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As filed with the Securities and Exchange Commission on July 3, 1997
Registration No. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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RADIO ONE, INC.
RADIO ONE LICENSES, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
CERTIFICATE OF AMENDED AND
RESTATED CERTIFICATE OF INCORPORATION
OF
RADIO ONE, INC.
The undersigned, being the duly elected President and Chief
Executive Officer of Radio One, Inc. (the "Corporation"), a corporation
organized and existing under and by virtue of the General Corporation Law of the
State of Delaware ("DGCL"), hereby declares and certifies the following:
1. That the Corporation filed its original Certificate of
Incorporation with the Secretary of State of the State of Delaware on July 15,
1996 (the "Certificate of Incorporation").
2. That the present name of the Corporation is Radio One, Inc.
3. That the Board of Directors of the Corporation, pursuant to
Sections 141, 242 and 245 of the DGCL, adopted resolutions authorizing the
Corporation to amend, integrate and restate the Certificate of Incorporation of
the Corporation in its entirety to read as set forth in Exhibit A attached
hereto and made a part hereof (the "Amended and Restated Certificate").
4. That the stockholders of the Corporation approved and
adopted the Amended and Restated Certificate in accordance with Sections 228,
242 and 245 of the DGCL.
IN WITNESS WHEREOF, the undersigned has executed this certificate in
the name and on behalf of the Corporation as of this 16th day of May, 1997.
By:
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Name: Alfred C. Liggins
Title: President and Chief Executive Officer
EXHIBIT A
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
OF
RADIO ONE, INC.
ARTICLE I - Name
The name of the corporation is Radio One, Inc. (hereinafter referred to
as the "Corporation").
ARTICLE II - Registered Office
The post office address of the registered office of the Corporation in
the State of Delaware is 9 East Loockerman Street, Dover, Kent County, Delaware
19901. The name of the registered agent of the Corporation at that address is
National Registered Agents, Inc.
ARTICLE III - Purpose
The purpose of the Corporation is to acquire, operate, and maintain
radio stations and television stations and to engage in any other lawful act or
activity for which corporations may be organized under the General Corporation
Law of the State of Delaware (the "DGCL").
ARTICLE IV - Capital Stock
Section 4.1. General. The total number of shares of capital stock which
the Corporation has authority to issue is 252,000 shares, consisting of: (i)
100,000 shares of 15% Series A Cumulative Redeemable Preferred Stock, par value
$.01 per share (the "Series A Preferred"), (ii) 150,000 shares of 15% Series B
Cumulative Redeemable Preferred Stock, par value $.01 per share (the "Series B
Preferred," and together with the Series A Preferred, the "Preferred Stock"),
(iii) 1,000 shares of Class A Common Stock, par value $.01 per share (the "Class
A Common"), and (iv) 1,000 shares of Class B Common Stock, par value $.01 per
share (the "Class B Common," and together with the Class A Common, the "Common
Stock"). The Preferred Stock and Common Stock are hereinafter sometimes
collectively referred to as "Capital Stock." Certain capitalized terms used
herein are defined in Section 4.4(c) of this ARTICLE IV below.
Section 4.2. Preferred Stock. Except as otherwise provided in this
Section 4.2 of this ARTICLE IV or as otherwise required by applicable law, all
shares of Series A Preferred and Series B Preferred shall be identical in all
respects and shall entitle the holders thereof to the same rights and privileges
and shall be subject to the same qualifications, limitations and restrictions.
(a) Dividends.
(i) General Obligation. To the extent permitted under
the DGCL, the Corporation shall pay preferential cumulative dividends to the
holders of the Preferred Stock as provided in this Section 4.2(a)(i) of this
ARTICLE IV. Except as otherwise provided herein, dividends on each share of
Preferred Stock (a "Preferred Share") shall accrue on a daily basis at the rate
of 15% per annum (the "Dividend Rate") on the sum of (A) the Liquidation Value
thereof plus (B) all unpaid accumulated dividends thereon, if any, from and
including the date of issuance of such Preferred Share to and including the date
on which the Liquidation Preference Amount of such Preferred Share is paid.
Notwithstanding the foregoing, if the Corporation does not redeem all of the
issued and outstanding Preferred Shares on the Mandatory Redemption Date (as
defined in Section 4.2(d)(i) of this ARTICLE IV) or, upon the occurrence of an
Event of Noncompliance (as defined in the Preferred Stockholders' Agreement)
(such failure to redeem or occurrence of an Event of Noncompliance, a
"Noncompliance Event"), the Majority Holders may elect, by written notice to the
Corporation, to have the Dividend Rate increase to 18% per annum (the
"Noncompliance Dividend Rate") and dividends shall accrue on each Preferred
Share on a daily basis at the Noncompliance Dividend Rate on the sum of (x) the
Liquidation Value thereof plus (y) all unpaid accumulated dividends thereon, if
any, commencing on the date of the occurrence of such Noncompliance Event (after
the expiration of all applicable cure periods) and continuing until (I) such
Default is cured pursuant to the terms of the Preferred Stockholders' Agreement
or waived by the Majority Holders or (II) the date on which the Liquidation
Preference Amount of such Preferred Share is paid. Dividends on Preferred Shares
shall accrue whether or not they have been declared and whether or not there are
profits, surplus or other funds of the Corporation legally available for the
payment of dividends. The date on which the Corporation initially issues any
Preferred Share shall be deemed to be its "date of issuance" regardless of the
number of times transfer of such Preferred Share is made on the stock records
maintained by or for the Corporation and regardless of the number of
certificates which may be issued to evidence such Preferred Share.
(ii) Special WPHI-FM Dividend. Notwithstanding the
provisions of Section 4.2(a)(i) of this ARTICLE IV, in the event the Corporation
does not meet any performance target listed below relating exclusively to the
operation of WPHI-FM, the Dividend Rate for each Preferred Share shall be
increased to 17% per annum (the "Retroactive Dividend Rate") and dividends shall
accrue on each Preferred Share on a daily basis at the Retroactive Dividend Rate
on the sum of (A) the Liquidation Value thereof plus (B) all unpaid accumulated
dividends thereon, if any, for the period commencing on the date of issuance of
such Preferred Share until (x) such time as the Corporation first meets a
performance target at a subsequent date or such noncompliance is waived by the
Majority Holders or (y) the date on which the Liquidation Preference Amount of
such Preferred Share is paid:
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AS OF THE TWELVE-MONTH PERIOD ENDING BROADCAST CASH FLOW ($)
12/31/98 1,517
3/31/99 1,669
6/30/99 1,878
9/30/99 2,097
12/31/99 2,346
3/31/00 2,446
6/30/00 2,583
9/30/00 2,727
12/31/00 2,891
3/31/01 2,987
6/30/01 3,121
9/30/01 3,261
12/31/01 3,419
3/31/02 3,451
6/30/02 3,494
9/30/02 3,539
12/31/02 3,590
3/31/03 3,623
6/30/03 3,669
9/30/03 3,716
12/31/03 3,770
and in each calendar quarter thereafter
for the immediately prior twelve-month
period through the Mandatory Redemption
Any right to receive dividends on a Preferred Share at the Retroactive Dividend
Rate shall transfer with each such Preferred Share.
(iii) Dividend Reference Date. To the extent not paid
on December 31 of each year, beginning December 31, 1997 (the "Dividend
Reference Date"), all dividends which have accrued on each Preferred Share
issued and outstanding during the one-year period (or other period in the case
of the initial Dividend Reference Date) ending upon each such Dividend Reference
Date shall be accumulated and shall remain accumulated dividends with respect to
such Preferred Share until paid. All dividends paid on a Preferred Share shall
be applied first to, and to the extent of, unpaid dividends that have accrued
(but which have not been accumulated) and then to, and to the extent of,
accumulated dividends, if any.
(iv) Distribution of Partial Dividend Payments.
Except as otherwise provided herein, if at any time the Corporation pays less
than the total amount of unpaid dividends accrued on the Preferred Shares then
outstanding, such payment shall be distributed ratably among
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the holders thereof based upon the aggregate amount of accumulated and accrued
but unpaid dividends on the Preferred Shares held by each such holder.
(b) Liquidation. Upon any Liquidation of the Corporation,
provided all indebtedness for money borrowed of the Corporation (including,
without limitation, the Senior Indebtedness) has been finally and indefeasibly
paid in full in cash, each holder of Preferred Shares shall be entitled to be
paid in cash, before and in preference to any distribution or payment of any
asset, capital, surplus or earnings of the Corporation is made to the holders of
other Capital Stock, an amount equal to the aggregate Liquidation Preference
Amount of the Preferred Shares held by such holder, and the holders of Preferred
Shares shall not be entitled to any other payment in respect of their Preferred
Shares. If upon any such Liquidation of the Corporation, the funds to be
distributed among the holders of the Preferred Shares are insufficient to permit
payment to such holders of the aggregate Liquidation Preference Amount for such
Preferred Shares in cash, then the entire assets and funds of the Corporation
legally available for distribution shall be distributed ratably among the
holders based on the aggregate Liquidation Preference Amount of the Preferred
Shares held by each such holder. The Corporation shall provide written notice of
any such Liquidation, not less than 60 days prior to the payment date stated
therein, to each record holder of Preferred Shares.
(c) Priority of Preferred Stock. So long as any Preferred
Share remains outstanding, neither the Corporation nor any Subsidiary of the
Corporation shall redeem, purchase or otherwise acquire directly or indirectly,
or set apart funds for the redemption, purchase or acquisition of, any other
Capital Stock, nor shall the Corporation directly or indirectly pay or declare
any dividend or make any distribution upon any other Capital Stock (other than a
dividend payable solely in Junior Securities); provided, however,
notwithstanding the foregoing, the Corporation may purchase Junior Securities in
accordance with the provisions of the Warrantholders' Agreement.
(d) Redemptions.
(i) Mandatory Redemption. On May 29, 2005 (the
"Mandatory Redemption Date"), the Company will be required, subject to
applicable law, to redeem all issued and outstanding Preferred Shares, together
with any and all accumulated and accrued but unpaid dividends thereon.
(ii) Redemptions at the Option of the Corporation.
The Corporation shall have the right (but not the obligation) to redeem issued
and outstanding Preferred Shares, subject to applicable law, as follows:
(A) the Corporation may at any time, and from
time to time, redeem all or a portion of the issued and outstanding shares of
Series A Preferred; provided, however, that upon the timely delivery of a
Participation Notice as set forth in clause (v) of this Section 4.2(d), any
holder of shares of Series B Preferred shall have the right to participate in
such redemption and the number of Preferred Shares to be redeemed from each
holder of Series A Preferred and each holder of Series B Preferred that has
delivered a timely Participation Notice shall be the number of Preferred Shares
determined by multiplying the total number of Preferred Shares the Corporation
has elected to redeem as specified in the Final Redemption Notice by a fraction,
the
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numerator of which shall be the total number of shares of Series A Preferred
held by such holder or the total number of shares of Series B Preferred
specified in such holder's timely delivered Participation Notice, as the case
may be, and the denominator of which shall be the sum of the total number of
outstanding shares of Series A Preferred and the number of shares of Series B
Preferred that are the subject of timely delivered Participation Notices;
(B) the Corporation may at any time, and from
time to time, redeem issued and outstanding Preferred Shares having an aggregate
Liquidation Value of up to $2,000,000, provided that the Corporation has paid
all accumulated and accrued but unpaid dividends on all of the outstanding
Preferred Shares in full simultaneously with or prior to such redemption; and
(C) on or after June 6, 1999, the Corporation
may at any time, and from time to time, redeem all or any portion of the issued
and outstanding Preferred Shares.
(iii) Redemption at the Option of the Holders of
Preferred Shares. The Majority Holders shall have the right (but not the
obligation) to require the Corporation (and if the Majority Holders exercise
such right, the Corporation shall be obligated) to redeem issued and outstanding
Preferred Shares, subject to applicable law, as follows:
(A) if permitted by the terms of the Debt
Agreements, upon the consummation of an Initial Public Offering, the Majority
Holders may require the Company to apply an amount not to exceed the Net Cash
Proceeds received by the Corporation from the Initial Public Offering to redeem
the maximum number of Shares of Preferred Stock that may be redeemed given the
amount elected by the Majority Holders to be so applied; and
(B) after all outstanding indebtedness for
money borrowed of the Corporation (including, without limitation, the Senior
Indebtedness) has been finally and indefeasibly paid in full in cash and any
commitment to fund related thereto shall have been terminated, if a Redemption
Event (as defined in the Preferred Stockholders' Agreement) is existing, the
Majority Holders may require the Company to redeem all or any portion of the
outstanding Preferred Shares.
(iv) Redemption Payment. For each Preferred Share
which is to be redeemed, the Corporation shall pay to the holder thereof on the
Redemption Date (upon surrender by such holder at the Corporation's principal
office of the certificate representing such Preferred Share) an amount in
immediately available funds equal to the Liquidation Preference Amount. If the
funds of the Corporation legally available for redemption of Preferred Shares on
any Redemption Date are insufficient to redeem the total number of Preferred
Shares to be redeemed on such date, those funds which are legally available
shall be used to redeem the maximum possible number of Preferred Shares ratably
among the holders of the Preferred Shares to be redeemed based upon the
aggregate Liquidation Preference Amount held by each such holder. At any time
thereafter when additional funds of the Corporation are legally available for
the redemption of Preferred Shares, such funds shall immediately be used to
redeem the balance of the Preferred Shares which the Corporation has become
obligated to redeem on any Redemption Date but which it has not redeemed.
(v) Notice of Redemption on the Mandatory Redemption
Date. After September 1, 2004, and on or prior to November 29, 2004, the
Corporation shall give written notice (a "Mandatory Redemption Notice") by mail,
postage prepaid, overnight courier or facsimile to the holders of the then
outstanding Preferred Shares at the address of each such holder appearing on the
books of the Corporation or given by such holder to the Corporation, which
notice shall set forth the Mandatory Redemption Date and the Liquidation
Preference Amount for each Preferred Share. The Mandatory Redemption Notice
shall further call upon such holders to surrender to the Corporation on or
before the Mandatory Redemption Date at the place designated in the notice such
holder's certificate or certificates representing the Preferred Shares to be
redeemed on the Mandatory Redemption Date or an indemnification and loss
certificate therefor. On or before the Mandatory Redemption Date, each holder of
Preferred Shares to be redeemed shall surrender the certificate evidencing such
shares, or such indemnification and loss certificate, to the Corporation.
(vi) Notice of Redemption at the Election of the
Corporation. The Corporation shall provide prior written notice (the "Redemption
Notice") of any redemption of Preferred Shares to each record holder of
Preferred Shares not more than 60 nor less than 30 days prior to the date on
which a redemption of Preferred Shares is expected to be made pursuant to
Section 4.2(d)(ii), and which shall set forth the series and number of Preferred
Shares to be redeemed, the date on which such redemption is to take place and
the Liquidation Preference Amount for each Preferred Share on such date. Such
Redemption Notice shall be sent by mail, postage prepaid, overnight courier or
facsimile to the address of each such holder appearing on the books of the
Corporation or given by such holder to the Corporation for the purpose of
notice. The Redemption Notice shall further call upon such holders to surrender
to the Corporation or before the applicable Redemption Date at the place
designated in the Redemption Notice such holder's certificate or certificates
representing the shares to be redeemed on the applicable Redemption Date or an
indemnification and loss certificate therefor. On or before the applicable
Redemption Date, each holder of Preferred Shares called for redemption shall
surrender the certificate evidencing such Preferred Shares, or such
indemnification and loss certificate, to the Corporation. With respect to any
election by the Corporation to redeem all or any portion of the Series A
Preferred pursuant to Section 4.2(d)(ii)(A) of this ARTICLE IV, (A) any holders
of Series B Preferred that intend to participate in such redemption shall
provide written notice of such intention to the Corporation (the "Participation
Notice") within five days of receipt of a Redemption Notice, and such
Participation Notice shall set forth the number of shares of Series B Preferred
that such holder desires to have redeemed by the Corporation, and (B) if the
Corporation receives any timely Participation Notices, the Corporation may elect
either (a) to redeem the number of Preferred Shares originally set forth in its
Redemption Notice or (b) to redeem a greater number of Preferred Shares. Upon
making such election, the Corporation shall provide written notice to each
holder of Preferred Shares setting forth the total number of Preferred Shares
the Corporation has so elected to redeem and the Series and number of Preferred
Shares that shall be redeemed from each holder of Series A Preferred and each
holder of Series B Preferred that has delivered a timely Participation Notice no
later than two days prior to the applicable Redemption Date (the "Final
Redemption Notice").
(vii) Notice of Redemption at the Election of the
Holders. With respect to any election by the Majority Holders to cause the
Corporation to redeem all or any portion of the issued and outstanding Preferred
Shares pursuant to Section 4.2(d)(iii) of this ARTICLE IV, the Majority Holders
shall provide written notice of such election to the Corporation not more than
60
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nor less than 30 days prior to the date on which such redemption is to be made
and such notice shall set forth the number of Preferred Shares to be redeemed
and the date on which such redemption is to take place (the "Put Notice"). The
Corporation shall notify the record holders of Preferred Shares promptly of (A)
the commencement of the Initial Public Offering (and the amount of Net Cash
Proceeds received therefrom) and (B) the first date on which all outstanding
indebtedness for money borrowed of the Corporation (including, without
limitation, the Senior Indebtedness) has been finally and indefeasibly paid in
full in cash and any commitment to fund related thereto shall have been
terminated.
(viii) Determination of the Number of Each Holder's
Preferred Shares to be Redeemed. Except in redemptions pursuant to Section
4.2(d)(ii)(A) of this ARTICLE IV, the number of Preferred Shares to be redeemed
from each holder thereof in redemptions hereunder shall be the number of
Preferred Shares determined by multiplying the total number of Preferred Shares
to be redeemed by a fraction, the numerator of which shall be the total number
of Preferred Shares then held by such holder and the denominator of which shall
be the total number of Preferred Shares then issued and outstanding. In case
fewer than the total number of Preferred Shares represented by any certificate
are redeemed, a new certificate representing the number of unredeemed Preferred
Shares shall be issued to the holder thereof without cost to such holder within
three business days after surrender of the certificate representing the redeemed
Preferred Shares.
(ix) Dividends After Redemption Date. No Preferred
Share is entitled to any dividends that accrue after the date on which the
Liquidation Preference Amount of such Preferred Share is paid to the holder
thereof. On such date all rights of the holder of such Preferred Share shall
cease, and such Preferred Share shall not be deemed to be issued and
outstanding.
(x) Redeemed or Otherwise Acquired Preferred Shares.
Any Preferred Shares which are redeemed or otherwise acquired by the Corporation
shall be canceled and shall not be reissued, sold or transferred.
(xi) Other Redemptions or Acquisitions. Neither the
Corporation nor any Subsidiary shall redeem or otherwise acquire any Preferred
Stock, except as expressly authorized herein or pursuant to a purchase offer
made pro rata to all holders of Preferred Stock on the basis of the number of
Preferred Shares owned by each such holder.
(e) Voting Rights. Except as provided in ARTICLE VII of this
Amended and Restated Certificate of Incorporation or as otherwise required by
applicable law, the holders of Preferred Shares shall have no right to vote on
any matters to be voted on by the Corporation's stockholders.
(f) Restrictions and Limitations. For so long as any Preferred
Share is outstanding, without the written consent of the Majority Holders, the
Corporation shall not fail to comply with Sections 6.1, 6.3, 6.4, 6.7 and 6.11
of the Preferred Stockholders' Agreement.
4.3. Section Common Stock. Except as otherwise provided in
Section 4.3 of this ARTICLE IV or as otherwise required by applicable law, all
shares of Class A Common and Class B Common
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shall be identical in all respects and shall entitle the holders thereof to the
same rights and privileges and shall be subject to the same qualifications,
limitations and restrictions.
(a) Voting Rights. At every meeting of the stockholders, except as
specifically otherwise required by law, the holders of Class A Common shall be
entitled to one vote per share on all matters presented for a vote of the
stockholders of the Corporation. Except to the extent provided in ARTICLE VII of
this Amended and Restated Certificate of Incorporation or as required by
applicable law, the holders of Class B Common shall have no right to vote on any
matter presented for a vote of the stockholders of the Corporation (including,
without limitation, the election or removal of directors of the Corporation),
and Class B Common shall not be included in determining the number of shares
voting or entitled to vote on such matters. The Board of Directors of the
Corporation shall have concurrent power with the holders of Class A Common to
adopt, amend or repeal the Bylaws of the Corporation. A consolidation or merger,
or the sale, lease, exchange, mortgage, pledge, or other disposition of all, or
substantially all, of the property or assets of the Corporation, if not made in
the usual and regular course of its business, shall require a resolution adopted
by a majority of the Board of Directors of the Corporation and the authorization
of an affirmative vote of at least two-thirds of the outstanding shares of Class
A Common.
(b) Dividends. As and when dividends are declared or paid with respect
to shares of Common Stock, whether in cash, property or securities of the
Corporation, the holders of Class A Common and the holders of Class B Common
shall be entitled to receive such dividends pro rata at the same rate per share
for each such class of Common Stock; provided that (i) if dividends are declared
or paid in shares of Common Stock, the dividends payable to the holders of Class
A Common shall be payable in shares of Class A Common and the dividends payable
to the holders of Class B Common shall be payable in shares of Class B Common
and (ii) if the dividends consist of other voting securities of the Corporation,
the Corporation shall make available to each holder of Class B Common, at such
holder's request, dividends consisting of non-voting securities (except as
otherwise required by law) of the Corporation which are otherwise identical to
the voting securities and which are convertible into such voting securities on
the same terms as the Class B Common is convertible into the Class A Common. The
rights of the holders of Common Stock to receive dividends are subject to the
provisions of the Preferred Stock.
(c) Reservation. The Corporation shall at all times reserve and keep
available out of its authorized but unissued shares of Common Stock Class A
Common and Class B Common in a quantity sufficient to provide for the conversion
of all outstanding shares of the Class A Common and Class B Common into Class B
Common and Class A Common, respectively.
(d) Conversion of Common Stock.
(i) General Provisions. Subject to the terms and conditions
stated herein, the holder of any shares of either Class A Common or Class B
Common shall have the right at any time, at such holder's option, to convert all
or a portion of the shares of the class of Common Stock so held into the same
number of shares of the other class of Common Stock. Such right of conversion
shall be exercised (A) by giving written notice (the "Notice") to the
Corporation at least ten (10) days prior to the Conversion Date (as defined
below) specified therein that the holder elects to convert a stated number of
shares of Class A Common or Class B Common into shares of the
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other class of Common Stock on the date specified in such Notice or on such
later date following any Deferral Period (as defined below) on which conversion
may occur (the "Conversion Date") and (B) by surrendering the certificate or
certificates representing at least the number of shares of Class A Common or
Class B Common to be converted to the Corporation at its principal office at any
time during the usual business hours on or before the Conversion Date, duly
endorsed in blank by the owner of the certificate so surrendered, together with
a statement of the name or names (with addresses) of the Person or Persons in
whose name or names the certificate or certificates for shares issued on
conversion shall be registered. Promptly after receipt of the Notice, the
Corporation shall send written notice of such holder's intent to convert to each
other registered holder of any shares of Class A Common or Class B Common at
such other holder's address as shown on the stock transfer records of the
Corporation. The Corporation shall not convert or directly or indirectly redeem,
purchase or otherwise acquire any share of Class A Common or take any other
action affecting the voting rights of such share if such action will increase
the percentage of outstanding voting securities owned or controlled by any
Regulated Stockholder (other than any Regulated Stockholder which requested that
the Corporation take such action) and the effect thereof would cause such
Regulated Stockholder and its Affiliates to hold in the aggregate 5% or more of
the outstanding shares of Class A Common unless the Corporation gives written
notice (the "Deferral Notice") of such action to each such Regulated
Stockholder. The Corporation will defer making any such conversion, redemption,
purchase or other acquisition, or taking any such other action, for a period of
30 days (the "Deferral Period") after giving the Deferral Notice in order to
allow each such Regulated Stockholder to determine whether it wishes to convert
or take any other action with respect to the Common Stock it owns, controls or
has the power to vote. If any such Regulated Stockholder then elects to convert
any shares of Class A Common into shares of Class B Common, it shall notify the
Corporation in writing within 20 days of the issuance of the Deferral Notice, in
which case the Corporation shall promptly notify from time to time each other
Regulated Stockholder holding shares of Common Stock of each proposed conversion
and the proposed transaction and each Regulated Stockholder may notify the
Corporation in writing of its election to convert shares of Class A Common into
Class B Common at any time prior to the end of the Deferral Period. The
Corporation shall effect the conversions requested by all Regulated Stockholders
in response to the Deferral Notice and the notices issued pursuant to the
immediately proceeding sentence at the end of the Deferral Period.
(ii) Regulated Stockholders. No Regulated Stockholder shall
exercise its rights as a holder of shares of Class B Common to convert such
shares into shares of Class A Common, or otherwise acquire shares of Class A
Common, if, after giving effect to such exercise, such Regulated Stockholder and
its Affiliates would own 5% or more of the outstanding Class A Common; provided,
however, that the foregoing restrictions shall cease and terminate as to any
shares of Class B Common or any Regulated Stockholder, when, in the opinion of
counsel reasonably satisfactory to the Corporation, such restrictions are no
longer required in order to assure compliance with Regulation Y or when
Regulation Y shall cease to be in effect. The Corporation shall rely
conclusively on a certificate of a Regulated Stockholder as to whether or not a
conversion of shares of Class B Common into, or an acquisition of, shares of
Class A Common will be in compliance with the provisions of the immediately
preceding sentence, and, notwithstanding the immediately preceding sentence, to
the extent not inconsistent with Regulation Y, such conversion rights may be
exercised or shares of Class A Common may be so acquired in the event that: (A)
the Corporation shall vote to merge or consolidate with or into any other Person
and, after giving effect
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to such merger or consolidation, such Regulated Stockholder and its Affiliates
would not own 5% or more of the outstanding voting securities of the surviving
Person; (B) such Regulated Stockholder desires to sell shares of Class A Common
into which all or part of its shares of Class B Common are to be converted in
connection with any proposed purchase of Class A Common by another Person (other
than a Regulated Stockholder or an Affiliate thereof); or (C) such Regulated
Stockholder intends to sell shares of Class A Common into which all or part of
its shares of Class B Common are to be converted pursuant to a registration
statement under the Securities Act of 1933, as amended (the "1933 Act"), which
has been declared effective.
(iii) Surrender of Certificates. Subject to the other
provisions of this Section 4.3 of this ARTICLE IV and of ARTICLE IX of this
Amended and Restated Certificate of Incorporation, promptly after (A) the
Conversion Date and (B) the surrender of such certificate or certificates
representing the share or shares of Class A Common or Class B Common to be
converted, the Corporation shall issue and deliver, or cause to be issued and
delivered, to the holder requesting conversion, registered in such name or names
as such holder may direct, a certificate or certificates for the number of
shares of the class of Common Stock issuable upon the conversion of such share
or shares, together with a certificate or certificates evidencing any balance of
the shares of the class surrendered to the Corporation but not then being
converted. To the extent permitted by law, such conversion shall be deemed to
have been effected as of the close of business on the later of the Conversion
Date or the date upon which the Corporation shall have received the certificate
or certificates representing the shares to be converted, and at such time the
rights of the holder of such share or shares as such holder shall cease, and the
person or person in whose name or names any certificate or certificates for
shares shall be issuable upon such conversion shall be deemed to have become the
holder or holders of record of such shares of Class A Common or Class B Common,
as the case may be.
(e) Listing. If the shares of Class A Common required to be reserved
for the purpose of conversion hereunder require listing on any national
securities exchange, before such shares are issued upon conversion, the
Corporation will, at its expense and as expeditiously as possible, use its
commercially reasonable best efforts to cause such shares to be listed or duly
approved for listing on such national securities exchange.
(f) No Charge. The issuance of certificates representing Common Stock
upon conversion of Class A Common or Class B Common as hereinabove set forth
shall be made without charge or any expense or issuance tax in respect thereof;
provided, however, that the Corporation shall not be required to pay any taxes
which may be payable in respect of any transfer involved in the issuance and
delivery of any certificate in a name other than that of the holder of the
shares converted.
