued hereunder shall be deemed to be a contract made under the laws of the
State of New York and shall be governed by and construed in accordance with the
laws of said State, without regard to the conflict of law rules thereof.
SECTION 24. Benefits of This Agreement. Nothing in this Agreement shall
be construed to give to any person or corporation other than the Company, the
Warrant Agent and the registered holders of the Warrant Certificates any legal
or equitable right, remedy or claim under this Agreement; but this Agreement
shall be for the sole and exclusive benefit of the Company, the Warrant Agent
and the registered holders of the Warrant Certificates.
SECTION 25. Counterparts. This Agreement may be executed in any number
of counterparts and each of such counterparts shall for all purposes be deemed
to be an original, and all such counterparts shall together constitute but one
and the same instrument.
37
<PAGE> 39
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed, as of the day and year first above written.
SPANISH BROADCASTING SYSTEM, INC.
By: /s/ Raul Alarcon, Jr.
------------------------------------
Name: Raul Alarcon, Jr.
Title: President and Chief Executive
Officer
IBJ SCHRODER BANK & TRUST COMPANY,
as Warrant Agent
By: /s/ James P. Freeman
------------------------------------
Name: James P. Freeman
Title: Assistant Vice President
38
<PAGE> 40
EXHIBIT A
[Form of Warrant Certificate]
[Face]
THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE WARRANT
AGREEMENT HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITORY
OR A NOMINEE OF A DEPOSITORY OR A SUCCESSOR DEPOSITORY. THIS SECURITY IS NOT
EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE
DEPOSITORY OR ITS NOMINEE EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE
WARRANT AGREEMENT, AND NO TRANSFER OF THIS SECURITY (OTHER THAN A TRANSFER OF
THIS SECURITY AS A WHOLE BY THE DEPOSITORY TO A NOMINEE OF THE DEPOSITORY OR BY
A NOMINEE OF THE DEPOSITORY TO THE DEPOSITORY OR ANOTHER NOMINEE OF THE
DEPOSITORY) MAY BE REGISTERED EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN
THE WARRANT AGREEMENT. UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"),
TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT,
AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH
OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY
PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS 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)
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR
SOLD EXCEPT AS SET FORTH BELOW. BY ITS ACQUISITION HEREOF, THE HOLDER (1)
REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE
144A UNDER THE SECURITIES ACT) OR (B) IT IS AN INSTITUTIONAL "ACCREDITED
INVESTOR" (AS DEFINED IN RULE 501(a)(1), (2), (3) OR (7) UNDER THE SECURITIES
ACT) (AN "ACCREDITED INVESTOR") OR (C) IT IS NOT A U.S. PERSON AND IS ACQUIRING
THIS SECURITY IN AN OFFSHORE TRANSACTION, (2) AGREES THAT IT WILL NOT WITHIN TWO
- -------------------------
(1) This paragraph is to be included only if the Warrant is in global form.
<PAGE> 41
YEARS AFTER THE ORIGINAL ISSUANCE OF THIS SECURITY RESELL OR OTHERWISE TRANSFER
THIS SECURITY EXCEPT (A) TO THE ISSUER OR ANY SUBSIDIARY THEREOF, (B) INSIDE THE
UNITED STATES TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A
UNDER THE SECURITIES ACT, (C) INSIDE THE UNITED STATES TO AN ACCREDITED INVESTOR
THAT, PRIOR TO SUCH TRANSFER, FURNISHES TO THE WARRANT AGENT A SIGNED LETTER
CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS (THE FORM OF WHICH LETTER CAN
BE OBTAINED FROM THE WARRANT AGENT), (D) OUTSIDE THE UNITED STATES TO PERSONS
OTHER THAN U.S. PERSONS IN OFFSHORE TRANSACTIONS MEETING THE REQUIREMENTS OF
RULE 904 UNDER REGULATION S UNDER THE SECURITIES ACT, (E) PURSUANT TO THE
EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF
AVAILABLE), OR (F) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT AND (3) AGREES THAT IT WILL GIVE TO EACH PERSON TO WHOM THIS
SECURITY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. AS
USED HEREIN, THE TERMS "OFFSHORE TRANSACTION," "UNITED STATES" AND "U.S. PERSON"
HAVE THE RESPECTIVE MEANINGS GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES
ACT.
2
<PAGE> 42
EXERCISABLE ON OR AFTER THE EXERCISABILITY DATE
AND ON OR BEFORE JUNE 30, 1999
No. _______ _______
Warrants
CUSIP No.: [ ]
Warrant Certificate
SPANISH BROADCASTING SYSTEM, INC.
This Warrant Certificate certifies that ______, or registered
assigns, is the registered holder of Warrants expiring June 30, 1999 (the
"Warrants") to purchase shares of Class A Common Stock (the "Common Stock") of
Spanish Broadcasting System, Inc., a Delaware corporation (the "Company"). Each
Warrant entitles the holder upon exercise to receive from the Company on or
after the Exercisability Date and on or before 5:00 p.m. New York City Time on
June 30, 1999, .428 fully paid and nonassessable shares of Common Stock (a
"Warrant Share") at the initial exercise price (the "Exercise Price") of $.01
payable in lawful money of the United States of America upon surrender of this
Warrant Certificate and payment of the Exercise Price at the office or agency of
the Warrant Agent, but only subject to the conditions set forth herein and in
the Warrant Agreement referred to on the reverse hereof. The Exercise Price and
number of Warrant Shares issuable upon exercise of the Warrants are subject to
adjustment upon the occurrence of certain events set forth in the Warrant
Agreement.
No Warrant may be exercised before the Exercisability Date or after
5:00 p.m., New York City Time, on June 30, 1999, and to the extent not exercised
by such time such Warrants shall become void.
This Warrant Certificate shall not be valid unless countersigned by
the Warrant Agent, as such term is used in the Warrant Agreement.
<PAGE> 43
This Warrant Certificate shall be governed and construed in
accordance with the internal laws of the State of New York.
2
<PAGE> 44
IN WITNESS WHEREOF, Spanish Broadcasting System, Inc.
has caused this Warrant Certificate to be signed by its
[ ] and by its [ ].
Dated:
SPANISH BROADCASTING SYSTEM, INC.
By: ___________________________
Name:
Title:
By: ___________________________
Name:
Title:
Countersigned:
IBJ Schroder Bank & Trust Company,
as Warrant Agent
By: _________________________
Authorized Signature
3
<PAGE> 45
[Form of Warrant Certificate]
[Reverse]
The Warrants evidenced by this Warrant Certificate are part of a
duly authorized issue of Warrants expiring June 30, 1999, entitling the holder
on exercise to receive shares of Class A voting Common Stock, of the Company
(the "Class A Common Stock"), $.01 par value, and are issued or to be issued
pursuant to a Warrant Agreement dated as of March 15, 1997 (the "Warrant
Agreement"), duly executed and delivered by the Company to IBJ Schroder Bank &
Trust Company, a bank and trust company organized and existing under the laws of
the State of New York as warrant agent (the "Warrant Agent"), which Warrant
Agreement is hereby incorporated by reference in and made a part of this
instrument and is hereby referred to for a description of the rights, limitation
of rights, obligations, duties and immunities thereunder of the Warrant Agent,
the Company and the holders (the words "holders" or "holder" meaning the
registered holders or registered holder) of the Warrants. A copy of the Warrant
Agreement may be obtained by the holder hereof upon written request to the
Company.
Warrants may be exercised at any time on or after the
"Exercisability Date" and on or before June 30, 1999, subject to extension as
provided in the Warrant Agreement. The holder of Warrants evidenced by this
Warrant Certificate may exercise them by surrendering this Warrant Certificate,
with the form of election to purchase set forth hereon properly completed and
executed, together with payment of the Exercise Price in cash at the office of
the Warrant Agent. In the event that upon any exercise of Warrants evidenced
hereby the number of Warrants exercised shall be less than the total number of
Warrants evidenced hereby, there shall be issued to the holder hereof or his
assignee a new Warrant Certificate evidencing the number of Warrants not
exercised. No adjustment shall be made for any dividends on any Class A Common
Stock issuable upon exercise of this Warrant.
The Warrant Agreement provides that upon the occurrence of certain
events the number of Warrants set forth on the face hereof may, subject to
certain conditions, be adjusted. No fractions of a share of Class A Common Stock
will be issued upon the exercise of any Warrant, but the Company will pay the
cash value thereof determined as provided in the Warrant Agreement.
<PAGE> 46
The holders of the Warrants are entitled to certain registration
rights with respect to the Class A Common Stock purchasable upon exercise
thereof. Such registration rights are set forth in the Common Stock Registration
Rights and Stockholders Agreement, dated as of March 15, 1997, among the Company
and the parties named therein.
Warrant Certificates, when surrendered at the office of the Warrant
Agent by the registered holder thereof in person or by legal representative or
attorney duly authorized in writing, may be exchanged, in the manner and subject
to the limitations provided in the Warrant Agreement, but without payment of any
service charge, for another Warrant Certificate or Warrant Certificates of like
tenor evidencing in the aggregate a like number of Warrants.
Upon due presentation for registration of transfer of this Warrant
Certificate at the office of the Warrant Agent a new Warrant Certificate or
Warrant Certificates of like tenor and evidencing in the aggregate a like number
of Warrants shall be issued to the transferee(s) in exchange for this Warrant
Certificate, subject to the limitations provided in the Warrant Agreement,
without charge except for any tax or other governmental charge imposed in
connection therewith.
The Company and the Warrant Agent may deem and treat the registered
holder(s) thereof as the absolute owner(s) of this Warrant Certificate
(notwithstanding any notation of ownership or other writing hereon made by
anyone), for the purpose of any exercise hereof, of any distribution to the
holder(s) hereof, and for all other purposes, and neither the Company nor the
Warrant Agent shall be affected by any notice to the contrary. Neither the
Warrants nor this Warrant Certificate entitles any holder hereof to any rights
of a stockholder of the Company.
2
<PAGE> 47
[Form of Election to Purchase]
(To Be Executed upon Exercise of Warrant)
The undersigned hereby irrevocably elects to exercise the right,
represented by this Warrant Certificate, to receive _____ shares of Class A
Common Stock and herewith tenders payment for such shares to the order of
Spanish Broadcasting System, Inc. in the amount of $_____ in accordance with the
terms hereof. The undersigned requests that a certificate for such shares be
registered in the name of ______________, whose address is __________ and that
such shares be delivered to _________ whose address is ______________. If said
number of shares is less than all of the shares of Class A Common Stock
purchasable hereunder, the undersigned requests that a new Warrant Certificate
representing the remaining balance of such shares be registered in the name of
_____________, whose address is ________, and that such Warrant Certificate be
delivered to ___________, whose address is ________________.
Signature:
Date:
Signature Guaranteed:
<PAGE> 48
SCHEDULE OF EXCHANGES(2)
The following exchanges of a part of this Global Warrant for Physical Warrants
(or of Physical Warrants for an interest in the Global Warrant) have been made:
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Number of
Warrants of
Amount of Amount of this Global
decrease in increase in Warrant Signature of
Number of Number of following authorized
Date of Warrants of this Warrants of this such decrease officer of
Exchange Global Warrant Global Warrant (or increase) Warrant Agent
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
</TABLE>
- -------------------------
(2) This is to be included only if the Warrant is in global form.
<PAGE> 49
EXHIBIT B
CERTIFICATE TO BE DELIVERED UPON EXCHANGE
OR REGISTRATION OF TRANSFER OF WARRANTS
Re: Warrants to purchase Class A
Common Stock (the "Securities"),
of Spanish Broadcasting System, Inc.
This Certificate relates to _______ Securities held in the form of*
___ a beneficial interest in a Global Warrant or* _______ Physical Warrants by
______ (the "Transferor").
The Transferor:*
/ / has requested by written order that the Warrant Agent deliver in
exchange for its beneficial interest in the Global Warrant held by the
Depositary a Physical Warrant or Physical Warrants in definitive, registered
form of authorized denominations and an aggregate number equal to its beneficial
interest in such Global Warrant (or the portion thereof indicated above); or
/ / has requested that the Warrant Agent by written order to exchange or
register the transfer of a Physical Warrant or Physical Warrants.
In connection with such request and in respect of each such
Security, the Transferor does hereby certify that the Transferor is familiar
with the Warrant Agreement relating to the above captioned Securities and the
restrictions on transfers thereof as provided in Section 6 of such Warrant
Agreement, and that the transfer of these Securities does not require
registration under the Securities Act of 1933, as amended (the "Act") because*:
/ / Such Security is being acquired for the Transferor's own account,
without transfer.
/ / Such Security is being transferred to a "qualified institutional
buyer" (as defined in Rule 144A under the Act), in reliance on Rule 144A.
<PAGE> 50
/ / Such Security is being transferred to an institutional "accredited
investor" (within the meaning of subparagraphs (a)(1), (2), (3) or (7) of Rule
501 under the Act.
/ / Such Security is being transferred in reliance on
Regulation S under the Act
/ / Such Security is being transferred in reliance on Rule 144 under the
Act.
/ / Such Security is being transferred in reliance on and in compliance
with an exemption from the registration requirements of the Act other than Rule
144A or Rule 144 or Regulation S under the Act to a person other than an
institutional "accredited investor."
_______________________________
[INSERT NAME OF TRANSFEROR]
By: _________________________
[Authorized Signatory]
Date:
_____________
*Check applicable box.
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<PAGE> 51
EXHIBIT C
Form of Certificate To Be
Delivered in Connection with
Transfers to Institutional Accredited Investors
___________________,_______
IBJ Schroder Bank & Trust
Company One State Street Plaza
New York, New York 10004
Attention: Corporate Trust Administration
Re: Spanish Broadcasting System, Inc.
(the "Company") Warrant Agreement
(the "Warrant Agreement") relating
to Warrants to Purchase Class A
Common Stock (the "Securities")___
Ladies and Gentlemen:
In connection with our proposed purchase of Securities, of the
Company, we confirm that:
1. We have received such information as we deem necessary in
order to make our investment decision.
2. We understand that any subsequent transfer of the
Securities is subject to certain restrictions and conditions set forth
in the Warrant Agreement and the undersigned agrees to be bound by, and
not to resell, pledge or otherwise transfer the Securities except in
compliance with, such restrictions and conditions and the Securities
Act of 1933, as amended (the "Securities Act").
3. We understand that the offer and sale of the Securities
have not been registered under the Securities Act, and that the
Securities may not be offered or sold within the United States or to,
or for the account or benefit of, U.S. persons except as permitted in
the following sentence. We agree, on our own behalf and on behalf of
any accounts for which we are acting as hereinafter stated, that if we
should sell any Securities,
<PAGE> 52
we will do so only (A) to the Company or any subsidiary thereof, (B)
inside the United States in accordance with Rule 144A under the
Securities Act to a "qualified institutional buyer" (as defined
therein), (C) inside the United States to an institutional "accredited
investor" (as defined below) that, prior to such transfer, furnishes
(or has furnished on its behalf by a U.S. broker-dealer) to the Warrant
Agent a signed letter substantially in the form hereof, (D) outside the
United States in accordance with Regulations S under the Securities
Act, (E) pursuant to the exemption from registration provided by Rule
144 under the Securities Act (if available), or (F) pursuant to an
effective registration statement under the Securities Act, and we
further agree to provide to any person purchasing Securities from us a
notice advising such purchaser that resales of the Securities are
restricted as stated herein.
4. We understand that, on any proposed resale of Securities,
we will be required to furnish to the Warrant Agent and the Company,
such certification, legal opinions and other information as the Warrant
Agent and the Company may reasonably require to confirm that the
proposed sale complies with the foregoing restrictions. We further
understand that the Securities purchased by us will bear a legend to
the foregoing effect.
5. We are an institutional "accredited investor" (as defined
in Rule 501(a)(1), (2), (3) or (7) of Regulation D under the Securities
Act) and have such knowledge and experience in financial and business
matters as to be capable of evaluating the merits and risks of our
investment in the Securities, and we and any accounts for which we are
acting are each able to bear the economic risk of our or their
investment, as the case may be.
6. We are acquiring the Securities purchased by us for our
account or for one or more accounts (each of which is an institutional
"accredited investor") as to each of which we exercise sole investment
discretion.
You and the Company are entitled to rely upon this letter and
are irrevocably authorized to produce this letter or a copy hereof to any
interested party in any administrative or
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<PAGE> 53
legal proceeding or official inquiry with respect to the matters covered hereby.
Very truly yours,
[Name of Transferor]
By: ________________________________
[Authorized Signatory]
3
<PAGE> 54
EXHIBIT D
Form of Certificate To Be
Delivered in Connection
with Regulation S Transfers
___________________, ____
IBJ Schroder Bank & Trust
Company
One State Street Plaza
New York, New York 10004
Attention: Corporate Trust Administration
Re: Spanish Broadcasting System, Inc.
(the "Company") Warrants to
purchase Class A Common Stock
(the "Securities")
Dear Sirs:
In connection with our proposed sale of ________ of the
Securities, we confirm that such sale has been effected pursuant to and in
accordance with Regulation S under the Securities Act of 1933, as amended (the
"Securities Act"), and, accordingly, we represent that:
(1) the offer of the Securities was not made to a person in
the United States;
(2) either (a) at the time the buy offer was originated, the
transferee was outside the United States or we and any person acting on
our behalf reasonably believed that the transferee was outside the
United States, or (b) the transaction was executed in, on or through
the facilities of a designated off-shore securities market and neither
we nor any person acting on our behalf knows that the transaction has
been prearranged with a buyer in the United States;
(3) no directed selling efforts have been made in the United
States in contravention of the requirements of Rule 903(b) or Rule
904(b) of Regulation S, as applicable;
<PAGE> 55
(4) the transaction is not part of a plan or scheme to evade
the registration requirements of the Securities Act; and
(5) we have advised the transferee of the transfer
restrictions applicable to the Securities.
You and the Company are entitled to rely upon this letter and
are irrevocably authorized to produce this letter or a copy hereof to any
interested party in any administrative or legal proceedings or official inquiry
with respect to the matters covered hereby. Defined terms used herein without
definition have the respective meanings provided in Regulation S.
Very truly yours,
[Name of Transferor]
By: ________________________________
[Authorized Signature]
2
<PAGE> 1
Exhibit 10.4
COMMON STOCK REGISTRATION RIGHTS
AND STOCKHOLDERS AGREEMENT
Dated as of March 15, 1997
among
SPANISH BROADCASTING SYSTEM, INC.
and
CERTAIN MANAGEMENT STOCKHOLDERS
and
CIBC WOOD GUNDY SECURITIES CORP.
(as Initial Purchaser)
THIS COMMON STOCK REGISTRATION RIGHTS AND STOCKHOLDERS AGREEMENT (the
"Agreement") is made and entered into as of March 15, 1997 among Spanish
Broadcasting System, Inc., a Delaware corporation (the "Company"), the
Management Stockholders (as defined herein) and CIBC Wood Gundy Securities
Corp., as Initial Purchaser (the "Initial Purchaser"). This Agreement is made
pursuant to the Securities Purchase Agreement, dated as of March 24, 1997, among
the Company, the Guarantors named therein and the Initial Purchaser (the
"Purchase Agreement"), relating, among other things, to the sale by the Company
to the Initial Purchaser of an aggregate of 175,000 Units, each Unit consisting
of one share of the Company's 14 1/4 % Senior Exchangeable Preferred Stock (the
"Senior Preferred Stock") and one Warrant (collectively, "Warrants") to purchase
.428 shares of Class A Common Stock, par value $0.01 per share ("Class A Common
Stock"), of the Company. In order to induce the Initial Purchaser to enter into
the Purchase Agreement, the Company has agreed to provide to the Initial
Purchaser and the Holders (as defined herein) among other things, the
registration rights for the Class A Common Stock set forth in this Agreement and
the Management Stockholders (as defined) have agreed to provide the Holders,
among other things, the take-along rights for the Class A Common Stock set forth
herein. In consideration of the foregoing, the parties hereto agree as follows:
1. Definitions. As used in this Agreement, the following capitalized
defined terms shall have the following meanings:
"Affiliate" means, when used with reference to any Person, any other
Person directly or indirectly controlling, controlled by, or under direct or
indirect common control with, the referent Person or such other Person, as the
case may be.
<PAGE> 2
For the purposes of this definition, "control" (including, with correlative
meanings, the term "controlling," "controlled by," and "under common control
with"), when used with respect to any specified Person means the power to direct
or cause the direction of management or policies of such Person, directly or
indirectly, whether through the ownership of voting securities, by contract or
otherwise; provided, however, that beneficial ownership of at least 10% of the
voting securities of a Person shall be deemed to be control.
"Business Day" shall mean a day that is not a Legal Holiday.
"Capital Stock" shall mean with respect to any Person any and all
shares or other equivalents (however designated) of capital stock, partnership
interests or any other participation, right or other interest in nature of an
equity interest in such Person or any option, warrant or other security
convertible into any of the foregoing. "Certificate of Designation" means the
certificate of designation governing the Senior Preferred Stock as in effect
on the date hereof.
"Change of Control" means (i) an event whereby at any time any "person"
or "group" (within the meaning of Section 13(d) and 14(d)(2) of the Exchange
Act), excluding the Management Stockholders and their Affiliates, acquires, in
one or more transactions, (a) beneficial ownership (within the meaning of Rule
13d-3 under the Exchange Act) of more than 50% of the total voting power
represented by all then outstanding Capital Stock of the Company ordinarily (and
a part from rights exercisable under certain circumstances) having the right to
vote in the election of directors or (b) the power to elect a majority of the
board of directors of the Company or (ii) so long as Senior Preferred Stock
remains outstanding, the occurrence of a "Change of Control" as such term is
defined in the Certificate of Designation governing the Senior Preferred Stock
or the certificate of designation governing the Exchange Preferred Stock and
Stock Exchange Preferred Stock (each as defined in such Certificate of
Designation).
"Class A Common Stock" shall mean the Class A Common Stock, par value
$.01 per share, of the Company.
"Class B Common Stock" shall mean the Class B Common Stock, par value
$.01 per share, of the Company.
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<PAGE> 3
"Closing Date" shall mean the Closing Date as defined in the Purchase
Agreement.
"Common Stock" shall mean the Class A Common Stock and Class B Common
Stock.
"Company" shall have the meaning set forth in the preamble and shall
also include the Company's successors.
"Contingent Class A Shares" means shares of Class A Common Stock issued
to holders of Senior Preferred Stock, Exchange Preferred Stock (as defined in
the Purchase Agreement), Private Exchange Preferred Stock (as defined in the
Purchase Agreement) and Debentures (as defined in the Purchase Agreement)
pursuant to the terms thereof.
"Demand Registration" shall have the meaning set forth in Section 2.1.
"Depository" shall mean, with respect to Warrant Shares represented by
one or more Global Certificates, The Depository Trust Company or another person
designated as Depository by the Company, which must be a clearing agency
registered under the Exchange Act.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended from time to time.
"Exempt Transfer" shall mean a transfer by a Management Stockholder to
another Management Stockholder.
"Fair Market Value" shall mean the value of any securities as
determined (without any discount for lack of liquidity, the amount of Warrants
and Class A Common Stock proposed to be sold or the fact that the shares of
Warrants and Class A Common Stock held by any Holder of such security may
represent a minority interest in a private company) by a nationally recognized
investment banking firm selected by the Company for the determination of such
value.
"Global Certificate" shall mean a certificate representing all or part
of the Warrant Shares issued to the Depository and bearing the legend set forth
in Exhibit A hereto.
3
<PAGE> 4
"Holder" shall mean a holder of Warrants and/or Warrant Shares as the
context may require.
"Legal Holiday" shall mean a Saturday, a Sunday or a day on which
banking institutions in New York, New York are required by law, regulation or
executive order to remain closed. If a payment date is a Legal Holiday, payment
may be made on the next succeeding day that is not a Legal Holiday.
"Person" shall mean an individual, partnership, corporation, trust or
unincorporated organization, or a government or agency or political subdivision
thereof.
"Physical Certificate" shall mean a certificate representing Warrant
Shares in definitive registered form, other than a Global Certificate.
"Piggy-Back Registration" shall have the meaning set forth in Section
2.2.
"Management Stockholder" shall mean (i) Mr. Pablo Raul Alarcon, Sr.,
Raul Alarcon, Jr., or Jose Grimalt, (ii) any employee benefit plan of the
Company or any participants therein, (iii) the heirs, executors, administrators,
testamentary trustees, legatees or beneficiaries of any person described in (i)
or (ii), and (iv) a trust the beneficiaries of which include only persons
described in (i) and their respective spouses and lineal descendants.
"Purchase Agreement" shall have the meaning set forth in the preamble.
"Registrable Securities" shall mean Warrant Shares and the shares of
Class A Common Stock issuable upon exercise of the Warrants. As to any
particular Registrable Securities, such securities shall cease to be Registrable
Securities when (i) a Registration Statement with respect to such securities
shall have been declared effective under the Securities Act and such securities
shall have been disposed of pursuant to such Registration Statement, (ii) such
securities have been sold to the public pursuant to Rule 144(k) (or any similar
provision then in force, but not Rule 144A) under the Securities Act, (iii) such
securities shall have been otherwise transferred by such Holder and new
certificates for such securities not bearing a legend restricting further
transfer shall have been delivered by the Company or its transfer agent and
subsequent disposition of such
4
<PAGE> 5
securities shall not require registration or qualification under the Securities
Act or any similar state law then in force or (iv) such securities shall have
ceased to be outstanding.
"Registration Expenses" shall mean all expenses incident to the
Company's performance of or compliance with this Agreement, including, without
limitation, all SEC and stock exchange or National Association of Securities
Dealers, Inc. registration and filing fees and expenses, fees and expenses of
compliance with securities or blue sky laws (including, without limitation,
reasonable fees and disbursements of counsel for the underwriters in connection
with blue sky qualifications of the Registrable Securities), rating agency fees,
printing expenses, messenger, telephone and delivery expenses, fees and
disbursements of counsel for the Company and all independent certified public
accountants, the fees and disbursements of underwriters customarily paid by
issuers or sellers of securities (but not including any underwriting discounts
or commissions or transfer taxes, if any, attributable to the sale of
Registrable Securities by Holders of such Registrable Securities) and other
reasonable out-of-pocket expenses of Holders.
"Registration Statement" shall mean any registration statement of the
Company which covers any of the Warrant Shares pursuant to the provisions of
this Agreement and all amendments and supplements to any such Registration
Statement, including post-effective amendments, in each case including the
Prospectus contained therein, all exhibits thereto and all material incorporated
by reference therein.
"Requisite Shares" shall mean a number of Registrable Securities and
Warrants to purchase Registrable Securities equal to not less than 25% of the
outstanding Warrants and Registrable Securities held in the aggregate by all
Holders.
"Restricted Security" shall have the meaning set forth in Rule
144(a)(3) under the Securities Act. "Rule 144" shall mean Rule 144 under the
Securities Act, as such Rule may be amended from time to time, or any similar
rule (other than Rule 144A) or regulation hereafter adopted by the SEC providing
for offers and sales of securities made in compliance therewith resulting in
offers and sales by subsequent holders that are not affiliates of an issuer of
such securities being free of the
5
<PAGE> 6
registration and prospectus delivery requirements of the Securities Act.
"Rule 144A" shall mean Rule 144A under the Securities Act, as such Rule
may be amended from time to time, or any similar rule or regulation hereafter
adopted by the SEC.
"SEC" shall mean the Securities and Exchange Commission. "Securities
Act" shall mean the Securities Act of 1933, as amended from time to time.
"Selling Holder" shall mean a Holder who is selling Warrant Shares in
accordance with the provisions of Section 2.2, 2.3, 3.3 or 3.4 hereof.
"Stockholder" means, collectively, each Holder and each Management
Stockholder.
"Transfer Agent" means any transfer agent or registrar appointed by the
Company for the Class A Common Stock.
"Triggering Event" shall have the meaning set forth in Section 2.1
hereof.
"Warrant Shares" means the shares of Class A Common Stock issued and
issuable upon exercise of the Warrants.
2. Registration Rights.
2.1 Demand Registration.
(a) Request for Registration. At any time and from time to
time on or after the earliest of (i) a Change of Control shall have occurred,
(ii) seven days prior to consummation of a Public Equity Offering (as defined in
the Certificate of Designation), (iii) the date on which any class of equity
securities of the Company is listed on a national securities exchange or
authorized for quotation on the National Association of Securities Dealers, Inc.
Automated Quotation System, (iv) the date of any Change of Control or (v) June
29, 1998 (each a "Triggering Event"), Holders owning, individually or in the
aggregate, at least the Requisite Shares may make a written request for
registration under the Securities Act of their Registrable Securities (a "Demand
Registration"). Any such
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<PAGE> 7
request will specify the number of Registrable Securities proposed to be sold
and will also specify the intended method of disposition thereof. Subject to
Section 2.1(b), upon a demand, the Company will prepare, file and cause to be
effective within 180 days of such demand a registration statement in respect of
all the Registrable Securities. The Company shall give written notice of such
registration request within 10 days after the receipt thereof to all other
Holders. Within 20 days after receipt of such notice by any Holder, such Holder
may request in writing that Registrable Securities be included in such
registration and the Company shall include in the Demand Registration the
Registrable Securities of any such Selling Holder requested to be so included
(the "Included Shares"). Each such request by such other Selling Holders shall
specify the number of Included Shares proposed to be sold and the intended
method of disposition thereof. Subject to Section 2.1(c), the Company shall be
required to register Registrable Securities pursuant to this Section 2.1 on a
maximum of two separate occasions.
(b) Repurchase Election.
(i) Notwithstanding the foregoing provisions of
Section 2.1(a), the Company shall not be obligated to effect a Demand
Registration if the Company elects to make an offer to repurchase (a "Purchase
Offer") all of the Warrants and Registrable Securities (a "Purchase Election")
by mailing notice of such Purchase Offer to all Holders of Warrants and
Registrable Securities on a date (the "Purchase Election Date") not more than 20
days after the receipt of any request for a Demand Registration made pursuant to
Section 2.1(a) and indicating in such Purchase Offer that the Purchase Election
will be consummated on a Business Day (the "Purchase Offer Payment Date") not
more than 60 days after the Purchase Election Date at a price per share equal to
the Fair Market Value per Warrant and per Registrable Security (without any
discount for lack of liquidity, the amount of Warrants and Class A Common Stock
proposed to be sold or the fact that the Warrants and shares of Class A Common
Stock held by the Holders may represent a minority interest in a private
company).
(ii) Notice of a Purchase Offer shall be mailed by
the Company (or caused to be mailed by the
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<PAGE> 8
Company), not less than 30 days nor more than 40 days before the Purchase Offer
Payment Date to each Holder of Warrants and Registrable Securities at its last
registered address. The Purchase Offer shall remain open from the time of
mailing for at least 20 Business Days and until 5:00 p.m., New York City time,
on the Business Day next preceding the Purchase Offer Payment Date. The notice,
which shall govern the terms of the Purchase Offer, shall include such
disclosures as are required by law and shall state:
(1) that the Purchase Offer is being made pursuant to this
Section 2.1(b) and that all Warrants and Registrable Securities
tendered for repurchase will be accepted for payment;
(2) the purchase prices per Warrant and per Registrable
Security and the Purchase Offer Payment Date;
(3) that any Warrants and Registrable Securities accepted for
payment pursuant to the Purchase Offer shall cease to be outstanding
after the Purchase Offer Payment Date unless the Company defaults in
making payment therefor of the respective purchase price;
(4) that Holders electing to have Warrants and Registrable
Securities purchased pursuant to a Purchase Offer will be required to
surrender such Warrants and Registrable Securities, together with a
completed letter of transmittal, to the Company (or its agent as
designated by the Company in such notice) at the address specified in
the notice no later than 5:00 p.m. New York City time on the Business
Day prior to the Purchase Offer Payment Date;
(5) that Holders will be entitled to withdraw their election
if the Company (or such designated agent) receives, not later than 5:00
p.m. New York City time on the Business Day prior to the Purchase Offer
Payment Date, a telegram, telex, facsimile transmission or letter
setting forth the name of the Holder, the number of Warrants and/or
Registrable Securities delivered for purchase and a statement that such
Holder is withdrawing its election to have such Warrants
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<PAGE> 9
and/or Registrable Securities purchased and promptly thereafter the
Company (or such designated agent) shall redeliver the withdrawn
Warrants and/or Registrable Securities to the Holder;
(6) that a Holder electing not to tender such Holder's
Warrants and/or Registrable Securities for purchase pursuant to such
Purchase Offer by 5:00 p.m. New York City time on the Business Day
prior to the Purchase Offer Payment Date will have no continuing right
to require the Company to repurchase such Holder's Warrants and
Registrable Securities; and
(7) that Holders whose Warrants and/or Registrable Securities
are tendered for purchase in part only will be issued new certificates
representing the number of the unpurchased Warrants and/or Registrable
Securities surrendered.
On the Purchase Offer Payment Date, the Company shall (i) accept for
payment Warrants and Registrable Securities or portions thereof tendered
pursuant to the Purchase Offer, (ii) promptly deliver to Holders of Warrants and
Registrable Securities so accepted payment of the purchase price therefor and
(iii) issue and mail or deliver to such Holders new certificates representing a
number of Warrants and Registrable Securities equal to the unpurchased portion
of the Warrants and Registrable Securities surrendered. Upon payment for all
Warrants and Registrable Securities tendered pursuant to a Purchase Offer the
Company shall be deemed to have effected the Demand Registration.
The Company shall comply, to the extent applicable, with the
requirements of Sections 13 and 14 of the Exchange Act, and any other securities
laws or regulations in connection with the repurchase of Warrants and
Registrable Securities pursuant to a Purchase Offer. To the extent that the
provisions of any securities laws or regulations conflict with the provisions of
this Section 2.1(b), the Company shall comply with the applicable securities
laws and regulations and shall not be deemed to have breached its obligations
under this Section 2.1(b) by virtue thereof.
(c) Effective Registration. A registration will not be deemed to have
been effective as a Demand Registration unless
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<PAGE> 10
it has been declared effected by the SEC and the Company has complied in all
material respects with its obligations under this Agreement with respect
thereto; provided that if, after it has become effective, the offering of the
Registrable Securities pursuant to such registration is or becomes the subject
of any stop order, injunction or other order or requirement of the SEC or any
other governmental or administrative agency, or if any court prevents or
otherwise limits the sale of Registrable Securities pursuant to the registration
(for any reason other than the act or omissions of the Selling Holders), such
registration will be deemed not to have been effected. If (i) a registration
requested pursuant to this Section 2.1 is deemed not to have been effected or
(ii) the registration requested pursuant to this Section 2.1 does not remain
effective for a period of at least 90 days beyond the effective date thereof or
until the consummation of the distribution by the Selling Holders of the
Included Shares, then the Company shall continue to be obligated to effect an
additional registration pursuant to this Section 2.1. The Selling Holders of
Registrable Securities shall be permitted to withdraw all or any part of the
Included Shares from a Demand Registration at any time prior to the effective
date of such Demand Registration. If at any time a Registration Statement is
filed pursuant to a Demand Registration, and subsequently a sufficient number of
Included Shares are withdrawn from the Demand Registration so that such
Registration Statement does not cover at least 25% of the Registrable Securities
held by all Holders, the Selling Holders who have not withdrawn their Included
Shares shall have the opportunity to include an additional number of Registrable
Securities in the Demand Registration so that such Registration Statement covers
at least 25% of the Registrable Securities held by all Holders. If an additional
number of Registrable Securities is not so included, the Company may withdraw
the Registration Statement. Such withdrawn Registration Statement will not count
as a Demand Registration and the Company shall continue to be obligated to
effect a registration pursuant to this Section 2.1.
(d) Priority in Demand Registrations Pursuant to Section 2.1. If a
Demand Registration pursuant to this Section 2.1 involves an underwritten
offering and the managing underwriter advises the Company in writing that, in
its opinion, the number of securities requested to be included in such
registration (including securities of the Company which are not Registrable
Securities) exceeds the number which can be sold in
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<PAGE> 11
such offering, the Company will include in such registration only the
Registrable Securities requested to be included in such registration. In the
event that the number of Registrable Securities requested to be included in such
registration exceeds the number which, in the opinion of such managing
underwriter, can be sold, the number of such Registrable Securities to be
included in such registration shall be allocated pro rata among all requesting
Holders on the basis of the relative number of shares of Registrable Securities
then held by each such Holder (provided that any shares thereby allocated to any
such Holder that exceed such Holder's request shall be reallocated among the
remaining requesting Holders in like manner). In the event that the number of
Registrable Securities requested to be included in such registration is less
than the number which, in the opinion of the managing underwriter, can be sold,
the Company may include in such registration the securities the Company proposes
to sell up to the number of securities that, in the opinion of the underwriter,
can be sold.
