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): July 16, 1996; (July 1, 1996)
AMERICAN RADIO SYSTEMS CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 0-26102 04-3196245
(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
116 Huntington Avenue
Boston, Massachusetts 02116
(Address of principal executive offices, including zip code)
(617) 375-7500
(Registrant's telephone number, including area code)
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Item 2. Acquisition and Disposition of Assets
1. On July 12, 1996, American Radio Systems Corporation, a Delaware corporation,
("American" or the "Company") consummated the transactions contemplated by the
Asset Purchase Agreement, dated April 22, 1996, with the Parker Communications -
Las Vegas, Inc., a Nevada corporation, pursuant to which the Registrant acquired
the assets of KMBX-FM, (formerly KMJZ-FM ), in Las Vegas, Nevada for
approximately $8.0 million. American has been operating the station pursuant to
a local marketing agreement ("LMA") since April 22, 1996. The acquisition was
financed through a $1.2 million escrow deposit, $.3 million in prepaid LMA fees,
the forgiveness of a $.1 million note payable and available cash.
2. On July 3, 1996, the transactions contemplated by the Agreement and Plan of
Merger, dated March 21, 1996, as amended ("the Merger Agreement"), by and
between American and Henry Broadcasting Company, a California corporation
("HBC") were consummated. Pursuant thereto, American acquired KUFO-FM and
KBBT-AM in Portland, Oregon, KYMX-FM and KCTC-AM in Sacramento, California,
KGOR-FM and KFAB-AM in Omaha, Nebraska, and KSKS-FM, KKDJ-FM, and KMJ-AM in
Fresno, California, for an aggregate purchase price of approximately $110.4
million. The acquisition was financed through a $5.0 million escrow deposit, the
issuance of 1,879,034 shares of Class A Common Stock with a Current Market Value
(as defined in the Merger Agreement) of approximately $64.0 million,
approximately $5.4 million in available cash, together with the assumption of
approximately $35.9 million in long term debt, which was paid by the Company at
closing. As part of a related transaction with the principal stockholder of HBC,
American acquired certain real estate used in the business of HBC for
approximately $2.0 million in cash and obtained a five-year option to acquire
certain other real estate for approximately $1.0 million.
3. On July 1, 1996, American consummated the Agreement of Sale, dated March 14,
1996, with Nationwide Communications Inc., an Ohio corporation, pursuant to
which American acquired the assets of KLUC-FM and KXNO-AM, serving Las Vegas,
Nevada, for approximately $11.0 million. The acquisition was financed through a
$1.0 million escrow deposit and available cash.
4. On July 1, 1996, American consummated the transactions contemplated by the
Asset Purchase Agreement, dated March 27, 1996, with Fuller-Jeffrey Broadcasting
Companies, Inc., a Maine corporation, pursuant to which American acquired the
assets of KSTE-AM serving Rancho Cordova, California for approximately $7.25
million. The acquisition was financed through a $0.35 million escrow deposit and
available cash. American has been operating the station pursuant to a LMA since
April 1, 1996.
Item 5. Other Events
On June 25, 1996, the transactions (the "Private Offering) contemplated by
the Purchase Agreement, dated June 19, 1996, by and among American and CS First
Boston Corporation, Alex. Brown & Sons Incorporated, Morgan Stanley & Co.
Incorporated and Smith Barney Inc. (CS First Boston Corporation, Alex. Brown &
Sons Incorporated, Morgan Stanley & Co. Incorporated and Smith Barney Inc. are
collectively referred to herein as the "Initial Purchasers") were consummated.
Pursuant thereto, American offered and sold to the Initial Purchasers, without
registration under the Securities Act of 1933, as amended, 2,750,000 Depositary
Shares (the "Depositary Shares") each representing a one-twentieth of a share of
its 7% Convertible Exchangeable Preferred Stock, $1,000 liquidation preference
(the "Convertible Exchangeable Preferred Stock"). Net proceeds to American from
the Private Offering were approximately $133,300,000.
The Convertible Exchangeable Preferred Stock is convertible into shares of
the Class A Common Stock, $.01 par value per share, of American (the "Common
Stock"), at a conversion price of $42.50 for each share of Common Stock (subject
to adjustment as described in the Certificate of Designation pursuant to which
the Convertible Exchangeable Preferred Stock was issued) and exchangeable at the
American's
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option after June 30, 1997 for its 7% Senior Subordinated Debentures due 2011
(the "Exchange Debentures") which are convertible into Common Stock on the same
terms as the Convertible Exchangeable Preferred Stock.
Attached herewith as Exhibits 99.1, 99.2, 99.3 and 99.4, respectively,
are (i) the Purchase Agreement, (ii) the Indenture, dated as of June 25, 1996,
by and between American and Bank of Montreal Trust Company, as Trustee, relating
to the Exchange Debentures (the "Indenture"), (iii) the Deposit Agreement, dated
as of June 25, 1996, by and among American, Harris Trust and Saving Bank, as
Depositary, and the Holders of the Depositary Receipts, relating to the
Depositary Shares (the "Deposit Agreement"), and (iv) the Certificate of
Designation of Preferences and Rights of the Convertible Exchangeable Preferred
Stock, as filed on June 24, 1996 with the Office of the Secretary of State of
the State of Delaware (the "Certificate of Designation"). Such exhibits are
hereby incorporated by reference herein.
Item 7. Financial Statements and Exhibits
(a) Financial Statements
As of the date of filing of this Current Report on 8-K, it is
impracticable for the Company to provide the financial statements required by
this Item 7(a). In accordance with Item 7(a) (4) of Form 8-K, such financial
statements shall be filed by amendment to this Form 8-K no later than 60 days
after July 16, 1996.
(b) Pro Forma Financial Information
As of the date of this filing of this Current Report on 8-K, it is
impracticable for the Company to provide the pro forma financial information
required by this Item 7(b). In accordance with Item 7(b) of Form 8-K, such
financial statements shall be filed by amendment to this Form 8-K no later than
60 days after July 16, 1996.
(c) Exhibits
Exhibit 2.1- Asset Purchase Agreement, dated April 22, 1996, with the
Parker Communications - Las Vegas, Inc., a Nevada corporation, and American.*
Exhibit 2.2 - Agreement and Plan of Merger, dated as of March 21, 1996,
by and between American and Henry Broadcasting Company, a California
corporation.*
Exhibit 2.3 - Amendment to Agreement and Plan of Merger, dated as of
July 3, 1996, by and between American and HBC.
Exhibit 2.4 - Agreement of Sale, dated March 14, 1996, by and between
American and Nationwide Communications Inc., an Ohio corporation.*
Exhibit 2.5 - Asset Purchase Agreement, dated March 27, 1996, with
Fuller-Jeffrey Broadcasting Companies, Inc., a Maine corporation.*
Exhibit 99.1 - Purchase Agreement, dated June 19, 1996, by and among
American and CS First Boston Corporation, Alex. Brown & Sons Incorporated,
Morgan Stanley & Co. Incorporated and Smith Barney Inc.
Exhibit 99.2 - Indenture, dated as of June 25, 1996, by and between
American and Bank of Montreal Trust Company, as Trustee, relating to the
Exchange Debentures.
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Exhibit 99.3 - Deposit Agreement, dated as of June 25, 1996, by and
among American, Harris Trust and Saving Bank, as Depositary, and the Holders of
the Depositary Receipts, relating to the Depositary Shares.
Exhibit 99.4 - Certificate of Designation of Preferences and Rights of
the Convertible Exchangeable Preferred Stock, as filed on June 24, 1996 with the
Office of the Secretary of State of the State of Delaware.
* Filed as Exhibits to American's Quarterly Report on Form 10-Q for the fiscal
quarter ended March 31, 1996.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
AMERICAN RADIO SYSTEMS CORPORATION
(Registrant)
By: /s/ Justin D. Benincasa
Justin D. Benincasa
Vice President and Chief Accounting
Officer
Date: July 16, 1996
AMENDMENT TO AGREEMENT AND PLAN OF MERGER
This Amendment (this "Amendment"), dated as of July 3, 1996, is made by and
between American Radio Systems Corporation, a Delaware corporation ("American"),
and Henry Broadcasting Company, a California corporation (the "Company" and,
together with American, the "parties"), to the Agreement and Plan of Merger (the
"Merger Agreement"), dated as of March 21, 1996, by and between the Company and
American.
RECITALS
WHEREAS, the parties wish to amend and waive certain provisions of the
Merger Agreement; and
WHEREAS, the Board of Directors of each of the Company and American has
heretofore authorized the respective officers of the company and American, to
the extent permitted by law to amend and waive the Merger Agreement;
NOW, THEREFORE, in consideration of the foregoing Recitals and the mutual
representations, warranties, covenants and agreements set forth herein, the
parties hereto, intending to be legally bound, do hereby covenant and agree as
follows:
1. Defined Terms. Capitalized terms used in this Amendment that are not
otherwise defined herein shall have the respective meanings prescribed therefor
in the Merger Agreement.
2. Section 1071 Acquisitions by American. American agrees, to the extent
permitted by the Code, to acquire sufficient radio broadcast stations prior to
December 31, 1996 and allocate not less than $5,300,000 of the purchase price of
such stations to the Company in order to enable it to take advantage of Section
1071 of the Code.
3. Transfer by Buckley of Shares to Employees.
American consents to the Company, prior to the Closing, issuing shares of
the Company Common Stock to key employees of the Company as follows:
Number of Shares of
Name of Transferee Company Common Stock
Caroline J. Erwin 3.75
Jeffrey D. Salgo 3.75
Alvin L. Smith 3.75
Sean C. Buckley 3
Courtney R. Zitelli 0.75
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Accordingly, the Company will have 1,015 shares, the other 1,000 shares being
owned by Charlton H. Buckley ("Buckley").
The Merger Agreement shall be, and it hereby is, deemed to be amended so
that in each instance in which a reference is made to the term "Company
Stockholder" it shall be amended to read the "Company Stockholders", which
shall, where the context so dictates, refer to all persons holding Company
Common Stock at the time of Closing as set forth above. For all purposes of
Sections 7.2(l) and 7.2(m), Article 9 and elsewhere in the Merger Agreement
where it is evident that the reference to "the Company Stockholder" refers only
to Buckley, however, then the Merger Agreement shall be, and it hereby is,
deemed amended to read so that it refers to "Charlton H. Buckley."
4. Portland Condominium Not Part of Assets to be Acquired by American. The
real property described in subparagraph 6 of Section 4.5(b) of the Final Company
Disclosure Statement described as "American Plaza Towers condominium family unit
lot 2022 and garage units GU-149 and GU-151 located at 2221/2022 SW First
Avenue, Portland, Oregon 97201" was and is not the property of the Company, was
and is owned by Buckley as an individual, and was and is not part of the assets
of the Company being acquired by American as a result of the Merger.
5. Closing Date. The Closing Date shall be July 3, 1996 and the Company
hereby waives any requirements of notice from American pursuant to the
provisions of Section 1.3 of the Merger Agreement.
6. Effective Time. The Effective Time shall be the filing of a Certificate
of Merger in accordance with the DGCL with the Secretary of State of Delaware;
provided, however, that notwithstanding the foregoing, the parties agree that
for financial reporting purposes the Merger shall be deemed to be effective as
of the opening of business on July 1, 1996. The parties agree to the filing of
the Certificate of Merger of Henry Broadcasting Co. and American Radio Systems
Corporation (the "Certificate of Merger") with the Office of the California
Secretary of State after the Closing Date, but within six months thereafter,
subject to the understanding that under the California Corporations Code the
effective date of the Merger shall be the date such Certificate of Merger is
effective under the laws of the State of Delaware.
7. Amendment of Section 3.1(b) of the Merger Agreement.
(a) The first sentence of Section 3.1(b) of the Merger Agreement shall be
amended by deleting the number "$8,000,000" inserting in lieu thereof the number
"$11,000,000".
(b) The second sentence of Section 3.1(b) of the Merger Agreement shall be
amended to delete the words "Common Stock Consideration" and inserting in lieu
thereof the words "Cash Consideration".
(c) The provisions of Section 3.1(b) of the Merger Agreement with respect
to the definition of the term "Current Market Price" shall be amended to delete
the phrase "the day immediately preceding such date," and inserting in lieu
thereof the words "June 28, 1996,".
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8. Amendment of Section 7.1(f) of the Merger Agreement. Section 7.1(f) of
the Merger Agreement shall be amended to read in its entirety as follows:
(f) American or one of its Subsidiaries shall have entered into
agreements, in form and substance reasonably satisfactory to American,
to acquire (i) the following real property interests of Affiliates of
the Company for consideration in addition to the Merger Consideration
as follows: (A) the building and real property located at 1110 E.
Olive Street, Fresno, California, for $1,000,000 and (B) the building
and real property located at 2040 SW First Avenue, Portland, Oregon,
for $1,000,000 and (ii) an option to acquire approximately 650 acres
of land located on Box Springs Mountain in San Bernardino County,
California for $1,000,000, such option to be effective for a period of
five (5) years following the Closing Date, and including management
rights which would allow the Company to retain and be responsible for
all income and expenses at such property.
9. Contribution of Property to the Company. On or prior to the Closing,
Buckley and any other Affiliate of the Company having any right, title or
interest thereto shall have transferred to the Company, at no cost to the
Company, all radio station equipment used by or useful to KSKS(FM)/KMJ(AM),
Fresno, California, in which they have any right, title or interest, free and
clear of all Liens, and the representations and warranties of the Company set
forth in Section 4.5 of the Merger Agreement shall be deemed to apply to such
equipment.
10. Current Asset Distribution. The Merger Agreement is amended, including
without limitation Section 4.16, to permit the Company to distribute to Buckley,
all cash and accounts receivable of the Company, subject, however, to his
payment of all accounts payable and other current liabilities, as of the time
immediately prior to the Effective Time, it being understood, however, that
American shall act as agent for, and at the expense of, Buckley in the
collection of such accounts receivable and remit them to him as collected in the
ordinary course of business; provided, however, that American may, in its sole
and absolute discretion, resign at any time from acting in such capacity.
11. Amendments of Closing Conditions.
(a) Section 7.2(d) of the Merger Agreement shall be amended to insert
before the word "report" on the second line, the words "form of unsigned".
(b) Sections 7.2(i) and 7.3(f) of the Merger Agreement shall be
deleted in their entirety.
(c) Section 7.3(b) of the Merger Agreement shall be amended to delete
the phrase "and of FCC counsel for American, in form, scope and substance
reasonably satisfactory to the Company and its counsel".
12. Reaffirmation of Merger Agreement; Incorporation of Provisions. Except
as expressly amended, waived or modified by this Agreement, the Merger Agreement
is hereby reaffirmed by the parties, and the same shall remain in full force and
effect. The provisions of Article 10 of the Merger Agreement are incorporated
herein by reference with the same force and effect as though set forth herein in
their entirety.
13. Counterparts. This Agreement may be executed in several counterparts,
each of which shall be deemed an original, but all of which shall constitute one
and the same instrument, binding upon all of the parties.
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IN WITNESS WHEREOF, American and the Company have caused this Agreement to
be executed as of the date first written above.
AMERICAN RADIO SYSTEMS CORPORATION
By:_________________________________________
HENRY BROADCASTING COMPANY
By:_________________________________________
Charlton H. Buckley
Chairman and Chief Executive Officer
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2,500,000 Depositary Shares
AMERICAN RADIO SYSTEMS CORPORATION
Each Representing a One-Twentieth Interest in a Share of
7% Convertible Exchangeable Preferred Stock
PURCHASE AGREEMENT
June 19, 1996
CS FIRST BOSTON CORPORATION
ALEX. BROWN & SONS INCORPORATED
MORGAN STANLEY & CO. INCORPORATED
SMITH BARNEY INC.,
c/o CS First Boston Corporation,
Park Avenue Plaza,
New York, N.Y. 10055
Dear Sirs:
1. Introductory. American Radio Systems Corporation, a Delaware
corporation (the "Company"), proposes, subject to the terms and conditions
stated herein, to issue and sell to the several initial purchasers named in
Schedule A hereto (the "Purchasers") 2,500,000 Depositary Shares (the "Firm
Securities"), each representing a one-twentieth interest in a share of its 7%
Convertible Exchangeable Preferred Stock, stated liquidation preference $1,000
per share (the "Offered Preferred Stock"), and also proposes to grant to the
Purchasers an option, exercisable from time to time by CS First Boston
Corporation to purchase up to an additional 250,000 Depositary Shares (the
"Optional Securities") (the Firm Securities and the Optional Securities which
the Purchasers may elect to purchase pursuant to Section 3 hereof are herein
collectively called the "Offered Securities"). The Depositary Shares will be
evidenced by Depositary Receipts to be issued pursuant to a Deposit Agreement,
dated as of June 25, 1996 (the "Deposit Agreement"), to be entered into among
the Company and Harris Trust and Savings Bank, as depositary (the "Depositary"),
and all holders from time to time of the Depositary Receipts. The Offered
Preferred Stock is convertible, in whole or in part at the option of the holder
thereof, into shares of the Company's Class A Common Stock, par value $.01 per
share ("Class A Common Stock"), and is exchangeable, in whole but not in part at
the option of the Company, for its 7% Convertible Subordinated Debentures Due
2011 (the "Exchange Debentures") to be issued under an indenture (the
"Indenture") between the Company and Bank of Montreal Trust Company, as Trustee.
The United States Securities Act of 1933 is herein referred to as the
"Securities Act."
The Company has entered into a Credit Agreement, dated as of December
19, 1995, with The Bank of New York and the co-agents and other lenders named
therein, as amended by Amendment No. 1, dated as of February 1, 1996 and
Amendment No. 2 (the "Credit Agreement Amendment"), dated as of June 19, 1996
(as so amended, the "Credit Agreement"). The Company has also issued 9% Senior
Subordinated Notes due 2006 under an indenture, dated as of February 1, 1996 (as
heretofore amended, the "Senior Note Indenture"), among the Company, American
Radio Systems License Corp. and Fleet National Bank (formerly known as Fleet
National Bank of Connecticut), as trustee, as amended by the Supplemental
Indenture, dated as of May 31, 1996.
<PAGE>
The Company hereby agrees with the several Purchasers as follows:
2. Representations and Warranties of the Company. The Company
represents and warrants to, and agrees with, the several Purchasers that:
(a) A preliminary offering circular and an offering circular
relating to the Offered Securities to be offered by the Purchasers have
been prepared by the Company. Such preliminary offering circular and
offering circular, as supplemented as of the date of this Agreement,
together with the documents listed in Schedule B hereto and any other
document approved by the Company for use in connection with the
contemplated resale of the Offered Securities are hereinafter
collectively referred to as the "Offering Document". On the date of
this Agreement, the Offering Document does not include any untrue
statement of a material fact or omit to state any material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. The preceding
sentence does not apply to statements in or omissions from the Offering
Document based upon written information furnished to the Company by any
Purchaser through CS First Boston Corporation ("CSFBC") specifically
for use therein, it being understood and agreed that the only such
information is that described as such in Section 7(b). Except as
disclosed in the Offering Document, on the date of this Agreement, the
Company's Annual Report on Form 10-K most recently filed with the
Securities and Exchange Commission (the "Commission") and all
subsequent reports (collectively, the "Exchange Act Reports") which
have been filed by the Company with the Commission or sent to
stockholders pursuant to the Securities Exchange Act of 1934 (the
"Exchange Act") do not include 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 the light of the
circumstances under which they were made, not misleading. Such
documents, when they were filed with the Commission, conformed in all
material respects to the requirements of the Exchange Act and the rules
and regulations of the Commission thereunder.
(b) The Company has been duly incorporated and is an existing
corporation in good standing under the laws of the State of Delaware,
with power and authority (corporate and other) to own its properties
and conduct its business as described in the Offering Document; and the
Company is duly qualified to do business as a foreign corporation in
good standing in all other jurisdictions in which its ownership or
lease of property or the conduct of its business requires such
qualification.
(c) Each subsidiary of the Company has been duly incorporated
and is an existing corporation in good standing under the laws of the
jurisdiction of its incorporation, with power and authority (corporate
and other) to own its properties and conduct its business as described
in the Offering Document; and each subsidiary of the Company is duly
qualified to do business as a foreign corporation in good standing in
all other jurisdictions in which its ownership or lease of property or
the conduct of its business requires such qualification; all of the
issued and outstanding capital stock of each subsidiary of the Company
has been duly authorized and validly issued and is fully paid and
nonassessable; and, except for the pledge pursuant to the Credit
Agreement, the capital stock of each subsidiary owned by the Company,
directly or through subsidiaries, is owned free from liens,
encumbrances and defects.
(d) The Offered Preferred Stock and all other outstanding
shares of capital stock of the Company have been duly authorized; all
outstanding shares of Class A Common Stock and other capital stock of
the Company are, and, when the Offered Securities have been delivered
and paid for in accordance with this Agreement on each Closing Date (as
hereinafter defined) and the Offered Preferred Stock relating thereto
has been issued and deposited with the Depositary as contemplated in
the Deposit Agreement, such Offered Preferred Stock will have been,
validly issued, fully paid and nonassessable and will conform to the
respective descriptions thereof contained in the Offering Document; and
the stockholders of the Company have no preemptive rights with respect
to the Offered
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Securities or the Offered Preferred Stock; and there are no
restrictions on transfers of the Offered Securities, the Offered
Preferred Stock, the Exchange Debentures or the Underlying Shares (as
hereinafter defined) except as required by (A) Rule 144A under the
Securities Act or otherwise described under "Transfer Restrictions" in
the Offering Document, (B) the restrictions on transfer contained in
the Purchaser's Letter (as hereinafter defined) with respect to
Securities (as defined therein) purchased by Institutional Accredited
Investors (as hereinafter defined) and (C) the Deposit Agreement and
the Indenture, all as described in the Offering Document under "The
Offering", "Risk Factors--Factors Relating to the Securities--Lack of
Trading Market for the Depositary Shares; Transfer Restrictions",
"Description of the Depository Shares--Book-Entry Only Issuance--The
Depository Trust Company", "Plan of Distribution" and "Transfer
Restrictions".
(e) The Deposit Agreement has been duly authorized, executed
and delivered by the Company and constitutes a valid and legally
binding obligation of the Company enforceable in accordance with its
terms, subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors' rights and to general equity
principles; upon issuance by the Depositary on each Closing Date of
Depositary Receipts evidencing Offered Securities in accordance with
the Deposit Agreement, such Depositary Receipts will be duly and
validly issued and will entitle the holders thereof to the rights
specified therein and in the Deposit Agreement; and the Deposit
Agreement and the Depositary Receipts conform to the descriptions
thereof in the Offering Document.
(f) The Indenture has been duly authorized by the Company; the
Exchange Debentures have been duly authorized; when the Exchange
Debentures are delivered in exchange for the Offered Preferred Stock
pursuant to the terms of the Offered Preferred Stock, the Indenture
will have been duly executed and delivered by the Company, the Exchange
Debentures will have been duly executed, authenticated, issued and
delivered and will conform to the description thereof contained in the
Offering Document and the Indenture, and the Exchange Debentures will
constitute valid and legally binding obligations of the Company,
enforceable in accordance with their terms, subject to bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and similar
laws of general applicability relating to or affecting creditors'
rights and to general equity principles.
(g) When the Offered Securities are delivered and paid for
pursuant to this Agreement on each Closing Date, the related Offered
Preferred Stock will be convertible into the shares of Class A Common
Stock ("Underlying Shares") of the Company in accordance with their
terms; when the Exchange Debentures are delivered in exchange for the
Offered Preferred Stock pursuant to the terms of the Offered Preferred
Stock, the Exchange Debentures will be convertible into Underlying
Shares in accordance with the terms of the Indenture; the Underlying
Shares initially issuable upon conversion of such Offered Preferred
Stock and the Exchange Debentures have been duly authorized and
reserved for issuance upon such conversion and, when issued upon such
conversion, will be validly issued, fully paid and nonassessable; and
the stockholders of the Company have no preemptive rights with respect
to the Underlying Shares.
(h) Except as disclosed in the Offering Document, there are no
contracts, agreements or understandings between the Company and any
person that would give rise to a valid claim against the Company or any
Purchaser for a brokerage commission, finder's fee or other like
payment in connection with the offering of the Offered Securities.
(i) No consent, approval, authorization, or order of, or
filing with, any governmental agency or body or any court is required
for the consummation of the transactions contemplated by this
Agreement, the Indenture or the Credit Agreement Amendment in
connection with the issuance and sale of the Offered Securities or
Offered Preferred Stock by the Company or the issuance and delivery
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of the Exchange Debentures or the Underlying Shares, except as may be
required by the Blue Sky laws of the several states of the Unites
States.
(j) The execution, delivery and performance of the Indenture
by the Company, the Deposit Agreement, this Agreement and the Credit
Agreement Amendment, the issuance and sale of the Offered Securities
and Offered Preferred Stock and compliance with the respective terms
and provisions thereof will not result in a breach or violation of any
of the terms and provisions of, or constitute a default under, any
statute, any rule, regulation or order of any governmental agency or
body or any court, domestic or foreign, having jurisdiction over the
Company or any subsidiary of the Company or any of their properties,
the Credit Agreement, the Senior Note Indenture or any other agreement
or instrument to which the Company or any such subsidiary is a party or
by which the Com pany or any such subsidiary is bound or to which any
of the properties of the Company or any such subsidiary is subject, or
the charter or by-laws of the Company or any such subsidiary, and the
Company has full power and authority to authorize, issue and sell the
Offered Securities and the Offered Preferred Stock as contemplated by
this Agreement and to authorize, issue and deliver the Exchange
Debentures as contemplated by the terms of the Offered Preferred Stock.
(k) Each of the radio stations owned, operated, programmed,
marketed or for which advertising time is sold by the Company and its
subsidiaries is validly licensed by the Federal Communications
Commission (the "FCC") and no administrative or judicial proceedings
are pending or, to the knowledge of the Company or its subsidiaries,
threatened by or pending before the FCC with respect to such licenses;
the Company and its subsidiaries possess adequate certificates,
authorizations or permits which are in full force and effect issued by
other appropriate governmental agencies or bodies necessary to conduct
the business now operated by them and have not received any notice of
proceedings relating to the revocation or modification of any such
certificate, authority or permit that, if determined adversely to the
Company or any of its subsidiaries, would individually or in the
aggregate have a material adverse effect on the Company and its
subsidiaries taken as a whole.
(l) This Agreement has been duly authorized, executed and
delivered by the Company.
(m) Except as disclosed in the Offering Document, the Company
and its subsidiaries have good and marketable title to all real
properties and all other properties and assets owned by them, in each
case free from liens, encumbrances and defects that would materially
affect the value thereof or materially interfere with the use made or
to be made thereof by them; and except as disclosed in the Offering
Document, the Company and its subsidiaries hold any leased real or
personal property under valid and enforceable leases with no exceptions
that would materially interfere with the use made or to be made thereof
by them.
(n) No labor dispute with the employees of the Company or any
subsidiary exists or, to the knowledge of the Company, is imminent that
might have a material adverse effect on the Company and its
subsidiaries taken as a whole.
(o) The Company and its subsidiaries own, possess or can
acquire on reasonable terms, ade quate trademarks, trade names and
other rights to inventions, know-how, patents, copyrights, confiden
tial information and other intellectual property (collectively,
"intellectual property rights") necessary to conduct the business now
operated by them, or presently employed by them, and have not received
any notice of infringement of or conflict with asserted rights of
others with respect to any intellectual property rights that, if
determined adversely to the Company or any of its subsidiaries, would
individually or in the aggregate have a material adverse effect on the
Company and its subsidiaries taken as a whole.
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(p) Except as disclosed in the Offering Document, neither the
Company nor any of its subsidiaries is in violation of any statute, any
rule, regulation, decision or order of any governmental agency or body
or any court, domestic or foreign, relating to the use, disposal or
release of hazardous or toxic substances or relating to the protection
or restoration of the environment or human exposure to hazardous or
toxic substances (collectively, "environmental laws"), owns or operates
any real property contaminated with any substance that is subject to
any environmental laws, is liable for any off-site disposal or
contamination pursuant to any environmental laws, or is subject to any
claim relating to any environmental laws, which violation,
contamination, liability or claim would individually or in the
aggregate have a material adverse effect on the Company and its
subsidiaries taken as a whole; and the Company is not aware of any
pending investigation which might lead to such a claim.
(q) Except as disclosed in the Offering Document, there are no
pending actions, suits or proceedings against or affecting the Company,
any of its subsidiaries or any of their respective proper ties that, if
determined adversely to the Company or any of its subsidiaries, would
individually or in the aggregate have a material adverse effect on the
condition (financial or other), business, properties or results of
operations of the Company and its subsidiaries taken as a whole, or
would materially and adversely affect the ability of the Company to
perform its obligations under the Deposit Agreement, the Indenture or
this Agreement, or which are otherwise material in the context of the
sale of the Offered Securities; and no such actions, suits or
proceedings are threatened or, to the Company's knowledge,
contemplated.
(r) The financial statements included in the Offering Document
present fairly the financial position of the Company and its
consolidated subsidiaries as of the dates shown and their results of
operations and cash flows for the periods shown, and such financial
statements have been prepared in conformity with the generally accepted
accounting principles in the United States applied on a consistent
basis; and the assumptions used in preparing the estimated pro forma
financial information included in the Offering Document provide a
reasonable basis for presenting the significant effects directly
attributable to the transactions or events described therein, the
related pro forma adjustments give appropriate effect to those
assumptions, and the pro forma columns therein reflect the proper
application of those adjustments to the corresponding historical
financial statement amounts.
(s) Except as disclosed in the Offering Document, since the
date of the latest audited financial statements included in the
Offering Document there has been no material adverse change, nor any
development or event involving a prospective material adverse change,
in the condition (financial or other), business, properties or results
of operations of the Company and its subsidiaries taken as a whole,
and, except as disclosed in or contemplated by the Offering Document,
there has been no dividend or distribution of any kind declared, paid
or made by the Company on any class of its capital stock.
(t) The Company is not an open-end investment company, unit
investment trust or face- amount certificate company that is or is
required to be registered under Section 8 of the United States
Investment Company Act of 1940 (the "Investment Company Act"), nor is
it a closed-end investment company required to be registered, but not
registered, thereunder; and the Company is not and, after giving effect
to the offering and sale of the Offered Securities and the application
of the proceeds thereof as described in the Offering Document, will not
be an "investment company" as defined in the Investment Company Act.
(u) No securities of the same class (within the meaning of
Rule 144A(d)(3) under the Securi ties Act) as the Offered Securities,
Offered Preferred Stock or Exchange Debentures are listed on any
national securities exchange registered under Section 6 of the Exchange
Act or quoted in a U.S. automated inter-dealer quotation system.
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(v) The offer and sale of the Offered Securities and Offered
Preferred Stock in the manner contemplated by this Agreement will be
exempt from the registration requirements of the Securities Act by
reason of Section 4(2) thereof and Regulation S thereunder; and it is
not necessary to qualify an indenture in respect of the Exchange
Debentures under the United States Trust Indenture Act of 1939 (the
"Trust Indenture Act").
(w) Neither the Company, nor any of its affiliates, nor any
person acting on its or their behalf (i) has, within the six-month
period prior to the date hereof, offered or sold in the United States
or to any U.S. person (as such terms are defined in Regulation S under
the Securities Act) the Offered Securities, any Offered Preferred
Stock, any Exchange Debentures or any Underlying Shares or any security
of the same class or series as any of the foregoing, any instruments
representing interests therein or any depositary shares representing
the right to receive any such securities, other than (x) offers and
sales of Class A Common Stock (but not the Underlying Shares) pursuant
to registration statement no. 333-00270 on February 1, 1996 and as
consideration in privately negotiated acquisitions and mergers, and (y)
offers and sales of Class A Common Stock and Class B Common Stock
pursuant to employee benefit plans, or (ii) has offered or will offer
or sell the Offered Securities, Offered Preferred Stock, Exchange
Debentures or Underlying Shares (A) in the United States by means of
any form of general solicitation or general advertising within the
meaning of Rule 502(c) under the Securities Act or (B) with respect to
any such securities sold in reliance on Rule 903 of Regulation S
("Regulation S") under the Securities Act, by means of any directed
selling efforts within the meaning of Rule 902(b) of Regulation S. The
Company, its affiliates and any person acting on its or their behalf
have complied and will comply with the offering restrictions
requirement of Regulation S. The Company has not entered and will not
enter into any contractual arrangement with respect to the distribution
of the Offered Securities, Offered Preferred Stock, Exchange Debentures
or Underlying Shares except for this Agreement.
(x) The Company is subject to Section 13 or 15(d) of the
Exchange Act.
3. Purchase, Sale and Delivery of Offered Securities. On the basis of
the representations, warranties and agreements herein contained, but subject to
the terms and conditions herein set forth, the Company agrees to sell to the
Purchasers, and the Purchasers agree, severally and not jointly, to purchase
from the Company, at a purchase price of $48.50 per Depositary Share plus
accumulated dividends, if any, from June 25, 1996, the respective numbers of
Firm Securities set forth opposite the names of the several Purchasers in
Schedule A hereto.
The Company will deliver against payment of the purchase price the Firm
Securities in the form of one or more permanent global Securities in definitive
form (the "Firm Global Securities") deposited with the Depository as custodian
for The Depository Trust Company ("DTC") and registered in the name of Cede &
Co., as nominee for DTC. Interests in any permanent global Securities will be
held only in book-entry form through DTC, except in the limited circumstances
described in the Offering Document. Payment for the Firm Securities shall be
made by the Purchasers in Federal (same day) funds by official check or checks
or wire transfer to an account previously designated to CSFBC by the Company at
a bank acceptable to CSFBC drawn to the order of the Company at the office of
Sullivan & Cromwell, 125 Broad Street, New York, New York at 9:30 A.M. (New York
time), on June 25, 1996, or at such other time not later than seven full
business days thereafter as CSFBC and the Company determine, such time being
herein referred to as the "First Closing Date", against delivery to the
Depositary as custodian for DTC of the Firm Global Securities representing all
of the Firm Securities. The Firm Global Securities will be made available for
checking at the New York office of the Depositary at least 24 hours prior to the
First Closing Date.
In addition, upon written notice from CSFBC given to the Company from
time to time not more than 30 days subsequent to the First Closing Date, the
Purchasers may purchase all or less than all of the Optional Securities at the
purchase price per Depositary Share (including any accumulated dividends thereon
to the related
6
<PAGE>
Optional Closing Date) to be paid for the Firm Securities. The Company agrees to
sell to the Purchasers the number of Optional Securities specified in such
notice and the Purchasers agree, severally and not jointly, to purchase such
Optional Securities. Such Optional Securities shall be purchased from the
Company for the account of each Purchaser in the same proportion as the number
of Firm Securities set forth opposite such Purchaser's name in Schedule A hereto
bears to the total number of Firm Securities (subject to adjustment by CSFBC to
eliminate fractions) and may be purchased by the Purchasers only for the purpose
of covering over-allotments made in connection with the sale of the Firm
Securities. No Optional Securities shall be sold or delivered unless the Firm
Securities previously have been, or simultaneously are, sold and delivered. The
right to purchase the Optional Securities or any portion thereof may be
exercised from time to time and to the extent not previously exercised may be
surrendered and terminated at any time upon notice by CSFBC to the Company.
Each time for the delivery of and payment for the Optional Securities,
being herein referred to as the "Optional Closing Date", which may be the First
Closing Date (the First Closing Date and each Optional Closing Date, if any,
being sometimes referred to as a "Closing Date"), shall be determined by CSFBC
on behalf of the several Purchasers but shall not be later than seven full
business days after written notice of election to purchase Optional Securities
is given. The Company will deliver against payment of the purchase price the
Optional Securities being purchased on each Optional Closing Date in the form of
one or more permanent global Securities in definitive form (each, an "Optional
Global Security") deposited with the Depositary as custodian for DTC and
registered in the name of Cede & Co., as nominee for DTC. Payment for such
Optional Securities shall be made by the Purchasers in Federal (same day) funds
by official check or checks or wire transfer to an account previously designated
to CSFBC by the Company at a bank acceptable to CSFBC drawn to the order of the
Company at the above office of Sullivan & Cromwell, against delivery to the
Depositary as custodian for DTC of the Optional Global Securities representing
all of the Optional Securities being purchased on such Optional Closing Date.
Notwithstanding the foregoing, any Offered Securities sold in reliance
on Regulation S or sold to Institutional Accredited Investors (as hereinafter
defined) pursuant to Section 4(c) shall be issued in definitive, fully
registered form and shall bear the legend relating thereto set forth under
"Transfer Restrictions" in the Offering Document, but shall be paid for in the
same manner as any Offered Securities to be purchased by the Purchasers
hereunder and to be offered and sold by them in reliance on Rule 144A under the
Securities Act.
4. Representations by Purchasers; Resale by Purchasers. (a) Each
Purchaser severally represents and warrants to the Company that it is an
"accredited investor" within the meaning of Regulation D under the Securities
Act.
(b) Each Purchaser severally acknowledges that neither the
Offered Securities, the Offered Preferred Stock, the Exchange
Debentures nor the Underlying Shares (collectively, the "Restricted
Securities") have been registered under the Securities Act and may not
be offered or sold within the United States or to, or for the account
or benefit of, U.S. persons except in accordance with Regula tion S or
pursuant to an exemption from the registration requirements of the
Securities Act. Each Purchaser severally represents and agrees that it
has offered and sold the Restricted Securities, and will offer and sell
the Restricted Securities (i) as part of its distribution at any time
and (ii) otherwise until 40 days after the later of the commencement of
the offering and the latest Closing Date, only in accordance with Rule
903 or Rule 144A under the Securities Act ("Rule 144A") or in the case
of CSFBC or any other Purchaser authorized by CSFBC to a limited number
of Institutional Accredited Investors in accordance with subsection
(c). Accordingly, neither such Purchaser nor its affiliates, nor any
persons acting on its or their behalf, have engaged or will engage in
any directed selling efforts with respect to the Restricted Securities,
and such Purchaser, its affiliates and all persons acting on its or
their behalf have complied and will comply with the offering
restrictions requirement of Regulation S. Each Purchaser severally
agrees that, at or prior to confirmation of sale of the Restricted
Securities, other than a sale pursuant to Rule 144A or a sale to an
Institutional Accredited Investor in accordance with subsection (c),
such Purchaser will have sent to each distributor, dealer or person
7
<PAGE>
receiving a selling concession, fee or other remuneration that
purchases the Offered Securities from it during the restricted period a
confirmation or notice to substantially the following effect:
"The Securities covered hereby have not been registered under
the U.S. Securities Act of 1933 (the "Securities Act") and may
not be offered or sold within the United States or to, or for
the account or benefit of, U.S. persons (i) as part of their
distribution at any time or (ii) otherwise until 40 days after
the date of the commencement of the offering and the closing
date, except in either case in accor dance with Regulation S
(or Rule 144A if available) under the Securities Act. Terms
used above have the meanings given to them by Regulation S."
Terms used in this subsection (b) have the meanings given to them by
Regulation S.
(c) CSFBC and any other Purchaser authorized by CSFBC may
offer and sell Offered Securities in definitive, fully registered form
to a limited number of institutions, each of which is reasonably
believed by the applicable Purchaser to be an "accredited investor"
within the meaning of Rule 501(a)(1), (2) or (3) under the Securities
Act or an entity in which all of the equity owners are accredited
investors within the meaning of Rule 501(a)(1), (2) or (3) under the
Securities Act (each, an "Institutional Accredited Investor"); provided
that each such Institutional Accredited Investor executes and delivers
to such Purchaser and the Company, prior to the consummation of any
sale of Offered Securities to such Institutional Accredited Investor, a
Purchaser's Letter in substantially the form attached hereto as
Schedule F (a "Purchaser's Letter").
(d) Each Purchaser severally agrees that it and each of its
affiliates has not entered and will not enter into any contractual
arrangement with respect to the distribution of the Restricted
Securities except for any such arrangements with the other Purchasers
or affiliates of the other Purchasers, or with the prior written
consent of the Company.
(e) Each Purchaser severally agrees that it and each of its
affiliates will not offer or sell the Restricted Securities in the
United States by means of any form of general solicitation or general
advertising within the meaning of Rule 502(c) under the Securities Act,
including, but not limited to (i) any advertisement, article, notice or
other communication published in any newspaper, magazine or similar
media or broadcast over television or radio, or (ii) any seminar or
meeting whose attendees have been invited by any general solicitation
or general advertising. Each Purchaser severally agrees, with respect
to resales by it of Offered Securities purchased from the Company made
in reliance on Rule 144A, other than through the National Association
of Securities Dealers, the Private Offerings, Resale and Trading
through Automated Linkages ("PORTAL") market, to deliver either with
the confirmation of such resale or otherwise prior to settlement of
such resale a notice to the effect that the resale of such Offered
Securities has been made in reliance upon the exemption from the
registration requirements of the Securities Act provided by Rule 144A.
(f) Each of the Purchasers severally represents and agrees
that (i) it has not offered or sold, and prior to the date six months
after the date of issue of the Restricted Securities will not offer or
sell, any Restricted Securities to any persons in the United Kingdom
except to persons whose ordinary activities involve them in acquiring,
holding, managing or disposing of investments (as principal or agent)
for purposes of their businesses or otherwise in circumstances which
have not resulted and will not result in an offer to the public in the
United Kingdom within the meaning of the Public Offers of Securities
Regulations 1995, (ii) it has complied and will comply with all
applicable provisions of the Financial Services Act 1986 with respect
to anything done by it in relation to the Restricted Securities in,
from or otherwise involving the United Kingdom, and (iii) it has only
issued or passed on and will only issue or pass on in the United
Kingdom any document received by it in connection with the issue of the
Restricted Securities to a person who is of a kind described in Article
11(3) of the Financial
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<PAGE>
Services Act 1986 (Investment Advertisements) (Exemptions) Order 1995
or is a person to whom the document may otherwise lawfully be issued or
passed on.
5. Certain Agreements of the Company. The Company agrees with the
several Purchasers that:
(a) The Company will advise CSFBC promptly of any proposal to
amend or supplement the Offering Document and will not effect such
amendment or supplementation without CSFBC's consent. If, at any time
prior to the completion of the resale of the Offered Securities by the
Purchasers, any event occurs as a result of which the Offering Document
as then amended or supplemented would include an untrue statement of a
material fact or omit to state any material fact necessary in order to
make the statements therein, in the light of the circumstances under
which they were made, not misleading, the Company promptly will notify
CSFBC of such event and promptly will prepare, at its own expense, an
amendment or supplement which will correct such statement or omission.
Neither CSFBC's consent to, nor the Purchasers' delivery to offerees or
investors of, any such amendment or supplement shall constitute a
waiver of any of the conditions set forth in Section 6.
(b) The Company will furnish to CSFBC copies of any
preliminary offering circular, the Offering Document and all amendments
and supplements to such documents, in each case as soon as available
and in such quantities as CSFBC requests, and the Company will furnish
to CSFBC on the date hereof five copies of the Offering Document signed
by a duly authorized officer of the Company, one of which will include
the independent accountants' reports therein manually signed by such
independent accountants. At any time when the Company is not subject to
Section 13 or 15(d) of the Exchange Act, the Company will promptly
furnish or cause to be furnished to CSFBC (and, upon request, to each
of the other Purchasers) and, upon request of holders and prospective
purchasers of the Offered Securities, the Offered Preferred Stock, the
Exchange Debentures and the Underlying Shares, to such holders and
purchasers, copies of the information required to be delivered to
holders and prospective purchasers of such securities pursuant to Rule
144A(d)(4) under the Securities Act (or any successor provision
thereto) in order to permit compliance with Rule 144A in connection
with resales by such holders of such securities. The Company will pay
the expenses of printing and distributing to the Purchasers (and such
holders and prospective purchasers) all such documents.
(c) The Company will arrange for the qualification of the
Offered Securities for sale and the determination of their eligibility
for investment under the laws of such jurisdictions in the United
States and Canada as CSFBC designates and will continue such
qualifications in effect so long as required for the resale of the
Offered Securities by the Purchasers, provided that the Company will
not be required to qualify as a foreign corporation or to file a
general consent to service of process in any such state or subject
itself to taxation generally in any jurisdiction.
(d) During the period of five years hereafter, the Company
will furnish to CSFBC and, upon request, to each of the other
Purchasers, as soon as practicable after the end of each fiscal year, a
copy of its annual report to stockholders for such year; and the
Company will furnish to CSFBC and, upon request, to each of the other
Purchasers (i) as soon as available, a copy of each report and any
definitive proxy statement of the Company filed with the Commission
under the Exchange Act or mailed to stockholders; and (ii) from time to
time, such other information concerning the Company as CSFBC may
reasonably request.
(e) During the period of three years after the later of the
First Closing Date and the last Optional Closing Date, the Company
will, upon request, furnish to CSFBC, each of the other Purchasers and
any holder of Restricted Securities a copy of the restrictions on
transfer applicable to the Restricted Securities.
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<PAGE>
(f) During the period of three years after the later of the
First Closing Date and the last Optional Closing Date, the Company will
not, and will not permit any of its affiliates (as defined in Rule 144
under the Securities Act) to, resell any of the Restricted Securities
that have been reacquired by any of them.
(g) During the period of three years after the later of the
First Closing Date and the last Optional Closing Date, the Company will
not be or become, an open-end investment company, unit investment trust
or face-amount certificate company that is or is required to be
registered under Section 8 of the Investment Company Act, and is not,
and will not be or become, a closed-end investment company required to
be registered, but not registered, under the Investment Company Act.
(h) The Company will pay all expenses incidental to the
performance of its obligations under this Agreement, the Indenture and
the Deposit Agreement, including (i) the fees and expenses of the
Trustee, the registrar, transfer and conversion agent of the Offered
Preferred Stock, the Depositary and their professional advisers; (ii)
all expenses in connection with the execution, issue, authentication,
packaging and initial delivery of the Offered Securities, the
preparation and printing of this Agreement, the Offered Securities, the
Offered Preferred Stock, the Underlying Shares, the Indenture, the
Deposit Agreement, the Offering Document and amendments and supplements
thereto, and any other document relating to the issuance, offer, sale
and delivery of the Offered Securities, the Offered Preferred Stock,
the Underlying Shares and the Exchange Debentures; (iii) the cost of
qualifying the Offered Securities for trading in the PORTAL market and
any expenses incidental thereto; and (iv) the cost of any advertising
approved by the Company in connection with the issue of the Offered
Securities. The Company will also pay or reimburse the Purchasers (to
the extent incurred by them) for any expenses (including fees and
disbursements of counsel) incurred in connection with qualification of
the Offered Securities for sale under the laws of such jurisdictions in
the United States and Canada as CSFBC designates and the printing of
memoranda relating thereto, for any fees charged by investment rating
agencies for the rating of the Restricted Securities, for any travel
expenses of the Company's officers and employees and any other expenses
of the Company in connection with attending or hosting meetings with
prospective purchasers of the Offered Securities and for expenses
incurred in distributing preliminary offering circulars and the
Offering Document (including any amendments and supplements thereto) to
the Purchasers.
(i) In connection with the offering, until CSFBC shall have
notified the Company and the other Purchasers of the completion of the
resale of the Offered Securities, neither the Company nor any of its
affiliates has or will, either alone or with one or more other persons,
bid for or purchase for any account in which it or any of its
affiliates has a beneficial interest any, Offered Securities, Offered
Preferred Stock, Underlying Shares or Exchange Debentures or any
securities of the same class as any of the foregoing (collectively,
"Subject Securities") or attempt to induce any person to purchase any
Subject Securities; and neither it nor any of its affiliates will make
bids or purchases for the purpose of creating actual, or apparent,
active trading in, or of raising the price of, any Subject Securities.