(g) No Interference. Except as otherwise provided in ARTICLE IX of this
Amended and Restated Certificate of Incorporation, the Corporation will not
close its books against the transfer of any share of Common Stock or of any of
the shares of Common Stock issued or issuable upon the conversion of such shares
of Common Stock in any manner which interferes with the timely conversion of any
of such shares.
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(h) Mergers, Consolidations. In the case of a merger or consolidation
which reclassifies or changes the shares of Common Stock, or in the case of the
consolidation or merger of the Corporation with or into another corporation or
corporations or the transfer of all or substantially all of the assets of the
Corporation to another corporation or corporations, each share of Class B Common
shall thereafter be convertible into the number of shares of stock or other
securities or property to which a holder of shares of Class A Common would have
been entitled upon such reclassification, change, consolidation, merger or
transfer, and, in any such case, appropriate adjustment (as determined in good
faith by the Corporation's Board of Directors) shall be made in the application
of the provisions herein set forth with respect to the rights and interests
thereafter of the holders of the Class B Common to the end that the provisions
set forth herein shall thereafter be applicable, as nearly as reasonably may be
practicable, in relation to any shares of stock or other securities on property
thereafter deliverable upon the conversion of shares of Class B Common. In case
of any such merger or consolidation, the resulting or surviving corporation (if
not the Corporation) shall expressly assume the obligation to deliver, upon
conversion of the Class B Common, such stock or other securities or property as
the holders of the Class B Common remaining outstanding shall be entitled to
receive pursuant to the provisions hereof, and to make provisions for the
protection of the conversion rights provided for in this ARTICLE IV. The
Corporation shall not be party to any merger, consolidation or recapitalization
pursuant to which any Regulated Stockholder would be required to take (A) any
voting securities which would cause such holder to violate any law, regulation
or other requirement of any governmental body applicable to such Regulated
Stockholder, or (B) any securities convertible into voting securities which if
such conversion took place would cause such Regulated Stockholder to violate any
law, regulation or other requirement of any governmental body applicable to such
Regulated Stockholder other than securities which are specifically provided to
be convertible only in the event that such conversion may occur without any such
violation.
(i) Liquidation, Dissolution or Winding Up. Subject to the provisions
of the Preferred Stock, in the event of any Liquidation of the Corporation, all
remaining assets of the Corporation shall be distributed to holders of the
Common Stock pro rata at the same rate per share of each class of Common Stock
according to their respective holdings of shares of the Common Stock.
Section 4.4. Miscellaneous. Subject to the provisions of ARTICLE IX of this
Amended and Restated Certificate of Incorporation:
(a) Registration of Transfer. The Corporation shall keep at its
principal office a register for the registration of Capital Stock. Upon the
surrender of any certificate representing Capital Stock at such place, the
Corporation shall, at the request of the record holder of such certificate,
execute and deliver (at the Corporation's expense) a new certificate or
certificates in exchange therefor representing in the aggregate the number of
shares represented by the surrendered certificate. Each such new certificate
shall be registered in such name and shall represent such number of shares as is
requested by the holder of the surrendered certificate and shall be
substantially identical in form to the surrendered certificate, and dividends
shall accrue on the Capital Stock represented by such new certificate from the
date to which dividends have been fully paid on such Capital Stock represented
by the surrendered certificate. The issuance of new certificates shall be made
without charge to the original holders of the surrendered certificates for
11
any issuance tax in respect thereof or other cost incurred by the Corporation in
connection with such issuance.
(b) Replacement. Upon receipt of evidence reasonably satisfactory to
the Corporation (an affidavit of the registered holder shall be satisfactory) of
the ownership and the loss, theft, destruction or mutilation of any certificate
evidencing shares of any class or series of Capital Stock, and in the case of
any such loss, theft or destruction, upon receipt of an indemnity reasonably
satisfactory to the Corporation (provided that if the holder is a financial
institution or other institutional investor its own agreement shall be
satisfactory), or, in the case of any such mutilation upon surrender of such
certificate, the Corporation shall (at its expense) execute and deliver in lieu
of such certificate a new certificate of like kind representing the number of
shares of such class or series represented by such lost, stolen, destroyed or
mutilated certificate and dated the date of such lost, stolen, destroyed or
mutilated certificate, and dividends shall accrue on the Capital Stock
represented by such new certificate from the date to which dividends have been
fully paid on such lost, stolen, destroyed or mutilated certificate.
(c) Definitions. The following terms shall have the following meanings:
"Affiliate" means, with respect to any Person, any other Person
directly or indirectly controlling, controlled by or under common control with
such Person (it being understood that for purposes of this definition, the term
"control" (including with correlative meaning the terms "controlling,"
"controlled by" and "under common control with"), as used with respect to any
Person, shall mean the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of such Person,
whether through the ownership of voting securities or by contract or otherwise).
"Broadcash Cash Flow" has the meaning given to such term in the
Preferred Stockholders' Agreement.
"Debt Agreements" means, collectively, the Indenture, the Senior Loan
Agreement, and any other agreement governing indebtedness for borrowed money of
the Corporation permitted by the Preferred Stockholders' Agreement.
"Indenture" means that certain Indenture, dated as of May 15, 1997,
pursuant to which the Corporation issued 12% Senior Subordinated Notes due 2004.
"Initial Public Offering" means the first sale by the Corporation of
Common Stock of the Corporation to the public in an offering pursuant to an
effective registration statement filed with the Securities and Exchange
Commission pursuant to the 1933 Act, as then in effect; provided that an Initial
Public Offering shall not include an offering made in connection with a business
acquisition or combination or an employee benefit plan.
"Investors" means the New Investors and the Original Investors.
"Junior Securities" means (i) any class or series of Capital Stock of
the Corporation, whether now existing or hereafter authorized, that is junior to
any of the Series A Preferred or the
12
Series B Preferred in priority with respect to dividends or distributions or
upon Liquidation, and (ii) any rights, warrants, options, convertible or
exchangeable securities, exercisable for or convertible or exchangeable into,
directly or indirectly, any class or series of capital stock described in clause
(i) of this definition, whether at the time of issuance or upon the passage of
time or the occurrence of some future event.
"Liquidation" with respect to the Corporation, means the liquidation,
dissolution or winding up of the Corporation. Except as permitted under the
Preferred Stockholders' Agreement, a consolidation, merger or capital
reorganization of the Corporation (except (i) into or with a wholly-owned
subsidiary of the Corporation with requisite stockholder approval or (ii) a
merger in which the beneficial owners of the Corporation's outstanding Capital
Stock immediately prior to such transaction (assuming for this purpose that all
outstanding warrants, options and other securities convertible into Capital
Stock that are outstanding at such time have been exercised or converted, as
applicable) hold no less than fifty-one percent (51%) of the voting power of the
resulting entity) or a sale, transfer or other disposition of all or
substantially all of the assets of the Corporation shall be regarded as a
liquidation, dissolution or winding up of the affairs of the Corporation, and
shall constitute a Liquidation.
"Liquidation Preference Amount" means, with respect to a Preferred
Share, the Liquidation Value for such Preferred Share plus all accumulated and
accrued but unpaid dividends on such Preferred Share.
"Liquidation Value" of any Preferred Share shall be equal to $100.00.
"Majority Holders" means, collectively, the holders of a majority of
the issued and outstanding Preferred Shares as of the date of determination.
"Management Investors" means, collectively, Alfred C. Liggins,
Catherine L. Hughes, and Jerry A. Moore III.
"Net Cash Proceeds" means the gross cash proceeds actually received by
the Corporation from an Initial Public Offering, net of attorneys' fees,
accountants' fees, all discounts, underwriters' commissions, brokerage,
consultant or other customary fees and commissions, and all other reasonable
fees and expenses actually incurred by the Corporation in connection with such
Initial Public Offering.
"New Investors" means, collectively, Alta Subordinated Debt Partners
III, L.P., BancBoston Investments Inc. and Grant Wilson.
"Original Investors" means, collectively, Syncom Capital Corporation,
Alliance Enterprise Corporation, Greater Philadelphia Venture Capital
Corporation, Inc., Opportunity Capital Corporation, Capital Dimensions Venture
Fund, Inc., TSG Ventures Inc. and Fulcrum Venture Capital Corporation.
13
"Person" means an individual, a partnership, a joint venture, a
corporation, an association, a joint stock company, a limited liability company,
a trust, an unincorporated association and any other entity or organization.
"Preferred Stockholders' Agreement" means that certain Preferred
Stockholders' Agreement, dated as of May 14, 1997, by and among the Corporation,
the Original Investors, the New Investors and the Management Investors, as the
same may be amended from time to time.
"Redemption Date" as to any Preferred Share means the date specified in
any Redemption Notice or Put Notice, as applicable; provided, that no such date
shall be a Redemption Date unless the Liquidation Preference Amount is actually
paid in full on such date, and if not so paid in full, the Redemption Date shall
be the date on which such amount is fully paid.
"Regulated Stockholder" means any stockholder that is subject to the
provisions of Regulation Y and which holds shares of Common Stock of the
Corporation, so long as such stockholder shall hold, and only with respect to,
such shares of Common Stock or shares issued upon conversion of such shares.
"Regulation Y" means Regulation Y of the Board of Governors of the
Federal Reserve System (12 C.F.R. Part 225) or any successor to such regulation.
"Senior Indebtness" has the meaning given to such term in that certain
Standstill Agreement, effective as of May 19, 1997, among the Companies,
Liggins, Hughes, Moore, Syncom Capital Corporation, Alliance Enterprise
Corporation, Greater Philadelphia Venture Capital Corporation, Inc., Opportunity
Capital Corporation, Capital Dimensions Venture Fund, Inc., TSG Ventures Inc.,
Fulcrum Venture Capital Corporation, Alta Subordinated Debt Partners III, L.P.,
BancBoston Investments Inc., Grant M. Wilson, NationsBank of Texas, N.A., and
United States Trust Company of New York.
"Senior Loan Agreement" has the meaning given to such term in the
Preferred Stockholders' Agreement.
"Subsidiary" means any corporation with respect to which another
specified corporation has the power to vote or direct the voting of sufficient
securities to elect directors having a majority of the voting power of the board
of directors of such corporation.
"Warrantholders' Agreement" means that certain Warrantholders'
Agreement, dated as of June 6, 1995, by and among the Corporation, the
Subsidiaries of the Corporation party thereto, the Original Investors, the New
Investors and the Management Investors, as amended by the First Amendment to
Warrantholders' Agreement dated as of May 19, 1997, and as thereafter amended
from time to time.
ARTICLE V - Existence
The Corporation is to have a perpetual existence.
14
ARTICLE VI - General Provisions
Section 6.1. Dividends. The Board of Directors of the Corporation shall
have authority from time to time to set apart out of any assets of the
Corporation otherwise available for dividends a reserve or reserves as working
capital or for any other purpose or purposes, and to abolish or add to any such
reserve or reserves from time to time as said Board may deem to be in the
interest of the Corporation; and said Board shall likewise have power to
determine in its discretion, except as herein otherwise provided, what part of
the assets of the Corporation available for dividends in excess of such reserve
or reserves shall be declared in dividends and paid to the stockholders of the
Corporation.
Section 6.2. Issuance of Stock. The shares of all classes and series of
Capital Stock of the Corporation may be issued by the Corporation from time to
time for such consideration as from time to time may be fixed by the Board of
Directors of the Corporation, provided that shares having a par value shall not
be issued for a consideration less than such par value, as determined by the
Board. At any time, or from time to time, the Corporation may grant rights or
options to purchase from the Corporation any shares of its Capital Stock of any
class or series to run for such period of time, for such consideration, upon
such terms and conditions, and in such form as the Board of Directors of the
Corporation may determine. The Board of Directors of the Corporation shall have
authority, as provided by law, to determine that only a part of the
consideration which shall be received by the Corporation for the shares of its
Capital Stock having a par value be capital provided that the amount of the part
of such consideration so determined to be capital shall at least be equal to the
aggregate par value of such shares. The excess, if any, at any time, of the
total net assets of the Corporation over the amount so determined to be capital,
as aforesaid, shall be surplus. All classes and series of Capital Stock of the
Corporation shall be and remain at all times nonassessable.
The Board of Directors of the Corporation is hereby expressly authorized,
in its discretion, in connection with the issuance of any obligations or Capital
Stock of the Corporation (but without intending hereby to limit its general
power so to do in other cases), to grant rights or options to purchase Capital
Stock of the Corporation of any class or series upon such terms and during such
period as the Board of Directors of the Corporation shall determine, and to
cause such rights to be evidenced by such warrants or other instruments as it
may deem advisable.
Section 6.3. Inspection of Books and Records. The Board of Directors of the
Corporation shall have power from time to time to determine to what extent and
at what times and places and under what conditions and regulations the accounts
and books of the Corporation, or any of them, shall be open to the inspection of
the stockholders; and no stockholder shall have any right to inspect any account
or book or document of the Corporation, except as conferred by the laws of the
State of Delaware, unless and until authorized so to do by resolution of the
Board of Directors or the stockholders of the Corporation.
Section 6.4. Location of Meetings, Books and Records. Except as otherwise
provided in the Bylaws, the stockholders of the Corporation and the Board of
Directors of the Corporation may hold their meetings and have an office or
offices outside of the State of Delaware, and, subject to the provisions of the
laws of said State, may keep the books of the Corporation outside of said State
at such places as may, from time to time, be designated by the Board of
Directors.
15
Section 6.5. Board of Directors Meeting. The Board of Directors shall be
comprised of the number of directors specified in the Corporation's Bylaws, and
such directors shall be elected in the manner contemplated by such Bylaws.
ARTICLE VII - Amendments
The Corporation reserves the right to amend, alter, change or repeal any
provision contained in this Amended and Restated Certificate of Incorporation in
the manner now or hereinafter prescribed herein and by the laws of the State of
Delaware, and all rights conferred upon stockholders herein are granted subject
to this reservation. Notwithstanding the foregoing or anything contained in this
Amended and Restated Certificate of Incorporation to the contrary, no amendment,
modification or waiver shall be binding or effective with respect to any
provision of (i) Section 4.2 of ARTICLE IV (or any definitions used therein) or
clause (i) of this ARTICLE VII without the prior written consent of the Majority
Holders at the time such action is taken, (ii) Section 4.3 of ARTICLE IV (or any
definitions used therein) or clause (ii) of this ARTICLE VII without the prior
written consent of the Majority Holders and holders of a majority of the Common
Stock outstanding at the time such action is taken, or (iii) ARTICLE VIII or
clause (iii) of this ARTICLE VII without the affirmative vote of the holders of
at least two-thirds of the outstanding shares of Class A Common of the
Corporation and the prior written consent of the Majority Holders; provided,
that no such action under clause (iii) of this ARTICLE VII shall change (A) the
redemption, conversion, voting or other rights of any class or series of
Preferred Stock without the prior written consent of the holders of a majority
of each such class or series of Preferred Stock then outstanding, (B) the
conversion or voting rights of any class of Common Stock without the prior
written consent of the holders of a majority of each class of Common Stock then
outstanding, and (C) the percentage required to approve any amendment,
modification or waiver described herein, without the prior written consent of
holders of that percentage of the class or series of Capital Stock then required
to approve such amendment, modification or waiver.
ARTICLE VIII - Liability
Section 8.1. Limitation of Liability.
(a) To the fullest extent permitted by the DGCL as it now exists or may
hereafter be amended (but, in the case of any such amendment, only to the extent
that such amendment permits the Corporation to provide broader indemnification
rights than permitted as of the date this Amended and Restated Certificate of
Incorporation is filed with the State of Delaware), and except as otherwise
provided in the Corporation's Bylaws, no director of the Corporation shall be
liable to the Corporation or its stockholders for monetary damages arising from
a breach of fiduciary duty owed to the Corporation or its stockholders.
(b) Any repeal or modification of the foregoing paragraph by the
stockholders of the Corporation shall not adversely affect any right or
protection of a director of the Corporation existing at the time of such repeal
or modification.
Section 8.2. Right to Indemnification. Each person who was or is made party
or is threatened to be made a party to or is otherwise involved (including
involvement as a witness) in
16
any action, suit or proceeding, whether civil, criminal, administrative or
investigative (hereinafter a "proceeding"), by reason of the fact that he or she
is or was a director or officer of the Corporation or, while a director or
officer of the Corporation, is or was serving at the request of the Corporation
as a director, officer, employee or agent of another corporation or of a
partnership, joint venture, trust or other enterprise, including service with
respect to an employee benefit plan (hereinafter, an "indemnitee"), whether the
basis of such proceeding is alleged action in an official capacity as a director
or officer or in any other capacity while serving as a director or officer,
shall be indemnified and held harmless by the Corporation to the fullest extent
authorized by the DGCL, as the same exists or may hereafter be amended (but, in
the case of any such amendment, only to the extent that such amendment permits
the Corporation to provide for broader indemnification rights than permitted as
of the date this Amended and Restated Certificate of Incorporation is filed with
the State of Delaware), against all expense, liability and loss (including
attorneys' fees, judgments, fines, excise taxes or penalties and amounts paid in
settlement) reasonably incurred or suffered by such indemnitee in connection
therewith and such indemnification shall continue as to an indemnitee who has
ceased to be a director, officer, employee or agent and shall inure to the
benefit of the indemnitee's heirs, executors and administrators; provided,
however, that except as provided in Section 8.3 of this ARTICLE VIII with
respect to proceedings to enforce rights to indemnification, the Corporation
shall indemnify any such indemnitee in connection with a proceeding (or part
thereof) initiated by such indemnitee only if such proceeding (or part thereof)
was authorized by the Board of Directors of the Corporation. The right to
indemnification conferred in this Section 8.2 of this ARTICLE VIII shall be a
contract right and shall include the obligation of the Corporation to pay the
expenses incurred in defending any such proceeding in advance of its final
disposition (hereinafter an "advance of expenses"); provided, however, that if
and to the extent that the Board of Directors of the Corporation requires, an
advance of expenses incurred by an indemnitee in his or her capacity as a
director or officer (and not in any other capacity in which service was or is
rendered by such indemnitee, including, without limitation, service to an
employee benefit plan) shall be made only upon delivery to the Corporation of an
undertaking (hereinafter an "undertaking"), by or on behalf of such indemnitee,
to repay all amounts so advanced if it shall ultimately be determined by final
judicial decision from which there is no further right to appeal (hereinafter a
"final adjudication") that such indemnitee is not entitled to be indemnified for
such expenses under this Section 8.2 or otherwise. The Corporation may, by
action of its Board of Directors, provide indemnification to employees and
agents of the Corporation with the same or lesser scope and effect as the
foregoing indemnification of directors and officers.
Section 8.3. Procedure for Indemnification. Any indemnification of a
director or officer of the Corporation or advance of expenses under Section 8.2
of this ARTICLE VIII shall be made promptly, and in any event within forty-five
days (or, in the case of an advance of expenses, twenty days) upon the written
request of the director or officer. If a determination by the Corporation that
the director or officer is entitled to indemnification pursuant to this ARTICLE
VIII is required, and the Corporation fails to respond within sixty days to a
written request for indemnity, the Corporation shall be deemed to have approved
the request. If the Corporation denies a written request for indemnification or
advance of expenses, in whole or in part, or if payment in full pursuant to such
request is not made within forty-five days (or, in the case of an advance of
expenses, twenty days), the right to indemnification or advances as granted by
this ARTICLE VIII shall be enforceable by the director or officer in any court
of competent jurisdiction. Such person's costs and expenses incurred in
connection with successfully establishing his or her right to indemnification,
in whole
17
or in part, in any such action shall also be indemnified by the Corporation. It
shall be a defense to any such action (other than an action brought to enforce a
claim for the advance of expenses where the undertaking required pursuant to
Section 8.2 of this ARTICLE VIII, if any, has been tendered to the Corporation)
that the claimant has not met the standards of conduct which make it permissible
under the DGCL for the Corporation to indemnify the claimant for the amount
claimed, but the burden of such defense shall be on the Corporation. Neither the
failure of the Corporation (including its Board of Directors, independent legal
counsel, or its stockholders) to have made a determination prior to the
commencement of such action that indemnification of the claimant is proper in
the circumstances because he or she has met the applicable standard of conduct
set forth in the DGCL, nor an actual determination by the Corporation (including
its Board of Directors, independent legal counsel, or its stockholders) that the
claimant has not met such applicable standard of conduct, shall be a defense to
the action or create a presumption that the claimant has not met the applicable
standard of conduct. The procedure for indemnification of other employees and
agents for whom indemnification is provided pursuant to Section 8.2 of this
ARTICLE VIII shall be the same procedure set forth in this Section 8.3 for
directors or officers, unless otherwise set forth in the action of the Board of
Directors of the Corporation providing for indemnification for such employee or
agent.
Section 8.4. Insurance. The Corporation may purchase and maintain insurance
on its own behalf and on behalf of any person who is or was a director, officer,
employee or agent of the Corporation or was serving at the request of the
Corporation as a director, officer, employee or agent of another Corporation,
partnership, joint venture, trust or other enterprise against any expense,
liability or loss asserted against him or her and incurred by him or her in any
such capacity, whether or not the Corporation would have the power to indemnify
such person against such expenses, liability or loss under the DGCL.
Section 8.5. Service for Subsidiaries. Any person serving as a director,
officer, employee or agent of another Corporation, partnership, limited
liability company, joint venture or other enterprise, at least 50% of whose
equity interests are owned by the Corporation (hereinafter a "subsidiary" for
this ARTICLE VIII) shall be conclusively presumed to be serving in such capacity
at the request of the Corporation.
Section 8.6. Reliance. Persons who after the date of the adoption of this
provision become or remain directors or officers of the Corporation or who,
while a director or officer of the Corporation, become or remain a director,
officer, employee or agent of a subsidiary, shall be conclusively presumed to
have relied on the rights to indemnity, advance of expenses and other rights
contained in this ARTICLE VIII in entering into or continuing such service. The
rights to indemnification and to the advance of expenses conferred in this
ARTICLE VIII shall apply to claims made against an indemnitee arising out of
acts or omissions which occurred or occur both prior and subsequent to the
adoption hereof.
Section 8.7. Non-Exclusivity of Rights. The rights to indemnification and
to the advance of expenses conferred in this ARTICLE VIII shall not be exclusive
of any other right which any person may have or hereafter acquire under this
Amended and Restated Certificate of Incorporation or under any statute, Bylaw,
agreement, vote of stockholders or disinterested directors or otherwise.
18
Section 8.8. Merger or Consolidation. For purposes of this ARTICLE VIII,
references to "the Corporation" shall include any constituent corporation
(including any constituent of a constituent) absorbed into the Corporation in a
consolidation or merger which, if its separate existence had continued, would
have had power and authority to indemnify its directors, officers, and employees
or agents, so that any person who is or was a director, officer, employee or
agent of such constituent corporation, or is or was serving at the request of
such constituent corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise,
shall stand in the same position under this ARTICLE VIII with respect to the
resulting or surviving corporation as he or she would have with respect to such
constituent corporation if its separate existence had continued.
ARTICLE IX - Alien Ownership of Stock
Section 9.1. Applicability. This ARTICLE IX shall be applicable to the
Corporation so long as the provisions of Section 310 of the Communications Act
of 1934, as the same may be amended from time to time (the "Communications Act")
(or any successor, provisions thereto) are applicable to the Corporation. As
used herein, the term "alien" shall have the meaning ascribed thereto by the
Federal Communications Commission ("FCC") on the date hereof and in the future
as Congress or the FCC may change such meaning form time to time. If the
provisions of Section 310 of the Communications Act (or any successor provisions
thereto) are amended, the restrictions in this ARTICLE IX shall be amended in
the same way, and as so amended, shall apply to the Corporation. The Board of
Directors of the Corporation may make such rules and regulations as it shall
deem necessary or appropriate to enforce the provisions of this ARTICLE IX.
Section 9.2 Voting. Except as otherwise provided by law, not more than
twenty percent of the aggregate number of shares of Capital Stock of the
Corporation outstanding in any class or series entitled to vote on any matter
before a meeting of stockholders of the Corporation shall at any time be for the
account of aliens or their representatives or for the account of a foreign
government or representative thereof, or for the account of any corporation
organized under the laws of a foreign country.
Section 9.3. Stock Certificates. Shares of Capital Stock issued to or held
by or for the account of aliens and their representatives, foreign governments
and representatives thereof, and corporations organized under the laws of
foreign countries shall be represented by Foreign Share Certificates. All other
shares of Capital Stock shall be represented by Domestic Share Certificates. All
of such certificates shall be in such form not inconsistent with this Amended
and Restated Certificate of Incorporation as shall be prepared or approved by
the Board of Directors of the Corporation.
Section 9.4. Limitation on Foreign Ownership. Except as otherwise provided
by law, not more than twenty percent of the aggregate number of shares of
Capital Stock of the Corporation outstanding shall at any time be owned of
record by or for the account of aliens or their representatives or by or for the
account of a foreign government or representatives thereof, or by or for the
account of any corporation organized under the laws of a foreign country. Shares
of Capital Stock shall not be transferable on the books of the Corporation to
aliens or their representatives, foreign governments or representatives thereof,
or corporations organized under the laws of foreign
19
countries if, as a result of such transfer, the aggregate number of shares of
Capital Stock owned by or for the account of aliens and their representatives,
foreign governments and representatives thereof, and corporations organized
under the laws of foreign countries shall be more than twenty percent of the
number of shares of Capital Stock then outstanding. If it shall be found by the
Corporation that Capital Stock represented by a Domestic Share Certificate is,
in fact, held by or for the account of aliens or their representative, foreign
governments or representatives thereof, or corporations organized under the laws
of foreign countries, then such Domestic Share Certificate shall be canceled and
a new certificate representing such Capital Stock marked "Foreign Share
Certificate" shall be issued in lieu thereof, but only to the extent that after
such issuance the Corporation shall be in compliance with this ARTICLE IX;
provided, however, that if, and to the extent, such issuance would violate this
ARTICLE IX, then, the holder of such Capital Stock shall not be entitled to
vote, to receive dividends, or to have any other rights with regard to such
Capital Stock to such extent, except the right to transfer such Capital Stock to
a citizen of the United States.
Section 9.5. Transfer of Foreign Share Certificates. Any Capital Stock
represented by Foreign Share Certificates may be transferred either to aliens or
non-aliens. In the event that any Capital Stock represented by a certificate
marked "Foreign Share Certificate" is sold or transferred to a non-alien, then
such non-alien shall be required to exchange such certificate for a certificate
marked "Domestic Share Certificate." If the Board of Directors of the
Corporation reasonably determines that a Domestic Share Certificate has been or
is to be transferred to or for the account of aliens or their representatives,
foreign governments or representatives thereof, or corporations organized under
the laws of foreign countries, the Corporation shall issue a new certificate for
the shares of Capital Stock transferred to the transferee marked "Foreign Shares
Certificate", cancel the old Domestic Share Certificate, and record the
transaction upon its books, but only to the extent that after such transfer is
complete, the Corporation shall be in compliance with this ARTICLE IX.
Notwithstanding any other provision of this Amended and Restated
Certificate of Incorporation, the transfer or conversion of the Corporation's
Capital Stock, whether voluntary or involuntary, shall not be permitted, and
shall be ineffective, if such transfer or conversion would (i) violate (or would
result in violation of) the Communications Act or any of the rules or regulation
promulgated thereunder or (ii) require the prior approval of the FCC, unless
such prior approval has been obtained.
20
AMENDED AND RESTATED
BYLAWS
OF
RADIO ONE, INC.
(AS OF MAY 16, 1997)
ARTICLE I - OFFICES
Section 1. Registered Office. The registered office in the
State of Delaware shall be at 9 East Loockerman Street, in the City of Dover,
County of Kent. The name of the corporation's registered agent at such address
shall be National Registered Agents, Inc. The registered office or registered
agent of the corporation may be changed from time to time by action of the board
of directors on the filing of a certificate or certificates as required by law.
Section 2. Other Offices. The corporation may also have
offices at such other places, both within and without the State of Delaware, as
the board of directors may from time to time determine or the business of the
corporation may require.
