EXHIBIT 3.1
As amended through November 21, 2008
AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF CUMULUS MEDIA INC.
ARTICLE I
NAME
The name of the Company is Cumulus Media Inc.
ARTICLE II
REGISTERED AGENT
AND REGISTERED OFFICE
The registered agent of the Company is The Corporation Trust Company
and the registered office of the Company is located at Corporation Trust
Center, 1209 Orange Street, Wilmington, New Castle County, Delaware 19801.
ARTICLE III
PURPOSE
The purpose or purposes for which the Company is organized is the
transaction of any or all lawful business for which corporations may be
incorporated under the Delaware General Corporation Law, as amended. The
Company shall have perpetual existence.
ARTICLE IV
AUTHORIZED SHARES
The aggregate number of shares which the Company is authorized to
issue is 270,262,000, divided into four classes consisting of: (i) 200,000,000
shares designated as Class A Common Stock, $.01 par value per share
(hereinafter referred to as the "Class A Common Stock"); (ii) 20,000,000 shares
designated as Class B Common Stock, $.01 par value per share (hereinafter
referred to as the "Class B Common Stock"); (iii) 30,000,000 shares designated
as Class C Common Stock, $ .01 par value per share (hereinafter referred to as
the "Class C Common Stock"), and (iv) 20,262,000 shares of Preferred Stock,
$.01 par value per share (hereinafter referred to as the "Preferred Stock"); of
which 250,000 shares are designated as 13 3/4% Series A Cumulative Exchangeable
Redeemable Preferred Stock due 2009 (the "Series A Preferred Stock"), having
the voting powers, preferences and relative participating, optional and other
special rights, and qualifications, limitations and restrictions thereon, as
set forth on Appendix A attached hereto and made a part of this Amended and
Restated Certificate of Incorporation, and of which 12,000 shares are
designated as 12% Series B Cumulative Preferred Stock (the "Series B Preferred
Stock"), having the voting powers, preferences and relative participating,
optional and other special rights, and qualifications, limitations and
restrictions thereon, as set forth on Appendix B attached hereto and made a
part of this Amended and Restated Certificate of Incorporation. The Class A
Common Stock, Class B Common Stock, and Class C Common Stock shall be referred
to collectively herein as the "Common Stock".
ARTICLE V
TERMS OF COMMON STOCK
Except with regard to voting and conversion rights, shares of Class A
Common Stock, Class B Common Stock, and Class C Common Stock are identical in
all respects. The preferences, qualifications, limitations, restrictions, and
the special or relative rights in respect of the Common Stock and the various
classes of Common Stock shall be as follows:
SECTION 1. VOTING RIGHTS.
(a) General Rights. The holders of shares of Class A Common Stock
shall be entitled to one (1) vote for each share of Class A Common Stock held
on the record date therefor on any matter submitted to a vote of the
stockholders of the Company. Except as may be required by law or by Section 2
of Article VII, the holders of shares of Class B Common Stock shall not be
entitled to vote on any matter submitted to a vote of the stockholders of the
Company; provided,
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however, that this sentence is not intended to detract from or limit the
consent rights of certain holders of Class B Common Stock as set forth in
Section 1(c) of this Article V. The holders of shares of Class C Common Stock
shall be entitled to ten (10) votes for each share of Class C Common Stock held
on the record date therefor on any matter submitted to a vote of the
stockholders of the Company; provided, however, that during the period of time
commencing with the date of conversion of any Class B Common Stock to Class C
Common Stock held by either BA Capital or SWIB and ending with the date on
which BA Capital and SWIB (together with their respective Affiliates) each
ceases to beneficially own at least five percent (5%) of the aggregate number
of shares of all classes of Common Stock held by such entity immediately prior
to the consummation of the Offering, the holders of shares of Class C Common
Stock shall be entitled to one (1) vote for each share of Class C Common Stock
held on the record date therefor on any matter submitted to a vote of the
stockholders of the Company.
(b) Voting in General. The holders of Class A Common Stock and
the holders of Class C Common Stock shall vote together, as a single class, on
all matters submitted for a vote to the stockholders of the Company.
(c) Consent to Fundamental Action. The express written consent of
Consent Right Holders holding a majority of that number of shares of Class B
Common Stock held in the aggregate by all Consent Right Holders shall be
required for the taking of any Fundamental Action. Such consent is in addition
to the approval required by Section 1(b) of this Article V. The term "Consent
Right Holder," at any given time, means a Person who owns at least one (1)
share of Class B Common Stock at such time, and who held at least one (1) share
of Class B Common Stock immediately prior to the consummation of the Offering,
and who (together with such Person's Affiliates) beneficially owns at such time
a number of shares of the Common Stock of the Company equal to or greater than
fifty percent (50%) of the number of shares of Common Stock held by such Person
immediately prior to the consummation of the Offering.
SECTION 2. DIVIDENDS.
After payment of the preferential amounts to which the holders of any
shares ranking prior to the Common Stock shall be entitled, the holders of
Common Stock shall be entitled to receive when, as and if declared by the Board
of Directors of the Company, from funds lawfully available therefor, such
dividends as may be declared by the Board of Directors of the Company from time
to time. When and as dividends are declared on Common Stock, the holders of
shares of each class of Common Stock will be entitled to share ratably in such
dividend according to the number of shares of Common Stock held by them;
provided, however, that in the case of dividends or other distributions payable
on Common Stock in shares of Common Stock, including distributions pursuant to
share splits or dividends, only Class A Common Stock will be distributed with
respect to Class A Common Stock, only Class B Common Stock will be distributed
with respect to Class B Common Stock and only Class C Common Stock will be
distributed with respect to Class C Common Stock. In the event any class of
Common Stock is split, divided or combined, each other class of Common Stock
simultaneously shall be proportionately split, divided or combined.
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SECTION 3. LIQUIDATION, DISSOLUTION OR WINDING-UP.
In the event of any liquidation, dissolution or winding up of the
Company, whether voluntarily or involuntarily, after payment or provision for
payment of the debts and other liabilities of the Company and the preferential
amounts to which the holders of any shares ranking prior to the Common Stock in
the distribution of assets shall be entitled upon liquidation, the holders of
shares of the Class A Common Stock, the Class B Common Stock and the Class C
Common Stock shall be entitled to share pro rata in the remaining assets of the
Company in proportion to the respective number of shares of Common Stock held
by each holder compared to the aggregate number of shares of Common Stock
outstanding.
SECTION 4. MERGER OR CONSOLIDATION.
In the event of a merger or consolidation of the Company, shares of
Class A Common Stock, Class B Common Stock, and Class C Common Stock shall be
treated identically, except with respect to voting and conversion rights as
specifically described in this Article V.
SECTION 5. CONVERTIBILITY AND TRANSFER.
(a) Conversion of Class B Common Stock. Each holder of Class B
Common Stock is entitled to convert at any time or times all or any part of
such holder's shares of Class B Common Stock into an equal number of shares of
Class A Common Stock or an equal number of shares of Class C Common Stock;
provided, however, that the prior consent of any governmental authority
required under any applicable law, rule, regulation or other governmental
requirement to make such conversion lawful shall have first been obtained and
provided further, that such holder is not at the time of such conversion a
Disqualified Person.
(b) Conversion of Class C Common Stock. Each holder of Class C
Common Stock is entitled to convert at any time or times all or any part of
such holder's shares of Class C Common Stock into an equal number of shares of
Class A Common Stock; provided, however, that the prior consent of any
governmental authority required under any applicable law, rule, regulation or
other governmental requirement to make such conversion lawful shall have first
been obtained; and provided further, that such holder is not at the time of
such conversion a Disqualified Person. In the event of the death of any
Principal or the Disability of any Principal which results in termination of
such Principal's employment with the Company, the shares of Class C Common
Stock held by such deceased or disabled Principal or any Related Party or
Affiliate of such deceased or disabled Principal shall automatically be
converted into one (1) share of Class A Common Stock. The holder of such
converted shares shall have no further rights as a holder of Class C Common
Stock with respect to such converted shares, but shall be deemed to have become
the holder of the number of shares of Class A Common Stock into which such
shares of Class C Common Stock have converted pursuant to this Section 5(b).
Such holder shall exchange the certificates representing such converted Class C
Common Stock for certificates representing Class A Common Stock.
(c) Transfer of Certain Shares.
(i) A record or beneficial owner of shares of Class B
Common Stock, or of Class C Common Stock that at any time was converted from
Class B Common Stock, may transfer such shares (whether by sale, assignment,
gift, bequest, appointment or otherwise) to any
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transferee; provided, however that (i) the prior consent of any governmental
authority required under applicable law, rule, regulation or other governmental
requirement to make such transfer lawful shall have first been obtained, and
(ii) the transferee is not a Disqualified Person. Concurrently with any such
transfer, each such transferred share of Class B Common Stock or Class C Common
Stock shall automatically be converted into one (1) share of Class A Common
Stock. The holder of such converted shares shall have no further rights as a
holder of Class B Common Stock or Class C Common Stock with respect to such
converted shares but shall be deemed to have become the holder of the number of
shares of Class A Common Stock into which such shares of Class B Common Stock
or Class C Common Stock have converted pursuant to this Section 5(c)(i). Such
holder shall exchange the certificates representing such converted Class B
Common Stock or Class C Common Stock for certificates representing Class A
Common Stock.
(ii) A record or beneficial owner of shares of Class C
Common Stock may transfer such shares (whether by sale, assignment, gift,
bequest, appointment or otherwise) to any transferee; provided, however, that
(i) the prior consent of any governmental authority required under applicable
law, rule, regulation or other governmental requirement to make such transfer
lawful shall have first been obtained, and (ii) the transferee is not a
Disqualified Person and provided further, that if the transferee is not an
Affiliate or a Related Party of a Principal, then, concurrently with any such
transfer, each such transferred share of Class C Common Stock shall
automatically be converted into one (1) share of Class A Common Stock. The
holder of such converted shares shall have no further rights as a holder of
Class C Common Stock with respect to such converted shares but shall be deemed
to have become the holder of the number of shares of Class A Common Stock into
which such shares of Class C Common Stock have converted pursuant to this
Section 5(c)(ii). Such holder shall exchange the certificates representing such
converted Class C Common Stock for certificates representing Class A Common
Stock.
(d) Condition Precedent to Transfer or Conversion. As a condition
precedent to any transfer or conversion of any shares of Class B Common Stock
or Class C Common Stock, the transferor shall give the Company not less than
five (5) business days prior written notice of any intended transfer or
conversion and the intended transferee or the Person who will hold the
converted shares, as applicable, shall promptly provide the Company with any
information reasonably requested by the Company to enable the Company to
determine whether such intended transferee or holder of converted shares is a
Disqualified Person.
(e) Conversion.
(i) Effective Time of Conversion. The conversion of
shares of Class B Common Stock or Class C Common Stock, as the case may be,
will be deemed to have been effected as of the close of business on the date on
which occurs the last to occur of the following events:
(A) The certificate or certificates
representing the shares of Class B Common Stock or Class C Common Stock to be
converted have been surrendered to the principal office of the Company with
duly executed conversion instructions and, if applicable, transfer
instructions;
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(B) All information requested by the Company,
for the purpose of making the determination contemplated by Section 5(d) of
this Article V, has been provided to the Company and the Company has determined
that the intended transferee is not a Disqualified Person; and
(C) All consents contemplated by Section
5(c)(i) of this Article V have been obtained and evidence thereof satisfactory
to the Company has been provided to the Company.
At such time as such conversion has been effected, the rights of the holder of
such shares will cease and the Person or Persons in whose name or names any
certificate or certificates for shares of Class C Common Stock or Class A
Common Stock are to be issued upon such conversion will be deemed to have
become the holder or holders of record of the shares of the Class C Common
Stock or the Class A Common Stock so issuable by reason of the conversion.
(ii) Deliveries Upon Conversion. As soon as possible
after a conversion has been effected (but in any event within three (3)
business days), the Company will deliver to the converting holder:
(A) a certificate or certificates representing
the number of shares of Class A Common Stock or Class C Common Stock issuable
by reason of such conversion in such name or names and such denominations as
the converting holder has specified; and
(B) a certificate representing any shares of
Class B Common Stock or Class C Common Stock which were represented by the
certificate or certificates delivered to the Company in connection with such
conversion but which were not converted.
(iii) No Charges. The issuance of certificates for shares
of Class A Common Stock or Class C Common Stock upon conversion of Class B
Common Stock or Class C Common Stock will be made without charge to the holders
of such Common Stock for any issuance tax in respect of such issuance or other
costs incurred by the Company in connection with such conversion and the
related issuance of shares of Class A Common Stock or Class C Common Stock,
except for any transfer taxes that may be payable if certificates are to be
issued in a name other than that in which the surrendered certificate is
registered. Upon conversion of a share of Class B Common Stock or Class C
Common Stock, the Company will take all such actions as are necessary in order
to ensure that the Class A Common Stock or Class C Common Stock issued or
issuable with respect to such conversion will be validly issued, fully paid and
nonassessable.
(iv) No Adverse Action. The Company will not close its
books against the transfer of Class A Common Stock or Class C Common Stock
issued or issuable upon conversion of Class B Common Stock or Class C Common
Stock in any manner which interferes with the timely conversion of Class B
Common Stock or Class C Common Stock.
(v) Sufficient Shares. The Company shall at all times
have authorized, reserved and set aside a sufficient number of shares of Class
A Common Stock and Class C Common Stock for the conversion of all shares of
Class B Common Stock then outstanding. The Company shall at all times have
authorized, reserved and set aside a sufficient number of shares of Class A
Common Stock for the conversion of all shares of Class C Common Stock then
outstanding.
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SECTION 6. DISQUALIFIED PERSON.
In event that a Person is or becomes a Disqualified Person, such
Person shall promptly take any and all actions necessary or required by the FCC
to cause such Person to cease being a Disqualified Person, including, without
limitation, (i) divesting all or a portion of such Person's interest in the
Company, (ii) making an application to or requesting a ruling from and/or
cooperating with the Company in any application to or request for a ruling from
the FCC seeking a waiver for or an approval of such ownership, (iii) divesting
itself of any ownership interest in any entity which together with such
Person's interest in the Company makes such Person a Disqualified Person, (iv)
entering into a voting trust whereby such Person's interest in the Company will
not make such Person a Disqualified Person, or (v) subject to any Board of
Directors and/or vote of Class B Common Stock holders required under Article
VII hereof, exchanging such Person's shares of Common Stock for Class B Common
Stock.
SECTION 7. LEGEND.
Each Certificate representing shares of Common Stock shall bear a
legend setting forth the restrictions on transfer and ownership which apply to
the shares represented by such Certificate.
SECTION 8. DEFINITIONS.
For the purposes of this Certificate of Incorporation, the following
capitalized terms shall have the meanings set forth below:
"Affiliate" shall be defined as set forth in Rule 144 promulgated
under the Securities Act.
"Applicable Period" shall be defined as set forth in Article VII,
Section 1.
"BA Capital" shall mean (i) BA Capital Company, L.P., a Delaware
limited partnership and successor in interest to NationsBanc Capital Corp.
("NBCC"), and any entity that is a successor to BA Capital Company, L.P., and
(ii) NBCC prior to the time that BA Capital Company, L.P. succeeded to NBCC's
interests.
"Change of Control" means the occurrence of any of the following: (i)
the sale, lease, transfer, conveyance or other disposition (other than by way
of merger or consolidation), in one transaction or a series of related
transactions, of all or substantially all of the assets of the Company and its
subsidiaries taken as a whole to any Person or group of related Persons (a
"Group") (as such terms are used in Section 13(d)(3) of the Exchange Act) other
than a Principal or a Related Party of a Principal, (ii) the consummation of
any transaction (including, without limitation, any purchase, sale,
acquisition, disposition, merger or consolidation) the result of which is that
any Person or Group other than a Principal or Related Party of a Principal
becomes the "beneficial owner" (as such term is defined in Rule 13d-3 and 13d-5
under the Exchange Act) of more than fifty percent (50%) of the aggregate
voting power of all classes of capital stock of the Company having the right to
elect directors under ordinary circumstances, or (iii) the first day on which a
majority of the members of the Board of Directors of the Company are not
Continuing Directors.
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"Class A Common Stock" shall be defined as set forth in Article IV.
"Class B Common Stock" shall be defined as set forth in Article IV.
"Class C Common Stock" shall be defined as set forth in Article IV.
"Common Stock" shall be defined as set forth in Article IV.
"Communications Act" shall mean the Telecommunications Act of 1996, as
amended.
"Company" shall mean Cumulus Media Inc., a Delaware corporation.
"Consent Right Holder" shall be defined as set forth in Section 1(c)
of this Article V.
"Continuing Directors" means, as of any date of determination, any
member of the Board of Directors of the Company who (i) was a member of such
Board of Directors on the date of consummation of the Offering, or (ii) was
nominated for election or elected to such Board of Directors with the approval
of (x) two-thirds (2/3) of the Continuing Directors who were members of such
Board at the time of such nomination or election, or (y) two-thirds (2/3) of
those Directors who were previously approved by Continuing Directors.
"Director" shall mean a member of the Board of Directors of the
Company.
"Disability" shall mean the inability of the Principal to perform his
duties to the Company on account of physical or mental illness or incapacity
for a period of four and one-half (4 1/2) consecutive months, or for a period
of one hundred thirty-five (135) calendar days, whether or not consecutive,
during any three hundred sixty-five (365) day period, as a result of a
condition that is treated as a total or permanent disability under the
long-term disability insurance policy of the Company that covers the Principal.
A Person shall be deemed to be a "Disqualified Person" if (and with
respect to any proposed conversion or transfer, after giving effect to such
proposed conversion or transfer), the Board of Directors of the Company in good
faith determines such Person is (or would be after giving effect to such
conversion or transfer), or such Person becomes aware that he or she is (or
would be after giving effect to such conversion or transfer), or the FCC
determines by a final order that such Person is (or would be after giving
effect to such conversion or transfer), a Person who, directly or indirectly,
as a result of ownership of Common Stock or other capital stock of the Company
or otherwise (i) causes (or would cause) the Company or any of its subsidiaries
to violate the multiple, cross-ownership, cross-interest or other rules,
regulations, policies or orders of the FCC, (ii ) would result in
disqualification of the Company or any of its subsidiaries as a licensee of the
FCC, or (iii) would cause the Company to violate the provisions with respect to
foreign ownership or voting of the Company or any of its subsidiaries as set
forth in Section 310(b)(3) or (4) of the Communications Act, as applicable.
Notwithstanding the foregoing, if a Person objects in good faith to such
determination by written notice to the Company, within ten (10) days of notice
by the Company that the Board of Directors of the Company has determined that
such Person is a Disqualified Person, the Company and/or such Person shall,
when appropriate, apply for a determination by the FCC with respect thereto
within ten (10) days of receipt by the Company of notice of such objection. If
no determination is made by the FCC
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within ninety (90) days from the date of such application or if the Company and
the Person determine that it is inappropriate to make any application to the
FCC, the Company and such Person agree that such determination shall be made by
an arbitrator, mutually agreed upon by the Company and such Person.
Notwithstanding the foregoing, until a determination is made by the FCC (and
such determination becomes a final order) or by the arbitrator, such Person
will not be deemed a Disqualified Person.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
"FCC" shall mean the Federal Communications Commission.
"Fundamental Action" shall mean: (i) any proposed amendment to the
Company's Certificate of Incorporation or By-Laws (other than an amendment
required by Section 1 of Article VII hereof); (ii) any proposed merger,
consolidation or other business combination involving the Company, or sale,
transfer or other disposition of all or substantially all of the assets of the
Company; (iii) any proposed voluntary liquidation, dissolution or termination
of the Company; or (iv) any proposed transaction resulting in a Change of
Control.
"Offering" shall mean the underwritten public offering of shares of
Class A Common Stock by the Company's predecessor entity, Cumulus Media Inc.,
an Illinois corporation, which was consummated on July 1, 1998.
"Person" shall include any individual, entity, or group within the
meaning of Section 13(d)(2) of the Exchange Act.
"Preferred Stock" shall be defined as set forth in Article IV.
"Principal" means each of Richard W. Weening and Lewis W. Dickey, Jr.
"Related Party" with respect to any Principal means (a) any spouse or
immediate family member of such Principal, or (b) any trust, corporation,
partnership or other entity, the beneficiaries, stockholders, partners, owners
or Persons beneficially holding an eighty percent (80%) or more controlling
interest of which consist of such Principal and/or other Persons referred to in
the immediately preceding clause (a).
"Restricted Actions" shall be defined as any of the following actions
by the Company:
(a) Entering into any transaction with any Affiliate of the
Company or amending or otherwise modifying any existing agreement with any
Affiliate of the Company, other than a transaction with an Affiliate which is
on terms no less favorable to the Company than the Company would obtain in a
comparable arm's-length transaction with a Person not an Affiliate of the
Company and which is approved, after disclosure of the terms thereof, by a vote
of the majority of the Board of Directors of the Company (provided, that any
Director who is an interested party or an Affiliate of an interested party to
such transaction shall not be entitled to participate in such vote and shall
not be counted for the purpose of determining whether a majority of the Board
of Directors of the Company has approved such transaction);
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(b) Issuing any shares of Class B Common Stock, or any shares of
Class C Common Stock other than in a conversion pursuant to Section 5(a) of
Article V hereof;
(c) Acquiring (by purchase or otherwise) or selling, transferring
or otherwise disposing of assets having, at the time of disposition, a fair
market value in excess of ten percent (10%) of the Company's Stockholders'
Equity as of the last day of the preceding fiscal quarter for which financial
statements are available; or
(d) amending, terminating or otherwise modifying any of the
foregoing subparagraphs (a) through (c) or this subparagraph (d) or any
provision of this Article V governing the voting or conversion rights of the
Class B Common Stock or the Class C Common Stock.
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Stockholders' Equity," as of any date, shall mean the Company's
assets minus its liabilities, as determined in accordance with generally
accepted accounting principles and as reflected on the Company's consolidated
balance sheet as of such date.
"SWIB" shall mean the State of Wisconsin Investment Board.
ARTICLE VI
TERMS OF PREFERRED STOCK
The Board of Directors is hereby authorized to issue shares of
undesignated Preferred Stock in such series and to fix from time to time before
issuance the number of shares to be included in any series and the designation,
relative powers, preferences and rights and qualifications, limitations or
restrictions of all shares of such series. The authority of the Board of
Directors with respect to each series shall include, without limiting the
generality of the foregoing, the determination of any or all of the following:
(a) the number of shares of any series and the designation to
distinguish the shares of such series from the shares of all other series;
(b) the voting powers, if any, and whether such voting powers are
full or limited in such series;
(c) the redemption provisions, if any, applicable to such series,
including the redemption price or prices to be paid;
(d) whether dividends, if any, shall be cumulative or
noncumulative, the dividend rate of such series, and the dates and preferences
of dividends on such series;
(e) the rights of such series upon the voluntary or involuntary
dissolution of, or upon any distribution of the assets of, the Company;
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(f) the provisions, if any, pursuant to which the shares of such
series are convertible into, or exchangeable for, shares of any other class or
classes or of any other series of the same or any other class or classes of
stock of the Company or any other corporation, and the price or prices or the
rates of exchange applicable thereto;
(g) the right, if any, to subscribe for or to purchase any
securities of the Company or any other corporation;
(h) the provisions, if any, of a sinking fund applicable to such
series; and
(i) any other relative, participating, optional or other special
powers, preferences, rights, qualifications, limitations or restrictions
thereof;
all as shall be determined from time to time by the Board of Directors in the
resolution or resolutions providing for the issuance of such Preferred Stock
and set forth in a certificate of designations.
ARTICLE VII
CERTAIN RIGHTS AND OBLIGATIONS
APPLICABLE ONLY DURING BA CAPITAL'S OWNERSHIP
SECTION 1. RESTRICTED ACTIONS.
Upon the day of issuance ("Order Date"), at any time following the
consummation of the Offering, of a final order of the FCC that the granting of
a right to BA Capital to designate a Director of the Company pursuant to a
stockholders agreement with the holders of Class C Common Stock will not result
in BA Capital's interest being "attributable" under applicable FCC rules, and
for so long thereafter ("Applicable Period") as BA Capital (together with its
Affiliates) continues to own not less than fifty percent (50%) of the number of
shares of Common Stock held by BA Capital immediately prior to the Offering:
(a) the holders of Class C Common Stock shall have the right,
voting as a class, to elect one (1) Director (the "Class C Director"); and
(b) the Company shall not take any Restricted Action without the
unanimous vote of the Board of Directors of the Company.
The right of the holders of the Class C Common Stock to elect the
Class C Director may be exercised initially either at a special meeting of the
holders of Class C Common Stock called as hereafter provided or at any annual
meeting of stockholders held for the purposes of electing directors and
thereafter at such annual meeting or by the written consent of the holders of
Class C Common Stock, until the expiration of the Applicable Period. Effective
on the Order Date, the number of Directors constituting the Board of Directors
of the Company shall be increased by one (1) without the necessity of any
further action by the stockholders or the Board of Directors of the Company,
and the By-Laws shall be deemed amended so as to increase the number of members
of the Board of Directors effective on the Order Date. Upon the termination of
the Applicable Period, the term of office of the Class C Director shall
terminate immediately and the
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number of Directors constituting the Board of Directors of the Company shall be
reduced by one (1) without the necessity of any further action by the
stockholders or the Board of Directors of the Company, and the By-Laws shall be
deemed amended so to decrease the number of members of the Board of Directors
effective as of the date of termination of the Applicable Period.
At any time after the Order Date, if such rights to elect a Class C
Director shall not already have been initially exercised, a proper officer of
the Company shall, upon the written request of holders of record of ten percent
(10%) or more of the shares of Class C Common Stock then outstanding, addressed
to the Secretary of the Company, call a special meeting of holders of Class C
Common Stock. Such meeting shall be held at the earliest practicable date based
upon the number of days of notice required for annual meetings of stockholders
at the place designated for holding annual meetings of stockholders of the
Company or, if none, at a place designated by the Secretary of the Company. If
such meeting shall not be called by the officers of the Company within thirty
(30) days after the personal service of such written request upon the Secretary
of the Company, or within thirty (30) days after mailing the same within the
United States, by registered mail, addressed to the Secretary of the Company at
its principal office (such mailing to be evidenced by the registry receipt
issued by the postal authorities), then the holders of record of ten percent
(10%) or more of the shares of Class C Common Stock then outstanding may
designate in writing any holder of Class C Common Stock to call such meeting at
the expense of the Company, and such meeting may be called by such person so
designated upon the number of days of notice required for annual meetings of
stockholders and shall be held at the place designated for holding annual
meetings of the stockholders of the Company or, if none, at a place designated
by such holder. Any holder of Class C Common Stock that would be entitled to
vote at such meeting shall have access to the stock books of the Company for
the purpose of causing a meeting of holders of Class C Common Stock to be
called pursuant to the provisions of this Section 1. Notwithstanding the
provisions of this section, however, no such special meeting shall be called if
any such request is received less than seventy (70) days before the date fixed
for the next ensuing annual or special meeting of stockholders. Any action
required hereunder to elect a Class C Director may be taken without a meeting
if a consent in writing, setting forth the name of the director to be elected,
shall be signed by all of the holders of Class C Common Stock outstanding and
entitled to vote on the election of the Class C Director. Such consent shall
have the same force and effect as the unanimous vote of the holders of the
Class C Common Stock.
In case of any vacancy occurring with respect to the Class C Director,
such vacancy may be filled only by the affirmative vote of the holders of a
majority of the then outstanding shares of Class C Common Stock at a special
meeting called as provided above or pursuant to a written consent as provided
above.
SECTION 2. VOTE OF CLASS B COMMON STOCK HOLDERS.
So long as BA Capital (together with its Affiliates) continues to own
not less than fifty percent (50%) of the number of shares of Common Stock held
by BA Capital immediately prior to the consummation of the Offering, the
Company may not take any Restricted Action unless either (a) the membership of
the Board of Directors includes a Class C Director and the Class C Director
voted in favor of the Restricted Action, or (b) the membership of the Board of
Directors does not at the time of approval of the Restricted Action by the
Board include a Class C Director
12
and the Restricted Action has been approved by the affirmative vote or consent
of the holders of a majority of the outstanding shares of Class B Common Stock,
voting separately as a class.
SECTION 3. EXPIRATION OF RESTRICTIONS.
The restrictions set forth in Section 1 and 2 of this Article VII
shall terminate upon expiration of the Applicable Period.
ARTICLE VIII
NO CUMULATIVE VOTING
No holder of any shares of any class of stock of the Company shall be
entitled to cumulative voting rights in any circumstances.
ARTICLE IX
NO PRE-EMPTIVE RIGHTS
No stockholders shall have any pre-emptive rights to acquire unissued
shares of the Company or securities of the Company convertible into or carrying
a right to subscribe to or acquire shares.
ARTICLE X
ELECTION BY WRITTEN BALLOT NOT REQUIRED
Elections of Directors need not be by written ballot except and to the
extent provided in the by-laws of the Company.
ARTICLE XI
OFFERS FROM THIRD PARTIES
The Board of Directors of the Company shall consider in good faith any
bona fide offer from any third party to acquire any shares of stock or assets
of the Company, and shall pursue diligently any transaction determined by the
Board of Directors of the Company in good faith to be in the best interests of
the Company's stockholders.
ARTICLE XII
LIMITATION OF LIABILITY OF DIRECTORS
No Director of the Company shall be liable to the Company or its
stockholders for monetary damages for breach of fiduciary duty as a Director,
provided, however, that this Article XI shall not eliminate or limit the
liability of a Director (i) for any breach of the Director's duty of loyalty to
the Company or its stockholders, (ii) for acts or omissions not in good faith
or that involve intentional misconduct or a knowing violation of law, (iii)
under Section 174 of the
13
DGCL, (iv) for any transaction from which the Director derived an improper
personal benefit, or (v) for any act or omission occurring before the effective
date of this Amended and Restated Certificate of Incorporation.
ARTICLE XIII
BOARD OF DIRECTORS
At the 2009 annual meeting of stockholders, the Directors whose terms
expire at that meeting (or such directors' successors) shall be elected to hold
office for a one-year term expiring at the 2010 annual meeting of stockholders.
At the 2010 annual meeting of stockholders, the directors whose terms expire at
that meeting (or such directors' successors) shall be elected to hold office for
a one-year term expiring at the 2011 annual meeting of stockholders. At the 2011
annual meeting of stockholders, and each annual meeting of stockholders
thereafter, all directors shall be elected to hold office for a one-year term
expiring at the next annual meeting of stockholders. Directors may be re-elected
any number of times. Each Director shall hold office until the election and
qualification of his or her successor.
ARTICLE XIV
AMENDMENT OF BY-LAWS
In furtherance and not in limitation of the rights, powers,
privileges, and discretionary authority granted or conferred by the DGCL or
other statutes or laws of the State of Delaware, the Board of Directors is
expressly authorized to make, alter, amend or repeal the by-laws of the
Company, without any action on the part of the stockholders, but the
stockholders may make additional by-laws and may alter, amend or repeal any
by-law whether adopted by them or otherwise. The Company may in its by-laws
confer powers upon the Board of Directors in addition to the foregoing and in
addition to the powers and authorities expressly conferred upon the Board of
Directors by applicable law.
14
APPENDIX A
CERTIFICATE OF DESIGNATIONS SETTING FORTH THE
VOTING POWER, PREFERENCES AND RELATIVE,
PARTICIPATING, OPTIONAL AND
OTHER SPECIAL RIGHTS
AND QUALIFICATIONS, LIMITATIONS
AND RESTRICTIONS
OF THE
13 3/4% SERIES A CUMULATIVE EXCHANGEABLE
REDEEMABLE PREFERRED STOCK DUE 2009
OF
CUMULUS MEDIA INC.
The 13 3/4% Series A Cumulative Exchangeable Redeemable Preferred
Stock due 2009 of Cumulus Media Inc., a Delaware corporation (the "Company")
(tHE "Series A Preferred Stock") shall have the voting powers, preferences and
relative participating, optional and other special rights, and qualifications,
limitations and restrictions thereon as follows:
1. CERTAIN DEFINITIONS.
Unless the context otherwise requires, the terms defined in this
Section 1 shall have, for all purposes of this resolution, the meanings herein
specified (with terms defined in the singular having comparable meanings when
used in the plural).
"Acquired Debt" means, with respect to any specified Person, (i)
Indebtedness of any other Person existing at the time such other Person is
merged with or into or becomes a Subsidiary of such specified Person,
including, without limitation, Indebtedness incurred in connection with, or in
contemplation of, such other Person merging with or into or becoming a
Subsidiary of such specified Person, and (ii) Indebtedness secured by a Lien
encumbering any asset acquired by such specified Person.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For purposes of this definition, "control"
(including, with correlative meanings, the terms "controlling," "controlled by"
and "under common control with"), as used with respect to any Person, shall
mean the possession, directly or indirectly, of the power to direct or cause
the direction of the management or policies of such Person, whether through the
ownership of voting
securities, by agreement or otherwise; provided, that beneficial ownership of
10% or more of the voting securities of a Person shall be deemed to be control.
"Applicable Redemption Price" means, for each share of Series A
Preferred Stock, the price equal to the redemption prices set forth below
(expressed as percentages of the then effective Liquidation Preference
thereof), plus, without duplication, all accumulated and unpaid dividends, if
any, to but excluding the Redemption Date (including an amount in cash equal to
a prorated dividend for the period from the Dividend Payment Date immediately
prior to but excluding the Redemption Date), if redeemed during the 12-month
period commencing on July 1 of the years set forth below:
2003................................ 106.875%
2004................................ 105.156%
2005................................ 103.438%
2006................................ 101.719%
2007 and thereafter................. 100%
"Attributable Debt" in respect of a sale and leaseback transaction
means, at the time of determination, the present value (discounted at the rate
of interest implicit in such transaction, determined in accordance with GAAP)
of the obligation of the lessee for net rental payments during the remaining
term of the lease included in such sale and leaseback transaction (including
any period for which such lease has been extended or may, at the option of the
lessor, be extended).
"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been duly adopted by
the Company's Board of Directors, to be in full force and effect on the date of
such certification and delivered to the Transfer Agent.
"Business Day" means each Monday, Tuesday, Wednesday, Thursday and
Friday which is not a day on which banking institutions in New York City, or in
the state in which the Company's principal executive offices are located, are
authorized or obligated by law or executive order to close.
"Capital Lease Obligation" means, at the time any determination
thereof is to be made, the amount of the liability in respect of a capital
lease that would at such time be required to be capitalized on a balance sheet
in accordance with GAAP.
"Capital Stock" means (i) in the case of a corporation, corporate
stock, (ii) in the case of an association or business entity, any and all
shares, interests, participations, rights or other equivalents (however
designated) of corporate stock, (iii) in the case of a partnership, partnership
interests (whether general or limited), (iv) in the case of a limited liability
company or similar entity, any membership or similar interests therein and (v)
any other interest or participation that confers on a Person the right to
receive a share of the profits and losses of, or distributions of assets of,
the issuing Person.
2
"Cash Equivalents" means (i) United States dollars, (ii) securities
issued, or directly and fully guaranteed, or insured by the United States
government or any agency or instrumentality thereof having maturities of not
more than one year or less from the date of acquisition, (iii) certificates of
deposit and eurodollar time deposits with maturities of one year or less from
the date of acquisition, bankers' acceptances with maturities not exceeding one
year and overnight bank deposits, in each case with any lender party to the
Credit Facility or with any domestic commercial bank having capital and surplus
in excess of $500 million 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) above entered into
with any financial institution meeting the qualifications specified in clause
(iii) above and (v) commercial paper having a rating of at least P-2 from
Moody's Investors Service, Inc. (or its successor) and a rating of at least A-2
from Standard & Poor's Ratings Services (or its successor) and (vi) investments
in money market or other mutual funds substantially all of whose assets
comprise securities of types described in clauses (ii) through (v) above.
"CCC" means Caribbean Communications Company Ltd., a corporation
organized under the laws of Montserrat.
"Certificate of Designations" means this Certificate of Designations
of Voting Power, Preferences and Relative, Participating, Optional and Other
Special Rights and Qualifications, Limitations and Restrictions of 13 3/4%
Series A Cumulative Exchangeable Redeemable Preferred Stock due 2009 of the
Company.
"Change of Control" means the occurrence of any of the following: (i)
the sale, lease, transfer, conveyance or other disposition (other than by way
of merger or consolidation), in one or a series of related transactions, of all
or substantially all of the assets of the Company and its Subsidiaries taken as
a whole, to any "person" or group of related "persons" (a "Group") (as such
terms are used in Section 13(d)(3) of the Exchange Act) other than a Principal
or a Related Party of a Principal, (ii) the adoption of a plan relating to the
liquidation or dissolution of the Company, (iii) the consummation of any
transaction (including, without limitation, any purchase, sale, acquisition,
disposition, merger or consolidation) the result of which is that any "person"
(as defined above) or Group becomes the "beneficial owner" (as such term is
defined in Rule 13d-3 and Rule 13d-5 under the Exchange Act) of more than 50%
of the aggregate voting power of all classes of Capital Stock of the Company
having the right to elect directors under ordinary circumstances or (iv) the
first day on which a majority of the members of the Board of Directors of the
Company are not Continuing Directors.
"Change of Control Offer" has the meaning set forth in Section 8(a).
"Change of Control Payment" has the meaning set forth in Section 8(a).
"Change of Control Payment Date" has the meaning set forth in Section
8(d).
"Commission" means the Securities and Exchange Commission.
"Company" means Cumulus Media Inc., a Delaware corporation, including
its rights and interests as successor by merger to Cumulus Media Inc., an
Illinois corporation.
3
"Consolidated Cash Flow" means, with respect to any Person for any
period, the sum of, without duplication, the Consolidated Net Income of such
Person for such period plus (i) provision for taxes based on income or profits
of such Person and its Subsidiaries for such period, to the extent that such
provision for taxes was included in computing such Consolidated Net Income,
plus (ii) Consolidated Interest Expense of such Person for such period, to the
extent that any such expense was deducted in computing such Consolidated Net
Income, plus (iii) consolidated depreciation, amortization and other non-cash
charges of the Person and its Subsidiaries deducted in computing Consolidated
Net Income of such Person for such period (v) cash payments with respect to any
non-cash charges previously added back pursuant to clause (iv). Notwithstanding
the foregoing, the provision for taxes on the income or profits of, and the
depreciation and amortization and other non-cash charges of, a Subsidiary of
the referent Person shall be added to Consolidated Net Income to compute
Consolidated Cash Flow only to the extent (and in same proportion) that the Net
Income of such Subsidiary was included in calculating the Consolidated Net
Income of such Person.
"Consolidated Interest Expense" means, with respect to any Person for
any period, the sum, without duplication of (i) the consolidated interest
expense of such Person and its Restricted Subsidiaries for such period, whether
paid or accrued (including, without limitation, amortization of original issue
discount, non-cash interest payments, the interest component of any deferred
payment obligations, the interest component of all payments associated with
Capital Lease Obligations, imputed interest with respect to Attributable Debt,
commissions, discounts and other fees and charges incurred in respect of letter
of credit or bankers' acceptance financings, and net payments (if any) pursuant
to Hedging Obligations), (ii) the consolidated interest expense of such Person
and its Restricted Subsidiaries that was capitalized during such period, (iii)
any interest expense on Indebtedness of another Person that is guaranteed by
such Person or any of its Restricted Subsidiaries or secured by a Lien on
assets of such Person or any of its Restricted Subsidiaries (whether or not
such guarantee or Lien is called upon) and (iv) the product of (a) all cash
dividend payments (and non-cash dividend payments in the case of a Person that
is a Restricted Subsidiary) on any series of preferred stock of such Person or
any of its Restricted Subsidiaries, times (b) a fraction, the numerator of
which is one and the denominator of which is one minus the then current
combined federal, state and local statutory tax rate of such Person, expressed
as a decimal, in each case, on a consolidated basis and in accordance with
GAAP.
"Consolidated Net Income" means, with respect to any Person for any
period, the aggregate of the Net Income of such Person and its Subsidiaries for
such period, on a consolidated basis, determined in accordance with GAAP;
provided that (i) the Net Income (but not loss) of any Person that is not a
Restricted Subsidiary or that is accounted for by the equity method of
accounting shall be included only to the extent of the amount of dividends or
distributions paid in cash to the referent Person or a Restricted Subsidiary
thereof, (ii) the Net Income of any Subsidiary shall be excluded to the extent
that the declaration or payment of dividends or similar distributions by that
Subsidiary of that Net Income is not at the date of determination permitted
without any prior government approval (that has not been obtained) or, directly
or indirectly, by operation of the terms of its charter or any agreement,
instrument, judgment, decree, order, statute, rule or governmental regulation
applicable to that Subsidiary or its stockholders, (iii) the Net Income of any
Person acquired in a pooling of interests transaction for any period prior to
the date of such acquisition shall be excluded, (iv) the cumulative effect of
4
a change in accounting principles shall be excluded, and (v) all other
extraordinary gains and extraordinary losses shall be excluded.
"Consolidated Net Worth" means, with respect to any Person as of any
date, the sum of (i) the consolidated equity of the common stockholders of such
Person and its consolidated Subsidiaries as of such date plus (ii) the
respective amounts reported on such Person's balance sheet as of such date with
respect to any series of preferred stock (other than Disqualified Stock) that
by its terms is not entitled to the payment of dividends unless such dividends
may be declared and paid only out of net earnings in respect of the year of
such declaration and payment, but only to the extent of any cash received by
such Person upon issuance of such preferred stock, less (x) all write-ups
(other than write-ups resulting from foreign currency translations and
write-ups of tangible assets of a going concern business made within 12 months
after the acquisition of such business) subsequent to the Issue Date in the
book value of any asset owned by such Person or a consolidated Subsidiary of
such Person, (y) all investments as of such date in unconsolidated Subsidiaries
and in Persons that are not Subsidiaries (except, in each case, Permitted
Investments), and (z) all unamortized debt discount and expense and unamortized
deferred charges as of such date, all of the foregoing determined in accordance
with GAAP.
"Continuing Directors" means, as of any date of determination, any
member of the Board of Directors of the Company who (i) was a member of such
Board of Directors on the date of original issuance of the Exchange Debentures
or (ii) was nominated for election or elected to such Board of Directors with
the approval of (x) two-thirds of the Continuing Directors who were members of
such Board at the time of such nomination or election or (y) two-thirds of
those Directors who were previously approved by Continuing Directors.
"Credit Agreements" means, with respect to the Company, one or more
debt facilities (including, without limitation, the Credit Facility) or
commercial paper facilities with banks or other institutional lenders providing
for revolving credit loans, term loans, production payments, receivables
financing (including through the sale of receivables to such lenders or to
special purpose entities formed to borrow from such lenders against such
receivables) or letters of credit, in each case, as amended, restated,
modified, renewed, refunded, replaced or refinanced in whole or in part from
time to time. Indebtedness under Credit Agreements outstanding on the Issue
Date (after giving effect to the use of proceeds thereof) shall be deemed to
have been incurred on such date in reliance on the exception provided by clause
(b) of the definition of Permitted Indebtedness.
"Credit Facility" means that certain Credit Agreement, dated as of
March 2, 1998, as amended by and among the Predecessor, Lehman Brothers Inc.,
as Arranger and Lehman Brothers Commercial Paper Inc., as Syndication Agent and
Administrative Agent and as a lender, and certain banks, financial institutions
and other entities, as lenders, providing for up to $150.0 million of
Indebtedness, including any related notes, guarantees, collateral documents,
instruments and agreements executed in connection therewith, and in each case
as amended, restated, modified, renewed, refunded, replaced or refinanced, in
whole or in part, from time to time, whether or not with the same lenders or
agents.
"Debentures Trustee" has the meaning set forth in Section 6(a).
5
"DGCL" means the Delaware General Corporation Law, as amended.
"Disqualified Stock" means any Capital Stock that, by its terms (or by
the terms of any security into which it is convertible or for which it is
exchangeable), or upon the happening of any event, matures or is mandatorily
redeemable, pursuant to a sinking fund obligation or otherwise, is convertible
or exchangeable for Indebtedness or Disqualified Stock or redeemable at the
option of the holder thereof, in whole or in part, on or prior to the date that
is 91 days after the date on which the Exchange Debentures mature, provided
however, that any Capital Stock that would constitute Disqualified Stock solely
because the holders thereof (or of any security into which it is convertible or
for which it is exchangeable) have the right to require the issuer to
repurchase such Capital Stock (or such security into which it is convertible or
for which it is exchangeable) upon the occurrence of any of the events
constituting a Change of Control shall not constitute Disqualified Stock if
such Capital Stock (and all such securities into which it is convertible or for
which it is exchangeable) provides that the issuer thereof will not repurchase
or redeem any such Capital Stock (or any such security into which it is
convertible or for which it is exchangeable) pursuant to such provisions prior
to compliance by the Company with the provisions of Section 8.
"Dividend Payment Date" has the meaning set forth in Section 3(a).
"Dividend Shares" means shares of Series A Preferred Stock paid by the
Company to Holders of then outstanding shares of Series A Preferred Stock as
dividends on such outstanding shares in accordance with this Certificate of
Designations.
"Equity Interests" means Capital Stock and all warrants, options or
other rights to acquire Capital Stock (but excluding any debt security that is
convertible into, or exchangeable for, Capital Stock).
"Equity Offering" means any public or private sale of the Common Stock
of the Company pursuant to which the Company receives net proceeds of at least
$25.0 million, other than issuances of Common Stock of the Company pursuant to
employee benefit plans or as compensation to employees.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exchange Date" has the meaning set forth in Section 6(c).
"Exchange Debentures" means the Company's 13 3/4% Subordinated
Debentures due 2009, issuable in exchange for the Series A Preferred Stock in
accordanCe with the terms hereof.
"Exchange Indenture" has the meaning set forth in Section 6(a).
"Exchange Notice" has the meaning set forth in Section 6(c).
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board
6
or in such other statements by such other entity as have been approved by a
significant segment of the accounting profession, which are in effect on the
Issue Date.
"Guarantee" means a guarantee (other than by endorsement of negotiable
instruments for collection in the ordinary course of business), direct or
indirect, in any manner (including, without limitation, letters of credit and
reimbursement agreements in respect thereof), of all or any part of any
Indebtedness.
"Guarantor Senior Debt" means (i) Indebtedness of any Subsidiary
Guarantor under or in respect of any Credit Agreement, whether for principal,
interest (including interest accruing after the filing of a petition initiating
any proceeding pursuant to any bankruptcy law, whether or not the claim for
such interest is allowed as a claim in such proceeding), reimbursement
obligations, fees, commissions, expenses, indemnities or other amounts, and
(ii) any other Indebtedness of any Subsidiary Guarantor permitted under the
terms of the Indenture, unless the instrument under which such Indebtedness is
incurred expressly provides that it is on a parity with or subordinated in
right of payment to the Subsidiary Guarantees. Notwithstanding anything to the
contrary in the foregoing sentence, Guarantor Senior Debt will not include (w)
any liability for federal, state, local or other taxes owed by a Subsidiary
Guarantor, (x) any Indebtedness of a Subsidiary Guarantor to any of its
Subsidiaries or other Affiliates or (y) any Indebtedness that is incurred in
violation of the Indenture (other than Indebtedness under (i) the Credit
Facility or (ii) any other Credit Agreement that is incurred on the basis of a
representation by the Company to the applicable lenders that the applicable
Subsidiary Guarantor is permitted to incur such Indebtedness under the
Indenture).
"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 with respect to
Indebtedness that is permitted by Section 9(a) and (ii) other agreements or
arrangements designed to protect such Person against fluctuation in interest
rates or the value of foreign currencies purchased or received by such Person
in the ordinary course of business.
"Holder" means a Person in whose name a share of Series A Preferred
Stock is registered.
"Incur" means, with respect to any Indebtedness or other obligation of
any Person, to create, incur, issue, assume, guarantee or otherwise become
liable contingently or otherwise (and "Incurrence", "Incurred", "Incurrable"
and "Incurring" shall have meanings correlative to the foregoing).
"Indebtedness" means, with respect to any Person, any indebtedness of
such Person, whether or not contingent, (i) in respect of borrowed money, or
(ii) evidenced by bonds, notes, debentures or similar instruments or letters of
credit or reimbursement agreements in respect thereof (other than letters of
credit securing obligations not constituting Indebtedness that are issued in
the ordinary course of business by a Person to the extent not drawn upon or, if
and to the extent drawn upon, such drawing is reimbursed no later than the
tenth Business Day following receipt by such Person of a demand for
reimbursement following payment on the letter of credit) or bankers'
acceptances, or (iii) representing Capital Lease Obligations or the balance
7
deferred and unpaid of the purchase price of any property, except any such
balance that constitutes an accrued expense or trade payable, or (iv)
representing any Hedging Obligations, in each case if and to the extent any of
the foregoing indebtedness (other than letters of credit and Hedging
Obligations) would appear as a liability upon a balance sheet of such Person
prepared in accordance with GAAP, as well as all Indebtedness of others secured
by a Lien on any asset of such Person (whether or not such Indebtedness is
assumed by such Person) and, to the extent not otherwise included, the
Guarantee by such Person of any Indebtedness of any other Person.
"Investments" means, with respect to any Person, all investments by
such Person in other Persons (including Affiliates) in the forms of direct or
indirect loans (including guarantees of Indebtedness or other obligations),
advances or capital contributions (excluding commission, travel and similar
advances to officers and employees made in the ordinary course of business),
purchases or other acquisitions for consideration of Indebtedness, Equity
Interests or other securities, together with all items that are or would be
classified as investments on a balance sheet prepared in accordance with GAAP.
If the Company or any Restricted Subsidiary of the Company sells or otherwise
disposes of any Equity Interests of any direct or indirect Restricted
Subsidiary of the Company such that, after giving effect to any such sale or
disposition, such Person is no longer a Subsidiary of the Company, the Company
shall be deemed to have made an Investment on the date of any such sale or
disposition equal to the fair market value of the Equity Interests of such
Subsidiary not sold or disposed of.
"Issue Date" means the date on which the shares of Series A Preferred
Stock were originally issued by the Predecessor.
"Junior Securities" has the meaning set for in Section 2.
"Leverage Ratio" means the ratio of (i) the aggregate outstanding
amount of Indebtedness of the Company and its Subsidiaries as of the date of
calculation on a consolidated basis in accordance with GAAP (subject to the
terms described in the next paragraph) plus the aggregate liquidation
preference of all outstanding Disqualified Stock of the Company and preferred
stock of the Company's Subsidiaries (except preferred stock issued to the
Company or a Wholly Owned Subsidiary of the Company) on such date to (ii) the
Consolidated Cash Flow of the Company for the four full fiscal quarters (the
"Four Quarter Period") ending on or prior to the date of determination.