(j) The Company will comply with the terms of the Deposit
Agreement so that the Depositary Receipts evidencing the Offered
Securities will be executed by the Depositary and delivered to the
Purchasers pursuant to this Agreement at the applicable Closing Date.
(k) For a period of 90 days after the date of the initial
offering of the Offered Securities by the Purchasers, the Company will
not offer, sell, contract to sell, pledge or otherwise dispose of,
directly or indirectly, or file with the Commission a registration
statement under the Securities Act relating to (a) any preferred stock
or any other securities of the Company which are substantially similar
to any of the Restricted Securities, (b) any shares of Class A Common
Stock or any other capital stock of the Company, or (c) any other
securities convertible into or exchangeable or exercisable for
preferred stock or substantially similar securities of the Company, or
publicly disclose
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<PAGE>
the intention to make any such offer, sale, pledge or disposal, without
the prior written consent of CSFBC, except for any such offer, sale,
contract to sell, pledge or other disposition of (i) any of the
Restricted Securities, (ii) securities issued or delivered upon
conversion, exchange or exercise of any other securities of the Company
outstanding on the date hereof, (iii) capital stock of the Company
issued pursuant to benefit or other incentive plans maintained for its
officers, directors or employees or (iv) securities issued in
connection with mergers, acquisitions or similar transactions. The
Company will deliver to the Purchasers prior to the date hereof
"lock-up agreements" of the directors, officers and certain
shareholders of the Company also agreeing not to make any such offer,
sale, contract to sell or disposition for a period of 90 days after the
date of the initial offering of the Offered Securities by the
Purchasers. The Company will not at any time offer, sell, contract to
sell, pledge or otherwise dispose of, directly or indirectly, any
securities under circumstances where such offer, sale, pledge, contract
or disposition would cause the exemption afforded by Section 4(2) of
the Securities Act or the safe harbor of Regulation S thereunder to
cease to be applicable to the offer and sale of the Restricted
Securities.
6. Conditions of the Obligations of the Purchasers. The obligations of
the several Purchasers to purchase and pay for the Restricted Firm Securities on
the First Closing Date and for the Optional Securities on each Optional Closing
Date will be subject to the accuracy of the representations and warranties on
the part of the Company herein, to the accuracy of the statements of officers of
the Company and the Depositary made pursuant to the provisions hereof, to the
performance by the Company of its obligations hereunder and to the following
additional conditions precedent:
(a) The Purchasers shall have received a letter, dated the
date of this Agreement, of Deloitte & Touche LLP confirming that they
are independent public accountants under rule 101 of the American
Institute of Certified Public Accountants Code of Professional Conduct,
and its interpretation and rulings.
(b) Subsequent to the execution and delivery of this
Agreement, there shall not have occurred (i) any change, or any
development or event involving a prospective change, in the condition
(financial or other), business, properties or results of operations of
the Company or its subsidiaries which, in the judgment of a majority in
interest of the Purchasers including CSFBC, is material and adverse and
makes it impractical or inadvisable to proceed with completion of the
offering or the sale of and payment for the Offered Securities; (ii)
any downgrading in the rating of any debt securities of the Company by
any "nationally recognized statistical rating organization" (as defined
for purposes of Rule 436(g) under the Securities Act), or any public
announcement that any such organization has under surveillance or
review its rating of any debt securities of the Company (other than an
announcement with positive implications of a possible upgrading, and no
implication of a possible downgrading, of such rating); (iii) any
suspension or limitation of trading in securities generally on the New
York Stock Exchange, or any setting of minimum prices for trading on
such exchange or on the Nasdaq National Market, or any suspension of
trading of any securities of the Company on any exchange or in the
over-the-counter market; (iv) any banking moratorium declared by U.S.
Federal or New York authorities; or (v) any outbreak or escalation of
major hostilities in which the United States is involved, any
declaration of war by Congress or any other substantial national or
international calamity or emergency if, in the judgment of a majority
in interest of the Purchasers including CSFBC, the effect of any such
outbreak, escalation, declaration, calamity or emergency makes it
impractical or inadvisable to proceed with completion of the offering
or sale of and payment for the Offered Securities.
(c) The Purchasers shall have received an opinion, dated such
Closing Date, of Sullivan & Worcester, counsel for the Company, to the
effect set forth in Schedule D hereto.
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(d) The Purchasers shall have received an opinion, dated such
Closing Date, of Dow, Lohnes & Albertson, FCC counsel for the Company,
to the effect set forth in Schedule E hereto.
(e) The Purchasers shall have received from Sullivan &
Cromwell, counsel for the Purchasers, such opinion or opinions, dated
such Closing Date, with respect to the incorporation of the Company,
the validity of the Offered Securities, the Offering Document, the
exemption from registra tion for the offer and sale of the Offered
Securities by the Company to the several Purchasers and the resales by
the several Purchasers as contemplated hereby and other related matters
as CSFBC may require, and the Company shall have furnished to such
counsel such documents as they request for the purpose of enabling them
to pass upon such matters.
(f) The Purchasers shall have received a certificate, dated
such Closing Date, of the Chief Executive Officer of the Company and
the Chief Financial Officer of the Company in which such officers, to
the best of their knowledge after reasonable investigation, shall state
that the representations and warranties of the Company in this
Agreement are true and correct, that the Company has complied with all
agreements and satisfied all conditions on its part to be performed or
satisfied hereunder at or prior to such Closing Date, and that,
subsequent to the date of the most recent financial statements in the
Offering Document there has been no material adverse change, nor any
development or event involving a prospective material adverse change,
in the condition (financial or other), business, properties or results
of operations of the Company and its subsidiaries taken as a whole
except as set forth in or contemplated by the Offering Document or as
described in such certificate.
(g) The Purchasers shall have received a letter, dated such
Closing Date, of Deloitte & Touche LLP which meets the requirements of
subsection (a) of this Section, except that the specified date referred
to in such subsection will be a date not more than five days prior to
such Closing Date for the purposes of this subsection.
(h) The Company and the Depositary shall have executed and
delivered the Deposit Agreement (in form and substance satisfactory to
CSFBC) and the Deposit Agreement shall be in full force and effect.
(i) The Depositary shall have furnished or caused to be
furnished to the Purchasers a certificate satisfactory to CSFBC of one
of its authorized officers with respect to the deposit with it of the
Offered Preferred Stock against issuance of the Depositary Receipts
evidencing the Offered Securities being sold on such Closing Date, the
execution, issuance, countersignature and delivery of such Depositary
Receipts pursuant to the Deposit Agreement and such other matters
related thereto as CSFBC reasonably requests.
The Company will furnish the Purchasers with such conformed copies of such
opinions, certificates, letters and documents as the Purchasers reasonably
request. CSFBC may in its sole discretion waive on behalf of the Purchasers
compliance with any conditions to the obligations of the Purchasers hereunder,
whether in respect of an Optional Closing Date or otherwise.
7. Indemnification and Contribution. (a) The Company will indemnify and
hold harmless each Purchaser against any losses, claims, damages or liabilities,
joint or several, to which such Purchaser may become subject, under the
Securities Act or the Exchange Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon any untrue statement or alleged untrue statement of any material fact
contained in the Offering Document, or any amendment or supplement thereto, or
any related preliminary offering circular or the Exchange Act Reports, or arise
out of or are based upon the omission or alleged omission to state therein a
material fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading, and will
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<PAGE>
reimburse each Purchaser for any legal or other expenses reasonably incurred by
such Purchaser in connection with investigating or defending any such loss,
claim, damage, liability or action as such expenses are incurred; provided,
however, that the Company will not be liable in any such case to the extent that
any such loss, claim, damage or liability arises out of or is based upon an
untrue statement or alleged untrue statement in or omission or alleged omission
from any of such documents in reliance upon and in conformity with written
information furnished to the Company by any Purchaser through CSFBC specifically
for use therein, it being understood and agreed that the only such information
consists of the information described as such in subsection (b) below.
(b) Each Purchaser will severally and not jointly indemnify
and hold harmless the Company against any losses, claims, damages or liabilities
to which the Company may become subject, under the Securities Act or the
Exchange Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact contained in
the Offering Document, or any amendment or supplement thereto, or any related
pre liminary offering circular, or arise out of or are based upon the omission
or the alleged omission to state therein a material fact necessary in order to
make the statements therein, in the light of the circumstances under which they
were made, not misleading, in each case to the extent, but only to the extent,
that such untrue statement or alleged untrue statement or omission or alleged
omission was made in reliance upon and in conformity with written information
furnished to the Company by such Purchaser through CSFBC specifically for use
therein, and will reimburse any legal or other expenses reasonably incurred by
the Company in connection with investi gating or defending any such loss, claim,
damage, liability or action as such expenses are incurred, it being understood
and agreed that the only such information furnished by any Purchaser consists of
the following information in the Offering Document furnished on behalf of each
Purchaser: the last paragraph at the bottom of the cover page concerning the
terms of the offering by the Purchasers, the legend concerning over-allotments
and stabilizing on the inside front cover page and the material relationship
disclosure appearing in the ninth paragraph under the caption "Plan of
Distribution".
(c) Promptly after receipt by an indemnified party under this
Section of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying party
under subsection (a) or (b) above, notify the indemnifying party of the
commencement thereof; but the omission so to notify the indemnifying party will
not relieve it from any liability which it may have to any indemnified party
otherwise than under subsection (a) or (b) above. In case any such action is
brought against any indemnified party and it notifies the indemnifying party of
the commencement thereof, the indemnifying party will be entitled to participate
therein and, to the extent that it may wish, jointly with any other indemnifying
party similarly notified, to assume the defense thereof, with counsel
satisfactory to such indemnified party (who shall not, except with the consent
of the indemnified party, be counsel to the indemnifying party), and after
notice from the indemnifying party to such indemnified party of its election so
to assume the defense thereof, the indemnifying party will not be liable to such
indemnified party under this Section for any legal or other expenses
subsequently incurred by such indemnified party in connection with the defense
thereof other than reasonable costs of investigation. No indemnifying party
shall, without the prior written consent of the indemnified party, effect any
settlement of any pending or threatened action in respect of which any
indemnified party is or could have been a party and indemnity could have been
sought hereunder by such indemnified party unless such settlement includes an
unconditional release of such indemnified party from all liability on any claims
that are the subject matter of such action.
(d) If the indemnification provided for in this Section is
unavailable or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above, then each indemnifying party shall contribute to
the amount paid or payable by such indemnified party as a result of the losses,
claims, damages or liabilities referred to in subsection (a) or (b) above (i) in
such proportion as is appropriate to reflect the relative benefits received by
the Company on the one hand and the Purchasers on the other from the offering of
the Offered 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 Purchasers on the other in
connection with the statements
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<PAGE>
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 Company on the one hand and the Purchasers on the other shall be
deemed to be in the same proportion as the total net proceeds from the offering
(before deducting expenses) received by the Company bear to the total discounts
and commissions received by the Purchasers from the Company under this
Agreement. The relative fault shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company or the Purchasers and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
untrue statement or omission. The amount paid by an indemnified party as a
result of the losses, claims, damages or liabilities referred to in the first
sentence of this subsection (d) shall be deemed to include any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any action or claim which is the subject of this
subsection (d). Notwithstanding the provisions of this subsection (d), no
Purchaser shall be required to contribute any amount in excess of the amount by
which the total price at which the Offered Securities purchased by it were
resold exceeds the amount of any damages which such Purchaser has otherwise been
required to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission. The Purchasers' obligations in this subsection (d) to
contribute are several in proportion to their respective purchase obligations
and not joint.
(e) The obligations of the Company under this Section shall be
in addition to any liability which the Company may otherwise have and shall
extend, upon the same terms and conditions, to each person, if any, who controls
any Purchaser within the meaning of the Securities Act or the Exchange Act; and
the obligations of the Purchasers under this Section shall be in addition to any
liability which the respective Purchasers may otherwise have and shall extend,
upon the same terms and conditions, to each person, if any, who controls the
Company within the meaning of the Securities Act or the Exchange Act.
8. Default of Purchasers. If any Purchaser or Purchasers default in
their obligations to purchase Offered Securities hereunder on either the First
Closing Date or any Optional Closing Date and the aggregate number of Offered
Securities that such defaulting Purchaser or Purchasers agreed but failed to
purchase does not exceed 10% of the total number of Offered Securities that the
Purchasers are obligated to purchase on such Closing Date, CSFBC may make
arrangements satisfactory to the Company for the purchase of such Offered
Securities by other persons, including any of the Purchasers, but if no such
arrangements are made by such Closing Date, the non-defaulting Purchasers shall
be obligated severally, in proportion to their respective commitments hereunder,
to purchase the Offered Securities that such defaulting Purchasers agreed but
failed to purchase on such Closing Date. If any Purchaser or Purchasers so
default and the aggregate number of Offered Securities with respect to which
such default or defaults occur exceeds 10% of the total number of shares of
Offered Securities that the Purchasers are obligated to purchase on such Closing
Date and arrangements satisfac tory to CSFBC and the Company for the purchase of
such Offered Securities by other persons are not made within 36 hours after such
default, this Agreement will terminate without liability on the part of any
non-defaulting Purchaser or the Company, except as provided in Section 9
(provided that if such default occurs with respect to Optional Securities after
the First Closing Date, this Agreement shall not terminate as to the Firm
Securities or any Optional Securities purchased prior to such termination). As
used in this Agreement, the term "Purchaser" includes any person substituted for
a Purchaser under this Section. Nothing herein will relieve a defaulting
Purchaser from liability for its default.
9. Survival of Certain Representations and Obligations. The respective
indemnities, agreements, representations, warranties and other statements of the
Company or its officers and of the several Purchasers set forth in or made
pursuant to this Agreement will remain in full force and effect, regardless of
any investigation, or statement as to the results thereof, made by or on behalf
of any Purchaser, the Company or any of their respective representatives,
officers or directors or any controlling person, and will survive delivery of
and payment for the Offered Securities. If this Agreement is terminated pursuant
to Section 8 or if for any reason the purchase of the Offered Securities by the
Purchasers is not consummated, the Company shall remain responsible for the
expenses to be paid or reimbursed by it pursuant to Section 5 and the respective
obligations
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<PAGE>
of the Company and the Purchasers pursuant to Section 7 shall remain in effect
and if any Offered Securities have been purchased hereunder the representations
and warranties in Section 2 and all obligations under Section 5 shall also
remain in effect. If the purchase of the Offered Securities by the Purchasers is
not consummated for any reason other than solely because of the termination of
this Agreement pursuant to Section 8 or the occur rence of any event specified
in clause (iii), (iv) or (v) of Section 6(b), the Company will reimburse the
Purchasers for all out-of-pocket expenses (including fees and disbursements of
counsel) reasonably incurred by them in connection with the offering of the
Offered Securities.
10. Notices. All communications hereunder will be in writing and, if
sent to the Purchasers will be mailed, delivered or telegraphed and confirmed to
the Purchasers, c/o CS First Boston Corporation, Park Avenue Plaza, New York,
N.Y. 10055, Attention: Investment Banking Department--Transactions Advisory
Group, or, if sent to the Company, will be mailed, delivered or telegraphed and
confirmed to it at 116 Huntington Avenue, Boston, MA 02116, Attention: Steven B.
Dodge; provided, however, that any notice to a Purchaser pursuant to Section 7
will be mailed, delivered or telegraphed and confirmed to such Purchaser.
11. Successors. This Agreement will inure to the benefit of and be
binding upon the parties hereto and their respective successors and the
controlling persons referred to in Section 7, and no other person will have any
right or obligation hereunder, except that holders and prospective purchasers of
Offered Securities, Offered Preferred Stock, Exchange Debentures and Underlying
Shares shall be entitled to enforce the agreements for their benefit contained
in the second and third sentences of Section 5(b) hereof against the Company as
if such holders were parties hereto.
12. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all such
counterparts shall together constitute one and the same Agreement.
13. Applicable Law. This Agreement shall be governed by, and construed
in accordance with, the laws of the State of New York without regard to
principles of conflicts of laws.
The Company hereby submits to the non-exclusive jurisdiction of the
Federal and state courts in the Borough of Manhattan in The City of New York in
any suit or proceeding arising out of or relating to this Agreement or the
transactions contemplated hereby.
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<PAGE>
If the foregoing is in accordance with the Purchasers' understanding of
our agreement, kindly sign and return to us one of the counterparts hereof,
whereupon it will become a binding agreement between the Company and the several
Purchasers in accordance with its terms.
Very truly yours,
AMERICAN RADIO SYSTEMS CORPORATION
By____________________________
Name:
Title:
The foregoing Purchase Agreement is hereby confirmed and accepted as of the
date first above written.
CS FIRST BOSTON CORPORATION
ALEX. BROWN & SONS INCORPORATED
MORGAN STANLEY & CO. INCORPORATED
SMITH BARNEY INC.,
By CS FIRST BOSTON CORPORATION
By____________________________
Name:
Title:
16
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SCHEDULE A
Number of
Purchaser Firm Securities
- - --------- ---------------
CS First Boston Corporation................................ 625,000
Alex. Brown & Sons Incorporated............................ 625,000
Morgan Stanley & Co. Incorporated.......................... 625,000
Smith Barney Inc........................................... 625,000
Total.......................................... 2,500,000
=========
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SCHEDULE B
The following documents are attached to and incorporated by reference in the
preliminary offering circular and the offering circular:
(a) The Company's Annual Report on Form 10-K for the year ended
December 31, 1995;
(b) the Company's Quarterly Report on Form 10-Q/A for the three
months ended March 31, 1996; and
(c) the Company's proxy statement for the 1996 Annual Meeting of
Stockholders held on May 22, 1996.
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SCHEDULE C
Letter of Independent Public Accountants
Referred to in Section 6(a)
(i) they have performed the procedures specified by
the American Institute of Certified Public Accountants for a
review of interim financial information as described in
Statement of Auditing Standards No. 71, Interim Financial
Information, on the unaudited financial statements included in
the Offering Document and in the Exchange Act Reports;
(ii) on the basis of the review referred to in clause
(ii) above, a reading of the latest available interim
financial statements of the Company, inquiries of officials of
the Company who have responsibility for financial and
accounting matters and other specified procedures, nothing
came to their attention that caused them to believe that:
(A) the unaudited financial statements
included in the Offering Document or in the Exchange
Act Reports do not comply as to form in all material
respects with the applicable accounting requirements
of the Exchange Act and the related published rules
and regulations thereunder or any material
modifications should be made to such unaudited
financial statements for them to be in conformity
with gener ally accepted accounting principles;
(B) at the date of the latest available
balance sheet read by such accoun tants, or at a
subsequent specified date not more than five days
prior to the date of this Agreement, there was any
change in the capital stock or any increase in
short-term debt or long-term debt of the Company and
its consolidated subsidiaries or, at the date of the
latest available balance sheet read by such
accountants, there was any decrease in consolidated
net current assets or net assets, as compared with
amounts shown on the latest balance sheet included in
the Offering Document; or
(C) for the period from the closing date of
the latest income statement included in the Offering
Document to the closing date of the latest available
income statement read by such accountants there were
any decreases, as compared with the corresponding
period of the previous year and with the period of
corresponding length ended the date of the latest
income statement included in the Offering Document,
in consolidated net revenues, station operating
income (defined as net revenues less operating
expenses, excluding depreciation, amortization and
corporate expenses) or in other income and expense,
net, or in the total amounts of consolidated income
before extraordinary items or net income;
except in all cases set forth in clauses (B) and (C) above for
changes, increases or decreases which the Offering Document
discloses have occurred or may occur or which are described in
such letter; and
(iii) they have compared specified dollar amounts (or
percentages derived from such dollar amounts) and other
financial information contained in the Offering Document and
the Exchange Act Reports (in each case to the extent that such
dollar amounts, percentages and other financial information
are derived from the general accounting records of the Company
and its subsidiaries subject to the internal controls of the
Company's accounting system or are derived directly from such
records by analysis or computation) with the results obtained
from inquiries, a reading of such general accounting records
and other procedures specified in such letter and have found
such dollar amounts, percentages and other financial
information to be in agreement with such results, except as
otherwise specified in such letter.
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<PAGE>
SCHEDULE D
Opinion of Counsel for the Company
Referred to in Section 6(c)
(i) Each of the Company and its subsidiaries has been
duly incorporated and is an existing corporation in good
standing under the laws of the jurisdiction of its
incorporation, with corporate power and authority to own its
properties and conduct its business as described in the
Offering Document; and is duly qualified to do business as a
foreign corporation in good standing in all other
jurisdictions in which its ownership or lease of property or
the conduct of its business requires such qualification,
except where the failure to be so qualified would not
individually have a material adverse effect on the Company or
such subsidiary (it being understood that such counsel need
express no opinion as to the due incorporation of subsidiaries
of the Company acquired in the Marlin Transaction (as defined
in the Offering Document));
(ii) The Offered Preferred Stock relating to the
Offered Securities delivered on such Closing Date and all
other outstanding shares of the Common Stock of the Company
have been duly authorized and validly issued, are fully paid
and nonassessable and conform to the respective descriptions
thereof contained in the Offering Document; and the
stockholders of the Company have no preemptive or other rights
with respect to the Offered Securities or the Offered
Preferred Stock;
(iii) The Deposit Agreement has been duly authorized,
executed and delivered by the Company and constitutes a valid
and legally binding obligation of the Company enforceable in
accordance with its terms, subject to bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar
laws of general applicability relating to or affecting
creditors' rights and to general equity principles; the
Depositary Receipts evidencing Offered Securities being sold
on such Closing Date have been duly and validly issued and
will entitle the holders thereof to the rights specified
therein and in the Deposit Agreement; and the Deposit
Agreement and the Depositary Receipts conform to the
descriptions thereof in the Offering Document;
(iv) The Indenture and the Exchange Debentures have
been duly authorized by the Company; when the Exchange
Debentures have been duly executed, authenticated, issued and
delivered in exchange for the Offered Preferred Stock pursuant
to the terms of the Offered Preferred Stock, the Indenture and
the Exchange Debentures will constitute valid and legally
binding obligations of the Company enforceable in accordance
with their terms, subject to bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar
laws of general applicability relating to or affecting
creditors' rights and to general equity principles; the
Indenture conforms and the Exchange Debentures will conform to
the descriptions thereof contained in the Offering Document;
(v) The shares of Offered Preferred Stock relating to
the Offered Securities delivered on such Closing Date are
convertible into Class A Common Stock of the Company in
accordance with their terms; when the Exchange Debentures are
delivered in exchange for the Offered Preferred Stock pursuant
to the terms of the Offered Preferred Stock, the Exchange
Debentures will be convertible into Class A Common Stock in
accordance with the terms of the Indenture; the shares of such
Class A Common Stock initially issuable upon conversion of the
shares of Offered Preferred Stock relating to the Offered
Securities delivered on such Closing Date or the related
Exchange Debentures have been duly authorized and reserved for
issuance upon such conversion and, when issued upon such
conversion, will be validly issued, fully paid and
nonassessable; the outstanding shares of Class A Common
20
<PAGE>
Stock have been duly authorized and validly issued, are fully
paid and nonassessable and conform to the description thereof
contained in the Offering Document; and the stockholders of
the Company have no preemptive rights with respect to the
Class A Common Stock;
(vi) The Credit Agreement Amendment has been duly
authorized, executed and delivered by the Company, has become
effective and constitutes a valid and legally binding
obligation of the Company, enforceable in accordance with its
terms, subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and other laws of general
applicability relating to or affecting creditors' rights and
to general equity principles;
(vii) No consent, approval, authorization or order
of, or filing with, any govern mental agency or body or any
court is required for the consummation of the transactions
contemplated by this Agreement, the Indenture or the Credit
Agreement Amendment in connection with the issuance or sale of
the Offered Securities or the Offered Preferred Stock by the
Company or the issuance and delivery of the Exchange
Debentures or the Underlying Shares, except that we express no
opinion as to (x) such as may be required by the
Communications Act of 1934, as amended (the "Communications
Act"), and (y) such as may be required by the Blue Sky laws of
the several states of the United States;
(viii) The execution, delivery and performance of the
Indenture by the Company, the Deposit Agreement, this
Agreement and the Credit Agreement Amendment, the issuance and
sale of the Offered Securities and Offered Preferred Stock and
compliance with the respective terms and provisions thereof
will not result in a breach or violation of any of the terms
and provisions of, or constitute a default under, any statute,
any rule, regulation or order of any governmental agency or
body or any court having jurisdiction over the Company or any
subsidiary of the Company or any of their properties, or, to
such counsel's knowledge, any agreement or instrument to which
the Company or any such subsidiary is a party or by which the
Company or any such subsidiary is bound including, but not
limited to, the Credit Agreement and the Senior Note
Indenture, or to which any of the properties of the Company or
any such subsidiary is subject, or the charter or by-laws of
the Company or any such subsidiary, except that such counsel
need not express any opinion with respect to the
Communications Act, or the rules, regulations and orders of
the FCC promulgated thereunder, and the Company has full power
and authority to authorize, issue and sell the Offered
Securities and Offered Preferred Stock as contemplated by this
Agreement and the Deposit Agreement and to authorize issue and
deliver the Exchange Debentures as contemplated by the terms
of the Offered Preferred Stock;
(ix) Such counsel have no reason to believe that the
Offering Document, or any amendment or supplement thereto, or
any Exchange Act Report as of the date hereof and as of such
Closing Date, contained any untrue statement of a material
fact or omitted to state any material fact required to be
stated therein or necessary to make the statements therein not
misleading; the descriptions in the Offering Document and the
Exchange Act Reports of statutes, legal and governmental
proceedings and contracts and other documents are accurate and
fairly present the information required to be shown; it being
understood that such counsel need express no opinion as to the
financial statements or other financial data contained in the
Offering Document and the Exchange Act Reports;
(x) This Agreement has been duly authorized, executed
and delivered by the Company; and
(xi) It is not necessary in connection with (i) the
offer, sale and delivery of the Offered Securities by the
Company to the several Purchasers pursuant to this Agreement
or (ii) the resales of the Offered Securities by the several
Purchasers in the manner contemplated by this Agreement to
register the Offered Securities, Offered Preferred Stock,
Exchange Debentures or Underlying Shares under the Securities
Act or to qualify an indenture in respect of the Exchange
Debentures under the Trust Indenture Act.
21
<PAGE>
SCHEDULE E
Opinion of FCC Counsel for the Company
Referred to in Section 6(d)
(i) No consent, approval, authorization, order or waiver of filing
(other than information filings) with the FCC is required under the
Communications Act of 1934, as amended, and the published rules, regulations and
policies of the FCC (the "Communications Act") to be obtained or made by the
Company or any subsidiary of the Company for the issuance and sale of the
Offered Securities or the Offered Preferred Stock by the Company or the issuance
and delivery of the Exchange Debentures or the Underlying Shares, and the
compliance with the terms and provisions thereof, the offering thereof by the
Purchasers, the effectiveness of the Credit Agreement Amendment and the
execution, delivery and performance of the Indenture, the Deposit Agreement and
this Agreement;
(ii) The execution, delivery and performance by the Company of the
Indenture, the Deposit Agreement, this Agreement and the Credit Agreement
Amendment and the issuance and sale of the Offered Securities and the Offered
Preferred Stock and the issuance and delivery of the Exchange Debentures and the
Underlying Shares and the compliance with the respective terms and provisions
thereof, and the offering thereof by the Purchasers, do not violate any of the
terms or provisions of (i) the Communications Act or (ii) those radio broadcast
licenses that are held by the Company or any subsidiary of the Company;
(iii) Neither the Offering Document nor the Exchange Act Report as of
the date of the Offering Document and as of the date hereof, with respect to
statements of federal broadcast communications law or legal conclusions solely
with respect to federal broadcast communications law contained any untrue
statement of a material fact or omitted to state any material fact necessary in
order to make such statements or conclusions, in light of the circumstances
under which they were made, not misleading;
(iv) The statements set forth under "Risk Factors - Factors Relating to
American and its Business Regulatory Matters" and "Business - Federal Regulation
of Radio Broadcasting" in the portion of the Offering Document preceding the
Annexes and in "Business - Federal Regulation of Radio Broadcasting" in Annex A
of the Offering Document, insofar as they are, or refer to, statements of
federal broadcast communications law, or legal conclusions with respect to
federal broadcast communications law, have been reviewed by us and, taken
together, present the information required to make such statements of federal
law or legal conclusions, in light of the circumstances in which they were made,
accurate in all material respects;
(v) The licensee for each of the radio broadcast stations identified in
the Offering Document and Attachment B hereof as (a) radio broadcast stations
either (i) owned or (ii) operated, programmed and marketed by the Company or a
subsidiary of the Company, or (b) radio broadcast stations for which advertising
time is sold by the Company or a subsidiary of the Company, holds a currently
effective radio broadcast license issued by the FCC for such radio broadcast
station; and
(vi) Except as may be described in the Offering Document, to our
knowledge (a) there is no administrative proceeding pending before the FCC
against the radio broadcast stations described in the Offering Document as being
licensed to the Company or a subsidiary of the Company which, if determined
adversely, could reasonably be expected to have a material adverse effect upon
any of the Company's radio broadcast stations, and (b) the radio broadcast
licenses issued by the FCC for such radio broadcast stations are in full force
and effect in that, except as may be described in the Offering Document, they
are held by a subsidiary of the Company, are currently effective and are not
subject to any special conditions (other than those conditions of a type
customarily imposed under the general rules, regulations and policies of the
FCC) that would materially and adversely affect the operation of such radio
broadcast stations as currently operated.
22
<PAGE>
SCHEDULE F
Form of Letter to be Delivered
for Institutional Accredited Investors
American Radio Systems Corporation
116 Huntington Avenue
Boston, Massachusetts 02116
CS First Boston Corporation
Alex. Brown & Sons Incorporated
Morgan Stanley & Co. Incorporated
Smith Barney Inc.,
c/o CS First Boston Corporation
52 East 55th Street
New York, N.Y. 10055
Dear Sirs,
We are delivering this letter in connection with an offering of
Depositary Shares, each representing a one-twentieth interest in a share of %
Convertible Exchangeable Preferred Stock of American Radio Systems Corporation,
a Delaware corporation (the "Issuer")(such securities, together with the related
securities exchangeable or convertible therefor, the "Securities"), all as
described in the Confidential Offering Circular (the "Offering Circular")
relating to the offering.
We hereby confirm that:
(i) we are an "accredited investor" within the meaning of Rule
501(a)(1), (2) or (3) under the Securities Act of 1933, as amended (the
"Securities Act"), or any entity in which all of the equity owners are
accredited investors within the meaning of Rule 501(a)(l), (2) or (3)
under the Securities Act (an "Institutional Accredited Investor");
(ii) (A) any purchase of the Securities by us will be for our
own account or for the account of one or more other Institutional
Accredited Investors or a fiduciary for the account of one or more
trusts, each of which is an "accredited investor" within the meaning of
Rule 501(a)(7) under the Securities Act and for each of which we
exercise sole investment discretion or (B) we are a "bank", within the
meaning of Section 3(a)(2) of the Securities Act, or a "savings and
loan association" or other institution described in Section 3(a)(5)(A)
of the Securities Act, that is acquiring the Securities as a fiduciary
for the account of one or more institutions for which we exercise sole
investment discretion;
(iii) in the event that we purchase any of the Securities, we
will acquire Securities having a minimum purchase price of not less
than $100,000 for our own account or for any separate account described
above for which we are acting;
(iv) we have acknowledge and experience in financial and
business matters that we are capable of evaluating the merits and risks
of purchasing the Securities;
(v) we are not acquiring the Securities with a view of
distribution thereof or with any present intention of offering or
selling any of the Securities, except in accordance with Rule 144A
under the Securities Act or in offshore transactions in accordance with
Regulation S under the Securities Act, as provided below; provided that
the disposition or our property and the property of any accounts for
which we are acting as fiduciary shall remain at all times within our
control; and
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<PAGE>
(vi) we have received a copy of the Offering Circular relating
to the offering of the Securities and acknowledge that we have had
access to such financial and other information, and have been afforded
the opportunity to ask such questions of representatives of the Issuer
and receive answers thereto, as we deem necessary in connection with
our decision to purchase the Securities.
We understand that the Securities are being offered in a transaction
not involving any public offering within the Untied States within the meaning of
the Securities Act and that the Securities have not been and will not be
registered under the Securities Act or any state securities law, and we agree,
on our own behalf and on behalf of each account for which we acquire any
Securities, that if in the future we decide to resell, pledge or otherwise
transfer such Securities, such Securities may be offered, resold, pledged or
otherwise transferred only (i) to a person who we reasonably believe is a
"qualified institutional buyer" (as defined in Rule 144A under the Securities
Act) in a transaction meeting the requirements of Rule 144A, (ii) in an offshore
transaction meeting the requirements of Rule 904 under the Securities Act, (iii)
pursuant to an exemption from registration under the Securities Act provided by
Rule 144 thereunder (if available), (iv) pursuant to an effective registration
statement under the Securities Act, or (v) to the Issuer and (vi) in each case,
in accordance with any applicable securities laws of any State of the United
States or other applicable jurisdiction. We agree to notify any purchaser,
pledgee or transferee of such Securities of the restrictions referred to in (i)
through (vi) above. We understand that the registrar and transfer agent for the
Securities will not be required to accept for registration of transfer any
Securities acquired by us, except upon presentation of evidence satisfactory to
the Issuer and the transfer agent that the foregoing restrictions on transfer
have been complied with. We further understand that any Securities acquired by
us (other than pursuant to Rule 144A) will be in the form of definitive physical
certificates and that such certificates will bear a legend reflecting the
substance of this paragraph.
We acknowledge that you, the Issuer and others will rely upon our
confirmations, acknowledgements and agreements set forth herein, and we agree to
notify you promptly in writing if any of our representations or warranties
herein cease to be accurate and complete.
THIS LETTER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF
CONFLICTS OF LAWS.
Date: ____________________ ____________________________________
(Name of Purchaser)
By: ____________________________
Name:
Title:
Address:
24
AMERICAN RADIO SYSTEMS CORPORATION
TO
BANK OF MONTREAL TRUST COMPANY
Trustee
______________________
Indenture
Dated as of June 25, 1996
______________________
$125,000,000
(subject to increase to up to $137,500,000 in
the event and to the extent an over-allotment
option is exercised)
7% Convertible Subordinated
Debentures Due 2011
<PAGE>
TABLE OF CONTENTS
Page
PARTIES................................................................... 1
RECITALS
Authorization of Indenture....................................... 1
Compliance with Legal Requirements............................... 1
Purpose of and Consideration for Indenture....................... 1
ARTICLE ONE
DEFINITIONS
SECTION 1.1 Certain Terms Defined............................... 1
Affiliate............................................... 1
Agent ............................................... 2
Board of Directors...................................... 2
Board Resolution........................................ 2
Business Day............................................ 2
Capital Lease Obligation................................ 2
Capital Stock........................................... 2
Cash Equivalents........................................ 2
Certificate of Designation.............................. 3
Change in Control....................................... 3
Class A Common Stock.................................... 3
Closing Date............................................ 3
Common Stock............................................ 3
Conversion Agent........................................ 3
Conversion Price........................................ 3
Convertible Preferred Stock............................. 3
Corporate Trust Office.................................. 4
Credit Agreement........................................ 4
Date of Conversion...................................... 4
Disposition............................................. 4
Equity Interests........................................ 4
Event of Default........................................ 4
Excess Amount........................................... 4
Exchange Act............................................ 4
Exchange Date........................................... 4
Hedging Obligations..................................... 5
Holder ............................................... 5
Holder of Securities.................................... 5
Securityholder.......................................... 5
Immediate Family Member................................. 5
Indebtedness............................................ 5
Indenture............................................... 5
Issuer ............................................... 5
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Page
Issuer Notice........................................... 5
Issuer Order............................................ 5
Last Sale Price......................................... 6
Lien ............................................... 6
NASDAQ ............................................... 6
Obligations............................................. 6
Officer ............................................... 6
Officers' Certificate................................... 6
Opinion of Counsel...................................... 7
Outstanding............................................. 7
Paying Agent............................................ 7
Permitted Owner......................................... 7
Person ............................................... 8
principal............................................... 8
Proceeding.............................................. 8
Redemption Date......................................... 8
Redemption Price........................................ 8
Registrar............................................... 8
Related Party........................................... 8
Repurchase Price........................................ 8
Responsible Officer..................................... 8
Restricted Subsidiary................................... 8
SEC ............................................... 8
Securities Payment...................................... 8
Security ............................................... 8
Securities.............................................. 8
Securities Act.......................................... 9
Senior Bank Debt........................................ 9
Senior Indebtedness..................................... 9
Senior Note Indenture................................... 9
Subsidiary.............................................. 9
Surviving Person........................................ 10
Trading Day............................................. 10
Trustee ............................................... 10
U.S. Government Obligations............................. 10
ARTICLE TWO
SECURITIES
SECTION 2.1 Form and Dating..................................... 10
SECTION 2.2 Execution and Authentication........................ 10
SECTION 2.3 Registrar, Paying Agent
and Conversion Agent.................. 12
SECTION 2.4 Paying Agent to Hold Money in Trust................. 13
SECTION 2.5 Holder Lists........................................ 14
SECTION 2.6 Transfer and Exchange............................... 14
SECTION 2.7 Replacement Securities.............................. 15
SECTION 2.8 Outstanding Securities.............................. 15
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Page
SECTION 2.9 Temporary Securities................................ 16
SECTION 2.10 Cancellation....................................... 16
SECTION 2.11 Defaulted Interest................................. 16
SECTION 2.12 CUSIP Numbers...................................... 16
SECTION 2.13 Transfer Restrictions.............................. 17
ARTICLE THREE
COVENANTS
SECTION 3.1 Payment of Principal and Interest................... 17
SECTION 3.2 Written Statement to Trustee........................ 17
SECTION 3.3 Corporate Existence................................. 18
SECTION 3.4 Reports by the Issuer............................... 18
SECTION 3.5 Waiver of Usury Defense............................. 18
SECTION 3.6 Payment of Excess Cash Dividends.................... 19
ARTICLE FOUR
REMEDIES OF THE TRUSTEE AND
SECURITYHOLDERS ON EVENT OF DEFAULT
SECTION 4.1 Event of Default Defined;
Acceleration of Maturity;
Waiver of Default..................... 19
SECTION 4.2 Collection of Indebtedness
by Trustee; Trustee May Prove Debt.... 22
SECTION 4.3 Application of Proceeds............................. 24
SECTION 4.4 Suits for Enforcement............................... 25
SECTION 4.5 Restoration of Rights or
Abandonment of Proceedings............ 26
SECTION 4.6 Limitations on Suits by
Securityholders....................... 26
SECTION 4.7 Unconditional Right of Security
holders to Receive Principal,
Premium and Interest, to Convert and
to Institute Certain Suits.............................. 27
SECTION 4.8 Powers and Remedies Cumulative;
Delay or Omission Not Waiver
of Default............................ 27
SECTION 4.9 Control by Securityholders.......................... 27
SECTION 4.10 Waiver of Past Defaults............................. 28
SECTION 4.11 Trustee to Give Notice of
Default, But May Withhold in
Certain Circumstances................. 28
SECTION 4.12 Right of Court to Require
Filing of Undertaking to Pay Costs.... 29
SECTION 4.13 Waiver of Stay or Extension Laws................... 29
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Page
ARTICLE FIVE
CONCERNING THE TRUSTEE...................... 30
SECTION 5.1 Duties and Responsibilities
of the Trustee; During Default;
Prior to Default...................... 30
SECTION 5.2 Certain Rights of the Trustee....................... 31
SECTION 5.3 Trustee Not Responsible for Recitals,
Disposition of Securities or
Application of Proceeds Thereof...... 33
SECTION 5.4 Trustee and Agents May Hold
Securities; Collections, etc.................... 33
SECTION 5.5 Compensation and Indemnification of
Trustee and Its Prior Claim..................... 33
SECTION 5.6 Right of Trustee to Rely on Officers'
Certificate, etc...................... 34
SECTION 5.7 Persons Eligible for Appointment as
Trustee......................................... 34
SECTION 5.8 Resignation and Removal; Appointment
of Successor Trustee.................. 35
SECTION 5.9 Acceptance of Appointment by
Successor Trustee..................... 36
SECTION 5.10 Merger, Conversion, Consolidation
or Succession to Business of Trustee.. 37
ARTICLE SIX
CONCERNING THE SECURITYHOLDERS
SECTION 6.1 Evidence of Action Taken by
Securityholders....................... 38
SECTION 6.2 Proof of Execution of Instruments and
of Holding of Securities.............. 38
SECTION 6.3 Holders to Be Treated as Owners..................... 38
SECTION 6.4 Securities Owned by Issuer Deemed Not
Outstanding........................... 39
SECTION 6.5 Right of Revocation of Action Taken................. 39
SECTION 6.6 Record Date for Consents and Waivers................ 40
ARTICLE SEVEN
SUPPLEMENTAL INDENTURES
SECTION 7.1 Supplemental Indentures Without
Consent of Securityholders.............................. 40
SECTION 7.2 Supplemental Indentures with Consent
of Securityholders.................... 42
SECTION 7.3 Effect of Supplemental Indenture.................... 43
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Page
SECTION 7.4 Documents to be Given to Trustee.................... 44
SECTION 7.5 Notation on Securities in Respect of
Supplemental Indentures............... 44
ARTICLE EIGHT
CONSOLIDATION, MERGER, SALE OR CONVEYANCE
SECTION 8.1 Covenant Not to Merge, Consolidate,
Sell or Convey Property Except Under
Certain Conditions...................................... 44
SECTION 8.2 Successor Corporation or Entity
Substituted............................................. 45
SECTION 8.3 Opinion of Counsel to Trustee....................... 46
ARTICLE NINE
SATISFACTION AND DISCHARGE
OF INDENTURE; UNCLAIMED MONEYS
SECTION 9.1 Satisfaction and Discharge of
Indenture.......................................... 46
SECTION 9.2 Application by Trustee of Funds
Deposited for Payment of Securities
....................................................... 47
SECTION 9.3 Repayment of Moneys Held by Paying
Agent............................................. 48
SECTION 9.4 Return of Moneys Held by Trustee and
Paying Agent Unclaimed for Two
Years............................................. 48
SECTION 9.5 Indemnity for U.S. Government
Obligations....................................... 48
ARTICLE TEN
MISCELLANEOUS PROVISIONS
SECTION 10.1 Partners, Incorporators,
Stockholders, Officers and Directors
of Issue Exempt from Individual
Liability......................................... 49
SECTION 10.2 Provisions of Indenture for the Sole
Benefit of Parties and
Securityholder.................................... 49
SECTION 10.3 Successors and Assigns of Issuer
Bound by Indenture................................ 49
SECTION 10.4 Notices and Demands on Issuer,
Trustee and Securityholders....................... 49
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Page
SECTION 10.5 Officers' Certificates and Opinions
of Counsel; Statements to Be
Contained Therein................................ 50
SECTION 10.6 Payments Due on Saturdays, Sundays
and Legal Holidays............................... 51
SECTION 10.7 Issuer to Furnish Trustee Names and
Addresses of Holders............................ 52
SECTION 10.8 New York Law to Govern............................. 52
SECTION 10.9 Counterparts....................................... 52
SECTION 10.10 Effect of Headings................................ 52
ARTICLE ELEVEN
REDEMPTION OF SECURITIES
SECTION 11.1 Right of Optional Redemption;
Prices.......................................... 52
SECTION 11.2 Notice of Redemption; Partial
Redemptions..................................... 53
SECTION 11.3 Payment of Securities Called for
Redemption...................................... 54
SECTION 11.4 Exclusion of Certain Securities from
Eligibility for Selection for
Redemption...................................... 55
ARTICLE TWELVE
SUBORDINATION OF SECURITIES
SECTION 12.1 Securities Subordinate to
Senior Indebtedness............................ 56
SECTION 12.2. Payment Over of Proceeds Upon
Dissolution, Etc............................... 56
SECTION 12.3 Payments to Securityholders........................ 58
SECTION 12.4 Payment Permitted If No Default.................... 58
SECTION 12.5 Subrogation to Rights of Holders
of Senior Indebtedness......................... 58
SECTION 12.6 Provisions Solely to Define
Relative Rights................................ 59
SECTION 12.7 Trustee to Effectuate
Subordination.................................. 59
SECTION 12.8. No Waiver of Subordination Provisions.............. 60
SECTION 12.9. Notice to Trustee.................................. 60
SECTION 12.10. Reliance on Judicial Order or
Certificate of Liquidating Agent............... 61
SECTION 12.11. Trustee Not Fiduciary for Holders
of Senior Indebtedness......................... 61
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Page
SECTION 12.12. Rights of Trustee as Holder
of Senior Indebtedness;
Preservation of Trustee's Rights................ 62
SECTION 12.13. Article Applicable to Paying Agents............... 62
ARTICLE THIRTEEN
CONVERSION OF SECURITIES
SECTION 13.1 Conversion Privilege............................... 62
SECTION 13.2 Exercise of Conversion Privilege................... 63
SECTION 13.3 Fractional Shares.................................. 65
SECTION 13.4 Adjustment of Conversion Price..................... 65
SECTION 13.5 Continuation of Conversion Privilege
in Case of Reclassification,
Reorganization, Change, Merger,
Consolidation or Sale of Assets................ 69
SECTION 13.6 Notice of Certain Events........................... 70
SECTION 13.7 Taxes on Conversion................................ 71
SECTION 13.8 Issuer to Provide Class A Common
Stock.......................................... 71
SECTION 13.9 Disclaimer of Responsibility for
Certain Matters................................ 72
SECTION 13.10 Return of Funds Deposited for
Redemption of Converted Securities............. 73
ARTICLE FOURTEEN
RIGHT TO REQUIRE REDEMPTION
SECTION 14.1 Right to Require Redemption........................ 73
SECTION 14.2 Notices; Method of Exercising
Redemption Right, etc.......................... 73
SECTION 14.3 Definition of Change in Control.................... 75
SECTION 14.4 Limitation on Right to Require
Redemption..................................... 76
TESTIMONIUM............................................................... 77
SIGNATURES................................................................ 77
EXHIBIT A -- FORM OF SECURITY
vii
<PAGE>
THIS INDENTURE, dated as of June 25, 1996 between American Radio
Systems Corporation, a Delaware corporation (the "Issuer"), and Bank of Montreal
Trust Company, a New York State Banking corporation (the "Trustee"),
W I T N E S S E T H :
WHEREAS, the Issuer has duly authorized the issue from time to
time of its unsecured convertible subordinated debentures to be issued (the
"Securities") in exchange for shares of Convertible Preferred Stock;
WHEREAS, the Issuer has duly authorized the execution and delivery of
this Indenture to provide, among other things, for the authentication, delivery
and administration of the Securities; and
WHEREAS, all things necessary to make this Indenture a valid indenture
and agreement according to its terms have been done;
NOW, THEREFORE:
In consideration of the premises and the purchases of the Securities by
the Holders thereof, the Issuer and the Trustee mutually covenant and agree for
the equal and proportionate benefit of the respective Holders from time to time
of the Securities as follows:
ARTICLE ONE
DEFINITIONS
SECTION 1.1 Certain Terms Defined. The following terms (except as
otherwise expressly provided or unless the context otherwise clearly requires)
for all purposes of this Indenture and of any indenture supplemental hereto
shall have the respective meanings specified in this Section. All accounting
terms used herein and not expressly defined shall have the meanings given to
them in accordance with generally accepted accounting principles, and the term
"generally accepted accounting principles" shall mean such accounting principles
which are generally accepted at the date or time of any computation. The words
"herein", "hereof" and "hereunder" and other words of similar import refer to
this Indenture as a whole and not to any particular Article, Section or other
subdivision. The terms defined in this Article include the plural as well as the
singular.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or
<PAGE>
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 specified 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.