ARTICLE II - MEETINGS OF STOCKHOLDERS
Section 1. Place and Time of Meetings. An annual meeting of
the stockholders shall be held each year, beginning in the year 1998, prior to
the last day of April. At such meeting, the stockholders shall elect the
directors of the corporation and conduct such other business as may come before
the meeting. The time and place of the annual meeting shall be determined by the
board of directors. Special meetings of the stockholders for any other purpose
may be held at such time and place, within or without the State of Delaware, as
shall be stated in the notice of the meeting or in a duly executed waiver of
notice thereof. Special meetings of the stockholders may be called by the
president or the chairman of the board for any purpose and shall be called by
the secretary if directed by the board of directors.
Section 2. Notice. Whenever stockholders are required or
permitted to take action at a meeting, written or printed notice of every annual
or special meeting of the stockholders, stating the place, date, time, and, in
the case of special meetings, the purpose or purposes, of such meeting, shall be
given to each stockholder entitled to vote at such meeting not less than l0 nor
more than 60 days before the date of the meeting. All such notices shall be
delivered, either personally or by mail, by or at the direction of the board of
directors, the chairman of the board, the chief executive officer, the president
or the secretary, and if mailed, such notice shall be deemed to be delivered
when deposited in the United States mail with postage prepaid and addressed to
the stockholder at his or her address as it appears on the records of the
corporation.
Section 3. Stockholders List. The officer having charge of the
stock ledger of the corporation shall make, at least l0 days before every
meeting of the stockholders, a complete list arranged in alphabetical order of
the stockholders entitled to vote at such meeting, specifying the address of and
the number of shares registered in the name of each stockholder. Such list shall
be open to the examination of any stockholder, for any purpose germane to the
meeting, during ordinary business hours, for a period of at least l0 days prior
to the meeting, either at a place within the city where the meeting is to be
held, which place shall be specified in the notice of the meeting or, if not so
specified, at the place where the meeting is to be held. The list shall also be
produced and kept at the time and place of the meeting during the whole time
thereof, and may be inspected by any stockholder who is present.
Section 4. Quorum. The holders of a majority of the
outstanding shares of capital stock entitled to vote thereat, whether present in
person or represented by proxy, shall constitute a quorum at all meetings of the
stockholders, except as otherwise provided by statute or by the certificate of
incorporation. If a quorum is not present, the holders of the shares present in
person or represented by proxy at the meeting and entitled to vote thereat shall
have the power, by the affirmative vote of the holders of a majority of such
shares, to adjourn the meeting to another time or place. Unless the adjournment
is for more than thirty days or unless a new record date is set for the
adjourned meeting, no notice of the adjourned meeting need be given to any
stockholder, provided that the time and place of the adjourned meeting were
announced at the meeting at which the adjournment was taken. At the adjourned
meeting, the corporation may transact any business which might have been
transacted at the original meeting.
Section 5. Vote Required. When a quorum is present or
represented by proxy at any meeting, the vote of the holders of a majority of
the shares of capital stock present in person or represented by proxy at the
meeting and entitled to vote on the subject matter shall be the act of the
stockholders, unless the question is one upon which by express provisions of an
applicable statute or of the certificate of incorporation a different vote is
required, in which case such express provision shall govern and control the
decision of such question.
Section 6. Voting Rights. Except as otherwise provided by the
Delaware General Corporation Law or by the certificate of incorporation of the
corporation or any amendments thereto and subject to Section 3 of ARTICLE VI
hereof, each stockholder shall at every meeting of the stockholders be entitled
to one vote in person or by proxy for each share of capital stock held by such
stockholder.
Section 7. Proxies. Each stockholder entitled to vote at a
meeting of stockholders or to express consent or dissent to corporate action in
writing without a meeting may authorize another person or persons to act for him
or her by proxy, but no such proxy shall be voted or acted upon after three
years from its date, unless the proxy provides for a longer period.
Section 8. Action by Written Consent. Any action required to
be taken at any annual or special meeting of stockholders of the corporation, or
any action which may be taken at any annual or special meeting of such
stockholders, may be taken without a meeting, without prior notice and without a
vote, if a consent in writing, setting forth the action so taken, shall be
signed by the holders of outstanding stock having not less than the minimum
number of votes that would be necessary to authorize or take such action at a
meeting at which all shares of capital stock entitled
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to vote thereon were present and voted, and shall be delivered to the
corporation by delivery to its registered office in the State of Delaware or the
corporation's principal place of business or an officer or agent of the
corporation having custody of the books in which proceedings of meetings are
recorded. All consents delivered in accordance with this section shall be deemed
to be recorded when so delivered. No written consent shall be effective to take
the corporate action referred to therein unless, within 60 days of the earliest
date on which any consent is delivered to the corporation as required by this
section, written consents signed by the holders of a sufficient number of shares
to take such corporate action are recorded. Prompt notice of the taking of the
corporate action without a meeting by less than unanimous written consent shall
be given to those stockholders who have not consented in writing. Any action
taken pursuant to such written consent of the stockholders shall have the same
force and effect as if taken by the stockholders at a meeting thereof.
ARTICLE III - DIRECTORS
Section 1. Number, Election and Term of Office. The board of
directors shall be five (5) in number; provided, however, the number of members
of the board of directors shall be increased to nine (9) at the election of
Investors (as defined in the Preferred Stockholders' Agreement (the "PSA") dated
as of May __, 1997 among Radio One, Inc., Radio One Licenses, Inc., and the
other parties thereto and the Warrantholders' Agreement (the "WA") dated as of
June 6, 1995 among Radio One, Inc., Radio One Licenses, Inc. and the other
parties thereto, as amended by the First Amendment to Warrantholders' Agreement
dated as of May __, 1997, as applicable) in accordance with, and subject to the
terms and conditions of, Section 10 of the PSA or Article VI of the WA, as
applicable (an election to increase the size of the board of directors is
referred to herein as the "Special Election"). The directors shall be elected at
the annual meeting of stockholders, except as provided in Section 3 of this
ARTICLE III, and each director elected shall hold office until the next annual
meeting of stockholders and until a successor is duly elected and qualified or
until his or her death, resignation or removal as hereinafter provided.
Section 2. Removal and Resignation. Any director or the entire
board of directors may be removed at any time, with or without cause, by the
holders of a majority of the shares of stock of the corporation then entitled to
vote at an election of directors, except as otherwise provided by statute. Any
director may resign at any time upon written notice to the corporation.
Section 3. Vacancies. Vacancies and newly created
directorships resulting from any increase in the authorized number of directors
may be filled only by the holders of a majority of the shares of stock of the
corporation then entitled to vote at an election of directors at an annual or
special meeting of stockholders, and each director so chosen shall hold office
until the next annual meeting of stockholders and until a successor is duly
elected and qualified or until his or her earlier death, resignation or removal
as hereinafter provided; provided, however, that any vacancy created as a result
of the Special Election shall be filled in the manner provided for in Section 10
of the PSA or Article VI of the WA, as applicable, and a director so elected
shall continue to serve as a director until the date on which the Special
Election is no longer in effect, at which time the number of directors
constituting the board of directors of the corporation shall decrease to such
number as constituted the whole board of directors of the corporation
immediately prior to the exercise of the Special Election.
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Section 4. Annual Meetings. The annual meeting of each newly
elected board of directors shall be held without other notice than this bylaw
immediately after, and at the same place as, the annual meeting of stockholders.
Section 5. Other Meetings and Notice. Regular meetings, other
than the annual meeting, of the board of directors may be held without notice at
such time and at such place as shall from time to time be determined by
resolution of the board. Special meetings of the board of directors may be
called by or at the request of the chairman, the chief executive officer or the
president on at least 24 hours notice to each director, either personally, by
telephone, by mail, or by telegraph; in like manner and on like notice the
secretary must call a special meeting on the written request of a majority of
directors; in like manner on like notice, the secretary must call a special
meeting on the written request of Investors holding a majority of the
outstanding Preferred Shares (as defined in the PSA); provided that any such
request made by such Investors must be called in good faith for a reasonable
business purpose.
Section 6. Quorum. A majority of the total number of directors
shall constitute a quorum for the transaction of business. The vote of a
majority of directors present at a meeting at which a quorum is present shall be
the act of the board of directors. If a quorum shall not be present at any
meeting of the board of directors, the directors present thereat may adjourn the
meeting from time to time, without notice other than announcement at the
meeting, until a quorum shall be present.
Section 7. Committees. The board of directors may, by
resolution passed by a majority of the whole board, designate one or more
committees. Each committee shall consist of one or more of the directors of the
corporation, which, to the extent provided in such resolution and not otherwise
limited by statute, shall have and may exercise the powers of the board of
directors in the management and affairs of the corporation including without
limitation the power to declare a dividend and to authorize the issuance of
stock. The board of directors may designate one or more directors as alternate
members of any committee, who may replace any absent or disqualified member at
any meeting of the committee. Such committee or committees shall have such name
or names as may be determined from time to time by resolution adopted by the
board of directors. Each committee shall keep regular minutes of its meetings
and report the same to the directors when required.
Section 8. Committee Rules. Each committee of the board of
directors may fix its own rules of procedure and shall hold its meetings as
provided by such rules, except as may otherwise be provided by the resolution of
the board of directors designating such committee, but in all cases the presence
of at least a majority of the members of such committee shall be necessary to
constitute a quorum. In the event that a member and that member's alternate, if
alternates are designated by the board of directors as provided in Section 7 of
this ARTICLE III, of such committee is/are absent or disqualified, the member or
members thereof present at any meeting and not disqualified from voting, whether
or not such member or members constitute a quorum, may unanimously appoint
another member of the board of directors to act at the meeting in place of any
such absent or disqualified member.
Section 9. Communications Equipment. Members of the board of
directors or any committee thereof may participate in and act at any meeting of
such board or committee through the use of a conference telephone or other
communications equipment by means of which all persons
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participating in the meeting can hear each other, and participation in the
meeting pursuant to this section shall constitute presence in person at the
meeting.
Section 10. Action by Written Consent. Any action required or
permitted to be taken at any meeting of the board of directors, or of any
committee thereof, may be taken without a meeting if all members of the board or
committee, as the case may be, consent thereto in writing, and the writing or
writings are filed with the minutes of proceedings of the board of directors or
committee.
ARTICLE IV - OFFICERS
Section 1. Number. The officers of the corporation shall be
elected by the board of directors and shall consist of a chairman of the board
(if the board of directors so deems advisable and elects), a president (who
shall perform the functions of the chairman of the board if none be elected),
one or more vice-presidents, a secretary, a treasurer, and such other officers
and assistant officers as may be deemed necessary or desirable by the board of
directors. Any number of offices may be held by the same person. In its
discretion, the board of directors may choose not to fill any office for any
period as it may deem advisable, except the offices of president and secretary.
Section 2. Election and Term of Office. The officers of the
corporation shall be elected annually by the board of directors at the meeting
of the board of directors held after each annual meeting of stockholders. If the
election of officers shall not be held at such meeting, such election shall be
held as soon thereafter as conveniently may be. Vacancies may be filled or new
offices created and filled at any meeting of the board of directors. Each
officer shall hold office until the next annual meeting of the board of
directors and until a successor is duly elected and qualified or until his or
her earlier death, resignation or removal as hereinafter provided.
Section 3. Removal. Any officer or agent elected by the board
of directors may be removed by the board of directors whenever in its judgment
the best interest of the corporation would be served thereby, but such removal
shall be without prejudice to the contract rights, if any, of the person so
removed.
Section 4. Vacancies. A vacancy in any office because of
death, resignation, removal, disqualification or otherwise, may be filled by the
board of directors for the unexpired portion of the term by the board of
directors then in office.
Section 5. Compensation. Compensation of all officers shall be
fixed by the board of directors, and no officer shall be prevented from
receiving such compensation by virtue of the fact that he or she is also a
director of the corporation.
Section 6. Chairman of the Board. The chairman shall preside
at all meetings of the board of directors and all meetings of the stockholders
and shall have such other powers and perform such duties as may from time to
time be assigned to him by the board of directors.
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Section 7. The Chief Executive Officer. The chief executive
officer of the corporation shall have such powers and perform such duties as are
specified in these bylaws and as may from time to time be assigned to him by the
board of directors.
The chief executive officer shall have overall management of
the business of the corporation and its subsidiaries and shall see that all
orders and resolutions of the boards of directors of the corporation and its
subsidiaries are carried into effect. The chief executive officer shall execute
bonds, mortgages and other contracts requiring a seal, under the seal of the
corporation, except where required or permitted by law to be otherwise signed
and executed and except where the signing and execution thereof shall be
expressly delegated by the board of directors to some other officer or agent of
the corporation. The chief executive officer shall have general powers of
supervision and shall be the final arbitrator of all differences among officers
of the corporation and its subsidiaries, and such decision as to any matter
affecting the corporation and its subsidiaries subject only to the boards of
directors.
Section 8. The President. The president shall have such powers
and perform such duties as are specified in these bylaws and as may from time to
time be assigned to him by the board of directors.
The president shall have general and active management of the
business of the corporation and shall see that all orders and resolutions of the
board of directors are carried into effect. The president shall execute bonds,
mortgages and other contracts requiring a seal, under the seal of the
corporation, except where required or permitted by law to be otherwise signed
and executed and except where the signing and execution thereof shall be
expressly delegated by the board of directors to some other officer or agent of
the corporation. The president shall have general powers of supervision and
shall be the final arbitrator of all differences between officers of the
corporation, and such decision as to any matter affecting the corporation
subject only to the board of directors.
Section 9. Vice Presidents. The vice-president, or if there
shall be more than one, the vice-presidents in the order determined by the board
of directors, shall, in the absence or disability of the president, perform the
duties and exercise the powers of the president and shall perform such other
duties and have such other powers as the board of directors may, from time to
time, determine or these bylaws may prescribe.
Section 10. The Secretary and Assistant Secretaries. The
secretary shall attend all meetings of the board of directors and all meetings
of the stockholders and record all the proceedings of the meetings of the
corporation and the board of directors in a book to be kept for that purpose and
shall perform like duties for the standing committees when required. The
secretary shall give, or cause to be given, notice of all meetings of the
stockholders and special meetings of the board of directors; perform such other
duties as may be prescribed by the board of directors or president, under whose
supervision he or she shall be; shall have custody of the corporate seal of the
corporation and the secretary, or an assistant secretary, shall have authority
to affix the same to any instrument requiring it and when so affixed, it may be
attested by his or her signature or by the signature of such assistant
secretary. The board of directors may give general authority to any other
officer to affix the seal of the corporation and to attest the affixing by his
or her signature. The assistant secretary, or if there be more than one, the
assistant secretaries in the order determined by the board of directors, shall,
in the absence or disability of the secretary, perform the duties and
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exercise the powers of the secretary and shall perform such other duties and
have such other powers as the board of directors may from time to time
prescribe.
Section 11. The Treasurer and Assistant Treasurer. The
treasurer shall have the custody of the corporate funds and securities; shall
keep full and accurate accounts of receipts and disbursements in books belonging
to the corporation; shall deposit all monies and other valuable effects in the
name and to the credit of the corporation as may be ordered by the board of
directors, taking proper vouchers for such disbursements; and shall render to
the president and the board of directors, at its regular meeting or when the
board of directors so requires, an account of the corporation. If required by
the board of directors, the treasurer shall give the corporation a bond (which
shall be rendered every six years) in such sums and with such surety or sureties
as shall be satisfactory to the board of directors for the faithful performance
of the duties of the office of treasurer and for the restoration to the
corporation, in case of death, resignation, retirement, or removal from office,
of all books, papers, vouchers, money, and other property of whatever kind in
the possession or under the control of the treasurer belonging to the
corporation. The assistant treasurer, or if there shall be more than one, the
assistant treasurers in the order determined by the board of directors, shall in
the absence or disability of the treasurer, perform the duties and exercise the
powers of the treasurer and shall perform such other duties and have such other
powers as the board of directors may from time to time prescribe.
Section 12. Other Officers, Assistant Officers and Agents.
Officers, assistant officers and agents, if any, other than those whose duties
are provided for in these bylaws, shall have such authority and perform such
duties as may from time to time be prescribed by resolution of the board of
directors.
ARTICLE V - INDEMNIFICATION OF OFFICERS, DIRECTORS AND OTHERS
Section 1. Right to Indemnification. Each person who was or is
made party or is threatened to be made a party to or is otherwise involved
(including involvement as a witness) in any action, suit or proceeding, whether
civil, criminal, administrative or investigative (hereinafter a "proceeding"),
by reason of the fact that he or she is or was a director or officer of the
corporation or, while a director or officer of the corporation, is or was
serving at the request of the corporation as a director, officer, employee or
agent of another corporation or of a partnership, joint venture, trust or other
enterprise, including service with respect to an employee benefit plan
(hereinafter, an "indemnitee"), whether the basis of such proceeding is alleged
action in an official capacity as a director or officer or in any other capacity
while serving as a director or officer, shall be indemnified and held harmless
by the corporation to the fullest extent authorized by the Delaware General
Corporation Law ("DGCL"), as the same exists or may hereafter be amended (but,
in the case of any such amendment, only to the extent that such amendment
permits the corporation to provide for broader indemnification rights than
permitted as of the date of these bylaws), against all expense, liability and
loss (including attorneys' fees, judgments, fines, excise taxes or penalties and
amounts paid in settlement) reasonably incurred or suffered by such indemnitee
in connection therewith and such indemnification shall continue as to an
indemnitee who has ceased to be a director, officer, employee or agent and shall
inure to the benefit of the indemnitee's heirs, executors and administrators;
provided, however, that except as provided in Section 2 of this ARTICLE V with
respect to proceedings to enforce rights to indemnification, the corporation
shall indemnify any such
7
indemnitee in connection with a proceeding (or part thereof) initiated by such
indemnitee only if such proceeding (or part thereof) was authorized by the board
of directors of the corporation. The right to indemnification conferred in this
Section 1 of this ARTICLE V shall be a contract right and shall include the
obligation of the corporation to pay the expenses incurred in defending any such
proceeding in advance of its final disposition (hereinafter an "advance of
expenses"); provided, however, that if and to the extent that the board of
directors of the corporation requires, an advance of expenses incurred by an
indemnitee in his or her capacity as a director or officer (and not in any other
capacity in which service was or is rendered by such indemnitee, including,
without limitation, service to an employee benefit plan) shall be made only upon
delivery to the corporation of an undertaking (hereinafter an "undertaking"), by
or on behalf of such indemnitee, to repay all amounts so advanced if it shall
ultimately be determined by final judicial decision from which there is no
further right to appeal (hereinafter a "final adjudication") that such
indemnitee is not entitled to be indemnified for such expenses under this
Section 1 or otherwise. The corporation may, by action of its board of
directors, provide indemnification to employees and agents of the corporation
with the same or lesser scope and effect as the foregoing indemnification of
directors and officers.
Section 2. Procedure for Indemnification. Any indemnification
of a director or officer of the corporation or advance of expenses under Section
1 of this ARTICLE V shall be made promptly, and in any event within forty-five
days (or, in the case of an advance of expenses, twenty days) upon the written
request of the director or officer. If a determination by the corporation that
the director or officer is entitled to indemnification pursuant to this ARTICLE
V is required, and the corporation fails to respond within sixty days to a
written request for indemnity, the corporation shall be deemed to have approved
the request. If the corporation denies a written request for indemnification or
advance of expenses, in whole or in part, or if payment in full pursuant to such
request is not made within forty-five days (or, in the case of an advance of
expenses, twenty days), the right to indemnification or advances as granted by
this ARTICLE V shall be enforceable by the director or officer in any court of
competent jurisdiction. Such person's costs and expenses incurred in connection
with successfully establishing his or her right to indemnification, in whole or
in part, in any such action shall also be indemnified by the corporation. It
shall be a defense to any such action (other than an action brought to enforce a
claim for the advance of expenses where the undertaking required pursuant to
Section 1 of this ARTICLE V, if any, has been tendered to the corporation) that
the claimant has not met the standards of conduct which make it permissible
under the DGCL for the corporation to indemnify the claimant for the amount
claimed, but the burden of such defense shall be on the corporation. Neither the
failure of the corporation (including its board of directors, independent legal
counsel, or its stockholders) to have made a determination prior to the
commencement of such action that indemnification of the claimant is proper in
the circumstances because he or she has met the applicable standard of conduct
set forth in the DGCL, nor an actual determination by the corporation (including
its board of directors, independent legal counsel, or its stockholders) that the
claimant has not met such applicable standard of conduct, shall be a defense to
the action or create a presumption that the claimant has not met the applicable
standard of conduct. The procedure for indemnification of other employees and
agents for whom indemnification is provided pursuant to Section 1 of this
ARTICLE V shall be the same procedure set forth in this Section 2 for directors
or officers, unless otherwise set forth in the action of the board of directors
of the corporation providing for indemnification for such employee or agent.
Section 3. Insurance. The corporation may purchase and
maintain insurance on its own behalf and on behalf of any person who is or was a
director, officer, employee or agent of the
8
corporation or was serving at the request of the corporation as a director,
officer, employee or agent of another corporation, partnership, joint venture,
trust or other enterprise against any expense, liability or loss asserted
against him or her and incurred by him or her in any such capacity, whether or
not the corporation would have the power to indemnify such person against such
expenses, liability or loss under the DGCL.
Section 4. Service for Subsidiaries. Any person serving as a
director, officer, employee or agent of another corporation, partnership,
limited liability company, joint venture or other enterprise, at least 50% of
whose equity interests are owned by the corporation (hereinafter a "subsidiary"
for purposes of this ARTICLE V) shall be conclusively presumed to be serving in
such capacity at the request of the corporation.
Section 5. Reliance. Persons who after the date of the
adoption of these bylaws become or remain directors or officers of the
corporation or who, while a director or officer of the corporation, become or
remain a director, officer, employee or agent of a subsidiary, shall be
conclusively presumed to have relied on the rights to indemnity, advance of
expenses and other rights contained in this ARTICLE V in entering into or
continuing such service. The rights to indemnification and to the advance of
expenses conferred in this ARTICLE V shall apply to claims made against an
indemnitee arising out of acts or omissions which occurred or occur both prior
and subsequent to the adoption hereof.
Section 6. Non-Exclusivity of Rights. The rights to
indemnification and to the advance of expenses conferred in this ARTICLE V shall
not be exclusive of any other right which any person may have or hereafter
acquire under these bylaws or the corporation's certificate of incorporation or
under any statute, agreement, vote of stockholders or disinterested directors or
otherwise.
Section 7. Merger or Consolidation. For purposes of this
ARTICLE V, references to "the corporation" shall include any constituent
corporation (including any constituent of a constituent) absorbed into the
corporation in a consolidation or merger which, if its separate existence had
continued, would have had power and authority to indemnify its directors,
officers, and employees or agents, so that any person who is or was a director,
officer, employee or agent of such constituent corporation, or is or was serving
at the request of such constituent corporation as a director, officer, employee
or agent of another corporation, partnership, joint venture, trust or other
enterprise, shall stand in the same position under this ARTICLE V with respect
to the resulting or surviving corporation as he or she would have with respect
to such constituent corporation if its separate existence had continued.
ARTICLE VI - CERTIFICATES OF STOCK
Section 1. Form. Subject to ARTICLE X of the certificate of
incorporation, every holder of stock in the corporation shall be entitled to
have a certificate, signed by, or in the name of the corporation by the
president or a vice-president, and the secretary or an assistant secretary of
the corporation, certifying the number of shares owned by him or her in the
corporation. Where a certificate is signed (l) by a transfer agent or an
assistant transfer agent other than the corporation or its employee or (2) by a
registrar, other than the corporation or its employee, the signature of any
9
such president, vice-president, secretary, or assistant secretary may be
facsimile. In case any officer or officers have signed a certificate or
certificates, or whose facsimile signature or signatures have been used on
certificate or certificates, shall cease to be such officer or officers of the
corporation whether because of death, resignation or otherwise before such
certificate or certificates have been delivered by the corporation, such
certificate or certificates may nevertheless be issued and delivered as though
the person or persons who signed such certificate or certificates or whose
facsimile signature or signatures have been used on such certificate or
certificates had not ceased to be such officer or officers of the corporation.
All certificates for shares shall be consecutively numbered or otherwise
identified. The name of the person to whom the shares represented thereby are
issued, with the number of shares and date of issue, shall be entered on the
books of the corporation. All certificates surrendered to the corporation for
transfer shall be cancelled, and no new certificate shall be issued in
replacement until the former certificate for a like number of shares shall have
been surrendered or cancelled, except as otherwise provided in Section 2 with
respect to lost, stolen or destroyed certificates.
Section 2. Lost Certificates. Subject to ARTICLE X of the
certificate of incorporation, the board of directors may direct a new
certificate or certificates to be issued in place of any certificate or
certificates theretofore issued by the corporation alleged to have been lost,
stolen, or destroyed, upon the making of an affidavit of that fact by the person
claiming the certificate of stock to be lost, stolen, or destroyed. When
authorizing such issue of a new certificate or certificates, the board of
directors may, in its discretion and as a condition precedent to the issuance
thereof, require the owner of such lost, stolen, or destroyed certificate or
certificates, or his or her legal representative, to give the corporation a bond
in such sum as it may direct as indemnity against any claim that may be made
against the corporation with respect to the certificate alleged to have been
lost, stolen or destroyed.
Section 3. Fixing a Record Date. The board of directors may
fix in advance a record date for the determination of stockholders entitled to
notice of, and to vote at, any meeting of stockholders and any adjournment
thereof; stockholders entitled to consent to corporate action in writing without
a meeting; stockholders entitled to receive payment of any dividend or other
distribution or allotment of rights or entitled to exercise any rights in
respect to any change, conversion or exchange of stock; or, for the purpose of
any other lawful action, which record date may not precede the date on which the
resolution fixing such record date is adopted by the board of directors. The
record date for the determination of stockholders entitled to notice of, and to
vote at, a meeting of stockholders shall not be more than 60 days nor less than
10 days before the date of such meeting. The record date for the determination
of stockholders entitled to consent to corporate action in writing without a
meeting shall not be more than 10 days after the date upon which the resolution
fixing the record date is adopted by the board of directors. The record date for
the determination of stockholders with respect to any other action shall not be
more than 60 days before the date of such action. If no record date is fixed:
the record date for determining stockholders entitled to notice of, and to vote
at, a meeting of stockholders shall be at the close of business on the day next
preceding the day on which notice is given, or if notice is waived, at the close
of business on the day next preceding the day on which the meeting is held; the
record date for determining stockholders entitled to consent to corporate action
in writing without a meeting when no prior action by the board of directors is
required by the Delaware General Corporation Law, shall be the first date on
which a signed written consent setting forth the action taken or proposed to be
taken is delivered to the corporation by delivery to its registered office in
the State of Delaware, its principal
10
place of business, or an officer or agent of the corporation having custody of
the book in which proceedings of meetings of stockholders are recorded; and, the
record date for determining stockholders with respect to any other action shall
be the close of business on the day on which the board of directors adopts the
resolution relating thereto.
ARTICLE VII - GENERAL PROVISIONS
Section 1. Dividends. Dividends upon the capital stock of the
corporation, subject to the provisions of the certificate of incorporation, if
any, may be declared by the board of directors at any regular or special
meeting, pursuant to law. Dividends may be paid in cash, in property, or in
shares of the capital stock, subject to the provisions of the certificate of
incorporation. Before payment of any dividend, there may be set aside out of any
funds of the corporation available for dividends such sum or sums as the
directors from time to time, in their absolute discretion, think proper as a
reserve or reserves to meet contingencies, equalize dividends, repair or
maintain any property of the corporation, or for any other purpose, and the
directors may modify or abolish any such reserve in the manner in which it was
created.
Section 2. Checks, Drafts or Orders. All checks, drafts, or
other orders for the payment of money by or to the corporation and all notes and
other evidences of indebtedness issued in the name of the corporation shall be
signed by such officer or officers, agent or agents of the corporation, and in
such manner, as shall be determined by resolution of the board of directors or a
duly authorized committee thereof.
Section 3. Contracts. The board of directors may authorize any
officer or officers, or any agent or agents, of the corporation to enter into
any contract or to execute and deliver any instrument in the name of and on
behalf of the corporation, and such authority may be general or confined to
specific instances.
Section 4. Loans. The corporation may lend money to, or
guarantee any obligation of, or otherwise assist any officer or other employee
of the corporation or of its subsidiary, including any officer or employee who
is a director of the corporation or its subsidiary, whenever, in the judgment of
the directors, such loan, guaranty or assistance may reasonably be expected to
benefit the corporation. The loan, guaranty or other assistance may be with or
without interest, and may be unsecured, or secured in such manner as the board
of directors shall approve, including, without limitation, a pledge of shares of
stock of the corporation. Nothing contained in this section shall be deemed to
deny, limit or restrict the powers of guaranty or warranty of the corporation at
common law or under any statute.
