Right to Purchase 217,223 Shares of
Class A Common Stock of SFX Broadcasting, Inc.
THIS WARRANT HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED, AND MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH
REGISTRATION OR AN EXEMPTION THEREFROM UNDER SUCH ACT OR ANY APPLICABLE STATE
SECURITIES LAWS. FURTHERMORE, THIS WARRANT MAY BE SOLD OR OTHERWISE TRANSFERRED
ONLY IN COMPLIANCE WITH THE CONDITIONS SPECIFIED IN SECTION 13 OF THE CONSENT
AGREEMENT, DATED AS OF MAY 17, 1996, BY AND AMONG MULTI-MARKET RADIO, INC., THE
XXXX ALTERNATIVE INCOME FUND, L.P. AND SFX BROADCASTING, INC., A COMPLETE AND
CORRECT COPY OF WHICH IS AVAILABLE FOR INSPECTION AT THE PRINCIPAL OFFICES OF
SFX BROADCASTING, INC. AND WILL BE FURNISHED WITHOUT CHARGE TO THE HOLDER OF
THIS WARRANT UPON WRITTEN REQUEST.
EXERCISE OF THIS WARRANT MAY BE SUBJECT TO THE RESTRICTIONS IMPOSED BY
THE COMMUNICATIONS ACT OF 1934, AS AMENDED.
SFX BROADCASTING, INC.
Common Stock Purchase Warrant
SFX Broadcasting, Inc., a Delaware corporation (the "Company"), hereby
certifies that, for value received, THE XXXX ALTERNATIVE INCOME FUND, L.P., a
Delaware limited partnership (the "Fund"), or assigns, is entitled, subject to
the terms set forth below, to purchase from the Company at any time or from
time to time after the date hereof and prior to the expiration hereof pursuant
to Section 2.2 hereof, an aggregate of 217,223 fully paid and non-assessable
shares of Class A Common Stock, at an initial purchase price per share of
$25.98. (Such number of shares as adjusted from time to time as provided herein
is referred to as the "Warrant Shares" and such price per share as adjusted
from time to time as provided herein is referred to herein as the "Exercise
Price".)
This Warrant, together with the Other Warrants (as defined below), is
being issued pursuant to the Consent Agreement, dated as of May 17, 1996, among
the Company, Multi-Market Radio, Inc. ("MMR") and the Fund (the "Consent
Agreement"). The holder of this Warrant shall be entitled to all of the
benefits and shall be subject to all of the obligations of the Consent
Agreement and the Registration Rights Agreement, dated as of May 17, 1996,
between the Company and the Fund (the "Registration Rights Agreement"). Copies
of each of the Consent Agreement and the Registration Rights Agreement are on
file at the principal offices of the Company.
1. DEFINITIONS. The following terms shall have the meanings set forth below:
"Additional Shares of Common Stock" means any shares of Common Stock
issued by the Company after the date hereof, other than Warrant Stock and
shares of Common Stock issuable upon exercise or conversion of the securities
listed on Exhibit A hereto. For purposes of this Warrant, only the securities
of the Company listed on Exhibit A shall be deemed outstanding on the date
hereof and any securities not listed on Exhibit A shall be deemed issued after
the date hereof and, therefore, the issuance thereof shall be subject to
Sections 5, 6 and 7 hereof.
"Applicable Percentage" means the quotient of (x) the number of
Warrant Shares which would be purchasable from time to time hereunder upon the
exercise of this Warrant divided by (y) the total number of shares of Common
Stock then outstanding and deemed (in accordance with Section 7.1 hereof) to be
then outstanding, including the Warrant Shares issuable upon exercise of this
Warrant, provided, however, that for purposes of computing clause (y) above at
any time, any Additional Shares of Common Stock issued or sold or deemed issued
or sold after the date hereof at an Effective Price greater than the Exercise
Price in effect immediately prior to such issuance or sale or deemed issuance
or sale shall be disregarded. On the date of the issuance of this Warrant, the
Applicable Percentage is .01439 percent (1.439%). A sample calculation of the
Applicable Percentage as of the date hereof is set forth on Exhibit A hereto.
"Average Closing Price" means, as of any specified date, (x) if shares
of the Company's Class A Common Stock are listed on a national securities
exchange, the average of the closing sales prices therefor on the largest
securities exchange on which such shares are traded on the last fifteen (15)
trading days immediately prior to, but not including, such date; (y) if such
shares are listed on the NASDAQ National Market System but not on any national
securities exchange, the average of the closing sales prices therefor on the
NASDAQ National Market System on the last fifteen (15) trading days immediately
prior to, but not including, such date; or (z) if such shares are not listed on
either a national securities exchange or the NASDAQ National Market System, the
average of the mean of the high and low bid and asked quotations therefor on
the last thirty (30) trading days immediately prior to, but not including, such
date.
"Business Day" means any day other than a Saturday, Sunday or other
day on which commercial banks in New York City are required to be closed.
"Capital Stock" means, with respect to any Person, any and all shares,
interests, participations, rights in, other shares of beneficial interest or
other equivalents (however designated and whether voting or non-voting, or
preferred or common) of such Person's capital stock, whether outstanding on the
date hereof or issued thereafter, and any and all warrants, options and other
rights to acquire such capital stock (including, without limitation, by way of
conversion or exchange).
"Charter" means the articles or certificate of incorporation, statute,
constitution, joint venture, operating or partnership agreement or articles or
other organizational document of any Person other than an individual, each as
from time to time amended or modified.
"Common Stock" means, collectively, (i) the Class A Common Stock, par
value $.01 per share (the "Class A Common Stock"), the Class B Common Stock,
par value $.01 per share, and the Class C Common Stock, par value $.01 per
share, of the Company, (ii) any other Capital
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Stock of the Company, the holders of which shall have the right, without
limitation as to amount, either to all or to a share of the balance of current
dividends and liquidating dividends after the payment of dividends and
distributions on any shares entitled to preference, and (iii) any other
securities into which or for which any of the securities described in clause
(i) or (ii) above have been converted or exchanged pursuant to a plan of
recapitalization, reorganization, merger, sale of assets or otherwise.
"Company" means SFX Broadcasting, Inc., a Delaware corporation, and
any corporation which shall succeed to or assume (whether in writing or
otherwise) the obligations of the Company hereunder.
"Effective Price" means: (a) with respect to any issuance or sale of
Capital Stock, the lowest consideration per share received by the Company upon
such issuance or sale; (b) with respect to any issuance or sale of any rights
to subscribe for or to purchase, or grant of options for the purchase of,
shares of Capital Stock or Convertible Securities, the price per share
determined by dividing:
(x) the total amount, if any, received or receivable by the
Company as consideration for the issuance or sale of such rights
or the granting of such options, plus the minimum aggregate
amount of additional consideration payable to the Company upon
the exercise of such rights or options, plus, in the case of such
Convertible Securities, the minimum aggregate amount of
additional consideration, if any, payable to the Company upon the
conversion or exchange thereof; by
(y) the maximum number of shares of Common Stock issuable
upon the exercise of such rights or options or upon the
conversion or exchange of the maximum number of such Convertible
Securities issuable on the exercise of such rights or options;
and (c) with respect to any issuance or sale of Convertible Securities, the
price per share determined by dividing:
(x) the total amount, if any, received or receivable by the
Company as a consideration for the issuance or sale of such
Convertible Securities, plus the minimum aggregate amount of
additional consideration (if any) payable to the Company upon
such conversion or exchange; by
(y) the maximum number of shares of Common Stock issuable as
of the date of issue of such Convertible Securities to effect the
conversion or exchange of all such Convertible Securities.
"Other Securities" means any Capital Stock (other than Common Stock)
and other securities of the Company or any other entity (corporate or
otherwise) (i) which the holder of this Warrant at any time shall be entitled
to receive, or shall have received, on the exercise of this Warrant, in lieu of
or in addition to Common Stock, or (ii) which at any time shall be issuable or
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shall have been issued in exchange for or in replacement of Common Stock or
Other Securities, in each case pursuant to Section 5 or 6 hereof.
"Other Warrants" means the Common Stock Purchase Warrants issued in
consideration for the Fund entering into the Consent Agreement by the Company
to the Fund, dated the date hereof, and exercisable for shares of Class A
Common Stock of the Company.
"Person" means any individual, corporation, general or limited
partnership, limited liability company, joint venture, association, enterprise,
joint stock company, trust, unincorporated organization or other entity.
"Property" means all types of real, personal or mixed property and all
types of tangible or intangible property.
"Subsidiary" means any Person of which the Company now or hereafter
shall at the time own directly or indirectly through a Subsidiary at least a
majority of the outstanding Capital Stock entitled to vote generally in the
election of directors.
"Warrants" means (a) this Warrant, (b) all other warrants transferred
to any other holders in respect of this Warrant and (c) any warrants issued as
replacements for or in substitution of any of the foregoing pursuant to
Sections 11 or 12 of the Consent Agreement.
"Warrant Stock" means Common Stock issuable upon exercise of the
Warrants in accordance with their terms and any Capital Stock or Other
Securities into which or for which such Common Stock shall have been converted
or exchanged pursuant to any recapitalization, reorganization or merger of the
Company.
2. EXERCISE OF WARRANT.
2.1. Exercise; Cashless Exercise. (a) This Warrant may be exercised by
the holder hereof at any time or from time to time prior to its expiration by
surrender of this Warrant, with the form of subscription at the end hereof,
duly executed by such holder, to the Company at its principal office,
accompanied by payment, by certified or official bank check payable to the
order of the Company, by wire transfer to an account designated by the Company,
or as provided in Section 2.1(b) below, in the amount obtained by multiplying
the number of shares of Class A Common Stock for which this Warrant is then
being exercised by the Exercise Price then in effect with respect to such
shares. In the event this Warrant is not exercised in full, the Company, at its
expense, will forthwith issue and deliver to or upon the order of the holder
hereof a new Warrant or Warrants of identical tenor, in the name of the holder
hereof or as such holder may request, calling in the aggregate on the face or
faces thereof for the number of shares of Class A Common Stock equal (before
application of any adjustment required pursuant hereto) to the number of such
shares called for on the face of this Warrant minus the number of such shares
(before application of any adjustment required pursuant hereto) for which this
Warrant shall have been exercised.
(b) The holder of this Warrant shall have the right, at its election,
in lieu of delivering the Exercise Price in cash, to instruct the Company in
the form of subscription to retain,
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in payment of the Exercise Price, a number of shares of Class A Common Stock
(the "Payment Shares") equal to the quotient of (i) the aggregate Exercise
Price of the shares as to which this Warrant is then being exercised divided by
(ii) the Average Closing Price as of the date of exercise and to deduct the
number of Payment Shares from the shares to be delivered to the holder hereof.
2.2. Expiration of the Warrant. This Warrant shall expire on November
22, 2002; provided, however, that in the event that this Warrant has not been
exercised in full, this Warrant (or any warrant issued in exchange for this
Warrant or pursuant to Section 2.1(a) above) shall not expire until November
22, 2006, unless the holder of this Warrant shall have notified the Company in
writing, prior to November 22, 2002.
3. CALL OPTION; REGISTRATION RIGHTS.
(a) The Company has the option to repurchase this Warrant at the
time and in the manner specified in Section 14 of the Consent
Agreement. Upon the initial exercise, in whole or in part, by the
holder of this Warrant of its rights under Section 2.1 above, the
Company shall (i) have ten (10) days from the date of such exercise to
deliver a written notice (the "Repurchase Notice") to the holder
exercising the Company's rights under such Section 14 to repurchase
this Warrant and (ii) be obligated to consummate the repurchase of
this Warrant no later than ninety (90) days from the date of such
exercise of this Warrant under Section 2.1 above; provided, that
notwithstanding anything to the contrary in the Consent Agreement, if
(x) the Repurchase Notice shall not be so delivered or (y) the
Repurchase Notice shall be delivered but this Warrant shall not be so
repurchased within such 90-day period, the Company's right to
repurchase this Warrant shall terminate without further action by any
party and the holder of this Warrant shall be entitled to the full
benefits of this Warrant.
(b) The holder of this Warrant has the right to cause the Company
to register and to maintain the registration of the shares of Warrant
Stock under the Securities Act and any blue sky or securities laws of
any jurisdictions within the United States at the time and in the
manner specified in the Registration Rights Agreement.
4. DELIVERY OF STOCK CERTIFICATES ON EXERCISE. As soon as practicable
after the exercise of this Warrant in full or in part, and in any event within
five (5) Business Days thereafter, the Company at its expense (including the
payment by it of any applicable issue taxes) will cause to be issued in the
name of and delivered to the holder hereof, or as such holder (upon payment by
such holder of any applicable transfer taxes then due) may direct, a
certificate or certificates for the number of fully paid and non-assessable
shares of Class A Common Stock (or Other Securities) to which such holder shall
be entitled on such exercise, together with any other Capital Stock or Other
Securities and Property (including cash, where applicable) to which such holder
is entitled upon such exercise.