For purposes of this definition, (i) the amount of Indebtedness which
is issued at a discount shall be deemed to be the accreted value of such
Indebtedness at the end of the Four Quarter period, whether or not such amount
is the amount then reflected on a balance sheet prepared in accordance with
GAAP, and (ii) the aggregate outstanding principal amount of Indebtedness of
the Company and its Subsidiaries and the aggregate liquidation preference of
all outstanding preferred stock of the Company's Subsidiaries for which such
calculation is made shall be determined on a pro forma basis as if the
Indebtedness and preferred stock giving rise to the need to perform such
calculation had been incurred and issued and the proceeds therefrom had been
applied, and all other transactions in respect of which such Indebtedness is
being incurred or preferred stock is being issued had occurred, on the first
day of the Four Quarter Period. In addition to the foregoing, for purposes of
this definition, Consolidated Cash Flow shall be calculated on a pro forma
basis after giving effect to (i) the incurrence of the
8
Indebtedness of such Person and its Subsidiaries and the issuance of the
preferred stock of such Subsidiaries (and the application of the proceeds
therefrom) giving rise to the need to make such calculation and any incurrence
(and the application of the proceeds therefrom) or repayment of other
Indebtedness, other than the incurrence or repayment of Indebtedness pursuant
to working capital facilities, at any time subsequent to the beginning of the
Four Quarter Period and on or prior to the date of determination, as if such
incurrence or issuance (and the application of the proceeds thereof), or the
repayment, as the case may be, occurred on the first day of the Four Quarter
Period, (ii) any acquisition (including, without limitation, any acquisition
giving rise to the need to make such calculation as a result of such Person or
one of its Subsidiaries (including any Person that becomes a Subsidiary as a
result of such acquisition) incurring, assuming or otherwise becoming liable
for Indebtedness or such Person's Subsidiaries issuing preferred stock) at any
time on or subsequent to the first day of the Four Quarter Period and on or
prior to the date of determination, as if such acquisition (including the
incurrence, assumption or liability for any such Indebtedness and the issuance
of such preferred stock and also including any Consolidated Cash Flow
associated with such acquisition) occurred on the first day of the Four Quarter
Period. For purposes of this definition, whenever pro forma effect is to be
given to a transaction, the pro forma calculations shall be made in good faith
by a responsible financial or accounting officer of the Company consistent with
Article 11 of Regulation S-X, promulgated pursuant to the Securities Act, as
such Regulation is in effect on the Issue Date. Furthermore, in calculating
"Consolidated Interest Expense" for purposes of the calculation of
"Consolidated Cash Flow," (i) interest on Indebtedness determined on a
fluctuating basis as of the date of determination (including Indebtedness
actually incurred on the date of the transaction giving rise to the need to
calculate the Leverage Ratio) and which will continue to be so determined
thereafter shall be deemed to have accrued at a fixed rate per annum equal to
the rate of interest on such Indebtedness as in effect on the date of
determination and (ii) notwithstanding (i) above, interest determined on a
fluctuating basis, to the extent such interest is covered by Hedging
Obligations, shall be deemed to accrue at the rate per annum resulting after
giving effect to the operation of such agreements.
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset,
whether or not filed, recorded or otherwise perfected under applicable law
(including any conditional sale or other title retention agreement, any lease
in the nature thereof, any option or other agreement to sell or give a security
interest in and any filing of or agreement to give any financing statement
under the Uniform Commercial Code (or equivalent statutes) of any jurisdiction
other than a precautionary financing statement with respect to a lease not
intended as a security agreement).
"Liquidation Preference" means $1,000 per share of Series A Preferred
Stock.
"Mandatory Redemption Date" has the meaning set forth in Section 5(a).
"Net Income" means, with respect to any Person, the net income (loss)
of such Person, determined in accordance with GAAP and before any reduction in
respect of preferred stock dividends, excluding, however, (i) any gain or loss,
together with any related provision for taxes on such gain or loss, realized in
connection with (a) any asset sale (including, without limitation, dispositions
pursuant to sale and leaseback transactions) or asset swap or (b) the
disposition of any securities by such Person or any of its Restricted
Subsidiaries or the extinguishment of any
9
Indebtedness of such Person or any of its Restricted Subsidiaries and (ii) any
extraordinary or nonrecurring gain or loss, together with any related provision
for taxes on such extraordinary or nonrecurring gain or loss.
"Non-Recourse Debt" means Indebtedness (i) as to which neither the
Company nor any of its Restricted Subsidiaries (a) provides any guarantee or
credit support of any kind (including any undertaking, guarantee, indemnity,
agreement or instrument that would constitute Indebtedness), or (b) is directly
or indirectly liable (as a guarantor or otherwise); (ii) no default with
respect to which (including any rights that the holders thereof may have to
take enforcement action against an Unrestricted Subsidiary) would permit (upon
notice, lapse of time or both) any holder of any other Indebtedness of the
Company or any of its Restricted Subsidiaries to declare a default on such
other Indebtedness or cause the payment thereof to be accelerated or payable
prior to its stated maturity; and (iii) the explicit terms of which provide
that there is no recourse against any of the assets of the Company or its
Restricted Subsidiaries.
"Notes Indenture" means the Indenture dated the Issue Date between the
Predecessor and pursuant to which the Senior Subordinated Notes were issued.
"Obligations" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any Indebtedness.
"Officers' Certificate" means a certificate signed by two officers at
least one of whom shall be the principal executive officer, principal
accounting officer or principal financial officer of the Company and delivered
to the Transfer Agent.
"Opinion of Counsel" means a written opinion of counsel, who may be
counsel for the Company, and who shall be reasonably acceptable to the Transfer
Agent, delivered to the Transfer Agent.
"Parity Securities" has the meaning set forth in Section 2.
"Paying Agent" means Firstar Trust Company, a state bank organized and
existing under the laws of the State of Wisconsin, and its successors.
"Permitted Business" means the broadcasting business or any business
that is reasonably similar thereto or a reasonable extension, development or
expansion thereof or ancillary thereto.
"Permitted Indebtedness" means (a) Indebtedness evidenced by the
Senior Subordinated Notes and the Subsidiary Guarantees; (b) Indebtedness
pursuant to Credit Agreements, so long as the aggregate principal amount of all
Indebtedness outstanding under all Credit Agreements does not, at any one time,
exceed $150.0 million, less the aggregate amount of all mandatory prepayments
of principal applied since June 24, 1998 to permanently reduce the outstanding
amount of such Indebtedness; (c) Indebtedness of the Company and its Restricted
Subsidiaries in existence as of June 24, 1998; (d) intercompany Indebtedness
between or among the Company and any of its Wholly Owned Restricted
Subsidiaries; provided, however, that (i) any subsequent issuance or transfer
of Equity Interests that results in any such Indebtedness being held by a
Person other than the Company or a Wholly Owned Restricted Subsidiary and (ii)
any sale or
10
other transfer of any such Indebtedness to a Person that is not either the
Company or a Wholly Owned Restricted Subsidiary shall be deemed, in each case,
to constitute an incurrence of such Indebtedness by the Company or such
Restricted Subsidiary, as the case may be; (e) Indebtedness represented by
Capital Lease Obligations, mortgage financings or purchase money obligations,
in each case incurred for the purpose of financing all or any part of the
purchase price, lease or cost of construction or improvement of property, plant
or equipment used in a Permitted Business in an aggregate principal amount not
to exceed $15.0 million at any time outstanding; (f) the incurrence by the
Company or its Restricted Subsidiaries of Permitted Refinancing Debt in
exchange for, or the net proceeds of which are used to refund, refinance or
replace Indebtedness (other than intercompany Indebtedness) that is permitted
by this Statement of Resolutions Fixing Terms to be incurred; (g) the
incurrence by the Company or its Restricted Subsidiaries of Hedging Obligations
that are incurred for the purpose of fixing or hedging interest rate risk with
respect to any floating or variable rate Indebtedness or for the purpose of
protecting against fluctuations in interest rates or the value of foreign
currencies purchased or received, in each case in respect of Indebtedness that
is permitted by the terms of this Certificate of Designations to be
outstanding; provided, however, that in the case of Hedging Obligations that
are incurred for the purpose of fixing or hedging interest rate risks with
respect to Indebtedness, the notional principal amount of any such Hedging
Obligation does not exceed the principal amount of the Indebtedness to which
such Hedging Obligation relates and in the case of Hedging Obligations incurred
for the purpose of protecting against fluctuations in interest rates or the
value of foreign currencies purchased or received, such Hedging Obligations do
not increase the Indebtedness of the Company and its Restricted Subsidiaries
outstanding other than as a result of fluctuations in foreign currency exchange
rates or by reason of fees, indemnities and compensation payable thereunder;
(h) Indebtedness incurred solely in respect of performance, surety and similar
bonds or completion guarantees, to the extent that such incurrence does not
result in the incurrence of any obligation for the payment of borrowed money to
others; (i) Indebtedness arising out of standby letters of credit covering
workers compensation, performance or similar obligations in an aggregate amount
not to exceed $500,000 at any time outstanding; (j) any guarantee of the
Company of Indebtedness or other obligations of any of its Restricted
Subsidiaries so long as the incurrence of such Indebtedness incurred by such
Restricted Subsidiary is permitted under the terms of this Certificate of
Designations; (k) the incurrence by the Company of additional Indebtedness in
an aggregate principal amount (or accreted value, as applicable) at any time
outstanding not to exceed $10.0 million; (l) the issuance of Dividend Shares
issued on the Series A Preferred Stock outstanding on the Issue Date or issued
subsequent to the Issue Date as dividends permitted pursuant to this clause
(l), to the extent such dividends are made pursuant to the terms of this
Certificate of Designations for such Series A Preferred Stock as in effect on
the Issue Date, on any Preferred Stock issued in exchange for the Series A
Preferred Stock, or any dividends on such Preferred Stock to the extent such
dividends are made pursuant to the terms of this Certificate of Designations of
such Preferred Stock; and (m) Guarantor Senior Debt constituting Guarantees by
the Subsidiary Guarantors of Indebtedness incurred under the Credit Facility
that is permitted by the terms of this Statement of Resolution to be incurred.
"Permitted Investments" means (a) any Investment in the Company or in
a Wholly Owned Restricted Subsidiary of the Company; (b) any Investment in Cash
Equivalents or securities issued or directly and fully guaranteed or insured by
the United States government or any agency or instrumentality thereof having
maturities of not more than one year from the date
11
of acquisition; (c) any Investment by the Company or any Restricted Subsidiary
of the Company in a Person if, as a result of such Investment, (i) such Person
becomes a Wholly Owned Restricted Subsidiary of the Company or (ii) such Person
is merged, consolidated or amalgamated with or into, or transfers or conveys
all or substantially all of its assets to, or is liquidated into, the Company
or a Wholly Owned Restricted Subsidiary of the Company; (d) any Investment made
as a result of the receipt of non-cash consideration from an asset sale; (e)
other Investments in any Person or Persons having an aggregate fair market
value (measured on the date each such Investment was made and without giving
effect to subsequent changes in value), when taken together with all other
Investments made pursuant to this clause (e) that are at the time outstanding
without giving effect to subsequent changes in value or increases or decreases
attributable to the accounting for the net income of such Investment, not to
exceed $15.0 million; (f) any Investment acquired by the Company in exchange
for Equity Interests in the Company (other than Disqualified Stock); (g) any
Investment acquired by the Company or any of its Restricted Subsidiaries (i) in
exchange for any other Investment or accounts receivable held by the Company or
any such Restricted Subsidiary in connection with or as a result of a
bankruptcy, workout, reorganization or recapitalization of the issuer of such
other Investment or accounts receivable or (ii) as a result of the transfer of
title with respect to any secured investment in default as a result of a
foreclosure by the Company or any of its Restricted Subsidiaries with respect
to such secured Investment; (h) Hedging Obligations permitted under Section
9(a); (i) loans and advances to officers, directors and employees for
business-related travel expenses, moving expenses and other similar expenses,
in each case, incurred in the ordinary course of business; and (j) any
guarantees permitted to be made pursuant to Section 9(a); and (k) all
investments of the Company and its Restricted Subsidiaries in existence as of
the date hereof.
"Permitted Refinancing Debt" means any Indebtedness of the Company or
any of its Restricted Subsidiaries issued in exchange for, or the net proceeds
of which are used to extend, refinance, renew, replace, defease or refund other
Indebtedness (other than Indebtedness incurred under a Credit Agreement) of the
Company or any of its Restricted Subsidiaries; provided that: (i) the principal
amount of such Permitted Refinancing Debt does not exceed the principal amount
of the Indebtedness so extended, refinanced, renewed, replaced, defeased or
refunded (plus the amount of reasonable expenses incurred in connection
therewith); (ii) such Permitted Refinancing Debt has a final maturity date on
or later than the final maturity date of, and has a Weighted Average Life to
Maturity equal to or greater than the Weighted Average Life to Maturity of, the
Indebtedness being extended, refinanced, renewed, replaced, defeased or
refunded; and (iii) such Indebtedness is incurred either by the Company or by
the Restricted Subsidiary who is the obligor on the Indebtedness being
extended, refinanced, renewed, replaced, defeased or refunded.
"Person" means any individual, corporation, partnership, joint
venture, trust, unincorporated organization or government or any agency or
political subdivision thereof.
"Predecessor" means Cumulus Media Inc., an Illinois corporation, as
predecessor to the Company.
"Preferred Stock" means, with respect to any Person, and any and all
shares of Capital Stock of such Person that have preferential rights to any
other Capital Stock of such Person with respect to dividends or redemptions or
upon liquidation.
12
"Principal" means Richard W. Weening and Lewis W. Dickey, Jr.
"Prospectus" means the Prospectus dated June 26, 1998 with respect to
the offering of the Series A Preferred Stock by the Predecessor.
"Record Date" has the meaning set forth in Section 3(a).
"Redemption Date" has the meaning set forth in Section 5(d).
"Related Party" with respect to any Principal means (i) any
controlling stockholder, 80% (or more) owned subsidiary, or spouse or immediate
family member (in the case of an individual) of such principal or (ii) any
trust, corporation, partnership or other entity, the beneficiaries,
stockholders, partners, owners or Persons beneficially holding an 80% or more
controlling interest of which consist of such Principal and/or such other
Persons referred to in the immediately preceding clause (i).
"Restricted Investment" means an Investment other than a Permitted
Investment.
"Restricted Payment" means (i) the declaration or payment of any
dividend or the making of any distribution on account of any Junior Securities
(other than dividends or distributions payable in Junior Securities (other than
Disqualified Stock)), (ii) the purchase, redemption or other acquisition or the
retirement of, for value, any Junior Securities or (iii) the making of any
Investment (other than a Permitted Investment) in any Person.
"Restricted Subsidiary" means any direct or indirect Subsidiary of the
Company that is not an Unrestricted Subsidiary.
"Securities Act" means the Securities Act of 1933, as amended.
"Senior Subordinated Notes" means the 10 3/8% Senior Subordinated
Notes Due 2008, originally issued by the Predecessor.
"Series A Preferred Stock" has the meaning designated in the second
paragraph of the recitals hereof.
"Subsidiary" means, with respect to any Person, (i) any corporation,
association or other business entity of which more than 50% of the total voting
power of shares of Capital Stock, entitled (without regard to the occurrence of
any contingency) to vote in the election of directors, managers or trustees
thereof is at the time owned or controlled, directly or indirectly, by such
Person or one or more of the other Subsidiaries of that Person (or a
combination thereof) and (ii) any partnership (a) the sole general partner or
the managing general partner of which is such Person or a Subsidiary of such
Person or (b) the only general partners of which are such Person or of one or
more Subsidiaries of such Person (or any combination thereof).
"Subsidiary Guarantees" means each of the Guarantees entered into by
each Subsidiary Guarantor of the Company dated as of the date of the Note
Indenture and each Guarantee entered into by each Restricted Subsidiary created
or acquired by the Company thereafter.
13
"Subsidiary Guarantors" means each subsidiary of the Company and party
to a Subsidiary Guarantee.
"Transfer Agent" means Firstar Trust Company, a state bank organized
and existing under the laws of the State of Wisconsin, and its successors.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as
amended.
"Undesignated Shares" means shares of the preferred stock of the
Company which are authorized under its Certificate of Incorporation, are not
issued and outstanding, and have not been assigned to a series of preferred
stock.
"Unrestricted Subsidiary" means (i) any Subsidiary of the Company
which 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 Subsidiary of an Unrestricted Subsidiary and (iii) CCC. The Board of
Directors of the Company may designate any Subsidiary of the Company (including
any newly acquired or newly formed Subsidiary or a Person becoming a Subsidiary
through merger or consolidation or Investment therein) to be an Unrestricted
Subsidiary only if (a) such Subsidiary does not own any Capital Stock of, or
own or hold any Lien on any property of, any other Subsidiary of the Company
which is not a Subsidiary of the Subsidiary to be so designated or otherwise an
Unrestricted Subsidiary; (b) all the Indebtedness of such Subsidiary shall, at
the date of designation, and will at all times thereafter, consist of
Non-Recourse Debt; (c) the Company certifies that such designation complies
with Section 9(c); (d) such Subsidiary, either alone or in the aggregate with
all other Unrestricted Subsidiaries, does not operate, directly or indirectly,
all or substantially all of the business of the Company and its Subsidiaries;
(e) such Subsidiary does not, directly or indirectly, own any Indebtedness of
or Equity Interest in, and has no investments in, the Company or any Restricted
Subsidiary; (f) such Subsidiary is a Person with respect to which neither the
Company nor any of its Restricted Subsidiaries has any direct or indirect
obligation (1) to subscribe for additional Equity Interests or (2) to maintain
or preserve such Person's financial condition or to cause such Person to
achieve any specified levels of operating results; and (g) on the date such
Subsidiary is designated an Unrestricted Subsidiary, such Subsidiary is not a
party to any agreement, contract, arrangement or understanding with the Company
or any Restricted Subsidiary with terms substantially less favorable to the
Company than those that might have been obtained from Persons who are not
Affiliates of the Company. Any such designation by the Board of Directors of
the Company shall be evidenced by a resolution of the Board of Directors of the
Company giving effect to such designation and an Officers' Certificate
certifying that such designation complied with the foregoing conditions. If, at
any time, any Unrestricted Subsidiary would fail to meet the foregoing
requirements as an Unrestricted Subsidiary, it shall thereafter cease to be an
Unrestricted Subsidiary for purposes of this Certificate of Designations and
any Indebtedness of such Subsidiary shall be deemed to be incurred as of such
date. 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 Voting Rights Triggering Event shall have
occurred and be continuing or would occur as a consequence thereof and the
Company could incur at least $1.00 of additional Indebtedness (excluding
Permitted Indebtedness) pursuant to Section 9(a)(i) on a pro forma basis taking
into account such designation.
14
"Voting Rights Amendment" means an amendment to the By-laws of the
Company providing for an increase in the size of the Board of Directors of the
Company to, at all times, accommodate the appointment of a sufficient number of
directors designated by the Holders of Series A Preferred Stock in compliance
with clauses (a) and (b) of Section 7(b).
"Voting Rights Triggering Event" has the meaning set forth in Section
7(b).
"Weighted Average Life to Maturity" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing (i) the sum
of the products obtained by multiplying (a) the amount of each then remaining
installment, sinking fund, serial maturity or other required payments of
principal, including payment at final maturity, in respect thereof, by (b) the
number of years (calculated to the nearest one-twelfth) that will elapse
between such date and the making of such payment, by (ii) the then outstanding
principal amount of such Indebtedness.
"Wholly Owned Restricted Subsidiary" of any Person means a Restricted
Subsidiary of such Person all of the outstanding Capital Stock or other
ownership interests of which (other than directors' qualifying shares) shall at
the time be owned, directly or indirectly, by such Person or by one or more
Wholly Owned Restricted Subsidiaries of such Person.
2. RANKING.
(a) The Series A Preferred Stock shall, with respect to dividend
distributions and distributions upon the liquidation,
winding-up and dissolution of the Company, rank (i) senior to
all classes of common stock of the Company and to each other
class of Capital Stock of the Company established after the
Issue Date by the Board of Directors of the Company the terms
of which do not expressly provide that it ranks on a parity
with the Series A Preferred Stock as to dividend
distributions and distributions upon the liquidation,
winding-up and dissolution of the Company (collectively
referred to, together with all classes of common stock of the
Company, as "Junior Securities"); (ii) subject to certain
conditions, described below, on a parity with each series of
preferred stock existing on the date of the Prospectus the
terms of which do not expressly provide that it ranks junior
to the Series A Preferred Stock as to dividend distributions
and distributions upon the liquidation, winding-up and
dissolution of the Company, and any class of Capital Stock
established after the Issue Date by the Board of Directors of
the Company, the terms of which expressly provide that such
class or series will rank on a parity with the Series A
Preferred Stock as to dividend distributions and
distributions upon the liquidation, winding-up and
dissolution of the Company (collectively referred to as
"Parity Securities").
(b) The Company shall not authorize or issue any new class of
Parity Securities without the affirmative vote or consent
(voting or consenting as one class) of the holders of at
least 50% of the shares of Series A Preferred Stock then
outstanding, voting or consenting, as the case may be, as one
class; provided, that, without the approval of Holders of the
Series A Preferred Stock, the Company may issue shares of
Parity Securities in exchange for, or the proceeds of which
are used to
15
redeem or purchase, any or all of the shares of the Series A
Preferred Stock or other Parity Securities then outstanding.
3. DIVIDENDS.
(a) The Holders of the outstanding shares of the Series A
Preferred Stock shall be entitled to receive, when, as and if
declared by the Board of Directors out of funds of the
Company legally available therefor, dividends on the Series A
Preferred Stock, which shall accrue at a rate per annum equal
to 13 3/4% of the Liquidation Preference. If at any time
dividends on the Series A Preferred Stock are in arrears and
unpaiD for four consecutive quarterly dividend periods,
holders of Series A Preferred Stock will be entitled to the
voting rights specified in Section 7 of this Certificate of
Designations. All dividends will be cumulative, whether or
not earned or declared on a daily basis, from the Issue Date
and will be payable quarterly in arrears on July 1, October
1, January 1, and April 1 of each year, commencing on October
1, 1998, or, if any such date is not a Business Day, on the
next succeeding Business Day (each a "Dividend Payment Date")
to the Holders on June 15, September 15, December 15 or March
15 immediately preceding the relevant Dividend Payment Date
(each, a "Record Date"). On or before July 1, 2003, the
Company may, at its option, pay dividends in cash or in
Dividend Shares (including fractional shares, provided, that
the Company may, at its option, pay cash in lieu of issuing
fractional shares) having an aggregate Liquidation Preference
equal to the amount of such dividends. After July 1, 2003,
dividends shall be paid only in cash. The issuance of such
Dividend Shares shall constitute "payment" of the related
dividend for all purposes of this Certificate of
Designations. Dividends payable on the Series A Preferred
Stock will be computed on the basis of a 360-day year
consisting of twelve 30-day months and the number of days
actually elapsed and will be deemed to accrue on a daily
basis.
(b) No full dividends shall be declared or paid or funds set
apart for the payment of dividends on any Parity Securities
for any period unless full cumulative dividends shall have
been or contemporaneously are declared and paid (or are
deemed declared and paid) in full or declared and, if payable
in cash, a sum in cash sufficient for such payment set apart
for such payment on the Series A Preferred Stock. If full
dividends are not so paid, the Series A Preferred Stock will
share dividends pro rata with the Parity Securities. Unless
full cumulative dividends on all outstanding shares of Series
A Preferred Stock for all past dividend periods shall have
been declared and paid, or declared and a sufficient sum for
the payment thereof set apart, then: (i) no dividend (other
than a dividend on Junior Securities payable solely in shares
of any Junior Securities) shall be declared or paid upon (or
deemed paid), or any sum set apart for the payment of
dividends upon, any shares of Junior Securities; (ii) no
shares of Junior Securities or Parity Securities shall be
repurchased, redeemed or otherwise acquired or retired by the
Company or any of its Subsidiaries except as permitted under
Section 9(c) hereof; and (iii) no monies shall be paid into
or set apart or made available for a sinking or other like
fund for the purchase, redemption or other acquisition or
retirement for value of any shares of Junior Securities or
Parity Securities by the Company or
16
any of its Subsidiaries. Dividends on account of arrears for
any past dividend period and dividends in connection with any
optional redemption may be declared and paid at any time,
without reference to any regular Dividend Payment Date, to
holders of record of the Series A Preferred Stock on such
date, not more than 45 days prior to the payment thereof, as
may be fixed by the Board of Directors of the Company.
4. LIQUIDATION PREFERENCE.
Upon any voluntary or involuntary liquidation, dissolution or
winding-up of the Company, Holders of Series A Preferred Stock shall be
entitled to payment, out of the assets of the Company available for
distribution to stockholders, the Liquidation Preference per share of Series A
Preferred Stock, plus, without duplication, an amount in cash equal to all
accumulated and unpaid dividends thereon to but excluding the date fixed for
liquidation, dissolution or winding-up (including an amount equal to a prorated
dividend for the period from the last Dividend Payment Date to the date fixed
for liquidation, dissolution or winding-up), before any distribution is made on
any Junior Securities, including, without limitation, common stock of the
Company. If, upon any voluntary or involuntary liquidation, dissolution or
winding-up of the Company, the amounts payable with respect to the Series A
Preferred Stock and all other Parity Securities are not paid in full, the
Holders of the Series A Preferred Stock and the Parity Securities shall share
equally and ratably in any distribution of assets of the Company in proportion
to the full liquidation preference to which each is entitled. After payment of
the full amount of the Liquidation Preference and accumulated and unpaid
dividends to which they are entitled, the Holders of shares of Series A
Preferred Stock shall not be entitled to any further participation in any
distribution of assets of the Company. However, neither the sale, conveyance,
exchange or transfer (for cash, shares of stock, securities or other
consideration) of all or substantially all of the property or assets of the
Company nor the consolidation or merger of the Company with or into one or more
Persons shall be deemed to be a liquidation, dissolution or winding-up of the
Company, unless such sale, conveyance, exchange or transfer shall be in
connection with a liquidation, dissolution or winding-up of the business of the
Company.
5. REDEMPTION BY THE COMPANY.
(a) On July 1, 2009 (the "Mandatory Redemption Date"), the
Company shall be required to redeem (subject to the legal
availability of funds therefor and to Section 170 of the
DGCL) all outstanding shares of Series A Preferred Stock at a
price equal to 100% of the then effective Liquidation
Preference thereof, plus, without duplication, an amount in
cash equal to all accumulated and unpaid dividends, if any,
to but excluding the Redemption Date (including an amount in
cash equal to a prorated dividend for the period from the
Dividend Payment Date immediately prior to the Redemption
Date). The Company shall not be required to make sinking fund
payments to protect the Liquidation Preference with respect
to the Series A Preferred Stock.
(b) The Series A Preferred Stock shall not be redeemed for cash
at the option of the Company prior to July 1, 2003. The
Series A Preferred Stock may be redeemed (subject to
contractual and other restrictions with respect thereto, to
the legal
17
availability of funds therefor and to Section 170 of the
DGCL) at any time, in whole or from time to time in part, at
the option of the Company after July 1, 2003, at the
Applicable Redemption Price. In addition, at any time prior
to July 1, 2001, the Company may, at its option, redeem
shares of Series A Preferred Stock in whole or from time to
time in part having an aggregate Liquidation Preference of up
to 35% of the original aggregate Liquidation Preference of
the Series A Preferred Stock from the proceeds of one or more
Equity Offerings at a price equal to 113 3/4% of the
Liquidation Preference thereof, plus, without duplication, an
amount in cash equal to all accumulated and unpaid dividends,
if any, to but excluding the Redemption Date (including an
amount in cash equal to a prorated dividend for the period
from the Dividend Payment Date immediately prior to the
Redemption Date), subject to the right of Holders of record
on the relevant Record Date to receive dividends due on a
Dividend Payment Date; provided, that a number of shares
representing at least 65% of the original aggregate
Liquidation Preference of the Series A Preferred Stock
remains outstanding immediately following such redemption.
Any such redemption must be made within 90 days after the
date of the closing of such Equity Offerings.
(c) In the event of partial redemptions of Series A Preferred
Stock, the shares to be redeemed will be determined pro rata
or by lot, as determined by the Company, provided that the
Company may redeem such shares held by any holders of fewer
than 100 shares (or shares held by Holders who would hold
less than 100 shares as a result of such redemption), without
regard to any pro rata redemption requirement.
(d) Notice of any redemption shall be sent by or on behalf of the
Company not less than 30 nor more than 60 days prior to the
date specified for redemption in such notice (including the
Mandatory Redemption Date, the "Redemption Date"), by first
class mail, postage prepaid, to all Holders of record of the
Series A Preferred Stock at their registered address. In
addition to any information required by law or by the
applicable rules of any exchange upon which Series A
Preferred Stock may be listed or admitted to trading, such
notice shall state: (i) whether such redemption is being made
pursuant to the optional or the mandatory redemption
provisions hereof; (ii) the Redemption Date; (iii) the
redemption price; (iv) if less than all the outstanding
shares of Series A Preferred Stock are to be redeemed, the
Liquidation Preference of, and the accrued and unpaid
dividends on, the shares of Series A Preferred Stock to be
redeemed; (v) that on the Redemption Date the redemption
price shall become due and payable upon each share of Series
A Preferred Stock to be redeemed; and (vii) the place or
places where shares are to be surrendered for payment of the
redemption price. Upon the mailing of any such notice of
redemption, the Company shall become obligated to redeem at
the time of redemption specified thereon all shares called
for redemption.
(e) If notice has been mailed in accordance with Section 5(d)
above and, provided that on or before the Redemption Date
specified in such notice, all funds necessary for such
redemption shall have been segregated and irrevocably set
apart by the Company, in trust for the pro rata benefit of
the Holders of the shares
18
so called for redemption, so as to be, and to continue to be
available therefor, then, on and after the Redemption Date,
unless the Company defaults in the payment of the applicable
redemption price, dividends on the shares of the Series A
Preferred Stock so called for redemption shall cease to
accumulate and all rights of the Holders of such shares shall
terminate except for the right to receive from the Company
the redemption price, without interest; provided, however,
that if a notice of redemption shall have been given and the
funds necessary for redemption (including an amount in
respect of all dividends that will accrue to the Redemption
Date) shall have been segregated and irrevocably set apart by
the Company, in trust for the pro rata benefit of the Holders
of the shares called for redemption, dividends shall cease to
accumulate on the Redemption Date on the shares to be
redeemed and, at the close of business on the day on which
such funds are segregated and set apart, the Holders of the
shares to be redeemed shall cease to be stockholders of the
Company and shall be entitled only to receive the redemption
price for such shares. New certificates of Series A Preferred
Stock having an aggregate Liquidation Preference equal to the
unredeemed portion of the Series A Preferred Stock shall be
issued in the name of the Holder thereof upon cancellation of
the original shares of Series A Preferred Stock without cost
to the Holder thereof. Upon surrender, in accordance with
said notice, of the certificates for any shares so redeemed
(properly endorsed or assigned for transfer, if the Company
shall so require and the notice shall so state), such shares
shall be redeemed by the Company at the applicable redemption
price. Shares of Series A Preferred Stock issued and
reacquired by the Company pursuant to this Section 5 shall,
upon compliance with the applicable requirements of Delaware
law, have the status of Undesignated Shares of the Company,
and may, with any and all other Undesignated Shares of the
Company, be designated or redesignated, and issued or
reissued, as the case may be, as part of any series of
preferred stock of the Company, except that any issuance or
reissuance of shares of Series A Preferred Stock must be in
compliance with this Certificate of Designations.
(f) Any deposit of funds with a bank or trust company for the
purpose of redeeming Series A Preferred Stock shall be
irrevocable except that:
(i) the Company shall be entitled to receive from such
bank or trust company the interest or other
earnings, if any, earned on any money so deposited
in trust, and the Holders of any shares redeemed
shall have no claim to such interest or other
earnings; and
(ii) any balance of monies so deposited by the Company
and unclaimed by the Holders of the Series A
Preferred Stock entitled thereto at the expiration
of two years from the applicable Redemption Date
shall be repaid, together with any interest or other
earnings earned thereon, to the Company, and after
any such repayment, the holders of the shares
entitled to the funds so repaid to the Company shall
look only to the Company for payment without
interest or other earnings.
19
(g) No Series A Preferred Stock may be redeemed except with funds
legally available for the purpose. The Company shall take all
actions required or permitted under the DGCL to permit any
redemption which is required pursuant to clause (a) above or
which the Company elects pursuant to clause (b) above.
(h) No optional redemption may be authorized or made (i) unless
prior thereto or contemporaneously therewith full unpaid
cumulative dividends shall have been paid or a sum set apart
for such payment on the Series A Preferred Stock or (ii) at a
price less than 101% of the Liquidation Preference of the
Series A Preferred Stock at any time when the company is
making an offer to purchase shares of Series A Preferred
Stock under a Change of Control Offer in accordance with
Section 8.
6. EXCHANGE OF SERIES A PREFERRED STOCK FOR EXCHANGE DEBENTURES.
(a) The Company may at its option, on any scheduled Dividend
Payment Date, exchange, in whole, but not in part, the then
outstanding shares of Series A Preferred Stock for the
Exchange Debentures to be issued under an indenture (the
"Exchange Indenture") in the form attached hereto as Exhibit
A to be entered into between the Company and a trustee to be
selected by the Company (the "Debentures Trustee"); provided,
that on the date of such exchange: (i) there are no
contractual impediments to such exchange; (ii) such exchange
would comply with the DGCL; (iii) immediately after giving
effect to such exchange, no Default or Event of Default (each
as defined in the Exchange Indenture) would exist under the
Exchange Indenture; and (iv) the Company shall have delivered
a written opinion of counsel, dated the date of exchange,
regarding the satisfaction of the conditions set forth in
clauses (i) and (ii) and certain other matters.
(b) Upon any exchange of Series A Preferred Stock for Exchange
Debentures on the Exchange Date pursuant to clause (a) of
this Section 6, Holders of outstanding shares of Series A
Preferred Stock shall be entitled to receive, subject to the
second succeeding sentence, $1.00 of principal amount of
Exchange Debentures for each $1.00 of the Liquidation
Preference of Series A Preferred Stock held by them. The
Exchange Debentures shall be issued in registered form,
without coupons. Exchange Debentures issued in exchange for
Series A Preferred Stock shall be issued in principal amounts
of $1,000 and integral multiples thereof, and the Company
may, at its option, pay cash in lieu of issuing an Exchange
Debenture in any other principal amount. On and after the
Exchange Date, provided that the conditions of Section
6(a)(i)-(iv) and 6(f) have been satisfied, dividends will
cease to accumulate on the outstanding shares of Series A
Preferred Stock, and all rights of the Holders of Series A
Preferred Stock (except the right to receive the Exchange
Debentures, an amount in cash, to the extent applicable,
equal to the accumulated and unpaid dividends to the Exchange
Date and if the Company so elects, cash in lieu of any
Exchange Debenture that is in a principal amount less than
$1,000) shall terminate. The person entitled to receive the
Exchange Debentures issuable upon such exchange shall be
treated for all purposes as the registered holder of such
Exchange Debentures.
20
(c) The Company shall send a written notice (the "Exchange
Notice") of exchange by mail to each Holder of record of
Series A Preferred Stock, which notice shall state: (i) that
the Company is exercising its option to exchange the Series A
Preferred Stock for Exchange Debentures pursuant to this
Certificate of Designations; (ii) the date fixed for exchange
(the "Exchange Date"), which date shall not be less than 30
days nor more than 60 days following the date on which the
Exchange Notice is mailed; (iii) that the Holder is to
surrender to the Company, at the place or places where shares
of Series A Preferred Stock are to be surrendered for
exchange in the manner designated in the Exchange Notice, the
shares of Series A Preferred Stock to be exchanged; (iv) that
dividends on the shares of Series A Preferred Stock to be
exchanged shall cease to accrue on the Exchange Date whether
or not the shares of Series A Preferred Stock are surrendered
for exchange on the Exchange Date unless the Company shall
default in the delivery of Exchange Debentures; and (v) that
interest on the Exchange Debentures shall accrue from the
Exchange Date whether or not the shares of Series A Preferred
Stock are surrendered for exchange on the Exchange Date. On
the Exchange Date, if the conditions set forth in Sections
6(a)(i) through 6(a)(iv) above and Section 6(f) below are
satisfied, the Company shall issue Exchange Debentures in
exchange for the Series A Preferred Stock as provided in this
Section 6.
(d) A Holder delivering Series A Preferred Stock for exchange
shall not be required to pay any taxes or duties in respect
of the issue or delivery of Exchange Debentures on exchange
but shall be required to pay any tax or duty that may be
payable in respect of any transfer involved in the issue or
delivery of the Exchange Debentures in a name other than that
of the Holder of the Series A Preferred Stock. Certificates
representing Exchange Debentures shall not be issued or
delivered unless all taxes and duties, if any, payable by the
Holder have been paid.
(e) On or before the Exchange Date, each Holder of Series A
Preferred Stock shall surrender the shares of Series A
Preferred Stock, in the manner and at the place designated in
the Exchange Notice. The Company shall cause the Exchange
Debentures to be executed on the Exchange Date and, upon
surrender, in accordance with the Exchange Notice, of the
shares of Series A Preferred Stock so exchanged (properly
endorsed or assigned for transfer, if the notice shall so
state), such shares shall be exchanged by the Company for
Exchange Debentures. The Company shall pay dividends, if any,
on the Exchange Debentures at the rate and on the dates
specified therein from the Exchange Date.
(f) After the Exchange Notice has been mailed in accordance with
Section 6(c), the conditions set forth in Section 6(a)(i)
through 6(a)(iv) have been satisfied, and before the Exchange
Date (i) the Exchange Indenture shall have been duly executed
and delivered by the Company and the Debentures Trustee; (ii)
all Exchange Debentures necessary for such exchange shall
have been duly executed and authenticated by the Company and
delivered to the Debentures Trustee with irrevocable
instructions to authenticate the Exchange Debentures
necessary for
21
such exchange; and (iii) an amount in cash, set aside by the
Company, separate and apart from its other funds in trust, or
additional Series A Preferred Stock (as applicable) equal to
all accumulated and unpaid dividends thereon to the Exchange
Date shall have been deposited with the Debentures Trustee,
then on and after the close of business on the Exchange Date,
dividends on the shares of Series A Preferred Stock so
exchanged shall cease to accumulate and all rights of the
Holders of such shares shall terminate except for the right
to receive from the Company the Exchange Debentures, cash, if
any, and all accrued interest, if any, thereon to the
Exchange Date. Shares of Series A Preferred Stock issued and
reacquired by the Company pursuant to this Section 6 shall,
upon compliance with the applicable requirements of Delaware
law, have the status of Undesignated Shares of the Company,
and may, with any and all other authorized but unissued
Undesignated Shares of the Company, be designated or
redesignated, and issued or reissued, as the case may be, as
part of any series of preferred stock of the Company, but not
as Series A Preferred Stock.
(g) The Company shall comply with the provisions of Rule 13e-4
promulgated pursuant to the Exchange Act in connection with
any exchange, to the extent applicable.
7. VOTING RIGHTS.
(a) The Holders of shares of the Series A Preferred Stock shall
have no voting rights, except as required by non-waivable
provisions of Delaware law and as hereinafter provided in
this Section 7. It is the intention of this Section 7(a) to
deny voting rights to holders of shares of Series A Preferred
Stock except (i) as specifically granted in Sections 7(b)
through 7(i), and (ii) to the extent that non-waivable
provisions of Delaware law preclude the denial of voting
rights to holders of shares of Series A Preferred Stock.
(b) If:
(i) at any time, dividends on the outstanding Series A
Preferred Stock are in arrears and unpaid (and in
the case of dividends payable after July 1, 2003,
are not paid in cash) for four (4) consecutive
quarterly dividend periods;
(ii) the Company fails to discharge any redemption
obligation with respect to the Series A Preferred
Stock (whether or not the Company is permitted to do
so by the terms of the Credit Facility, the Senior
Subordinated Notes, the DGCL, or any other
obligation of the Company);
(iii) the Company fails to make a Change of Control Offer
on the terms and in accordance with the provisions
described below in Section 8 hereof (whether or not
the Company is permitted to do so by the terms of
the Credit Facility, the Senior Subordinated Notes
or any other obligation of the Company) or fails to
purchase shares of Series A Preferred Stock from
22
Holders who elect to have such shares purchased
pursuant to the Change of Control Offer;
(iv) the Company breaches or violates any of the other
covenants or agreements set forth in Section 9 and
such breach or violation continues for a period of
60 days or more after the Company receives notice
thereof specifying the default from the Holders of
at least 25% of the shares of Series A Preferred
Stock then outstanding; or
(v) the Company or any Restricted Subsidiary defaults
under the terms of any mortgage, indenture or
instrument under which there may be issued or by
which there may be secured or evidenced any
Indebtedness for money borrowed by the Company or
any of its Restricted Subsidiaries (or the payment
of which is guaranteed by the Company or any of its
Restricted Subsidiaries) whether such Indebtedness
or guarantee now exists, or is created after June
24, 1998, which default (A) is caused by a failure
to pay principal of or premium, if any, or interest
on such Indebtedness prior to the expiration of the
grace period provided in such Indebtedness on the
date of such default (a "Payment Default") or (B)
results in the acceleration of such Indebtedness
prior to its express maturity and, in each case, the
principal amount of any such Indebtedness, together
with the principal amount of any other such
Indebtedness under which there is then existing a
Payment Default or the maturity of which has been so
accelerated, aggregates $5.0 million or more (each
of the events described in clauses (i), (ii), (iii),
(iv) and (v) being referred to herein as a "Voting
Rights Triggering Event"); then, the number of
directors constituting the Board of Directors of the
Company will be adjusted to permit the holders of
the majority of the then outstanding Series A
Preferred Stock, voting separately as a class, to
elect two directors.
(c) Whenever the foregoing voting rights shall have vested, such
rights may be exercised initially either at a special meeting
of the Holders of Series A Preferred Stock, called as
hereinafter provided, or at any annual meeting of
stockholders held for the purpose of electing directors, and
thereafter at such annual meetings or by the written consent
of the Holders of Series A Preferred Stock. Such right of the
Holders of Series A Preferred Stock to elect directors may be
exercised until (i) all dividends in arrears shall have been
paid in full (and in the case of dividends payable after July
1, 2003, paid in cash) and (ii) all other failures, breaches
or defaults giving rise to such Voting Rights Triggering
Event are remedied or waived by the Holders of at least a
majority of the shares of Series A Preferred Stock then
outstanding, at which time the term of such directors
previously elected pursuant to the provisions of this Section
7(b) shall thereupon terminate, and such directors shall be
deemed to have resigned.
(d) At any time when the foregoing voting rights shall have
vested in the Holders of Series A Preferred Stock and if such
rights shall not already have been initially exercised, a
proper officer of the Company shall, upon the written request
of
23
Holders of record of 10% or more of the Series A Preferred
Stock then outstanding, addressed to the Secretary of the
Company, call a special meeting of Holders of Series A
Preferred Stock. Such meeting shall be held at the earliest
practicable date based upon the number of days of notice
required for annual meetings of stockholders at the place for
Holding annual meetings of stockholders of the Company or, if
none, at a place designated by the Secretary of the Company.
If such meeting shall not be called by the proper officers of
the Company within 30 days after the personal service of such
written request upon the Secretary of the Company, or within
30 days after mailing the same within the United States, by
registered mail, addressed to the Secretary of the Company at
its principal office (such mailing to be evidenced by the
registry receipt issued by the postal authorities), then the
Holders of record of 10% of the shares of Series A Preferred
Stock then outstanding may designate in writing a Holder of
Series A Preferred Stock to call such meeting at the expense
of the Company, and such meeting may be called by such person
so designated upon the number of days of notice required for
annual meetings of stockholders and shall be held at the
place for holding annual meetings of the Company or, if none,
at a place designated by such Holder. Any Holder of Series A
Preferred Stock that would be entitled to vote at such
meeting shall have access to the stock books of the Company
for the purpose of causing a meeting of stockholders to be
called pursuant to the provisions of this Section 7.
Notwithstanding the provisions of this Section 7(d) however,
no such special meeting shall be called if any such request
is received less than 90 days before the date fixed for the
next ensuing annual meeting of stockholders.
(e) If any director so elected by the Holders of Series A
Preferred Stock shall cease to serve as a director before his
term shall expire, the Holders of Series A Preferred Stock
then outstanding may, at a special meeting of the Holders
called as provided above, elect a successor to hold office
for the unexpired term of the director whose place shall be
vacant.
(f) In addition to the matters set forth in Section 2(b), the
Company shall not, without the affirmative vote or consent of
the Holders of at least a majority of the shares of Series A
Preferred Stock then outstanding (with shares held by the
Company or any of its Affiliates not being considered to be
outstanding for this purpose) voting or consenting as the
case may be as one class merge, consolidate or sell all or
substantially all of the assets of the Company except as
permitted pursuant to Section 9(b).
(g) In addition to the matters set forth in clause (f) above,
except as stated above under Section 2, the Company shall
not, without the affirmative vote or consent of holders of at
least 50% of the shares of Series A Preferred Stock then
outstanding (with shares held by the Company or any of its
Affiliates not being considered to be outstanding for his
purpose), voting or consenting, as the case may be, as one
class:
24
(i) amend the Certificate of Designations so as to
adversely affect the specified rights, preferences,
privileges or voting rights of holders of shares of
the Series A Preferred Stock, or
(ii) increase the number of authorized shares of the
Company designated as Series A Preferred Stock.
(h) Without the consent of each Holder affected, an amendment or
waiver of the Company's Certificate of Incorporation or of
this Certificate of Designations may not (with respect to any
shares of Series A Preferred Stock held by a non-consenting
Holder):
(i) alter the voting rights with respect to the Series A
Preferred Stock (provided, however, that the consent
of Holders of Series A Preferred Stock shall not be
required to approve the Voting Rights Amendment) or
reduce the number of shares of Series A Preferred
Stock whose holders must consent to an amendment,
supplement or waiver;
(ii) reduce the Liquidation Preference of or change the
Mandatory Redemption Date of any share of Series A
Preferred Stock or alter the provisions with respect
to the redemption of the Series A Preferred Stock
(except as provided with respect to Section 8
hereof):
(iii) reduce the rate or change the time for payment of
dividends on any share of Series A Preferred Stock;
(iv) waive the consequences of any failure to pay
dividends on the Series A Preferred Stock;
(v) make any share of Series A Preferred Stock payable
in any form other than that stated in this
Certificate of Designations;
(vi) make any change in the provisions of this
Certificate of Designations relating to waivers of
the rights of holders of Series A Preferred Stock to
receive the Liquidation Preference and dividends on
the Series A Preferred Stock:
(vii) waive a redemption payment with respect to any share
of Series A Preferred Stock (except as provided with
respect to Section 8 hereof); or
(viii) make any change in the foregoing amendment and
waiver provisions.
(i) The Company in its sole discretion may, without the vote or
consent of any Holders of the Series A Preferred Stock, amend
or supplement this Certificate of Designations:
(i) to cure any ambiguity, defect or inconsistency;
25
(ii) except as set forth in clauses (f) and (g) above,
create, authorize or issue any shares of Junior
Securities or Parity Securities;
(iii) to decrease the amount of authorized capital stock
of any class, including any Series A Preferred
Stock;
(iv) to increase the amount of authorized capital stock
of any class of Junior Securities; or
(v) to make any change that would provide any additional
rights or benefits to the Holders of the Series A
Preferred Stock or that does not adversely affect
the legal rights under this Certificate of
Designations of any such Holder.
8. CHANGE OF CONTROL.
(a) Upon the occurrence of a Change of Control, the Company shall
make an offer (the "Change of Control Offer") to each Holder
of shares of Series A Preferred Stock to repurchase all or
any part (but not, in the case of any Holder requiring the
Company to purchase less than all of the shares of Series A
Preferred Stock held by such Holder, any fractional shares)
of such Holder's Series A Preferred Stock at an offer price
in cash equal to 101% of the aggregate Liquidation Preference
thereof plus, without duplication, an amount in cash equal to
all accumulated and unpaid dividends, if any, thereon to but
excluding the date of purchase (the "Change of Control
Payment") (including an amount in cash equal to a pro rated
dividend for the period from the Dividend Payment Date
immediately prior to the Change of Control Payment Date)
(subject to the right of Series A Preferred Stock Holders of
record on the relevant record date to receive dividends due
on the relevant dividend payment date); provided, however,
that notwithstanding the occurrence of a Change of Control,
the Company shall not be obligated to purchase the Series A
Preferred Stock pursuant to this covenant in the event that
it has exercised its right to redeem all of the Series A
Preferred Stock pursuant to Section 5(b).
(b) The Change of Control Offer shall include all instructions
and materials necessary to enable Holders to tender their
shares of Series A Preferred Stock and a full description of
the circumstances and relevant facts and financial
information regarding such Change of Control.
(c) The Company shall comply, to the extent applicable, with the
requirements of Rule 14(e) of the Exchange Act and any other
securities laws and regulations in connection with the
repurchase of the Series A Preferred Stock as a result of a
Change of Control. To the extent that the provisions of any
securities laws or regulations conflict with provisions of
this covenant, the Company will comply with the applicable
securities laws and regulations and will not be deemed to
have breached its obligations under this paragraph by virtue
thereof. The Change of Control Offer shall contain
information concerning the business of the Company
26
and its Subsidiaries which the Company in good faith believes
will enable such Holders to make an informed decision with
respect to the Change of Control Offer (which at a minimum
will include (i) the most recent annual and quarterly
financial statements, (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 Change of Control Offer) and (iii) if
applicable, appropriate pro forma financial information
concerning the Offer to Purchase.
(d) Within 30 days following any Change of Control (or at the
Company's option, prior to such Change of Control but after
the public announcement thereof), the Company shall mail a
notice to each Holder stating:
(i) that the Change of Control Offer is being made
pursuant to this Section 8 and that all shares of
Series A Preferred Stock tendered shall be accepted
for payment;
(ii) the amount of the Change of Control Payment, the
purchase date, which shall be not earlier than 30
days nor later than 60 days from the date such
notice is mailed (the "Change of Control Payment
Date");
(iii) that any share of Series A Preferred Stock not
tendered shall continue to accumulate dividends;
(iv) the place or places where Series A Preferred Stock
are to be surrendered for tender pursuant to the
Change of Control Offer;
(v) that, on the Change of Control Payment Date, the
purchase price shall become due and payable upon
each share of Series A Preferred Stock accepted for
payment pursuant to the Change of Control Offer and,
unless the Company fails to pay the Change of
Control Payment on the Change of Control Payment
Date, all shares of Series A Preferred Stock
accepted for payment pursuant to the Change of
Control Offer shall cease to accumulate dividends
after the Change of Control Payment Date;
(vi) that Holders electing to have any shares of Series A
Preferred Stock purchased pursuant to a Change of
Control Offer will be required to surrender the
shares of Series A Preferred Stock, with the form
entitled "Option of Holder to Elect Purchase" which
shall be included with the notice of Change of
Control completed, to the Paying Agent at the
address specified in the notice prior to the close
of business on the third Business Day preceding the
Change of Control Payment Date;
(vii) that, if such Offer is made prior to such Change of
Control, payment is conditioned on the occurrence of
such Change of Control; and
(viii) that the Holder may tender all or any portion of the
shares of Series A Preferred Stock held by such
Holder and that in the case of any Holder
27
whose shares are to be purchased only in part, the
Company shall execute, authorize and deliver to the
Holder, without service charge, a new certificate as
requested by such Holder, for the unpurchased
portion of his shares of Series A Preferred Stock.