Section 5. Fiscal Year. The fiscal year of the corporation
shall be fixed by resolution of the board of directors.
Section 6. Corporate Seal. The board of directors shall
provide a corporate seal which shall be in the form of a circle and shall have
inscribed thereon the name of the corporation and the words "Corporate Seal,
Delaware." The seal may be used by causing it or a facsimile thereof to be
impressed or affixed or reproduced or otherwise.
11
Section 7. Voting Securities Owned by Corporation. Voting
securities in any other corporation held by the corporation shall be voted by
the president or the vice president, unless the board of directors specifically
confers authority to vote with respect thereto upon some other person or
officer. Any person authorized to vote securities shall have the power to
appoint proxies, with general power of substitution.
Section 8. Inspection of Books and Records. Any stockholder of
record, in person or by attorney or other agent, shall, upon written demand upon
oath stating the purpose thereof, have the right during the usual hours of
business to inspect for any proper purpose the corporation's stock ledger, a
list of its stockholders, and its other books and records, and to make copies or
extracts therefrom. A proper purpose shall mean any purpose reasonably related
to such person's interest as a stockholder. In every instance where an attorney
or other agent shall be the person who seeks the right to inspection, the demand
under oath shall be accompanied by a power of attorney or such other writing
which authorizes the attorney or other agent to so act on behalf of the
stockholder. The demand under oath shall be directed to the corporation at its
registered office in the State of Delaware or at its principal place of
business.
Section 9. Section Headings. Section headings in these bylaws
are for convenience of reference only and shall not be given any substantive
effect in limiting or otherwise construing any provision herein.
Section 10. Inconsistent Provisions. In the event that any
provision of these bylaws is or becomes inconsistent with any provision of the
certificate of incorporation, the Delaware General Corporation Law or any other
applicable law, the provision of these bylaws shall not be given any effect to
the extent of such inconsistency but shall otherwise be given full force and
effect.
ARTICLE VIII - AMENDMENTS
These bylaws may be amended, altered or repealed and new
bylaws adopted at any meeting of the board of directors by a majority vote,
provided that the affirmative vote of the holders of a majority of the shares of
common stock of the corporation then entitled to vote and of any series or class
of preferred stock of the Corporation then outstanding shall be required to
adopt any provision inconsistent with, or to amend or repeal any provision of,
Section 1 or 3 of ARTICLE III or this ARTICLE VIII. The fact that the power to
adopt, amend, alter or repeal the bylaws has been conferred upon the board of
directors shall not divest the stockholders of the same powers.
================================================================================
RADIO ONE, INC.,
Issuer
12% Senior Subordinated Notes Due 2004
------------
INDENTURE
Dated as of May 15, 1997
------------
UNITED STATES TRUST COMPANY OF NEW YORK,
Trustee
================================================================================
CROSS-REFERENCE TABLE
TIA Indenture
Section Section
- ------- ---------
310(a)(1) .............................. 7.10
(a)(2) .............................. 7.10
(a)(3) .............................. N.A.
(a)(4) .............................. N.A.
(b) .............................. 7.08; 7.10
(c) .............................. N.A.
311(a) .............................. 7.11
(b) .............................. 7.11
(c) .............................. N.A.
312(a) .............................. 2.05
(b) .............................. 13.03
(c) .............................. 13.03
313(a) .............................. 7.06
(b)(1) .............................. N.A.
(b)(2) .............................. 7.06
(c) .............................. 13.02
(d) .............................. 7.06
314(a) .............................. 4.02;
4.14; 13.02
(b) .............................. N.A.
(c)(1) .............................. 13.04
(c)(2) .............................. 13.04
(c)(3) .............................. N.A.
(d) .............................. N.A.
(e) .............................. 13.05
(f) .............................. 4.14
315(a) .............................. 7.01
(b) .............................. 7.05; 13.02
(c) .............................. 7.01
(d) .............................. 7.01
(e) .............................. 6.11
316(a)(last sentence) .............................. 13.06
(a)(1)(A) .............................. 6.05
(a)(1)(B) .............................. 6.04
(a)(2) .............................. N.A.
(b) .............................. 6.07
317(a)(1) .............................. 6.08
(a)(2) .............................. 6.09
(b) .............................. 2.04
318(a) .............................. 13.01
N.A. means Not Applicable.
- ----------
Note: This Cross-Reference Table shall not, for any purpose, be deemed to be
part of the Indenture.
TABLE OF CONTENTS
ARTICLE 1 Page Page
----
Definitions and Incorporation by Reference
------------------------------------------
SECTION 1.01. Definitions ..................................... 1
SECTION 1.02. Other Definitions ............................... 23
SECTION 1.03. Incorporation by Reference of Trust
Indenture Act ........................ 23
SECTION 1.04. Rules of Construction ........................... 24
ARTICLE 2
The Securities
--------------
SECTION 2.01. Form and Dating ................................ 24
SECTION 2.02. Execution and Authentication ................... 25
SECTION 2.03. Registrar and Paying Agent ..................... 25
SECTION 2.04. Paying Agent To Hold Money in Trust............. 26
SECTION 2.05. Securityholder Lists ........................... 27
SECTION 2.06. Transfer and Exchange .......................... 27
SECTION 2.07. Replacement Securities ......................... 28
SECTION 2.08. Outstanding Securities ......................... 28
SECTION 2.09. Temporary Securities ........................... 29
SECTION 2.10. Cancellation ................................... 29
SECTION 2.11. Defaulted Interest ............................. 29
SECTION 2.12. CUSIP Number ................................... 29
ARTICLE 3
Redemption
----------
SECTION 3.01. Notices to Trustee ............................. 30
SECTION 3.02. Selection of Securities To Be
Redeemed ............................ 30
SECTION 3.03. Notice of Redemption ........................... 31
SECTION 3.04. Effect of Notice of Redemption ................. 32
SECTION 3.05. Deposit of Redemption Price .................... 32
SECTION 3.06. Securities Redeemed in Part .................... 32
2
ARTICLE 4
Covenants
----------
SECTION 4.01. Payment of Securities .......................... 32
SECTION 4.02. SEC Reports .................................... 33
SECTION 4.03. Limitation on Incurrence of Indebtedness
and Issuance of Preferred Stock ..... 33
SECTION 4.04. Limitation on Senior Subordinated
Debt ................................ 35
SECTION 4.05. Limitation on Restricted Payments............... 35
SECTION 4.06. Limitation on Dividend and Other Payment
Restrictions Affecting Restricted
Subsidiaries ....................... 38
SECTION 4.07. Limitation on Certain Asset Sales .............. 40
SECTION 4.08. Transactions with Affiliates ................... 41
SECTION 4.09. Limitation on Restricted Subsidiary Equity
Interests ................................. 42
SECTION 4.10. Change of Control .............................. 43
SECTION 4.11. Limitation on Asset Swaps ...................... 43
SECTION 4.12. Future Subsidiary Guarantors ................... 44
SECTION 4.13. Compliance Certificate ......................... 44
SECTION 4.14. Further Instruments and Acts ................... 44
SECTION 4.15. Ratings for Notes .............................. 44
ARTICLE 5
Successor Company
-----------------
SECTION 5.01. When Company May Merge or Transfer
Assets ............................... 45
ARTICLE 6
Defaults and Remedies
---------------------
SECTION 6.01. Events of Default .............................. 47
SECTION 6.02. Acceleration ................................... 49
SECTION 6.03. Other Remedies ................................. 50
SECTION 6.04. Waiver of Past Defaults ........................ 50
SECTION 6.05. Control by Majority ............................ 50
SECTION 6.06. Limitation on Suits ............................ 50
SECTION 6.07. Rights of Holders to Receive Payment ........... 51
SECTION 6.08. Collection Suit by Trustee ..................... 51
SECTION 6.09. Trustee May File Proofs of Claim ............... 51
3
SECTION 6.10. Priorities ..................................... 52
SECTION 6.11. Undertaking for Costs .......................... 52
SECTION 6.12. Waiver of Stay or Extension Laws ............... 53
ARTICLE 7
Trustee
-------
SECTION 7.01. Duties of Trustee .............................. 53
SECTION 7.02. Rights of Trustee .............................. 54
SECTION 7.03. Individual Rights of Trustee ................... 55
SECTION 7.04. Trustee's Disclaimer ........................... 56
SECTION 7.05. Notice of Defaults ............................. 56
SECTION 7.06. Reports by Trustee to Holders .................. 56
SECTION 7.07. Compensation and Indemnity ..................... 56
SECTION 7.08. Replacement of Trustee ......................... 57
SECTION 7.09. Successor Trustee by Merger .................... 58
SECTION 7.10. Eligibility; Disqualification .................. 59
SECTION 7.11. Preferential Collection of Claims
Against Company ..................... 59
ARTICLE 8
Discharge of Indenture; Defeasance
----------------------------------
SECTION 8.01. Discharge of Liability on Securities;
Defeasance .......................... 59
SECTION 8.02. Conditions to Defeasance ....................... 61
SECTION 8.03. Application of Trust Money ..................... 62
SECTION 8.04. Repayment to Company ........................... 62
SECTION 8.05. Indemnity for Government
Obligations ......................... 62
SECTION 8.06. Reinstatement .................................. 62
ARTICLE 9
Amendments
----------
SECTION 9.01. Without Consent of Holders ..................... 63
SECTION 9.02. With Consent of Holders ........................ 64
SECTION 9.03. Compliance with Trust Indenture ................ 65
SECTION 9.04. Revocation and Effect of Consents
and Waivers ......................... 65
SECTION 9.05. Notation on or Exchange of
Securities .......................... 66
SECTION 9.06. Trustee To Sign Amendments ..................... 66
4
SECTION 9.07. Payment for Consent ............................ 66
ARTILCE 10
Subordination
-------------
SECTION 10.01. Agreement to Subordinate ....................... 67
SECTION 10.02. Liquidation, Dissolution, Bankruptcy ........... 67
SECTION 10.03. Default on Senior Indebtedeness ................ 67
SECTION 10.04. Acceleration of Payment of Securites ........... 69
SECTION 10.05. When Distribution Must Be Paid Over ............ 69
SECTION 10.06. Subrogation .................................... 69
SECTION 10.07. Relative Rights ................................ 70
SECTION 10.08. Subordination May Not Be Impared By
Company ............................ 70
SECTION 10.09. Rights of Trustee and Paying
Agent .............................. 70
SECTION 10.10. Distribution or Notice to
Representative ..................... 71
SECTION 10.11. Article 10 Not to Prevent Events
of Defaults or Limit Right
To Accelerate ...................... 71
SECTION 10.12. Trust Moneys Not Subordinate ................... 71
SECTION 10.13. Trustee Entitled to Rely ....................... 72
SECTION 10.14. Trustee to Effectuate Subordination ............ 72
SECTION 10.15. Trustee Not Fiduciary for Holders
of Senior Debt ..................... 72
SECTION 10.16. Reliance by Holders of Senior Debt
on Subordination Provisions ........ 73
ARTICLE 11
Subsidiary Guaranties
---------------------
SECTION 11.01. Guaranties ..................................... 73
SECTION 11.02. Limitation on Liability ........................ 75
SECTION 11.03. Successors and Assigns ......................... 76
SECTION 11.04. No Waiver ...................................... 76
SECTION 11.05. Modification ................................... 76
SECTION 11.06. Release of Subsidiary Guarantor ................ 76
5
ARTICLE 12
Subordination of Subsidiary Guranties
-------------------------------------
SECTION 12.01. Agreement to Subordinate ....................... 77
SECTION 12.02. Liquidation, Dissolution, Bankruptcy ........... 77
SECTION 12.03. Default on Senior Debt of
Subsidiary Guarantor .............. 78
SECTION 12.04. Demand for Payment ............................. 78
SECTION 12.05. When Distribution Must Be Paid Over ............ 79
SECTION 12.06. Subrogation .................................... 79
SECTION 12.07. Relative Rights ................................ 79
SECTION 12.08. Subordination May Not Be Impaired
by Company ........................ 79
SECTION 12.09. Rights of Trustee and Paying Agent ............. 80
SECTION 12.10. Distribution or Notice to
Representation .................... 81
SECTION 12.11. Article 12 Not To Prevent Defaults
Under a Subsidiary Guarantee or
Limit Right to Demand Payment ..... 81
SECTION 12.12. Trustee Entitled to Rely ....................... 81
SECTION 12.13. Trustee To Effectuate Subordination ............ 82
SECTION 12.14. Trustee Not Fiduciary for Holders
of Senior Debt of Subsidiary
Guarantor ......................... 82
SECTION 12.15. Reliance by Holders of Senior Debt
on Subordination Provisions ........ 82
ARTICLE 13
Miscellaneous
-------------
SECTION 13.01. Trust Indenture Act Controls ................... 82
SECTION 13.02. Notices ........................................ 83
SECTION 13.03. Communication by Holders with Other
Holders ............................ 83
SECTION 13.04. Certificate and Opinion as to
Conditions Precedent ............... 83
SECTION 13.05. Statements Required in Certificate
or Opinion ......................... 84
SECTION 13.06. When Securities Disregarded .................... 84
SECTION 13.07. Rules by Trustee, Paying Agent and
Registrar .......................... 85
SECTION 13.08. Legal Holidays ................................. 85
SECTION 13.09. Governing Law .................................. 85
SECTION 13.10. No Recourse Against Others ..................... 85
6
SECTION 13.11. Successors ..................................... 85
SECTION 13.12. Multiple Originals ............................. 85
SECTION 13.13. Table of Contents; Headings .................... 85
Exhibit A - Form of Security
Rule 144A/Regulation S Appendix
INDENTURE dated as of May 15, 1997, among
RADIO ONE, INC., a Delaware corporation (the
"Company"), RADIO ONE LICENSES, INC., as guarantor
("License Sub"), and UNITED STATES TRUST COMPANY OF
NEW YORK, a New York trust company (the "Trustee").
Each party agrees as follows for the benefit of the other
party and for the equal and ratable benefit of the Holders of the Company's 12%
Senior Subordinated Notes Due 2004 (the "Initial Securities") and, if and when
issued pursuant to a registered exchange for Initial Securities, the Company's
12% Senior Subordinated Notes Due 2004 (the "Exchange Securities") and, if and
when issued pursuant to a private exchange for Initial Securities, the Company's
12% Senior Subordinated Notes Due 2004 (the "Private Exchange Securities",
together with the Exchange Securities and the Initial Securities, the
"Securities"):
ARTICLE 1
Definitions and Incorporation by Reference
SECTION 1.01. Definitions.
"Accreted Value" means, as of any date (the "Specified Date"),
the amount provided below for each $1,000 principal amount of the Securities:
(i) if the Specified Date occurs on one of the following dates
(each, a "Semi-Annual Accrual Date"), the Accreted Value will equal the
amount set forth below for such Semi-Annual Accrual Date:
Semi-Annual Accrual Date Accreted Value
------------------------ --------------
November 15, 1997 $894.69
May 15, 1998 913.37
November 15, 1998 933.17
May 15, 1999 954.17
November 15, 1999 976.42
May 15, 2000 1,000.00
(ii) if the Specified Date occurs before the first Semi-Annual Accrual
Date, the Accreted Value will equal the sum of (a) the original issue
price for each $1,000 principal amount of the Securities and (b) an
amount equal to the product of (1) the Accreted Value for the first
Semi-Annual Accrual Date less such original issue price, multiplied by
(2) a fraction, the numerator of which is the number of days from the
Issue Date to the Specified Date, using a 360-day year of 12 30-day
2
months, and the denominator of which is the number of days elapsed from
the Issue Date to the first Semi-Annual Accrual Date, using a 360-day
year of twelve 30-day months;
(iii) if the Specified Date occurs between two Semi-Annual Accrual
Dates, the Accreted Value will equal the sum of (a) the Accreted Value
for the Semi-Annual Accrual Date immediately preceding such Specified
Date and (b) an amount equal to the product of (1) the Accreted Value
for the immediately following Semi-Annual Accrual Date less the Accreted
Value for the immediately preceding Semi-Annual Accrual Date multiplied
by (2) a fraction, the numerator of which is the number of days from the
immediately preceding Semi-Annual Accrual Date to the Specified Date,
using a 360-day year of 12 30-day months, and the denominator of which
is 180; or
(iv) if the Specified Date occurs after the last Semi-Annual Accrual
Date, the Accreted Value will equal $1,000.
"Acquired Debt" means, with respect to any specified Person,
Indebtedness of any other Person existing at the time such other Person merges
with or into, or becomes a Subsidiary of, such specified Person, including
Indebtedness incurred in connection with, or in contemplation of, such other
Person merging with or into, or becoming a Subsidiary of, such specified Person.
"Affiliate" means, with respect to any specified Person, any
other Person directly or indirectly controlling or controlled by or under direct
or indirect common control with such specified Person. For purposes of this
definition, "control of" (including, with correlative meanings, the terms
"controlling," "controlled by" and "under common control with") any Person means
the possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of such Person, whether through the
ownership of voting securities, by agreement or otherwise; provided, however,
that beneficial ownership of 10% or more of the voting securities of a Person
shall be deemed to be control.
"Agent" means NationsBank of Texas, N.A., in its capacity as
agent for the lenders under the Credit Agreement.
"Asset Swap" means the execution of a definitive agreement,
subject only to FCC approval and other customary
3
closing conditions, that the Company in good faith believes will be satisfied,
for a substantially concurrent purchase and sale, or exchange, of Broadcast
Assets between the Company or any of its Wholly Owned Restricted Subsidiaries
and another Person or group of Affiliated Persons; provided that any amendment
to or waiver of any closing condition which individually or in the aggregate is
material to the Asset Swap shall be deemed to be a new Asset Swap.
"Broadcast Assets" means assets used or useful in the
ownership or operation of an AM or FM radio station.
"Broadcast License" means an authorization issued by the FCC
for the operation of an AM or FM radio station.
"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.
"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 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)
immediately above, (v) commercial paper having the highest rating obtainable for
Moody's Investors Service, Inc. or Standard & Poor's Ratings Services and in
each case maturing within nine months after the date of acquisition and (vi)
interests in money market mutual funds which invest solely in assets or
securities of the type described in clauses (i)-(v) immediately above.
"Change of Control" means the occurrence of any of the
following:
(i) the sale, lease or transfer, in one or a series of related
transactions, of all or substantially all of the Company's assets to any
Person or group (as
4
such term is used in Section 13(d)(3) of the Exchange Act) (other than
any or all of the Principal Shareholders or their Related Parties);
(ii) the adoption of a plan relating to the liquidation or dissolution
of the Company;
(iii) prior to the first Public Equity Offering of the Company, either
(x) the Principal Shareholders and their Related Parties cease to be the
beneficial owner of at least 35% of the voting power of the voting stock
of the Company or (y) any Person or group (as such term is used in
Section 13(d)(3) of the Exchange Act) other than the Warrantholders
acquires, directly or indirectly, 35% or more of the voting power of the
voting stock of the Company by way of merger, consolidation or
otherwise;
(iv) following the first Public Equity Offering of the Company, any
Person or group (as such term is used in Section 13(d)(3) of the
Exchange Act) (other than one or more of the Principal Shareholders and
their Related Parties) acquires, directly or indirectly, 35% or more of
the voting power of the voting stock of the Company by way of merger or
consolidation or otherwise; provided, however, that such acquisition
will not constitute a "Change of Control" (x) in the case of a Person or
group consisting of the Warrantholders, if and for so long as the
Principal Shareholders and Related Parties, individually or
collectively, own at least 30% of the voting power of the voting stock
of the Company and have the right or ability by voting power, contract
or otherwise to elect or designate for electing a majority of the board
of directors of the Company, or (y) in the case of any Person or group
not including any Warrantholder, unless or until such Person or group
owns, directly or indirectly, more of the voting power of the voting
stock of the Company than the Principal Shareholders and their Related
Parties; or
(v) the Continuing Directors cease for any reason (other than as a
result and during the continuance of a default under the Warrant
Agreement entitling the Warrantholders to appoint directors) to
constitute a majority of the directors of the Company then in office.
For purposes of this definition, any transfer of an Equity
Interest of an entity that was formed for the purpose of acquiring voting stock
of the Company shall be
5
deemed to be a transfer of such portion of such voting stock as corresponds to
the portion of the equity of such entity that has been so transferred.
"Code" means the Internal Revenue Code of 1986, as amended.
"Company" means the party named as such in this Indenture
until a successor replaces it and, thereafter, means the successor and, for
purposes of any provision contained herein and required by the TIA, each other
obligor on the indenture securities.
"Consolidated Cash Interest Expense" means, with respect to
any period, the amount of Consolidated Interest Expense for such period to the
extent it represents cash disbursements for such purpose by the Company and its
Restricted Subsidiaries during such period.
"Consolidated Interest Expense" means, without duplication,
with respect to any period, the sum of (a) the interest expense and all
capitalized interest of the Company and its Restricted Subsidiaries for such
period, on a consolidated basis, including, without limitation, (i) amortization
of debt discount, (ii) the net cost under interest rate contracts (including
amortization of debt discount), (iii) the interest portion of any deferred
payment obligation and (iv) accrued interest, plus (b) the interest component of
any Capital Lease Obligation paid or accrued or scheduled to be paid or accrued
by the Company during such period, determined on a consolidated basis in
accordance with GAAP; provided, however, that any dividends with respect to the
Senior Preferred Stock shall not be considered for purposes of this definition.
"Continuing Director" means any member of the Board of
Directors of the Company who (i) is a member of that Board of Directors on the
Issue Date or (ii) was nominated for election by either (a) one or more of the
Principal Shareholders (or a Related Party thereof) or (b) the Board of
Directors a majority of whom were directors at the Issue Date or whose election
or nomination for election was previously approved by one or more of the
Principal Shareholders or such directors.
"Credit Agreement" means the credit agreement to be entered
into between the Company and NationsBank of Texas, N.A. individually, as a
lender, and as agent for the lenders from time to time party thereto.
6
"Debt to EBITDA Ratio" means, with respect to any date, the
ratio of (a) the aggregate principal amount of all outstanding Indebtedness of
the Company (excluding Hedging Obligations, including interest rate swap
obligations, that are incurred in the ordinary course of business for the
purpose of fixing or hedging interest rate risk with respect to any floating
rate Indebtedness which Indebtedness is permitted by the terms of the Indenture
to be outstanding) and its Restricted Subsidiaries as of such date on a
consolidated basis, plus the aggregate liquidation preference or redemption
amount of all outstanding Disqualified Stock of the Company and its Restricted
Subsidiaries as of such date (excluding any such Disqualified Stock held by the
Company of a Wholly Owned Restricted Subsidiary), to (b) EBITDA of the Company
and its Restricted Subsidiaries on a consolidated basis for the four most recent
full fiscal quarters ending immediately prior to such date, determined on a pro
forma basis after giving effect to each acquisition or disposition of assets
made by the Company and its Restricted Subsidiaries from the beginning of such
four-quarter period through such date as if such acquisition or disposition had
occurred at the beginning of such four-quarter period.
"Default" means any event that is, or after the giving of
notice or passage of time or both would be, an Event of Default.
"Designated Senior Debt" means (i) the Senior Bank Debt and
(ii) any Senior Debt of the Company and the Subsidiary Guarantors permitted
under the Indenture, the principal amount (or accreted value in the case of
Indebtedness issued at a discount) of which is $10 million or more at the time
of designation by the Company (or otherwise available under a committed
facility) or a Subsidiary Guarantor, as the case may be, in a written instrument
delivered to the Trustee.
"Disposition" means, with respect to any Person, any merger,
consolidation or other business combination involving such Person (whether or
not such Person is the Surviving Person) or the sale, assignment, transfer,
lease, conveyance or other disposition of all or substantially all of such
Person's assets.
"Disqualified Stock" means any Equity Interest that, by its
terms (or by the terms of any security into which it is convertible or for which
it is exchangeable), or upon the happening of any event, matures or is
mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or
is redeemable at the option of the holder
7
thereof (other than upon a Change of Control of the Company in circumstances
where the holders of the Securities would have similar rights), in whole or in
part on or prior to one year after the stated maturity of the Securities. The
amount of Disqualified Stock shall be the greater of the liquidation preference
or mandatory or optional redemption price thereof.
"EBITDA" of a specified Person means, for any period, the
consolidated net income of such specified Person and its Restricted Subsidiaries
for such period:
(a) plus (without duplication and to the extent involved in computing
such consolidated net income) (i) interest expense, (ii) provision for
taxes on income or profits and (iii) depreciation and amortization and
other non-cash items (including amortization of goodwill and other
intangibles and barter expenses); and
(b) minus (without duplication and to the extent involved in computing
such consolidated net income) (i) any gains (or plus losses), together
with any related provision for taxes on such gains (or losses), realized
in connection with any sale of assets (including, without limitation,
dispositions pursuant to sale and leaseback transactions), (ii) any
non-cash or extraordinary gains (or plus losses), together with any
related provision for taxes on such extraordinary gains (or losses),
(iii) the amount of any cash payments related to non-cash charges that
were added back in determining EBITDA in any prior period and (iv)
barter revenues,
provided, however, that
(1) the net income of any other Person that is accounted for by the
equity method of accounting shall be included only to the extent of the
amount of dividends or distributions paid in cash to such specified
Person whose EBITDA is being determined or a Wholly Owned Restricted
Subsidiary thereof;
(2) the net income of any other Person that is a Restricted Subsidiary
(other than a Wholly Owned Restricted Subsidiary) or is an Unrestricted
Subsidiary shall be included only to the extent of the amount of
dividends or distributions paid in cash to such specified Person whose
EBITDA is being determined or a Wholly Owned Restricted Subsidiary
thereof; provided that for purposes of Section 4.05 only, any such
8
dividend or distribution shall be excluded to the extent it has already
been included under clause (a)(3)(D) thereof;
(3) the net income (loss) of any other Person acquired after the Issue
Date in a pooling of interests transaction for any period prior to the
date of such acquisition shall be excluded (to the extent otherwise
included); and
(4) gains or losses from sales of assets other than sales of assets
acquired and held for resale in the ordinary course of business shall be
excluded (to the extent otherwise included).
All of the foregoing will determined in accordance with GAAP.
"Equity Interests" of any Person means any and all shares,
interests, rights to purchase, warrants, options, participations or other
equivalents of or interests in (however designated) equity of such Person,
including any Preferred Stock, but excluding any debt securities convertible
into such equity, and including, 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.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Existing Indebtedness" means any outstanding Indebtedness of
the Company and its Restricted Subsidiaries as of the Issue Date, including the
Securities.
"Fair Market Value" means, with respect to any asset or
property, the sale value that would be obtained in an arm's-length transaction
between an informed and willing seller under no compulsion to sell and an
informed and willing buyer under no compulsion to buy. All determinations in the
covenants of Fair Market Value shall be made by the Board of Directors of the
Company and shall be evidenced by a resolution of such Board set forth in an
Officers' Certificate delivered to the Trustee, upon which the Trustee may
conclusively rely.
"FCC" means the Federal Communications Commission and any
successor agency.
9
"GAAP" means generally accepted accounting principles in the
United States of America as in effect as of the Issue Date, including those set
forth in (i) the opinions and pronouncements of the Accounting Principles Board
of the American Institute of Certified Public Accountants, (ii) statements and
pronouncements of the Financial Accounting Standards Board, (iii) such other
statements by such other entity as approved by a significant segment of the
accounting profession and (iv) the rules and regulations of the SEC governing
the inclusion of financial statements (including pro forma financial statements)
in periodic reports required to be filed pursuant to Section 13 of the Exchange
Act, including opinions and pronouncements in staff accounting bulletins and
similar written statements from the accounting staff of the SEC.
"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 Persons against fluctuations
in interest rates.
"Holder" or "Securityholder" means the Person in whose name a
Security is registered on the Registrar's books.
"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).
"Incur" means issue, assume, Guarantee, incur or otherwise
become liable for; provided, however, that any Indebtedness or Equity Interests
of a Person existing at the time such Person becomes a Subsidiary (whether by
merger, consolidation, acquisition or otherwise) shall be deemed to be incurred
by such Subsidiary at the time it becomes a Subsidiary. The term "Incurrence"
when used as a noun shall have a correlative meaning. The accretion of principal
of a non-interest bearing or other discount security shall not be deemed the
Incurrence of Indebtedness.