(e) Selection of Underwriter. If the Selling Holders so elect, the
offering of such Registrable Securities pursuant to such Demand Registration
shall be in the form of an underwritten offering. The Selling Holders making
such Demand Registration shall select one or more nationally recognized firms of
investment bankers, who shall be reasonably acceptable to the Company, to act as
the managing Underwriter or Underwriters in connection with such offering and
shall select any additional investment bankers and managers to be used in
connection with the offering.
(f) Expenses. The Company will pay all Registration Expenses in
connection with the registrations requested pursuant to Section 2.1(a). Each
Holder shall pay all underwriting discounts and commissions and transfer taxes,
if any, relating to the sale or disposition of such Holder's Registrable
Securities pursuant to a registration statement requested pursuant to this
Section 2.1.
2.2 Piggy-Back Registration. If at any time the Company proposes to
file a Registration Statement under the Securities Act with respect to an
offering by the Company for its own account or for the account of any of its
respective securityholders of any class of its common equity securities (other
than (i) a Registration Statement on Form S-4 or S-8 (or any
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<PAGE> 12
substitute form that may be adopted by the SEC), (ii) a Registration Statement
filed in connection with an offer or offering of securities solely to the
Company's existing securityholders, or (iii) a Demand Registration, then the
Company shall give written notice of such proposed filing to the Holders of
Registrable Securities as soon as practicable (but in no event less than 20
Business Days before the anticipated filing date), and such notice shall offer
such Holders the opportunity to register such number of shares of Registrable
Securities as each such Holder may request (which request shall specify the
Registrable Securities intended to be disposed of by such Selling Holder and the
intended method of distribution thereof) (a "Piggy-Back Registration"). The
Company shall use its best efforts to cause the managing Underwriter or
Underwriters of such proposed underwritten offering to permit the Registrable
Securities requested to be included in a Piggy-Back Registration to be included
on the same terms and conditions as any similar securities of the Company or any
other securityholder included therein and to permit the sale or other
disposition of such Registrable Securities in accordance with the intended
method of distribution thereof. Any Selling Holder shall have the right to
withdraw its request for inclusion of its Registrable Securities in any
Registration Statement pursuant to this Section 2.2 by giving written notice to
the Company of its request to withdraw. The Company may withdraw a Piggy-Back
Registration at any time prior to the time it becomes effective; provided that
the Company shall give prompt notice thereof to participating Selling Holders.
The Company will pay all Registration Expenses in connection with each
registration of Registrable Securities requested pursuant to this Section 2.2,
and each Holder shall pay all underwriting discounts and commissions and
transfer taxes, if any, relating to the sale or disposition of such Holder's
Registrable Securities pursuant to a registration statement effected pursuant to
this Section 2.2.
No registration effected under this Section 2.2, and no failure to
effect a registration under this Section 2.2, shall relieve the Company of its
obligation to effect a registration upon the request of Holders pursuant to
Section 2.1, and no failure to effect a registration under this Section 2.2 and
to complete the sale of shares of Class A Common Stock in connection therewith
shall relieve the Company of any other obligation under this Agreement.
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2.3 Reduction of Offering.
(a) Piggy-Back Registration.
(i) If the managing Underwriter or Underwriters of
any underwritten offering described in Section 2.2 have informed, in writing,
the Selling Holders of the Registrable Securities requesting inclusion in such
offering that it is their opinion that the total number of shares which the
Company, the Selling Holders and any other Persons desiring to participate in
such registration intend to include in such offering is such as to materially
and adversely affect the success of such offering, including the price at which
such securities can be sold, then the number of shares to be offered for the
account of the Selling Holders and all such other Persons (other than the
Company) participating in such registration shall be reduced or limited pro rata
in proportion to the respective number of shares requested to be registered to
the extent necessary to reduce the total number of shares requested to be
included in such offering to the number of shares, if any, recommended by such
managing Underwriters; provided, however, that if such offering is effected for
the account of any securityholder of the Company other than the Selling Holders,
pursuant to the demand registration rights of any such securityholder, then the
number of shares to be offered for the account of the Company (if any) and the
Selling Holders (but not such securityholders who have exercised their demand
registration rights) shall be reduced or limited pro rata in proportion to the
respective number of shares requested to be registered to the extent necessary
to reduce the total number of shares requested to be included in such offering
to the number of shares, if any, recommended by such managing Underwriters.
(ii) If the managing Underwriter or Underwriters of
any underwritten offering described in Section 2.2 notify the Selling Holders
requesting inclusion of Registrable Securities in such offering, that the kind
of securities that the Selling Holders, the Company and any other Persons
desiring to participate in such registration intend to include in such offering
is such as to materially and adversely affect the success of such offering, (x)
the Registrable Securities to be included in such offering shall
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be reduced as described in clause (i) above or (y) if a reduction in
the Registrable Securities pursuant to clause (i) above would, in the
judgment of the managing Underwriter or Underwriters, be insufficient
to substantially eliminate the adverse effect that inclusion of the
Registrable Securities requested to be included would have on such
offering, such Registrable Securities will be excluded from such
offering.
(b) If, as a result of the proration provisions of
this Section 2.3, any Selling Holder shall not be entitled to include all
Registrable Securities in a Piggy-Back Registration that such Selling Holder has
requested to be included, such Selling Holder may elect to withdraw his request
to include Registrable Securities in such registration (a "Withdrawal
Election"); provided, however, that a Withdrawal Election shall be irrevocable
and, after making a Withdrawal Election, a Selling Holder shall no longer have
any right to include Registrable Securities in the registration as to which such
Withdrawal Election was made.
3. Transfers of Warrant Shares.
3.1 Generally. All Warrant Shares at any time and from time to
time outstanding that are Registrable Securities shall be held subject to the
conditions and restrictions set forth in this Section 3. All shares of Common
Stock now or hereafter held by a Management Stockholder shall be held subject to
the conditions and restrictions set forth in this Section 3. Each Holder of
Warrant Shares and each Management Stockholder by executing this Agreement or by
accepting a certificate representing Common Stock or other indicia of ownership
therefor from the Company agrees with the Company and with each other
Stockholder to such conditions and restrictions.
3.2 Restrictions on Transfer.
(a) No Management Stockholder shall sell, assign, give,
transfer, exchange, convert, devise, bequeath, pledge or otherwise dispose of
(collectively, "Transfer") any Common Stock or any interest therein except (A)
in compliance with Section 3.3 or (B) to another Management Stockholder. Each
certificate representing Warrants and/or Warrant Shares shall contain
conspicuous notation on such certificate indicating that
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<PAGE> 15
the transfer of such Warrant Shares is subject to the terms and restrictions of
this Agreement, and each Holder consents to the placement of such legend on the
certificate or certificates representing the Warrant Shares owned by such
Holder.
(b) Each Holder agrees that it will not transfer any
Warrant Shares or any interest therein except in compliance with Sections 3.3
and 3.4 and prior to any Transfer of Common Stock by a Management Stockholder,
such Management Stockholder shall give notice to the Company of its intent to so
Transfer.
3.3 TakeAlong Rights.
(a) In the event of any proposed Transfer of Common
Stock by any of the Management Stockholders (other than in a bona fide public
distribution pursuant to an effective Registration Statement under the
Securities Act) in a single transaction or a series of related transactions
involving shares of Common Stock aggregating at least 15% of the shares of
Common Stock collectively owned by the Management Stockholders on the date
hereof to a person (such other person being hereinafter referred to as the
"proposed purchaser"), other than pursuant to an Exempt Transfer, each of the
Holders of Warrants, Warrant Shares and Contingent Class A Shares (the
"Non-Selling Stockholders") each shall have the irrevocable and exclusive right,
but not the obligation (the "Take-Along Right"), to require the proposed
purchaser to purchase from each of them up to such number of Warrants, Warrant
Shares and/or Contingent Class A Shares (the "Take-Along Shares") determined in
accordance with Section 3.3(c). The Company shall give written notice at least
20 days prior to the date of the proposed transfer to the Non-Selling
Stockholders stating
(i) the name and address of the proposed purchaser,
(ii) the proposed amount of consideration and terms
and conditions of payment offered by such proposed purchaser (if the proposed
consideration is not cash, the notice shall describe the terms of the proposed
consideration),
(iii) the number of shares of Common Stock proposed
to be transferred and
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<PAGE> 16
(iv) that either the proposed purchaser has been
informed of the TakeAlong Right and has agreed to purchase Warrants, Warrant
Shares and/or Contingent Class A Shares in accordance with the terms hereof or
that the Management Stockholders will make such purchase. The TakeAlong Right
shall be exercised by any or all of the NonSelling Stockholders by giving
written notice to the Company ("TakeAlong Notice") within ten Business Days of
receipt of the notice specified in the preceding sentence, indicating its
election to exercise the TakeAlong Right (the "Participating Stockholders"). The
TakeAlong Notice shall state the amount of Warrants, Warrant Shares and/or
Contingent Class A Shares that such Holder proposes to include in such transfer
to the proposed purchaser. Failure by any NonSelling Stockholder to give such
notice within the ten Business Day period shall be deemed an election by such
NonSelling Stockholder not to sell its Warrants, Warrant Shares and/or
Contingent Class A Shares pursuant to that TakeAlong Notice. The closing with
respect to any sale to a proposed purchaser pursuant to this Section shall be
held at the time and place specified in the TakeAlong Notice but in any event
within 30 days of the date the TakeAlong Notice is given; provided that if
through the exercise of reasonable efforts the Management Stockholders are
unable to cause such transaction to close within 30 days, such period may be
extended for such reasonable period of time as may be necessary to close such
transaction. Consummation of the sale of Common Stock by any Management
Stockholder to a proposed purchaser shall be conditioned upon consummation of
the sale by each Participating Stockholder to such proposed purchaser of the
TakeAlong Shares, if any. As used in this Section 3.3(a), the term "Transfer"
shall be deemed to include all transactions or series of transactions pursuant
to which beneficial ownership of Common Stock is transferred, directly or
indirectly, to a proposed purchaser, regardless of the number or type of
intermediate entities or transactions between a Management Stockholder and such
proposed purchaser.
(b) In the event that the proposed purchaser does not purchase
TakeAlong Shares from the Holders on the same terms and conditions as purchased
from the Management Stockholders, then the Management Stockholders making such
Transfer shall purchase on such terms and conditions such TakeAlong Shares if
the Transfer occurs.
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<PAGE> 17
(c) The number of TakeAlong Shares to be purchased from each
Participating Stockholder and the number of shares of Common Stock to be
purchased from each Management Stockholder shall be determined by multiplying
the aggregate number of shares of Common Stock proposed to be purchased from the
Management Stockholders by a proposed purchaser by a fraction, the numerator of
which is (i) with respect to each Participating Stockholder, the number of
TakeAlong Shares of such Participating Stockholder or (ii) with respect to each
Management Stockholder, the number of shares of Common Stock proposed to be sold
by such Management Stockholder and, in each case, the denominator of which is
the total number of TakeAlong Shares and shares of Common Stock proposed to be
sold by the Management Stockholders. In the event that any Participating
Stockholder shall elect to sell less than the maximum number of Warrants,
Warrant Shares and/or Contingent Class A Shares he is entitled to sell pursuant
to the provisions of this Section 3.3(b) then each other Participating
Stockholder shall have the right to sell additional Warrants, Warrant Shares
and/or Contingent Class A Shares, pro rata according to the respective number of
Warrants, Warrant Shares and/or Contingent Class A Shares offered for sale by
the Participating Stockholders.
(d) The Management Stockholders who are parties to a sale to a
proposed purchaser shall arrange for payment directly by the proposed purchaser
to each Participating Stockholder, upon delivery of the certificate or
certificates representing the Warrants, Warrant Shares and/or Contingent Class A
Shares duly endorsed for transfer, together with such other documents as the
proposed purchaser may reasonably request. The reasonable costs and expenses
incurred by the Management Stockholders and Participating Stockholders in
connection with a sale of Common Stock, Warrants, Warrant Shares and/or
Contingent Class A Shares subject to this Section 3.3 shall be allocated pro
rata based upon the number of shares of Common Stock, Warrants, Warrant Shares
and/or Contingent Class A Shares sold by each Stockholder to a proposed
purchaser; provided, that the costs and expenses shall not include the fees and
expenses of more than one law firm, which firm shall be selected by the
Management Stockholders, unless representation of the Management Stockholders
and the Participating Stockholders by the same counsel, due to actual or
potential differing interests between them, shall create a conflict of interest,
in which case the costs and expenses shall include the reasonable fees and
expenses
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of one additional law firm designated by Participating Stockholders proposing to
sell a majority of the TakeAlong Shares proposed to be sold by all
Participating Stockholders.
(e) If at the end of 30 days following the date on which a
TakeAlong Notice was given, or as otherwise extended pursuant to the provisions
of Section 3.3(a), the sale of Common Stock by the Management Stockholders and
the sale of the TakeAlong Shares have not been completed in accordance with the
terms of the proposed purchaser's offer, all certificates representing the
TakeAlong Shares shall be returned to the Participating Stockholders, and all
the restrictions on sale, transfer or assignment contained in this Agreement
with respect to Common Stock owned by the Management Stockholders shall again be
in effect.
(f) TakeAlong Rights shall terminate upon the effectiveness
of any Registration Statement filed with the SEC with respect to shares of Class
A Common Stock in an initial public offering or subsequent public offering if,
after giving effect to such offering, (i) at least 20% of the Company's Class A
Common Stock on a fully-diluted basis would be held by persons unaffiliated with
the Company and without restriction on transfer under the Act and (ii) the Class
A Common Stock is listed on a national securities exchange or included for
trading in the NASDAQ National Market System.
3.4 Registration of Transfers and Exchanges.
(a) Transfer and Exchange of Physical Certificates. When
Physical Certificates are presented to the Transfer Agent with a request:
(i) to register the transfer of the Physical
Certificates; or
(ii) to exchange such Physical Certificates for an
equal number of Physical Certificates of other authorized denominations, the
Transfer Agent shall register the transfer or make the exchange as requested if
the requirements under this Agreement as set forth in this Section 3.4 for such
transactions are met; provided, however, that the Physical Certificates
presented or surrendered for registration of transfer or exchange:
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(I) shall be duly endorsed or accompanied by a
written Instrument of transfer in form satisfactory to the Transfer Agent, duly
executed by the Holder thereof or his attorney duly authorized in writing; and
(II) in the case of Physical Certificates the offer
and sale of which have not been registered under the Securities, such Physical
Certificates shall be accompanied, in the sole discretion of the Company, by the
following additional information and documents, as applicable:
(A) if such Physical Certificates are being
delivered to the Transfer Agent by a holder for registration in the name of such
holder, without transfer, a certification from such holder to that effect (in
substantially the form of Exhibit B hereto); or
(B) if such Physical Certificates are being
transferred to a "qualified Institutional buyer" (as defined in Rule 144A under
the Securities Act (a "Qualified Institutional Buyer")) in accordance with Rule
144A under the Securities Act, a certification to that effect (in substantially
the form of Exhibit B hereto); or
(C) if such Physical Certificates are being
transferred to an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) under the Securities Act (an "Institutional
Accredited Investor")) delivery of a certification to that effect (in
substantially the form of Exhibit B hereto) and a Transferee Certificate for
Institutional Accredited Investors in substantially the form of Exhibit C
hereto; or
(D) if such Physical Certificates are being
transferred in reliance on Regulation S under the Securities Act ("Regulation
S"), delivery of a certification to that effect (in substantially the form of
Exhibit B hereto) and a Transferee Certificate for Regulation S Transfers in
substantially the form of Exhibit D hereto and an opinion of counsel reasonably
satisfactory to the Company to the effect that such transfer is in compliance
with the Securities Act; or
(E) if such Physical Certificates are being
transferred in reliance on Rule 144 under the
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Securities Act, delivery of a certification to that effect (in substantially the
form of Exhibit B hereto) and an opinion of counsel reasonably satisfactory to
the Company to the effect that such transfer is in compliance with the
Securities Act; or
(F) if such Physical Certificates are being
transferred in reliance on another exemption from the registration requirements
of the Securities Act, a certification to that effect (in substantially the form
of Exhibit B hereto) and an opinion of counsel reasonably satisfactory to the
Company to the effect that such transfer is in compliance with the Securities
Act.
(b) Restrictions on Transfer of Physical Certificates for a
Beneficial Interest in a Global Certificate. A Physical Certificate may not be
exchanged for a beneficial interest in a Global Certificate except upon
satisfaction of the requirements set forth below. Upon receipt by the Transfer
Agent of a Physical Certificate, duly endorsed or accompanied by appropriate
instruments of transfer, in form satisfactory to the Transfer Agent, together
with:
(A) a certification, in substantially the form of
Exhibit B hereto, that such Physical Certificate is being
transferred to a Qualified Institutional Buyer; and
(B) written instructions directing the Transfer Agent
to make, or to direct the Depositary to make, an endorsement
on the Global Certificate to reflect an increase in the
aggregate amount of the shares represented by the Global
Certificate, then the Transfer Agent shall cancel such
Physical Certificate and cause, or direct the Depositary to
cause, in accordance with the standing instructions and
procedures existing between the Depositary and the Transfer
Agent, the number of shares represented by the Global
Certificate to be increased accordingly. If no Global
Certificate is then outstanding, the Company shall issue a new
Global Certificate in the appropriate amount.
(c) Transfer and Exchange of Global Certificates. The transfer
and exchange of Global Certificates or beneficial
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interests therein shall be effected through the Depositary, in accordance with
this Agreement (including the restrictions on transfer set forth herein) and the
procedures of the Depositary therefor.
(d) Transfer of a Beneficial Interest in a Global Certificate
for a Physical Certificate.
(i) Any person having a beneficial interest in a
Global Certificate may upon request exchange such beneficial interest for a
Physical Certificate. Upon receipt by the Transfer Agent of written instructions
or such other form of instructions as is customary for the Depositary from the
Depositary or its nominee on behalf of any person having a beneficial interest
in a Global Certificate and upon receipt by the Transfer Agent of a written
order or such other form of instructions as is customary for the Depositary or
the person designated by the Depositary as having such a beneficial interest
containing registration instructions and, in the case of any such transfer or
exchange of a beneficial interest in a Global Certificate the offer and sale of
which have not been registered under the Securities Act, the following
additional information and documents:
(A) if such beneficial interest is being transferred
to the person designated by the Depositary as being the
beneficial owner, a certification from such person to that
effect (in substantially the form of Exhibit B hereto); or
(B) if such beneficial interest is being transferred
to a Qualified Institutional Buyer in accordance with Rule
144A under the Securities Act, a certification to that effect
(in substantially the form of Exhibit B hereto); or
(C) if such beneficial interest is being transferred
to an Institutional Accredited Investor, delivery of a
certification to that effect (in substantially the form of
Exhibit B hereto) and a Certificate for Institutional
Accredited Investors in substantially the form of Exhibit C
hereto; or
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(D) if such beneficial interest is being transferred
in reliance on Regulation S, delivery of a certification to
that effect (in substantially the form of Exhibit B hereto)
and a Transferee Certificate for Regulation S Transfers in
substantially the form of Exhibit D hereto and an opinion of
counsel reasonably satisfactory to the Company to the effect
that such transfer is in compliance with the Securities Act;
or
(E) if such beneficial interest is being transferred
in reliance on Rule 144 under the Securities Act, delivery of
a certification to that effect (in substantially the form of
Exhibit B hereto) and an opinion of counsel reasonably
satisfactory to the Company to the effect that such transfer
is in compliance with the Securities Act; or
(F) if such beneficial interest is being transferred
in reliance on another exemption from the registration
requirements of the Securities Act, a certification to that
effect (in substantially the form of Exhibit B hereto) and an
opinion of counsel reasonably satisfactory to the Company to
the effect that such transfer is in compliance with the
Securities Act, then the Transfer Agent will cause, in
accordance with the standing instructions and procedures
existing between the Depositary and the Transfer Agent, the
aggregate amount of the Global Certificate to be reduced and,
following such reduction, the Company will execute and deliver
to the transferee a Physical Certificate.
(ii) Physical Certificates issued in exchange for a
beneficial interest in a Global Certificate shall be registered in such names
and in such authorized denominations as the Depositary, pursuant to instructions
from its direct or indirect participants or otherwise, shall instruct the
Transfer Agent in writing. The Transfer Agent shall deliver such Physical
Certificates to the persons in whose names such Physical Certificates are so
registered.
(e) Restrictions on Transfer and Exchange of Global
Certificates. Notwithstanding any other provisions of this Agreement, a Global
Certificate may not be transferred as a
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whole except by the Depositary to a nominee of the Depositary or by a nominee of
the Depositary to the Depositary or another nominee of the Depositary or by the
Depositary or any such nominee to a successor Depositary or a nominee of such
successor Depositary.
(f) Authentication of Definitive Certificates in Absence of
Depositary. If at any time:
(i) the Depositary for the Global Certificates
notifies the Company that the Depositary is unwilling or unable to continue as
Depositary for the Global Certificates and a successor Depositary for the Global
Certificates is not appointed by the Company within 90 days after delivery of
such notice; or
(ii) the Company, at its sole discretion, notifies
the Transfer Agent in writing that it elects to cause the issuance of Physical
Certificates, then the Company will execute, and the Transfer Agent, upon
written instructions from the Company, will authenticate and deliver Definitive
Certificates, in an aggregate number equal to the aggregate number of shares
represented by the Global Certificates, in exchange for such Global
Certificates.
(g) Legends.
(i) Each Warrant Share (and all shares of Class A
Common Stock issued in exchange therefor or substitution thereof) which is a
Restricted Security shall bear a legend substantially to the following effect:
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD
EXCEPT AS SET FORTH BELOW. BY ITS ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS
THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER
THE SECURITIES ACT) OR (B) IT IS AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS
DEFINED IN RULE 501(a)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT) (AN
"ACCREDITED INVESTOR") OR (C) IT IS NOT A U.S. PERSON AND IS ACQUIRING THIS
SECURITY IN AN OFFSHORE TRANSACTION, (2) AGREES THAT IT WILL NOT WITHIN TWO
YEARS AFTER THE ORIGINAL ISSUANCE OF THIS SECURITY RESELL OR OTHERWISE TRANSFER
THIS SECURITY EXCEPT (A) TO THE ISSUER OR ANY SUBSIDIARY THEREOF, (B) INSIDE THE
UNITED STATES TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE
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WITH RULE 144A UNDER THE SECURITIES ACT, (C) INSIDE THE UNITED STATES TO AN
ACCREDITED INVESTOR THAT, PRIOR TO SUCH TRANSFER, FURNISHES TO THE TRANSFER
AGENT A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS (THE
FORM OF WHICH LETTER CAN BE OBTAINED FROM THE TRANSFER AGENT), (D) OUTSIDE THE
UNITED STATES TO PERSONS OTHER THAN U.S. PERSONS IN OFFSHORE TRANSACTIONS
MEETING THE REQUIREMENTS OF RULE 904 UNDER REGULATION S UNDER THE SECURITIES
ACT, (E) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER
THE SECURITIES ACT (IF AVAILABLE), OR (F) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT AND (3) AGREES THAT IT WILL GIVE TO EACH
PERSON TO WHOM THIS SECURITY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT
OF THIS LEGEND. AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION," "UNITED
STATES" AND "U.S. PERSON" HAVE THE RESPECTIVE MEANINGS GIVEN TO THEM BY
REGULATION S UNDER THE SECURITIES ACT.
(h) Cancellation and/or Adjustment of a Global Certificate. At
such time as all beneficial interests in a Global Certificate have either been
exchanged for Physical Certificates, redeemed, repurchased or cancelled, such
Global Certificate shall be returned to or retained and cancelled by the
Transfer Agent. At any time prior to such cancellation, if any beneficial
interest in a Global Certificate is exchanged for Physical Certificates,
redeemed, repurchased or cancelled, the number of shares of Common Stock
represented by such Global Certificate shall be reduced and an endorsement shall
be made on such Global Certificate, by the Transfer Agent to reflect such
reduction.
(i) Obligations with Respect to Transfers and Exchanges of
Physical Certificates.
(i) To permit registrations of transfers and
exchanges, the Company shall execute, at the Transfer Agent's request, and the
Transfer Agent shall countersign and register Physical Certificates and Global
Certificates.
(ii) All Physical Certificates and Global
Certificates issued upon any registration, transfer or exchange of Physical
Certificates or Global Certificates shall be validly issued, fully paid and
nonassessable.
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4. Registration Procedures. In connection with the obligations of the
Company with respect to any Registration Statement pursuant to Sections 2.1 and
2.2 hereof, the Company shall:
(a) prepare and file with the SEC a Registration Statement on
the appropriate form under the Securities Act, which form (i) shall be selected
by the Company and (ii) shall comply as to form in all material respects with
the requirements of the applicable form and include all financial statements
required by the SEC to be filed therewith, and the Company shall use its best
efforts to cause such Registration Statement to become effective and remain
effective in accordance with Section 2 hereof;
(b) prepare and file with the SEC such amendments and
post-effective amendments to each Registration Statement as may be necessary to
keep such Registration Statement effective for the applicable period, cause each
Prospectus to be supplemented by any required prospectus supplement and, as so
supplemented, to be filed pursuant to Rule 424 under the Securities Act;
(c) furnish to each Holder of Registrable Securities and to
each underwriter of an underwritten offering of Registrable Securities, if any,
without charge, as many copies of each Prospectus, including each preliminary
Prospectus, and any amendment or supplement thereto and such other documents as
such Holder or underwriter may reasonably request, in order to facilitate the
public sale or other disposition of the Registrable Securities;
(d) use their best efforts to register or qualify the
Registrable Securities under all applicable state securities or Blue Sky laws of
such jurisdictions as any Holder thereof covered by a Registration Statement
shall reasonably request in writing by the time the applicable Registration
Statement is declared effective by the SEC, and do any and all other acts and
things which may be reasonably necessary or advisable to enable such Holder to
consummate the disposition in each such jurisdiction of such Registrable
Securities owned by such Holder; provided, however, that the Company shall not
be required to
(i) qualify as a foreign corporation or as a dealer
in securities in any jurisdiction where it would not otherwise be required to
qualify but for this Section 4(d),
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(ii) file any general consent to service of process
or (iii) subject itself to taxation in any such jurisdiction if it is not so
subject;
(e) notify each Holder of Registrable Securities promptly and,
if requested by such Holder, confirm such advice in writing
(i) when a Registration Statement has become
effective and when any post-effective amendments and supplements thereto become
effective,
(ii) of any request by the SEC or any state
securities authority for amendments and supplements to a Registration Statement
and Prospectus or for additional information after the Registration Statement
has become effective,
(iii) of the issuance by the SEC or any state
securities authority of any stop order suspending the effectiveness of a
Registration Statement or the initiation of any proceedings for that purpose,
(iv) if, between the effective date of a Registration
Statement and the closing of any sale of Registrable Securities covered thereby,
the representations and warranties of the Company contained in any underwriting
agreement, securities sales agreement or other similar agreement, if any,
relating to the offering cease to be true and correct in all material respects
or if the Company receives any notification with respect to the suspension of
the qualification of the Registrable Securities for sale in any jurisdiction or
the initiation of any proceeding for such purpose and
(v) of the happening of any event during the period a
Registration Statement is effective which makes any statement made in such
Registration Statement or the related Prospectus untrue in any material respect
or which requires the making of any changes in such Registration Statement or
Prospectus in order to make the statements therein not misleading;
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(f) make every reasonable effort to obtain the withdrawal of
any order suspending the effectiveness of a Registration Statement at the
earliest possible moment;
(g) furnish to each Holder of Registrable Securities and to
the Initial Purchaser, without charge, at least one conformed copy of each
Registration Statement and any posteffective amendment thereto (with documents
incorporated therein by reference or exhibits thereto);
(h) cooperate with the Selling Holders of Registrable
Securities to facilitate the timely preparation and delivery of certificates
representing Registrable Securities to be sold and not bearing any restrictive
legends and registered in such names as the selling Holders may reasonably
request at least two business days prior to the closing of any sale of
Registrable Securities;
(i) upon the occurrence of any event contemplated by Section
4(e)(v) hereof, use reasonable efforts to prepare a supplement or post-effective
amendment to a Registration Statement or the related Prospectus or any document
incorporated therein by reference or file any other required document so that,
as thereafter delivered to the purchasers of the Registrable Securities, such
Prospectus will not contain any untrue statement of a material fact or omit to
state a material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading; provided, however,
that the Company shall not be required to amend or supplement a Registration
Statement, any related Prospectus or any document incorporated therein by
reference in the event that, and for so long as, an event occurs and is
continuing as a result of which the Registration Statement, any related
Prospectus or any document incorporated therein by reference as then amended or
supplemented would, in the Company's good faith judgment, contain an untrue
statement of a material fact or omit to state a material fact necessary in order
to make the statements therein not misleading in light of the circumstances
under which they are made. The Company agrees to notify each Holder to suspend
use of the Prospectus as promptly as practicable after the occurrence of such an
event, and each Holder hereby agrees to suspend use of the Prospectus until the
Company has amended or supplemented the Prospectus to correct such misstatement
or omission. At such time as such public disclosure is otherwise made or the
Company
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determines in good faith that such disclosure is not necessary, the Company
agrees promptly to notify each Holder of such determination, to amend or
supplement the Prospectus if necessary to correct any untrue statement or
omission therein and to furnish each Holder such numbers of copies of the
Prospectus as so amended or supplemented as each Holder may reasonably request;
(j) a reasonable time prior to the filing of any Registration
Statement, any Prospectus, any amendment to a Registration Statement or
amendment or supplement to a Prospectus or any document which is to be
incorporated by reference into a Registration Statement or a Prospectus after
initial filing of a Registration Statement, provide copies of such document to
the Holders and make available for discussion of such document the
representatives of the Company as shall be reasonably requested by the Holders
of Registrable Securities;
(k) obtain a CUSIP number for the Class A Common Stock;
(l) (i) make reasonably available for inspection by a
representative of, and counsel for, any underwriter participating in any
disposition pursuant to a Registration Statement, all relevant financial and
other records, pertinent corporate documents and properties of the Company and
(ii) cause the Company's officers, directors and
employees to supply all relevant information reasonably requested by such
representative, counsel or any such underwriter in connection with any such
Registration Statement; and
(m) if requested by the Holders in connection with any
Registration Statement, shall use its best efforts to cause (w) counsel for the
Company to deliver an opinion relating to the Registration Statement and the
Common Stock, in customary form, (x) its officers to execute and deliver all
customary documents and certificates requested by a representative of the
Holders or any underwriter, as applicable and (y) its independent public
accountants to provide a comfort letter in customary form. The Company may, as a
condition to such Holder's participation in any Registration Statement, require
each Holder of Registrable Securities to (i) furnish to the Company such
information regarding the Holder and the proposed distribution by such Holder
28
<PAGE> 29
of such Registrable Securities as the Company may from time to time reasonably
request in writing and (ii) agree in writing to be bound by this Agreement.
5. Indemnification and Contribution. (a) The Company agrees to
indemnify and hold harmless each Holder and each person, if any, who controls
such Holder within the meaning of either Section 15 of the Securities Act or
Section 20 of the Exchange Act, or is under common control with, or is
controlled by, such Holder, from and against all losses, claims, damages and
liabilities (including, without limitation, any legal or other expenses
reasonably incurred by any Holder or any such controlling or affiliated person
in connection with defending or investigating any such action or claim) caused
by any untrue statement or alleged untrue statement of a material fact contained
in any Registration Statement (or any amendment thereto) pursuant to which
Registrable Securities were registered under the Securities Act, or caused by
any omission or alleged omission to state therein a material fact necessary to
make the statements therein in light of the circumstances under which they were
made not misleading, or caused by any untrue statement or alleged untrue
statement of a material fact contained in any Prospectus (as amended or
supplemented if the Company shall have furnished any amendments or supplements
thereto), or caused by any omission or alleged omission to state therein a
material fact necessary to make the statements therein in light of the
circumstances under which they were made not misleading, except insofar as such
losses, claims, damages or liabilities are caused by any such untrue statement
or omission or alleged untrue statement or omission based upon information
relating to any Holder furnished to the Company in writing by such Holder
expressly for use in any such Registration Statement or Prospectus.
(b) Each Holder agrees, severally and not jointly, to
indemnify and hold harmless the Company, its directors, its officers and each
person, if any, who controls the Company within the meaning of either Section 15
of the Securities Act or Section 20 of the Exchange Act to the same extent as
the foregoing indemnity from the Company to such Holder, but only with reference
to information relating to such Holder furnished to the Company in writing by
such Holder expressly for use in any Registration Statement (or any amendment
thereto) or any Prospectus (or any amendment or supplement thereto).
29
<PAGE> 30
(c) In case any proceeding (including any governmental investigation)
shall be instituted involving any person in respect of which indemnity may be
sought pursuant to either paragraph (a) or (b) above, such person (the
"indemnified party") shall promptly notify the person against which such
indemnity may be sought (the "indemnifying party") in writing and the
indemnifying party, upon request of the indemnified party, shall retain counsel
reasonably satisfactory to the indemnified party to represent the indemnified
party and any others the indemnifying party may designate in such proceeding and
shall pay the reasonable fees and disbursements of such counsel relating to such
proceeding. In any such proceeding, any indemnified party shall have the right
to retain its own counsel, but the fees and expenses of such counsel shall be at
the expense of such indemnified party unless (i) the indemnifying party and the
indemnified party shall have mutually agreed in writing to the retention of such
counsel or (ii) the indemnifying party fails promptly to assume the defense of
such proceeding or fails to employ counsel reasonably satisfactory to such
indemnified party or parties or (iii) the named parties to any such proceeding
(including any impleaded parties) include both such indemnified party or parties
and the indemnifying parties or an affiliate of the indemnifying parties or such
indemnified parties, and there may be one or more defenses available to such
indemnified party or parties that are different from or additional to those
available to the indemnifying parties, in which case, if such indemnified party
or parties notifies the indemnifying parties in writing that it elects to employ
separate counsel of its choice at the expense of the indemnifying parties, the
indemnifying parties shall not have the right to assume the defense thereof and
such counsel shall be at the expense of the indemnifying parties, it being
understood, however, that unless there exists a conflict among indemnified
parties, the indemnifying parties shall not, in connection with any one such
proceeding or separate but substantially similar or related proceedings in the
same jurisdiction, arising out of the same general allegations or circumstances,
be liable for the fees and expenses of more than one separate firm of attorneys
(together with appropriate local counsel) at any time for such indemnified party
or parties. The indemnifying party shall not be liable for any settlement of any
proceeding effected without its written consent but, if settled with such
consent or if there be a final judgment for the plaintiff, the indemnifying
party agrees to indemnify the indemnified party from and against any loss or
liability by
30
<PAGE> 31
reason of such settlement or judgment. No indemnifying party shall, without the
prior written consent of the indemnified party, effect any settlement of any
pending or threatened proceeding in respect of which any indemnified party is a
party, and indemnity could have been sought hereunder by such indemnified party,
unless such settlement includes an unconditional release of such indemnified
party from all liability on claims that are the subject matter of such
proceeding.
(d) To the extent the indemnification provided for in paragraph (a) or
(b) of this Section 5 is unavailable to an indemnified party or insufficient in
respect of any losses, claims, damages or liabilities, then each indemnifying
party under such paragraph, in lieu of indemnifying such indemnified party
thereunder, shall contribute to the amount paid or payable by such indemnified
party as a result of such losses, claims, damages or liabilities (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Company on the one hand and the Holders on the other hand from the offering of
such Registrable Securities or (ii) if the allocation provided by clause (i)
above is not permitted by applicable law, in such proportion as is appropriate
to reflect not only the relative benefits referred to in clause (i) above but
also the relative fault of the Company on the one hand and the Holders on the
other hand in connection with the statements or omissions that resulted in such
losses, claims, damages or liabilities, as well as any other relevant equitable
considerations. The relative fault of the Company on the one hand and the
Holders on the other hand shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company or by the Holders and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.