5. ADJUSTMENT FOR DIVIDENDS, DISTRIBUTIONS AND RECLASSIFICATIONS. In
case at any time or from time to time, the holders of Common Stock shall have
received, or (on or after the record date fixed for the determination of
shareholders eligible to receive) shall have become entitled to receive,
without payment therefor:
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(a) other or additional Capital Stock or Other Securities or
Property (other than cash) by way of dividend; or
(b) other or additional (or less) Capital Stock or Other
Securities or Property (including cash) by way of spin-off, split-up,
reclassification, recapitalization, combination of shares or similar
corporate restructuring;
other than additional shares of Common Stock issued as a stock dividend or in a
stock-split (adjustments in respect of which are provided for in Section 7
hereof), then and in each such case the holder of this Warrant, on the exercise
hereof as provided in Section 2 hereof, shall be entitled to receive from the
Company the amount of Capital Stock and Other Securities and Property
(including cash in the case referred to in clause (b) of this Section 5) which
such holder would have received prior to or would have held on the date of such
exercise if on the date hereof he had been the holder of record of the number
of shares of Class A Common Stock called for on the face of this Warrant.
During the period from the date hereof to and including the date of such
exercise, such shares and all such other or additional Capital Stock and Other
Securities and Property (including cash in the case referred to in clause (b)
of this Section 5) receivable by such holder as aforesaid, giving effect to all
further adjustments called for during such period by Sections 6 and 7 hereof,
shall be held by the Company in trust for the benefit of the holder of this
Warrant.
6. ADJUSTMENT FOR CERTAIN CAPITAL TRANSACTIONS.
6.1. Certain Adjustments. In case at any time or from time to time,
the Company shall (i) effect a capital reorganization, reclassification or
recapitalization, (ii) consolidate with or merge into any other Person, or
(iii) transfer all or substantially all of its assets to any Person (each of
the transactions in (i), (ii) or (iii) above being a "Capital Transaction"),
then in each such case, the holder of this Warrant, on the exercise hereof as
provided in Section 2 hereof at any time after the consummation of such Capital
Transaction shall receive, in lieu of the Class A Common Stock (or Other
Securities) issuable on such exercise prior to such consummation or effective
date, the Capital Stock and Other Securities and Property (including cash) to
which such holder would have been entitled upon such consummation or in
connection with such Capital Transaction if such holder had so exercised this
Warrant immediately prior thereto, all subject to further adjustment thereafter
as provided in Sections 5 and 7 hereof.
6.2. Continuation of Terms. Upon the occurrence of any Capital
Transaction, this Warrant shall continue in full force and effect and the terms
hereof shall be applicable to the shares of Capital Stock and Other Securities
and Property receivable on the exercise of this Warrant after the consummation
of such Capital Transaction and shall be binding upon the issuer of any such
Capital Stock or Other Securities, including, in the case of any transaction
specified in Section 6.1(iii), the Person acquiring all or substantially all of
the assets of the Company, whether or not such Person shall have expressly
assumed the terms of this Warrant as provided in Section 8 hereof.
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7. ADJUSTMENTS FOR ISSUANCE OF COMMON STOCK AND CONVERTIBLE SECURITIES.
7.1. Adjustment of Number of Warrant Shares. In case at any time after
the date hereof, the Company shall issue or sell, or shall be deemed to have
issued or sold pursuant to Section 7.1(b) below, any Additional Shares of
Common Stock at an Effective Price less than the Exercise Price in effect
immediately prior to such issuance or sale or deemed issuance or sale, the
number of Warrant Shares purchasable upon the exercise of this Warrant shall be
forthwith increased so that such issuance or sale does not change the then
Applicable Percentage existing immediately prior to such issuance or sale. For
purposes of this Section 7.1, the following provisions shall also be
applicable:
(a) Adjustment of Exercise Price. Upon an adjustment of the number of
Warrant Shares pursuant to this 7.1, no adjustment to the Exercise Price shall
be made, except as required by Section 7.2 hereof.
(b) Constructive Issuance of Common Stock; Convertible Securities;
Rights and Options.
(i) In case at any time after the date hereof the Company shall
in any manner issue or sell any rights or options to subscribe for or to
purchase (x) any Common Stock or (y) any Capital Stock or Other Securities
convertible into or exchangeable for shares of Common Stock (such convertible
or exchangeable capital stock or securities being hereinafter referred to as
"Convertible Securities") at an Effective Price less than the Exercise Price in
effect immediately prior to such issuance or sale, whether or not such rights
or options or the right to convert or exchange any such Convertible Securities
are immediately exercisable, then the total maximum number of shares of Common
Stock issuable upon the exercise of such rights or options or upon conversion
of exchange of the total maximum amount of such Convertible Securities issuable
upon the exercise of such rights or options shall (on the date of the granting
of such rights or options) be deemed constructively issued and shall (on and
after the date of the issuance or sale of such rights or options) be deemed
outstanding. Except as provided in Section 7.1(c) below, no further adjustments
of the number of Warrant Shares shall be made pursuant to this Section 7.1 upon
the actual exercise of such rights or options or upon the actual issuance of
shares of Common Stock upon conversion or exchange of such Convertible
Securities.
(ii) In case at any time the Company shall in any manner issue or
sell any Convertible Securities at an Effective Price less than the Exercise
Price in effect immediately prior to such issuance or sale, whether or not the
rights to exchange or convert thereunder are immediately exercisable, then the
total maximum number of shares of Common Stock issuable upon conversion or
exchange of all such Convertible Securities shall (on the date of the issuance
or sale of such Convertible Securities) be deemed constructively issued and
shall (on and after the date of the issuance or sale of such Convertible
Securities) be deemed outstanding, provided, that, except as otherwise
specified in Section 7.1(c) below, (x) no further adjustments of the number of
Warrant Shares shall be made pursuant to this Section 7.1 upon the actual
issuance of Common Stock upon conversion or exchange of such Convertible
Securities, and (y) if any such issuance or sale of such Convertible Securities
is made upon exercise of any rights to subscribe for or to
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purchase or any option to purchase any such Convertible Securities for which
adjustments of the number of Warrant Shares have been or are to be made
pursuant to clause (i) of this Section 7.1(b), no further adjustment of the
number of Warrant Shares shall be made pursuant to this clause (ii) by reason
of such issuance or sale.
(c) Readjustment; Lapse. If the number of shares of Common Stock
purchasable upon the exercise of any right or option referred to in Section
7.1(b)(i) hereof or purchasable upon the conversion of any Convertible
Securities referred to in Section 7.1(b) or (b)(ii) hereof shall change or a
different number of such shares than originally set out by the terms of such
rights, options or Convertible Securities shall be issued upon such exercise or
conversion at any time or from time to time or if such right or option or
Convertible Security shall terminate, be cancelled or otherwise lapse without
exercise in whole or in part, then, upon the effectiveness of such event, the
number of Warrant Shares shall forthwith be changed to such number of shares of
Common Stock as would have been obtained had all adjustments made under this
Section 7.1 been made at the time of such event based upon (x) the number of
shares of Common Stock theretofore actually delivered upon the exercise of any
options or rights or upon the conversion or exchange of any Convertible
Securities, and (y) the number of shares of Common Stock then purchasable upon
the exercise of all of the rights, options and Convertible Securities to the
extent and in the form then outstanding.
(d) Stock Dividends. In case at any time after the date hereof, the
Company shall declare a dividend or any other distribution upon any Capital
Stock of the Company which is payable in shares of Common Stock, then the
number of Warrant Shares immediately prior to the declaration of such dividend
or distribution shall be increased so that the then existing Applicable
Percentage does not change.
(e) Stock Splits and Reverse Splits. In case at any time after the
date hereof, the Company shall subdivide the outstanding shares of Common Stock
into a greater number of shares, the number of Warrant Shares immediately prior
to such subdivision shall be proportionately increased, and conversely, in case
at any time the Company shall combine the outstanding shares of Common Stock
into a smaller number of shares, the number of Warrant Shares immediately prior
to such combination shall be proportionately reduced, in each case, so that the
then existing Applicable Percentage does not change.
7.2. Adjustment of Exercise Price. The Exercise Price shall be subject
to adjustment from time to time after the date hereof as follows:
(a) In case at any time after the date hereof, the Company shall issue
or sell, or shall be deemed to have issued or sold pursuant to Section 7.2(b)
or (c) below, any Additional Shares of Common Stock at an Effective Price less
than the Exercise Price in effect immediately prior to such issuance or sale or
deemed issuance or sale, then forthwith upon such issuance or sale the Exercise
Price in effect immediately prior to such issuance or sale shall be reduced to
a price equal to the Effective Price of such issuance or sale.
(b) In case at any time after the date hereof the Company shall in any
manner issue or sell any rights or options to subscribe for or to purchase any
Common Stock or
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Convertible Securities at an Effective Price less than the Exercise Price in
effect immediately prior to such issuance or sale, whether or not such rights
or options or the right to convert or exchange any such Convertible Securities
are immediately exercisable, then the maximum number of shares of Common Stock
issuable upon the exercise of such rights or options or upon conversion or
exchange of the maximum number of such Convertible Securities issuable upon the
exercise of such rights or options shall be deemed to be issued or sold for
such Effective Price; provided, however, that upon the expiration of all, but
not less than all, of such rights or options, and, in the case of options to
purchase Convertible Securities, upon the expiration in whole, but not in part,
of the right to convert or exchange such Convertible Securities, the currently
applicable Exercise Price in effect immediately prior to such expiration shall
forthwith be adjusted to such Exercise Price as would have been obtained had
the adjustments made upon the issuance of such rights of the granting of such
options been made upon the basis of the issuance of only the number of shares
of Common Stock actually issued on the exercise of such rights or options or on
the conversion or exchange of such Convertible Securities (or in the case of
rights or options to purchase Convertible Securities, actually issued and at
the time still issuable upon the conversion or exchange of the Convertible
Securities actually issued), and upon the basis of only the consideration
applicable thereto, and any shares issuable upon the exercise of such rights or
options which have expired or upon the conversion or exchange of such
Convertible Securities, the right to convert or exchange which has expired,
shall not thereafter be deemed to be outstanding and the consideration
applicable thereto shall not thereafter be deemed to have been received. If
such rights or options are issued or granted in conjunction with the sale of
Other Securities of the Company, the part of the consideration allocable to
such rights and options, and the part of the consideration allocable to such
Other Securities, shall be determined in good faith by Board of Directors of
the Company in a certificate delivered promptly to the holder of this Warrant
setting forth the calculations used in determining such allocation. At its
election, the holder of this Warrant may confirm the allocation noted on the
certificate by causing such allocation to be determined by an independent
certified public accountant acceptable to the holder of this Warrant at the
expense of the Company. The determination of such independent certified public
accountant shall be final, conclusive and binding for all purposes of this
Warrant.
(c) In case at any time after the date hereof the Company shall in any
manner issue or sell any Convertible Securities at an Effective Price less than
the Exercise Price in effect immediately prior to such issuance or sale,
whether or not such rights to convert or exchange any such Convertible
Securities are immediately exercisable, then such issuance or sale shall be
deemed to be an issuance or sale (as of the date of issuance or sale of such
Convertible Securities) of the maximum number of shares of Common Stock
necessary to be issued as of that date to effect the conversion or exchange of
all such Convertible Securities, and the gross amount received or receivable by
the Company as consideration for the issuance or sale of such Convertible
Securities, plus the minimum aggregate amount of additional consideration (if
any) payable to the Company upon such conversion or exchange, shall be deemed
to be the consideration actually received (as of the date of the issue or sale
of such Convertible Securities) for the issuance or sale of such Common Stock;
provided, however, that upon the termination of the right to convert or to
exchange such Convertible Securities for Common Stock, the Exercise Price shall
forthwith be adjusted to such Exercise Price which would have been obtained had
the adjustments made upon the issuance of such Convertible Securities been made
upon the basis of
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the issuance of only the number of shares of Common Stock actually issued
upon the conversion or exchange thereof, and upon the basis of the
consideration applicable only to the Convertible Securities so converted or
exchanged, and no shares issuable upon the conversion or exchange of such
Convertible Securities which were not actually so issued shall thereafter be
deemed to be outstanding and the consideration applicable thereto shall not
thereafter be deemed to have been received. No adjustment of the Exercise Price
shall be made pursuant to this Section 7.2(c) upon any issuance or sale of
Convertible Securities if such issuance or sale has been made upon the exercise
of any rights to subscribe for or to purchase, or any options to purchase, any
such Convertible Securities for which an adjustment of the Exercise Price has
been made pursuant to Section 7.2(b) above.
(d) If the amount of consideration payable to the Company upon the
exercise of any right or option to which Section 7.2(b) above is applicable or
upon the conversion or exchange of any Convertible Securities referred to in
Section 7.2(b) or (c) above shall change at any time (other than under or by
reason of provisions designed to protect against dilution), then, forthwith
upon each such change becoming effective, all such rights or options or all
such rights of conversion or exchange not theretofore exercised shall be deemed
to have expired or terminated, as the case may be, and the Exercise Price shall
forthwith be adjusted in accordance with the proviso contained in Section
7.2(b) or (c) above, as the case may be, and further adjusted as though such
rights or options or Convertible Securities deemed expired or terminated were
newly issued and convertible or exercisable upon the payment of such changed
consideration.