(e) On the Change of Control Payment Date, the Company shall, to
the extent lawful, (i) accept for payment all shares of
Series A Preferred Stock or portions thereof properly
tendered pursuant to the Change of Control Offer, (ii)
deposit with the Payment Agent an amount equal to the Change
of Control Payment in respect of all shares of Series A
Preferred Stock or portions thereof so tendered and (iii)
deliver or cause to be delivered to the Transfer Agent the
shares of Series A Preferred Stock so accepted together with
an Officers' Certificate stating the aggregate Liquidation
Preference of the shares of Series A Preferred Stock or
portions thereof being purchased by the Company. The Paying
Agent shall promptly mail to each holder of Series A
Preferred Stock so tendered the Change of Control Payment for
such Series A Preferred Stock, and the Transfer Agent shall
promptly authenticate and mail (or cause to be transferred by
book entry) to each holder a new certificate representing the
shares of Series A Preferred Stock equal in Liquidation
Preference amount to any unpurchased portion of the shares of
the shares of Series A Preferred Stock represented by the
certificates so surrendered. The Company shall publicly
announce the results of the Change of Control Offer on or as
soon as practicable after the Change of Control Payment Date.
(f) If, at the time of a Change of Control, the Company is
restricted or prohibited by the terms of any Credit
Agreements from purchasing shares of Series A Preferred Stock
that may be tendered by holders pursuant to a Change of
Control Offer, prior to complying with the provisions of
Section 8(a), but in any event within 30 days following a
Change of Control (unless the Company has exercised its right
to redeem all the Series A Preferred Stock pursuant to
Section 5(b)), the Company shall either (i) repay in full all
outstanding Obligations under such Credit Agreements or offer
to repay in full all outstanding Obligations under such
Credit Agreements and repay the Obligations of each lender
who has accepted such offer or (ii) obtain the requisite
consent under such Credit Agreements to permit the repurchase
of the Series A Preferred Stock required by this Section 8.
The Company must first comply with the covenant described in
the preceding sentence before it will be required to
repurchase shares of Series A Preferred Stock in the event of
a Change of Control; provided, that if the Company fails to
comply with the covenant described in the preceding sentence,
the sole remedy to holders of Series A Preferred Stock will
be the voting rights arising from a Voting Rights Triggering
Event. Moreover, the Company will not repurchase or redeem
any Series A Preferred Stock pursuant to this Change of
Control provision prior to the Company's repurchase of the
Senior Subordinated Notes pursuant to the Change of Control
covenants in the Notes Indenture.
(g) The Company shall not be required to make a Change of Control
Offer upon a Change of Control if a third party makes the
Change of Control Offer in the
28
manner, at the times and otherwise in compliance with the
requirements set forth in this Section 8 applicable to a
Change of Control Offer made by the Company and purchases all
shares of Series A Preferred Stock validly tendered and not
withdrawn under such Chance of Control Offer.
9. CERTAIN COVENANTS.
(a) Limitation on Incurrence of Indebtedness and Issuance of
Preferred Stock.
(i) The Company will not, and will not permit any of its
Restricted Subsidiaries to, directly or indirectly,
Incur any Indebtedness (including Acquired Debt) and
that the Company will not issue any Disqualified
Stock and will not permit any of its Restricted
Subsidiaries to issue any shares of preferred stock;
provided, however, that the Company and the
Subsidiary Guarantors may incur Indebtedness
(including Acquired Debt) and the Company may issue
shares of Disqualified Stock if the Company's
Leverage Ratio at the time of the incurrence of such
Indebtedness or issuance of such Disqualified Stock,
after giving pro-forma effect thereto and to the use
of proceeds therefrom, is less than 7.0 to 1.
Accrual of interest, accretion or amortization of
original issue discount and the payment of interest
in the form of additional indebtedness will not be
deemed to be an incurrence of indebtedness for
purposes of this Section 9(a).
(ii) Notwithstanding clause (i) above, the Company and
its Restricted Subsidiaries may Incur Permitted
Indebtedness (other than the Indebtedness evidenced
by the Exchange Debentures) without regard to the
foregoing limitation provided, however, that the
Company will not permit any Unrestricted Subsidiary
to Incur Indebtedness other than Non-Recourse Debt
and in the event such Indebtedness ceases to be
Non-Recourse Debt such event shall be deemed to
constitute an Incurrence of Indebtedness by the
Company.
(b) Merger, Consolidation, or Sale of Assets.
The Company may not consolidate or merge with or into (whether or not
the Company is the surviving corporation), or sell, assign, transfer, lease,
convey or otherwise dispose of all or substantially all of its properties or
assets, in one or more related transactions, to another Person, and the Company
may not permit any of its Restricted Subsidiaries to enter into any such
transaction or series of transactions if such transaction or series of
transactions would, in the aggregate, result in a sale, assignment, transfer,
lease, conveyance, or other disposition of all or substantially all of the
properties or assets of the Company to another Person unless (i) the Company is
the surviving corporation or the Person formed by or surviving any such
consolidation or merger (if other than the Company) or to which such sale,
assignment, transfer, lease, conveyance or other disposition shall have been
made (the "Surviving Entity") is a corporation organized or existing under the
laws of the United States, any state thereof or the District of Columbia; (ii)
the Series A Preferred Stock shall be converted into or exchanged for
29
and shall become shares of the Surviving Entity, having in respect of such
successor, transferee or resulting corporation substantially the same powers,
preferences and relative participating, optional or other special rights, and
the qualifications, limitations or restrictions thereon that the Series A
Preferred Stock had immediately prior to such transaction; (iii) immediately
after such transaction, no Voting Rights Triggering Event, and no event that
after the giving of notice or lapse of time or both would become a Voting
Rights Triggering Event, shall have occurred and be continuing; and (iv) the
Company or the Surviving Entity will, at the time of such transaction or series
of transactions and after giving pro forma effect thereto as if such
transaction or series of transactions had occurred at the beginning of the
applicable four-quarter period, be permitted to incur at least $1.00 of
additional Indebtedness pursuant to the test set forth in the first paragraph
of Section 9(a)(i). Notwithstanding the restrictions described in the foregoing
clause (iv), any Restricted Subsidiary may consolidate with, merge into or
transfer all or part of its properties and assets to the Company, and any
Wholly Owned Restricted Subsidiary may consolidate with, merge into or transfer
all or part of its properties and assets to another Wholly Owned Restricted
Subsidiary.
(c) Restricted Payments.
(i) The Company and its Restricted Subsidiaries shall
not make any Restricted Payment unless after giving
effect thereto (A) no Voting Rights Triggering Event
or event which, with notice or lapse of time or
both, would become a Voting Rights Triggering Event
has occurred and is continuing; (B) all dividends on
the Series A Preferred Stock payable on dividend
payment dates after July 1, 2003, have been declared
and paid in cash; (C) such Restricted Payment,
together with the aggregate of all other Restricted
Payments made by the Company and its Restricted
Subsidiaries after June 24, 1998 (excluding
Restricted Payments permitted by clauses (B), (C)
and (E) of paragraph (ii) below, is less than the
sum of (1)(a) 100% of the aggregate Consolidated
Cash Flow of the Company (or, in the event such
Consolidated Cash Flow shall be a deficit, minus
100% of such deficit) accrued for the period
beginning on the first day of the Company's fiscal
quarter commencing after the Issue Date and ending
on the last day of the Company's most recent fiscal
quarter for which financial information is available
to the Company ending prior to the date of such
proposed Restricted Payment, taken as one accounting
period, less (b) 1.4 times Consolidated Interest
Expense for the same period, plus (2) 100% of the
aggregate net cash proceeds and the fair market
value of marketable securities (as determined in
good faith by the Company) received by the Company
from the issue or sale since the Issue Date of
Equity Interests of the Company or of debt
securities of the Company that have been converted
into or exchanged for such Equity Interests (other
than Equity Interests (or convertible debt
securities) sold to a Subsidiary of the Company,
other than Disqualified Stock or debt securities
that have been converted into Disqualified Stock and
other than the Common Stock issued in the Common
Stock Offering), plus (3) to the extent that any
Restricted Investment that was made after the Issue
Date is sold for cash or otherwise liquidated or
repaid for cash, the lesser of (a) the net proceeds
30
of such sale, liquidation or repayment and (b) the
amount of such Restricted Investment, plus (4) $5.0
million.
(ii) The provisions of Section 9(c)(i) shall not be
violated, by reason of (A) the payment of any
dividend within 60 days after the date of
declaration thereof, if at said date of declaration
such payment would have complied with the provisions
of this Certificate of Designations; (B) the
redemption, repurchase, retirement or other
acquisition of any Junior Securities or Parity
Securities of the Company in exchange for, or out of
the proceeds of, the substantially concurrent sale
(other than to a Subsidiary of the Company) of other
Junior Securities or Parity Securities of the
Company (other than any Disqualified Stock); (C) the
repurchase, redemption or other acquisition or
retirement for value of any Junior Securities or
Parity Securities of the Company or any Subsidiary
of the Company held by any of the Company's (or any
of its Subsidiaries') employees pursuant to any
management equity subscription agreement or stock
option agreement in connection with the termination
of such person's employment for any reason
(including by reason of death or disability);
provided that the aggregate price paid for all such
repurchased, redeemed, acquired or retired Junior
Securities or Parity Securities shall not exceed
$500,000 in any twelve-month period; and provided
further that no Voting Rights Triggering Event shall
have occurred and be continuing immediately after
such transaction; and (D) repurchases of Junior
Securities or Parity Securities deemed to occur upon
exercise of stock options if such Junior Securities
or Parity Securities represent a portion of the
exercise price of such options.
(d) Designation of Unrestricted Subsidiaries.
The Board of Directors of the Company may designate any Restricted
Subsidiary to be an Unrestricted Subsidiary if such designation would not cause
a Voting Rights Triggering Event. For purposes of making such determination,
all outstanding Investments by the Company and its Restricted Subsidiaries
(except to the extent repaid in cash) in the Subsidiary so designated will be
deemed to be Restricted Payments at the time of such designation and will
reduce the amount available for Restricted Payments under clause (C) of Section
9(c)(i). All such outstanding Investments will be deemed to constitute
Investments in an amount equal to the greater of the fair market value or the
book value of such Investments at the time of such designation. Such
designation will only be permitted if such Restricted Payment would be
permitted at such time and if such Restricted Subsidiary otherwise meets the
definition of an Unrestricted Subsidiary.
(e) Limitations on Transactions with Affiliates and Related
Persons.
The Company shall not, and shall not permit any Restricted Subsidiary
of the Company to, make any payment to, or sell, lease, transfer or otherwise
dispose of any of its properties or assets to, or purchase any property or
assets from, or enter into or make or amend any contract, agreement,
understanding, loan, advance or guarantee with, or for the benefit of any of
its Affiliates (each of the foregoing, an "Affiliate Transaction"), unless (i)
such Affiliate
31
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 an
unrelated Person and (ii) (A) with respect to any Affiliate Transaction or
series of related Affiliate Transactions involving aggregate consideration in
excess of $1.0 million, such Affiliate Transaction or series of related
Affiliated Transactions has been approved in good faith by a majority of the
members of the Board of Directors who are disinterested with respect to such
Affiliate Transaction or series of related Affiliated Transactions, and (B)
with respect to any Affiliate Transaction or series of related Affiliate
Transactions involving aggregate consideration in excess of $10.0 million, such
Affiliate Transaction or series of related Affiliate Transactions has been
approved in good faith by a resolution adopted by a majority of the members of
the Board of Directors of the Company who are disinterested with respect to
such Affiliate Transaction or series of related Affiliate Transactions and an
opinion as to the fairness to the Company or such Subsidiary of such Affiliate
Transaction or series of related Affiliate Transactions from a financial point
of view has been issued to the Company by an accounting, appraisal, engineering
or investment banking firm of national standing provided that the following
shall not be deemed Affiliate Transactions: (1) transactions contemplated by
any employment agreement or other compensation plan or arrangement 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, (2) transactions between or among the Company and/or its
Restricted Subsidiaries, (3) Restricted Payments and Permitted Investments that
are permitted by Section 9(c), (4) indemnification payments made to officers,
directors and employees of the Company or any Restricted Subsidiary pursuant to
charter, bylaw, statutory or contractual provisions, and (5) any agreement in
effect as of the Issue Date or any transaction contemplated thereby.
(f) Reports.
Whether or not required by the rules and regulations of the
Commission, so long as any shares of Series A Preferred Stock are outstanding,
the Company will furnish to the Transfer Agent and the Holders, (i) all
quarterly and annual financial information that would be required to be
contained in a filing with the Commission on Forms 10-Q and 10-K if the Company
were required to file such Forms, including a "Management's Discussion and
Analysis of Financial Condition and Results of Operations" that describes the
financial condition and results of operations of the Company and its
consolidated Subsidiaries and, with respect to the annual information only, a
report thereon by the Company certified independent accountants and (ii) all
current reports that would be required to be filed with the Commission on Form
8-K if the Company was required to file such reports, in each case within the
time periods set forth in the Commission's rules and regulations. In addition,
whether or not required by the rules and regulations of the Commission, the
Company will file a copy of such information and reports with the Commission
for public availability within the time periods set forth in the Commission's
rules and regulations (unless the Commission will not accept such filing).
10. AMENDMENT.
Notwithstanding anything to the contrary in the DGCL, unless otherwise
provided in Section 2(b) or 7, neither this Certificate of Designations nor the
Certificate of Incorporation shall be amended in any manner that would increase
or decrease the par value of the shares of the
32
Series A Preferred Stock class or alter or change the powers, preferences or
special rights of the Series A Preferred Stock so as to affect the Holders
thereof adversely without the affirmative vote of the Holders of a majority of
the outstanding Series A Preferred Stock voting separately as a class.
11. EXCLUSION OF OTHER RIGHTS.
Except as may otherwise be required by law, the shares of Series A
Preferred Stock shall not have any voting powers, preferences and relative,
participating, optional or other special rights, other than those specifically
set forth in this Certificate of Designations (as such Certificate of
Designations may be amended from time to time in accordance with the terms
hereof) and in the Certificate of Incorporation. The shares of Series A
Preferred Stock shall have no preemptive or subscription rights.
12. HEADINGS OF SECTIONS.
The headings of the various sections and subsections hereof are for
convenience of reference only and shall not affect the interpretation of any of
the provisions hereof.
13. SEVERABILITY OF PROVISIONS.
If any voting powers, preferences and relative, participating,
optional and other special rights of the Series A Preferred Stock and
qualifications, limitations and restrictions thereof set forth in this
Certificate of Designations (as this Certificate of Designations may be amended
from time to time) is invalid, unlawful or incapable of being enforced by
reason of any rule of law or public policy, all other voting powers,
preferences and relative, participating, optional and other special rights of
Series A Preferred Stock and qualifications, limitations and restrictions
thereof set forth in this Certificate of Designations (as so amended) which can
be given effect without the invalid, unlawful or unenforceable voting powers,
preferences and relative, participating, optional and other special rights of
Series A Preferred Stock and qualifications, limitations and restrictions
thereof shall, nevertheless, remain in full force and effect, and no voting
powers, preferences and relative, participating, optional or other special
rights of Series A Preferred Stock and qualifications, limitations and
restrictions thereof herein set forth shall be deemed dependent upon any other
such voting powers, preferences and relative, participating, optional or other
special rights of Series A Preferred Stock and qualifications, limitations and
restrictions thereof unless so expressed herein.
33
EXHIBIT A TO
APPENDIX A
CUMULUS MEDIA INC.,
as Issuer
and
U.S. BANK TRUST NATIONAL ASSOCIATION,
as Trustee
--------------------
INDENTURE
Dated as of ,
---------------
--------------------
$125,000,000
13 3/4% Subordinated Exchange Debentures due 2009
INDENTURE dated as of [_______ __, ____] among Cumulus Media
Inc., a Delaware corporation (the "Company"), as issuer and U.S. Bank Trust
National Association, as trustee (the "Trustee").
The Company and the Trustee agree as follows for the benefit
of each other and for the equal and ratable benefit of the Holders of the 13
3/4% Subordinated Exchange Debentures due 2009 of the Company (the "Exchange
Debentures"):
ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.1. Definitions.
"Acquired Debt" means, with respect to any specified Person,
(i)Indebtedness of any other Person existing at the time such other Person is
merged with or into or becomes a Subsidiary of such specified Person, including,
without limitation, Indebtedness incurred in connection with, or in
contemplation of, such other Person merging with or into or becoming a
Subsidiary of such specified Person, and (ii) Indebtedness secured by a Lien
encumbering any asset acquired by such specified Person.
"Affiliate" of any specified Person means any other Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified Person. For purposes of this definition,
"control" (including, with correlative meanings, the terms "controlling,"
"controlled by" and "under common control with"), as used with respect to any
Person, shall mean the possession, directly or indirectly, of the power to
direct or cause the direction of the management or policies of such Person,
whether through the ownership of voting securities, by agreement or otherwise;
provided that beneficial ownership of 10% or more of the voting securities of a
Person shall be deemed to be control.
"Agent" means any Registrar, Paying Agent or co-registrar.
"Asset Sale" means (i) the sale, lease, conveyance or other
disposition (but excluding the creation of a Lien) of any assets including,
without limitation, by way of a sale and leaseback (provided that the sale,
lease, conveyance or other disposition of all or substantially all of the assets
of the Company and its Subsidiaries taken as a whole shall be governed by
Sections 4.13 and/or 5.1 hereof and not by Section 4.10 hereof), and (ii) the
issue or sale by the Company or any of its Restricted Subsidiaries of Equity
Interests of any of the Company's Subsidiaries (including the sale by the
Company or a Restricted Subsidiary of Equity Interests in an Unrestricted
Subsidiary), in the case of either clause (i) or (ii), whether in a single
transaction or a series of related transactions (a) that have a fair market
value in excess of $1.0 million or (b) for net proceeds in excess of $1.0
million. Notwithstanding the foregoing, the following shall not be deemed to be
Asset Sales: (1) a transfer of assets by the Company to a Wholly Owned
Restricted Subsidiary of the Company or by a Wholly Owned Restricted Subsidiary
of the Company to the Company or to another Wholly Owned Restricted Subsidiary
of the Company; (2) an issuance of Equity Interests by a Wholly Owned Restricted
Subsidiary of the Company to the Company or to another Wholly Owned Restricted
Subsidiary of the Company; (3) the making of a Restricted Payment or a Permitted
Investment that is permitted by Section 4.7; (4) a
disposition of cash or Cash Equivalents; (5) a disposition of either obsolete
equipment or equipment that is damaged, worn out or otherwise no longer useful
in the business; (6) any sale of Equity Interests in, or Indebtedness or other
securities of, an Unrestricted Subsidiary; (7) any sale and leaseback of an
asset within 90 days after the completion of construction or acquisition of such
asset; (8) any surrender or waiver of contract rights or a settlement, release
or surrender of contract, tort or other claims of any kind or a grant of any
Lien not prohibited by this Exchange Debenture Indenture; and (9) any transfer
of properties or assets that is governed by Section 4.14 hereof; or (10) a
disposition of inventory in the ordinary course of business.
"Asset Swap" means the execution of a definitive agreement,
subject only to regulatory approval and other customary closing conditions, that
the Company in good faith believes will be satisfied, for a substantially
concurrent purchase and sale, or exchange, of assets used or useful in a
Permitted Business between the Company or any of its Restricted Subsidiaries and
another person or group of affiliated persons; provided that any amendment to or
waiver of any closing conditions which individually or in the aggregate is
material to the Asset Swap shall be deemed to be a new Asset Swap.
"Attributable Debt" in respect of a sale and leaseback
transaction means, at the time of determination, the present value (discounted
at the rate of interest implicit in such transaction, determined in accordance
with GAAP) of the obligation of the lessee for net rental payments during the
remaining term of the lease included in such sale and leaseback transaction
(including any period for which such lease has been extended or may, at the
option of the lessor, be extended).
"Board of Directors" means the Board of Directors of the
Company or any authorized committee of such Board of Directors.
"Business Day" means any day other than a Legal Holiday.
"Capital Lease Obligation" means, at the time any
determination thereof is to be made, the amount of the liability in respect of a
capital lease that would at such time be required to be capitalized on a balance
sheet in accordance with GAAP.
"Capital Stock" means (i) in the case of a corporation,
corporate stock, (ii) in the case of an association or business entity, any and
all shares, interests, participations, rights or other equivalents (however
designated) of corporate stock, (iii) in the case of a partnership, partnership
interests (whether general or limited), (iv) in the case of a limited liability
company or similar entity, any membership or similar interests therein and (v)
any other interest or participation that confers on a Person the right to
receive a share of the profits and losses of, or distributions of assets of, the
issuing Person.
"Cash Equivalents" means (i) United States dollars, (ii)
securities issued or directly and fully guaranteed or insured by the United
States government or any agency or instrumentality thereof having maturities of
not more than one year from the date of acquisition, (iii) certificates of
deposit and eurodollar time deposits with maturities of one year or less from
the date of acquisition, bankers' acceptances with maturities not exceeding one
year and overnight bank deposits, in each case with any lender party to the
Credit Facility or with any
2
domestic commercial bank having capital and surplus in excess of $500 million
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) above entered into with any financial
institution meeting the qualifications specified in clause (iii) above, (v)
commercial paper having a rating of at least P2 from Moody's (or its successor)
or a rating of at least A2 from S&P (or its successor), and (vi) investments in
money market or other mutual funds substantially all of whose assets comprise
securities of the types described in clauses (ii) through (v) above.
"CCC" means Caribbean Communications Company Ltd., a
corporation organized under the laws of Montserrat.
"Change of Control" means the occurrence of any of the
following: (i) the sale, lease, transfer, conveyance or other disposition (other
than by way of merger or consolidation), in one or a series of related
transactions, of all or substantially all of the assets of the Company and its
Subsidiaries taken as a whole to any "person" or group of related "persons" (a
"Group") (as such terms are used in Section 13(d)(3) of the Exchange Act) other
than a Principal or a Related Party of a Principal, (ii) the adoption of a plan
relating to the liquidation or dissolution of the Company, (iii) the
consummation of any transaction (including, without limitation, any purchase,
sale, acquisition, disposition, merger or consolidation) the result of which is
that any "person" (as defined above) or Group becomes the "beneficial owner" (as
such term is defined in Rule 13d-3 and Rule 13d-5 under the Exchange Act) of
more than 50% of the aggregate voting power of all classes of Capital Stock of
the Company having the right to elect directors under ordinary circumstances or
(iv) the first day on which a majority of the members of the Board of Directors
of the Company are not Continuing Directors.
"Commission" means the Securities and Exchange Commission.
"Company" means Cumulus Media Inc., a Delaware corporation,
including its rights and interests as successor by merger to Cumulus Media Inc.,
an Illinois corporation.
"Consolidated Cash Flow" means, with respect to any Person for
any period, the sum of, without duplication, the Consolidated Net Income of such
Person for such period plus (i) provision for taxes based on income or profits
of such Person and its Subsidiaries for such period, to the extent that such
provision for taxes was included in computing such Consolidated Net Income, plus
(ii) Consolidated Interest Expense of such Person for such period, to the extent
that any such expense was deducted in computing such Consolidated Net Income,
plus (iii) consolidated depreciation, amortization and other non-cash charges of
the Person and its Subsidiaries deducted in computing Consolidated Net Income of
such Person for such period plus (iv) cash payments with respect to any non-cash
charges previously added back pursuant to clause (iii). Notwithstanding the
foregoing, the provision for taxes on the income or profits of, and the
depreciation and amortization and other non-cash charges of, a Subsidiary of the
referent Person shall be added to Consolidated Net Income to compute
Consolidated Cash Flow only to the extent (and in same proportion) that the Net
Income of such Subsidiary was included in calculating the Consolidated Net
Income of such Person.
3
"Consolidated Interest Expense" means, with respect to any
Person for any period, the sum, without duplication of (i) the consolidated
interest expense of such Person and its Restricted Subsidiaries for such period,
whether paid or accrued (including, without limitation, amortization of original
issue discount, non-cash interest payments, the interest component of any
deferred payment obligations, the interest component of all payments associated
with Capital Lease Obligations, imputed interest with respect to Attributable
Debt, commissions, discounts and other fees and charges incurred in respect of
letter of credit or bankers' acceptance financings, and net payments (if any)
pursuant to Hedging Obligations), (ii) the consolidated interest expense of such
Person and its Restricted Subsidiaries that was capitalized during such period,
(iii) any interest expense on Indebtedness of another Person that is guaranteed
by such Person or any of its Restricted Subsidiaries or secured by a Lien on
assets of such Person or any of its Restricted Subsidiaries (whether or not such
guarantee or Lien is called upon) and (iv) the product of (a) all cash dividend
payments (and non-cash dividend payments in the case of a Person that is a
Restricted Subsidiary) on any series of preferred stock of such Person or any of
its Restricted Subsidiaries, times (b) a fraction, the numerator of which is one
and the denominator of which is one minus the then current combined federal,
state and local statutory tax rate of such Person, expressed as a decimal, in
each case, on a consolidated basis and in accordance with GAAP.
"Consolidated Net Income" means, with respect to any Person
for any period, the aggregate of the Net Income of such Person and its
Subsidiaries for such period, on a consolidated basis, determined in accordance
with GAAP; provided that (i) the Net Income (but not loss) of any Person that is
not a Restricted Subsidiary or that is accounted for by the equity method of
accounting shall be included only to the extent of the amount of dividends or
distributions paid in cash to the referent Person or a Restricted Subsidiary
thereof, (ii) the Net Income of any Subsidiary shall be excluded to the extent
that the declaration or payment of dividends or similar distributions by that
Subsidiary of that Net Income is not at the date of determination permitted
without any prior governmental approval (that has not been obtained) or,
directly or indirectly, by operation of the terms of its charter or any
agreement, instrument, judgment, decree, order, statute, rule or governmental
regulation applicable to that Subsidiary or its stockholders, (iii) the Net
Income of any Person acquired in a pooling of interests transaction for any
period prior to the date of such acquisition shall be excluded, (iv) the
cumulative effect of a change in accounting principles shall be excluded and (v)
all other extraordinary gains and extraordinary losses shall be excluded.
"Consolidated Net Tangible Assets" of a Person means the
consolidated total assets of such Person and its consolidated Subsidiaries
determined in accordance with GAAP, less the sum of (i) all current liabilities
and current liability items, and (ii) all goodwill, trade names, trademarks,
patents, organization expense, unamortized debt discount and expense and other
similar intangibles properly classified as intangibles in accordance with GAAP.
"Consolidated Net Worth" means, with respect to any Person as
of any date, the sum of (i) the consolidated equity of the common stockholders
of such Person and its consolidated Subsidiaries as of such date plus (ii) the
respective amounts reported on such Person's balance sheet as of such date with
respect to any series of preferred stock (other than Disqualified Stock) that by
its terms is not entitled to the payment of dividends unless such dividends may
be declared and paid only out of net earnings in respect of the year of such
4
declaration and payment, but only to the extent of any cash received by such
Person upon issuance of such preferred stock (or, in the case of the preferred
stock issued in exchange for the shares of Class A Cumulative Preferred Stock
which were held by the Northwestern Mutual Life Insurance Company immediately
prior to the offering of the Series A Preferred Stock (the "NML Preferred
Stock"), to the extent of cash received by the Company upon original issuance of
the NML Preferred Stock), less (x) all write-ups (other than write-ups
resulting from foreign currency translations and write-ups of tangible assets of
a going concern business made within 12 months after the acquisition of such
business) subsequent to the date of this Exchange Debenture Indenture in the
book value of any asset owned by such Person or a consolidated Subsidiary of
such Person, (y) all investments as of such date in unconsolidated Subsidiaries
and in Persons that are not Subsidiaries (except, in each case, Permitted
Investments), and (z) all unamortized debt discount and expense and unamortized
deferred charges as of such date, all of the foregoing determined in accordance
with GAAP.
"Continuing Directors" means, as of any date of determination,
any member of the Board of Directors of the Company who (i) was a member of such
Board of Directors on the date of original issuance of the Exchange Debentures
or (ii) was nominated for election or elected to such Board of Directors with
the approval of (x) two-thirds of the Continuing Directors who were members of
such Board at the time of such nomination or election or (y) two-thirds of those
Directors who were previously approved by Continuing Directors.
"Corporate Trust Office of the Trustee" shall be at the
address of the Trustee specified in Section 11.2 hereof or such other address as
to which the Trustee may give notice to the Company.
"Credit Agreements" means, with respect to the Company, one or
more debt facilities (including, without limitation, the Credit Facility) or
commercial paper facilities with banks or other institutional lenders providing
for revolving credit loans, term loans, production payments, financings,
receivables financing (including through the sale of receivables to such lenders
or to special purpose entities formed to borrow from such lenders against such
receivables) or letters of credit, in each case, as amended, restated, modified,
renewed, refunded, replaced or refinanced in whole or in part from time to time.
Indebtedness under Credit Agreements outstanding on the date on which the
Exchange Debentures are first issued and authenticated under this Exchange
Debenture Indenture (after giving effect to the use of proceeds thereof) shall
be deemed to have been incurred on such date in reliance on the exception
provided by clause (b) of the definition of Permitted Indebtedness set forth in
Section 4.9 hereof.
"Credit Facility" means that certain Credit Agreement, dated
as of March 2, 1998, by and among the Predecessor, Lehman Brothers Inc., as
Arranger, and Lehman Brothers Commercial Paper Inc., as Syndication Agent and
Administrative Agent and as a lender, and certain banks, financial institutions
and other entities, as lenders, providing for up to $150 million of
Indebtedness, including any related notes, guarantees, collateral documents,
instruments and agreements executed in connection therewith, and in each case as
amended, restated, modified, renewed, refunded, replaced or refinanced, in whole
or in part, from time to time, whether or not with the same lenders or agents.
5
"Default" means any event that is or with the passage of time
or the giving of notice or both would be an Event of Default.
"Depository" means, with respect to the Exchange Debentures
issued in the form of one or more Global Exchange Debentures, The Depository
Trust Company or another Person designated as Depository by the Company, which
must be a clearing agency registered under the Exchange Act.
"Designated Exchange Debenture Senior Debt" means (i) the
Credit Facility and (ii) any other Exchange Debenture Senior Debt permitted
under this Exchange Debenture Indenture the principal amount of which is $25
million or more and that has been designated by the Company as "Designated
Exchange Debenture Senior Debt."
"Disqualified Stock" means any Capital Stock that, by its
terms (or by the terms of any security into which it is convertible or for which
it is exchangeable), or upon the happening of any event, matures or is
mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, is
convertible or exchangeable for Indebtedness or Disqualified Stock or redeemable
at the option of the holder thereof, in whole or in part, on or prior to the
date that is 91 days after the date on which the Exchange Debentures mature,
provided however, that any Capital Stock that would constitute Disqualified
Stock solely because the holders thereof (or of any security into which it is
convertible or for which it is exchangeable) have the right to require the
issuer to repurchase such Capital Stock (or such security into which it is
convertible or for which it is exchangeable) upon the occurrence of any of the
events constituting an Asset Sale or a Change of Control shall not constitute
Disqualified Stock if such Capital Stock (and all such securities into which it
is convertible or for which it is exchangeable) provides that the issuer thereof
will not repurchase or redeem any such Capital Stock (or any such security into
which it is convertible or for which it is exchangeable) pursuant to such
provisions prior to compliance by the Company with the provisions of Section
4.10 or Section 4.13 hereof, as the case may be.
"Equity Interests" means Capital Stock and all warrants,
options or other rights to acquire Capital Stock (but excluding any debt
security that is convertible into, or exchangeable for, Capital Stock).
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Exchange Debenture Custodian" means the Trustee or the
Registrar, as custodian with respect to the Exchange Debentures in global form,
or any successor entity thereto or any entity acting as custodian with respect
to Exchange Debentures in global form.
"Exchange Debenture Indenture" means this Indenture, as
amended or supplemented from time to time.
"Exchange Debenture Pari Passu Debt" means the Exchange
Debentures and any other Indebtedness of the Company that (i) specifically
provides that such Indebtedness is to rank pari passu with the Exchange
Debentures or is otherwise entitled "Senior Subordinated" Indebtedness of the
Company that is not Exchange Debenture Senior Debt.
6
"Exchange Debenture Senior Debt" means (i) Indebtedness of the
Company or any Subsidiary of the Company under or in respect of any Credit
Agreement, whether for principal, interest (including interest accruing after
the filing of a petition initiating any proceeding pursuant to any bankruptcy
law, whether or not the claim for such interest is allowed as a claim in such
proceeding), reimbursement obligations, fees, commissions, expenses, indemnities
or other amounts, and (ii) any other Indebtedness permitted under the terms of
this Exchange Debenture Indenture, unless the instrument under which such
Indebtedness is incurred expressly provides that it is on a parity with or
subordinated in right of payment to the Exchange Debentures. Notwithstanding
anything to the contrary in the foregoing sentence, Exchange Debenture Senior
Debt will not include (w) any liability for federal, state, local or other taxes
owed or owing by the Company, (x) any Indebtedness of the Company to any of its
Subsidiaries or other Affiliates, or (y) any Indebtedness that is incurred in
violation of the Exchange Debenture Indenture (other than Indebtedness under (i)
the Credit Facility or (ii) any other Credit Agreement that is incurred on the
basis of a representation by the Company to the applicable lenders that it is
permitted to incur such Indebtedness under this Exchange Debenture Indenture).
"Exchange Debenture Subordinated Debt" means any Indebtedness
of the Company or any Restricted Subsidiary (whether outstanding on the date of
the issuance of the Exchange Debentures or thereafter incurred) which is
subordinate or junior in right of payment to the Exchange Debentures pursuant to
a written agreement.
"GAAP" means generally accepted accounting principles set
forth in the opinions and pronouncements of the Accounting Principles Board of
the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as have been approved by a significant segment
of the accounting profession, which are in effect on the Issue Date.
"Government Securities" means securities that are (a) direct
obligations of the United States of America for the timely payment of which its
full faith and credit is pledged or (b) obligations of a Person controlled or
supervised by and acting as an agency or instrumentality of the United States of
America the timely payment of which is unconditionally guaranteed as a full
faith and credit obligation by the United States of America, which, in either
case, are not callable or redeemable at the option of the issuer thereof, and
shall also include a depository receipt issued by a bank (as defined in Section
3(a)(2) of the Securities Act), as custodian with respect to any such Government
Security or a specific payment of principal of or interest on any such
Government Security held by such custodian for the account of the holder of such
depository receipt; provided, that (except as required by law) such custodian is
not authorized to make any deduction from the amount payable to the holder of
such depository receipt from any amount received by the custodian in respect of
the Government Security or the specific payment of principal of or interest on
the Government Security evidenced by such depository receipt.
"Guarantee" means a guarantee (other than by endorsement of
negotiable instruments for collection in the ordinary course of business),
direct or indirect, in any manner (including, without limitation, letters of
credit and reimbursement agreements in respect thereof), of all or any part of
any Indebtedness.
7
"Guarantor Senior Debt" has the meaning assigned to such term
in the Note Indenture.
"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 with respect to
Indebtedness that is permitted by the terms of this Exchange Debenture Indenture
and (ii) other agreements or arrangements designed to protect such Person
against fluctuation in interest rates or the value of foreign currencies
purchased or received by such Person in the ordinary course of business.
"Holder" means a Person in whose name an Exchange Debenture is
registered on the Registrar's books.
"Indebtedness" means, with respect to any Person, any
indebtedness of such Person, whether or not contingent, (i) in respect of
borrowed money, or (ii) evidenced by bonds, notes, debentures or similar
instruments or letters of credit or reimbursement agreements in respect thereof
(other than letters of credit securing obligations not constituting Indebtedness
that are issued in the ordinary course of business by a Person to the extent not
drawn upon or, if and to the extent drawn upon, such drawing is reimbursed no
later than the tenth Business Day following receipt by such Person of a demand
for reimbursement following payment on the letter of credit) or bankers'
acceptances, or (iii) representing Capital Lease Obligations or the balance
deferred and unpaid of the purchase price of any property, except any such
balance that constitutes an accrued expense or trade payable, or (iv)
representing any Hedging Obligations, in each case if and to the extent any of
the foregoing indebtedness (other than letters of credit and Hedging
Obligations) would appear as a liability upon a balance sheet of such Person
prepared in accordance with GAAP, as well as all Indebtedness of others secured
by a Lien on any asset of such Person (whether or not such Indebtedness is
assumed by such Person) and, to the extent not otherwise included, the Guarantee
by such Person of any Indebtedness of any other Person.
"Investments" means, with respect to any Person, all
investments by such Person in other Persons (including Affiliates) in the forms
of direct or indirect loans (including guarantees of Indebtedness or other
obligations), advances or capital contributions (excluding commission, travel
and similar advances to officers and employees made in the ordinary course of
business and extensions of trade credit in the ordinary course of business),
purchases or other acquisitions for consideration of Indebtedness, Equity
Interests or other securities, together with all items that are or would be
classified as investments on a balance sheet prepared in accordance with GAAP.
If the Company or any Restricted Subsidiary of the Company sells or otherwise
disposes of any Equity Interests of any direct or indirect Restricted Subsidiary
of the Company such that, after giving effect to any such sale or disposition,
such Person is no longer a Subsidiary of the Company, the Company shall be
deemed to have made an Investment on the date of any such sale or disposition
equal to the fair market value of the Equity Interests of such Subsidiary not
sold or disposed of.
"Issue Date" means the date on which the Exchange Debentures
are originally issued.
8
"Legal Holiday" means a Saturday, a Sunday or a day on which
banking institutions in the City of New York, the State of Delaware or at a
place of payment are authorized by law, regulation or executive order to remain
closed. If a payment date is a Legal Holiday at a place of payment, payment may
be made at that place on the next succeeding day that is not a Legal Holiday,
and no interest shall accrue for the intervening period.
"Leverage Ratio" means the ratio of (i) the aggregate
outstanding amount of Indebtedness of the Company and its Subsidiaries as of the
date of calculation on a consolidated basis in accordance with GAAP (subject to
the terms described in the next paragraph) plus the aggregate liquidation
preference of all outstanding Disqualified Stock of the Company and preferred
stock of the Company's Subsidiaries (except preferred stock issued to the
Company or a Wholly Owned Restricted Subsidiary of the Company) on such date to
(ii) the Consolidated Cash Flow of the Company for the four full fiscal quarters
(the "Four Quarter Period") ending on or prior to the date of determination.
For purposes of this definition, (i) the amount of
Indebtedness which is issued at a discount shall be deemed to be the accreted
value of such Indebtedness at the end of the Four Quarter period, whether or not
such amount is the amount then reflected on a balance sheet prepared in
accordance with GAAP, and (ii) the aggregate outstanding principal amount of
Indebtedness of the Company and its Subsidiaries and the aggregate liquidation
preference of all outstanding preferred stock of the Company's Subsidiaries for
which such calculation is made shall be determined on a pro forma basis as if
the Indebtedness and preferred stock giving rise to the need to perform such
calculation had been incurred and issued and the proceeds therefrom had been
applied, and all other transactions in respect of which such Indebtedness is
being incurred or preferred stock is being issued had occurred, on the first day
of the Four Quarter Period. In addition to the foregoing, for purposes of this
definition, Consolidated Cash Flow shall be calculated on a pro forma basis
after giving effect to (i) the incurrence of the Indebtedness of such Person and
its Subsidiaries and the issuance of the preferred stock of such Subsidiaries
(and the application of the proceeds therefrom) giving rise to the need to make
such calculation and any incurrence (and the application of the proceeds
therefrom) or repayment of other Indebtedness, other than the incurrence or
repayment of Indebtedness pursuant to working capital facilities, at any time
subsequent to the beginning of the Four Quarter Period and on or prior to the
date of determination, as if such incurrence or issuance (and the application of
the proceeds thereof), or the repayment, as the case may be, occurred on the
first day of the Four Quarter Period, (ii) any acquisition (including, without
limitation, any acquisition giving rise to the need to make such calculation as
a result of such Person or one of its Subsidiaries (including any Person that
becomes a Subsidiary as a result of such acquisition) incurring, assuming or
otherwise becoming liable for Indebtedness or such Person's Subsidiaries issuing
preferred stock) at any time on or subsequent to the first day of the Four
Quarter Period and on or prior to the date of determination, as if such
acquisition (including the incurrence, assumption or liability for any such
Indebtedness and the issuance of such preferred stock and also including any
Consolidated Cash Flow associated with such acquisition) occurred on the first
day of the Four Quarter Period. For purposes of this definition, whenever pro
forma effect is to be given to a transaction, the pro forma calculations shall
be made in good faith by a responsible financial or accounting officer of the
Company consistent with Article 11 of Regulation S-X, promulgated pursuant to
the Securities Act, as such Regulation is in effect on the date hereof.
Furthermore, in calculating "Consolidated Interest Expense" for purposes of the
calculation of "Consolidated
9
Cash Flow," (i) interest on Indebtedness determined on a fluctuating basis as of
the date of determination (including Indebtedness actually incurred on the date
of the transaction giving rise to the need to calculate the Leverage Ratio) and
which will continue to be so determined thereafter shall be deemed to have
accrued at a fixed rate per annum equal to the rate of interest on such
Indebtedness as in effect on the date of determination and (ii) notwithstanding
(i) above, interest determined on a fluctuating basis, to the extent such
interest is covered by Hedging Obligations, shall be deemed to accrue at the
rate per annum resulting after giving effect to the operation of such
agreements.
"Lien" means, with respect to any asset, any mortgage, lien,
pledge, charge, security interest or encumbrance of any kind in respect of such
asset, whether or not filed, recorded or otherwise perfected under applicable
law (including any conditional sale or other title retention agreement, any
lease in the nature thereof, any option or other agreement to sell or give a
security interest in and any filing of or agreement to give any financing
statement under the Uniform Commercial Code (or equivalent statutes) of any
jurisdiction other than a precautionary financing statement with respect to a
lease not intended as a security agreement).
"Moody's" means Moody's Investors Service, Inc. and its
successors.
"Net Income" means, with respect to any Person, the net income
(loss) of such Person, determined in accordance with GAAP and before any
reduction in respect of preferred stock dividends, excluding, however, (i) any
gain or loss, together with any related provision for taxes on such gain or
loss, realized in connection with (a) any Asset Sale (including, without
limitation, dispositions pursuant to sale and leaseback transactions) or (b) the
disposition of any securities by such Person or any of its Restricted
Subsidiaries or the extinguishment of any Indebtedness of such Person or any of
its Restricted Subsidiaries and (ii) any extraordinary or nonrecurring gain or
loss, together with any related provision for taxes on such extraordinary or
nonrecurring gain or loss.
"Net Proceeds" means the aggregate cash proceeds received by
the Company or any of its Restricted Subsidiaries in respect of any Asset Sale
(including, without limitation, any cash received upon the sale or other
disposition of any non-cash consideration received in any Asset Sale, but
excluding cash amounts placed in escrow, until such amounts are released to the
Company), net of the direct costs relating to such Asset Sale (including,
without limitation, legal, accounting and investment banking fees and expenses,
and sales commissions) and any relocation expenses incurred as a result thereof,
taxes paid or payable as a result thereof (after taking into account any
available tax credits or deductions and any tax sharing arrangements), amounts
required to be applied to the repayment of Indebtedness (other than Indebtedness
under any Credit Facility) secured by a Lien on the asset or assets that were
the subject of such Asset Sale and any reserve for adjustment in respect of the
sale price of such asset or assets established in accordance with GAAP and any
reserve established for future liabilities.
"Non-Recourse Debt" means Indebtedness (i) as to which neither
the Company nor any of its Restricted Subsidiaries (a) provides any guarantee or
credit support of any kind (including any undertaking, guarantee, indemnity or
agreement or instrument that would constitute Indebtedness) or (b) is directly
or indirectly liable (as a guarantor or otherwise); (ii) no default with respect
to which (including any rights that the holders thereof may have to take
10
enforcement action against an Unrestricted Subsidiary) would permit (upon
notice, lapse of time or both) any holder of any other Indebtedness of the
Company or any of its Restricted Subsidiaries to declare a default on such other
Indebtedness or cause the payment thereof to be accelerated or payable prior to
its stated maturity; and (iii) the explicit terms of which provide that there is
no recourse against any of the assets of the Company or its Restricted
Subsidiaries.
"Note Indenture" means the Indenture dated as of July 1, 1998,
among the Predecessor, the Subsidiary Guarantors listed therein and Firstar Bank
of Minnesota, N.A., relating to the 10 3/8% Senior Subordinated Notes due 2008
issued by the Predecessor on July 1, 1998, as amended.
"Obligations" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any Indebtedness.
"Offering" means the offering of the Exchange Debentures by
the Company.
"Officer" means, with respect to any Person, the Chairman of
the Board, the Chief Executive Officer, the President, the Chief Operating
Officer, the Chief Financial Officer, the Treasurer, any Assistant Treasurer,
the Controller, the Secretary, the Assistant Secretary or any Vice-President of
such Person.
"Officers' Certificate" means a certificate signed on behalf
of the Company, by two Officers of the Company, one of whom must be the
principal executive officer, the principal financial officer, the treasurer or
the principal accounting officer of the Company, that meets the requirements of
Section 11.5 hereof.
"Opinion of Counsel" means an opinion from legal counsel who
is reasonably acceptable to the Trustee, that meets the requirements of Section
11.5 hereof. The counsel may be an employee of or counsel to the Company or the
Trustee.
"Permitted Business" means the broadcasting business or any
business that is reasonably similar thereto or a reasonable extension,
development or expansion thereof or ancillary thereto.
"Permitted Investments" means (a) any Investment in the
Company or in a Wholly Owned Restricted Subsidiary of the Company; (b) any
Investment in Cash Equivalents or securities issued or directly and fully
guaranteed or insured by the United States government or any agency or
instrumentality thereof having maturities of not more than one year from the
date of acquisition; (c) any Investment by the Company or any Restricted
Subsidiary of the Company in a Person if, as a result of such Investment and any
related transactions that at the time of such Investment are contractually
mandated to occur, (i) such Person becomes a Wholly Owned Restricted Subsidiary
of the Company or (ii) such Person is merged, consolidated or amalgamated with
or into, or transfers or conveys all or substantially all of its assets to, or
is liquidated into, the Company or a Wholly Owned Restricted Subsidiary of the
Company; (d) any Investment made as a result of the receipt of non-cash
consideration from an Asset Sale that was made pursuant to and in compliance
with Section 4.10 hereof; (e) other Investments in any Person or Persons having
an aggregate fair market value (measured on the date each such
11
Investment was made and without giving effect to subsequent changes in value),
when taken together with all other Investments made pursuant to this clause (e)
that are at the time outstanding without giving effect to subsequent changes in
value or increases or decreases attributable to the accounting for the net
income of such Investment, not to exceed $15.0 million; (f) any Investment
acquired by the Company in exchange for Equity Interests in the Company (other
than Disqualified Stock); (g) any Investment acquired by the Company or any of
its Restricted Subsidiaries (A) in exchange for any other Investment or accounts
receivable held by the Company or any such Restricted Subsidiary in connection
with or as a result of a bankruptcy, workout, reorganization or recapitalization
of the issuer of such other Investment or accounts receivable or (B) as a result
of the transfer of title with respect to any secured investment in default as a
result of a foreclosure by the Company or any of its Restricted Subsidiaries
with respect to such secured Investment; (h) Hedging Obligations permitted under
Section 4.9 hereof; (i) loans and advances to officers, directors and employees
for business-related travel expenses, moving expenses and other similar
expenses, in each case, incurred in the ordinary course of business; (j) any
guarantees permitted to be made pursuant to Section 4.9 hereof; and (k) all
Investments of the Company and its Restricted Subsidiaries in existence as of
the date of this Exchange Debenture Indenture.
"Permitted Liens" means (i) Liens securing Indebtedness of a
Subsidiary or Liens securing Exchange Debenture Senior Debt that is outstanding
on the date of issuance of the Exchange Debentures and Liens securing Exchange
Debenture Senior Debt that is permitted by the terms of the Exchange Debenture
Indenture to be incurred; (ii) Liens in favor of the Company; (iii) Liens on
property existing at the time of acquisition thereof by the Company or any
Subsidiary of the Company and Liens on property or assets of a Subsidiary
existing at the time it became a Subsidiary, provided that such Liens were in
existence prior to the contemplation of the acquisition and do not extend to any
assets other than the acquired property; (iv) Liens incurred or deposits made in
the ordinary course of business in connection with workers' compensation,
unemployment insurance or other kinds of social security, or to secure the
payment or performance of tenders, statutory or regulatory obligations, surety
or appeal bonds, performance bonds or other obligations of a like nature
incurred in the ordinary course of business; (v) Liens existing on the date
hereof; (vi) Liens for taxes, assessments or governmental charges or claims that
are not yet delinquent or that are being contested in good faith by appropriate
proceedings promptly instituted and diligently concluded, provided that any
reserve or other appropriate provision as shall be required in conformity with
GAAP shall have been made therefor; (vii) statutory liens of landlords,
mechanics, suppliers, vendors, warehousemen, carriers or other like Liens
arising in the ordinary course of business; (viii) judgment Liens not giving
rise to an Event of Default so long as any appropriate legal proceeding that may
have been duly initiated for the review of such judgment shall not have been
finally terminated or the period within which such proceeding may be initiated
shall not have expired; (ix) Liens to secure Indebtedness (including Capital
Lease Obligations) permitted by clause (f) of the second paragraph of Section
4.9 hereof covering only the assets acquired with such Indebtedness; (x) Liens
incurred in the ordinary course of business of the Company or any Subsidiary of
the Company with respect to obligations that do not exceed $5.0 million at any
one time outstanding and that (A) are not incurred in connection with the
borrowing of money or the obtaining of advances or credit (other than trade
credit in the ordinary course of business) and (B) do not in the aggregate
materially detract from the value of the property or materially impair the use
thereof in the operation of business by the Company or such Subsidiary; (xi)
easements, rights-
12
of-way, zoning and similar restrictions and other similar encumbrances or title
defects incurred or imposed, as applicable, in the ordinary course of business
and consistent with industry practices which, in the aggregate, are not
substantial in amount, and which do not in any case materially detract from the
value of the property subject thereto (as such property is used by the Company
or its Subsidiary) or interfere with the ordinary conduct of the business of the
Company or such Subsidiary; provided, however, that any such Liens are not
incurred in connection with any borrowing of money or any commitment to loan any
money or to extend any credit; and (xii) customary Liens (other than any Lien
imposed by ERISA) incurred or deposits made in the ordinary course of business
in connection with worker's compensation, unemployment insurance and other types
of social security legislation.