"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
10
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 of the type referred to
in clause (i), (ii) or (iii) immediately above which are 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; provided, however,
in no event shall Senior Preferred Stock (including any and all accrued
dividends thereon) be considered "Indebtedness."
"Indenture" means this Indenture as amended or supplemented
from time to time.
"Investment" in any Person means any direct or indirect
advance, loan (other than advances to customers in the ordinary course of
business that are recorded as accounts receivable on the balance sheet of the
lender) or other extension of credit (including by way of Guarantee or similar
arrangement) or capital contribution to (by means of any transfer of cash or
other property to others or any payment for property or services for the account
or use of others), or any purchase or acquisition of Capital Stock, Indebtedness
or other similar instruments issued by such Person. For purposes of the
definition of "Unrestricted Subsidiary", the definition of "Restricted Payment"
and Section 4.05, (i) "Investment" shall include the portion (proportionate to
the Company's equity interest in such Subsidiary) of the fair market value of
the net assets of any Subsidiary of the Company at the time that such Subsidiary
is designated an Unrestricted Subsidiary; provided, however, that upon a
redesignation of such Subsidiary as a Restricted Subsidiary, the Company shall
be deemed to continue to have a permanent "Investment" in an Unrestricted
Subsidiary equal to an amount (if positive) equal to (x) the Company's
"Investment" in such Subsidiary at the time of such redesignation less (y) the
portion (proportionate to the Company's equity interest in such Subsidiary) of
the fair market value of the net assets of such Subsidiary at the time of such
redesignation; and (ii) any property transferred to or from an Unrestricted
Subsidiary shall be valued at its fair market value at the
11
time of such transfer, in each case as determined in good faith by the Board of
Directors.
"Issue Date" means the date on which the Securities are
originally issued.
"License Subsidiary" means Radio One Licenses, Inc., a
Delaware corporation and a wholly owned subsidiary of the Company.
"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).
"Net Cash Proceeds", with respect to any issuance or sale of
Equity Interests, means the cash proceeds of such issuance or sale net of
attorneys' fees, accountants' fees, underwriters' or placement agents' fees,
discounts or commissions and brokerage, consultant and other fees actually
incurred in connection with such issuance or sale and net of taxes paid or
payable as a result thereof.
"Net Proceeds" means, with respect to any Asset Sale by any
Person, the aggregate cash proceeds received by such Person in respect of such
Asset Sale, which amount is equal to the excess, if any, of:
(i) the cash received by such Person (including any cash payments
received by way of deferred payment pursuant to, or monetization of, a
note or installment receivable or otherwise, but only as and when
received) in connection with such Asset Sale, over
(ii) the sum of
(a) the amount of any Indebtedness including any premium
thereon and fees and expenses associated therewith which is
required to be repaid by such Person in connection with such
Asset Sale, plus
(b) the out-of-pocket expenses (1) incurred by such Person in
connection with such Asset Sale, and (2) if such Person is a
Restricted Subsidiary,
12
incurred in connection with the transfer of such amount to the
parent company or entity of such Person, plus
(c) provision for taxes, including income taxes, attributable
to the Asset Sale or attributable to required prepayments or
repayments of Indebtedness with the proceeds of such Asset
Sale, plus
(d) a reasonable reserve for the after-tax costs of any
indemnification payments (fixed or contingent) attributable to
the seller's indemnities to the purchaser in respect of such
Asset Sale undertaken by the Company or any of its Restricted
Subsidiaries in connection with such Asset Sale.
"Obligations" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any Indebtedness.
"Offer to Purchase" means a written offer (an "Offer") sent by
the Company to each Holder at his address appearing in the Note Register on the
date of the Offer offering to purchase in cash up to the principal amount of the
Securities specified in such Offer at a purchase price equal to 101% of the
Accreted Value of the Securities plus accrued and unpaid interest, if any.
Unless otherwise required by applicable law, the Offer shall specify an
expiration date ("Expiration Date") of the Offer to Purchase which shall be,
subject to any contrary requirements of applicable law, not less than 30 days
nor more than 60 days after the date of such Offer and a settlement date
("Purchase Date") for purchase of Securities within five Business Days after the
Expiration Date. The Company shall notify the Trustee at least 15 Business Days
(or such shorter period as is acceptable to the Trustee) prior to the mailing of
the Offer of the Company's obligation to make an Offer to Purchase, and the
Offer shall be sent by first class mail by the Company or, at the Company's
request and expense, by the Trustee in the name and at the expense of the
Company. The Offer shall contain information concerning the business of the
Company and its Subsidiaries which the Company in good faith believes will
enable such Holders to make an informed decision with respect to the Offer to
Purchase (which at a minimum will include (i) the most recent annual and
quarterly financial statements and "Management's Discussion and Analysis of
Financial Condition and Results of Operations" contained in the documents
13
required to be filed with the Trustee pursuant to Section 4.02 (which
requirements may be satisfied by delivery of such documents together with the
Offer), (ii) a description of material developments in the Company's business
subsequent to the date of the latest of such financial statements referred to in
clause (i) (including a description of the events requiring the Company to make
the Offer to Purchase), (iii) if applicable, appropriate pro forma financial
information concerning the Offer to Purchase and the events requiring the
Company to make the Offer to Purchase and (iv) any other information required by
applicable law to be included therein. The Offer shall contain all instructions
and materials necessary to enable such Holders to tender Securities pursuant to
the Offer to Purchase. The Offer shall also state:
(1) the Section of the Indenture pursuant to which the Offer to
Purchase is being made;
(2) the Expiration Date and the Purchase Date;
(3) the aggregate Accreted Value of the outstanding Securities offered
to be purchased by the Company (the "Purchase Amount") and the aggregate
principal amount of the outstanding Securities offered to be purchased
by the Company pursuant to the Offer to Purchase (including, if less
than 100% of the principal amount, the manner by which such has been
determined pursuant to the Section hereof requiring the Offer to
Purchase);
(4) the purchase price to be paid by the Company (the "Purchase Price")
for each $1,000 aggregate principal amount of Securities accepted for
payment (as specified pursuant to the Indenture);
(5) that the Holder may tender all or any portion of the Securities
registered in the name of such Holder and that any portion of a Note
tendered must be tendered in an integral multiple of $1,000 principal
amount;
(6) the place or places where Securities are to be surrendered for
tender pursuant to the Offer to Purchase;
(7) that interest on any Security not tendered or tendered but not
purchased by the Company pursuant to the Offer to Purchase will continue
to accrue;
14
(8) that on the Purchase Date the Purchase Price will become due and
payable upon each Security being accepted for payment pursuant to the
Offer to Purchase and that interest thereon shall cease to accrue on and
after the Purchase Date;
(9) that each Holder electing to tender a Note pursuant to the Offer to
Purchase will be required to surrender such Security at the place or
places specified in the Offer prior to the close of business on the
Expiration Date (such Security being, if the Company or the Trustee so
requires, duly endorsed by, or accompanied by a written instrument of
transfer in form satisfactory to the Company and the Trustee duly
executed by, the Holder thereof or his attorney duly authorized in
writing);
(10) that Holders will be entitled to withdraw all or any portion of
Securities tendered if the Company (or the Paying Agent) receives, not
later than the close of business on the Expiration Date, a telegram,
telex, facsimile transmission or letter setting forth the name of the
Holder, the principal amount of the Security that the Holder tendered,
the certificate number of the Security that the Holder tendered and a
statement that such Holder is withdrawing all or a portion of his
tender;
(11) that (a) if Securities in an aggregate Accreted Value less than or
equal to the Purchase Amount are duly tendered and not withdrawn
pursuant to the Offer to Purchase, the Company shall purchase all such
Securities and (b) if Securities in an aggregate Accreted Value in
excess of the Purchase Amount are tendered and not withdrawn pursuant to
the Offer to Purchase, the Company shall purchase Securities having an
aggregate Accreted Value equal to the Purchase Amount on a pro rata
basis (with such adjustments as may be deemed appropriate so that only
Securities in denominations of $1,000 principal amount or integral
multiples thereof shall be purchased); and
(12) that in the case of any Holder whose Security is purchased only in
part, the Company 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 an aggregate principal amount equal to and in exchange
for the unpurchased portion of the Security so tendered.
15
Any Offer to Purchase will be governed by and effected in
accordance with the Offer for such Offer to Purchase.
"Officer" means the Chairman of the Board, the President, any
Vice President, the Treasurer or the Secretary of the Company.
"Officers' Certificate" means a certificate signed by two
Officers, one of whom shall be the principal executive financial or accounting
officer of the Company.
"Opinion of Counsel" means a written opinion from legal
counsel who is acceptable to the Trustee. The counsel may be an employee of or
counsel to the Company or the Trustee.
"Permitted Investment" means:
(i) any Investment in the Company or any Wholly Owned Restricted
Subsidiary:
(ii) any Investment in Cash Equivalents;
(iii) any Investment in a Person if, as a result of such Investment,
(a) such Person becomes a Wholly Owned Restricted Subsidiary of the
Company, or (b) such Person either (1) is merged, consolidated or
amalgamated with or into the Company or one of its Wholly Owned
Restricted Subsidiaries and the Company or such Wholly Owned Restricted
Subsidiary is the Surviving Person or the Surviving Person becomes a
Wholly Owned Restricted Subsidiary, or (2) transfers or conveys all or
substantially all of its assets to, or is liquidated into, the Company
or one of its Wholly Owned Restricted Subsidiaries;
(iv) any Investment in accounts and notes receivable acquired in the
ordinary course of business;
(v) notes from employees issued to the Company representing payment of
the exercise price of options to purchase capital stock of the Company;
and
(vi) Investments in Unrestricted Subsidiaries represented by Equity
Interests (other than Disqualified Stock) or assets and property
acquired in exchange for Equity Interests (other than Disqualified
Stock) of the Company.
16
Any Investment in an Unrestricted Subsidiary shall not be a
Permitted Investment unless permitted pursuant to any of clauses (i) through
(vi) above.
"Person" means any individual, corporation, partnership,
limited liability company, joint venture, association, joint-stock company,
trust, unincorporated organization, government or any agency or political
subdivision thereof or any other entity.
"Preferred Stock", as applied to the Equity Interests of any
Person, means Equity Interests of any class or classes (however designated) that
is preferred as to the payment of dividends or distributions, or as to the
distribution of assets upon any voluntary or involuntary liquidation or
dissolution of such Person, over Equity Interests of any other class of such
Person.
"principal" of a Security means the principal of the Security
plus the premium, if any, payable on the Security which is due or overdue or is
to become due at the relevant time.
"Principal Shareholders" means Catherine L. Hughes and Alfred
C. Liggins, III and their respective estates, executors and heirs.
"Public Equity Offering" means an underwritten primary public
offering of common stock of the Company pursuant to an effective registration
statement under the Securities Act.
"Purchase Money Indebtedness" means Indebtedness of the
Company and its Restricted Subsidiaries incurred in connection with the purchase
of property or assets for the business of the Company and its Restricted
Subsidiaries.
"Purchase Money Lien" means any Lien securing solely Purchase
Money Indebtedness.
"Refinancing Indebtedness" means (i) Indebtedness of the
Company or any Restricted Subsidiary incurred or given in exchange for, or the
proceeds of which are used to extend, refinance, renew, replace, substitute,
defease or refund, any other Indebtedness or Disqualified Stock incurred by the
Company in accordance with the terms of this Indenture, and (ii) Indebtedness of
any Restricted Subsidiary incurred or given in exchange for, or the proceeds of
which are used to extend, refinance, renew, replace, substitute, defease or
refund, any other Indebtedness or Disqualified Stock of the Company or any
17
Restricted Subsidiary in accordance with the terms of this Indenture.
"Registration Rights Agreement" means the Registration Rights
Agreement dated May 14, 1997, among the Company, License Subsidiary, Credit
Suisse First Boston and NationsBank Capital Markets, Inc.
"Related Party" with respect to any Principal Shareholder
means (i) any 80% (or more) owned Subsidiary or Immediate Family Member (in the
case of an individual) of such Principal Shareholder or (ii) any Person, the
beneficiaries, stockholders, partners, owners or Persons beneficially holding an
80% or more controlling interest of which consist of such Principal Shareholder
or an Immediate Family Member, or (iii) any Person employed by the Company in a
management capacity as of the Issue Date.
"Representative" means any Vice President or other more senior
officer of the Agent in respect of the Senior Bank Debt, or any trustee, agent
or representative (if any) for any other issue of Senior Indebtedness of the
Company.
"Restricted Payment" with respect to any Person means (i) the
declaration or payment of any dividends or any other distributions of any sort
in respect of its Equity Interests (including any payment in connection with any
merger or consolidation involving such Person) or similar payment to the direct
or indirect holders of its Equity Interests (other than distributions payable
solely in its Equity Interests (other than Disqualified Stock) and dividends or
distributions payable solely to the Company or a Restricted Subsidiary, and
other than pro rata dividends or other distributions made by a Subsidiary that
is not a Wholly Owned Restricted Subsidiary to minority stockholders (or owners
of an equivalent interest in the case of a Subsidiary that is an entity other
than a corporation)), (ii) the purchase, redemption or other acquisition or
retirement for value of any Equity Interests of the Company held by any Person
or of any Equity Interests of a Restricted Subsidiary held by any Affiliate of
the Company (other than a Restricted Subsidiary), including the exercise of any
option to exchange any Equity Interests (other than its Equity Interests of the
Company that is not Disqualified Stock), (iii) the purchase, repurchase,
redemption, defeasance or other acquisition or retirement for value, prior to
scheduled maturity, scheduled repayment or scheduled sinking fund payment of any
Subordinated Debt (other than the purchase, repurchase or other acquisition of
Subordinated Debt purchased in anticipation of satisfying a sinking fund
obligation, principal installment or final
18
maturity, in each case due within one year of the date acquisition) or (iv) the
making of any Investment in any Person (other than a Permitted Investment).
"Restricted Subsidiary" means any Subsidiary of the Company
that is not an Unrestricted Subsidiary.
"SEC" means the Securities and Exchange Commission.
"Secured Debt" means any Indebtedness of the Company secured
by a Lien.
"Securities" means the Securities issued under this Indenture.
"Senior Bank Debt" means the Indebtedness Incurred pursuant to
the Credit Agreement and any other agreement that replaces the Credit Agreement
or otherwise refunds or refinances any or all of the indebtedness thereunder.
"Senior Debt":
(i) with respect to the Company, 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 Indebtedness permitted to be
incurred by the Company under the terms of this Indenture, including the
Credit Agreement, (including but not limited to reasonable fees and
expenses of counsel and all other charges, fees and expenses incurred in
connection with such Indebtedness), whether presently outstanding or
hereafter created, incurred or assumed, unless the instrument creating
or evidencing such Indebtedness or pursuant to which such Indebtedness
is outstanding expressly provides that such Indebtedness is on a parity
with or subordinated in right of payment to the Securities; and
(ii) with respect to any Subsidiary Guarantor, the principal of and
interest (including postpetition interest whether or not allowed as a
claim) on, and all other amounts owing in respect of Indebtedness
permitted to be incurred by such Subsidiary Guarantor under the terms of
this Indenture, including the Credit Agreement, (including but not
limited to reasonable fees and expenses of counsel and all other
charges, fees and expenses incurred in connection with such
Indebtedness), whether presently outstanding or hereafter created,
incurred or assumed, unless the instrument created or evidencing such
Indebtedness or
19
pursuant to which such Indebtedness is outstanding expressly provides
that such Indebtedness is on a parity with or subordinated in right of
payment to the Subsidiary Guarantee of such Subsidiary Guarantor.
Notwithstanding the foregoing, Senior Debt shall not include
(A) any Indebtedness consisting of Disqualified Stock, (B) any liability for
federal, state, local, or other taxes, (C) any Indebtedness among or between the
Company, any Restricted Subsidiary or any of their Affiliates, (D) 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, or (E) any Indebtedness that is
incurred in violation of this Indenture.
"Senior Preferred Stock" means the Company's Series A 15%
Cumulative Redeemable Preferred Stock issued on the Issue Date.
"Senior Subordinated Indebtedness" means (i) with respect to
the Company, the Securities and any other Indebtedness of the Company that
specifically provides that such Indebtedness is to rank pari passu with the
Securities in right of payment and is not subordinated by its terms in right of
payment to any Indebtedness or other obligation of the Company which is not
Senior Debt of the Company and (ii) with respect to a Subsidiary Guarantor, its
Guarantee of the Securities and any other Indebtedness of such Subsidiary
Guarantor that specifically provides that such Indebtedness is to rank pari
passu with such Guarantee in right of payment and is not subordinated by its
terms in right of payment to any Indebtedness or other obligations of such
Subsidiary Guarantor which is not Senior Debt of such Subsidiary Guarantor.
"Significant Subsidiary" means any Restricted Subsidiary that
would be a "Significant Subsidiary" of the Company within the meaning of Rule
1-02 under Regulation S-X promulgated by the SEC.
"Subordinated Debt" means any Indebtedness of the Company or a
Subsidiary Guarantor if the instrument creating or evidencing such Indebtedness
or pursuant to which such Indebtedness is outstanding expressly provides that
such Indebtedness is (i) if incurred by the Company, subordinated in right of
payment to the Securities, or (ii) if incurred by a Subsidiary Guarantor,
subordinated in right of payment to the Subsidiary Guarantee of such Subsidiary
Guarantor.
20
"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 all Voting 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).
"Subsidiary Guarantee" means the guarantee by a Subsidiary
Guarantor of the Company's obligations with respect to the Securities contained
in Article 11 hereof.
"Subsidiary Guarantors" means License Subsidiary and each
other Subsidiary of the Company that, pursuant to the terms hereof, executes a
supplemental indenture in a form reasonably satisfactory to the Trustee and
thereby becomes bound under Article 11 hereof.
"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.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. ss.ss.
77aaa-77bbbb) as in effect on the date of this Indenture, except as otherwise
provided in Section 9.03.
"Trustee" means the party named as such in this Indenture
until a successor replaces it and, thereafter, means the successor.
"Trust Officer" means the Chairman of the Board, the President
or any other officer or assistant officer of the Trustee assigned by the Trustee
to administer its corporate trust matters and with respect to the Senior Bank
Debt as notified to the Agent in writing from time to time by the Trustee.
"Uniform Commercial Code" means the New York Uniform
Commercial Code as in effect from time to time.
"Unrestricted Subsidiary" means (i) any Subsidiary of the
Company that at the time of determination shall be an Unrestricted Subsidiary
(as designated by the Board of Directors of the Company, as provided below) and
(ii) any direct or indirect Subsidiary of an Unrestricted Subsidiary. The Board
of Directors of the Company may designate any Subsidiary of the Company
(including any newly acquired or
21
newly formed Subsidiary) to be an Unrestricted Subsidiary if all of the
following conditions apply: (a) neither the Company nor any of its Restricted
Subsidiaries provides credit support for any Indebtedness of such Subsidiary
(including any undertaking, agreement or instrument evidencing such
Indebtedness) other than capital contributions or other Restricted Payments
permitted under Section 4.05, (b) such Subsidiary is not liable, directly or
indirectly, with respect to any Indebtedness other than Unrestricted Subsidiary
Indebtedness, (c) such Unrestricted Subsidiary is not a party to any agreement,
contract, arrangement or understanding at such time with the Company or any
Restricted Subsidiary of the Company except for transactions with affiliates
permitted by the terms of this Indenture unless the terms of any such agreement,
contract, arrangement or understanding are no less favorable to the Company or
such Restricted Subsidiary than those that might be obtained at the time from
Persons who are not Affiliates of the Company (the "Third Party Value") or, in
the event such condition is not satisfied, an amount equal to the value of the
portion of such agreement, contract, arrangement or understanding to such
Subsidiary in excess of the Third Party Value shall be deemed a Restricted
Payment, and (d) such Unrestricted Subsidiary does not own any Equity Interest
in or Indebtedness of any Subsidiary of the Company that has not theretofore
been and is not simultaneously being designated an Unrestricted Subsidiary. Any
such designation by the Board of Directors of the Company shall be evidenced to
the Trustee by filing with the Trustee of a board resolution giving effect to
such designation and an Officers' Certificate certifying that such designation
complies with the foregoing conditions. The Board of Directors of the Company
may designate any Unrestricted Subsidiary as a Restricted Subsidiary; provided,
however, that (i) immediately after giving effect to such designation, the
Company could incur $1.00 of additional Indebtedness pursuant to Section 4.03(a)
and (ii) all Indebtedness of such Unrestricted Subsidiary shall be deemed to be
incurred on the date such Subsidiary is designated a Restricted Subsidiary.
"Unrestricted Subsidiary Indebtedness" of any Unrestricted
Subsidiary means Indebtedness of such Unrestricted Subsidiary (other than a
guarantee of Indebtedness of the Company or any Restricted Subsidiary which is
non-recourse to the Company and its Restricted Subsidiaries) (i) as to which
neither the Company nor any Restricted Subsidiary is directly or indirectly
liable (by virtue of the Company or any such Restricted Subsidiary being the
primary obligor on, guarantor of, or otherwise liable in any respect to, such
Indebtedness) and (ii) which,
22
upon the occurrence of a default with respect thereto, does not result in, or
permit any holder of any Indebtedness of the Company or any Restricted
Subsidiary to declare, a default on such Indebtedness of the Company or any
Restricted Subsidiary or cause the payment thereof to be accelerated or payable
prior to its stated maturity.
"U.S. Government Obligations" means direct obligations (or
certificates representing an ownership interest in such obligations) of the
United States of America (including any agency or instrumentality thereof) for
the payment of which the full faith and credit of the United States of America
is pledged and which are not callable or redeemable at the issuer's option.
"Voting Equity Interest" of a Person means all classes of
Equity Interest or other interests (including partnership interests) of such
Person then outstanding and normally entitled (without regard to the occurrence
of any contingency) to vote in the election of directors, managers or trustees
thereof.
"Warrant Agreement" means the Warrantholders' Agreement dated
as of June 6, 1995, as amended from time to time, among the Company, the
Principal Shareholders, Jerry Moore and the Warrantholders.
"Warrantholders" means the holders of warrants issued pursuant
to the Warrant Agreement and, in the case of any such holders, shares of Common
Stock issued in exchange therefor.
"Weighted Average Life to Maturity" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing (i) the sum
of the products obtained by multiplying (a) the amount of each then remaining
installment, sinking fund, serial maturity or other required scheduled payment
of principal, including payment at final maturity, in respect thereof, by (b)
the number of years (calculated to the nearest one-twelfth) that will elapse
between such date and the making of such payment, by (ii) the then outstanding
aggregate principal amount of such Indebtedness.
"Wholly Owned Restricted Subsidiary" means any Restricted
Subsidiary all of the outstanding Voting Equity Interests (other than directors'
qualifying shares) of which are owned, directly or indirectly, by the Company or
a Surviving Person of any Disposition involving the Company, as the case may be.
23
SECTION 1.02. Other Definitions.
Defined in
Term Section
---- -------
"Affiliate Transaction"........................ 4.08
"Asset Sale"....................................4.07
"Bankruptcy Law"............................... 6.01
"Blockage Notice"............................. 10.03
"covenant defeasance option".................8.01(b)
"Custodian".................................... 6.01
"Event of Default"............................. 6.01
"legal defeasance option"....................8.01(b)
"Legal Holiday"............................... 13.08
"pay the Securities".......................... 10.03
"Paying Agent"................................. 2.03
"Payment Blockage Period"..................... 10.03
"Registrar".................................... 2.03
"Successor Company"............................ 5.01
SECTION 1.03. Incorporation by Reference of Trust Indenture
Act. This Indenture is subject to the mandatory provisions of the TIA which are
incorporated by reference in and made a part of this Indenture. The following
TIA terms have the following meanings:
"Commission" means the SEC;
"indenture securities" means the Securities;
"indenture security holder" means a Securityholder;
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means the
Trustee; and
"obligor" on the indenture securities means the Company and
any other obligor on the indenture securities.
All other TIA terms used in this Indenture that are defined by
the TIA, defined by TIA reference to another statute or defined by SEC rule have
the meanings assigned to them by such definitions.
24
SECTION 1.04. Rules of Construction. Unless the context
otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning
assigned to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) "including" means including without limitation;
(5) words in the singular include the plural and words in the
plural include the singular;
(6) unsecured Indebtedness shall not be deemed to be
subordinate or junior to Secured Debt merely by virtue of its nature as
unsecured Indebtedness;
(7) the principal amount of any noninterest bearing or other
discount security at any date shall be the principal amount thereof
that would be shown on a balance sheet of the issuer dated such date
prepared in accordance with GAAP;
(8) the principal amount of any Preferred Stock shall be (i)
the maximum liquidation value of such Preferred Stock or (ii) the
maximum mandatory redemption or mandatory repurchase price with respect
to such Preferred Stock, whichever is greater; and
(9) all references to the date the Securities were originally
issued shall refer to the date the Initial Securities were originally
issued.
ARTICLE 2
The Securities
--------------
SECTION 2.01. Form and Dating. Provisions relating to the
Initial Securities, the Private Exchange Securities and the Exchange Securities
are set forth in the Rule 144A/Regulation S Appendix attached hereto (the
"Appendix") which is hereby incorporated in and expressly made part of this
Indenture. The Initial Securities and the Trustee's certificate of
authentication shall be substantially in the form of Exhibit 1 to the Appendix
which is hereby incorporated in and expressly made a part of this Indenture. The
Exchange Securities, the Private Exchange
25
Securities and the Trustee's certificate of authentication shall be
substantially in the form of Exhibit A, which is hereby incorporated in and
expressly made a part of this Indenture. The Securities may have notations,
legends or endorsements required by law, stock exchange rule, agreements to
which the Company is subject, if any, or usage (provided that any such notation,
legend or endorsement is in a form acceptable to the Company). Each Security
shall be dated the date of its authentication. The terms of the Securities set
forth in the Appendix and Exhibit A are part of the terms of this Indenture.
SECTION 2.02. Execution and Authentication. Two Officers shall
sign the Securities for the Company by manual or facsimile signature. The
Company's seal shall be impressed, affixed, imprinted or reproduced on the
Securities and may be in facsimile form.
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 an authorized signatory of
the Trustee manually signs the certificate of authentication on the Security.
The signature shall be conclusive evidence that the Security has been
authenticated under this Indenture.
The Trustee shall authenticate and deliver Securities for
original issue in an aggregate principal amount of $85,478,000, upon a written
order of the Company signed by two Officers or by an Officer and either an
Assistant Treasurer or an Assistant Secretary of the Company. Such order shall
specify the amount of the Securities to be authenticated and the date on which
the original issue of Securities is to be authenticated.
The Trustee may appoint an authenticating agent reasonably
acceptable to the Company to authenticate the Securities. Unless limited by the
terms 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 any Registrar, Paying Agent or agent
for service of notices and demands.
SECTION 2.03. Registrar and Paying Agent. The Company shall
maintain an office or agency where Securities may be presented for registration
of transfer or for
26
exchange (the "Registrar") and an office or agency where Securities may be
presented for payment (the "Paying Agent"). The Registrar shall keep a register
of the Securities and of their transfer and exchange. The Company may have one
or more co-registrars and one or more additional paying agents. The term "Paying
Agent" includes any additional paying agent.
The Company shall enter into an appropriate agency agreement
with any Registrar, Paying Agent or co-registrar not a party to this Indenture,
which shall incorporate the terms of the TIA. The agreement shall implement the
provisions of this Indenture that relate to such agent. The Company shall notify
the Trustee of the name and address of any such agent. If the Company fails to
maintain a Registrar or Paying Agent, the Trustee shall act as such and shall be
entitled to appropriate compensation therefor pursuant to Section 7.07. The
Company or any of its domestically incorporated Wholly Owned Subsidiaries may
act as Paying Agent, Registrar, co-registrar or transfer agent.
The Company initially appoints the Trustee as Registrar and
Paying Agent in connection with the Securities.