(e) The Company and each Holder agrees that it would not be just or
equitable if contribution pursuant to this Section 5 were determined by pro rata
allocation or by any other method of allocation that does not take account of
the equitable considerations referred to in paragraph (d) above. The amount paid
or payable by an indemnified party as a result of the losses, claims, damages
and liabilities referred to in paragraph (d) above shall be deemed to include,
subject to the limitations
31
<PAGE> 32
set forth above, any legal or other expenses reasonably incurred (and not
otherwise reimbursed) by such indemnified party in connection with investigating
or defending any such action or claim. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The remedies provided for in this Section 5 are
not exclusive and shall not limit any rights or remedies which may otherwise be
available to any indemnified party at law or in equity.
6. Miscellaneous. (a) No Inconsistent Agreements. The Company has not
entered into nor will the Company on or after the date of this Agreement enter
into any agreement which is inconsistent with the rights granted to the Holders
of Registrable Securities in this Agreement or otherwise conflicts with the
provisions hereof. The rights granted to the Holders hereunder do not in any way
conflict with and are not inconsistent with the rights granted to the holders of
the Company's other issued and outstanding securities, if any, under any such
agreements.
(b) Amendments and Waivers. The provisions of this Agreement, including
the provisions of this sentence, may not be amended, modified or supplemented,
and waivers or consents to departures from the provisions hereof may not be
given unless the Company has obtained the written consent of Holders of at least
a majority of the outstanding Warrants, Warrant Shares and Contingent Class A
Shares affected by such amendment, modification, supplement, waiver or consent;
provided, however, a waiver or consent to departure from the provisions hereof
that relates exclusively to the rights of Holders of Registrable Securities
whose securities are being sold pursuant to a registration statement and that
does not directly or indirectly affect the rights of other Holders of
Registrable Securities may be given by the Holders of a majority of the
Registrable Securities proposed to be sold.
(c) Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand delivery, registered
first-class mail, telex, telecopier, or any courier guaranteeing overnight
delivery (i) if to the Initial Purchaser, at its address set forth in the
Purchase Agreement; (ii) if to the Company or a Management Stockholder, at the
32
<PAGE> 33
Company's address set forth in the Purchase Agreement; (iii) if to a holder of
Warrants, as set forth in the register of the Warrants; and (iv) if to a holder
of Warrant Shares or Contingent Class A Shares, at such holder's address as set
forth in the stock books of the Company. All such notices and communications
shall be deemed to have been duly given: at the time delivered by hand, if
personally delivered, five business days after being deposited in the mail,
postage prepaid, if mailed; when answered back, if telexed; when receipt is
acknowledged, if telecopied; and on the next business day, if timely delivered
to an air courier guaranteeing overnight delivery.
(d) Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the successors, assigns and transferees of each
of the parties, including without limitation and without the need for an express
assignment, subsequent Holders as holders of Contingent Class A Shares;
provided, however, that nothing herein shall be deemed to permit any assignment,
transfer or other disposition of Registrable Securities in violation of the
terms of the Purchase Agreement. If any transferee of any Holder shall acquire
Warrants and Warrant Shares, in any manner, whether by operation of law or
otherwise, such Warrants and Warrant Shares shall be held subject to all of the
terms of this Agreement, and by taking and holding such Warrants and Warrant
Shares such person shall be conclusively deemed to have agreed to be bound by
and to perform all of the terms and provisions of this Agreement and such person
shall be entitled to receive the benefits hereof.
(e) Third Party Beneficiary. The Holders as holders of
Contingent Class A Shares shall be a third party beneficiary to the agreements
made hereunder between the Company and the Management Stockholders, on the one
hand, and the Initial Purchaser, on the other hand, and the Initial Purchaser
shall have the right to enforce such agreements directly to the extent it deems
such enforcement necessary or advisable to protect its rights or the rights of
Holders hereunder.
(f) Counterparts. This Agreement may be executed in any number
of counterparts and by the parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
33
<PAGE> 34
(g) Headings. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.
(h) Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York.
(i) Severability. In the event that any on or more of the
provisions contained herein, or the application thereof in any circumstance, is
held invalid, illegal or unenforceable, the validity, legality and
enforceability of any such provision in every other respect and of the remaining
provisions contained herein shall not be affected or impair thereby.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
SPANISH BROADCASTING SYSTEM, INC.
By: /s/ Raul Alarcon, Jr.
--------------------------------
Name: Raul Alarcon, Jr.
Title: President and Chief
Executive Officer
/s/ Pablo Raul Alarcon, Sr.
--------------------------------
Pablo Raul Alarcon, Sr.
Raul Alarcon, Jr.
--------------------------------
Raul Alarcon, Jr.
Jose Grimalt
--------------------------------
Jose Grimalt
34
<PAGE> 35
CIBC WOOD GUNDY SECURITIES CORP.
By: /s/ Walter McLallen
--------------------------------
Name: Walter McLallen
Title: Managing Director
35
<PAGE> 36
EXHIBIT A
THIS SECURITY IS A GLOBAL SECURITY AND IS REGISTERED IN THE NAME OF A
DEPOSITORY OR A NOMINEE OF A DEPOSITORY OR A SUCCESSOR DEPOSITORY. THIS SECURITY
IS NOT EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN
THE DEPOSITORY OR ITS NOMINEE EXCEPT IN LIMITED CIRCUMSTANCES, AND NO TRANSFER
OF THIS SECURITY (OTHER THAN A TRANSFER OF THIS SECURITY AS A WHOLE BY THE
DEPOSITORY TO A NOMINEE OF THE DEPOSITORY OR BY A NOMINEE OF THE DEPOSITORY TO
THE DEPOSITORY OR ANOTHER NOMINEE OF THE DEPOSITORY) MAY BE REGISTERED EXCEPT IN
LIMITED CIRCUMSTANCES DESCRIBED.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER OR
ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME
AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE
TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS 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.
36
<PAGE> 37
EXHIBIT B
CERTIFICATE TO BE DELIVERED UPON EXCHANGE OR REGISTRATION OF TRANSFER
OF WARRANTS
Re: Class A Common Stock (the "Securities"), of Spanish
Broadcasting System, Inc.
This Certificate relates to _______ Securities held in the form of* ___
a beneficial interest in a Global Certificate or* _______ Physical Certificates
by ______ (the "Transferor").
The Transferor:*
- has requested by written order that the Transfer Agent deliver
in exchange for its beneficial interest in the Global
Certificate held by the Depositary a Physical Certificate or
Physical Certificates in definitive, registered form of
authorized denominations and an aggregate number equal to its
beneficial interest in such Global Certificate (or the portion
thereof indicated above); or
- has requested that the Transfer Agent by written order to
exchange or register the transfer of a Physical Certificate or
Physical Certificates. In connection with such request and in
respect of each such Security, the Transferor does hereby
certify that the Transferor is familiar with the Common Stock
Registration Rights and Stockholders Agreement relating to the
above captioned Securities and the restrictions on transfers
thereof as provided in Section 3.4 of such Common Stock
Registration Rights and Stockholders Agreement, and that the
transfer of these Securities does not require registration
under the Securities Act of 1933, as amended (the "Act")
because*:
- Such Security is being acquired for the Transferor's own
account, without transfer.
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<PAGE> 38
- Such Security is being transferred to a "qualified
institutional buyer" (as defined in Rule 144A under the Act),
in reliance on Rule 144A.
- Such Security is being transferred to an institutional
"accredited investor" (within the meaning of subparagraphs
(a)(1), (2), (3) or (7) of Rule 501 under the Act.
- Such Security is being transferred in reliance on Regulation S
under the Act.
- Such Security is being transferred in reliance on Rule 144
under the Act.
- Such Security is being transferred in reliance on and in
compliance with an exemption from the registration
requirements of the Act other than Rule 144A or Rule 144 or
Regulation S under the Act to a person other than an
institutional "accredited investor."
[INSERT NAME OF TRANSFEROR]
By:
----------------------------------
[Authorized Signatory]
Date:
----------------------------------
*Check applicable box.
38
<PAGE> 39
EXHIBIT C
Form of Certificate To Be Delivered in Connection
with Transfers to Institutional Accredited
Investors
_______________, ____
[Transfer Agent]
[ ]
[ ]
Attention: Corporate Trust Administration
Re: Spanish Broadcasting System, Inc. (the "Company")
Class A Common Stock (the "Securities")
Ladies and Gentlemen:
In connection with our proposed purchase of Securities of the
Company, we confirm that:
1. We have received such information as we deem necessary in
order to make our investment decision.
2. We understand that any subsequent transfer of the
Securities is subject to certain restrictions and conditions set forth in the
Common Stock Registration Rights and Stockholders Agreement relating to the
Securities and the undersigned agrees to be bound by, and not to resell, pledge
or otherwise transfer the Securities except in compliance with, such
restrictions and conditions and the Securities Act of 1933, as amended (the
"Securities Act").
3. We understand that the offer and sale of the Securities
have not been registered under the Securities Act, and that the Securities may
not be offered or sold within the United States or to, or for the account or
benefit of, U.S. persons except as permitted in the following sentence. We
agree, on our own behalf and on behalf of any accounts for which we are acting
as hereinafter stated, that if we should sell any Securities, we will do so only
(A) to the Company or any subsidiary thereof, (B) inside the United States in
accordance with Rule 144A under the Securities Act to a "qualified institutional
buyer" (as defined therein), (C) inside the United States to an institutional
39
<PAGE> 40
"accredited investor" (as defined below) that, prior to such transfer, furnishes
(or has furnished on its behalf by a U.S. brokerdealer) to the Trustee a signed
letter substantially in the form hereof, (D) outside the United States in
accordance with Regulation S under the Securities Act, (E) pursuant to the
exemption from registration provided by Rule 144 under the Securities Act (if
available), or (F) pursuant to an effective registration statement under the
Securities Act, and we further agree to provide to any person purchasing
Securities from us a notice advising such purchaser that resales of the
Securities are restricted as stated herein.
4. We understand that, on any proposed resale of Securities, we will be
required to furnish to the Transfer Agent and the Company, such certification,
legal opinions and other information as the Transfer Agent and the Company may
reasonably require to confirm that the proposed sale complies with the foregoing
restrictions. We further understand that the Securities purchased by us will
bear a legend to the foregoing effect.
5. We are an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act) and have
such knowledge and experience in financial and business matters as to be capable
of evaluating the merits and risks of our investment in the Securities, and we
and any accounts for which we are acting are each able to bear the economic risk
of our or their investment, as the case may be.
6. We are acquiring the Securities purchased by us for our account or
for one or more accounts (each of which is an institutional "accredited
investor") as to each of which we exercise sole investment discretion.
You and the Company are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or
40
<PAGE> 41
legal proceeding or official inquiry with respect to the matters covered hereby.
Very truly yours,
[Name of Transferor]
By:
---------------------------
[Authorized Signatory]
41
<PAGE> 42
EXHIBIT D
Form of Certificate To Be
Delivered in Connection
with Regulation S Transfers
_______________, ____
[Transfer Agent]
[ ]
[ ]
Attention: Corporate Trust Administration
Re: Spanish Broadcasting System, Inc. (the "Company")
Class A Common Stock (the "Securities")
Dear Sirs:
In connection with our proposed sale of ________ of the Securities, we
confirm that such sale has been effected pursuant to and in accordance with
Regulation S under the Securities Act of 1933, as amended (the "Securities
Act"), and, accordingly, we represent that:
(1) the offer of the Securities was not made to a person in the
United States;
(2) either (a) at the time the buy offer was originated, the
transferee was outside the United States or we and any person
acting on our behalf reasonably believed that the transferee
was outside the United States, or (b) the transaction was
executed in, on or through the facilities of a designated
off-shore securities market and neither we nor any person
acting on our behalf knows that the transaction has been
pre-arranged with a buyer in the United States;
(3) no directed selling efforts have been made in the United
States in contravention of the requirements of Rule 903(b) or
Rule 904(b) of Regulation S, as applicable;
42
<PAGE> 43
(4) the transaction is not part of a plan or scheme to evade the
registration requirements of the Securities Act; and
(5) we have advised the transferee of the transfer restrictions
applicable to the Securities.
You and the Company are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceedings or official inquiry with
respect to the matters covered hereby. Defined terms used herein without
definition have the respective meanings provided in Regulation S.
Very truly yours,
[Name of Transferor]
By:
-------------------------------
[Authorized Signature]
43
<PAGE> 1
Exhibit 10.5
NOTES REGISTRATION RIGHTS AGREEMENT
Dated as of March 15, 1997
by and among
SPANISH BROADCASTING SYSTEM, INC.,
THE GUARANTORS NAMED HEREIN
and
CIBC WOOD GUNDY SECURITIES CORP.
(as Initial Purchaser)
$75,000,000
11% SENIOR NOTES DUE 2004
<PAGE> 2
This Notes Registration Rights Agreement is dated as of March 15,
1997, by and among Specialty Paperboard, Inc., a Delaware corporation (the
"Company"), each of the subsidiaries of the Company listed on the signature
pages hereto as a Guarantor (collectively, the "Guarantors" and, together with
the Company, the "Issuers") and CIBC Wood Gundy Securities Corp. (the "Initial
Purchaser").
This Agreement is made pursuant to the Securities Purchase
Agreement, dated March 24, 1997, among the Company, the Guarantors and Initial
Purchaser (the "Purchase Agreement"). In order to induce the Initial Purchaser
to enter into the Purchase Agreement, the Issuers have agreed to provide the
registration rights provided for in this Agreement to the Initial Purchaser and
its direct and indirect transferees and assigns. The execution and delivery of
this Agreement is a condition to the closing of the transactions contemplated by
the Purchase Agreement.
The parties hereby agree as follows:
1. Definitions
As used in this Agreement, the following terms shall have the
following meanings:
Additional Interest: As defined in Section 4(a) hereof.
Affiliate: With respect to any specified person, "Affiliate" shall
mean any other person directly or indirectly through one or more intermediaries
controlling or controlled by or under direct or indirect common control with
such specified person. For the purposes of this definition, "control," when used
with respect to any person, means the power to direct the management and
policies of such person, directly or indirectly, whether through the ownership
of voting securities, by contract or otherwise and the terms "affiliated",
"controlling" and "controlled" have meanings correlative to the foregoing.
Agreement: This Notes Registration Rights Agreement, as the same
may be amended, supplemented or modified from time to time in accordance with
the terms hereof.
2
<PAGE> 3
Business Day: Any day except a Saturday, a Sunday or a day on which
banking institutions in New York, New York generally are required or authorized
by law or other government action to be closed.
Company: As defined in the preamble hereof.
Consummate or consummate: When used to qualify the term "Exchange
Offer", shall mean validly and lawfully to issue and deliver the Exchange Notes
pursuant to the Exchange Offer for all Notes validly tendered and not validly
withdrawn pursuant thereto in accordance with the terms of this Agreement.
Consummation Date: The date that is 60 days immediately following
the date that the Exchange Registration Statement shall have been declared
effective by the SEC.
Effectiveness Period: As defined in Section 3(a) hereof.
Exchange Act: The Securities Exchange Act of 1934, as amended, and
the rules and regulations promulgated by the SEC pursuant thereto.
Exchange Date: As defined in Section 2(d) hereof.
Exchange Notes: The 11% Senior Notes due 2004 of the Company,
guaranteed on a senior basis by each of the Guarantors, that are identical to
the Notes in all material respects, except that the provisions regarding
restrictions on transfer shall be modified, as provided in the Indenture (or the
indenture pursuant to which the Exchange Notes are issued), and the issuance
thereof pursuant to the Exchange Offer shall have been registered pursuant to an
effective Registration Statement in compliance with the Securities Act.
Exchange Offer: An offer to issue, in exchange for any and all of
the Notes, a like aggregate principal amount of Exchange Notes, which offer
shall be made by the Company pursuant to Section 2 hereof.
Exchange Offer Filing Date: As defined in Section 2(a).
3
<PAGE> 4
Exchange Registration Statement: As defined in Section 2(a) hereof.
Guarantors: As defined in the preamble hereof.
Indemnified Person: As defined in Section 7(a) hereof.
Indenture: The Indenture, dated as of March 15, 1997, among the
Issuers and IBJ Schroder Bank & Trust Company, as trustee thereunder, pursuant
to which the Notes are issued, as amended or supplemented from time to time in
accordance with the terms thereof.
Initial Purchaser: As defined in the preamble hereof.
Issue Date: As defined in Section 2(a).
Issuers: As defined in the preamble hereof.
Notes: The 11% Senior Notes due 2004 of the Company, guaranteed on
a senior basis by each of the Guarantors, issued pursuant to the Indenture.
Participating Broker-Dealer: As defined in Section 2(e) hereof.
Private Exchange: As defined in Section 2(c) hereof.
Private Exchange Notes: As defined in Section 2(c) hereof.
Prospectus: The prospectus included in any Registration Statement
(including, without limitation, a prospectus that discloses information
previously omitted from a prospectus filed as part of an effective registration
statement in reliance upon Rule 430A promulgated pursuant to the Securities
Act), as amended or supplemented by any prospectus supplement, with respect to
the terms of the offering of any portion of the Notes, Exchange Notes or Private
Exchange Notes covered by such Registration Statement, and all other amendments
and supplements to any such prospectus, including post-effective amendments, and
all material incorporated by
4
<PAGE> 5
reference or deemed to be incorporated by reference, if any, in such prospectus.
Registration Default: As defined in Section 4(a) hereof.
Registration Statement: Any registration statement of the Company
and the Guarantors that covers any of the Notes, Exchange Notes or Private
Exchange Notes pursuant to the provisions of this Agreement, including the
Prospectus, amendments and supplements to such registration statement or
Prospectus, including pre- and post-effective amendments, all exhibits thereto,
and all material incorporated by reference or deemed to be incorporated by
reference, if any, in such registration statement.
Rule 144(k): Rule 144(k) promulgated by the SEC pursuant to the
Securities Act, as such Rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the SEC as a replacement thereto having
substantially the same effect as such Rule.
Rule 144A: Rule 144A promulgated by the SEC pursuant to the
Securities Act, as such Rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the SEC as a replacement thereto having
substantially the same effect as such Rule.
Rule 158: Rule 158 promulgated by the SEC pursuant to the
Securities Act, as such Rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the SEC as a replacement thereto having
substantially the same effect as such Rule.
Rule 174: Rule 174 promulgated by the SEC pursuant to the
Securities Act, as such Rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the SEC as a replacement thereto having
substantially the same effect as such Rule.
Rule 415: Rule 415 promulgated by the SEC pursuant to the
Securities Act, as such Rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the SEC as a replacement thereto having
substantially the same
5
<PAGE> 6
effect as such Rule.
Rule 424: Rule 424 promulgated by the SEC pursuant to the
Securities Act, as such Rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the SEC as a replacement thereto having
substantially the same effect as such Rule.
SEC: The Securities and Exchange Commission.
Securities Act: The Securities Act of 1933, as amended, and the
rules and regulations promulgated by the SEC thereunder.
Shelf Filing Event: As defined in Section 3(a) hereof.
Shelf Registration: As defined in Section 3(a) hereof.
Shelf Registration Statement: As defined in Section 3(a) hereof.
Special Counsel: Cahill Gordon & Reindel, special counsel to the
holders of Transfer Restricted Notes, or such other counsel as shall be agreed
upon by the Issuers and holders of a majority in aggregate principal amount of
Transfer Restricted Notes, the reasonable expenses of which holders of Transfer
Restricted Notes will be reimbursed by the Issuers pursuant to Section 6 hereof.
TIA: The Trust Indenture Act of 1939, as amended.
Transfer Restricted Note: Each Note, upon original issuance thereof,
and at all times subsequent thereto, each Exchange Note as to which Section
3(a)(ii) hereof is applicable upon original issuance and at all times subsequent
thereto, and each Private Exchange Note upon original issuance thereof and
at all times subsequent thereto, until in the case of any such Note, Exchange
Note or Private Exchange Note, as the case may be, the earliest to occur of (i)
the date on which any such Note has been exchanged by a person other than a
Participating Broker-Dealer for an Exchange Note (other than with respect to an
Exchange Note as to which Section 3(a)(ii) hereof applies)
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<PAGE> 7
pursuant to the Exchange Offer, (ii) with respect to Exchange Notes received by
Participating Broker-Dealers in the Exchange Offer, the earlier of (x) the date
on which such Exchange Note has been sold by such Participating Broker-Dealer by
means of the Prospectus contained in the Exchange Registration Statement and (y)
the date on which the Exchange Registration Statement has been effective under
the Securities Act for a period of six months after the Consummation Date, (iii)
the date on which a Shelf Registration Statement covering such Note, Exchange
Note or Private Exchange Note has been declared effective by the SEC and such
Note, Exchange Note or Private Exchange Note, as the case may be, has been
disposed of in accordance with such effective Shelf Registration Statement, (iv)
the date on which such Note, Exchange Note or Private Exchange Note, as the case
may be, is eligible for distribution to the public without volume or manner of
sale restrictions pursuant to Rule 144(k) or (v) the date on which such Note,
Exchange Note or Private Exchange Note, as the case may be, ceases to be
outstanding for purposes of the Indenture or any other indenture under which
such Exchange Note or Private Exchange Note was issued.
Trustee: The trustee under the Indenture.
underwritten registration or underwritten offering: A registration
in connection with which securities are sold to an underwriter for reoffering to
the public pursuant to an effective Registration Statement.
2. Exchange Offer
(a) To the extent not prohibited by any applicable law or applicable
interpretation of the staff of the SEC, the Issuers shall (A) prepare and,
within (x) 45 days after (the "Exchange Offer Filing Date") the date of original
issuance of the Notes (the "Issue Date"), file or cause to be filed with the SEC
a Registration Statement under the Securities Act with respect to an offer by
the Company to the holders of the Notes to issue and deliver to such holders, in
exchange for Notes, a like principal amount of Exchange Notes, (B) use their
best efforts to cause the Registration Statement relating to the Exchange Offer
to be declared effective by the SEC under the Securities Act on or prior to the
120th day after the Issue Date and (C) commence the Exchange Offer and use their
best efforts to issue, on or prior to the Consummation Date, the
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<PAGE> 8
Exchange Notes. The offer and sale of the Exchange Notes pursuant to the
Exchange Offer shall be registered pursuant to the Securities Act on an
appropriate form (the "Exchange Registration Statement") and duly registered or
qualified under all applicable state securities or Blue Sky laws and will comply
with all applicable tender offer rules and regulations under the Exchange Act
and state securities or Blue Sky laws. The Exchange Offer shall not be subject
to any condition, other than that the Exchange Offer does not violate any
applicable law or interpretation of the staff of the SEC. Upon consummation of
the Exchange Offer in accordance with this Section 2, the Issuers shall have no
further registration obligations other than with respect to (i) Private Exchange
Notes, (ii) Exchange Notes held by Participating Broker-Dealers and (iii) Notes
or Exchange Notes as to which Section 3(a)(iii) hereof applies. No securities
shall be included in the Exchange Registration Statement other than the Exchange
Notes.
(b) The Issuers may require each holder of Notes, as a condition to
its participation in the Exchange Offer, to represent to the Issuers and their
counsel in writing (which may be contained in the applicable letter of
transmittal) that at the time of the consummation of the Exchange Offer (i) any
Exchange Notes received by such holder will be acquired in the ordinary course
of its business, (ii) such holder will have no arrangement or understanding with
any person to participate in the distribution (within the meaning of the
Securities Act) of the Exchange Notes and (iii) such holder is not an Affiliate
of an Issuer, or if it is an Affiliate of an Issuer, it will comply with the
registration and prospectus delivery requirements of the Securities Act, to the
extent applicable.
(c) If, prior to consummation of the Exchange Offer, the Initial
Purchaser holds any Notes acquired by them and having, or which are reasonably
likely to be determined to have, the status of an unsold allotment in the
initial distribution, or any other holder of Notes is not entitled to
participate in the Exchange Offer, the Company, upon the request of the Initial
Purchaser or any such holder, shall, simultaneously with the delivery of the
Exchange Notes in the Exchange Offer, issue and deliver to such Initial
Purchaser and any such holder, in exchange (the "Private Exchange") for such
Notes held by the Initial Purchaser and any such holder, a like principal amount
of debt securities of the Company, guaranteed
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<PAGE> 9
by each of the Guarantors on a senior basis, that are identical in all material
respects to the Exchange Notes (the "Private Exchange Notes") (and which are
issued pursuant to the same indenture as the Exchange Notes). The Private
Exchange Notes shall bear the same CUSIP number as the Exchange Notes.
(d) Unless the Exchange Offer would not be permitted by any
applicable law or interpretation of the staff of the SEC, the Company shall mail
the Exchange Offer Prospectus and appropriate accompanying documents, including
appropriate letters of transmittal, to each holder of Notes providing, in
addition to such other disclosures as are required by applicable law:
(i) that the Exchange Offer is being made pursuant to this Agreement
and that all Notes validly tendered will be accepted for exchange;
(ii) the date of acceptance for exchange (the "Exchange Date"), which
date shall in no event be later than the Consummation Date (unless
otherwise required by applicable law);
(iii) that a holder of a Note electing to have a Note exchanged
pursuant to the Exchange Offer will be required to surrender such Note,
together with the enclosed letters of transmittal, to the institution and
at the address (located in the Borough of Manhattan, The City of New York)
specified in the notice prior to the close of business on the Exchange
Date; and
(iv) that holders of Notes that do not tender all such securities
pursuant to the Exchange Offer may no longer have any registration rights
hereunder with respect to Notes not tendered.
Promptly after the Exchange Date, the Company shall:
(i) accept for exchange all Notes or portions thereof validly
tendered and not validly withdrawn pursuant to the Exchange Offer; and
(ii) deliver, or cause to be delivered, to the Trustee for
cancellation all Notes or portions thereof so
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<PAGE> 10
accepted for exchange by the Company, and issue, cause the Trustee under
the Indenture (or the indenture pursuant to which the Exchange Notes are
issued) to authenticate, and mail to each holder of Notes, Exchange Notes
equal in principal amount to the principal amount of the Notes surrendered
by such holder.
(e) The Issuers and the Initial Purchaser acknowledge that the staff
of the SEC has taken the position that any broker-dealer that owns Exchange
Notes that were received by such broker-dealer for its own account in the
Exchange Offer (a "Participating Broker-Dealer") may be deemed to be an
"underwriter" within the meaning of the Securities Act and must deliver a
prospectus meeting the requirements of the Securities Act in connection with any
resale of such Exchange Notes (other than a resale of an unsold allotment
resulting from the original offering of the Notes).
The Issuers and the Initial Purchaser also acknowledge that it is
the SEC staff's position that if the Prospectus contained in the Exchange
Registration Statement includes a plan of distribution containing a statement to
the above effect and the means by which Participating Broker- Dealers may resell
the Exchange Notes, without naming the Participating Broker-Dealers or
specifying the amount of Exchange Notes owned by them, such Prospectus may be
delivered by Participating Broker-Dealers to satisfy their prospectus delivery
obligations under the Securities Act in connection with resales of Exchange
Notes for their own accounts, so long as the Prospectus otherwise meets the
requirements of the Securities Act.
In light of the foregoing, if requested by a Participating
Broker-Dealer, the Issuers agree (x) to use their best efforts to keep the
Exchange Registration Statement continuously effective for a period of up to 180
days after the Consummation Date or such earlier date as each Participating
Broker-Dealer shall have notified the Company in writing that such Participating
Broker-Dealer has resold all Exchange Notes acquired in the Exchange Offer, (y)
to comply with the provisions of Section 5 of this Agreement, as they relate to
the Exchange Offer and the Exchange Registration Statement, and (z) to deliver
to such Participating Broker-Dealer a "cold comfort" letter of the independent
public accountants of the
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<PAGE> 11
Issuers and a legal opinion as to matters reasonably requested by such
Participating Broker-Dealer relating to the Exchange Registration Statement and
the related Prospectus and any amendments or supplements thereto.
(f) The Initial Purchaser shall have no liability to any
Participating Broker-Dealer with respect to any request made pursuant to Section
2(e).
(g) Interest on the Exchange Notes and the Private Exchange Notes
will accrue from the last interest payment date on which interest was paid on
the Notes surrendered in exchange therefor or, if no interest has been paid on
the Notes, from the date of the original issuance of the Notes.
(h) The Exchange Notes and the Private Exchange Notes may be issued
under (i) the Indenture or (ii) an indenture identical in all material respects
to the Indenture, which in either event shall provide that the Exchange Notes
shall not be subject to the transfer restrictions set forth in the Indenture.
The Indenture or such indenture shall provide that the Exchange Notes, the
Private Exchange Notes and the Notes shall vote and consent together on all
matters as one class and that neither the Exchange Notes, the Private Exchange
Notes nor the Notes will have the right to vote or consent as a separate class
on any matter.
3. Shelf Registration
(a) If (i) the Company is not permitted to file the Exchange Offer
Registration Statement or to consummate the Exchange Offer because the Exchange
Offer is not permitted by any applicable law or applicable interpretation of the
staff of the SEC or (ii) any holder of a Note notifies the Company on or prior
to the 30th day following the Issue Date that (A) due to a change in law or
policy it is not entitled to participate in the Exchange Offer, (B) due to a
change in law or policy it may not resell Exchange Notes acquired by it in the
Exchange Offer to the public without delivering a prospectus and the Prospectus
contained in the Exchange Registration Statement is not appropriate or available
for such resales by such holder or (C) it owns Notes (including the Initial
Purchaser that holds Notes as part of an unsold allotment from the original
offering of the Notes) acquired directly from an Issuer or an Affiliate
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<PAGE> 12
of an Issuer or (iii) any holder of Private Exchange Notes so requests after the
consummation of the Private Exchange or (iv) the Company has not consummated the
Exchange Offer within 180 days after the Issue Date (each such event referred to
in clauses (i) through (iv), a "Shelf Filing Event"), the Issuers shall cause to
be filed with the SEC pursuant to Rule 415 a shelf registration statement (the
"Shelf Registration Statement") prior to the later of (x) 60 days after the
Issue Date or (y) 45 days after the occurrence of such Shelf Filing Event,
relating to all Transfer Restricted Notes (the "Shelf Registration") the holders
of which have provided the information required pursuant to Section 3(b) hereof
(provided that if the Shelf Filing Event arises pursuant to clause (iv) above,
the Issuers shall file the Shelf Registration Statement on the 181st day after
the Issue Date and shall use their best efforts to have the Shelf Registration
Statement declared effective by the SEC on or prior to 120 days after the filing
of such Shelf Filing Event. In such circumstances, the Issuers shall use their
best efforts to keep the Shelf Registration Statement continuously effective
under the Securities Act, until (A) 36 months following the Issue Date or (B) if
sooner, the date immediately following the date that all Transfer Restricted
Notes covered by the Shelf Registration Statement have been sold pursuant
thereto or otherwise cease to be Transfer Restricted Notes (the "Effectiveness
Period"); provided that the Effectiveness Period shall be extended to the extent
required to permit dealers to comply with the applicable prospectus delivery
requirements of Rule 174.
(b) No holder of Transfer Restricted Notes may include any of its
Transfer Restricted Notes in any Shelf Registration Statement pursuant to this
Agreement unless and until such holder furnishes to the Company in writing,
within 30 days after receipt of a request therefor, such information as the
Company may reasonably request for use in connection with any Shelf Registration
Statement or Prospectus or preliminary prospectus included therein, including,
without limitation, such information specified in item 507 of Regulation S-K
under the Securities Act. No holder of Transfer Restricted Notes shall be
entitled to Additional Interest pursuant to Section 4 hereof unless and until
such holder shall have provided all such reasonably requested information. Each
holder of Transfer Restricted Notes as to which any Shelf Registration Statement
is being effected agrees to furnish
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<PAGE> 13
promptly to the Company all information required to be disclosed in order to
make the information previously furnished to the Company by such holder not
materially misleading.
4. Additional Interest
(a) The parties hereto agree that the holders of Transfer Restricted
Notes will suffer damages if the Issuers fail to fulfill their obligations
pursuant to Section 2 or Section 3, as applicable, and that it would not be
feasible to ascertain the extent of such damages. Accordingly, in the event that
(i) the applicable Registration Statement is not filed with the SEC on or prior
to the date specified herein for such filing, (ii) the applicable Registration
Statement has not been declared effective by the SEC on or prior to the date
specified herein for such effectiveness after such obligation arises, (iii) if
the Exchange Offer is required to be Consummated hereunder, the Company has not
exchanged Exchange Notes for all Notes validly tendered and not validly
withdrawn in accordance with the terms of the Exchange Offer by the Consummation
Date or (iv) the applicable Registration Statement is filed and declared
effective but shall thereafter cease to be effective or usable in connection
with the Exchange Offer or resales of Transfer Restricted Notes during a period
in which it is required to be effective hereunder without being succeeded
immediately by any additional Registration Statement covering the Notes, the
Exchange Notes or the Private Exchange Notes, as the case may be, which has been
filed and declared effective (each such event referred to in clauses (i) through
(iv), a "Registration Default"), then the interest rate on Transfer Restricted
Notes will increase ("Additional Interest"), with respect to the first 90-day
period immediately following the occurrence of such Registration Default, by
0.5% per annum and will increase by an additional 0.25% per annum with respect
to each subsequent 90-day period until such Registration Default has been cured,
up to a maximum amount of 2.0% per annum with respect to all Registration
Defaults. Following the cure of a Registration Default, the accrual of
Additional Interest with respect to such Registration Default will cease and
upon the cure of all Registration Defaults the interest rate will revert to the
original rate.
(b) The Company shall notify the Trustee and paying agent under the
Indenture (or the trustee and paying agent
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<PAGE> 14
under such other indenture under which any Transfer Restricted Notes are issued)
immediately upon the happening of each and every Registration Default. The
Company shall pay the Additional Interest due on the Transfer Restricted Notes
by depositing with the paying agent (which shall not be the Company for these
purposes) for the Transfer Restricted Notes, in trust, for the benefit of the
holders thereof, prior to 11:00 A.M. on the next interest payment date specified
by the Indenture (or such other indenture), sums sufficient to pay the
Additional Interest then due. The Additional Interest due shall be payable on
each interest payment date specified by the Indenture (or such other indenture)
to the record holders entitled to receive the interest payment to be made on
such date. Each obligation to pay Additional Interest shall be deemed to accrue
from and including the applicable Registration Default.
(c) The parties hereto agree that the Additional Interest provided
for in this Section 4 constitutes a reasonable estimate of the damages that will
be suffered by holders of Transfer Restricted Notes by reason of the happening
of any Registration Default.