"Permitted Refinancing Debt" means any Indebtedness of the
Company or any of its Restricted Subsidiaries issued in exchange for, or the net
proceeds of which are used to extend, refinance, renew, replace, defease or
refund other Indebtedness (other than Indebtedness incurred under a Credit
Agreement) of the Company or any of its Restricted Subsidiaries; provided that:
(i) the principal amount of such Permitted Refinancing Debt does not exceed the
principal amount of the Indebtedness so extended, refinanced, renewed, replaced,
defeased or refunded (plus the amount of reasonable expenses incurred in
connection therewith); (ii) such Permitted Refinancing Debt has a final maturity
date on or later than the final maturity date of, and has a Weighted Average
Life to Maturity equal to or greater than the Weighted Average Life to Maturity
of, the Indebtedness being extended, refinanced, renewed, replaced, defeased or
refunded; (iii) if the Indebtedness being extended, refinanced, renewed,
replaced, defeased or refunded is subordinated in right of payment to the
Exchange Debentures, such Permitted Refinancing Debt has a final maturity date
later than the final maturity date of, and is subordinated in right of payment
to, the Exchange Debentures on terms at least as favorable taken as a whole to
the Holders of the Exchange Debentures as those contained in the documentation
governing the Indebtedness being extended, refinanced, renewed, replaced,
defeased or refunded; and (iv) such Indebtedness is incurred either by the
Company or by the Restricted Subsidiary who is the obligor on the Indebtedness
being extended, refinanced, renewed, replaced, defeased or refunded.
"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.
"Predecessor" means Cumulus Media Inc., an Illinois
corporation, as predecessor to the Company.
"Principal" means Richard W. Weening and Lewis W. Dickey, Jr.
"Related Party" with respect to any Principal means (A) any
controlling stockholder, 80% (or more) owned subsidiary, or spouse or immediate
family member (in the case of an individual) of such principal or (B) any trust,
corporation, partnership or other entity, the beneficiaries, stockholders,
partners, owners or Persons beneficially holding an 80% or more controlling
interest of which consist of such Principal and/or such other Persons referred
to in the immediately preceding clause (A).
13
"Responsible Officer" when used with respect to the Trustee,
means any officer within the corporate trust department of the Trustee (or any
successor group of the Trustee) or any other officer of the Trustee customarily
performing functions similar to those performed by any of the above designated
officers and also means, with respect to a particular corporate trust matter,
any other officer to whom such matter is referred because of his knowledge of
and familiarity with the particular subject.
"Restricted Investment" means an Investment other than a
Permitted Investment.
"Restricted Subsidiary" means any direct or indirect
Subsidiary of the Company that is not an Unrestricted Subsidiary.
"S&P" means Standard & Poor's Ratings Group and its
successors.
"Securities Act" means the Securities Act of 1933, as amended.
"Significant Subsidiary" means any Subsidiary which would be a
"significant subsidiary" as defined in Article 1, Rule 1-02 of Regulation S-X,
promulgated pursuant to the Securities Act, as such Regulation is in effect on
the date hereof.
"Subsidiary" means, with respect to any Person, (i) any
corporation, association or other business entity of which more than 50% of the
total voting power of shares of Capital Stock entitled (without regard to the
occurrence of any contingency) to vote in the election of directors, managers or
trustees thereof is at the time owned or controlled, directly or indirectly, by
such Person or one or more of the other Subsidiaries of that Person (or a
combination thereof) and (ii) any partnership (a) the sole general partner or
the managing general partner of which is such Person or a Subsidiary of such
Person or (b) the only general partners of which are such Person or of one or
more Subsidiaries of such Person (or any combination thereof).
"Subsidiary Guarantee" has the meaning assigned to such term
in the Note Indenture.
"Subsidiary Guarantor" has the meaning assigned to such term
in the Note Indenture.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. ss.ss.
77aaa-77bbbb) as in effect on the date on which this Exchange Debenture
Indenture is qualified under the TIA.
"Total Assets" means, with respect to any Person, the total
consolidated assets of such Person and its Restricted Subsidiaries, as shown on
the most recent balance sheet of such Person.
"Trustee" means the party named as such in the preamble to
this Exchange Debenture Indenture until a successor replaces it in accordance
with the applicable provisions of this Exchange Debenture Indenture and
thereafter means the successor serving hereunder.
"Unrestricted Subsidiary" means (i) any Subsidiary of the
Company which at the time of determination shall be an Unrestricted Subsidiary
(as designated by the Board of
14
Directors of the Company, as provided below) and (ii) any Subsidiary of an
Unrestricted Subsidiary and (iii) CCC. The Board of Directors of the Company may
designate any Subsidiary of the Company (including any newly acquired or newly
formed Subsidiary or a Person becoming a Subsidiary through merger or
consolidation or Investment therein) to be an Unrestricted Subsidiary only if:
(a) such Subsidiary does not own any Capital Stock of, or own or hold any Lien
on any property of, any other Subsidiary of the Company which is not a
Subsidiary of the Subsidiary to be so designated or otherwise an Unrestricted
Subsidiary; (b) all the Indebtedness of such Subsidiary shall at the date of
designation, and will at all times thereafter consist of, Non-Recourse Debt; (c)
the Company certifies that such designation was permitted by Section 4.7; (d)
such Subsidiary, either alone or in the aggregate with all other Unrestricted
Subsidiaries, does not operate, directly or indirectly, all or substantially all
of the business of the Company and its Subsidiaries; (e) such Subsidiary does
not, directly or indirectly, own any Indebtedness of or Equity Interest in, and
has no Investments in, the Company or any Restricted Subsidiary; (f) such
Subsidiary is a Person with respect to which neither the Company nor any of its
Restricted Subsidiaries has any direct or indirect obligation (1) to subscribe
for additional Equity Interests or (2) to maintain or preserve such Person's
financial condition or to cause such Person to achieve any specified levels of
operating results; and (g) on the date such Subsidiary is designated an
Unrestricted Subsidiary, such Subsidiary is not a party to any agreement,
contract, arrangement or understanding with the Company or any Restricted
Subsidiary with terms substantially less favorable to the Company than those
that might have been obtained from Persons who are not Affiliates of the
Company. Any such designation by the Board of Directors of the Company shall be
evidenced to the Trustee by filing with the Trustee a resolution of the Board of
Directors of the Company giving effect to such designation and an Officer's
Certificate certifying that such designation complied with the foregoing
conditions. If, at any time, any Unrestricted Subsidiary would fail to meet the
foregoing requirements as an Unrestricted Subsidiary, it shall thereafter cease
to be an Unrestricted Subsidiary for purposes of this Exchange Debenture
Indenture and any Indebtedness of such Subsidiary shall be deemed to be incurred
as of such date. 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 or would occur as a consequence
thereof and the Company could incur at least $1.00 of additional Indebtedness
(excluding Permitted Indebtedness) pursuant to Section 4.9 on a pro forma basis
taking into account such designation.
"Weighted Average Life to Maturity" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing (i) the sum
of the products obtained by multiplying (a) the amount of each then remaining
installment, sinking fund, serial maturity or other required payments of
principal, including payment at final maturity, in respect thereof, by (b) the
number of years (calculated to the nearest one-twelfth) that will elapse between
such date and the making of such payment, by (ii) the then outstanding principal
amount of such Indebtedness.
"Wholly Owned Restricted Subsidiary" of any Person means a
Restricted Subsidiary of such Person, all of the outstanding Capital Stock or
other ownership interests of which (other than directors' qualifying shares) are
owned, directly or indirectly, by such Person or by one or more Wholly Owned
Restricted Subsidiaries of such Person.
15
Section 1.2. Other Definitions.
Defined in
Term Section
"Affiliate Transaction"................................................. 4.11
"Asset Sale Offer"...................................................... 3.9
"Bankruptcy Law"........................................................ 10.2
"Change of Control Offer"............................................... 4.13
"Change of Control Payment"............................................. 4.13
"Change of Control Payment Date"........................................ 4.13
"Covenant Defeasance"................................................... 8.3
"Custodian"............................................................. 6.1
"DTC"................................................................... 2.3
"Equity Offering"....................................................... 3.7
"Event of Default"...................................................... 6.1
"Excess Proceeds"....................................................... 4.10
"Global Exchange Debenture"............................................. 2.1
"Global Exchange Debenture Holder"...................................... 2.1
"incur"................................................................. 4.9
"Legal Defeasance"...................................................... 8.2
"Notice of Default"..................................................... 6.1
"Offer Amount".......................................................... 3.9
"Offer Period".......................................................... 3.9
"Paying Agent".......................................................... 2.3
"Payment Blockage Notice"............................................... 10.4
"Payment Default"....................................................... 6.1
"Permitted Indebtedness"................................................ 4.9
"Purchase Date"......................................................... 3.9
"Registrar"............................................................. 2.3
"Restricted Payments"................................................... 4.7
Section 1.3. Incorporation By Reference of Trust Indenture
Act.
Whenever this Exchange Debenture Indenture refers to a
provision of the TIA, the provision is incorporated by reference in and made a
part of this Exchange Debenture Indenture.
The following TIA terms used in this Exchange Debenture
Indenture have the following meanings:
"indenture securities" means the Exchange Debentures;
"indenture to be qualified" means this Exchange Debenture
Indenture; "indenture trustee" or "institutional trustee" means the Trustee;
"obligor" means the Company and any successor obligor upon the
Exchange Debentures.
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All other terms used in this Exchange Debenture Indenture that
are defined by the TIA, defined by TIA reference to another statute or defined
by rule enacted by the Commission under the TIA have the meanings so assigned to
them.
Section 1.4. Rules of Construction.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the
meaning assigned to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and in the
plural include the singular;
(5) provisions apply to successive events and
transactions; and
(6) references to sections of or rules under the
Securities Act shall be deemed to include substitute, replacement of successor
sections or rules adopted by the Commission from time to time.
ARTICLE 2
THE EXCHANGE DEBENTURES
Section 2.1. Form and Dating.
The Exchange Debentures and the Trustee's certificate of
authentication shall be substantially in the form of Exhibit A hereto, the terms
of which are incorporated herein and made part of this Exchange Debenture
Indenture. The Exchange Debentures may have notations, legends or endorsements
required by law, stock exchange rule or usage. Each Exchange Debenture shall be
dated the date of its issuance and shall show the date of its authentication.
The Exchange Debentures will be fully registered as to principal and interest in
minimum denominations of $1,000 and integral multiples of $1,000 in excess
thereof.
The Exchange Debentures offered and sold may be issued
initially in the form of one or more fully registered global Exchange Debentures
(each being called a "Global Exchange Debenture"), with, or on behalf of, The
Depository Trust Company and registered in the name of Cede & Co., as nominee of
the Depository (such nominee being referred to herein as the "Global Exchange
Debenture Holder"), or will remain in the custody of the Registrar pursuant to
the Fast Balance Certificate Agreement between the Depository and the Registrar
and shall bear the legend set forth as Exhibit B. Except as set forth in Section
2.6, the Global Exchange Debenture may be transferred, in whole and not in part,
only to another nominee of the Depository or to a successor of the Depository or
its nominee.
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The terms and provisions contained in the Exchange Debentures
shall constitute, and are hereby expressly made, a part of this Exchange
Debenture Indenture and the Company and the Trustee, by their execution and
delivery of this Exchange Debenture Indenture, expressly agree to such terms and
provisions and (as to the Trustee, to the extent such terms and provisions
pertain to the Trustee) to be bound thereby.
Exchange Debentures issued in global form shall be
substantially in the form of Exhibit A attached hereto (including the legend on
Exhibit B). Exchange Debentures issued in certificated form shall be
substantially in the form of Exhibit A attached hereto (but without including
the legend on Exhibit B). Each Global Exchange Debenture shall represent such of
the outstanding Exchange Debentures as shall be specified therein and each shall
provide that it shall represent the aggregate amount of outstanding Exchange
Debentures from time to time endorsed thereon and that the aggregate amount of
outstanding Exchange Debentures represented thereby may from time to time be
reduced or increased, as appropriate, to reflect exchanges and redemptions. Any
endorsement of a Global Exchange Debenture to reflect the amount of any increase
or decrease in the amount of outstanding Exchange Debentures represented thereby
shall be made by the Trustee or the Exchange Debenture Custodian, at the
direction of the Trustee, in accordance with instructions given by the Holder
thereof as required by Section 2.6 hereof.
Section 2.2. Execution and Authentication.
One Officer shall sign the Exchange Debentures for the Company
by manual or facsimile signature.
If an Officer whose signature is on an Exchange Debenture no
longer holds that office at the time an Exchange Debenture is authenticated, the
Exchange Debenture shall nevertheless be valid.
An Exchange Debenture shall not be valid until authenticated
by the manual signature of the Trustee. The signature shall be conclusive
evidence that the Exchange Debenture has been authenticated under this Exchange
Debenture Indenture.
The Trustee shall, upon a written order of the Company signed
by one Officer, authenticate Exchange Debentures for original issue up to the
aggregate principal amount of $133,000,000. The aggregate principal amount of
Exchange Debentures outstanding at any time may not exceed $133,000,000, except
as provided in Section 2.7 hereof. Notwithstanding anything in this Exchange
Debenture Indenture to the contrary or the execution and delivery of this
Exchange Debenture Indenture on the date hereof, the terms and provisions of
this Exchange Debenture Indenture shall not be effective until the consummation
of an exchange pursuant to the Certificate of Designations relating to the
Company's 13 3/4% Series A Cumulative Exchangeable Redeemable Preferred Stock
due 2009 (the "Series A Preferred Stock").
The Trustee may appoint an authenticating agent acceptable to
the Company to authenticate Exchange Debentures. An authenticating agent may
authenticate Exchange Debentures whenever the Trustee may do so. Each reference
in this Exchange Debenture Indenture to authentication by the Trustee includes
authentication by such agent. An
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authenticating agent has the same rights as an Agent to deal with the Company or
an Affiliate of the Company.
Section 2.3. Registrar and Paying Agent.
The Company shall maintain an office or agency in the Borough
of Manhattan, The City of New York where (i) Exchange Debentures may be
presented for registration of transfer or for exchange ("Registrar") and (ii)
Exchange Debentures may be presented for payment ("Paying Agent"). The Registrar
shall keep a register of the Exchange Debentures and of their transfer and
exchange. The Company may appoint one or more co-registrars and one or more
additional paying agents. The term "Registrar" includes any co-registrar and the
term "Paying Agent" includes any additional paying agent. The Company may change
any Paying Agent or Registrar without notice to any Holder. The Company shall
notify the Trustee in writing of the name and address of any Agent not a party
to this Exchange Debenture Indenture. If the Company fails to appoint or
maintain another entity as Registrar or Paying Agent, the Trustee shall act as
such. The Company or any of its Subsidiaries may act as Paying Agent or
Registrar.
The Company initially appoints The Depository Trust Company
("DTC") to act as Depository with respect to the Global Exchange Debentures.
The Company initially appoints the Trustee to act as the
Registrar and Paying Agent and to act as Exchange Debenture Custodian with
respect to the Global Exchange Debentures.
Section 2.4. Paying Agent to Hold Money in Trust.
The Company shall require each Paying Agent, including the
Trustee (who shall be deemed to have agreed by its execution of this Exchange
Debenture Indenture), to agree in writing that the Paying Agent shall hold in
trust for the benefit of Holders or the Trustee (unless the Paying Agent is the
Trustee, in which case it shall hold in trust for the Holders) all money held by
the Paying Agent for the payment of principal, premium, if any, or interest, on
the Exchange Debentures, and shall notify the Trustee of any default by the
Company in making any such payment. While any such default continues, the
Trustee may require a Paying Agent to pay all money held by it to the Trustee.
The Company at any time may require a Paying Agent to pay all money held by it
to the Trustee. Upon payment over to the Trustee, the Paying Agent (if other
than the Company or a Subsidiary) shall have no further liability for the money.
If the Company or a Subsidiary acts as Paying Agent, it shall segregate and hold
in a separate trust fund for the benefit of the Holders all money held by it as
Paying Agent. Upon any bankruptcy or reorganization proceedings relating to the
Company, the Trustee shall serve as sole Paying Agent for the Exchange
Debentures.
Section 2.5. Holder Lists.
The Trustee shall preserve in as current a form as is
reasonably practicable the most recent list available to it of the names and
addresses of all Holders and shall otherwise comply with TIA ss. 312(a). If the
Trustee is not the Registrar, the Company shall furnish to the Trustee at least
seven Business Days before each interest payment date and at such other times as
19
the Trustee may request in writing, a list in such form and as of such date as
the Trustee may reasonably require of the names and addresses of the Holders of
Exchange Debentures and the Company shall otherwise comply with TIA ss. 312(a).
Section 2.6. Transfer and Exchange.
Subject to the provisions of Section 2.13, when Exchange
Debentures are presented to the Registrar with a request to register the
transfer of such Exchange Debentures or to exchange such Exchange Debentures for
an equal principal amount of Exchange Debentures of other authorized
denominations, the Registrar shall register the transfer or make the exchange as
requested if its requirements for such transaction are met; provided, however,
that the Exchange Debentures surrendered for transfer or exchange shall be duly
endorsed or accompanied by a written instrument of transfer duly executed by the
Holder thereof (or his attorney duly authorized in writing) in form satisfactory
to the Company and to the Registrar. In order to permit registrations of
transfers and exchanges, the Company shall execute and the Trustee shall
authenticate Exchange Debentures at the Registrar's written request. No service
charge shall be made for any registration of transfer or exchange or of
redemption, but the Company may, by notice to the Trustee, require payment of a
sum sufficient to cover any transfer tax or similar governmental charge payable
in connection therewith (other than any such transfer taxes or other
governmental charge payable upon exchanges or transfers pursuant to Sections
3.6, 3.7(b) or 3.9). The Registrar shall not be required to register the
transfer of or exchange of any Exchange Debenture (i) during a period beginning
at the opening of business 15 days before the mailing of a notice of redemption
of Exchange Debentures and ending at the close of business on the day of such
mailing and (ii) selected for redemption in whole or in part pursuant to Article
Three, except the unredeemed portion of any Exchange Debenture being redeemed in
part.
Prior to due presentment for the registration of a transfer of
any Exchange Debenture, the Trustee, any Agent and the Company may deem and
treat the Person in whose name any Exchange Debenture is registered as the
absolute owner of such Exchange Debenture for the purpose of receiving payment
of principal of and interest on such Exchange Debentures, and neither the
Trustee, any Agent nor the Company shall be affected by notice to the contrary.
Section 2.7. Replacement Exchange Debentures.
If any mutilated Exchange Debenture is surrendered to the
Trustee, or the Company and the Trustee receive evidence to their satisfaction
of the destruction, loss or theft of any Exchange Debenture, the Company shall
issue and the Trustee, upon the receipt of a written authentication order of the
Company signed by two Officers of the Company, shall authenticate a replacement
Exchange Debenture if the Trustee's requirements are met. If required by the
Trustee or the Company, an indemnity bond must be supplied by the Holder that is
sufficient in the judgment of the Trustee and the Company to protect the
Company, the Trustee, any Agent and any authenticating agent from any loss that
any of them may suffer if an Exchange Debenture is replaced. The Company and the
Trustee may charge for its expenses in replacing a Exchange Debenture.
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Every replacement Exchange Debenture is an additional
obligation of the Company and shall be entitled to all of the benefits of this
Exchange Debenture Indenture equally and proportionately with all other Exchange
Debentures duly issued hereunder.
Section 2.8. Outstanding Exchange Debentures.
The Exchange Debentures outstanding at any time are all the
Exchange Debentures authenticated by the Trustee except for those. cancelled by
it, those delivered to it for cancellation, those reductions in the interest in
a Global Exchange Debenture effected by the Trustee in accordance with the
provisions hereof, and those described in this Section as not outstanding.
Except as set forth in Section 2.9 hereof, a Exchange Debenture does not cease
to be outstanding because the Company or an Affiliate of the Company holds the
Exchange Debenture.
If an Exchange Debenture is replaced pursuant to Section 2.7
hereof, it ceases to be outstanding unless the Trustee receives proof
satisfactory to it that the replaced Exchange Debenture is held by a bona fide
purchaser.
If the principal amount of any Exchange Debenture is
considered paid under Section 4.1 hereof, it ceases to be outstanding and
interest on it ceases to accrue. Exchange Debentures will also cease to be
outstanding for certain purposes hereunder as provided in Article 8 hereof.
If the Paying Agent (other than the Company, a Subsidiary or
an Affiliate of any thereof) holds, on a redemption date or maturity date, money
sufficient to pay Exchange Debentures payable on that date, then on and after
that date such Exchange Debentures shall be deemed to be no longer outstanding
and shall cease to accrue interest.
Section 2.9. Treasury Exchange Debentures.
In determining whether the Holders of the required principal
amount of Exchange Debentures have concurred in any direction, waiver or
consent, Exchange Debentures owned by the Company or by any Affiliate of the
Company shall be considered as though not outstanding, except that for the
purposes of determining whether the Trustee shall be protected in relying on any
such direction, waiver or consent, only Exchange Debentures that a Trustee
actually knows are registered in the names of the Company or any of their
Affiliates or are certified as such by the Company in an Officer's Certificate
delivered to the Trustee shall be so disregarded.
When the Company or any of its Affiliates repurchases or
otherwise acquires Exchange Debentures, the Company shall notify the Trustee, in
writing, of the aggregate principal amount of such Exchange Debentures so
repurchased or otherwise acquired. The Trustee may require an Officer's
Certificate listing Exchange Debentures owned by the Company or any of its
Affiliates.
Section 2.10. CUSIP Number.
The Company in issuing the Exchange Debentures may use a
"CUSIP" number, and if so, the Trustee shall use the CUSIP number in notices of
redemption or exchange as a
21
convenience to Holders; provided that any such notice may state that no
representation is made as to the correctness or accuracy of the CUSIP number
printed in the notice or on the Exchange Debentures and that reliance may be
placed only on the other identification numbers printed on the Exchange
Debentures.
Section 2.11. Cancellation.
The Company at any time may deliver Exchange Debentures to the
Trustee for cancellation. The Registrar and Paying Agent shall forward to the
Trustee any Exchange Debentures surrendered to them for registration of
transfer, exchange or payment. The Trustee and no one else shall cancel all
Exchange Debentures surrendered for registration of transfer, exchange, payment,
replacement or cancellation and shall destroy cancelled Exchange Debentures
(subject to the record retention requirement of the Exchange Act). Certification
of the destruction of all cancelled Exchange Debentures shall be delivered to
the Company. The Company may not issue new Exchange Debentures to replace
Exchange Debentures that it has paid or that have been delivered to the Trustee
for cancellation.
Section 2.12. Defaulted Interest.
If the Company defaults in a payment of interest on the
Exchange Debentures, it shall pay the defaulted interest in any lawful manner
plus, to the extent lawful, interest payable on the defaulted interest, to the
Persons who are Holders on a subsequent special record date, in each case at the
rate provided in the Exchange Debentures and in Section 4.1 hereof. The Company
shall notify the Trustee in writing of the amount of defaulted interest proposed
to be paid on each Exchange Debenture and the date of the proposed payment. The
Company shall fix or cause to be fixed each such special record date and payment
date, provided that no such special record date shall be less than 10 days prior
to the related payment date for such defaulted interest. At least 15 days before
the special record date, the Company (or, upon the written request of the
Company, the Trustee in the name and at the expense of the Company) shall mail
or cause to be mailed to Holders a notice that states the special record date,
the related payment date and the amount of such interest to be paid.
Section 2.13. Book-Entry Provisions for Global Exchange
Debentures.
(a) The Global Exchange Debentures initially shall (i) be
registered in the name of Cede & Co., as the nominee of DTC, (ii) be delivered
to the Registrar as custodian for such Depository and (iii) bear legends as set
forth in Exhibit B.
(b) Members of, or participants in, the Depository
("Agent Members") shall have no rights under this Exchange Debenture Indenture
with respect to any Global Exchange Debenture held on their behalf by the
Depository, or the Registrar or the Trustee as its custodian, or under the
Global Exchange Debenture, and the Depository may be treated by the Company, the
Trustee and any agent of the Company or the Trustee as the absolute owner of the
Global Exchange Debenture for all purposes whatsoever. Notwithstanding the
foregoing, nothing herein shall prevent the Company, the Trustee or any agent of
the Company or the Trustee from giving effect to any written certification,
proxy or other authorization furnished by the Depository or
22
impair, as between the Depository and its Agent Members, the operation of
customary practices governing the exercise of the rights of a Holder of any
Exchange Debenture.
(c) Transfers of Global Exchange Debentures shall be
limited to transfers in whole, but not in part, to the Depository, its
successors or their respective nominees. Interests of beneficial owners in the
Global Exchange Debentures may be transferred or exchanged for Certificated
Exchange Debentures in accordance with the rules and procedures of the
Depository. In addition, Certificated Exchange Debentures shall be transferred
to all beneficial owners in exchange for their beneficial interests in Global
Exchange Debentures if (i) the Company notifies the Registrar that the
Depository is unwilling or unable to continue as Depository for any Global
Exchange Debenture and a successor Depository is not appointed by the Company
within 90 days of such notice or (ii) the Company, at its option, notifies the
Registrar in writing that it elects to cause the issuance of Exchange Debentures
in definitive form under this Exchange Debenture Indenture or (iii) an Event of
Default has occurred and is continuing and the Registrar has received a request
from the Depository to issue Certificated Exchange Debentures.
(d) In connection with any transfer or exchange of a
portion of the beneficial interest in any Global Exchange Debenture to
beneficial owners pursuant to paragraph (c), the Registrar shall (if one or more
Certificated Exchange Debentures are to be issued) reflect on its books and
records the date and a decrease in the principal amount of the Global Exchange
Debenture in an amount equal to the principal amount of the beneficial interest
in the Global Exchange Debenture to be transferred, and the Company shall
execute, and the Trustee shall authenticate and deliver, one or more
Certificated Exchange Debentures of like tenor and amount.
(e) In connection with the transfer of Global Exchange
Debentures as an entirety to beneficial owners pursuant to the second sentence
of paragraph (c), the Global Exchange Debentures shall be deemed to be
surrendered to the Trustee for cancellation, and the Company shall execute, and
the Trustee shall authenticate and deliver, to each beneficial owner identified
by the Depository in exchange for its beneficial interest in the Global Exchange
Debentures, an equal aggregate principal amount of Certificated Exchange
Debentures of authorized denominations.
(f) The Holder of any Global Exchange Debenture may grant
proxies and otherwise authorize any person, including Agent Members and persons
that may hold interests through Agent Members, to take any action which a Holder
is entitled to take under this Exchange Debenture Indenture or the Exchange
Debentures.
ARTICLE 3
REDEMPTION AND PREPAYMENT
Section 3.1. Notices to Trustee.
If the Company elects to redeem Exchange Debentures pursuant
to the optional redemption provisions of Section 3.7 hereof, then it shall
furnish to the Trustee, at least 45 days but not more than 60 days before a
redemption date, an Officers' Certificate setting forth (i) the
23
paragraph of the Exchange Debentures and/or Section of this Exchange Debenture
Indenture pursuant to which the redemption shall occur, (ii) the redemption
date, (iii) the principal amount of Exchange Debentures to be redeemed and (iv)
the redemption price.
Section 3.2. Selection of Exchange Debentures to Be Redeemed.
If less than all of the Exchange Debentures are to be redeemed
at any time, selection of Exchange Debentures for redemption shall be made by
the Trustee in compliance with the requirements of the principal national
securities exchange, if any, on which the Exchange Debentures are listed, or, if
the Exchange Debentures are not so listed, on a pro rata basis, by lot or by
such method as the Trustee shall deem fair and appropriate; provided that no
Exchange Debentures of $1,000 or less shall be redeemed in part. In the event of
partial redemption by lot, the particular Exchange Debentures to be redeemed
shall be selected, unless otherwise provided herein, not less than 30 nor more
than 60 days prior to the redemption date by the Trustee from the outstanding
Exchange Debentures not previously called for redemption.
The Trustee shall promptly notify the Company in writing of
the Exchange Debentures selected for redemption Debenture selected for
redemption, and, in the case of any Exchange Debenture selected for partial
redemption, the principal amount thereof to be redeemed. Exchange Debentures and
portions of Exchange Debentures selected shall be in amounts of $1,000 or whole
multiples of $1,000; except that if all of the Exchange Debentures of a Holder
are to be redeemed, the entire outstanding amount of Exchange Debentures held by
such Holder, even if not a multiple of $1,000, shall be redeemed. A new Exchange
Debenture in principal amount equal to the unredeemed portion thereof shall be
issued in the name of the Holder thereof upon cancellation of the original
Exchange Debenture. On and after the redemption date, unless the Company
defaults in payment of the redemption price, interest ceases to accrue on
Exchange Debentures or portions of them called for redemption. Except as
provided in this Section 3.2, provisions of this Exchange Debenture Indenture
that apply to Exchange Debentures called for redemption also apply to portions
of Exchange Debentures called for redemption.
The provisions of the two preceding paragraphs of this Section
3.2 shall not apply with respect to any redemption affecting only a Global
Exchange Debenture, whether such Global Exchange Debenture is to be redeemed in
whole or in part. In case of any such redemption in part, the unredeemed portion
of the principal amount of the Global Exchange Debenture shall be in an
authorized denomination.
Section 3.3. Notice of Redemption.
Subject to the provisions of Section 3.9 hereof, at least 30
days but not more than 60 days before a redemption date, the Company shall mail
or cause to be mailed, by first class mail, a notice of redemption to each
Holder of Exchange Debentures to be redeemed at such Holder's registered
address, provided, however, that the Company shall provide notice to the Trustee
in accordance with Section 3.1 hereof at least five days prior to the mailing of
the notice pursuant to this Section 3.3.
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The notice shall identify the Exchange Debentures to be
redeemed and shall state:
(a) the redemption date;
(b) the redemption price;
(c) if any Exchange Debenture is being redeemed in part,
the portion of the principal amount of such Exchange Debenture to be redeemed
and that, after the redemption date upon surrender of such Exchange Debenture, a
new Exchange Debenture or Exchange Debentures in principal amount equal to the
unredeemed portion shall be issued upon cancellation of the original Exchange
Debenture;
(d) the name and address of the Paying Agent;
(e) that Exchange Debentures called for redemption must
be surrendered to the Paying Agent to collect the redemption price;
(f) that, unless the Company defaults in making such
redemption payment, interest on Exchange Debentures called for redemption cease
to accrue on and after the redemption date;
(g) the paragraph of the Exchange Debentures and/or
Section of this Exchange Debenture Indenture pursuant to which the Exchange
Debentures called for redemption are being redeemed; and
(h) that no representation is made as to the correctness
or accuracy of the CUSIP number, if any, listed in such notice or printed on the
Exchange Debentures.
If any of the Exchange Debentures to be redeemed is in the
form of a Global Exchange Debenture, then such notice shall be modified in form
but not substance to the extent appropriate to accord with the procedures of the
Depository applicable to redemptions.
At the Company's request and expense, the Trustee shall give
the notice of redemption in the Company's name; provided, however, that the
Company shall have delivered to the Trustee, at least 45 days prior to the
redemption date, an Officers' Certificate requesting that the Trustee give such
notice and setting forth the information to be stated in such notice as provided
in the preceding paragraph.
Section 3.4. Effect of Notice of Redemption.
Once notice of redemption is mailed in accordance with Section
3.3 hereof, Exchange Debentures called for redemption become irrevocably due and
payable on the redemption date at the redemption price. A notice of redemption
may not be conditional.
Section 3.5. Deposit of Redemption Price.
On or prior to the redemption date, the Company shall deposit
with the Trustee or with the Paying Agent money sufficient to pay the redemption
price of and accrued interest on
25
all Exchange Debentures to be redeemed on that date. The Trustee or the Paying
Agent shall promptly return to the Company any money deposited with the Trustee
or the Paying Agent by the Company in excess of the amounts necessary to pay the
redemption price of and accrued interest on, all Exchange Debentures to be
redeemed.
If the Company complies with the provisions of the preceding
paragraph, on and after the redemption date, interest shall cease to accrue on
the Exchange Debentures or the portions of Exchange Debentures called for
redemption. If an Exchange Debenture is redeemed on or after an interest record
date but on or prior to the related interest payment date, then any accrued and
unpaid interest shall be paid to the Person in whose name such Exchange
Debenture was registered at the close of business on such record date. If any
Exchange Debenture called for redemption shall not be so paid upon surrender for
redemption because of the failure of the Company to comply with the preceding
paragraph, interest shall be paid on the unpaid principal, from the redemption
date until such principal is paid, and to the extent lawful on any interest not
paid on such unpaid principal, in each case at the rate provided in the Exchange
Debentures and in Section 4.1 hereof.
Section 3.6. Exchange Debentures Redeemed in Part.
Upon surrender of a Exchange Debenture that is redeemed in
part, the Company shall issue and, upon the receipt of a written authentication
order of the Company signed by two Officers of the Company, the Trustee shall
authenticate for the Holder at the expense of the Company a new Exchange
Debenture equal in principal amount to the unredeemed portion of the Exchange
Debenture surrendered.
Section 3.7. Optional Redemption.
(a) Except as described below, the Exchange Debentures
will not be redeemable at the Company's option prior to July 1, 2003.
Thereafter, the Exchange Debentures will be subject to redemption at the option
of the Company, in whole or in part, upon not less than 30 nor more than 60
days' notice at the redemption prices (expressed as percentages of principal
amount) set forth below plus accrued and unpaid interest thereon to the
applicable redemption date, if redeemed during the twelve-month period beginning
on July 1 of each of the years indicated below:
Percentage of
Year Principal Amount
---- ----------------
2003.................................. 106.875%
2004.................................. 105.156%
2005.................................. 103.438%
2006.................................. 101.719%
2007 and thereafter................... 100.00000
(b) Prior to July 1, 2001, the Company may, at its
option, on any one or more occasions, redeem up to 35% of the original aggregate
principal amount of Exchange Debentures at a redemption price equal to 113 3/4%
of the principal amount thereof, plus accrued and unpaid interest, if any,
thereon to the redemption date with all or a portion of the net proceeds of one
or
26
more Equity Offerings (as defined below); provided that at least 50% of the
original aggregate principal amount of Exchange Debentures remains outstanding
immediately after the occurrence of such redemption; and provided, further, that
such redemption shall occur within 90 days of the date after the closing of any
such Equity Offering.
As used in the preceding paragraph, "Equity Offering" means
any public or private sale of common stock of the Company pursuant to which the
Company receives net proceeds of at least $25.0 million, other than issuances of
common stock of the Company pursuant to employee benefit plans or as
compensation to employees.
(c) Any redemption pursuant to this Section 3.7 shall be
made in accordance with the provisions of Sections 3.1 through 3.6 hereof.
Section 3.8. Mandatory Redemption.
Except as set forth under Sections 4.10 and 4.13 hereof, the
Company shall not be required to make mandatory redemption or sinking fund
payments with respect to the Exchange Debentures.
Section 3.9. Offer to Purchase By Application of Excess
Proceeds.
In the event that, pursuant to Section 4.10 hereof, the
Company shall be required to commence an offer to all Holders of Exchange
Debentures and, to the extent required by the terms thereof, to all holders or
lenders of other Exchange Debenture Pari Passu Debt, to purchase Exchange
Debentures and any such Exchange Debenture Pari Passu Debt (an "Asset Sale
Offer"), it shall follow the procedures specified below.
The Asset Sale offer shall remain open for a period of 20
Business Days following its commencement and no longer, except to the extent
that a longer period is required by applicable law (the "Offer Period"). No
later than five Business Days after the termination of the Offer Period (the
"Purchase Date"), the Company shall purchase the principal amount of Exchange
Debentures required to be purchased pursuant to Section 4.10 hereof, giving
effect to any related offer for Exchange Debenture Pari Passu Debt pursuant to
Section 4.10, (the "Offer Amount") or, if less than the Offer Amount has been
tendered, all Exchange Debentures tendered in response to the Asset Sale Offer.
Payment for any Exchange Debentures so purchased shall be made in the same
manner as interest payments are made.
If the Purchase Date is on or after an interest record date
and on or before the related interest payment date, any accrued and unpaid
interest shall be paid to the Person in whose name an Exchange Debenture is
registered at the close of business on such record date, and no additional
interest shall be payable to Holders who tender Exchange Debentures pursuant to
the Asset Sale Offer.
Upon the commencement of an Asset Sale Offer, the Company
shall send, by first class mail, a notice to the Trustee and each of the
Holders. The notice shall contain all instructions and materials necessary to
enable such Holders to tender Exchange Debentures pursuant to the Asset Sale
Offer. The Asset Sale Offer shall be made to all Holders. The notice, which
shall govern the terms of the Asset Sale Offer, shall state:
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(a) that the Asset Sale Offer is being made pursuant to
this Section 3.9 and Section 4.10 hereof and the length of time the Asset Sale
Offer shall remain open;
(b) the Offer Amount, the purchase price and the Purchase
Date;
(c) that any Exchange Debenture not tendered or accepted
for payment shall continue to accrue interest;
(d) that, unless the Company defaults in making such
payment, any Exchange Debenture accepted for payment pursuant to the Asset Sale
Offer shall cease to accrue interest after the Purchase Date;
(e) that Holders electing to have an Exchange Debenture
purchased pursuant to an Asset Sale Offer may only elect to have all of such
Exchange Debenture purchased and may not elect to have only a portion of such
Exchange Debenture purchased;
(f) that Holders electing to have a Exchange Debenture
purchased pursuant to any Asset Sale Offer shall be required to surrender the
Exchange Debenture, with the form entitled "Option of Holder to Elect Purchase"
on the reverse of the Exchange Debenture completed, or transfer by book-entry
transfer, to the Company, a Depository, if appointed by the Company, or a Paying
Agent at the address specified in the notice at least three Business Days before
the Purchase Date;
(g) that Holders shall be entitled to withdraw their
election if the Company, the Depository or the Paying Agent, as the case may be,
receives, not later than the expiration of the Offer Period, a telegram, telex,
facsimile transmission or letter setting forth the name of the Holder, the
principal amount of the Exchange Debenture the Holder delivered for purchase and
a statement that such Holder is withdrawing his election to have such Exchange
Debenture purchased;
(h) that, if the aggregate principal amount of Exchange
Debentures surrendered by Holders exceeds the Offer Amount, the Company shall
select the Exchange Debentures to be purchased on a pro rata basis (with such
adjustments as may be deemed-appropriate by the Company so that only Exchange
Debentures in denominations of $1,000, or integral multiples thereof, shall be
purchased) in the manner provided in Section 4.10; and
(i) that Holders whose Exchange Debentures were purchased
only in part shall be issued new Exchange Debentures equal in principal amount
to the unpurchased portion of the Exchange Debentures surrendered (or
transferred by book-entry transfer).
If any of the Exchange Debentures subject to an Asset Sale
Offer is in the form of a Global Exchange Debenture, then such notice may be
modified in form but not substance to the extent appropriate to accord with the
procedures of the Depository applicable to repurchases.
On or before the Purchase Date, the Company shall, to the
extent lawful, accept for payment, on a pro rata basis to the extent necessary,
the Offer Amount of Exchange Debentures or portions thereof tendered pursuant to
the Asset Sale Offer, or if less than the Offer Amount has been tendered, all
Exchange Debentures tendered, and shall deliver to the Trustee an
28
Officers' Certificate stating that such Exchange Debentures or portions thereof
were accepted for payment by the Company in accordance with the terms of this
Section 3.9. The Company, the Depository or the Paying Agent, as the case may
be, shall promptly (but in any case not later than five days after the Purchase
Date) mail or deliver to each tendering Holder an amount equal to the purchase
price of the Exchange Debentures tendered by such Holder and accepted by the
Company for purchase, and the Company shall promptly issue a new Exchange
Debenture, and the Trustee, upon receipt of a written authentication order of
the Company signed by two officers of the Company shall authenticate and mail or
deliver such new Exchange Debenture to such Holder, in a principal amount equal
to any unpurchased portion of the Exchange Debenture surrendered. Any Exchange
Debenture not so accepted shall be promptly mailed or delivered by the Company
to the Holder thereof. The Company shall publicly announce the results of the
Asset Sale Offer on the Purchase Date.
Other than as specifically provided in this Section 3.9, any
purchase pursuant to this Section 3.9 shall be made pursuant to the provisions
of Sections 3.1 through 3.6 hereof.
ARTICLE 4
COVENANTS
Section 4.1. Payment of Exchange Debentures.
The Company shall pay or cause to be paid the principal of,
premium, if any, and interest on the Exchange Debentures on the dates and in the
manner provided in the Exchange Debentures. Principal, premium, if any, and
interest shall be considered paid on the date due if the Paying Agent, if other
than the Company or a Subsidiary thereof, holds as of 10:00 a.m. Eastern Time on
the due date money deposited by the Company in immediately available funds and
designated for and sufficient to pay all such amounts then due.
Section 4.2. Maintenance of Office or Agency.
The Company shall maintain in the Borough of Manhattan, the
City of New York, an office or agency (which may be an office of the Trustee or
an affiliate of the Trustee, Registrar or co-registrar) where principal,
premium, if any, and interest on the Exchange Debentures will be paid and where
Exchange Debentures may be surrendered for registration of transfer or for
exchange and where notices and demands to or upon the Company in respect of the
Exchange Debentures and this Exchange Debenture Indenture may be served. The
Company shall give prompt written notice to the Trustee of the location, and any
change in the location, of such office or agency. If at any time the Company
shall fail to maintain any such required office or agency or shall fail to
furnish the Trustee with the address thereof, such presentations, surrenders,
notices and demands may be made or served at the Corporate Trust Office of the
Trustee.
The Company may also from time to time designate one or more
other offices or agencies where the Exchange Debentures may be presented or
surrendered for any or all such purposes and may from time to time rescind such
designations; provided, however, that no such designation or rescission shall in
any manner relieve the Company of its obligation to maintain an office or agency
in the Borough of Manhattan, the City of New York for such purposes. The
29
Company shall give prompt written notice to the Trustee of any such designation
or rescission and of any change in the location of any such other office or
agency.
The Company hereby designates the following office of an
Affiliate of the Trustee as one such office or agency of the Company in
accordance with Section 2.3.
Section 4.3. Reports.
Whether or not required by the rules and regulations of the
Commission, so long as any Exchange Debentures are outstanding, the Company
shall furnish to the Holders of Exchange Debentures (i) all quarterly and annual
financial information that would be required to be contained in a filing with
the Commission on Forms 10-Q and 10-K if the Company were required to file such
Forms, including a "Management's Discussion and Analysis of Financial Condition
and Results of Operations" that describes the financial condition and results of
operations of the Company and its consolidated Subsidiaries and, with respect to
the annual information only, a report thereon by the Company's certified
independent accountants and (ii) all current reports that would be required to
be filed with the Commission on Form 8-K if the Company were required to file
such reports, in each case within the time periods set forth in the Commission's
rules and regulations. In addition, whether or not required by the rules and
regulations of the Commission, the Company will file a copy of such information
and report with the Commission for public availability within the time periods
set forth in the Commission's rules and regulations (unless the Commission will
not accept such a filing). The Company shall at all times comply with TIA
ss.314(a).
Section 4.4. Compliance Certificate.
(a) The Company shall deliver to the Trustee, within 90
days after the end of each fiscal year, an Officers' Certificate stating that a
review of the activities of the Company and its Subsidiaries during the
preceding fiscal year has been made under the supervision of the signing
Officers with a view to determining whether the Company has kept, observed,
performed and fulfilled its obligations under this Exchange Debenture Indenture,
and further stating, as to each such officer signing such certificate, that to
the best of his or her knowledge the Company has kept, observed, performed and
fulfilled each and every covenant contained in this Exchange Debenture Indenture
and is not in default in the performance or observance of any of the terms,
provisions and conditions of this Exchange Debenture Indenture (or, if a Default
or Event of Default shall have occurred, describing all such Defaults or Events
of Default of which he or she may have knowledge and what action the Company is
taking or proposes to take with respect thereto) and that to the best of his or
her knowledge no event has occurred and remains in existence by reason of which
payments on account of the principal of, premium, if any, or interest on the
Exchange Debentures is prohibited or if such event has occurred, a description
of the event and what action the Company is taking or proposes to take with
respect thereto. As of the date hereof, the Company's fiscal year ends on
December 31 of each calendar year. In the event the Company changes its fiscal
year, it shall promptly notify the Trustee of such change.
(b) So long as not contrary to the then current
recommendations of the American Institute of Certified Public Accountants, the
fiscal year-end financial statements delivered pursuant to Section 4.3(a) above
shall be accompanied by a written statement of the
30
Company's independent public accountants (who shall be a firm of established
national reputation) that in making the examination necessary for certification
of such financial statements, nothing has come to their attention that would
lead them to believe that the Company has violated any provisions of Article 4
or Article 5 hereof or, if any such violation has occurred, specifying the
nature and period of existence thereof, it being understood that such
accountants shall not be liable directly or indirectly to any Person for any
failure to obtain knowledge of any such violation.
(c) The Company shall, so long as any of the Exchange
Debentures are outstanding, deliver to the Trustee, within five Business Days of
any Officer becoming aware of any Default or Event of Default, an Officers'
Certificate specifying such Default or Event of Default and what action the
Company is taking or proposes to take with respect thereto.
Section 4.5. Taxes.
The Company shall pay, and shall cause each of its
Subsidiaries to pay, prior to delinquency all material taxes, assessments, and
governmental levies except such as are contested in good faith and by
appropriate proceedings or where the failure to effect such payment is not
adverse in any material respect to the Holders of the Exchange Debentures.
Section 4.6. Stay, Extension and Usury Laws.
The Company covenants (to the extent that it may lawfully do
so) that it shall not at any time insist upon, plead, or in any manner
whatsoever claim or take the benefit or advantage of, any stay, extension or
usury law wherever enacted, now or at any time hereafter in force, that may
affect the covenants or the performance of this Exchange Debenture Indenture;
and the Company (to the extent that it may lawfully do so) hereby expressly
waives all benefit or advantage of any such law, and covenants that it shall
not, by resort to any such law, hinder, delay or impede the execution of any
power herein granted to the Trustee, but shall suffer and permit the execution
of every such power as though no such law has been enacted.
Section 4.7. Restricted Payments.
The Company shall not and shall not permit any of its
Restricted Subsidiaries to, directly or indirectly: (i) declare or pay any
dividend or make any other payment or distribution on account of the Company's
Equity Interests (including, without limitation, any payment to holders of the
Company's Equity Interests in connection with any merger or consolidation
involving the Company) to the direct or indirect holders of the Company's Equity
Interests in their capacity as such (other than dividends or distributions
payable in Equity Interests (other than Disqualified Stock) of the Company);
(ii) purchase, redeem or otherwise acquire or retire for value any Equity
Interests of the Company or any direct or indirect parent or other Affiliate of
the Company that is not a Wholly Owned Restricted Subsidiary of the Company;
(iii) make any principal payment on, or purchase, redeem, defease or otherwise
acquire or retire for value any Indebtedness that is subordinated to the
Exchange Debentures, except at final maturity; or (iv) make any Restricted
Investment (all such payments and other actions set forth in clauses (i) through
(iv) above being collectively referred to as "Restricted Payments"), unless, at
the time of and after giving effect to such Restricted Payment:
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(a) no Default or Event of Default shall have occurred
and be continuing or would occur as a consequence thereof; and
(b) the Company would, at the time of such Restricted
Payment and after giving pro forma effect thereto as if such Restricted
Payment had been made at the beginning of the applicable four-quarter
period, have been permitted to incur at least $1.00 of additional
Indebtedness pursuant to the test set forth in the first paragraph of
Section 4.9 hereof; and
(c) such Restricted Payment, together with the aggregate
of all other Restricted Payments made by the Company and its Restricted
Subsidiaries after the date of the Exchange Debenture Indenture
(excluding Restricted Payments permitted by clauses (2), (3) and (5) of
the next succeeding paragraph), is less than the sum of (i) (A) 100% of
the aggregate Consolidated Cash Flow of the Company (or, in the event
such Consolidated Cash Flow shall be a deficit, minus 100% of such
deficit) accrued for the period beginning on the first day of the
Company's fiscal quarter commencing after the Issue Date and ending on
the last day of the Company's most recent fiscal quarter for which
financial information is available to the Company ending prior to the
date of such proposed Restricted Payment, taken as one accounting
period, less (B) 1.4 times Consolidated Interest Expense for the same
period, plus (ii) 100% of the aggregate net cash proceeds and the fair
market value of marketable securities (as determined in good faith by
the Company) received by the Company from the issue or sale since the
date hereof of Equity Interests of the Company or of debt securities of
the Company that have been converted into or exchanged for such Equity
Interests (other than Equity Interests (or convertible debt securities)
sold to a Subsidiary of the Company, other than Disqualified Stock or
debt securities that have been converted into Disqualified Stock and
other than the Common Stock issued in the Common Stock Offering), plus
(iii) to the extent that any Restricted Investment that was made after
the date hereof is sold for cash or otherwise liquidated or repaid for
cash, the lesser of (A) the net proceeds of such sale, liquidation or
repayment and (B) the amount of such Restricted Investment, plus (iv)
$5.0 million.
The foregoing provisions will not prohibit (1) the payment of
any dividend within 60 days after the date of declaration thereof, if at said
date of declaration such payment would have complied with the provisions of this
Exchange Debenture Indenture; (2) the redemption, repurchase, retirement or
other acquisition of any Equity Interests of the Company in exchange for, or out
of the proceeds of, the substantially concurrent sale (other than to a
Subsidiary of the Company) of other Equity Interests of the Company (other than
any Disqualified Stock); provided that the amount of any such net cash proceeds
that are utilized for any such redemption, repurchase, retirement or other
acquisition shall be excluded from clause (c)(ii) of the preceding paragraph;
(3) the defeasance, redemption or repurchase of subordinated Indebtedness with
the net cash proceeds from an incurrence of subordinated Permitted Refinancing
Debt or the substantially concurrent sale (other than to a Subsidiary of the
Company) of Equity Interests of the Company (other than Disqualified Stock);
provided that the amount of any such net cash proceeds that are utilized for any
such redemption, repurchase, retirement or other acquisition shall be excluded
from clause (c)(ii) of the preceding paragraph; (4) the repurchase, redemption
or other acquisition or retirement for value of any Equity Interests of the
Company or any
32
Subsidiary of the Company held by any of the Company's (or any of its
Subsidiaries') employees pursuant to any management equity subscription
agreement or stock option agreement in effect as of the date of the Exchange
Debenture Indenture in connection with the termination of such person's
employment for any reason (including by reason of death or disability); provided
that the aggregate price paid for all such repurchased, redeemed, acquired or
retired Equity Interests shall not exceed $500,000 in any twelve-month period;
and provided further that no Default or Event of Default shall have occurred and
be continuing immediately after such transaction; and (5) repurchases of Equity
Interests deemed to occur upon exercise of stock options if such Equity
Interests represent a portion of the exercise price of such options.
The amount of all Restricted Payments (other than cash) shall
be the fair market value (as determined in good faith by a resolution of the
Board of Directors set forth in an Officers' Certificate delivered to the
Trustee, which determination shall be conclusive evidence of compliance with
this provision) on the date of the Restricted Payment of the asset(s) proposed
to be transferred by the Company or the applicable Restricted Subsidiary, as the
case may be, pursuant to the Restricted Payment. Not later than five days after
the date of making any Restricted Payment, the Company shall deliver to the
Trustee an Officers' Certificate stating that such Restricted Payment is
permitted and setting forth the basis upon which the calculations required by
this Section 4.7 were computed.
Section 4.8. Dividend and Other Payment Restrictions Affecting
Subsidiaries.