SECTION 2.04. Paying Agent To Hold Money in Trust. Prior to
each due date of the principal and interest on any Security, the Company shall
deposit with the Paying Agent a sum sufficient to pay such principal and
interest when so becoming due. The Company shall require each Paying Agent
(other than the Trustee) to agree in writing that 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 Company in making any such
payment. If the Company or a Subsidiary acts as Paying Agent, it shall segregate
the money held by it as Paying Agent and hold it as a separate trust fund. The
Company at any time may require a Paying Agent to pay all money held by it to
the Trustee and to account for any funds disbursed by the Paying Agent. Upon
complying with this Section, the Paying Agent shall have no further liability
for the money delivered to the Trustee.
Any money deposited with any Paying Agent, or then held by the
Company or a Subsidiary in trust for the payment of principal or interest on any
Security and remaining unclaimed for two years after such principal and interest
has become due and payable shall be paid to the Company at its request, or, if
then held by the Company or a Subsidiary, shall be discharged from such trust;
and the
27
Securityholders shall thereafter, as unsecured general creditors, look only to
the Company for payment thereof, and all liability of the Paying Agent with
respect to such money, and all liability of the Company or such Subsidiary as
trustee thereof, shall thereupon cease.
SECTION 2.05. Securityholder Lists. The Trustee shall preserve
in as current a form as is reasonably practicable the most recent list available
to it of the names and addresses of Securityholders. If the Trustee is not the
Registrar, the Company shall furnish to the Trustee, in writing at least five
Business Days before each interest payment date and at such other times as the
Trustee may request in writing, a list in such form and as of such date as the
Trustee may reasonably require of the names and addresses of Securityholders.
SECTION 2.06. Transfer and Exchange. The Securities shall be
issued in registered form and shall be transferable only upon the surrender of a
Security for registration of transfer. When a Security is presented to the
Registrar or a co-registrar with a request to register a transfer, the Registrar
shall register the transfer as requested if the requirements of Section 8-401(1)
of the Uniform Commercial Code are met. When Securities are presented to the
Registrar or a co-registrar with a request to exchange them for an equal
principal amount of Securities of other denominations, the Registrar shall make
the exchange as requested if the same requirements are met. To permit
registration of transfers and exchanges, the Company shall execute and the
Trustee shall authenticate Securities at the Registrar's or co-registrar's
request. The Company may require payment of a sum sufficient to pay all taxes,
assessments or other governmental charges in connection with any transfer or
exchange pursuant to this Section. The Company shall not be required to make and
the Registrar need not register transfers or exchanges of Securities selected
for redemption (except, in the case of Securities to be redeemed in part, the
portion thereof not to be redeemed) or any Securities for a period of 15 days
before a selection of Securities to be redeemed or 15 days before an interest
payment date.
Prior to the due presentation for registration of transfer of
any Security, the Company, the Trustee, the Paying Agent, the Registrar or any
co-registrar may deem and treat the person in whose name a 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 Company,
the
28
Trustee, the Paying Agent, the Registrar or any co-registrar shall be affected
by notice to the contrary.
All Securities issued upon any transfer or exchange pursuant
to the terms of this Indenture will evidence the same debt and will be entitled
to the same benefits under this Indenture as the Securities surrendered upon
such transfer or exchange.
SECTION 2.07. Replacement Securities. If a mutilated Security
is surrendered to the Registrar or if the Holder of a Security claims that the
Security has been lost, destroyed or wrongfully taken, the Company shall issue
and the Trustee shall authenticate a replacement Security if the requirements of
Section 8-405 of the Uniform Commercial Code are met and the Holder satisfies
any other reasonable requirements of the Trustee. If required by the Trustee or
the Company, such Holder shall furnish an indemnity bond sufficient in the
judgment of the Company and the Trustee to protect the Company, the Trustee, the
Paying Agent, the Registrar and any co-registrar from any loss which any of them
may suffer if a Security is replaced. The Company and the Trustee may charge the
Holder for their expenses in replacing a Security. In the event any such
mutilated, lost, destroyed or wrongfully taken Security has become or is about
to become due and payable, the Company in its discretion may pay such Security
instead of issuing a new Security in replacement thereof.
Every replacement Security is an additional obligation of the
Company.
SECTION 2.08. Outstanding Securities. Securities outstanding
at any time are all Securities authenticated by the Trustee except for those
canceled by it, those delivered to it for cancelation and those described in
this Section as not outstanding. A Security does not cease to be outstanding
because the Company or an Affiliate of the Company holds the Security.
If a Security is replaced pursuant to Section 2.07, it ceases
to be outstanding unless the Trustee and the Company receive proof satisfactory
to them that the replaced Security is held by a bona fide purchaser; provided,
however, that the rights of the Company under Section 8-405 of the Uniform
Commercial Code shall not be diminished in any way.
If the Paying Agent segregates and holds in trust, in
accordance with this Indenture, on a redemption date or maturity date money
sufficient to pay all principal and
29
interest payable on that date with respect to the Securities (or portions
thereof) to be redeemed or maturing, as the case may be, and the Paying Agent is
not prohibited from paying such money to the Securityholders on that date
pursuant to the terms of this Indenture, then on and after that date such
Securities (or portions thereof) cease to be outstanding and interest on them
ceases to accrue.
SECTION 2.09. Temporary Securities. Until definitive
Securities are ready for delivery, the Company may prepare and the Trustee shall
authenticate temporary Securities. Temporary Securities shall be substantially
in the form of definitive Securities but may have variations that the Company
considers appropriate for temporary Securities. Without unreasonable delay, the
Company shall prepare and the Trustee shall authenticate definitive Securities
and deliver them in exchange for temporary Securities.
SECTION 2.10 Cancelation. The Company at any time may deliver
Securities to the Trustee for cancelation. The Registrar and the Paying Agent
shall forward to the Trustee any Securities surrendered to them for registration
of transfer, exchange or payment. The Trustee and no one else shall cancel and
destroy (subject to the record retention requirements of the Exchange Act) all
Securities surrendered for registration of transfer, exchange, payment or
cancelation and deliver a certificate of such destruction to the Company unless
the Company directs the Trustee to deliver canceled Securities to the Company.
The Company may not issue new Securities to replace Securities it has redeemed,
paid or delivered to the Trustee for cancelation.
SECTION 2.11. Defaulted Interest. If the Company defaults in a
payment of interest on the Securities, the Company shall pay defaulted interest
(plus interest on such defaulted interest to the extent lawful) in any lawful
manner. The Company may pay the defaulted interest to the persons who are
Securityholders on a subsequent special record date. The Company shall fix or
cause to be fixed any such special record date and payment date to the
reasonable satisfaction of the Trustee and shall promptly mail to each
Securityholder a notice that states the special record date, the payment date
and the amount of defaulted interest to be paid.
SECTION 2.12. CUSIP Numbers. The Company in issuing the
Securities may use "CUSIP" numbers (if then generally in use) and, if so, the
Trustee shall use "CUSIP" numbers in notices of redemption as a convenience to
Holders; provided, however, that any such notice may state
30
that no representation is made as to the correctness of such numbers either as
printed on the Securities or as contained in any notice of a redemption and that
reliance may be placed only on the other identification numbers printed on the
Securities, and any such redemption shall not be affected by any defect in or
omission of such numbers.
ARTICLE 3
Redemption
----------
SECTION 3.01. Notices to Trustee. If the Company elects to
redeem Securities pursuant to paragraph 5 of the Securities, it shall notify the
Trustee in writing of the redemption date, the principal amount of Securities to
be redeemed and the paragraph of the Securities pursuant to which the redemption
will occur.
The Company shall give each notice to the Trustee provided for
in this Section at least 60 days before the redemption date unless the Trustee
consents to a shorter period. Such notice shall be accompanied by an Officers'
Certificate and an Opinion of Counsel from the Company to the effect that such
redemption will comply with the conditions herein.
If fewer than all the Securities are to be redeemed, the
record date relating to such redemption shall be selected by the Company and
given to the Trustee, which record date shall be not less than 15 days after the
date of notice to the Trustee (unless a shorter period shall be acceptable to
the Trustee). Any such notice may be canceled by notice in writing to the
Trustee at any time prior to notice of such redemption being mailed to any
Holder and shall thereby be void and of no effect.
SECTION 3.02. Selection of Securities To Be Redeemed. If fewer
than all the Securities are to be redeemed, the Trustee shall select the
Securities to be redeemed pro rata or by lot or by a method that complies with
applicable legal and securities exchange requirements, if any, and that the
Trustee in its sole discretion shall deem to be fair and appropriate and in
accordance with methods generally used at the time of selection by fiduciaries
in similar circumstances. The Trustee shall make the selection from outstanding
Securities not previously called for redemption. The Trustee may select for
redemption portions of the principal of Securities that have denominations
larger than $1,000. Securities and portions of them the Trustee selects shall be
in amounts of
31
$1,000 or a whole multiple of $1,000. Provisions of this Indenture that apply to
Securities called for redemption also apply to portions of Securities called for
redemption. The Trustee shall notify the Company promptly of the Securities or
portions of Securities to be redeemed.
SECTION 3.03. Notice of Redemption. At least 30 days but not
more than 60 days before a date for redemption of Securities, the Company shall
mail, or cause to be mailed, a notice of redemption by first-class mail to each
Holder of Securities to be redeemed at such Holder's registered address.
The notice shall identify the Securities to be redeemed and
shall state:
(1) the redemption date;
(2) the redemption price;
(3) the name and address of the Paying Agent;
(4) that Securities called for redemption must be surrendered
to the Paying Agent to collect the redemption price;
(5) if fewer than all the outstanding Securities are to be
redeemed, the identification and principal amounts of the particular
Securities to be redeemed;
(6) that, unless the Company defaults in making such
redemption payment or the Paying Agent is prohibited from making such
payment pursuant to the terms of this Indenture, interest on Securities
(or portion thereof) called for redemption ceases to accrue on and
after the redemption date;
(7) the CUSIP number, if any, printed on the Securities being
redeemed; provided, however, that no representation is made as to the
correctness or accuracy of the CUSIP number, if any, listed in such
notice or printed on the Securities; and
(8) that if a Security is to be redeemed in part, only the
portion of the principal amount (equal to $1,000 or an integral
multiple thereof) of such Security is to be redeemed and that a new
Security in the aggregate principal amount equal to the unredeemed
portion thereof will be issued without charge to the holder.
32
At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at the Company's expense. In such event,
the Company shall provide the Trustee with the information required by this
Section.
SECTION 3.04. Effect of Notice of Redemption. Once notice of
redemption is mailed, Securities called for redemption become due and payable on
the redemption date and at the redemption price stated in the notice. Upon
surrender to the Paying Agent, such Securities shall be paid at the redemption
price stated in the notice, plus accrued interest to the redemption date
(subject to the right of Holders of record on the relevant record date to
receive interest due on the related interest payment date that is on or prior to
the redemption date). Failure to give notice or any defect in the notice to any
Holder shall not affect the validity of the notice to any other Holder.
SECTION 3.05. Deposit of Redemption Price. Prior to the
redemption date, the Company shall deposit with the Paying Agent (or, if the
Company or a Subsidiary is the Paying Agent, shall segregate and hold in trust)
money sufficient to pay the redemption price of and accrued interest on all
Securities to be redeemed on that date other than Securities or portions of
Securities called for redemption which have been delivered by the Company to the
Trustee for cancelation.
SECTION 3.06. Securities Redeemed in Part. Upon surrender of a
Security that is redeemed in part, the Company shall execute and the Trustee
shall authenticate for the Holder (at the Company's expense) a new Security
equal in principal amount to the unredeemed portion of the Security surrendered.
ARTICLE 4
Covenants
---------
SECTION 4.01. Payment of Securities. The Company shall
promptly pay the principal of and interest on the Securities on the dates and in
the manner provided in the Securities and in this Indenture. Principal and
interest shall be considered paid on the date due if on such date the Trustee or
the Paying Agent holds in accordance with this Indenture money sufficient to pay
all principal and interest then due and the Trustee or the Paying Agent, as the
case may be, is not prohibited from paying such money to the Securityholders on
that date pursuant to the terms of this Indenture.
33
The Company shall pay interest on overdue principal at the
rate specified therefor in the Securities, and it shall pay interest on overdue
installments of interest at the same rate to the extent lawful.
SECTION 4.02. SEC Reports. Notwithstanding that the Company
may not be subject to the reporting requirements of Section 13 or 15(d) of the
Exchange Act, commencing the first fiscal quarter ended June 30, 1997, the
Company shall file with the SEC and provide the Trustee and Securityholders with
such annual reports and such information, documents and other reports as are
specified in Sections 13 and 15(d) of the Exchange Act and applicable to a U.S.
corporation subject to such Sections, such information, documents and reports to
be so filed and provided at the times specified for the filing of such
information, documents and reports under such Sections. The Company also shall
comply with the other provisions of TIA ss. 314(a).
SECTION 4.03. Limitation on Incurrence of Indebtedness and
Issuance of Preferred Stock. (a) The Company shall not, and shall not permit any
of its Restricted Subsidiaries to, Incur any Indebtedness (including Acquired
Debt) or issue any Preferred Stock, except that the Company may (i) issue
Preferred Stock that is not Disqualified Stock at any time and (ii) Incur
Indebtedness or issue Disqualified Stock if the Debt to EBITDA Ratio of the
Company and its Restricted Subsidiaries at the time of Incurrence of such
Indebtedness or issuance of such Disqualified Stock, after giving pro forma
effect thereto, does not exceed 7.0 to 1.0; provided, however, that any such
Indebtedness (other than Senior Debt) Incurred by the Company shall, at the time
of Incurrence, have a Weighted Average Life to Maturity equal to or greater than
the Weighted Average Life to Maturity of the Securities.
(b) The limitations set forth in paragraph (a) above shall not
apply to the Incurrence of any of the following:
(i) Indebtedness consisting of Senior Bank Debt; provided,
however, that the aggregate principal amount outstanding at any time
under this clause (i) does not exceed $10,000,000;
(ii) Existing Indebtedness;
(iii) Indebtedness represented by the Securities and the
Subsidiary Guarantees;
34
(iv) Refinancing Indebtedness; provided, however, that
(A) the principal amount of such Refinancing
Indebtedness does not exceed the principal amount of
Indebtedness or the amount of Disqualified Stock so extended,
refinanced, renewed, replaced, substituted, defeased or
refunded (plus the amount of expenses incurred and premiums
paid in connection therewith),
(B) with respect to Refinancing Indebtedness of any
Indebtedness other than Senior Debt or Disqualified Stock, the
Refinancing Indebtedness has a Weighted Average Life to
Maturity equal to or greater than the Weighted Average Life to
Maturity of the Indebtedness being extended, refinanced,
renewed, replaced, substituted, defeased or refunded, and
(C) with respect to Refinancing Indebtedness of any
Indebtedness other than Senior Debt or Disqualified Stock
incurred by (1) the Company, such Refinancing Indebtedness
ranks no more senior, and at least as subordinated, in right
of payment to the Securities as the Indebtedness being
extended, refinanced, renewed, replaced, substituted, defeased
or refunded and (2) a Subsidiary Guarantor, such Refinancing
Indebtedness ranks no more senior, and at least as
subordinated, in right of payment to the Subsidiary Guarantee
of such Subsidiary Guarantor as the Indebtedness being
extended, refinanced, renewed, replaced, substituted, defeased
or refunded;
(v) intercompany Indebtedness between the Company and any of
its Wholly Owned Restricted Subsidiaries;
(vi) Hedging Obligations, including interest rate swap
obligations, that are incurred in the ordinary course of business for
the purpose of fixing or hedging interest rate risk with respect to any
floating rate Indebtedness that is permitted by the terms of this
Indenture to be outstanding;
(vii) guarantees by the Company and the Subsidiary Guarantors
of any Indebtedness of the Company or any Restricted Subsidiary
permitted under this Section 4.03;
35
(viii) Indebtedness of the Company or any Restricted
Subsidiary consisting of indemnification, adjustment of purchase price
or similar obligations, in each case incurred in connection with the
disposition of any assets of the Company or any Restricted Subsidiary;
and
(ix) Indebtedness of the Company or any of its Restricted
Subsidiaries (in addition to Indebtedness permitted by clauses (ii)
through (viii) of this Section) in an aggregate principal amount at any
time outstanding that, together with any Indebtedness incurred pursuant
to clause (i) of this Section, does not exceed $5,000,000.
(c) For purposes of determining compliance with this Section
4.03, (i) in the event that an item of Indebtedness meets the criteria of more
than one of the types of Indebtedness described herein, the Company, in its sole
discretion, will classify such item of Indebtedness and only be required to
include the amount and type of such Indebtedness in one of the above clauses and
(ii) an item of Indebtedness may be divided and classified in more than one of
the types of Indebtedness described herein.
SECTION 4.04. Limitation on Senior Subordinated Debt. (a) The
Company shall not Incur (i) any Indebtedness that is subordinate or junior in
ranking in right of payment by its terms to any Senior Debt of the Company and
senior in right of payment by its terms to the Securities or (ii) any Secured
Debt that is not Senior Debt unless contemporaneously therewith effective
provision is made to secure the Securities equally and ratably with such Secured
Debt for so long as such Secured Debt is secured by a Lien.
(b) The Company shall not permit any Subsidiary Guarantor to
Incur (i) any Indebtedness that is subordinated or junior in ranking in right of
payment by its terms to any Senior Debt and senior in right of payment to its
Subsidiary Guarantee or (ii) any Secured Debt that is not Senior Debt unless
contemporaneously therewith effective provision is made to secure its Subsidiary
Guarantee equally and ratably with such Secured Debt for so long as such Secured
Debt is secured by a Lien.
SECTION 4.05. Limitation on Restricted Payments. (a) The
Company shall not, and shall not permit any Restricted Subsidiary, directly or
indirectly, to make a
36
Restricted Payment if at the time the Company or such Restricted Subsidiary
makes such Restricted Payment:
(1) a Default shall have occurred and be continuing (or would
result therefrom);
(2) at the time of such Restricted Payment and after giving
pro forma effect thereto as if such Restricted Payment had been made at
the beginning of the applicable four-quarter period, the Company would
not be permitted to Incur at least $1.00 of additional Indebtedness
under Section 4.03(a); or
(3) the aggregate amount of such Restricted Payment and all
other Restricted Payments since the Issue Date would exceed the sum of:
(A) an amount equal to the Company's EBITDA cumulated
from April 1, 1997, to the end of the Company's most recently
ended full fiscal quarter, taken as a single accounting
period, minus 1.4 times the sum of (i) the Company's
Consolidated Interest Expense from April 1, 1997, to the end
of the Company's most recently ended full fiscal quarter,
taken as a single accounting period, plus (ii) all dividends
or other distributions paid or made by the Company or any
Restricted Subsidiary on any Disqualified Stock of the Company
or any of its Subsidiaries during such period;
(B) the aggregate Net Cash Proceeds received by the
Company from the issuance or sale of its Equity Interests
(other than Disqualified Stock) subsequent to the Issue Date
(other than an issuance or sale to a Subsidiary of the Company
and other than an issuance or sale to an employee stock
ownership plan or to a trust established by the Company or any
of its Subsidiaries for the benefit of their employees);
(C) the amount by which Indebtedness of the Company
is reduced on the Company's balance sheet upon the conversion
or exchange (other than by a Subsidiary of the Company)
subsequent to the Issue Date of any Indebtedness of the
Company convertible or exchangeable for Equity Interests
(other than Disqualified Stock) of the Company (less the
amount of any cash, or the fair value of any other property,
distributed by the Company upon such conversion or exchange
other than Equity
37
Interests not constituting Disqualified Stock); and
(D) an amount equal to the sum of (i) the net
reduction in Investments in Unrestricted Subsidiaries
resulting from dividends, repayments of loans or advances or
other transfers of assets, in each case to the Company or any
Restricted Subsidiary from Unrestricted Subsidiaries, and (ii)
the portion (proportionate to the Company's equity interest in
such Subsidiary) of the fair market value of the net assets of
an Unrestricted Subsidiary at the time such Unrestricted
Subsidiary is designated a Restricted Subsidiary; provided,
however, that the foregoing sum shall not exceed, in the case
of any Unrestricted Subsidiary, the amount of Investments
previously made (and treated as a Restricted Payment) by the
Company or any Restricted Subsidiary in such Unrestricted
Subsidiary.
(b) The provisions of paragraph (a) above shall not prohibit:
(i) any Restricted Payment made out of the proceeds of the
substantially concurrent sale of, and any acquisition of any Equity
Interest of the Company made by exchange for, Equity Interests of the
Company (other than Disqualified Stock and Capital Stock issued or sold
to a Subsidiary of the Company or to an employee stock ownership plan
or a trust established by the Company or any of its Subsidiaries for
the benefit of their employees); provided, however, that (A) such
Restricted Payment shall be excluded in the calculation of the amount
of Restricted Payments and (B) the Net Cash Proceeds from such sale
shall be excluded from the calculation of amounts under clause (3)(B)
of paragraph (a) above;
(ii) any purchase, repurchase, redemption, defeasance or other
acquisition or retirement for value of Subordinated Debt made by
exchange for, or out of the proceeds of the substantially concurrent
sale of, Indebtedness of the Company that is permitted to be Incurred
pursuant to Section 4.03; provided, however, that such purchase,
repurchase, redemption, defeasance or other acquisition or retirement
for value shall be excluded in the calculation of the amount of
Restricted Payments;
38
(iii) dividends paid within 60 days after the date of
declaration thereof if at such date of declaration such dividend would
have complied with paragraph (a) above; provided, however, that (A) at
the time of payment of such dividend, no Default shall have occurred
and be continuing (or result therefrom) and (B) such dividend shall be
included in the calculation of the amount of Restricted Payments from
and after such time;
(iv) loans to members of management of the Company or any
Restricted Subsidiary the proceeds of which are used for a concurrent
purchase of Equity Interests of the Company or a capital contribution
to the Company (provided that the proceeds from such purchase of Equity
Interests or capital contribution shall be excluded from the
calculation of amounts under clause (3)(B) of paragraph (a) above);
provided, however, that such loans shall be included in the calculation
of the amount of Restricted Payments from and after such time;
(v) any principal payment on, or purchase, redemption,
defeasance or other acquisition or retirement for value of, any
Indebtedness that is subordinated by its terms to the Securities out of
Excess Proceeds available for general corporate purposes after the
purchase of all Securities properly tendered pursuant to an Offer to
Purchase required by Section 4.07; provided, however, that the amount
of such payments shall be excluded in the calculation of the amount of
Restricted Payments; and
(vi) repurchases of Equity Interests of the Company from any
employee of the Company (other than a Principal Shareholder) whose
employment with the Company has ceased; provided, however, that the
aggregate amount of such repurchases shall not exceed $500,000 in any
year; provided further, however, that the amount of such payments shall
be included in the calculation of the amount of Restricted Payments
from and after such time.
SECTION 4.06. Limitation on Dividend and Other Payment
Restrictions Affecting Restricted Subsidiaries. The Company shall not, and shall
not permit any Restricted Subsidiary to, directly or indirectly, create or
otherwise cause or suffer to exist or become effective any encumbrance or
restriction on the ability of any Restricted Subsidiary to (a) (i) pay dividends
or make any other distributions to the Company or any other Restricted
Subsidiary (A) on its
39
Equity Interests or (B) with respect to any other interest or participation in,
or measured by, its profits or (ii) pay any Indebtedness owed to the Company or
any other Restricted Subsidiary, (b) make any loans or advances to the Company
or any other Restricted Subsidiary or (c) transfer any of its property or assets
to the Company or any other Restricted Subsidiary, except any encumbrance or
restriction existing under or by reason of:
(i) any Existing Indebtedness;
(ii) applicable law;
(iii) any instrument governing Indebtedness or Equity
Interests of a Person acquired by the Company or any Restricted
Subsidiary as in effect at the time of such acquisition (except to the
extent such Indebtedness was incurred in connection with or in
contemplation of such acquisition); provided, however, that (A) such
restriction is not applicable to any other Person or the properties or
assets of any other Person, and (B) the consolidated net income (loss)
of such acquired Person for any period prior to such acquisition shall
not be taken into account in determining whether such acquisition was
permitted by the terms of the Indenture;
(iv) by reason of customary nonassignment provisions in leases
entered into in the ordinary course of business and consistent with
past practices;
(v) Purchase Money Indebtedness for property acquired in the
ordinary course of business that only impose restrictions on the
property so acquired;
(vi) Refinancing Indebtedness permitted under Section 4.03;
provided, however, that the restrictions contained in the agreements
governing such Refinancing Indebtedness are no more restrictive in the
aggregate than those contained in the agreements governing the
Indebtedness being refinanced immediately prior to such refinancing;
(vii) the Credit Agreement;
(viii) agreements relating to the financing of the acquisition
of real or tangible personal property acquired after the date of the
Indenture, provided that such encumbrance or restriction relates only
to the property that is acquired and, in the case of any
40
encumbrance or restriction that constitutes a Lien, such Lien
constitutes a Purchase Money Lien; or
(ix) any restriction or encumbrance contained in contracts for
sale of assets in respect of the assets being sold pursuant to such
contract.
SECTION 4.07. Limitation on Certain Asset Sales. The Company
shall not, and shall not permit any Restricted Subsidiary to:
(i) sell, lease, convey or otherwise dispose of any assets
(including by way of a sale-and-leaseback) other than in the ordinary
course of business, or
(ii) issue or sell Equity Interests of any of its Restricted
Subsidiaries,
in each case, whether in a single transaction or a series of related
transactions, to any Person (other than (x) an issuance, sale, lease, conveyance
or disposal by a Restricted Subsidiary to the Company or one of its Wholly Owned
Restricted Subsidiaries, (y) an Asset Swap permitted by Section 4.11 or (z) the
sale of the stock of any Unrestricted Subsidiary) (each of the foregoing, an
"Asset Sale"), unless: (x) the Company or such Restricted Subsidiary, as the
case may be, receives consideration at the time of such Asset Sale at least
equal to the Fair Market Value of the assets or Equity Interests sold or
otherwise disposed of, (y) at least 80% of such consideration is in the form of
cash or Cash Equivalents and (z) if such Asset Sale includes Equity Interests of
any Restricted Subsidiary, 100% of the Equity Interests of such Restricted
Subsidiary owned by the Company or any other Restricted Subsidiary are sold or
otherwise disposed of in such Asset Sale. Following any Asset Sale, the Company
may at its option apply all or any portion of the Net Proceeds from such Asset
Sale, within 360 days of such Asset Sale, (A) to permanently reduce or satisfy
any Senior Debt (and, in the event that such Senior Debt is extended under a
revolving credit or similar facility, to permanently reduce or satisfy the
aggregate commitments thereunder as then in effect) or (B) to acquire Broadcast
Assets. Pending the final application of any such Net Proceeds, the Company may
temporarily reduce Senior Debt or invest such Net Proceeds in Permitted
Investments or to reduce loans outstanding under any revolving credit facility
of the Company or any Restricted Subsidiary. Any Net Proceeds from an Asset Sale
not applied to the payment of Senior Debt or the acquisition of Broadcast Assets
as provided in the immediately preceding sentence, upon expiration such 360-day
period, will be
41
deemed to constitute "Excess Proceeds". Whenever aggregate Excess Proceeds
realized since the Issue Date minus the aggregate purchase price of the
Securities that have been the subject of any previous Offer to Purchase ("Net
Excess Proceeds") exceeds $5,000,000, the Company will commence an Offer to
Purchase within 30 days after the date on which the Net Excess Proceeds exceeded
$5,000,000. Such Offer to Purchase shall be for a principal amount of Notes then
outstanding having an aggregate purchase price equal to such Net Excess
Proceeds. Notwithstanding the foregoing provisions of this Section 4.07, the
Company and the Restricted Subsidiaries shall not be required to apply any Net
Proceeds in accordance with this Section 4.07 except to the extent that the
aggregate Net Proceeds from all Asset Sales which are not applied in accordance
with this Section 4.07 exceeds $1,000,000.
For the purposes of this Section 4.07, the following are
deemed to be cash: (x) the assumption of Senior Debt of the Company or any
Restricted Subsidiary and the release of the Company or such Restricted
Subsidiary from all liability on such Senior Debt in connection with such Asset
Sale (other than customary indemnification provisions relating thereto that do
not involve the repayment of funded indebtedness) and (y) securities received by
the Company or any Restricted Subsidiary from the transferee that are promptly
converted by the Company or such Restricted Subsidiary into cash.