"Agent" means any Registrar, Paying Agent or Conversion Agent.
"Board of Directors" means either the Board of Directors of the Issuer
or any committee of such Board duly authorized to act on its behalf.
"Board Resolution" means a copy of one or more resolutions, certified
by the secretary or an assistant secretary of the Issuer to have been duly
adopted by the Board of Directors and to be in full force and effect on the date
of such certification, and delivered to the Trustee.
"Business Day" means a day which in the City and State of New York is
neither Saturday, Sunday, a legal holiday nor a day on which banking
institutions and trust companies are authorized by law or regulation or
executive order to close.
"Capital Lease Obligation" means, at any time any determination thereof
is to be made, the amount of the liability in respect of a capital lease that
would at such time be required to be capitalized on the balance sheet in
accordance with GAAP.
"Capital Stock" means (i) in the case of a corporation, capital stock,
(ii) in the case of any association or business entity, any and all shares,
interests, participations, rights or other equivalents (however designated) or
capital stock and (iii) in the case of a partnership, partnership interests
(whether general or limited) and any other interest or participation that
confers on a Person the right to receive a share of the profits and losses of,
or distributions of assets of, such partnership.
"Cash Equivalents" means (i) United States dollars, (ii) securities
issued or directly and fully guaranteed or insured by the United States
government or any agency or instrumentality thereof having maturities of less
than one year from the date of acquisition, (iii) certificates of deposit and
eurodollar time deposits
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<PAGE>
with maturities of less than one year from the date of acquisition, bankers'
acceptances with maturities of less than one year and overnight bank deposits,
in each case with any lender party to the Credit Agreement or with any domestic
commercial bank having capital and surplus in excess of $500,000,000 and a Keefe
Bank Watch Rating of "B" or better, (iv) repurchase obligations with a term of
not more than seven days for underlying securities of the types described in
clauses (ii) and (iii) entered into with any financial institution meeting the
qualifications specified in clause (iii) above and (v) commercial paper having
the highest rating obtainable from Moody's Investors Service, Inc. or Standard &
Poor's Ratings Services, a division of the McGraw-Hill Companies, Inc., and in
each case maturing within nine months after the date of acquisition.
"Certificate of Designation" means the certificate of designation,
dated June 24, 1996, of preferences and rights of the Issuer's 7% Convertible
Exchangeable Preferred Stock.
"Change in Control" has the meaning assigned to it in Section 14.3.
"Class A Common Stock" means the Class A Common Stock, par value $0.01
per share, of the Issuer as the same exists at the Closing Date or as such stock
may be reconstituted from time to time.
"Closing Date" means the date (or, if more than one, the earliest date)
of original issuance of the Convertible Preferred Stock.
"Common Stock" means the Class A Common Stock, the Class B Common
Stock, par value $0.01 per share and the Class C Common Stock, par value $0.01
per share, of the Issuer as the same exists at the Closing Date or as such stock
may be reconstituted from time to time.
"Conversion Agent" has the meaning assigned to it in Section 2.3.
"Conversion Price" means the principal amount of the Securities
convertible into one share of Class A Common Stock, subject to adjustment in
accordance with Section 13.4.
"Convertible Preferred Stock" means the 7% Convertible Exchangeable
Preferred Stock, par value $0.01
-3-
<PAGE>
per share, issued by the Issuer, which by its terms is exchangeable for
Securities.
"Corporate Trust Office" means the office of the Trustee at which the
corporate trust business of the Trustee shall, at any particular time, be
principally administered, which office is, at the date as of which this
Indenture is dated, located at 77 Water Street, 4th Floor, New York, New York
10004.
"Credit Agreement" means that certain Credit Agreement, dated as of
December 19, 1995, among the Issuer, The Bank of New York, as agent, the
co-agents named therein and the lenders named therein, as amended by Amendment
No.1, dated as of February 1, 1996 and Amendment No. 2, dated as of June 19,
1996, including (i) any related notes, guaran tees (including guarantees by the
Issuer's Subsidiaries), collateral documents, instruments and agreements
executed in connection therewith, and in each case as amended, modified,
increased, renewed, refunded, replaced or refinanced from time to time, and (ii)
any notes, guarantees (including guarantees by the Issuer's Subsidiaries),
collateral documents, instruments and agreements executed in connection with any
such amendment, modification, increase, renewal, refunding, replacement or
refinancing.
"Date of Conversion" has the meaning assigned to it in Section 13.2.
"Disposition" has the meaning assigned to it in Section 8.1.
"Equity Interests" means Capital Stock and all warrants, options or
other rights to acquire Capital Stock (including any securities that is
convertible into, or exchangeable for, Capital Stock).
"Event of Default" means any event or condition specified as such in
Section 4.1.
"Excess Amount" has the meaning assigned to it in Section 3.6.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exchange Date" means the date on which the outstanding shares of
Convertible Preferred Stock are exchanged for the Securities.
-4-
<PAGE>
"Hedging Obligations" means, with respect to any Person, the
Obligations of such Person under (i) interest rate swap agreements, interest
rate cap agreements and interest rate collar agreements, and (ii) other
agreements or arrangements designed to protect such Person against fluctuations
in interest rates.
"Holder", "Holder of Securities", "Securityholder" or other similar
terms mean in the case of any Security, the Person in whose name such Security
is registered in the security register kept by the Issuer for that purpose in
accordance with the terms hereof.
"Immediate Family Member" means, with respect to any individual, such
individual's spouse (past or current), descendants (natural or adoptive, of the
whole or half blood) of the parents of such individual, such individual's
grandparents and parents (natural or adoptive), and the grandparents, parents
and descendants of parents (natural or adoptive, of the whole or half blood) of
such individual's spouse (past or current).
"Indebtedness" means, with respect to any Person, whether or not
contingent, (i) all indebtedness of such Person for borrowed money or for the
deferred purchase price of property or services (other than current trade
liabilities incurred in the ordinary course of business and payable in
accordance with customary practices) or which is evidenced by a note, bond,
debenture or similar instrument, (ii) all Capital Lease Obligations of such
Person, (iii) all obligations of such Person in respect of letters of credit or
bankers' acceptances issued or created for the account of such Person, (iv) all
Hedging Obligations of such Person, (v) all liabilities secured by any Lien on
any property owned by such Person even if such Person has not assumed or
otherwise become liable for the payment thereof to the extent of the value of
the property subject to such Lien, and (vi) to the extent not otherwise
included, any guarantee by such person of any other Person's indebtedness or
other obligations described in clauses (i) through (v) above.
"Indenture" means this instrument as originally executed and delivered
or, if amended or supplemented as herein provided, as so amended or
supplemented.
"Issuer" means American Radio Systems Corporation, a Delaware
corporation, and, subject to Article Eight, its successors and assigns.
"Issuer Notice" has the meaning assigned to it in Section 14.2.
-5-
<PAGE>
"Issuer Order" means a written statement, request or order of the
Issuer which is signed in its name by its Chairman of the Board of Directors,
its Chief Executive Officer, its President, a Chief Operating Officer, a Vice
President, or its Chief Financial Officer, and, without duplication, by its
Treasurer, an Assistant Treasurer, its Controller, its Secretary or an Assistant
Secretary, of the Issuer, and delivered to the Trustee.
"Last Sale Price" means the last sale price of the Class A Common Stock
as reported on the composite tape for New York Stock Exchange listed stocks (or
if not listed or admitted to trading on such exchange, then on the principal
national securities exchange on which the Class A Common Stock is listed or
admitted to trading, or, if not listed or admitted to trading on any national
securities exchange, on NASDAQ or a similar organization if NASDAQ is no longer
reporting information) on the last Trading Day prior to the Date of Conversion
or, if no such sale takes place on such day, the last sale price for such day
shall be the average of the closing bid and asked prices regular way on the New
York Stock Exchange (or, if not listed or admitted to trading on such exchange,
then on the principal national securities exchange on which the Class A Common
Stock is listed or admitted to trading, or, if not listed or admitted to trading
on any national securities exchange, on NASDAQ or a similar organization if
NASDAQ is no longer reporting information) on such day.
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset,
whether or not filed, recorded or otherwise perfected under applicable law
(including any conditional sale or other title retention agreement, any lease in
the nature thereof, any option or other agreement to sell or give a security
interest in any asset and any filing of, or agreement to give, any financing
statement under the "Uniform Commercial Code" (or equivalent statutes) of any
jurisdiction).
"NASDAQ" means the National Association of Securities Dealers Automated
Quotations National Market System.
"Obligations" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any Indebtedness.
"Officer" means the Chairman of the Board of Directors, the Chief
Executive Officer, the President, a
-6-
<PAGE>
Chief Operating Officer, a Vice President, the Chief Financial Officer, the
Treasurer, an Assistant Treasurer, the Controller, the Secretary or an Assistant
Secretary, of the Issuer.
"Officers' Certificate" means a certificate signed by the Chairman of
the Board of Directors, the Chief Executive Officer, the President, a Chief
Operating Officer, a Vice President, or the Chief Financial Officer and, without
duplication, by the Treasurer, an Assistant Treasurer, Controller, the Secretary
or an Assistant Secretary, of the Issuer, and delivered to the Trustee. Each
such certificate shall include the statements provided for in Section 10.5, if
and to the extent required hereby.
"Opinion of Counsel" means a written opinion, in form and substance
reasonably satisfactory to the Trustee, of counsel, who may be counsel to the
Issuer and who shall be acceptable to the Trustee. Each such opinion shall
include the statements provided for in Section 10.5, if and to the extent
required hereby.
"Outstanding", when used with reference to Securities, shall, subject
to the provision of Section 6.4, mean, as of any particular time, all Securities
authenti cated and delivered by the Trustee under this Indenture, except
(a) Securities theretofore cancelled by the Trustee or delivered
to the Trustee for cancellation;
(b) Securities, or portions thereof, for the payment or
redemption of which moneys in the necessary amount shall have been
deposited in trust with the Trustee or with any Paying Agent (other
than the Issuer) or shall have been set aside, segregated and held in
trust by the Issuer (if the Issuer shall act as its own Paying Agent),
provided that if such Securities are to be redeemed prior to the
maturity thereof, notice of such redemption shall have been given as
herein provided, or provision satisfactory to the Trustee shall have
been made for giving such notice; and
(c) Securities in substitution for which other Securities shall
have been authenticated and delivered, or which shall have been paid,
pursuant to the terms of Section 2.7 (unless proof satisfactory to the
Trustee is presented that any of such Securities is held by a Person
in whose hands such Security is a legal, valid and binding obligation
of the Issuer), Securities
-7-
<PAGE>
converted into Class A Common Stock pursuant hereto and Securities not
deemed Outstanding pursuant to and for the purposes of the last
sentence of Section 11.2.
"Paying Agent" has the meaning assigned to it in Section 2.3.
"Permitted Owner" has the meaning assigned to it in Section 14.3.
"Person" means any individual, corporation, part nership, limited
liability company, joint venture, association, joint stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
"principal" wherever used with reference to the Securities or any
Security or any portion thereof shall be deemed to include "and premium, if any"
whether or not so specified.
"Proceeding" has the meaning assigned to it in Section 12.2.
"Redemption Date", has the meaning assigned to it in Section 11.2.
"Redemption Price", when used with respect to any Security to be
redeemed, means the price at which it is to be redeemed pursuant to this
Indenture.
"Registrar" has the meaning assigned to it in Section 2.3.
"Related Party" with respect to any individual means (i) any Immediate
Family Member of such individual or (ii) any Person, the beneficiaries,
stockholders, partners, owners or Persons beneficially holding an 80% or more
controlling interest of which consist of such individual or an Immediate Family
Member.
"Repurchase Date" has the meaning assigned to it in Section 14.1.
"Repurchase Price" has the meaning assigned to it in Section 14.1.
"Responsible Officer", when used with respect to the Trustee means the
Chairman of the Board of Directors, the President, the Secretary, the Treasurer,
or any other officer of the Trustee customarily performing corporate trust
functions.
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<PAGE>
"Restricted Subsidiary" has the meaning assigned to it in the Senior
Note Indenture.
"SEC" means the Securities and Exchange Commission or any successor
agency.
"Securities Payment" has the meaning assigned to it in Section 12.2.
"Security" or "Securities" has the meaning stated in the first recital
of this Indenture and more particularly means any securities authenticated and
delivered under this Indenture.
"Securities Act" means the Securities Act of 1933, as amended.
"Senior Bank Debt" means (i) the Indebtedness outstanding under the
Credit Agreement and (ii) all Obligations incurred by or owing to the holders or
their agent or representatives of such Indebtedness outstanding under the Credit
Agreement (including, but not limited to, all fees and expenses of counsel and
all other interest, charges, fees and expenses).
"Senior Indebtedness" means, with respect to the Issuer, the principal
of and interest (including post-petition interest whether or not allowed as a
claim) on, and all other amounts owing in respect of, (a) Senior Bank Debt, and
(b) any other Indebtedness permitted to be incurred by the Issuer under the
terms of this Indenture (including, but not limited to, reasonable fees and
expenses of counsel and all other charges, fees and expenses incurred in
connection with such Indebtedness), other than such Indebtedness, if any, as the
Issuer, in its sole and absolute discretion, may, from time to time at the later
to occur of (i) the incurrence of such Indebtedness or (ii) the Exchange Date,
exclude from the definition of Senior Indebtedness by notice to the Trustee in
the manner provided in this Indenture, except that Senior Indebtedness will at
all times include, and the Issuer may not so exclude, any Senior Bank Debt;
provided that Senior Indebtedness shall not include (w) any liability for
federal, state, local, or other taxes, (x) any Indebtedness among or between the
Issuer, any Restricted Subsidiary or any of their Affiliates or (y) any trade
payables and any Indebtedness to trade creditors (other than amounts accrued
thereon) incurred for the purchase of goods or materials, or for services
obtained, in the ordinary course of business or any Obligations to trade
creditors in respect of any such Indebtedness.
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"Senior Note Indenture" means the indenture, dated as of February 1,
1996, among the Issuer, the Subsidiary Guarantor named therein and Fleet
National Bank of Connecticut, as Trustee, as amended, modified, renewed,
refunded or refinanced from time to time.
"Subsidiary" means, with respect to any Person, any corporation,
association or other business entity of which more than 50% of the total voting
power of shares of Equity Interests entitled (without regard to the occurrence
of any contingency) to vote in the election of directors, managers or trustees
or other governing body thereof is at the time owned or controlled by such
Person (regardless of whether such Equity Interests are owned directly or
through one or more other Subsidiaries of such Person or a combination thereof).
"Surviving Person" means, with respect to any Person involved in or
that makes any Disposition, the Person formed by or surviving such Disposition
or the Person to which such Disposition is made.
"Trading Day" means each Monday, Tuesday, Wednesday, Thursday and
Friday, other than any day on which securities are not traded on the applicable
securities exchange or in the applicable securities market.
"Trustee" means the entity identified as "Trustee" in the first
paragraph hereof and, subject to the provisions of Article Five, shall also
include any successor trustee. "Trustee" shall also mean or include each Person
who is then a trustee hereunder if at any time there is more than one such
Person.
"U.S. Government Obligations" means direct obliga tions of the United
States of America, backed by its full faith and credit.
ARTICLE TWO
SECURITIES
SECTION 2.1 Form and Dating. The Securities and the Trustee's
certificate of authentication shall be substantially in the form of Exhibit A
(including the legends appearing thereon), the terms of which are incorporated
in and made a part of this Indenture. The
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Securities may have notations, legends or endorsements required by law,
securities exchange (including NASDAQ) rule, agreements to which the Issuer is
subject or usage, including, if required by Section 2.13, the legend contem
plated thereby. The Issuer shall approve the form of the Securities and any
notation, legend or endorsement on them. Each Security shall be dated the date
of its authentication.
SECTION 2.2 Execution and Authentication. Two Officers shall sign the
Securities for the Issuer by manual or facsimile signature. The Issuer's seal
shall be reproduced on the Securities.
If an Officer whose signature is on a Security no longer holds that
office at the time the Trustee authenticates the Security, the Security shall be
valid nevertheless.
A security shall not be valid until the Trustee manually signs the
certificate of authentication on the Security. The signature of the Trustee
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 of up to $137.5 million upon a written order of the
Issuer signed by two Officers. The order shall specify the amount of Securities
to be authenticated and the date on which the original issue of Securities is to
be authenticated. The aggregate principal amount of Securities outstanding at
any time may not exceed $137.5 million except as provided in Section 2.7.
The Trustee's authentication of Securities pursuant to the next
preceding paragraph shall be conditioned upon receipt of each of the following
in form and substance reasonably satisfactory to the Trustee on or prior to the
Exchange Date:
A. An Officer's Certificate to the effect that:
(1) All conditions required to be satisfied under the
Certificate of Designation for an exchange of the outstanding
Convertible Preferred Stock for the Securities have been so
satisfied on or prior to the Exchange Date; and
(2) No Event of Default shall have occurred
and be continuing.
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B. An Opinion of Counsel to the effect that:
(1) The execution and delivery of the Indenture, the
issuance of the Securities and the fulfillment of the terms
herein and therein contemplated will not conflict with the
charter or bylaws of the Issuer, or constitute a breach of or
default under any material agreement, indenture, evidence of
Indebtedness, mortgage, deed of trust or other material
agreement or instrument known to such counsel to which the
Issuer is a party or by which it is bound, or any law,
administrative regulation, rule, judgment, order or decree
known to such counsel to be applicable to the Issuer or any of
its properties;
(2) The Indenture has been duly authorized by the
Issuer, executed and delivered by the Issuer, and is a legal,
valid and binding agree ment of the Issuer enforceable in
accordance with its terms, except as such enforceability may
be limited by bankruptcy, insolvency, reorganization,
receivership, moratorium and similar laws affect ing the
rights and remedies of creditors and obligations of debtors
generally and by the effect of general principles of equity,
whether applied by a court of law or equity;
(3) All legally required proceedings by the Issuer in
connection with the authorization and issuances of the
Securities have been duly taken, and all orders, consents or
other authorizations or approvals of any public board or body
legally required for the validity of the Securities have been
obtained; and
(4) The Securities, when executed and authenticated
in accordance with the terms of this Indenture and delivered
in exchange for outstand ing Convertible Preferred Stock, will
be legal, valid and binding obligations of the Issuer
enforceable in accordance with their terms, except as such
enforceability may be limited by bank ruptcy, insolvency,
reorganization, receivership, moratorium and similar laws
affecting the rights and remedies of creditors and obligations
of debtors generally and by the effect of general principles
of equity, whether applied by a court of law or equity.
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The Trustee may appoint an authenticating agent acceptable to the
Issuer to authenticate Securities. Unless limited by the term of such
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 Issuer or an Affiliate of the Issuer.
The Securities shall be issuable only in regis tered form without
coupons and only in denominations of $1,000 and any integral multiple thereof.
SECTION 2.3 Registrar, Paying Agent and Conver sion Agent. The Issuer
shall maintain in The Borough of Manhattan in The City of New York, New York, an
office or agency where Securities may be presented for registration of transfer
or for exchange ("Registrar"), an office or agency where Securities may
presented for payment ("Paying Agent"), an office or agency where Securities may
be presented for conversion ("Conversion Agent") and an office or agency where
notices and demands to or upon the Issuer 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 Issuer may appoint one or more
co-Registrars, one or more additional Paying Agents and one or more additional
Conversion Agents, which may be inside or outside The Borough of Manhattan. The
term "Registrar" includes any co-Registrar, the term "Paying Agent" includes any
additional Paying Agent and the term "Conversion Agent" includes any additional
Conversion Agent. The Issuer may change any Registrar, Paying Agent or
Conversion Agent without notice to any Holder. If the Issuer fails to appoint or
maintain another person as Registrar, Paying Agent or Conversion Agent, the
Trustee shall act as such. The Issuer or any Affiliate of the Issuer may act as
Registrar or Conversion Agent. Except for purposes of Article Nine, the Issuer
or any Affiliate of the Issuer may act as Paying Agent.
The Issuer shall enter into an appropriate agency agreement with any
Agent not a party to this Indenture. The agreement shall implement the
provisions of this Indenture that relate to such Agent. The Issuer shall
promptly notify the Trustee of the name and address of any Agent not a party to
this Indenture. If the Issuer fails to maintain a Registrar, Paying Agent,
Conversion Agent or agent for service of notices and demands, or fails to give
the foregoing notice, the Trustee shall act as such.
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The Issuer initially appoints the Trustee as Registrar, Paying Agent,
Conversion Agent and agent for service of notices and demands.
SECTION 2.4 Paying Agent to Hold Money in Trust. Not later than each
due date of the principal of or interest on any Securities, the Issuer shall
deposit with the Paying Agent a sum of money in immediately available funds
sufficient to pay such principal or interest so becoming due. Subject to Section
9.2, the Paying Agent shall hold in trust for the benefit of Securityholders or
the Trustee all money held by the Paying Agent for the payment of principal of
or interest on the Securities, and shall notify the Trustee of any default by
the Issuer in making any such payment. If the Issuer or an Affiliate of the
Issuer acts as Paying Agent, it shall on or before each due date of the
principal of or interest on any Securities segregate the money and hold it as a
separate trust fund. The Issuer at any time may require a Paying Agent to pay
all money held by it to the Trustee, and the Trustee may at any time during the
continuance of any default, upon written request to a Paying Agent, require such
Paying Agent to forthwith pay to the Trustee all sums so held in trust by such
Paying Agent. Upon doing so, the Paying Agent (other than the Issuer) shall have
no further liability for the money.
SECTION 2.5 Holder Lists. The Trustee shall preserve in as current a
form as is reasonably practicable the most recent list available to it of the
names and addresses of the Holders. If the Trustee is not the Registrar, the
Issuer shall promptly furnish to the Trustee on or before each interest payment
date and at such other times as the Trustee may request in writing a list in
such form and as of such date as the Trustee may reasonably require for the
names and addresses of the Holders.
SECTION 2.6 Transfer and Exchange. When a Security is presented to the
Registrar with a request to register a transfer thereof, the Registrar shall
register the transfer as requested, and, when Securities are presented to the
Registrar with a request to exchange them for an equal principal amount of
Securities of other authorized denominations, the Registrar shall make the
exchange as requested; provided that every Security presented or surrendered for
registration of transfer or exchange shall be duly endorsed or be accompanied by
a written instrument of transfer in form satisfactory to the Issuer and the
Registrar duly executed by the Holder thereof or his attorney duly authorized in
writing. To permit registration of transfers and exchanges, the Issuer shall
execute and the Trustee shall authenticate Securities at the
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Registrar's request. The Issuer shall not be required (i) to issue, register the
transfer of or exchange Securities during a period beginning at the opening of
business on a Business Day 15 days before the day of any selection of Securities
for redemption under Section 11.2 and ending at the close of business on the day
of selection, or (ii) to register the transfer of or exchange any Security so
selected for redemption in whole or in part, except the unredeemed portion of
any Security being redeemed in part. Any exchange or transfer shall be without
charge, except that the Issuer may require payment of a sum sufficient to cover
any tax or other governmental charge that may be imposed in relation thereto,
but this provision shall not apply to any exchange pursuant to Section 7.5 or
11.2. Prior to due presentment for registration of transfer of any Security, the
Trustee, any Agent and the Issuer may deem and treat the Person in whose name
any Security is registered as the absolute owner of such Security for the
purpose of receiving payment of principal of and interest on such Security and
for all other purposes whatsoever, whether or not such Security is overdue, and
none of the Trustee, any Agent or the Issuer shall be affected by notice to the
contrary.
SECTION 2.7 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, and neither the Issuer
nor the Trustee has received notice that such Security has been acquired by a
bona fide purchaser, the Issuer shall issue and the Trustee shall authenticate a
replacement Security if the requirements of Section 8-405 of the New York
Uniform Commercial Code, as in effect on the date of this Indenture, are met,
and there shall have been delivered to the Issuer and the Trustee evidence to
their satisfaction of the loss, destruction or theft of any Security if such is
the case. An indemnity bond may be required that is sufficient in the judgment
of the Issuer and the Trustee to protect the Issuer, the Trustee or any Agent
from any loss which any of them may suffer if a Security is replaced. The Issuer
may charge the Holder for its expenses (including the fees and expenses of the
Trustee) in replacing a Security. Every replacement Security is an additional
obligation of the Issuer. The provisions of this Section 2.7 are exclusive and
shall preclude all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities.
SECTION 2.8 Outstanding Securities. The Securities Outstanding at any
time are all of the Securities authenticated by the Trustee, except for those
canceled by
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it, those delivered to it for cancellation and those described in this Section
2.8 as not Outstanding.
If a Security is replaced pursuant to Section 2.7, it ceases to be
Outstanding until the Trustee receives proof satisfactory to it that the
replaced Security is held by a bona fide purchaser.
If the Paying Agent (other than the Issuer or an Affiliate of the
Issuer) holds on a redemption date or maturity date money sufficient to pay the
principal of and accrued interest on Securities payable on that date, then on
and after that date such Securities cease to be Outstanding and interest on them
ceases to accrue.
Subject to Section 6.4, a Security does not cease to be Outstanding
because the Issuer or an Affiliate of the Issuer holds the Security.
SECTION 2.9 Temporary Securities. Until defini tive Securities are
ready for delivery, the Issuer may prepare and, upon the order of the Issuer,
the Trustee shall authenticate temporary Securities. Temporary Securities shall
be substantially in the form of definitive Securities but may have variations
that the Issuer considers appropri ate for temporary Securities. Without
unreasonable delay, the Issuer shall prepare and the Trustee shall authenticate
definitive Securities in exchange for temporary Securities. Until such exchange,
temporary Securities shall be entitled to the same rights, benefits and
privileges as definitive Securities.
SECTION 2.10 Cancellation. The Issuer at any time may deliver
Securities to the Trustee for cancellation. The Registrar, Paying Agent and
Conversion Agent shall forward to the Trustee any Securities surrendered to them
for transfer, exchange, payment or conversion. The Trustee and no one else shall
cancel all Securities surrendered for transfer, exchange, payment, conversion or
cancellation. The Issuer may not issue new Securities to replace Securities it
has paid or delivered to the Trustee for cancellation or which have been
converted. All canceled Securities shall be held by the Trustee and may be
destroyed (and, if so destroyed, certification of their destruction shall be
delivered to the Issuer), unless the Issuer shall direct in writing that the
canceled Securities be returned to it.
SECTION 2.11 Defaulted Interest. If the Issuer defaults in a payment of
interest on the Securities, it shall pay the defaulted interest in any lawful
manner plus,
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to the extent lawful, interest payable on the defaulted interest, to the persons
who are Holders on a subsequent special record date, which date shall be at
least five Business Days prior to the payment date, in each case at the rate
provided in the Securities and in Section 3.1. The Issuer shall, with the
consent of the Trustee, fix or cause to be fixed each such special record date
and payment date. At least 15 days before a special record date, the Issuer (or
the Trustee in the name of and at the expense of the Issuer) shall mail to the
Holders a notice that states the special record date, the related payment date
and the amount of such interest to be paid.
SECTION 2.12 CUSIP Numbers. The Issuer in issuing the Securities may
use "CUSIP" numbers (if then generally in use), and, if so, the Trustee shall
use "CUSIP" numbers in notices of redemption as a convenience to Holders;
provided that any such notice may state that no representation is made as to the
correctness of such numbers either as printed on the Securities or as contained
in any notice of redemption and that reliance may be placed only on the other
identification numbers printed on the Securities, and any such redemption shall
not be affected by any defect in or omission of such numbers.
SECTION 2.13 Transfer Restrictions. Securities shall be stamped or
otherwise be imprinted with the legends containing the transfer restrictions set
forth on the face of the text of the Securities attached as Exhibit A hereto.
The legends so provided on the face of the text of the Securities may be removed
from any Security, upon receipt by the Trustee of an Issuer Order, (i) three
years from the later of issuance of the Security or the date such Security (or
any predecessor) was last acquired from an "affiliate" of the Issuer within the
meaning of Rule 144 under the Securities Act or (ii) in connection with a sale
made pursuant to the volume (and other restrictions) of Rule 144 under the
Securities Act following two years from such time, provided that, if the legend
is removed and the Security is subsequently held by such an affiliate of the
Issuer, the legend shall be reinstated.
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ARTICLE THREE
COVENANTS
SECTION 3.1 Payment of Principal and Interest. The Issuer covenants and
agrees that it will duly and punctually pay or cause to be paid the principal
of, and interest on, each of the Securities at the place or places, at the
respective times and in the manner provided in the Securities and this
Indenture. Each instalment of interest on the Securities may be paid by mailing
checks for such interest payable to or upon the written order of the Holders of
Securities entitled thereto as they shall appear on the registry books of the
Issuer.
SECTION 3.2 Written Statement to Trustee. The Issuer will deliver to
the Trustee, within 120 days after the end of each fiscal year of the Issuer
ending after the date hereof, an Officers' Certificate, stating that in the
course of the performance by the signers of their duties as officers of the
Issuer they would normally have knowledge of any default or non-compliance by
the Issuer in the perfor mance or fulfillment of any covenant, agreement or
condition contained in this Indenture, stating whether or not they have
knowledge of any such default or non-compliance (without regard to any period of
grace or requirement of notice provided hereunder), and, if so, specifying each
such default or non-compliance of which the signers have knowledge and the
nature thereof.
SECTION 3.3 Corporate Existence. Subject to Article Eight, the Issuer
will do or cause to be done all things necessary to preserve and keep in full
force and effect its corporate existence, rights and franchises; provided that
the Issuer shall not be required to preserve its corporate existence or any such
right or franchise if the Issuer shall determine that the preservation thereof
is no longer desirable in the conduct of its business and that the loss thereof
is not disadvantageous in any material respect to the Holders of the Securities.
SECTION 3.4 Reports by the Issuer. The Issuer covenants to file with
the Trustee, within 15 days after the Issuer is required to file the same 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
from time to time by rules and regulations prescribe) which the Issuer may be
required to file with the SEC pursuant to Section 13 or Section 15(d) of the
Exchange Act, or if the Issuer is not required to file information, documents,
or reports pursuant to either of
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such sections, then to file with the Trustee, in accordance with rules and
regulations prescribed from time to time by the SEC, such of the supplementary
and periodic information, documents, and reports which may be required pursuant
to Section 13 of the Exchange Act; or, in respect of a security listed and
registered on a national securities exchange or on NASDAQ as may be prescribed
from time to time in such rules and regulations. At any time when the Issuer is
not subject to Section 13 or 15(d) of the Exchange Act, upon request of Holders
and prospective purchasers of Securities or the Class A Common Stock issuable
upon conversion thereof, the Issuer will promptly furnish or cause to be
furnished to such holders and prospective purchasers, copies of the information
required to be delivered to such holders and prospective purchasers of such
securities pursuant to Rule 144A(d)(4) under the Securities Act (or any
successor provision thereto) in order to permit compliance with Rule 144A in
connection with resales by such holders of such securities. The Issuer will pay
the expenses of printing and distributing to such holders and prospective
purchasers all such documents.
SECTION 3.5 Waiver of Usury Defense. The Issuer covenants (to the
extent that it may lawfully do so) that it shall not assert, plead (as a defense
or otherwise) or in any manner whatsoever claim (and shall actively resist any
attempt to compel it to assert, plead or claim) in any action, suit or
proceeding that the interest rate on the Securities violates present or future
usury or other laws relating to the interest payable on any Indebtedness and
shall not otherwise avail itself (and shall actively resist any attempt to
compel it to avail itself) of the benefits or advantages of any such laws.
SECTION 3.6 Payment of Excess Cash Dividends. If the Issuer shall
declare and pay cash dividends on its Class A Common Stock in an annualized per
share amount which exceeds the greater of (i) the annualized per share amount of
the immediately preceding cash dividend on its Class A Common Stock (as adjusted
to reflect any of the events listed in Sections 13.4 or 13.5) and (ii) 15% of
the Last Sale Price of the Class A Common Stock as of the Trading Day
immediately preceding the date of declaration of such dividend (the per share
amount of any such per share excess, to the extent of such per share excess,
being herein called an "Excess Amount"), then in any such event the Holders
shall have the right to receive, and the Issuer will pay to each such Holder, at
the time of the payment of such Class A Common Stock dividend, an amount equal
to such Excess Amount (calculated on the basis of the number of shares of Class
A Common Stock that would have been issued to a Holder upon
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conversion of the Securities held by such Holder on the record date for the
payment of such dividend) unless the Holder converts and receives such dividend
as a holder of Class A Common Stock.
ARTICLE FOUR
REMEDIES OF THE TRUSTEE AND
SECURITYHOLDERS ON EVENT OF DEFAULT
SECTION 4.1 Event of Default Defined; Accelera tion of Maturity; Waiver
of Default. "Event of Default" with respect to Securities where used herein,
means each one of the following events which shall have occurred and be
continuing (whatever the reason for such Event of Default and whether it shall
be occasioned by the provisions of Article Twelve or be voluntary or involuntary
or be effected by operation of law or pursuant to any judgment, decree or order
of any court or any order, rule or regulation of any administrative or
governmental body):
(a) default in the payment of any instalment of interest upon
any of the Securities as and when the same shall become due and
payable, and continuance of such default for a period of 30 days; or
(b) default in the payment of all or any part of the principal
of or premium, if any, upon any of the Securities as and when the same
shall become due and payable either at maturity, upon any redemption or
acceleration, by declaration or otherwise; or
(c) failure on the part of the Issuer to observe or perform
any other of the covenants or agreements on the part of the Issuer in
the Securities or in this Indenture contained for a period of 60 days
after the date on which written notice specifying such failure, stating
that such notice is a "Notice of Default" hereunder and demanding that
the Issuer remedy the same, shall have been given by registered or
certified mail, return receipt requested, to the Issuer by the Trustee,
or to the Issuer and the Trustee by the Holders of at least 25% in
aggregate principal amount of the Outstanding Securities; or
(d) a court having jurisdiction in the premises shall enter a
decree or order for relief in respect of the Issuer in an involuntary
case or proceeding under any applicable Federal or State bankruptcy,
insolvency, reorganization or other similar law now or hereafter in
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effect, or a decree or order adjudging the Issuer a bankrupt or
insolvent, approving as properly filed a petition seeking
reorganization, assignment, adjustment or composition of, or in respect
of, the Issuer under any applicable Federal or State law or appointing
a receiver, liquidator, assignee, custodian, trustee, sequestrator (or
similar official) of the Issuer or for any substantial part of its
property or ordering the winding up or liquidation of its affairs, and
such decree or order shall remain unstayed and in effect for a period
of 60 consecutive days; or
(e) the Issuer shall commence a voluntary case or proceeding
under any applicable Federal or State bankruptcy, insolvency,
reorganization or other similar law now or hereafter in effect, or any
other case or proceeding to be adjudicated a bankrupt or insolvent, or
consent to the entry of an order for relief in an involuntary case or
proceeding under any applicable Federal or State bankruptcy,
insolvency, reorganization or other similar law or to the commencement
of any bankruptcy or insolvency case or proceeding against it, or to
the filing by it of a petition or answer or consent seeking
reorganization or relief under any applicable Federal or State law, or
consent to the filing of such petition or to the appointment or taking
possession by a receiver, liquidator, assignee, cus todian, trustee or
sequestrator (or similar official) of the Issuer or for any substantial
part of its prop erty, or make any general assignment for the benefit
of creditors, or the admission by it in writing of its inability to pay
its debts generally as they become due, or the taking of corporate
action by the Issuer in furtherance of any such action.
If an Event of Default occurs and is continuing with respect to the
Securities, then, and in each and every such case, unless the principal of all
the Securities shall have already become due and payable, either the Trustee or
the Holders of not less than 25% in aggregate principal amount of the Securities
then Outstanding hereunder, by notice in writing to the Issuer (and to the
Trustee if given by Securityholders), may declare the entire principal of all
the Securities and the interest accrued thereon, to be due and payable
immediately, and upon any such declaration the same shall become immediately due
and payable. This provision, however, is subject to the condition that if, at
any time after the principal of the Securities shall have been so declared due
and payable, and before any judgment or decree for the payment of the moneys due
shall have been obtained or entered as hereinafter provided, the Issuer
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shall pay or shall deposit with the Trustee a sum sufficient to pay all matured
installments of interest upon all the Securities and the principal of any and
all Securities which shall have become due otherwise than by acceleration (with
interest upon such principal and, to the extent that payment of such interest is
enforceable under applicable law, on overdue installments of interest, at the
same rate as the rate of interest specified in the Securities, to the date of
such payment or deposit) and such amount as shall be sufficient to cover
reasonable compensation to the Trustee and each predecessor Trustee, their
respective agents, attorneys and counsel, and all other expenses and liabilities
incurred, and all advances made, by the Trustee and each predecessor Trustee
except as a result of negligence or bad faith, and if any and all Events of
Default under the Indenture, other than the non-payment of the interest on and
principal of Securities which shall have become due by acceleration, shall have
been cured, waived or otherwise remedied as provided herein--then and in every
such case of such a cure the Holders of a majority in aggre gate principal
amount of the Securities then Outstanding, by written notice to the Issuer and
to the Trustee, may waive all defaults and rescind and annul such declaration
and its consequences, but no such waiver or rescission and annulment shall
extend to or shall affect any subsequent default or shall impair any right
consequent thereon.
SECTION 4.2 Collection of Indebtedness by Trustee; Trustee May Prove
Debt. The Issuer covenants that (a) in case default shall be made in the payment
of any instalment of interest on any of the Securities when such interest shall
have become due and payable, and such default shall have continued for a period
of 30 days or (b) in case default shall be made in the payment of all or any
part of the principal of or premium, if any, on any of the Securities when the
same shall have become due and payable, whether upon maturity or upon any
redemption or by declaration or otherwise, then upon demand of the Trustee, the
Issuer will pay to the Trustee for the benefit of the Holders of the Securities
the whole amount that then shall have become due and payable on all such
Securities for principal, premium, if any, or interest, as the case may be (with
interest to the date of such payment upon the overdue principal and, to the
extent that payment of such interest is enforceable under applicable law, on
overdue installments of interest at the same rate as the rate of interest
specified in the Securities); and in addition thereto, such further amount as
shall be sufficient to cover the costs and expenses of collection, including
reasonable compensation to the Trustee and each predecessor Trustee, their
respective agents, attorneys and counsel, and any expense and liabili ties
incurred, and all advances made, by the Trustee and each predecessor Trustee
except as a result of its negligence or bad faith.
Until such demand is made by the Trustee, the Issuer may pay the
principal of and premium, if any, and interest on the Securities to the
registered Holders, whether or not the Securities be overdue.
In case the Issuer shall fail forthwith to pay such amounts upon such
demand, the Trustee, in its own name and as trustee of an express trust, shall
be entitled and empowered to institute any action or proceedings at law or in
equity for the collection of the sums so due and unpaid, and may prosecute any
such action or proceedings to judgment or final decree, and may enforce any such
judgment or final decree against the Issuer or other obligor upon the Securi
ties and collect in the manner provided by law out of the property of the Issuer
or other obligor upon the Securities, wherever situated, the moneys adjudged or
decreed to be payable.
In case there shall be pending proceedings relative to the Issuer or
any other obligor upon the Securities under Title 11 of the United States Code
or any other applicable Federal or state bankruptcy, insolvency, reorganization
or other similar law, or in case a receiver, assignee or trustee in bankruptcy
or reorganization, liquidator, sequestrator or similar official shall have been
appointed for or taken possession of the Issuer or its property or such other
obligor, or in case of any other comparable judicial proceedings relative to the
Issuer or other obligor upon the Securities, or to the creditors or property of
the Issuer or such other obligor, the Trustee, irrespective of whether the
principal of the Securities shall then be due and payable as therein expressed
or by declaration or otherwise and irrespective of whether the Trustee shall
have made any demand pursuant to the provisions of this Section, shall be
entitled and empowered, by intervention in such proceedings or otherwise:
(a) to file and prove a claim or claims for the whole amount
of principal, premium, if any, and interest owing and unpaid in respect
of the Securities, and to file such other papers or documents as may be
necessary or advisable in order to have the claims of the Trustees
(including any claim for reasonable compensation to the Trustee and
each predecessor Trustee, and their respective agents, attorneys and
counsel, and for reimbursement of all expenses and liabilities
incurred, and all advances made, by the
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Trustee and each predecessor Trustee, except as a result of negligence
or bad faith) and of the Securityholders allowed in any judicial
proceedings relative to the Issuer or other obligor upon the
Securities, or to the creditors or property of the Issuer or such other
obligor,
(b) unless prohibited by applicable law and regulations, to
vote on behalf of the Holders of the Securities in any election of a
trustee or a standby trustee in arrangement, reorganization,
liquidation or other bankruptcy or insolvency proceedings or person
performing similar functions in comparable proceedings, and
(c) to collect and receive any moneys or other property
payable or deliverable on any such claims, and to distribute all
amounts received with respect to the claims of the Securityholders and
of the Trustee on their behalf; and any trustee, receiver, or
liquidator, custodian or other similar official is hereby authorized by
each of the Securityholders to make payments to the Trustee, and, in
the event that the Trustee shall consent to the making of payments
directly to the Securityholders, to pay to the Trustee such amounts as
shall be sufficient to cover reasonable compensation to the Trustee,
each predecessor Trustee and their respective agents, attorneys and
counsel, and all other expenses and liabilities incurred, and all
advances made, by the Trustee and each predecessor Trustee except as a
result of negligence or bad faith.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or vote for or accept or adopt on behalf of any
Securityholder any plan of reorganization, arrangement, adjustment or caption
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 except, as aforesaid, to vote for the election of a trustee in
bankruptcy or similar person.
All rights of action and of asserting claims under this Indenture, or
under any of the Securities, may be prosecuted and enforced by the Trustee
without the possession of any of the Securities or the production thereof on any
trial or other proceedings relative thereto, and any such action or proceedings
instituted by the Trustee shall be brought in its own name as trustee of an
express trust, and any recovery of judgment, subject to the payment of the
expenses, disbursements and compensation of the
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Trustee, each predecessor Trustee and their respective agents and attorneys,
shall be for the ratable benefit of the Holders of the Securities.
In any proceedings brought by the Trustee (and also any proceedings
involving the interpretation of any provision of this Indenture to which the
Trustee shall be a party) the Trustee shall be held to represent all the Holders
of the Securities in respect of which such action was taken, and it shall not be
necessary to make any Holders of the Securities parties to any such proceedings.
SECTION 4.3 Application of Proceeds. Any moneys collected by the
Trustee pursuant to this Article in respect of Securities shall be applied in
the following order at the date or dates fixed by the Trustee and, in case of
the distribution of such moneys on account of principal or interest, upon
presentation of the several Securities and stamping (or otherwise noting)
thereon the payment, or issuing Securities in reduced principal amounts in
exchange for the presented Securities if only partially paid, or upon surrender
thereof if fully paid:
FIRST: To the payment of costs and expenses, including any and
all amounts due the Trustee under Section 5.5;
SECOND: Subject to Article Twelve herein, in case the principal
of the Securities shall not have become and be then due and payable,
to the payment of interest on the Securities in default in the order
of the maturity of the installments of such interest, with interest
(to the extent that such interest has been collected by the Trustee)
upon the overdue installments of interest at the same rate as the rate
of interest specified in the Securities, such payments to be made
ratably to the person entitled thereto, without discrimination or
preference;
THIRD: Subject to Article Twelve herein, in case the principal of
the Securities shall have become and shall be then due and payable, to
the payment of the whole amount then owing and unpaid upon all the
Securities for principal, premium, if any, and interest, with interest
upon the overdue principal and premium, if any, and (to the extent
that such interest has been collected by the Trustee) upon overdue
installments of interest at the same rate as the rate of interest
specified in the Securities; and in case such moneys shall be
insufficient to pay in full the whole amount so due and unpaid upon
the Securities,
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then to the payment of such principal, premium, if any, and interest,
without preference or priority of principal (and premium, if any) over
interest, or of interest over principal (and premium, if any), or of
any instalment of interest over any other instalment of interest, or of
any Security over any other Security, ratably to the aggregate of such
principal, premium, if any, and accrued and unpaid interest; and
FOURTH: To the payment of the remainder, if any, to the Issuer or
any other person lawfully entitled thereto.
SECTION 4.4 Suits for Enforcement. In case an Event of Default has
occurred, has not been waived and is continuing, the Trustee may in its
discretion proceed to protect and enforce the rights vested in it by this
Indenture by such appropriate judicial proceedings as the Trustee shall deem
most effectual to protect and enforce any of such rights, either at law or in
equity or in bankruptcy or otherwise, whether for the specific enforcement of
any covenant or agreement contained in this Indenture or in aid of the exercise
of any power granted in this Indenture or to enforce any other legal or
equitable right vested in the Trustee by this Indenture or by law.
SECTION 4.5 Restoration of Rights or Abandonment of Proceedings. In
case the Trustee or any Securityholder shall have proceeded to enforce any right
under this Indenture and such proceedings shall have been discontinued or
abandoned for any reason, or shall have been determined adversely to the Trustee
or to such Securityholder, then and in every such case, subject to any
determination in such proceeding, the Issuer, the Trustee and the
Securityholders shall be restored severally and respectively to their former
positions and rights hereunder, and thereafter all rights, remedies and powers
of the Issuer, the Trustee and the Securityholders shall continue as though no
such proceedings had been taken.
SECTION 4.6 Limitations on Suits by Security holders. No Holder of any
Security shall have any right by virtue or by availing of any provision of this
Indenture to institute any action or proceeding, judicial or otherwise, at law
or in equity or in bankruptcy or otherwise upon or under or with respect to this
Indenture, or for the appoint ment of a trustee, receiver, liquidator, custodian
or other similar official or for any other remedy hereunder, unless such Holder
previously shall have given to the Trustee written notice of a continuing Event
of Default as herein before provided, and unless also the Holders of not less
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than 25% in aggregate principal amount of the securities then Outstanding shall
have made written request upon the Trustee to institute such action or
proceedings in its own name as trustee hereunder and shall have offered to the
Trustee such reasonable indemnity as it may require against the costs, expenses
and liabilities to be incurred therein or thereby and the Trustee for 45 days
after its receipt of such notice, request and offer of indemnity shall have
failed to institute any such action or proceedings and no direction inconsistent
with such written request shall have been given to the Trustee pursuant to
Section 4.9; it being understood and intended, and being expressly covenanted by
the Holder of every Security with every other Holder of the Securities and the
Trustee, that no one or more Holders of Securities shall have any right in any
manner whatever by virtue or by availing of any provision of this Indenture to
affect, disturb or prejudice the rights of any other Holder of Securities, or to
obtain or seek to obtain priority over or preference to any other such Holder or
to enforce any right under this Indenture, except in the manner herein provided
and for the equal, ratable and common benefit of all Holders of Securities. For
the protection and enforcement of the provisions of this Section, each and every
Securityholder and the Trustee shall be entitled to such relief as can be given
either at law or in equity.
SECTION 4.7 Unconditional Right of Security holders to Receive
Principal, Premium and Interest, to Convert and to Institute Certain Suits.