The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, directly or indirectly, create or otherwise cause or
suffer to exist or become effective any encumbrance or restriction on the
ability of any Restricted Subsidiary to (i)(x) pay dividends or make any other
distributions to the Company or any of its Restricted Subsidiaries (1) on its
Capital Stock or (2) with respect to any other interest or participation in, or
measured by, its profits, or (y) pay any indebtedness owed by it to the Company
or any of its Restricted Subsidiaries, (ii) make loans or advances to the
Company or any of its Restricted Subsidiaries or (iii) transfer any of its
properties or assets to the Company or any Restricted Subsidiaries of the
Company, except for such encumbrances or restrictions existing under or by
reason of (a) the Credit Facility as in effect as of the date of this Exchange
Debenture Indenture, and any amendments, modifications, restatements, renewals,
increases, supplements, refundings, replacements or refinancings thereof or any
other Credit Agreement, provided that such amendments, modifications,
restatements, renewals, increases, supplements, refundings, replacements,
refinancings or any other Credit Agreements are no more restrictive taken as a
whole with respect to such dividend and other payment restrictions than those
contained in the Credit Facility as in effect on the date of this Exchange
Debenture Indenture, (b) this Exchange Debenture Indenture and the Exchange
Debentures, (c) applicable law, (d) any instrument governing Indebtedness or
Capital Stock of a Person acquired by the Company or any of its Restricted
Subsidiaries as in effect at the time of such acquisition (except, in the case
of Indebtedness, to the extent such Indebtedness was incurred in connection with
or in contemplation of such acquisition), which encumbrance or restriction is
not applicable to any Person, or the properties or assets of any Person, other
than the Person and its Subsidiaries, or the property or assets of the Person
and its Subsidiaries, so acquired, provided that, such Indebtedness or
Disqualified Stock was permitted by the terms of this Exchange Debenture
Indenture to be incurred, (e) customary non-assignment provisions in leases
entered into in the
33
ordinary course of business, (f) purchase money obligations for property
acquired in the ordinary course of business that impose restrictions of the
nature described in clause (iii) above on the property so acquired or (g)
Permitted Refinancing Debt, provided that the restrictions contained in the
agreements governing such Permitted Refinancing Debt are no more restrictive
than those contained in the agreements governing the Indebtedness being
refinanced.
Section 4.9. Incurrence of Indebtedness and Issuance of
Preferred Stock.
The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, directly or indirectly, create incur, issue, assume,
guarantee or otherwise become directly or indirectly liable, contingently or
otherwise, with respect to (collectively, "incur") any Indebtedness (including
Acquired Debt) and the Company shall not issue any Disqualified Stock and shall
not permit any of its Restricted Subsidiaries to issue any shares of preferred
stock; provided, however, that the Company may incur Indebtedness (including
Acquired Debt) or issue shares of Disqualified Stock if the Company's Leverage
Ratio at the time of the incurrence of such indebtedness, after giving pro-forma
effect thereto and to the use of proceeds therefrom, is less than 7.0 to 1.
Accrual of interest, accretion or amortization of original issue discount and
the payment of interest in the form of additional Indebtedness will not be
deemed to be an incurrence of Indebtedness for purposes of this covenant.
Notwithstanding the foregoing, this Section 4.9 will not
prohibit any of the following (collectively, "Permitted Indebtedness"): (a) the
Indebtedness evidenced by the Exchange Debentures; (b) the incurrence by the
Company of Indebtedness pursuant to Credit Agreements; the Company's 10 3/8%
Senior Subordinated Notes due 2008 or the Subsidiary Guarantees, so long as the
aggregate principal amount of all Indebtedness outstanding under all Credit
Agreements does not, at any one time, exceed $150.0 million, less the aggregate
amount of all proceeds from all Asset Sales that have been applied since the
date hereof to permanently reduce the outstanding amount of such Indebtedness
pursuant to the provisions described under Section 4.10; (c) all Indebtedness of
the Company and its Restricted Subsidiaries in existence as of the date hereof;
(d) intercompany Indebtedness between or among the Company and any of its Wholly
Owned Restricted Subsidiaries; provided, however, that (i) if the Company is the
obligor on such Indebtedness, such Indebtedness is expressly subordinate to the
payment in full of all Obligations with respect to the Exchange Debentures and
(ii)(A) any subsequent issuance or transfer of Equity Interests that results in
any such Indebtedness being held by a Person other than the Company or a Wholly
Owned Restricted Subsidiary and (B) any sale or other transfer of any such
Indebtedness to a Person that is not either the Company or a Wholly Owned
Restricted Subsidiary shall be deemed, in each case, to constitute an incurrence
of such Indebtedness by the Company or such Restricted Subsidiary, as the case
may be; (e) the incurrence by the Company or its Restricted Subsidiaries of
Indebtedness represented by Capital Lease Obligations, mortgage financings or
purchase money obligations, in each case incurred for the purpose of financing
all or any part of the purchase price, lease or cost of construction or
improvement of property, plant or equipment used in a Permitted Business in an
aggregate principal amount not to exceed $15.0 million at any time outstanding;
(f) the incurrence by the Company or its Restricted Subsidiaries of Permitted
Refinancing Debt in exchange for, or the net proceeds of which are used to
refund, refinance or replace Indebtedness (other than intercompany Indebtedness)
that was permitted by the Exchange Debenture Indenture to be incurred; (g) the
incurrence by the Company or its Restricted Subsidiaries of Hedging Obligations
that are
34
incurred for the purpose of fixing or hedging interest rate risk with respect to
any floating or variable rate Indebtedness or for the purpose of protecting
against fluctuations in interest rates or the value of foreign currencies
purchased or received, in each case in respect of Indebtedness that is permitted
by the terms of this Exchange Debenture Indenture to be outstanding; provided,
however, that in the case of Hedging obligations that are incurred for the
purpose of fixing or hedging interest rate risks with respect to Indebtedness,
the notional principal amount of any such Hedging obligation does not exceed the
principal amount of the Indebtedness to which such Hedging obligation relates
and in the case of Hedging Obligations incurred for the purpose of protecting
against fluctuations in interest rates or the value of foreign currencies
purchased or received, such Hedging Obligations do not increase the Indebtedness
of the Company and its Restricted Subsidiaries outstanding other than as a
result of fluctuations in foreign currency exchange rates or by reason of fees,
indemnities and compensation payable thereunder; (h) Indebtedness incurred
solely in respect of performance, surety and similar bonds or completion
guarantees, to the extent that such incurrence does not result in the incurrence
of any obligation for the payment of borrowed money to others; (i) Indebtedness
arising out of standby letters of credit covering workers compensation,
performance or similar obligations in an aggregate amount not to exceed $500,000
at any time outstanding; (j) any guarantee of the Company of Indebtedness or
other obligations of any of its Restricted Subsidiaries so long as the
incurrence of such Indebtedness incurred by such Restricted Subsidiary is
permitted under the terms of the Exchange Debenture Indenture; (k) the
incurrence by the Company of additional Indebtedness in an aggregate principal
amount (or accreted value, as applicable) at any time outstanding not to exceed
$10.0 million; (1) the incurrence by the Company of Indebtedness in respect of
Exchange Debentures issued as payment in kind interest on Exchange Debentures
issued on the exchange of the Series A Preferred Stock, to the extent such
interest payments are made pursuant to the terms hereof; and (m) Guarantor
Senior Debt constituting Guarantees by the Subsidiary Guarantors of Senior Debt
incurred under a Credit Agreement that is permitted by the terms of this
Indenture to be incurred.
The Company shall not permit any Unrestricted Subsidiary to
incur any Indebtedness other than Non-Recourse Debt; provided, however, if any
such Indebtedness ceases to be Non-Recourse Debt, such event shall be deemed to
constitute an incurrence of Indebtedness by the Company.
Section 4.10. Asset Sales.
The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, engage in an Asset Sale unless (i) the Company (or
the Restricted Subsidiary, as the case may be) receives consideration at the
time of such Asset Sale at least equal to the fair market value (as determined
in good faith by a resolution of the Board of Directors set forth in an
Officer's Certificate delivered to the Trustee, which determination shall be
conclusive evidence of compliance with this provision) of the assets or Equity
Interests issued or sold or otherwise disposed of and (ii) at least 75% of the
consideration therefor received by the Company or such Restricted Subsidiary, is
in the form of cash or Cash Equivalents; provided that the amount of (x) any
liabilities (as shown on the Company's or such Restricted Subsidiary's most
recent balance sheet), of the Company or any Restricted Subsidiary (other than
contingent liabilities and liabilities that are by their terms subordinated to
the Exchange Debentures or any guarantee thereof) that are assumed by the
transferee of any such assets pursuant to a customary novation
35
agreement that releases the Company or such Restricted Subsidiary from further
liability and (y) any non-cash consideration received by the Company or any such
Restricted Subsidiary that are converted by the Company or such Restricted
Subsidiary into cash within 30 days of closing such Asset Sale, shall be deemed
to be cash for purposes of this provision (to the extent of the cash received).
Within 360 days after the receipt of any Net Proceeds from an
Asset Sale, the Company or such Restricted Subsidiary may apply such Net
Proceeds, at its option, (a) to permanently reduce Exchange Debenture Senior
Debt (and to correspondingly permanently reduce commitments with respect thereto
in the case of revolving borrowings), or (b) to an investment in any one or more
businesses, capital expenditures or acquisition of other assets, in each case,
used or useful in a Permitted Business. Pending the final application of any
such Net Proceeds, the Company may temporarily reduce Exchange Debenture Senior
Debt that is revolving debt or otherwise invest such Net Proceeds in any manner
that is not prohibited by the Exchange Debenture Indenture. Any Net Proceeds
from Asset Sales that are not applied as provided in the first sentence of this
paragraph will (after the expiration of the periods specified in this paragraph)
be deemed to constitute "Excess Proceeds."
When the aggregate amount of Excess Proceeds exceeds $5.0
million, the Company will be required to make an offer to all Holders of the
Exchange Debentures and, to the extent required by the terms thereof, to all
holders or lenders of Exchange Debenture Pari Passu Debt (an "Asset Sale Offer")
to purchase the maximum principal amount of the Exchange Debentures and any such
Exchange Debenture Pari Passu Debt to which the Asset Sale Offer applies that
may be purchased out of the Excess Proceeds, at an offer price in cash equal to
100% of the principal amount thereof plus accrued and unpaid interest thereon to
the date of purchase, in accordance with the procedures set forth in the
Exchange Debenture Indenture or the agreements governing the Exchange Debenture
Pari Passu Debt, as applicable. To the extent that the aggregate principal
amount of the Exchange Debentures and Exchange Debenture Pari Passu Debt
tendered pursuant to an Asset Sale Offer is less than the Excess Proceeds, the
Company may use any remaining Excess Proceeds for general corporate purposes. If
the aggregate principal amount of the Exchange Debentures surrendered by Holders
thereof and other Exchange Debenture Pari Passu Debt surrendered by holders or
lenders thereof, collectively, exceeds the amount of Excess Proceeds, the
Trustee shall select the Exchange Debentures and the trustee or other lender
representative for the Exchange Debenture Pari Passu Debt shall select the
Exchange Debenture Pari Passu Debt to be purchased on a pro rata basis, based on
the aggregate principal amount thereof surrendered in such Asset Sale Offer.
Upon completion of such Asset Sale Offer, the amount of Excess Proceeds shall be
reset at zero.
Section 4.11. Transactions with Affiliates.
The Company shall not, and shall not permit any of its
Subsidiaries to, make any payment to, or sell, lease, transfer or otherwise
dispose of any of its properties or assets to, or purchase any property or
assets from, or enter into or make or amend any contract, agreement,
understanding, loan, advance or guarantee with, or for the benefit of, any of
its Affiliates (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
36
with an unrelated Person and (ii) the Company delivers to the Trustee (a) with
respect to any Affiliate Transaction or series of related Affiliate Transactions
involving aggregate consideration in excess of $1.0 million, a resolution of the
Board of Directors set forth in an Officers' Certificate certifying that such
Affiliate Transaction or series of Affiliated Transactions complies with clause
(i) above and that such Affiliate Transaction or series of Affiliated
Transactions has been approved in good faith by a majority of the members of the
Board of Directors who are disinterested with respect to such Affiliate
Transaction or series of Affiliated Transactions, which resolution shall be
conclusive evidence of compliance with this provision, and (b) with respect to
any Affiliate Transaction or series of related Affiliate Transactions involving
aggregate consideration in excess of $10.0 million, the Company delivers an
Officer's Certificate certifying that such Affiliate Transaction or series of
related Affiliate Transactions complies with clause (i) above and that such
Affiliate Transaction or series of related Affiliate Transactions has been
approved in good faith by a resolution adopted by a majority of the members of
the Board of Directors of the Company who are disinterested with respect to such
Affiliate Transaction or series of related Affiliate Transactions and an opinion
as to the fairness to the Company or such Subsidiary of such Affiliate
Transaction or series of related Affiliate Transactions from a financial point
of view issued by an accounting, appraisal, engineering or investment banking
firm of national standing (which resolution and fairness opinion shall be
conclusive evidence of compliance with this provision); provided that the
following shall not be deemed Affiliate Transactions: (1) transactions
contemplated by any employment agreement or other compensation plan or
arrangement 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, (2) transactions between or among the
Company and/or its Restricted Subsidiaries, (3) Restricted Payments and
Permitted Investments that are permitted by Section 4.7 of this Exchange
Debenture Indenture, (4) indemnification payments made to officers, directors
and employees of the Company or any Restricted Subsidiary pursuant to charter,
bylaw, statutory or contractual provisions and (5) any agreement as in effect as
of the Issue Date or any Transaction contemplated thereby.
Section 4.12. Liens.
The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, create, incur, assume or otherwise cause or suffer
to exist or become effective any Lien securing Indebtedness of any kind (other
than Permitted Liens) upon any of its property or assets, now owned or hereafter
acquired.
Section 4.13. Offer to Repurchase Upon Change of Control.
Upon the occurrence of a Change of Control, each Holder of the
Exchange Debentures will have the right to require the Company to repurchase all
or any part (equal to $1,000 or an integral multiple thereof) of such Holder's
Exchange Debentures pursuant to the offer described below (the "Change of
Control Offer") at an offer price in cash equal to 101% of the aggregate
principal amount of the Exchange Debentures plus accrued and unpaid interest, if
any, thereon to the date of purchase (the "Change of Control Payment"). Within
30 days following any Change of Control, the Company will (i) mail a notice to
each Holder describing the transaction or transactions that constitute the
Change of Control and offer to repurchase the Exchange Debentures pursuant to
the procedures required by this Exchange Debenture Indenture
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and described in such notice on a date no earlier than 30 days nor later than 60
days from the date such notice is mailed (the "Change of Control Payment Date")
and (ii) (a) offer to repay in full all obligations under the Credit Facility
and to repay in full all Obligations of each lender who has accepted such offer
or (b) obtain the requisite consent under agreements evidencing Exchange
Debenture Senior Debt to permit the purchase of the Exchange Debentures as
described herein. The Company will comply with the requirements of Rule 14e-1
under the Exchange Act and any other securities laws and regulations thereunder
to the extent such laws and regulations are applicable in connection with the
repurchase of the Exchange Debentures as a result of a Change of Control.
On the Change of Control Payment Date, the Company shall, to
the extent lawful, (i) accept for payment all Exchange Debentures or portions
thereof properly tendered pursuant to the Change of Control Offer, (ii) deposit
with the Paying Agent an amount equal to the Change of Control Payment in
respect of all the Exchange Debentures or portions thereof so tendered and (iii)
deliver or cause to be delivered to the Trustee the relevant Exchange Debentures
so accepted together with an Officers' Certificate stating the aggregate
principal amount of such Exchange Debentures or portions thereof being purchased
by the Company. The Paying Agent will promptly mail to each Holder of the
Exchange Debentures so tendered the Change of Control Payment for such Exchange
Debentures, and the Trustee will promptly authenticate and mail (or cause to be
transferred by book entry) to each tendering Holder a new Exchange Debenture
equal in principal amount to any unpurchased portion of the Exchange Debentures
surrendered, if any; provided that each such new Exchange Debenture will be in a
principal amount of $1,000 or an integral multiple thereof. The Company shall
publicly announce the results of the Change of Control Offer on or as soon as
practicable after the Change of Control Payment Date.
The Company shall not be required to make a Change of Control
Offer if a third party makes the Change of Control Offer in the manner, at the
times and otherwise in compliance with the requirements set forth in this
Exchange Debenture Indenture applicable to a Change of Control Offer made by the
Company and purchases all Exchange Debentures (or portions thereof) validly
tendered and not withdrawn under such Change of Control Offer.
Section 4.14. Asset Swaps.
The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, in one or a series of related transactions, directly
or indirectly, engage in any Asset Swaps, unless: (i) at the time of entering
into the agreement to swap assets and immediately after giving effect to the
proposed Asset Swap, no Default or Event of Default shall have occurred and be
continuing or would occur as a consequence thereof; (ii) the Company would,
after giving pro forma effect to the proposed Asset Swap, have been permitted to
incur at least $1.00 of additional Indebtedness pursuant to the test set forth
in Section 4.9 hereof; (iii) the respective fair market values of the assets
being purchased and sold by the Company or any of its Restricted Subsidiaries
(as determined in good faith by the management of the company or, if such Asset
Swap includes consideration in excess of $1.0 million by the Board of Directors
of the Company, as evidenced by a Board Resolution) are substantially the same
at the time of entering into the agreement to swap assets; and (iv) at the time
of the consummation of the proposed Asset Swap, the percentage of any decline in
the fair market value (determined as aforesaid) of the asset or
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assets being acquired by the Company and its Restricted Subsidiaries shall not
be significantly greater than the percentage of any decline in the fair market
value (determined as aforesaid) of the assets being disposed of by the Company
or its Restricted Subsidiaries, calculated from the time the agreement to swap
assets was entered into.
Section 4.15. Corporate Existence.
Subject to Article 5 hereof, the Company shall and shall cause
its Subsidiaries to do or cause to be done all things necessary to preserve and
keep in full force and effect (i) its corporate existence, and the corporate,
partnership or other existence of each of the Subsidiaries, in accordance with
the respective organizational documents (as the same may be amended from time to
time) of the Company or any such Subsidiary and (ii) the rights (charter,
partnership agreement and statutory), licenses and franchises of the Company and
the Subsidiaries; provided, however, that the Company and the Subsidiaries shall
not be required to preserve any such right, license or franchise, or the
corporate, partnership or other existence of any of the Subsidiaries, if the
Board of Directors of the relevant Person shall determine that the preservation
thereof is no longer desirable in the conduct of the business of the Company and
the Subsidiaries, taken as a whole, and that the loss thereof is not adverse in
any material respect to the Holders of the Exchange Debentures.
Section 4.16. Business Activities.
The Company shall not, and shall not permit any Restricted
Subsidiary to, engage in any material respect in any business other than a
Permitted Business.
Section 4.17. Issuances and Sales of Capital Stock of Wholly
Owned Restricted Subsidiaries.
The Company (i) will not, and will not permit any Wholly Owned
Restricted Subsidiary of the Company to, transfer, convey, sell, lease or
otherwise dispose of any Capital Stock of any Wholly Owned Restricted Subsidiary
of the Company to any Person (other than the Company or a Wholly Owned
Restricted Subsidiary of the Company), unless (a) such transfer, conveyance,
sale, lease or other disposition is of all the Capital Stock of such Wholly
Owned Restricted Subsidiary and (b) the Net Proceeds from such transfer,
conveyance, sale, lease or other disposition are applied in accordance with
Section 4.10 hereof and (ii) will not permit any Wholly Owned Restricted
Subsidiary of the Company to issue any of its Equity Interests (other than, if
necessary, shares of its Capital Stock constituting directors, qualifying
shares) to any Person other than to the Company or a Wholly Owned Restricted
Subsidiary; provided that the Company may, and may permit any Wholly Owned
Restricted Subsidiary of the Company to, take any of the actions referred to in
(i) and (ii) above so long as immediately after giving effect to such action no
more than 10% of the Consolidated Net Tangible Assets of the Company and its
Subsidiaries is owned by other than Wholly Owned Restricted Subsidiaries of the
Company.
Section 4.18. Payments for Consent.
Neither the Company nor any of its Subsidiaries will, directly
or indirectly, pay or cause to be paid any consideration, whether by way of
interest, fee or otherwise, to any Holder of any Exchange Debentures for or as
an inducement to any consent, waiver or amendment of any
39
of the terms or provisions hereof or of the Exchange Debentures unless such
consideration is offered to be paid or is paid to all Holders of the Exchange
Debentures that consent, waive or agree to amend in the time frame set forth in
the solicitation documents relating to such consent, waiver or agreement.
Section 4.19. Designation of Unrestricted Subsidiaries.
The Board of Directors may designate any Restricted Subsidiary
to be an Unrestricted Subsidiary if such designation would not cause a Default.
For purposes of making such determination, all outstanding investments by the
Company and its Restricted Subsidiaries (except to the extent repaid in cash) in
the Subsidiary so designated will be deemed to be Restricted Payments at the
time of such designation and shall reduce the amount available for Restricted
Payments under clause (c) of the first paragraph Section 4.7 hereof. All such
outstanding Investments will be deemed to constitute Investments in an amount
equal to the greater of the fair market value or the book value of such
investments at the time of such designation. Such designation will only be
permitted if such Restricted Payment would be permitted at such time and if such
restricted subsidiary otherwise meets the definition of an Unrestricted
Subsidiary.
ARTICLE 5 SUCCESSORS
Section 5.1. Merger, Consolidation, or Sale of Substantially
All Assets.
The Company will not consolidate or merge with or into
(whether or not the Company is the surviving corporation), or sell, assign,
transfer, lease, convey or otherwise dispose of all or substantially all of its
properties or assets, in one or more related transactions, to another Person,
and the Company may not permit any of its Restricted Subsidiaries to enter into
any such transaction or series of transactions if such transaction or series of
transactions would, in the aggregate, result in a sale, assignment, transfer,
lease, conveyance, or other disposition of all or substantially all of the
properties or assets of the Company to another Person unless (i) the Company is
the surviving corporation or the Person formed by or surviving any such
consolidation or merger (if other than the Company) or to which such sale,
assignment, transfer, lease, conveyance or other disposition shall have been
made (the "Surviving Entity") is a corporation organized or existing under the
laws of the United States, any state thereof or the District of Columbia; (ii)
the Surviving Entity (if the Company is not the continuing obligor under this
Exchange Debenture Indenture) assumes all the obligations of the Company under
the Exchange Debentures and this Exchange Debenture Indenture pursuant to a
supplemental indenture in a form reasonably satisfactory to the Trustee; (iii)
immediately before and after giving effect to such transaction or series of
transactions no Default or Event of Default exists; (iv) immediately after
giving effect to such transaction or series of transactions on a pro forma basis
(and treating any Indebtedness not previously an obligation of the Company or
any of its Subsidiary which becomes the obligation of the Company or any of its
Subsidiary as a result of such transaction or series of transactions as having
been incurred at the time of such transaction or series of transactions), the
Consolidated Net Worth of the Company and its Subsidiaries or the Surviving
Entity (if the Company is not the continuing obligor under this Exchange
Debenture Indenture) is equal to or greater than the Consolidated Net Worth of
the Company and its
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Subsidiaries immediately prior to such transaction or series of transactions and
(v) the Company or Surviving Entity (if the Company is not the continuing
obligor under this Exchange Debenture Indenture) will, at the time of such
transaction or series of transactions and after giving pro forma effect thereto
as if such transaction or series of transactions had occurred at the beginning
of the applicable four-quarter period, be permitted to incur at least $1.00 of
additional Indebtedness pursuant to the test set forth in the first paragraph of
Section 4.9 hereof. Notwithstanding the restrictions described in the foregoing
clauses (iv) and (v), any Restricted Subsidiary may consolidate with, merge into
or transfer all or part of its properties and assets to the Company, and any
Wholly Owned Restricted Subsidiary may consolidate with, merge into or transfer
all or part of its properties and assets to another Wholly Owned Restricted
Subsidiary.
Section 5.2. Successor Corporation Substituted.
Upon any consolidation or merger, or any sale, assignment,
transfer, lease, conveyance or other disposition of all or substantially all of
the assets of the Company in accordance with Section 5.1 hereof, the Surviving
Entity shall succeed to, and be substituted for (so that from and after the date
of such consolidation, merger, sale, lease, conveyance or other disposition, the
provisions of this Exchange Debenture Indenture referring to the "Company" shall
refer instead to the Surviving Entity and not to the Company), and may exercise
every right and power of the Company under this Exchange Debenture Indenture
with the same effect as if such successor Person had been named as the Company
herein; provided, however, that the predecessor Company shall not be relieved
from the obligation to pay the principal of and interest on the Exchange
Debentures except in the case of a sale of all of the Company's assets that
meets the requirements of Section 5.1 hereof.
ARTICLE 6
DEFAULTS AND REMEDIES
Section 6.1. Events of Default.
An "Event of Default" occurs if (i) a default for 30 days in
the payment when due of interest on the Exchange Debentures (whether or not
prohibited by the subordination provisions hereof); (ii) a default in payment
when due of the principal of or premium, if any, on the Exchange Debentures
(whether or not prohibited by the subordination provisions hereof); (iii) the
failure by the Company or any of its Restricted Subsidiaries to comply with
Sections 4.10, 4.17 and 5.1; (iv) failure by the Company for 30 days after
notice from the Trustee or the Holders of at least 25% in aggregate principal
amount of the Exchange Debentures then outstanding to comply with any of its
other agreements in this Exchange Debenture Indenture or the Exchange
Debentures; (v) a default under any mortgage, indenture or instrument under
which there may be issued or by which there may be secured or evidenced any
Indebtedness for money borrowed by the Company or any of its Restricted
Subsidiaries (or the payment of which is guaranteed by the Company or any of its
Restricted Subsidiaries) whether such Indebtedness or guarantee now exists, or
is created after the date of the Exchange Debenture Indenture, which default (a)
is caused by a failure to pay principal of or premium, if any, or interest on
such Indebtedness prior to the expiration of the grace period provided in such
Indebtedness on the date of such default (a "Payment Default") or (b) results in
the acceleration of such Indebtedness prior to its express maturity and, in each
case, the principal amount of any such Indebtedness,
41
together with the principal amount of any other such Indebtedness under which
there is then existing a Payment Default or the maturity of which has been so
accelerated, aggregates $5.0 million or more; (vi) the failure by the Company or
any of its Restricted Subsidiaries to pay final, non-appealable judgments
aggregating in excess of $5.0 million (net of any amounts with respect to which
a creditworthy insurance company has acknowledged full liability in writing),
which judgments remain unpaid or discharged for a period of 60 days; (vii) the
Company or any Significant Subsidiary or any group of Subsidiaries that, taken
together, would constitute a Significant Subsidiary pursuant to or within the
meaning of any Bankruptcy Law: (a) commences a voluntary case or proceeding, (b)
consents to the entry of an order for relief against it in an involuntary case
or proceeding, (c) consents to the appointment of a Custodian of it or for all
or substantially all of its property or (d) makes a general assignment for the
benefit of its creditors; (viii) a court of competent jurisdiction enters an
order or decree under any Bankruptcy Law that: (a) is for relief against the
Company or any Significant Subsidiary or any group of Subsidiaries that, taken
together, would constitute a Significant Subsidiary, in an involuntary case or
proceeding, (b) appoints a Custodian of the Company, any Significant Subsidiary
or any group of Subsidiaries that, taken together, would constitute a
Significant Subsidiary, or for all or substantially all of the property of the
Company, any Significant Subsidiary or any group of Subsidiaries that, taken
together, would constitute a Significant Subsidiary, or (c) orders the
liquidation of the Company, any Significant Subsidiary or any group of
Subsidiaries that, taken together, would constitute a Significant Subsidiary,
and in each case the order or decree remains unstayed and in effect for 60
consecutive days.
The term "Custodian" means any receiver, trustee, assignee,
liquidator or similar official under any Bankruptcy Law.
The Company is required to deliver to the Trustee annually a
statement regarding compliance with this Exchange Debenture Indenture, and the
Company is required, within five business days of becoming aware of any Default
or Event of Default, to deliver to the Trustee a statement specifying such
Default or Event of Default.
Section 6.2. Acceleration.
If an Event of Default (other than an Event of Default
described in Section 6.1 (vii) or (viii) above) relating 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 then outstanding Exchange Debentures by
written notice to the Company and the Trustee, may declare the unpaid principal
amount of and any accrued and unpaid interest on all the Exchange Debentures to
be due and payable immediately.
Notwithstanding the foregoing paragraph, in the case of an
Event of Default arising under Section 6.1 (vii) or (viii) above, all
outstanding Exchange Debentures will become due and payable without further
action or notice.
After a declaration of acceleration under this Exchange
Debenture Indenture, but before a judgment or decree for payment of principal,
premium, if any, and interest on the Exchange Debentures due under this Article
6 has been obtained by the Trustee, Holders of a majority in principal amount of
the then outstanding Exchange Debentures by written notice to
42
the Company and the Trustee may rescind an acceleration and its consequences if
(i) the Company has paid or deposited with the Trustee a sum sufficient to pay
(a) all sums paid or advanced by the Trustee under this Exchange Debenture
Indenture and the reasonable compensation, expenses, disbursements and advances
of the Trustee, its agents and counsel and (b) all overdue interest on the
Exchange Debentures, if any, (ii) the rescission would not conflict with any
judgment or decree of a court of competent jurisdiction and (iii) all existing
Events of Default (except nonpayment of principal, premium, if any, or interest
that has become due solely because of the acceleration) have been cured or
waived.
Section 6.3. Other Remedies.
If an Event of Default occurs and is continuing, the Trustee
may pursue any available remedy to collect the payment of principal, premium, if
any, and interest on the Exchange Debentures or to enforce the performance of
any provision of the Exchange Debentures or this Exchange Debenture Indenture.
The Trustee may maintain a proceeding even if it does not
possess any of the Exchange Debentures or does not produce any of them in the
proceeding. A delay or omission by the Trustee or any Holder of a Exchange
Debenture 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. All remedies are cumulative to the extent permitted by
law.
Section 6.4. Waiver of Past Defaults.
Holders of not less than a majority in aggregate principal
amount of the Exchange Debentures then outstanding by notice to the Trustee may
on behalf of the Holders of all of the Exchange Debentures waive an existing
Default or Event of Default and its consequences hereunder, except a continuing
Default or Event of Default in the payment of principal of, premium and
liquidated damages, if any, or interest on, the Exchange Debentures (including
in connection with an offer to purchase) (provided, however, that the Holders of
a majority in aggregate principal amount of the then outstanding Exchange
Debentures may rescind an acceleration and its consequences, including any
related payment default that resulted from such acceleration pursuant to Section
6.3). Upon any such waiver, such Default shall cease to exist, and any Event of
Default arising therefrom shall be deemed to have been cured for every purpose
of this Exchange Debenture Indenture; but no such waiver shall extend to any
subsequent or other Default or impair any right consequent thereon.
Section 6.5. Control by Majority.
Holders of a majority in principal amount of the then
outstanding Exchange Debentures may direct the time, method and place of
conducting any proceeding for exercising any remedy available to the Trustee or
exercising any trust or power conferred on it. However, the Trustee may refuse
to follow any direction that conflicts with law or this Exchange Debenture
Indenture that the Trustee determines may be unduly prejudicial to the rights of
other Holders of Exchange Debentures or that may involve the Trustee in personal
liability it being understood that (subject to Section 7.1) the Trustee shall
have no duty to ascertain whether or not such actions or forebearances are
unduly prejudicial to such holders.
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Section 6.6. Limitation on Suits.
A Holder of an Exchange Debenture may pursue a remedy with
respect to this Exchange Debenture Indenture or the Exchange Debentures only if:
(a) the Holder of an Exchange Debenture gives to the
Trustee written notice of a continuing Event of Default;
(b) the Holders of at least 25% in principal amount of
the then outstanding Exchange Debentures make a written request to the
Trustee to pursue the remedy;
(c) such Holder of an Exchange Debenture or Holders of
Exchange Debentures offer and, if requested, provide to the Trustee
indemnity satisfactory to the Trustee against any loss, liability or
expense;
(d) the Trustee does not comply with the request within
60 days after receipt of the request and the offer and, if requested,
the provision of indemnity; and
(e) during such 60-day period the Holders of a majority
in principal amount of the then outstanding Exchange Debentures do not
give the Trustee a direction inconsistent with the request.
A Holder of an Exchange Debenture may not use this Exchange Debenture Indenture
to prejudice the rights of another Holder of an Exchange Debenture or to obtain
a preference or priority over another Holder of an Exchange Debenture.
Section 6.7. Rights of Holders of Exchange Debentures to
Receive Payment.
Notwithstanding any other provision of this Exchange Debenture
Indenture, the right of any Holder of an Exchange Debenture to receive payment
of principal, premium, if any, and interest on the Exchange Debenture, on or
after the respective due dates expressed in the Exchange Debenture (including in
connection with an offer to purchase), or to bring suit for the enforcement of
any such payment on or after such respective dates, shall not be impaired or
affected without the consent of such Holder.
Section 6.8. Collection Suit by Trustee.
If an Event of Default specified in Section 6.1(i) or (ii)
occurs and is continuing, the Trustee is authorized to recover judgment in its
own name and as trustee of an express trust against the Company for the whole
amount of principal of, premium, if any, and interest remaining unpaid on the
Exchange Debentures and interest on overdue principal and, to the extent lawful,
interest and such further amount as shall be sufficient to cover the costs and
expenses of collection, including the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel.
44
Section 6.9. Trustee May File Proofs of Claim.
The Trustee is authorized to file such proofs of claim and
other papers or documents as may be necessary or advisable in order to have the
claims of the Trustee (including any claim for the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel) and
the Holders of the Exchange Debentures allowed in any judicial proceedings
relative to the Company (or any other obligor upon the Exchange Debentures), its
creditors or its property and shall be entitled and empowered to collect,
receive and distribute any money or other property payable or deliverable on any
such claims and any custodian in any such judicial proceeding is hereby
authorized by each Holder to make such payments to the Trustee, and in the event
that the Trustee shall consent to the making of such payments directly to the
Holders, to pay to the Trustee any amount due to it for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, and any other amounts due the Trustee under Section 7.7 hereof. To
the extent that the payment of any such compensation, expenses, disbursements
and advances of the Trustee, its agents and counsel, and any other amounts due
the Trustee under Section 7.7 hereof out of the estate in any such proceeding,
shall be denied for any reason, payment of the same shall be secured by a Lien
on, and shall be paid out of, any and all distributions, dividends, money,
securities and other properties that the Holders may be entitled to receive in
such proceeding whether in liquidation or under any plan of reorganization or
arrangement or otherwise. Nothing herein contained shall be deemed to authorize
the Trustee to authorize or consent to or accept or adopt on behalf of any
Holder any plan of reorganization, arrangement, adjustment or composition
affecting the Exchange Debentures or the rights of any Holder, or to authorize
the Trustee to vote in respect of the claim of any Holder in any such proceeding
provided, however, that the Trustee may, on behalf of the Holders, vote for the
election of a trustee in bankruptcy or similar official and may be a member of
the creditors' committee.
Section 6.10. Priorities.
If the Trustee collects any money pursuant to this Article, it
shall, subject to the provisions of Article 10, pay out the money in the
following order:
First: to the Trustee, its agents and attorneys for amounts
due under Sections 6.8 and 7.7 hereof, including payment of all compensation,
expense and liabilities incurred, and all advances made, by the Trustee and the
costs and expenses of collection;
Second: to Holders of Exchange Debentures for amounts due and
unpaid on the Exchange Debentures for principal, premium, if any, and accrued
interest, ratably, without preference or priority of any kind, according to the
amounts due and payable on the Exchange Debentures for principal, premium, if
any, and accrued interest, as the case may be, respectively; and
Third: to the Company or to such party as a court of competent
jurisdiction shall direct.
The Trustee may fix a record date and payment date for any
payment to Holders of Exchange Debentures pursuant to this Section 6.10.
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Section 6.11. Undertaking for Costs.
In any suit for the enforcement of any right or remedy under
this Exchange Debenture Indenture or in any suit against the Trustee for any
action taken or omitted by it as a Trustee, a court in its discretion may
require the filing by any party litigant in the suit of an undertaking to pay
the costs of the suit, and the court in its discretion may assess reasonable
costs, including reasonable attorneys' fees, against any party litigant in the
suit, having due regard to the merits and good faith of the claims or defenses
made by the party litigant. This Section 6.11 does not apply to a suit by the
Trustee, a suit by a Holder of a Exchange Debenture pursuant to Section 6.7
hereof, or a suit by Holders of more than 10% in principal amount of the then
outstanding Exchange Debentures.
ARTICLE 7
TRUSTEE
Section 7.1. Duties of Trustee.
(a) If an Event of Default has occurred and is
continuing, the Trustee shall exercise such of the rights and powers vested in
it by this Exchange Debenture Indenture, and use the same degree of care and
skill in its exercise, as a prudent man would exercise or use under the
circumstances in the conduct of his own affairs.
(b) Except during the continuance of an Event of Default:
(i) the duties of the Trustee shall be determined solely
by the express provisions of this Exchange Debenture Indenture and the
Trustee need perform only those duties that are specifically set forth
in this Exchange Debenture Indenture and no others, and no implied
covenants or obligations shall be read into this Exchange Debenture
Indenture against the Trustee; and
(ii) 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 any notices,
requests, statements, certificates or opinions furnished to the Trustee
and conforming to the requirements of this Exchange Debenture
Indenture. However, the Trustee shall examine the certificates and
opinions to determine whether or not they conform to the requirements
of this Exchange Debenture Indenture.
(c) The Trustee may not be relieved from liabilities for
its own negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(i) this paragraph does not limit the effect of paragraph
(b) of this Section;
(ii) the Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer, unless it is
proved that the Trustee was negligent in ascertaining the pertinent
facts; and
46
(iii) the Trustee shall not be liable with respect to any
action it takes or omits to take in good faith in accordance with a
direction received by it pursuant to Section 6.5 hereof.
(d) Whether or not therein expressly so provided, every
provision of this Exchange Debenture Indenture that in any way relates to the
Trustee is subject to paragraphs (a), (b), and (c) of this Section.
(e) No provision of this Exchange Debenture Indenture
shall require the Trustee to expend or risk its own funds or incur any
liability. The Trustee shall be under no obligation to exercise any of its
rights and powers under this Exchange Debenture Indenture at the request of any
Holder, unless such Holder shall have furnished to the Trustee security and
indemnity satisfactory to it against any loss, liability or expense.
(f) The Trustee shall not be liable for interest on any
money received by it except as the Trustee may agree in writing with the
Company. Money held in trust by the Trustee need not be segregated from other
funds except to the extent required by law.
Section 7.2. Rights of Trustee.
(a) The Trustee may conclusively rely upon any document
believed by it to be genuine and to have been signed or presented by the proper
Person. The Trustee need not investigate any fact or matter stated in the
document.
(b) Before the Trustee acts or refrains from acting, it
may require an Officers' Certificate or an Opinion of Counsel or both. The
Trustee shall not be liable for any action it takes or omits to take in good
faith in reliance on such Officers' Certificate or opinion of Counsel. The
Trustee may consult with counsel and the written advice of such counsel or any
Opinion of Counsel shall be full and complete authorization and protection from
liability in respect of any action taken, suffered or omitted by it hereunder in
good faith and in reliance thereon.
(c) The Trustee may act through its attorneys and agents
and shall not be responsible for the misconduct or negligence of any agent
appointed with due care.
(d) Unless otherwise specifically provided in this
Exchange Debenture Indenture, any demand, request, direction or notice from the
Company shall be sufficient if signed by an Officer of the Company.
(e) Except with respect to Sections 4.1 and 4.4 hereof,
the Trustee shall have no duty to inquire as to the performance of the Company's
covenants in Article 4 hereof. In addition, the Trustee shall not be deemed to
have knowledge of any Default or Event of Default except (i) any Event of
Default occurring pursuant to Sections 4.1 or 4.4 hereof or (ii) any Default or
Event of Default of which the Trustee shall have received written notification
or obtained actual knowledge. For the purposes of this clause (e) only, "actual
knowledge" shall mean the actual fact or statement of knowing, without any duty
to make investigation with regard thereto.
47
(f) The Trustee shall not be required to give any bond or
surety in respect of the performance of its powers and duties hereunder.
(g) the Trustee shall not be bound to ascertain or
inquire as to the performance or observance of any covenants, conditions, or
agreements on the part of the Company, except as otherwise set forth herein, but
the Trustee may require of the Company full information and advice as to the
performance of the covenants, conditions and agreements contained herein and
shall be entitled in connection herewith to examine the books, records and
premises of the Company.
(h) The permissive rights of the Trustee to perform the
acts enumerated in this Exchange Debenture Indenture shall not be construed as a
duty and the Trustee shall not be answerable for other than its negligence or
willful misconduct.
(i) Delivery of reports, information and documents to the
Trustee under Section 4.3 is for informational purposes only and the Trustee's
receipt of the foregoing shall not constitute constructive notice of any
information contained therein or determinable from information contained
therein, including the Company's compliance with any of their covenants
hereunder (as to which the Trustee is entitled to rely exclusively on Officer's
Certificate).
Section 7.3. Individual Rights of Trustee.
The Trustee in its individual or any other capacity may become
the owner or pledgee of Exchange Debentures and may otherwise deal with the
Company or any Affiliate of the Company with the same rights it would have if it
were not Trustee. However, in the event that the Trustee acquires any
conflicting interest it must eliminate such conflict within 90 days, apply to
the Commission for permission to continue as trustee or resign. Any Agent may do
the same with like rights and duties. The Trustee is also subject to Sections
7.10 and 7.11 hereof.
Section 7.4. Trustee's Disclaimer.
The Trustee shall not be responsible for and makes no
representation as to the validity or adequacy of this Exchange Debenture
Indenture or the Exchange Debentures, it shall not be accountable for the
Company's use of the proceeds from the Exchange Debentures or any money paid to
the Company or upon the Company's direction under any provision of this Exchange
Debenture Indenture, it shall not be responsible for the use or application of
any money received by any Paying Agent other than the Trustee, and it shall not
be responsible for any statement or recital herein or in any certificate
delivered pursuant hereto or any statement in the Exchange Debentures or any
other document in connection with the sale of the Exchange Debentures or
pursuant to this Exchange Debenture Indenture other than its certificate of
authentication.
Section 7.5. Notice of Defaults.
If a Default or Event of Default occurs and is continuing and
if it is actually known to the Trustee, the Trustee shall mail to Holders of
Exchange Debentures a notice of the Default or Event of Default within 90 days
after it occurs. Except in the case of a Default or Event of Default in payment
of principal of, premium, if any, or interest on, any Exchange
48
Debenture, the Trustee may withhold the notice if and so long as a committee of
its Responsible Officers in good faith determines that withholding the notice is
in the interests of the Holders of the Exchange Debentures.
Section 7.6. Reports by Trustee to Holders of the Exchange
Debentures.
Within 60 days after each May 15 beginning with the May 15
following the date of this Exchange Debenture Indenture, and for so long as
Exchange Debentures remain outstanding, the Trustee shall mail to the Holders of
the Exchange Debentures a brief report dated as of such reporting date that
complies with TIA ss. 313(a) (but if no event described in TIA ss. 313(a) has
occurred within the twelve months preceding the reporting date, no report need
be transmitted). The Trustee also shall comply with TIA ss. 313(b)(2) and
transmit by mail all reports as required by TIA ss. 313(c).
A copy of each report at the time of its mailing to the
Holders of Exchange Debentures shall be mailed to the Company and filed with the
Commission and each stock exchange on which the Exchange Debentures are listed
in accordance with TIA ss. 313(d). The Company shall promptly notify the Trustee
when the Exchange Debentures are listed on any stock exchange.
Section 7.7. Compensation and Indemnity.
The Company shall pay to the Trustee from time to time
reasonable compensation for its acceptance of this Exchange Debenture Indenture
and services hereunder, including, without limitation, extraordinary services
such as default administration. The Trustee's compensation shall not be limited
by any law on compensation of a trustee of an express trust. The Company shall
reimburse the Trustee promptly upon request for all reasonable disbursements,
advances and expenses incurred or made by it in addition to the compensation for
its services. Such expenses shall include the reasonable compensation,
disbursements and expenses of the Trustee's agents and counsel.
The Company shall indemnify the Trustee against any and all
losses, liabilities or expenses incurred by it arising out of or in connection
with the acceptance or administration of its duties under this Exchange
Debenture Indenture, including the costs and expenses of enforcing this Exchange
Debenture Indenture against the Company (including this Section 7.7) and
investigating or defending itself against any claim (whether asserted by the
Company or any Holder or any other person) or liability in connection with the
exercise or performance of any of its powers or duties hereunder, except to the
extent any such loss, liability or expense may be attributable to its negligence
or bad faith. The Trustee shall notify the Company promptly of any claim for
which it may seek indemnity. Failure by the Trustee to so notify the Company
shall not relieve the Company of their obligations hereunder. The Company shall
defend the claim and the Trustee shall cooperate in the defense. The Trustee may
have separate counsel and the Company shall pay the reasonable fees and expenses
of such counsel. The Company need not pay for any settlement made without their
consent.
The obligations of the Company under this Section 7.7 are
joint and several and shall survive the satisfaction and discharge of this
Exchange Debenture Indenture.
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To secure the Company's payment obligations in this Section,
the Trustee shall have a Lien prior to the Exchange Debentures on all money or
property held or collected by the Trustee, except that held in trust to pay
principal and interest on particular Exchange Debentures. Such Lien shall
survive the satisfaction and discharge of this Exchange Debenture Indenture.
When the Trustee incurs expenses or renders services after an
Event of Default specified in Section 6.1(vii) or (viii) hereof occurs, the
expenses and the compensation for the services (including the fees and expenses
of its agents and counsel) are intended to constitute expenses of administration
under any Bankruptcy Law.
The Trustee shall comply with the provisions of TIA ss.
313(b)(2) to the extent applicable.
Section 7.8. Replacement of Trustee.
A resignation or removal of the Trustee and appointment of a
successor Trustee shall become effective only upon the successor Trustee's
acceptance of appointment as provided in this Section.
The Trustee may resign in writing at any time and be
discharged from the trust hereby created by so notifying the Company. The
Holders of Exchange Debentures of a majority in principal amount of the then
outstanding Exchange Debentures may remove the Trustee by so notifying the
Trustee and the Company in writing. The Company may remove the Trustee if:
(a) the Trustee fails to comply with Section 7.10 hereof;
(b) the Trustee is adjudged a bankrupt or an insolvent or
an order for relief is entered with respect to the Trustee under any Bankruptcy
Law;
(c) a Custodian or public officer takes charge of the
Trustee or its property; or
(d) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in
the office of Trustee for any reason, the Company shall promptly appoint a
successor Trustee. Within one year after the successor Trustee takes office, the
Holders of a majority in principal amount of the then outstanding Exchange
Debentures may appoint a successor Trustee to replace the successor Trustee
appointed by the Company.
If a successor Trustee does not take office within 60 days
after the retiring Trustee resigns or is removed, the retiring Trustee, the
Company, or the Holders of Exchange Debentures of at least 10% in principal
amount of the then outstanding Exchange Debentures may petition any court of
competent jurisdiction for the appointment of a successor Trustee.
If the Trustee, after written request by any Holder of an
Exchange Debenture who has been a Holder of an Exchange Debenture for at least
six months, fails to comply with Section 7.10, such Holder of an Exchange
Debenture may petition any court of competent jurisdiction for the removal of
the Trustee and the appointment of a successor Trustee.
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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 Exchange Debenture Indenture. The successor Trustee shall mail a
notice of its succession to Holders of the Exchange Debentures. The retiring
Trustee shall promptly transfer all property held by it as Trustee to the
successor Trustee, provided all sums owing to the Trustee hereunder have been
paid and subject to the Lien provided for in Section 7.7 hereof. Notwithstanding
replacement of the Trustee pursuant to this Section 7.8, the Company's
obligations under Section 7.7 hereof shall continue for the benefit of the
retiring Trustee.
Section 7.9. Successor Trustee by Merger, etc.
If the Trustee consolidates, merges or converts into, or
transfers all or substantially all of its corporate trust business to, another
corporation, the successor corporation without any further act shall be the
successor Trustee.
Section 7.10. Eligibility; Disqualification.
There shall at all times be a Trustee hereunder that is a
corporation organized and doing business under the laws of the United States of
America or of any state thereof that is authorized under such laws to exercise
corporate trustee power, that is subject to supervision or examination by
federal or state authorities and that is a member of a holding company that has
a combined capital and surplus of at least $50 million as set forth in its most
recent published annual report of condition.
This Exchange Debenture Indenture shall always have a Trustee
who satisfies the requirements of TIA ss. 310(a)(1), (2) and (5). The Trustee is
subject to TIA ss. 310(b).
Section 7.11. Preferential Collection of Claims Against
Company.
The Trustee is subject to TIA ss. 311(a), excluding any
creditor relationship listed in TIA ss. 311(b). A Trustee who has resigned or
been removed shall be subject to TIA ss. 311(a) to the extent indicated therein.
ARTICLE 8
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
Section 8.1. Option to Effect Legal Defeasance or Covenant
Defeasance.
The Company may, at the option of its Board of Directors
evidenced by a resolution set forth in an Officers' Certificate, at any time,
elect to have either Section 8.2 or 8.3 hereof be applied to all outstanding
Exchange Debentures upon compliance with the conditions set forth below in this
Article 8.
51
Section 8.2. Legal Defeasance and Discharge.
Upon the Company's exercise under Section 8.1 hereof of the
option applicable to this Section 8.2, the Company shall, subject to the
satisfaction of the conditions set forth in Section 8.4 hereof, be deemed to
have been discharged from their obligations with respect to all outstanding
Exchange Debentures on the date the conditions set forth below are satisfied
(hereinafter, "Legal Defeasance"). For this purpose, Legal Defeasance means that
the Company shall be deemed to have paid and discharged the entire Indebtedness
represented by the outstanding Exchange Debentures, which shall thereafter be
deemed to be "outstanding" only for the purposes of Section 8.5 hereof and the
other Sections of this Exchange Debenture Indenture referred to in (a) and (b)
below, and to have satisfied all its other obligations under such Exchange
Debentures and this Exchange Debenture Indenture (and the Trustee, on demand of
and at the expense of the Company, shall execute proper instruments
acknowledging the same), except for the following provisions which shall survive
until otherwise terminated or discharged hereunder: (a) the rights of Holders of
outstanding Exchange Debentures to receive payments in respect of the principal
of, premium, if any, and interest on such Exchange Debentures when such payments
are due from the trust fund described in Section 8.4 hereof, and as more fully
set forth in such Section, (b) the Company's obligations with respect to such
Exchange Debentures under Article 2 and Section 4.2 hereof, (c) the rights,
powers, trusts, duties and immunities of the Trustee hereunder and the Company's
obligations in connection therewith and (d) this Article 8. Subject to
compliance with this Article 8, the Company may exercise its option under this
Section 8.2 notwithstanding the prior exercise of its option under Section 8.3
hereof.
Section 8.3. Covenant Defeasance.