(e) If the consideration payable to the Company upon the exercise of
any right or option to which Section 7.2(b) above is applicable or upon the
conversion or exchange of any Convertible Securities referred to in Section
7.2(b) or (c) above shall decrease at any time under or by reason of provisions
with respect thereto designed to protect the holders thereof against dilution,
the Exercise Price which would apply if this Warrant were being exercised
immediately prior to such event shall forthwith be decreased to the Exercise
Price that would have been obtained had the adjustments made upon the issuance
of such right, option or Convertible Securities been made upon the basis of (i)
the issuance of (and the total consideration received for) the shares of Common
Stock theretofore delivered upon the exercise of such rights or options or upon
the conversion or exchange of such Convertible Securities, and (ii) the
issuance of (and the total minimum consideration thereafter receivable for) the
maximum number of shares of Common Stock thereafter deliverable upon the
exercise of such rights or options or upon the conversion or exchange of such
Convertible Securities. Any right or option to purchase shares of Common Stock
or any Convertible Securities issued after the date hereof which shall contain
provisions designed to protect the holders thereof against dilution shall
expressly provide that adjustments of the Exercise Price hereunder or of the
number of Warrant Shares purchasable hereunder or the issuance of any shares of
Warrant Stock upon the exercise hereof shall be excluded from the operation of
such provisions protecting the holders of such rights, options or Convertible
Securities against dilution, so that in the event of any such adjustment of the
Exercise Price hereunder or of the number of Warrant Shares purchasable
hereunder or the issuance of any shares of Warrant Stock upon the exercise
hereof, there shall be no adjustment in the amount of consideration payable to
or receivable by the Company upon the exercise of any such rights or options or
the conversion or exchange of any such Convertible Securities.
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(f) In case any dividends on any class of Capital Stock (other than
Common Stock) of the Company, payable in Common Stock, shall be declared or
paid by the Company, the Common Stock so issued shall be deemed to have been
issued without consideration.
(g) In case any shares of Common Stock or Convertible Securities or
any rights or options to purchase any such Common Stock or Convertible
Securities shall be issued or sold for cash, the consideration received by the
Company therefor shall be deemed to be the amount received by the Company
therefor, after deducting therefrom all underwriting commissions, discounts or
concessions and all finder's fees paid or allowed by the Company in connection
therewith.
(h) In case any shares of Common Stock or Convertible Securities or
any rights or options to purchase any such Common Stock or Convertible
Securities shall be issued or sold for a consideration other than cash, then,
in any such event, the amount of the consideration (other than cash) received
by the Company shall be the fair market value of such consideration, as
determined in good faith by the Board of Directors of the Company, after
deducting all underwriting commissions, discounts or concessions and all
finder's fees paid or incurred by the Company in connection therewith. Such
fair market value and the calculations used in determining such fair market
value shall be set forth in a certificate delivered promptly to the holder of
this Warrant. At its election, the holder of this Warrant may confirm the
valuations noted on the certificate by causing such valuations to be determined
by an independent certified public accountant acceptable to the holder of this
Warrant at the expense of the Company. The determination of such independent
certified public accountant shall be final, conclusive and binding for all
purposes of this Warrant.
(i) If (and on each occasion that) the Company shall, at any time, (i)
issue any shares of Common Stock as a dividend upon Common Stock, or (ii) issue
any shares of Common Stock in subdivision of outstanding shares of Common Stock
by reclassification or otherwise, or (iii) combine outstanding shares of Common
Stock by reclassification or otherwise, the then current Exercise Price shall
be adjusted to a price determined by dividing (x) the number of shares of
Common Stock outstanding immediately prior to such dividend, subdivision or
combination, multiplied by the then current Exercise Price, by (y) the total
number of shares of Common Stock outstanding immediately after such issue, and
the resulting quotient shall be the adjusted Exercise Price per share.
7.3. Additional Provisions.
(a) In determining the number of shares of Common Stock outstanding
at any time, shares of Common Stock owned by the Company or any Subsidiary
thereof shall not be deemed to be outstanding.
(b) The parties intend that an adjustment of the number of Warrant
Shares pursuant to Section 7.1 hereof and an adjustment to the Exercise Price
pursuant to 7.2 hereof may arise from the same transaction or circumstances
and, in such event, each of the provisions of Sections 7.1 and 7.2 hereof shall
be applicable to such transaction or circumstances as set forth in such
Sections.
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(c) In case at any time the Company shall fix a record date
applicable to the holders of Common Stock for the purpose of entitling them (x)
to receive a dividend or other distribution payable in shares of Common Stock
or in Convertible Securities, or (y) to subscribe for or purchase shares of
Common Stock or Convertible Securities, then such record date shall be deemed
to be the date of the issuance or sale of the shares of Common Stock deemed to
have been issued or sold upon the declaration of such dividend or of such other
distribution, or the date of the granting of such right of subscription or
purchase, as the case may be.
7.4. Other Securities. In case any Other Securities shall have been
issued, or shall then be subject to issue upon the conversion or exchange of
any Capital Stock (or Other Securities) of the Company (or any other issuer of
Other Securities or any other Person referred to in Section 6 hereof) or to
subscription, purchase or other acquisition pursuant to any rights or options
granted by the Company (or such other issuer or entity), the holder hereof
shall be entitled to receive upon exercise hereof such amount of Other
Securities (in lieu of or in addition to Class A Common Stock) as is determined
in accordance with the terms hereof, treating all references to Common Stock
herein as references to Other Securities to the extent applicable, and the
computations, adjustments and readjustments provided for in this Section 7 with
respect to the number of shares of Class A Common Stock issuable upon exercise
of this Warrant shall be made as nearly as possible in the manner so provided
and applied to determine the amount of Other Securities from time to time
receivable on the exercise of this Warrant, so as to provide the holder of this
Warrant with the benefits intended by this Section 7 and the other provisions
of this Warrant.
8. NO DILUTION OR IMPAIRMENT. The Company will not, by amendment of its Charter
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 of this
Warrant, but will at all times in good faith assist in the carrying out of all
such terms and in the taking of all such action as may be necessary or
appropriate in order to protect the rights of the holder of this Warrant
hereunder. Without limiting the generality of the foregoing, the Company (i)
will not increase the par value of any shares of Class A Common Stock
receivable on the exercise of this Warrant above the amount payable therefor on
such exercise, (ii) will take all such action as may be necessary or
appropriate in order that the Company may validly and legally issue fully paid
and non-assessable shares of Class A Common Stock on the exercise of this
Warrant from time to time outstanding, (iii) will not issue any Capital Stock
which is preferred as to dividends or as to the distribution of assets upon
voluntary or involuntary dissolution, liquidation or winding up, unless the
rights of the holders thereof shall be limited to a fixed sum or percentage of
par value in respect of participation in dividends and in any such distribution
of assets and (iv) will not transfer all or substantially all of its assets to
any other Person or consolidate with or merge into any other Person, or permit
any such Person to consolidate with or merge into the Company (if the Company
is not the surviving entity), unless such other Person shall expressly assume
in writing and will be bound by all the terms of this Warrant, the Consent
Agreement and the Registration Rights Agreement.
9. CERTIFICATES AS TO ADJUSTMENTS. In each case of any event that may require
any adjustment or readjustment in the shares of Class A Common Stock issuable
on the exercise of this Warrant, the Company at its expense will promptly
prepare a certificate setting forth such
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adjustment or readjustment, or stating the reasons why no adjustment or
readjustment is being made, and showing, in detail the facts upon which any
such adjustment or readjustment is based, including a statement of (i) the
number of shares of the Company's Common Stock then outstanding on a fully
diluted basis, and (ii) the number of shares of Class A Common Stock to be
received upon exercise of this Warrant, in effect immediately prior to such
adjustment or readjustment and as adjusted and readjusted (if required by
Section 7 hereof) on account thereof. The Company will forthwith mail a copy of
each such certificate to each holder of a Warrant, and will, on the written
request at any time of any holder of a Warrant, furnish to such holder a like
certificate setting forth the calculations used to determine such adjustment or
readjustment. At its election, the holder of this Warrant may confirm the
adjustment noted on the certificate by causing such adjustment to be computed
by an independent certified public accountant acceptable to the holder of this
Warrant at the expense of the Company. The determination of such independent
certified public accountant shall be final, conclusive and binding for all
purposes of this Warrant.
10. NOTICES OF RECORD DATE AND OTHER EVENTS. In the event of:
(a) any taking by the Company of a record of the holders of any
class of securities for the purpose of determining the holders thereof
who are entitled to receive any dividend or other distribution, or any
right to subscribe for, purchase or otherwise acquire any shares of
Capital Stock or any other securities or Property, or to receive any
other right; or
(b) any capital reorganization of the Company, any reclassification
or recapitalization of the Capital Stock of the Company or any transfer
of all or substantially all the assets of the Company to or any
consolidation or merger of the Company with or into any other Person; or
(c) any voluntary or involuntary dissolution, liquidation or
winding-up of the Company; or
(d) any proposed issuance or grant by the Company of any shares of
Capital Stock or any Other Securities, or any right or option to
subscribe for, purchase or otherwise acquire any shares of Capital Stock
or any Other Securities (other than the issuance of Class A Common Stock
on the exercise of this Warrant);
then, and in each such event, the Company will mail or cause to be mailed to
the holder of this Warrant a notice specifying (i) the record date fixed for
the purpose of such dividend, distribution or right, and stating the amount and
character of such dividend, distribution or right, (ii) the date on which any
such reorganization, reclassification, recapitalization, transfer,
consolidation, merger, dissolution, liquidation or winding-up is to take place,
and the time, if any is to be fixed, as of which the holders of record of
Common Stock (or Other Securities) shall be entitled to exchange their shares
of Common Stock (or Other Securities) for securities or other Property
deliverable on such reorganization, reclassification, recapitalization,
transfer, consolidation, merger, dissolution, liquidation or winding-up and
(iii) the amount and character of any stock or other securities, or rights or
options with respect thereto, proposed to be issued or granted, the
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date of such proposed issue or grant and the Persons or class of Persons to
whom such proposed issue or grant is to be offered or made. Such notice shall
be mailed at least sixty (60) days prior to the date specified in such notice
on which any such action is to be taken.
11. RESERVATION OF STOCK ISSUABLE ON EXERCISE OF WARRANT. The Company will at
all times reserve and keep available, solely for issuance and delivery on the
exercise of this Warrant, a number of shares of Class A Common Stock equal to
the total number of shares of Class A Common Stock from time to time issuable
upon exercise of this Warrant, and, from time to time, will take all steps
necessary to amend its Charter to provide sufficient reserves of shares of
Class A Common Stock issuable upon exercise of this Warrant.
12. REMEDIES. The Company stipulates that the remedies at law of the holder of
this Warrant in the event of any default or threatened default by the Company
in the performance of or compliance with any of the terms of this Warrant are
not and will not be adequate, and that such terms may be specifically enforced
by a decree for the specific performance of any agreement contained herein or
by an injunction against a violation of any of the terms hereof or otherwise.
13. NOTICES. Any notice or other communication in connection with this Warrant
or any Warrant Stock shall be deemed to be delivered if in writing (or in the
form of a telecopy) addressed as provided below and if either (a) actually
delivered or telecopied to said address, (b) in the case of overnight delivery
of a notice, the next Business Day after properly posted with postage prepaid,
or (c) in the case of a letter, 3 Business Days shall have elapsed after the
same shall have been deposited in the United States mails, postage prepaid and
registered or certified:
If to the Company, then to SFX Broadcasting, Inc., 000 Xxxx
00xx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention:
Xxxxxx F.X. Sillerman, Telecopy No.: (000) 000-0000 or at such
other address as the Company shall have specified by notice
actually received by the addressor.
If to the Fund, then to The Xxxx Alternative Income Fund, L.P., 00
Xxxx Xxxxx, Xxxxx Xxxxx, Xxxxxxxxxx, Xxx Xxxxxx 00000, Attention: General
Partner, Telecopy No.: (000) 000-0000, or at such other address as the
Fund shall have specified by notice actually received by the addressor.
If to any other holder of record of this Warrant or any Warrant
Stock, to it at its address set forth on the books and records of the
Company.
The failure to deliver a copy of any notice to any party's counsel
shall not affect the validity of such notice.
14. ASSIGNMENT. This Warrant and all Warrant Stock shall be transferable,
in whole or in part, by the holder hereof or thereof, subject to the
conditions specified in Section 13 of the Consent Agreement.
15. MISCELLANEOUS. In case any provision of this Warrant shall be invalid,
illegal or unenforceable, or partially invalid, illegal or unenforceable, the
provision shall be enforced to the extent, if any, that it may legally be
enforced and the validity, legality and enforceability of the
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remaining provisions shall not in any way be affected or impaired thereby. This
Warrant and any term hereof may be changed, waived, discharged or terminated
only by a statement in writing signed by the holder of this Warrant and the
Company. This Warrant shall be governed by and construed in accordance with the
laws of the State of New York applicable to agreements made and to be performed
entirely within such State. The headings in this Warrant are for purposes of
reference only, and shall not limit or otherwise affect any of the terms
hereof.
IN WITNESS WHEREOF, the Company has caused this Warrant to be
executed by its duly authorized officer.
Dated as of November 22, 1996 SFX BROADCASTING, INC.
By:
--------------------------------
Name:
Title:
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FORM OF SUBSCRIPTION
(To be signed only on exercise
of Common Stock Purchase Warrant)
TO: SFX Broadcasting, Inc.
The undersigned, the Holder of the within Common Stock Purchase
Warrant, hereby irrevocably elects to exercise this Common Stock Purchase
Warrant for, and to purchase thereunder __________ shares of Class A Common
Stock of SFX Broadcasting, Inc. and herewith [makes payment of
$___________________ therefor] [instructs you herein, in payment of the
Exercise Price, to deduct shares of Class A Common Stock and to deliver the net
number of shares, being _____ shares of Class A Common Stock], and requests
that the certificates for such shares be issued in the name of, and delivered
to _______________________, whose address is _________________________________.