Notwithstanding any other provision in this Indenture and any provision of any
Security, the right, subject to Article 12 herein, of any Holder of any Security
to receive payment of the principal of and premium, if any, and interest on such
Security on or after the respective due dates expressed in such Security (or, in
the case of redemption, on the Redemption Date), or to convert such Security in
accordance with Article Thirteen, or to institute suit for the enforcement of
any such payment on or after such respective dates, or for the enforcement of
such conversion right, shall not be impaired or affected without the consent of
such Holder.
SECTION 4.8 Powers and Remedies Cumulative; Delay or Omission Not
Waiver of Default. Except as provided in Sections 2.7, no right or remedy herein
conferred upon or reserved to the Trustee or to the Securityholders is intended
to be exclusive of any other right or remedy, and every right and remedy shall,
to the extent permitted by law, be cumulative and in addition to every other
right and remedy given hereunder or now or hereafter existing at law or in
equity or otherwise. The assertion or employment of any right or remedy
hereunder, or otherwise, shall not
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prevent the concurrent assertion or employment of any other appropriate right or
remedy.
No delay or omission of the Trustee or of any Holder of any of the
Securities to exercise any right or power accruing upon any Event of Default
occurring and continuing as aforesaid shall impair any such right or power or
shall be construed to be a waiver of any such Event of Default or an
acquiescence therein; and, subject to Section 4.6, every power and remedy given
by this Indenture or by law to the Trustee or to the Securityholders may be
exercised from time to time, and as often as shall be deemed expedient, by the
Trustee or by the Securityholders, as the case may be.
SECTION 4.9 Control by Securityholders. The Holders of a majority in
aggregate principal amount of the Securities at the time Outstanding shall have
the right to direct the time, method, and place of conducting any proceeding for
any remedy available to the Trustee, or exercising any trust or power conferred
on the Trustee; provided that such direction shall not be otherwise than in
accordance with law and the provisions of this Indenture; and provided further
that (subject to the provisions of Section 5.1) the Trustee shall have the right
to decline to follow any such direction if the Trustee, being advised by
counsel, shall determine that the action or proceeding so directed may expose
the Trustee to personal liability or if the Trustee in good faith by its board
of directors or the executive committee thereof shall so determine that the
actions or forbearances specified in or pursuant to such direction would be
unduly prejudicial to the interests of Holders of the Securities not joining in
the giving of said direction, it being understood that (subject to Section 5.1)
the Trustee shall have no duty to ascertain whether or not such actions or
forbearances are unduly prejudicial to such Holders.
Nothing in this Indenture shall impair the right of the Trustee in its
discretion to take any action deemed proper by the Trustee and which is not
inconsistent with such direction by Securityholders.
SECTION 4.10 Waiver of Past Defaults. Prior to the declaration of the
maturity of the Securities as provided in Section 4.1, the Holders of a majority
in aggregate principal amount of the Securities at the time Outstanding may on
behalf of the Holders of all the Securities waive any past default or Event of
Default hereunder and its consequences, except a default in respect of a
covenant or provision hereof which cannot be modified
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or amended without the consent of the Holder of each Security affected
(including, without limitation, the provisions with respect to payment of
principal of and premium, if any, and interest on such Security or with respect
to conversion of such Security).
Upon any such waiver, such default shall cease to exist and be deemed
to have been cured and not to have occurred, and any Event of Default arising
therefrom shall be deemed to have been cured, and not to have occurred for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other default or Event of Default or impair any right consequent thereon.
SECTION 4.11 Trustee to Give Notice of Default, But May Withhold in
Certain Circumstances. The Trustee shall, at the Issuer's expense, transmit to
the Holders of Securities, as the names and addresses of such Holders appear on
the registry books, notice by mail of all defaults known to the Trustee, such
notice to be transmitted within 90 days after the occurrence thereof, unless
such defaults shall have been cured before the giving of such notice (the term
"default" or "defaults" for the purposes of this Section being hereby defined to
mean any event or condition which is, or with notice or lapse of time or both
would become, an Event of Default); provided that, except in the case of default
in the payment of the principal of or premium, if any, or interest on any of the
Securities, the Trustee shall be protected in withholding such notice if and so
long as the board of directors, the executive committee, or a trust committee of
directors or trustees and/or Responsible Officers of the Trustee in good faith
determines that the withholding of such notice is in the interests of the
Securityholders.
SECTION 4.12 Right of Court to Require Filing of Undertaking to Pay
Costs. All parties to this Indenture agree, and each Holder of any Security by
his acceptance thereof shall be deemed to have agreed, that any court may in its
discretion require, in any suit for the enforcement of any right or remedy under
this Indenture or in any suit against the Trustee for any action taken, suffered
or omitted by it as Trustee, the filing by any party litigant in such suit other
than the Trustee of an undertaking to pay the costs of such suit, and that such
court may in its discretion assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in such suit including the Trustee,
having due regard to the merits and good faith of the claims or defenses made by
such party litigant; but the provisions of this Section shall not apply to any
suit instituted by the Trustee, to any suit
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instituted by any Securityholder or group of Securityholders holding in the
aggregate more than 10% in aggregate princi pal amount of the Securities at the
time Outstanding, or to any suit instituted by any Securityholder for the
enforcement of the payment of the principal of or interest on any Security on or
after the due date expressed in such Security or for the enforcement of a right
to convert any Security in accordance with Article Thirteen.
SECTION 4.13 Waiver of Stay or Extension Laws. The Issuer covenants (to
the extent that it may lawfully do so) that it will not at any time insist upon,
or plead, or in any manner whatsoever claim or take the benefit or advantage of,
any stay or extension law wherever enacted, now or at any time hereafter in
force, which may affect the covenants or the performance of this Indenture; and
the Issuer (to the extent that it may lawfully do so) 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 FIVE
CONCERNING THE TRUSTEE
SECTION 5.1 Duties and Responsibilities of the Trustee; During Default;
Prior to Default. With respect to the Holders of Securities issued hereunder,
the Trustee, prior to the occurrence of an Event of Default and after the curing
or waiving of all Events of Default which may have occurred, undertakes to
perform such duties and only such duties as are specifically set forth in this
Indenture. In case an Event of Default with respect to the Securities has
occurred (which has not been cured or waived), 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 man would exercise or use
under the circumstances in the conduct of his own affairs.
No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act or its own wilful misconduct or bad faith, except that
(a) prior to the occurrence of an Event of Default and after
the curing or waiving of all such Events of Default which may have
occurred:
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(i) the duties and obligations of the Trustee with
respect to Securities shall be determined solely by the
express provisions of this Indenture, and the Trustee shall
not be liable except for the performance of such duties and
obligations as are specifically set forth in this Indenture,
and no implied covenants or obligations shall be read into
this Indenture against the Trustee; and
(ii) in the absence of bad faith on the part of the
Trustee, the Trustee may conclusively rely, as to the truth of
the statements and the correct ness of the opinions expressed
therein, upon any resolution, statement, officer's
certificate, or any other certificate, instrument or opinion
furnished to the Trustee and conforming to the requirements of
this Indenture; but in the case of any such statements,
certificates or opinions which by any provision hereof are
specifically required to be furnished to the Trustee, the
Trustee shall be under a duty to examine the same to determine
whether or not they conform to the requirements of this
Indenture;
(b) the Trustee shall not be liable for any error of judgment
made in good faith by a Responsible Officer or Responsible Officers of
the Trustee, unless it shall be proved that the Trustee was negligent
in ascertaining the pertinent facts; and
(c) the Trustee shall not be liable with respect to any action
taken or omitted to be taken by it in good faith in accordance with the
direction of Holders pursuant to Section 4.9 relating to the time,
method and place of conducting any proceeding for any remedy available
to the Trustee, or exercising any trust or power conferred upon the
Trustee, under this Indenture.
None of the provisions contained in this Indenture shall require the
Trustee to expend or risk its own funds or otherwise incur personal financial
liability in the performance of any of its duties or in the exercise of any of
its rights or powers, if there shall be reasonable ground for believing that the
repayment of such funds or adequate indemnity against such liability is not
reasonably assured to it.
SECTION 5.2 Certain Rights of the Trustee. Subject to Section 5.1:
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(a) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolu tion, Officers' Certificate or
any other certificate, statement, instrument, opinion, report, notice,
request, direction, consent, order, bond, debenture, note, coupon,
security or other paper or document believed by it to be genuine and to
have been signed or presented by the proper party or parties;
(b) any request, direction, order or demand of the Issuer
mentioned herein shall be sufficiently evidenced by an Officers'
Certificate (unless other evidence in respect thereof be herein
specifically prescribed); and any resolution of the Board of Directors
may be evidenced to the Trustee by a copy thereof certified by the
Secretary or an Assistant Secretary of the Issuer;
(c) the Trustee may consult with counsel and any advice or
Opinion of Counsel shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted to be
taken by it hereunder in good faith and in accordance with such advice
or Opinion of Counsel;
(d) the Trustee shall be under no obligation to exercise any
of the trusts or powers vested in it by this Indenture at the request,
order or direction of any of the Securityholders pursuant to the
provisions of this Indenture, unless such Securityholders shall have
offered to the Trustee reasonable security or indemnity against the
costs, expenses and liabilities which might be incurred therein or
thereby;
(e) the Trustee shall not be liable for any action taken,
suffered or omitted by it in good faith and believed by it to be
authorized or within the discretion, rights or powers conferred upon it
by this Indenture;
(f) prior to the occurrence of an Event of Default hereunder
and after the curing or waiver of all Events of Default, the Trustee
shall not be bound to make any investigation into the facts or matters
stated in any resolution, certificate, statement, instrument, opinion,
report, notice, request, consent, order, approval, appraisal, bond,
debenture, note, coupon, security, or other paper or document unless
requested in writing so to do by the Holders of not less than a
majority in aggregate principal amount of the Securities then
Outstanding, but the Trustee, in its
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discretion, may make such further inquiries or investigation into such
facts or matters as it may see fit, and, if the Trustee shall determine
to make such inquiry or investigation, it shall be entitled to examine
the books, records and premises of the Issuer, personally or by agent
or attorney; provided that, if the payment within a reasonable time to
the Trustee of the costs, expenses or liabilities likely to be incurred
by it in the making of such investigation is, in the opinion of the
Trustee, not reasonably assured to the Trustee by the security afforded
to it by the terms of this Indenture, the Trustee may require
reasonable indemnity against such expenses or liabili ties as a
condition to proceeding; the reasonable expenses of every such
examination shall be paid by the Issuer or, if paid by the Trustee or
any predecessor trustee, shall be repaid by the Issuer upon demand; and
(g) the Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or
through agents or attorneys not regularly in its employ and the Trustee
shall not be responsible for any misconduct or negligence on the part
of any such agent or attorney appointed with due care by it hereunder.
SECTION 5.3 Trustee Not Responsible for Recitals, Disposition of
Securities or Application of Proceeds Thereof. The recitals contained herein and
in the Securi ties, except the Trustee's certificates of authentication, shall
be taken as the statements of the Issuer, and the Trustee assumes no
responsibility for the correctness of the same. The Trustee makes no
representation as to the validity or sufficiency of this Indenture or of the
Securi ties. The Trustee shall not be accountable for the use or application by
the Issuer of any of the Securities or of the proceeds thereof.
SECTION 5.4 Trustee and Agents May Hold Securities; Collections, etc.
The Trustee or any agent of the Issuer or the Trustee, in its individual or any
other capacity, may become the owner or pledgee of Securities with the same
rights it would have if it were not the Trustee or such agent and, subject to
Section 5.8, may otherwise deal with the Issuer and receive, collect, hold and
retain collections from the Issuer with the same rights it would have if it were
not the Trustee or such agent.
SECTION 5.5 Compensation and Indemnification of Trustee and Its Prior
Claim. The Issuer covenants and agrees to pay to the Trustee from time to time,
and the
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Trustee shall be entitled to, reasonable compensation (which shall not be
limited by any provision of law in regard to the compensation of a trustee of an
express trust) and the Issuer covenants and agrees to pay or reimburse the
Trustee and each predecessor Trustee upon its request for all reasonable
expenses, disbursements and advances incurred or made by or on behalf of it in
accordance with any of the provisions of this Indenture (including the
reasonable compensation and the expenses and disbursements of its counsel and of
all agents and other persons not regularly in its employ) except any such
expense, disbursement or advance as may arise from its negligence or bad faith.
The Issuer also covenants to indemnify the Trustee and each predecessor Trustee
for, and to hold it harmless against, any loss, liability or expense incurred
without negligence or bad faith on its part, arising out of or in connection
with the acceptance or administration of this Indenture or the trusts hereunder
and its duties hereunder, including but not limited to the costs and expenses of
defending itself against or investigating any claim or liability in connec tion
with the exercise or performance of any of its powers or duties hereunder. The
obligations of the Issuer under this Section to compensate and indemnify the
Trustee and each predecessor Trustee and to pay or reimburse the Trustee and
each predecessor Trustee for expenses, disbursements and advances shall
constitute additional Indebtedness hereunder and shall survive the satisfaction
and discharge of this Indenture. Such additional Indebtedness shall be a senior
claim to that of the Securities upon all property and funds held or collected by
the Trustee as such, except funds held in trust for the payment of principal of
or interest on particular Securities, and the Securities are hereby subordinated
to such senior claim. When the Trustee incurs expenses or renders services in
connection with an Event of Default specified in Section 4.1 or in connection
with Article Four hereof, the expenses (including the reasonable fees and
expenses of its counsel) and the compensation for the service in connection
therewith are intended to constitute expenses of administration under any
bankruptcy law.
SECTION 5.6 Right of Trustee to Rely on Officers' Certificate, etc.
Subject to Sections 5.1 and 5.2, whenever in the administration of the trusts of
this Indenture the Trustee shall deem it necessary or desirable that a matter be
proved or established prior to taking or suffering or omitting any action
hereunder, such matter unless other evidence in respect thereof be herein
specifically prescribed) may, in the absence of negligence or bad faith on the
part of the Trustee, be deemed to be conclusively proved and established by an
Officers' Certificate delivered
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to the Trustee, and such certificate, in the absence of negligence or bad faith
on the part of the Trustee, shall be full warrant to the Trustee for any action
taken, suffered or omitted by it under the provisions of this Indenture upon the
faith thereof.
SECTION 5.7 Persons Eligible for Appointment as Trustee. The Trustee
hereunder shall at all times be a corporation organized and doing business under
the laws of the United States of America or of any State or the District of
Columbia. The Trustee and its direct parent shall at all times have a combined
capital and surplus of at least $50,000,000, and which is authorized under such
laws to exercise corporate trust powers and is subject to supervision or
examination by Federal, State or District of Columbia authority. If such
corporation publishes reports of condition at least annually, pursuant to law or
to the requirements of the aforesaid supervising or examining authority, then
for the purposes of this Section, the combined capital and surplus of such
corporation shall be deemed to be its combined capital and surplus as set forth
in its most recent report of condition so published. In case at any time the
Trustee shall cease to be eligible in accordance with the provisions of this
Section, the Trustee shall resign immediately in the manner and with the effect
specified in Section 5.8.
SECTION 5.8 Resignation and Removal; Appointment of Successor Trustee.
(a) The Trustee may at any time resign by giving written notice of resignation
to the Issuer. Upon receiving such notice of resignation, the Issuer shall
promptly appoint a successor trustee by written instrument in duplicate,
executed by authority of the Board of Directors, one copy of each instrument
shall be delivered to the resigning Trustee and one copy to the successor
trustee. If no successor trustee shall have been so appointed and have accepted
appointment within 30 days after the giving of such notice of resignation, the
resigning trustee may petition any court of competent jurisdiction for the
appointment of a successor trustee, or any Security holder who has been a bona
fide Holder of a Security or Securities for at least six months may, subject to
the provisions of Section 4.12, on behalf of himself and all others similarly
situated, petition any such court for the appointment of a successor trustee.
Such court may thereupon, after such notice, if any, as it may deem proper and
prescribe, appoint a successor trustee.
(b) (1) At any time prior to the Exchange Date or (2) if at any time
any of the following shall occur:
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(i) the Trustee shall fail to comply with the pro visions of
Section 5.7 after written request therefor by the Issuer or by any
Securityholder who has been a bona fide Holder of a Security or
Securities for at least six months; or
(ii) the Trustee shall became incapable of acting, or shall be
adjudged a bankrupt or insolvent, or a receiver or liquidator of the
Trustee or of its property shall be appointed, or any public officer
shall take charge or control of the Trustee or of its property or
affairs for the purpose of rehabilitation, conservation or liquidation;
then, in any such case in (1) or (2)(i) or (ii), the Issuer may remove the
Trustee and appoint a successor trustee by written instrument, in duplicate,
executed by order of the Board of Directors of the Issuer, one copy of which
instrument shall be delivered to the Trustee so removed and one copy to the
successor trustee (provided that in the case of (1) such removal and appointment
of a successor must become effective prior to the Exchange Date), or, in the
case of (2)(i) or (ii) and subject to the provisions of Section 4.12, any
Securityholder who has been a bona fide Holder of a Security or Securities for
at least six months may on behalf of himself and all others similarly situated,
petition any court of competent jurisdiction for the removal of the Trustee and
the appointment of a successor trustee. Such court may thereupon, after such
notice, if any, as it may deem proper and prescribe, remove the Trustee and
appoint a successor trustee.
(c) The Holders of a majority in aggregate principal amount of the
Securities at the time Outstanding may at any time remove the Trustee and
appoint a successor trustee by delivering to the Trustee so removed, to the
successor trustee so appointed and to the Issuer the evidence provided for in
Section 6.1 of the action in that regard taken by the Securityholders.
(d) Any resignation or removal of the Trustee and any appointment of a
successor trustee pursuant to any of the provisions of this Section 5.8 shall
become effective upon acceptance of appointment by the successor trustee as
provided in Section 5.9.
(e) The Issuer shall give notice of each resigna tion and each removal
of the Trustee and each appointment of a successor trustee by mailing written
notice of such event by first-class mail, postage prepaid, to the Holders of
Securities affected as their names and addresses appear in
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the Security register, provided that if such removal and appointment of a
successor occurs prior to the Exchange Date, such notice shall be so given on
the Exchange Date. Each notice shall include the name of the successor trustee
and the address of its principal corporate trust office.
SECTION 5.9 Acceptance of Appointment by Succes sor Trustee. Any
successor trustee appointed as provided in Section 5.8 shall execute and deliver
to the Issuer and to its predecessor trustee an instrument accepting such
appointment hereunder, and thereupon the resignation or removal of the
predecessor trustee shall become effective and such successor trustee, without
any further act, deed or conveyance, shall become vested with all rights,
powers, duties and obligations of its predecessor hereunder, with like effect as
if originally named as trustee herein; but, nevertheless, on the written request
of the Issuer or of the successor trustee, upon payment of its charges then
unpaid, the trustee ceasing to act shall, subject to Section 9.4, pay over to
the successor trustee all moneys at the time held by it hereunder and shall
execute and deliver an instrument transferring to such successor trustee all
such rights, powers, duties and obligations. Upon request of any such successor
trustee, the Issuer shall execute any and all instruments in writing for more
fully and certainly vesting in and confirming to such successor trustee all such
rights and powers. Any trustee ceasing to act shall, nevertheless, retain a
prior claim upon all property or funds held or collected by such trustee to
secure any amounts then due it pursuant to the provisions of Section 5.5.
Upon acceptance of appointment by a successor trustee as provided in
this Section 5.9, the Issuer shall mail notice thereof by first-class mail to
the Holders of Securities at their last addresses as they shall appear in the
Security register. If the acceptance of appointment is substantially
contemporaneous with the resignation, then the notice called for by the
preceding sentence may be combined with the notice called for by Section 5.8. If
the Issuer fails to mail such notice within 10 days after acceptance of
appointment by the successor trustee, the successor trustee shall cause such
notice to be mailed at the expense of the Issuer.
SECTION 5.10 Merger, Conversion, Consolidation or Succession to
Business of Trustee. Any corporation into which the Trustee may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which the Trustee shall be a
party, or any corporation succeeding to the cor porate trust business of the
Trustee, shall be the successor
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of the Trustee hereunder without the execution or filing of any paper or any
further act on the part of any of the parties hereto, anything herein to the
contrary notwithstanding; provided that such corporation shall be eligible under
the provisions of Section 5.7.
In case at the time such successor to the Trustee shall succeed to the
trusts created by this Indenture any of the Securities shall have been
authenticated but not delivered, any such successor to the Trustee may adopt the
certificate of authentication of any predecessor trustee and deliver such
Securities so authenticated; and, in case at that time any of the Securities
shall not have been authen ticated, any successor to the Trustee may
authenticate such Securities either in the name of any predecessor hereunder or
in the name of the successor trustee; and in all such cases such certificate
shall have the full force which it is anywhere in the Securities or in this
Indenture provided that the certificate of the Trustee shall have; provided,
that the right to adopt the certificate of authentication of any predecessor
trustee or to authenticate Securities of any series in the name of any
predecessor trustee shall apply only to its successor or successors by merger,
conversion or consolidation.
ARTICLE SIX
CONCERNING THE SECURITYHOLDERS
SECTION 6.1 Evidence of Action Taken by Security holders. Any request,
demand, authorization, direction, notice, consent, waiver or other action
provided by this Indenture to be given or taken by Securityholders may be
embodied in and evidenced by one or more instruments of substantially similar
tenor signed by such Securityholders in person or by agent duly appointed in
writing; and, except as herein otherwise expressly provided, such action shall
become effective when such instrument or instruments are delivered to the
Trustee. Proof of execution of any such instrument or of a writing appointing
any such agent shall be sufficient for any purpose of this Indenture and
(subject to Sections 5.1 and 5.2) conclusive in favor of the Trustee and the
Issuer, if made in the manner provided in this Article.
SECTION 6.2 Proof of Execution of Instruments and of Holding of
Securities. Subject to Sections 5.1 and 5.2, the fact and date of the execution
of any instrument by any Securityholder or his agent or proxy, or the authority
of such an agent or proxy to execute such an instrument may be
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proved (i) by the affidavit of a witness of such execution, (ii) by a
certificate of a notary public (or other officer authorized by law to take
acknowledgments of deeds) as to such execution, or (iii) in accordance with such
reasonable rules and regulations as may be prescribed by the Trustee or in such
manner as shall be reasonably satisfactory to the Trustee. The holding of
Securities shall be proved by the Security register or by a certificate of the
registrar thereof.
SECTION 6.3 Holders to Be Treated as Owners. Prior to due presentment
of a Security for registration of transfer, the Issuer, the Trustee, any Agent
and any agent of the Issuer or the Trustee may deem and treat the person in
whose name any Security shall be registered upon the Security register as the
absolute owner of such Security (whether or not such Security shall be overdue
and notwithstanding any notation of ownership or other writing thereon) for the
purpose of receiving payment of or on account of the principal of and, subject
to the provisions of this Indenture, interest on such Security and for all other
purposes; and neither the Issuer nor the Trustee nor any Agent or agent of the
Issuer or the Trustee shall be affected by any notice to the contrary. All such
payments so made to any such person, or upon his order, shall be valid, and, to
the extent of the sum or sums so paid, effectual to satisfy and discharge the
liability for moneys payable upon any such Security.
SECTION 6.4 Securities Owned by Issuer Deemed Not Outstanding. In
determining whether the Holders of the requisite principal amount of Outstanding
Securities have concurred in any direction, consent or waiver under this
Indenture, Securities which are owned by the Issuer or any other obligor on the
Securities or any Affiliate of the Issuer or of such other obligor shall be
disregarded and deemed not to be Outstanding for the purpose of any such
determination, except that for the purpose of determining whether the Trustee
shall be protected in relying on any such direction, consent or waiver only
Securities which the Trustee knows are so owned shall be so disregarded. Securi
ties so owned which have been pledged in good faith may be regarded as
Outstanding if the pledgee establishes to the satisfaction of the Trustee the
pledgee's right so to act with respect to such Securities and that the pledgee
is not the Issuer or any other obligor upon the Securities or any Affiliate of
the Issuer or of such other obligor. In case of a dispute as to such right, the
advice of counsel shall be full protection in respect of any decision made by
the Trustee in accordance with such advice. Upon request of the Trustee, the
Issuer shall furnish to the Trustee promptly an
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Officers' Certificate listing and identifying all Securi ties, if any, known by
the Issuer to be owned or held by or for the account of any of the
above-described Persons; and, subject to Sections 5.1 and 5.2, the Trustee shall
be entitled to accept such Officers' Certificate as conclusive evidence of the
facts therein set forth and of the fact that all Securities not listed therein
are Outstanding for the purpose of any such determination.
SECTION 6.5 Right of Revocation of Action Taken. At any time prior to
(but not after) the evidencing to the Trustee, as provided in Section 6.1, of
the taking of any action by the Holders of the percentage in aggregate principal
amount of the Securities specified in this Indenture in connection with such
action, any Holder of a Security the serial number of which is shown by the
evidence to be included among the serial numbers of the Securities the Holders
of which have consented to such action may, by filing written notice at the
Corporate Trust Office and upon proof of holding as provided in this Article,
revoke such action so far as concerns such Security. Except as afore said any
such action taken by the Holder of any Security shall be conclusive and binding
upon such Holder and upon all future Holders and owners of such Security and of
any Securities issued in exchange or substitution therefor or on registration or
transfer thereof, irrespective of whether or not any notation in regard thereto
is made upon any such Security. Any action taken by the Holders of the
percentage in aggregate principal amount of the Securities specified in this
Indenture in connection with such action shall be conclusively binding upon the
Issuer, the Trustee and the Holders of all the Securities.
SECTION 6.6 Record Date for Consents and Waivers. The Issuer may, but
shall not be obligated to, direct the Trustee to establish a record date for the
purpose of determining the Persons entitled to (i) waive any past default with
respect to the Securities in accordance with Section 4.10, (ii) consent to any
supplemental indenture in accordance with Section 7.2 or (iii) waive compliance
with any term, condition or provision of any covenant hereunder (if the
Indenture should expressly provide for such waiver). If a record date is fixed,
the Holders of Securities on such record date, or their duly designated proxies,
and any such Persons, shall be entitled to waive any such past default, consent
to any such supplemental indenture or waive compliance with any such term,
condition or provision, whether or not such Holder remains a Holder after such
record date; provided, however, that unless such waiver or consent is obtained
from the Holders, or duly designated proxies, of the requisite principal amount
of Outstanding
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Securities prior to the date which is the 90th day after such record date, any
such waiver or consent previously given shall automatically and without further
action by any Holder be cancelled and of no further effect.
ARTICLE SEVEN
SUPPLEMENTAL INDENTURES
SECTION 7.1 Supplemental Indentures Without Consent of Securityholders.
The Issuer, when authorized by a resolution of its Board of Directors, and the
Trustee may from time to time and at any time enter into an indenture or
indentures supplemental hereto for one or more of the following purposes:
(a) to convey, transfer, assign, mortgage or pledge to the
Trustee as security for the Securities any property or assets;
(b) to evidence the succession of another corporation to the
Issuer, or successive successions, and the assumption by the successor
corporation of the covenants, agreements and obligations of the Issuer
pursuant to Article Eight;
(c) to add to the covenants of the Issuer such further covenants,
restrictions, conditions or provisions (including without limitation
provisions necessary or desirable to qualify this Indenture under the
Trust Indenture Act of 1939, or any successor statute, as may then be
in effect) as its Board of Directors and the Trustee shall consider to
be for the protection or benefit of the Holders of Securities, and to
make the occurrence, or the occurrence and continu ance, of a default
in any such additional covenants, restrictions, conditions or
provisions an Event of Default permitting the enforcement of all or
any of the several remedies provided in this Indenture as herein set
forth; provided, that in respect of any such addi tional covenant,
restriction, condition or provision such supplemental indenture may
provide for a particu lar period of grace after default (which period
may be shorter or longer than that allowed in the case of other
defaults) or may provide for an immediate enforcement upon such an
Event of Default or may limit the remedies available to the Trustee
upon such an Event of Default or may limit the right of the Holders of
a majority in aggregate principal amount of the Securities to waive
such an Event of Default;
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(d) to cure any ambiguity or to correct or supplement any
provision contained herein or in any supplemental indenture which may
be defective or inconsistent with any other provision contained herein
or in any supplemental indenture or to make such other provision in
regard to matters or questions arising under this Indenture or under
any supplemental indenture as the Board of Directors may deem
necessary or desirable, provided that no such action shall adversely
affect the interests of the Holders of the Securities;
(e) to provide for adjustment of conversion rights pursuant to
Section 13.5; or
(f) to evidence the removal or resignation of the Trustee and the
appointment of a successor Trustee or Trustees pursuant to Article
Five.
The Trustee is hereby authorized to join in the execution of any such
supplemental indenture, to make any further appropriate agreements and
stipulations, which may be therein contained, and to accept the conveyance,
transfer, assignment, mortgage or pledge of any property thereunder, but the
Trustee shall not be obligated to enter into any such supplemental indenture
which affects adversely the Trustee's own rights, duties, immunities or
liabilities under this Indenture or otherwise.
Any supplemental indenture authorized by the provisions of this Section
7.1 may be executed without the consent of the Holders of any of the Securities
at the time Outstanding, notwithstanding any of the provisions of Section 7.2.
SECTION 7.2 Supplemental Indentures with Consent of Securityholders.
With the consent (evidenced as provided in Article Six) of the Holders of not
less than a majority in aggregate principal amount of the Securities at the time
Outstanding (or, prior to any exchange of Securities for Convertible Preferred
Stock, with the consent of holders of not less than a majority of the
Outstanding shares of Convertible Preferred Stock), the Issuer, when authorized
by a resolution of its Board of Directors, and the Trustee may, from time to
time and at any time, enter into an indenture or indentures supplemental hereto
for the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions of this Indenture or of any supplemental
indenture or of modifying in any manner the rights of the Holders of the
Securities; provided, that no such supplemental indenture shall (a) extend the
final
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maturity of any Security, or reduce the principal amount thereof or premium, if
any, thereon, or reduce the rate or extend the time of payment of interest
thereon, or any premium payable upon the redemption thereof, or change the place
of payment where, or the coin or currency in which, any principal, premium or
interest is payable, or reduce or alter the method of calculation of any amount
payable on redemption or repayment thereof (or the time at which any such
redemption may be made), or impair or adversely affect the right of any
Securityholder to institute suit for the payment or conversion thereof or
adversely affect the right to convert the Securities in accordance with Article
Thirteen, in each case, without the consent of the Holder of each Security so
affected; provided, no consent of any Holder of any Security shall be necessary
under this Section 7.2 to permit the Trustee and the Issuer to execute
supplemental indentures pursuant to Section 7.1(e) and Section 13.5 of this
Indenture; or (b) reduce the aforesaid percentage in principal amount of
Outstanding Securities, the consent of the Holders of which is required for any
such supplemental indenture, without the consent of the Holders of each Security
so affected; or (c) reduce the percentage of Securities necessary to consent to
waive any past default under this Indenture to less than a majority, without the
consent of the Holders of each Security so affected, or (d) modify the
provisions of Article Twelve hereof or any other provision hereof relating to
subordination of the Securities in any manner adverse to the Securityholders
without the consent of the Holder of each Security so affected, or (e) modify
any of the provisions of this Section or Section 4.10, except to increase any
such percentage provided in either such Section or to provide that certain other
provisions of this Indenture cannot be modified or waived without the consent of
the Holder of each Security affected thereby.
Upon the request of the Issuer, accompanied by a copy of a resolution
of the Board of Directors (which resolution may provide general terms or
parameters for such action and may provide that the specific terms of such
action may be determined in accordance with or pursuant to an Issuer Order),
certified by the Secretary or an Assistant Secretary of the Issuer, authorizing
the execution of any such supplemental indenture, and upon the filing with the
Trustee of evidence of the consent of Securityholders and other documents, if
any, required by Section 6.1, the Trustee shall join with the Issuer in the
execution of such supplemental indenture unless such supplemental indenture
adversely affects the Trustee' own rights, duties, immunities or liabilities
under this Indenture or otherwise,
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in which case the Trustee may in its discretion, but shall not be obligated to,
enter into such supplemental indenture.
It shall not be necessary for the consent of the Securityholders under
this Section to approve the particular form of any proposed supplemental
indenture, but it shall be sufficient if such consent shall approve the
substance thereof.
Promptly after the execution by the Issuer and the Trustee of any
supplemental indenture pursuant to the provisions of this Section, the Issuer
shall mail a notice thereof by first-class mail to the Holders of Securities at
their addresses as they shall appear on the registry books of the Issuer,
setting forth in general terms the substance of such supplemental indenture. Any
failure of the Issuer 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 7.3 Effect of Supplemental Indenture. Upon the execution of any
supplemental indenture pursuant to the provisions hereof, this Indenture shall
be and be deemed to be modified and amended in accordance therewith and the
respective rights, limitations of rights, obligations, duties and immunities
under this Indenture of the Trustee, the Issuer and the Holders of Securities
shall thereafter be determined, exercised and enforced hereunder subject in all
respects to such modifications and amendments, and all the terms and conditions
of any such supplemental indenture shall be and be deemed to be part of the
terms and conditions of this Indenture for any and all purposes.
SECTION 7.4 Documents to be Given to Trustee. The Trustee, subject to
the provisions of Sections 5.1 and 5.2, may receive an Officers' Certificate and
an Opinion of Counsel as conclusive evidence that any such supplemental
indenture complies with the applicable provisions of this Indenture.
SECTION 7.5 Notation on Securities in Respect of Supplemental
Indentures. Securities authenticated and delivered after the execution of any
supplemental indenture pursuant to the provisions of this Article may bear a
notation in form approved by the Trustee as to any matter provided for by such
supplemental indenture. If the Issuer or the Trustee shall so determine, new
Securities so modified as to conform, in the opinion of the Trustee and the
Board of Directors, to any modification of this Indenture contained in any such
supplemental indenture may
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be prepared by the Issuer, authenticated by the Trustee and delivered in
exchange for the Securities then Outstanding.
ARTICLE EIGHT
CONSOLIDATION, MERGER, SALE OR CONVEYANCE
SECTION 8.1 Covenant Not to Merge, Consolidate, Sell or Convey Property
Except Under Certain Conditions.
The Issuer may not consolidate or merge with or into (whether or not
the Issuer is the Surviving Person), or sell, assign, transfer, lease, convey or
otherwise dispose of all or substantially all of its properties or assets in one
or more related transactions, to another Person (each a "Disposition"), unless:
(i) the Surviving Person is a corporation organized or existing under
the laws of the United States, any state thereof or the District of
Columbia;
(ii) the Surviving Person (if other than the Issuer) assumes all the
obligations of the Issuer under the Securities and this Indenture, and
makes provision for conversion rights in accordance with Section 13.5,
pursuant to a supplemental indenture in a form reasonably satisfactory
to the Trustee; and
(iii) immediately after such Disposition, no Event of Default or event
that, after the giving of notice or the passage of time or both, would
be an Event of Default, shall have occurred and be continuing.
SECTION 8.2 Successor Corporation or Entity Substituted. In case of any
such consolidation, merger, sale or conveyance, and following such an assumption
by the successor corporation, partnership or limited liability company, such
successor corporation, partnership or limited liability company shall succeed to
and be substituted for the Issuer, with the same effect as if it had been named
herein.
Such successor corporation, partnership or limited liability company
may cause to be signed, and may issue either in its own name or in the name of
the Issuer prior to such succession any or all of the Securities issuable
hereunder which theretofore shall not have been signed by the Issuer and
delivered to the Trustee; and, upon the order
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of such successor corporation, partnership or limited liability company, instead
of the Issuer, and subject to all the terms, conditions and limitations in this
Indenture prescribed, the Trustee shall authenticate and shall deliver any
Securities which previously shall have been signed and delivered by the officers
of the Issuer to the Trustee for authentication, and any Securities which such
successor corporation, partnership or limited liability company thereafter shall
cause to be signed and delivered to the Trustee for that purpose. All of the
Securities so issued shall in all respects have the same legal rank and benefit
under this Indenture as the Securities theretofore or thereafter issued in
accordance with the terms of this Indenture as though all of such Securities had
been issued at the date of the execution hereof.
In case of any such consolidation, merger, sale, lease or conveyance,
such changes in phraseology and form (but not in substance) may be made in the
Securities thereafter to be issued as may be appropriate.
In the event of any such sale or conveyance (other than a conveyance by
way of lease), the Issuer or any successor corporation, partnership or limited
liability company which shall theretofore have become such in the manner
described in this Article shall be discharged from all obligations and covenants
under this Indenture and the Securities and may be liquidated and dissolved.
SECTION 8.3 Opinion of Counsel to Trustee. The Trustee, subject to the
provisions of Sections 5.1 and 5.2, may receive an Opinion of Counsel prepared
in accordance with Section 10.5 as conclusive evidence that any such
consolidation, merger, sale, lease or conveyance, and any such assumption, and
any such liquidation or dissolution, complies with the applicable provisions of
this Indenture.
ARTICLE NINE
SATISFACTION AND DISCHARGE
OF INDENTURE; UNCLAIMED MONEYS
SECTION 9.1 Satisfaction and Discharge of Indenture. If at any time (a)
the Issuer shall have paid or caused to be paid the principal of and premium, if
any, and interest on all the Securities then Outstanding hereunder, as and when
the same shall have become due and payable, or (b) the Issuer shall have
delivered to the Trustee for cancellation all Securities theretofore
authenticated (other
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than any Securities which shall have been destroyed, lost or stolen and which
shall have been replaced or paid as provided in Section 2.7) or (c) (i) all such
Securities not theretofore delivered to the Trustee for cancellation (x) shall
have become due and payable, or (y) are by their terms to become due and payable
within one year or are to be called for redemption within one year under
arrangements reasonably satisfactory to the Trustee for the giving of notice of
redemption, and (ii) the Issuer shall have irrevocably deposited or caused to be
deposited with the Trustee as trust funds the entire amount in cash (other than
moneys repaid by the Trustee or any Paying Agent to the Issuer in accordance
with Section 9.4) or U.S. Government Obligations maturing as to principal and
interest at such times and in such amounts as will insure the availability of
cash, or a combination thereof, sufficient in the opinion of a nationally
recognized firm of independent public accountants expressed in a written
certification thereof delivered to the Trustee, to pay the principal of and
interest on all Securities on each date that such principal or interest is due
and payable; and if, in any such case, the Issuer shall also pay or cause to be
paid all other sums payable hereunder by the Issuer, then this Indenture shall
cease to be of further effect (except as to (i) rights of registration of
transfer, conversion and exchange of Securities, and the Issuer's right of
optional redemption contemplated in clause (c)(i)(y) above (but not otherwise
and not including the Holders' right of redemption contemplated by Article
Fourteen), (ii) substitution of apparently mutilated, defaced, destroyed, lost
or stolen Securities, (iii) rights of the Holders of Securities to receive
payments of principal thereof and premium, if any and interest thereon upon the
original stated due dates therefor (but not upon acceleration), (iv) the rights,
obli gations and immunities of the Trustee hereunder, including any right to
compensation and indemnification under Section 5.5, and (v) the rights of the
Holders of Securities as beneficiaries hereof with respect to the property so
deposited with the Trustee payable to all or any of them), and the Trustee, on
demand of the Issuer accompanied by an Officers' Certificate and an Opinion of
Counsel stating that the provisions of this Section have been complied with and
at the cost and expense of the Issuer, shall execute proper instruments
acknowledging such satisfaction of and discharging this Indenture, provided,
that the rights of Holders of the Securities to receive amounts in respect of
principal of, premium, if any, and interest on the Securities held by them shall
not be delayed longer than required by then-applicable mandatory rules or
policies of any securities exchange upon which the Securities are listed. In
addition, in connection with the satisfaction
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and discharge pursuant to clause (c)(i)(y) above, the Trustee shall give notice
to the Holders of Securities of such satisfaction and discharge. The Issuer
agrees to reimburse the Trustee for any costs or expenses thereafter reasonably
and properly incurred and to compensate the Trustee for any services thereafter
reasonably and properly rendered by the Trustee in connection with this
Indenture or the Securities.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Issuer to the Trustee under Section 5.5 shall survive.
SECTION 9.2 Application by Trustee of Funds Deposited for Payment of
Securities. Subject to Section 9.4, all moneys and securities deposited with the
Trustee pursuant to Section 9.1 shall be held in trust and applied by it to the
payment, either directly or through any Paying Agent (including the Issuer
acting as its own Paying Agent), to the Holders of the particular Securities for
the payment or redemption of which such moneys or Securities have been deposited
with the Trustee of all sums due and to become due thereon for principal and
interest; but such moneys or securities need not be segregated from other funds
except to the extent required by law.
SECTION 9.3 Repayment of Moneys Held by Paying Agent. In connection
with the satisfaction and discharge of this Indenture with respect to
Securities, all moneys then held by any Paying Agent under the provisions of
this Indenture shall, upon demand of the Issuer, be repaid to it or paid to the
Trustee and thereupon such Paying Agent shall be released from all further
liability with respect to such moneys.
SECTION 9.4 Return of Moneys Held by Trustee and Paying Agent Unclaimed
for Two Years. Any moneys deposited with or paid to the Trustee or any Paying
Agent for the payment of the principal of or premium, if any, or interest on any
Security and not applied but remaining unclaimed for two years after the date
upon which such principal, premium or interest shall have become due and payable
shall, upon the written request of the Issuer and unless otherwise required by
mandatory provisions of applicable escheat or abandoned or unclaimed property
law, be repaid to the Issuer by the Trustee or such Paying Agent, and the Holder
of the Securities shall, unless otherwise required by mandatory provisions of
applicable escheat or abandoned or unclaimed property laws, thereafter look only
to the Issuer for any payment which such Holder may be entitled to collect, and
all liability of the Trustee or any Paying Agent with
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respect to such moneys shall thereupon cease; provided, however, that the
Trustee or such Paying Agent, before being required to make any such repayment
with respect to moneys deposited with it for any payment, shall, at the expense
of the Issuer, mail by first-class mail to Holders of such Securities at their
addresses as they shall appear on the Security register notice that such moneys
remain and that, after a date specified therein, which shall not be less than 30
days from the date of such mailing, any unclaimed balance of such money then
remaining will be repaid to the Issuer.
SECTION 9.5 Indemnity for U.S. Government Obligations. The Issuer 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
9.1 or the principal or interest received in respect of such obligations.
ARTICLE TEN
MISCELLANEOUS PROVISIONS
SECTION 10.1 Partners, Incorporators, Stockholders, Officers and
Directors of Issue Exempt from Individual Liability. No recourse under or upon
any obliga tion, covenant or agreement contained in this Indenture, or in any
Security, or because of any Indebtedness evidenced thereby, shall be had against
any incorporator, as such, or against any past, present or future stockholder,
officer or director, as such, of the Issuer or of any partner or member of the
Issuer or of any successor, either directly or through the Issuer or any
successor, under any rule of law, statute or constitutional provision or by the
enforcement of any assessment or by any legal or equitable proceeding or
otherwise, all such liability being expressly waived and released by the
acceptance of the Securities by the Holders thereof and as part of the
consideration for the issue of the Securities.
SECTION 10.2 Provisions of Indenture for the Sole Benefit of Parties
and Securityholder. Nothing in this Indenture or in the Securities, expressed or
implied, shall give or be construed to give to any Person, other than the
parties hereto and their successors and the holders of Senior Indebtedness and
the Holders of the Securities, any legal or equitable right, remedy or claim
under this Indenture or under any covenant or provision herein contained, all
such covenants and provisions being for the sole benefit of the parties hereto
and their successors, the holders of Senior Indebtedness and the Holders of the
Securities.
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SECTION 10.3 Successors and Assigns of Issuer Bound by Indenture. All
the covenants, stipulations, promises and agreements in this Indenture contained
by or in behalf of the Issuer shall bind its successors and assigns, whether so
expressed or not.
SECTION 10.4 Notices and Demands on Issuer, Trustee and
Securityholders. Any notice or demand which by any provision of this Indenture
is required or permitted to be given or served by the Trustee or by the Holders
of Securities to or on the Issuer may be given or served by being deposited
postage prepaid, first-class mail (except as otherwise specifically provided
herein) addressed (until another address of the Issuer is filed by the Issuer
with the Trustee) to American Radio Systems Corporation, 116 Huntington Avenue,
Boston, MA 02116, Attention: Chief Financial Officer and Secretary. Any notice,
direction, request or demand by the Issuer or any Securityholder to or upon the
Trustee shall be deemed to have been sufficiently given or made, for all
purposes, if given or made at the Corporate Trust Office, Attention: Corporate
Trustee Administration Department.
Where this Indenture provides for notice to Holders, such notice shall
be sufficiently given (except as otherwise specifically provided herein) if in
writing, and mailed, first-class postage prepaid, to each Holder entitled
thereto, at his last address as it appears in the Security register. In any case
where notice to Holders is given by mail, neither the failure to mail such
notice, nor any defect in any notice so mailed, to any particular Holder shall
affect the sufficiency of such notice with respect to other Holders. Where this
Indenture provides for notice in any manner, such notice may be waived in
writing by the Person entitled to receive such notice, either before or after
the event, and such waiver shall be the equivalent of such notice. Waivers of
notice by Holders shall be filed with the Trustee, but such filing shall not be
a condition precedent to the validity of any action taken in reliance upon such
waiver.
In case, by reason of the suspension of or irregu larities in regular
mail service, it shall be impracticable to mail notice to the Issuer and
Securityholders when such notice is required to be given pursuant to any
provision of this Indenture, then any manner of giving such notice as shall be
satisfactory to the Trustee shall be deemed to be a sufficient giving of such
notice.
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SECTION 10.5 Officers' Certificates and Opinions of Counsel; Statements
to Be Contained Therein. Upon any application or demand by the Issuer to the
Trustee to take any action under any of the provisions of this Indenture, the
Issuer shall furnish to the Trustee an Officers' Certificate stating that all
conditions precedent provided for in this Indenture relating to the proposed
action have been complied with and an Opinion of Counsel stating that in the
opinion of such counsel all such conditions precedent have been complied with,
except that in the case of any such application or demand as to which the
furnishing of such documents is specifically required by any provision of this
Indenture relating to such particular application or demand, no additional
certificate or opinion need be furnished.
Each certificate or opinion provided for in this Indenture and
delivered to the Trustee with respect to compliance with a condition or covenant
provided for in this Indenture shall include (a) a statement that the person
making such certificate or opinion has read such covenant or condition, (b) a
brief statement as to the nature and scope of the examination or investigation
upon the statements or opinions contained in such certificate or opinion are
based, (c) a statement that, in the opinion of such person, he has made such
examination or investigation as is necessary to enable him to express an
informed opinion as to whether or not such covenant or condition has been
complied with, and (d) a statement as to whether or not, in the opinion of such
person, such condition or covenant has been complied with.
Any certificate, statement or opinion of an officer of the Issuer may
be based, insofar as it relates to legal matters, upon a certificate or opinion
of or represen tations by counsel, unless such officer knows that the
certificate or opinion or representations with respect to the matters upon which
his certificate, statement or opinion may be based as aforesaid are erroneous,
or in the exercise of reasonable care should know that the same are erroneous.
Any certificate, statement or opinion of counsel may be based, insofar as it
relates to factual matters, information with respect to which is in the
possession of the Issuer, upon the certificate, statement or opinion of or
representa tions by an officer or officers of the Issuer, unless such counsel
knows that the certificate, statement or opinion or representations with respect
to the matters upon which his certificate, statement or opinion may be based as
aforesaid are erroneous, or in the exercise of reasonable care should know that
the same are erroneous.