5. Registration Procedures
In connection with the Issuers' registration obligations hereunder,
the Issuers shall effect such registrations on the appropriate form available
for the sale of the Notes, the Exchange Notes or Private Exchange Notes, as
applicable, to (i) in the case of the Exchange Offer, permit the exchange of
Exchange Notes for Notes in the Exchange Offer and, if applicable, resales of
Exchange Notes by Participating Broker-Dealers and (ii) in the case of a Shelf
Registration, permit the sale of the applicable Transfer Restricted Notes in
accordance with the method or methods of disposition thereof specified by the
holders of such Transfer Restricted Notes, and pursuant thereto the Issuers
shall:
(a) In the case of a Shelf Registration, a reasonable period of time
prior to the initial filing of a Shelf Registration Statement or
Prospectus and a reasonable period of time prior to the filing of any
amendment or supplement thereto (including any document that would be
incorporated or deemed to be incorporated
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<PAGE> 15
therein by reference), furnish to the holders of the Transfer Restricted
Notes included in such Shelf Registration Statement, their Special Counsel
and the managing underwriters, if any, copies of all such documents
proposed to be filed, which documents (other than those incorporated or
deemed to be incorporated by reference) will be subject to the review of
such holders, their Special Counsel and such underwriters, if any, and
cause the officers and directors of the Issuers, counsel to the Issuers
and independent certified public accountants to the Issuers to respond to
such reasonable inquiries as shall be necessary, in the opinion of
respective counsel to such holders and such underwriters, to conduct a
reasonable investigation within the meaning of the Securities Act;
provided that the foregoing inspection and information gathering shall be
coordinated on behalf of any other persons, by one counsel designated by
and on behalf of such other persons; provided, however, that the Issuers
shall not be deemed to have kept a Shelf Registration Statement effective
during the applicable period if any of them voluntarily takes any
unreasonable action or voluntarily fails to take any reasonable action
that results in holders of the Transfer Restricted Notes covered thereby
not being able to sell such Transfer Restricted Notes pursuant to Federal
securities laws during that period. The Issuers shall not file any such
Shelf Registration Statement or related Prospectus or any amendments or
supplements thereto which the holders of a majority in principal amount of
the Transfer Restricted Notes included in such Shelf Registration
Statement shall reasonably object in writing within five days of receipt
of the information described above;
(b) Prepare and file with the SEC such amendments, including
post-effective amendments, to each Registration Statement as may be
necessary to keep such Registration Statement continuously effective for
the applicable time period required hereunder; cause the related
Prospectus to be supplemented by any required Prospectus supplement, and
as so supplemented to be filed pursuant to Rule 424; and comply with the
provisions of the Securities Act and the Exchange Act with respect to the
disposition of all securities covered by such Registration Statement
during such period in accordance with the intended methods of
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<PAGE> 16
disposition by the sellers thereof set forth in such Registration
Statement as so amended or in such Prospectus as so supplemented;
(c) Notify the holders of Transfer Restricted Notes to be sold or,
in the case of an Exchange Offer, tendered for, their Special Counsel and
the managing underwriters, if any, promptly, and (if requested by any such
person), confirm such notice in writing, (i)(A) when a Prospectus or any
Prospectus supplement or post-effective amendment is proposed to be filed,
and (B) with respect to a Registration Statement or any post-effective
amendment, when the same has become effective, (ii) of any request by the
SEC or any other Federal or state governmental authority for amendments or
supplements to a Registration Statement or related Prospectus or for
additional information, (iii) of the issuance by the SEC, any state
securities commission, any other governmental agency or any court of any
stop order or injunction suspending or enjoining the use of a Prospectus
or the effectiveness of a Registration Statement or the initiation of any
proceedings for that purpose, (iv) of the receipt by the Company of any
notification with respect to the suspension of the qualification or
exemption from qualification of any of the Notes, Exchange Notes or
Private Exchange Notes for sale in any jurisdiction, or the initiation or
threatening of any proceeding for such purpose, and (v) of the happening
of any event or information becoming known to any Issuer that makes any
statement made in a Registration Statement or related Prospectus or any
document incorporated or deemed to be incorporated therein by reference
untrue in any material respect or that requires the making of any changes
in such Registration Statement, Prospectus or documents so that it will
not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the
statements therein, not misleading, and that in the case of a Prospectus,
it will not contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which they
were made, not misleading;
(d) Use their best efforts to avoid the issuance of
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<PAGE> 17
or, if issued, obtain the withdrawal of any order enjoining or suspending
the use of a Prospectus or the effectiveness of a Registration Statement
or the lifting of any suspension of the qualification (or exemption from
qualification) of any of the Notes, Exchange Notes or Private Exchange
Notes for sale in any jurisdiction, at the earliest practicable moment;
(e) If a Shelf Registration Statement is filed pursuant to Section 3
hereof and if requested by the managing underwriters, if any, or the
holders of a majority in aggregate principal amount of the Transfer
Restricted Notes being sold pursuant to such Shelf Registration Statement,
(i) promptly incorporate in a Prospectus supplement or post-effective
amendment such information as the managing underwriters, if any, and such
holders reasonably believe should be included therein, and (ii) make all
required filings of such Prospectus supplement or such post-effective
amendment under the Securities Act as soon as practicable after the
Company has received notification of the matters to be incorporated in
such Prospectus supplement or post-effective amendment; provided, however,
that the Issuers shall not be required to take any action pursuant to this
Section 5(e) that would, in the opinion of counsel for the Issuers,
violate applicable law;
(f) Upon written request to the Company by a holder of Notes,
Exchange Notes or Private Exchange Notes to be exchanged or sold pursuant
to a Registration Statement, their Special Counsel and each managing
underwriter, if any, without charge, furnish at least one conformed copy
of such Registration Statement and each amendment thereto, including
financial statements and schedules, all documents incorporated or deemed
to be incorporated therein by reference, and all exhibits to the extent
requested (including those previously furnished or incorporated by
reference) as soon as practicable after the filing of such documents with
the SEC;
(g) Deliver to each holder of Notes, Exchange Notes or Private
Exchange Notes to be exchanged or sold pursuant to a Registration
Statement, their Special Counsel, and the underwriters, if any, without
charge, as many copies
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<PAGE> 18
of the Prospectus (including each form of prospectus) and each amendment
or supplement thereto as such persons reasonably request; and the Issuers
hereby consent to the use of such Prospectus and each amendment or
supplement thereto by each of the selling holders of Transfer Restricted
Notes and the underwriters, if any, in connection with the offering and
sale of the Transfer Restricted Notes in accordance with the terms thereof
and with U.S. Federal securities laws and Blue Sky laws covered by such
Prospectus and any amendment or supplement thereto;
(h) Prior to any public offering of Notes, Exchange Notes or Private
Exchange Notes, use their best efforts to register or qualify or cooperate
with the holders of Notes, Exchange Notes or Private Exchange Notes to be
sold or tendered for, the underwriters, if any, and their respective
counsel in connection with the registration or qualification (or exemption
from such registration or qualification) of such Notes, Exchange Notes or
Private Exchange Notes for offer and sale under the securities or Blue Sky
laws of such jurisdictions within the United States as any such holder or
underwriter reasonably requests in writing; keep each such registration or
qualification (or exemption therefrom) effective during the period such
Registration Statement is required to be kept effective hereunder and do
any and all other acts or things necessary or advisable to enable the
disposition in such jurisdictions of the Notes, Exchange Notes or Private
Exchange Notes covered by the applicable Registration Statement; provided,
however, that the Issuers shall not be required to (i) qualify generally
to do business in any jurisdiction where they are not then so qualified or
(ii) take any action which would subject them to general service of
process or to taxation in any jurisdiction where they are not so subject;
(i) In connection with any sale or transfer of Transfer Restricted
Notes that will result in such securities no longer being Transfer
Restricted Notes, cooperate with the holders thereof and the managing
underwriters, if any, to facilitate the timely preparation and delivery of
certificates representing Transfer Restricted Notes to be sold, which
certificates shall not
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<PAGE> 19
bear any restrictive legends and shall be in a form eligible for deposit
with The Depository Trust Company and to enable such Transfer Restricted
Notes to be in such denominations and registered in such names as the
managing underwriters, if any, or such holders may request at least
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<PAGE> 20
two Business Days prior to any sale of Transfer Restricted Notes;
(j) Upon the occurrence of any event contemplated by Section 5(c)
(v), as promptly as practicable, prepare a supplement or amendment,
including, if appropriate, a post-effective amendment, to each
Registration Statement or a supplement to the related Prospectus or any
document incorporated or deemed to be incorporated therein by reference,
and file any other required document so that, as thereafter delivered,
such Prospectus will not contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary
to make the statements therein, in light of the circumstances under which
they were made, not misleading;
(k) Prior to the effective date of the Exchange Registration
Statement, to provide a CUSIP number for the Exchange Notes (and Private
Exchange Notes, if applicable);
(l) If a Shelf Registration Statement is filed pursuant to Section 3
hereof, enter into such agreements (including an underwriting agreement in
form, scope and substance as is customary in underwritten offerings) and
take all such other reasonable actions in connection therewith (including
those reasonably requested by the managing underwriters, if any, or the
holders of a majority in aggregate principal amount of the Transfer
Restricted Notes being sold) in order to expedite or facilitate the
disposition of such Transfer Restricted Notes, and, whether or not an
underwriting agreement is entered into and whether or not the registration
is an underwritten registration, (i) make such representations and
warranties to the holders of such Transfer Restricted Notes and the
underwriters, if any, with respect to the business of the Issuers and
their subsidiaries (including with respect to businesses or assets
acquired or to be acquired by any of them), and the Shelf Registration
Statement, Prospectus and documents, if any, incorporated or deemed to be
incorporated by reference therein, in each case, in form, substance and
scope as are customarily made by issuers to underwriters in underwritten
offerings, and
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<PAGE> 21
confirm the same if and when customarily requested; (ii) obtain opinions
of counsel to the Issuers and updates thereof (which counsel and opinions
(in form, scope and substance) shall be reasonably satisfactory to the
managing underwriters, if any, and Special Counsel to the holders of the
Transfer Restricted Notes being sold), addressed to each selling holder of
Transfer Restricted Notes and each of the underwriters, if any, covering
the matters customarily covered in opinions requested in underwritten
offerings and such other matters as may be reasonably requested by such
Special Counsel and the
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<PAGE> 22
managing underwriters, in any; (iii) use their best efforts to obtain
customary "cold comfort" letters and updates thereof from the independent
certified public accountants of the Issuers (and, if necessary, any other
independent certified public accountants of any subsidiary of the Issuers
or of any business acquired by an Issuer or any such subsidiary for which
financial statements and financial data is, or is required to be, included
in the Shelf Registration Statement), addressed (where reasonably
possible) to each selling holder of Transfer Restricted Notes and each of
the underwriters, if any, such letters to be in customary form and
covering matters of the type customarily covered in "cold comfort" letters
in connection with underwritten offerings; (iv) if an underwriting
agreement is entered into, the same shall contain indemnification
provisions and procedures no less favorable to the selling holders and the
underwriters, if any, than those set forth in Section 7 hereof (or such
other provisions and procedures acceptable to holders of a majority in
aggregate principal amount of Transfer Restricted Notes covered by such
Shelf Registration Statement and the managing underwriters, if any); and
(v) deliver such documents and certificates as may be reasonably requested
by the holders of a majority in aggregate principal amount of the Transfer
Restricted Notes being sold, their Special Counsel and the managing
underwriters, if any, to evidence the continued validity of the
representations and warranties made pursuant to clause (i) above and to
evidence compliance with any customary conditions contained in the
underwriting agreement or other agreement entered into by the Issuers;
(m) In the case of a Shelf Registration, make available for
inspection by a representative of the holders of Transfer Restricted Notes
being sold, any underwriter participating in any such disposition of
Transfer Restricted Notes, and any attorney, consultant or accountant
retained by such selling holders or underwriter, at the offices where
normally kept, during reasonable business hours, all relevant financial
and other records, pertinent corporate documents and properties of the
Issuers and their subsidiaries (including with respect to businesses and
assets acquired or to be acquired to the extent that such information is
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available to the Issuers), and cause the officers, directors, agents and
employees of the Issuers and their subsidiaries (including with respect to
businesses and assets acquired or to be acquired to the extent that such
information is available to the Issuers) to supply all information in each
case reasonably requested by any such representative, underwriter,
attorney, consultant or accountant in connection with such Shelf
Registration; provided, however, that such persons shall first agree in
writing with the Company that any information that is reasonably and in
good faith designated by the Company in writing as confidential at the
time of delivery of such information shall be kept confidential by such
persons, unless and to the extent that (i) disclosure of such information
is required by court or administrative order or is necessary to respond to
inquiries of regulatory authorities, (ii) disclosure of such information
is required by law (including any disclosure requirements pursuant to
Federal securities laws in connection with the filing of the Shelf
Registration Statement or the use of any Prospectus), (iii) such
information becomes generally available to the public other than as a
result of a disclosure or failure to safeguard such information by such
person or (iv) such information becomes available to such person from a
source other than the Issuers and their subsidiaries and such source is
not bound by a confidentiality agreement; and provided, further, that the
foregoing inspection and information gathering shall be coordinated on
behalf of any other persons, by one counsel designated by and on behalf of
such other persons;
(n) Provide an indenture trustee for the Notes and/or the Exchange
Notes and Private Exchange Notes, as the case may be, and cause an
indenture to be qualified under the TIA not later than the effective date
of the first Registration Statement relating to the Notes and/or the
Exchange Notes and Private Exchange Notes, as the case may be; and if such
indenture shall be the Indenture, in connection therewith, cooperate with
the Trustee and the holders of the Notes and/or the Exchange Notes and
Private Exchange Notes, to effect such changes to the Indenture, if any,
as may be required for the Indenture to be so qualified in accordance with
the terms of the TIA; and execute, and use its reasonable efforts to cause
the
23
<PAGE> 24
Trustee to execute, all customary documents as may be required to effect
such changes, and all other forms and documents required to be filed with
the SEC to enable the Indenture to be so qualified in a timely manner;
(o) Comply with all applicable rules and regulations of the SEC and
make generally available to their securityholders earning statements
satisfying the provisions of Section 11(a) of the Securities Act and Rule
158, no later than 45 days after the end of any 12-month period (or 90
days after the end of any 12-month period if such period is a fiscal year)
(i) commencing at the end of any fiscal quarter in which Transfer
Restricted Notes are sold to underwriters in a firm commitment or
reasonable efforts underwritten offering and (ii) if not sold to
underwriters in such an offering, commencing on the first day of the first
fiscal quarter after the effective date of a Registration Statement, which
statement shall cover said period, consistent with the requirements of
Rule 158;
(p) Cooperate with each seller of Transfer Restricted Notes covered
by any Registration Statement and each underwriter, if any, participating
in the disposition of such Transfer Restricted Notes and their respective
counsel in connection with any filings required to be made with the
National Association of Securities Dealers, Inc.; and
(q) Use their best efforts to take all other steps reasonably
necessary to effect the registration of the Transfer Restricted Notes
covered by a Registration Statement contemplated hereby.
The Issuers may require a holder of Transfer Restricted Notes to be
included in a Registration Statement to furnish to the Issuers such information
regarding the distribution of such Transfer Restricted Notes as is required by
law to be disclosed in such Registration Statement and the Issuers may exclude
from such Registration Statement the Transfer Restricted Notes of any holder who
unreasonably fails to furnish such information within a reasonable time after
receiving such request.
24
<PAGE> 25
If any such Registration Statement refers to any holder by name or
otherwise as the holder of any securities of an Issuer, then such holder shall
have the right to require (i) the insertion therein of language, in form and
substance reasonably satisfactory to such holder, to the effect that the holding
by such holder of such securities is not to be construed as a recommendation by
such holder of the investment quality of the Issuers' securities covered thereby
and that such holding does not imply that such holder will assist in meeting any
future financial requirements of the Issuers, or (ii) in the event that such
reference to such holder by name or otherwise is not required by the Securities
Act, the deletion of the reference to such holder in any amendment or supplement
to the Registration Statement filed or prepared subsequent to the time that such
reference ceases to be required.
In the case of a Shelf Registration pursuant to Section 3 hereof,
each holder of Transfer Restricted Notes agrees by acquisition of such Transfer
Restricted Notes that, upon receipt of any notice from the Company of the
happening of any event of the kind described in Section 5(c)(ii), 5(c)(iii),
5(c)(iv) or 5(c)(v) hereof, such holder will forthwith discontinue disposition
of such Transfer Restricted Notes covered by such Registration Statement or
Prospectus until such holder's receipt of the copies of the supplemented or
amended Prospectus contemplated by Section 5(j) hereof, or until it is advised
in writing by the Company that the use of the applicable Prospectus may be
resumed, and, in either case, has received copies of any additional or
supplemental filings that are incorporated or deemed to be incorporated by
reference in such Prospectus (the "Advice"). If so directed by the Company, each
holder will deliver to the Company (at the Company's expense) all copies, other
than permanent file copies then in such holder's possession, of the Prospectus
covering such Transfer Restricted Note that was current at the time of receipt
of either such notice. In the event the Company shall give any such notice and
comply with the provisions of Section 5(j), the time period regarding the
effectiveness of such Registration Statement shall be extended by the number of
days during the period from and including the date of the giving of such notice
pursuant to Section 5(c) hereof to and including the date when each selling
holder covered by such Registration Statement shall have received the copies of
the supplemented or amended Prospectus contemplated by Section 5(j) hereof or
shall
25
<PAGE> 26
have received the Advice.
6. Registration Expenses
All fees and expenses incident to the performance of or compliance
with this Agreement by the Issuers shall be borne by the Issuers whether or not
any Registration Statement is filed or becomes effective and whether or not any
Notes, Exchange Notes or Private Exchange Notes are issued or sold pursuant to
any Registration Statement. The fees and expenses referred to in the foregoing
sentence shall include, without limitation, (i) all registration and filing fees
(including, without limitation, fees and expenses (A) with respect to filings
required to be made with the National Association of Securities Dealers, Inc.
and (B) in compliance with securities or Blue Sky laws), (ii) printing expenses
(including, without limitation, expenses of printing certificates for Notes,
Exchange Notes and Private Exchange Notes in a form eligible for deposit with
The Depository Trust Company and of printing Prospectuses), (iii) reasonable
fees and disbursements of counsel for the Issuers and the Special Counsel (not
to exceed one firm of counsel), (iv) fees and disbursements of all independent
certified public accountants referred to in Section 2(e) and Section 5(l)(iii)
hereof (including, without limitation, the expenses of any special audit and
"cold comfort" letters required by or incident to such performance), (v) if
required, the reasonable fees and expenses of any "qualified independent
underwriter" and its counsel as may be required by the rules and regulations of
the National Association of Securities Dealers, Inc., and (vi) fees and expenses
of all other persons retained by the Issuers. In addition, the Issuers shall pay
their internal expenses (including, without limitation, all salaries and
expenses of their respective officers and employees performing legal or
accounting duties), the expense of any annual audit, and the fees and expenses
incurred in connection with the listing of the Notes, Exchange Notes or Private
Exchange Notes to be registered on any securities exchange. Notwithstanding the
foregoing or anything in this Agreement to the contrary, each holder of Transfer
Restricted Notes shall pay all underwriting discounts and commissions of any
underwriters with respect to any Notes, Exchange Notes or Private Exchange Notes
sold by or on behalf of it.
26
<PAGE> 27
7. Indemnification
(a) The Issuers agree, jointly and severally, to indemnify and hold
harmless (i) the Initial Purchaser, each holder of Notes, Exchange Notes and
Private Exchange Notes and each Participating Broker-Dealer, (ii) each person,
if any, who controls (within the meaning of Section 15 of the Act or Section 20
of the Exchange Act) any of the foregoing (any of the persons referred to in
this clause (ii) being hereinafter referred to as a "controlling person"), and
(iii) the respective officers, directors, partners, employees, representatives
and agents of the Initial Purchaser, each holder of Notes, Exchange Notes and
Private Exchange Notes, each Participating Broker-Dealer and any controlling
person (any person referred to in clause (i), (ii) or (iii) may hereinafter be
referred to as an "Indemnified Person"), from and against any and all losses,
claims, damages, liabilities and judgments arising out of or relating to any
untrue statement or alleged untrue statement of a material fact contained in any
Registration Statement, Prospectus or preliminary prospectus or in any amendment
or supplement thereto, or arising out of or relating to any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein (in the case of any Prospectus or
preliminary prospectus or supplement thereto, in light of the circumstances
under which they were made) not misleading, except insofar as such losses,
claims, damages, liabilities or judgments are caused by any such untrue
statement or omission or alleged untrue statement or omission based upon
information relating to any Indemnified Person furnished in writing to the
Issuers by or on behalf of such Indemnified Person expressly for use therein;
provided that the foregoing indemnity with respect to any preliminary prospectus
shall not inure to the benefit of any Indemnified Person from whom the person
asserting such losses, claims, damages, liabilities and judgments purchased
securities if such untrue statement or omission or alleged untrue statement or
omission made in such preliminary prospectus is eliminated or remedied in the
Prospectus and a copy of the Prospectus shall not have been furnished to such
person in a timely manner due to the wrongful action or wrongful inaction of
such Indemnified Person.
(b) In case any action shall be brought against any
27
<PAGE> 28
Indemnified Person, based upon any Registration Statement or any such Prospectus
or preliminary prospectus or any amendment or supplement thereto and with
respect to which indemnity may be sought against the Issuers hereunder, such
Indemnified Person shall promptly notify the Issuers in writing and the Company
shall assume the defense thereof, including the employment of counsel reasonably
satisfactory to such
28
<PAGE> 29
Indemnified Person and payment of all fees and expenses. Any Indemnified Person
shall have the right to employ separate counsel in any such action and
participate in the defense thereof, but the fees and expenses of such counsel
shall be at the expense of such Indemnified Person, unless (i) the employment of
such counsel shall have been specifically authorized in writing by the Issuers,
(ii) the Company shall have failed to assume the defense and employ counsel or
pay all such fees and expenses or (iii) the named parties to any such action
(including any impleaded parties) include both such Indemnified Person and an
Issuer and such Indemnified Person shall have been advised by counsel that there
may be one or more legal defenses available to it which are different from or
additional to those available to any such Issuer (in which case the Company
shall not have the right to assume the defense of such action on behalf of such
Indemnified Person, it being understood, however, that the Issuers shall not, in
connection with any one such action or separate but substantially similar or
related actions in the same jurisdiction arising out of the same general
allegations or circumstances, be liable for the reasonable fees and expenses of
more than one separate firm of attorneys (in addition to any local counsel) for
all such Indemnified Persons, which firm shall be designated in writing by such
Indemnified Persons, and that all such reasonable fees and expenses shall be
reimbursed as they are incurred). The Issuers shall not be liable for any
settlement of any such action effected without their written consent but if
settled with the written consent of the Issuers, the Issuers agree, jointly and
severally, to indemnify and hold harmless each Indemnified Person from and
against any loss or liability by reason of such settlement. No Issuer shall,
without the prior written consent of each Indemnified Person, effect any
settlement of any pending or threatened proceeding in respect of which any
Indemnified Person is a party and indemnity could have been sought hereunder by
such Indemnified Person, unless such settlement includes an unconditional
release of such Indemnified Person from all liability on claims that are the
subject matter of such proceeding.
(c) In connection with any Registration Statement pursuant to which
a holder of Transfer Restricted Notes offers or sells Transfer Restricted Notes,
such holder agrees, severally and not jointly, to indemnify and hold harmless
the Issuers, their respective directors and officers and any person
29
<PAGE> 30
controlling an Issuer within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act, to the same extent as the foregoing indemnity
from the Issuers to each Indemnified Person but only with respect to information
relating to such holder furnished in writing by or on behalf of such holder
expressly for use in such Registration Statement. In any such case in which any
action shall be brought against an Issuer, any director or officer of an Issuer
or any person controlling an Issuer based on such Registration Statement and in
respect of which indemnity may be sought against a holder of Transfer Restricted
Notes, such holder shall have the rights and duties given to the Issuers (except
that if an Issuer shall have assumed the defense thereof, such holder shall not
be required to do so, but may employ separate counsel therein and participate in
the defense thereof but the fees and expenses of such counsel shall be at the
expense of such holder), and the Issuers, their respective directors and
officers and any person controlling an Issuer shall have the rights and duties
given to the Indemnified Persons by Section 7(b) hereof.
(d) If the indemnification provided for in this Section 7 is
unavailable to an indemnified party in respect of any losses, claims, damages,
liabilities or judgments referred to herein, then each indemnifying party, in
lieu of indemnifying such indemnified party, shall contribute to the amount paid
or payable by such indemnified party as a result of such losses, claims,
damages, liabilities and judgments (i) in such proportion as is appropriate to
reflect the relative benefits received by each indemnifying party on the one
hand and the indemnified party on the other hand from the offering of the Notes,
the Exchange Notes or the Private Exchange Notes, as the case may be (it being
expressly understood and agreed that the relative benefits received by the
Issuers from the offering of the Notes, Exchange Notes or Private Exchange
Notes, as the case may be, shall be the amount of the net proceeds received by
the Company from the sale of the Notes to the Initial Purchaser), or (ii) if the
allocation provided by clause (i) above is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of each indemnifying
party on the one hand and the indemnified party on the other hand in connection
with the statements or omissions which resulted in such losses, claims, damages,
liabilities or judgments, as well as any other
30
<PAGE> 31
relevant equitable considerations. The relative fault of the each indemnifying
party on the one hand the indemnified party on the other hand shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission to state a material fact
relates to information supplied by an indemnifying party or such indemnified
party and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission.
The Issuers and the Initial Purchaser agree that it would not be
just and equitable if contribution pursuant to this Section 7(d) were determined
by pro rata allocation (even if all Indemnified Persons were treated as one
entity for such purpose) or by any other method of allocation which does not
take account of the equitable considerations referred to in the immediately
preceding paragraph. The amount paid or payable by an indemnified party as a
result of the losses, claims, damages, liabilities or judgments referred to in
the immediately preceding paragraph shall be deemed to include,
31
<PAGE> 32
subject to the limitations set forth above, any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such action or claim. Notwithstanding the provisions of this
Section 7, no Indemnified Person shall be required to contribute any amount in
excess of the amount by which the net proceeds received by it in connection with
the sale of the Notes, Exchange Notes or Private Exchange Notes contemplated by
this Agreement (or, in the case of an underwriter that is an Indemnified Person,
the total underwriting discounts received by such underwriter) exceeds the
amount of any damages which such Indemnified Person has otherwise been required
to pay by reason of such untrue or alleged untrue statement or omission or
alleged omission. No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The Indemnified Person's obligations to contribute pursuant
to this Section 7(d) are several in proportion to the respective amount of
Notes, Exchange Notes or Private Exchange Notes included in any such
Registration Statement by each Indemnified Person and not joint.
8. Rule 144A
Each of Issuers shall use its best efforts to file the reports
required to be filed by it under the Securities Act and the Exchange Act in a
timely manner and, if at any time it is not required to file such reports but in
the past had been required to or did file such reports, it will, upon the
request of any holder of Transfer Restricted Notes, make available other
information as required by, and so long as necessary to permit sales of Transfer
Restricted Notes pursuant to Rule 144A. Notwithstanding the foregoing, nothing
in this Section 8 shall be deemed to require an Issuer to register any of its
securities pursuant to the Exchange Act.
9. Underwritten Registrations
If any of the Transfer Restricted Notes covered by any Shelf
Registration are to be sold in an underwritten offering, the investment banker
or investment bankers and manager or managers that will administer the offering
will be selected by the holders of a majority in aggregate principal
32
<PAGE> 33
amount of the Transfer Restricted Notes included in such offering, subject to
the consent of the Company (which will not be unreasonably withheld or delayed).
No person may participate in any underwritten registration hereunder
unless such person (i) agrees to sell such Transfer Restricted Notes on the
basis reasonably provided in any underwriting arrangements approved by the
persons entitled hereunder to approve such arrangements and (ii) completes and
executes all questionnaires, powers of attorney,
33
<PAGE> 34
indemnities, underwriting agreements and other documents required under the
terms of such underwriting arrangements.
10. Miscellaneous
(a) Remedies. In the event of a breach by an Issuer or by a holder
of Notes, Exchange Notes or Private Exchange Notes of any of its obligations
under this Agreement, each holder of Notes, Exchange Notes or Private Exchange
Notes and each Issuer, in addition to being entitled to exercise all rights
granted by law, including recovery of damages, will be entitled to specific
performance of its rights under this Agreement. Notwithstanding the provisions
of Section 4 hereof, the Issuers and each holder of Notes, Exchange Notes and
Private Exchange Notes agree that monetary damages would not be adequate
compensation for any loss incurred by reason of a breach of any of the
provisions of this Agreement and each hereby further agrees that, in the event
of any action for specific performance in respect of such breach, it shall waive
the defense that a remedy at law would be adequate.
(b) No Inconsistent Agreements. The Issuers will not enter into any
agreement with respect to their securities that is inconsistent with the rights
granted to the holders of Notes, Exchange Notes and Private Exchange Notes and
Indemnified Persons in this Agreement or otherwise conflicts with the provisions
hereof. Without the written consent of the holders of a majority in aggregate
principal amount of the outstanding Transfer Restricted Notes, the Issuers shall
not grant to any person any rights which conflict with or are inconsistent with
the provisions of this Agreement.
(c) No Piggyback on Registrations. The Issuers shall not grant to
any of their securityholders (other than the holders of Transfer Restricted
Notes in such capacity) the right to include any of their securities in any
Registration Statement other than Transfer Restricted Notes.
(d) Amendments and Waivers. The provisions of this Agreement,
including the provisions of this sentence, may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions hereof
may not be given, otherwise than with the prior written consent of the holders
of not less than a majority of the then outstanding aggregate
34
<PAGE> 35
principal amount of Transfer Restricted Notes; provided, however, that, for the
purposes of this Agreement, Transfer Restricted Notes that are owned, directly
or indirectly, by the Issuers or any of their Affiliates are not deemed
outstanding. Notwithstanding the foregoing, a waiver or consent to depart from
the provisions hereof with respect to a matter that relates exclusively to the
rights of holders of Transfer Restricted Notes whose securities are being sold
or tendered pursuant to a Registration Statement and that does not directly or
indirectly affect the rights of other holders of Transfer Restricted Notes may
be given by holders of a majority in aggregate principal amount of the Transfer
Restricted Notes being sold or tendered by such holders pursuant to such
Registration Statement; provided, however, that the provisions of this sentence
may not be amended, modified or supplemented except in accordance with the
provisions of the immediately preceding sentence. Notwithstanding the foregoing,
no amendment, modification, supplement, waiver or consent with respect to
Section 7 shall be made or given otherwise than with the prior written consent
of each Indemnified Person affected thereby.
(e) Notices. All notices and other communications provided for
herein shall be made in writing by hand-delivery, next-day air courier,
certified first-class mail, return receipt requested, telex or telecopier:
(i) if to the Issuers, as provided in the Purchase Agreement,
(ii) if to the Initial Purchaser, as provided in the Purchase
Agreement, or
(iii) if to any other person who is then the registered holder of
Notes, Exchange Notes or Private Exchange Notes, to the address of such
holder as it appears in the register therefor of the Company.
Except as otherwise provided in this Agreement, all such
communications and notices shall be deemed to have been duly given: when
delivered by hand, if personally delivered; one Business Day after being timely
delivered to a next-day air courier; five Business Days after being deposited in
the mail, postage prepaid, if mailed; when answered back, if telexed; and
35
<PAGE> 36
when receipt is acknowledged by the recipient's telecopier machine, if
telecopied.
(f) Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the successors and permitted assigns of each of
the parties and shall inure to the benefit of each holder of Notes, Exchange
Notes and Private Exchange Notes and each Indemnified Person. The Issuers may
not assign any of their rights or obligations hereunder without the prior
written consent of each holder of Transfer Restricted Notes and each Indemnified
Person. Notwithstanding the foregoing, no successor or assignee of an Issuer
shall have any of the rights granted under this Agreement until such person
shall acknowledge its rights and obligations hereunder by a signed written
statement of such person's acceptance of such rights and obligations.
(g) Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and, all of which taken
together shall constitute one and the same Agreement.
(h) Governing Law; Submission to Jurisdiction. THIS AGREEMENT SHALL
BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK, AS APPLIED TO CONTRACTS MADE AND PERFORMED WITHIN THE STATE OF NEW YORK.
THE ISSUERS HEREBY IRREVOCABLY SUBMIT TO THE JURISDICTION OF ANY NEW YORK STATE
COURT SITTING IN THE BOROUGH OF MANHATTAN IN THE CITY OF NEW YORK OR ANY FEDERAL
COURT SITTING IN THE BOROUGH OF MANHATTAN IN THE CITY OF NEW YORK IN RESPECT OF
ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT, AND
EACH IRREVOCABLY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY
AND UNCONDITIONALLY, JURISDICTION OF THE AFORESAID COURTS.
(i) Severability. The remedies provided herein are cumulative and
not exclusive of any remedies provided by law. If any term, provision, covenant
or restriction of this Agreement is held by a court of competent jurisdiction to
be invalid, illegal, void or unenforceable, the remainder of the terms,
provisions, covenants and restrictions set forth herein
36
<PAGE> 37
shall remain in full force and effect and shall in no way be affected, impaired
or invalidated, and the parties hereto shall use their reasonable efforts to
find and employ an alternative means to achieve the same or substantially the
same result as that contemplated by such term, provision, covenant or
restriction. It is hereby stipulated and declared to be the intention of the
parties that they would have executed the remaining terms, provisions, covenants
and restrictions without including any of such that may be hereafter declared
invalid, illegal, void or unenforceable.
(j) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof. All
references made in this Agreement to "Section" and "paragraph" refer to such
Section or paragraph of this Agreement, unless expressly stated otherwise.
(k) Entire Agreement. This Agreement is intended by the parties as a
final expression of their agreement and is intended to be a complete and
exclusive statement of the agreement and understanding of the parties hereto in
respect of the subject matter contained herein. There are no restrictions,
promises, warranties or undertakings, other than those set forth or referred to
herein with respect to the registration rights granted by the Issuers with
respect to the Notes, the Exchange Notes and the Private Exchange Notes. This
Agreement supersedes all prior agreements and understandings between the parties
with respect to such subject matter.
37
<PAGE> 38
IN WITNESS WHEREOF, the parties have caused this Registration Rights
Agreement to be duly executed as of the date first written above.
THE COMPANY:
SPANISH BROADCASTING SYSTEM, INC.
By: /s/ Raul Alarcon, Jr.
-----------------------
Name: Raul Alarcon, Jr.
Title: President and Chief Executive Officer
THE GUARANTORS:
SPANISH BROADCASTING SYSTEM, INC.,
a New Jersey Corporation
By: /s/ Raul Alarcon, Jr.
-------------------------
Name: Raul Alarcon, Jr.
Title: President and Chief Executive Officer
SPANISH BROADCASTING SYSTEM
OF CALIFORNIA, INC.
By: /s/ Raul Alarcon, Jr.
-------------------------
Name: Raul Alarcon, Jr.
Title: President and Chief Executive Officer
SPANISH BROADCASTING SYSTEM
OF FLORIDA, INC.
By: /s/ Raul Alarcon, Jr.
-------------------------
Name: Raul Alarcon, Jr.
Title: President and Chief Executive Officer
38
<PAGE> 39
SPANISH BROADCASTING SYSTEM
NETWORK, INC.
By: /s/ Raul Alarcon, Jr.
-------------------------
Name: Raul Alarcon, Jr.
Title: President and Chief Executive Officer
SBS PROMOTIONS, INC.
By: /s/ Raul Alarcon, Jr.
-------------------------
Name: Raul Alarcon, Jr.
Title: President and Chief Executive Officer
ALARCON HOLDINGS, INC.
By: /s/ Raul Alarcon, Jr.
-------------------------
Name: Raul Alarcon, Jr.
Title: President and Chief Executive Officer
SBS OF GREATER NEW YORK, INC.
By: /s/ Raul Alarcon, Jr.
-------------------------
Name: Raul Alarcon, Jr.
Title: President and Chief Executive Officer
THE INITIAL PURCHASER:
CIBC WOOD GUNDY SECURITIES CORP.
By: /s/ Walter McLallen
-------------------------
Name: Walter McLallen
Title: Managing Director
39
<PAGE> 1
EXHIBIT 10.6
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
PREFERRED STOCK REGISTRATION RIGHTS AGREEMENT
Dated as of March 15, 1997
by and among
SPANISH BROADCASTING SYSTEM, INC.,
THE GUARANTORS NAMED HEREIN
and
CIBC WOOD GUNDY SECURITIES CORP.
(as Initial Purchaser)
175,000 Shares
of
14-1/4% Senior Exchangeable Preferred Stock, Series A
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
<PAGE> 2
This Preferred Stock Registration Rights Agreement is dated as of
March 15, 1997, by and among Spanish Broadcasting System, Inc., a Delaware
corporation (the "Company"), each of the subsidiaries of the Company listed on
the signature pages hereto as a Guarantor (collectively, the "Guarantors" and,
together with the Company, the "Issuers") and CIBC Wood Gundy Securities Corp.
(the "Initial Purchaser").
This Agreement is made pursuant to the Purchase Agreement, dated
March 24, 1997, among the Company, the Guarantors and Initial Purchaser (the
"Purchase Agreement"). In order to induce the Initial Purchaser to enter into
the Purchase Agreement, the Issuers have agreed to provide the registration
rights provided for in this Agreement to the Initial Purchaser and its direct
and indirect transferees and assigns. The execution and delivery of this
Agreement is a condition to the closing of the transactions contemplated by the
Purchase Agreement.
The parties hereby agree as follows:
1. Definitions
As used in this Agreement, the following terms shall have the
following meanings:
Additional Dividends: As defined in Section 4(a) hereof.
Affiliate: With respect to any specified person, "Affiliate" shall
mean any other person directly or indirectly through one or more intermediaries
controlling or controlled by or under direct or indirect common control with
such specified person. For the purposes of this definition, "control," when used
with respect to any person, means the power to direct the management and
policies of such person, directly or indirectly, whether through the ownership
of voting securities, by contract or otherwise and the terms "affiliated",
"controlling" and "controlled" have meanings correlative to the foregoing.
Agreement: This Preferred Stock Registration Rights Agreement, as
the same may be amended, supplemented or modified from time to time in
accordance with the terms hereof.
Business Day: Any day except a Saturday, a Sunday or a day on which
banking institutions in New York, New York
<PAGE> 3
-2-
generally are required or authorized by law or other government action to be
closed.
Certificate of Designation: means the certificate of designation
governing the 14-1/4% Senior Exchangeable Preferred Stock, par value $.01 per
share, Series A, of the Company.