Dated
---------------------------------------
(Signature must conform in all respects
to name of Holder as specified on the
face of the Warrant or its assigns)
---------------------------------------
---------------------------------------
(Address)
FORM OF ASSIGNMENT
(To be signed only on transfer of Warrant)
For value received, the undersigned hereby sells, assigns, and
transfers unto ______________________ the right represented by the within
Common Stock Purchase Warrant (the "Warrant") to purchase ____________ shares
of Class A Common Stock of SFX Broadcasting, Inc., a Delaware corporation, to
which the Warrant relates, and appoints ____________________ attorney to
transfer such right on the books of SFX Broadcasting, Inc., with full power of
substitution in the premises.
[NAME OF HOLDER]
Dated: By:
---------------------------- ------------------------------
Title:
---------------------------
Address:
-------------------------
Signed in the presence of:
----------------------------------
EXHIBIT A
[SAMPLE CALCULATION OF APPLICABLE PERCENTAGE]
Right to Purchase 7,458 Shares of Class A
Common Stock of SFX Broadcasting, Inc.
THIS WARRANT HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, AND MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH
REGISTRATION OR AN EXEMPTION THEREFROM UNDER SUCH ACT OR ANY APPLICABLE STATE
SECURITIES LAWS. FURTHERMORE, THIS WARRANT MAY BE SOLD OR OTHERWISE TRANSFERRED
ONLY IN COMPLIANCE WITH THE CONDITIONS SPECIFIED IN SECTION 13 OF THE CONSENT
AGREEMENT, DATED AS OF MAY 17, 1996, BY AND AMONG MULTI-MARKET RADIO, INC., THE
XXXX ALTERNATIVE INCOME FUND, L.P. AND SFX BROADCASTING, INC., A COMPLETE AND
CORRECT COPY OF WHICH IS AVAILABLE FOR INSPECTION AT THE PRINCIPAL OFFICES OF
SFX BROADCASTING, INC. AND WILL BE FURNISHED WITHOUT CHARGE TO THE HOLDER OF
THIS WARRANT UPON WRITTEN REQUEST.
EXERCISE OF THIS WARRANT MAY BE SUBJECT TO THE RESTRICTIONS IMPOSED
BY THE COMMUNICATIONS ACT OF 1934, AS AMENDED.
SFX BROADCASTING, INC.
Common Stock Purchase Warrant
SFX Broadcasting, Inc., a Delaware corporation (the "Company"),
hereby certifies that, for value received, THE XXXX ALTERNATIVE INCOME FUND,
L.P., a Delaware limited partnership (the "Fund"), or assigns, is entitled,
subject to the terms set forth below, to purchase from the Company at any time
or from time to time after the date hereof and prior to the expiration hereof
pursuant to Section 2.2 hereof, an aggregate of 7,458 fully paid and
non-assessable shares of Class A Common Stock, at an initial purchase price per
share of $41.90. (Such number of shares as adjusted from time to time as
provided herein is referred to as the "Warrant Shares" and such price per share
as adjusted from time to time as provided herein is referred to herein as the
"Exercise Price".)
This Warrant, together with the Other Warrants (as defined below),
is being issued pursuant to the Consent Agreement, dated as of May 17, 1996,
among the Company, Multi-Market Radio, Inc. ("MMR") and the Fund (the "Consent
Agreement"). The holder of this Warrant shall be entitled to all of the
benefits and shall be subject to all of the obligations of the Consent
Agreement and the Registration Rights Agreement, dated as of May 17, 1996,
between the Company and the Fund (the "Registration Rights Agreement"). Copies
of each of the Consent Agreement and the Registration Rights Agreement are on
file at the principal offices of the Company.
1. DEFINITIONS. The following terms shall have the meanings set forth
below:
"Additional Shares of Common Stock" means any shares of Common Stock
issued by the Company after the date hereof, other than Warrant Stock and
shares of Common Stock issuable upon exercise or conversion of the securities
listed on Exhibit A hereto. For purposes of this
Warrant, only the securities of the Company listed on Exhibit A shall be deemed
outstanding on the date hereof and any securities not listed on Exhibit A shall
be deemed issued after the date hereof and, therefore, the issuance thereof
shall be subject to Sections 5, 6 and 7 hereof.
"Applicable Percentage" means the quotient of (x) the number of Warrant
Shares which would be purchasable from time to time hereunder upon the exercise
of this Warrant divided by (y) the total number of shares of Common Stock then
outstanding and deemed (in accordance with Section 7.1 hereof) to be then
outstanding, including the Warrant Shares issuable upon exercise of this
Warrant, provided, however, that for purposes of computing clause (y) above at
any time, any Additional Shares of Common Stock issued or sold or deemed issued
or sold after the date hereof at an Effective Price greater than the Exercise
Price in effect immediately prior to such issuance or sale or deemed issuance
or sale shall be disregarded. On the date of the issuance of this Warrant, the
Applicable Percentage is .000494 percent (.0494%). A sample calculation of the
Applicable Percentage as of the date hereof is set forth on Exhibit A hereto.
"Average Closing Price" means, as of any specified date, (x) if shares of
the Company's Class A Common Stock are listed on a national securities
exchange, the average of the closing sales prices therefor on the largest
securities exchange on which such shares are traded on the last fifteen (15)
trading days immediately prior to, but not including, such date; (y) if such
shares are listed on the NASDAQ National Market System but not on any national
securities exchange, the average of the closing sales prices therefor on the
NASDAQ National Market System on the last fifteen (15) trading days immediately
prior to, but not including, such date; or (z) if such shares are not listed on
either a national securities exchange or the NASDAQ National Market System, the
average of the mean of the high and low bid and asked quotations therefor on
the last thirty (30) trading days immediately prior to, but not including, such
date.
"Business Day" means any day other than a Saturday, Sunday or other day
on which commercial banks in New York City are required to be closed.
"Capital Stock" means, with respect to any Person, any and all shares,
interests, participations, rights in, other shares of beneficial interest or
other equivalents (however designated and whether voting or non-voting, or
preferred or common) of such Person's capital stock, whether outstanding on the
date hereof or issued thereafter, and any and all warrants, options and other
rights to acquire such capital stock (including, without limitation, by way of
conversion or exchange).
"Charter" means the articles or certificate of incorporation, statute,
constitution, joint venture, operating or partnership agreement or articles or
other organizational document of any Person other than an individual, each as
from time to time amended or modified.
"Common Stock" means, collectively, (i) the Class A Common Stock, par
value $.01 per share (the "Class A Common Stock"), the Class B Common Stock,
par value $.01 per share, and the Class C Common Stock, par value $.01 per
share, of the Company, (ii) any other Capital Stock of the Company, the holders
of which shall have the right, without limitation as to amount, either to all
or to a share of the balance of current dividends and liquidating dividends
after the payment of dividends and distributions on any shares entitled to
preference, and (iii) any other securities into which or for which any of the
securities described in clause (i) or (ii) above have
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been converted or exchanged pursuant to a plan of recapitalization,
reorganization, merger, sale of assets or otherwise.
"Company" means SFX Broadcasting, Inc., a Delaware corporation, and any
corporation which shall succeed to or assume (whether in writing or otherwise)
the obligations of the Company hereunder.
"Effective Price" means: (a) with respect to any issuance or sale of
Capital Stock, the lowest consideration per share received by the Company upon
such issuance or sale; (b) with respect to any issuance or sale of any rights
to subscribe for or to purchase, or grant of options for the purchase of,
shares of Capital Stock or Convertible Securities, the price per share
determined by dividing:
(x) the total amount, if any, received or receivable by the
Company as consideration for the issuance or sale of such rights or
the granting of such options, plus the minimum aggregate amount of
additional consideration payable to the Company upon the exercise
of such rights or options, plus, in the case of such Convertible
Securities, the minimum aggregate amount of additional
consideration, if any, payable to the Company upon the conversion
or exchange thereof; by
(y) the maximum number of shares of Common Stock issuable
upon the exercise of such rights or options or upon the conversion
or exchange of the maximum number of such Convertible Securities
issuable on the exercise of such rights or options;
and (c) with respect to any issuance or sale of Convertible Securities, the
price per share determined by dividing:
(x) the total amount, if any, received or receivable by the
Company as a consideration for the issuance or sale of such
Convertible Securities, plus the minimum aggregate amount of
additional consideration (if any) payable to the Company upon such
conversion or exchange; by
(y) the maximum number of shares of Common Stock issuable as
of the date of issue of such Convertible Securities to effect the
conversion or exchange of all such Convertible Securities.
"Other Securities" means any Capital Stock (other than Common Stock) and
other securities of the Company or any other entity (corporate or otherwise)
(i) which the holder of this Warrant at any time shall be entitled to receive,
or shall have received, on the exercise of this Warrant, in lieu of or in
addition to Common Stock, or (ii) which at any time shall be issuable or shall
have been issued in exchange for or in replacement of Common Stock or Other
Securities, in each case pursuant to Section 5 or 6 hereof.
"Other Warrants" means the Common Stock Purchase Warrants issued by the
Company to the Fund, dated the date hereof, and exercisable for (i) shares of
Class A Common Stock of the Company in exchange for the Common Stock Purchase
Warrants issued by MMR to the Fund,
-3-
dated March 27, 1995, and September 26, 1995, and exercisable, respectively,
into 595,000 and 133,201.54 shares of MMR Class A Common Stock, and (ii) shares
of Class A Common Stock of the Company issued in consideration, together with
this Warrant, for the Fund entering into the Consent Agreement.
"Person" means any individual, corporation, general or limited
partnership, limited liability company, joint venture, association, enterprise,
joint stock company, trust, unincorporated organization or other entity.
"Property" means all types of real, personal or mixed property and all
types of tangible or intangible property.
"Subsidiary" means any Person of which the Company now or hereafter shall
at the time own directly or indirectly through a Subsidiary at least a majority
of the outstanding Capital Stock entitled to vote generally in the election of
directors.
"Warrants" means (a) this Warrant, (b) all other warrants transferred to
any other holders in respect of this Warrant and (c) any warrants issued as
replacements for or in substitution of any of the foregoing pursuant to
Sections 11 or 12 of the Consent Agreement.
"Warrant Stock" means Common Stock issuable upon exercise of the Warrants
in accordance with their terms and any Capital Stock or Other Securities into
which or for which such Common Stock shall have been converted or exchanged
pursuant to any recapitalization, reorganization or merger of the Company.
2. EXERCISE OF WARRANT.
2.1. Exercise; Cashless Exercise. (a) This Warrant may be exercised by
the holder hereof at any time or from time to time prior to its expiration by
surrender of this Warrant, with the form of subscription at the end hereof,
duly executed by such holder, to the Company at its principal office,
accompanied by payment, by certified or official bank check payable to the
order of the Company, by wire transfer to an account designated by the Company,
or as provided in Section 2.1(b) below, in the amount obtained by multiplying
the number of shares of Class A Common Stock for which this Warrant is then
being exercised by the Exercise Price then in effect with respect to such
shares. In the event this Warrant is not exercised in full, the Company, at its
expense, will forthwith issue and deliver to or upon the order of the holder
hereof a new Warrant or Warrants of identical tenor, in the name of the holder
hereof or as such holder may request, calling in the aggregate on the face or
faces thereof for the number of shares of Class A Common Stock equal (before
application of any adjustment required pursuant hereto) to the number of such
shares called for on the face of this Warrant minus the number of such shares
(before application of any adjustment required pursuant hereto) for which this
Warrant shall have been exercised.
(b) The holder of this Warrant shall have the right, at its
election, in lieu of delivering the Exercise Price in cash, to instruct the
Company in the form of subscription to retain, in payment of the Exercise
Price, a number of shares of Class A Common Stock (the "Payment Shares") equal
to the quotient of (i) the aggregate Exercise Price of the shares as to which
this
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Warrant is then being exercised divided by (ii) the Average Closing Price as of
the date of exercise and to deduct the number of Payment Shares from the shares
to be delivered to the holder hereof.
2.2. Expiration of the Warrant. This Warrant shall expire on November 22,
2002; provided, however, that in the event that this Warrant has not been
exercised in full, this Warrant (or any warrant issued in exchange for this
Warrant or pursuant to Section 2.1(a) above) shall not expire until November
22, 2006, unless the holder of this Warrant shall have notified the Company in
writing, prior to November 22, 2002.
3. CALL OPTION; REGISTRATION RIGHTS.
(a) The Company has the option to repurchase this Warrant at the
time and in the manner specified in Section 14 of the Consent Agreement.
Upon the initial exercise, in whole or in part, by the holder of this
Warrant of its rights under Section 2.1 above, the Company shall (i) have
ten (10) days from the date of such exercise to deliver a written notice
(the "Repurchase Notice") to the holder exercising the Company's rights
under such Section 14 to repurchase this Warrant and (ii) be obligated to
consummate the repurchase of this Warrant no later than ninety (90) days
from the date of such exercise of this Warrant under Section 2.1 above;
provided, that notwithstanding anything to the contrary in the Consent
Agreement, if (x) the Repurchase Notice shall not be so delivered or (y)
the Repurchase Notice shall be delivered but this Warrant shall not be so
repurchased within such 90-day period, the Company's right to repurchase
this Warrant shall terminate without further action by any party and the
holder of this Warrant shall be entitled to the full benefits of this
Warrant.