Any certificate, statement or opinion of an officer of the Issuer or of
counsel may be based, insofar as
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it relates to accounting matters, upon a certificate or opinion of or
representations by an accountant or firm of accountants in the employ of the
Issuer, unless such officer or counsel, as the case may be, knows that the
certificate or opinion or representations with respect to the accounting matters
upon which his certificate, statement or opinion may be based as aforesaid are
erroneous, or in the exercise of reasonable care should know that the same are
erroneous.
Any certificate or opinion of any independent firm of public
accountants filed with the Trustee shall contain a statement that such firm is
independent.
SECTION 10.6 Payments Due on Saturdays, Sundays and Legal Holidays. If
the date of maturity of interest on or principal of the Securities or the date
fixed for redemp tion or repayment of any Security or the last date on which a
Holder of Securities has a right to convert his Securities shall not be a
Business Day, then (notwithstanding any other provision of this Indenture or of
the Securities) payment of interest or principal or conversion of the Securities
need not be made on such date, but may be made on the next succeeding Business
Day with the same force and effect as if made on the date of maturity or the
date fixed for redemption or repayment or on such last day for conversion, and
no interest shall accrue for the period after such date.
SECTION 10.7 Issuer to Furnish Trustee Names and Addresses of Holders.
The Issuer will furnish or cause to be furnished to the Trustee:
(a) semiannually, not later than February 15 and August 15 in
each year, a list, in such form as the Trustee may reasonably require,
of the names and addresses of the Securityholders as of a date not more
than 15 days prior to the delivery thereof, and
(b) at such other times as the Trustee may request in writing,
within 30 days after the receipt by the Issuer of any such request, a
list of similar form and content as of a date not more than 15 days
prior to the time such list is furnished;
excluding from any such list names and addresses received by the Trustee in the
capacity of Registrar.
SECTION 10.8 New York Law to Govern. This Indenture and each Security
shall be deemed to be a contract 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 laws.
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SECTION 10.9 Counterparts. This 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.
SECTION 10.10 Effect of Headings. The Article and Section headings
herein and the Table of Contents are for convenience only and shall not affect
the construction hereof.
ARTICLE ELEVEN
REDEMPTION OF SECURITIES
SECTION 11.1 Right of Optional Redemption; Prices. The Issuer at its
option may, at any time, redeem all, or from time to time any part of, the
Securities upon payment of the optional Redemption Prices set forth in the form
of Security attached as Exhibit A hereto, together with accrued interest to the
date fixed for redemption.
SECTION 11.2 Notice of Redemption; Partial Redemptions. Notice of
redemption to the Holders of Securities to be redeemed as a whole or in part
shall be given by mailing notice of such redemption by first-class mail, postage
prepaid, at least 30 days and not more than 60 days prior to the date fixed for
redemption to such Holders of Securities at their last addresses as they shall
appear upon the registry books. Any notice which is mailed in the manner herein
provided shall be conclusively presumed to have been duly given, whether or not
the Holder receives the notice. Failure to give notice by mail, or any defect in
the notice to the Holder of any Security designated for redemption as a whole or
in part, shall not affect the validity of the proceedings for the redemption of
any other Security.
The notice of redemption to each such Holder shall specify the
principal amount of each Security held by such Holder to be redeemed, the date
fixed for redemption (the "Redemption Date"), the applicable Redemption Price,
the place or places of payment, that payment will be made upon presentation and
surrender of such Securities, that interest accrued to the date fixed for
redemption will be paid as specified in said notice and that on and after said
date interest thereon or on the portions thereof to be redeemed will cease to
accrue, and shall also specify the Conversion
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Price then in effect and the date on which the right to convert such Securities
or the portions thereof to be redeemed will expire. In case any Security is to
be redeemed in part only the notice of redemption shall state the portion of the
principal amount thereof to be redeemed and shall state that on and after the
date fixed for redemption, upon surrender of such Security, a new Security or
Securities in principal amount equal to the unredeemed portion thereof will be
issued.
The notice of redemption of Securities to be redeemed at the option of
the Issuer shall be given by the Issuer or, at the Issuer's request, by the
Trustee in the name and at the expense of the Issuer.
At least one Business Day prior to the Redemption Date specified in the
notice of redemption given as provided in this Section, the Issuer will deposit
with the Trustee or with one or more Paying Agents (or, if the Issuer is acting
as its own Paying Agent, set aside, segregate and hold in trust as provided in
Section 2.3) an amount of money suffi cient to redeem on the Redemption Date all
the Securities so called for redemption (other than those theretofore
surrendered for conversion pursuant to Article 13) at the appropriate Redemption
Price, together with accrued interest to and including the date fixed for
redemption. If any Security called for redemption is converted pursuant hereto,
any money deposited with the Trustee or any Paying Agent or so segregated and
held in trust for the redemption of such Security shall be paid to the Issuer
upon the Issuer's request, or, if then held by the Issuer, shall be discharged
from such trust. If less than all the outstanding Securi ties are to be
redeemed, the Issuer will deliver to the Trustee at least 10 days prior to the
date of making of the notice of redemption an Officers' Certificate stating the
aggregate principal amount of Securities to be redeemed.
If less than all the Securities are to be redeemed, the Trustee shall
select, by lot, pro rata or by such other manner as it shall deem appropriate
and fair, Securities to be redeemed in whole or in part. Securities may be
redeemed in part in multiples equal to the minimum authorized denomination for
Securities or any multiple thereof. The Trustee shall promptly notify the Issuer
in writing of the Securities selected for redemption and, in the case of any
Securities selected for partial redemption, the principal amount thereof to be
redeemed. For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to the redemption of Securities shall relate,
in the case of any Security redeemed or to be redeemed only in part, to the
portion of
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the principal amount of such Security which has been or is to be redeemed. If
any Security selected for partial redemption is surrendered for conversion after
such selection, the converted portion of such Security shall be deemed (so far
as may be) to be the portion selected for redemption. Upon any redemption of
less than all the Securities, for purposes of the selection for redemption, the
Issuer and the Trustee may treat as Outstanding Securities surrendered for
conversion during the period of 15 days next preceding the mailing of a notice
of redemption, and need not treat as Outstanding any Security authenticated and
delivered during such period in exchange for the unconverted portion of any
Security converted in part during such period.
SECTION 11.3 Payment of Securities Called for Redemption. If notice of
redemption has been given as above provided, the Securities or portions of
Securities specified in such notice shall become due and payable on the date and
at the place stated in such notice at the applicable Redemption Price, together
with interest accrued to and including the date fixed for redemption, and on and
after said date (unless the Issuer shall default in the payment of such
Securities at the Redemption Price, together with interest accrued to said date)
interest on the Securities or portions of Securities so called for redemption
shall cease to accrue and such Securities shall cease from and after the close
of business on the Business Day immediately prior to the date fixed for
redemption to be convertible pursuant to the provisions of Article 13 or, except
as provided in Sections 2.4 and 9.4, be entitled to any benefit or security
under this Indenture, and the Holders thereof shall have no right in respect of
such Securities except the right to receive the applicable Redemption Price
thereof and unpaid interest to and including the date fixed for redemption. On
presentation and surrender of such Securities at a place of payment specified in
said notice, said Securities or the specified portions thereof shall be paid and
redeemed by the Issuer at the applicable Redemption Price, together with
interest accrued thereon to and including the date fixed for redemption,
provided that any payment of interest becoming due on or prior to the date fixed
for redemption shall be payable to the Holders of such Securities registered as
such on the relevant record date subject to the terms and provisions of Section
2.11 hereof.
If any Security called for redemption shall not be so paid upon
surrender thereof for redemption, the principal shall, until paid or duly
provided for, bear interest from the date fixed for redemption at the rate of
interest specified in such Security and such Security shall remain
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convertible pursuant to the provisions of Article 13 until the principal of such
Security shall have been paid or duly provided for.
Upon presentation of any Security redeemed in part only, the Issuer
shall execute and the Trustee shall authenticate and deliver to or on the order
of the Holder thereof, at the expense of the Issuer, a new Security or
Securities, of authorized denominations, in principal amount equal to the
unredeemed portion of the Security so presented.
SECTION 11.4 Exclusion of Certain Securities from Eligibility for
Selection for Redemption. Securities shall be excluded from eligibility for
selection for redemption if they are identified by registration and certificate
number in a written statement signed by an authorized officer of the Issuer and
delivered to the Trustee at least 40 days prior to the last date on which notice
of redemption may be given as being owned of record and beneficially by, and not
pledged or hypothecated by either (a) the Issuer or (b) an entity specifically
identified in such Officers' Certificate directly or indirectly controlling or
controlled by or under direct or indirect common control with the Issuer.
ARTICLE TWELVE
SUBORDINATION OF SECURITIES
SECTION 12.1 Securities Subordinate to Senior Indebtedness. The Issuer
covenants and agrees, and each Holder of a Security, by his acceptance thereof,
likewise covenants and agrees, that, to the extent and in the manner hereinafter
set forth in this Article (subject to the provisions of Article Nine), the
payment of the principal of (and premium, if any) and interest on each and all
of the Securities are hereby expressly made subordinate and subject in right of
payment to the prior payment in full of all Senior Indebtedness.
SECTION 12.2. Payment Over of Proceeds Upon Dissolution, Etc. In the
event of (a) any insolvency or bankruptcy case or proceeding, or any
receivership, liquidation, reorganization or other similar case or proceeding in
connection therewith, relative to the Issuer or to its creditors, as such, or to
its assets, or (b) any liquidation, dissolution or other winding up of the
Issuer, whether voluntary or involuntary and whether or not involv ing
insolvency or bankruptcy, or (c) any assignment for the benefit of creditors or
any other marshalling of assets or
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liabilities of the Issuer, then and in any such event specified in (a), (b) or
(c) above (each such event, if any, herein sometimes referred to as a
"Proceeding") the holders of Senior Indebtedness will be first entitled to
receive payment in full of all amounts due or to become due on or in respect of
all Senior Indebtedness, or provision shall be made for such payment, in cash or
Cash Equivalents or otherwise in a manner satisfactory to the holders of Senior
Indebtedness, before the Holders of the Securities are entitled to receive any
payment or distribution of any kind or character, on account of principal of (or
premium, if any) or interest on or other obligations in respect of the
Securities or on account of any purchase, redemption (including, without
limitation, any redemption pursuant to Article Fourteen) or other acquisition of
Securities by the Issuer or any Subsidiary of the Issuer (all such payments,
distributions, purchases, redemptions and acquisitions herein referred to,
individually and collectively, as a "Securities Payment"), and to that end the
holders of Senior Indebtedness shall be entitled to receive, for application to
the payment thereof, any Securities Payment which may be payable or deliverable
in respect of the Securities in any such Proceeding.
In the event that, notwithstanding the foregoing provisions of this
Section, the Trustee receives payment or distribution of assets of the Issuer of
any kind or character, before all the Senior Indebtedness is paid in full in
cash or Cash Equivalents, then and in such event such Securities Payment shall
be paid over or delivered forthwith to the trustee in bankruptcy, receiver,
liquidating trustee, custodian, assignee, agent or other Person making payment
or distribution of assets of the Issuer for application to the payment of all
Senior Indebtedness remaining unpaid, to the extent necessary to pay the Senior
Indebtedness in full in cash or Cash Equivalents.
For purposes of this Article only, the words "any payment or
distribution of any kind or character, whether in cash, property or securities"
shall not be deemed to include a payment or distribution of stock or securities
of the Issuer provided for by a plan of reorganization or readjust ment
authorized by an order or decree of a court of competent jurisdiction in a
reorganization proceeding under any applicable bankruptcy law or of any other
corporation provided for by such plan of reorganization or readjustment which
stock or securities are subordinated in right of payment to all then outstanding
Senior Indebtedness to at least the same extent as the Securities are so
subordinated as provided in this Article; provided that (1) if a new
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corporation results from such reorganization or readjustment, such corporation
assumes any Senior Indebtedness not paid in full in cash or Cash Equivalents in
connection with such reorganization or readjustment and (2) the rights of the
holders of such Senior Indebtedness are not, without the consent of such
holders, altered by such reorganization or readjustment. The consolidation of
the Issuer with, or the merger of the Issuer into, another Person or the
liquidation or dissolution of the Issuer following the conveyance or transfer of
all or substantially all of its properties and assets as an entirety to another
Person upon the terms and conditions set forth in Article Eight shall not be
deemed a Proceeding for the purposes of this Section if the Person formed by
such consolidation or into which the Issuer is merged or the Person which
acquires by conveyance or transfer such properties and assets as an entirety, as
the case may be, shall, as a part of such consolidation, merger, conveyance or
transfer, comply with the conditions set forth in Article Eight.
SECTION 12.3 Payments to Securityholders. No payment on account of
principal of or premium or interest on the Securities shall be made if at the
time of such payment or immediately after giving effect thereto (1) there shall
exist a default in any payment with respect to any Senior Indebtedness or (2)
there shall have occurred a default (as defined in such Senior Indebtedness or
in the instrument under which the same is outstanding, other than a default in
the payment of amounts due thereon) with respect to any Senior Indebtedness
permitting the holders thereof, whether with notice, upon the passage of time or
both, to accelerate the maturity thereof, and such default shall not have been
cured or waived or shall not have ceased to exist.
In the event that, notwithstanding the foregoing, the Company shall
make any Securities Payment to the Trustee or any Holder prohibited by the
foregoing provisions of this Section, then and in such event, subject to Section
12.4, such payment shall be paid over and delivered forthwith to the holders of
the Senior Indebtedness remaining unpaid, or any trustee therefor, to the extent
necessary to pay in full in cash and Cash Equivalents all the Senior
Indebtedness.
The provisions of this Section shall not apply to any payment with
respect to which Section 12.2 would be applicable.
SECTION 12.4 Payment Permitted If No Default. Nothing contained in this
Article or elsewhere in this Indenture or in any of the Securities shall prevent
(a) the Issuer, at any time except during the pendency of any
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Proceeding referred to in Section 12.2 or under the conditions described in
Section 12.3, from making Securities Payments, or (b) the application by the
Trustee of any money deposited with it hereunder to Securities Payments or the
retention of such Securities Payment by the Holders, if, at the time of such
application by the Trustee, it did not have knowledge that such Securities
Payment would have been prohibited by the provisions of this Article.
SECTION 12.5 Subrogation to Rights of Holders of Senior Indebtedness.
Subject to the payment in full of all amounts due or to become due on or in
respect of Senior Indebtedness, or the provision for such payment, in cash or
Cash Equivalents or otherwise in a manner satisfactory to the holders of Senior
Indebtedness, the Holders of the Securities shall be subrogated (equally and
ratably with the holders of all Indebtedness of the Issuer which by its express
terms is subordinated to Indebtedness of the Issuer to substantially the same
extent as the Securities are subordinated to the Senior Indebtedness and is
entitled to like rights of subrogation by reason of any payments or
distributions made to holders of such Senior Indebtedness) to the rights of the
holders of such Senior Indebtedness to receive payments and distributions of
cash, property and securities applicable to the Senior Indebtedness until the
principal of (and premium, if any) and interest on the Securities shall be paid
in full. For purposes of such subrogation, no payments or distributions to the
holders of the Senior Indebtedness of any cash, property or securities to which
the Holders of the Securities or the Trustee would be entitled except for the
provisions of this Article, and no payments over pursuant to the provisions of
this Article to the holders of Senior Indebtedness by Holders of the Securities
or the Trustee, shall, as among the Issuer, its creditors other than holders of
Senior Indebtedness and the Holders of the Securities, be deemed to be a payment
or distribution by the Issuer to or on account of the Senior Indebtedness.
SECTION 12.6 Provisions Solely to Define Relative Rights. The
provisions of this Article are and are intended solely for the purpose of
defining the relative rights of the Holders on the one hand and the holders of
Senior Indebtedness on the other hand. Nothing contained in this Article or
elsewhere in this Indenture or in the Securities is intended to or shall (a)
impair, as among the Issuer, its creditors other than holders of Senior
Indebtedness and the Holders of the Securities, the obligation of the Issuer,
which is absolute and unconditional, to pay to the Holders of the Securities the
principal of (and premium, if any) and
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interest on the Securities as and when the same shall become due and payable in
accordance with their terms; or (b) affect the relative rights against the
Issuer of the Holders of the Securities and creditors of the Issuer other than
the holders of Senior Indebtedness; or (c) prevent the Trustee or the Holder of
any Security from exercising all remedies otherwise permitted by applicable law
upon default under this Indenture, subject to the rights, if any, under this
Article of the holders of Senior Indebtedness to receive cash, property and
securities otherwise payable or deliverable to the Trustee or such Holder.
SECTION 12.7 Trustee to Effectuate Subordination. Each Holder of a
Security by his acceptance thereof authorizes and directs the Trustee on his
behalf to take such action as may be necessary or appropriate to effectuate the
subordination provided in this Article and appoints the Trustee his
attorney-in-fact for any and all such purposes.
SECTION 12.8. No Waiver of Subordination Provisions. No right of any
present or future holder of any Senior Indebtedness to enforce subordination as
herein provided shall at any time in any way be prejudiced or impaired by any
act or failure to act on the part of the Issuer or by any act or failure to act,
in good faith, by any such holder, or by any noncompliance by the Issuer with
the terms, provisions and covenants of this Indenture, regardless of any
knowledge thereof any such holder may have or be otherwise charged with.
Without in any way limiting the generality of the foregoing paragraph,
the holders of Senior Indebtedness may, at any time and from time to time,
without the consent of or notice to the Trustee or the Holders of the
Securities, without incurring responsibility to the Holders of the Securities
and without impairing or releasing the subordina tion provided in this Article
or the obligations hereunder of the Holders of the Securities to the holders of
Senior Indebtedness, 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, increase
or alter, Senior Indebtedness, or otherwise amend or supplement in any manner
Senior Indebtedness or any instrument evidencing the same or any agreement under
which Senior Indebtedness is outstand ing; (ii) sell, exchange, release or
otherwise deal with any property pledged, mortgaged or otherwise securing Senior
Indebtedness; (iii) release any Person liable in any manner for the payment or
collection of Senior Indebtedness; and (iv) exercise or refrain from exercising
any rights against the Issuer and any other Person.
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SECTION 12.9. Notice to Trustee. The Issuer shall give prompt written
notice to the Trustee of any fact known to the Issuer which would prohibit the
making of any payment to or by the Trustee in respect of the Securities.
Notwithstanding the provisions of this Article or any other provision of this
Indenture, the Trustee shall not be charged with knowledge of the existence of
any facts which would prohibit the making of any payment to or by the Trustee in
respect of the Securities, unless and until the Trustee shall have received
written notice thereof from the Issuer or a holder of Senior Indebtedness or
from any trustee therefor; and, prior to the receipt of any such written notice,
the Trustee, subject to the provisions of Section 5.1, shall be entitled in all
respects to assume that no such facts exist; provided, however, that if the
Trustee shall not have received the notice provided for in this Section at least
three Business Days prior to the date upon which by the terms hereof any money
may become payable for any purpose (including, without limitation, the payment
of the principal of (and premium, if any) or interest on any Security), then,
anything herein contained to the contrary notwithstanding, the Trustee shall
have full power and authority to receive such money and to apply the same to the
purpose for which such money was received and shall not be affected by any
notice to the contrary which may be received by it within three Business Days
prior to such date.
Subject to the provisions of Article 5, the Trustee shall be entitled
to rely on the delivery to it of a written notice by a Person representing
himself to be a holder of Senior Indebtedness (or a trustee therefor) to
establish that such notice has been given by a holder of Senior Indebtedness (or
a trustee therefor). In the event that the Trustee determines in good faith that
further evidence is required with respect to the right of any Person as a holder
of Senior Indebtedness to participate in any payment or distribution pursuant to
this Article, the Trustee may request such Person to furnish evidence to the
reasonable satisfaction of the Trustee as to the amount of Senior Indebtedness
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, 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.
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SECTION 12.10. Reliance on Judicial Order or Certificate of Liquidating
Agent. Upon any payment or distribution of assets of the Issuer referred to in
this Article, the Trustee, subject to the provisions of Article 5, and the
Holders of the Securities shall be entitled to rely upon any order or decree
entered by any court of competent jurisdiction in which such Proceeding is
pending, or a certificate of the trustee in bankruptcy, receiver, liquidating
trustee, custodian, assignee for the benefit of creditors, agent or other Person
making such payment or distribution, delivered to the Trustee or to the Holders
of Securities, for the purpose of ascertaining the Persons entitled to
participate in such payment or distribution, the holders of the Senior
Indebtedness and other indebtedness of the Issuer, the amount thereof or payable
thereon, the amount or amounts paid or distributed thereon and all other facts
pertinent thereto or to this Article.
SECTION 12.11. Trustee Not Fiduciary for Holders of Senior
Indebtedness. The Trustee shall not be deemed to owe any fiduciary duty to the
holders of Senior Indebtedness and shall not be liable to any such holders if it
shall in good faith mistakenly pay over or distribute to Holders of Securities
or to the Issuer or to any other Person cash, property or securities to which
any holders of Senior Indebtedness shall be entitled by virtue of this Article
or otherwise.
SECTION 12.12. Rights of Trustee as Holder of Senior Indebtedness;
Preservation of Trustee's Rights. The Trustee in its individual capacity shall
be entitled to all the rights set forth in this Article with respect to any
Senior Indebtedness which may at any time be held by it, to the same extent as
any other holder of Senior Indebtedness, and nothing in this Indenture shall
deprive the Trustee of any of its rights as such holder.
Nothing in this Article shall apply to claims of, or payments to, the
Trustee under or pursuant to Article 5.
SECTION 12.13. Article Applicable to Paying Agents. In case at any time
any Paying Agent other than the Trustee shall have been appointed by the Issuer
and be then acting hereunder, the term "Trustee" as used in this Article shall
in such case (unless the context otherwise requires) be construed as extending
to and including such Paying Agent within its meaning as fully for all intents
and purposes as if such Paying Agent were named in this Article in addition to
or in place of the Trustee; provided, however, that Section 12.12 shall not
apply to the Issuer or any Affiliate of the Issuer if it or such Affiliate acts
as Paying Agent.
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SECTION 12.14. Securities Not Superior to Senior Subordinated Notes.
The Securities shall not be superior in right of payment to, and shall be on a
parity with or subordinated to (depending on the issuer's election in accordance
with the definition of Senior Indebtedness herein), the Issuer's 9% Senior
Subordinated Notes due 2006 issued pursuant to the Senior Note Indenture and all
amounts payable pursuant to such Notes and the Senior Note Indenture.
ARTICLE THIRTEEN
CONVERSION OF SECURITIES
SECTION 13.1 Conversion Privilege. A Holder of a Security may convert
it into Class A Common Stock of the Issuer at any time prior to maturity at the
conversion price then in effect, except that, with respect to any Security
called for redemption, such conversion right shall terminate at the close of
business on the Business Day immediately preceding the Redemption Date or
Repurchase Date (unless the Issuer shall default in making the redemption
payment then due, in which case the conversion right shall terminate on the date
such default is cured and, if applicable, the provisions of Section 14.2(d) are
satisfied). The number of shares of Class A Common Stock issuable upon
conversion of a Security is determined as follows: divide the principal amount
to be converted by the Conversion Price in effect on the Conversion Date; round
the result to the nearest 1/100th of a share.
The initial Conversion Price is stated in paragraph 5 of the reverse of
the Securities and is subject to adjustment as provided in this Article Thirteen
(which initial Conversion Price shall be equal to the conversion price of the
Convertible Preferred Stock in effect on the Exchange Date).
A Holder may convert a portion of a Security equal to $1,000 or any
integral multiple thereof. Provisions of this Indenture that apply to conversion
of all of a Security also apply to conversion of a portion of it.
SECTION 13.2 Exercise of Conversion Privilege. In order to exercise the
conversion privilege, the Holder of any Security to be converted shall surrender
such Security to the Issuer at any time during usual business hours at its
office or agency maintained for the purpose as provided in this Indenture,
accompanied by a fully executed written notice, in substantially the form set
forth on the reverse of the Security, that the Holder elects to convert such
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Security or a stated portion thereof constituting a multiple of the minimum
authorized denomination thereof, and, if such Security is surrendered for
conversion during the period between the close of business on any record date
for such Security and the opening of business on the related interest payment
date (unless such Security shall have been called for redemption on a Redemption
Date or Repurchase Date within such period or on such interest payment date),
accom panied also by payment of an amount equal to the interest payable on such
interest payment date on the portion of the principal amount of the Security
being surrendered for conversion. A Holder of any Security on a record date for
such Security who converts such Security on the related interest payment date
will receive the interest payable on such Security, and such converting Holder
need not include a payment for any such interest upon surrender of such Security
for conversion. Such notice shall also state the name or names (with address) in
which the certificate or certificates for shares of Class A Common Stock shall
be issued. Securities surrendered for conversion shall (if so required by the
Issuer or the Trustee) be duly endorsed by, or be accompanied by a written
instrument or instruments of transfer in form satisfactory to the Issuer and the
Trustee duly executed by, the Holder or his attorney duly authorized in writing.
As promptly as practicable after the receipt of such notice and the surrender of
such Security as aforesaid, the Issuer shall, subject to the provisions of
Section 13.7, issue and deliver at such office or agency to such Holder, or on
his written order, a certificate or certificates for the number of full shares
of Class A Common Stock issuable on such conversion of Securities in accordance
with the provisions of this Article and cash, as provided in Section 13.3, in
respect of any fraction of a share of Class A Common Stock otherwise issuable
upon such conversion. Such conversion shall be deemed to have been effected
immediately prior to the close of business on the date (herein called the "Date
of Conversion") on which such notice shall have been received by the Issuer and
such Security shall have been surrendered as aforesaid, and the Person or
Persons in whose name or names any certificate or certificates for shares of
Class A Common Stock shall be issuable upon such conversion shall be deemed to
have become on the Date of Conversion the holder or holders of record of the
shares represented thereby; provided, however, that any such surrender on any
date when the stock transfer books of the Issuer shall be closed shall
constitute the person or persons in whose name or names the certificate or
certificates for such shares are to be issued as the recordholder or holders
thereof for all purposes at the opening of business on the next succeeding day
on which such stock transfer books are open but such conversion shall
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nevertheless be at the Conversion Price in effect at the close of business on
the date when such Security shall have been so surrendered with the conversion
notice. In the case of conversion of a portion, but less than all, of a
Security, the Issuer shall execute, and the Trustee shall authenticate and
deliver to the Holder thereof, at the expense of the Issuer, a Security or
Securities in the aggregate principal amount of the unconverted portion of the
Security surrendered. Except as otherwise expressly provided in this Indenture,
no payment or adjustment shall be made for interest accrued on any Security (or
portion thereof) converted or for dividends or distributions on any Class A
Common Stock issued upon conversion of any Security; provided, however, that in
the case of any Securities which are converted after the close of business on a
relevant record date and on or prior to the next succeeding interest payment
date, installments of interest which are due and payable on the next succeeding
interest payment date shall be payable on such interest payment date
notwithstanding such conversion (unless such Security shall have been called for
redemption on a Redemption Date or Repurchase Date after the close of business
on such record date and prior to the opening of business on such interest
payment date) and such interest (whether or not punctually paid or duly provided
for) shall be paid to the Holder of such Securities registered as such at the
close of business on the relevant record date according to their terms.
SECTION 13.3 Fractional Shares. Except as pro vided below, the Issuer
will not issue fractional shares of Class A Common Stock upon conversion of
Securities. In lieu thereof, in the sole discretion of the Board of Directors,
either (a) such fractional interest will be rounded up to the nearest full
share, or (b) an appropriate amount will be paid in cash by the Issuer, unless
payment in cash is prohibited by the terms of the Issuer's Indebtedness, in
which case fractional shares may be issued. If the Issuer shall deliver cash,
such cash shall be in the amount of the fair market value (as determined by the
Board of Directors) of such fractional interest. If more than one Security shall
be surrendered for conversion at one time by the same Holder, the number of full
shares issuable upon conversion thereof shall be computed on the basis of the
aggregate number of Securities, or the specified portions thereof to be
converted, so surrendered.
SECTION 13.4 Adjustment of Conversion Price. The Conversion Price shall
be subject to adjustment from time to time as follows:
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(a) In case the Issuer shall (1) pay a dividend or make a
distribution on Class A Common Stock in shares of Class A Common Stock,
(2) subdivide its outstanding shares of Class A Common Stock into a
greater number of shares or (3) combine its outstanding shares of Class
A Common Stock into a smaller number of shares, the Conversion Price in
effect immediately prior to such action shall be adjusted as provided
below so that the Holder of any Security thereafter surrendered for
conversion shall be entitled to receive the number of shares of Class A
Common Stock which he would have been entitled to receive immediately
following such action had such Security been converted immediately
prior thereto. An adjustment made pursuant to this subsection (a) shall
become effective immedi ately, except as provided in subsection (e)
below, after the record date in the case of a dividend or distribution
and shall become effective immediately after the effective date in the
case of a subdivision or combination.
(b) In case the Issuer shall issue rights, warrants or options
to all holders of Class A Common Stock entitling them for a period
expiring within 45 days after the record date therefor to subscribe for
or purchase shares of Class A Common Stock at a price per share less
than the current market price per share (as determined pursuant to
subsection (d) below) of the Class A Common Stock on the record date
mentioned below, the Conversion Price shall be adjusted to a price,
computed to the nearest cent, so that the same shall equal the price
determined by multiplying:
(1) the Conversion Price in effect
immediately prior to the date of issuance of such
rights, warrants or option by a fraction, of which
(2) the numerator shall be (A) the number of shares
of Class A Common Stock outstanding on the date of issuance of
such rights, warrants or options immediately prior to such
issuance, plus (B) the number of shares which the aggregate
offering price of the total number of shares so offered for
subscription or purchase would purchase at such current market
price (determined by multiplying such total number of shares
by the exercise price of such rights, warrants or options and
dividing the product so obtained by such current market
price), and of which
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(3) the denominator shall be (A) the number of shares
of Class A Common Stock outstanding on the date of issuance of
such rights, warrants or options, immediately prior to such
issuance, plus (B) the number of additional shares of Class A
Common Stock which are so offered for subscription or
purchase.
Such adjustment shall become effective immedi ately, except as
provided in subsection (e) below, after the record date for the
determination of Holders entitled to receive such rights, warrants or
options.
(c) In case the Issuer shall distribute to all holders of Class A
Common Stock evidences of Indebtedness, equity securities (including
equity interests in the Issuer's Subsidiaries) other than Class A
Common Stock or other assets (other than cash dividends), or shall
distribute to all holders of Class A Common Stock rights, warrants or
options to subscribe to securities (other than those referred to in
subsection (b) above and dividends and distributions in connection
with the liquidation, dissolution or winding up of the Issuer), then
in each such case the Conversion Price shall be adjusted so that the
same shall equal the price determined by multiplying the Conversion
Price in effect immediately prior to the date of such distribution by
a fraction of which the numerator shall be the current market price
per share (determined as provided in subsection (d) below) of the
Class A Common Stock on the record date mentioned below less the then
fair market value (as determined by the Board of Directors, whose
determination shall be conclusive evidence of such fair market value,
and described in a Board Resolution filed with the Trustee) of the
portion of the assets, evidences of Indebtedness and equity securities
so distributed or of such subscription rights, warrants or options
applicable to one share of Class A Common Stock, and of which the
denominator shall be such current market price per share of the Class
A Common Stock. For the purposes of this subsection (c), in the event
of a distribution of shares of capital stock or other securities of
any Subsidiary as a dividend on shares of Class A Common Stock, the
then fair market value of the shares of other securities so
distributed shall be deemed to be the market value (determined as
provided above) of such shares or other securities. Such adjustment
shall become effective immediately, except as provided in subsection
(e) below, after the record date for the determination of stockholders
entitled to receive such distribution.
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(d) For the purpose of any computation under subsections (b)
and (c) above, the current market price per share of Class A Common
Stock on any date shall be deemed to be the average of the Last Sale
Prices of a share of Class A Common Stock for the five consecutive
Trading Days commencing not more than 20 Trading Days before, and
ending not later than, the earlier of the date in question and the date
before the "ex" date with respect to the issuance or distribution
requiring such computation. For purposes of this paragraph, the term
"'ex' date", when used with respect to any issuance or distribution,
means the first date on which the Class A Common Stock trades regular
way on the principal national securities exchange on which the Class A
Common Stock is listed or admitted to trading (or if not so listed or
admitted on NASDAQ or a similar organization if NASDAQ is no longer
reporting trading information) without the right to receive such
issuance or distribution.
(e) In any case in which this Section shall require that an
adjustment be made immediately follow ing a record date, the Issuer may
elect to defer the effectiveness of such adjustment (but in no event
until a date later than the effective time of the event giving rise to
such adjustment), in which case the Issuer shall, with respect to any
Security converted after such record date and before such adjustment
shall have become effective (i) defer making any cash payment pursuant
to Section 13.3 or issuing to the Holder of such Security the number of
shares of Class A Common Stock and other capital stock of the Issuer
issuable upon such conversion in excess of the number of shares of
Class A Common Stock and other capital stock of the Issuer issuable
thereupon only on the basis of the Conversion Price prior to
adjustment, and (ii) not later than five Business Days after such
adjustment shall have become effective, pay to such Holder the
appropriate cash payment pursuant to Section 13.3 and issue to such
Holder the additional shares of Class A Common Stock and other capital
stock of the Issuer issuable on such conversion.
(f) No adjustment in the Conversion Price shall be required if
Securityholders are to participate in the transaction on a basis and
with notice that the Board of Directors determines to be fair and
appropri ate in light of the basis and notice on which holders
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of Class A Common Stock participate in the transaction. In addition, no
adjustment in the Conversion Price shall be required unless such
adjustment would require an increase or decrease of at least 1% in the
Conversion Price; provided, that any adjustments which by reason of
this subsection (f) are not required to be made shall be carried
forward and taken into account in any subsequent adjustment. All
calculations under this Article shall be made to the nearest cent or to
the nearest one-hundredth of a share, as the case may be.
(g) Whenever the Conversion Price is adjusted as herein
provided, the Issuer shall promptly (i) file with the Trustee and each
conversion agent an Officers' Certificate setting forth the Conversion
Price after such adjustment and setting forth in reasonable detail the
facts requiring such adjustment and the calculations on which the
adjustment is based, which certificate shall be conclusive evidence of
the correctness of such adjustment and which shall be made available by
the Trustee to the Holders of Securities for inspection thereof, (ii)
mail or cause to be mailed a notice of such adjustment, setting forth
the adjusted Conversion Price and the date on which such adjustment
became or becomes effective, to each Holder of Securities at his
address as the same appears on the registry books of the Issuer.
To the extent permitted by law, the Issuer from time to time may reduce
the Conversion Price by any amount for any period of at least 20 days, if the
Board of Directors has made a determination that such reduction would be in the
best interests of the Issuer, which determination shall be conclusive. In such
case, the Issuer shall give at least 15 days' notice of the reduction. In
addition, at its option, the Issuer may make such reduction in the Conversion
Price as the Board of Directors deems advisable to avoid or diminish any income
tax to holders of Class A Common Stock resulting from any dividend or
distribution of stock (or rights to acquire stock) or from any event treated as
such for income tax purposes.
SECTION 13.5 Continuation of Conversion Privilege in Case of
Reclassification, Reorganization, Change, Merger, Consolidation or Sale of
Assets. If any transaction shall occur, including without limitation (i) any
recapitalization or reclassification of shares of Class A Common Stock (other
than a change in par value, 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 of the Class
A Common Stock), (ii) any consolidation or merger of the Issuer with or into
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another person or any merger of another person into the Issuer (other than a
consolidation or merger that does not result in a reclassification, conversion,
exchange or cancellation of Class A Common Stock), (iii) any sale or transfer of
all or substantially all of the assets of the Issuer, or (iv) any compulsory
share exchange, pursuant to any of which holders of Class A Common Stock shall
be entitled to receive other securities, cash or other property, then
appropriate provision shall be made so that the Holder of each Security then
Outstanding shall have the right thereafter to convert such Security only into
the kind and amount of the securities, cash or other property that would have
been receivable upon such recapitalization, reclassification, consolidation,
merger, sale, transfer or share exchange by a holder of the number of shares of
Class A Common Stock issuable upon conversion of such Security immediately prior
to such recapitalization, reclassification, consolidation, merger, sale,
transfer or share exchange, after giving effect to any adjustment in the
conversion price in accordance with Article Fourteen hereof. The company formed
by such consolidation or resulting from such merger or that acquires such assets
or that acquires the Issuer's shares, as the case may be, shall make provisions
in its certificate of incorporation or other constituent document to establish
such right. Such certificate of incorporation or other constituent document
shall provide for adjustments that, for events subsequent to the effective date
of such certificate of incorporation or other constituent documents, shall be as
nearly equivalent as may be practicable to the relevant adjustments provided for
in Section 13.4 and in this Section.
SECTION 13.6 Notice of Certain Events. In case:
(a) the issuer shall declare a dividend (or any other
distribution) payable to the holders of Class A Common Stock (other
than cash dividends and dividends payable in Class A Common Stock); or
(b) the Issuer shall authorize the granting to the holders of
Class A Common Stock of rights, warrants or options to subscribe for or
purchase any shares of stock of any class or of any other rights,
warrants or options; or
(c) the Issuer shall authorize any reclassifica tion or change
of the Class A Common Stock (other than a subdivision or combination of
its outstanding shares of Class A Common Stock or a change in par
value, or from par value to no par value, or from no par value to par
value), or any consolidation or merger to which the
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Issuer is a party and for which approval of any stock holders of the
Issuer is required, or the sale or conveyance of all or substantially
all the property or business of the Issuer; or
(d) there shall be proposed any voluntary or involuntary
dissolution, liquidation or winding-up of the Issuer:
then, the Issuer shall cause to be filed with the Trustee, and, if other than
the Corporate Trust Office of the Trustee, at the office or agency maintained
for the purpose of conversion of the Securities as provided in Section 2.3, and
shall cause to be mailed to each Holder of Securities, at his address as it
shall appear on the registry books of the Issuer, as promptly as possible but in
any event at least 20 days before the date hereinafter specified (or the earlier
of the dates hereinafter specified, in the event that more than one date is
specified), a notice stating the date on which (1) a record is expected to be
taken for the purpose of such dividend, distribution, rights, warrants or
options, or if a record is not to be taken, the date as of which the holders of
Class A Common Stock of record to be entitled to such dividend, distribution,
rights or warrants are to be determined, or (2) such reclassification, change,
consolidation, merger, sale, transfer, conveyance, dissolution, liquidation or
winding-up is expected to become effective and the date, if any is to be fixed,
as of which it is expected that holders of Class A Common Stock of record shall
be entitled to exchange their shares of Class A Common Stock for securities or
other property deliverable upon such reclassification, change, consolidation,
merger, sale, transfer, conveyance, dissolution, liquidation or winding-up.
SECTION 13.7 Taxes on Conversion. The issuance and delivery of
certificates for shares of Class A Common Stock on conversion of Securities
shall be made without charge to the converting Holder of Securities for such
certificates or for any documentary, stamp or similar taxes payable to the
United States of America or any political subdivision or taxing authority
thereof in respect of the issuance or delivery of such certificates; provided,
however, that the Issuer shall not be required to pay any tax which may be
payable in respect of any transfer involved in the issuance of certificates for
shares of Class A Common Stock, and no such issue or delivery shall be made
unless and until the Person requesting such issue or delivery has paid to the
Issuer the amount of any such tax or has established, to the satisfaction of the
Issuer, that such tax has been paid.
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SECTION 13.8 Issuer to Provide Class A Common Stock. The Issuer
covenants that it will reserve and keep available, free from preemptive rights,
out of its authorized but unissued shares, solely for the purpose of issue upon
conversion of Securities as herein provided, sufficient shares of Class A Common
Stock to provide for the conversion of the Securities from time to time as such
Securities are presented for conversion.
If any shares of Class A Common Stock to be reserved for the purpose of
conversion of Securities hereunder require registration with or approval of any
governmental authority under any Federal or State law before such shares may be
validly issued or delivered upon conversion, then the Issuer covenants that it
will in good faith and as expeditiously as possible endeavor to secure such
registration or approval, as the case may be; provided, however, that nothing in
this Section shall be deemed to affect in any way the obligations of the Issuer
to convert Securities into Class A Common Stock as provided in this Article.
Before taking any action which would cause an adjustment reducing the
Conversion Price below the then par value, if any, of the Class A Common Stock,
the Issuer will take all corporate action which may, in the Opinion of Counsel,
be necessary in order that the Issuer may validly and legally issue fully paid
and non-assessable shares of Class A Common Stock at such adjusted Conversion
Price.
The Issuer covenants that all shares of Class A Common Stock which may
be issued upon conversion of Securities will upon issue be duly and validly
issued and fully paid and non-assessable by the Issuer and free of preemptive
rights and that, if the Class A Common Stock is then listed on any national
securities exchange or quoted on NASDAQ, the shares of Class A Common Stock
which may be issued upon conversion of Securities will be similarly listed or
quoted at the time of such issuance.
The Issuer covenants that, upon conversion of Securities as herein
provided, there will be credited to Class A Common Stock par capital from the
consideration for which the shares of Class A Common Stock issuable upon such
conversion are issued an amount per share of Class A Common Stock so issued as
determined by the Board of Directors, which amount shall not be less than the
amount required by law and by the Issuer's certificate of incorporation, as
amended, as in effect on the date of such conversion. For the purposes of this
covenant the net proceeds received by the Issuer from the issuance and sale of
the Convertible
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Preferred Stock exchanged for the Securities converted, less any cash
conversion, shall be deemed to be the amount of consideration for which the
shares of Class A Common Stock issuable upon such conversion are issued.
SECTION 13.9 Disclaimer of Responsibility for Certain Matters. Neither
the Trustee nor any Conversion Agent or agent of the Trustee shall at any time
be under any duty or responsibility to any Holder of Securities to determine
whether any facts exist which may require any adjustment of the Conversion
Price, or with respect to the Officers' Certificate referred to in Section
13.4(g), or with respect to the nature or extent of any such adjustment when
made, or with respect to the method employed, or herein or in any supplemental
indenture provided to be employed, in making the same. Neither the Trustee nor
any Conversion Agent nor any agent of the Trustee shall be accountable with
respect to the validity, registration, listing, or value (or the kind or amount)
of any shares of Class A Common Stock, or of any securities or cash or other
property, which may at any time be issued or delivered upon the conversion of
any Security; and neither the Trustee nor any agent of the Trustee nor any
Conversion Agent makes any representation with respect thereto. Neither the
Trustee nor any Conversion Agent nor any agent of the Trustee shall be
responsible for any failure of the Issuer to make any cash payment or to issue,
register the transfer of or deliver any shares of Class A Common Stock or stock
certificates or other securities or property upon the surrender of any Security
for the purpose of conversion or, subject to Sections 5.1 and 5.2, to comply
with any of the covenants of the Issuer contained in this Article.
SECTION 13.10 Return of Funds Deposited for Redemption of Converted
Securities. Any funds which at any time shall have been deposited by the Issuer
or on its behalf with the Trustee or any other Paying Agent for the purpose of
paying the principal of and interest on any of the Securities and which shall
not be required for such purposes because of the conversion of such Securities,
as provided in this Article, shall after such conversion, upon the written
request of the Issuer, be repaid to the Issuer by the Trustee or such other
paying agent.
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ARTICLE FOURTEEN
RIGHT TO REQUIRE REDEMPTION
SECTION 14.1 Right to Require Redemption. If at any time there shall
occur any Change in Control (as defined below) of the Issuer, then each Holder
shall have the right, at such Holder's option, to require the Issuer to redeem,
and upon the exercise of such right the Issuer shall redeem, all or any part of
such Holder's Securities that is $1,000 or any integral multiple thereof, on the
date (the "Repurchase Date") that is 45 days after the date of the Issuer Notice
(as defined below) at a price in cash equal to the principal amount thereof,
plus accrued and unpaid interest to the Repurchase Date (the "Repurchase
Price").
SECTION 14.2 Notices; Method of Exercising Redemption Right, etc. (a)
Unless the Issuer shall have theretofore called for redemption all the
Securities then Outstanding pursuant to Article Eleven of the Indenture, on or
before the 30th day after the occurrence of a Change in Control, the Issuer or,
at the request of the Issuer, the Trustee, shall mail to all holders of record
of the Securities a notice (the "Issuer Notice") of the occurrence of the Change
in Control and of the redemption right set forth herein arising as a result
thereof in the manner provided in Section 10.4 of the Indenture. The Issuer
shall also deliver a copy of the Issuer Notice to the Trustee prior to or
promptly after the mailing of such Issuer Notice.
Each Issuer Notice shall state:
(1) the Repurchase Date;
(2) the date by which the Securities with respect to which such
right is being exercised and the irrevocable written notice referred
to in Section 14.2(b) must be delivered to the Trustee;
(3) the Repurchase Price and accrued interest, if any;
(4) a description of the procedure which a Holder must follow to
exercise a redemption right including a form of the irrevocable
written notice referred to in Section 14.2(b); and
(5) the Conversion Price then in effect, the date on which the
right to convert the principal amount of the Securities to be redeemed
will terminate and the place or places where such Securities may be
surrendered for conversion.
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No failure of the Issuer to give the Issuer Notice or any defect
therein shall limit any Holder's right to exercise a redemption right or affect
the validity of the proceedings for the redemption of Securities.
(b) To exercise a redemption right, a Holder shall deliver to the
Trustee on or before the 30th day after the date of the Issuer Notice (i)
irrevocable written notice of the Holder's exercise of such right, which notice
shall set forth the name of the Holder, the amount of the Securities to be
redeemed (which shall be in any authorized denomination), a statement that an
election to exercise the redemption right is being made thereby, and (ii) the
Securities with respect to which the redemption right is being exercised, duly
endorsed for transfer to the Issuer. Securities held by a securities depositary
may be delivered in such other manner as may be agreed to by such securities
depositary and the Issuer. Such written notice shall be irrevocable. Subject to
the provisions of paragraph (d) below, Securities surrendered for redemption
together with such irrevocable written notice shall cease to be convertible from
the date of delivery of such notice. If the Repurchase Date falls after the
record date and before the following interest payment date, any Securities to be
redeemed must be accompanied by payment of an amount equal to the interest
thereon which the registered Holder thereof is to receive on such interest
payment date, and, notwithstanding such redemption, such interest payment will
be made by the Issuer to the registered Holder thereof on the applicable record
date.
(c) In the event a redemption right shall be exercised in accordance
with the terms hereof, the Issuer shall pay or cause to be paid the Repurchase
Price in cash, to the Holder on the Repurchase Date.
(d) If any Security surrendered for redemption shall not be so redeemed
on the Repurchase Date, such Security shall be convertible at any time from the
Repur chase Date until redeemed and, until redeemed, continue to bear interest
to the extent permitted by applicable law from the Repurchase Date at the same
rate borne by such Security. The Issuer shall pay to the Holder of such Security
the additional amount arising as a result of the provisions of this Section
14.2(d) at the same time that it pays the Repurchase Price, and if applicable
such Security shall remain convertible into Class A Common Stock until the
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Repurchase Price plus any additional amounts owing on such Security shall have
been paid or duly provided for.
