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KATZ MEDIA CORPORATION,
as Issuer
KATZ COMMUNICATIONS, INC.,
BANNER RADIO SALES, INC.,
CHRISTAL RADIO SALES, INC.,
EASTMAN RADIO SALES, INC.,
CABLE MEDIA CORPORATION,
SELTEL, INC.,
CABLE READY CORPORATION,
THE CABLE COMPANY, INC.,
THE NATIONAL PAYROLL COMPANY,
KATZ INTERNATIONAL LIMITED,
INTERNATIONAL MEDIA SALES LIMITED, and
INDEPENDENT RADIO SALES LIMITED,
as Guarantors,
and
FIRST UNION NATIONAL BANK,
as Trustee
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SUPPLEMENTAL INDENTURE NO. 3
Dated as of December 13, 1996
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$100,000,000
12 3/4% Senior Subordinated Notes due 2002
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SUPPLEMENTAL INDENTURE NO. 3, dated as of December 13, 1996
(the "Supplement") to the Indenture, dated as of November 15, 1992, among KATZ
MEDIA CORPORATION (formerly The Katz Corporation), a Delaware corporation, as
Issuer (the "Company"), the Guarantors listed on Schedule I hereto (each
individually a "Guarantor," and collectively the "Guarantors") and FIRST UNION
NATIONAL BANK (formerly, First Fidelity Bank, National Association, New
Jersey), as Trustee (the "Trustee"). Capitalized terms used herein without
definition shall have the respective meanings ascribed to them in the Indenture
(as defined herein).
RECITALS
WHEREAS, the Company, each of the Guarantors and the Trustee
entered into an Indenture, dated as of November 15, 1992 as amended by
Supplemental Indenture No. 1 dated May 19, 1994 and Supplemental Indenture No.
2 dated August 12, 1994 (as amended, the "Indenture"), pursuant to which the
Company issued $100,000,000 aggregate principal amount of its 12 3/4% Senior
Subordinated Notes due 2002 (the "Notes");
WHEREAS, Section 8.02 of the Indenture provides that the
Company, the Guarantors and the Trustee may modify or supplement the Indenture
with the written consent of the Holders of at least a majority in aggregate
principal amount of the outstanding Notes without notice to any Noteholder;
WHEREAS, all acts and things prescribed by the Indenture, by
law and by the Certificate of Incorporation and the Bylaws of the Company and
of the Trustee necessary to make this Supplement a valid instrument legally
binding on the Company, each of the Guarantors and the Trustee, in accordance
with its terms, have been duly done and performed;
WHEREAS, the written consents to the amendments or
supplements to the Indenture have been obtained from the Holders of at least a
majority in aggregate principal amount of the outstanding Notes; and
WHEREAS, all conditions precedent to amend or supplement the
Indenture have been met.
NOW, THEREFORE, each party agrees, for the benefit of the
other parties and for the equal and ratable benefit of the Holders of the
Notes, to the deletions, amendments and modifications set forth below (the
"Amendments") which will become operative pursuant to the terms hereof.
ARTICLE 1
AMENDMENTS
Section 1.01. Deletions, Amendments and Modifications to Article 1.
a. Deletions. THE FOLLOWING DEFINITIONS ARE HEREBY ELIMINATED
IN THEIR ENTIRETY AND SHALL BE OF NO FURTHER FORCE OR
EFFECT: "Acquired Debt", "Consolidated EBITDA",
"Consolidated Fixed Charge Coverage Ratio", "Consolidated
Interest Expense", "Consolidated Net Income", "Consolidated
Net Worth", "Disqualified Stock", "Permitted Debt",
"Permitted Liens" and "Redeemable Dividend".
b. Amendments and Modifications.
1. THE FOLLOWING IS INSERTED IN SECTION 1.01 OF THE
INDENTURE AS A NEW DEFINITION:
""Net Consideration" shall equal the greater of (i)
the Net Cash Proceeds from such Asset Sale and (ii) 85% of
the consideration for the Asset Sale less any Permitted Asset
Sale Consideration received in connection with such Asset
Sale."
2. THE DEFINITION OF "UNRESTRICTED SUBSIDIARY" IN
SECTION 1.01 IS HEREBY REPLACED IN ITS ENTIRETY BY
THE FOLLOWING:
""Unrestricted Subsidiary" means (a) any Subsidiary
of the Company which at the time of determination shall have
been designated an Unrestricted Subsidiary by the Board of
Directors of the Company, as provided below, and (b) any
Subsidiary of an Unrestricted Subsidiary. The Board of
Directors of the Company may designate any Subsidiary of the
Company (including any newly acquired or newly formed
Subsidiary) to be an Unrestricted Subsidiary; provided that
(x) the Subsidiary to be so designated (i) has total assets
with a fair market value at the time of such designation of
$25,000 or less or (ii) is being so designated simultaneously
with the acquisition by the Company of such Subsidiary by
merger or consolidation with an Unrestricted Subsidiary and
(y) immediately after giving effect to such designation, no
Default or Event of Default shall have occurred and be
continuing. The Board of Directors of the Company may
designate any Unrestricted Subsidiary to be a Restricted
Subsidiary; provided that, immediately after giving effect to
such designation, no Default or Event of Default shall have
occurred and be continuing. Any such designation by the Board
of Directors of the Company shall be evidenced to the Trustee
by filing with the Trustee a certified copy of the resolution
of the Board of Directors of the Company giving effect to
such designation and a certificate certifying that such
designation complied with the foregoing conditions.