(b) The holder of this Warrant has the right to cause the Company
to register and to maintain the registration of the shares of Warrant
Stock under the Securities Act and any blue sky or securities laws of any
jurisdictions within the United States at the time and in the manner
specified in the Registration Rights Agreement.
4. DELIVERY OF STOCK CERTIFICATES ON EXERCISE. As soon as practicable after the
exercise of this Warrant in full or in part, and in any event within five (5)
Business Days thereafter, the Company at its expense (including the payment by
it of any applicable issue taxes) will cause to be issued in the name of and
delivered to the holder hereof, or as such holder (upon payment by such holder
of any applicable transfer taxes then due) may direct, a certificate or
certificates for the number of fully paid and non-assessable shares of Class A
Common Stock (or Other Securities) to which such holder shall be entitled on
such exercise, together with any other Capital Stock or Other Securities and
Property (including cash, where applicable) to which such holder is entitled
upon such exercise.
5. ADJUSTMENT FOR DIVIDENDS, DISTRIBUTIONS AND RECLASSIFICATIONS. In case at
any time or from time to time, the holders of Common Stock shall have received,
or (on or after the record date fixed for the determination of shareholders
eligible to receive) shall have become entitled to receive, without payment
therefor:
(a) other or additional Capital Stock or Other Securities or
Property (other than cash) by way of dividend; or
-5-
(b) other or additional (or less) Capital Stock or Other Securities
or Property (including cash) by way of spin-off, split-up,
reclassification, recapitalization, combination of shares or similar
corporate restructuring;
other than additional shares of Common Stock issued as a stock dividend or in a
stock-split (adjustments in respect of which are provided for in Section 7
hereof), then and in each such case the holder of this Warrant, on the exercise
hereof as provided in Section 2 hereof, shall be entitled to receive from the
Company the amount of Capital Stock and Other Securities and Property
(including cash in the case referred to in clause (b) of this Section 5) which
such holder would have received prior to or would have held on the date of such
exercise if on the date hereof he had been the holder of record of the number
of shares of Class A Common Stock called for on the face of this Warrant.
During the period from the date hereof to and including the date of such
exercise, such shares and all such other or additional Capital Stock and Other
Securities and Property (including cash in the case referred to in clause (b)
of this Section 5) receivable by such holder as aforesaid, giving effect to all
further adjustments called for during such period by Sections 6 and 7 hereof,
shall be held by the Company in trust for the benefit of the holder of this
Warrant.
6. ADJUSTMENT FOR CERTAIN CAPITAL TRANSACTIONS.
6.1. Certain Adjustments. In case at any time or from time to time, the
Company shall (i) effect a capital reorganization, reclassification or
recapitalization, (ii) consolidate with or merge into any other Person, or
(iii) transfer all or substantially all of its assets to any Person (each of
the transactions in (i), (ii) or (iii) above being a "Capital Transaction"),
then in each such case, the holder of this Warrant, on the exercise hereof as
provided in Section 2 hereof at any time after the consummation of such Capital
Transaction shall receive, in lieu of the Class A Common Stock (or Other
Securities) issuable on such exercise prior to such consummation or effective
date, the Capital Stock and Other Securities and Property (including cash) to
which such holder would have been entitled upon such consummation or in
connection with such Capital Transaction if such holder had so exercised this
Warrant immediately prior thereto, all subject to further adjustment thereafter
as provided in Sections 5 and 7 hereof.
6.2. Continuation of Terms. Upon the occurrence of any Capital
Transaction, this Warrant shall continue in full force and effect and the terms
hereof shall be applicable to the shares of Capital Stock and Other Securities
and Property receivable on the exercise of this Warrant after the consummation
of such Capital Transaction and shall be binding upon the issuer of any such
Capital Stock or Other Securities, including, in the case of any transaction
specified in Section 6.1(iii), the Person acquiring all or substantially all of
the assets of the Company, whether or not such Person shall have expressly
assumed the terms of this Warrant as provided in Section 8 hereof.
7. ADJUSTMENTS FOR ISSUANCE OF COMMON STOCK AND CONVERTIBLE SECURITIES.
7.1. Adjustment of Number of Warrant Shares. In case at any time after
the date hereof, the Company shall issue or sell, or shall be deemed to have
issued or sold pursuant to Section 7.1(b) below, any Additional Shares of
Common Stock at an Effective Price less than the Exercise Price in effect
immediately prior to such issuance or sale or deemed issuance or sale, the
-6-
number of Warrant Shares purchasable upon the exercise of this Warrant shall be
forthwith increased so that such issuance or sale does not change the then
Applicable Percentage existing immediately prior to such issuance or sale. For
purposes of this Section 7.1, the following provisions shall also be
applicable:
(a) Adjustment of Exercise Price. Upon an adjustment of the number
of Warrant Shares pursuant to this 7.1, no adjustment to the Exercise Price
shall be made, except as required by Section 7.2 hereof.
(b) Constructive Issuance of Common Stock; Convertible
Securities; Rights and Options.
(i) In case at any time after the date hereof the Company
shall in any manner issue or sell any rights or options to subscribe for or to
purchase (x) any Common Stock or (y) any Capital Stock or Other Securities
convertible into or exchangeable for shares of Common Stock (such convertible
or exchangeable capital stock or securities being hereinafter referred to as
"Convertible Securities") at an Effective Price less than the Exercise Price in
effect immediately prior to such issuance or sale, whether or not such rights
or options or the right to convert or exchange any such Convertible Securities
are immediately exercisable, then the total maximum number of shares of Common
Stock issuable upon the exercise of such rights or options or upon conversion
of exchange of the total maximum amount of such Convertible Securities issuable
upon the exercise of such rights or options shall (on the date of the granting
of such rights or options) be deemed constructively issued and shall (on and
after the date of the issuance or sale of such rights or options) be deemed
outstanding. Except as provided in Section 7.1(c) below, no further adjustments
of the number of Warrant Shares shall be made pursuant to this Section 7.1 upon
the actual exercise of such rights or options or upon the actual issuance of
shares of Common Stock upon conversion or exchange of such Convertible
Securities.
(ii) In case at any time the Company shall in any manner
issue or sell any Convertible Securities at an Effective Price less than the
Exercise Price in effect immediately prior to such issuance or sale, whether or
not the rights to exchange or convert thereunder are immediately exercisable,
then the total maximum number of shares of Common Stock issuable upon
conversion or exchange of all such Convertible Securities shall (on the date of
the issuance or sale of such Convertible Securities) be deemed constructively
issued and shall (on and after the date of the issuance or sale of such
Convertible Securities) be deemed outstanding, provided, that, except as
otherwise specified in Section 7.1(c) below, (x) no further adjustments of the
number of Warrant Shares shall be made pursuant to this Section 7.1 upon the
actual issuance of Common Stock upon conversion or exchange of such Convertible
Securities, and (y) if any such issuance or sale of such Convertible Securities
is made upon exercise of any rights to subscribe for or to purchase or any
option to purchase any such Convertible Securities for which adjustments of the
number of Warrant Shares have been or are to be made pursuant to clause (i) of
this Section 7.1(b), no further adjustment of the number of Warrant Shares
shall be made pursuant to this clause (ii) by reason of such issuance or sale.
(c) Readjustment; Lapse. If the number of shares of Common Stock
purchasable upon the exercise of any right or option referred to in Section
7.1(b)(i) hereof or purchasable upon the conversion of any Convertible
Securities referred to in Section 7.1(b) or (b)(ii) hereof shall change or a
different number of such shares than originally set out by the terms
-7-
of such rights, options or Convertible Securities shall be issued upon such
exercise or conversion at any time or from time to time or if such right or
option or Convertible Security shall terminate, be cancelled or otherwise lapse
without exercise in whole or in part, then, upon the effectiveness of such
event, the number of Warrant Shares shall forthwith be changed to such number
of shares of Common Stock as would have been obtained had all adjustments made
under this Section 7.1 been made at the time of such event based upon (x) the
number of shares of Common Stock theretofore actually delivered upon the
exercise of any options or rights or upon the conversion or exchange of any
Convertible Securities, and (y) the number of shares of Common Stock then
purchasable upon the exercise of all of the rights, options and Convertible
Securities to the extent and in the form then outstanding.
(d) Stock Dividends. In case at any time after the date hereof, the
Company shall declare a dividend or any other distribution upon any Capital
Stock of the Company which is payable in shares of Common Stock, then the
number of Warrant Shares immediately prior to the declaration of such dividend
or distribution shall be increased so that the then existing Applicable
Percentage does not change.
(e) Stock Splits and Reverse Splits. In case at any time after the
date hereof, the Company shall subdivide the outstanding shares of Common Stock
into a greater number of shares, the number of Warrant Shares immediately prior
to such subdivision shall be proportionately increased, and conversely, in case
at any time the Company shall combine the outstanding shares of Common Stock
into a smaller number of shares, the number of Warrant Shares immediately prior
to such combination shall be proportionately reduced, in each case, so that the
then existing Applicable Percentage does not change.
7.2. Adjustment of Exercise Price. The Exercise Price shall be
subject to adjustment from time to time after the date hereof as follows:
(a) In case at any time after the date hereof, the Company shall
issue or sell, or shall be deemed to have issued or sold pursuant to Section
7.2(b) or (c) below, any Additional Shares of Common Stock at an Effective
Price less than the Exercise Price in effect immediately prior to such issuance
or sale or deemed issuance or sale, then forthwith upon such issuance or sale
the Exercise Price in effect immediately prior to such issuance or sale shall
be reduced to a price equal to the Effective Price of such issuance or sale.
(b) In case at any time after the date hereof the Company shall in
any manner issue or sell any rights or options to subscribe for or to purchase
any Common Stock or Convertible Securities at an Effective Price less than the
Exercise Price in effect immediately prior to such issuance or sale, whether or
not such rights or options or the right to convert or exchange any such
Convertible Securities are immediately exercisable, then the maximum number of
shares of Common Stock issuable upon the exercise of such rights or options or
upon conversion or exchange of the maximum number of such Convertible
Securities issuable upon the exercise of such rights or options shall be deemed
to be issued or sold for such Effective Price; provided, however, that upon the
expiration of all, but not less than all, of such rights or options, and, in
the case of options to purchase Convertible Securities, upon the expiration in
whole, but not in part, of the right to convert or exchange such Convertible
Securities, the currently applicable Exercise Price in effect immediately prior
to such expiration shall forthwith be adjusted to such Exercise Price as would
have been obtained had the adjustments made upon the issuance of such rights of
-8-
the granting of such options been made upon the basis of the issuance of only
the number of shares of Common Stock actually issued on the exercise of such
rights or options or on the conversion or exchange of such Convertible
Securities (or in the case of rights or options to purchase Convertible
Securities, actually issued and at the time still issuable upon the conversion
or exchange of the Convertible Securities actually issued), and upon the basis
of only the consideration applicable thereto, and any shares issuable upon the
exercise of such rights or options which have expired or upon the conversion or
exchange of such Convertible Securities, the right to convert or exchange which
has expired, shall not thereafter be deemed to be outstanding and the
consideration applicable thereto shall not thereafter be deemed to have been
received. If such rights or options are issued or granted in conjunction with
the sale of Other Securities of the Company, the part of the consideration
allocable to such rights and options, and the part of the consideration
allocable to such Other Securities, shall be determined in good faith by Board
of Directors of the Company in a certificate delivered promptly to the holder
of this Warrant setting forth the calculations used in determining such
allocation. At its election, the holder of this Warrant may confirm the
allocation noted on the certificate by causing such allocation to be determined
by an independent certified public accountant acceptable to the holder of this
Warrant at the expense of the Company. The determination of such independent
certified public accountant shall be final, conclusive and binding for all
purposes of this Warrant.
(c) In case at any time after the date hereof the Company shall in
any manner issue or sell any Convertible Securities at an Effective Price less
than the Exercise Price in effect immediately prior to such issuance or sale,
whether or not such rights to convert or exchange any such Convertible
Securities are immediately exercisable, then such issuance or sale shall be
deemed to be an issuance or sale (as of the date of issuance or sale of such
Convertible Securities) of the maximum number of shares of Common Stock
necessary to be issued as of that date to effect the conversion or exchange of
all such Convertible Securities, and the gross amount received or receivable by
the Company as consideration for the issuance or sale of such Convertible
Securities, plus the minimum aggregate amount of additional consideration (if
any) payable to the Company upon such conversion or exchange, shall be deemed
to be the consideration actually received (as of the date of the issue or sale
of such Convertible Securities) for the issuance or sale of such Common Stock;
provided, however, that upon the termination of the right to convert or to
exchange such Convertible Securities for Common Stock, the Exercise Price shall
forthwith be adjusted to such Exercise Price which would have been obtained had
the adjustments made upon the issuance of such Convertible Securities been made
upon the basis of the issuance of only the number of shares of Common Stock
actually issued upon the conversion or exchange thereof, and upon the basis of
the consideration applicable only to the Convertible Securities so converted or
exchanged, and no shares issuable upon the conversion or exchange of such
Convertible Securities which were not actually so issued shall thereafter be
deemed to be outstanding and the consideration applicable thereto shall not
thereafter be deemed to have been received. No adjustment of the Exercise Price
shall be made pursuant to this Section 7.2(c) upon any issuance or sale of
Convertible Securities if such issuance or sale has been made upon the exercise
of any rights to subscribe for or to purchase, or any options to purchase, any
such Convertible Securities for which an adjustment of the Exercise Price has
been made pursuant to Section 7.2(b) above.