(e) Any Security which is to be redeemed only in part shall be
surrendered at any office or agency of the Issuer designated for that purpose
pursuant to Section 2.3 (with, if the Issuer or the Trustee so requires, due
endorsement by, or a written instrument of transfer in form satisfactory to the
Issuer and the Trustee duly executed by, the Holder thereof or his attorney duly
authorized in writing), and the Issuer shall execute, and the Trustee shall
authenticate and deliver to the Holder of such Security without service charge,
a new Security or Securities, of any authorized denomination as requested by
such Holder, in aggregate principal amount equal to and in exchange for the
unredeemed portion of the Security so surrendered.
SECTION 14.3 Definition of Change in Control.
A "Change in Control" is deemed to have occurred when (i) any Person or
group (as the term "person" or "group" is used in Section 13(d)(3) or 14(d)(2)
of the Exchange Act) other than Stephen B. Dodge, Thomas H. Stoner, their
Related Parties or any person employed by the Issuer in a management capacity as
of June 19, 1996 (or any group in which any of them is a member, collectively,
"a Permitted Owner") acquires beneficial ownership of, directly or indirectly,
shares of capital stock of the Issuer sufficient to entitle such person to
exercise more than 50% of the total voting power of all classes of capital stock
entitled to vote in elections of directors (whether by means of an exchange
offer, liquidation, tender offer, consolidation, merger, combination,
reclassification, recapitalization or otherwise), or (ii) the Issuer sells,
leases, exchanges or transfers (in one transaction or series of related
transactions) all or substantially all of its assets to any person or group (as
the term "person" or "group" is used in Section 13(d)(3) or 14(d)(2) of the
Exchange Act), other than to one or more Permitted Owners.
SECTION 14.4 Limitation on Right to Require Redemption. Notwithstanding
anything herein to the contrary, no Holder shall have any right to require
redemption pursuant to this Article Fourteen if either (i) the Last Sale Price
(or if on any such Trading Day the Class A Common Stock is not quoted by any
organization referred to in the definition of Last Sale Price, the fair value of
the Class A Common Stock on such day, as conclusively determined by the Board of
Directors) on any five Trading Days during the 10 Trading Day period
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immediately preceding the date of the Change in Control shall equal or exceed
105% of the Conversion Price in effect on such Trading Days or (ii) with respect
to any transaction described in clause (i) of Section 14.3 above, or any
transaction described in clause (ii) of Section 14.3 above (so long as such
transaction is accompanied by or immediately followed by the complete
liquidation and dissolution of the Issuer), all the consideration to be paid for
the Class A Common Stock or the assets, as the case may be, in the transaction
or transactions constituting the Change in Control (A) has an aggregate fair
market value of at least 105% of the Conversion Price with respect to such
Holder's Securities in effect immediately prior to the closing of such
transaction and (B) consists of cash, securities traded on a national securities
exchange or quoted on NASDAQ or a combination of cash and securities.
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IN WITNESS WHEREOF, the parties hereto have caused this
Indenture to be duly executed, and their respective corporate seals to be
hereunto affixed and attested, all as of June 25, 1996.
AMERICAN RADIO SYSTEMS
CORPORATION
By_________________________
Name:
Title:
[CORPORATE SEAL]
Attest:
By_________________________
Name:
Title:
BANK OF MONTREAL TRUST
COMPANY,
as Trustee
By_________________________
Name:
Title:
[CORPORATE SEAL]
Attest:
By:________________________
Name:
Title:
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STATE OF NEW YORK ) ss.:
COUNTY OF NEW YORK )
On the 25th day of June, 1996, before me personally came
Justin Benincasa, to me known, who, being by me duly sworn, did depose and say
that [he -- he] is the Chief Accounting Officer and Vice President of AMERICAN
RADIO SYSTEMS CORPORATION, one of the corporations described in and which
executed the foregoing instrument; that he knows the seal of said corporation;
that the seal affixed to said instrument is such corporate seal; that it was so
affixed by authority of the Board of Directors of said corporation, and that he
signed his name thereto by like authority.
------------------------------
STATE OF NEW YORK ) ss.:
COUNTY OF NEW YORK )
On the 25th day of June, 1996, before me personally came
___________________________, to me known, who, being by me duly sworn, did
depose and say that he/she is the _____________________of Bank of Montreal Trust
Company, one of the corporations described in and which executed the foregoing
instrument; that [he -- she] knows the seal of said corporation; that the seal
affixed to said instrument is such corporate seal; that it was so affixed by
authority of the Board of Directors of said corporation, and that [he -- she]
signed [his -- her] name thereto by like authority.
------------------------------
-78-
<PAGE>
EXHIBIT A
[FORM OF FACE OF SECURITY]
THIS SECURITY (OR ITS PREDECESSOR) AND ANY CLASS A COMMON STOCK ISSUED
ON CONVERSION HEREOF HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAW AND
MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (A)(1) TO A
PERSON WHO THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER
WITHIN THE MEANING OF RULE 144A UNDER THE SECURITIES ACT PURCHASING FOR ITS OWN
ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION
MEETING THE REQUIREMENTS OF RULE 144A, (2) IN AN OFFSHORE TRANSACTION COMPLYING
WITH RULE 904 OF REGULATION S UNDER THE SECURITIES ACT, OR (3) PURSUANT TO AN
EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144
THEREUNDER (IF AVAILABLE) AND (B) IN ACCORDANCE WITH ALL APPLICABLE SECURITIES
LAWS OF THE STATES OF THE UNITED STATES. FOR ANY SECURITY ISSUED IN EXCHANGE FOR
ANY DEPOSITARY SHARE RELATING TO CONVERTIBLE PREFERRED STOCK ORIGINALLY SOLD IN
AN OFFSHORE TRANSACTION IN RELIANCE ON REGULATION S UNDER THE SECURITIES ACT OR
CLASS A COMMON STOCK ISSUED UPON CONVERSION OF SUCH A SECURITY -- SUBSEQUENT
TRANSFERS OF THIS SECURITY (OR ANY OTHER SECURITY REFERRED TO ABOVE) AND
REGISTRATION OF SUCH TRANSFERS ARE SUBJECT TO THE PRIOR SATISFACTION OF THE
CERTIFICATION REQUIREMENTS AS THE REGIS TRAR OR TRANSFER AGENT MAY REASONABLY
REQUIRE TO CONFIRM THAT THE TRANSFER COMPLIES WITH THE FOREGOING RESTRICTIONS.
EACH PURCHASER OF THIS SECURITY IS HEREBY NOTIFIED THAT THE SELLER OF
THIS SECURITY MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTIONS OF
THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER.
[IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE
REGISTRAR AND TRANSFER AGENT SUCH CERTIFI CATES AND OTHER INFORMATION AS SUCH
TRANSFER AGENT MAY REASONABLY REQUIRE TO CONFIRM THAT THE TRANSFER COMPLIES WITH
THE FOREGOING RESTRICTIONS.]
<PAGE>
No. $
[CUSIP NO.]
American Radio Systems Corporation
7% Convertible Subordinated Debentures Due 2011
American Radio Systems Corporation (the "Issuer"), for value received
hereby promises to pay to _________ or registered assigns the principal sum of
_________ Dollars at the Issuer's office or agency for said purpose in the
Borough of Manhattan, The City of New York, on June 30, 2011, in 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, and to pay interest,
quarterly on March 31, June 30, September 30 and December 31 of each year and at
maturity, on said principal sum in like coin or currency at the rate per annum
set forth above beginning on the March 31, June 30, September 30 and December
31, as the case may be, next succeeding the date on which the Securities are
issued in exchange for shares of the Issuer's 7% Convertible Exchangeable
Preferred Stock (the "Preferred Stock") from the time of exchange of the
Securities for the Preferred Stock (the "Securities Exchange Date") or from the
most recent date to which interest has been paid or duly provided for on the
Securities. The interest so payable on any March 31, June 30, September 30 or
December 31 will, except as otherwise provided in the Indenture referred to on
the reverse hereof, be paid to the person in whose name this Security is
registered at the close of business on the March 15, June 15, September 15 or
December 15, preceding such March 31, June 30, September 30, or December 31,
whether or not such day is a business day; provided, that interest may be paid,
at the option of the Issuer, by mailing a check therefor payable to the
registered Holder entitled thereto at his last address as it appears on the
Security register.
Reference is made to the further provisions set forth on the reverse
hereof, including without limitation provisions subordinating the payment of
principal of, premium, if any, and interest on the Securities to the payment in
full of all Senior Indebtedness as defined in the Indenture (as defined on the
reverse hereof) and provisions giving the Holder hereof the right to convert
this Security into Class A Common Stock of the Issuer on the terms and subject
to the conditions and limitations referred to on the reverse hereof, as more
fully specified in the Indenture. Such further provisions shall for all purposes
have the same effect as though fully set forth at this place.
-2-
<PAGE>
This Security shall not be valid or obligatory until the certificate of
authentication hereon shall have been duly signed by the Trustee acting under
the Indenture.
IN WITNESS WHEREOF, the Issuer has caused this instrument to be duly
executed under its corporate seal.
Dated:
[Seal]
AMERICAN RADIO SYSTEMS
CORPORATION
By____________________________
-3-
<PAGE>
[FORM OF REVERSE OF SECURITY]
American Radio Systems Corporation
7% Convertible Subordinated Debentures Due 2011
This Security is one of a duly authorized issue of debt securities of
the Issuer, limited to up to the aggregate principal amount of $137,500,000
(except as otherwise provided in the Indenture defined below), issued or to be
issued pursuant to an indenture dated as of June 25, 1996 (the "Indenture"),
duly executed and delivered by the Issuer to Bank of Montreal Trust Company, as
Trustee (the "Trustee"). Reference is hereby made to the Indenture and all
indentures supplemental thereto for a description of the rights, limitations of
rights, obligations, duties and immunities thereunder of the Trustee, the Issuer
and the Holders (the word "Holders" or "Holder" meaning the registered Holders
or registered Holder) of the Securities. Capitalized terms used but not
otherwise defined herein shall have the meanings assigned thereto in the
Indenture.
In case an Event of Default, as defined in the Indenture, shall have
occurred and be continuing, the principal of all the Securities and interest
accrued thereon may be declared due and payable, in the manner and with the
effect, and subject to the conditions, provided in the Indenture. The Indenture
provides that in certain events a declaration of default, a default, or the
consequences of either of them may be waived by the Holders of a majority in
aggregate principal amount of the Securities then outstanding except a default
in the payment of principal of or premium, if any, or interest on any of the
Securities or in respect of the conversion of any of the Securities. Any such
consent or waiver by the Holder of this Security (unless revoked as provided in
the Indenture) shall be conclusive and binding upon such Holder and upon all
future Holders and owners of this Security and any Security which may be issued
in exchange or substitution hereof, whether or not any notation thereof is made
upon this Security or such other Securities.
The Indenture permits the Issuer and the Trustee, without the consent
of any of the Holders under the circumstances described in Section 7.1 of the
Indenture, and with the consent of the Holders of not less than a majority in
aggregate principal amount of the Securities at the time outstanding, evidenced
as in the Indenture provided, to execute supplemental indentures adding any
provisions to or
-4-
<PAGE>
changing in any manner or eliminating any of the provisions of the Indenture or
of any supplemental indenture or modifying in any manner the rights of the
Holders of the Securities; provided, that no such supplemental indenture shall
(a) extend the final maturity of any Security, or reduce the principal amount
thereof or premium, if any, thereon, or reduce the rate or extend the time of
payment of interest thereof, or any premium payable on the redemption thereof,
or change the place of payment where, or the coin or currency in which, any
principal, premium or interest is payable, or reduce or alter the method of
computation of any amount payable on redemption thereof (or the time at which
such redemption may be made), or impair or adversely affect the right of any
Securityholder to institute suit for the payment or conversion thereof or
adversely affect the right to convert the Securities into Class A Common Stock
of the Issuer, in each case, without the consent of the Holder of the Security
so affected; provided, no consent of any Holder of any Security will be
necessary to permit the Trustee and the Issuer to execute supplemental
indentures under the circumstances provided in Section 7.1(e) and Section 13.5
of the Indenture;, or (b) reduce the aforesaid percentage of Securities, the
consent of the Holders of which is required for any such supplemental indenture,
without the consent of the Holders of each Security so affected, or (c) reduce
the percentage of Securities necessary to consent to waive any past default
under the Indenture to less than a majority, without the consent of the Holders
of each Security so affected, or (d) modify the provisions of the Indenture
relating to subordination of the Securities in any manner adverse to the
Securityholders without the consent of the Holder of each security so affected,
or (e) modify any of the provisions of the Indenture relating to supplemental
indentures or waivers of past defaults, except to increase any percentage
provided for in Section 4.10 or Section 7.2 of the Indenture or to provide that
certain other provisions of the Indenture cannot be modified or waived without
the consent of the Holder of each Security affected thereby.
The Indebtedness evidenced by the Securities is, to the extent
and in the manner provided in the Indenture, expressly subordinate and
subject in right of payment to the prior payment in full of all Senior
Indebtedness of the Issuer as defined in the Indenture, whether outstanding at
the date of the Indenture or thereafter incurred, and this Security is issued
subject to the provisions of the Indenture with respect to such subordination.
Each Holder of this Security, by accepting the same, agrees to and shall be
bound by such provisions and authorizes the Trustee in his behalf to take such
action as may be necessary or
-5-
<PAGE>
appropriate to effectuate the subordination so provided and appoints the Trustee
his attorney-in-fact for such purpose.
Subject to the provisions of the Indenture, the Holder of this Security
has the right, at his option, at any time until and including, but not after the
close of business on, June 30, 2011 (except that, in case this Security or a
portion hereof shall be called for redemption and the Issuer shall not
thereafter default in making due provision for the payment of the redemption
price, such right shall terminate with respect to this Security or such portion
hereof at the close of business on the Business Day prior to the date fixed for
redemption), to convert the principal of this Security, or any portion thereof
which is $1,000 or an integral multiple of $1,000, into fully paid and
non-assessable shares of Class A Common Stock of the Issuer, as said shares
shall be constituted at the date of conversion, at the conversion price of $____
in principal amount of Securities for each share of such Class A Common Stock,
or at the adjusted conversion price in effect at the date of conversion if an
adjustment has been made, determined as provided in the Indenture, upon
surrender of this Security to the Issuer at the office or agency of the Issuer
maintained for that purpose in the Borough of Manhattan, The City of New York,
together with a fully executed notice substantially in the form set forth at the
foot hereof that the Holder elects so to convert this Security (or any portion
hereof which is an integral multiple of 1,000) and, if this Security is
surrendered for conversion during the period between the close of business on
March 15, June 15, September 15 or December 15 in any year and the opening of
business on the following March 31, June 30, September 30 or December 31 and has
not been called for redemption on a redemption date within such period (or on
such March 31, June 30, September 30 or December 31), or within five days after
such period, accompanied by payment of an amount equal to the interest payable
on such March 31, June 30, September 30 or December 31 on the principal amount
of the Security being surrendered for conversion. Except as provided in the
preceding sentence or as otherwise expressly provided in the Indenture, no
payment or adjustment shall be made on account of interest accrued on this
Security (or portion thereof) so converted or on account of any dividend or
distribution on any such Common Stock issued upon conversion, but the Holder of
record of this Security on March 15, June 15, September 15 or December 15 shall
be entitled to receive interest on such Security on the succeeding March 15,
June 15, September 15 or December 15 notwithstanding the conversion of such
Security prior to such March 31, June 30, September 30 or December 31. If so
required by the Issuer or the Trustee, this Security, upon
-6-
<PAGE>
surrender for conversion as aforesaid, shall be duly endorsed by, or be
accompanied by instruments of transfer, in form satisfactory to the Issuer, duly
executed by, the Holder or by his duly authorized attorney. The conversion price
from time to time in effect is subject to adjustment as provided in the
Indenture. No fractions of shares will be issued on conversion. In the sole
discretion of the Board of Directors, any fractional interest may be rounded up
to the nearest full share, or an adjustment in cash will be made for any
fractional interest, in either case in accordance with and as provided in the
Indenture.
No reference herein to the Indenture and no provision of this Security
or of the Indenture shall alter or impair the obligation of the Issuer, which is
absolute and unconditional, to pay the principal of and premium, if any, and
interest on this Security at the place, times, and rate, and in the currency,
herein prescribed.
The Securities are issuable only as registered Securities without
coupons in denominations of $1,000 and any integral multiple of $1,000.
In the manner and subject to the limitations provided in the Indenture,
this Security may be exchanged for a like aggregate principal amount of
Securities of other authorized denominations.
Upon due presentment for registration of transfer of this Security at
the above-mentioned office or agency of the Issuer, a new Security or Securities
of authorized denominations, for a like aggregate principal amount, will be
issued to the transferee as provided in the Indenture. No service charge shall
be made for any such transfer, but the Issuer may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
relation thereto.
The Securities may be redeemed at the option of the Issuer as a whole,
or from time to time in part, on and after July 15, 1999, upon mailing a notice
of such redemption not less than 30 nor more than 60 days prior to the date
fixed for redemption to the Holders of Securities to be redeemed, all as
provided in the Indenture, at the following redemption prices (expressed in
percentages of the principal amount) together in each case with accrued interest
to the date fixed for redemption:
If rendered during the twelve-month period begin ning July 15, of each
year indicated,
-7-
<PAGE>
Year Redemption Price
---- ----------------
1999 104.9%
2000 104.2
2001 103.5
2002 102.8
2003 102.1
2004 101.4
2005 100.7
2006 and thereafter 100.0
The Securities do not have the benefit of any sinking fund obligations.
If at any time there shall occur any Change in Control as defined in
the Indenture with respect to the Issuer, each Holder of Securities shall,
except as otherwise provided in the Indenture, have the right, at such Holder's
option but subject to the conditions set forth in the Indenture, to require the
Issuer to redeem on the Repurchase Date as defined in the Indenture all or any
part of such Holder's Securities that is $1,000 or an integral multiple thereof
at a Repurchase Price equal to the principal amount thereof, plus accrued and
unpaid interest, if any, up to but excluding the Repurchase Date.
Subject to payment by the Issuer of a sum suffi cient to pay the amount
due on redemption, interest on this Security (or portion hereof if this Security
is redeemed in part) shall cease to accrue upon the date duly fixed for
redemption of this Security (or portion hereof if this Security is redeemed in
part).
The Issuer, the Trustee and any authorized agent of the Issuer or the
Trustee may deem and treat the registered Holder hereof as the absolute owner of
this Security (whether or not this Security shall be overdue and notwithstanding
any notation of ownership or other writing hereon made by anyone other than the
Issuer or the Trustee or any authorized agent of the Issuer or the Trustee), for
the purpose of receiving payment of, or on account of, the principal hereof and
premium, if any, and, subject to the provisions on the face hereof, interest
hereon and for all other purposes, and neither the Issuer nor the Trustee nor
any authorized agent of the Issuer or the Trustee shall be affected by any
notice to the contrary.
No recourse shall be had for the payment of the principal of or
premium, if any, or the interest on this Security, for any claim based hereon,
or otherwise in respect hereof, or based on or in respect of the Indenture
-8-
<PAGE>
or any indenture supplemental thereto, against any incorporator, as such, or
against any past, present or future stockholder, officer or director, as such,
of the Issuer or of any partner or member of the Issuer or of any successor,
either directly or through the Issuer or any successor, whether by virtue of any
constitution, statute or rule of law or by the enforcement of any assessment or
penalty or otherwise, all such liability being, by the acceptance thereof and as
part of the consideration for the issue hereof, expressly waived and released.
The Indenture and this Security shall be governed by and construed in
accordance with the laws of the State of New York.
-9-
<PAGE>
[FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION]
This is one of the Securities described in the within-mentioned
Indenture.
Bank of Montreal Trust Company,
as Trustee
Authorized Officer
[FORM OF CONVERSION NOTICE]
To: American Radio Systems Corporation
The undersigned owner of this Security hereby: (i) irrevocably
exercises the option to convert this Security, or the portion hereof below
designated, for shares of Class A Common Stock of American Radio Systems Corpora
tion in accordance with the terms of the Indenture referred to in this Security
and (ii) directs that such shares of Class A Common Stock deliverable upon the
conversion, together with any check in payment for fractional shares and any
Security(ies) representing any unconverted principal amount hereof, be issued
and delivered to the registered Holder hereof unless a different name has been
indicated below. If shares and/or Security(ies) are to be delivered registered
in the name of a person other than the undersigned, the undersigned will pay all
transfer taxes payable with respect thereto. Any amount required to be paid by
the undersigned on account of interest accompanies this Security.
Dated:
Signature
-10-
<PAGE>
Fill in for registration of shares if to be delivered, and of Securities if to
be issued, otherwise than to and in the name of the registered Holder.
Social Security or Other
Taxpayer Identifying Number
(Name)
(Street Address)
(City, State and Zip Code)
(Please print name and address)
Principal Amount to Be Converted:
(if less than all)
$
-11-
<PAGE>
[FORM OF OPTION OF HOLDER TO ELECT REDEMPTION
UPON CHANGE IN CONTROL]
If you want to elect to have this Security purchased in its entirety by
the Issuer pursuant to Article 14 of the Indenture, check the box:
| |
If you want to elect to have only a part of this Security purchased by
the Issuer pursuant to Article 14 of the Indenture, state the amount: $
Dated: Your Signature:____________________
(Sign exactly as name appears
on the face of this Security)
Signature Guarantee:___________________________________
(Signature must be guaranteed by
a member firm of the New York Stock
Exchange or a commercial bank or
trust company)
-12-
AMERICAN RADIO SYSTEMS CORPORATION
- - --------------------------------------------------------------------------------
HARRIS TRUST AND SAVINGS BANK, As Depositary
AND
THE HOLDERS FROM TIME TO TIME OF
THE DEPOSITARY RECEIPTS DESCRIBED HEREIN
------------------------------------
DEPOSIT AGREEMENT
------------------------------------
Dated as of June 25, 1996
- - --------------------------------------------------------------------------------
<PAGE>
Page
TABLE OF CONTENTS
PARTIES..................................................................... 1
............................................................................ 1
ARTICLE I
Definitions
Accredited Investor......................................................... 1
Certificate................................................................. 1
Common Stock................................................................ 1
Company..................................................................... 2
Deposit Agreement........................................................... 2
Depositary.................................................................. 2
Depositary Shares........................................................... 2
Depositary's Agent.......................................................... 2
Depositary's Office......................................................... 2
DTC......................................................................... 2
DTC Receipt................................................................. 2
Exchange.................................................................... 2
Exchange Date............................................................... 2
Exchange Debentures......................................................... 2
Offshore Investor........................................................... 2
Original Purchasers......................................................... 3
PORTAL...................................................................... 3
Purchase Agreement.......................................................... 3
QIB......................................................................... 3
Receipt..................................................................... 3
Record Holder............................................................... 3
-i-
<PAGE>
Page
Redemption Date............................................................. 3
Registrar................................................................... 3
Securities Act.............................................................. 3
Stock....................................................................... 3
ARTICLE II
Book-Entry Form, Form of Receipts, Deposit of Stock,
Execution and Delivery, Transfer,
Surrender and Redemption of Receipts
SECTION 2.01. Book-Entry Form; Form and Transfer of
Receipts................................................ 4
SECTION 2.02. Deposit of Stock; Execution and Delivery
of Receipts in Respect Thereof.......................... 7
SECTION 2.03. Redemption of Stock....................................... 8
SECTION 2.04. Transfer of Receipts...................................... 10
SECTION 2.05. Split-ups and Combinations of Receipts;
Surrender of Receipts and Withdrawal
of Stock................................................ 10
SECTION 2.06. Limitations on Execution and Delivery,
Transfer, Surrender and Exchange
of Receipts............................................. 12
SECTION 2.07. Lost Receipts, etc....................................... 12
SECTION 2.08. Cancellation and Destruction of
Surrendered Receipts................................... 13
SECTION 2.09. Conversion Rights........................................ 13
SECTION 2.10. Exchange ................................................ 16
SECTION 2.11. Exchange of Book-Entry Receipts
and Receipts in Physical, Certificated Form............ 17
SECTION 2.12. Removal of Legends....................................... 18
-ii-
<PAGE>
Page
ARTICLE III
Certain Obligations of
Holders of Receipts and the Company
SECTION 3.01. Filing Proofs, Certificates and Other
Information............................................ 19
SECTION 3.02. Payment of Charges and Expenses.......................... 19
SECTION 3.03. Warranty as to Stock..................................... 20
SECTION 3.04. Warranty as to Receipts.................................. 20
SECTION 3.05. Covenants and Warranties as to
Common Stock........................................... 20
ARTICLE IV
The Deposited Securities; Notices
SECTION 4.01. Cash Distributions....................................... 20
SECTION 4.02. Distributions Other than Cash,
Depositary Shares, Rights,
Preferences or Privileges............................... 21
SECTION 4.03. Subscription Rights, Preferences or
Privileges............................................. 21
SECTION 4.04. Notice of Dividends, etc.; Fixing of
Record Date for Holders of Receipts.................... 22
SECTION 4.05. Voting Rights............................................ 23
SECTION 4.06. Changes Affecting Deposited Securities
and Reclassifications,
Recapitalization, etc.................................. 23
SECTION 4.07. Inspection of Reports.................................... 24
SECTION 4.08. Lists of Receipt Holders................................. 24
SECTION 4.09. Withholding.............................................. 24
-iii-
<PAGE>
Page
ARTICLE V
The Depositary, the Depositary's
Agents, the Registrar and the Company
SECTION 5.01. Maintenance of Offices, Agencies and
Transfer Books by the Depositary;
Registrar.............................................. 25
SECTION 5.02. Prevention of or Delay in Performance
by the Depositary, the Depositary's
Agents, the Registrar or the
Company................................................. 25
SECTION 5.03. Obligations of the Depositary, the
Depositary's Agents and the
Registrar............................................... 26
SECTION 5.04. Resignation and Removal of the
Depositary; Appointment of Successor
Depositary............................................. 27
SECTION 5.05. Corporate Notices and Reports............................. 28
SECTION 5.06. Indemnification by the Company........................... 29
SECTION 5.07. Taxes or Other Governmental
Charges................................................ 29
ARTICLE VI
Amendment and Termination
SECTION 6.01. Amendment................................................ 30
SECTION 6.02. Termination.............................................. 30
ARTICLE VII
Miscellaneous
SECTION 7.01. Counterparts............................................. 31
SECTION 7.02. Exclusive Benefit of Parties............................. 31
SECTION 7.03. Invalidity of Provisions................................. 31
SECTION 7.04. Notices.................................................. 32
-iv-
<PAGE>
Page
SECTION 7.05. Depositary's Agents...................................... 32
SECTION 7.06. Holders of Receipts Are Parties.......................... 33
SECTION 7.07. Governing Law............................................ 33
SECTION 7.08. Inspection of Deposit Agreement.......................... 33
SECTION 7.09. Headings................................................. 33
SIGNATURES................................................................. 34
EXHIBIT A: Form of Depositary Receipt
EXHIBIT B: Letter of Representations to The Depository
Trust Company
-v-
<PAGE>
DEPOSIT AGREEMENT, dated as of June 25, 1996, among AMERICAN RADIO
SYSTEMS CORPORATION, a Delaware corporation, HARRIS TRUST AND SAVINGS BANK, an
Illinois banking corporation, and the holders from time to time of the Receipts
described herein.
WHEREAS, it is desired to provide, as hereinafter set forth in this
Deposit Agreement, for the deposit of shares of 7% Convertible Exchangeable
Preferred Stock, par value $.01 per share, of American Radio Systems Corporation
with the Depositary for the purposes set forth in this Deposit Agreement and for
the issuance hereunder of Receipts by the Depositary evidencing Depositary
Shares each representing a one-twentieth interest in a share of 7% Convertible
Exchangeable Preferred Stock, par value $.01 per share, of American Radio
Systems Corporation so deposited; and
WHEREAS, the Receipts are to be in substantially the form of Exhibit
A, annexed hereto, with appropriate insertions, modifications and omissions, as
hereinafter provided in this Deposit Agreement;
NOW, THEREFORE, in consideration of the premises contained herein and
such other good and valuable consideration, receipt of which is hereby
acknowledged, the parties hereto agree as follows:
ARTICLE I
Definitions
The following definitions shall for all purposes, unless otherwise
indicated, apply to the respective terms used in this Deposit Agreement and the
Receipts:
"Accredited Investor" means any purchaser of the Depositary Shares,
other than a QIB, which is an "accredited investor" as defined in Rule
501(a)(1), (2) or (3) of Regulation D under the Securities Act or an entity in
which all of the equity owners are accredited investors within the meaning of
Rule 501(a)(1), (2) or (3) and is identified to the Depositary by the Company
(or by an agent of the Company) as an Accredited Investor.
"Certificate" shall mean the certificate of designations filed with
the Secretary of State of Delaware with respect to the Stock.
"Common Stock" shall mean the Class A Common Stock, par value $.01 per
share, of the Company.
<PAGE>
"Company" shall mean American Radio Systems Corporation, a Delaware
corporation, and its successors.
"Deposit Agreement" shall mean this Deposit Agreement, as amended or
supplemented from time to time in accordance with the terms hereof.
"Depositary" shall mean Harris Trust and Savings Bank, an Illinois
banking corporation, and any successor Depositary hereunder.
"Depositary Shares" shall mean Depositary Shares, evidenced by
Receipts issued hereunder and representing an interest in the Stock deposited
with the Depositary hereunder. Each Depositary Share shall, as provided herein,
represent a one-twentieth interest in a share of Stock and is evidenced by a
Receipt.
"Depositary's Agent" shall mean an agent appointed by the Depositary
pursuant to Section 7.05.
"Depositary's Office" shall mean the office of the Depositary in New
York City, or such other location as the Depositary shall from time to time
designate, at which at any particular time its depositary business shall be
administered.
"DTC" shall mean The Depository Trust Company.
"DTC Receipt" shall mean a single Receipt which shall be deposited
with DTC (or its designee) evidencing all Depositary Shares traded on PORTAL
with book-entry settlement through DTC.
"Exchange" shall mean the exchange, at the Company's option, of Stock
for Exchange Debentures in accordance with the Certificate.
"Exchange Date" shall mean any March 31, June 30, September 30 or
December 31, commencing June 30, 1997, on which the Company may elect in
accordance with the Certificate to exchange Stock for Exchange Debentures.
"Exchange Debentures" shall mean the Company's 7% Convertible
Subordinated Debentures due 2011 issuable in exchange for all but not less than
all the Stock, at the Company's election in accordance with the Certificate.
"Offshore Investor" means any purchaser of the Depositary Shares,
other than a QIB, which acquires such Depositary Shares in a transaction exempt
pursuant to
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Rule 903 or 904 under the Securities Act and is identified to the Depositary by
the Company (or by an agent of the Company) as an Offshore Investor.
"Original Purchasers" shall mean CS First Boston Corporation, Alex.
Brown & Sons Incorporated, Morgan Stanley & Co. Incorporated and Smith Barney
Inc.
"PORTAL" shall mean the Private Offerings, Resales and Trading through
Automated Linkages Market.
"Purchase Agreement" shall mean the Purchase Agreement dated as of
June 19, 1996 between the Company and the Original Purchasers.
"QIB" means a "qualified institutional buyer" as defined in Rule 144A
under the Securities Act.
"Receipt" shall mean one of the depositary receipts issued hereunder
by the Depositary, whether in definitive or temporary form, evidencing interests
held in Depositary Shares in substantially the form set forth in Exhibit A.
Where the context requires, the term "Receipt" shall be deemed to include the
DTC Receipt.
"Record Holder" as applied to a Receipt shall mean the person in whose
name a Receipt is registered on the books of the Depositary or any register of
any Registrar maintained for such purpose.
"Redemption Date" shall have the meaning set forth in Section 2.03
hereof.
"Registrar" shall mean any bank or trust company which shall be
appointed to register ownership and transfers of Receipts as herein provided and
may include the Depositary.
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Stock" shall mean shares of the Company's 7% Convertible Exchangeable
Preferred Stock, par value $.01 per share.
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ARTICLE II
Book-Entry Form, Form of Receipts, Deposit of Stock,
Execution and Delivery, Transfer,
Surrender and Redemption of Receipts
SECTION 2.01. Book-Entry Form; Form and Transfer of Receipts. The
Company and the Depositary shall make application to DTC for acceptance of all
or a portion of the Receipts for its book-entry settlement system. The Company
hereby appoints the Depositary acting through any authorized officer thereof as
its attorney-in-fact, with full power to delegate, for purposes of executing any
agreements, certifications or other instruments or documents necessary or
desirable in order to effect the acceptance of such Receipts for DTC
eligibility, including but not limited to the Letter of Representations, the
form of which is attached hereto as Exhibit B. So long as the Receipts are
eligible for book-entry settlement with DTC except as provided for in Section
2.10 of this Deposit Agreement, or unless otherwise required by law, all
Depositary Shares to be traded on the PORTAL Market shall be represented by the
DTC Receipt registered in the name of the nominee of DTC (initially expected to
be Cede & Co.). Harris Trust and Savings Bank or such other entity as is agreed
with DTC may hold the DTC Receipt as custodian for DTC. During any period in
which any Depositary Shares are evidenced by the DTC Receipts except as
expressly provided for in Section 2.10 of this Deposit Agreement, no person
acquiring Depositary Shares traded on the PORTAL Market shall receive or be
entitled to receive physical delivery of the Depositary Receipts evidencing such
Depositary Shares. Ownership of beneficial interests in the DTC Receipt shall be
shown on, and the transfer of such ownership shall be effected through, records
maintained by (i) DTC or its nominee for such DTC Receipt, or (ii) institutions
that have accounts with DTC.
If DTC subsequently ceases to make its book-entry settlement system
available for the Receipts, the Company may instruct the Depositary regarding
making other arrangements for book-entry settlement. In the event that the
Receipts are not eligible for, or it is no longer necessary to have the Receipts
available in book-entry form, the Depositary shall provide written instructions
to DTC to deliver to the Depositary for cancellation the DTC Receipt, and the
Company shall instruct the Depositary to deliver to the beneficial owners of the
Depositary Shares previously evidenced by the DTC Receipt definitive Receipts in
physical form evidencing such Depositary Shares. Such definitive Receipts shall
be in substantially the form annexed hereto
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as Exhibit A with appropriate insertions, modifications and
omissions, as hereafter provided.
The beneficial owners of Depositary Shares shall, except as stated
above with respect to Depositary Shares in book-entry form represented by the
DTC Receipt, be entitled to receive Receipts in physical, certificated form as
herein provided.
The Receipts shall be typewritten, in the case of the DTC Receipt, and
otherwise shall, upon notice by the Company to the Depositary, be definitive
Receipts which shall be engraved, printed or typewritten and shall be
substantially in the form set forth in Exhibit A annexed to this Deposit
Agreement, with appropriate insertions, modifications and omissions, as
hereinafter provided. The DTC Receipt shall bear such legend or legends as may
be required by DTC in order for it to accept the Depositary Shares for its
book-entry settlement system. Until such time as the Receipts are so engraved,
printed or typewritten in accordance with the preceding sentence, the
Depositary, upon the written order of the Company or any holder of Stock, as the
case may be, delivered in compliance with Section 2.02, shall execute and
deliver temporary Receipts which are printed, lithographed, typewritten,
mimeographed or otherwise substantially of the tenor of the definitive Receipts
in lieu of which they are issued and with such appropriate insertions,
omissions, substitutions and other variations as the persons executing such
Receipts may determine, as evidenced by their execution of such Receipts. If
temporary Receipts are issued, the Company and the Depositary will cause
definitive Receipts to be prepared without unreasonable delay. After the
preparation of definitive Receipts, the temporary Receipts shall be exchangeable
for definitive Receipts upon surrender of the temporary Receipts at the
Depositary's Office, without charge to the holder. Upon surrender for
cancellation of any one or more temporary Receipts, the Depositary shall execute
and deliver in exchange therefor definitive Receipts representing the same
number of Depositary Shares as represented by the surrendered temporary Receipt
or Receipts. Such exchange shall be made at the Company's expense and without
any charge therefor to the holder of the Receipts. Until so exchanged, the
temporary Receipts shall in all respects be entitled to the same benefits under
this Deposit Agreement, and with respect to the Stock, as definitive Receipts.
Receipts shall be executed by the Depositary by the manual signature
of a duly authorized officer of the Depositary; provided, that such signature
may be a facsimile
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if a Registrar for the Receipts (other than the Depositary) shall have been
appointed and such Receipts are countersigned by manual signature of a duly
authorized officer of the Registrar. No Receipt shall be entitled to any
benefits under this Deposit Agreement or be valid or obligatory for any purpose
unless it shall have been executed manually by a duly authorized officer of the
Depositary or, if a Registrar for the Receipts (other than the Depositary) shall
have been appointed, by manual or facsimile signature of a duly authorized
officer of the Depositary and countersigned manually by a duly authorized
officer of such Registrar. The Depositary shall record on its books each Receipt
so signed and delivered as hereinafter provided. The manual or facsimile
signatures of individuals who were at any time proper officers of the Depositary
or the Registrar, as the case may be, shall constitute adequate signatures
hereunder, notwithstanding that such individuals or any of them have ceased to
hold such offices prior to the delivery of Receipts bearing such signatures or
did not hold such offices on the date of delivery of such Receipts.
Except as the Depositary may otherwise determine, Receipts shall be in
denominations of any number of whole Depositary Shares.
Receipts may be endorsed with or have incorporated in the text thereof
such legends or recitals or changes not inconsistent with the provisions of this
Deposit Agreement as may be required by the National Association of Securities
Dealers Inc. in order for the Receipts to be tradeable on PORTAL or as may be
required for the Receipts to be tradeable on any other market developed for
trading of securities pursuant to Rule 144A under the Securities Act or required
to comply with any applicable law or any regulation thereunder or with the rules
and regulations of any securities exchange upon which the Stock, the Depositary
Shares or the Receipts may be listed or to conform with any usage with respect
thereto, or to indicate any special limitations or restrictions to which any
particular Receipts are subject.
Subject to any limitations set forth in a Receipt or in this Deposit
Agreement, title to a Receipt (and to the Depositary Shares evidenced by such
Receipt) which is properly endorsed or accompanied by a properly executed
instrument of transfer, shall be transferable by delivery with the same effect
as in the case of a negotiable instrument; provided, however, that until
transfer of a Receipt shall be registered on the books of the Depositary as
provided in Section 2.04, the Depositary may,
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notwithstanding any notice to the contrary, treat the record holder thereof at
such time as the absolute owner thereof for the purpose of determining the
person entitled to distributions of dividends or other distributions, the
exercise of conversion rights, the exchange of Depositary Shares for Stock, the
right to exchange Receipts pursuant to Section 2.10 or to any notice provided
for in this Deposit Agreement and for all other purposes.
The Depositary (and any Registrar acting on its behalf) shall not,
prior to the removal of the legends set forth on Exhibit A pursuant to Section
2.12 hereof, register the transfer of any Receipt by an Accredited Investor or
an Offshore Investor except upon the delivery by the Accredited Investor or
Offshore Investor to the Depositary of such certification and other evidence as
the Depositary may reasonably require to confirm that the proposed transfer
complies with the resale restrictions stated in the restrictive legend included
on the form of Receipt set forth as Exhibit A hereto.
SECTION 2.02. Deposit of Stock; Execution and Delivery of Receipts in
Respect Thereof. Subject to the terms and conditions of this Deposit Agreement,
the Company or an Original Purchaser may from time to time deposit shares of the
Stock with the Depositary under this Deposit Agreement by delivery to the
Depositary of the certificate or certificates for the Stock to be deposited,
properly endorsed or accompanied, if required by law or by the Depositary, by a
duly executed instrument of transfer or endorsement, in form satisfactory to the
Depositary, together with all such certifications as may be required by the
Depositary in accordance with the provisions of this Deposit Agreement, and
together with a written order of the Company or an Original Purchaser, as the
case may be, directing the Depositary to execute and deliver to, or upon the
written order of, the person or persons stated in such order a Receipt or
Receipts for the number of Depositary Shares representing such deposited Stock.
Deposited Stock shall be held by the Depositary at the Depositary's
Office or at such other place or places as the Depositary shall determine.
Upon receipt by the Depositary of a certificate or certificates for
Stock deposited in accordance with the provisions of this Section, together with
the other documents required as above specified, and upon recordation of the
Stock on the books of the Company in the name of the Depositary or its nominee,
the Depositary, subject to the terms and conditions of this Deposit Agreement,
shall
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execute and deliver, to or upon the order of the Company or an Original
Purchaser, a Receipt or Receipts for the number of Depositary Shares
representing the Stock so deposited and registered in such name or names as may
be requested by the Company or such Original Purchaser. The Depositary shall
execute and deliver such Receipt or Receipts at the Depositary's Office or such
other offices, if any, as the Depositary may designate. Delivery at other
offices shall be at the risk and expense of the person requesting such delivery.
The DTC Receipt shall provide that it shall evidence the aggregate amount of
Depositary Shares from time to time indicated in the records of the Depositary
and that the aggregate amount of Depositary Shares evidenced thereby may from to
time be increased or decreased by making adjustments on such records of the
Depositary.
Other than in the case of splits, combinations or other
reclassifications affecting the Stock, or in the case of dividends or other
distributions of Stock, if any, there shall be deposited hereunder not more than
137,500 shares of Stock.
SECTION 2.03. Redemption of Stock. Whenever the Company shall be
permitted and shall elect to redeem shares of Stock in accordance with the
provisions of the Certificate, it shall (unless otherwise agreed to in writing
with the Depositary) give the Depositary not more than 30 days' or less than 60
days' notice of the date of such proposed redemption of Stock and of the number
of such shares held by the Depositary to be so redeemed and the applicable
redemption price, as set forth in the Certificate, which notice shall be
accompanied by a certificate from the Company stating that such redemption of
Stock is in accordance with the provisions of the Certificate. On the date of
such redemption, provided that the Company shall then have paid in full to the
Depositary the redemption price of the Stock to be redeemed, plus any accrued
and unpaid dividends thereon, in accordance with the provisions of the
Certificate, the Depositary shall redeem the number of Depositary Shares
representing such Stock. The Depositary shall mail notice of the Company's
redemption of Stock and the proposed simultaneous redemption of the number of
Depositary Shares representing the Stock to be redeemed by first-class mail,
postage prepaid, not less than 30 and not more than 60 days prior to the date
fixed for redemption of such Stock and Depositary Shares (the "Redemption
Date"), to the Record Holders of the Receipts evidencing the Depositary Shares
to be so redeemed, at the addresses of such holders as they appear on the
records of the Depositary; but neither failure to mail any such notice of
redemption of Depositary Shares to one or more such
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holders nor any defect in any notice of redemption of Depositary Shares to one
or more such holders shall affect the sufficiency of the proceedings for
redemption as to the other holders. Each such notice shall state: (i) the
Redemption Date; (ii) the number of Depositary Shares to be redeemed and, if
less than all the Depositary Shares held by any such holder are to be redeemed,
the number of such Depositary Shares held by such holder to be so redeemed;
(iii) the redemption price; (iv) the place or places where Receipts evidencing
Depositary Shares are to be surrendered for payment of the redemption price; (v)
the then current conversion price; and (vi) that dividends in respect of the
Stock represented by the Depositary Shares to be redeemed will cease to accrue
on such Redemption Date. In case less than all the outstanding Depositary Shares
are to be redeemed, the Depositary Shares to be so redeemed shall be selected by
lot or pro rata as may be determined by the Depositary to be equitable.
Notice having been mailed by the Depositary as aforesaid, from and
after the Redemption Date (unless the Company shall have failed to provide the
funds necessary to redeem the Stock evidenced by the Depositary Shares called
for redemption) (i) dividends on the shares of Stock so called for redemption
shall cease to accrue after such date, (ii) the Depositary Shares being redeemed
from such proceeds shall be deemed no longer to be outstanding, (iii) all rights
of the holders of Receipts evidencing such Depositary Shares (except the right
to receive the redemption price) shall, to the extent of such Depositary Shares,
cease and terminate, and (iv) upon surrender in accordance with such redemption
notice of the Receipts evidencing any such Depositary Shares called for
redemption (properly endorsed or assigned for transfer, if the Depositary or
applicable law shall so require), such Depositary Shares shall be redeemed by
the Depositary at a redemption price per Depositary Share equal to 1/20th of the
redemption price per share paid in respect of the shares of Stock so redeemed
plus all money and other property, if any, represented by such Depositary
Shares, including all amounts paid by the Company in respect of dividends which
on the Redemption Date have accumulated on the shares of Stock to be so redeemed
and have not theretofore been paid.
If fewer than all of the Depositary Shares evidenced by a Receipt are
called for redemption, the Depositary will deliver to the holder of such Receipt
upon its surrender to the Depositary, together with the redemption payment, a
new Receipt evidencing the Depositary Shares evidenced by such prior Receipt and
not called for redemption.
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SECTION 2.04. Transfer of Receipts. Subject to the terms and
conditions of this Deposit Agreement (including, without limitation, the final
paragraph of Section 2.01), the Depositary shall register on its books from time
to time transfers of Receipts upon any surrender thereof by the holder in person
or by a duly authorized attorney, properly endorsed or accompanied by a properly
executed instrument of transfer and any necessary certifications. Thereupon the
Depositary shall execute a new Receipt or Receipts evidencing the same aggregate
number of Depositary Shares as those evidenced by the Receipt or Receipts
surrendered and deliver such new Receipt or Receipts to or upon the order of the
person entitled thereto.
SECTION 2.05. Split-ups and Combinations of Receipts; Surrender of
Receipts and Withdrawal of Stock. Upon surrender by a holder of a Receipt or
Receipts at the Depositary's Office or at such other offices as it may designate
for the purpose of effecting a split-up or combination of such Receipt or
Receipts, the Depositary shall execute and deliver a new Receipt or Receipts in
the authorized denomination or denominations requested, evidencing the aggregate
number of Depositary Shares evidenced by the Receipt or Receipts surrendered. In
connection with any split-up or combination pursuant to this paragraph not
involving a transfer of Receipts, the Depositary shall not be obligated to
obtain any certification or endorsement otherwise required by the terms of this
Deposit Agreement.
Any holder of a Receipt or Receipts representing any number of whole
shares of Stock or his duly authorized attorney may withdraw the Stock and all
money and other property, if any, represented thereby by surrendering such
Receipt or Receipts, at the Depositary's Office or at such other offices as the
Depositary may designate for such withdrawals. If such holder's Depositary
Shares are being held by DTC or its nominee pursuant to Section 2.01, such
holder shall request, in accordance with and subject to the limitations in
Section 2.11, withdrawal from the book-entry system of the number of Depositary
Shares specified in the preceding sentence. Thereafter, without unreasonable
delay, the Depositary shall deliver to such holder or to the person or persons
designated by such holder as hereinafter provided, the number of whole shares of
Stock and all money and other property, if any, represented by the Receipt or
Receipts so surrendered for withdrawal, but holders of such whole shares of
Stock will not thereafter be entitled to deposit such Stock hereunder or to
receive Depositary Shares therefor. If a Receipt delivered by the holder to the
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Depositary in connection with such withdrawal shall evidence a number of
Depositary Shares in excess of the number of Depositary Shares representing the
number of whole shares of Stock to be so withdrawn, the Depositary shall at the
same time, in addition to such number of whole shares of Stock and such money
and other property, if any, to be so withdrawn, deliver to such holder, or upon
his order or to the person or persons stated in the order, a new Receipt
evidencing such excess number of Depositary Shares. In no event will fractional
shares of Stock be distributed by the Depositary. Delivery of the Stock and
money and other property being withdrawn may be made by the delivery of such
certificates, documents of title and other instruments as the Depositary may
deem appropriate.