Class A Shelf Registration: As defined in Section 3A.
Class A Shelf Registration Statement: As defined in Section 3A.
Company: As defined in the preamble hereof.
Consummate or consummate: When used to qualify the term "Exchange
Offer", shall mean validly and lawfully to issue and deliver the Exchange
Preferred Stock pursuant to the Exchange Offer for all Preferred Stock validly
tendered and not validly withdrawn pursuant thereto in accordance with the terms
of this Agreement.
Consummation Date: The date that is 60 days immediately following
the date that the Exchange Registration Statement shall have been declared
effective by the SEC.
Contingent Class A Shares: means shares of Class A Common Stock, par
value $0.01, of the Company issued to holders of Preferred Stock, Exchange
Preferred Stock, Private Exchange Preferred Stock and Debentures pursuant to the
terms thereof.
Debentures: means the 14-1/4% Exchange Debentures of the Company
issuable under the Indenture, guaranteed by each of the Guarantors.
Effectiveness Period: As defined in Section 3(a) hereof.
Exchange Act: The Securities Exchange Act of 1934, as amended, and
the rules and regulations promulgated by the SEC pursuant thereto.
Exchange Date: As defined in Section 2(d) hereof.
Exchange Preferred Stock: The shares of 14-1/4% Senior Exchangeable
Preferred Stock, par value $.01 per share, Series B, of the Company that are
identical to the Preferred
<PAGE> 4
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Stock in all material respects, except that the provisions regarding
restrictions on transfer shall be modified, as provided in the Certificate of
Designation, and the issuance thereof pursuant to the Exchange Offer shall have
been registered pursuant to an effective Registration Statement in compliance
with the Securities Act.
Exchange Offer: An offer to issue, in exchange for any and all of
the Preferred Stock, a like number of shares of Exchange Preferred Stock, which
offer shall be made by the Company pursuant to Section 2 hereof.
Exchange Offer Filing Date: As defined in Section 2(a).
Exchange Registration Statement: As defined in Section 2(a) hereof.
Guarantors: As defined in the preamble hereof.
Indemnified Person: As defined in Section 7(a) hereof.
Indenture: The Indenture, dated as of March 15, 1997, among the
Issuers and U.S. Trust Company of New York, as trustee thereunder, pursuant to
which the Debentures are issuable, as amended or supplemented from time to time
in accordance with the terms thereof.
Initial Purchaser: As defined in the preamble hereof.
Issue Date: As defined in Section 2(a).
Issuers: As defined in the preamble hereof.
Participating Broker-Dealer: As defined in Section 2(e) hereof.
"Preferred Stock" means the 14-1/4% Senior Exchangeable Preferred
Stock, Series A, of the Company.
Private Exchange: As defined in Section 2(c) hereof.
Private Exchange Preferred Stock: As defined in Section 2(c) hereof.
<PAGE> 5
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Prospectus: The prospectus included in any Registration Statement
(including, without limitation, a prospectus that discloses information
previously omitted from a prospectus filed as part of an effective registration
statement in reliance upon Rule 430A promulgated pursuant to the Securities
Act), as amended or supplemented by any prospectus supplement, with respect to
the terms of the offering of any portion of the Preferred Stock, Exchange
Preferred Stock, Private Exchange Preferred Stock, Debentures or Contingent
Class A Shares covered by such Registration Statement, and all other amendments
and supplements to any such prospectus, including post-effective amendments, and
all material incorporated by reference or deemed to be incorporated by
reference, if any, in such prospectus.
Registration Default: As defined in Section 4(a) hereof.
Registration Statement: Any registration statement of the Company
and the Guarantors that covers any of the Preferred Stock, Exchange Preferred
Stock, Private Exchange Preferred Stock, Debentures or Contingent Class A Shares
pursuant to the provisions of this Agreement, including the Prospectus,
amendments and supplements to such registration statement or Prospectus,
including pre- and post-effective amendments, all exhibits thereto, and all
material incorporated by reference or deemed to be incorporated by reference, if
any, in such registration statement.
Rule 144(k): Rule 144(k) promulgated by the SEC pursuant to the
Securities Act, as such Rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the SEC as a replacement thereto having
substantially the same effect as such Rule.
Rule 144A: Rule 144A promulgated by the SEC pursuant to the
Securities Act, as such Rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the SEC as a replacement thereto having
substantially the same effect as such Rule.
Rule 158: Rule 158 promulgated by the SEC pursuant to the Securities
Act, as such Rule may be amended from time to time, or any similar rule or
regulation hereafter adopted by the SEC as a replacement thereto having
substantially the same effect as such Rule.
<PAGE> 6
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Rule 174: Rule 174 promulgated by the SEC pursuant to the Securities
Act, as such Rule may be amended from time to time, or any similar rule or
regulation hereafter adopted by the SEC as a replacement thereto having
substantially the same effect as such Rule.
Rule 415: Rule 415 promulgated by the SEC pursuant to the Securities
Act, as such Rule may be amended from time to time, or any similar rule or
regulation hereafter adopted by the SEC as a replacement thereto having
substantially the same effect as such Rule.
Rule 424: Rule 424 promulgated by the SEC pursuant to the Securities
Act, as such Rule may be amended from time to time, or any similar rule or
regulation hereafter adopted by the SEC as a replacement thereto having
substantially the same effect as such Rule.
SEC: The Securities and Exchange Commission.
Securities Act: The Securities Act of 1933, as amended, and the
rules and regulations promulgated by the SEC thereunder.
Shelf Filing Event: As defined in Section 3(a) hereof.
Shelf Registration: As defined in Section 3(a) hereof.
Shelf Registration Statement: As defined in Section 3(a) hereof.
Special Counsel: Cahill Gordon & Reindel, special counsel to the
holders of Transfer Restricted Preferred Stock and Contingent Class A Shares, or
such other counsel as shall be agreed upon by the Issuers and holders of a
majority of outstanding shares of Transfer Restricted Preferred Stock or
Contingent Class A Shares, as the case may be, the reasonable expenses of which
holders of Transfer Restricted Preferred Stock or Contingent Class A Shares, as
the case may be, will be reimbursed by the Issuers pursuant to Section 6 hereof.
TIA: The Trust Indenture Act of 1939, as amended.
Transfer Restricted Preferred Stock: Each share of Preferred Stock,
upon original issuance thereof, and at all
<PAGE> 7
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times subsequent thereto, each share of Exchange Preferred Stock as to which
Section 3(a)(ii) hereof is applicable upon original issuance and at all times
subsequent thereto, and each share of Private Exchange Preferred Stock upon
original issuance thereof and at all times subsequent thereto, until in the case
of any such share of Preferred Stock, Exchange Preferred Stock or Private
Exchange Preferred Stock, as the case may be, the earliest to occur of (i) the
date on which any such share of Preferred Stock has been exchanged by a person
other than a Participating Broker-Dealer for a share of Exchange Preferred Stock
(other than with respect to a share of Exchange Preferred Stock as to which
Section 3(a)(ii) hereof applies) pursuant to the Exchange Offer, (ii) with
respect to any share of Exchange Preferred Stock received by Participating
Broker-Dealers in the Exchange Offer, the earlier of (x) the date on which such
share has been sold by such Participating Broker-Dealer by means of the
Prospectus contained in the Exchange Registration Statement and (y) the date on
which the Exchange Registration Statement has been effective under the
Securities Act for a period of 180 days after the Consummation Date, (iii) the
date on which a Shelf Registration Statement covering such share of Preferred
Stock, Exchange Preferred Stock or Private Exchange Preferred Stock has been
declared effective by the SEC and such share has been disposed of in accordance
with such effective Shelf Registration Statement, (iv) the date on which such
share of Preferred Stock, Exchange Preferred Stock or Private Exchange Preferred
Stock, as the case may be, is eligible for distribution to the public without
volume or manner of sale restrictions pursuant to Rule 144(k) or (v) the date on
which such share of Preferred Stock, Exchange Preferred Stock or Private
Exchange Preferred Stock, as the case may be, ceases to be outstanding.
Trustee: The trustee under the Indenture.
underwritten registration or underwritten offering: A registration
in connection with which securities are sold to an underwriter for reoffering to
the public pursuant to an effective Registration Statement.
2. Exchange Offer
(a) To the extent not prohibited by any applicable law or applicable
interpretation of the staff of the SEC, the Issuers shall (A) prepare and, on or
prior to 45 days after (the "Exchange Offer Filing Date") the date of original
issuance of the Preferred Stock (the "Issue Date"), file, or cause to be filed,
with the SEC a Registration Statement under the
<PAGE> 8
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Securities Act with respect to an offer by the Company to the holders of the
Preferred Stock to issue and deliver to such holders, in exchange for Preferred
Stock, a like number of shares of Exchange Preferred Stock, (B) use their best
efforts to cause the Registration Statement relating to the Exchange Offer to be
declared effective by the SEC under the Securities Act on or prior to the 120th
day after the Issue Date, and (C) commence the Exchange Offer and use their best
efforts to issue, on or prior to the Consummation Date, the Exchange Preferred
Stock. The offer and sale of the Exchange Preferred Stock pursuant to the
Exchange Offer shall be registered pursuant to the Securities Act on an
appropriate form (the "Exchange Registration Statement") and duly registered or
qualified under all applicable state securities or Blue Sky laws and will comply
with all applicable tender offer rules and regulations under the Exchange Act
and state securities or Blue Sky laws. The Exchange Offer Registration Statement
will also register any deemed offering of the Debentures by the Issuers pursuant
to the Exchange Offer. The Exchange Offer shall not be subject to any condition,
other than that the Exchange Offer does not violate any applicable law or
interpretation of the staff of the SEC. Upon consummation of the Exchange Offer
in accordance with this Section 2, the Issuers shall have no further
registration obligations other than with respect to (i) Private Exchange
Preferred Stock, (ii) Exchange Preferred Stock held by Participating
Broker-Dealers, (iii) Preferred Stock or Exchange Preferred Stock as to which
Section 3(a)(iii) hereof applies and (iv) if required, registration of the
issuance of the Debentures as contemplated by Section 3(c). Other than in
connection with a deemed offering of the Debentures required by this Section
2(a), no securities shall be included in the Exchange Registration Statement
other than the Exchange Preferred Stock.
(b) The Issuers may require each holder of Preferred Stock, as a
condition to its participation in the Exchange Offer, to represent to the
Issuers and their counsel in writing (which may be contained in the applicable
letter of transmittal) that at the time of the consummation of the Exchange
Offer (i) any Exchange Preferred Stock received by such holder will be acquired
in the ordinary course of its business, (ii) such holder will have no
arrangement or understanding with any person to participate in the distribution
(within the meaning of the Securities Act) of the Exchange Preferred Stock and
(iii) such holder is not an Affiliate of an Issuer, or if it is an Affiliate of
an Issuer, it will comply with the registration
<PAGE> 9
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and prospectus delivery requirements of the Securities Act, to the extent
applicable.
(c) If, prior to consummation of the Exchange Offer, the Initial
Purchaser holds any Preferred Stock acquired by it and having, or which are
reasonably likely to be determined to have, the status of an unsold allotment in
the initial distribution, or any other holder of Preferred Stock is not entitled
to participate in the Exchange Offer, the Company, upon the request of the
Initial Purchaser or any such holder, shall, simultaneously with the delivery of
the Exchange Preferred Stock in the Exchange Offer, issue and deliver to such
Initial Purchaser and any such holder, in exchange (the "Private Exchange") for
such Preferred Stock held by the Initial Purchaser and any such holder, a like
number of shares of 14-1/4% Senior Exchangeable Preferred Stock, par value $.01,
of the Company that are identical in all material respects to the Exchange
Preferred Stock (the "Private Exchange Preferred Stock"). The Private Exchange
Preferred Stock shall bear the same CUSIP number as the Exchange Preferred
Stock.
(d) Unless the Exchange Offer would not be permitted by any
applicable law or interpretation of the staff of the SEC, the Company shall mail
the Exchange Offer Prospectus and appropriate accompanying documents, including
appropriate letters of transmittal, to each holder of Preferred Stock providing,
in addition to such other disclosures as are required by applicable law:
(i) that the Exchange Offer is being made pursuant to this
Agreement and that all Preferred Stock validly tendered will be
accepted for exchange;
(ii) the date of acceptance for exchange (the "Exchange
Date"), which date shall in no event be later than the Consummation
Date (unless otherwise required by applicable law);
(iii) that a holder of Preferred Stock electing to have
Preferred Stock exchanged pursuant to the Exchange Offer will be
required to surrender such Preferred Stock, together with the enclosed
letters of transmittal, to the institution and at the address (located
in the Borough of Manhattan, The City of New York) specified in the
notice prior to the close of business on the Exchange Date; and
<PAGE> 10
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(iv) that holders of Preferred Stock that do not tender all
such securities pursuant to the Exchange Offer may no longer have any
registration rights hereunder with respect to Preferred Stock not
tendered.
Promptly after the Exchange Date, the Company shall:
(i) accept for exchange all Preferred Stock or portions
thereof validly tendered and not validly withdrawn pursuant to the
Exchange Offer; and
(ii) cancel all Preferred Stock or portions thereof so
accepted for exchange by the Company, and issue to and mail to each
holder of Preferred Stock, shares of Exchange Preferred Stock equal in
number to the shares of Preferred Stock surrendered by such holder.
(e) The Issuers and the Initial Purchaser acknowledge that the staff
of the SEC has taken the position that any broker-dealer that owns Exchange
Preferred Stock that was received by such broker-dealer for its own account in
the Exchange Offer (a "Participating Broker-Dealer") may be deemed to be an
"underwriter" within the meaning of the Securities Act and must deliver a
prospectus meeting the requirements of the Securities Act in connection with any
resale of such Exchange Preferred Stock (other than a resale of an unsold
allotment resulting from the original offering of the Preferred Stock).
The Issuers and the Initial Purchaser also acknowledge that it is
the SEC staff's position that if the Prospectus contained in the Exchange
Registration Statement includes a plan of distribution containing a statement to
the above effect and the means by which Participating Broker- Dealers may resell
the Exchange Preferred Stock, without naming the Participating Broker-Dealers or
specifying the amount of Exchange Preferred Stock owned by them, such Prospectus
may be delivered by Participating Broker-Dealers to satisfy their prospectus
delivery obligations under the Securities Act in connection with resales of
Exchange Preferred Stock for their own accounts, so long as the Prospectus
otherwise meets the requirements of the Securities Act.
In light of the foregoing, if requested by a Participating
Broker-Dealer, the Issuers agree (x) to use their best efforts to keep the
Exchange Registration Statement continuously effective for a period of up to 180
days after the Consummation Date or such earlier date as each Participating
<PAGE> 11
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Broker-Dealer shall have notified the Company in writing that such Participating
Broker-Dealer has resold all Exchange Preferred Stock acquired in the Exchange
Offer, (y) to comply with the provisions of Section 5 of this Agreement, as they
relate to the Exchange Offer and the Exchange Registration Statement, and (z) to
deliver to such Participating Broker-Dealer a "cold comfort" letter of the
independent public accountants of the Issuers and a legal opinion as to matters
reasonably requested by such Participating Broker-Dealer relating to the
Exchange Registration Statement and the related Prospectus and any amendments or
supplements thereto.
(f) The Initial Purchaser shall have no liability to any
Participating Broker-Dealer with respect to any request made pursuant to Section
2(e).
(g) Dividends on the Exchange Preferred Stock and the Private
Exchange Preferred Stock will accumulate from the last dividend payment date on
which dividends were paid on the Preferred Stock surrendered in exchange
therefor or, if no dividends have been paid on the Preferred Stock, from the
date of the original issuance of the Preferred Stock.
3. Shelf Registration
(a) If (i) the Company is not permitted to file the Exchange Offer
Registration Statement or to consummate the Exchange Offer because the Exchange
Offer is not permitted by any applicable law or applicable interpretation of the
staff of the SEC or (ii) any holder of Preferred Stock notifies the Company on
or prior to the 30th day following the Issue Date that (A) due to a change in
law or policy it is not entitled to participate in the Exchange Offer, (B) due
to a change in law or policy it may not resell Exchange Preferred Stock acquired
by it in the Exchange Offer to the public without delivering a prospectus and
the Prospectus contained in the Exchange Registration Statement is not
appropriate or available for such resales by such holder or (C) it owns
Preferred Stock (including the Initial Purchaser that holds Preferred Stock as
part of an unsold allotment from the original offering of the Preferred Stock)
acquired directly from an Issuer or an Affiliate of an Issuer or (iii) any
holder of Private Exchange Preferred Stock so requests after the consummation of
the Private Exchange or (iv) the Company has not consummated the Exchange Offer
within 180 days after the Issue Date (each such event referred to in clauses (i)
through (iv), a "Shelf Filing Event"), the Issuers shall cause to be filed with
the SEC pursuant to Rule 415 a
<PAGE> 12
-11-
shelf registration statement (the "Shelf Registration Statement") prior to the
later of (x) 60 days after the Issue Date or (y) 45 days after the occurrence of
such Shelf Filing Event, relating to all Transfer Restricted Preferred Stock
(the "Shelf Registration") the holders of which have provided the information
required pursuant to Section 3(b) hereof (provided that if the Shelf Filing
Event arises pursuant to clause (iv) above, the Issuers shall file the Shelf
Registration Statement on the 181st day after the Issue Date), and shall use
their best efforts to have the Shelf Registration Statement declared effective
by the SEC on or prior to 90 days after the filing of such Shelf Filing Event.
The Shelf Registration Statement will also register any deemed offering of the
Debentures pursuant to resale of Preferred Stock, Exchange Preferred Stock or
Private Exchange Preferred Stock, as the case may be. In such circumstances, the
Issuers shall use their best efforts to keep the Shelf Registration Statement
continuously effective under the Securities Act, until (A) 36 months following
the Issue Date or (B) if sooner, the date immediately following the date that
all Transfer Restricted Preferred Stock covered by the Shelf Registration
Statement has been sold pursuant thereto or otherwise cease to be Transfer
Restricted Preferred Stock (the "Effectiveness Period"); provided that the
Effectiveness Period shall be extended to the extent required to permit dealers
to comply with the applicable prospectus delivery requirements of Rule 174.
(b) No holder of Transfer Restricted Preferred Stock may include any
of its Transfer Restricted Preferred Stock in any Shelf Registration Statement
pursuant to this Agreement unless and until such holder furnishes to the Company
in writing, within 30 days after receipt of a request therefor, such information
as the Company may reasonably request for use in connection with any Shelf
Registration Statement or Prospectus or preliminary prospectus included therein,
including, without limitation, such information specified in item 507 of
Regulation S-K under the Securities Act. No holder of Transfer Restricted
Preferred Stock shall be entitled to Additional Dividends pursuant to Section 4
hereof unless and until such holder shall have provided all such reasonably
requested information. Each holder of Transfer Restricted Preferred Stock as to
which any Shelf Registration Statement is being effected agrees to furnish
promptly to the Company all information required to be disclosed in order to
make the information previously furnished to the Company by such holder not
materially misleading.
<PAGE> 13
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(c) If the issuance of the Debentures requires registration under
the Securities Act and any such issuance shall not have been effectively
registered under the Securities Act pursuant to the Exchange Offer Registration
Statement or a Shelf Registration Statement, then, prior to any issuance of
Debentures, the Issuers shall file with the SEC and cause to become effective a
Registration Statement registering the issuance of such Debentures.
3A. Class A Shelf Registration
The Company shall use its best efforts to (i) file with the SEC a
Registration Statement on the appropriate form within 45 days of the Issue Date
registering the issuance of all Contingent Class A Shares, (ii) cause such
Registration Statement to become effective within 120 days after the Issue Date
and (iii) keep such Registration Statement continuously effective so long as any
shares of Preferred Stock, Exchange Preferred Stock or Private Exchange
Preferred Stock or Debentures (for so long as Contingent Class A Shares are
issuable with respect to the Debentures) remain outstanding. If any Contingent
Class A Shares are issued prior to the effectiveness of such Registration
Statement, the Company will use its best efforts to cause to become effective
within 120 days after the Issue Date a Registration Statement (the "Class A
Shelf Registration Statement") registering the resale of such Contingent Class A
Shares, including a Prospectus that made delivered by such holders upon any such
resale (a "Class A Shelf Registration"). The Company shall use its best efforts
to cause the Class A Shelf Registration Statement to remain continuously
effective until the earlier of (x) two years after the latest issuance of such
Contingent Class A Shares and (y) the date on which all such Contingent Class A
Shares have been resold pursuant to an effective Class A Shelf Registration.
4. Additional Dividends
(a) The parties hereto agree that the holders of Transfer Restricted
Preferred Stock will suffer damages if the Issuers fail to fulfill their
obligations pursuant to Section 2 or Section 3, as applicable, and that it would
not be feasible to ascertain the extent of such damages. Accordingly, in the
event that (i) the Exchange Offer Registration Statement or the Shelf
Registration Statement is not filed with the SEC on or prior to the date
specified herein for such filing, (ii) any such Registration Statement has not
been declared effective by
<PAGE> 14
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the SEC on or prior to the date specified herein for such effectiveness after
such obligation arises, (iii) if the Exchange Offer is required to be
Consummated hereunder, the Company has not exchanged Exchange Preferred Stock
for all Preferred Stock validly tendered and not validly withdrawn in accordance
with the terms of the Exchange Offer by the Consummation Date or (iv) any such
Registration Statement is filed and declared effective but shall thereafter
cease to be effective or usable in connection with the Exchange Offer or resales
of Transfer Restricted Preferred Stock during a period in which it is required
to be effective hereunder without being succeeded immediately by any additional
Registration Statement covering the Preferred Stock, the Exchange Preferred
Stock or the Private Exchange Preferred Stock, as the case may be, which has
been filed and declared effective (each such event referred to in clauses (i)
through (iv), a "Registration Default"), then the dividend rate on Transfer
Restricted Preferred Stock will increase ("Additional Interest"), with respect
to the first 90-day period immediately following the occurrence of such
Registration Default, by 0.5% per annum and will increase by an additional 0.25%
per annum with respect to each subsequent 90-day period until such Registration
Default has been cured, up to a maximum amount of 2.0% per annum with respect to
all Registration Defaults. Following the cure of a Registration Default, the
accumulation of Additional Dividends with respect to such Registration Default
will cease and upon the cure of all Registration Defaults the dividend rate will
revert to the original rate.
(b) The Additional Dividends due shall be payable on each dividend
payment date specified by the Certificate of Designation to the record holders
entitled to receive the dividend payment to be made on such date. Each
obligation to pay Additional Dividends shall be deemed to accumulate from and
including the applicable Registration Default.
(c) The parties hereto agree that the Additional Dividends provided
for in this Section 4 constitute a reasonable estimate of the damages that will
be suffered by holders of Transfer Restricted Preferred Stock by reason of the
happening of any Registration Default.
5. Registration Procedures
In connection with the Issuers' registration obligations hereunder,
the Issuers shall effect such registrations on the appropriate form available
for the sale of the Preferred
<PAGE> 15
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Stock, the Exchange Preferred Stock, the Private Exchange Preferred Stock, the
Debentures or Contingent Class A Shares, as applicable, to (i) in the case of
the Exchange Offer, permit the exchange of Exchange Preferred Stock for
Preferred Stock in the Exchange Offer, if applicable, resales of Exchange
Preferred Stock by Participating Broker-Dealers and to permit the issuance and
resale of the Debentures without registration under the Securities Act, (ii) in
the case of registration of the issuance by the Company of Contingent Class A
Shares, to permit resales of such Contingent Class A Shares without registration
under the Securities Act, and (iii) in the case of a Shelf Registration or Class
A Shelf Registration, permit the sale of the applicable Transfer Restricted
Preferred Stock or Contingent Class A Shares, as the case may be, in accordance
with the method or methods of disposition thereof specified by the holders of
such Transfer Restricted Preferred Stock or Contingent Class A Shares, as the
case may be, and to permit the issuance and resale of the Debentures without
registration under the Securities Act, and pursuant thereto the Issuers shall:
(a) In the case of a Shelf Registration or Class A Shelf
Registration, a reasonable period of time prior to the initial filing
of a Shelf Registration Statement or Class A Shelf Registration
Statement, as the case may be, or a related Prospectus and a reasonable
period of time prior to the filing of any amendment or supplement
thereto (including any document that would be incorporated or deemed to
be incorporated therein by reference), furnish to the holders of the
Transfer Restricted Preferred Stock or Contingent Class A Shares, as
the case may be, included in such Shelf Registration Statement or Class
A Shelf Registration Statement, as the case may be, their Special
Counsel and the managing underwriters, if any, copies of all such
documents proposed to be filed, which documents (other than those
incorporated or deemed to be incorporated by reference) will be subject
to the review of such holders, their Special Counsel and such
underwriters, if any, and cause the officers and directors of the
Issuers, counsel to the Issuers and independent certified public
accountants to the Issuers to respond to such reasonable inquiries as
shall be necessary, in the opinion of respective counsel to such
holders and such underwriters, to conduct a reasonable investigation
within the meaning of the Securities Act; provided that the foregoing
inspection and information gathering shall be coordinated on behalf of
any other persons, by one counsel designated by and on
<PAGE> 16
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behalf of such other persons; provided, however, that the Issuers shall
not be deemed to have kept a Shelf Registration Statement or Class A
Shelf Registration Statement, as the case may be, effective during the
applicable period if any of them voluntarily takes any unreasonable
action or voluntarily fails to take any reasonable action that results
in holders of the Transfer Restricted Preferred Stock or Contingent
Class A Shares, as the case may be, covered thereby not being able to
sell such Transfer Restricted Preferred Stock or Contingent Class A
Shares, as the case may be, pursuant to Federal securities laws during
that period. The Issuers shall not file any such Shelf Registration
Statement or Class A Shelf Registration Statement or related Prospectus
or any amendments or supplements thereto which the holders of a
majority of the shares of the Transfer Restricted Preferred Stock or
Contingent Class A Shares, as the case may be, included in such Shelf
Registration Statement shall reasonably object in writing within five
days of receipt of the information described above;
(b) Prepare and file with the SEC such amendments, including
post-effective amendments, to each Registration Statement as may be
necessary to keep such Registration Statement continuously effective
for the applicable time period required hereunder; cause the related
Prospectus to be supplemented by any required Prospectus supplement,
and as so supplemented to be filed pursuant to Rule 424; and comply
with the provisions of the Securities Act and the Exchange Act with
respect to the disposition of all securities covered by such
Registration Statement during such period in accordance with the
intended methods of disposition by the sellers thereof set forth in
such Registration Statement as so amended or in such Prospectus as so
supplemented;
(c) Notify the holders of Transfer Restricted Preferred Stock
or Contingent Class A Shares, as the case may be, to be sold or, in the
case of an Exchange Offer, tendered for, their Special Counsel and the
managing underwriters, if any, promptly, and (if requested by any such
person), confirm such notice in writing, (i)(A) when a Prospectus or
any Prospectus supplement or post-effective amendment is proposed to be
filed, and (B) with respect to a Registration Statement or any
post-effective amendment, when the same has become effective, (ii) of
any request by the SEC or any other Federal or state governmental
<PAGE> 17
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authority for amendments or supplements to a Registration Statement or
related Prospectus or for additional information, (iii) of the issuance
by the SEC, any state securities commission, any other governmental
agency or any court of any stop order or injunction suspending or
enjoining the use of a Prospectus or the effectiveness of a
Registration Statement or the initiation of any proceedings for that
purpose, (iv) of the receipt by the Company of any notification with
respect to the suspension of the qualification or exemption from
qualification of any of the Preferred Stock, Exchange Preferred Stock,
Private Exchange Preferred Stock or Contingent Class A Shares for sale
in any jurisdiction, or the initiation or threatening of any proceeding
for such purpose, and (v) of the happening of any event or information
becoming known to any Issuer that makes any statement made in a
Registration Statement or related Prospectus or any document
incorporated or deemed to be incorporated therein by reference untrue
in any material respect or that requires the making of any changes in
such Registration Statement, Prospectus or documents so that it will
not contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary to make
the statements therein, not misleading, and that in the case of a
Prospectus, it will not contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading;
(d) Use their best efforts to avoid the issuance of or, if
issued, obtain the withdrawal of any order enjoining or suspending the
use of a Prospectus or the effectiveness of a Registration Statement or
the lifting of any suspension of the qualification (or exemption from
qualification) of any of the Preferred Stock, Exchange Preferred Stock,
Private Exchange Preferred Stock or Contingent Class A Shares for sale
in any jurisdiction, at the earliest practicable moment;
(e) If a Shelf Registration Statement is filed pursuant to
Section 3 or Section 3A hereof and if requested by the managing
underwriters, if any, or the holders of a majority of shares of the
Transfer Restricted Preferred Stock or Contingent Class A Shares, as
the case may be, being sold pursuant to such Shelf Registration
Statement, (i) promptly incorporate in a Prospectus supplement or
<PAGE> 18
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post-effective amendment such information as the managing underwriters,
if any, and such holders reasonably believe should be included therein,
and (ii) make all required filings of such Prospectus supplement or
such post-effective amendment under the Securities Act as soon as
practicable after the Company has received notification of the matters
to be incorporated in such Prospectus supplement or post-effective
amendment; provided, however, that the Issuers shall not be required to
take any action pursuant to this Section 5(e) that would, in the
opinion of counsel for the Issuers, violate applicable law;
(f) Upon written request to the Company by a holder of
Preferred Stock, Exchange Preferred Stock, Private Exchange Preferred
Stock or Contingent Class A Shares to be exchanged or sold pursuant to
a Registration Statement, their Special Counsel and each managing
underwriter, if any, without charge, furnish at least one conformed
copy of such Registration Statement and each amendment thereto,
including financial statements and schedules, all documents
incorporated or deemed to be incorporated therein by reference, and all
exhibits to the extent requested (including those previously furnished
or incorporated by reference) as soon as practicable after the filing
of such documents with the SEC;
(g) Deliver to each holder of Preferred Stock, Exchange
Preferred Stock, Private Exchange Preferred Stock or Contingent Class A
Shares to be exchanged or sold pursuant to a Registration Statement,
their Special Counsel, and the underwriters, if any, without charge, as
many copies of the Prospectus (including each form of prospectus) and
each amendment or supplement thereto as such persons reasonably
request; and the Issuers hereby consent to the use of such Prospectus
and each amendment or supplement thereto by each of the selling holders
of Transfer Restricted Preferred Stock or Contingent Class A Shares and
the underwriters, if any, in connection with the offering and sale of
the Transfer Restricted Preferred Stock or Contingent Class A Shares in
accordance with the terms thereof and with U.S. Federal securities laws
and Blue Sky laws covered by such Prospectus and any amendment or
supplement thereto;
(h) Prior to any public offering of Preferred Stock, Exchange
Preferred Stock, Private Exchange Preferred Stock or Contingent Class A
Shares, use their best efforts to
<PAGE> 19
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register or qualify or cooperate with the holders of Preferred Stock,
Exchange Preferred Stock, Private Exchange Preferred Stock or
Contingent Class A Shares to be sold or tendered for, the underwriters,
if any, and their respective counsel in connection with the
registration or qualification (or exemption from such registration or
qualification) of such Preferred Stock, Exchange Preferred Stock,
Private Exchange Preferred Stock or Contingent Class A Shares for offer
and sale under the securities or Blue Sky laws of such jurisdictions
within the United States as any such holder or underwriter reasonably
requests in writing; keep each such registration or qualification (or
exemption therefrom) effective during the period such Registration
Statement is required to be kept effective hereunder and do any and all
other acts or things necessary or advisable to enable the disposition
in such jurisdictions of the Preferred Stock, Exchange Preferred Stock,
Private Exchange Preferred Stock or Contingent Class A Shares covered
by the applicable Registration Statement; provided, however, that the
Issuers shall not be required to (i) qualify generally to do business
in any jurisdiction where they are not then so qualified or (ii) take
any action which would subject them to general service of process or to
taxation in any jurisdiction where they are not so subject;
(i) In connection with any sale or transfer of Transfer
Restricted Preferred Stock or Contingent Class A Shares that will
result in such securities no longer being "restricted securities" under
the Securities Act, cooperate with the holders thereof and the managing
underwriters, if any, to facilitate the timely preparation and delivery
of certificates representing Transfer Restricted Preferred Stock or
Contingent Class A Shares to be sold, which certificates shall not bear
any restrictive legends and shall be in a form eligible for deposit
with The Depository Trust Company and to enable such Transfer
Restricted Preferred Stock or Contingent Class A Shares to be in such
denominations and registered in such names as the managing
underwriters, if any, or such holders may request at least two Business
Days prior to any sale of Transfer Restricted Preferred Stock or
Contingent Class A Shares;
(j) Upon the occurrence of any event contemplated by Section
5(c)(v), as promptly as practicable, prepare a supplement or amendment,
including, if appropriate, a
<PAGE> 20
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post-effective amendment, to each Registration Statement or a
supplement to the related Prospectus or any document incorporated or
deemed to be incorporated therein by reference, and file any other
required document so that, as thereafter delivered, such Prospectus
will not contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which
they were made, not misleading;
(k) Prior to the effective date of the Exchange Registration
Statement, to provide a CUSIP number for the Exchange Preferred Stock
(and Private Exchange Preferred Stock, if applicable) and prior to the
issuance of the Debentures, to provide a CUSIP number therefor;
(l) If a Shelf Registration Statement or Class A Registration
Statement is filed pursuant to Section 3 or Section 3A hereof, enter
into such agreements (including an underwriting agreement in form,
scope and substance as is customary in underwritten offerings) and take
all such other reasonable actions in connection therewith (including
those reasonably requested by the managing underwriters, if any, or the
holders of a majority of shares of the Transfer Restricted Preferred
Stock or Contingent Class A Shares, as the case may be, being sold) in
order to expedite or facilitate the disposition of such Transfer
Restricted Preferred Stock or Contingent Class A Shares, as the case
may be, and, whether or not an underwriting agreement is entered into
and whether or not the registration is an underwritten registration,
(i) make such representations and warranties to the holders of such
Transfer Restricted Preferred Stock or Contingent Class A Shares, as
the case may be, and the underwriters, if any, with respect to the
business of the Issuers and their subsidiaries (including with respect
to businesses or assets acquired or to be acquired by any of them), and
the applicable Registration Statement, applicable Prospectus and
applicable documents, if any, incorporated or deemed to be incorporated
by reference therein, in each case, in form, substance and scope as are
customarily made by issuers to underwriters in underwritten offerings,
and confirm the same if and when customarily requested; (ii) obtain
opinions of counsel to the Issuers and updates thereof (which counsel
and opinions (in form, scope and substance) shall be reasonably
satisfactory to the managing underwriters, if any, and Special Counsel
to the holders of the Transfer
<PAGE> 21
-20-
Restricted Preferred Stock or Contingent Class A Shares, as the case
may be, being sold), addressed to each selling holder of Transfer
Restricted Preferred Stock or Contingent Class A Shares, as the case
may be, and each of the underwriters, if any, covering the matters
customarily covered in opinions requested in underwritten offerings and
such other matters as may be reasonably requested by such Special
Counsel and the managing underwriters, in any; (iii) use their best
efforts to obtain customary "cold comfort" letters and updates thereof
from the independent certified public accountants of the Issuers (and,
if necessary, any other independent certified public accountants of any
subsidiary of the Issuers or of any business acquired by an Issuer or
any such subsidiary for which financial statements and financial data
is, or is required to be, included in the Shelf Registration
Statement), addressed (where reasonably possible) to each selling
holder of Transfer Restricted Preferred Stock or Contingent Class A
Shares, as the case may be, and each of the underwriters, if any, such
letters to be in customary form and covering matters of the type
customarily covered in "cold comfort" letters in connection with
underwritten offerings; (iv) if an underwriting agreement is entered
into, the same shall contain indemnification provisions and procedures
no less favorable to the selling holders and the underwriters, if any,
than those set forth in Section 7 hereof (or such other provisions and
procedures acceptable to holders of a majority of the shares of
Transfer Restricted Preferred Stock or Contingent Class A Shares, as
the case may be, covered by such Registration Statement and the
managing underwriters, if any); and (v) deliver such documents and
certificates as may be reasonably requested by the holders of a
majority of the shares of the Transfer Restricted Preferred Stock or
Contingent Class A Shares, as the case may be, being sold, their
Special Counsel and the managing underwriters, if any, to evidence the
continued validity of the representations and warranties made pursuant
to clause (i) above and to evidence compliance with any customary
conditions contained in the underwriting agreement or other agreement
entered into by the Issuers;
(m) In the case of a Shelf Registration or Class A Shelf
Registration Statement, make available for inspection by a
representative of the holders of Transfer Restricted Preferred Stock or
Contingent Class A Shares, as the case may be, being sold, any
underwriter
<PAGE> 22
-21-
participating in any such disposition of Transfer Restricted Preferred
Stock or Contingent Class A Shares, as the case may be, and any
attorney, consultant or accountant retained by such selling holders or
underwriter, at the offices where normally kept, during reasonable
business hours, all relevant financial and other records, pertinent
corporate documents and properties of the Issuers and their
subsidiaries (including with respect to businesses and assets acquired
or to be acquired to the extent that such information is available to
the Issuers), and cause the officers, directors, agents and employees
of the Issuers and their subsidiaries (including with respect to
businesses and assets acquired or to be acquired to the extent that
such information is available to the Issuers) to supply all information
in each case reasonably requested by any such representative,
underwriter, attorney, consultant or accountant in connection with such
Shelf Registration or Class A Shelf Registration Statement; provided,
however, that such persons shall first agree in writing with the
Company that any information that is reasonably and in good faith
designated by the Company in writing as confidential at the time of
delivery of such information shall be kept confidential by such
persons, unless and to the extent that (i) disclosure of such
information is required by court or administrative order or is
necessary to respond to inquiries of regulatory authorities, (ii)
disclosure of such information is required by law (including any
disclosure requirements pursuant to Federal securities laws in
connection with the filing of the Shelf Registration Statement or Class
A Shelf Registration Statement or the use of any Prospectus), (iii)
such information becomes generally available to the public other than
as a result of a disclosure or failure to safeguard such information by
such person or (iv) such information becomes available to such person
from a source other than the Issuers and their subsidiaries and such
source is not bound by a confidentiality agreement; and provided,
further, that the foregoing inspection and information gathering shall
be coordinated on behalf of any other persons, by one counsel
designated by and on behalf of such other persons;
(n) Provide an indenture trustee for the Debentures and cause
the Indenture to be qualified under the TIA not later than the
effective date of the first Registration Statement relating to the
Preferred Stock and/or the Exchange Preferred Stock and Private
Exchange Preferred
<PAGE> 23
-22-
Stock, as the case may be; and in connection therewith, cooperate with
the Trustee and the holders of the Preferred Stock and/or the Exchange
Preferred Stock and Private Exchange Preferred Stock, to effect such
changes to the Indenture, if any, as may be required for the Indenture
to be so qualified in accordance with the terms of the TIA; and
execute, and use its reasonable efforts to cause the Trustee to
execute, all customary documents as may be required to effect such
changes, and all other forms and documents required to be filed with
the SEC to enable the Indenture to be so qualified in a timely manner;
(o) Comply with all applicable rules and regulations of the
SEC and make generally available to their securityholders earning
statements satisfying the provisions of Section 11(a) of the Securities
Act and Rule 158, no later than 45 days after the end of any 12- month
period (or 90 days after the end of any 12-month period if such period
is a fiscal year) (i) commencing at the end of any fiscal quarter in
which Transfer Restricted Preferred Stock or Contingent Class A Shares
are sold to underwriters in a firm commitment or reasonable efforts
underwritten offering and (ii) if not sold to underwriters in such an
offering, commencing on the first day of the first fiscal quarter after
the effective date of a Registration Statement, which statement shall
cover said period, consistent with the requirements of Rule 158;
(p) Cooperate with each seller of Transfer Restricted
Preferred Stock or Contingent Class A Shares covered by any
Registration Statement and each underwriter, if any, participating in
the disposition of such Transfer Restricted Preferred Stock or
Contingent Class A Shares, as the case may be, and their respective
counsel in connection with any filings required to be made with the
National Association of Securities Dealers, Inc.; and
(q) Use their best efforts to take all other steps reasonably
necessary to effect the registration of the Transfer Restricted
Preferred Stock or Contingent Class A Shares, as the case may be,
covered by a Registration Statement contemplated hereby.