Notwithstanding the foregoing or any other provision of this
Indenture to the contrary, no assets of
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any Restricted Subsidiary existing as of the date of this
Indenture may be held at any time by Unrestricted
Subsidiaries, except to the extent that the transfer by a
Restricted Subsidiary of such assets to such Unrestricted
Subsidiary would be deemed to constitute a Permitted
Investment hereunder."
Section 1.02. Deletions, Amendments and Modifications to Article 4.
a. Deletions. THE FOLLOWING SECTIONS ARE HEREBY ELIMINATED IN
THEIR ENTIRETY AND SHALL BE OF NO FURTHER FORCE OR EFFECT:
1. Section 4.06. Limitations on Incurrence of Debt.
2. Section 4.07. Limitations on Restricted Subsidiary Debt
and Preferred Stock.
3. Section 4.08. Limitations on Other Subordinated Debt.
4. Section 4.09. Limitation on Restricted Payments.
5. Section 4.11. Limitations on Transactions with Affiliates.
6. Section 4.12. Limitation on Liens.
7. Section 4.13. Limitations on Distribution Restrictions
Affecting Restricted Subsidiaries.
b. Amendments and Modifications.
1. SECTION 4.02 IS HEREBY AMENDED AND MODIFIED TO READ
IN ITS ENTIRETY AS FOLLOWS:
"Section 4.02. SEC Reports.
So long as any of the Notes remains outstanding, the
Company shall cause copies of all quarterly and annual
financial reports and of the information, documents, and
other reports (or copies of such portions of any of the
foregoing as the SEC may by rules and regulations prescribe)
which the Company is required to file with the SEC pursuant
to Section 13 or 15(d) of the Exchange Act to be filed with
the Trustee and mailed to the Holders at their addresses
appearing in the register of Notes maintained by the
Registrar, in each case, within 15 days of filing with the
SEC. The Company shall also comply with the provisions of TIA
ss. 314(a). The Company shall provide the Trustee with a
sufficient number of copies of all reports and other
documents and information that the Trustee may be required to
deliver to the Noteholders under this Section 4.02."
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2. SECTION 4.04 IS HEREBY AMENDED AND MODIFIED TO READ
IN ITS ENTIRETY AS FOLLOWS:
"Section 4.04. Compliance Certificate.
(a) The Company shall deliver to the Trustee, at
such time as the Company's annual financial statements are
delivered pursuant to Section 4.02 above, an Officers'
Certificate stating that a review of the activities of the
Company and its Restricted Subsidiaries during the period has
been made under the supervision of the signing Officers with
a view to determining whether each has kept, observed,
performed and fulfilled its obligations under this Indenture,
and further stating, as to each such Officer signing such
Certificate, that to the best of his or her knowledge each
has kept, observed, performed and fulfilled each and every
covenant contained in this Indenture and is not in default in
the performance or observance of any of the terms, provisions
and conditions hereof (or, if a Default or Event of Default
shall have occurred, describing all such Defaults or Events
of Default of which he or she may have knowledge no event has
occurred, describing all such Defaults or Events of Default
of which he or she may have knowledge and what action each is
taking or proposes to take with respect thereto) and that to
the best of his or her knowledge no event has occurred and
remains in existence by reason of which payments on account
of the principal of or interest, if any, on the Notes is
prohibited or if such event has occurred, a description of
the event and what action each is taking or proposes to take
with respect thereto.
(b) The Company will, so long as any of the Notes
are outstanding, deliver to the Trustee, forthwith upon any
Officer becoming aware of any Default or Event of Default, an
Officers' Certificate specifying such Default, Event of
Default or default and what action the Company is taking or
proposes to take with respect thereto."
3. THE FIRST PARAGRAPH OF SECTION 4.10 ENTITLED
"LIMITATIONS ON SALES OF ASSETS AND RESTRICTED
SUBSIDIARY STOCK" IS HEREBY DELETED AND REPLACED IN
ITS ENTIRETY WITH THE FOLLOWING PARAGRAPH:
"The Company may not, and may not permit any of its
Restricted Subsidiaries to, directly or indirectly, make any
Asset Sale unless 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 Capital Stock sold or otherwise disposed of.