(d) If the amount of consideration payable to the Company upon the
exercise of any right or option to which Section 7.2(b) above is applicable or
upon the conversion or
-9-
exchange of any Convertible Securities referred to in Section 7.2(b) or (c)
above shall change at any time (other than under or by reason of provisions
designed to protect against dilution), then, forthwith upon each such change
becoming effective, all such rights or options or all such rights of conversion
or exchange not theretofore exercised shall be deemed to have expired or
terminated, as the case may be, and the Exercise Price shall forthwith be
adjusted in accordance with the proviso contained in Section 7.2(b) or (c)
above, as the case may be, and further adjusted as though such rights or
options or Convertible Securities deemed expired or terminated were newly
issued and convertible or exercisable upon the payment of such changed
consideration.
(e) If the consideration payable to the Company upon the exercise
of any right or option to which Section 7.2(b) above is applicable or upon the
conversion or exchange of any Convertible Securities referred to in Section
7.2(b) or (c) above shall decrease at any time under or by reason of provisions
with respect thereto designed to protect the holders thereof against dilution,
the Exercise Price which would apply if this Warrant were being exercised
immediately prior to such event shall forthwith be decreased to the Exercise
Price that would have been obtained had the adjustments made upon the issuance
of such right, option or Convertible Securities been made upon the basis of (i)
the issuance of (and the total consideration received for) the shares of Common
Stock theretofore delivered upon the exercise of such rights or options or upon
the conversion or exchange of such Convertible Securities, and (ii) the
issuance of (and the total minimum consideration thereafter receivable for) the
maximum number of shares of Common Stock thereafter deliverable upon the
exercise of such rights or options or upon the conversion or exchange of such
Convertible Securities. Any right or option to purchase shares of Common Stock
or any Convertible Securities issued after the date hereof which shall contain
provisions designed to protect the holders thereof against dilution shall
expressly provide that adjustments of the Exercise Price hereunder or of the
number of Warrant Shares purchasable hereunder or the issuance of any shares of
Warrant Stock upon the exercise hereof shall be excluded from the operation of
such provisions protecting the holders of such rights, options or Convertible
Securities against dilution, so that in the event of any such adjustment of the
Exercise Price hereunder or of the number of Warrant Shares purchasable
hereunder or the issuance of any shares of Warrant Stock upon the exercise
hereof, there shall be no adjustment in the amount of consideration payable to
or receivable by the Company upon the exercise of any such rights or options or
the conversion or exchange of any such Convertible Securities.
(f) In case any dividends on any class of Capital Stock (other than
Common Stock) of the Company, payable in Common Stock, shall be declared or
paid by the Company, the Common Stock so issued shall be deemed to have been
issued without consideration.
(g) In case any shares of Common Stock or Convertible Securities or
any rights or options to purchase any such Common Stock or Convertible
Securities shall be issued or sold for cash, the consideration received by the
Company therefor shall be deemed to be the amount received by the Company
therefor, after deducting therefrom all underwriting commissions, discounts or
concessions and all finder's fees paid or allowed by the Company in connection
therewith.
(h) In case any shares of Common Stock or Convertible Securities or
any rights or options to purchase any such Common Stock or Convertible
Securities shall be issued or sold for a consideration other than cash, then,
in any such event, the amount of the consideration
-10-
(other than cash) received by the Company shall be the fair market value of
such consideration, as determined in good faith by the Board of Directors of
the Company, after deducting all underwriting commissions, discounts or
concessions and all finder's fees paid or incurred by the Company in connection
therewith. Such fair market value and the calculations used in determining such
fair market value shall be set forth in a certificate delivered promptly to the
holder of this Warrant. At its election, the holder of this Warrant may confirm
the valuations noted on the certificate by causing such valuations to be
determined by an independent certified public accountant acceptable to the
holder of this Warrant at the expense of the Company. The determination of such
independent certified public accountant shall be final, conclusive and binding
for all purposes of this Warrant.
(i) If (and on each occasion that) the Company shall, at any time,
(i) issue any shares of Common Stock as a dividend upon Common Stock, or (ii)
issue any shares of Common Stock in subdivision of outstanding shares of Common
Stock by reclassification or otherwise, or (iii) combine outstanding shares of
Common Stock by reclassification or otherwise, the then current Exercise Price
shall be adjusted to a price determined by dividing (x) the number of shares of
Common Stock outstanding immediately prior to such dividend, subdivision or
combination, multiplied by the then current Exercise Price, by (y) the total
number of shares of Common Stock outstanding immediately after such issue, and
the resulting quotient shall be the adjusted Exercise Price per share.
7.3. Additional Provisions.
(a) In determining the number of shares of Common Stock outstanding
at any time, shares of Common Stock owned by the Company or any Subsidiary
thereof shall not be deemed to be outstanding.
(b) The parties intend that an adjustment of the number of Warrant
Shares pursuant to Section 7.1 hereof and an adjustment to the Exercise Price
pursuant to 7.2 hereof may arise from the same transaction or circumstances
and, in such event, each of the provisions of Sections 7.1 and 7.2 hereof shall
be applicable to such transaction or circumstances as set forth in such
Sections.
(c) In case at any time the Company shall fix a record date
applicable to the holders of Common Stock for the purpose of entitling them (x)
to receive a dividend or other distribution payable in shares of Common Stock
or in Convertible Securities, or (y) to subscribe for or purchase shares of
Common Stock or Convertible Securities, then such record date shall be deemed
to be the date of the issuance or sale of the shares of Common Stock deemed to
have been issued or sold upon the declaration of such dividend or of such other
distribution, or the date of the granting of such right of subscription or
purchase, as the case may be.
7.4. Other Securities. In case any Other Securities shall have been
issued, or shall then be subject to issue upon the conversion or exchange of
any Capital Stock (or Other Securities) of the Company (or any other issuer of
Other Securities or any other Person referred to in Section 6 hereof) or to
subscription, purchase or other acquisition pursuant to any rights or options
granted by the Company (or such other issuer or entity), the holder hereof
shall be entitled to receive upon exercise hereof such amount of Other
Securities (in lieu of or in addition to Class A Common Stock) as is determined
in accordance with the terms hereof, treating all references to Common
-11-
Stock herein as references to Other Securities to the extent applicable, and
the computations, adjustments and readjustments provided for in this Section 7
with respect to the number of shares of Class A Common Stock issuable upon
exercise of this Warrant shall be made as nearly as possible in the manner so
provided and applied to determine the amount of Other Securities from time to
time receivable on the exercise of this Warrant, so as to provide the holder of
this Warrant with the benefits intended by this Section 7 and the other
provisions of this Warrant.
8. NO DILUTION OR IMPAIRMENT. The Company will not, by amendment of its Charter
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 of this
Warrant, but will at all times in good faith assist in the carrying out of all
such terms and in the taking of all such action as may be necessary or
appropriate in order to protect the rights of the holder of this Warrant
hereunder. Without limiting the generality of the foregoing, the Company (i)
will not increase the par value of any shares of Class A Common Stock
receivable on the exercise of this Warrant above the amount payable therefor on
such exercise, (ii) will take all such action as may be necessary or
appropriate in order that the Company may validly and legally issue fully paid
and non-assessable shares of Class A Common Stock on the exercise of this
Warrant from time to time outstanding, (iii) will not issue any Capital Stock
which is preferred as to dividends or as to the distribution of assets upon
voluntary or involuntary dissolution, liquidation or winding up, unless the
rights of the holders thereof shall be limited to a fixed sum or percentage of
par value in respect of participation in dividends and in any such distribution
of assets and (iv) will not transfer all or substantially all of its assets to
any other Person or consolidate with or merge into any other Person, or permit
any such Person to consolidate with or merge into the Company (if the Company
is not the surviving entity), unless such other Person shall expressly assume
in writing and will be bound by all the terms of this Warrant, the Consent
Agreement and the Registration Rights Agreement.
9. CERTIFICATES AS TO ADJUSTMENTS. In each case of any event that may require
any adjustment or readjustment in the shares of Class A Common Stock issuable
on the exercise of this Warrant, the Company at its expense will promptly
prepare a certificate setting forth such adjustment or readjustment, or stating
the reasons why no adjustment or readjustment is being made, and showing, in
detail the facts upon which any such adjustment or readjustment is based,
including a statement of (i) the number of shares of the Company's Common Stock
then outstanding on a fully diluted basis, and (ii) the number of shares of
Class A Common Stock to be received upon exercise of this Warrant, in effect
immediately prior to such adjustment or readjustment and as adjusted and
readjusted (if required by Section 7 hereof) on account thereof. The Company
will forthwith mail a copy of each such certificate to each holder of a
Warrant, and will, on the written request at any time of any holder of a
Warrant, furnish to such holder a like certificate setting forth the
calculations used to determine such adjustment or readjustment. At its
election, the holder of this Warrant may confirm the adjustment noted on the
certificate by causing such adjustment to be computed by an independent
certified public accountant acceptable to the holder of this Warrant at the
expense of the Company. The determination of such independent certified public
accountant shall be final, conclusive and binding for all purposes of this
Warrant.
10. NOTICES OF RECORD DATE AND OTHER EVENTS. In the event of:
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(a) any taking by the Company of a record of the holders of any
class of securities for the purpose of determining the holders thereof
who are entitled to receive any dividend or other distribution, or any
right to subscribe for, purchase or otherwise acquire any shares of
Capital Stock or any other securities or Property, or to receive any
other right; or
(b) any capital reorganization of the Company, any reclassification
or recapitalization of the Capital Stock of the Company or any transfer
of all or substantially all the assets of the Company to or any
consolidation or merger of the Company with or into any other Person; or
(c) any voluntary or involuntary dissolution, liquidation or
winding-up of the Company; or
(d) any proposed issuance or grant by the Company of any shares of
Capital Stock or any Other Securities, or any right or option to
subscribe for, purchase or otherwise acquire any shares of Capital Stock
or any Other Securities (other than the issuance of Class A Common Stock
on the exercise of this Warrant);
then, and in each such event, the Company will mail or cause to be mailed to
the holder of this Warrant a notice specifying (i) the record date fixed for
the purpose of such dividend, distribution or right, and stating the amount and
character of such dividend, distribution or right, (ii) the date on which any
such reorganization, reclassification, recapitalization, transfer,
consolidation, merger, dissolution, liquidation or winding-up is to take place,
and the time, if any is to be fixed, as of which the holders of record of
Common Stock (or Other Securities) shall be entitled to exchange their shares
of Common Stock (or Other Securities) for securities or other Property
deliverable on such reorganization, reclassification, recapitalization,
transfer, consolidation, merger, dissolution, liquidation or winding-up and
(iii) the amount and character of any stock or other securities, or rights or
options with respect thereto, proposed to be issued or granted, the date of
such proposed issue or grant and the Persons or class of Persons to whom such
proposed issue or grant is to be offered or made. Such notice shall be mailed
at least sixty (60) days prior to the date specified in such notice on which
any such action is to be taken.
11. RESERVATION OF STOCK ISSUABLE ON EXERCISE OF WARRANT. The Company will at
all times reserve and keep available, solely for issuance and delivery on the
exercise of this Warrant, a number of shares of Class A Common Stock equal to
the total number of shares of Class A Common Stock from time to time issuable
upon exercise of this Warrant, and, from time to time, will take all steps
necessary to amend its Charter to provide sufficient reserves of shares of
Class A Common Stock issuable upon exercise of this Warrant.
12. REMEDIES. The Company stipulates that the remedies at law of the holder of
this Warrant in the event of any default or threatened default by the Company
in the performance of or compliance with any of the terms of this Warrant are
not and will not be adequate, and that such terms may be specifically enforced
by a decree for the specific performance of any agreement contained herein or
by an injunction against a violation of any of the terms hereof or otherwise.
13. NOTICES. Any notice or other communication in connection with this Warrant
or any Warrant Stock shall be deemed to be delivered if in writing (or in the
form of a telecopy)
-13-
addressed as provided below and if either (a) actually delivered or telecopied
to said address, (b) in the case of overnight delivery of a notice, the next
Business Day after properly posted with postage prepaid, or (c) in the case of
a letter, 3 Business Days shall have elapsed after the same shall have been
deposited in the United States mails, postage prepaid and registered or
certified:
If to the Company, then to SFX Broadcasting, Inc., 000 Xxxx
00xx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention:
Xxxxxx F.X. Sillerman, Telecopy No.: (000) 000-0000 or at such
other address as the Company shall have specified by notice
actually received by the addressor.
If to the Fund, then to The Xxxx Alternative Income Fund, L.P., 00
Xxxx Xxxxx, Xxxxx Xxxxx, Xxxxxxxxxx, Xxx Xxxxxx 00000, Attention: General
Partner, Telecopy No.: (000) 000-0000, or at such other address as the
Fund shall have specified by notice actually received by the addressor.
If to any other holder of record of this Warrant or any Warrant
Stock, to it at its address set forth on the books and records of the
Company.