The Issuers may require a holder of Transfer Restricted Preferred
Stock or Contingent Class A Shares, as the case may be, to be included in a
Registration Statement to
<PAGE> 24
-23-
furnish to the Issuers such information regarding the distribution of such
Transfer Restricted Preferred Stock or Contingent Class A Shares, as the case
may be, as is required by law to be disclosed in such Registration Statement and
the Issuers may exclude from such Registration Statement the Transfer Restricted
Preferred Stock or Contingent Class A Shares, as the case may be, of any holder
who unreasonably fails to furnish such information within a reasonable time
after receiving such request.
If any such Registration Statement refers to any holder by name or
otherwise as the holder of any securities of an Issuer, then such holder shall
have the right to require (i) the insertion therein of language, in form and
substance reasonably satisfactory to such holder, to the effect that the holding
by such holder of such securities is not to be construed as a recommendation by
such holder of the investment quality of the Issuers' securities covered thereby
and that such holding does not imply that such holder will assist in meeting any
future financial requirements of the Issuers, or (ii) in the event that such
reference to such holder by name or otherwise is not required by the Securities
Act, the deletion of the reference to such holder in any amendment or supplement
to the Registration Statement filed or prepared subsequent to the time that such
reference ceases to be required.
In the case of a Shelf Registration pursuant to Section 3 hereof or
a Class A Shelf Registration pursuant to Section 3A hereof, each holder of
Transfer Restricted Preferred Stock or Contingent Class A Shares, as the case
may be, agrees by acquisition of such Transfer Restricted Preferred Stock or
Contingent Class A Shares, as the case may be, that, upon receipt of any notice
from the Company of the happening of any event of the kind described in Section
5(c)(ii), 5(c)(iii), 5(c)(iv) or 5(c)(v) hereof, such holder will forthwith
discontinue disposition of such Transfer Restricted Preferred Stock or
Contingent Class A Shares, as the case may be, covered by such Registration
Statement or Prospectus until such holder's receipt of the copies of the
supplemented or amended Prospectus contemplated by Section 5(j) hereof, or until
it is advised in writing by the Company that the use of the applicable
Prospectus may be resumed, and, in either case, has received copies of any
additional or supplemental filings that are incorporated or deemed to be
incorporated by reference in such Prospectus (the "Advice"). If so directed by
the Company, each holder will deliver to the Company (at the Company's expense)
all copies, other than permanent file copies then in such holder's
<PAGE> 25
-24-
possession, of the Prospectus covering such Transfer Restricted Preferred Stock
or Contingent Class A Shares, as the case may be, that was current at the time
of receipt of either such notice. In the event the Company shall give any such
notice and comply with the provisions of Section 5(j), the time period regarding
the effectiveness of such Registration Statement shall be extended by the number
of days during the period from and including the date of the giving of such
notice pursuant to Section 5(c) hereof to and including the date when each
selling holder covered by such Registration Statement shall have received the
copies of the supplemented or amended Prospectus contemplated by Section 5(j)
hereof or shall have received the Advice.
6. Registration Expenses
All fees and expenses incident to the performance of or compliance
with this Agreement by the Issuers shall be borne by the Issuers whether or not
any Registration Statement is filed or becomes effective and whether or not any
Preferred Stock, Exchange Preferred Stock, Private Exchange Preferred Stock or
Contingent Class A Shares are issued or sold pursuant to any Registration
Statement. The fees and expenses referred to in the foregoing sentence shall
include, without limitation, (i) all registration and filing fees (including,
without limitation, fees and expenses (A) with respect to filings required to be
made with the National Association of Securities Dealers, Inc. and (B) in
compliance with securities or Blue Sky laws), (ii) printing expenses (including,
without limitation, expenses of printing certificates for Preferred Stock,
Exchange Preferred Stock, Private Exchange Preferred Stock and Contingent Class
A Shares in a form eligible for deposit with The Depository Trust Company and of
printing Prospectuses), (iii) reasonable fees and disbursements of counsel for
the Issuers and the Special Counsel (not to exceed one firm of counsel), (iv)
fees and disbursements of all independent certified public accountants referred
to in Section 2(e) and Section 5(l)(iii) hereof (including, without limitation,
the expenses of any special audit and "cold comfort" letters required by or
incident to such performance), (v) if required, the reasonable fees and expenses
of any "qualified independent underwriter" and its counsel as may be required by
the rules and regulations of the National Association of Securities Dealers,
Inc., and (vi) fees and expenses of all other persons retained by the Issuers.
In addition, the Issuers shall pay their internal expenses (including, without
limitation, all salaries and expenses of their respective officers and employees
performing
<PAGE> 26
-25-
legal or accounting duties), the expense of any annual audit, and the fees and
expenses incurred in connection with the listing of the Preferred Stock,
Exchange Preferred Stock, Private Exchange Preferred Stock or Contingent Class A
Shares to be registered on any securities exchange. Notwithstanding the
foregoing or anything in this Agreement to the contrary, each holder of Transfer
Restricted Preferred Stock shall pay all underwriting discounts and commissions
of any underwriters with respect to any Preferred Stock, Exchange Preferred
Stock or Private Exchange Preferred Stock sold by or on behalf of it.
7. Indemnification
(a) The Issuers agree, jointly and severally, to indemnify and hold
harmless (i) the Initial Purchaser, each holder of Preferred Stock, Exchange
Preferred Stock, Private Exchange Preferred Stock, Debentures and Contingent
Class A Shares and each Participating Broker-Dealer, (ii) each person, if any,
who controls (within the meaning of Section 15 of the Securities Act or Section
20 of the Exchange Act) any of the foregoing (any of the persons referred to in
this clause (ii) being hereinafter referred to as a "controlling person"), and
(iii) the respective officers, directors, partners, employees, representatives
and agents of the Initial Purchaser, each holder of Preferred Stock, Exchange
Preferred Stock, Private Exchange Preferred Stock, Debentures and Contingent
Class A Shares, each Participating Broker-Dealer and any controlling person (any
person referred to in clause (i), (ii) or (iii) may hereinafter be referred to
as an "Indemnified Person"), from and against any and all losses, claims,
damages, liabilities and judgments arising out of or relating to any untrue
statement or alleged untrue statement of a material fact contained in any
Registration Statement, Prospectus or preliminary prospectus or in any amendment
or supplement thereto, or arising out of or relating to any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein (in the case of any Prospectus or
preliminary prospectus or supplement thereto, in light of the circumstances
under which they were made) not misleading, except insofar as such losses,
claims, damages, liabilities or judgments are caused by any such untrue
statement or omission or alleged untrue statement or omission based upon
information relating to any Indemnified Person furnished in writing to the
Issuers by or on behalf of such Indemnified Person expressly for use therein;
provided that the foregoing indemnity with respect to any preliminary prospectus
shall not inure to the benefit of any Indemnified Person from whom the
<PAGE> 27
-26-
person asserting such losses, claims, damages, liabilities and judgments
purchased securities if such untrue statement or omission or alleged untrue
statement or omission made in such preliminary prospectus is eliminated or
remedied in the Prospectus and a copy of the Prospectus shall not have been
furnished to such person in a timely manner due to the wrongful action or
wrongful inaction of such Indemnified Person.
(b) In case any action shall be brought against any Indemnified
Person, based upon any Registration Statement or any such Prospectus or
preliminary prospectus or any amendment or supplement thereto and with respect
to which indemnity may be sought against the Issuers hereunder, such Indemnified
Person shall promptly notify the Issuers in writing and the Company shall assume
the defense thereof, including the employment of counsel reasonably satisfactory
to such Indemnified Person and payment of all fees and expenses. Any Indemnified
Person shall have the right to employ separate counsel in any such action and
participate in the defense thereof, but the fees and expenses of such counsel
shall be at the expense of such Indemnified Person, unless (i) the employment of
such counsel shall have been specifically authorized in writing by the Issuers,
(ii) the Company shall have failed to assume the defense and employ counsel or
pay all such fees and expenses or (iii) the named parties to any such action
(including any impleaded parties) include both such Indemnified Person and an
Issuer and such Indemnified Person shall have been advised by counsel that there
may be one or more legal defenses available to it which are different from or
additional to those available to any such Issuer (in which case the Company
shall not have the right to assume the defense of such action on behalf of such
Indemnified Person, it being understood, however, that the Issuers shall not, in
connection with any one such action or separate but substantially similar or
related actions in the same jurisdiction arising out of the same general
allegations or circumstances, be liable for the reasonable fees and expenses of
more than one separate firm of attorneys (in addition to any local counsel) for
all such Indemnified Persons, which firm shall be designated in writing by such
Indemnified Persons, and that all such reasonable fees and expenses shall be
reimbursed as they are incurred). The Issuers shall not be liable for any
settlement of any such action effected without their written consent but if
settled with the written consent of the Issuers, the Issuers agree, jointly and
severally, to indemnify and hold harmless each Indemnified Person from and
against any loss or liability by reason of such settlement. No Issuer shall,
without the prior written consent of each Indemnified Person,
<PAGE> 28
-27-
effect any settlement of any pending or threatened proceeding in respect of
which any Indemnified Person is a party and indemnity could have been sought
hereunder by such Indemnified Person, unless such settlement includes an
unconditional release of such Indemnified Person from all liability on claims
that are the subject matter of such proceeding.
(c) In connection with any Registration Statement pursuant to which
a holder of Transfer Restricted Preferred Stock or Contingent Class A Shares
offers or sells Transfer Restricted Preferred Stock or Contingent Class A
Shares, as the case may be, such holder agrees, severally and not jointly, to
indemnify and hold harmless the Issuers, their respective directors and officers
and any person controlling an Issuer within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act, to the same extent as the
foregoing indemnity from the Issuers to each Indemnified Person but only with
respect to information relating to such holder furnished in writing by or on
behalf of such holder expressly for use in such Registration Statement. In any
such case in which any action shall be brought against an Issuer, any director
or officer of an Issuer or any person controlling an Issuer based on such
Registration Statement and in respect of which indemnity may be sought against a
holder of Transfer Restricted Preferred Stock or Contingent Class A Shares, as
the case may be, such holder shall have the rights and duties given to the
Issuers (except that if an Issuer shall have assumed the defense thereof, such
holder shall not be required to do so, but may employ separate counsel therein
and participate in the defense thereof but the fees and expenses of such counsel
shall be at the expense of such holder), and the Issuers, their respective
directors and officers and any person controlling an Issuer shall have the
rights and duties given to the Indemnified Persons by Section 7(b) hereof.
(d) If the indemnification provided for in this Section 7 is
unavailable to an indemnified party in respect of any losses, claims, damages,
liabilities or judgments referred to herein, then each indemnifying party, in
lieu of indemnifying such indemnified party, shall contribute to the amount paid
or payable by such indemnified party as a result of such losses, claims,
damages, liabilities and judgments (i) in such proportion as is appropriate to
reflect the relative benefits received by each indemnifying party on the one
hand and the indemnified party on the other hand from the offering of the
Preferred Stock, the Exchange Preferred Stock, the Private Exchange Preferred
Stock, Debentures or Contingent Class A
<PAGE> 29
-28-
Shares, as the case may be (it being expressly understood and agreed that the
relative benefits received by the Issuers from the offering of the Preferred
Stock, Exchange Preferred Stock, Private Exchange Preferred Stock, Debentures or
Contingent Class A Shares, as the case may be, shall be the amount of the net
proceeds received by the Company from the sale of the Preferred Stock to the
Initial Purchaser), or (ii) if the allocation provided by clause (i) above is
not permitted by applicable law, in such proportion as is appropriate to reflect
not only the relative benefits referred to in clause (i) above but also the
relative fault of each indemnifying party on the one hand and the indemnified
party on the other hand in connection with the statements or omissions which
resulted in such losses, claims, damages, liabilities or judgments, as well as
any other relevant equitable considerations. The relative fault of the each
indemnifying party on the one hand the indemnified party on the other hand shall
be determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission to state a material fact
relates to information supplied by an indemnifying party or such indemnified
party and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission.
The Issuers and the Initial Purchaser agree that it would not be
just and equitable if contribution pursuant to this Section 7(d) were determined
by pro rata allocation (even if all Indemnified Persons were treated as one
entity for such purpose) or by any other method of allocation which does not
take account of the equitable considerations referred to in the immediately
preceding paragraph. The amount paid or payable by an indemnified party as a
result of the losses, claims, damages, liabilities or judgments referred to in
the immediately preceding paragraph shall be deemed to include, subject to the
limitations set forth above, any legal or other expenses reasonably incurred by
such indemnified party in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this Section 7, no
Indemnified Person shall be required to contribute any amount in excess of the
amount by which the net proceeds received by it in connection with the sale of
the Preferred Stock, Exchange Preferred Stock, Private Exchange Preferred Stock,
Debentures or Contingent Class A Shares contemplated by this Agreement (or, in
the case of an underwriter that is an Indemnified Person, the total underwriting
discounts received by such underwriter) exceeds the amount of any damages which
such Indemnified Person has otherwise been required to pay by reason of such
untrue or
<PAGE> 30
-29-
alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The Indemnified Person's
obligations to contribute pursuant to this Section 7(d) are several in
proportion to the respective amount of Preferred Stock, Exchange Preferred
Stock, Private Exchange Preferred Stock, Debentures or Contingent Class A Shares
included in any such Registration Statement by each Indemnified Person and not
joint.
8. Rule 144A
Each of Issuers shall use its best efforts to file the reports
required to be filed by it under the Securities Act and the Exchange Act in a
timely manner and, if at any time it is not required to file such reports but in
the past had been required to or did file such reports, it will, upon the
request of any holder of Transfer Restricted Preferred Stock or Contingent Class
A Shares, make available other information as required by, and so long as
necessary to permit sales of Transfer Restricted Preferred Stock and Contingent
Class A Shares pursuant to Rule 144A. Notwithstanding the foregoing, nothing in
this Section 8 shall be deemed to require an Issuer to register any of its
securities pursuant to the Exchange Act.
9. Underwritten Registrations
If any of the Transfer Restricted Preferred Stock or Contingent
Class A Shares covered by any Shelf Registration are to be sold in an
underwritten offering, the investment banker or investment bankers and manager
or managers that will administer the offering will be selected by the holders of
a majority of shares of the Transfer Restricted Preferred Stock or Contingent
Class A Shares, as the case may be, included in such offering, subject to the
consent of the Company (which will not be unreasonably withheld or delayed).
No person may participate in any underwritten registration hereunder
unless such person (i) agrees to sell such Transfer Restricted Preferred Stock
or Contingent Class A Shares on the basis reasonably provided in any
underwriting arrangements approved by the persons entitled hereunder to approve
such arrangements and (ii) completes and executes all questionnaires, powers of
attorney, indemnities, underwriting
<PAGE> 31
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agreements and other documents required under the terms of such underwriting
arrangements.
10. Miscellaneous
(a) Remedies. In the event of a breach by an Issuer or by a holder
of Preferred Stock, Exchange Preferred Stock, Private Exchange Preferred Stock,
Debentures or Contingent Class A Shares of any of its obligations under this
Agreement, each holder of Preferred Stock, Exchange Preferred Stock, Private
Exchange Preferred Stock, Debentures and Contingent Class A Shares and each
Issuer, in addition to being entitled to exercise all rights granted by law,
including recovery of damages, will be entitled to specific performance of its
rights under this Agreement. Notwithstanding the provisions of Section 4 hereof,
the Issuers and each holder of Preferred Stock, Exchange Preferred Stock,
Private Exchange Preferred Stock, Debentures and Contingent Class A Shares agree
that monetary damages would not be adequate compensation for any loss incurred
by reason of a breach of any of the provisions of this Agreement and each hereby
further agrees that, in the event of any action for specific performance in
respect of such breach, it shall waive the defense that a remedy at law would be
adequate.
(b) No Inconsistent Agreements. The Issuers will not enter into any
agreement with respect to their securities that is inconsistent with the rights
granted to the holders of Preferred Stock, Exchange Preferred Stock, Private
Exchange Preferred Stock, Debentures and Contingent Class A Shares and
Indemnified Persons in this Agreement or otherwise conflicts with the provisions
hereof. Without the written consent of the holders of a majority of shares of
the outstanding Transfer Restricted Preferred Stock, the Issuers shall not grant
to any person any rights which conflict with or are inconsistent with the
provisions of this Agreement.
(c) No Piggyback on Registrations. The Issuers shall not grant to
any of their securityholders (other than the holders of Transfer Restricted
Preferred Stock in such capacities) the right to include any of their securities
in any Shelf Registration Statement other than Transfer Restricted
Preferred Stock.
(d) Amendments and Waivers. The provisions of this Agreement,
including the provisions of this sentence, may not be amended, modified or
supplemented, and waivers or consents
<PAGE> 32
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to departures from the provisions hereof may not be given, otherwise than with
the prior written consent of the holders of not less than a majority of the then
outstanding shares of Transfer Restricted Preferred Stock and the consent of the
holder of a majority of Contingent Class A Shares which are "restricted
securities" within the meaning of the Securities Act; provided, however, that,
for the purposes of this Agreement, Transfer Restricted Preferred Stock and
Contingent Class A Shares that are owned, directly or indirectly, by the Issuers
or any of their Affiliates is not deemed outstanding. Notwithstanding the
foregoing, a waiver or consent to depart from the provisions hereof with respect
to a matter that relates exclusively to the rights of holders of Transfer
Restricted Preferred Stock or Contingent Class A Shares whose securities are
being sold or tendered pursuant to a Registration Statement and that does not
directly or indirectly affect the rights of other holders of Transfer Restricted
Preferred Stock or Contingent Class A Shares, as the case may be, may be given
by holders of a majority of shares of the Transfer Restricted Preferred Stock or
Contingent Class A Shares, as the case may be, being sold or tendered by such
holders pursuant to such Registration Statement; provided, however, that the
provisions of this sentence may not be amended, modified or supplemented except
in accordance with the provisions of the immediately preceding sentence.
Notwithstanding the foregoing, no amendment, modification, supplement, waiver or
consent with respect to Section 7 shall be made or given otherwise than with the
prior written consent of each Indemnified Person affected thereby.
(e) Notices. All notices and other communications provided for
herein shall be made in writing by hand-delivery, next-day air courier,
certified first-class mail, return receipt requested, telex or telecopier:
(i) if to the Issuers, as provided in the Purchase
Agreement,
(ii) if to the Initial Purchaser, as provided in the
Purchase Agreement, or
(iii) if to any other person who is then the registered holder of
Preferred Stock, Exchange Preferred Stock, Private Exchange Preferred
Stock, Debentures or Contingent Class A Shares, to the address of such
holder as it appears in the register therefor of the Company.
<PAGE> 33
-32-
Except as otherwise provided in this Agreement, all such
communications and notices shall be deemed to have been duly given: when
delivered by hand, if personally delivered; one Business Day after being timely
delivered to a next-day air courier; five Business Days after being deposited in
the mail, postage prepaid, if mailed; when answered back, if telexed; and when
receipt is acknowledged by the recipient's telecopier machine, if telecopied.
(f) Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the successors and permitted assigns of each of
the parties and shall inure to the benefit of each holder of Preferred Stock,
Exchange Preferred Stock, Private Exchange Preferred Stock, Debentures,
Contingent Class A Shares and each Indemnified Person. The Issuers may not
assign any of their rights or obligations hereunder without the prior written
consent of each holder of Transfer Restricted Preferred Stock, Contingent Class
A Shares and Debentures and each Indemnified Person. Notwithstanding the
foregoing, no successor or assignee of an Issuer shall have any of the rights
granted under this Agreement until such person shall acknowledge its rights and
obligations hereunder by a signed written statement of such person's acceptance
of such rights and obligations.
(g) Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and, all of which taken
together shall constitute one and the same Agreement.
(h) Governing Law; Submission to Jurisdiction. THIS AGREEMENT SHALL
BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK, AS APPLIED TO CONTRACTS MADE AND PERFORMED WITHIN THE STATE OF NEW YORK.
THE ISSUERS HEREBY IRREVOCABLY SUBMIT TO THE JURISDICTION OF ANY NEW YORK STATE
COURT SITTING IN THE BOROUGH OF MANHATTAN IN THE CITY OF NEW YORK OR ANY FEDERAL
COURT SITTING IN THE BOROUGH OF MANHATTAN IN THE CITY OF NEW YORK IN RESPECT OF
ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT, AND
EACH IRREVOCABLY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY
AND UNCONDITIONALLY, JURISDICTION OF THE AFORESAID COURTS.
(i) Severability. The remedies provided herein are cumulative and
not exclusive of any remedies provided by law. If any term, provision, covenant
or restriction of this
<PAGE> 34
-33-
Agreement is held by a court of competent jurisdiction to be invalid, illegal,
void or unenforceable, the remainder of the terms, provisions, covenants and
restrictions set forth herein shall remain in full force and effect and shall in
no way be affected, impaired or invalidated, and the parties hereto shall use
their reasonable efforts to find and employ an alternative means to achieve the
same or substantially the same result as that contemplated by such term,
provision, covenant or restriction. It is hereby stipulated and declared to be
the intention of the parties that they would have executed the remaining terms,
provisions, covenants and restrictions without including any of such that may be
hereafter declared invalid, illegal, void or unenforceable.
(j) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof. All
references made in this Agreement to "Section" and "paragraph" refer to such
Section or paragraph of this Agreement, unless expressly stated otherwise.
(k) Entire Agreement. This Agreement is intended by the parties as a
final expression of their agreement and is intended to be a complete and
exclusive statement of the agreement and understanding of the parties hereto in
respect of the subject matter contained herein. There are no restrictions,
promises, warranties or undertakings, other than those set forth or referred to
herein with respect to the registration rights granted by the Issuers with
respect to the Preferred Stock, the Exchange Preferred Stock, the Private
Exchange Preferred Stock, Debentures and Contingent Class A Shares. This
Agreement supersedes all prior agreements and understandings between the parties
with respect to such subject matter.
<PAGE> 35
-34-
IN WITNESS WHEREOF, the parties have caused this Registration Rights
Agreement to be duly executed as of the date first written above.
THE COMPANY:
SPANISH BROADCASTING SYSTEM, INC.
By: /s/ Raul Alarcon, Jr.
-----------------------------------
Name: Raul Alarcon, Jr.
Title: President and Chief Executive Officer
THE GUARANTORS:
SPANISH BROADCASTING SYSTEM, INC.,
a New Jersey Corporation
By: /s/ Raul Alarcon, Jr.
-----------------------------------
Name: Raul Alarcon, Jr.
Title: President and Chief Executive Officer
SPANISH BROADCASTING SYSTEM
OF CALIFORNIA, INC.
By: /s/ Raul Alarcon, Jr.
-----------------------------------
Name: Raul Alarcon, Jr.
Title: President and Chief Executive Officer
SPANISH BROADCASTING SYSTEM
OF FLORIDA, INC.
By: /s/ Raul Alarcon, Jr.
-----------------------------------
Name: Raul Alarcon, Jr.
Title: President and Chief Executive Officer
<PAGE> 36
-35-
SPANISH BROADCASTING SYSTEM
NETWORK, INC.
By: /s/ Raul Alarcon, Jr.
-----------------------------------
Name: Raul Alarcon, Jr.
Title: President and Chief Executive Officer
SBS PROMOTIONS, INC.
By: /s/ Raul Alarcon, Jr.
-----------------------------------
Name: Raul Alarcon, Jr.
Title: President and Chief Executive Officer
ALARCON HOLDINGS, INC.
By: /s/ Raul Alarcon, Jr.
-----------------------------------
Name: Raul Alarcon, Jr.
Title: President and Chief Executive Officer
SBS OF GREATER NEW YORK, INC.
By: /s/ Raul Alarcon, Jr.
-----------------------------------
Name: Raul Alarcon, Jr.
Title: President and Chief Executive Officer
THE INITIAL PURCHASER:
CIBC WOOD GUNDY SECURITIES CORP.
By: Walter McLallen
------------------------------
Name: Walter McLallen
Title: Managing Director
<PAGE> 1
EXHIBIT 10.7
NATIONAL RADIO SALES
MASTER REPRESENTATION AGREEMENT
CABALLERO SPANISH MEDIA, L.L.C.
<PAGE> 2
NATIONAL RADIO SALES REPRESENTATION AGREEMENT
THIS AGREEMENT made and entered into in New York, this 3rd day of February,
1997, between Caballero Spanish Media, L.L.C. ("REPRESENTATIVE") and Spanish
Broadcasting System ("SBS").
W I T N E S S E T H :
WHEREAS, SBS owns and operates radio stations and wishes to retain
Representative as its exclusive representative for the sale of national radio
broadcast advertising time for such stations; and
WHEREAS, Representative wishes to act as such exclusive Representative;
NOW, the parties agree as follows:
1. Term. Subject to the terms and conditions of this Agreement the term shall be
effective as of December 30, 1996 and shall continue for an initial period of
seven years (the "Term"). After the sixth anniversary of the Agreement, the Term
shall continue except that either party may terminate this Agreement with
written notice to the other. Such termination shall take effect 12 months after
receipt of such written notice.
2. Exclusive Representation.
(a) Appointment. SBS appoints Representative, and Representative agrees to serve
as the exclusive national representative for the sale of radio broadcast
advertising time ("Time") for: each of the radio stations listed on Schedule A
which are all of the radio stations currently owned or operated by SBS or any of
its subsidiaries or affiliates or are pending acquisitions currently under
contract.
(b) Station Agreements. As promptly as possible after the execution of this
Agreement, each of the current Stations shall execute and deliver to
Representative a National Radio Sales Representation Agreement substantially in
the form attached as Schedule B (a "Station Contract"). SBS shall be jointly and
severally liable with each Station for such Station's obligations under its
Station Contract. If at any time an entity becomes a Station pursuant to Section
2(f), it promptly shall execute and deliver to Representative a Station
Contract.
(c) (i) Local Areas. As exclusive national representative for each Station,
Representative shall sell Time for such station to parties located anywhere
outside of the local area specified for such Station in Schedule A or in its
Station Contract (a "Local Area"). A party with locations both within and
outside of the Local Area shall, nevertheless, be considered to be outside of
the Local Area if the point of origin of its orders for the Time is outside of
the Local Area or if the invoice is to be sent to an office outside the Local
Area.
<PAGE> 3
(ii) Certain Accounts. For purposes of this Agreement concert promotions,
Fonovisa, trade (barter) accounts currently handled directly by Stations, and
advertising placed by any or another general market national or regional network
shall be excluded from National Orders. It is further agreed that all beer
accounts emanating from outside the MSA for each Station shall be included as
National Orders and Representative shall be compensated at a rate of 7.5% of net
on all beer orders.
(d) Exclusivity. During the Term, (i) except for those stations already under
contract for representations or unless waived by the President of SBS,
Representative shall not represent any other Spanish language radio station
located within the Local Area of any Station and (ii) neither SBS nor any of the
Stations shall retain or employ any third party to represent any Station in the
sale of Time to parties located outside of the Local Area for such Station. SBS
and/or each Station shall promptly advise trade publications, national
advertisers, and advertising agencies that Representative is the exclusive
national representative for such Station. It is also agreed that Representative
may also so inform such parties and, generally, may refer to its exclusive
national representation of SBS and each Station in its advertising and
promotional materials and activities. Each Station shall make references to
Representative in its listing in Standard Rate and Data Service (if customary),
on its rate cards and in all other advertising or promotional material for
Station when appropriate.
(e) Non-Circumvention. If any advertiser, individual, buying service or agency
outside of the Local Area of any Station contacts such Station or SBS, directly
or indirectly through a third party, for the purpose of buying Time on such
Station directly or through a third party, SBS or such Station shall promptly
inform Representative of such fact and shall notify the advertiser, buying
service or agency that the advertising schedule be placed through Representative
at the same rates on the same terms and conditions as are normally available
directly from such Station. Nevertheless, if any order for national Time is
actually placed other than through the Representative, the Station involved
shall pay Representative commissions on such order in accordance with Section 4.
(f) Right of First Refusal. If, during the Term, SBS acquires a controlling
interest in, or the right to operate, any other radio station or radio network,
SBS shall promptly notify Representative of such fact and Representative shall
have a right of first refusal to enter into an exclusive representation
agreement therewith. In accordance with industry practice, such representation
may require a "buyout" of existing representation.
3. Cooperation. SBS and Representative agree to cooperate with each other to the
extent necessary in order to permit each other to perform duties under this
Agreement and, in this regard, to supply the other from time to time with all
current information relating to each other's activities.
2
<PAGE> 4
4. Commissions.
(a) General. Each Station shall pay commissions to Representative in accordance
with this Section 4 on all Time orders obtained by Station during the Term from
parties located outside of the Local Area for such Station ("National Orders"),
whether or not obtained by or through Representative. A Station's obligation to
pay commissions shall be in effect for the full duration of any National Order,
even if such duration extends beyond the Term. For purposes of this Agreement,
National Order is defined in National Time Sales collected. See Addendum No. 1,
letter dated February 11, 1997 from Joseph Garcia to Debbie Schwartz.
(b) Commission Rates.
(i) The base commissions payable to Representative shall be at a rate of 15% of
each Station's net (that is, the Station's gross less customary agency
commissions) on all National Orders.
(ii) If, in any year, National Orders (for SBS Stations in the aggregate) exceed
the previous year's National Orders by an amount in excess of 12.5%, then
Representative will be paid commissions at a rate of 17.5% (applicable to all
National Orders scheduled to be broadcast in that year).
(iii) If, in any year, National Orders (for SBS Stations in the aggregate)
exceed the previous year's National Orders by an amount in excess of 17.5%, then
Representative will be paid commissions at a rate of 20% (applicable to all
National Orders scheduled to be broadcast in that year).
(c) Monthly Statements. Each Station shall furnish Representative, on or before
the 15th day of each month during the Term (and thereafter to the extent that
commissions are payable pursuant to the second sentence of Section 4(a)), with a
statement in reasonable detail of its gross and net on all National Orders (by
national advertisers) during the immediately preceding month.
(d) Payments. During the Term (and thereafter to the extent that commissions are
payable pursuant to the second sentence to Section 4(a)), each Station shall,
within twenty (20) days of the end of each calendar month, pay to the
Representative all commissions owed by it to Representative for that month. SBS
shall be jointly and severally liable with each Station for the commissions
payable to Representative by such Station.
(e) No Liability; Payment Forwarding; Offset. It is understood that the
Representative shall be acting strictly as an agent, and not as a principal or
guarantor, under this Agreement. Accordingly, Representative shall have no
liability to SBS or any Station for any payments or other obligation due any
advertiser, advertising agency, media buyer or other party, including, without
limitation, any with respect to any unwired network orders. If Representative
receives from any party payment for any Station's broadcasts, Representative
shall forward payment to the Station, provided, however, that if any amounts
payable to Representative pursuant to this Section 4 are then past due,
Representative shall have the right to withhold payment to Station of
3
<PAGE> 5
any such payment received, including any unwired network monies, to the extent
of the amounts then owed Representative, and to apply such amounts to the
payment of the commissions owed Representative.
5. Prior Representatives. SBS shall indemnify, defend and hold harmless
Representative and its officers, directors, employees, agents and shareholders
from and against any loss, liability, cost or expense, including, without
limitation, reasonable attorneys' fees and disbursements, which any of them may
suffer or incur in connection with any claim, action, suit or proceeding brought
by any prior representative or other third party which provided any services to
SBS or any Station comparable to those to be performed by Representative
hereunder (a "prior representative") arising from the (i) termination or breach
of any contract or understanding between SBS or any Station and any such prior
representative or (ii) the execution or performance of this Agreement.
6. Certain Remedies of Representatives.
(a) Transfer of a Station. If SBS or any Station sells all or substantially all
of the assets or business of any Station or, through the sale of securities,
merger or any other transaction, transfers the ownership or control of any
Station to any party (a "transferee") other than SBS or one of its controlled
subsidiaries:
(i) The transferee shall execute and deliver to Representative a written
instrument satisfactory to Representative by which the transferee shall assume
all of the obligations of SBS and such Station under this Agreement with respect
to the such Station or
(ii) SBS and/or such Station shall pay to Representative an amount equal to (A)
the average monthly commissions earned by Representative hereunder during the 12
complete broadcast calendar months preceding such transfer (or if Representative
has not yet represented such Station for a full 12 broadcast calendar month,
applicable prior national gross billing shall be used to derive average monthly
commissions) multiplied by (B) the number of broadcast calendar months then
remaining in the Term and any applicable notice period, plus two months. On
receipt by Representative of such payment, this Agreement shall terminate and be
of no further force or effect with respect to such Station.