Within one year after any Asset Sale, the Company (or such
Restricted Subsidiary, as the case may be) may apply an
amount up to the Net Consideration to repay Senior Debt or to
an investment in capital assets in a line of business of the
Company or its Restricted Subsidiaries existing as of the
date of the Asset Sale. The difference between the Net
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Consideration and the amount so applied or invested as
provided in the preceding sentence constitutes "Excess
Proceeds.""
Section 1.03. Amendments and Modifications to Article 5. SECTION
5.01 IS HEREBY AMENDED AND MODIFIED TO READ IN ITS ENTIRETY AS FOLLOWS:
"Section 5.01. Limitation on Consolidation,
Merger, and Sales of Assets.
Neither the Company nor any Guarantor may
consolidate with or merge with or into any other entity or
sell, convey, assign, transfer, lease or otherwise dispose of
all or substantially all of its properties and assets, in a
single transaction or through a series of transactions, as an
entirety or substantially as an entirety, to any entity
(other than the merger of a Wholly-Owned Restricted
Subsidiary of the Company into another Wholly-Owned
Restricted Subsidiary of the Company or the merger of a
Wholly-Owned Restricted Subsidiary of the Company into the
Company), unless: (i) either (a) the Company or such
Guarantor shall be the continuing corporation or (b) the
entity (if other than the Company or such Guarantor) formed
by such consolidation or into which the Company or such
Guarantor is merged or the entity that acquires, by sale,
assignment, conveyance, transfer, lease or disposition, all
or substantially all of the properties and assets of the
Company or such Guarantor as an entirety shall be a
corporation, partnership or trust organized and validly
existing under the laws of the United States or any State
thereof or the District of Columbia, and shall expressly
assume, by a supplemental indenture, the due and punctual
payment of the principal of, premium, if any, and interest on
all the Notes and the performance and observance of every
covenant of this Indenture to be performed or observed on the
part of the Company or such Guarantor; and (ii) the Company
or such Guarantor shall deliver to the Trustee prior to the
proposed transaction an Officers' Certificate to the
foregoing effect and an Opinion of Counsel stating that the
proposed transaction and the supplemental indenture comply
with this Indenture.
Section 1.04. Amendments and Modifications to Article 11.
a. SECTION 11.02 IS HEREBY AMENDED AND MODIFIED TO READ
IN ITS ENTIRETY AS FOLLOWS:
"Section 11.02. Defeasance and Discharge.
Upon the Company's exercise of the option described
in Section 11.01 above applicable to this Section with
respect to the Notes, the Company shall be deemed to have
been discharged from its obligations with respect to the
notes on the date the conditions set forth in Section 11.04
below are satisfied (hereinafter, "Defeasance"). For this
purpose, such Defeasance means that the Company shall
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be deemed to have paid and discharged the entire indebtedness
represented by the Notes and to have satisfied all its other
obligations under such Notes and this Indenture insofar as
such Notes are concerned (and the Trustee, at the expense of
the Company, shall, subject to Section 11.06 hereof, execute
proper instruments acknowledging the same), except for the
following which shall survive until otherwise terminated or
discharged hereunder: (A) the rights of Holders of
outstanding Notes to receive solely from the trust funds
described in Section 11.04 hereof and as more fully set forth
in such Section, payments in respect of the principal of,
premium, if any, and interest on such Notes when such
payments are due, (B) the Company's obligations with respect
to such Notes under Sections 2.03, 2.04, 2.05, 2.06, 2.07 and
2.08 hereof, (C) the Company's rights and obligations under
Sections 3.01, 3.02, 3.03, 3.04, 3.05, 3.06 and 3.07, (D) the
rights, powers, trusts, duties, and immunities of the Trustee
hereunder (including claims of, or payments to, the Trustee
under or pursuant to Section 7.07 hereof) and (E) this
Article 11. Subject to compliance with this Article 11, the
Company may exercise its option under this Section 11.02 with
respect to the Notes notwithstanding the prior exercise of
its option under Section 11.03 below with respect to the
Notes."
b. SUBSECTION 11.04(2) OF SECTION 11.04 ENTITLED
"CONDITIONS TO DEFEASANCE OR COVENANT DEFEASANCE" IS
HEREBY AMENDED AND MODIFIED TO READ IN ITS ENTIRETY
AS FOLLOWS:
"(2) no Event of Default or Default with respect to
the Notes shall have occurred and be continuing on the date
of such deposit;"
Section 1.05. Amendments and Modifications to Article 12. SECTION
12.06 IS HEREBY AMENDED AND MODIFIED TO READ IN ITS ENTIRETY AS FOLLOWS:
"Section 12.06. Release of Guarantors.