SECTION 4.08. Transactions with Affiliates. (a) The Company
shall not, and shall not permit any Restricted Subsidiary to, directly or
indirectly, sell, lease, transfer or otherwise dispose of any of its properties
or assets to, or purchase any property or assets from, or enter into any
contract, agreement, understanding, loan, advance or guarantee with, or for the
benefit of, any Affiliate of the Company or any Restricted Subsidiary (each of
the foregoing, an "Affiliate Transaction"), unless (i) such Affiliate
Transaction is on terms that are no less favorable to the Company or the
relevant Restricted Subsidiary than those that would have been obtained in a
comparable transaction by the Company or such Restricted Subsidiary with a
non-Affiliated Person, (ii) such Affiliate Transaction is approved by a majority
of the disinterested members of the Company's Board of Directors and (iii) the
Company delivers to the Trustee (A) with respect to any Affiliate Transaction
involving aggregate payments in excess of $1,000,000, an Officers' Certificate
certifying that such Affiliate Transaction complies with clauses (i) and (ii)
above and (B) with respect to any Affiliate Transaction (or series of related
transactions) with an aggregate value in
42
excess of $5,000,000, an opinion from a nationally recognized investment bank to
the effect that the transaction is fair to the Company or the Restricted
Subsidiary, as the case may be, from a financial point of view.
(b) The provisions of paragraph (a) above shall not prohibit:
(i) employment arrangements (including customary benefits
thereunder) entered into by the Company or any of its Restricted
Subsidiaries in the ordinary course of business and consistent with the
past practice of the Company or such Restricted Subsidiary;
(ii) transactions solely between or among the Company and its
Wholly Owned Restricted Subsidiaries or solely between or among wholly
Owned Restricted Subsidiaries;
(iii) transactions permitted under Section 4.05;
(iv) any agreement as in effect on the Issue Date or any
amendment thereto or any transaction contemplated thereby (including
pursuant to any amendment thereto) and any replacement agreement
thereto so long as any such amendment or replacement agreement is not
more disadvantageous to the holders of the Securities in any material
respect than the original agreement as in effect on the Issue Date;
(v) the existence of, or the performance by the Company or any
of its Restricted Subsidiaries of its obligations under the terms of,
any stockholders agreement (including any registration rights agreement
or purchase agreement related thereto) to which it is a party on the
Issue Date;
(vi) services provided to any Unrestricted Subsidiary of the
Company for fees approved by the Board of Directors; and
(vii) the issuance, sale or other disposition of any Equity
Interest (other than Disqualified Stock) of the Company, including any
equity-related agreements relating thereto such as registration rights
and voting agreements so long as such agreements do not result in such
Equity Interests being Disqualified Stock.
SECTION 4.09. Limitation on Restricted Subsidiary Equity
Interests. The Company shall not permit any
43
Restricted Subsidiary to issue any Equity Interests, except (a) Equity Interests
issued to and held by the Company or a Wholly Owned Restricted Subsidiary, and
(b) Equity Interests issued by a Person prior to the time (i) such Person
becomes a Restricted Subsidiary, (ii) such Person merges with or into a
Restricted Subsidiary or (iii) a Restricted Subsidiary mergers with or into such
Person; provided, however, that such Equity Interests were not issued or
incurred by such Person in anticipation of the type of transaction contemplated
by subclause (i), (ii) or (iii).
SECTION 4.10. Change of Control. Upon the occurrence of a
Change of Control, the Company shall commence an Offer to Purchase all the
outstanding Securities. The Company shall comply, to the extent applicable, with
the requirements of Section 14(e) of the Exchange Act and any other securities
laws or regulations in connection with an Offer to Purchase Notes pursuant to
this Section 4.10. To the extent the provisions of any securities laws or
regulations conflict with the provisions of this Section 4.10, the Company shall
comply with the applicable securities laws and regulations and shall not be
deemed to have breached its obligations under this Section 4.10 by virtue
thereof.
SECTION 4.11. Limitation on Asset Swaps. The Company shall
not, and shall not permit any Restricted Subsidiary to, engage in any Asset
Swaps, unless:
(i) at the time of entering into the agreement relating to the
proposed Asset Swap and immediately after such Asset Swap, no Default
or Event of Default shall have occurred and be continuing;
(ii) at the time of entering into the agreement relating to
the proposed Asset Swap and after giving pro forma effect to such Asset
Swap as if it had occurred at the beginning of the applicable
four-quarter period, the Company would be permitted to incur at least
$1.00 of additional Indebtedness under Section 4.03(a);
(iii) after giving pro forma effect to the proposed Asset Swap
as if such Asset Swap had occurred at the beginning of the four most
recent full fiscal quarters ending immediately prior to the date of the
proposed Asset Swap, the ratio of (A) EBITDA of the Company and its
Restricted Subsidiaries on a consolidated basis for such four-quarter
period to (B) the Consolidated Cash Interest Expense of the Company and
its Restricted
44
Subsidiaries for such four-quarter period exceeds 1.2 to 1.0; and
(iv) the respective Fair Market Values of the assets being
purchased and sold by the Company or any of its Restricted Subsidiaries
are substantially the same at the time of entering into such agreement.
SECTION 4.12. Future Subsidiary Guarantors. The Company shall
(a) cause each Person that, after the Issue Date, becomes a Wholly Owned
Restricted Subsidiary of the Company to execute and deliver a supplemental
indenture and thereby become a Subsidiary Guarantor bound by the Subsidiary
Guarantee of the Securities set forth in Article 11 hereof (without such
Subsidiary Guarantor being required to execute and deliver its Subsidiary
Guarantee endorsed on the Securities) and (b) deliver to the Trustee an Opinion
of Counsel, in form and substance reasonably satisfactory to the Trustee, that
the Subsidiary Guarantee of such Subsidiary Guarantor is a valid and legally
binding obligation of such Subsidiary Guarantor.
SECTION 4.13. Compliance Certificate. The Company shall
deliver to the Trustee within 120 days after the end of each fiscal year an
Officers' Certificate stating that in the course of the performance by the
signers of their duties as Officers of the Company they would normally have
knowledge of any Default and whether or not the signers know of any Default that
occurred during such fiscal year. If they do, the certificate shall describe the
Default or Event of Default, its status and what action the Company is taking or
proposes to take with respect thereto. The Company also shall comply with TIA
ss. 314(a)(4).
SECTION 4.14. Further Instruments and Acts. Upon request of
the Trustee, the Company will execute and deliver such further instruments and
do such further acts as may be reasonably necessary or proper to carry out more
effectively the purpose of this Indenture.
SECTION 4.15. Ratings for Notes. Following the filing with the
SEC of the Company's first Annual Report on Form 10-K after the Issue Date, the
Company shall use its reasonable best efforts to obtain, by June 30, 1998, the
publication of ratings for the Securities from Moody's Investors Service, Inc.
and from Standard and Poor's Ratings Group (or any successor to either of them)
or, in the event that either of such entities at such time no longer publishes
ratings for long-term debt securities, then any other nationally recognized
statistical rating organization (as defined in Rule 436 under the Securities
Act).
45
ARTICLE 5
Successor Company
-----------------
SECTION 5.01. When Company May Merge or Transfer Assets. (a)
The Company shall not consolidate or merge with or into (whether or not the
Company 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, unless:
(i) the Surviving Person shall be 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 Company) shall
expressly assume all the obligations of the Company under the
Securities and this Indenture pursuant to a supplemental indenture in a
form reasonably satisfactory to the Trustee;
(iii) at the time of and immediately after such Disposition,
no Default shall have occurred and be continuing;
(iv) the Surviving Person shall, at the time of such
Disposition and after giving pro forma effect thereto, be permitted to
incur at least $1.00 of additional Indebtedness pursuant to Section
4.03(a); and
(v) the Company shall have delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, each stating that such
consolidation, merger or transfer and such supplemental indenture (if
any) comply with this Indenture.
The Surviving Person (if other than the Company) shall be the
successor to the Company and shall succeed to, and be substituted for, and may
exercise every right and power of, the Company under this Indenture, but the
predecessor Company in the case of a sale, assignment, transfer, lease or
conveyance shall not be released from the obligation to pay the principal of and
interest on the Securities.
(b) In the event of a sale of all or substantially all of the
assets of any Subsidiary Guarantor or all of the Equity Interests of any
Subsidiary Guarantor, by way of
46
merger, consolidation or otherwise, then the Surviving Person of any such merger
or consolidation, or such Subsidiary Guarantor, if all of its Equity Interests
are sold, shall be released and relieved of any and all obligations under the
Subsidiary Guarantee of such Subsidiary Guarantor if:
(i) the Person surviving such merger or consolidation or
acquiring the Equity Interest of such Subsidiary Guarantor is not a
Restricted Subsidiary of the Company;
(ii) the Net Proceeds from such sale are applied as described
under Section 4.07; and
(iii) such Subsidiary Guarantor is released from its
guarantees of other Indebtedness of the Company or any Restricted
Subsidiary.
(c) Except as provided in clause (b), no Subsidiary Guarantor
may consolidate or merge with or into (whether or not such Person is Affiliated
with such Subsidiary Guarantor and whether or not the Guarantor is the Surviving
Person), or sell, assign, transfer, lease, convey or otherwise dispose of all or
substantially all of its assets in one or more related transactions, to another
Person, unless:
(i) the Surviving Person shall be the Company or one of its
Wholly Owned Restricted Subsidiaries;
(ii) the Surviving Person shall be a corporation organized or
existing under the laws of the United States, any state thereof or the
District of Columbia;
(iii) the Surviving Person (if other than the Subsidiary
Guarantor) shall expressly assume all the obligations of the Subsidiary
Guarantor under the Securities and this Indenture pursuant to a
supplemental indenture in a form reasonably satisfactory to the
Trustee; and
(iv) at the time of and immediately after such Disposition, no
Default shall have occurred an be continuing.
47
ARTICLE 6
Defaults and Remedies
---------------------
SECTION 6.01. Events of Default. An "Event of Default" occurs
if:
(1) the Company defaults in any payment of principal of (or
premium if any, on) any Security when the same becomes due and payable,
whether or not such payment shall be prohibited by Article 10;
(2) the Company defaults in any payment of interest on any
Security when the same becomes due and payable, whether or not such
payment shall be prohibited by Article 10, and such default continues
for a period of 30 days;
(3) the Company fails to redeem or purchase any Security when
required pursuant to this Indenture or the Securities, including, in
connection with an Offer to Purchase, whether or not such redemption or
purchase shall be prohibited by Article 10;
(4) the Company fails to comply with Sections 4.15 or 5.01;
(5) the Company or any Subsidiary Guarantor fails to comply
with any of their respective agreements in the Securities or this
Indenture (other than those referred to in clause (1), (2), (3) or (4)
above) and such failure continues for 30 days after the notice
specified below;
(6) the Company or any Restricted Subsidiary fails to comply
with terms of any instrument evidencing or securing Indebtedness for
money borrowed by the Company or any Restricted Subsidiary having an
outstanding principal amount of $5,000,000 individually or in the
aggregate, which failure results in the acceleration of the payment of
such Indebtedness or constitutes the failure to pay such Indebtedness
when due at final maturity, and such non-payment continues for a period
of 30 days;
48
(7) the Company or any Restricted Subsidiary pursuant to or
within the meaning of any Bankruptcy Law:
(A) commences a voluntary case;
(B) consents to the entry of an order for relief
against it in an involuntary case;
(C) consents to the appointment of a Custodian of it
or for any substantial part of its property; or
(D) makes a general assignment for the benefit of its
creditors;
or takes any comparable action under any foreign laws relating to
insolvency;
(8) a court of competent jurisdiction enters an order or
decree under any Bankruptcy Law that:
(A) is for relief against the Company or any
Restricted Subsidiary in an involuntary case;
(B) appoints a Custodian of the Company or any
Restricted Subsidiary or for any substantial part of its
property; or
(C) orders the winding up or liquidation of the
Company or any Restricted Subsidiary;
or any similar relief is granted under any foreign laws and the order
or decree remains unstayed and in effect for 60 days;
(9) any final judgment or decree for the payment of money in
excess of $5,000,000 (not subject to appeal) is entered against the
Company or any Restricted Subsidiary and remains undischarged or
unstayed for a period of 60 days after the later of (A) entry of such
final judgment or decree and (B) the date on which the right to appeal
has expired; or
(10) a Subsidiary Guarantee of a significant Subsidiary ceases
to be in full force and effect (other than in accordance with the terms
of such Subsidiary Guarantee) or a Subsidiary Guarantor denies or
disaffirms its obligations under its Subsidiary Guarantee.
49
The foregoing will constitute Events of Default whatever the
reason for any such Event of Default and whether it is voluntary or involuntary
or is 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.
The term "Bankruptcy Law" means Title 11, United States Code,
or any similar Federal or state law for the relief of debtors. The term
"Custodian" means any receiver, trustee, assignee, liquidator, custodian or
similar official under any Bankruptcy Law.
A Default under clause (5) is not an Event of Default until
the Trustee or the holders of at least 25% in principal amount of the
outstanding Securities notify the Company of the Default and the Company does
not cure such Default within the time specified after receipt of such notice.
Such notice must specify the Default, demand that it be remedied and state that
such notice is a "Notice of Default".
The Company shall deliver to the Trustee, within 30 days after
the occurrence thereof, written notice in the form of an Officers' Certificate
of any Event of Default under clause (6), (9) or (10) and any event which with
the giving of notice or the lapse of time would become an Event of Default under
clause (5), its status and what action the Company is taking or proposes to take
with respect thereto.
SECTION 6.02. Acceleration. If an Event of Default (other than
an Event of Default specified in Section 6.01(7) or (8) with respect to the
Company) occurs and is continuing, the Trustee by notice to the Company, or the
Holders of at least 25% in principal amount of the Securities by notice to the
Company and the Trustee, may declare the Accreted Value of and accrued but
unpaid interest on all the Securities (the "Default Amount") to be due and
payable. Upon such a declaration, the Default Amount shall be due and payable
immediately. If an Event of Default specified in Section 6.01(7) or (8) with
respect to the Company occurs, the Default Amount shall ipso facto become and be
immediately due and payable without any declaration or other act on the part of
the Trustee or any Securityholders. The Holders of a majority in principal
amount of the Securities by notice to the Trustee may rescind an acceleration
and its consequences if the rescission would not conflict with any judgment or
decree and if all existing Events of Default have been cured or waived except
nonpayment of principal or interest that has become due solely because of
acceleration. No such
50
rescission shall affect any subsequent Default or impair any right consequent
thereto.
SECTION 6.03. Other Remedies. If an Event of Default occurs
and is continuing, the Trustee may pursue any available remedy to collect the
payment of principal of or interest on the Securities or to enforce the
performance of any provision of the Securities or this Indenture.
The Trustee may maintain a proceeding even if it does not
possess any of the Securities or does not produce any of them in the proceeding.
A delay or omission by the Trustee or any Securityholder in exercising any right
or remedy accruing upon an Event of Default shall not impair the right or remedy
or constitute a waiver of or acquiescence in the Event of Default. No remedy is
exclusive of any other remedy. All available remedies are cumulative.
SECTION 6.04. Waiver of Past Defaults. The Holders of a
majority in principal amount of the Securities by notice to the Trustee may
waive an existing Default and its consequences except (i) a Default in the
payment of the principal of, or premium or interest on, a Security, (ii) a
Default arising from the failure to repurchase any Security tendered for
repurchase in connection with an Offer to Purchase or (iii) a Default in respect
of a provision that under Section 9.02 cannot be amended without the consent of
each Securityholder affected. When a Default is waived, it is deemed cured, but
no such waiver shall extend to any subsequent or other Default or impair any
consequent right.
SECTION 6.05. Control by Majority. The Holders of a majority
in principal amount of the Securities may direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee or of
exercising any trust or power conferred on the Trustee. However, the Trustee may
refuse to follow any direction that conflicts with law or this Indenture or,
subject to Section 7.01, that the Trustee determines is unduly prejudicial to
the rights of other Securityholders or would involve the Trustee in personal
liability; provided, however, that the Trustee may take any other action deemed
proper by the Trustee that is not inconsistent with such direction. Prior to
taking any action hereunder, the Trustee shall be entitled to receive from the
Securityholders indemnification or security satisfactory to it in its sole
discretion against all losses and expenses caused by taking or not taking such
action.
SECTION 6.06. Limitation on Suits. Except to enforce the right
to receive payment of principal, premium (if any) or interest when due, no
Securityholder may pursue
51
any remedy with respect to this Indenture or the Securities unless:
(1) the Holder gives to the Trustee written notice stating
that an Event of Default is continuing;
(2) the Holders of at least 25% in principal amount of the
Securities make a written request to the Trustee to pursue the remedy;
(3) such Holder or Holders offer to the Trustee reasonable
security or indemnity against any loss, liability or expense;
(4) the Trustee does not comply with the request within 60
days after receipt of the request and the offer of security or
indemnity; and
(5) the Holders of a majority in aggregate principal amount of
the Securities do not give the Trustee a direction inconsistent with
the request during such 60-day period.
A Securityholder may not use this Indenture to prejudice the
rights of another Securityholder or to obtain a preference or priority over
another Securityholder.
SECTION 6.07. Rights of Holders to Receive Payment.
Notwithstanding any other provision of this Indenture, the right of any Holder
to receive payment of principal of and interest on the Securities held by such
Holder, on or after the respective due dates expressed in the Securities, or to
bring suit for the enforcement of any such payment on or after such respective
dates, shall not be impaired or affected without the consent of such Holder.
SECTION 6.08. Collection Suit by Trustee. If an Event of
Default specified in Section 6.01(1), (2) or (3) occurs and is continuing, the
Trustee may recover judgment in its own name and as trustee of an express trust
against the Company for the whole amount then due and owing (together with
interest on any unpaid interest to the extent lawful) and the amounts provided
for in Section 7.07.
SECTION 6.09. Trustee May File Proofs of Claim. The Trustee
may file such proofs of claim and other papers or documents as may be necessary
or advisable in order to have the claims of the Trustee and the Securityholders
allowed in any judicial proceedings relative to the Company, its creditors or
its property and, unless prohibited by law or applicable regulations, may vote
on behalf of the Holders
52
in any election of a trustee in bankruptcy or other Person performing similar
functions, and any Custodian in any such judicial proceeding is hereby
authorized by each Holder to make payments to the Trustee and, in the event that
the Trustee shall consent to the making of such payments directly to the
Holders, to pay to the Trustee any amount due it for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and its counsel, and any other amounts due the Trustee under Section 7.07.
Nothing herein shall be deemed to empower the Trustee to
authorize or consent to, or accept or adopt on behalf of any Securityholder, any
plan of reorganization, arrangement, adjustment or composition affecting the
Securities or the rights of any Securityholder, or to authorize the Trustee to
vote in respect of the claim of any Securityholder in any such proceeding.
SECTION 6.10. Priorities. If the Trustee collects any money or
property pursuant to this Article 6, it shall pay out the money or property in
the following order:
FIRST: to the Trustee for amounts due under Section 7.07;
SECOND: to holders of Senior Indebtedness of the Company to
the extent required by Article 10;
THIRD: to Securityholders for amounts due and unpaid on the
Securities for principal and interest, ratably, without preference or
priority of any kind, according to the amounts due and payable on the
Securities for principal and interest, respectively; and
FOURTH: to the Company.
The Trustee may fix a record date and payment date for any
payment to Securityholders pursuant to this Section. At least 15 days before
such record date, the Company shall mail to each Securityholder and the Trustee
a notice that states the record date, the payment date and amount to be paid.
SECTION 6.11. Undertaking for Costs. In any suit for the
enforcement of any right or remedy under this Indenture or in any suit against
the Trustee for any action taken or omitted by it as Trustee, a court in its
discretion may require the filing by any party litigant in the suit of an
undertaking to pay the costs of the suit, and the court in its discretion may
assess reasonable costs, including reasonable
53
attorneys' fees, against any party litigant in the suit, having due regard to
the merits and good faith of the claims or defenses made by the party litigant.
This Section does not apply to a suit by the Trustee, a suit by a Holder
pursuant to Section 6.07 or a suit by Holders of more than 10% in principal
amount of the Securities.
SECTION 6.12. Waiver of Stay or Extension Laws. The Company
(to the extent it may lawfully do so) shall 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 Company (to the extent that it may lawfully do so) hereby expressly waives
all benefit or advantage of any such law, and shall not hinder, delay or impede
the execution of any power herein granted to the Trustee, but shall suffer and
permit the execution of every such power as though no such law had been enacted.
ARTICLE 7
Trustee
-------
SECTION 7.01. Duties of Trustee. (a) If an Event of Default
has occurred and is continuing, the Trustee shall exercise the rights and powers
vested in it by this Indenture and use the same degree of care and skill in
their exercise as a prudent Person would exercise or use under the circumstances
in the conduct of such Person's own affairs.
(b) Except during the continuance of an Event of Default:
(1) the Trustee undertakes to perform such duties and only
such duties as are specifically set forth in this Indenture and no
implied covenants or obligations shall be read into this Indenture
against the Trustee; and
(2) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Trustee and conforming to the requirements of
this Indenture. However, in the case of any such certificate or
opinions which, by any provision hereof, are required to be furnished
to the Trustee, the Trustee shall examine the certificates and opinions
54
to determine whether or not they conform to the requirements of this
Indenture.
(c) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act or its own wilful misconduct,
except that:
(1) this paragraph does not limit the effect of paragraph (b)
of this Section;
(2) the Trustee shall not be liable for any error of judgment
made in good faith by a Trust Officer unless it is proved that the
Trustee was negligent in ascertaining the pertinent facts; and
(3) the Trustee shall not be liable with respect to any action
it takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.05.
(d) Every provision of this Indenture that in any way relates
to the Trustee is subject to paragraphs (a), (b) and (c) of this Section.
(e) The Trustee shall not be liable for interest on any money
received by it except as the Trustee may agree in writing with the Company.
(f) Money held in trust by the Trustee need not be segregated
from other funds except to the extent required by law.
(g) No provision of this Indenture shall require the Trustee
to expend or risk its own funds or otherwise incur financial liability in the
performance of any of its duties hereunder or in the exercise of any of its
rights or powers, if it shall have reasonable grounds to believe that repayment
of such funds or adequate indemnity against such risk or liability is not
reasonably assured to it.
(h) Every provision of this Indenture relating to the conduct
or affecting the liability of or affording protection to the Trustee shall be
subject to the provisions of this Section and to the provisions of the TIA.
SECTION 7.02. Rights of Trustee. (a) The Trustee may rely on
any document believed by it to be genuine and to have been signed or presented
by the proper person. The Trustee need not investigate any fact or matter stated
in the document.
55
(b) Before the Trustee acts or refrains from acting, it may
require an Officers' Certificate or an Opinion of Counsel. The Trustee shall not
be liable for any action it takes or omits to take in good faith in reliance on
the Officers' Certificate or Opinion of Counsel.
(c) The Trustee may act through agents and shall not be
responsible for the misconduct or negligence of any agent appointed with due
care.
(d) The Trustee shall not be liable for any action it takes or
omits to take in good faith which it believes to be authorized or within its
rights or powers; provided, however, that the Trustee's conduct does not
constitute wilful misconduct or negligence.
(e) The Trustee may consult with counsel, and the advice or
opinion of counsel with respect to legal matters relating to this Indenture and
the Securities shall be full and complete authorization and protection from
liability in respect to any action taken, omitted or suffered by it hereunder in
good faith and in accordance with the advice or opinion of such counsel.
(f) The Trustee shall be under no obligation to exercise any
of the rights or powers created in it by this Indenture at the request or
direction of any of the Holders pursuant to this Indenture, unless such Holders
shall have offered to the Trustee reasonable security or indemnity against the
costs, expenses and liabilities which might be incurred by it in compliance with
such request or direction.
(g) The Trustee shall not be bound to make any investigation
into the facts or matters stated in any document, but the Trustee, in its
discretion, may make such further inquiry or investigation into such facts or
matters as it may see fit.
(h) The Trustee may enter into and perform its obligations
under the Standstill Agreement dated May 19, 1997, among the Company, the
Subsidiary Guarantors, the Investors and Management Stockholders (as those terms
are defined in the Standstill Agreement), and the Agent and the Trustee.
SECTION 7.03. Individual Rights of Trustee. The Trustee in its
individual or any other capacity may become the owner or pledgee of Securities
and may otherwise deal with the Company or its Affiliates with the same rights
it would have if it were not Trustee. Any Paying Agent, Registrar, co-registrar
or co-paying agent may do the same
56
with like rights. However, the Trustee must comply with Sections 7.10 and 7.11.
SECTION 7.04. Trustee's Disclaimer. The Trustee shall not be
responsible for and makes no representation as to the validity or adequacy of
this Indenture or the Securities, it shall not be accountable for the Company's
use of the proceeds from the Securities, and it shall not be responsible for any
statement of the Company in the Indenture or in any document issued in
connection with the sale of the Securities or in the Securities other than the
Trustee's certificate of authentication.
SECTION 7.05. Notice of Defaults. If a Default occurs and is
continuing and if it is known to the Trustee, the Trustee shall mail to each
Securityholder notice of the Default within 90 days after it occurs. Except in
the case of a Default in payment of principal of or interest on any Security,
the Trustee may withhold the notice if and so long as a committee of its Trust
Officers in good faith determines that withholding the notice is in the
interests of Securityholders.
SECTION 7.06. Reports by Trustee to Holders. As promptly as
practicable after each May 15 beginning with May 15, 1998, and in any event
prior to June 15 in each year, the Trustee shall mail to each Securityholder a
brief report dated as of such date that complies with TIA ss. 313(a). The
Trustee also shall comply with TIA ss. 313(b).
A copy of each report at the time of its mailing to
Securityholders shall be filed with the SEC and each stock exchange (if any) on
which the Securities are listed. The Company agrees to notify promptly the
Trustee whenever the Securities become listed on any stock exchange and of any
delisting thereof.
SECTION 7.07. Compensation and Indemnity. The Company shall
pay to the Trustee promptly upon request from time to time reasonable
compensation for its services. The Trustee's compensation shall not be limited
by any law on compensation of a trustee of an express trust. The Company shall
reimburse the Trustee promptly upon request for all reasonable out-of-pocket
expenses incurred or made by it, including costs of collection, in addition to
the compensation for its services. Such expenses shall include the reasonable
compensation and expenses, disbursements and advances of the Trustee's agents,
counsel, accountants and experts. The Company shall indemnify the Trustee
against any and all loss, liability or expense (including attorneys' fees)
incurred by it in connection with the administration
57
of this trust, the enforcement of this Indenture (including this Section 7.07)
against the Company and the performance of its duties hereunder, including the
costs and expenses of defending itself against any claim (whether asserted by
any Securityholder or any other Person) or liability in connection with the
acceptance, exercise or performance of any of its powers or duties hereunder.
The Trustee shall notify the Company promptly of any claim for which it may seek
indemnity. Failure by the Trustee so to notify the Company shall not relieve the
Company of its obligations hereunder. The Company shall defend the claim and the
Trustee may have separate counsel and the Company shall pay the fees and
expenses of such counsel. The Company need not reimburse any expense or
indemnify against any loss, liability or expense incurred by the Trustee through
the Trustee's own wilful misconduct, negligence or bad faith. The Company need
not pay for any settlement made by the Trustee without the Company's consent,
such consent not to be unreasonably withheld.
To secure the Company's payment obligations in this Section,
the Trustee shall have a lien prior to the Securities on all money or property
held or collected by the Trustee other than money or property held in trust to
pay principal of and interest on particular Securities. The Trustee's right to
receive payment of any amounts due under this Section 7.07 shall not be
subordinate to any other liability or Indebtedness of the Company.
The Company's payment obligations pursuant to this Section
shall survive the discharge of this Indenture. When the Trustee incurs expenses
or render services after the occurrence of a Default specified in Section
6.01(7) or (8) with respect to the Company, the expenses and the compensation
for the services (including the fees and expenses of its agents and counsel) are
intended to constitute expenses of administration under the Bankruptcy Law.
SECTION 7.08. Replacement of Trustee. The Trustee may resign
at any time by so notifying the Company. The Holders of a majority in principal
amount of the Securities may remove the Trustee by so notifying the Trustee and
may appoint a successor Trustee. The Company shall remove the Trustee if:
(1) the Trustee fails to comply with Section 7.10;
(2) the Trustee is adjudged bankrupt or insolvent;
58
(3) a receiver or other public officer takes charge of the
Trustee or its property; or
(4) the Trustee otherwise becomes incapable of acting.