Upon the Company's exercise under Section 8.1 hereof of the
option applicable to this Section 8.3, the Company shall, subject to the
satisfaction of the conditions set forth in Section 8.4 hereof, be released from
their obligations under the covenants contained in Sections 4.3, 4.4, 4.5, 4.7,
4.8, 4.9, 4.10, 4.11, 4.12, 4.13, 4.14, 4.15, 4.16, 4.17, 4.18, 4.19 and 4.20
hereof and in clause (iv) of Section 5.1 with respect to the outstanding
Exchange Debentures on and after the date the conditions set forth below are
satisfied (hereinafter, "Covenant Defeasance"), and the Exchange Debentures
shall thereafter be deemed not "outstanding" for the purposes of any compliance
certificate, direction, waiver, consent or declaration or act of Holders (and
the consequences of any thereof) in connection with such covenants, but shall
continue to be deemed "outstanding" for all other purposes hereunder (it being
understood that such Exchange Debentures shall not be deemed outstanding for
accounting purposes). For this purpose, Covenant Defeasance means that, with
respect to the outstanding Exchange Debentures, the Company may omit to comply
with and shall have no liability in respect of any term, condition or limitation
set forth in any such covenant, whether directly or indirectly, by reason of any
reference elsewhere herein to any such covenant or by reason of any reference in
any such covenant to any other provision herein or in any other document and
such omission to comply shall not constitute a Default or an Event of Default
under Section 6.1 hereof, but, except as specified above, the remainder of this
Exchange Debenture Indenture, such Exchange Debentures shall be unaffected
thereby. In addition, upon the Company's exercise under Section 8.1 hereof of
the option applicable to this Section 8.3 hereof, subject to the satisfaction of
the conditions set forth in Section 8.4 hereof, Sections 6.1(iv) (but only with
respect to the Company's failure to observe or perform the covenants, conditions
and agreements of the
52
Company under clause (iv) of Section 5.1), 6.1(v) and 6.1(vi) hereof shall not
constitute Events of Default.
Section 8.4. Conditions to Legal or Covenant Defeasance.
The following shall be the conditions to the application of
either Section 8.2 or 8.3 hereof to the outstanding Exchange Debentures:
In order to exercise either Legal Defeasance or Covenant
Defeasance:
(a) the Company must irrevocably deposit with the
Trustee, in trust, for the benefit of the Holders of the Exchange Debentures,
cash in United States dollars, non-callable Government Securities, or a
combination thereof, in such amounts as will be sufficient, in the opinion of a
nationally recognized firm of independent public accountants, to pay the
principal of, premium, if any, and interest, on the outstanding Exchange
Debentures on the stated maturity or on the applicable redemption date, as the
case may be, and the Company must specify whether the Exchange Debentures are
being defeased to maturity or to a particular redemption date;
(b) in the case of an election under Section 8.2 hereof,
the Company shall have delivered to the Trustee an Opinion of Counsel in the
United States reasonably acceptable to the Trustee confirming that (A) the
Company has received from, or there has been published by, the Internal Revenue
Service a ruling or (B) since the date of this Exchange Debenture 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 Holders of the outstanding Exchange Debentures will not recognize
income, gain or loss for federal income tax purposes as a result of such legal
Defeasance and will be subject to federal income tax on the same amounts, and in
the same manner and at the same times as would have been the case if such Legal
Defeasance had not occurred;
(c) in the case of an election under Section 8.3 hereof,
the Company shall have delivered to the Trustee an opinion of Counsel in the
United States reasonably acceptable to the Trustee confirming that the Holders
of the outstanding Exchange Debentures will not recognize income, gain or loss
for federal income tax purposes as a result of such Covenant Defeasance and will
be subject to federal income tax on the same amounts, in the same manner and at
the same times as would have been the case if such Covenant Defeasance had not
occurred;
(d) no Default or Event of Default shall have occurred
and be continuing on the date of such deposit (other than a Default or Event of
Default resulting from the borrowing of funds to be applied to such deposit) or
insofar as Section 6.1(vii) or 6.1(viii) hereof is concerned, at any time in the
period ending on the 91st day after the date of deposit;
(e) such Legal Defeasance or Covenant Defeasance shall
not result in a breach or violation of, or constitute a default under, any
material agreement or instrument (other than this Exchange Debenture Indenture)
to which the Company or any of its Subsidiaries is a party or by which the
Company or any of its Subsidiaries is bound;
53
(f) the Company shall have delivered to the Trustee an
Opinion of Counsel to the effect that after the 91st day following the deposit,
the trust funds will not be subject to the effect of any applicable bankruptcy,
insolvency, reorganization or similar laws affecting creditors' rights
generally;
(g) the Company shall deliver to the Trustee an Officers'
Certificate stating that the deposit was not made by the Company with the intent
of preferring the Holders of the Exchange Debentures over the other creditors of
the Company, or with the intent of defeating, hindering, delaying or defrauding
creditors of the Company or others; and
(h) the Company shall have delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, each stating that all
conditions precedent provided for or relating to the Legal Defeasance or the
Covenant Defeasance have been complied with.
Section 8.5. Deposited Money and Government Securities to be
Held in Trust; Other Miscellaneous Provisions.
Subject to Section 8.6 hereof, all money and non-callable
Government Securities (including the proceeds thereof) deposited with the
Trustee (or other qualifying trustee, collectively for purposes of this Section
8.5, the "Trustee") pursuant to Section 8.4 hereof in respect of the outstanding
Exchange Debentures shall be held in trust and applied by the Trustee, in
accordance with the provisions of such Exchange Debentures and this Exchange
Debenture Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as Paying Agent) as the Trustee may determine, to
the Holders of such Exchange Debentures of all sums due and to become due
thereon in respect of principal, premium, if any, and interest, but such money
need not be segregated from other funds except to the extent required by law.
The Company shall pay and indemnify the Trustee against any
tax, fee or other charge imposed on or assessed against the cash or non-callable
Government Securities deposited pursuant to Section 8.4 hereof or the principal
and interest received in respect thereof other than any such tax, fee or other
charge which by law is for the account of the Holders of the outstanding
Exchange Debentures.
Anything in this Article 8 to the contrary notwithstanding,
the Trustee shall deliver or pay to the Company from time to time upon the
request of the Company any money or non-callable Government Securities held by
it as provided in Section 8.4 hereof which, in the opinion of a nationally
recognized firm of independent public accountants expressed in a written
certification thereof delivered to the Trustee (which may be the opinion
delivered under Section 8.4(a) hereof), are in excess of the amount thereof that
would then be required to be deposited to effect an equivalent Legal Defeasance
or Covenant Defeasance.
Section 8.6. Repayment to Company.
Any money deposited with the Trustee or any Paying Agent, or
then held by the Company, in trust for the payment of the principal of, premium,
if any, or interest on any Exchange Debenture and remaining unclaimed for two
years after such principal, premium, if any, or interest has become due and
payable shall be paid to the Company on its request or (if
54
then held by the Company) shall be discharged from such trust; and the Holder of
such Exchange Debenture shall thereafter, as a general creditor, look only to
the Company for payment thereof, and all liability of the Trustee or such Paying
Agent with respect to such trust money, and all liability of the Company as
trustee thereof, shall thereupon cease; provided, however, that the Trustee or
such Paying Agent, before being required to make any such repayment, may at the
expense of the Company cause to be published once, in the New York Times and The
Wall Street Journal (national edition), notice that such money remains unclaimed
and that, after a date specified therein, which shall not be less than 30 days
from the date of such notification or publication, any unclaimed balance of such
money then remaining shall be repaid to the Company.
Section 8.7. Reinstatement.
If the Trustee or Paying Agent is unable to apply any United
States dollars or non-callable Government Securities in accordance with Section
8.2 or 8.3 hereof, as the case may be, by reason of any order or judgment of any
court or governmental authority enjoining, restraining or otherwise prohibiting
such application, then the obligations of the Company under this Exchange
Debenture Indenture, the Exchange Debentures shall be revived and reinstated as
though no deposit had occurred pursuant to Section 8.2 or 8.3 hereof, as the
case may be; provided, however, that if the Company makes any payment of
principal of, premium, if any, or interest on any Exchange Debenture following
the reinstatement of its obligations, the Company shall be subrogated to the
rights of the Holders of such Exchange Debentures to receive such payment from
the money held by the Trustee or Paying Agent.
ARTICLE 9
AMENDMENT, SUPPLEMENT AND WAIVER
Section 9.1. With Consent of Holders of Exchange Debentures.
Except as provided below, this Exchange Debenture Indenture or
the Exchange Debentures may be amended or supplemented with the consent of the
Holders of at least a majority in principal amount of the Exchange Debentures
then outstanding (including, without limitation, consents obtained in connection
with a purchase of, or tender offer or exchange offer for, the Exchange
Debentures), and any existing default or compliance with any provision of this
Exchange Debenture Indenture or the Exchange Debentures may be waived with the
consent of the Holders of a majority in principal amount of the then outstanding
Exchange Debentures (including consents obtained in connection with a tender
offer or exchange offer for the Exchange Debentures).
Upon the request of the Company accompanied by a resolution of
the Board of Directors of the Company, authorizing the execution of any such
amended or supplemental indenture, and upon the filing with the Trustee of
evidence satisfactory to the Trustee of the consent of the Holders of Exchange
Debentures as aforesaid, and upon receipt by the Trustee of the documents
described in Section 7.2 hereof, the Trustee shall join with the Company in the
execution of such amended or supplemental indenture unless such amended or
supplemental indenture affects the Trustee's own rights, duties or immunities
under this indenture or otherwise,
55
in which case the Trustee may in its discretion, but shall not be obligated to,
enter into such amended or supplemental indenture.
It shall not be necessary for the consent of the Holders of
Exchange Debentures under this Section 9.2 to approve the particular form of any
proposed amendment or waiver, but it shall be sufficient if such consent
approves the substance thereof.
After an amendment, supplement or waiver under this Section
becomes effective, the Company shall mail to the Holders of Exchange Debentures
affected thereby a notice briefly describing the amendment, supplement or
waiver. Any failure of the Company to mail such notice, or any defect therein,
shall not, however, in any way impair or affect the validity of any such amended
or supplemental indenture or waiver.
Section 9.2. Without Consent of Holders of Exchange
Debentures.
Without the consent of each Holder affected, an amendment or
waiver may not (with respect to any Exchange Debentures held by a non-consenting
Holder): (i) reduce the principal amount of the Exchange Debentures whose
Holders must consent to an amendment, supplement or waiver, (ii) reduce the
principal of or change the fixed maturity of any Exchange Debenture or alter the
provisions with respect to the redemption of the Exchange Debentures (except as
provided above in Sections 4.10 and 4.13 hereof), (iii) reduce the rate of or
change the time for payment of interest on any Exchange Debenture, (iv) waive a
Default or Event of Default in the payment of principal of or premium, if any,
or interest on the Exchange Debentures (except a rescission of acceleration of
the Exchange Debentures by the Holders of at least a majority in principal
amount of such Exchange Debentures and a waiver of the payment default that
resulted from such acceleration), (v) make any Exchange Debenture payable in
money other than that stated in the Exchange Debentures, (vi) make any change in
the provisions of this Exchange Debenture Indenture relating to waivers of past
Defaults or the rights of Holders of the Exchange Debentures to receive payments
of principal of or premium, if any, or interest on the Exchange Debentures or
(vii) make any change in the foregoing amendment and waiver provisions. In
addition, any amendment to the provisions contained in Sections 4.10 and 4.13
hereof or the provisions of Article 10 hereof will require the consent of the
Holders of at least 66 2/3% in principal amount of the Exchange Debentures then
outstanding if such amendment would adversely affect the rights of Holders of
such Exchange Debentures. However, no amendment may be made to the subordination
provisions of the Exchange Debenture Indenture that adversely affects the rights
of any holder of Exchange Debenture Senior Debt then outstanding unless the
holders of such Exchange Debenture Senior Debt (or any group or representative
thereof authorized to give a consent) consents to such change.
Notwithstanding the foregoing, without the consent of any
Holder of the Exchange Debentures the Company and the Trustee may amend or
supplement this Exchange Debenture Indenture or the Exchange Debentures to cure
any ambiguity, defect or inconsistency, to provide for uncertificated Exchange
Debentures in addition to or in place of certificated Exchange Debentures, to
provide for the assumption of the Company's obligations to Holders of the
Exchange Debentures in the case of a merger or consolidation, to make any change
that would provide any additional rights or benefits to the Holders of the
Exchange Debentures or that does not adversely affect the legal rights under
this Exchange Debenture Indenture of any
56
such Holder, to secure the Exchange Debentures or to comply with requirements of
the Commission in order to effect or maintain the qualification of the Exchange
Debenture Indenture under the Trust Indenture Act.
Section 9.3. Compliance with Trust Indenture Act.
Every amendment or supplement to this Exchange Debenture
Indenture or the Exchange Debentures shall be set forth in an amended or
supplemental Exchange Debenture Indenture that complies with the TIA as then in
effect.
Section 9.4. Revocation and Effect of Consents.
Until an amendment, supplement or waiver becomes effective, a
consent to it by a Holder of an Exchange Debenture is a continuing consent by
the Holder of an Exchange Debenture and every subsequent Holder of an Exchange
Debenture or portion of an Exchange Debenture that evidences the same debt as
the consenting Holder's Exchange Debenture, even if notation of the consent is
not made on any Exchange Debenture. However, any such Holder of an Exchange
Debenture or subsequent Holder of an Exchange Debenture may revoke the consent
as to its Exchange Debenture if the Trustee receives written notice of
revocation before the date the waiver, supplement or amendment becomes
effective. An amendment, supplement or waiver becomes effective in accordance
with its terms and thereafter binds every Holder.
Section 9.5. Notation on or Exchange of Exchange Debentures.
The Trustee may place an appropriate notation about an
amendment, supplement or waiver on any Exchange Debenture thereafter
authenticated. The Company in exchange for all Exchange Debentures may issue and
the Trustee shall authenticate new Exchange Debentures that reflect the
amendment, supplement or waiver.
Failure to make the appropriate notation or issue a new
Exchange Debenture shall not affect the validity and effect of such amendment,
supplement or waiver.
Section 9.6. Trustee to Sign Amendment, etc.
The Trustee shall sign any amended or supplemental indenture
authorized pursuant to this Article 9 if the amendment or supplement does not
adversely affect the rights, duties, liabilities or immunities of the Trustee.
The Company may not sign an amendment or supplemental Exchange Debenture
Indenture until its respective Board of Directors approves it. In executing any
amended or supplemental indenture, the Trustee shall be entitled to receive and
(subject to Section 7.1) shall be fully protected in relying upon, an Officer's
Certificate and an Opinion of Counsel stating that the execution of such amended
or supplemental indenture is authorized or permitted by this Exchange Debenture
Indenture and that there has been compliance with all conditions precedent.
57
ARTICLE 10
SUBORDINATION
Section 10.1. Agreement to Subordinate.
The Company agrees, and each Holder by accepting an Exchange
Debenture agrees, that (i) the Indebtedness evidenced by the Exchange
Debentures, including, but not limited to, the payment of principal of, premium,
if any, and interest on the Exchange Debentures, and any other payment
Obligation of the Company in respect of the Exchange Debentures (including any
obligation to repurchase the Exchange Debentures) is subordinated in right of
payment, to the extent and in the manner provided in this Article, to the prior
payment in full in cash of all Exchange Debenture Senior Debt of the Company
(whether outstanding on the date hereof or hereafter created, incurred, assumed
or guaranteed) (ii) the subordination is for the benefit of the Holders of
Exchange Debenture Senior Debt.
Section 10.2. Certain Definitions.
"Bankruptcy Law" means title 11, U.S. Code or any similar
Federal or state law for the relief of debtors.
"Representative" means the indenture trustee or other trustee,
agent or representative for any Exchange Debenture Senior Debt.
A "distribution" may consist of cash, securities or other
property, by set-off or otherwise.
All Designated Exchange Debenture Senior Debt now or hereafter
existing and all other Obligations relating thereto shall not be deemed to have
been paid in full unless the holders or owners thereof shall have received
payment in full in cash (or other form of payment consented to by the holders of
such Designated Exchange Debenture Senior Debt) with respect to such Designated
Exchange Debenture Senior Debt and all other obligations with respect thereto.
Section 10.3. Liquidation; Dissolution; Bankruptcy.
(a) Upon any payment or distribution of property or
securities to creditors of the Company in a liquidation or dissolution of the
Company or in a bankruptcy, reorganization, insolvency, receivership or similar
proceeding relating to the Company or its property, or in an assignment for the
benefit of creditors or any marshalling of the Company's assets and liabilities:
(1) the holders of Exchange Debenture Senior Debt of the
Company shall be entitled to receive payment in full in cash of all
Obligations in respect of such Exchange Debenture Senior Debt
(including interest after the commencement of any such proceeding at
the rate specified in the applicable Exchange Debenture Senior Debt,
whether or not a claim for such interest would be allowed in such
proceeding) before the Holders of Exchange Debentures shall be entitled
to receive any payment with respect to the Exchange Debentures and
related obligations; and
58
(2) until all Obligations with respect to Exchange
Debenture Senior Debt of the Company (as provided in subsection (1)
above) are paid in full in cash, any payment or distribution to which
the Holders of Exchange Debentures would be entitled shall be made to
holders of Exchange Debenture Senior Debt of the Company (except that
in the case of both paragraph (i) above and this paragraph (ii),
Holders of Exchange Debentures may receive (x) securities that are
subordinated at least to the same extent as the Exchange Debentures to
Exchange Debenture Senior Debt (or securities issued in exchange for
Exchange Debenture Senior Debt), so long as the rights of the holders
of such Exchange Debenture Senior Debt are not altered or impaired
without their consent, and (ii) payments made from any defeasance trust
created pursuant to Section 8.1 hereof provided that the applicable
deposit does not violate a Credit Agreement or Article 8 or 10 of this
Exchange Debenture Indenture).
Under the circumstances described in this Section 10.3, the
Company or any receiver, trustee in bankruptcy, liquidating trustee, agent or
other similar person making any payment or distribution of cash or other
property or securities is authorized or instructed to make any payment or
distribution to which the Holders of the Exchange Debentures would otherwise be
entitled (other than (i) securities that are subordinated at least to the same
extent as the Exchange Debentures to Exchange Debenture Senior Debt and any
securities issued in exchange for Exchange Debenture Senior Debt, so long as the
rights of the holders of such Exchange Debenture Senior Debt are not altered or
impaired without their consent and (ii) payments made from any defeasance trust
referred to in the second parenthetical of clause (a)(2) above (provided, that
the applicable deposit does not violate a Credit Agreement or Article 8 or 10 of
this Exchange Debenture Indenture), which shall be delivered or paid to the
Holders of Exchange Debentures as set forth in such clause) directly to the
holders of the Exchange Debenture Senior Debt of the Company (pro rata to such
holders on the basis of the respective amounts of Exchange Debenture Senior Debt
of the Company held by such holders) or their Representatives, or to any trustee
or trustees under any other indenture pursuant to which any such Exchange
Debenture Senior Debt may have been issued, as their respective interests
appear, to the extent necessary to pay all such Exchange Debenture Senior Debt
in full, in cash or cash equivalents after giving effect to any concurrent
payment, distribution or provision therefor to or for the holders of such
Exchange Debenture Senior Debt.
To the extent any payment of or distribution in respect of
Exchange Debenture Senior Debt, as proceeds of security or enforcement of any
right of setoff or otherwise) is declared to be fraudulent or preferential, set
aside or required to be paid to any receiver, trustee in bankruptcy, liquidating
trustee, agent or other similar Person under any bankruptcy, insolvency,
receivership, fraudulent conveyance or similar law, then if such payment or
distribution is recovered by, or paid over to, such receiver, trustee in
bankruptcy, liquidating trustee, agent or other similar Person, the Exchange
Debenture Senior Debt or part thereof originally intended to be satisfied shall
be deemed to be reinstated and outstanding as if such payment had not occurred.
To the extent the obligation to repay any Exchange Debenture Senior Debt is
declared to be fraudulent, invalid or otherwise set aside under any bankruptcy,
insolvency, receivership, fraudulent conveyance or similar law, then the
obligation so declared fraudulent, invalid or otherwise set aside (and all other
amounts that would come due with respect thereto had such obligation not been so
affected) shall be deemed to be reinstated and
59
outstanding as Exchange Debenture Senior Debt for all purposes hereof as if such
declaration, invalidity or setting aside had not occurred.
Section 10.4. Default on Designated Exchange Debenture Senior
Debt.
The Company may not make any payment (whether by redemption,
purchase, retirements, defeasance or otherwise) upon or in respect of the
Exchange Debentures (other than (i) securities that are subordinated at least to
the same extent as the Exchange Debentures are subordinated to Exchange
Debenture Senior Debt and any securities issued in exchange for Exchange
Debenture Senior Debt, so long as the rights of the holders of such Exchange
Debenture Senior Debt are not altered or impaired without their consent and (ii)
payments and other distributions made from any defeasance trust created pursuant
to Section 8.1 hereof if the applicable deposit does not violate a Credit
Agreement or Article 8 or 10 of this Exchange Debenture Indenture) until all
principal and other Obligations with respect to the Exchange Debenture Senior
Debt of the Company have been paid in full if:
(i) a default in the payment of any principal of,
premium, if any, or interest on Designated Exchange Debenture Senior
Debt occurs or any other default on Exchange Debenture Senior Debt
occurs and the maturity of such Exchange Debenture Senior Debt is
accelerated in accordance with its terms; or
(ii) any other default occurs and is continuing with
respect to Designated Exchange Debenture Senior Debt that permits, or
with the giving of notice or passage of time or both (unless cured or
waived) would permit, holders of the Designated Exchange Debenture
Senior Debt as to which such default relates to accelerate its maturity
and the Trustee receives a notice of the default (a "Payment Blockage
Notice") from the Company or the holders of any Designated Exchange
Debenture Senior Debt. If the Trustee receives any such Payment
Blockage Notice, no subsequent Payment Blockage Notice shall be
effective for purposes of this Section unless and until 360 days shall
have elapsed since the date of commencement of the payment blockage
period resulting from the immediately prior Payment Blockage Notice. No
nonpayment default in respect of any Designated Exchange Debenture
Senior Debt that existed or was continuing on the date of delivery of
any Payment Blockage Notice to the Trustee shall be, or be made, the
basis for a subsequent Payment Blockage Notice unless such default
shall have been cured or waived for a period of not less than 181 days.
The Company shall resume payments on and distributions in
respect of the Exchange Debentures upon:
(1) in the case of a default referred to in Section
10.4(i) hereof the date upon which the default is cured or waived, or
(2) in the case of a default referred to in clause (ii)
in the first paragraph of this Section 10.4, the earliest of (A) the
date on which such nonpayment default is cured or waived, (B) the date
the applicable Payment Blockage Notice is retracted by written notice
to the Trustee and (C) 179 days after the date on which the applicable
Payment Blockage Notice is received unless (1) the maturity of any
Designated Exchange
60
Debenture Senior Debt has been accelerated or (2) a Default or Event of
Default under Section 6.1(vii) or (viii) has occurred and is
continuing, if this Article otherwise permits the payment, distribution
or acquisition at the time of such payment or acquisition.
Section 10.5. Acceleration of Exchange Debentures.
If payment of the Exchange Debentures is accelerated because
of an Event of Default, the Company shall promptly notify holders of Exchange
Debenture Senior Debt of the acceleration.
Section 10.6. When Distribution Must Be Paid Over.
In the event that the Trustee or any Holder receives any
payment or distribution of or in respect of any Obligations with respect to the
Exchange Debentures at a time when such payment or distribution is prohibited by
Section 10.3 or Section 10.4 hereof, such payment or distribution shall be held
by the Trustee (if the Trustee has actual knowledge that such payment or
distribution is prohibited by Section 10.3 or 10.4) or such Holder, in trust for
the benefit of, and shall be paid forthwith over and delivered to, the holders
of Exchange Debenture Senior Debt as their interests may appear or their
Representative under the indenture or other agreement (if any) pursuant to which
such Exchange Debenture Senior Debt may have been issued, as their respective
interests may appear, for application to the payment of all Obligations with
respect to Exchange Debenture Senior Debt remaining unpaid to the extent
necessary to pay such Obligations in full in accordance with their terms, after
giving effect to any concurrent payment or distribution to or for the holders of
Exchange Debenture Senior Debt.
With respect to the holders of Exchange Debenture Senior Debt,
the Trustee undertakes to perform only such obligations on the part of the
Trustee as are specifically set forth in this Article 10, and no implied
covenants or obligations with respect to the holders of Exchange Debenture
Senior Debt shall be read into this Exchange Debenture Indenture against the
Trustee. The Trustee shall not be deemed to owe any fiduciary duty to the
holders of Exchange Debenture Senior Debt, and, except as provided in Section
10.12, shall not be liable to any such holders if the Trustee shall pay over or
distribute to or on behalf of Holders of Exchange Debentures or the Company or
any other Person money or assets to which any holders of Exchange Debenture
Senior Debt shall be entitled by virtue of this Article 10, except if such
payment is made as a result of the willful misconduct or gross negligence of the
Trustee.
Section 10.7. Notice by Company.
The Company shall promptly notify the Trustee and the Paying
Agent of any facts known to the Company that would cause a payment of any
obligations with respect to the Exchange Debentures to violate this Article, but
failure to give such notice shall not affect the subordination of the Exchange
Debentures to the Exchange Debenture Senior Debt as provided in this Article.
Section 10.8. Subrogation.
After all Exchange Debenture Senior Debt is paid in full and
until the Exchange Debentures are paid in full, Holders of Exchange Debentures
shall be subrogated (equally and
61
ratably with all other Indebtedness pari passu with the Exchange Debentures) to
the rights of holders of Exchange Debenture Senior Debt to receive distributions
and payments applicable to Exchange Debenture Senior Debt to the extent that
distributions and payments otherwise payable to the Holders of Exchange
Debentures have been applied to the payment of Exchange Debenture Senior Debt. A
payment or distribution made under this Article to holders of Exchange Debenture
Senior Debt that otherwise would have been made to Holders of Exchange
Debentures is not, as between the Company and Holders of Exchange Debentures, a
payment by the Company on the Exchange Debentures.
Section 10.9. Relative Rights.
This Article defines the relative rights of Holders of
Exchange Debentures and holders of Exchange Debenture Senior Debt. Nothing in
this Exchange Debenture Indenture shall:
(1) impair, as between the Company and Holders of
Exchange Debentures, the obligation of the Company, which is absolute
and unconditional, to pay principal of and interest on the Exchange
Debentures in accordance with their terms;
(2) affect the relative rights of Holders of Exchange
Debentures and creditors of the Company other than their rights in
relation to holders of Exchange Debenture Senior Debt; or
(3) prevent the Trustee or any Holder from exercising its
available remedies upon a Default or Event of Default, subject to the
rights of holders and owners of Exchange Debenture Senior Debt to
receive distributions and payments otherwise payable to Holders of
Exchange Debentures.
If the Company fails because of this Article to pay principal
of or interest on a Exchange Debenture on the due date, the failure is still a
Default or Event of Default.
Section 10.10. Subordination May Not Be Impaired by Company.
No right of any present or future holders of any Exchange
Debenture Senior Debt to enforce subordination as provided in this Article Ten
will at any time in any way be prejudiced or impaired by any act or failure to
act on the part of the Company or by any act or failure to act, in good faith,
by any such holder, or by noncompliance by the Company with the terms of this
Exchange Debenture Indenture, regardless of any knowledge thereof that any such
holder of Exchange Debenture Senior Debt may have or otherwise be charged with.
The provisions of this Article Ten are intended to be for the benefit of, and
shall be enforceable directly by, the holders of Exchange Debenture Senior Debt.
Section 10.11. Payment, Distribution or Notice to
Representative.
Whenever a payment or distribution is to be made or a notice
given to holders of Exchange Debenture Senior Debt, the distribution may be made
and the notice given to their Representative.
62
Upon any payment or distribution of assets or securities of
the Company referred to in this Article 10, the Trustee and the Holders of
Exchange Debentures shall be entitled to rely upon any order or decree made by
any court of competent jurisdiction or upon any certificate of such
Representative or of the liquidating trustee or agent or other Person making any
payment or distribution to the Trustee or to the Holders of Exchange Debentures
for the purpose of ascertaining the Persons entitled to participate in such
payment or distribution, the holders of the Exchange Debenture Senior Debt and
other Indebtedness of the Company, the amount thereof or payable thereon, the
amount or amounts paid or distributed thereon and all other facts pertinent
thereto or to this Article 10.
Section 10.12. Rights of Trustee and Paying Agent.
Notwithstanding the provisions of this Article 10 or any other
provision of this Exchange Debenture Indenture, the Trustee shall not be charged
with knowledge of the existence of any facts that would prohibit the making of
any payment or distribution by the Trustee, and the Trustee and the Paying Agent
may continue to make payments on the Exchange Debentures, unless the Trustee
shall have received at its Corporate Trust Office at least one Business Day
prior to the date of such payment written notice of facts that would cause the
payment of any obligations with respect to the Exchange Debentures to violate
this Article, which notice shall specifically refer to Section 10.3 or 10.4
hereof. Only the Company or a representative may give the notice. Nothing in
this Article 10 shall impair the claims of, or payments to, the Trustee under or
pursuant to Section 7.7 hereof.
The Trustee in its individual or any other capacity may hold
Exchange Debenture Senior Debt with the same rights it would have if it were not
Trustee. Any Agent may do the same with like rights.
Section 10.13. Authorization to Effect Subordination.
Each Holder by the Holder's acceptance thereof authorizes and
directs the Trustee on the Holder's behalf to take such action as may be
necessary or appropriate to effectuate the subordination as provided in this
Article 10, and appoints the Trustee to act as the Holder's attorney-in-fact for
any and all such purposes. If the Trustee does not file a proper proof of claim
or proof of debt in the form required in any proceeding referred to in Section
6.9 hereof at least 30 days before the expiration of the time to file such
claim, each lender under the Credit Facility is hereby authorized to file an
appropriate claim for and on behalf of the Holders of the Exchange Debentures.
Section 10.14. Amendments.
No amendment may be made to the provisions of or the
definitions of any terms appearing in this Article 10, or to the provisions of
Section 6.2 relating to the Designated Exchange Debenture Senior Debt, that
adversely affects the rights of any holder of Exchange Debenture Senior Debt
then outstanding unless the holders of such Exchange Debenture Senior Debt (or
any group or Representative authorized to give a consent) consent to such
change.
63
Section 10.15. No Waiver of Subordination Provisions.
Without in any way limiting the generality of Section 10.9 of
this Exchange Debenture Indenture, the holders of Exchange Debenture Senior Debt
may, at any time and from time to time, without the consent of or notice to the
Trustee or the Holders, without incurring responsibility to the Holders and
without impairing or releasing the subordination provided in this Article 10 or
the obligations hereunder of the Holders to the holders of Exchange Debenture
Senior Debt, do any one or more of the following: (a) change the manner, place
or terms of payment or extend the time of payment of, or renew or alter,
Exchange Debenture Senior Debt or any instrument evidencing the same or any
agreement under which Exchange Debenture Senior Debt is outstanding or secured;
(b) sell, exchange, release or otherwise deal with any property pledged,
mortgaged or otherwise securing Exchange Debenture Senior Debt; (c) release any
Person liable in any manner for the collection of Exchange Debenture Senior
Debt; and (d) exercise or refrain from exercising any rights against the Company
and any other Person.
ARTICLE 11
MISCELLANEOUS
Section 11.1. Trust Indenture Act Controls.
If any provision of this Exchange Debenture Indenture limits,
qualifies or conflicts with the duties imposed by TIA ss. 318(c), the imposed
duties shall control. If any provisions of this Exchange Debenture Indenture
modifies or excludes any provision of the TIA that may be so modified or
excluded, the letter provision shall be deemed to apply to this Exchange
Debenture Indenture as so modified or excluded, as the case may be.
Section 11.2. Notices.
Any notice or communication by the Company or the Trustee to
the others is duly given if in writing and delivered in Person or mailed by
first class mail (registered or certified, return receipt requested), telecopier
or overnight air courier guaranteeing next day delivery, to the others' address:
If to the Company:
Cumulus Media Inc.
3535 Piedmont Road
Building 14, Fourteenth Floor
Atlanta, Georgia 30305
Attention: Chief Executive Officer
If to the Trustee:
U.S. Bank Trust National Association
U.S. Bank Trust Center
186 East Fifth Street
St. Paul, MN 55101
Attention: Corporate Trust Administration
64
The Company or the Trustee, by notice to the others may
designate additional or different addresses for subsequent notices or
communications.
All notices and communications (other than those sent to
Holders) shall be deemed to have been duly given: at the time delivered by hand,
if personally delivered; five Business Days after being deposited in the mail,
postage prepaid, if mailed; when receipt acknowledged, if by telecopy; and the
next Business Day after timely delivery to the courier, if sent by overnight air
courier guaranteeing next day delivery.
Any notice or communication to a Holder shall be mailed by
first class mail, certified or registered, return receipt requested, or by
overnight air courier guaranteeing next day delivery to its address shown on the
register kept by the Registrar. Any notice or communication shall also be so
mailed to any Person described in TIA ss. 313(c), to the extent required by the
TIA. Failure to mail a notice or communication to a Holder or any defect in it
shall not affect its sufficiency with respect to other Holders.
If a notice or communication is mailed in the manner provided
above within the time prescribed, it is duly given, whether or not the addressee
receives it.
If the Company mails a notice or communication to Holders, it
shall mail a copy to the Trustee and each Agent at the same time.
Section 11.3. Communication by Holders of Exchange Debentures
with Other Holders of Exchange Debentures.
Holders may communicate pursuant to TIA ss. 312(b) with other
Holders with respect to their rights under this Exchange Debenture Indenture or
the Exchange Debentures. The Company the Trustee, the Registrar and anyone else
shall have the protection of TIA ss. 312(c).
Section 11.4. Certificate and Opinion as to Conditions
Precedent.
Upon any request or application by the Company to the Trustee
to take any action under this Exchange Debenture Indenture, the Company shall
furnish to the Trustee:
(a) an Officers' Certificate in form and substance
reasonably satisfactory to the Trustee (which shall include the statements set
forth in Section 11.5 hereof) stating that, in the opinion of the signers, all
conditions precedent and covenants, if any, provided for in this Exchange
Debenture Indenture relating to the proposed action have been complied with; and
(b) an Opinion of Counsel in form and substance
reasonably satisfactory to the Trustee (which shall include the statements set
forth in Section 11.5 hereof) stating that, in the opinion of such counsel, all
such conditions precedent and covenants have been complied with.
65
Section 11.5. Statements Required in Certificate or Opinion.
Each certificate or opinion with respect to compliance with a
condition or covenant provided for in this Exchange Debenture Indenture (other
than a certificate provided pursuant to TIA ss. 314(a)(4)) shall comply with the
provisions of TIA ss. 314(e) and shall include:
(a) a statement that the Person making such certificate
or opinion has read such covenant or condition;
(b) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions contained in
such certificate or opinion are based;
(c) a statement that, in the opinion of such Person, he
or she has made such examination or investigation as is necessary to enable him
or her to express an informed opinion as to whether or not such covenant or
condition has been complied with; and
(d) a statement as to whether or not, in the opinion of
such Person, such condition or covenant has been complied with.
Section 11.6. Rules by Trustee and Agents.
The Trustee may make reasonable rules for action by or at a
meeting of Holders. The Registrar or Paying Agent may make reasonable rules and
set reasonable requirements for its functions.
Section 11.7. No Personal Liability of Directors, Officers,
Employees and Stockholders.
No director, officer, employee, incorporator or stockholder of
the Company, as such, shall have any liability for any obligations of the
Company under the Exchange Debentures or this Exchange Debenture Indenture or
for any claim based on, in respect of, or by reason of, such obligations or
their creation. Each Holder of Exchange Debentures, by accepting a Exchange
Debenture, waives and releases all such liability. The waiver and release are
part of the consideration for issuance of the Exchange Debentures. Such waiver
may not be effective to waive liabilities under the federal securities laws and
it is the view of the Commission that such a waiver is against public policy.
Section 11.8. Governing Law.
THE INTERNAL LAW OF THE STATE OF NEW YORK WITHOUT GIVING
EFFECT TO CONFLICTS OF LAWS SHALL GOVERN AND BE USED TO CONSTRUE THIS EXCHANGE
DEBENTURE INDENTURE AND THE EXCHANGE DEBENTURES.
66
Section 11.9. No Adverse Interpretation of Other Agreements.
This Exchange Debenture Indenture may not be used to interpret
any other indenture, loan or debt agreement of the Company or their respective
Subsidiaries or of any other Person. Any such indenture, loan or debt agreement
may not be used to interpret this Exchange Debenture Indenture.
Section 11.10. Successors.
All agreements of the Company in this Exchange Debenture
Indenture, the Exchange Debentures shall bind its respective successors. All
agreements of the Trustee in this Exchange Debenture Indenture shall bind its
successors.
Section 11.11. Severability.
In case any provision in this Exchange Debenture Indenture or
in the Exchange Debentures shall be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby.
Section 11.12. Counterpart Originals.
The parties may sign any number of copies of this Exchange
Debenture Indenture. Each signed copy shall be an original, but all of them
together represent the same agreement.
Section 11.13. Table of Contents, Headings, Etc.
The Table of Contents, Cross-Reference Table and Headings of
the Articles and Sections of this Exchange Debenture Indenture have been
inserted for convenience of reference only, are not to be considered a part of
this Exchange Debenture Indenture and shall in no way modify or restrict any of
the terms or provisions hereof.
[Signatures on following page]
67
SIGNATURES
Dated as of
, 1998
- ------------------
CUMULUS MEDIA INC.
Attest: By:
------------------------------
Name:
----------------------------
Title:
- ------------------------------- ---------------------------
[TRUSTEE]
Attest: By:
------------------------------
Name:
----------------------------
Title:
- ------------------------------- ---------------------------
68
EXHIBIT A
(FACE OF EXCHANGE DEBENTURE)
13 3/4% Subordinated Exchange Debentures due 2009
No. $
CUSIP Number: --------------
CUMULUS MEDIA INC.
promises to pay to
or registered assigns,
the principal sum of
DOLLARS on July 1, 2009.
Interest Payment Dates: January 1 and July 1
Record Dates: December 15 and June 15
Dated: ,
---------------- ---------
CUMULUS MEDIA INC. By
By:
-----------------------------------
Name:
Title:
By:
-----------------------------------
Name:
Title:
This is one of the Exchange Debentures
referred to in the within-mentioned (SEAL)
Exchange Debenture Indenture:
as Trustee
By:
----------------------------------------
Authorized Signatory
A-1
(Back of Exchange Debenture)
13 3/4% Subordinated Exchange Debentures due 2009
Capitalized terms used herein shall have the meanings assigned to them
in the Exchange Debenture Indenture referred to below unless otherwise
indicated.
1. Interest. Cumulus Media Inc., a Delaware corporation (the
"Company"), promises to pay interest on the principal amount of this
Exchange Debenture at the rate of 13 3/4% per annum, which interest
shall be payable in cash semiannually in arrears on each January 1 and
July 1, or if any such day is not a Business Day, on the next
succeeding Business Day (each an "Interest Payment Date"); provided
that the first Interest Payment Date shall be _______________ ___,
____. Interest on the Exchange Debentures will accrue from the most
recent date to which interest has been paid or, if no interest has been
paid, from the date of original issuance. Interest will be computed on
the basis of a 360-day year comprised of twelve 30-day months.
2. Method of Payment. On each Interest Payment Date the Company
will pay interest to the Person who is the Holder of record of this
Exchange Debenture as of the close of business on the December 15 or
June 15 immediately preceding such Interest Payment Date, even if this
Exchange Debenture is cancelled after such record date and on or before
such Interest Payment Date, except as provided in Section 2.12 of the
Exchange Debenture Indenture with respect to defaulted interest.
Principal, premium, if any, and interest on this Exchange Debenture
will be payable at the office or agency of the Company maintained for
such purpose within the City and State of New York or, in the event the
Exchange Debentures do not remain in book-entry form, at the option of
the Company, payment of interest may be made by check mailed to the
Holder of this Exchange Debenture at its address set forth in the
register of Holders of Exchange Debentures; provided that all payments
with respect to the Global Exchange Debentures and definitive Exchange
Debentures having an aggregate principal amount of $5.0 million or more
the Holders of which have given wire transfer instructions to the
Company at least 10 Business Days prior to the applicable payment date
will be required to be made by wire transfer of immediately available
funds to the accounts specified by the Holders thereof. Such payment
shall be in such coin or currency of the United States of America as at
the time of payment is legal tender for payment of public and private
debts.
3. Paying Agent and Registrar. Initially, U.S. Bank Trust
National Association, the Trustee under the Exchange Debenture
Indenture, will act as Paying Agent and Registrar. The Company may
change any Paying Agent or Registrar without notice to any Holder. The
Company or any of the Company's Subsidiaries may act in any such
capacity.
4. Exchange Debenture Indenture. The Company issued the Exchange
Debentures under an Exchange Debenture Indenture dated as of
_______________ ___, ____, ("Exchange Debenture Indenture") between the
Company and the Trustee. The terms of the Exchange Debentures include
those stated in the Exchange Debenture Indenture and
A-2
those made part of the Exchange Debenture Indenture by reference to the
Trust Indenture Act of 1939, as amended (15 U.S. Code ss.ss.
77aaa-77bbbb). The Exchange Debentures are subject to all such terms,
and Holders are referred to the Exchange Debenture Indenture and such
Act for a statement of such terms. The Exchange Debentures are general
unsecured obligations of the Company equal in an aggregate principal
amount to $133,000,000 and will mature on July 1, 2009.
5. Optional Redemption.
(a) Except as otherwise described below, the Exchange
Debentures are not redeemable at the Company's option prior to
July 1, 2003. Thereafter, the Exchange Debentures will be
subject to redemption at the option of the Company, in whole
or in part, upon not less than 30 nor more than 60 days'
notice, at the redemption prices (expressed as percentages of
principal amount) set forth below plus accrued and unpaid
interest thereon to the applicable redemption date, if
redeemed during the twelve-month period beginning on July 1 of
the years indicated below:
Year Percentage
2003................................. 106.875%
2004................................. 105.156%
2005................................. 103.438%
2006................................. 101.719%
2007 and thereafter.................. 100.0000%
(b) Prior to July 1, 2001 the Company may, at its option,
on any one or more occasions, redeem up to 35% of the original
aggregate principal amount of Exchange Debentures at a
redemption price equal to 113 3/4% of the principal amount
thereof, plus accrued and unpaid interest, if any, thereon to
the redemption date, with the net proceeds of one or more
Equity Offerings (as defined in the Exchange Debenture
Indenture) of the Company; provided that at least 65% of the
original aggregate principal amount of Exchange Debentures
remain outstanding immediately after the occurrence of such
redemption; and provided, further, that any such redemption
shall occur within 90 days after the date of the closing of
any such Equity Offering (as defined in the Exchange Debenture
Indenture).
6. Mandatory Redemption.
Except as set forth in paragraph 7 below, the Company shall not be
required to make mandatory redemption or sinking fund payments with respect to
the Exchange Debentures.
7. Repurchase at Option of Holder.
(a) Upon the occurrence of a Change of Control, each
Holder of Exchange Debentures shall have the right to require
the Company to repurchase all or any
A-3
part (equal to $1,000 or an integral multiple thereof) of such
Holder's Exchange Debentures pursuant to the offer described
below (the "Change of Control Offer") at an offer price in
cash equal to 101% of the aggregate principal amount thereof
plus accrued and unpaid interest, if any, thereon to the date
of purchase (the "Change of Control Payment"). The right of
the Holders of the Exchange Debentures to require the Company
to repurchase such Exchange Debentures upon a Change of
Control may not be waived by the Trustee without the approval
of the Holders of the Exchange Debentures required by Section
9.2 of the Exchange Debenture Indenture. Within 30 days
following any Change of Control, the Company will mail a
notice to each Holder describing the transaction or
transactions that constitute the Change of Control and
offering to repurchase Exchange Debentures pursuant to the
procedures required by the Exchange Debenture Indenture and
described in such notice. The Change of Control Payment shall
be made on a business day not less than 30 days nor more than
60 days after such notice is mailed. The Company will comply
with the requirements of Rule 14e-1 under the Exchange Act and
any other securities laws and regulations thereunder to the
extent such laws and regulations are applicable in connection
with the repurchase of the Exchange Debentures as a result of
a Change of Control.
(b) If the Company or a Restricted Subsidiary consummates
any Asset Sales permitted by the Exchange Debenture Indenture,
when the aggregate amount of Excess Proceeds exceeds $5.0
million, the Company shall make an Asset Sale Offer to
purchase the maximum principal amount of Exchange Debentures
and any other Exchange Debenture Pari Passu Debt to which the
Asset Sale Offer applies that may be purchased out of the
Excess Proceeds, at an offer price in cash in an amount equal
to, in the case of the Exchange Debentures, 100% of the
principal amount thereof, plus accrued and unpaid interest
thereon to the date of purchase or, in the case of any
Exchange Debenture Pari Passu Debt, 100% of the principal
amount thereof (or with respect to discount Exchange Debenture
Pari Passu Debt, the accreted value thereof) on the date of
purchase, in each case, in accordance with the procedures set
forth in Section 3.9 of the Exchange Debenture Indenture or
the agreements governing the Exchange Debenture Pari Passu
Debt, as applicable. To the extent that the aggregate
principal amount (or accreted value, as the case may be) of
Exchange Debentures, and Exchange Debenture Pari Passu Debt
tendered pursuant to an Asset Sale Offer is less than the
Excess Proceeds, the Company may use any remaining Excess
Proceeds for general corporate purposes. If the sum of (i) the
aggregate principal amount of Exchange Debentures surrendered
by Holders thereof and (ii) the aggregate principal amount or
accreted value, as the case may be, of Exchange Debenture Pari
Passu Debt surrendered by holders or lenders thereof exceeds
the amount of Excess Proceeds, the Trustee and the trustee or
other lender representative for the Exchange Debenture Pari
Passu Debt shall select the Exchange Debentures and the other
Exchange Debenture Pari Passu Debt to be purchased on a pro
rata basis, based on the aggregate principal amount (or
accreted value, as applicable) thereof surrendered in such
Asset Sale Offer. Upon completion of such Asset Sale Offer,
the amount of Excess Proceeds shall be reset at zero.
A-4
8. Notice of Redemption. Notice of redemption will be mailed at
least 30 days but not more than 60 days before the redemption date to
each Holder whose Exchange Debentures are to be redeemed at its
registered address. Exchange Debentures in denominations larger than
$1,000 may be redeemed in part but only in integral multiples of
$1,000, unless all of the Exchange Debentures held by a Holder are to
be redeemed. On and after the redemption date interest ceases to accrue
on the aggregate principal amount of the Exchange Debentures called for
redemption.
9. Denominations, Transfer, Exchange. The Exchange Debentures may
be issued initially in the form of one or more fully registered Global
Exchange Debentures. The Exchange Debentures may also be issued in
registered form without coupons in minimum denominations of $1,000 and
integral multiples of $1,000. The transfer of Exchange Debentures may
be registered and Exchange Debentures may be exchanged as provided in
the Exchange Debenture Indenture. The Registrar and the Trustee may
require a Holder, among other things, to furnish appropriate
endorsements and transfer documents and the Company may require a
Holder to pay any taxes and fees required by law or permitted by the
Exchange Debenture Indenture. The Company need not exchange or register
the transfer of any Exchange Debenture or portion of a Exchange
Debenture selected for redemption, except for the unredeemed portion of
any Exchange Debenture being redeemed in part. Also, it need not
exchange or register the transfer of any Exchange Debenture for a
period of 15 days before a selection of Exchange Debentures to be
redeemed or during the period between a record date and the
corresponding Interest Payment Date.
10. Persons Deemed Owners. The registered Holder of a Exchange
Debenture may be treated as its owner for all purposes.
11. Amendment, Supplement and Waiver. Subject to certain
exceptions, the Exchange Debenture Indenture or the Exchange Debentures
may be amended or supplemented with the consent of the Holders of at
least a majority in aggregate principal amount of the Exchange
Debentures then outstanding (including, without limitation, consents
obtained in connection with a purchase of, or the tender offer or
exchange offer for, such Exchange Debentures), and any existing Default
or Event of Default under, or compliance with any provision of the
Exchange Debenture Indenture or the Exchange Debentures may be waived
with the consent of the Holders of a majority in principal amount of
the then outstanding Exchange Debentures (including consents obtained
in connection with a tender offer or exchange offer for the Exchange
Debentures). Without the consent of any Holder of a Exchange Debenture,
the Exchange Debenture Indenture or the Exchange Debentures may be
amended or supplemented to cure any ambiguity, defect or inconsistency,
to provide for uncertificated Exchange Debentures in addition to or in
place of certificated Exchange Debentures, to provide for the
assumption of the Company's obligations to Holders of the Exchange
Debentures in case of a merger or consolidation, to make any change
that would provide any additional rights or benefits to the Holders of
the Exchange Debentures or that does not adversely affect the legal
rights under the Exchange Debenture Indenture of any such Holder, or to
comply with the requirements of the Commission in order to effect or
maintain the qualification of the Exchange Debenture Indenture under
the Trust Indenture Act.
A-5
12. Defaults and Remedies. Events of Default include: (i) default
for 30 consecutive days in the payment when due of interest on the
Exchange Debentures (whether or not prohibited by the provisions of
Article 10 of the Exchange Debenture Indenture); (ii) default in
payment when due of the principal of or premium, if any, on the
Exchange Debentures (whether or not prohibited by the provisions of
Article 10 of the Exchange Debenture Indenture); (iii) failure by the
Company to comply with the provisions of Article 4 of the Exchange
Debenture Indenture; (iv) failure by the Company for 30 consecutive
days after notice from the Trustee or the Holders of at least 25% in
aggregate principal amount of the Exchange Debentures then outstanding
to comply with any of its other agreements in the Exchange Debenture
Indenture or the Exchange Debentures; (v) a default under any mortgage,
indenture or instrument under which there may be issued or by which
there may be secured or evidenced any Indebtedness for money borrowed
by the Company or any of its Restricted Subsidiaries (or the payment of
which is guaranteed by the Company or any of its Restricted
Subsidiaries) whether such Indebtedness or guarantee now exists, or is
created after the date of the Exchange Debenture Indenture, which
default (a) is caused by a failure to pay principal of or premium, if
any, or interest on such Indebtedness prior to the expiration of the
grace period provided in such Indebtedness on the date of such default
(a "Payment Default") or (b) results in the acceleration of such
Indebtedness prior to its express maturity and, in each case, the
principal amount of any such Indebtedness, together with the principal
amount of any other such Indebtedness under which there is then
existing a Payment Default or the maturity of which has been so
accelerated, aggregates $5.0 million or more; (vi) the failure by the
Company or any of its Restricted Subsidiaries to pay final,
non-appealable judgments aggregating in excess of $5.0 million, which
judgments remain unpaid or discharged for a period of 60 days; and
(vii) certain events of bankruptcy or insolvency with respect to the
Company or any Significant Subsidiary or any group of Subsidiaries
that, taken together, would constitute a Significant Subsidiary. If any
Event of Default (other than an Event of Default described in clause
(vii) above) occurs and is continuing, the Trustee or the Holders of at
least 25% in principal amount of the then outstanding Exchange
Debentures may declare all the Exchange Debentures to be due and
payable immediately. Notwithstanding the foregoing, in the case of an
Event of Default arising from certain events of bankruptcy or
insolvency with respect to the Company, any Significant Subsidiary or
any group of Subsidiaries that, taken together, would constitute a
Significant Subsidiary, all outstanding Exchange Debentures will become
due and payable without further action or notice. Holders of the
Exchange Debentures may not enforce the Exchange Debenture Indenture or
the Exchange Debentures except as provided in the Exchange Debenture
Indenture. Subject to certain limitations, Holders of a majority in
principal amount of the then outstanding Exchange Debentures may direct
the Trustee in its exercise of any trust or power. The Trustee may
withhold from Holders of the Exchange Debentures notice of any
continuing Default or Event of Default (except a Default or Event of
Default relating to the payment of principal or interest) if it
determines that withholding notice is in their interest. The Holders of
a majority in aggregate principal amount of the Exchange Debentures
then outstanding by notice to the Trustee may on behalf of the Holders
of all of the Exchange Debentures waive any existing Default or Event
of Default and its consequences under the Exchange Debenture Indenture
except a continuing Default or Event of Default in the payment of
interest or
A-6
premium on, or the principal of, the Exchange Debentures. The Company
is required to deliver to the Trustee annually a statement regarding
compliance with the Exchange Debenture Indenture, and the Company is
required, within 5 Business days after becoming aware of any Default or
Event of Default, to deliver to the Trustee a statement specifying such
Default or Event of Default.