Stock delivered pursuant to the preceding paragraph may be endorsed
with or have incorporated in the text thereof such legends or recitals or
changes not inconsistent with the provisions of this Deposit Agreement as may be
required to comply with any applicable law or any regulation thereunder or to
conform with any usage with respect thereto, or to indicate any special
limitations or restrictions to which any particular shares of Stock are subject.
If the Stock and the money and other property being withdrawn are to
be delivered to a person or persons other than the Record Holder of the Receipt
or Receipts being surrendered for withdrawal of Stock, such holder shall execute
and deliver to the Depositary a written order so directing the Depositary and
the Depositary may require that the Receipt or Receipts surrendered by such
holder for withdrawal of such shares of Stock be properly endorsed in blank or
accompanied by a properly executed instrument of transfer in blank. In addition,
if the Record Holder of the Receipt being surrendered for withdrawal of Stock is
an Accredited Investor or an Offshore Investor, the Depositary shall not deliver
the Stock to, and such Stock shall not be registered in the name of, any person
other than such Accredited Investor or Offshore Investor except upon the
delivery by such Accredited Investor or Offshore Investor to the Depositary of
such certification and other evidence as the Depositary may reasonably require
to confirm that the proposed transfer complies with the resale restrictions
stated in the restrictive legend included on the form of Receipt set forth as
Exhibit A hereto.
Delivery of the Stock and the money and other property, if any,
represented by Receipts surrendered for withdrawal shall be made by the
Depositary at the Depositary's Office, except that, at the request, risk and
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expense of the holder surrendering such Receipt or Receipts and for the account
of the holder thereof, such delivery may be made at such other place as may be
designated by such holder.
SECTION 2.06. Limitations on Execution and Delivery, Transfer,
Surrender and Exchange of Receipts. As a condition precedent to the execution
and delivery, transfer, split-up, combination, surrender or exchange of any
Receipt, the Depositary, any of the Depositary's Agents or the Company may
require payment to it of a sum sufficient for the payment (or, in the event that
the Depositary or the Company shall have made such payment, the reimbursement to
it) of any charges or expenses payable by the holder of a Receipt pursuant to
Section 5.07 (or reasonably satisfactory evidence that such charges and expenses
have been paid), may require the production of evidence satisfactory to it as to
the identity and genuineness of any signature and may also require compliance
with such regulations, if any, as the Depositary or the Company may establish
consistent with the provisions of this Deposit Agreement.
The deposit of Stock may be refused, the delivery of Receipts against
Stock may be suspended, the registration of transfer of Receipts may be refused
and the registration of transfer, surrender or exchange of outstanding Receipts
may be suspended during (i) any period when the register of stockholders of the
Company is closed or (ii) if required by law or any government or governmental
body or commission or (iii) under any provision of this Deposit Agreement or the
Purchase Agreement.
The transfer or surrender of Receipts by Accredited Investors and
Offshore Investors shall, in addition to the foregoing limitations, also be
subject to the applicable restrictions stated in the final paragraph of Section
2.01 and the penultimate paragraph of Section 2.05.
SECTION 2.07. Lost Receipts, etc. In case any Receipt shall be
mutilated, destroyed, lost or stolen, the Depositary may in its discretion
execute and deliver a Receipt of like form and tenor in exchange and
substitution for such mutilated Receipt, or in lieu of and in substitution for
such destroyed, lost or stolen Receipt, upon (i) the filing by the holder
thereof with the Depositary of evidence satisfactory to the Depositary of such
destruction or loss or theft of such Receipt, of the authenticity thereof and of
his or her ownership thereof and (ii) the furnishing to the Depositary of
reasonable indemnification satisfactory to it.
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SECTION 2.08. Cancellation and Destruction of Surrendered Receipts.
All Receipts physically surrendered to the Depositary or any Depositary's Agent
shall be cancelled by the Depositary. Except as prohibited by applicable law or
regulation, the Depositary is authorized to destroy all Receipts so cancelled.
Any Receipt evidenced in book-entry form shall be deemed cancelled when the
Depositary has caused the amount of Depositary Shares evidenced by the DTC
Receipt to be reduced in proportion to the number of Depositary Shares evidenced
by the surrendered Receipt.
SECTION 2.09. Conversion Rights. Receipts may be surrendered with
written instructions to the Depositary to instruct the Company to cause the
conversion of any specified number of whole or fractional shares of Stock
represented by the Depositary Shares evidenced thereby into whole shares of
Common Stock at the conversion price then in effect for the Stock (and,
therefore, for the Depositary Shares) specified in the Certificate, as such
conversion price may be adjusted by the Company from time to time as provided in
the Certificate. Subject to the terms and conditions of this Deposit Agreement
and the Certificate, a holder of a Receipt or Receipts evidencing Depositary
Shares representing whole or fractional shares of Stock may surrender such
Receipt or Receipts to the Depositary at the Depositary's Office or to such
office or to such Depositary's Agents as the Depositary may designate for such
purpose, together with (i) a notice of conversion thereof duly completed and
executed (a "Notice of Conversion"), and (ii) any payment in respect of
dividends required by the fourth paragraph of this Section 2.09, thereby
directing the Depositary to instruct the Company to cause the conversion of the
number of shares or fractions thereof of underlying Stock specified in such
Notice of Conversion into whole shares of Common Stock. If such holder's
Depositary Shares are being held by DTC or its nominee pursuant to Section 2.01,
such holder shall request, pursuant to Section 2.11, withdrawal from the
book-entry system the number of Depositary Shares to be converted. In the event
that a holder delivers to the Depositary for conversion a Receipt or Receipts
which in the aggregate are convertible into less than one whole share of Common
Stock, the holder shall receive payment in lieu of such fractional shares of
Common Stock otherwise issuable in accordance with the last paragraph of this
Section 2.09.
Upon receipt by the Depositary of a Receipt or Receipts, together with
a Notice of Conversion, duly completed and executed, directing the Depositary to
instruct the Company to cause the conversion of a specified number of
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shares or fractions thereof of Stock, the Depositary shall instruct the Company
(i) to cause the conversion of the Depositary Shares evidenced by the Receipts
so surrendered for conversion as specified in the written Notice of Conversion
to the Depositary and (ii) to cause the delivery to the holders of such Receipts
a certificate or certificates evidencing the number of whole shares of Common
Stock, and the amount of immediately available funds, if any, to be delivered to
the holders of Receipts surrendered for conversion in payment of any fractional
shares of Common Stock otherwise issuable. The Company shall, as promptly as
practicable after receipt thereof, cause the delivery of (i) a certificate or
certificates evidencing the number of whole shares of Common Stock into which
the Stock represented by the Depositary Shares evidenced by such Receipt or
Receipts has been converted, and (ii) any money or other property to which the
holder is entitled. The person or persons in whose name or names any certificate
or certificates for shares of Common Stock shall be issuable upon such
conversion shall be deemed to have become the holder or holders of record of the
shares represented thereby at the close of business on the date such Receipt or
Receipts shall have been surrendered to and a Notice of Conversion received by
the Depositary, unless the stock transfer books of the Company shall be closed
on that date, in which event such person or persons shall be deemed to have
become such holder or holders of record on the next succeeding day on which such
stock transfer books are open. Upon such conversion, the Depositary (i) shall
deliver to the holder a Receipt evidencing the number of Depositary Shares, if
any, which such holder has elected not to convert evidenced by such Receipt or
Receipts in excess of the number of Depositary Shares representing Stock which
has been so converted, (ii) shall cancel the Depositary Shares evidenced by
Receipts surrendered for conversion and (iii) shall deliver for cancellation to
the transfer agent for the Stock the shares of Stock represented by the
Depositary Shares evidenced by the Receipts so surrendered and so converted.
If any Stock shall be called by the Company for redemption or
exchange, the Depositary Shares representing such Stock may be converted into
Common Stock as provided in this Deposit Agreement until and including, but,
except as may be provided in the Certificate, not after, the close of business
on the day prior to the Redemption Date or the close of business on the Exchange
Date, as the case may be, unless the Company shall default in making payment of
the cash redemption price or the delivery of the Exchange Debentures, as the
case may be, and the payment of other amounts, if any, payable upon such
redemption or exchange, in which case the Depositary Shares representing such
Stock
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may continue to be converted into Common Stock until and including, but not
after, the close of business on the date on which the Company makes full payment
of the cash redemption price or delivery of the Exchange Debentures and payment
of other amounts, if any, payable on such redemption or exchange, as the case
may be. Upon receipt by the Depositary of a Receipt or Receipts, together with a
properly completed and executed Notice of Conversion, representing any Stock
called for redemption or exchange, the shares of Stock held by the Depositary
represented by such Depositary Shares for which conversion is requested shall be
deemed to have been received by the Company for conversion.
Upon any conversion of the Stock underlying the Depositary Shares, no
allowance, adjustment or payment shall be made with respect to accrued dividends
upon such Stock except that if any holder of a Receipt surrenders such Receipt
with instructions to the Depositary for conversion of the underlying Stock
evidenced thereby during the period between the close of business on any
dividend record date and the opening of business on the corresponding dividend
payment date (except shares called for redemption on a Redemption Date during
such period or shares being exchanged on an Exchange Date during such period),
such Receipt must be accompanied by a payment equal to the dividend thereon, if
any, which the holder of record of such Receipt is entitled to receive on such
dividend payment date in respect of the underlying Stock to be converted.
Upon the conversion of any shares of Stock for which a request for
conversion has been made by the holder of Depositary Shares representing such
shares, all dividends in respect of such Depositary Shares shall cease to
accrue, such Depositary Shares shall be deemed no longer outstanding, all rights
of the holder of the Receipt with respect to such Depositary Shares (except the
right to receive the Common Stock, any cash payable with respect to any
fractional shares of Common Stock as provided herein and any cash payable on
account of accrued dividends in respect of the Stock so converted and any
Receipts evidencing Depositary Shares not so converted) shall terminate, and the
Receipt evidencing such Depositary Shares shall be cancelled in accordance with
Section 2.08 hereof.
No fractional shares of Common Stock shall be issuable upon conversion
of Stock underlying the Depositary Shares except as hereinafter provided. If,
except for the provisions of this Section 2.09 and the Certificate, any holder
of Receipts surrendered with instructions to the Depositary for conversion of
the underlying Stock would be
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entitled to a fractional share of Common Stock upon such conversion, the Company
shall cause to be delivered to such holder an amount, in immediately available
funds, for such fractional share based upon the last reported sale price then in
effect for the Common Stock on such date computed as set forth in the
Certificate unless payment in cash is prohibited by the terms of the Company's
indebtedness, in which case fractional shares will be issued or, at the sole
option of the Company, such fractional shares shall be rounded up to the nearest
full share.
SECTION 2.10. Exchange. On the Exchange Date, provided that the
Company shall then have delivered to the Depositary the Exchange Debentures and
the aggregate amount of cash required to pay any accrued and unpaid dividends
and cash in respect of any principal amount of Exchange Debentures less than the
minimum denomination that is issuable and payable with respect to the Stock then
deposited with the Depositary, the Depositary shall deliver to each holder the
proportionate amount of such Exchange Debentures (subject to the minimum
denomination requirements of such Exchange Debentures referred to below in this
Section 2.10) and cash so delivered to the Depositary in respect of such
holder's Depositary Shares.
The Depositary shall, as directed by the Company, mail, first class
postage prepaid, notice of such Exchange of Stock and the proposed simultaneous
exchange of the Depositary Shares, not less than 30 and not more than 60 days
prior to the Exchange Date. Such notice shall be mailed to each holder at the
address of such holder as the same appears on the records of the Depositary at
the close of business on the second business day immediately preceding the date
on which the mailing of such notices is commenced; but neither failure to mail
any such notice to one or more holders nor any defect in any notice shall affect
the sufficiency of the proceedings for the exchange. The Company shall provide
the Depositary with such notice, and each such notice shall state: the Exchange
Date; that all outstanding shares of Stock on the Exchange Date will be
exchanged for Exchange Debentures; that all outstanding Depositary Shares on the
Exchange Date will in turn be exchanged for such Exchange Debentures; the amount
of accrued and unpaid dividends, if any, payable with respect to each Depositary
Share to be so exchanged; the place or places where Receipts to be so exchanged
are to be surrendered for exchange; that dividends in respect of the Stock
represented by the Depositary Shares to be so exchanged shall cease to accrue at
the close of business on the day prior to the Exchange Date; the minimum
principal amount in which Exchange Debentures shall be issued; the
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then current conversion price and the last date on which Depositary Shares may
be converted; and such additional information as the Company in its discretion
deems appropriate.
From and after the Exchange Date, the Depositary Shares shall be
deemed no longer to be outstanding and all rights of the holders of Receipts
evidencing such Depositary Shares (except the right to receive the Exchange
Debentures and any cash payable upon the Exchange) shall cease and terminate.
Upon surrender, in accordance with the notice specified in the preceding
paragraph, of the Receipts evidencing such Depositary Shares (properly endorsed
or assigned for transfer, if the Depositary shall so require), a holder of such
Receipts shall receive for such holder's Depositary Shares, subject to the
following sentence, the Exchange Debentures issued in exchange for the Stock
represented by such Depositary Shares, and an amount of cash equal to the cash
for accrued and unpaid dividends, if any, delivered in respect of the exchanged
Stock represented by such Depositary Shares. An amount of cash will be paid to
holders in respect of any principal amount of Exchange Debentures otherwise
issuable which is less than $1,000, or such other minimum denomination as shall
be specified in the notice referred to in the preceding paragraph. The
Depositary shall, at the written direction of the Company, sell Exchange
Debentures delivered by the Company in exchange for Stock that shall not
otherwise be distributable to holders of Depositary Shares because of such
minimum denomination and shall distribute the proceeds thereof in payment of
cash amounts payable to holders of Depositary Shares pursuant to the preceding
sentence. The foregoing shall be subject further to the terms and conditions of
the Certificate.
SECTION 2.11. Exchange of Book-Entry Receipts and Receipts in
Physical, Certificated Form. Beneficial interests in Depositary Shares evidenced
by a DTC Receipt may only be exchanged for Receipts in physical, certificated
form upon the transfer of such beneficial interest by a holder thereof pursuant
to Regulation S under the Securities Act. Subject to the terms and conditions of
this Deposit Agreement, upon such transfer, the beneficial interest being
transferred in the DTC Receipt may not continue to be held in book-entry form
through DTC and, in exchange therefor, the Depositary shall (i) execute and
deliver a Receipt in physical, certificated form evidencing such Depositary
Shares; (ii) follow the procedures set forth in paragraph 19 of the Letter of
Representations attached hereto as Exhibit B for the purpose of reducing the
number of Depositary Shares evidenced by the DTC Receipt; and (iii) following
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such reduction, execute and deliver to or upon the order of the person or
persons named in such order a Receipt or Receipts registered in the name or
names requested by such person and evidencing in the aggregate the number of
Depositary Shares equal to the reduction in the number evidenced by the DTC
Receipt subject, however, in the case of Accredited Investors and Offshore
Investors to the final paragraph of Section 2.01. The Depositary may require in
such written instructions any certification or representation as it shall deem
necessary to comply with applicable law.
Depositary Shares initially sold to Accredited Investors or sold to
Offshore Investors pursuant to Regulation S under the Securities Act shall be
issued in physical, certificated form. Receipts in physical, certificated form
may only be exchanged for beneficial interests in Depositary Shares evidenced by
a DTC Receipt (a) upon the transfer of any such Receipts initially sold pursuant
to Regulation S under the Securities Act (i) to a QIB in reliance on Rule 144A
under the Securities Act or (ii) following the expiration of the 40-day period
following the last issue date for the Stock issued to cover over allotments or
(b) upon the transfer of any such Receipts initially sold to an Accredited
Investor to a QIB in reliance on Rule 144A under the Securities Act. Subject to
the terms and conditions of this Deposit Agreement, upon any such transfer of
such Receipts, duly endorsed or accompanied by appropriate instruments of
transfer, in form satisfactory to the Depositary, including any required
certifications, following receipt by the Depositary of written instructions
directing the Depositary to adjust its records to reflect an increase in the
aggregate amount of Depositary Shares evidenced by the DTC Receipt (including,
without limitation, information regarding the DTC participant account to be
credited with such increase), and upon payment of the fees and expenses of the
Depositary, the Depositary shall cancel such Receipt or Receipts in physical,
certificated form and shall follow the procedures set forth in paragraph 20 of
the Letter of Representations attached hereto as Exhibit B for the purpose of
reflecting such increase in the number of Depositary Shares evidenced by the DTC
Receipt.
SECTION 2.12. Removal of Legends. The legends provided on the face of
the text of the Receipts attached as Exhibit A hereto may be removed from any
Receipt, upon receipt by the Depositary of a written order signed in the name of
the Company by its Chairman of the Board, its Chief Executive Officer, its
President, a Chief Operating Officer, a Vice President, or its Chief Financial
Officer, and, without duplication, by its Treasurer, an Assistant
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Treasurer, its Controller, its Secretary or an Assistant Secretary, of the
Issuer, (i) three years from the later of issuance of the Receipt or the date
such Receipt (or any predecessor) was last acquired from an "affiliate" of the
Company within the meaning of Rule 144 under the Securities Act or (ii) in
connection with a sale made pursuant to the volume (and other restrictions) of
Rule 144 under the Securities Act following two years from such time, provided
that, if the legend is removed and the Receipt is subsequently held by such an
affiliate of the Company, the legend shall be reinstated.
ARTICLE III
Certain Obligations of
Holders of Receipts and the Company
SECTION 3.01. Filing Proofs, Certificates and Other Information. Any
holder of a Receipt may be required from time to time to file such proof of
residence, or other matters or other information, to execute such certificates
and to make such representations and warranties as the Depositary or the Company
may reasonably deem necessary or proper. The Depositary or the Company may
withhold the delivery, or delay the registration of transfer, redemption,
conversion or exchange, of any Receipt or the withdrawal of the Stock
represented by the Depositary Shares evidenced by any Receipt or the
distribution of any dividend or other distribution or the sale of any rights or
of the proceeds thereof or the exercise of any conversion rights as specified in
Section 2.09 until such proof or other information is filed or such certificates
are executed or such representations and warranties are made.
SECTION 3.02. Payment of Charges and Expenses. Holders of Receipts
shall be obligated to make payments to the Depositary of certain charges and
expenses, as provided in Section 5.07, or provide reasonably satisfactory
evidence that such charges and expenses have been paid. Registration of transfer
of any Receipt, conversion rights or any withdrawal of Stock and all money or
other property, if any, represented by the Depositary Shares evidenced by such
Receipt may be refused until any such payment due is made, and any dividends,
interest payments or other distributions may be withheld and such conversion
right may be refused or any part of or all the Stock or other property
represented by the Depositary Shares evidenced by such Receipt and not
theretofore sold may be sold for the account of the holder thereof (after
attempting by reasonable means to notify such holder prior to such sale), and
such dividends, interest payments or other distributions or the proceeds of any
such
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sale may be applied to and payment of such charges or expenses, the holder of
such Receipt remaining liable for any deficiency.
SECTION 3.03. Warranty as to Stock. The Company hereby represents and
warrants that the Stock, when issued, will be validly issued, fully paid and
nonassessable and that any preemptive rights have been validly waived. Such
representation and warranty shall survive the deposit of the Stock and the
issuance of Receipts.
SECTION 3.04. Warranty as to Receipts. The Depositary hereby
represents and warrants that the Receipts, when issued, will be validly issued,
fully paid and nonassessable. Such representation and warranty shall survive the
deposit of the Stock and the issuance of Receipts.
SECTION 3.05. Covenants and Warranties as to Common Stock. The Company
covenants that it will keep reserved or otherwise available a sufficient number
of authorized and unissued shares of Common Stock to meet conversion
requirements in respect of the Stock and that it will give written notice to the
Depositary of any adjustments in the conversion price as set forth in the
Certificate. The Company represents and warrants that the Common Stock issued
upon conversion of Stock, when issued, will be validly issued, fully paid and
non-assessable.
ARTICLE IV
The Deposited Securities; Notices
SECTION 4.01. Cash Distributions. Whenever the Depositary shall
receive any cash dividend or other cash distribution on the Stock, including any
cash received upon redemption of the Stock pursuant to Section 2.03 or an
Exchange pursuant to Section 2.10 (subject in each case to the provisions of
Section 2.09), the Depositary shall, subject to Sections 3.01 and 3.02,
distribute to Record Holders of Receipts on the record date fixed pursuant to
Section 4.04 such amounts of such sum as are, as nearly as practicable, in
proportion to the respective numbers of Depositary Shares evidenced by the
Receipts held by such holders; provided, however, that in case the Company or
the Depositary shall be required to withhold and shall withhold from any cash
dividend or other cash distribution in respect of the Stock represented by the
Receipts held by any holder an amount on account of taxes, the amount made
available for distribution or distributed in respect of Depositary Shares
represented by such Receipts shall be reduced accordingly.
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The Depositary shall distribute or make available for distribution, as the case
may be, only such amount, however, as can be distributed without attributing to
any holder of Depositary Shares a fraction of one cent, and any balance not so
distributable shall be held by the Depositary (without liability for interest
thereon) and shall be added to and be treated as part of the next sum received
by the Depositary for distribution to Record Holders of Receipts then
outstanding.
SECTION 4.02. Distributions Other than Cash, Depositary Shares,
Rights, Preferences or Privileges. Except in the case of real property, whenever
the Depositary shall receive any distribution other than cash, Depositary
Shares, rights, preferences or privileges upon the Stock, the Depositary shall,
subject to Sections 3.01 and 3.02, distribute to Record Holders of Receipts on
the record date fixed pursuant to Section 4.04 such amounts of the securities or
property (other than real property) received by it as are, as nearly as
practicable, in proportion to the respective numbers of Depositary Shares
evidenced by the Receipts held by such holders in any manner that the Depositary
may deem equitable and practicable for accomplishing such distribution. If in
the opinion of the Depositary after consultation with the Company such
distribution cannot be made proportionately among such Record Holders, or if for
any other reason (including any requirement that the Company or the Depositary
withhold an amount on account of taxes) the Depositary deems, after consultation
with the Company, such distribution not to be feasible, the Depositary may, with
the approval of the Company, adopt such method as it deems equitable and
practicable for the purpose of effecting such distribution, including the sale
(at public or private sale) of the securities or property thus received, or any
part thereof, at such place or places and upon such terms as it may deem proper.
The net proceeds of any such sale shall, subject to Sections 3.01 and 3.02, be
distributed or made available for distribution, as the case may be, by the
Depositary to Record Holders of Receipts as provided by Section 4.01 in the case
of a distribution received in cash. The Company shall not make any distribution
of such securities unless the Company shall have provided the Depositary an
opinion of counsel stating that such securities have been registered under the
Securities Act or do not need to be so registered.
SECTION 4.03. Subscription Rights, Preferences or Privileges. If the
Company shall at any time offer or cause to be offered to the persons in whose
names Stock is recorded on the books of the Company any rights, preferences or
privileges to subscribe for or to purchase any securities
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or any rights, preferences or privileges of any other nature, such rights,
preferences or privileges shall in each such instance be made available by the
Depositary to the Record Holders of Receipts in such manner as the Depositary
may determine, either by the issue to such Record Holders of warrants
representing such rights, preferences or privileges or by such other method as
may be deemed appropriate by the Depositary in its discretion with the approval
of the Company; provided, however, that (i) if at the time of issue or offer of
any such rights, preferences or privileges the Depositary determines that it is
not feasible, or the Company determines that it is not lawful, to make such
rights, preferences or privileges available to holders of Receipts by the issue
of warrants or otherwise, or (ii) if and to the extent so instructed by holders
of Receipts who do not desire to exercise such rights, preferences or
privileges, then the Depositary, in its discretion (with approval of the
Company, in any case where the Depositary has determined that it is not feasible
to make such rights, preferences or privileges available), may, if applicable
laws or the terms of such rights, preferences or privileges permit such
transfer, sell such rights, preferences or privileges at public or private sale,
at such place or places and upon such terms as it may deem proper. The net
proceeds of any such sale shall, subject to Sections 3.01 and 3.02, be
distributed by the Depositary to the Record Holders of Receipts entitled thereto
as provided by Section 4.01 in the case of a distribution received in cash.
If any action under the laws of any jurisdiction or any governmental
or administrative authorization, consent or permit is required in order for such
rights, preferences or privileges to be made available to holders of Receipts,
the Company agrees with the Depositary that the Company will use its reasonable
business efforts to take such action or obtain such authorization, consent or
permit sufficiently in advance of the expiration of such rights, preferences or
privileges to enable such holders to exercise such rights, preferences or
privileges.
SECTION 4.04. Notice of Dividends, etc.; Fixing of Record Date for
Holders of Receipts. Whenever any cash dividend or other cash distribution shall
become payable or any distribution other than cash shall be made, or if rights,
preferences or privileges shall at any time be offered, with respect to the
Stock, or whenever the Depositary shall receive notice of (i) any meeting at
which holders of the Stock are entitled to vote or of which holders of the Stock
are entitled to notice, or (ii) any election on the part of the Company to
redeem, or issue Exchange Debentures in exchange for, any shares of the Stock
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or (iii) whenever the Depositary and the Company shall decide it is appropriate,
the Depositary shall in each such instance fix a record date (which shall be the
same date as the record date fixed by the Company with respect to the Stock) for
the determination of the holders of Receipts who shall be entitled to receive
such dividend, distribution, rights, preferences or privileges or the net
proceeds of sales thereof, or to give instructions for the exercise of voting
rights at any such meeting, or who shall be entitled to notice of such meeting
or for any other reasons which the Company and the Depositary shall deem
appropriate.
SECTION 4.05. Voting Rights. Upon receipt of notice of any meeting at
which the holders of Stock are entitled to vote, the Depositary shall, as soon
as practicable thereafter, mail to the Record Holders of Receipts a notice which
shall contain (i) such information as is contained in such notice of meeting and
(ii) a statement that the holders of Receipts at the close of business on the
relevant record date may, subject to any applicable restrictions, instruct the
Depositary as to the exercise of the voting rights pertaining to the amount of
Stock represented by their respective Depositary Shares (including an express
indication that instructions may be given to the Depositary to give a
discretionary proxy to a person designated by the Company) and (iii) a brief
statement as to the manner in which such instructions may be given. Upon the
written request of the holders of Receipts on the relevant record date, the
Depositary shall vote or cause to be voted, in accordance with the instructions
set forth in such requests, the maximum number of shares of Stock represented by
the Depositary Shares evidenced by all Receipts as to which any particular
voting instructions are received. The Company hereby agrees to take all action
which may be deemed necessary by the Depositary in order to enable the
Depositary to vote such Stock or cause such Stock to be voted. In the absence of
specific instructions from the holder of a Receipt, the Depositary will abstain
from voting (but, at its discretion, not from appearing at any meeting with
respect to such Stock unless directed to the contrary by the holders of all the
Receipts) to the extent of the Stock represented by the Depositary Shares
evidenced by such Receipt.
Holders of Receipts shall also be entitled to vote on certain
amendments to the Deposit Agreement pursuant to Section 6.01 hereof.
SECTION 4.06. Changes Affecting Deposited Securities and
Reclassifications, Recapitalization, etc. Upon any change in par or stated
value, split-up,
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combination or any other reclassification of the Stock, or upon any
recapitalization, reorganization, merger, amalgamation or consolidation or sale
of all or substantially all of the Company's assets affecting the Company or to
which it is a party, the Depositary shall, upon the instructions of the Company,
and in such manner as the Depositary may deem equitable, (i) make such
adjustments as are certified by the Company in (x) the fraction of an interest
represented by one Depositary Share in one share of Stock or (y) the ratio of
the redemption price per Depositary Share to the redemption price of a share of
Stock, in each case as may be necessary fully to reflect the effects of such
change in par or stated value, split-up, combination or other reclassification
of Stock, or of such recapitalization, reorganization, merger, amalgamation or
consolidation and (ii) treat any securities which shall be received by the
Depositary in exchange for or upon conversion of or in respect of the Stock as
new deposited securities so received in exchange for or upon conversion or in
respect of such Stock. In any such case the Depositary may in its discretion,
with the approval of the Company, execute and deliver additional Receipts, or
may call for the surrender of all outstanding Receipts to be exchanged for new
Receipts specifically describing such new deposited securities.
SECTION 4.07. Inspection of Reports. The Depositary shall, during
normal business hours and upon reasonable notice, make available for inspection
by holders of Receipts at the Depositary's Office, and at such other places as
it may from time to time deem advisable, any reports and communications received
from the Company which are received by the Depositary as the holder of Stock and
made generally available to the holders of Stock.
SECTION 4.08. Lists of Receipt Holders. Promptly upon request from
time to time by the Company, the Depositary shall furnish to it a list, as of a
recent date, of the names, addresses and holdings of Depositary Shares of all
persons in whose names Receipts are registered on the books of the Depositary.
SECTION 4.09. Withholding. Notwithstanding any other provision of this
Deposit Agreement, in the event that the Depositary determines that any
distribution of securities or other property is subject to any tax which the
Depositary is obligated to withhold, the Depositary may dispose of all or a
portion of such securities or other property in such amounts and in such manner
as the Depositary deems necessary and practicable to pay such taxes, by public
or private sale, and the Depositary shall
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distribute the net proceeds of any such sale or the balance of any such
securities or other property after deduction of such taxes to the Holders of
Receipts entitled thereto in proportion to the number of Depositary Shares held
by them respectively.
ARTICLE V
The Depositary, the Depositary's
Agents, the Registrar and the Company
SECTION 5.01. Maintenance of Offices, Agencies and Transfer Books by
the Depositary; Registrar. Upon execution of this Deposit Agreement, the
Depositary shall maintain at the Depositary's Office, facilities for the
execution and delivery, registration and registration of transfer, surrender and
exchange of Receipts, and at the offices of the Depositary's Agents, if any,
facilities for the delivery, registration of transfer, surrender and exchange of
Receipts, all in accordance with the provisions of this Deposit Agreement.
The Depositary shall keep books at the Depositary's Office which shall
reflect registration and registration of transfer of Receipts, split-ups and
combinations and conversions of Depositary Shares and which books at all
reasonable times shall be open for inspection by the Record Holders of Receipts;
provided, that any such holder requesting to exercise such right shall certify
to the Depositary that such inspection shall be for a proper purpose reasonably
related to such person's interest as an owner of Depositary Shares evidenced by
the Receipts.
The Depositary may close such books only when the register of
stockholders of the Company is closed.
The Depositary may, with the approval of the Company, appoint a
Registrar for registration of the Receipts or the Depositary Shares evidenced
thereby. Such Registrar (which may be the Depositary if so permitted by the
requirements of such Exchange) may be removed and a substitute Registrar
appointed by the Depositary upon the request or with the approval of the
Company.
SECTION 5.02. Prevention of or Delay in Performance by the Depositary,
the Depositary's Agents, the Registrar or the Company. Neither the Depositary
nor any Depositary's Agent nor any Registrar nor the Company shall incur any
liability to any holder of any Receipt if by reason of any provision of any
present or future law, or regulation thereunder, of the United States of America
or of
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any other governmental authority or, in the case of the Depositary, the
Depositary's Agent or the Registrar, by reason of any provision, present or
future, of the Company's Restated Certificate of Incorporation, as from time to
time amended (including the Certificate), or by reason of any act of God or war
or other circumstance beyond the control of the relevant party, the Depositary,
the Depositary's Agent, the Registrar or the Company shall be prevented or
forbidden from, or subjected to any penalty on account of, doing or performing
any act or thing which the terms of this Deposit Agreement provide shall be done
or performed; nor shall the Depositary, any Depositary's Agent, any Registrar or
the Company incur liability to any holder of a Receipt (i) by reason of any
nonperformance or delay, caused as aforesaid, in the performance of any act or
thing which the terms of this Deposit Agreement provide shall or may be done or
performed, or (ii) by reason of any exercise of, or failure to exercise, any
discretion provided for in this Deposit Agreement except, in the case of any
such exercise or failure to exercise discretion not caused as aforesaid, if
caused by the gross negligence or willful misconduct of the party charged with
such exercise or failure to exercise.
SECTION 5.03. Obligations of the Depositary, the Depositary's Agents
and the Registrar. Neither the Depositary nor any Depositary's Agent nor any
Registrar nor the Company assumes any obligation or shall be subject to any
liability under this Deposit Agreement to holders of Receipts other than for its
gross negligence or willful misconduct.
Neither the Depositary nor any Depositary's Agent nor any Registrar
nor the Company shall be under any obligation to appear in, prosecute or defend
any action, suit or other proceeding in respect of the Stock, the Depositary
Shares or the Receipts which in its opinion may involve it in expense or
liability unless indemnity satisfactory to it against all expense and liability
be furnished as often as may be required.
Neither the Depositary nor any Depositary's Agent nor any Registrar
nor the Company shall be liable for any action or any failure to act by it in
reliance upon the written advice of legal counsel or accountants, or information
from any person presenting Stock for deposit, any holder of a Receipt or any
other person believed by it in good faith to be competent to give such
information. The Depositary and any Depositary's Agent and any Registrar and the
Company may each rely and shall each be protected in acting upon any written
notice, request, direction or other
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document believed by it to be genuine and to have been signed or presented by
the proper party or parties.
The Depositary shall not be responsible for any failure to carry out
any instruction to vote any of the shares of Stock or for the manner or effect
of any such vote made, as long as any such action or non-action is in good faith
and does not result from gross negligence or willful misconduct of the
Depositary. The Depositary undertakes, and any Registrar shall be required to
undertake, to perform such duties and only such duties as are specifically set
forth in this Deposit Agreement, and no implied covenants or obligations shall
be read into this Deposit Agreement against the Depositary or any Registrar. The
Depositary will indemnify the Company against any liability which may arise out
of acts performed or omitted by the Depositary or the Depositary's Agents due to
its or their gross negligence or bad faith. The Depositary, the Depositary's
Agents, and any Registrar may own and deal in any class of securities of the
Company and its affiliates and in Receipts. The Depositary may also act as
transfer agent or registrar of any of the securities of the Company and its
affiliates.
SECTION 5.04. Resignation and Removal of the Depositary; Appointment
of Successor Depositary. The Depositary may at any time resign as Depositary
hereunder by notice of its election so to be delivered to the Company, such
resignation to take effect upon the appointment of a successor Depositary and
its acceptance of such appointment as hereinafter provided.
The Depositary may at any time be removed by the Company by notice of
such removal delivered to the Depositary, such removal to take effect upon the
appointment of a successor Depositary and its acceptance of such appointment as
hereinafter provided.
In case at any time the Depositary acting hereunder shall resign or be
removed prior to the termination of this Deposit Agreement, the Company shall,
within 60 days after the delivery of the notice of resignation or removal, as
the case may be, appoint a successor Depositary, which shall be a bank or trust
company having its principal office in the United States of America and having a
combined capital and surplus of at least $50,000,000. If no successor Depositary
shall have been so appointed and have accepted appointment within 60 days after
delivery of such notice, the resigning or removed Depositary may, at the
Company's expense, petition any court of competent jurisdiction for the
appointment of a successor Depositary. Every successor Depositary shall execute
and
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deliver to its predecessor and to the Company an instrument in writing accepting
its appointment hereunder, and thereupon such successor Depositary, without any
further act or deed, shall become fully vested with all the rights, powers,
duties and obligations of its predecessor and for all purposes shall be the
Depositary under this Deposit Agreement, and such predecessor, upon payment of
all sums due it and on the written request of the Company, shall execute and
deliver an instrument transferring to such successor all rights and powers of
such predecessor hereunder, shall duly assign, transfer and deliver all right,
title and interest in the Stock and any moneys or property held hereunder to
such successor, and shall deliver to such successor a list of the Record Holders
of all outstanding Receipts. Any successor Depositary shall promptly mail notice
of its appointment to the Record Holders of Receipts.
Any corporation into or with which the Depositary may be
merged, consolidated or converted shall be the successor of such Depositary
without the execution or filing of any document or any further act, and notice
thereof shall not be required hereunder. Such successor Depositary may
authenticate the Receipts in the name of the predecessor Depositary or in the
name of the successor Depositary.
SECTION 5.05. Corporate Notices and Reports. The Company agrees that
it will transmit to the Record Holders of Receipts, in each case at the
addresses furnished to it pursuant to Section 4.08, all notices and reports
(includ ing, without limitation, financial statements) required by law, by the
rules of any national securities exchange upon which the Stock, the Depositary
Shares or the Receipts are listed or by the Company's Restated Certificate of
Incorporation, as from time to time amended (including the Certificate), to be
furnished by the Company to holders of Stock. Such transmission will be at the
Company's expense. At any time when the Company is not subject to Section 13 or
15(d) of the Securities Exchange Act of 1934, as amended, the Company will
promptly furnish or cause to be furnished, upon request of holders of Receipts
and prospective purchasers of Depositary Shares, to such holders and prospective
purchasers, copies of the information required to be delivered to holders and
prospective purchasers of such securities pursuant to Rule 144A(d)(4) under the
Securities Act (or any successor provision thereto) in order to permit
compliance with Rule 144A in connection with resales by such holders of such
securities. The Company will pay the expenses of printing and distributing to
such holders and prospective purchasers all such documents.
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<PAGE>
SECTION 5.06. Indemnification by the Company. The Company shall
indemnify the Depositary, any Depositary's Agent and any Registrar against, and
hold each of them harmless from, loss, liability or expense (including the costs
and expenses of defending itself) which may arise out of acts performed or
omitted in connection with this Deposit Agreement, as amended, supplemented or
modified from time to time, and the Receipts (i) by the Depositary, any
Registrar or any of their respective agents (including any Depositary's Agent),
except for any liability arising out of gross negligence, willful misconduct or
bad faith on the respective parts of any such person or persons, or (ii) by the
Company or any of its agents, or (b) the offer, sale or registration of the
Receipts or the Stock pursuant to the provisions hereof. The obligations of the
Company set forth in this Section 5.06 shall survive any succession of any
Depositary, Registrar or Depositary's Agent. The costs and expenses of enforcing
this right of indemnification shall also be paid by the Company.
SECTION 5.07. Taxes or Other Governmental Charges. The Company shall
pay all transfer and other taxes and governmental charges arising solely from
the existence of the depositary arrangements. The Company shall pay all charges
of the Depositary in connection with the initial deposit of the Stock and the
initial issuance of the Depositary Shares, redemption of the Stock at the option
of the Company and all withdrawals of shares of the Stock by owners of
Depositary Shares. All other transfer and other taxes and governmental charges
shall be at the expense of holders of Depositary Shares. If a holder of Receipts
requests the Depositary to perform duties not required under this Deposit
Agreement, the Depositary shall notify the holder of the cost of this
performance of such duties. Such holder will be liable for the charges and
expenses related to such performance. All other charges and expenses of the
Depositary and any Depositary's Agent hereunder and of any Registrar (including,
in each case, fees and expenses of counsel) incident to the performance of their
respective obligations hereunder will be paid upon consultation and agreement
between the Depositary and the Company as to the amount and nature of such
charges and expenses (except those expenses pursuant to the second paragraph of
Section 2.05 and Section 2.09, which expenses shall be paid by such holders of
the Depositary Shares). The Depositary shall present its statement for charges
and expenses to the Company once every three months or at such other intervals
as the Company and the Depositary may agree. The Company agrees to pay (or
reimburse the Depositary) for all reasonable costs with regard to mailing
notices to holders.
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<PAGE>
ARTICLE VI
Amendment and Termination
SECTION 6.01. Amendment. The form of the Receipts and any provisions
of this Deposit Agreement may at any time and from time to time be amended by
agreement between the Company and the Depositary in any respect which they may
deem necessary or desirable; provided, however, that no such amendment which (i)
shall adversely alter the rights of the holders of Receipts or (ii) would be
inconsistent with the rights granted to the holder of the Stock pursuant to the
Purchase Agreement or the Certificate shall be effective unless such amendment
shall have been approved by the holders of at least a majority of the Depositary
Shares then outstanding. Every holder of an outstanding Receipt at the time any
such amendment becomes effective shall be deemed, by continuing to hold such
Receipt, to consent and agree to such amendment and to be bound by the Deposit
Agreement as amended thereby.
SECTION 6.02. Termination. This Deposit Agreement may be terminated by
the Company or the Depositary only after (i) all outstanding Depositary Shares
shall have been redeemed pursuant to Section 2.03 or exchanged pursuant to
Section 2.10, (ii) there shall have been made a final distribution in respect of
the Stock in connection with any liquidation, dissolution or winding up of the
Company and such distribution shall have been distributed to the holders of
Depositary Shares pursuant to Section 4.01 or 4.02, as applicable, (iii) upon
consent of holders of Receipts representing not less than two-thirds of the
Depositary Shares then outstanding or (iv) the Company shall have exchanged each
share of Stock for shares of Common Stock or shall have exchanged each
Depository Share for Exchange Debentures.
Whenever the Deposit Agreement has been terminated pursuant to (iii)
above, the Depositary will mail notice of such termination to the Record Holders
of all Depositary Shares then outstanding at least 30 days and not more than 60
days prior to the date fixed in that notice for termination of the Deposit
Agreement. If any Depositary Shares remain outstanding after the date of
termination, the Depositary thereafter will discontinue the transfer of
Depositary Shares, will suspend the distribution of dividends to the owners
thereof, and will not give any further notices (other than notice of such
termination) or perform any further acts under this Deposit Agreement, except
that the Depositary will continue (i) to collect dividends on the Stock and any
other distributions with
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<PAGE>
respect thereto, (ii) to deliver or cause to be delivered shares of Stock,
together with such dividends and distributions, or principal and interest, and
the net proceeds of any sales of rights, preferences, privileges or other
property (other than real property) in exchange for Depositary Shares
surrendered. At any time after the expiration of two years from the date of
termination, the Depositary may sell the Stock then held by it at public or
private sale, at such place or places and upon such terms as it deems proper and
may thereafter hold the net proceeds of any such sale, without liability for
interest, for the pro rata benefit of the owners of the Depositary Shares which
have not theretofore been surrendered. Subject to applicable escheat laws, any
monies set aside by the Company in respect of any payment with respect to the
Stock represented by the Depositary Shares, or dividends thereon, and unclaimed
at the end of two years from the date upon which such payment is due and payable
shall revert to the general funds of the Company, after which reversion the
holders of such Depositary Shares shall look only to the general funds of the
Company for the payment thereof.
Upon the termination of this Deposit Agreement, the Company shall be
discharged from all obligations under this Deposit Agreement except for its
obligations to the Depositary, any Depositary's Agent and any Registrar under
Sections 5.06 and 5.07.
ARTICLE VII
Miscellaneous
SECTION 7.01. Counterparts. This Deposit Agreement may be executed in
any number of counterparts, and by each of the parties hereto on separate
counterparts, each of which counterparts, when so executed and delivered, shall
be deemed an original, but all such counterparts taken together shall constitute
one and the same instrument.
SECTION 7.02. Exclusive Benefit of Parties. This Deposit Agreement is
for the exclusive benefit of the parties hereto, including the holders of the
Receipts, and their respective successors hereunder, and shall not be deemed to
give any legal or equitable right, remedy or claim to any other person
whatsoever.
SECTION 7.03. Invalidity of Provisions. In case any one or more of the
provisions contained in this Deposit Agreement or in the Receipts should be or
become invalid, illegal or unenforceable in any respect, the validity,
-31-
<PAGE>
legality and enforceability of the remaining provisions contained herein or
therein shall in no way be affected, prejudiced or disturbed thereby.
SECTION 7.04. Notices. Any and all notices to be given to the Company
hereunder or under the Receipts shall be in writing and shall be deemed to have
been duly given if personally delivered or sent by mail or telegram or telex
confirmed by letter, addressed to the Company at 116 Huntington Avenue, Boston,
Massachusetts 02116, to the attention of the Chief Executive Officer and the
Chief Financial Officer, or at any other address of which the Company shall have
notified the Depositary in writing.
Any and all notices to be given to the Depositary hereunder or under
the Receipts shall be in writing and shall be deemed to have been duly given if
personally delivered or sent by mail or by telegram or telex confirmed by
letter, addressed to the Depositary at its office, at 311 West Monroe, Chicago,
IL 60606, or at any other address of which the Depositary shall have notified
the Company in writing.
Any and all notices to be given to any Record Holder of a Receipt
hereunder or under the Receipts shall be in writing and shall be deemed to have
been duly given if personally delivered or sent by mail or by telegram or telex
confirmed by letter, addressed to such Record Holder at the address of such
Record Holder as it appears on the books of the Depositary, or if such holder
shall have filed with the Depositary a written request that notices intended for
such holder be mailed to some other address, at the address designated in such
request.
Delivery of a notice sent by mail or by telegram or telex shall be
deemed to be effected at the time when a duly addressed letter containing the
same (or a confirmation thereof in the case of a telegram or telex message) is
deposited, postage prepaid, in a post office letter box. The Depositary or the
Company may, however, act upon any telegram or telex message received by it from
the other or from any holder of a Receipt, notwithstanding that such telegram or
telex message shall not subsequently be confirmed by letter or as aforesaid.
SECTION 7.05. Depositary's Agents. The Depositary may from time to
time appoint Depositary's Agents to act in any respect for the Depositary for
the purposes of this Deposit Agreement and may at any time appoint additional
Depositary's Agents and vary or terminate the
-32-
<PAGE>
appointment of such Depositary's Agents. The Depositary
will notify the Company of any such action.
SECTION 7.06. Holders of Receipts Are Parties. The holders of Receipts
from time to time shall be parties to this Deposit Agreement and shall be bound
by and be entitled to the benefit of all of the terms and conditions hereof and
of the Receipts by acceptance of delivery thereof without the necessity of
executing a counterpart hereof.
SECTION 7.07. Governing Law. This Deposit Agreement and the Receipts
and all rights hereunder and thereunder and provisions hereof and thereof shall
be governed by, and construed in accordance with, the laws of the State of New
York without regard to principles of conflict of laws.
SECTION 7.08. Inspection of Deposit Agreement. Copies of this Deposit
Agreement shall be filed with the Depositary and the Depositary's Agents and
shall be open to inspection during business hours at the Depositary's Office and
the respective offices of the Depositary's Agents, if any, by any holder of a
Receipt.
SECTION 7.09. Headings. The headings of articles and sections in this
Deposit Agreement and in the form of the Receipt set forth in Exhibits A and B
hereto have been inserted for convenience only and are not to be
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<PAGE>
regarded as a part of this Deposit Agreement or the Receipts or to have any
bearing upon the meaning or interpretation of any provision contained herein or
in the Receipts.
IN WITNESS WHEREOF, the Company and the Depositary have duly executed
this Deposit Agreement as of the day and year first above set forth, and all
holders of Receipts shall become parties hereto by and upon acceptance by them
of delivery of Receipts issued in accordance with the terms hereof.