The failure to deliver a copy of any notice to any party's counsel
shall not affect the validity of such notice.
14. ASSIGNMENT. This Warrant and all Warrant Stock shall be transferable,
in whole or in part, by the holder hereof or thereof, subject to the
conditions specified in Section 13 of the Consent Agreement.
15. MISCELLANEOUS. In case any provision of this Warrant shall be invalid,
illegal or unenforceable, or partially invalid, illegal or unenforceable, the
provision shall be enforced to the extent, if any, that it may legally be
enforced and the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby. This Warrant
and any term hereof may be changed, waived, discharged or terminated only by a
statement in writing signed by the holder of this Warrant and the Company. This
Warrant shall be governed by and construed in accordance with the laws of the
State of New York applicable to agreements made and to be performed entirely
within such State. The headings in this Warrant are for purposes of reference
only, and shall not limit or otherwise affect any of the terms hereof.
IN WITNESS WHEREOF, the Company has caused this Warrant to be
executed by its duly authorized officer.
Dated as of November 22, 1996 SFX BROADCASTING, INC.
By:
-------------------------------
Name:
Title:
FORM OF SUBSCRIPTION
(To be signed only on exercise
of Common Stock Purchase Warrant)
TO: SFX Broadcasting, Inc.
The undersigned, the Holder of the within Common Stock Purchase
Warrant, hereby irrevocably elects to exercise this Common Stock Purchase
Warrant for, and to purchase thereunder __________ shares of Class A Common
Stock of SFX Broadcasting, Inc. and herewith [makes payment of
$___________________ therefor] [instructs you herein, in payment of the
Exercise Price, to deduct shares of Class A Common Stock and to deliver the net
number of shares, being _____ shares of Class A Common Stock], and requests
that the certificates for such shares be issued in the name of, and delivered
to _______________________, whose address is _________________________________.
Dated:
---------------------------------------
(Signature must conform in all respects
to name of Holder as specified on the
face of the Warrant or its assigns)
---------------------------------------
(Address)
FORM OF ASSIGNMENT
(To be signed only on transfer of Warrant)
For value received, the undersigned hereby sells, assigns, and
transfers unto ______________________ the right represented by the within
Common Stock Purchase Warrant (the "Warrant") to purchase ____________ shares
of Class A Common Stock of SFX Broadcasting, Inc., a Delaware corporation, to
which the Warrant relates, and appoints ____________________ attorney to
transfer such right on the books of SFX Broadcasting, Inc., with full power of
substitution in the premises.
[NAME OF HOLDER]
Dated: By:
---------------------------- ----------------------------------
Title:
-------------------------------
Address:
-----------------------------
Signed in the presence of:
----------------------------------
EXHIBIT A
[SAMPLE CALCULATION OF APPLICABLE PERCENTAGE]
Right to Purchase 7,458 Shares of Class A
Common Stock of SFX Broadcasting, Inc.
THIS WARRANT HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, AND MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH
REGISTRATION OR AN EXEMPTION THEREFROM UNDER SUCH ACT OR ANY APPLICABLE STATE
SECURITIES LAWS. FURTHERMORE, THIS WARRANT MAY BE SOLD OR OTHERWISE TRANSFERRED
ONLY IN COMPLIANCE WITH THE CONDITIONS SPECIFIED IN SECTION 13 OF THE CONSENT
AGREEMENT, DATED AS OF MAY 17, 1996, BY AND AMONG MULTI-MARKET RADIO, INC., THE
XXXX ALTERNATIVE INCOME FUND, L.P. AND SFX BROADCASTING, INC., A COMPLETE AND
CORRECT COPY OF WHICH IS AVAILABLE FOR INSPECTION AT THE PRINCIPAL OFFICES OF
SFX BROADCASTING, INC. AND WILL BE FURNISHED WITHOUT CHARGE TO THE HOLDER OF
THIS WARRANT UPON WRITTEN REQUEST.
EXERCISE OF THIS WARRANT MAY BE SUBJECT TO THE RESTRICTIONS IMPOSED
BY THE COMMUNICATIONS ACT OF 1934, AS AMENDED.
SFX BROADCASTING, INC.
Common Stock Purchase Warrant
SFX Broadcasting, Inc., a Delaware corporation (the "Company"),
hereby certifies that, for value received, THE XXXX ALTERNATIVE INCOME FUND,
L.P., a Delaware limited partnership (the "Fund"), or assigns, is entitled,
subject to the terms set forth below, to purchase from the Company at any time
or from time to time after the date hereof and prior to the expiration hereof
pursuant to Section 2.2 hereof, an aggregate of 7,458 fully paid and
non-assessable shares of Class A Common Stock, at an initial purchase price per
share of $41.06. (Such number of shares as adjusted from time to time as
provided herein is referred to as the "Warrant Shares" and such price per share
as adjusted from time to time as provided herein is referred to herein as the
"Exercise Price".)
This Warrant, together with the Other Warrants (as defined below),
is being issued pursuant to the Consent Agreement, dated as of May 17, 1996,
among the Company, Multi-Market Radio, Inc. ("MMR") and the Fund (the "Consent
Agreement"). The holder of this Warrant shall be entitled to all of the
benefits and shall be subject to all of the obligations of the Consent
Agreement and the Registration Rights Agreement, dated as of May 17, 1996,
between the Company and the Fund (the "Registration Rights Agreement"). Copies
of each of the Consent Agreement and the Registration Rights Agreement are on
file at the principal offices of the Company.
1. DEFINITIONS. The following terms shall have the meanings set forth
below:
"Additional Shares of Common Stock" means any shares of Common Stock
issued by the Company after the date hereof, other than Warrant Stock and
shares of Common Stock issuable upon exercise or conversion of the securities
listed on Exhibit A hereto. For purposes of this
Warrant, only the securities of the Company listed on Exhibit A shall be deemed
outstanding on the date hereof and any securities not listed on Exhibit A shall
be deemed issued after the date hereof and, therefore, the issuance thereof
shall be subject to Sections 5, 6 and 7 hereof.
"Applicable Percentage" means the quotient of (x) the number of Warrant
Shares which would be purchasable from time to time hereunder upon the exercise
of this Warrant divided by (y) the total number of shares of Common Stock then
outstanding and deemed (in accordance with Section 7.1 hereof) to be then
outstanding, including the Warrant Shares issuable upon exercise of this
Warrant, provided, however, that for purposes of computing clause (y) above at
any time, any Additional Shares of Common Stock issued or sold or deemed issued
or sold after the date hereof at an Effective Price greater than the Exercise
Price in effect immediately prior to such issuance or sale or deemed issuance
or sale shall be disregarded. On the date of the issuance of this Warrant, the
Applicable Percentage is .000494 percent (.0494%). A sample calculation of the
Applicable Percentage as of the date hereof is set forth on Exhibit A hereto.
"Average Closing Price" means, as of any specified date, (x) if shares of
the Company's Class A Common Stock are listed on a national securities
exchange, the average of the closing sales prices therefor on the largest
securities exchange on which such shares are traded on the last fifteen (15)
trading days immediately prior to, but not including, such date; (y) if such
shares are listed on the NASDAQ National Market System but not on any national
securities exchange, the average of the closing sales prices therefor on the
NASDAQ National Market System on the last fifteen (15) trading days immediately
prior to, but not including, such date; or (z) if such shares are not listed on
either a national securities exchange or the NASDAQ National Market System, the
average of the mean of the high and low bid and asked quotations therefor on
the last thirty (30) trading days immediately prior to, but not including, such
date.
"Business Day" means any day other than a Saturday, Sunday or other day
on which commercial banks in New York City are required to be closed.
"Capital Stock" means, with respect to any Person, any and all shares,
interests, participations, rights in, other shares of beneficial interest or
other equivalents (however designated and whether voting or non-voting, or
preferred or common) of such Person's capital stock, whether outstanding on the
date hereof or issued thereafter, and any and all warrants, options and other
rights to acquire such capital stock (including, without limitation, by way of
conversion or exchange).
"Charter" means the articles or certificate of incorporation, statute,
constitution, joint venture, operating or partnership agreement or articles or
other organizational document of any Person other than an individual, each as
from time to time amended or modified.
"Common Stock" means, collectively, (i) the Class A Common Stock, par
value $.01 per share (the "Class A Common Stock"), the Class B Common Stock,
par value $.01 per share, and the Class C Common Stock, par value $.01 per
share, of the Company, (ii) any other Capital Stock of the Company, the holders
of which shall have the right, without limitation as to amount, either to all
or to a share of the balance of current dividends and liquidating dividends
after the payment of dividends and distributions on any shares entitled to
preference, and (iii) any other securities into which or for which any of the
securities described in clause (i) or (ii) above have
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been converted or exchanged pursuant to a plan of recapitalization,
reorganization, merger, sale of assets or otherwise.
"Company" means SFX Broadcasting, Inc., a Delaware corporation, and any
corporation which shall succeed to or assume (whether in writing or otherwise)
the obligations of the Company hereunder.
"Effective Price" means: (a) with respect to any issuance or sale of
Capital Stock, the lowest consideration per share received by the Company upon
such issuance or sale; (b) with respect to any issuance or sale of any rights
to subscribe for or to purchase, or grant of options for the purchase of,
shares of Capital Stock or Convertible Securities, the price per share
determined by dividing:
(x) the total amount, if any, received or receivable by the
Company as consideration for the issuance or sale of such rights or
the granting of such options, plus the minimum aggregate amount of
additional consideration payable to the Company upon the exercise
of such rights or options, plus, in the case of such Convertible
Securities, the minimum aggregate amount of additional
consideration, if any, payable to the Company upon the conversion
or exchange thereof; by
(y) the maximum number of shares of Common Stock issuable
upon the exercise of such rights or options or upon the conversion
or exchange of the maximum number of such Convertible Securities
issuable on the exercise of such rights or options;
and (c) with respect to any issuance or sale of Convertible Securities, the
price per share determined by dividing:
(x) the total amount, if any, received or receivable by the
Company as a consideration for the issuance or sale of such
Convertible Securities, plus the minimum aggregate amount of
additional consideration (if any) payable to the Company upon such
conversion or exchange; by
(y) the maximum number of shares of Common Stock issuable as
of the date of issue of such Convertible Securities to effect the
conversion or exchange of all such Convertible Securities.
"Other Securities" means any Capital Stock (other than Common Stock) and
other securities of the Company or any other entity (corporate or otherwise)
(i) which the holder of this Warrant at any time shall be entitled to receive,
or shall have received, on the exercise of this Warrant, in lieu of or in
addition to Common Stock, or (ii) which at any time shall be issuable or shall
have been issued in exchange for or in replacement of Common Stock or Other
Securities, in each case pursuant to Section 5 or 6 hereof.
"Other Warrants" means the Common Stock Purchase Warrants issued by the
Company to the Fund, dated the date hereof, and exercisable for (i) shares of
Class A Common Stock of the Company in exchange for the Common Stock Purchase
Warrants issued by MMR to the Fund,
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dated March 27, 1995, and September 26, 1995, and exercisable, respectively,
into 595,000 and 133,201.54 shares of MMR Class A Common Stock, and (ii) shares
of Class A Common Stock of the Company issued in consideration, together with
this Warrant, for the Fund entering into the Consent Agreement.
"Person" means any individual, corporation, general or limited
partnership, limited liability company, joint venture, association, enterprise,
joint stock company, trust, unincorporated organization or other entity.
"Property" means all types of real, personal or mixed property and all
types of tangible or intangible property.
"Subsidiary" means any Person of which the Company now or hereafter shall
at the time own directly or indirectly through a Subsidiary at least a majority
of the outstanding Capital Stock entitled to vote generally in the election of
directors.
"Warrants" means (a) this Warrant, (b) all other warrants transferred to
any other holders in respect of this Warrant and (c) any warrants issued as
replacements for or in substitution of any of the foregoing pursuant to
Sections 11 or 12 of the Consent Agreement.
"Warrant Stock" means Common Stock issuable upon exercise of the Warrants
in accordance with their terms and any Capital Stock or Other Securities into
which or for which such Common Stock shall have been converted or exchanged
pursuant to any recapitalization, reorganization or merger of the Company.
2. EXERCISE OF WARRANT.
2.1. Exercise; Cashless Exercise. (a) This Warrant may be exercised by
the holder hereof at any time or from time to time prior to its expiration by
surrender of this Warrant, with the form of subscription at the end hereof,
duly executed by such holder, to the Company at its principal office,
accompanied by payment, by certified or official bank check payable to the
order of the Company, by wire transfer to an account designated by the Company,
or as provided in Section 2.1(b) below, in the amount obtained by multiplying
the number of shares of Class A Common Stock for which this Warrant is then
being exercised by the Exercise Price then in effect with respect to such
shares. In the event this Warrant is not exercised in full, the Company, at its
expense, will forthwith issue and deliver to or upon the order of the holder
hereof a new Warrant or Warrants of identical tenor, in the name of the holder
hereof or as such holder may request, calling in the aggregate on the face or
faces thereof for the number of shares of Class A Common Stock equal (before
application of any adjustment required pursuant hereto) to the number of such
shares called for on the face of this Warrant minus the number of such shares
(before application of any adjustment required pursuant hereto) for which this
Warrant shall have been exercised.