13. Subordination. The Exchange Debentures are subordinated to
Exchange Debenture Senior Debt of the Company. To the extent provided
in the Exchange Debenture Indenture, Exchange Debenture Senior Debt
must be paid before the Exchange Debentures may be paid. The Company
agrees, and each Holder by accepting a Exchange Debenture agrees, that
the Indebtedness evidenced by the Exchange Debentures, including, but
not limited to, the payment of principal of, premium, if any, and
interest on the Exchange Debentures, and any other payment Obligation
of the Company in respect of the Exchange Debentures is subordinated in
right of payment, to the extent and in the manner provided in the
Exchange Debenture Indenture, to the prior payment in full in cash of
all Exchange Debenture Senior Debt of the Company (whether outstanding
on the date hereof or hereafter created, incurred, assumed or
guaranteed) and authorizes the Trustee to give effect and appoints the
Trustee as attorney-in-fact for such purpose.
14. Trustee Dealings with Company. The Exchange Debenture
Indenture contains certain limitations on the rights of the Trustee,
should it become a creditor of the Company, to obtain payment of claims
in certain cases, or to realize on certain property received in respect
of any such claim as security or otherwise. The Trustee will be
permitted to engage in other transactions; however, if it acquires any
conflicting interest it must eliminate such conflict within 90 days,
apply to the Commission for permission to continue or resign.
15. No Recourse Against Others. No director, officer, employee,
incorporator or stockholder of the Company, as such, shall have any
liability for any obligations of the Company under the Exchange
Debentures or the Exchange Debenture Indenture or for any claim based
on, in respect of, or by reason of, such obligations or their creation.
Each Holder of Exchange Debentures, by accepting a Exchange Debenture,
waives and releases all such liability. The waiver and release are part
of the consideration for issuance of the Exchange Debentures. Such
waiver may not be effective to waive liabilities under the federal
securities laws and it is the view of the Commission that such a waiver
is against public policy.
16. Authentication. This Exchange Debenture shall not be valid
until authenticated by the manual signature of the Trustee or an
authenticating agent.
17. Abbreviations. Customary abbreviations may be used in the name
of a Holder or an assignee, such as: TEN COM (= tenants in common), TEN
ENT (= tenants by the entireties), JT TEN (= joint tenants with right
of survivorship and not as tenants in common), CUST (= Custodian), and
U/G/M/A (= Uniform Gifts to Minors Act.
18. CUSIP Numbers. Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Company
has caused CUSIP numbers
A-7
to be printed on the Exchange Debentures and the Trustee may use CUSIP
numbers in notices of redemption as a convenience to Holders. No
representation is made as to the accuracy of such numbers either as
printed on the Exchange Debentures or as contained in any notice of
redemption and reliance may be placed only on the other identification
numbers placed thereon.
The Company will furnish to any Holder upon written request and without
charge a copy of the Exchange Debenture Indenture. Requests may be made to:
Cumulus Media Inc.
3535 Piedmont Road
Building 14, Fourteenth Floor
Atlanta, Georgia 30305
Attention: Secretary
A-8
ASSIGNMENT FORM
To assign this Security, fill in the form below: (I) or (we) assign and
transfer this Security to
- --------------------------------------------------------------------------------
(Insert assignee's Social Security or tax I.D. No.)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
and irrevocably appoint ________________________________________________________
agent to transfer this Security on the books of the Company. The agent may
substitute another to act for him.
- --------------------------------------------------------------------------------
Date:
--------------------
Your Signature:
------------------------------------------------
(Sign exactly as your name appears on the face of this Security)
Signature Guarantee:*
-------------------------------------------
- ----------------
(*) Participant in a recognized Signature Guarantee Medallion Program (or
other signature guarantor acceptable to the Trustee).
A-9
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Exchange Debenture purchased by the
Company pursuant to Section 4.10 or 4.13 of the Exchange Debenture Indenture,
check the box below:
|_| Section 4.10 |_| Section 4.13
If you want to elect to have only part of the Exchange Debenture
purchased by the Company pursuant to Section 4.10 or Section 4.13 of the
Exchange Debenture Indenture, state the principal amount you elect to have
purchased: $______________
Date: Your Signature:
(Sign exactly as your name appears on the face of this Security)
Signature Guarantee:*
--------------------------------------------------
- -------------
(*) Participant in a recognized Signature Guarantee Medallion Program (or
other signature guarantor acceptable to the Trustee).
A-10
EXHIBIT B
(FORM OF LEGEND FOR GLOBAL EXCHANGE DEBENTURE)
Unless and until it is exchanged in whole or in part for Exchange
Debentures in definitive form, this Exchange Debenture may not be transferred
except as a whole by the Depository to a nominee of the Depository or by a
nominee of the Depository to the Depository or another nominee of the Depository
or by the Depository or any such nominee to a successor Depository or a nominee
of such successor Depository. Unless this certificate is presented by an
authorized representative of The Depository Trust Company (55 Water Street, New
York, New York) ("DTC"), to the issuer or its agent for registration of
transfer, exchange or payment, and any certificate issued is registered in the
name of Cede & Co. or such other name as may be requested by an authorized
representative of DTC (and any payment is made to Cede & Co. or such other
entity as may be requested by an authorized representative of DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest
herein.
B-1
SCHEDULE OF EXCHANGES OF DEFINITIVE EXCHANGE DEBENTURES
[TO BE ATTACHED TO GLOBAL EXCHANGE DEBENTURE]
The following exchanges of a part of this Global Exchange Debenture for
definitive Exchange Debentures have been made:
Principal Amount Signature of
Amount of decrease Amount of increase in of this Global authorized officer
in Principal Amount Principal Amount of Exchange Debenture of Trustee or
of this Global this Global Exchange following such Exchange Debenture
Date of Exchange Exchange Debenture Debenture decrease (or increase) Custodian
- ---------------- ------------------ --------------------- ---------------------- ------------------
B-2
CROSS-REFERENCE TABLE*
Exchange Debenture
Trust Exchange Debenture Indenture Act Section Indenture Section
310 (a)(1)............................................................. 7.10
(a)(2)............................................................. 7.10
(a)(3)............................................................. N.A.
(a)(4)............................................................. N.A.
(a)(5)............................................................. 7.10
(b)................................................................ 7.10
(c)................................................................ N.A.
311 (a)................................................................ 7.11
(b)................................................................ 7.11
(c)................................................................ N.A.
312 (a)................................................................ 2.5
(b)................................................................ 12.3
(c)................................................................ 12.3
313 (a)................................................................ 7.6
(b)(1)............................................................. N.A.
(b)(2)............................................................. 7.7
(c)................................................................ 7.6; 12.2
(d)................................................................ 7.6
314 (a)................................................................ 4.3; 12.2
(b)................................................................ N.A.
(c)(1)............................................................. 12.4
(c)(2)............................................................. 12.4
(c)(3)............................................................. N.A.
(d)................................................................ 10.3-10.5
(e)................................................................ 12.5
(f)................................................................ N.A.
315 (a)................................................................ 7.1
(b)................................................................ 7.5; 12.2
(c)................................................................ 7.1
(d)................................................................ 7.1
(e)................................................................ 6.11
316 (a) (last sentence)................................................ 2.9
(a)(1)(A).......................................................... 6.5
(a)(1)(B).......................................................... 6.4
(a)(2)............................................................. N.A.
(b)................................................................ 6.7
(c)................................................................ 2.12
317 (a)(1)............................................................. 6.8
(a)(2)............................................................. 6.9
(b)................................................................ 2.4
318 (a)................................................................ 12.1
(b)................................................................ N.A.
(c)................................................................ 12.1
- -------------
N.A. means not applicable.
*This Cross-Reference Table is not part of the Exchange Debenture Indenture.
B-3
TABLE OF CONTENTS
PAGE
ARTICLE 1 DEFINITIONS AND INCORPORATION BY REFERENCE.................................................1
Section 1.1. Definitions.......................................................................1
Section 1.2. Other Definitions................................................................16
Section 1.3. Incorporation By Reference of Trust Indenture Act................................16
Section 1.4. Rules of Construction............................................................17
ARTICLE 2 THE EXCHANGE DEBENTURES...................................................................17
Section 2.1. Form and Dating..................................................................17
Section 2.2. Execution and Authentication.....................................................18
Section 2.3. Registrar and Paying Agent.......................................................19
Section 2.4. Paying Agent to Hold Money in Trust..............................................19
Section 2.5. Holder Lists.....................................................................19
Section 2.6. Transfer and Exchange............................................................20
Section 2.7. Replacement Exchange Debentures..................................................20
Section 2.8. Outstanding Exchange Debentures..................................................21
Section 2.9. Treasury Exchange Debentures.....................................................21
Section 2.10. CUSIP Number.....................................................................21
Section 2.11. Cancellation.....................................................................22
Section 2.12. Defaulted Interest...............................................................22
Section 2.13. Book-Entry Provisions for Global Exchange Debentures.............................22
ARTICLE 3 REDEMPTION AND PREPAYMENT.................................................................23
Section 3.1. Notices to Trustee...............................................................23
Section 3.2. Selection of Exchange Debentures to Be Redeemed..................................24
Section 3.3. Notice of Redemption.............................................................24
Section 3.4. Effect of Notice of Redemption...................................................25
Section 3.5. Deposit of Redemption Price......................................................25
Section 3.6. Exchange Debentures Redeemed in Part.............................................26
Section 3.7. Optional Redemption..............................................................26
Section 3.8. Mandatory Redemption.............................................................27
Section 3.9. Offer to Purchase By Application of Excess Proceeds..............................27
ARTICLE 4 COVENANTS.................................................................................29
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TABLE OF CONTENTS
(continued)
PAGE
Section 4.1. Payment of Exchange Debentures...................................................29
Section 4.2. Maintenance of Office or Agency..................................................29
Section 4.3. Reports..........................................................................30
Section 4.4. Compliance Certificate...........................................................30
Section 4.5. Taxes............................................................................31
Section 4.6. Stay, Extension and Usury Laws...................................................31
Section 4.7. Restricted Payments..............................................................31
Section 4.8. Dividend and Other Payment Restrictions Affecting Subsidiaries...................33
Section 4.9. Incurrence of Indebtedness and Issuance of Preferred Stock.......................34
Section 4.10. Asset Sales......................................................................35
Section 4.11. Transactions with Affiliates.....................................................36
Section 4.12. Liens............................................................................37
Section 4.13. Offer to Repurchase Upon Change of Control.......................................37
Section 4.14. Asset Swaps......................................................................38
Section 4.15. Corporate Existence..............................................................39
Section 4.16. Business Activities..............................................................39
Section 4.17. Issuances and Sales of Capital Stock of Wholly Owned Restricted Subsidiaries.....39
Section 4.18. Payments for Consent.............................................................39
Section 4.19. Designation of Unrestricted Subsidiaries.........................................40
ARTICLE 5 SUCCESSORS................................................................................40
Section 5.1. Merger, Consolidation, or Sale of Substantially All Assets.......................40
Section 5.2. Successor Corporation Substituted................................................41
ARTICLE 6 DEFAULTS AND REMEDIES.....................................................................41
Section 6.1. Events of Default................................................................41
Section 6.2. Acceleration.....................................................................42
Section 6.3. Other Remedies...................................................................43
Section 6.4. Waiver of Past Defaults..........................................................43
Section 6.5. Control by Majority..............................................................43
Section 6.6. Limitation on Suits..............................................................44
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TABLE OF CONTENTS
(continued)
PAGE
Section 6.7. Rights of Holders of Exchange Debentures to Receive Payment......................44
Section 6.8. Collection Suit by Trustee.......................................................44
Section 6.9. Trustee May File Proofs of Claim.................................................45
Section 6.10. Priorities.......................................................................45
Section 6.11. Undertaking for Costs............................................................46
ARTICLE 7 TRUSTEE...................................................................................46
Section 7.1. Duties of Trustee................................................................46
Section 7.2. Rights of Trustee................................................................47
Section 7.3. Individual Rights of Trustee.....................................................48
Section 7.4. Trustee's Disclaimer.............................................................48
Section 7.5. Notice of Defaults...............................................................48
Section 7.6. Reports by Trustee to Holders of the Exchange Debentures.........................49
Section 7.7. Compensation and Indemnity.......................................................49
Section 7.8. Replacement of Trustee...........................................................50
Section 7.9. Successor Trustee by Merger, etc.................................................51
Section 7.10. Eligibility; Disqualification....................................................51
Section 7.11. Preferential Collection of Claims Against Company................................51
ARTICLE 8 LEGAL DEFEASANCE AND COVENANT DEFEASANCE..................................................51
Section 8.1. Option to Effect Legal Defeasance or Covenant Defeasance.........................51
Section 8.2. Legal Defeasance and Discharge...................................................52
Section 8.3. Covenant Defeasance..............................................................52
Section 8.4. Conditions to Legal or Covenant Defeasance.......................................53
Section 8.5. Deposited Money and Government Securities to be Held in Trust;
Other Miscellaneous Provisions...................................................54
Section 8.6. Repayment to Company.............................................................54
Section 8.7. Reinstatement....................................................................55
ARTICLE 9 AMENDMENT, SUPPLEMENT AND WAIVER..........................................................55
Section 9.1. With Consent of Holders of Exchange Debentures...................................55
Section 9.2. Without Consent of Holders of Exchange Debentures................................56
Section 9.3. Compliance with Trust Indenture Act..............................................57
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TABLE OF CONTENTS
(continued)
PAGE
Section 9.4. Revocation and Effect of Consents................................................57
Section 9.5. Notation on or Exchange of Exchange Debentures...................................57
Section 9.6. Trustee to Sign Amendment, etc...................................................57
ARTICLE 10 SUBORDINATION.............................................................................58
Section 10.1. Agreement to Subordinate.........................................................58
Section 10.2. Certain Definitions..............................................................58
Section 10.3. Liquidation; Dissolution; Bankruptcy.............................................58
Section 10.4. Default on Designated Exchange Debenture Senior Debt.............................60
Section 10.5. Acceleration of Exchange Debentures..............................................61
Section 10.6. When Distribution Must Be Paid Over..............................................61
Section 10.7. Notice by Company................................................................61
Section 10.8. Subrogation......................................................................61
Section 10.9. Relative Rights..................................................................62
Section 10.10. Subordination May Not Be Impaired by Company.....................................62
Section 10.11. Payment, Distribution or Notice to Representative................................62
Section 10.12. Rights of Trustee and Paying Agent...............................................63
Section 10.13. Authorization to Effect Subordination............................................63
Section 10.14. Amendments.......................................................................63
Section 10.15. No Waiver of Subordination Provisions............................................64
ARTICLE 11 MISCELLANEOUS.............................................................................64
Section 11.1. Trust Indenture Act Controls.....................................................64
Section 11.2. Notices..........................................................................64
Section 11.3. Communication by Holders of Exchange Debentures with Other Holders
of Exchange Debentures...........................................................65
Section 11.4. Certificate and Opinion as to Conditions Precedent...............................65
Section 11.5. Statements Required in Certificate or Opinion....................................66
Section 11.6. Rules by Trustee and Agents......................................................66
Section 11.7. No Personal Liability of Directors, Officers, Employees and Stockholders.........66
Section 11.8. Governing Law....................................................................66
Section 11.9. No Adverse Interpretation of Other Agreements....................................67
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TABLE OF CONTENTS
(continued)
PAGE
Section 11.10. Successors.......................................................................67
Section 11.11. Severability.....................................................................67
Section 11.12. Counterpart Originals............................................................67
Section 11.13. Table of Contents, Headings, Etc.................................................67
-v-
APPENDIX B
CERTIFICATE OF DESIGNATIONS SETTING FORTH THE
VOTING POWER, PREFERENCES AND RELATIVE,
PARTICIPATING, OPTIONAL AND
OTHER SPECIAL RIGHTS
AND QUALIFICATIONS, LIMITATIONS
AND RESTRICTIONS
OF
12% SERIES B CUMULATIVE PREFERRED STOCK
OF
CUMULUS MEDIA INC.
The 12% Series B Cumulative Preferred Stock of Cumulus Media
Inc., a Delaware corporation (the "Company") (the "Series B Preferred Stock")
shall have the voting powers, preferences and relative participating, optional
and other special rights, and qualifications, limitations and restrictions
thereon as follows:
1. Certain Definitions.
Unless the context otherwise requires, the terms defined in this
Section 1 shall have, for all purposes of this resolution, the meanings herein
specified (with terms defined in the singular having comparable meanings when
used in the plural).
"Acquired Debt" means, with respect to any specified Person, (i)
Indebtedness of any other Person existing at the time such other Person is
merged with or into or becomes a Subsidiary of such specified Person,
including, without limitation, Indebtedness incurred in connection with, or in
contemplation of, such other Person merging with or into or becoming a
Subsidiary of such specified Person, and (ii) Indebtedness secured by a Lien
encumbering any asset acquired by such specified Person.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For purposes of this definition, "control"
(including, with correlative meanings, the terms "controlling," "controlled by"
and "under common control with"), as used with respect to any Person, shall
mean the possession, directly or indirectly, of the power to direct or cause
the
direction of the management or policies of such Person, whether through the
ownership of voting securities, by agreement or otherwise: provided, that
beneficial ownership of 10% or more of the voting securities of a Person shall
be deemed to be control.
"Attributable Debt" in respect of a sale and leaseback transaction
means, at the time of determination, the present value (discounted at the rate
of interest implicit in such transaction, determined in accordance with GAAP)
of the obligation of the lessee for net rental payments during the remaining
term of the lease included in such sale and leaseback transaction (including
any period for which such lease has been extended or may, at the option of the
lessor, be extended).
"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been duly adopted by
the Board of Directors, to be in full force and effect on the date of such
certification and delivered to the Transfer Agent.
"Business Day" means each Monday, Tuesday, Wednesday, Thursday and
Friday which is not a day on which banking institutions in New York City or the
State of Delaware are authorized or obligated by law or executive order to
close.
"Capital Lease Obligation" means, at the time any determination
thereof is to be made, the amount of the liability in respect of a capital
lease that would at such time be required to be capitalized on a balance sheet
in accordance with GAAP.
"Capital Stock" means (i) in the case of a corporation, corporate
stock, (ii) in the case of an association or business entity, any and all
shares, interests, participations, rights or other equivalents (however
designated) of corporate stock, (iii) in the case of a partnership, partnership
interests (whether general or limited), (iv) in the case of a limited liability
company or similar entity, any membership or similar interests therein and (v)
any other interest or participation that confers on a Person the right to
receive a share of the profits and losses of, or distributions of assets of,
the issuing Person.
"Cash Equivalents" means (i) United States dollars, (ii) securities
issued or directly and fully guaranteed or insured by the United States
government or any agency or instrumentality thereof having maturities of not
more than one year or less from the date of acquisition, (iii) certificates of
deposit and eurodollar time deposits with maturities of one year or less from
the date of acquisition, bankers' acceptances with maturities not exceeding one
year and overnight bank deposits, in each case with any lender party to the
Credit Facility or with any domestic commercial bank having capital and surplus
in excess of $500 million 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) above entered into
with any financial institution meeting the qualifications specified in clause
(iii) above and (v) commercial paper having a rating of at least P-2 from
Moody's Investors Service, Inc. (or its successor) and a rating of at least A-2
from Standard & Poor's Ratings Services (or its successor) and (vi) investments
in money market or other mutual funds substantially all of whose assets
comprise securities of types described in clauses (ii) through (v) above.
2
"Change of Control" has the meaning set forth in the Series A
Certificate of Designations.
"Change of Control Offer" has the meaning set forth in Section 8(a).
"Change of Control Payment" has the meaning set forth in Section 8(a).
"Change of Control Payment Date" has the meaning set forth in Section
8(d).
"Commission" means the Securities and Exchange Commission.
"Company" means Cumulus Media Inc., a Delaware corporation, including
its rights and interests as successor by merger to Cumulus Media Inc., an
Illinois corporation.
"Consolidated Cash Flow" means, with respect to any Person for any
period, the sum of, without duplication, the Consolidated Net Income of such
Person for such period plus (i) provision for taxes based on income or profits
of such Person and its Subsidiaries for such period, to the extent that such
provision for taxes was included in computing such Consolidated Net Income,
plus (ii) Consolidated Interest Expense of such Person for such period, to the
extent that any such expense was deducted in computing such Consolidated Net
Income, plus (iii) consolidated depreciation, amortization and other non-cash
charges of the Person and its Subsidiaries deducted in computing Consolidated
Net Income of such Person for such period plus (iv) cash payments with respect
to any non-cash charges previously added back pursuant to clause (iii).
Notwithstanding the foregoing, the provision for taxes on the income or profits
of, and the depreciation and amortization and other non-cash charges of, a
Subsidiary of the referent Person shall be added to Consolidated Net Income to
compute Consolidated Cash Flow only to the extent (and in the same proportion)
that the Net Income of such Subsidiary was included in calculating the
Consolidated Net Income of such Person.
"Consolidated Interest Expense" means, with respect to any Person for
any period, the sum, without duplication of (i) the consolidated interest
expense of such Person and its Restricted Subsidiaries for such period, whether
paid or accrued (including, without limitation, amortization of original issue
discount, non-cash interest payments, the interest component of any deferred
payment obligations, the interest component of all payments associated with
Capital Lease Obligations, imputed interest with respect to Attributable Debt,
commissions, discounts and other fees and charges incurred in respect of letter
of credit or bankers' acceptance financings, and net payments (if any) pursuant
to Hedging Obligations), (ii) the consolidated interest expense of such Person
and its Restricted Subsidiaries that was capitalized during such period, (iii)
any interest expense on Indebtedness of another Person that is guaranteed by
such Person or any of its Restricted Subsidiaries or secured by a Lien on
assets of such Person or any of its Restricted Subsidiaries (whether or not
such guarantee or Lien is called upon) and (iv) the product of (a) all cash
dividend payments (and non-cash dividend payments in the case of a Person that
is a Restricted Subsidiary) on any series of preferred stock of such Person or
any of its Restricted Subsidiaries, times (b) a fraction, the numerator of
which is one and the denominator of which is one minus the then current
combined federal, state and local statutory tax rate of such Person, expressed
as a decimal; in each case on a consolidated basis and in accordance with GAAP.
3
"Consolidated Net Income" means, with respect to any Person for any
period, the aggregate of the Net Income of such Person and its Subsidiaries for
such period, on a consolidated basis, determined in accordance with GAAP;
provided that (i) the Net Income (but not loss) of any Person that is not a
Restricted Subsidiary or that is accounted for by the equity method of
accounting shall be included only to the extent of the amount of dividends or
distributions paid in cash to the referent Person or a Restricted Subsidiary
thereof, (ii) the Net Income of any Subsidiary shall be excluded to the extent
that the declaration or payment of dividends or similar distributions by that
Subsidiary of that Net Income is not at the date of determination permitted
without any prior government approval (that has not been obtained) or, directly
or indirectly, by operation of the terms of its charter or any agreement,
instrument, judgment, decree, order, statute, rule or governmental regulation
applicable to that Subsidiary or its stockholders, (iii) the Net Income of any
Person acquired in a pooling-of-interests transaction for any period prior to
the date of such acquisition shall be excluded, (iv) the cumulative effect of a
change in accounting principles shall be excluded, and (v) all other
extraordinary gains and extraordinary losses shall be excluded.
"Continuing Directors" has the meaning set forth in the Series A
Certificate of Designations.
"Conversion Effective Date" has the meaning set forth in Section 6(d).
"Conversion Notice" has the meaning set forth in Section 6(d).
"Conversion Notice Date" means as to any conversion of Series B
Preferred Stock, the date the Conversion Notice is issued.
"Conversion Price" has the meaning set forth in Section 6(a).
"Conversion Rate" has the meaning set forth in Section 6(a).
"Conversion Right" has the meaning set forth in Section 6(a).
"Credit Agreements" means, with respect to the Company, one or more
debt facilities (including, without limitation, the Credit Facility) or
commercial paper facilities with banks or other institutional lenders providing
for revolving credit loans, term loans, production payments, receivables
financing (including through the sale of receivables to such lenders or to
special purpose entities formed to borrow from such lenders against such
receivables) or letters of credit; in each case, as amended, restated,
modified, renewed, refunded, replaced or refinanced in whole or in part from
time to time. Indebtedness under Credit Agreements outstanding on the Issue
Date (after giving effect to the use of proceeds thereof) shall be deemed to
have been incurred on such date in reliance on the exception provided by clause
(b) of the definition of Permitted Indebtedness.
"Credit Facility" means that certain Amended and Restated Credit
Agreement, dated as of August 31, 1999, as amended, by and among the
Predecessor, Lehman Brothers Inc., as advisor, lead arranger and book manager,
Barclays Capital as syndication agent, and Lehman Commercial Paper Inc. as
administrative agent, and certain banks, financial institutions and other
entities, as lenders, providing for up to $225.0 million of Indebtedness,
including any related
4
notes, guarantees, collateral documents, instruments and agreements executed in
connection therewith, and in each case as amended, restated, modified, renewed,
refunded, replaced or refinanced, in whole or in part, from time to time,
whether or not with the same lenders or agents.
"DGCL" means the Delaware General Corporation Law, as amended.
"Disqualified Stock" means any Capital Stock that, by its terms (or by
the terms of any security into which it is convertible or for which it is
exchangeable), or upon the happening of any event, matures or is mandatorily
redeemable, pursuant to a sinking fund obligation or otherwise, is convertible
or exchangeable for Indebtedness or Disqualified Stock or redeemable at the
option of the holder thereof, in whole or in part, on or prior to the date that
is 91 days after the Mandatory Redemption Date; provided however, that any
Capital Stock that would constitute Disqualified Stock solely because the
holders thereof (or of any security into which it is convertible or for which
it is exchangeable) have the right to require the issuer to repurchase such
Capital Stock (or such security into which it is convertible or for which it is
exchangeable) upon the occurrence of any of the events constituting a Change of
Control shall not constitute Disqualified Stock if such Capital Stock (and all
such securities into which it is convertible or for which it is exchangeable)
provides that the issuer thereof will not repurchase or redeem any such Capital
Stock (or any such security into which it is convertible or for which it is
exchangeable) pursuant to such provisions prior to compliance by the Company
with the provisions of Section 8.
"Dividend Payment Date" has the meaning set forth in Section 3(a).
"Dividend Rate" has the meaning set forth in Section 3(a).
"Dividend Shares" means shares of Series B Preferred Stock paid by the
Company to Holders of then outstanding shares of Series B Preferred Stock as
dividends on such outstanding shares in accordance with this Series B
Certificate of Designations.
"Equity Interests" means Capital Stock and all warrants, options or
other rights to acquire Capital Stock (but excluding any debt security that is
convertible into, or exchangeable for, Capital Stock).
"Equity Offering" means any public or private sale of the Common Stock
of the Company pursuant to which the Company receives net proceeds of at least
$25.0 million, other than issuances of Common Stock of the Company pursuant to
employee benefit plans or as compensation to employees.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Four Quarter Period" has the meaning provided within the definition
of "Leverage Ratio".
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board
5
or in such other statements by such other entity as have been approved by a
significant segment of the accounting profession, which are in effect on the
Issue Date.
"Guarantee" means a guarantee (other than by endorsement of negotiable
instruments for collection in the ordinary course of business), direct or
indirect, in any manner (including, without limitation, letters of credit and
reimbursement agreements in respect thereof), of all or any part of any
Indebtedness.
"Guarantor Senior Debt" means (i) Indebtedness of any Subsidiary
Guarantor under or in respect of any Credit Agreement, whether for principal,
interest (including interest accruing after the filing of a petition initiating
any proceeding pursuant to any bankruptcy law, whether or not the claim for
such interest is allowed as a claim in such proceeding), reimbursement
obligations, fees, commissions, expenses, indemnities or other amounts, and
(ii) any other Indebtedness of any Subsidiary Guarantor permitted under the
terms of the Notes Indenture, unless the instrument under which such
Indebtedness is incurred expressly provides that it is on a parity with or
subordinated in right of payment to the Subsidiary Guarantees. Notwithstanding
anything to the contrary in the foregoing sentence, Guarantor Senior Debt will
not include (w) any liability for federal, state, local or other taxes owed by
a Subsidiary Guarantor, (x) any Indebtedness of a Subsidiary Guarantor to any
of its Subsidiaries or other Affiliates or (y) any Indebtedness that is
incurred in violation of the Notes Indenture (other than Indebtedness under (i)
the Credit Facility or (ii) any other Credit Agreement that is incurred on the
basis of a representation by the Company to the applicable lenders that the
applicable Subsidiary Guarantor is permitted to incur such Indebtedness under
the Notes Indenture).
"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 with respect to
Indebtedness that is permitted by Section 9(a) and (ii) other agreements or
arrangements designed to protect such Person against fluctuation in interest
rates or the value of foreign currencies purchased or received by such Person
in the ordinary course of business.
"Holder" means a Person in whose name a share of Series B Preferred
Stock is registered.
"Incur" means, with respect to any Indebtedness or other obligation of
any Person, to create, incur, issue, assume, guarantee or otherwise become
liable contingently or otherwise (and "Incurrence", "Incurred", "Incurrable"
and "Incurring" shall have meanings correlative to the foregoing).
"Indebtedness" means, with respect to any Person, any indebtedness of
such Person, whether or not contingent, (i) in respect of borrowed money, or
(ii) evidenced by bonds, notes, debentures or similar instruments or letters of
credit or reimbursement agreements in respect thereof (other than letters of
credit securing obligations not constituting Indebtedness that are issued in
the ordinary course of business by a Person to the extent not drawn upon or, if
and to the extent drawn upon, such drawing is reimbursed no later than the
tenth Business Day following receipt by such Person of a demand for
reimbursement following payment on the letter of credit) or bankers'
acceptances, or (iii) representing Capital Lease Obligations or the balance
6
deferred and unpaid of the purchase price of any property or services, except
any such balance that constitutes an accrued expense or trade payable for such
property or service, or (iv) representing any Hedging Obligations, in each case
if and to the extent any of the foregoing indebtedness (other than letters of
credit and Hedging Obligations) would appear as a liability upon a balance
sheet of such Person prepared in accordance with GAAP, as well as all
Indebtedness of others secured by a Lien on any asset of such Person (whether
or not such Indebtedness is assumed by such Person) and, to the extent not
otherwise included, the Guarantee by such Person of any Indebtedness of any
other Person.
"Investments" means, with respect to any Person, all investments by
such Person in other Persons (including Affiliates) in the forms of direct or
indirect loans (including guarantees of Indebtedness or other obligations),
advances or capital contributions (excluding commission, travel and similar
advances to officers and employees made in the ordinary course of business and
extensions of trade credit in the ordinary course of business), purchases or
other acquisitions for consideration of Indebtedness. Equity Interests or other
securities, together with all items that are or would be classified as
investments on a balance sheet prepared in accordance with GAAP. If the Company
or any Restricted Subsidiary of the Company sells or otherwise disposes of any
Equity Interests of any direct or indirect Restricted Subsidiary of the Company
such that, after giving effect to any such sale or disposition, such Person is
no longer a Subsidiary of the Company, the Company shall be deemed to have made
an Investment on the date of any such sale or disposition equal to the fair
market value of the Equity Interests of such Subsidiary not sold or disposed
of.
"Issue Date" means the date on which any shares of Series B Preferred
Stock are initially issued.
"Junior Securities" has the meaning set forth in Section 2.
"Leverage Ratio" means the ratio of (i) the aggregate outstanding
amount of Indebtedness of the Company and its Subsidiaries as of the date of
calculation on a consolidated basis in accordance with GAAP (subject to the
terms described in the next paragraph) plus the aggregate liquidation
preference of all outstanding Disqualified Stock of the Company and preferred
stock of the Company's Subsidiaries (except preferred stock issued to the
Company or a Wholly Owned Subsidiary of the Company) on such date to (ii) the
Consolidated Cash Flow of the Company for the four full fiscal quarters (the
"Four Quarter Period") ending on or prior to the date of determination.
For purposes of this definition, (i) the amount of Indebtedness which
is issued at a discount shall be deemed to be the accreted value of such
Indebtedness at the end of the Four Quarter Period, whether or not such amount
is the amount then reflected on a balance sheet prepared in accordance with
GAAP and (ii) the aggregate outstanding principal amount of Indebtedness of the
Company and its Subsidiaries and the aggregate liquidation preference of all
outstanding preferred stock of the Company's Subsidiaries for which such
calculation is made shall be determined on a pro forma basis as if the
Indebtedness and preferred stock giving rise to the need to perform such
calculation had been incurred and issued and the proceeds therefrom had been
applied, and all other transactions in respect of which such Indebtedness is
being incurred or preferred stock is being issued had occurred, on the first
day of the Four Quarter
7
Period. In addition to the foregoing, for purposes of this definition,
Consolidated Cash Flow shall be calculated on a pro forma basis after giving
effect to (i) the incurrence of the Indebtedness of such Person and its
Subsidiaries and the issuance of the preferred stock of such Subsidiaries (and
the application of the proceeds therefrom) giving rise to the need to make such
calculation and any incurrence (and the application of the proceeds therefrom)
or repayment of other Indebtedness, other than the incurrence or repayment of
Indebtedness pursuant to working capital facilities, at any time subsequent to
the beginning of the Four Quarter Period and on or prior to the date of
determination, as if such incurrence or issuance (and the application of the
proceeds thereof), or the repayment, as the case may be, occurred on the first
day of the Four Quarter Period, (ii) any acquisition (including, without
limitation, any acquisition giving rise to the need to make such calculation as
a result of such Person or one of its Subsidiaries (including any Person that
becomes a Subsidiary as a result of such acquisition) incurring, assuming or
otherwise becoming liable for Indebtedness or such Person's Subsidiaries
issuing preferred stock) at any time on or subsequent to the first day of the
Four Quarter Period and on or prior to the date of determination, as if such
acquisition (including the incurrence, assumption or liability for any such
Indebtedness and the issuance of such preferred stock and also including any
Consolidated Cash Flow associated with such acquisition) occurred on the first
day of the Four Quarter Period. For purposes of this definition, whenever pro
forma effect is to be given to a transaction, the pro forma calculations shall
be made in good faith by a responsible financial or accounting officer of the
Company consistent with Article 11 of Regulation S-X, promulgated pursuant to
the Securities Act, as such Regulation is in effect on the Issue Date.
Furthermore, in calculating "Consolidated Interest Expense" for purposes of the
calculation of "Consolidated Cash Flow," (i) interest on Indebtedness
determined on a fluctuating basis as of the date of determination (including
Indebtedness actually incurred on the date of the transaction giving rise to
the need to calculate the Leverage Ratio) and which will continue to be so
determined thereafter shall be deemed to have accrued at a fixed rate per annum
equal to the rate of interest on such Indebtedness as in effect on the date of
determination and (ii) notwithstanding (i) above, interest determined on a
fluctuating basis, to the extent such interest is covered by Hedging
Obligations, shall be deemed to accrue at the rate per annum resulting after
giving effect to the operation of such agreements.
"Lien" means, with, respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset,
whether or not filed, recorded or otherwise perfected under applicable law
(including any conditional sale or other title retention agreement, any lease
in the nature thereof any option or other agreement to sell or give a security
interest in and any filing of or agreement to give any financing statement
under the Uniform Commercial Code (or equivalent statutes) of any jurisdiction
other than a precautionary financing statement with respect to a lease not
intended as a security agreement).
"Liquidation Preference" means $10,000.00 per share of Series B
Preferred Stock.
"Mandatory Redemption Date" means October 3, 2009.
"Net Income" means, with respect to any Person, the net income (loss)
of such Person, determined in accordance with GAAP and after any reduction in
respect of preferred stock dividends, excluding, however, (i) any gain or loss,
together with any related provision for taxes on such gain or loss, realized in
connection with (a) any asset sale (including, without limitation,
8
dispositions pursuant to sale and leaseback transactions) or asset swap or (b)
the disposition of any securities by such Person or any of its Restricted
Subsidiaries or the extinguishment of any Indebtedness of such Person or any of
its Restricted Subsidiaries and (ii) any extraordinary or nonrecurring gain or
loss, together with any related provision for taxes on such extraordinary or
nonrecurring gain or loss.
"Non-Recourse Debt" means Indebtedness (i) as to which neither the
Company nor any of its Restricted Subsidiaries (a) provides any guarantee or
credit support of any kind (including any undertaking, guarantee, indemnity,
agreement or instrument that would constitute Indebtedness), or (b) is directly
or indirectly liable (as a guarantor or otherwise); (ii) no default with
respect to which (including any rights that the holders thereof may have to
take enforcement action against an Unrestricted Subsidiary) would permit (upon
notice, lapse of time or both) any holder of any other Indebtedness of the
Company or any of its Restricted Subsidiaries to declare a default on such
other Indebtedness or cause the payment thereof to be accelerated or payable
prior to its stated maturity; and (iii) the explicit terms of which provide
that there is no recourse against any of the assets of the Company or its
Restricted Subsidiaries.
"Notes Indenture" means the Indenture dated July 1, 1998, among the
Predecessor, the Subsidiary Guarantors and the trustee in respect thereof,
pursuant to which the Senior Subordinated Notes were issued.
"Obligations" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any Indebtedness.
"Officers' Certificate" means a certificate signed by two officers at
least one of whom shall be the principal executive officer, principal
accounting officer or principal financial officer of the Company and delivered
to the Transfer Agent.
"Opinion of Counsel" means a written opinion of counsel, who may be
counsel for the Company, and who shall be reasonably acceptable to the Transfer
Agent, delivered to the Transfer Agent.
"Parity Securities" has the meaning set forth in Section 2.
"Paying Agent" means Firstar Trust Company, a state bank organized and
existing under the laws of the State of Wisconsin.
"Permitted Business" means the broadcasting business or any business
that is reasonably similar thereto or a reasonable extension, development or
expansion thereof or ancillary thereto.
"Permitted Indebtedness" means (a) Indebtedness evidenced by the
Senior Subordinated Notes and the Subsidiary Guarantees; (b) Indebtedness
pursuant to Credit Agreements, so long as the aggregate principal amount of all
Indebtedness outstanding under all Credit Agreements does not, at any one time,
exceed $175.0 million, less the aggregate amount of all mandatory prepayments
of principal applied since the date of the Series A Certificate of Designations
to permanently reduce the outstanding amount of such Indebtedness; (c)
Indebtedness of the Company and its Restricted Subsidiaries in existence as of
the date of the Series A Certificate of
9
Designations; (d) intercompany Indebtedness between or among the Company and
any of its Wholly Owned Restricted Subsidiaries; provided, however, that (i)
any subsequent issuance or transfer of Equity Interests that results in any
such Indebtedness being held by a Person other than the Company or a Wholly
Owned Restricted Subsidiary and (ii) any sale or other transfer of any such
Indebtedness to a Person that is not either the Company or a Wholly Owned
Restricted Subsidiary shall be deemed, in each case, to constitute an
incurrence of such Indebtedness by the Company or such Restricted Subsidiary,
as the case may be; (e) Indebtedness represented by Capital Lease Obligations,
mortgage financings or purchase money obligations, in each case incurred for
the purpose of financing all or any part of the purchase price, lease or cost
of construction or improvement of property, plant or equipment used in a
Permitted Business in an aggregate principal amount not to exceed $15.0 million
at any time outstanding; (f) the incurrence by the Company or its Restricted
Subsidiaries of Permitted Refinancing Debt in exchange for, or the net proceeds
of which are used to refund, refinance or replace Indebtedness (other than
intercompany Indebtedness) that is permitted by this Series B Certificate of
Designations to be incurred; (g) the incurrence by the Company or its
Restricted Subsidiaries of Hedging Obligations that are incurred for the
purpose of fixing or hedging interest rate risk with respect to any floating or
variable rate Indebtedness or for the purpose of protecting against
fluctuations in interest rates or the value of foreign currencies purchased or
received, in each case in respect of Indebtedness that is permitted by the
terms of this Series B Certificate of Designations to be outstanding; provided,
however, that in the case of Hedging Obligations that are incurred for the
purpose of fixing or hedging interest rate risks with respect to Indebtedness,
the notional principal amount of any such Hedging Obligation does not exceed
the principal amount of the Indebtedness to which such Hedging Obligation
relates and in the case of Hedging Obligations incurred for the purpose of
protecting against fluctuations in interest rates or the value of foreign
currencies purchased or received, such Hedging Obligations do not increase the
Indebtedness of the Company and its Restricted Subsidiaries outstanding other
than as a result of fluctuations in foreign currency exchange rates or by
reason of fees, indemnities and compensation payable thereunder; (h)
Indebtedness incurred solely in respect of performance, surety and similar
bonds or completion guarantees, to the extent that such incurrence does not
result in the incurrence of any obligation for the payment of borrowed money to
others; (i) Indebtedness arising out of standby letters of credit covering
workers compensation, performance or similar obligations in an aggregate amount
not to exceed $500,000 at any time outstanding; (j) any guarantee of the
Company of Indebtedness or other obligations of any of its Restricted
Subsidiaries so long as the incurrence of such Indebtedness incurred by such
Restricted Subsidiary is permitted under the terms of this Certificate of
Designations; (k) the incurrence by the Company of additional Indebtedness in
an aggregate principal amount (or accreted value, as applicable) at any time
outstanding not to exceed $10.0 million; (l) the issuance of shares of Series A
Preferred Stock issued as dividends on the Series A Preferred Stock outstanding
on the Issue Date or issued subsequent to the Issue Date as dividends permitted
pursuant to this clause (l), to the extent such dividends are made pursuant to
the terms of the Series A Certificate of Designations as in effect on the Issue
Date, on any Preferred Stock issued in exchange for the Series A Preferred
Stock, or any dividends on such Preferred Stock to the extent such dividends
are made pursuant to the terms of the Series A Certificate of Designations of
such Preferred Stock; (m) the issuance of Dividend Shares issued on the Series
B Preferred Stock outstanding on the Issue Date or issued subsequent to the
Issue Date as dividends permitted pursuant to this clause (m), to the extent
such dividends are made pursuant
10
to the terms of this Statement of Resolution Fixing Terms as in effect on the
Issue Date, on any Preferred Stock issued in exchange for the Series B
Preferred Stock, or any dividends on such Preferred Stock to the extent such
dividends are made pursuant to the terms of the this Series B Certificate of
Designations of such Preferred Stock; and (n) Guarantor Senior Debt
constituting Guarantees by the Subsidiary Guarantors of Indebtedness incurred
under the Credit Facility that is permitted by the terms of this Series B
Certificate of Designations to be incurred.
"Permitted Investments" means (a) any Investment in the Company or in
a Wholly Owned Restricted Subsidiary of the Company; (b) any Investment in Cash
Equivalents or securities issued or directly and fully guaranteed or insured by
the United States government or any agency or instrumentality thereof having
maturities of not more than one year from the date of acquisition; (c) any
Investment by the Company or any Restricted Subsidiary of the Company in a
Person if, as a result of such Investment, (i) such Person becomes a Wholly
Owned Restricted Subsidiary of the Company or (ii) such Person is merged,
consolidated or amalgamated with or into, or transfers or conveys all or
substantially all of its assets to, or is liquidated into, the Company or a
Wholly Owned Restricted Subsidiary of the Company; (d) any Investment made as a
result of the receipt of non-cash consideration from an asset sale; (e) other
Investments in any Person or Persons having an aggregate fair market value
(measured on the date each such Investment was made and without giving effect
to subsequent changes in value), when taken together with all other Investments
made pursuant to this clause (e) that are at the time outstanding without
giving effect to subsequent changes in value or increases or decreases
attributable to the accounting for the net income of such Investment, not to
exceed $15.0 million; (f) any Investment acquired by the Company in exchange
for Equity Interests in the Company (other than Disqualified Stock); (g) any
Investment acquired by the Company or any of its Restricted Subsidiaries (i) in
exchange for any other Investment or accounts receivable held by the Company or
any such Restricted Subsidiary in connection with or as a result of a
bankruptcy, workout, reorganization or recapitalization of the issuer of such
other Investment or accounts receivable or (ii) as a result of the transfer of
title with respect to any secured investment in default as a result of a
foreclosure by the Company or any of its Restricted Subsidiaries with respect
to such secured Investment; (h) Hedging Obligations permitted under Section
9(a); (i) loans and advances to officers, directors and employees for
business-related travel expenses, moving expenses and other similar expenses,
in each case, incurred in the ordinary course of business; (j) any guarantees
permitted to be made pursuant to Section 9(a); and (k) all Investments of the
Company and its Restricted Subsidiaries in existence as of the date hereof.
"Permitted Refinancing Debt" means any Indebtedness of the Company or
any of its Restricted Subsidiaries issued in exchange for, or the net proceeds
of which are used to extend, refinance, renew, replace, defease or refund other
Indebtedness (other than Indebtedness incurred under a Credit Agreement) of the
Company or any of its Restricted Subsidiaries; provided that: (i) the principal
amount of such Permitted Refinancing Debt does not exceed the principal amount
of the Indebtedness so extended, refinanced, renewed, replaced, defeased or
refunded (plus the amount of reasonable expenses incurred in connection
therewith); (ii) such Permitted Refinancing Debt has a final maturity date on
or later than the final maturity date of, and has a Weighted Average Life to
Maturity equal to or greater than the Weighted Average Life to Maturity of, the
Indebtedness being extended, refinanced, renewed, replaced, defeased or
refunded; and (iii) such Indebtedness is incurred either by the Company or by
the Restricted
11
Subsidiary who is the obligor on the Indebtedness being extended, refinanced,
renewed, replaced, defeased or refunded.
"Person" means any individual, corporation, partnership, joint
venture, trust, unincorporated organization or government or any agency or
political subdivision thereof.
"Predecessor" means Cumulus Media Inc., an Illinois corporation, as
predecessor to the Company.
"Preferred Stock" means, with respect to any Person, any and all
shares of Capital Stock of such Person that have preferential rights to any
other Capital Stock of such Person with respect to dividends or redemptions or
upon liquidation.
"Principal" means Richard W. Weening and Lewis W. Dickey, Jr.
"Purchase Agreement" means that certain Securities Purchase Agreement
dated October 2, 2000 between the Predecessor and the initial purchasers of
shares of Series B Preferred Stock, as modified or amended in accordance with
the terms thereof.
"Record Date" has the meaning set forth in Section 3(a).
"Redemption Date" has the meaning set forth in Section 5(d).
"Related Party" with respect to any Principal means (i) any
controlling stockholder, 80% (or more) owned subsidiary, or spouse or immediate
family member (in the case of an individual) of such Principal or (ii) any
trust, corporation, partnership or other entity, the beneficiaries,
stockholders, partners, owners or Persons beneficially holding an 80% or more
controlling interest of which consist of such Principal and/or such other
Persons referred to in the immediately preceding clause (i).
"Restricted Investment" means an Investment other than a Permitted
Investment.
"Restricted Payment" means (i) the declaration or payment of any
dividend or the making of any distribution on account of any Junior Securities
(other than dividends or distributions payable in Junior Securities (other than
Disqualified Stock)), (ii) the purchase, redemption or other acquisition or the
retirement of, for value, any Junior Securities or (iii) the making of any
Investment (other than a Permitted Investment) in any Person.
"Restricted Subsidiary" means any direct or indirect Subsidiary of the
Company that is not an Unrestricted Subsidiary.
"Redemption Price" has the meaning set forth in Section 5(a).
"Securities Act" means the Securities Act of 1933, as amended.
"Senior Subordinated Notes" means the 10 3/8% Senior Subordinated
Notes Due 2008 originally issued by the Predecessor on July 1, 1998.
12
"Series A Issue Date" means the date on which shares of Series A
Preferred Stock were initially issued.
"Series A Preferred Stock" means the 13.75% Series A Cumulative
Convertible Redeemable Preferred Stock Due 2009 issued pursuant to the Series A
Certificate of Designations.
"Series B Preferred Stock" means the 12% Series B Cumulative Preferred
Stock issued pursuant to this Series B Certificate of Designations.
"Series A Certificate of Designations" means the Certificate of
Designations Setting Forth the Voting Power, Preferences and Relative,
Participating, Optional and other Special Rights and Qualifications,
Limitations and Restrictions of the 13 3/4 Series A Cumulative Exchangeable
Redeemable Preferred Stock due 2009 of the Company, subsequent to the merger of
the Predecessor with and into the Company, and, prior to such merger, the
Statement of Resolutions Fixing Terms of Voting Power, Preferences and
Relative, Participating, Optional and other Special Rights and Qualifications,
Limitations and Restrictions of the 13 3/4 Series A Cumulative Exchangeable
Redeemable Preferred Stock due 2009 of the Predecessor, as in effect on the
Issue Date.
"Series B Certificate of Designations" means this Certificate of
Designations Setting Forth the Voting Power, Preferences and Relative,
Participating, Optional and Other Special Rights and Qualifications,
Limitations and Restrictions of 12% Series B Cumulative Preferred Stock of the
Company, subsequent to the merger of the Predecessor with and into the Company,
and, prior to such merger, the Statement of Resolutions Fixing Terms of Voting
Power, Preferences and Relative, Participating, Optional and Other Special
Rights and Qualifications, Limitations and Restrictions of 12% Series B
Cumulative Preferred Stock of the Predecessor.
"Subsidiary" means, with respect to any Person, (i) any corporation,
association or other business entity of which more than 50% of the total voting
power of shares of Capital Stock, entitled (without regard to the occurrence of
any contingency) to vote in the election of directors, managers or trustees
thereof is at the time owned or controlled, directly or indirectly, by such
Person or one or more of the other Subsidiaries of that Person (or a
combination thereof) and (ii) any partnership (a) the sole general partner or
the managing general partner of which is such Person or a Subsidiary of such
Person or (b) the only general partners of which are such Person or one or more
Subsidiaries of such Person (or any combination thereof).
"Subsidiary Guarantees" means each of the Guarantees entered into by
each Subsidiary Guarantor of the Company dated as of the date of the Note
Indenture and each Guarantee entered into by each Restricted Subsidiary created
or acquired by the Company thereafter.