AMERICAN RADIO SYSTEMS
CORPORATION
by____________________________
HARRIS TRUST AND SAVINGS BANK,
as Depositary
by____________________________
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<PAGE>
[FORM OF FACE OF RECEIPT]
TEMPORARY RECEIPT - Exchangeable for Definitive Engraved Receipt When Ready
for Delivery
NUMBER DEPOSITARY SHARES
THIS SECURITY (OR ITS PREDECESSOR), THE PREFERRED STOCK, ANY EXCHANGE DEBENTURE
ISSUED IN EXCHANGE FOR THIS SECURITY AND ANY AMERICAN CLASS A COMMON STOCK
ISSUED ON CONVERSION THEREOF HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE
SECURITIES LAW AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED
EXCEPT (A)(1) TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS A QUALIFIED
INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A UNDER THE SECURITIES ACT
PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL
BUYER IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (2) IN AN OFFSHORE
TRANSACTION COMPLYING WITH RULE 904 OF REGULATION S UNDER THE SECURITIES ACT, OR
(3) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED
BY RULE 144 THEREUNDER (IF AVAILABLE) AND (B) IN ACCORDANCE WITH ALL APPLICABLE
SECURITIES LAWS OF THE STATES OF THE UNITED STATES. [FOR ANY DEPOSITARY SHARE
ORIGINALLY SOLD IN AN OFFSHORE TRANSACTION IN RELIANCE ON REGULATION S UNDER THE
SECURITIES ACT AND ANY CONVERTIBLE PREFERRED STOCK, EXCHANGE DEBENTURE OR
AMERICAN CLASS A COMMON STOCK ISSUED IN EXCHANGE THEREFOR OR UPON CONVERSION
THEREOF--SUBSEQUENT TRANSFERS OF THIS SECURITY (OR ANY OTHER SECURITY REFERRED
TO ABOVE) AND REGISTRATION OF SUCH TRANSFERS ARE SUBJECT TO THE PRIOR
SATISFACTION OF THE CERTIFICATION REQUIREMENTS AS THE REGISTRAR OR TRANSFER
AGENT MAY REASONABLY REQUIRE TO CONFIRM THAT THE TRANSFER COMPLIES WITH THE
FOREGOING RESTRICTIONS.] EACH PURCHASER OF THIS SECURITY IS HEREBY NOTIFIED THAT
THE SELLER OF THIS SECURITY MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS
OF SECTIONS OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER. [IN THE CASE
OF DEPOSITARY SHARES ISSUED TO INSTITUTIONAL ACCREDITED INVESTORS, OTHER THAN
QIB's, THE LEGEND WILL INCLUDE THE FOLLOWING: IN CONNECTION WITH ANY TRANSFER,
THE HOLDER WILL DELIVER TO THE REGISTRAR AND TRANSFER AGENT SUCH CERTIFICATES
AND OTHER INFORMATION AS SUCH TRANSFER AGENT MAY REASONABLY REQUIRE TO CONFIRM
THAT THE TRANSFER COMPLIES WITH THE FOREGOING RESTRICTIONS.]
DR
DEPOSITARY RECEIPT FOR DEPOSITARY SHARES,
REPRESENTING 7% CONVERTIBLE EXCHANGEABLE PREFERRED STOCK,
PAR VALUE $.01 PER SHARE OF
AMERICAN RADIO SYSTEMS CORPORATION
CUSIP __________
INCORPORATED UNDER THE LAWS OF THE STATE OF DELAWARE
SEE REVERSE FOR CERTAIN DEFINITIONS
Harris Trust and Savings Bank, as Depositary (the "Depositary"), hereby
certifies that
is the registered owner of DEPOSITARY SHARES
("Depositary Shares"), each Depositary Share representing a one-twentieth
interest in one share of 7% Convertible Exchangeable Preferred Stock, par value
$.01 per share (the "Stock"), of American Radio Systems Corporation, a Delaware
corporation (the "Corporation"), on deposit with the Depositary, subject to the
terms and entitled to the benefits of the Deposit Agreement dated as of June 25,
1996 (the "Deposit Agreement"), between the Corporation and the Depositary. By
accepting this Depositary Receipt the holder hereof becomes a party to and
agrees to be bound by all the terms and conditions of the Deposit Agreement.
This Depositary Receipt shall not be valid or obligatory for any purpose or
entitled to any benefits under the Deposit Agreement unless it shall have been
executed by the Depositary by the manual signature of a duly authorized officer,
or, if executed in facsimile by the Depositary, countersigned by a Registrar in
respect of the Depositary Receipts by the manual signature of a duly authorized
officer thereof.
Dated:
_________________________ _________________________
Depositary Registrar
By By
Authorized Officer Authorized Officer
<PAGE>
[FORM OF REVERSE OF RECEIPT]
AMERICAN RADIO SYSTEMS CORPORATION
AMERICAN RADIO SYSTEMS CORPORATION WILL FURNISH WITHOUT CHARGE TO EACH
RECEIPTHOLDER WHO SO REQUESTS A COPY OF THE DEPOSIT AGREEMENT AND A STATEMENT OR
SUMMARY OF THE POWERS, DESIGNATIONS, PREFERENCES AND RELATIVE, PARTICIPATING,
OPTIONAL OR OTHER SPECIAL RIGHTS OF EACH CLASS OF STOCK OR SERIES THEREOF WHICH
SUCH CORPORATION IS AUTHORIZED TO ISSUE AND OF THE QUALIFICATIONS, LIMITATIONS
OR RESTRICTIONS OF SUCH PREFERENCES AND/OR RIGHTS IF SUCH REQUEST IS TO BE
ADDRESSED TO THE DEPOSITARY NAMED ON THE FACE OF THIS RECEIPT.
______________________________
The following abbreviations when used in the instructions on the face
of this receipt shall be construed as though they were written out in full
according to applicable laws or regulations.
<TABLE>
<S> <C> <C>
TEN COM - as tenant in common UNIF GIFT MIN ACT - ________ Custodian ________
(Cust) (Minor)
TEN ENT - as tenants by the entireties Under Uniform Gifts to Minors Act
JT TEN - as joint tenants with right
of survivorship and not as
tenants in common
</TABLE>
_______________________________________________
(State)
Additional abbreviations may also be used though not in the above
list.
For value received, _________________________ hereby sell(s),
assign(s) and transfer(s) unto
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
_______________________________________________________________________________
_______________________________________________________________________________
PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS INCLUDING POSTAL ZIP CODE OF ASSIGNEE
____________________________________________________________________ Depositary
Shares represented by the within Receipt, and do hereby irrevocably constitute
and appoint
________________________________________________________________ Attorney to
transfer the said Depositary Shares on the books of the within named Depositary
with full power of substitution in the premises.
Dated__________________________________
________________________________________
NOTICE: The signature to the assignment must
correspond with the name as written upon the
face of this Receipt in every particular,
without alteration or enlargement or any
change whatever.
CERTIFICATE OF DESIGNATION OF
PREFERENCES AND RIGHTS OF
AMERICAN RADIO SYSTEMS CORPORATION
7% CONVERTIBLE EXCHANGEABLE PREFERRED STOCK
American Radio Systems Corporation, a Delaware corporation
(hereinafter called, the "Corporation"), pursuant to Section 151 of the General
Corporation Law of the State of Delaware, does hereby make this Certificate of
Designation and does hereby state and certify that pursuant to the authority
expressly vested in the Board of Directors of the Corporation by the Restated
Certificate of Incorporation of the Corporation (the "Restated Certificate"),
the Board of Directors of the Corporation duly adopted the following resolution:
RESOLVED, that pursuant to Article Four of the Restated Certificate
(which authorizes 1,000,000 shares of preferred stock, $.01 par value), the
Board of Directors of the Corporation hereby fixes the voting powers,
designations and preferences, and the relative, participating, optional and
other special rights, and the qualifications, limitations and restrictions
thereof, of a series of Convertible Exchangeable Preferred Stock.
RESOLVED, that each share of the Convertible Exchangeable Preferred
Stock shall rank equally in all respects and shall be subject to the following
provisions:
SECTION 1. Designation; Rank. This series of Preferred Stock shall be
designated 7% Convertible Exchangeable Preferred Stock, par value $.01 per share
(the "Convertible Preferred Stock"). The Convertible Preferred Stock will rank,
with respect to dividend rights and rights on liquidation, winding-up and
dissolution, (i) senior to all classes of Common Stock of the Corporation, each
other class of capital stock or series of preferred stock established after the
date hereof by the Board of Directors of the Corporation (or, to the extent
permitted by the General Corporation Law of the State of Delaware, the Executive
Committee thereof) (the "Board") which does not expressly provide that it ranks
senior to or on a parity with the Convertible Preferred Stock as to dividend
rights and rights on liquidation, winding-up and dissolution (collectively
referred to with the Common Stock of the Corporation as "Junior Securities");
(ii) on a parity with each other class of capital stock or series of preferred
<PAGE>
stock issued by the Corporation established after the date hereof by the Board,
which expressly provides that such series will rank on a parity with the
Convertible Preferred Stock as to dividend rights and rights on liquidation,
winding-up and dissolution (collectively referred to as "Parity Securities");
and (iii) junior to each other class of capital stock or series of preferred
stock established after the date hereof by the Board the terms of which
specifically provide that such series will rank senior to the Convertible
Preferred Stock as to dividend rights and rights on liquidation, winding-up and
dissolution (collectively referred to as "Senior Securities").
SECTION 2. Authorized Number. The number of shares constituting the
Convertible Preferred Stock shall be 137,500 shares.
SECTION 3. Dividends. Holders of shares of the Convertible Preferred
Stock will be entitled to receive, when, as and if declared by the Board out of
funds of the Corporation legally available for payment, cash dividends at an
annual rate of 7%, payable quarterly in arrears on March 31, June 30, September
30 and December 31 of each year, commencing September 30, 1996. Each dividend
will be payable to holders of record as they appear on the stock transfer books
of the Corporation on a record date, not more than 60 nor less than 10 days
before the payment date, fixed by the Board. Dividends will be cumulative from
the date of original issuance of the Convertible Preferred Stock. Dividends
payable on the Convertible Preferred Stock for each full dividend period will be
computed by annualizing the dividend rate and dividing by four. Dividends
payable for any period less than a full dividend period will be computed on the
basis of a 360-day year consisting of twelve 30-day months. The Convertible
Preferred Stock will not be entitled to any dividend, whether payable in cash,
property or stock, in excess of full cumulative dividends. No interest, or sum
of money in lieu of interest, will be payable in respect of any accrued and
unpaid dividends.
No full dividends may be declared or paid or funds set apart for the
payment of dividends on any Parity Securities for any period unless full
cumulative dividends shall have been paid or set apart for such payment on the
Convertible Preferred Stock. If full dividends are not so paid, the Convertible
Preferred Stock shall share dividends pro rata with the Parity Securities. No
dividends may be paid or set apart for such payment on Junior Securities (except
dividends on Junior Securities in additional shares of Junior Securities) and no
Junior Securities may be repurchased, redeemed or otherwise retired nor may
funds be
-2-
<PAGE>
set apart for payment with respect thereto, if full dividends have not been paid
on the Convertible Preferred Stock.
SECTION 4. Liquidation Rights. In the event of any voluntary or
involuntary liquidation, dissolution or winding up of the Corporation, before
any payment or distribution of assets is made on any Junior Securities,
including, without limitation, Common Stock of the Corporation, the holders of
Convertible Preferred Stock shall receive a liquidation preference of $1,000 per
share and shall be entitled to receive an amount equal to all accrued and unpaid
dividends through the date of distribution, and the holders of any Parity
Securities shall be entitled to receive an amount equal to the full respective
liquidation preferences (including any premium) to which they are entitled and
shall receive an amount equal to all accrued and unpaid dividends with respect
to their respective shares through and including the date of distribution. If,
upon such a voluntary or involuntary liquidation, dissolution or winding up of
the Corporation, the assets of the Corporation are insufficient to pay in full
the amounts described above as payable with respect to the Convertible Preferred
Stock and any Parity Securities, the holders of the Convertible Preferred Stock
and such Parity Securities will share ratably in any such distribution of assets
of the Corporation first in proportion to their respective liquidation
preferences until such preferences are paid in full, and then in proportion to
their respective amounts of accrued but unpaid dividends. After payment of any
such liquidation preference and accrued dividends, the shares of Convertible
Preferred Stock will not be entitled to any further participation in any
distribution of assets by the Corporation. Neither the sale or transfer of all
or substantially all the assets of the Corporation, nor the merger or
consolidation of the Corporation into or with any other corporation or other
entity or a merger of any other corporation or other entity with or into the
Corporation, will be deemed to be a liquidation, dissolution or winding up of
the Corporation.
SECTION 5. Voting Rights. (a) In addition to such other vote, if any,
as may be required by Delaware law or provided by the resolution creating any
other series of preferred stock to the extent such resolution refers to the
Convertible Preferred Stock, so long as any shares of Convertible Preferred
Stock are outstanding, the vote or consent of the holders of a majority of the
outstanding shares of Convertible Preferred Stock and any Parity Securities,
voting together as a single class (with each share being entitled to the number
of votes otherwise
-3-
<PAGE>
specified, if so specified, for such securities) without regard to series, shall
be necessary to (i) issue, authorize or increase the authorized amount of, or
issue, authorize or increase the authorized amount of any obligation or security
convertible into or evidencing a right to purchase, any class or series of
Senior Securities, (ii) increase or decrease the par value of the shares of
Convertible Preferred Stock or (iii) alter or change the powers, preferences, or
special rights of the shares of Convertible Preferred Stock so as to affect them
adversely.
(b) Prior to the Debenture Exchange Date (as defined in Section 10(a)
below), the Corporation shall not amend or modify the Indenture (as defined in
Section 10(a) below), without the affirmative vote or consent of holders of at
least a majority of the outstanding shares of Convertible Preferred Stock,
voting together as a single class; provided, however, that the Corporation and
the Trustee (as defined in Section 10(a) below) shall be permitted, without any
vote or consent of such holders, to effect any amendments to the Indenture that
could have been effected under the Indenture without the consent of holders of
Exchange Debentures (as defined in Section 10(a) below) if any Exchange
Debentures were then outstanding.
(c) (i) In the event that dividends on the Convertible Preferred
Stock, if any are then outstanding, remain unpaid in cash in an amount equal to
six full quarterly dividends, the maximum authorized number of directors of the
Corporation will be increased by two and holders of Convertible Preferred Stock
shall be entitled to vote their shares of Convertible Preferred Stock, together
with the holders of any Parity Securities upon which like voting rights have
been conferred and are exercisable, in accordance with the procedures set forth
below, to elect, as a class, an additional two directors; provided, however,
that (x) holders of Convertible Preferred Stock and such Parity Securities shall
not elect as director any individual who if so elected would cause the
Corporation to be in violation of the Communications Act of 1934, as amended, or
the rules and regulations of the Federal Communications Commission (the "FCC"),
and (y) if the exercise of such right by the holders of the Convertible
Preferred Stock and such Parity Securities would cause the Corporation or any of
its subsidiaries not to qualify for a license granted by the FCC that is
necessary for the continued operation of the Corporation or such subsidiaries,
the Board shall be increased, and such holders shall be entitled to vote their
shares to elect only such lesser number, including zero, of directors as would
not result in the Corporation or such subsidiaries not qualifying for such
license. So long as
-4-
<PAGE>
any shares of Convertible Preferred Stock shall be outstanding, the holders of
Convertible Preferred Stock shall retain the right to vote and elect, with the
holders of any such Parity Securities, voting together as a single class (with
each share being entitled to the number of votes otherwise specified for such
securities) without regard to series, such number of directors until all
dividends on the Convertible Preferred Stock, if any are then outstanding, are
paid in full or declared and set aside for payment. Such period is hereinafter
referred to as a "default period".
(ii) So long as any shares of Convertible Preferred Stock shall be
outstanding, during any default period, such voting right of the holders of
Convertible Preferred Stock may be exercised initially at a special meeting
called pursuant to subparagraph (iii) below or at any annual meeting of
stockholders. The absence of a quorum of holders of Common Stock or any class
thereof shall not affect the exercise of such voting rights by the holders of
Convertible Preferred Stock and Parity Securities.
(iii) Unless the holders of Convertible Preferred Stock and Parity
Securities so entitled, if any are then outstanding, have, during an existing
default period, previously exercised their right to elect directors, the Board
may order, or any stockholder or stockholders owning in the aggregate not less
than 5% of the outstanding shares of Convertible Preferred Stock and such Parity
Securities, taken together as a single class, may request, the calling of a
special meeting of holders of Convertible Preferred Stock and such Parity
Securities, if any are then outstanding, which meeting shall thereupon be called
by the Chairman of the Board, the President, a Vice President or the Secretary
of the Corporation. Notice of such meeting and of any annual meeting at which
holders of Convertible Preferred Stock and such Parity Securities are entitled
to vote pursuant to this paragraph shall be given to each holder of record of
Convertible Preferred Stock by mailing a copy of such notice to such holder at
such holder's last address as the same appears on the stock transfer books of
the Corporation. Such meeting shall be called for a time not later than twenty
(20) days after such order or request, or, in default of the calling of such
meeting may be called on similar notice by any stockholder or stockholders
owning in the aggregate not less than 5% of the outstanding shares of
Convertible Preferred Stock and such Parity Securities, taken together as a
single class. Notwithstanding the provisions of this paragraph, no such special
meeting shall be called during the period within ninety (90) days
-5-
<PAGE>
immediately preceding the date fixed for the next annual
meeting of stockholders.
(iv) During any default period, the holders of Common Stock of the
Corporation, and other classes of stock of the Corporation, if applicable, shall
continue to be entitled to elect all of the directors unless and until the
holders of Convertible Preferred Stock and Parity Securities so entitled shall
have exercised their right to elect two directors voting as a class, after the
exercise of which right (x) the directors so elected by the holders of
Convertible Preferred Stock and such Parity Securities shall continue in office
until the earlier of (A) such time as their successors shall have been elected
by such holders or (B) the expiration of the default period, and (y) any vacancy
in the Board may be filled by vote of the remaining director or directors, if
any, theretofore elected by the holders of the class or classes of stock which
elected the director whose office shall have become vacant. References in this
paragraph to directors elected by the holders of a particular class or classes
of stock shall include directors elected by such director or directors to fill
vacancies as provided in clause (y) of the foregoing sentence.
(v) Immediately upon the expiration of a default period, (x) the right
of the holders of Convertible Preferred Stock to elect directors shall cease,
(y) the term of office of any directors elected by the holders of Convertible
Preferred Stock and such Parity Securities as a class shall terminate, and (z)
the number of directors shall be such number as may be provided for in the
Restated Certificate or bylaws of the Corporation irrespective of any increase
made pursuant to the provisions of subparagraph (i) of this paragraph (such
number being subject, however, to change thereafter in any manner provided by
law or in the Restated Certificate or bylaws of the Corporation).
SECTION 6. Conversion.
(a) Right to Convert. Each share of Convertible Preferred Stock will
be convertible at any time at the option of the holder thereof into such number
of whole shares of Class A Common Stock, par value $.01 per share, of the
Corporation (the "Class A Common Stock") as is equal to the aggregate
liquidation preference of the shares of Convertible Preferred Stock surrendered
for conversion divided by the conversion price of $42.50 per share of Class A
Common Stock, subject to adjustment as described below (the "Conversion Price").
Holders of Convertible Preferred Stock will not be entitled to any payment or
adjustment on account of accrued and unpaid dividends upon conversion of
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the Convertible Preferred Stock. Shares of Convertible Preferred Stock
surrendered for conversion during the period after any dividend payment record
date and prior to the corresponding dividend payment date (unless such shares
shall have been called for redemption on a redemption date within such period or
on such dividend payment date) must be accompanied by payment of an amount equal
to the dividend payable on such shares on such dividend payment date. Shares of
Convertible Preferred Stock called for redemption will not be convertible after
the close of business on the business day preceding the date fixed for
redemption, unless the Corporation defaults in payment of the redemption price.
No fractional shares of Class A Common Stock will be issued as a result of
conversion, but in lieu thereof, an amount equal to the fair market value (as
determined by the Board, whose good faith determination shall be conclusive
evidence of such fair market value, and described in a board resolution) of such
fractional interest will be paid in cash by the Corporation, unless payment in
cash is prohibited by the terms of the Corporation's indebtedness, in which case
fractional shares will be issued or, at the sole discretion of the Corporation,
such fractional shares will be rounded up to the nearest full share.
(b) Anti-dilution Provisions. The Conversion Price is subject to
adjustment from time to time as follows:
(i) In case the Corporation shall (1) pay a dividend or make a
distribution on Class A Common Stock in shares of Class A Common Stock, (2)
subdivide its outstanding shares of Class A Common Stock into a greater
number of shares or (3) combine its outstanding shares of Class A Common
Stock into a smaller number of shares, the Conversion Price in effect
immediately prior to such action shall be adjusted as provided below so
that the holder of any Convertible Preferred Stock thereafter surrendered
for conversion shall be entitled to receive the number of shares of Class A
Common Stock which such holder would have been entitled to receive
immediately following such action had such security been converted
immediately prior thereto. An adjustment made pursuant to this subparagraph
(i) shall become effective immediately, except as provided in subparagraph
(v) below, after the record date in the case of a dividend or distribution
and shall become effective immediately after the effective date in the case
of a subdivision or combination.
(ii) Except as otherwise provided in subparagraph (vi) below, in case
the Corporation shall issue rights, warrants or options to all holders of
Class A Common
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Stockentitling them (for a period expiring within forty-five (45) days
after the record date therefor) to subscribe for or purchase shares of
Class A Common Stock at a price per share less than the Current Market
Price per share (as defined in subparagraph (iv) below) of the Class A
Common Stock on the record date mentioned below, the Conversion Price shall
be adjusted to a price, computed to the nearest cent, so that the same
shall equal the price determined by multiplying:
(1) the Conversion Price in effect immediately prior to the
date of issuance of such rights, warrants or options by a
fraction, of which
(2) the numerator shall be (A) the number of shares of Class
A Common Stock outstanding on the date of issuance of such
rights, warrants or options immediately prior to such issuance,
plus (B) the number of shares which the aggregate offering price
of the total number of shares so offered for subscription or
purchase would purchase at such Current Market Price (determined
by multiplying such total number of shares by the sum of the
exercise price of such rights, warrants or options plus the fair
market value of any consideration paid to the Corporation for
such rights, warrants or options and dividing the product so
obtained by such Current Market Price), and of which
(3) the denominator shall be (A) the number of shares of
Class A Common Stock outstanding on the date of issuance of such
rights, warrants or options, immediately prior to such issuance,
plus (B) the number of additional shares of Class A Common Stock
which are so offered for subscription or purchase.
Such adjustment shall become effective immediately, except as
provided in subparagraph (v) below, after the record date for the
determination of holders entitled to receive such rights, warrants or
options.
(iii) Except as otherwise provided in subparagraph (vi) below, in
case the Corporation shall distribute to substantially all holders of
Class A Common Stock evidences of indebtedness, equity securities
(including equity interests in the Corporation's subsidiaries) other
than Class A Common Stock or other assets (other
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than cash dividends), or shall distribute to substantially all holders
of Class A Common Stock rights, warrants or options to subscribe to
securities (other than those referred to in subparagraph (ii) above),
then in each such case the Conversion Price shall be adjusted so that
the same shall equal the price determined by multiplying the
Conversion Price in effect immediately prior to the date of such
distribution by a fraction of which the numerator shall be the Current
Market Price per share (as defined in subparagraph (iv) below) of the
Class A Common Stock on the record date mentioned below less the then
fair market value of the portion of the assets, evidences of
indebtedness and equity securities so distributed or of such
subscription rights, warrants or options applicable to one share of
Class A Common Stock, and of which the denominator shall be such
Current Market Price per share of the Class A Common Stock. For the
purposes of this subparagraph (iii), in the event of a distribution of
shares of capital stock or other securities of any subsidiary as a
dividend on shares of Class A Common Stock, the then fair market value
of the shares or other securities so distributed shall be deemed to be
the market value of such shares or other securities. Such adjustment
shall become effective immediately, except as provided in subparagraph
(v) below, after the record date for the determination of stockholders
entitled to receive such distribution.
(iv) For the purpose of any computation under subparagraphs (ii)
and (iii) above, the Current Market Price per share of Common Stock on
any date shall be deemed to be the average of the Last Sale Prices of
a share of Class A Common Stock for the five (5) consecutive Trading
Days commencing not more than twenty (20) Trading Days before, and
ending not later than, the earlier of the date in question and the
date before the "ex" date with respect to the issuance or distribution
requiring such computation. For purposes of this Certificate of
Designation, the term (i) "Last Sale Price" means the last sale price
of the Class A Common Stock as reported on the composite tape for New
York Stock Exchange listed stocks (or if not listed or admitted to
trading on such exchange, then on the principal national securities
exchange on which the Class A Common Stock is listed or admitted to
trading, or, if not listed or admitted to trading on any national
securities exchange, on NASDAQ or a similar organization if NASDAQ is
no longer reporting information) on the last Trading Day prior to the
date in question or if no such sale takes place on such day,
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the last sale price for such day shall be the average of the closing
bid and asked prices regular way on the New York Stock Exchange (or if
not listed or admitted to trading on such exchange, then on the
principal national securities exchange on which the Class A Common
Stock is listed or admitted to trading, or, if not listed or admitted
to trading on any national securities exchange, on NASDAQ or a similar
organization if NASDAQ is no longer reporting information) on such
day; (ii) "Trading Day" means each Monday, Tuesday, Wednesday,
Thursday and Friday, other than any day on which securities are not
traded on the applicable securities exchange or in the applicable
securities market; and (iii) "'ex' date", when used with respect to
any issuance or distribution, means the first date on which the Class
A Common Stock trades regular way on the principal national securities
exchange on which the Class A Common Stock is listed or admitted to
trading (or if not so listed or admitted on NASDAQ or a similar
organization if NASDAQ is no longer reporting trading information)
without the right to receive such issuance or distribution.
(v) In any case in which this Section shall require that an
adjustment be made immediately following a record date, the
Corporation may elect to defer the effectiveness of such adjustment
(but in no event until a date later than the effective time of the
event giving rise to such adjustment), in which case the Corporation
shall, with respect to any security converted after such record date
and before such adjustment shall have become effective (a) defer
making any cash payment or issuing to the holder of such security the
number of shares of Common Stock and other capital stock of the
Corporation issuable upon such conversion in excess of the number of
shares of Common Stock and other capital stock of the Corporation
issuable thereupon only on the basis of the Conversion Price prior to
adjustment, and (b) not later than five (5) business days after such
adjustment shall have become effective, pay to such holder the
appropriate cash payment and issue to such holder the additional
shares of Common Stock and other capital stock of the Corporation
issuable on such conversion.
(vi) No adjustment in the Conversion Price shall be required if
securityholders are offered the right to participate in the
transaction on a basis and with notice that the Board determines in
good faith to be fair and appropriate in light of the basis and notice
on which holders of Class A Common Stock participate in
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the transaction. In addition, no adjustment in the Conversion Price
shall be required unless such adjustment would require an increase or
decrease of at least 1% in the Conversion Price; provided, however,
that any adjustments which by reason of this subparagraph (vi) are not
required to be made shall be carried forward and taken into account in
any subsequent adjustment. All calculations under this Section shall be
made to the nearest cent or to the nearest one-hundredth of a share, as
the case may be.
(vii) Whenever the Conversion Price is adjusted as herein
provided, the Corporation shall promptly mail or cause to be mailed to
each holder of Convertible Preferred Stock at such holder's address as
the same appears on the stock transfer books of the Corporation a
notice setting forth the Conversion Price after such adjustment and
setting forth in reasonable detail the facts requiring such adjustment
and the calculations on which the adjustment is based, which notice
shall be conclusive evidence of the correctness of such adjustment.
(viii) To the extent permitted by law, the Corporation from
time to time may reduce the Conversion Price by any amount for any
period of at least twenty (20) days (or such other period as may then
be required by applicable law), if the Board has made a determination
in good faith that such reduction would be in the best interests of the
Corporation, which determination shall be conclusive. No reduction in
the Conversion Price pursuant to this subparagraph shall become
effective unless the Corporation shall have mailed a notice, at least
fifteen (15) days prior to the date on which such reduction is
scheduled to become effective, to each holder of shares of the
Convertible Preferred Stock. Such notice shall be given by first class
mail, postage prepaid, at such holder's address as the same appears on
the stock transfer books of the Corporation. Such notice shall state
the amount per share by which the Conversion Price will be reduced and
the period for which such reduction will be in effect.
(ix) At its option, the Corporation may make such reduction
in the Conversion Price, in addition to those otherwise required by
this Section, as the Board deems advisable to avoid or diminish any
income tax to holders of Class A Common Stock resulting from any
dividend or distribution of stock (or rights to acquire stock) or from
any event treated as such for income tax purposes; provided, however,
that any such reduction
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shall not be effective until written evidence of the action of the
Board authorizing such reduction shall be filed with the secretary of
the Corporation and notice thereof shall have been given by first class
mail, postage prepaid, to each holder of shares of the Convertible
Preferred Stock at such holder's address as the same appears on the
stock transfer books of the Corporation.
(c) Consolidation, Merger or Sale of Assets
If any transaction shall occur, including without limitation (i) any
recapitalization or reclassification of shares of Class A Common Stock (other
than a change in par value, 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 of the Class
A Common Stock), (ii) any consolidation or merger of the Corporation with or
into another person or any merger of another person into the Corporation (other
than a merger that does not result in a reclassification, conversion, exchange
or cancellation of Class A Common Stock), (iii) any sale or transfer of all or
substantially all of the assets of the Corporation, or (iv) any compulsory share
exchange, pursuant to which any holders of Class A Common Stock shall be
entitled to receive other securities, cash or other property, then appropriate
provision shall be made so that the holder of each share of Convertible
Preferred Stock then outstanding shall have the right thereafter to convert such
share only into the kind and amount of the securities, cash or other property
that would have been receivable upon such recapitalization, reclassification,
consolidation, merger, sale, transfer, or share exchange by a holder of the
number of shares of Class A Common Stock issuable upon conversion of such share
of Convertible Preferred Stock immediately prior to such recapitalization,
reclassification, consolidation, merger, sale, transfer or share exchange, after
giving effect to any adjustment in the Conversion Price in accordance with
Section 9 hereof, and the Corporation shall not enter into any such merger,
consolidation or sale, unless the person formed by such consolidation or
resulting from such merger or that acquires such assets or that acquires the
Corporation's shares, as the case may be, shall make provisions in its
certificate of incorporation or other constituent document to establish such
right. Such certificate of incorporation or other constituent document shall
provide for adjustments that, for events subsequent to the effective date of
such certificate of incorporation or other constituent documents, shall be as
nearly equivalent as may be practicable to the relevant adjustments provided for
in this Section.
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(d) Accrued Dividends. Dividends shall cease to accrue on shares of
the Convertible Preferred Stock surrendered for conversion into Class A Common
Stock.
(e) Mechanics of Conversion. Before any holder of Convertible
Preferred Stock shall be entitled to convert the same into shares of Class A
Common Stock or other securities, cash or other property and to receive
certificates or other evidences of ownership therefor, such holder shall
surrender the certificate or certificates for the Convertible Preferred Stock to
be converted, duly endorsed, at the office of the Corporation or of any transfer
agent for the Convertible Preferred Stock, and shall give written notice to the
Corporation at such office that such holder elects to convert the same. The
Corporation shall, within ten (10) days after such delivery, issue and deliver
at such office to such holder of the Convertible Preferred Stock (or to any
other person specified in the notice delivered by such holder), a certificate or
certificates for the number of shares of Class A Common Stock or other
securities, cash or other property to which such holder shall be entitled as
aforesaid and a check payable to the holder for any cash amounts payable as the
result of a conversion into fractional shares of Class A Common Stock or other
securities. Such conversion shall be deemed to have been made immediately prior
to the close of business on the date of such surrender of the shares of
Convertible Preferred Stock to be converted, and the person or persons entitled
to receive the shares of Class A Common Stock issuable upon such conversion
shall be treated for all purposes as the record holder or holders of such shares
of Class A Common Stock on such date. In case any certificate for shares of the
Convertible Preferred Stock shall be surrendered for conversion of only a part
of the shares represented thereby, the Corporation shall deliver within ten (10)
days at such office to or upon the written order of the holder thereof, a
certificate or certificates for the number of shares of Convertible Preferred
Stock represented by such surrendered certificate which are not being converted.
Notwithstanding the foregoing, the Corporation shall not be obligated to issue
certificates or other evidences of ownership evidencing the shares of Class A
Common Stock or other securities issuable upon such conversion unless the
certificates evidencing the Convertible Preferred Stock are either delivered to
the Corporation or its transfer agent or the Corporation or its transfer agent
shall have received evidence satisfactory to it evidencing that such
certificates have been lost, stolen or destroyed and the holder of such
Convertible Preferred Stock executes an agreement satisfactory to the
Corporation to indemnify the Corporation from any loss incurred by it in
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connection with such certificates and, if requested by the Corporation,
furnishes an indemnity bond of a recognized insurance company in an amount and
on terms satisfactory to the Corporation with respect to any such loss. The
issuance of certificates or other evidences of ownership of shares of Class A
Common Stock or other securities issuable upon conversion of shares of
Convertible Preferred Stock shall be made without charge to the converting
holder for any tax imposed in respect of the issuance thereof; provided,
however, that the Corporation shall not be required to pay any tax which may be
payable with respect to any transfer involved in the issue and delivery of any
certificate or other evidence of ownership in a name other than that of the
holder of the shares of Convertible Preferred Stock being converted.
(f) No Impairment. The Corporation will not, through any
reorganization, transfer of assets, consolidation, merger, dissolution, issue or
sale of securities or any other voluntary action, avoid or seek to avoid the
observance or performance of any of the terms to be observed or performed
hereunder by the Corporation, but will at all times in good faith assist in the
carrying out of all the provisions of this Section 6 and in the taking of all
such action as may be necessary or appropriate in order to protect the
conversion rights of the holders of the Convertible Preferred Stock against
impairment.
SECTION 7. (a) Optional Redemption. After July 15, 1999, the
Corporation may, at its option, redeem all or from time to time any part of the
shares of Convertible Preferred Stock, out of funds legally available therefor,
upon giving a notice of redemption as set forth below at the following
redemption prices per share (expressed as a percentage of the $1,000 liquidation
preference thereof), plus an amount equal to accrued and unpaid dividends, if
any, up to but excluding the date fixed for redemption, if redeemed during the
twelve-month period commencing immediately after July 15 of the years indicated
below:
Redemption
Year Price
1999.............................. 104.9%
2000.............................. 104.2
2001.............................. 103.5
2002.............................. 102.8
2003.............................. 102.1
2004.............................. 101.4
2005.............................. 100.7
2006 and thereafter............... 100.0
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If fewer than all of the outstanding shares of the Convertible
Preferred Stock are to be redeemed, the number of shares to be redeemed shall be
determined by the Board in good faith and the shares to be redeemed will be
determined pro rata as nearly as practicable, or by such other method as the
Board may determine to be fair and appropriate. In the event that any quarterly
dividends payable on the Convertible Preferred Stock are in arrears, the
Convertible Preferred Stock may not be redeemed unless all outstanding shares of
Convertible Preferred Stock are simultaneously redeemed or the outstanding
shares of the Convertible Preferred Stock are redeemed on a pro rata basis.
Notice of redemption shall be given by mail, not less than thirty (30)
nor more than sixty (60) days prior to the date fixed for redemption thereof, to
each record holder of the shares of Convertible Preferred Stock to be redeemed
at the address of such holder in the stock register of the Corporation. If a
notice of redemption has been given, from and after the specified redemption
date (unless the Corporation defaults in making payment of the redemption
price), dividends on the Convertible Preferred Stock so called for redemption
will cease to accrue, such shares will no longer be deemed to be outstanding,
and all rights of the holders thereof as stockholders of the Corporation (except
the right to receive the redemption price) will cease.
SECTION 8. Payment of Excess Cash Dividends. If the Corporation shall
declare and pay cash dividends on the Class A Common Stock in an annualized per
share amount which exceeds the greater of (i) the annualized per share amount of
the immediately preceding cash dividend on the Class A Common Stock (as adjusted
to reflect any of the events described in Section 6 hereof) and (ii) 15% of the
Last Sale Price of the Class A Common Stock as of the Trading Day immediately
preceding the date of declaration of such dividend (the per share amount of any
such excess, to the extent of such excess, being herein called an "Excess
Amount"), then in any such event the holders of the Convertible Preferred Stock
then outstanding shall have the right to receive, and the Corporation will pay
to each such holder, at the time of the payment of the Class A Common Stock
dividend, an amount equal to such Excess Amount (on the basis of the number of
shares of Class A Common Stock that would have been issued to such holder upon
conversion of the Convertible Preferred Stock held by such holder on the record
date for the payment of such dividend).
SECTION 9. Change in Control. If there occurs a Change in Control (as
hereinafter defined) with respect to
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the Corporation, then shares of Convertible Preferred Stock may be converted
(the "Special Conversion Rights"), at the option of the holders thereof at any
time from the date of such Change in Control until the expiration of forty-five
(45) days after the date of the Conversion Notice (as defined below), into the
number of shares of Class A Common Stock determined by dividing (i) the $1,000
liquidation preference of the Convertible Preferred Stock, plus accrued and
unpaid dividends, if any, up to but excluding the date of the Change in Control
by (ii) the Special Conversion Price (as defined below). The "Special Conversion
Price" shall be an amount equal to the greater of (i) the average of the Last
Sale Prices of a share of Class A Common Stock for the last five (5) Trading
Days before the Change in Control or (ii) 66 2/3% of the Last Sale Price
(adjusted for any stock splits or combinations) of the Class A Common Stock as
of the date immediately prior to the filing of this Certificate of Designation
with the Secretary of State of Delaware.
Within five (5) days after the occurrence of a Change in Control, the
Corporation shall give notice of the occurrence of the Change in Control and of
the Special Conversion Rights set forth herein in accordance with the procedures
set forth below to each holder of a share of Convertible Preferred Stock (the
"Conversion Notice").
Each Conversion Notice shall state:
(1) that a Change in Control has occurred (and shall specify the
date of occurrence), and that the holder's Special Conversion Rights
may be exercised in accordance with this Section;
(2) the expiration date of the Special Conversion Rights and the
Special Conversion Price;
(3) that a holder of a share of Convertible Preferred Stock which
desires to exercise the Special Conversion Rights must deliver on or
before the fifth day prior to the expiration date of the Special
Conversion Rights written notice to the Corporation of the holder's
exercise of such option, together with the certificate evidencing such
holder's shares with respect to which the option is being exercised,
duly endorsed for transfer;
(4) the applicable Special Conversion Price and the Conversion
Price;
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(5) a description of the procedures which a holder must follow to
exercise its Special Conversion Rights;
(6) that holders of shares of the Convertible Preferred Stock
electing to have such shares converted will be required to surrender
the certificates evidencing such shares of Convertible Preferred Stock
for delivery of shares of Class A Common Stock; and
(7) that the Corporation has the right, at its option, to pay any
holder electing to exercise the Special Conversion Rights an amount of
cash equal to the $1,000 liquidation preference, plus an amount equal
to any accrued and unpaid dividends, in which event no conversion into
Class A Common Stock will occur.
The Conversion Notice shall be given by first class mail, postage
paid, to the holders of record of the shares of the Convertible Preferred Stock
at their respective addresses as the same shall appear on the stock transfer
books of the Corporation.
No failure of the Corporation to give the foregoing Conversion Notice
shall limit any holder's right to exercise its Special Conversion Rights.
Exercise of the Special Conversion Rights by the holder of a share of
Convertible Preferred Stock will be irrevocable. The Corporation shall not enter
into any consolidation, merger or sale of assets unless, in connection
therewith, the holders of Convertible Preferred Stock exercising their Special
Conversion Rights will be entitled to receive the same consideration as received
for the number of shares of Class A Common Stock into which their shares of
Convertible Preferred Stock would have been converted pursuant to the Special
Conversion Rights. The Special Conversion Rights are in addition to the regular
conversion rights that apply to the Convertible Preferred Stock.
The Corporation may, at its option, elect to pay holders of the
Convertible Preferred Stock exercising their Special Conversion Rights an amount
in cash equal to the $1,000 liquidation preference of the Convertible Preferred
Stock, plus an amount equal to any accrued and unpaid dividends, if any, up to
but excluding the date of the Change in Control, in which event no conversion
pursuant to the exercise of the Special Conversion Rights will occur,
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unless the Corporation defaults in making payment of such amount.
A "Change in Control" is deemed to have occurred when (i) any person
or group other than one or more of Steven B. Dodge, Thomas H. Stoner, any of
their affiliates or any person employed by the Corporation in a management
capacity as of June 19, 1996 (or any group of which any of them is a member,
collectively, a "Permitted Owner") acquires beneficial ownership of, directly or
indirectly, shares of capital stock of the Corporation sufficient to entitle
such person to exercise more than 50% of the total voting power of all classes
of capital stock entitled to vote in elections of directors (whether by means of
an exchange offer, liquidation, tender offer, consolidation, merger,
combination, reclassification, recapitalization or otherwise), or (ii) the
Corporation sells, leases, exchanges or transfers (in one transaction or a
series of related transactions) all or substantially all of its assets to any
person or group (in each instance, as the term "person" or "group" is used in
Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as
amended), other than one or more Permitted Owners.
SECTION 10. Exchange Provisions. (a) Shares of Convertible Stock will
be exchangeable at the option of the Corporation, out of funds legally available
therefor, in whole but not in part, on any March 31, June 30, September 30 or
December 31 commencing June 30, 1997 (a "Debenture Exchange Date"), through the
issuance of the Corporation's 7% Convertible Subordinated Debentures due 2011
(the "Exchange Debentures") in redemption of and in exchange for shares of
Convertible Preferred Stock, in the manner provided in this Section 10. The
Exchange Debentures will be subject to the terms and conditions of the indenture
dated June 25, 1996 (the "Indenture") between the Corporation and the Trustee, a
copy of which is on file at the principal executive offices of the Corporation.
The "Trustee" is Bank of Montreal Trust Company or any successor Trustee
appointed in accordance with the terms of the Indenture.
(b) Holders of the Convertible Preferred Stock will be entitled to
receive Exchange Debentures at the rate of $1,000 principal amount of Exchange
Debentures for each share of Convertible Preferred Stock. Such exchange may be
made only if, at the time of the exchange, (i) there shall be no dividend
arrearage (including the dividend payable on the date of exchange) on shares of
Convertible Preferred Stock, and (ii) no Event of Default (as defined in the
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Indenture) under the Indenture shall have occurred and be continuing.
(c) The Corporation will mail notice of its intention to redeem
through such an exchange to each holder of record of the Convertible Preferred
Stock not less than thirty (30) nor more than sixty (60) days before the
Debenture Exchange Date. Such notice shall be given by first class mail, postage
prepaid, to the holders of record of shares of Convertible Preferred Stock at
their respective addresses as the same shall appear on the stock transfer books
of the Corporation, specifying the Debenture Exchange Date and the place where
certificates for shares of Convertible Preferred Stock are to be surrendered for
Exchange Debentures and stating that dividends on shares of the Convertible
Preferred Stock will cease to accrue on the Debenture Exchange Date, but neither
failure to mail such notice, nor any defect therein or in the mailing thereof,
to any particular holder shall affect the sufficiency of the notice or the
validity of the proceedings for exchange with respect to the other holders. Any
notice which was mailed in the manner herein provided shall be conclusively
presumed to have been duly given whether or not the holder receives the notice.
If notice of exchange has been given pursuant to this subsection then (unless
the Corporation defaults in issuing Exchange Debentures in exchange for the
Convertible Preferred Stock or fails to pay or set aside for payment accrued and
unpaid dividends on the Convertible Preferred Stock as set forth in subsection
(d) below and notwithstanding that any certificates for shares of Convertible
Preferred Stock have not been surrendered for exchange) on the Debenture
Exchange Date the holders of Convertible Preferred Stock will cease to be
stockholders with respect to such shares and will have no interests in or claims
against the Corporation by virtue thereof (except the right to receive Exchange
Debentures in exchange therefor and accrued and unpaid dividends on the
Convertible Preferred Stock to the Debenture Exchange Date) and will have no
voting, conversion or other rights with respect to such shares, and all shares
of Convertible Preferred Stock will no longer be outstanding.
Upon the surrender (and endorsement, if required by the Corporation)
in accordance with such notice of the certificate for shares of Convertible
Preferred Stock, such certificates shall be exchanged for Exchange Debentures
and such accrued and unpaid dividends in accordance with this subsection.
Notwithstanding the foregoing, if notice of redemption and exchange has been
given pursuant to this subsection and any holder of shares of Convertible
Preferred Stock shall, prior to the close of business on the fifth day
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preceding the Debenture Exchange Date, give written notice to the Corporation
pursuant to Section 6 hereof of the conversion of any or all of the shares of
Convertible Preferred Stock held by such holder (accompanied by a certificate or
certificates for such shares, duly endorsed or assigned to the Corporation, and
any necessary transfer tax payment, as required by Section 6 hereof), then such
exchange shall not become effective with respect to such shares and any funds
which have been deposited by the Corporation, or on its behalf, with a paying
agent or segregated and held in trust by the Corporation for the redemption and
exchange of such shares shall immediately upon such conversion be returned to
the Corporation, or, if then held in trust by the Corporation, shall be
discharged from such trust.
(d) No shares of Convertible Preferred Stock may be exchanged for
Exchange Debentures unless the Corporation has paid or set aside for the benefit
of the holders of the Convertible Preferred Stock all accrued and unpaid
dividends on the Convertible Preferred Stock to the Debenture Exchange Date.
SECTION 11. Status of Reacquired Shares. If shares of the Convertible
Preferred Stock are converted pursuant to Section 6 or Section 9 hereof,
redeemed pursuant to Section 7 or Section 9 hereof or exchanged pursuant to
Section 10 hereof, the shares so converted, redeemed or exchanged shall, upon
compliance with any statutory requirements, assume the status of authorized but
unissued shares of preferred stock of the Corporation.
SECTION 12. Reserved Shares. So long as any shares of Convertible
Preferred Stock remain outstanding, the Corporation agrees to keep reserved for
issuance in connection with the conversion of the Convertible Preferred Stock at
all times a number of authorized but unissued shares of Class A Common Stock at
least equal to the number of shares of Class A Common Stock issuable upon
conversion (including, without limitation, as a consequence of the anti-dilution
provisions of Section 6 hereof) of all shares of Convertible Preferred Stock
outstanding at such time.
SECTION 13. Notices. All notices, requests, demands and other
communications hereunder shall be in writing and shall be deemed to have been
duly given if delivered by hand or by first class mail, postage prepaid, or when
sent by telex or telecopier (with receipt confirmed), provided a copy is also
sent by first class mail, postage prepaid, or express (overnight, if possible)
courier, addressed (i) in the case of a holder of the
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Convertible Preferred Stock, to such holder's address of record, and (ii) in the
case of the Corporation, to the Corporation's principal executive offices to the
attention of the Corporation's Chief Executive Officer and Chief
Financial Officer.
SECTION 14. Amendments and Waivers. Any right, preference, privilege
or power of, or restriction provided for the benefit of, the Convertible
Preferred Stock set forth herein may be amended and the observance thereof may
be waived (either generally or in a particular instance and either retroactively
or prospectively) with the written consent of the Corporation and the vote or
consent of the holders of a majority of the shares of Convertible Preferred
Stock then outstanding, and any amendment or waiver so effected shall be binding
upon the Corporation and all holders of the Convertible Preferred Stock.
IN WITNESS WHEREOF, American Radio Systems Corporation has caused this
Certificate of Designation to be duly executed by its duly authorized officer
and attested by its secretary this __th day of June, 1996.
AMERICAN RADIO SYSTEMS CORPORATION
By:_______________________________
Name:
Title:
ATTEST:
_____________________________
Name:
Title: Secretary
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