(b) Liquidated Damages for Breach. The parties agree that the Representative's
agreement to provide the representation services contemplated by this Agreement
shall involve a commitment of its resources that will not be economically
feasible should SBS or any of the Stations fail to perform their obligations
under this Agreement. The parties also agree that any such failure by SBS or any
Station would cause damages to Representative that would be difficult to
determine accurately. Therefore, with the intention of providing a fair and
reasonable formula to calculate such damages in an amount which would not be
disproportionate to the presumed loss, it is agreed that, if SBS or any Station
breaches this Agreement, SBS and such Station shall pay to Representative as
liquidated damages, and not as a penalty, an amount equal to (A) the average
monthly commissions earned by Representative hereunder during the 12 complete
broadcast
4
<PAGE> 6
calendar months preceding such breach (or if Representative has not yet
represented such Station for a full 12 broadcast calendar months, applicable
prior national gross billing shall be used to derive average monthly
commissions), multiplied by (B) the number of calendar months then remaining in
the Term and any applicable notice period, plus two months. On receipt by
Representative of such payment, this Agreement shall terminate and be of no
further force or effect.
(c) Payment of Accrued Commissions and Costs. The termination of this Agreement
for any reason shall not affect the obligation of SBS and the Stations or
Representative to pay all commissions or monies owed or accrued through the date
of termination in accordance with the payment terms set forth in this Agreement.
If any party is required to take any steps, including, without limitation, the
institution of any action, suit or proceeding, to collect any amounts owed to it
under this Agreement, the prevailing party shall be entitled to costs and
expenses, including, without limitation, reasonable attorneys' fees and
disbursements, incurred in connection with such steps.
7. Arbitration.
(a) General. Any controversy or claim between SBS and Representative arising out
of or relating to this Agreement shall be finally resolved by arbitration in
accordance with the Commercial Arbitration Rules of the American Arbitration
Association in New York, New York. The parties further agree that (i) the
arbitrators shall be empowered to include arbitration costs and attorney fees in
the award to the prevailing party in such proceedings and (ii) the award in such
proceedings shall be final and binding on the parties. The arbitrators shall
apply the law of the State of New York, exclusive of conflicts of laws
principles, to any dispute. Judgment on the arbitrators' award may be entered in
any court having the requisite jurisdiction. Nothing in this Agreement shall
require the arbitration of disputes between the parties that arise from actions,
suits or proceedings instituted by third parties.
(b) Consent to Jurisdiction; Service of Process. Each party irrevocably submits
to the jurisdictions and venues of the arbitration described in section 9(a) and
to the jurisdiction and venue of federal and state courts sitting in New York,
New York, for the enforcement of any judgment on the arbitrators' award and
waives any objection it may have with respect to the jurisdiction of such
arbitration or courts or the inconvenience of such forums or venues.
Representative appoints Messrs. Christy & Viener, 620 Fifth Avenue, New York,
New York 10020, U.S.A., Attention: Laurence S. Markowitz, Esq. and SBS appoints
Kaye, Scholer, Fierman, Hays & Handler, LLP, 425 Park Avenue, New York, New York
10022, Attention: , Esq. as their respective attorney-in-fact and
authorized agents solely to receive on their behalf, service of any demands for,
or any notice with respect to, arbitration hereunder or any service of process.
Service on either of such attorneys-in-fact may be made by registered or
certified mail or by personal delivery, in any case return receipt requested,
and shall be effective as service on Representative and SBS, as the case may be.
Nothing herein shall be deemed to affect any right to service any such demand,
notice or process in any other manner permitted under applicable law.
5
<PAGE> 7
8. Miscellaneous.
(a) Entire Agreement; Amendments; No Waivers. This Agreement, together with
Schedules A and B and each Station Contract, sets forth the entire understanding
of the parties with respect to its subject matter and merges and supersedes all
prior and contemporaneous understandings of the parties with respect to its
subject matter. No provision of this Agreement may be waived or modified, in
whole or in part, except by a writing signed by each of the parties. Failure of
any party to enforce any provision of this Agreement shall not be construed as a
waiver of its rights under such or any other provision. No waiver of any
provision of this Agreement in any instance shall be deemed to be a waiver of
the same or any other provision in any other instance.
(b) Communications. All notices, consents and other communications given under
this Agreement shall be in writing and shall be deemed to have been duly given
(a) when delivered by hand or by Federal Express or a similar overnight courier
to, (b) five days after being deposited in any United States Post Office
enclosed in a postage paid, registered or certified mail envelope addressed to,
or (c) when successfully transmitted by facsimile (with a confirming copy of
such communication to be sent as provided in (a) or (b) above) to, the party for
whom intended, at the address or facsimile number for such party set forth
below, or to such other address or facsimile as may be furnished by such party
by notice in the manner provided herein; provided, however, that any notice of
change of address or facsimile number shall be effective only upon receipt.
If to Representative:
Caballero Spanish Media, L.L.C.
261 Madison Avenue
New York, New York 10016
Attention: Eduardo Caballero, Chairman
Telecopier Number: (212) 697-5934
If to SBS:
Spanish Broadcasting System
26 West 56th Street
New York, New York 10019
Attention: Raul Alarcon, President
Telecopier Number: (212) 541-6904
(c) Successors and Assigns. This Agreement shall be binding on, enforceable
against and inure to the benefit of, the parties and their respective successors
and assigns and nothing herein is intended to confer any right, remedy or
benefit upon any other person.
6
<PAGE> 8
(d) Governing Law. This Agreement shall in all respects be governed by and
construed in accordance with the laws of the State of New York. Applicable to
agreements made and fully to be performed in such state, without giving effect
to conflicts of law principles.
(e) Severability. If any provision of this Agreement is held to be invalid or
unenforceable by any court or tribunal of competent jurisdiction, the remainder
of this Agreement shall be affected thereby, and such provision shall be carried
out as nearly as possible according to its original terms and intent to
eliminate such invalidity or unenforceability.
(f) Non-Agency. For all purposes of this Agreement, each party shall be an
independent contractor, and not an agent, partner, or joint venturer of the
other.
(g) Counterparts. This Agreement may be executed in multiple counterparts, each
of which shall be deemed an original, but all of which together shall constitute
one and of the same instrument.
(h) Construction. Headings used in this Agreement are for convenience only and
shall not be used in the interpretation of this Agreement. References to
Sections and Schedules are to sections and schedules of this Agreement. As used
herein, the singular includes the plural and the masculine, feminine and neuter
gender each includes the others where the context so indicates.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first set forth above.
SPANISH BROADCASTING SYSTEM
By: /s/ Raul Alarcon, Jr.
Its: President and Chief Executive Officer
CABALLERO SPANISH MEDIA, L.L.C.
By: /s/ Ralph Gold
Its:
7
<PAGE> 9
SCHEDULE A
SBS Stations:
CALL LETTERS MARKET
WPAT-FM New York, NY
WSKQ-FM New York, NY
WXLX-AM New York, NY
KLAX-FM Los Angeles, CA
KXMG-FM Los Angeles, CA
WCMQ-AM Miami, FL
WCMQ-FM Miami, FL
WSKP-FM Key West, FL
WZMQ-FM Key Largo, FL
Additional Pending Stations which have no national representative:
WYSY-FM Chicago, IL
WRMA-FM Miami, FL
WXDJ-FM Miami, FL
The Local Area for each Station shall be its Metropolitan Survey Area ("MSA" or
"Metro") as defined by Arbitron.
A-1
<PAGE> 10
SCHEDULE B
NATIONAL RADIO SALES REPRESENTATION AGREEMENT
THIS AGREEMENT made and entered into in New York, this ___ day of _______, 1997,
between Caballero Spanish Media, L.L.C. ("REPRESENTATIVE") and Spanish
Broadcasting System, Inc. ("SBS"), owner, licensee and operator of radio station
_________ ("Station").
W I T N E S S E T H :
WHEREAS, SBS owns and operates radio stations (collectively, the "Station
Group") and wishes to retain Representative as its exclusive representative for
the sale of national radio broadcast advertising time for such Station Group;
and
WHEREAS, Representative wishes to act as such exclusive Representative;
NOW, the parties agree as follows:
1. Term. Subject to the terms and conditions of this Agreement the term shall be
effective as of December 30, 1996 and shall continue for an initial period of
seven years (the "Term"). After the sixth anniversary of the Agreement, the Term
shall continue except that either party may terminate this Agreement with
written notice to the other. Such termination shall take effect 12 months after
receipt of such written notice.
2. Exclusive Representation.
(a) Appointment. SBS appoints Representative, and Representative agrees to serve
as the exclusive national representative for the sale of radio broadcast
advertising time ("Time") for Station.
(b) (i) Local Areas. As exclusive national representative for Station,
Representative shall sell Time for Station to parties located anywhere outside
of the Metropolitan Survey Area ("MSA" or "Metro") as defined by Arbitron of
Station (the "Local Area"). A party with locations both within and outside of
the Local Area shall, nevertheless, be considered to be outside of the Local
Area if the point of origin of its orders for the Time is outside of the Local
Area or if the invoice is to be sent to an office outside the Local Area.
(ii) Certain Accounts. For purposes of this Agreement concert promotions,
Fonovisa, trade (barter) accounts currently handled directly by Stations, and
advertising placed by any or another general market national or regional network
shall be excluded from National Orders. It is further agreed that all beer
accounts emanating from outside the MSA for each Station shall be included
B-1
<PAGE> 11
as National Orders and Representative shall be compensated at a rate of 7.5% of
net on all beer orders.
(c) Exclusivity. During the Term, (i) except for those stations already under
contract for representations or unless waived by the President of SBS,
Representative shall not represent any other Spanish language radio station
located within the Local Area of any Station and (ii) Station shall not retain
or employ any third party to represent Station in the sale of Time to parties
located outside of the Local Area for such Station. Station shall promptly
advise trade publications, national advertisers, and advertising agencies that
Representative is the exclusive national representative for such Station. It is
also agreed that Representative may also so inform such parties and, generally,
may refer to its exclusive national representation of Station in its advertising
and promotional materials and activities. Station shall make references to
Representative in its listing in Standard Rate and Data Service (if customary),
on its rate cards and in all other advertising or promotional material for
Station when appropriate.
(d) Non-Circumvention. If any advertiser, individual, buying service or agency
outside of the Local Area of Station contacts Station, directly or indirectly
through a third party, for the purpose of buying Time on Station directly or
through a third party, SBS or Station shall promptly inform Representative of
such fact and shall notify the advertiser, buying service or agency that the
advertising schedule be placed through Representative at the same rates on the
same terms and conditions as are normally available directly from Station.
Nevertheless, if any order for national Time is actually placed other than
through the Representative, Station shall pay Representative commissions on such
order in accordance with Section 4.
(e) Right of First Refusal. If, during the Term, Station acquires a controlling
interest in, or the right to operate, any other radio station or radio network,
Station shall promptly notify Representative of such fact and Representative
shall have a right of first refusal to enter into an exclusive representation
agreement therewith. In accordance with industry practice, such representation
may require a "buyout" of existing representation.
3. Cooperation. Station and Representative agree to cooperate with each other to
the extent necessary in order to permit each other to perform duties under this
Agreement and, in this regard, to supply the other from time to time with all
current information relating to each other's activities.
4. Commissions.
(a) General. Station shall pay commissions to Representative in accordance with
this Section 4 on all Time orders obtained by Station during the Term from
parties located outside of the Local Area for such Station ("National Orders"),
whether or not obtained by or through Representative. A Station's obligation to
pay commissions shall be in effect for the full duration of any National Order,
even if such duration extends beyond the Term. For purposes of this Agreement,
National Order is defined in National Time Sales collected. See Addendum No. 1
letter dated February 11, 1997 from Joseph Garcia to Debbie Schwartz.
B-2
<PAGE> 12
(b) Commission Rates.
(i) The base commissions payable to Representative shall be at a rate of 15% of
Station's net (that is, the Station's gross less customary agency commissions)
on all National Orders.
(ii) If, in any year, National Orders collectively for the Station Group exceed
the previous year's National Orders by an amount in excess of 12.5%, then
Representative will be paid commissions at a rate of 17.5% (applicable to all
National Orders scheduled to be broadcast in that year).
(iii) If, in any year, National Orders collectively for the Station Group exceed
the previous year's National Orders by an amount in excess of 17.5%, then
Representative will be paid commissions at a rate of 20% (applicable to all
National Orders scheduled to be broadcast in that year).
(c) Monthly Statements. Station shall furnish Representative, on or before the
15th day of each month during the Term (and thereafter to the extent that
commissions are payable pursuant to the second sentence of Section 4(a)), with a
statement in reasonable detail of its gross and net on all National Orders (by
national advertisers) during the immediately preceding month.
(d) Payments. During the Term (and thereafter to the extent that commissions are
payable pursuant to the second sentence to Section 4(a)), Station shall, within
twenty (20) days of the end of each calendar month, pay to the Representative
all commissions owed by it to Representative for that month. SBS shall be
jointly and severally liable with Station for the commissions payable to
Representative by such Station.
(e) No Liability; Payment Forwarding; Offset. It is understood that the
Representative shall be acting strictly as an agent, and not as a principal or
guarantor, under this Agreement. Accordingly, Representative shall have no
liability to SBS or any Station for any payments or other obligation due any
advertiser, advertising agency, media buyer or other party, including, without
limitation, any with respect to any unwired network orders. If Representative
receives from any party payment for any Station's broadcasts, Representative
shall forward payment to the Station, provided, however, that if any amounts
payable to Representative pursuant to this Section 4 are then past due,
Representative shall have the right to withhold payment to Station of any such
payment received, including any unwired network monies, to the extent of the
amounts then owed Representative, and to apply such amounts to the payment of
the commissions owed Representative.
5. Prior Representatives. Station shall indemnify, defend and hold harmless
Representative and its officers, directors, employees, agents and shareholders
from and against any loss, liability, cost or expense, including, without
limitation, reasonable attorneys' fees and disbursements, which any of them may
suffer or incur in connection with any claim, action, suit or proceeding brought
by any prior representative or other third party which provided any services to
SBS or any Station comparable to those to be performed by Representative
hereunder (a "prior representative") arising from the (i) termination or breach
of any contract or understanding
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between Station and any such prior representative or (ii) the execution or
performance of this Agreement.
6. Certain Remedies of Representatives.
(a) Transfer of a Station. If Station sells all or substantially all of the
assets or business, through the sale of securities, merger or any other
transaction, transfers the ownership or control of any Station to any party (a
"transferee") other than SBS or one of its controlled subsidiaries:
(i) The transferee shall execute and deliver to Representative a written
instrument satisfactory to Representative by which the transferee shall assume
all of the obligations of SBS and such Station under this Agreement with respect
to the such Station or
(ii) Station shall pay to Representative an amount equal to (A) the average
monthly commissions earned by Representative hereunder during the 12 complete
broadcast calendar months preceding such transfer (or if Representative has not
yet represented such Station for a full 12 broadcast calendar month, applicable
prior national gross billing shall be used to derive average monthly
commissions) multiplied by (B) the number of broadcast calendar months then
remaining in the Term and any applicable notice period, plus two months. On
receipt by Representative of such payment, this Agreement shall terminate and be
of no further force or effect with respect to such Station.
(b) Liquidated Damages for Breach. The parties agree that the Representative's
agreement to provide the representation services contemplated by this Agreement
shall involve a commitment of its resources that will not be economically
feasible should Station fail to perform their obligations under this Agreement.
The parties also agree that any such failure by Station would cause damages to
Representative that would be difficult to determine accurately. Therefore, with
the intention of providing a fair and reasonable formula to calculate such
damages in an amount which would not be disproportionate to the presumed loss,
it is agreed that, if Station breaches this Agreement, Station shall pay to
Representative as liquidated damages, and not as a penalty, an amount equal to
(A) the average monthly commissions earned by Representative hereunder during
the 12 complete broadcast calendar months preceding such breach (or if
Representative has not yet represented such Station for a full 12 broadcast
calendar months, applicable prior national gross billing shall be used to derive
average monthly commissions), multiplied by (B) the number of calendar months
then remaining in the Term and any applicable notice period, plus two months. On
receipt by Representative of such payment, this Agreement shall terminate and be
of no further force or effect.
(c) Payment of Accrued Commissions and Costs. The termination of this Agreement
for any reason shall not affect the obligation of Station or Representative to
pay all commissions or monies owed or accrued through the date of termination in
accordance with the payment terms set forth in this Agreement. If any party is
required to take any steps, including, without limitation, the institution of
any action, suit or proceeding, to collect any amounts owed to it under this
Agreement, the prevailing party shall be entitled to costs and expenses,
including,
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without limitation, reasonable attorneys' fees and disbursements, incurred in
connection with such steps.
7. Arbitration.
(a) General. Any controversy or claim between Station and Representative arising
out of or relating to this Agreement shall be finally resolved by arbitration in
accordance with the Commercial Arbitration Rules of the American Arbitration
Association in New York, New York. The parties further agree that (i) the
arbitrators shall be empowered to include arbitration costs and attorney fees in
the award to the prevailing party in such proceedings and (ii) the award in such
proceedings shall be final and binding on the parties. The arbitrators shall
apply the law of the State of New York, exclusive of conflicts of laws
principles, to any dispute. Judgment on the arbitrators' award may be entered in
any court having the requisite jurisdiction. Nothing in this Agreement shall
require the arbitration of disputes between the parties that arise from actions,
suits or proceedings instituted by third parties.
(b) Consent to Jurisdiction; Service of Process. Each party irrevocably submits
to the jurisdictions and venues of the arbitration described in section 9(a) and
to the jurisdiction and venue of federal and state courts sitting in New York,
New York, for the enforcement of any judgment on the arbitrators' award and
waives any objection it may have with respect to the jurisdiction of such
arbitration or courts or the inconvenience of such forums or venues.
Representative appoints Messrs. Christy & Viener, 620 Fifth Avenue, New York,
New York 10020, U.S.A., Attention: Laurence S. Markowitz, Esq. and SBS appoints
as their respective attorney-in-fact and authorized
agents solely to receive on their behalf, service of any demands for, or any
notice with respect to, arbitration hereunder or any service of process. Service
on either of such attorneys-in-fact may be made by registered or certified mail
or by personal delivery, in any case return receipt requested, and shall be
effective as service on Representative and SBS, as the case may be. Nothing
herein shall be deemed to affect any right to service any such demand, notice or
process in any other manner permitted under applicable law.
8. Miscellaneous.
(a) Entire Agreement; Amendments; No Waivers. This Agreement, together with
Schedules A and B and each Station Contract, sets forth the entire understanding
of the parties with respect to its subject matter and merges and supersedes all
prior and contemporaneous understandings of the parties with respect to its
subject matter. No provision of this Agreement may be waived or modified, in
whole or in part, except by a writing signed by each of the parties. Failure of
any party to enforce any provision of this Agreement shall not be construed as a
waiver of its rights under such or any other provision. No waiver of any
provision of this Agreement in any instance shall be deemed to be a waiver of
the same or any other provision in any other instance.
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(b) Communications. All notices, consents and other communications given under
this Agreement shall be in writing and shall be deemed to have been duly given
(a) when delivered by hand or by Federal Express or a similar overnight courier
to, (b) five days after being deposited in any United States Post Office
enclosed in a postage paid, registered or certified mail envelope addressed to,
or (c) when successfully transmitted by facsimile (with a confirming copy of
such communication to be sent as provided in (a) or (b) above) to, the party for
whom intended, at the address or facsimile number for such party set forth
below, or to such other address or facsimile as may be furnished by such party
by notice in the manner provided herein; provided, however, that any notice of
change of address or facsimile number shall be effective only upon receipt.
If to Representative:
Caballero Spanish Media, L.L.C.
261 Madison Avenue
New York, New York 10016
Attention: Eduardo Caballero, Chairman
Telecopier Number: (212) 697-5934
If to Station:
Spanish Broadcasting System
26 West 56th Street
New York, New York 10019
Attention: Raul Alarcon, President
Telecopier Number: (212) 541-6904
(c) Successors and Assigns. This Agreement shall be binding on, enforceable
against and inure to the benefit of, the parties and their respective successors
and assigns and nothing herein is intended to confer any right, remedy or
benefit upon any other person.
(d) Governing Law. This Agreement shall in all respects be governed by and
construed in accordance with the laws of the State of New York. Applicable to
agreements made and fully to be performed in such state, without giving effect
to conflicts of law principles.
(e) Severability. If any provision of this Agreement is held to be invalid or
unenforceable by any court or tribunal of competent jurisdiction, the remainder
of this Agreement shall be affected thereby, and such provision shall be carried
out as nearly as possible according to its original terms and intent to
eliminate such invalidity or unenforceability.
(f) Non-Agency. For all purposes of this Agreement, each party shall be an
independent contractor, and not an agent, partner, or joint venturer of the
other.
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(g) Counterparts. This Agreement may be executed in multiple counterparts, each
of which shall be deemed an original, but all of which together shall constitute
one and of the same instrument.
(h) Construction. Headings used in this Agreement are for convenience only and
shall not be used in the interpretation of this Agreement. References to
Sections and Schedules are to sections and schedules of this Agreement. As used
herein, the singular includes the plural and the masculine, feminine and neuter
gender each includes the others where the context so indicates.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first set forth above.
SPANISH BROADCASTING SYSTEM
By:
Its:
CABALLERO SPANISH MEDIA, L.L.C.
By:
Its:
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SPANISH BROADCASTING SYSTEM
CORPORATE HEADQUARTERS
26 WEST 56TH STREET
NEW YORK, NEW YORK 10019
212/541-9200
TELEFAX 212/541-9236
February 11, 1997
Via Fax: 212-936-0750
Ms. Debbie Schwartz
Vice President/Treasurer
Interep
100 Park Avenue, 5th Floor
New York, NY 10017
Dear Ms. Schwartz:
In anticipation of our conference call, I am sending you an outline describing
the reporting procedures which I feel will meet our mutual needs.
The reporting system is designed around a tracking number which is your order
number. This order number will appear on all documentation that is sent to you
from our stations for every sales order received.
Interep/Caballero will receive on a monthly basis:
1. Copy of orders as they are generated and sent to customers by station. (Item
A)
2. Copy of invoice sent to customer by station. This is due on the 10th of the
month following the broadcast month. (Item B)
3. Monthly recap by station of orders ran and invoiced by rep order number,
invoice number, net billing, agency, product, and accrued commissions due
Interep/Caballero. This is due on the 10th of the month following the broadcast
month. (Item C).
<PAGE> 18
4. Monthly recap on collections received by rep order number, invoice number,
invoice amount, payment received, commissions due, plus check for the total of
this report. This is due on the 10th of the month following the broadcast month.
(Item D). National aging by station will accompany this report.
5. Discrepancy report (if any) by order number, invoice number, invoice amount,
amount received and reason for difference. (Item E)
6. (Optional) Bottle of Dom Perignon to be sent to Raul Alarcon at year end upon
meeting sales goals. SBS will reciprocate.
This letter will serve as addendum number one to the Master Representation
Agreement dated February 3, 1997 between Caballero Spanish Media, L.L.C. and
Spanish Broadcasting System, Inc. and referred to on page 4 of said agreement
and will apply individual station agreements as well. For the purposes of this
agreement national orders means national sales collected.
Thank You Very Much,
Joseph A. Garcia
Agreed To By:
Caballero Spanish Media, L.L.C.
cc: Raul Alarcon
Carroll Larkin
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<PAGE> 1
EXHIBIT 10.8
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT made as of the 4th day of March, 1997 by
and between Spanish Broadcasting System, Inc., a New Jersey corporation having a
place of business at 26 West 56th Street, New York, New York (hereinafter called
the "Company") and Raul Alarcon, Jr. (hereinafter called the "Executive").
WHEREAS, the Executive wishes to be employed by the Company as
President and Chief Executive Officer of the Company, and the Company desires to
assure itself of the availability of the Executive's services in such
capacities;
NOW, THEREFORE, the Company and the Executive agree as
follows:
1. Employment. The Company agrees to employ the Executive and
the Executive agrees to serve the Company upon the terms and conditions
hereinafter set forth.
2. Term. The employment of the Executive by the Company
pursuant to this Agreement will be for a period of five (5) years commencing on
the date hereof and terminating on December 31, 2007 (the "Service Period").
<PAGE> 2
3. Duties. The Executive shall, subject to overall direction
consistent with the legal authority of the Board of Directors of the Company
(the "Board"), serve as, and have all power and authority inherent in the
offices of, President and Chief Executive Officer of the Company and its
subsidiaries during the Service Period and, as such, shall supervise, control
and be responsible for the acquisition and the business affairs and operations
of the Company and its subsidiaries and have such other executive powers and
duties as may from time to time be prescribed by the Board. The Executive shall
also serve as a member of the Board and its Executive Committee and Compensation
Committee, if any, during the Service Period and as a member of each Committee
of the Board. The Executive shall devote his business time and efforts to the
business of the Company and his subsidiaries. The principal place of employment
of the Executive shall be New York, N.Y.
4. Compensation and Other Provisions.
(a) Base Salary. The Company shall pay to the Executive a
base salary at a rate of not less than $1,300,000.00 per annum during the
Service Period, payable in substantially equal semi-monthly installments (such
amount, as it may be increased from time to time, hereinafter being called the
"Base
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<PAGE> 3
Salary") provided that the first six installments will be reduced by 1/6th of
the amount advanced by the Company to Mr. Alarcon, Jr. to repay the amount due
on December 30, 1996 pursuant to his promissory note to the Company. The bonus,
dividend and related compensation is set forth at Exhibit A attached hereto. The
Base Salary and the Executive's other compensation will be reviewed by the Board
at least annually during the Service Period and may be increased or maintained
as the Board may determine. The Board shall also review the Executive's
performance at the end of each year and determine whether a bonus should be paid
for services rendered for that year.
(b) Participation in Benefit Plans. During the Service Period,
the Executive shall be eligible to participate in all employee benefit plans and
arrangements now in effect or which may hereafter be established which are
generally applicable to the other senior executives of the Company or any of its
subsidiaries, including without limitation, all life, group insurance and
medical care plans and all disability, retirement and other employee benefit
plans of the Company or any of its subsidiaries.
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<PAGE> 4
(c) Other Provisions. The Executive shall be furnished with
office facilities and services generally available to senior executives of
entities in the businesses in which the Company is engaged, the expenses of
which will be paid by the Company. He shall be entitled to the same vacation
benefits as are generally available to other senior executives of the Company,
but in no event less than six (6) weeks per year. He shall be reimbursed for all
reasonable expenses incurred by him in the discharge of his duties, including
but not limited to expenses for entertainment and travel. Travel shall be first
class. The Executive shall account to the Company for all such expenses.
(d) Other Benefits. Executive shall be entitled to receive
during the Service Period the non-salary benefits set forth on Exhibit B hereto.
In the event any expenses provided under this Section shall not be deductible to
the Company under the Internal Revenue Code of 1986, as the same shall hereafter
be amended, then the Company shall pay to the Executive additional compensation
equal to the expense thereof and the Executive shall pay such expenses directly.
All such additional compensation to the Executive shall be subject to applicable
withholding taxes.
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<PAGE> 5
As to those benefits obtained directly by Executive he shall be entitled to a
reasonable allowance therefor by the Company.
5. Termination. The Executive's employment hereunder shall
terminate as a result of any of the following events:
(a) the Executive's death;
(b) upon the election of the Board of Directors of the
Company, in the event the Executive shall have been unable to substantially
perform his duties hereunder by reason of illness, accident or other physical or
mental disability for a continuous period of at least six months or an aggregate
of nine months during any continuous twelve month period ("Disability");
(c) for cause where "Cause" shall mean (i) in the
event the Executive is incarcerated for a felony for one year and a day or more
or is convicted of a felony involving loss of property to the Company for the
personal benefit or gain of the Executive or (ii) upon the election of a
majority of the members of the Board of Directors other than the Executive in
the event (x) the Executive has engaged in material misconduct, neglect of
duties or failure to act which materially and adversely affects the business or
affairs of the Company or (y) the Executive shall willfully refuse to carry out
the reasonable instructions, consistent with the terms of this Agreement, of the
Board;
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<PAGE> 6
provided in each case, the Board of Directors shall have first notified the
Executive thereof, and the Executive at a regularly constituted or special
meeting of the Board of Directors on at least fifteen (15) days notice shall
have had a full opportunity to respond thereto prior to the vote of the Board.
Any termination pursuant to subparagraph (b) or (c) of this
Section shall be communicated by a written notice ("Notice of Termination")
which shall indicate the specific termination provision in this Agreement which
is being relied upon and set forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of the Executive's
employment under such provision.
The Executive's employment under this Agreement shall be
deemed to have terminated as follows: (i) if the Executive's employment is
terminated pursuant to subparagraph (a) above, on the date of his death; and
(ii) if the Executive's employment is terminated pursuant to subparagraph (b) or
(c) above, on the date on which Notice of Termination is given. The date on
which termination is deemed to have occurred pursuant to this paragraph is
hereinafter referred to as the "Date of Termination."
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<PAGE> 7
6. Payments on Termination.
(a) Disability; For Good Reason; Cause. If the
Company shall terminate the Executive's employment under subparagraph 5(b) for
Disability or subparagraph 5(c) hereof for Good Reason, then, in consideration
of the Executive's entering into this Agreement, the Company shall pay to the
Executive, as liquidated damages and not as a penalty, the amounts provided for
in subparagraphs (i) and (ii), below, and shall comply with the provisions
provided for in subparagraph (iii) below, as follows:
(i) The Executive's full Base Salary through the
Date of Termination, together with all benefits, Bonuses
and Incentive Compensation and other compensation through
such date.
(ii) An amount equal to (A) the aggregate
Base Salary payments which the Executive would have
received during the Services Period if such termination had
not occurred plus (B) the amount of Bonuses and Incentive
Compensation which the Executive would have received during
the Service Period and under plans or arrangements in
effect on the Date of Termination, if such termination had
not occurred. All payments provided for in
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<PAGE> 8
this subparagraph (a)(ii) shall be made at the time
when the same would have become due if termination
had not occurred.
(iii) The Company shall, for the balance of
the Service Period (as if such termination had not
occurred), keep in force for the Executive or provide
equivalent coverage with a national insurance company
of good repute, all life, group insurance and medical
care plans and all disability and other employee
benefit plans and arrangements from time to time
applicable to senior executives of the Company or its
subsidiaries or as specifically provided herein,
whichever is greater. The Company shall pay to the
Executive cash equivalent amounts for benefits not
capable of being maintained.
The Executive shall not be required to mitigate the
amount of any payment provided for in this subparagraph by seeking other
employment or otherwise, nor shall the amount of any payment or benefit provided
for in this subparagraph (a) be reduced by any compensation or retirement
benefits heretofore or
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<PAGE> 9
hereafter earned by the Executive as the result of employment by any other
person, firm or corporation.
(b) Death. Upon termination pursuant to subparagraph 5(a)
hereof, the Company shall pay the Executive's estate, in a lump sum on the fifth
day following the Date of Termination, the sum of the accrued Base Salary to
which he is entitled through the Date of Termination together with all benefits,
Bonuses and Incentive Compensation through such date. For the balance of the
Service Period, the Company shall pay the estate of the Executive the Base
Salary plus the amount of Bonuses which the Executive would have received during
the Service Period had such termination not occurred, all such payments to be
made at the time and when the same were to become due if termination had not
occurred. The Company shall, for the balance of the Service Period, for the
benefit of the family of the Executive keep in force or provide equivalent
coverage with a national insurance company of good repute all life group
insurance and major medical plans and all disability and other benefits covering
such family members.
(c) Retention of Life Insurance. In the event of the
termination of the Executive's employment for any reason, then the Executive
shall have the option for a period of 90 days
9
<PAGE> 10
following the Date of Termination, upon written notice delivered to the Company
during such 90-day period, to require that the Company transfer to him or any
other entity designated by Executive policies of insurance on the life of the
Executive required to be retained by the Company under Section 4(g), provided,
however, that from the effective date of such transfer, the Executive shall be
responsible for payment of any premiums connected therewith.
(d) Expenses. At the request of the Executive the
Company shall advance to the Executive funds for the payment by him for all
legal fees and expenses incurred by the Executive as the result of any
termination provided for in this Agreement (including without limitation all
such fees and expenses, if any, incurred in contesting or disputing any such
termination) or in seeking to obtain or enforce any right or benefit provided by
this Agreement. Upon the final determination of any such contest, the Executive
shall repay to the Company all such amounts so advanced.
7. Life Insurance. If requested by the Company, the Executive
shall submit to such physical examinations and otherwise take such actions and
execute and deliver such documents as may be reasonably necessary to enable the
Company to
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<PAGE> 11
obtain life insurance on the life of the Executive for the benefit of the
Company and to insure for the Company's benefit its obligations under Section
6(b).
8. Indemnification.
(a) If the Executive is made a party or is threatened
to be made a party to or is involved in any action, suit or proceeding, whether
civil, criminal, administrative or investigative (hereinafter a "proceeding"),
by reason of the fact that he is or was a director or officer of the Company or
is or was serving at the request of the Company as a director, officer, employee
or agent of another corporation or of a partnership, joint venture, trust or
other enterprise, including service with respect to employee benefit plans,
whether the basis of such proceeding is alleged action in an official capacity
as a director, officer, employee or agent or in any other capacity while serving
as a director, officer, employee or agent, shall be indemnified and held
harmless by the Company to the fullest extent authorized by the General
Corporation Law of the State of New Jersey as the same exists or may hereafter
be amended (but, in the case of any such amendment, only to the extent that such
amendment permits the Company to provide broader indemnification rights than
said law permitted the Company to provide prior to
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<PAGE> 12
such amendment), against all expense, liability and loss (including attorney's
fees, judgments, fines, ERISA excise taxes or penalties and amounts paid or to
be paid in settlement) reasonable incurred or suffered by the Executive in
connection therewith and such indemnification shall continue as to the Executive
after he has ceased to be a director, officer, employee or agent and shall inure
to the benefit of his heirs, executors and administrators; provided, however,
that the Company shall indemnify any such person seeking indemnification in
connection with a proceeding (or part thereof) initiated by the Executive only
if such proceeding (or part thereof) was authorized by the Board of Directors of
the Company. The right to indemnification conferred in this Section shall be a
contract right and shall include the right to be paid by the Company the
expenses incurred in defending any such proceeding in advance of its final
disposition; provided, however, that if the General Corporation Law of the State
of New York requires the payment of such expenses incurred by a director or
officer in his capacity as a director or officer (and not in any other capacity
in which service was or is rendered by such person while a director or officer,
including, without limitation, service to an employee benefit plan) in advance
of the final disposition of a
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<PAGE> 13
proceeding, payment shall be made only upon delivery to the Company of an
undertaking, by or on behalf of Executive, to repay all amounts so advanced if
it shall ultimately be determined that such director or officer is not entitled
to be indemnified under this Section or otherwise.
(b) The indemnification provided by this Section
shall not limit or exclude any rights, indemnities or limitations of liability
to which Executive may be entitled, whether as a matter of law, under the
By-laws of the Company by agreement, vote of the stockholders or disinterested
directors of the Company or otherwise.
9. Representations and Warranties.
(a) The executive represents and warrants to the
Company that the Executive is under no contractual or other restriction or
obligation which would prevent the performance of his duties hereunder, or
interfere with the rights of the Company hereunder.
(b) The Company represents and warrants to the
Executive that (i) it has all requisite power and authority to execute, deliver,
and perform this Agreement, (ii) all necessary corporate proceedings of the
Company have been duly taken to authorize the execution, delivery, and
performance of this
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Agreement, and (iii) this Agreement has been duly authorized, executed, and
delivered by the Company, is the legal, valid and binding obligation of the
Company, and is enforceable as to the Company in accordance with its terms.
10. Confidential Information. All confidential information
which the Executive may obtain during the Service Period relating to the
business of the Company shall not be published, disclosed, or made accessible by
him to any other person, firm, or corporation except in the business and for the
benefit of the Company. The provisions of this Section 10 shall not apply to any
information which is or becomes publicly available otherwise than by breach of
this Section 10.
11. Survival. The covenants, agreements, representations and
warranties contained in or made pursuant to this Agreement shall survive the
Executive's termination of employment, irrespective of any investigation made by
or on behalf of any party.
12. Modification. This Agreement sets forth the entire
understanding of the parties with respect to the subject matter hereof,
supersedes all existing agreements between them concerning such subject matter,
and may be modified only by a written instrument duly executed by each party.