"Subsidiary Guarantors" means each Subsidiary of the Company party to
a Subsidiary Guarantee.
"Transfer Agent" means Firstar Trust Company, a state bank organized
and existing under the laws of the State of Wisconsin.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as
amended.
13
"Undesignated Shares" means shares of the preferred stock of the
Company which are authorized under its Certificate of Incorporation, are not
issued and outstanding, and have not been assigned to a series of preferred
stock.
"Unrestricted Subsidiary" means (i) any Subsidiary of the Company
which at the time of determination shall be an Unrestricted Subsidiary (as
designated by the Board of Directors of the Company, as provided below), (ii)
any Subsidiary of an Unrestricted Subsidiary and (iii) CCC. The Board of
Directors of the Company may designate any Subsidiary of the Company (including
any newly acquired or newly formed Subsidiary or a Person becoming a Subsidiary
through merger or consolidation or Investment therein) to be an Unrestricted
Subsidiary only if (a) such Subsidiary does not own any Capital Stock of, or
own or hold any Lien on any property of, any other Subsidiary of the Company
which is not a Subsidiary of the Subsidiary to be so designated or otherwise an
Unrestricted Subsidiary; (b) all the Indebtedness of such Subsidiary shall, at
the date of designation, and will at all times thereafter, consist of
Non-Recourse Debt; (c) the Company certifies that such designation complies
with Section 9(c); (d) such Subsidiary, either alone or in the aggregate with
all other Unrestricted Subsidiaries, does not operate, directly or indirectly,
all or substantially all of the business of the Company and its Subsidiaries;
(e) such Subsidiary does not, directly or indirectly, own any Indebtedness of
or Equity Interest in, and has no Investments in, the Company or any Restricted
Subsidiary; (f) such Subsidiary is a Person with respect to which neither the
Company nor any of its Restricted Subsidiaries has any direct or indirect
obligation (1) to subscribe for additional Equity Interests or (2) to maintain
or preserve such Person's financial condition or to cause such Person to
achieve any specified levels of operating results; and (g) on the date such
Subsidiary is designated an Unrestricted Subsidiary, such Subsidiary is not a
party to any agreement, contract, arrangement or understanding with the Company
or any Restricted Subsidiary with terms substantially less favorable to the
Company than those that might have been obtained from Persons who are not
Affiliates of the Company. Any such designation by the Board of Directors of
the Company shall be evidenced by a resolution of the Board of Directors of the
Company giving effect to such designation and an Officers' Certificate
certifying that such designation complied with the foregoing conditions. If, at
any time, any Unrestricted Subsidiary would fail to meet the foregoing
requirements as an Unrestricted Subsidiary, it shall thereafter cease to be an
Unrestricted Subsidiary for purposes of this Certificate of Designations and
any Indebtedness of such Subsidiary shall be deemed to be incurred as of such
date. 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 Voting Rights Triggering Event shall have
occurred and be continuing or would occur as a consequence thereof and the
Company could incur at least $1.00 of additional Indebtedness (excluding
Permitted Indebtedness) pursuant to Section 9(a)(i) on a pro forma basis taking
into account such designation.
"Voting Rights Amendment" means an amendment to the By-laws of the
Company providing for an increase in the size of the Board of Directors of the
Company to, at all times, accommodate the appointment of a sufficient number of
directors designated by the Holders of Series B Preferred Stock in compliance
with clauses (a) and (b) of Section 7(b).
"Voting Rights Triggering Event" has the meaning set forth in Section
7(b).
14
"Weighted Average Life to Maturity" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing (i) the sum
of the products obtained by multiplying (a) the amount of each then remaining
installment, sinking fund, serial maturity or other required payments of
principal, including payment at final maturity, in respect thereof, by (b) the
number of years (calculated to the nearest one-twelfth) that will elapse
between such date and the making of such payment, by (ii) the then outstanding
principal amount of such Indebtedness.
"Wholly Owned Restricted Subsidiary" of any Person means a Restricted
Subsidiary of such Person all of the outstanding Capital Stock or other
ownership interests of which (other than directors' qualifying shares) shall at
the time be owned, directly or indirectly, by such Person or by one or more
Wholly Owned Restricted Subsidiaries of such Person.
2. Ranking.
(a) The Series B Preferred Stock shall, with respect to
dividend distributions and distributions upon the liquidation, winding-up and
dissolution of the Company, rank (i) senior to all classes of common stock of
the Company and to each other class of Capital Stock of the Company established
after the Issue Date by the Board of Directors of the Company the terms of
which do not expressly provide that it ranks on a parity with the Series B
Preferred Stock as to dividend distributions and distributions upon the
liquidation, winding-up and dissolution of the Company (collectively referred
to, together with all classes of common stock of the Company, as "Junior
Securities"); (ii) subject to certain conditions described below, on a parity
with each series of preferred stock existing on the Issue Date the terms of
which do not expressly provide that it ranks junior to the Series B Preferred
Stock as to dividend distributions and distributions upon the liquidation,
winding-up and dissolution of the Company and any class or series of Capital
Stock established after the Issue Date by the Board of Directors of the
Company, the terms of which expressly provide that such class or series will
rank on a parity with the Series B Preferred Stock as to dividend distributions
and distributions upon the liquidation, winding-up and dissolution of the
Company (collectively referred to as "Parity Securities"). The Shares of Series
B Preferred Stock shall rank on parity with the Series A Preferred Stock as to
dividend distributions and distribution upon the liquidation, winding up and
dissolution of the Company, and Parity Securities shall include, without
limitation, the shares of Series A Preferred Stock.
(b) The Company shall not authorize or issue any new
class of Parity Securities without the affirmative vote or consent (voting or
consenting as one class) of the holders of at least 50% of the shares of Series
B Preferred Stock then outstanding, voting or consenting, as the case may be,
as one class; provided, that, without the approval of Holders of the Series B
Preferred Stock, the Company may issue shares of Parity Securities in exchange
for, or the proceeds of which are used to redeem or purchase, any or all of the
shares of the Series B Preferred Stock or other Parity Securities then
outstanding.
3. Dividends.
(a) The Holders of the outstanding shares of the Series
B Preferred Stock shall be entitled to receive, when, as and if declared by the
Board of Directors out of funds of the
15
Company legally available therefor, dividends on the Series B Preferred Stock,
which shall accrue at a rate per annum equal to 12% of the Liquidation
Preference (the "Dividend Rate"). If at any time dividends on the Series B
Preferred Stock are in arrears and unpaid for four consecutive quarterly
dividend periods, holders of Series B Preferred Stock will be entitled to the
voting rights specified in Section 7 of this Series B Certificate of
Designations. All dividends will be cumulative, whether or not earned or
declared on a daily basis, from the Issue Date and will be payable quarterly in
arrears on July 1, October 1, January 1 and April 1,of each year, commencing on
January 1, 2001, or, if any such date is not a Business Day, on the next
succeeding Business Day (each, a "Dividend Payment Date") to the Holders on the
June 15, September 15, December 15 or March 15 immediately preceding the
relevant Dividend Payment Date (each, a "Record Date"). The Company may, at its
option, pay dividends in cash or in Dividend Shares (including fractional
shares, provided that the Company may, at its option, pay cash in lieu of
issuing fractional shares) having an aggregate Liquidation Preference equal to
the amount of such dividends. The issuance of such Dividend Shares shall
constitute "payment" of the related dividend for all purposes of this Series B
Certificate of Designations. Dividends payable on the Series B Preferred Stock
will be computed on the basis of a 360-day year consisting of twelve 30-day
months and the number of days actually elapsed and will be deemed to accrue on
a daily basis.
(b) Dividend Rate Adjustment Following Default. The
Dividend Rate shall be adjusted from 12% of the Liquidation Preference per
annum to 17% of Liquidation Preference per annum on the first day next
following the occurrence of a breach of any of the terms of this Series B
Certificate of Designations or a breach of any of the terms of (i) Section(s)
8.1, 8.4, 8.6, 8.8, 8.9, 8.10, 8.11, 8.17, 8.18 or 11.13, (ii) Article IX, or
(iii) Article X of the Purchase Agreement (each, a "Specified Event of
Default") and shall continue to accrue at such adjusted per annum rate through
and including the day following the date on which such Specified Event of
Default or breach has been cured or waived in writing by the holders of not
less than a majority of the aggregate number of shares of Series B Preferred
Stock outstanding (such period being herein referred to as the "Covenant
Default Period"). Such adjusted Dividend Rate shall automatically be readjusted
from the default rate applicable during the Covenant Default Period as provided
above to 12% of the Liquidation Preference per annum on the day following the
date on which such Specified Event of Default or breach is cured as provided in
the Purchase Agreement or waived in writing by the holders of not less than a
majority of the aggregate number of shares of Series B Preferred Stock
outstanding.
(c) No full dividends shall be declared or paid or funds
set apart for the payment of dividends on any Parity Securities for any period
unless full cumulative dividends shall have been or contemporaneously are
declared and paid (or are deemed declared and paid) in full or declared and, if
payable in cash, a sum in cash sufficient for such payment set apart for such
payment on the Series B Preferred Stock. If full dividends are not so paid, the
Series B Preferred Stock will share dividends pro rata with the Parity
Securities. Unless full cumulative dividends on all outstanding shares of
Series B Preferred Stock for all past dividend periods shall have been declared
and paid, or declared and a sufficient sum for the payment thereof set apart,
then: (i) no dividend (other than a dividend on Junior Securities payable
solely in shares of any Junior Securities) shall be declared or paid upon (or
deemed paid), or any sum set apart for the payment of dividends upon, any
shares of Junior Securities; (ii) no shares of Junior Securities or Parity
Securities shall be repurchased, redeemed or otherwise acquired or retired by
the
16
Company or any of its Subsidiaries except as permitted under Section 9(c)
hereof; and (iii) no monies shall be paid into or set apart or made available
for a sinking or other like fund for the purchase, redemption or other
acquisition or retirement for value of any shares of Junior Securities or
Parity Securities by the Company or any of its Subsidiaries. Dividends on
account of arrears for any past dividend period and dividends in connection
with any optional redemption may be declared and paid at any time, without
reference to any regular Dividend Payment Date, to holders of record of the
Series B Preferred Stock on such date, not more than 45 days prior to the
payment thereof, as may be fixed by the Board of Directors of the Company.
4. Liquidation Preference.
Upon any voluntary or involuntary liquidation, dissolution or
winding-up of the Company, Holders of Series B Preferred Stock shall be
entitled to payment, out of the assets of the Company available for
distribution to stockholders, the Liquidation Preference per share of Series B
Preferred Stock, plus, without duplication, an amount in cash equal to all
accumulated and unpaid dividends thereon to but excluding the date fixed for
liquidation, dissolution or winding-up (including an amount equal to a prorated
dividend for the period from the last Dividend Payment Date to the date fixed
for liquidation, dissolution or winding-up), before any distribution is made on
any Junior Securities, including, without limitation, common stock of the
Company. If, upon any voluntary or involuntary liquidation, dissolution or
winding-up of the Company, the amounts payable with respect to the Series B
Preferred Stock and all other Parity Securities are not paid in full, the
Holders of the Series B Preferred Stock and the Parity Securities shall share
equally and ratably in any distribution of assets of the Company in proportion
to the full liquidation preference to which each is entitled. After payment of
the full amount of the Liquidation Preference and accumulated and unpaid
dividends to which they are entitled, the Holders of shares of Series B
Preferred Stock shall not be entitled to any further participation in any
distribution of assets of the Company. However, neither the sale, conveyance,
exchange or transfer (for cash, shares of stock, securities or other
consideration) of all or substantially all of the property or assets of the
Company nor the consolidation or merger of the Company with or into one or more
Persons shall be deemed to be a liquidation, dissolution or winding-up of the
Company, unless such sale, conveyance, exchange or transfer shall be in
connection with a liquidation, dissolution or winding-up of the business of the
Company.
5. Redemption by the Company.
(a) On the Mandatory Redemption Date, the Company shall
be required to redeem (subject to the legal availability of funds therefor and
to Section 170 of the DGCL) all outstanding shares of Series B Preferred Stock
at a price (the "Redemption Price") equal to 100% of the then effective
Liquidation Preference thereof, plus, without duplication, an amount in cash
equal to all accumulated and unpaid dividends, if any, to but excluding the
Redemption Date (including an amount in cash equal to a prorated dividend for
the period from the Dividend Payment Date immediately prior to the Redemption
Date). The Company shall not be required to make sinking fund payments to
protect the Liquidation Preference with respect to the Series B Preferred
Stock.
(b) The Series B Preferred Stock may be redeemed
(subject to contractual and other restrictions with respect thereto, to the
legal availability of funds therefor and to
17
Section 170 of the DGCL) at any time, in whole or from time to time in part, at
the option of the Company at the Redemption Price.
(c) In the event of partial redemptions of Series B
Preferred Stock, the shares to be redeemed will be determined pro rata or by
lot, as determined by the Company, provided that the Company may redeem such
shares held by any Holder of fewer than 100 shares (or shares held by Holders
who would hold less than 100 shares as a result of such redemption), without
regard to any pro rata redemption requirement.
(d) Notice of any redemption shall be sent by or on
behalf of the Company not less than 30 nor more than 60 days prior to the date
specified for redemption in such notice (including the Mandatory Redemption
Date, the "Redemption Date"), by first class mail, postage prepaid, to all
Holders of record of the Series B Preferred Stock at their registered address.
In addition to any information required by law or by the applicable rules of
any exchange upon which Series B Preferred Stock may be listed or admitted to
trading, such notice shall state: (i) whether such redemption is being made
pursuant to the optional or the mandatory redemption provisions hereof; (ii)
the Redemption Date; (iii) the redemption price; (iv) if less than all the
outstanding shares of Series B Preferred Stock are to be redeemed, the
Liquidation Preference of, and the accrued and unpaid dividends on, the shares
of Series B Preferred Stock to be redeemed; (v) that on the Redemption Date the
redemption price shall become due and payable upon each share of Series B
Preferred Stock to be redeemed; and (vii) the place or places where shares are
to be surrendered for payment of the redemption price. Upon the mailing of any
such notice of redemption, the Company shall become obligated to redeem at the
time of redemption specified thereon all shares called for redemption.
(e) If notice has been mailed in accordance with Section
5(d) above and, provided that on or before the Redemption Date specified in
such notice, all funds necessary for such redemption shall have been segregated
and irrevocably set apart by the Company, in trust for the pro rata benefit of
the Holders of the shares so called for redemption, so as to be, and to
continue to be available therefor, then, on and after the Redemption Date,
unless the Company defaults in the payment of the applicable redemption price,
dividends on the shares of the Series B Preferred Stock so called for
redemption shall cease to accumulate and all rights of the Holders of such
shares shall terminate except for the right to receive from the Company the
redemption price, without interest; provided, however, that if a notice of
redemption shall have been given and the funds necessary for redemption
(including an amount in respect of all dividends that will accrue to the
Redemption Date) shall have been segregated and irrevocably set apart by the
Company, in trust for the pro rata benefit of the Holders of the shares called
for redemption, dividends shall cease to accumulate on the Redemption Date on
the shares to be redeemed and, at the close of business on the day on which
such funds are segregated and set apart, the Holders of the shares to be
redeemed shall cease to be stockholders of the Company and shall be entitled
only to receive the redemption price for such shares. New certificates of
Series B Preferred Stock having an aggregate Liquidation Preference equal to
the unredeemed portion of the Series B Preferred Stock shall be issued in the
name of the Holder thereof upon cancellation of the original shares of Series B
Preferred Stock without cost to the Holder thereof. Upon surrender, in
accordance with said notice, of the certificates for any shares so redeemed
(properly endorsed or assigned for transfer, if the Company shall so require
and the notice shall so state), such shares shall be redeemed by the Company at
the applicable redemption price. Shares of Series B
18
Preferred Stock issued and reacquired by the Company pursuant to this Section 5
shall, upon compliance with the applicable requirements of Delaware law, have
the status of Undesignated Shares of the Company, and may, with any and all
other Undesignated Shares of the Company, be designated or redesignated, and
issued or reissued, as the case may be, as part of any series of preferred
stock of the Company, except that any issuance or reissuance of shares of
Series B Preferred Stock must be in compliance with this Series B Certificate
of Designations.
(f) Any deposit of funds with a bank or trust company
for the purpose of redeeming Series B Preferred Stock shall be irrevocable
except that:
(i) the Company shall be entitled to receive
from such bank or trust company the interest or other
earnings, if any, earned on any money so deposited in trust,
and the Holders of any shares redeemed shall have no claim to
such interest or other earnings; and
(ii) any balance of monies so deposited by the
Company and unclaimed by the Holders of the Series B
Preferred Stock entitled thereto at the expiration of two
years from the applicable Redemption Date shall be repaid,
together with any interest or other earnings earned thereon,
to the Company, and after any such repayment, the holders of
the shares entitled to the funds so repaid to the Company
shall look only to the Company for payment without interest
or other earnings.
(g) No Series B Preferred Stock may be redeemed except
with funds legally available for the purpose. The Company shall take all
actions required or permitted under the DGCL to permit any redemption which is
required pursuant to clause (a) above or which the Company elects pursuant to
clause (b) above.
(h) No optional redemption may be authorized or made (i)
unless prior thereto or contemporaneously therewith full unpaid cumulative
dividends shall have been paid or a sum set apart for such payment on the
Series B Preferred Stock and on the Series A Preferred Stock, or (ii) at a
price less than 101 % of the Liquidation Preference of the Series B Preferred
Stock at any time when the Company is making an offer to purchase shares of
Series B Preferred Stock under a Change of Control Offer in accordance with
Section 8.
6. Conversion Rights. The Holders shall have conversion rights
in respect of the shares of Series B Preferred Stock as follows (the
"Conversion Rights"):
(a) The shares of Series B Preferred Stock shall be
convertible, at the times and under the conditions described in this Section 6
hereafter, at the rate (the "Conversion Rate") of one share of Series B
Preferred Stock into the number of shares of Class B Common Stock that equals
the quotient obtained by dividing the Liquidation Preference by the Conversion
Price (defined hereinafter). Thus, the number of shares Class B Common Stock to
which a Holder shall be entitled upon any conversion provided for in this
Section 6 shall be the product obtained by multiplying the Conversion Rate by
the number of shares of Series B Preferred Stock being converted. Such
conversion shall be deemed to have been made on the Conversion Effective Date
(defined hereinafter), and such conversion shall be effected in accordance with
the
19
procedures described herein below. Upon conversion of any shares of Series B
Preferred Stock, the Company shall pay all declared or accrued but unpaid
dividends as to such shares to the Holders thereof to and through the
Conversion Effective Date; provided, however, that the Company may, at its
option, in lieu of making a full cash payment of all such declared or accrued
but unpaid dividends, make payment thereof in that number of whole shares of
Class B Common Stock calculated by dividing the total of such declared or
accrued but unpaid dividends due such Holders by the Conversion Price. The
"Conversion Price" shall be equal to the lower of (i) the closing sale prices
of the Company's Class A Common Stock as reported by the NASDAQ Stock Market on
the Conversion Notice Date (or the first trading day prior thereto if such date
is not a trading day), or (ii) the average of the closing sales prices of the
Company's Class A Common Stock as reported by the NASDAQ Stock Market for the
twenty (20)-day trading period prior to the Conversion Notice Date (weighted by
daily trading volume); provided, however, that if on any day the Class A Common
Stock is not quoted on the NASDAQ Stock Market, then, as of the any applicable
date, the average of the highest bid and lowest asked prices in the domestic
over-the-counter market as reported by the National Quotation Bureau,
Incorporated or any similar successor organization, or if on any date the Class
A Common Stock is not so quoted on the National Quotation Bureau, Incorporated,
then as of the Conversion Notice Date the average (weighted by daily trading
volume) of the closing prices of the Class A Common Stock on the principal
securities exchange on which such security may be listed at the time.
(b) Each share of Series B Preferred Stock shall be
convertible, at the option of the Holder thereof, at any time on or after March
30, 2002, or at any time after the occurrence of a Specified Event of Default,
in respect of such share at the office of the Company or any transfer agent for
the Series B Preferred Stock, into Class B Common Stock at the then effective
Conversion Rate.
(c) No fractional shares of Class B Common Stock shall
be issued upon conversion of Series B Preferred Stock, and any shares of Series
B Preferred Stock surrendered for conversion that would otherwise result in a
fractional share of Class B Common Stock shall be redeemed at the then
effective Conversion Price per share, payable as promptly as possible when
funds are legally available therefor.
(d) Before any Holder shall be entitled to receive
certificates representing the shares of Class B Common Stock into which shares
of Series B Preferred Stock are converted in accordance with this Section 6,
such Holder shall surrender the certificate or certificates for such shares of
Series B Preferred Stock, duly endorsed, at the office of the Company or of any
transfer agent for the Series B Preferred Stock, and shall give written notice
to the certificates for shares of Class B Common Stock to be issued, if
different from the name shown on the books and records of the Company. Said
conversion notice ("Conversion Notice") shall also contain such representations
of the Holder as may reasonably be required by the Company to the effect that
the shares to be received upon conversion are not being acquired and will not
be transferred in any way that might violate the then applicable securities
laws. In the case of a conversion pursuant to this Section 6, the Company
shall, on or before the fifteenth (15th) day following receipt by the Company
of the Conversion Notice, issue and deliver at such office to such Holder, or
to the nominee or nominees of such Holder as provided in the Conversion Notice,
a certificate or certificates for the number of shares of Class B Common Stock
to which such
20
Holder shall be entitled as aforesaid. Such date for issuance and delivery of
the shares of Class B Common Stock received upon conversion of Preferred Stock
pursuant to this Section 6 is hereafter referred to as the Conversion Effective
Date. The person or persons entitled to receive the shares of Class B Common
Stock issuable upon a conversion pursuant to this Section 6 shall be treated
for all purposes as the record holder or holders of such shares of Common Stock
as of the Conversion Effective Date. All certificates issued upon the exercise
or occurrence of the conversion shall contain a legend governing restrictions
upon such shares imposed by law or agreement of the Holder or his or its
predecessors.
(e) In the event the Company at any time or from time to
time after the Issue Date effects a subdivision or combination of the
outstanding Class B Common Stock into a greater or lesser number of shares
without a proportionate and corresponding subdivision or combination of the
outstanding Series B Preferred Stock, then and in each such event the
Conversion Price to the extent then determined, (and the corresponding
Conversion Rate) shall be increased or decreased proportionately.
(f) The Company shall not, by amendment of its
Certificate of Incorporation or By-laws or through any reorganization, transfer
of assets, consolidation, merger, dissolution, issue or sale of securities or
any other voluntary action, avoid or seek to avoid the observance or
performance of any of the terms to be observed or performed hereunder by the
Company, but shall at all times in good faith assist in the carrying out of all
the provisions of this Section 6 and in the taking of all such action as may be
necessary or appropriate in order to protect the Conversion Rights of the
Holders against impairment.
(g) The Company shall at all times reserve and keep
available out of its authorized but unissued shares of Class B Common Stock
solely for the purpose of effecting the conversion of the shares of the Series
B Preferred Stock, to the extent such authorized but unissued shares of Class B
Common Stock are available as of the Issue Date, such number of its shares of
Class B Common Stock as shall from time to time be sufficient to effect the
conversion of all outstanding shares of the Series B Preferred Stock; and if at
any time after the Issue Date the number of authorized but unissued shares of
Class B Common Stock shall be insufficient to effect the conversion of all then
outstanding shares of the Series B Preferred Stock, the Company shall take such
corporate action as it may deem necessary to increase its authorized but
unissued shares of Class B Common Stock to such number of shares as shall be
sufficient for such purpose.
7. Voting Rights.
(a) The Holders of shares of Series B Preferred Stock
shall have no voting rights, except as required by non-waivable provisions of
Delaware law and as hereinafter provided in this Section 7. It is the intention
of this Section 7(a) to deny voting rights to holders of shares of Series B
Preferred Stock except (i) as specifically granted in Sections 7(b) through
7(i), and (ii) to the extent that non-waivable provisions of Delaware law
preclude the denial of voting rights to holders of shares of Series B Preferred
Stock.
21
(b) If:
(i) at any time, dividends on the outstanding
Series B Preferred Stock are in arrears and unpaid for four
(4) consecutive quarterly dividend periods;
(ii) the Company fails to discharge any
redemption obligation with respect to the Series B Preferred
Stock (whether or not the Company is permitted to do so by
the terms of the Credit Facility, the Senior Subordinated
Notes, the DGCL, or any other obligation of the Company);
(iii) the Company fails to make a Change of
Control Offer on the terms and in accordance with the
provisions described below in Section 8 hereof (whether or
not the Company is permitted to do so by the terms of the
Credit Facility, the Senior Subordinated Notes or any other
obligation of the Company) or fails to purchase shares of
Series B Preferred Stock from Holders who elect to have such
shares purchased pursuant to the Change of Control Offer;
(iv) the Company breaches or violates any of the
other covenants or agreements set forth in Section 9 hereof
and such breach or violation continues for a period of 60
days or more after the Company receives notice thereof
specifying the default from the Holders of at least 25% of
the shares of Series B Preferred Stock then outstanding; or
(v) the Company or any Restricted Subsidiary
defaults under the terms of any mortgage, indenture or
instrument under which there may be issued or by which there
may be secured or evidenced any Indebtedness for money
borrowed by the Company or any of its Restricted Subsidiaries
(or the payment of which is guaranteed by the Company or any
of its Restricted Subsidiaries) whether such Indebtedness or
guarantee now exists, or is created after the date of this
Certificate of Designations, which default (A) is caused by a
failure to pay principal of or premium, if any, or interest
on such Indebtedness prior to the expiration of the grace
period provided in such Indebtedness on the date of such
default (a "Payment Default") or (B) results in the
acceleration of such Indebtedness prior to its express
maturity and, in each case, the principal amount of any such
Indebtedness, together with the principal amount of any other
such Indebtedness under which there is then existing a
Payment Default or the maturity of which has been so
accelerated, aggregates $5.0 million or more (each of the
events described in clauses (i), (ii), (iii), (iv) and (v)
being referred to herein as a "Voting Rights Triggering
Event");
then, the number of directors constituting the Board of Directors of the
Company will be adjusted to permit the holders of the majority of the then
outstanding Series B Preferred Stock, voting separately as a class, to elect
two directors.
(c) Whenever the foregoing voting rights shall have
vested, such rights may be exercised initially either at a special meeting of
the Holders of Series B Preferred Stock, called as hereinafter provided, or at
any annual meeting of stockholders held for the purpose of electing directors,
and thereafter at such annual meetings or by the written consent of the Holders
of Series B Preferred Stock. Such right of the Holders of Series B Preferred
Stock to elect
22
directors may be exercised until (i) all dividends in arrears shall have been
paid in full (ii) all other failures, breaches or defaults giving rise to such
Voting Rights Triggering Event are remedied or waived by the Holders of at
least a majority of the shares of Series B Preferred Stock then outstanding, at
which time the term of such directors previously elected pursuant to the
provisions of this Section 7(b) shall thereupon terminate, and such directors
shall be deemed to have resigned.
(d) At any time when the foregoing voting rights shall
have vested in the Holders of Series B Preferred Stock and if such rights shall
not already have been initially exercised, a proper officer of the Company
shall, upon the written request of Holders of record of 10% or more of the
Series B Preferred Stock then outstanding, addressed to the Secretary of the
Company, call a special meeting of Holders of Series B Preferred Stock. Such
meeting shall be held at the earliest practicable date based upon the number of
days of notice required for annual meetings of stockholders at the place for
holding annual meetings of stockholders of the Company or, if none, at a place
designated by the Secretary of the Company. If such meeting shall not be called
by the officers of the Company within 30 days after the personal service of
such written request upon the Secretary of the Company, or within 30 days after
mailing the same within the United States, by registered mail, addressed to the
Secretary of the Company at its principal office (such mailing to be evidenced
by the registry receipt issued by the postal authorities), then the Holders of
record of 10% of the shares of Series B Preferred Stock then outstanding may
designate in writing a Holder of Series B Preferred Stock to call such meeting
at the expense of the Company, and such meeting may be called by such person so
designated upon the number of days of notice required for annual meetings of
stockholders and shall be held at the place for holding annual meetings of the
Company or, if none, at a place designated by such Holder. Any Holder of Series
B Preferred Stock that would be entitled to vote at such meeting shall have
access to the stock books of the Company for the purpose of causing a meeting
of stockholders to be called pursuant to the provisions of this Section 7.
Notwithstanding the provisions of this Section 7(d) however, no such special
meeting shall be called if any such request is received less than 90 days
before the date fixed for the next ensuing annual or special meeting of
stockholders.
(e) If any director so elected by the Holders of Series
B Preferred Stock shall cease to serve as a director before his term shall
expire, the Holders of Series B Preferred Stock then outstanding may, at a
special meeting of the Holders called as provided above, elect a successor to
hold office for the unexpired term of the director whose place shall be vacant.
(f) In addition to the matters set forth in Section
2(b), the Company shall not, without the affirmative vote or consent of the
Holders of at least a majority of the shares of Series B Preferred Stock then
outstanding (with shares held by the Company or any of its Affiliates not being
considered to be outstanding for this purpose) voting or consenting as the case
may be, as one class merge, consolidate or sell all or substantially all of the
assets of the Company except as permitted pursuant to Section 9(b).
(g) In addition to the matters set forth in clause (f)
above, except as stated above under Section 2, the Company shall not, without
the affirmative vote or consent of holders of at least a 50% of the shares of
Series B Preferred Stock then outstanding (with shares held by
23
the Company or any of it of its Affiliates not being considered to be
outstanding for this purpose), voting or consenting, as the case may be, as one
class:
(i) amend this Series B Certificate of
Designations so as to adversely affect the specified rights,
preferences, privileges or voting rights of holders of shares
of the Series B Preferred Stock, or
(ii) increase the number of authorized shares of
the Company designated as Series B Preferred Stock.
(h) Without the consent of each Holder affected, an
amendment or waiver of the Company's Certificate of Incorporation or of this
Series B Certificate of Designations may not (with respect to any shares of
Series B Preferred Stock held by a non-consenting Holder):
(i) alter the voting rights with respect to the
Series B Preferred Stock (provided, however, that the consent
of Holders of Series B Preferred Stock shall not be required
to approve the Voting Rights Amendment) or reduce the number
of shares of Series B Preferred Stock whose holders must
consent to an amendment, supplement or waiver of the terms of
this Series B Certificate of Designations;
(ii) reduce the Liquidation Preference of or
change the Mandatory Redemption Date of any share of Series B
Preferred Stock or alter the provisions with respect to the
redemption of the Series B Preferred Stock (except as
provided with respect to Section 8 hereof);
(iii) reduce the rate or change the time for
payment of dividends on any share of Series B Preferred
Stock;
(iv) waive the consequences of any failure to
pay dividends on the Series B Preferred Stock;
(v) make any share of Series B Preferred Stock
payable in any form other than that stated in this
Certificate of Designations;
(vi) make any change in the provisions of this
Series B Certificate of Designations relating to waivers of
the rights of holders of Series B Preferred Stock to receive
the Liquidation Preference and dividends on the Series B
Preferred Stock;
(vii) waive a redemption payment with respect to
any share of Series B Preferred Stock (except as provided
with respect to Section 8 hereof); or
(viii) make any change in the foregoing amendment
and waiver provisions.
24
(i) The Company in its sole discretion may, without the
vote or consent of any Holders of the Series B Preferred Stock, amend or
supplement this Series B Certificate of Designations:
(i) to cure any ambiguity, defect or
inconsistency;
(ii) except as set forth in Section 2(b) and
clauses (f) and (g) above, to create, authorize or issue any
shares of Junior Securities or Parity Securities;
(iii) to decrease the amount of authorized
capital stock of any class, including any Series A Preferred
Stock or Series B Preferred Stock;
(iv) to increase the amount of authorized
capital stock of any class of Junior Securities; or
(v) to make any change that would provide any
additional rights or benefits to the Holders of this Series B
Preferred Stock or that does not adversely affect the legal
rights under this Series B Certificate of Designations of any
such Holder.
8. Change of Control.
(a) Upon the occurrence of a Change of Control, and
subject to the limitation provided in Section 8(h), the Company shall make an
offer (the "Change of Control Offer") to each Holder of shares of Series B
Preferred Stock to repurchase all or any part (but not, in the case of any
Holder requiring the Company to purchase less than all of the shares of Series
B Preferred Stock held by such Holder, any fractional shares) of such Holder's
Series B Preferred Stock at an offer price in cash equal to 101% of the
aggregate Liquidation Preference thereof plus, without duplication, an amount
in cash equal to all accumulated and unpaid dividends, if any, thereon to but
excluding the date of purchase (the "Change of Control Payment") (including an
amount in cash equal to a pro rated dividend for the period from the Dividend
Payment Date immediately prior to the Change of Control Payment Date) (subject
to the right of Series B Preferred Stock Holders of record on the relevant
record date to receive dividends due on the relevant Dividend Payment Date);
provided, however, that notwithstanding the occurrence of a Change of Control,
the Company shall not be obligated to purchase the Series B Preferred Stock
pursuant to this covenant in the event that it has exercised its right to
redeem all of the Series B Preferred Stock pursuant to Section 5(b).
(b) The Change of Control Offer shall include all
instructions and materials necessary to enable Holders to tender their shares
of Series B Preferred Stock and a full description of the circumstances and
relevant facts and financial information regarding such Change of Control.
(c) The Company shall comply, to the extent applicable,
with the requirements of Rule 14(e) of the Exchange Act and any other
securities laws and regulations in connection with the repurchase of the Series
B Preferred Stock as a result of a Change of Control. To the extent that the
provisions of any securities laws or regulations conflict with provisions of
this covenant, the Company will comply with the applicable securities laws and
25
regulations and will not be deemed to have breached its obligations under this
paragraph by virtue thereof. The Change of Control 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 Change of Control Offer (which at a minimum will
include (i) the most recent annual and quarterly financial statements, (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 Change
of Control Offer) and (iii) if applicable, appropriate pro forma financial
information concerning the Offer to Purchase).
(d) Within 30 days following any Change of Control (or
at the Company's option, prior to such Change of Control but after the public
announcement thereof), the Company shall mail a notice to each Holder stating:
(i) that the Change of Control Offer is being
made pursuant to this Section 8 and that all shares of Series
B Preferred Stock tendered shall be accepted for payment;
(ii) the amount of the Change of Control
Payment, the purchase date, which shall be not earlier than
30 days nor later than 60 days from the date such notice is
mailed (the "Change of Control Payment Date");
(iii) that any share of Series B Preferred Stock
not tendered shall continue to accumulate dividends;
(iv) the place or places where Series B
Preferred Stock are to be surrendered for tender pursuant to
the Change of Control Offer;
(v) that, on the Change of Control Payment
Date, the purchase price shall become due and payable upon
each share of Series B Preferred Stock accepted for payment
pursuant to the Change of Control Offer and, unless the
Company fails to pay the Change of Control Payment on the
Change of Control Payment Date, all shares of Series B
Preferred Stock accepted for payment pursuant to the Change
of Control Offer shall cease to accumulate dividends after
the Change of Control Payment Date;
(vi) that Holders electing to have any shares of
Series B Preferred Stock purchased pursuant to a Change of
Control Offer will be required to surrender the shares of
Series B Preferred Stock, with the form entitled "Option of
Holder to Elect Purchase" which shall be included with the
notice of Change of Control completed, to the Paying Agent at
the address specified in the notice prior to the close of
business on the third Business Day preceding the Change of
Control Payment Date;
(vii) that, if such Offer is made prior to such
Change of Control, payment is conditioned on the occurrence
of such Change of Control; and
26
(viii) that the Holder may tender all or any
portion of the shares of Series B Preferred Stock held by
such Holder and that in the case of any Holder whose shares
are to be purchased only in part, the Company shall execute,
authorize and deliver to the Holder, without service charge,
a new certificate as requested by such Holder, for the
unpurchased portion of his shares of Series B Preferred
Stock.
(e) On the Change of Control Payment Date, the Company
shall, to the extent lawful, (i) accept for payment all shares of Series B
Preferred Stock or portions thereof property tendered pursuant to the Change of
Control Offer, (ii) deposit with the Payment Agent an amount equal to the
Change of Control Payment in respect of all shares of Series B Preferred Stock
so tendered and (iii) deliver or cause to be delivered to the Transfer Agent
the shares of Series B Preferred Stock so accepted together with an Officers'
Certificate stating the aggregate Liquidation Preference of the shares of
Series B Preferred Stock or portions thereof being purchased by the Company.
The Paying Agent shall promptly mail to each holder of Series B Preferred Stock
so tendered the Change of Control Payment for such Series B Preferred Stock,
and the Transfer Agent shall promptly authenticate and mail (or cause to be
transferred by book entry) to each holder a new certificate representing the
shares of Series B Preferred Stock equal in Liquidation Preference amount to
any unpurchased portion of the shares of Series B Preferred Stock represented
by the certificates so surrendered. The Company shall publicly announce the
results of the Change of Control Offer on or as soon as practicable after the
Change of Control Payment Date.
(f) If, at the time of a Change of Control, the Company
is restricted or prohibited by the terms of any Credit Agreements from
purchasing shares of Series B Preferred Stock that may be tendered by Holders
pursuant to a Change of Control Offer, prior to complying with the provisions
of Section 8(a), but in any event within 30 days following a Change of Control
(unless the Company has exercised its right to redeem all the Series B
Preferred Stock pursuant to Section 5(b)), the Company shall either (i) repay
in full all outstanding Obligations under such Credit Agreements or offer to
repay in full all outstanding Obligations under such Credit Agreements and
repay the Obligations of each lender who has accepted such offer or (ii) obtain
the requisite consent under such Credit Agreements to permit the repurchase of
the Series B Preferred Stock required by this Section 8. The Company must first
comply with the covenant described in the preceding sentence before it will be
required to repurchase shares of Series B Preferred Stock in the event of a
Change of Control; provided, that if the Company fails to comply with the
covenant described in the preceding sentence, the sole remedy to holders of
Series B Preferred Stock will be the voting rights arising from a Voting Rights
Triggering Event. Moreover, the Company will not repurchase or redeem any
Series B Preferred Stock pursuant to this Change of Control provision prior to
the Company's repurchase of the Senior Subordinated Notes pursuant to the
Change of Control covenants in the Notes Indenture.
(g) The Company shall not be required to make a Change
of Control Offer upon a Change of Control if a third party makes the Change of
Control Offer in the manner, at the times and otherwise in compliance with the
requirements set forth in this Section 8 applicable to a Change of Control
Offer made by the Company and purchases all shares of Series B Preferred Stock
validly tendered and not withdrawn under such Change of Control Offer.
27
(h) The Company may not repurchase or redeem, pursuant
to the provisions of this Section 8, any shares of Series B Preferred Stock (or
any securities into which any of such shares are convertible or exchangeable)
prior to compliance by the Company with the provisions of Section 8 of the
Series A Certificate of Designations and compliance with Section 4.13 of the
Notes Indenture as in effect on the date hereof.
9. Certain Covenants.
(a) Limitation on Incurrence of Indebtedness and
Issuance of Preferred Stock.
(i) The Company will not, and will not permit
any of its Restricted Subsidiaries to, directly or
indirectly, Incur any Indebtedness (including Acquired Debt)
and the Company will not issue any Disqualified Stock and
will not permit any of its Restricted Subsidiaries to issue
any shares of preferred stock; provided, however, that the
Company and the Subsidiary Guarantors may incur Indebtedness
(including Acquired Debt) and the Company may issue shares of
Disqualified Stock if the Company's Leverage Ratio at the
time of the incurrence of such Indebtedness or issuance of
such Disqualified Stock, after giving pro-forma effect
thereto and to the use of proceeds therefrom, is less than
7.0 to 1. Accrual of interest, accretion or amortization of
original issue discount and the payment of interest in the
form of additional Indebtedness will not be deemed to be an
incurrence of Indebtedness for purposes of this Section 9(a).
(ii) Notwithstanding clause (i) above, the
Company and its Restricted Subsidiaries may Incur Permitted
Indebtedness without regard to the foregoing limitation
provided, however, that the Company will not permit any
Unrestricted Subsidiary to Incur Indebtedness other than
Non-Recourse Debt and in the event such Indebtedness ceases
to be Non-Recourse Debt such event shall be deemed to
constitute an Incurrence of Indebtedness by the Company.
(b) Merger, Consolidation, or Sale of Assets.
The Company may not consolidate or merge with or into
(whether or not the Company is the surviving corporation), or sell, assign,
transfer, lease, convey or otherwise dispose of all or substantially all of its
properties or assets, in one or more related transactions, to another Person,
and the Company may not permit any of its Restricted Subsidiaries to enter into
any such transaction or series of transactions if such transaction or series of
transactions would, in the aggregate, result in a sale, assignment, transfer,
lease, conveyance, or other disposition of all or substantially all of the
properties or assets of the Company to another Person unless (i) the Company is
the surviving corporation or the Person formed by or surviving any such
consolidation or merger (if other than the Company) or to which such sale,
assignment, transfer, lease, conveyance or other disposition shall have been
made (the "Surviving Entity") is a corporation organized or existing under the
laws of the United States, any state thereof or the District of Columbia; (ii)
the Series B Preferred Stock shall be converted into or exchanged for and shall
become shares of the Surviving Entity, having in respect of such successor,
transferee or resulting corporation substantially the same powers, preferences
and relative participating, optional or other special rights, and the
qualifications, limitations or restrictions thereon that the
28
Series B Preferred Stock had immediately prior to such transaction; (iii)
immediately after such transaction, no Voting Rights Triggering Event, and no
event that after the giving of notice or lapse of time or both would become a
Voting Rights Triggering Event, shall have occurred and be continuing; and (iv)
the Company or the Surviving Entity will, at the time of such transaction or
series of transactions and after giving pro forma effect thereto as if such
transaction or series of transactions had occurred at the beginning of the
applicable Four Quarter Period, be permitted to incur at least $1.00 of
additional Indebtedness pursuant to the test set forth in the first paragraph
of Section 9(a)(i). Notwithstanding the restrictions described in the foregoing
clause (iv), any Restricted Subsidiary may consolidate with, merge into or
transfer all or part of its properties and assets to the Company, and any
Wholly Owned Restricted Subsidiary may consolidate with, merge into or transfer
all or part of its properties and assets to another Wholly Owned Restricted
Subsidiary.
(c) Restricted Payments.
(i) The Company and its Restricted Subsidiaries
shall not make any Restricted Payment unless after giving
effect thereto (A) no Voting Rights Triggering Event or event
which, with notice or lapse of time or both, would become a
Voting Rights Triggering Event has occurred and is
continuing; (B) such Restricted Payment, together with the
aggregate of all other Restricted Payments made by the
Company and its Restricted Subsidiaries after the date of
this Series B Certificate of Designations (excluding
Restricted Payments permitted by clauses (B), (C) and (E) of
paragraph (ii) below), is less than the sum of (1) (a) 100%
of the aggregate Consolidated Cash Flow of the Company (or,
in the event such Consolidated Cash Flow shall be a deficit,
minus 100% of such deficit) accrued for the period beginning
on the first day of the Company's fiscal quarter commencing
after the Series A Issue Date and ending on the last day of
the Company's most recent fiscal quarter for which financial
information is available to the Company ending prior to the
date of such proposed Restricted Payment, taken as one
accounting period, less (b) 1.4 times Consolidated Interest
Expense for the same period, plus (2) 100% of the aggregate
net cash proceeds and the fair market value of marketable
securities (as determined in good faith by the Company)
received by the Company from the issue or sale since the
Series A Issue Date of Equity Interests of the Company or of
debt securities of the Company that have been converted into
or exchanged for such Equity Interests (other than Equity
Interests (or convertible debt securities) sold to a
Subsidiary of the Company, other than Disqualified Stock or
debt securities that have been converted into Disqualified
Stock and other than the Common Stock issued in the Common
Stock Offering), plus (3) to the extent that any Restricted
Investment that was made after the Series A Issue Date is
sold for cash or otherwise liquidated or repaid for cash, the
lesser of (a) the net proceeds of such sale, liquidation or
repayment and (b) the amount of such Restricted Investment,
plus (4) $5.0 million.
(ii) The provisions in Section 9(c)(i) shall not
be violated by reason of (A) the payment of any dividend
within 60 days after the date of declaration thereof, if at
said date of declaration such payment would have complied
with the
29
provisions of this Series B Certificate of Designations; (B)
the redemption, repurchase, retirement or other acquisition
of any Junior Securities or Parity Securities of the Company
in exchange for, or out of the proceeds of, the substantially
concurrent sale (other than to a Subsidiary of the Company)
of other Junior Securities or Parity Securities of the
Company (other than any Disqualified Stock); (C) the
repurchase, redemption or other acquisition or retirement for
value of any Junior Securities or Parity Securities of the
Company or any Subsidiary of the Company held by any of the
Company's (or any of its Subsidiaries') employees pursuant to
any management equity subscription agreement or stock option
agreement in connection with the termination of such person's
employment for any reason (including by reason of death or
disability); provided that the aggregate price paid for all
such repurchased, redeemed, acquired or retired Junior
Securities or Parity Securities shall not exceed $500,000 in
any twelve-month period; and provided further that no Voting
Rights Triggering Event shall have occurred and be continuing
immediately after such transaction; and (D) repurchases of
Junior Securities or Parity Securities deemed to occur upon
exercise of stock options if such Junior Securities or Parity
Securities represent a portion of the exercise price of such
options.
(d) Designation of Unrestricted Subsidiaries.
The Board of Directors of the Company may designate any
Restricted Subsidiary to be an Unrestricted Subsidiary if such designation
would not cause a Voting Rights Triggering Event. For purposes of making such
determination, all outstanding Investments by the Company and its Restricted
Subsidiaries (except to the extent repaid in cash) in the Subsidiary so
designated will be deemed to be Restricted Payments at the time of such
designation and will reduce the amount available for Restricted Payments under
clause (C) of Section 9(c)(i). All such outstanding Investments will be deemed
to constitute Investments in an amount equal to the greater of the fair market
value or the book value of such Investments at the time of such designation.
Such designation will only be permitted if such Restricted Payment would be
permitted at such time and if such Restricted Subsidiary otherwise meets the
definition of an Unrestricted Subsidiary.
(e) Limitations on Transactions with Affiliates and
Related Persons.
The Company shall not, and shall not permit any Restricted
Subsidiary of the Company to, make any payment to, or sell, lease, transfer or
otherwise dispose of any of its properties or assets to, or purchase any
property or assets from, or enter into or make or amend any contract,
agreement, understanding, loan, advance or guarantee with, or for the benefit
of, any of its Affiliates (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 an unrelated Person and (ii) (A) with respect to any Affiliate
Transaction or series of related Affiliate Transactions involving aggregate
consideration in excess of $1.0 million, such Affiliate Transaction or series
of related Affiliate Transactions has been approved in good faith by a majority
of the members of the Board of Directors who are disinterested with respect to
such Affiliate Transaction or series of related Affiliate Transactions,
30
and (B) with respect to any Affiliate Transaction or series of related
Affiliate Transactions involving aggregate consideration in excess of $10.0
million, such Affiliate Transaction or series of related Affiliate Transactions
has been approved in good faith by a resolution adopted by a majority of the
members of the Board of Directors of the Company who are disinterested with
respect to such Affiliate Transaction or series of related Affiliate
Transactions and an opinion as to the fairness to the Company or such
Subsidiary of such Affiliate Transaction or series of related Affiliate
Transactions from a financial point of view has been issued to the Company by
an accounting, appraisal, engineering or investment banking firm of national
standing, provided that the following shall not be deemed Affiliate
Transactions: (1) transactions contemplated by any employment agreement or
other compensation plan or arrangement 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, (2)
transactions between or among the Company and/or its Restricted Subsidiaries,
(3) Restricted Payments and Permitted Investments that are permitted by Section
9(c), (4) indemnification payments made to officers, directors and employees of
the Company or any Restricted Subsidiary pursuant to charter, bylaw, statutory
or contractual provisions and (5) any agreement in effect as of the Issue Date
or any transaction contemplated thereby.
(f) Reports.
Whether or not required by the rules and regulations of the
Commission, so long as any shares of Series B Preferred Stock are outstanding,
the Company will furnish to the Transfer Agent and the Holders, (i) all
quarterly and annual financial information that would be required to be
contained in a filing with the Commission on Forms 10-Q and 10-K if the Company
were required to file such Forms, including a "Management's Discussion and
Analysis of Financial Condition and Results of Operations" that describes the
financial condition and results of operations of the Company and its
consolidated Subsidiaries and, with respect to the annual information only, a
report thereon by the Company certified independent accountants and (ii) all
current reports that would be required to be filed with the Commission on Form
8-K if the Company was required to file such reports, in each case within the
time periods set forth in the Commission's rules and regulations. In addition,
whether or not required by the rules and regulations of the Commission, the
Company will file a copy of such information and reports with the Commission
for public availability within the time periods set forth in the Commission's
rules and regulations (unless the Commission will not accept such filing).
10. Amendment.
Notwithstanding anything to the contrary in the DGCL, unless
otherwise provided in Section 2(b) or 7, neither this Series B Certificate of
Designations nor the Certificate of Incorporation shall be amended in any
manner that would increase or decrease the par value of the shares of the
Series B Preferred Stock or alter or change the powers, preferences or special
rights of the Series B Preferred Stock so as to affect the Holders thereof
adversely without the affirmative vote of the Holders of a majority of the
outstanding Series B Preferred Stock voting separately as a class.
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11. Exclusion of Other Rights.
Except as may otherwise be required by law, the shares of
Series B Preferred Stock shall not have any voting powers, preferences and
relative, participating, optional or other special rights, other than those
specifically set forth in this Series B Certificate of Designations (as such
Series B Certificate of Designations may be amended from time to time in
accordance with the terms hereof) and in the Certificate of Incorporation. The
shares of Series B Preferred Stock shall have no preemptive or subscription
rights.
12. Headings of Sections.
The headings of the various sections and subsections hereof
are for convenience of reference only and shall not affect the interpretation
of any of the provisions hereof.
13. Severability of Provisions.
If any voting powers, preferences and relative,
participating, optional and other special rights of the Series B Preferred
Stock and qualifications, limitations and restrictions thereof set forth in
this Series B Certificate of Designations (as this Certificate of Designations
may be amended from time to time) is invalid, unlawful or incapable of being
enforced by reason of any rule of law or public policy, all other voting
powers, preferences and relative, participating, optional and other special
rights of Series B Preferred Stock and qualifications, limitations and
restrictions thereof set forth in this Certificate of Designations (as so
amended) which can be given effect without the invalid, unlawful or
unenforceable voting powers, preferences and relative, participating, optional
and other special rights of Series B Preferred Stock and qualifications,
limitations and restrictions thereof, shall, nevertheless, remain in full force
and effect, and no voting powers, preferences and relative, participating,
optional or other special rights of Series B Preferred Stock and
qualifications, limitations and restrictions thereof herein set forth shall be
deemed dependent upon any other such voting powers, preferences and relative,
participating, optional or other special rights of Series B Preferred Stock and
qualifications, limitations and restrictions thereof unless so expressed
herein.
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