If the Trustee resigns, is removed by the Company or by the
Holders of a majority in principal amount of the Securities and such Holders do
not reasonably promptly appoint a successor Trustee, or if a vacancy exists in
the office of Trustee for any reason (the Trustee in such event being referred
to herein as the retiring Trustee), the Company shall promptly appoint a
successor Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. The successor Trustee shall mail a notice of its
succession to Securityholders. The retiring Trustee shall promptly transfer all
property held by it as Trustee to the successor Trustee, provided that the
amounts owing to the Trustee hereunder have been paid and subject to the lien
provided for in Section 7.07.
If a successor Trustee does not take office within 60 days
after the retiring Trustee resigns or is removed, the retiring Trustee or the
Holders of 10% in aggregate principal amount of the Securities may petition any
court of competent jurisdiction for the appointment of a successor Trustee.
If the Trustee fails to comply with Section 7.10, any
Securityholder may petition any court of competent jurisdiction for the removal
of the Trustee and the appointment of a successor Trustee.
Notwithstanding the replacement of the Trustee pursuant to
this Section, the Company's obligations under Section 7.07 shall continue for
the benefit of the retiring Trustee.
SECTION 7.09. Successor Trustee by Merger. If the Trustee
consolidates with, merges or converts into, or transfers all or substantially
all its corporate trust business or assets to, another corporation or banking
association, the resulting, surviving or transferee corporation without any
further act shall be the successor Trustee.
59
In case at the time such successor or successors by merger,
conversion or consolidation 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 authenticated, any successor to the Trustee may authenticate such
Securities either in the name of any predecessor hereunder or in the name of the
successor to the Trustee; and in all such cases such certificates 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.
SECTION 7.10. Eligibility; Disqualification. The Trustee shall
at all times satisfy the requirements of TIA ss. 310(a). The Trustee shall have
a combined capital and surplus of at least $50,000,000 as set forth in its most
recent published annual report of condition. The Trustee shall comply with TIA
ss. 310(b); provided, however, that there shall be excluded from the operation
of TIA ss. 310(b)(1) any indenture or indentures under which other securities or
certificates of interest or participation in other securities of the Company are
outstanding if the requirements for such exclusion set forth in TIA ss.
310(b)(1) are met.
SECTION 7.11. Preferential Collection of Claims Against
Company. The Trustee shall comply with TIA ss. 311(a), excluding any creditor
relationship listed in TIA ss. 311(b). A Trustee who has resigned or been
removed shall be subject to TIA ss. 311(a) to the extent indicated.
ARTICLE 8
Discharge of Indenture; Defeasance
----------------------------------
SECTION 8.01. Discharge of Liability on Securities;
Defeasance. (a) When (i) the Company delivers to the Trustee all outstanding
Securities (other than Securities replaced pursuant to Section 2.07) for
cancelation or (ii) all outstanding Securities have become due and payable,
whether at maturity or as a result of the mailing of a notice of redemption
pursuant to Article 3 hereof and the Company irrevocably deposits with the
Trustee funds sufficient to pay at maturity or upon redemption all outstanding
Securities, including interest thereon to maturity or such redemption date
(other than Securities replaced pursuant to Section 2.07), and if in either case
the Company pays all
60
other sums payable hereunder by the Company, then this Indenture shall, subject
to Section 8.01(c), cease to be of further effect. The Trustee shall acknowledge
satisfaction and discharge of this Indenture on demand of the Company
accompanied by an Officers' Certificate and an Opinion of Counsel and at the
cost and expense of the Company.
(b) Subject to Sections 8.01(c) and 8.02, the Company at any
time may terminate (i) all its obligations under the Securities and this
Indenture ("legal defeasance option") or (ii) its obligations under Sections
4.02, 4.03, 4.04, 4.05, 4.06, 4.07, 4.08, 4.09, 4.10, 4.11 and 4.12 and the
operation of Sections 6.01(6), 6.01(7), 6.01(8), 6.01(9) and 6.01(10) (but, in
the case of Sections 6.01(7) and (8), with respect only to Restricted
Subsidiaries) and the limitations contained in Sections 5.01(a)(iv) and 5.01(c)
("covenant defeasance option"). The Company may exercise its legal defeasance
option notwithstanding its prior exercise of its covenant defeasance option.
If the Company exercises its legal defeasance option, payment
of the Securities may not be accelerated because of an Event of Default with
respect thereto. If the Company exercises its covenant defeasance option,
payment of the Securities may not be accelerated because of an Event of Default
specified in Sections 6.01(3), 6.01(6), 6.01(7), 6.01(8), 6.01(9) and
6.01(10)(but, in the case of Sections 6.01(7) and (8), with respect only to
Restricted Subsidiaries which constitute Significant Subsidiaries) or because of
the failure of the Company to comply with Section 5.01(a)(iv) or 5.01(c). If the
Company exercises its legal defeasance option or its covenant defeasance option,
each Subsidiary Guarantor, if any, shall be released from all its obligations
with respect to its Subsidiary Guarantee.
Upon satisfaction of the conditions set forth herein and upon
request of the Company, the Trustee shall acknowledge in writing the discharge
of those obligations that the Company terminates.
(c) Notwithstanding clauses (a) and (b) above, the Company's
obligations in Sections 2.03, 2.04, 2.05, 2.06, 2.07, 2.08, 7.07 and 7.08 and in
this Article 8 shall survive until the Securities have been paid in full.
Thereafter, the Company's obligations in Sections 7.07, 8.04 and 8.05 shall
survive.
61
SECTION 8.02. Conditions to Defeasance. The Company may
exercise its legal defeasance option or its covenant defeasance option only if:
(1) the Company irrevocably deposits in trust with the Trustee
money or U.S. Government Obligations for the payment of principal of
and interest on the Securities to maturity or redemption, as the case
may be;
(2) the Company delivers to the Trustee a certificate from a
nationally recognized firm of independent accountants expressing their
opinion that the payments of principal and interest when due and
without reinvestment on the deposited U.S. Government Obligations plus
any deposited money without investment will provide cash at such times
and in such amounts as will be sufficient to pay principal and interest
when due on all the Securities to maturity or redemption, as the case
may be;
(3) 123 days pass after the deposit is made and during the
123-day period no Default specified in Sections 6.01(7) or (8) with
respect to the Company occurs which is continuing at the end of the
period;
(4) the deposit does not constitute a default under any other
agreement binding on the Company and is not prohibited by Article 10;
(5) the Company delivers to the Trustee an Opinion of Counsel
to the effect that the trust resulting from the deposit does not
constitute, or is qualified as, a regulated investment company under
the Investment Company Act of 1940;
(6) in the case of the legal defeasance option, the Company
shall have delivered to the Trustee an Opinion of Counsel stating that
(i) the Company has received from, or there has been published by, the
Internal Revenue Service a ruling, or (ii) since the date of this
Indenture there has been a change in the applicable Federal income tax
law, in either case to the effect that, and based thereon such Opinion
of Counsel shall confirm that, the Securityholders will not recognize
income, gain or loss for Federal income tax purposes as a result of
such defeasance and will be subject to Federal income tax on the same
amounts, in the same manner and at the same times as would have been
the case if such defeasance had not occurred;
62
(7) in the case of the covenant defeasance option, the Company
shall have delivered to the Trustee an Opinion of Counsel to the effect
that the Securityholders will not recognize income, gain or loss for
Federal income tax purposes as a result of such covenant defeasance and
will be subject to Federal income tax on the same amounts, in the same
manner and at the same times as would have been the case if such
covenant defeasance had not occurred; and
(8) the Company delivers to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent to the defeasance and discharge of the Securities as
contemplated by this Article 8 have been complied with.
Before or after a deposit, the Company may make arrangements
satisfactory to the Trustee for the redemption of Securities at a future date in
accordance with Article 3.
SECTION 8.03. Application of Trust Money. The Trustee shall
hold in trust money or U.S. Government Obligations deposited with it pursuant to
this Article 8. It shall apply the deposited money and the money from U.S.
Government Obligations through the Paying Agent and in accordance with this
Indenture to the payment of principal of and interest on the Securities. Money
and securities so held in trust are not subject to Article 10.
SECTION 8.04. Repayment to Company. The Trustee and the Paying
Agent shall promptly turn over to the Company upon request any excess money or
securities held by them at any time.
Subject to any applicable abandoned property law, the Trustee
and the Paying Agent shall pay to the Company upon request any money held by
them for the payment of principal or interest that remains unclaimed for two
years, and, thereafter, Securityholders entitled to the money must look to the
Company for payment as general creditors.
SECTION 8.05. Indemnity for Government Obligations. The
Company shall pay and shall indemnify the Trustee against any tax, fee or other
charge imposed on or assessed against deposited U.S. Government Obligations or
the principal and interest received on such U.S. Government Obligations.
SECTION 8.06. Reinstatement. If the Trustee or Paying Agent is
unable to apply any money or U.S. Government Obligations in accordance with this
Article 8 by reason of
63
any legal proceeding or by reason of any order or judgment of any court or
governmental authority enjoining, restraining or otherwise prohibiting such
application, the Company's obligations under this Indenture and the Securities
shall be revived and reinstated as though no deposit had occurred pursuant to
this Article 8 until such time as the Trustee or Paying Agent is permitted to
apply all such money or U.S. Government Obligations in accordance with this
Article 8; provided, however, that, if the Company has made any payment of
interest on or principal of any Securities because of the reinstatement of its
obligations, the Company shall be subrogated to the rights of the Holders of
such Securities to receive such payment from the money or U.S. Government
Obligations held by the Trustee or Paying Agent.
ARTICLE 9
Amendments
----------
SECTION 9.01. Without Consent of Holders. The Company, the
Subsidiary Guarantor and the Trustee may amend this Indenture or the Securities
without notice to or consent of any Securityholder:
(1) to cure any ambiguity, omission, defect or inconsistency;
(2) to comply with Article 5;
(3) to provide for uncertificated Securities in addition to or
in place of certificated Securities; provided, however, that the
uncertificated Securities are issued in registered form for purposes of
Section 163(f) of the Code or in a manner such that the uncertificated
Securities are described in Section 163(f)(2)(B) of the Code;
(4) to make any change in Article 10 or Article 12 that would
limit or terminate the benefits available to any holder of Senior
Indebtedness (or Representatives therefor) under Article 10 or Article
12, respectively;
(5) to add guarantees with respect to the Securities or to
release Guarantors when permitted by the terms hereof or to secure the
Securities;
(6) to add to the covenants of the Company for the benefit of
the Holders or to surrender any right or power herein conferred upon
the Company;
64
(7) to comply with any requirements of the SEC in connection
with qualifying, or maintaining the qualification of, this Indenture
under the TIA; or
(8) to make any change that does not adversely affect the
rights of any Securityholder.
An amendment under this Section may not make any change that
adversely affects the rights under Article 10 or Article 12 of any holder of
Senior Debt then outstanding unless the holders of such Senior Debt (or any
group or representative thereof authorized to give a consent) consent in writing
to such change.
After an amendment under this Section becomes effective, the
Company shall mail to Securityholders a notice briefly describing such
amendment. The failure to give such notice to all Securityholders, or any defect
therein, shall not impair or affect the validity of an amendment under this
Section.
SECTION 9.02. With Consent of Holders. The Company, the
Subsidiary Guarantors and the Trustee may amend this Indenture or the Securities
without notice to any Securityholder but with the written consent of the Holders
of at least a majority in aggregate principal amount of the Securities then
outstanding. However, without the consent of each Securityholder affected
thereby, an amendment may not:
(1) change the Stated Maturity of the principal of, or any
installment of interest on, any Security;
(2) reduce the principal amount of, or the premium or interest
on, any Security;
(3) change the place or currency of payment of principal of,
or premium or interest on, any Security;
(4) reduce the amount of Securities whose Holders must consent
to an amendment or modification of this Indenture;
(5) reduce the amount of Securities whose Holders must consent
to any waiver of compliance with the provisions of this Indenture;
(6) modify Section 6.04 or 6.07 or the second sentence of this
Section;
65
(7) modify any of the provisions of Article 10 or Article 12
in a manner materially adverse to the Securityholders;
(8) modify any provisions of the Indenture relating to the
guarantee by the Company or any Subsidiary Guarantor of the
Indebtedness of any Unrestricted Subsidiaries; or
(9) following the mailing of any Offer to Purchase, modify
such Offer to Purchase required under Section 4.07 and Section 4.10 in
a manner materially adverse to the Securityholders.
It shall not be necessary for the consent of the Holders under
this Section to approve the particular form of any proposed amendment, but it
shall be sufficient if such consent approves the substance thereof.
An amendment under this Section may not make any change that
adversely affects the rights under Article 10 or Article 12 of any holder of
Senior Debt then outstanding unless the holders of such Senior Debt (or any
group or representative thereof authorized to give a consent) consent in writing
to such change.
After an amendment under this Section becomes effective, the
Company shall mail to Securityholders a notice briefly describing such
amendment. The failure to give such notice to all Securityholders, or any defect
therein, shall not impair or affect the validity of an amendment under this
Section.
SECTION 9.03. Compliance with Trust Indenture Act. Every
amendment to this Indenture or the Securities shall comply with the TIA as then
in effect.
SECTION 9.04. Revocation and Effect of Consents and Waivers. A
consent to an amendment or a waiver by a Holder of a Security shall bind the
Holder and every subsequent Holder of that Security or portion of the Security
that evidences the same debt as the consenting Holder's Security, even if
notation of the consent or waiver is not made on the Security. However, any such
Holder or subsequent Holder may revoke the consent or waiver as to such Holder's
Security or portion of the Security if the Trustee receives the notice of
revocation before the date the amendment or waiver becomes effective. After an
amendment or waiver becomes effective, it shall bind every Securityholder. An
amendment or waiver becomes effective upon the execution of such amendment or
waiver by the Trustee.
66
The Company may, but shall not be obligated to, fix a record
date for the purpose of determining the Securityholders entitled to give their
consent or take any other action described above or required or permitted to be
taken pursuant to this Indenture. If a record date is fixed, then
notwithstanding the immediately preceding paragraph, those Persons who were
Securityholders at such record date (or their duly designated proxies), and only
those Persons, shall be entitled to give such consent or to revoke any consent
previously given or to take any such action, whether or not such Persons
continue to be Holders after such record date. No such consent shall be valid or
effective for more than 120 days after such record date.
SECTION 9.05. Notation on or Exchange of Securities. If an
amendment changes the terms of a Security, the Trustee may require the Holder of
the Security to deliver it to the Trustee. The Trustee may place an appropriate
notation on the Security regarding the changed terms and return it to the
Holder. Alternatively, if the Company or the Trustee so determines, the Company
in exchange for the Security shall issue and the Trustee shall authenticate a
new Security that reflects the changed terms. Failure to make the appropriate
notation or to issue a new Security shall not affect the validity of such
amendment.
SECTION 9.06. Trustee To Sign Amendments. The Trustee shall
sign any amendment authorized pursuant to this Article 9 if the amendment does
not adversely affect the rights, duties, liabilities or immunities of the
Trustee. If it does, the Trustee may but need not sign it. In signing such
amendment the Trustee shall be entitled to receive indemnity reasonably
satisfactory to it and to receive, and (subject to Section 7.01) shall be fully
protected in relying upon, an Officers' Certificate and an Opinion of Counsel
stating that such amendment is authorized or permitted by this Indenture.
SECTION 9.07. Payment for Consent. Neither the Company nor any
Affiliate of the Company shall, directly or indirectly, pay or cause to be paid
any consideration, whether by way of interest, fee or otherwise, to any Holder
for or as an inducement to any consent, waiver or amendment of any of the terms
or provisions of this Indenture or the Securities unless such consideration is
offered to be paid to all Holders that so consent, waive or agree to amend in
the time frame set forth in solicitation documents relating to such consent,
waiver or agreement.
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ARTICLE 10
Subordination
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SECTION 10.01. Agreement To Subordinate. The Company agrees,
and each Securityholder by accepting a Security agrees, that the Indebtedness
evidenced by the Securities is subordinated in right of payment, to the extent
and in the manner provided in this Article 10, to the prior payment in full in
cash or Cash Equivalents of all Senior Debt of the Company and that the
subordination is for the benefit of and enforceable by the holders of such
Senior Debt. The Securities shall rank pari passu in right of payment with all
other Senior Subordinated Indebtedness of the Company and only Indebtedness of
the Company that is Senior Debt shall rank senior to the Securities in
accordance with the provisions set forth herein. All provisions of this Article
10 shall be subject to Section 10.12.
SECTION 10.02. Liquidation, Dissolution, Bankruptcy. Upon any
payment or distribution of the assets of the Company to creditors upon any
liquidation, dissolution, winding up, reorganization, assignment for the benefit
of creditors, marshaling of assets or any bankruptcy, insolvency or similar
proceeding relating to the Company or its property:
(1) holders of Senior Debt of the Company shall be entitled to
receive payment in full of such Senior Debt in cash or Cash Equivalents
before Securityholders shall be entitled to receive any payment of
principal of, or premium, if any, or interest on, the Securities; and
(2) until the Senior Debt of the Company is paid in full in
cash or Cash Equivalents, any payment or distribution to which
Securityholders would be entitled but for this Article 10 shall be made
to holders of such Senior Debt as their interests may appear, except
that Securityholders may receive shares of stock and any debt
securities that are subordinated to such Senior Debt to at least the
same extent as the Securities.
SECTION 10.03. Default on Senior Indebtedness. The Company may
not pay the principal of or interest on the Securities or make any deposit
pursuant to Section 8.01 and may not repurchase, redeem or otherwise retire any
Securities (collectively, "pay the Securities") if (i) any Senior Debt is not
paid in full in cash or Cash Equivalents
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following the maturity (on the due date, upon acceleration or otherwise) of such
Senior Debt or (ii) there shall have occurred and be continuing a default in the
payment of Senior Debt unless, in either case, (x) the default has been
expressly cured or waived or (y) such Senior Debt has been paid in full in cash
or Cash Equivalents; provided, however, that the Company may pay the Securities
without regard to the foregoing if the Company and the Trustee receive written
notice approving such payment from the Representative of such Senior Debt.
During the continuance of any default (other than a default described in clause
(i) or (ii) of the preceding sentence) with respect to any Designated Senior
Debt that permits one or more holders thereof (or a trustee on behalf of the
holders thereof) to accelerate the maturity thereof, the Company may not pay the
Securities for a period (a "Payment Blockage Period") commencing upon the
receipt by the Company and the Trustee of written notice (a "Blockage Notice")
of such default from the Representative of such Designated Senior Debt
specifying an election to effect a Payment Blockage Period and ending on the
earlier of (x) 179 days thereafter and (y) the date on which the Designated
Senior Debt to which such default relates is paid in full in cash or Cash
Equivalents or such default is expressly waived or otherwise cured.
Notwithstanding the provisions described in the immediately preceding sentence
(but subject to the provisions contained in the first sentence of this Section),
unless the holders of such Designated Senior Debt or the Representative of such
holders shall have accelerated the maturity of such Designated Senior Debt, the
Company may resume payments on the Securities after termination of such Payment
Blockage Period, subject to the provisions of the Senior Debt. Not more than one
Blockage Notice may be given in any consecutive 360-day period, irrespective of
the number of defaults with respect to Designated Senior Debt during such
period, and there shall be a period of at least 181 consecutive days in each
period of 360 consecutive days during which no Payment Blockage Period is in
effect. For purposes of this Section, no default or event of default (other than
a default described in clause (i) or (ii) of the first sentence of this
paragraph) that existed or was continuing on the date of the commencement of any
Payment Blockage Period with respect to the Designated Senior Debt initiating
such Payment Blockage Period shall be, or be made, the basis of the commencement
of a subsequent Payment Blockage Period by the Representative of such Designated
Senior Debt, whether or not within a period of 360 consecutive days, unless such
default or event of default shall have been expressly cured or waived for a
period of not less than 180 consecutive days.
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SECTION 10.04. Acceleration of Payment of Securities. If
payment of the Securities is accelerated because of an Event of Default, the
holders of Senior Debt shall be entitled to receive payment in full in cash or
Cash Equivalents of all Senior Debt before the holders of the Securities shall
be entitled to receive any payment on account of the principal of (or premium,
if any) or interest on the Securities or on account of the purchase or
redemption or other acquisition of the Securities.
If an Event of Default shall have occurred and be continuing
(other than an Event of Default pursuant to Section 6.01(7) or 6.01(8)), the
Trustee or the Holders of the Securities electing to accelerate the Securities
pursuant to Section 6.02 shall give the holders of all Designated Senior Debt
(or their Representatives) five Business Days' prior written notice before
accelerating the Securities, which notice shall state that it is a "Notice of
Intent to Accelerate"; provided, however, that the Trustee shall have received
prior written notice from the Company specifying the names and addresses of such
holders of Designated Senior Debt; provided further, however, that the Trustee
or such holders may so accelerate the Securities immediately without such notice
if at such time payment of any Designated Senior Debt shall have been
accelerated. If payment of the Securities is accelerated because of an Event of
Default, the Company or the Trustee shall promptly notify the holders of the
Designated Senior Debt (or their Representatives) of the acceleration.
Notwithstanding anything to the contrary in this Section
10.04, the Trustee's obligations under this Section 10.04 shall only extend to
those holders of Designated Senior Debt whose identity or addresses have been
accurately disclosed in writing by the Company to the Trustee prior to the
occurrence of an Event of Default.
SECTION 10.05. When Distribution Must Be Paid Over. If a
payment or other distribution is made to the Trustee or any Securityholders that
because of this Article 10 should not have been made to them, the Trustee or
Securityholders, as the case may be, who receive the payment or other
distribution shall hold it in trust for holders of Senior Debt of the Company
and pay it over to them as their interests may appear, to the extent necessary
to pay in full in cash or Cash Equivalents all the Senior Debt.
SECTION 10.06. Subrogation. After all Senior Debt of the
Company is paid in full in cash or Cash Equivalents and until the Securities are
paid in full, Securityholders shall be subrogated to the rights of holders
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of such Senior Debt to receive distributions applicable to such Senior Debt. A
distribution made under this Article 10 to holders of such Senior Debt which
otherwise would have been made to Securityholders is not, as between the Company
and Securityholders, a payment by the Company on such Senior Debt.
SECTION 10.07. Relative Rights. This Article 10 defines the
relative rights of Securityholders and holders of Senior Debt of the Company.
Nothing in this Indenture shall:
(1) impair, as between the Company and Securityholders, the
obligation of the Company, which is absolute and unconditional, to pay
principal of and interest on the Securities in accordance with their
terms; or
(2) prevent the Trustee or any Securityholder from exercising
its available remedies upon a Default, subject to the rights of holders
of Senior Debt of the Company to receive payments and other
distributions otherwise payable to Securityholders.
SECTION 10.08. Subordination May Not Be Impaired by Company.
No right of any holder of Senior Debt of the Company to enforce the
subordination of the Indebtedness evidenced by the Securities shall be impaired
by any act or failure to act by the Company or by its failure to comply with
this Indenture. The holders of Senior Debt may extend, renew, modify, amend,
compromise, supplement or waive the terms of the Senior Debt or any security
therefor and release, sell or exchange such and otherwise deal freely with the
Company, all without affecting the liabilities and obligations of the parties to
the Indenture or the Securityholders. Each Securityholder by its acceptance of
the Securities, waives any and all notice of renewal, extension, modification,
amendment or compromise, supplement or waiver (including granting right of
accrual) of the Designated Senior Debt, present or future, and agrees and
consents to the foregoing.
SECTION 10.09. Rights of Trustee and Paying Agent.
Notwithstanding Section 10.03, the Trustee or Paying Agent may continue to make
payments on the Securities and shall not be charged with knowledge of the
existence of facts that would prohibit the making of any such payments unless,
prior to such payment, a Trust Officer of the Trustee receives notice
satisfactory to it that payments may not be made under this Article 10;
provided, however, that if on a date not less than two Business Days prior to
the
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date on which by the terms of this Indenture moneys deposited by the Company
with the Trustee for the payment of the Securities shall have become payable for
any purpose, the Trustee or the Paying Agent shall not have received with
respect to such moneys the notice provided for in this Article 10, then the
Trustee or such Payment Agent will have full power and authority to apply the
same to the purpose for which they were received. Nothing herein will be
construed to relieve any Securityholder from duties imposed upon it under
Section 10.05 with respect to moneys received in violation of the provisions of
this Article. The Company, the Registrar or co-registrar, the Paying Agent, a
Representative or a holder of Senior Debt may give the notice; provided,
however, that, if an issue of Senior Debt of the Company has a Representative,
only the Representative may give the notice.
The Trustee in its individual or any other capacity may hold
Senior Debt of the Company with the same rights it would have if it were not
Trustee. The Registrar and co-registrar and the Paying Agent may do the same
with like rights. The Trustee shall be entitled to all the rights set forth in
this Article 10 with respect to any Senior Debt of the Company which may at any
time be held by it, to the same extent as any other holder of such Senior Debt;
and nothing in Article 7 shall deprive the Trustee of any of its rights as such
holder. Nothing in this Article 10 shall apply to claims of, or payments to, the
Trustee under or pursuant to Section 7.07.
SECTION 10.10. Distribution or Notice to Representative.
Whenever a distribution is to be made or a notice given to holders of Senior
Debt of the Company, the distribution may be made and the notice given to their
Representative (if any).
SECTION 10.11. Article 10 Not To Prevent Events of Default or
Limit Right To Accelerate. The failure to make a payment pursuant to the
Securities by reason of any provision in this Article 10 shall not be construed
as preventing the occurrence of a Default. Except as specifically provided in
Section 10.04, nothing in this Article 10 shall have any effect on the right of
the Securityholders or the Trustee to accelerate the maturity of the Securities.
SECTION 10.12. Trust Moneys Not Subordinated. Notwithstanding
anything contained herein to the contrary, payments from money or the proceeds
of U.S. Government Obligations held in trust under Article 8 by the Trustee for
the payment of principal of and interest on the Securities shall not be
subordinated to the prior payment of any Senior
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Debt or subject to the restrictions set forth in this Article 10, and none of
the Securityholders shall be obligated to pay over any such amount to the
Company or any holder of Senior Debt of the Company or any other creditor of the
Company.
SECTION 10.13. Trustee Entitled To Rely. Upon any payment or
distribution pursuant to this Article 10, the Trustee and the Securityholders
shall be entitled to rely (i) upon any order or decree of a court of competent
jurisdiction in which any proceedings of the nature referred to in Section 10.02
are pending, (ii) upon a certificate of the liquidating trustee or agent or
other Person making such payment or distribution to the Trustee or to the
Securityholders or (iii) upon the Representatives for the holders of Senior Debt
of the Company for the purpose of ascertaining the Persons entitled to
participate in such payment or distribution, the holders of such Senior Debt and
other Indebtedness of the Company, the amount thereof or payable thereon, the
amount or amounts paid or distributed thereon and all other facts pertinent
thereto or to this Article 10. In the event that the Trustee determines, in good
faith, that evidence is required with respect to the right of any Person as a
holder of Senior Debt of the Company to participate in any payment or
distribution pursuant to this Article 10, the Trustee may request such Person to
furnish evidence to the reasonable satisfaction of the Trustee as to the amount
of such Senior Debt held by such Person, the extent to which such Person is
entitled to participate in such payment or distribution and other facts
pertinent to the rights of such Person under this Article 10, 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. The provisions of Sections 7.01 and 7.02 shall be applicable to all
actions or omissions of actions by the Trustee pursuant to this Article 10.
SECTION 10.14. Trustee To Effectuate Subordination. Each
Securityholder by accepting a Security authorizes and directs the Trustee on his
behalf to take such action as may be necessary or appropriate to acknowledge or
effectuate the subordination between the Securityholders and the holders of
Senior Debt of the Company as provided in this Article 10 and appoints the
Trustee as attorney-in-fact for any and all such purposes.
SECTION 10.15. Trustee Not Fiduciary for Holders of Senior
Debt. The Trustee shall not be deemed to owe any fiduciary duty to the holders
of Senior Debt and shall not be liable to any such holders if it shall
mistakenly pay