The Company covenants and agrees that in the event
of a sale or other disposition of all of the assets of any
Guarantor, by way of merger, consolidation or otherwise, or a
sale or other disposition of all of the capital stock of any
Guarantor, then such Guarantor (in the event of a sale or
other disposition, by way of such a merger, consolidation or
otherwise, of all of the capital stock of such Guarantor) or
the corporation acquiring the property (in the event of a
sale or other disposition of all of the assets of such
Guarantor) will be released and relieved of any obligations
under its Guarantee; provided, however, that the Net Proceeds
of such sale or other disposition are applied in accordance
with applicable provisions of this Indenture."
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ARTICLE 2
MISCELLANEOUS
Section 2.01. Effect of this Supplemental Indenture No. 3. This
Supplement is supplemental to the Indenture and does and shall be deemed to
form a part of, and shall be construed in connection with and as part of, the
Indenture for any and all purposes. Except as specifically modified herein, the
Indenture and the Notes are in all respects ratified and confirmed and shall
remain in full force and effect in accordance with their terms.
Section 2.02. Trustee. Except as otherwise expressly provided herein,
no duties, responsibilities or liabilities are assumed, or shall be construed
to be assumed, by the Trustee by reason of this Supplement. This Supplement is
executed and accepted by the Trustee subject to all the terms and conditions
set forth in the Indenture with the same force and effect as if those terms and
conditions were repeated at length herein and made applicable to the Trustee
with respect hereto. The Trustee assumes no responsibility for the recitals
contained herein, which shall be taken as statements of the Company, and makes
no representation as to the validity or sufficiency of this Supplement.
Section 2.03. Governing Law. The laws of the State of New York shall
govern this Supplement without regard to principles of conflicts of law.
Section 2.04. Counterparts. The parties may sign any number of copies
of this Supplement. Each signed copy shall be an original, but all of such
executed copies together shall represent the same agreement.
Section 2.05. Severability. In case one or more of the provisions in
this Supplement shall be held invalid, illegal or unenforceable, in any respect
for any reason, the validity, illegality and enforceability of any such
provision in every other respect and of the remaining provisions shall not in
any way be affected or impaired thereby, it being intended that all of the
provisions hereof shall be enforceable to the full extent permitted by law.
Section 2.06. Effective Date of this Supplemental Indenture No. 3.
This Supplement and the Amendments shall be effective immediately upon
execution by the Company, the Guarantors and the Trustee. The Amendments shall
not, however, become operative until such date that the Company delivers to the
Trustee an Officers' Certificate that the following events have occurred: (i)
the Acceptance Date (as defined in the Company's Offer to Purchase and Consent
Solicitation dated November 14, 1996, as amended from time to time (the "Offer
to Purchase")) has occurred in accordance with the terms of the Offer to
Purchase and (ii) all Conditions to the Repurchase Offer (as such terms are
defined in the Offer to Purchase) have been satisfied or waived.
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SIGNATURES
IN WITNESS WHEREOF, the parties hereto have caused this Supplement to
be duly executed, all as of the date first written above.
KATZ MEDIA CORPORATION
By: /s/ Richard E. Vendig
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Name: Richard E. Vendig
Title: Chief Financial and Administrative
Officer and Treasurer
KATZ COMMUNICATIONS, INC.,
as Guarantor
BANNER RADIO SALES, INC.,
as Guarantor
CHRISTAL RADIO SALES, INC.,
as Guarantor
EASTMAN RADIO SALES, INC.,
as Guarantor
CABLE MEDIA CORPORATION,
as Guarantor
SELTEL, INC.,
as Guarantor
CABLE READY CORPORATION,
as Guarantor
THE CABLE COMPANY, INC.,
as Guarantor
THE NATIONAL PAYROLL COMPANY,
as Guarantor
KATZ INTERNATIONAL LIMITED,
as Guarantor
INTERNATIONAL MEDIA SALES LIMITED,
as Guarantor
INDEPENDENT RADIO SALES LIMITED,
as Guarantor
By: /s/ Richard E. Vendig
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Name: Richard E. Vendig
Title: Chief Financial and Administrative
Officer and Treasurer
FIRST UNION NATIONAL BANK,
as Trustee
By: /s/ Rick Barnes
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Name: Rick Barnes
Title: Assistant Vice President
SCHEDULE I
KATZ COMMUNICATIONS, INC.
BANNER RADIO SALES, INC.
CHRISTAL RADIO SALES, INC.
EASTMAN RADIO SALES, INC.
CABLE MEDIA CORPORATION
SELTEL, INC.
CABLE READY CORPORATION
THE CABLE COMPANY, INC.
THE NATIONAL PAYROLL COMPANY
KATZ INTERNATIONAL LIMITED
INTERNATIONAL MEDIA SALES LIMITED
INDEPENDENT RADIO SALES LIMITED