13. Notices. Any notice or other communication required or
permitted to be given hereunder shall be in writing and shall be mailed by
certified mail, return receipt requested,
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<PAGE> 15
or delivered against receipt to the party to whom it is to be given at the
address of such party set forth in the preamble to this Agreement (or to such
other address as the party shall have furnished in writing in accordance with
the provisions of this Section 13). Notice to the estate of the Executive shall
be sufficient if addressed to the Executive as provided in this Section 13. Any
notice or other communication given by certified mail shall be deemed given at
the time of certification thereof, except for a notice changing a party's
address which shall be deemed given at the time of receipt thereof.
14. Waiver. Any waiver by either party of a breach of any
provision of this Agreement shall not operate as or be construed to be a waiver
of any other breach of such provision or of any breach of any other provision of
this Agreement. The failure of a party to insist upon strict adherence to any
term of this Agreement on one or more occasions shall not be considered a waiver
or deprive that party of the right thereafter to insist upon strict adherence to
that term or any other term of this Agreement. Any waiver must be in writing.
15. Binding Effect. The Executive's rights and obligations
under this Agreement shall not be transferable by assignment or otherwise, and
any attempt to do any of the foregoing shall be void. The provisions of this
Agreement shall be binding upon and inure to the benefit of each of the Company,
its successors and assigns.
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16. No Third Party Beneficiaries. This Agreement does not
create, and shall not be construed as creating, any rights enforceable by any
person not a party to this Agreement.
17. Headings. The headings in this Agreement are solely for
convenience of reference and shall be given no effect in the construction or
interpretation of this Agreement.
18. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the state of New York without giving
effect to rules governing conflicts of law.
19. Invalidity. The invalidity or unenforceability of any term
of this Agreement shall not invalidate, make unenforceable or otherwise affect
any other term of this Agreement, which shall remain in full force and effect.
16
<PAGE> 17
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first hereinabove written.
SPANISH BROADCASTING SYSTEM, INC.
By: \s\ Joseph Garcia
---------------------------------
RAUL ALARCON, JR.
\s\ Raul Alarcon, Jr.
------------------------------------
17
<PAGE> 18
EXHIBIT B
Benefits of Executive
1. Automobiles of the type presently used by the Executive with
reimbursement from the Company for insurance, maintenance, gasoline and
cellular telephone.
2. Health insurance similar to the health insurance presently retained by
Company for the Executive.
3. Insurance on the life of the Executive payable to beneficiaries
designated by the Executive in face amount of not less than $5,000,000.
4. Reimbursement for reasonable personal tax and accounting services.
5 An apartment or similar accommodation acceptable to the Executive in
New York City consistent with the position of an executive of similar
stature in the community not to exceed $150,000 per year.
6. Reasonable health and country club facilities not to exceed $50,00 per
year.
7. Reimbursement of all expenses incurred by the Executive in the normal
course of business solicitation either directly or indirectly for
Company as determined by the Executive.
8. Reimbursement of all costs and expenses incurred by the Executive in
relocating his family from Long Island, New York to Miami, Florida not
to exceed $100,000 per year.
<PAGE> 1
EXHIBIT 10.11
FIRST AMENDMENT TO ASSET PURCHASE AGREEMENT
This FIRST AMENDMENT TO ASSET PURCHASE AGREEMENT (the "First
Amendment"), dated as of December 26, 1996, is by and among Spanish Broadcasting
System, Inc., a Delaware corporation ("Buyer"), Raul Alarcon, Jr., New Age
Broadcasting, Inc., a Florida corporation ("New Age"), and The Seventies
Broadcasting Corporation, a Florida corporation ("Seventies", and together with
New Age hereafter collectively referred to as the "Sellers").
RECITALS
A. The Sellers have agreed to sell certain assets to Buyer pursuant to
an Asset Purchase Agreement, dated as of September 16, 1996 (the "Purchase
Agreement");
B. The parties to the Purchase Agreement desire to modify certain of
the provisions of the Purchase Agreement as hereafter provided in this First
Amendment;
AGREEMENTS
In consideration of the above recitals and of the mutual agreements and
covenants contained in the Purchase Agreement and in this First Amendment, the
parties hereto, intending to be bound legally, agree as follows:
1. Capitalized terms used herein but not otherwise defined shall have
the meaning ascribed to such terms in the Purchase Agreement. In addition, the
term "Agreement" when used herein and in the Purchase Agreement shall be deemed
to include the Purchase Agreement as amended and modified by this First
Amendment.
2. Section 2.3(c) (including Exhibit 2.3(c)) of the Purchase Agreement
is hereby amended and restated in its entirety to read as follows:
"(c) In the event that the minimum combined "Broadcast Cash Flow" of
the Sellers is less than nine million one hundred thousand dollars ($9,100,000)
(the "Target Broadcast Cash Flow") for the 12 month period ending on November
30, 1996 (the "Trailing 12 Months"), then the Purchase Price shall be reduced by
an amount equal to (i)(A) the Target Broadcast Cash Flow minus (B) the actual
Broadcast Cash Flow of the Sellers for the Trailing 12 Months multiplied by (ii)
12.09. For example, had the actual Broadcast Cash Flow of the Sellers for the
Trailing 12 Months been $8,900,000, then the Purchase Price would have been
reduced pursuant to this Section 2.3(c) by $2,418,000. For purposes of this
Agreement, "Broadcast Cash Flow" shall mean the Sellers' combined operating
income, as determined by generally accepted accounting
Initial Buyer /i/ Initial Sellers /i/
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<PAGE> 2
principles ("GAAP") as applied by Sellers on a basis consistent with their most
recent audited financial statements, before any reduction for depreciation and
amortization, interest, taxes, write-down of franchise costs, trade expense and
trade income, corporate expenses (including, without limitation, Russ Oasis'
compensation and benefits), legal fees and all expenses associated with the sale
or attempted sale of the Stations and the legal fees and costs and any judgment
associated with the litigation described in Schedule 3.16. Exhibit 2.3(c) to
this First Amendment sets forth an itemized determination of Broadcast Cash Flow
for the 12 month period ended September 30, 1996 and for the Trailing 12 Months.
The parties hereto acknowledge and agree that the Broadcast Cash Flow of the
Sellers for the 12 month period ended September 30, 1996 and for the Trailing 12
Months as set forth in Exhibit 2.3(c) hereto is correct for all purposes under
the Purchase Agreement and, therefore, the parties agree that no reduction of
the Purchase Price is required under the terms of the Agreement."
3. The second sentence of Section 5.22 of the Purchase Agreement is
amended and restated in its entirety to read as follows:
"Upon any breach by SBS or Alarcon of this Section 5.22, then Seller's
remedy for such breach shall be governed by Section 9.3 hereof in the event
Buyer fails to close as provided in this Agreement and Sellers shall not have
the right to terminate this Agreement solely as a consequence of the breach of
this Section 5.22."
4. Section 7.1(e) of the Purchase Agreement is hereby amended and
restated in its entirety to read as follows:
"(e) [intentionally omitted]"
5. Section 7.2(e) of the Purchase Agreement is hereby amended and
restated in its entirety to read as follows:
"(e) [intentionally omitted]"
6. Section 8.1(a) of the Purchase Agreement is hereby amended and
restated in its entirety to read as follows:
Initial Buyer /i/ Initial Sellers /i/
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<PAGE> 3
"8.1 Closing.
(a) Closing Date. The Closing shall take place at 10:00 a.m.,
Miami, Florida time, on February 10, 1997; provided, however, that Buyer shall
be permitted to extend the closing date to a date and time no later than 2:00
p.m., February 28, 1997 by notifying Sellers in writing prior to February 1,
1997 that the closing will not take place on February 10, 1997 and by delivering
written notice to the Sellers of the new closing date and time at least ten (10)
business days prior to such proposed closing date. If no such notice setting a
new closing date is given within the prescribed ten-day period, the new closing
date and time shall be February 28, 1997 at 2:00 p.m. Time is of the essence
with respect to the closing of the transaction contemplated by this Agreement.
In the event that the wire transfer of the Purchase Price is received by each of
the Sellers later than 2:00 p.m., Miami, Florida time on the Closing Date, then
Sellers shall be entitled to interest on the Purchase Price from the Closing
Date to the next business day following the Closing Date at a rate equal to the
prime rate as publicly announced on the Closing Date by Citibank N.A. as its
prime rate. The Closing shall take place at the offices of Greenberg, Traurig,
Hoffman, Lipoff, Rosen & Quentel, P.A., Miami, Florida."
7. The first sentence of paragraph 2 of the Agreement-Not-To-Compete
referenced in Section 8.2(f) of the Purchase Agreement and attached as Exhibit C
thereto is hereby amended and restated in its entirety to read as follows:
"Each Seller covenants and agrees that for a period of 24
months commencing on September 16, 1996 (the date of the Purchase Agreement), he
will not, directly or indirectly, own, operate, manage, be employed by, consult
or provide any services to any radio broadcast station that broadcasts in the
Spanish language whose main studio or transmitter is located in Dade or Broward
Counties, Florida."
8. Section 9.1(c) of the Purchase Agreement is hereby amended and
restated in its entirety to read as follows:
"(c) Upset Date. If the Closing shall not have occurred by February 28,
1997."
9. Section 9.2(c) of the Purchase Agreement is hereby amended and
restated in its entirety to read as follows:
"(c) Upset Date. If the Closing shall not have occurred by February 28,
1997."
Initial Buyer /i/ Initial Sellers /i/
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<PAGE> 4
10. Section 9.3 of the Purchase Agreement shall be amended and restated
in its entirety to read as follows:
"9.3 Letter of Credit and Default Sale.
(a) Simultaneously with the execution and delivery of this
Agreement, Buyer has delivered to Sellers an irrevocable letter of credit issued
by Canadian Imperial Bank of Commerce (the "Bank") in the principal amount of
ten million dollars ($10,000,000) (the "Letter of Credit") for purposes of
securing Buyer's obligations under the terms of this Agreement. The parties
acknowledge and understand that the terms of the Letter of Credit provide that
in the event of a default under this Agreement by Buyer, the full face amount of
the Letter of Credit, or ten million dollars ($10,000,000) (the "Face Amount"),
shall be drawn by the Sellers upon presentment to the bank of a drawing
certificate and an affidavit signed by two of Alan H. Potamkin, Russell A. Oasis
and Robert M. Potamkin (provided that the signature of only one such individual
shall be required if the other two individuals are not alive or legally
competent) attesting to such default by Buyer. In the event the Letter of Credit
is drawn upon by the Sellers as provided in this Section 9.3(a), the Sellers
shall retain the full amount drawn without prejudice pending a determination of
the Sellers' actual damages, as provided in this Section 9.3, resulting from
Buyers' default hereunder ("Actual Damages").
(b) The determination of Sellers' Actual Damages shall be made
by Sellers placing the Stations for immediate cash sale within twenty (20)
calendar days after February 28, 1997. Sellers shall place the Stations for sale
with one media broker selected by Sellers in their sole discretion from the
following media brokers: Star Media, Communications Equity Associates and
Blackburn & Company, Inc. (the media broker selected is referred to hereinafter
as the "Intermediary"). The Intermediary shall sell the Stations, subject to the
limitations of Section 9.3, on substantially the same terms and conditions of
this Agreement, with the exception that any proposed buyer shall be required to
furnish a cash deposit of ten percent (10%) of the Purchase Price; provided,
however, that (i) the previous requirement of Broadcast Cash Flow provided in
Section 2.3(c) shall be eliminated; (ii) the requirement of the Employment
Agreement between Russell A. Oasis and Buyer referenced in Section 7.2(f) shall
be eliminated; and (iii) the requirement of the Non-competition Agreements
referenced in Section 8.2(f) may not be greater than that provided therein
("Default Sale"). The Intermediary shall be required to select in writing the
highest legally binding offer received at the open bidding auction procedure
provided by Section 9.3(d). The terms and conditions of the engagement of the
Intermediary not specifically provided in this Agreement shall be determined by
the Sellers in their sole discretion.
(c) In the event that any provision of the agreement to be
entered into in connection with a Default Sale, as provided in this Section 9.3,
needs to be clarified or amended,
Initial Buyer /i/ Initial Sellers /i/
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<PAGE> 5
the Intermediary shall interpret the terms and conditions of this Agreement, in
its sole discretion, provided any such interpretation does not result in the
imposition of any additional obligations on, or otherwise does not eliminate or
diminish any rights of, the Sellers or their respective shareholders. In
addition to the foregoing, the Intermediary shall determine in its sole
discretion the manner in which any Default Sale will be conducted, subject
however to the limitations that (i) such Default Sale may not, and shall not,
result in the imposition of any additional obligations on, or otherwise
eliminate or diminish any rights of, the Sellers or their respective
shareholders and (ii) no public advertising for the sale of the Stations may
take place; provided, however, that the Intermediary shall be free to contact
all potential buyers individually, but not through general advertising. Unless
the Intermediary discharges its duties in a fraudulent manner or is otherwise
guilty of willful misconduct or gross negligence with regard to its performance
of such duties, the Intermediary shall not be liable to either the Sellers or
Buyer for any action taken pursuant to this Agreement or loss suffered by either
of them, and Buyer shall indemnify the Intermediary and hold it harmless from
any and all claims, liabilities, losses, actions, suits or proceedings, or other
expenses, fees or charges which the Intermediary may incur or with which it may
be threatened as a result of its involvement or participation in a Default Sale
pursuant to this Agreement. The parties hereto acknowledge and agree that the
Intermediary shall be a third party beneficiary of this Agreement with respect
to the terms set forth in this Section 9.3.
(d) Until the actual closing of a Default Sale and the Sellers
actually receiving the cash proceeds from a Default Sale, no Actual Damages will
or may be determined. The only obligation of Sellers on a Default Sale is to
select the highest legally binding cash offer that is selected by the
Intermediary at an open bidding auction held on or before the end of the 60th
day period after a written engagement has been entered into with the
Intermediary. If a Default Sale fails to close for any reason other than
material fraud or intentional material misconduct by the Sellers in violation of
the provisions of this Section 9.4, the Sellers shall have no liability and
shall not be required to seek the enforcement of any of the Sellers' rights
against the new buyer; provided, however, that in such event, (i) the Sellers
shall place the Stations for sale as soon as legally permissible thereafter,
based solely on the advice of counsel to the Sellers, and as soon as reasonably
practicable under the circumstances and (ii) Buyer shall be assigned, at the
time Sellers are paid any Damage Shortfall (as hereinafter defined) and without
any recourse or liability to Sellers, any rights of Sellers relating to a
Default Sale if Sellers do not wish to pursue such rights. All profits generated
by the Stations prior to the Default Sale shall be for the benefit of the
Sellers in consideration for Sellers' running the Stations during this period.
Sellers shall operate the Stations in the ordinary course of business consistent
with its past practices but (i) will not be required to lend money, guarantee
any obligations or make any capital contributions to the Stations and (ii)
Sellers will not be responsible for business judgments or decisions undertaken
in good faith. Sellers shall not under any circumstances, other than material
fraud or an intentional material breach of the previous sentence, be responsible
for any diminution of
Initial Buyer /i/ Initial Sellers /i/
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<PAGE> 6
value to the Stations at any time. The difference between (A) the cash purchase
price actually received by the Sellers from the Default Sale (the "Default Sale
Price") less an amount equal to any and all costs and expenses of Sellers,
including any brokerage fees, attorneys' fees and indemnity obligations or other
damages of Sellers, incurred in connection with effecting, or otherwise relating
to, the Default Sale, including, without limitation, any capital expenditures
for the Stations and (B) the Purchase Price, plus interest accrued at the rate
of 12% per annum from February 28, 1997 on $100,000,000 until the date of the
determination of Actual Damages, shall be the Actual Damages.
(e) In the event it is determined that the Sellers' Actual
Damages exceed the Face Amount of the Letter of Credit ("Damages Shortfall"),
the Buyer shall, as promptly as practicable but in no event later than ten (10)
days after such determination, remit payment to the Sellers, in cash or other
immediately available funds, of the full amount of the Damages Shortfall.
Interest shall accrue at the rate of 12% per annum on the Damages Shortfall from
the date of the determination of Actual Damages until actually paid. In the
event that (i) Sellers' Actual Damages are less than the Face Amount of the
Letter of Credit or (ii) the Default Sale Price less the applicable deductions
provided in Section 9.3(d) exceeds the Purchase Price (a "Damages Surplus"),
then the Sellers shall, as promptly as practicable but in no event later than
ten (10) days after such determination, remit payment to the Buyer, in cash or
other immediately available funds, of the full amount of the Damages Surplus
plus interest at the rate of 12% per annum on such Damage Surplus from February
28, 1997 until actually paid. Buyer agrees that any determination of Actual
Damages as provided herein shall be final and binding on Buyer absent a material
breach of the obligations under this Section 9.3 by Sellers. In the event Buyer
believes that there is a material breach of the obligations of Sellers under
this Section 9.3, Buyer shall be required to pay to Sellers any amounts not in
dispute prior to commencing or defending any legal proceedings relating to the
payment or determination of Actual Damages.
(f) The parties specifically acknowledge and agree that this
Section 9.3 is not intended as a "liquidated damages" provision since Buyer and
the Sellers believe that their provision for Actual Damages provides a fair and
reasonable determination of the actual monetary damages that would be incurred
by the Sellers in the event of a breach of this Agreement by Buyer. The Sellers
or their respective affiliates may, but shall not be required to, submit offers
to the Intermediary conducting the Default Sale. In the event the Sellers submit
the highest legally binding cash offer as provided herein, (i) such highest
offer shall be deemed the Default Sale Price for purposes of this Section 9.3,
(ii) no actual sale of the Stations shall be effected or take place and the
Sellers will retain the Stations and shall be entitled to collect any Damages
Shortfall, plus interest, as provided herein, and (iii) the Sellers shall not be
required to place any cash deposit. Buyer may, but shall not be required to
submit offers to the Intermediary conducting a Default Sale; provided, however,
that the offer of Buyer must be for immediate
Initial Buyer /i/ Initial Sellers /i/
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<PAGE> 7
cash purchase for an amount sufficient so that all Actual Damages would be paid
and Buyer and Sellers shall use their best efforts to keep the ability to close
immediately with the existing FCC approval in effect until an offer from a new
buyer (other than Buyer) is selected in writing by the Intermediary.
11. Section 9.4 of the Purchase Agreement shall be amended and restated
in its entirety to read as follows:
"9.4 [intentionally omitted]"
12. The following sentence shall be added to Section 11.14 of the
Purchase Agreement:
";provided, however, that upon a default by Buyer under the terms of
this Agreement, the Sellers shall no longer be subject to the restrictions set
forth in this Section 11.14."
13. In addition to and without limiting the foregoing, the parties
hereto acknowledge, agree, represent and warrant as follows:
(a) all Consents referenced in Schedule 3.3 to the Purchase
Agreement have been obtained and presented to Buyer within the time limits
prescribed in the Purchase Agreement and are satisfactory in all respects to
Buyer;
(b) all Tower Consents referenced in Section 6.10 of the
Purchase Agreement have been obtained and presented to Buyer within the 45-day
period referenced therein and are satisfactory in all respects to Buyer;
(c) the condition set forth in Sections 7.1(c) and 7.2(c)
relating to the grant of the FCC Consent has been fulfilled and satisfied in
full and is no longer applicable as a condition precedent to the respective
obligations of either Buyer or the Sellers to close the transaction contemplated
by the Purchase Agreement;
(d) the condition set forth in Sections 7.1(d) and 7.2(d)
relating to the expiration of the waiting period under the HSR Act has been
fulfilled and satisfied in full and is no longer applicable as a condition
precedent to the respective obligations of either Buyer or the Sellers to close
the transaction contemplated by the Purchase Agreement;
Initial Buyer /i/ Initial Sellers /i/
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<PAGE> 8
(e) the audit of the Sellers' financial statements for the
period ended September 30, 1996 has confirmed the accuracy of the unaudited
Financial Statements previously delivered by Sellers to Buyer and is acceptable
to Buyer in all respects;
(f) the Letter of Credit referenced in Section 9.3 of the
Purchase Agreement, as amended by this First Amendment, and the ability of the
Sellers to draw the Face Amount thereof upon the occurrence of a default by
Buyer as provided in Section 9.3, is not adversely affected in any manner by
this First Amendment and Buyer will provide the Sellers with a letter from the
Bank to such effect on or before January 24, 1997 (if no such letter is
delivered on such date this First Amendment shall at the sole option of Sellers
be null and void and of no effect as if the First Amendment had never been
entered into and delivered;
(g) all of the respective representations and warranties of
the Sellers and Buyer set forth in the Purchase Agreement are true, complete and
correct in all material respects as of the date hereof and, to the knowledge of
each of the parties hereto, no event or circumstance has occurred that would or
may (i) constitute a breach of any of the provisions of the Purchase Agreement
or the First Amendment by any of the parties thereto or that would or will cause
any representation or warranty of any of the other parties thereto to be untrue
in any material respect now or at the Closing (ii) adversely affect the ability
of either Buyer or the Sellers to close the transaction contemplated by the
Purchase Agreement and the First Amendment. Further, as of the date hereof, each
of the Sellers and Buyer have, and, to the best of their knowledge, acknowledge
and agree that each of the other parties hereto have, performed and complied in
all material respects with all covenants, agreements and conditions (with the
exception of the payment of the Purchase Price by Buyer) required by the
Purchase Agreement to be performed or complied with by them; and
(h) The Employment Agreement of Russell A. Oasis with Buyer
dated as of the 26th day of September 1996 is hereby amended to provide that the
provisions of Section 4.6 shall survive the termination of such Employment
Agreement for any reason.
14. In the event of a conflict between any of the terms contained in
the Purchase Agreement and any of the terms set forth in this First Amendment,
the terms of this First Amendment shall govern.
15. Except as hereby amended by this First Amendment, the remaining
terms and provisions of the Purchase Agreement shall remain unchanged and shall
continue in full force and effect.
Initial Buyer /i/ Initial Sellers /i/
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<PAGE> 9
16. This First Amendment may be executed in counterparts and may be
delivered via fax. Each page must be initialled by the parties.
[SIGNATURE PAGE FOLLOWS]
Initial Buyer /i/ Initial Sellers /i/
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<PAGE> 10
IN WITNESS WHEREOF, the parties hereto have duly executed this First
Amendment to Asset Purchase Agreement as of the day and year first above
written.
Witness: SPANISH BROADCASTING SYSTEM, INC.
/s/ By: /s/ Raul Alarcon, Jr.
- ----------------- -----------------------------
Raul Alarcon, Jr.
President
/s/ /s/ Raul Alarcon, Jr.
- ----------------- ----------------------------------
Raul Alarcon, Jr.
NEW AGE BROADCASTING, INC.
/s/ By: /s/ Russell A. Oasis
- ----------------- -----------------------------
Russell A. Oasis
President
THE SEVENTIES BROADCASTING CORPORATION
/s/ By: /s/ Russell A. Oasis
- ----------------- -----------------------------
Russell A. Oasis
President
Initial Buyer /i/ Initial Sellers /i/
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<PAGE> 1
EXHIBIT 10.12
SECOND AMENDMENT TO ASSET PURCHASE AGREEMENT
This SECOND AMENDMENT TO ASSET PURCHASE AGREEMENT (the "Second
Amendment"), dated as of February 28, 1997, is entered into by and among Spanish
Broadcasting System, Inc., a Delaware corporation ("Buyer"), Raul Alarcon, Jr.,
New Age Broadcasting, Inc., a Florida corporation ("New Age"), and The Seventies
Broadcasting Corporation, a Florida corporation ("Seventies", and together with
New Age hereafter collectively referred to as the "Sellers").
R E C I T A L S
A. The Sellers have agreed to sell certain assets to Buyer pursuant to
an Asset Purchase Agreement, dated as of September 16, 1996 ("Purchase
Amendment"). The Purchase Agreement was amended as of December 26, 1996 to
permit Buyer additional time to obtain the cash funds necessary to be paid to
Sellers as the Purchase Price at the Closing ("First Amendment");
B. The Sellers were willing, able and ready to close as required by the
Purchase Agreement, as amended by the First Amendment, having met all of the
closing conditions. Buyer has requested a further extension of the Closing Date
to a date no later than April 15, 1997 in order to obtain the cash funds
necessary to be paid to Sellers as the Purchase Price at the Closing;
C. The parties to the Purchase Agreement and the First Amendment desire
to modify certain of the provisions of the Purchase Agreement and the First
Amendment as hereafter provided in this Second Amendment.
AGREEMENT
In consideration of the above recitals and of the mutual agreements and
covenants contained in this Second Amendment, the parties hereto, intending to
be bound legally, agree as follows:
1. The Recitals are true and correct.
2. Capitalized terms used herein but not otherwise defined shall have
the meaning ascribed to such terms in the Purchase Agreement and the First
Amendment. In addition, the term "Agreement" when used herein and in the
Purchase Agreement shall be deemed to include the Purchase Agreement as amended
by the First Amendment and the Second Amendment.
Initial Buyer /i/ Initial Sellers /i/
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<PAGE> 2
3. Section 2.3(a) of the Purchase Agreement is hereby amended and
restated in its entirety to read as follows:
"2.3 Purchase Price.
(a) The Purchase Price for the Assets shall be One
hundred eleven million dollars ($111,000,000). One hundred ten
million dollars ($110,000,000) of the Purchase Price shall be
paid by Buyer in full at the Closing by confirmed wire
transfer or transfers of immediately available funds pursuant
to wire instructions signed by at least two of Alan Potamkin,
Russell Oasis or Robert Potamkin; provided, however, that the
signature of only one of such individual shall be required if
the other two individuals are not alive or legally competent
on the Closing Date. $1,000,000 of the Purchase Price is being
pre-paid to Sellers contemporaneously with the execution and
delivery of the Second Amendment.
4. Section 2.3(c) (including Exhibit 2.3(c)) of the Purchase Agreement,
as amended by Section 2 of the First Amendment, is hereby deleted in its
entirety. The parties agree that any requirement of Broadcast Cash Flow
previously required by this Section 2.3(c) has been met by Sellers and is no
longer a requirement or obligation of the Sellers.
5. Execution of this Agreement by Buyer and Sellers shall be deemed the
irrevocable instruction of Buyer to deliver the $1,000,000 held in escrow by
Greenberg, Traurig, et al. to the Sellers. This sum is being made as a
prepayment of the Purchase Price, and in the event Buyer is unable to close on
or before April 15, 1997, as a deposit to be held by Sellers until Actual
Damages can be determined pursuant to Section 9.3 of the Purchase Agreement, as
amended by Section 10 of the First Amendment.
6. If Buyer fails to close on or before April 15, 1997 as required by
the Purchase Agreement, Buyer authorizes Russell Oasis to immediately return to
Sellers as of that date all property and employees of Sellers on loan to Buyer
pending the Closing.
7. Section 8.1(a) of the Purchase Agreement is hereby amended and
restated in its entirety to read as follows:
"8.1 Closing.
(a) Closing Date. The Closing shall take place at
10:00 a.m., Miami, Florida time, on March 24, 1997; provided,
however, that Buyer shall be permitted to extend the closing
date to a date and time no later than 10:00 a.m., April 15,
1997 by notifying Sellers in writing prior to March 24, 1997
that the closing will not take place on March 24, 1997 and by
delivering written notice to the Sellers of the new closing
date and time
Initial Buyer /i/ Initial Sellers /i/
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2
<PAGE> 3
at least ten (10) business days prior to such proposed closing
date. If no such notice setting a new closing date is given
within the prescribed ten-day period, the new closing date and
time shall be April 15, 1997 at 10:00 a.m. TIME IS OF THE
ESSENCE WITH RESPECT TO THE CLOSING OF THE TRANSACTION
CONTEMPLATED BY THIS AGREEMENT. In the event that wire
transfer of the Purchase Price is received by each of the
Sellers later than 2:00 p.m., Miami, Florida time on the
Closing Date, then Sellers shall be entitled to interest on
the Purchase Price from the Closing Date to the next business
day following the Closing Date at a rate equal to the prime
rate as publicly announced on the Closing Date by Citibank,
N.A. as its prime rate. The Closing shall take place at the
offices of Greenberg, Traurig, Hoffman, Lipoff, Rosen &
Quentel, P.A., Miami, Florida."
8. Section 9.1(c) of the Purchase Agreement, as amended by Section 8 of
the First Amendment, is hereby amended and restated in its entirety to read as
follows:
"(c) Upset Date. If the Closing shall not have occurred by
April 15, 1997."
9. Section 9.2(c) of the Purchase Agreement, as amended by Section 9 of
the First Amendment, is hereby amended and restated in its entirety to read as
follows:
"(c) Upset Date. If the Closing shall not have occurred by
April 15, 1997."
10. The date of "February 28, 1997" specified in Sections 9.3(b),
9.3(d) and 9.3(e) of the Purchase Agreement, as amended by Section 10 of the
First Amendment, is hereby amended to read "April 15, 1997."
11. The parties agree that the words "closing of the" shall be inserted
prior to the words "Default Sale" on line 21 of Section 9.3(d) of the Purchase
Agreement, as amended by Section 10 of the First Amendment. Otherwise, this
Section 9.3(d) shall remain unchanged.
12. In addition to and without limiting the foregoing, the parties
hereto respectively acknowledge, agree, represent and warrant as follows:
(a) the Letter of Credit and the ability of the Sellers to
draw the Face Amount thereof upon the occurrence of a default by Buyer as
provided in Section 9.3 (as amended by the First Amendment and the Second
Amendment) is not affected in any manner by this Second Amendment;
(b) all of the respective representations and warranties of
the Sellers and Buyer set forth in the Purchase Agreement, the First Amendment
and the Second Amendment
Initial Buyer /i/ Initial Sellers /i/
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3
<PAGE> 4
are true, complete and correct in all material respects as of the date hereof
and, to the knowledge of each of the parties hereto, no event or circumstance
has occurred that would or may with the passage of time or otherwise (i)
constitute a breach of any of the provisions of the Purchase Agreement, the
First Amendment or the Second Amendment by any of the parties thereto or that
would or will cause any representation or warranty of any of the other parties
thereto to be untrue in any material respect now or at the Closing, (ii)
adversely affect the ability of either Buyer or the Sellers to close the
transaction contemplated by the Purchase Agreement, the First Amendment and the
Second Amendment. Further, as of the date hereof, each of the Sellers and Buyer
have, and, to the best of their knowledge, acknowledge and agree that each of
the other parties hereto have, performed and complied in all material respects
with all covenants, agreements and conditions (with the exception of the payment
of the Purchase Price by Buyer to Sellers) required by the Purchase Agreement,
the First Amendment and the Second Amendment to be performed or complied with by
any of them. Also, all Consents, the FCC Consent and the Tower Consents have
been previously obtained by Seller, delivered to Buyer and are satisfactory to
Buyer in all respects.
13. In the event of a conflict between any of the terms contained in
the Purchase Agreement or the First Amendment and any of the terms set forth in
this Second Amendment, the terms of this Second Amendment shall govern.
14. Except as hereby specifically amended by this Second Amendment, the
remaining terms and provisions of the Purchase Agreement and the First Amendment
shall remain unchanged and shall continue in full force and effect.
15. This Second Amendment may be executed in counterparts and may be
delivered via fax. Each page must be initialed by the parties.
[SIGNATURE PAGE FOLLOWS]
Initial Buyer /i/ Initial Sellers /i/
---- ----
4
<PAGE> 5
IN WITNESS WHEREOF, the parties hereto have duly executed this Second
Amendment to Asset Purchase Agreement as of the date and year first above
written.
Witness: SPANISH BROADCASTING SYSTEM, INC.
/s/ By: /s/ Raul Alarcon, Jr.
- ------------------------------ ---------------------------------
Raul Alarcon, Jr.
- ------------------------------
NEW AGE BROADCASTING, INC.
/s/ By: /s/ Russell A. Oasis
- ------------------------------ ---------------------------------
Russell A. Oasis, President
- ------------------------------
THAT SEVENTIES BROADCASTING
CORPORATION
/s/ By: /s/ Russell A. Oasis
- ------------------------------ ---------------------------------
Russell A. Oasis, President
- ------------------------------
/s/ /s/ Raul Alarcon, Jr.
- ------------------------------ ---------------------------------
Raul Alarcon, Jr.
- ------------------------------
5
<PAGE> 1
Exhibit 10.14
January 13, 1997
Raul Alarcon
President
Spanish Broadcasting System, Inc.
1001 Ponce De Leon Boulevard
Coral Gables, Florida 33134
Dear Raul:
Re: Spanish Broadcasting System, Inc. ("SBS")
You have assumed a contract from Katz Hispanic on January 8, 1997 for the
exclusive representation of SBS Radio Stations (the "Stations").
Contemporaneously, with the execution of the Representation Agreement between
SBS and Caballero Spanish Media, LLC ("CSM"), CSM agrees to purchase from SBS
all its rights, title and interest in said contract of representation, including
the right to receive commissions after December 29, 1996 on existing contracts
in force at the time plus any contracts written during the unexpired term of the
SBS representation contract. It is agreed that SBS shall have no further claims
for commissions on schedules broadcast after December 29, 1996.
In consideration of this transfer of rights, CSM agrees to pay to SBS the
following contingent payments:
A. Amounts based on historical gross billings:
$1,000,000 Upon the takeover of the Stations by CSM
4,100,000 See payment terms below
$5,100,000 Total
Timing of payments of the $4.1 million above will be predicated upon the timing
of buyout receipts to be determined pursuant to the buyout by Katz Hispanic of
the representation agreement between CSM and Heftel Broadcasting. Such payment
schedule will be agreed to on or before February 28, 1997 ("Payment Schedule").
The $4,100,000 payment due SBS from CSM will be paid within five (5) days of
each payment by Katz Hispanic to CSM per the agreed to Katz Hispanic/CSM Payment
Schedule. In all events, the Katz Hispanic/CSM Payment Schedule will not have a
term in excess of three (3) years. Moreover, failure of Katz Hispanic to make
the required payments per the Katz Hispanic/CSM Payment Schedule will not relive
CSM from making the required $4,100,000 payments to SBS.
The parties hereby acknowledge and agree that the above payments have been
calculated based on the following:
1996 Gross National Billings on SBS stations*
- - Currently Owned $11,044,550
<PAGE> 2
- - Under contract for acquisition by SCS
and broadcasting an Hispanic Language
Format during calendar 1996 6,838,429
TOTAL $17,882,979
*1996 Gross National Billings exclude any accounts which fall within the MSA as
defined by Arbitron for each Station and exclude trade (barter), direct
promotions, Fonovisa and (in 1996 only) all beer accounts.
As promptly as is practical after the takeover of the Stations by CSM, SBS shall
provide gross and net billing reports by month for all of the Stations for 1996,
as well as applicable takeover contracts for all 1997 National Orders.
If, for any reason, 1996 gross billings (as defined above) are less than
$17,882,979, the amounts in (A) above will be reduced proportionately. For
example, if, for any reason, 1996 gross billings (as defined above) total
$16,882,979 then the payments will be reduced as follows:
$16,882,979/$17,882,979 = 94.4% X $5,100,000 = $4,794,000.
Any such reduction shall be credited against the next payment due under this
agreement until such credit is satisfied.
B. Amounts based on future commission payments:
During the Term of the CSM Representation Agreement (the "Representation
Agreement") in addition to the amounts described in (A) above, CSM will pay SBS
noncompete payments which will be calculated and paid as follows:
Beginning with the first full calendar quarter after the effective date of the
Representation Agreement, SBS will earn an amount equal to 20% of the
commissions earned by CSM (15% of net National Orders) in that quarter. Such
noncompete payment will be made to SBS 45 days after the applicable calendar
quarter so long as all amounts otherwise due from SBS under the Representation
Agreement have been received by CSM.
If, for any year in which noncompete payments are earned, National Orders (for
SBS stations in the aggregate) (as defined in the Representation Agreement)
exceed the prior year's National Orders by 12.5% and payments to CSM have been
calculated and paid at 17.5%, then the noncompete payable hereunder shall be
increased to 25% of the commissions earned and paid to CSM for that year.
2
<PAGE> 3
If, for any year in which noncompete payments are earned, National Orders (for
SBS stations in the aggregate) exceed the prior year's National Orders by 17.5%
and payments to CSM have been calculated and paid at 20%, then the noncompete
payable hereunder shall be increased to 30% of the commissions earned and paid
to CSM for that year.
If the above meets your understanding and approval, please sign all three copies
of this agreement before and return them to me.
Sincerely,
/s/ Ralph Gold
Ralph Gold
Accepted and Agreed to:
Spanish Broadcasting System, Inc.
By: /s/ Raul Alarcon, Jr.
Its: President and Chief Executive Officer
3