(b) The holder of this Warrant shall have the right, at its
election, in lieu of delivering the Exercise Price in cash, to instruct the
Company in the form of subscription to retain, in payment of the Exercise
Price, a number of shares of Class A Common Stock (the "Payment Shares") equal
to the quotient of (i) the aggregate Exercise Price of the shares as to which
this
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Warrant is then being exercised divided by (ii) the Average Closing Price as of
the date of exercise and to deduct the number of Payment Shares from the shares
to be delivered to the holder hereof.
2.2. Expiration of the Warrant. This Warrant shall expire on November 22,
2002; provided, however, that in the event that this Warrant has not been
exercised in full, this Warrant (or any warrant issued in exchange for this
Warrant or pursuant to Section 2.1(a) above) shall not expire until November
22, 2006, unless the holder of this Warrant shall have notified the Company in
writing, prior to November 22, 2002.
3. CALL OPTION; REGISTRATION RIGHTS.
(a) The Company has the option to repurchase this Warrant at the
time and in the manner specified in Section 14 of the Consent Agreement.
Upon the initial exercise, in whole or in part, by the holder of this
Warrant of its rights under Section 2.1 above, the Company shall (i) have
ten (10) days from the date of such exercise to deliver a written notice
(the "Repurchase Notice") to the holder exercising the Company's rights
under such Section 14 to repurchase this Warrant and (ii) be obligated to
consummate the repurchase of this Warrant no later than ninety (90) days
from the date of such exercise of this Warrant under Section 2.1 above;
provided, that notwithstanding anything to the contrary in the Consent
Agreement, if (x) the Repurchase Notice shall not be so delivered or (y)
the Repurchase Notice shall be delivered but this Warrant shall not be so
repurchased within such 90-day period, the Company's right to repurchase
this Warrant shall terminate without further action by any party and the
holder of this Warrant shall be entitled to the full benefits of this
Warrant.
(b) The holder of this Warrant has the right to cause the Company
to register and to maintain the registration of the shares of Warrant
Stock under the Securities Act and any blue sky or securities laws of any
jurisdictions within the United States at the time and in the manner
specified in the Registration Rights Agreement.
4. DELIVERY OF STOCK CERTIFICATES ON EXERCISE. As soon as practicable after the
exercise of this Warrant in full or in part, and in any event within five (5)
Business Days thereafter, the Company at its expense (including the payment by
it of any applicable issue taxes) will cause to be issued in the name of and
delivered to the holder hereof, or as such holder (upon payment by such holder
of any applicable transfer taxes then due) may direct, a certificate or
certificates for the number of fully paid and non-assessable shares of Class A
Common Stock (or Other Securities) to which such holder shall be entitled on
such exercise, together with any other Capital Stock or Other Securities and
Property (including cash, where applicable) to which such holder is entitled
upon such exercise.
5. ADJUSTMENT FOR DIVIDENDS, DISTRIBUTIONS AND RECLASSIFICATIONS. In case at
any time or from time to time, the holders of Common Stock shall have received,
or (on or after the record date fixed for the determination of shareholders
eligible to receive) shall have become entitled to receive, without payment
therefor:
(a) other or additional Capital Stock or Other Securities or
Property (other than cash) by way of dividend; or
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(b) other or additional (or less) Capital Stock or Other Securities
or Property (including cash) by way of spin-off, split-up,
reclassification, recapitalization, combination of shares or similar
corporate restructuring;
other than additional shares of Common Stock issued as a stock dividend or in a
stock-split (adjustments in respect of which are provided for in Section 7
hereof), then and in each such case the holder of this Warrant, on the exercise
hereof as provided in Section 2 hereof, shall be entitled to receive from the
Company the amount of Capital Stock and Other Securities and Property
(including cash in the case referred to in clause (b) of this Section 5) which
such holder would have received prior to or would have held on the date of such
exercise if on the date hereof he had been the holder of record of the number
of shares of Class A Common Stock called for on the face of this Warrant.
During the period from the date hereof to and including the date of such
exercise, such shares and all such other or additional Capital Stock and Other
Securities and Property (including cash in the case referred to in clause (b)
of this Section 5) receivable by such holder as aforesaid, giving effect to all
further adjustments called for during such period by Sections 6 and 7 hereof,
shall be held by the Company in trust for the benefit of the holder of this
Warrant.
6. ADJUSTMENT FOR CERTAIN CAPITAL TRANSACTIONS.
6.1. Certain Adjustments. In case at any time or from time to time, the
Company shall (i) effect a capital reorganization, reclassification or
recapitalization, (ii) consolidate with or merge into any other Person, or
(iii) transfer all or substantially all of its assets to any Person (each of
the transactions in (i), (ii) or (iii) above being a "Capital Transaction"),
then in each such case, the holder of this Warrant, on the exercise hereof as
provided in Section 2 hereof at any time after the consummation of such Capital
Transaction shall receive, in lieu of the Class A Common Stock (or Other
Securities) issuable on such exercise prior to such consummation or effective
date, the Capital Stock and Other Securities and Property (including cash) to
which such holder would have been entitled upon such consummation or in
connection with such Capital Transaction if such holder had so exercised this
Warrant immediately prior thereto, all subject to further adjustment thereafter
as provided in Sections 5 and 7 hereof.
6.2. Continuation of Terms. Upon the occurrence of any Capital
Transaction, this Warrant shall continue in full force and effect and the terms
hereof shall be applicable to the shares of Capital Stock and Other Securities
and Property receivable on the exercise of this Warrant after the consummation
of such Capital Transaction and shall be binding upon the issuer of any such
Capital Stock or Other Securities, including, in the case of any transaction
specified in Section 6.1(iii), the Person acquiring all or substantially all of
the assets of the Company, whether or not such Person shall have expressly
assumed the terms of this Warrant as provided in Section 8 hereof.
7. ADJUSTMENTS FOR ISSUANCE OF COMMON STOCK AND CONVERTIBLE SECURITIES.
7.1. Adjustment of Number of Warrant Shares. In case at any time after
the date hereof, the Company shall issue or sell, or shall be deemed to have
issued or sold pursuant to Section 7.1(b) below, any Additional Shares of
Common Stock at an Effective Price less than the Exercise Price in effect
immediately prior to such issuance or sale or deemed issuance or sale, the
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number of Warrant Shares purchasable upon the exercise of this Warrant shall be
forthwith increased so that such issuance or sale does not change the then
Applicable Percentage existing immediately prior to such issuance or sale. For
purposes of this Section 7.1, the following provisions shall also be
applicable:
(a) Adjustment of Exercise Price. Upon an adjustment of the number
of Warrant Shares pursuant to this 7.1, no adjustment to the Exercise Price
shall be made, except as required by Section 7.2 hereof.
(b) Constructive Issuance of Common Stock; Convertible Securities;
Rights and Options.
(i) In case at any time after the date hereof the Company
shall in any manner issue or sell any rights or options to subscribe for or to
purchase (x) any Common Stock or (y) any Capital Stock or Other Securities
convertible into or exchangeable for shares of Common Stock (such convertible
or exchangeable capital stock or securities being hereinafter referred to as
"Convertible Securities") at an Effective Price less than the Exercise Price in
effect immediately prior to such issuance or sale, whether or not such rights
or options or the right to convert or exchange any such Convertible Securities
are immediately exercisable, then the total maximum number of shares of Common
Stock issuable upon the exercise of such rights or options or upon conversion
of exchange of the total maximum amount of such Convertible Securities issuable
upon the exercise of such rights or options shall (on the date of the granting
of such rights or options) be deemed constructively issued and shall (on and
after the date of the issuance or sale of such rights or options) be deemed
outstanding. Except as provided in Section 7.1(c) below, no further adjustments
of the number of Warrant Shares shall be made pursuant to this Section 7.1 upon
the actual exercise of such rights or options or upon the actual issuance of
shares of Common Stock upon conversion or exchange of such Convertible
Securities.
(ii) In case at any time the Company shall in any manner
issue or sell any Convertible Securities at an Effective Price less than the
Exercise Price in effect immediately prior to such issuance or sale, whether or
not the rights to exchange or convert thereunder are immediately exercisable,
then the total maximum number of shares of Common Stock issuable upon
conversion or exchange of all such Convertible Securities shall (on the date of
the issuance or sale of such Convertible Securities) be deemed constructively
issued and shall (on and after the date of the issuance or sale of such
Convertible Securities) be deemed outstanding, provided, that, except as
otherwise specified in Section 7.1(c) below, (x) no further adjustments of the
number of Warrant Shares shall be made pursuant to this Section 7.1 upon the
actual issuance of Common Stock upon conversion or exchange of such Convertible
Securities, and (y) if any such issuance or sale of such Convertible Securities
is made upon exercise of any rights to subscribe for or to purchase or any
option to purchase any such Convertible Securities for which adjustments of the
number of Warrant Shares have been or are to be made pursuant to clause (i) of
this Section 7.1(b), no further adjustment of the number of Warrant Shares
shall be made pursuant to this clause (ii) by reason of such issuance or sale.
(c) Readjustment; Lapse. If the number of shares of Common Stock
purchasable upon the exercise of any right or option referred to in Section
7.1(b)(i) hereof or purchasable upon the conversion of any Convertible
Securities referred to in Section 7.1(b) or (b)(ii) hereof shall change or a
different number of such shares than originally set out by the terms
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of such rights, options or Convertible Securities shall be issued upon such
exercise or conversion at any time or from time to time or if such right or
option or Convertible Security shall terminate, be cancelled or otherwise lapse
without exercise in whole or in part, then, upon the effectiveness of such
event, the number of Warrant Shares shall forthwith be changed to such number
of shares of Common Stock as would have been obtained had all adjustments made
under this Section 7.1 been made at the time of such event based upon (x) the
number of shares of Common Stock theretofore actually delivered upon the
exercise of any options or rights or upon the conversion or exchange of any
Convertible Securities, and (y) the number of shares of Common Stock then
purchasable upon the exercise of all of the rights, options and Convertible
Securities to the extent and in the form then outstanding.
(d) Stock Dividends. In case at any time after the date hereof, the
Company shall declare a dividend or any other distribution upon any Capital
Stock of the Company which is payable in shares of Common Stock, then the
number of Warrant Shares immediately prior to the declaration of such dividend
or distribution shall be increased so that the then existing Applicable
Percentage does not change.
(e) Stock Splits and Reverse Splits. In case at any time after the
date hereof, the Company shall subdivide the outstanding shares of Common Stock
into a greater number of shares, the number of Warrant Shares immediately prior
to such subdivision shall be proportionately increased, and conversely, in case
at any time the Company shall combine the outstanding shares of Common Stock
into a smaller number of shares, the number of Warrant Shares immediately prior
to such combination shall be proportionately reduced, in each case, so that the
then existing Applicable Percentage does not change.
7.2. Adjustment of Exercise Price. The Exercise Price shall be
subject to adjustment from time to time after the date hereof as follows:
(a) In case at any time after the date hereof, the Company shall
issue or sell, or shall be deemed to have issued or sold pursuant to Section
7.2(b) or (c) below, any Additional Shares of Common Stock at an Effective
Price less than the Exercise Price in effect immediately prior to such issuance
or sale or deemed issuance or sale, then forthwith upon such issuance or sale
the Exercise Price in effect immediately prior to such issuance or sale shall
be reduced to a price equal to the Effective Price of such issuance or sale.
(b) In case at any time after the date hereof the Company shall in
any manner issue or sell any rights or options to subscribe for or to purchase
any Common Stock or Convertible Securities at an Effective Price less than the
Exercise Price in effect immediately prior to such issuance or sale, whether or
not such rights or options or the right to convert or exchange any such
Convertible Securities are immediately exercisable, then the maximum number of
shares of Common Stock issuable upon the exercise of such rights or options or
upon conversion or exchange of the maximum number of such Convertible
Securities issuable upon the exercise of such rights or options shall be deemed
to be issued or sold for such Effective Price; provided, however, that upon the
expiration of all, but not less than all, of such rights or options, and, in
the case of options to purchase Convertible Securities, upon the expiration in
whole, but not in part, of the right to convert or exchange such Convertible
Securities, the currently applicable Exercise Price in effect immediately prior
to such expiration shall forthwith be adjusted to such Exercise Price as would
have been obtained had the adjustments made upon the issuance of such rights of
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the granting of such options been made upon the basis of the issuance of only
the number of shares of Common Stock actually issued on the exercise of such
rights or options or on the conversion or exchange of such Convertible
Securities (or in the case of rights or options to purchase Convertible
Securities, actually issued and at the time still issuable upon the conversion
or exchange of the Convertible Securities actually issued), and upon the basis
of only the consideration applicable thereto, and any shares issuable upon the
exercise of such rights or options which have expired or upon the conversion or
exchange of such Convertible Securities, the right to convert or exchange which
has expired, shall not thereafter be deemed to be outstanding and the
consideration applicable thereto shall not thereafter be deemed to have been
received. If such rights or options are issued or granted in conjunction with
the sale of Other Securities of the Company, the part of the consideration
allocable to such rights and options, and the part of the consideration
allocable to such Other Securities, shall be determined in good faith by Board
of Directors of the Company in a certificate delivered promptly to the holder
of this Warrant setting forth the calculations used in determining such
allocation. At its election, the holder of this Warrant may confirm the
allocation noted on the certificate by causing such allocation to be determined
by an independent certified public accountant acceptable to the holder of this
Warrant at the expense of the Company. The determination of such independent
certified public accountant shall be final, conclusive and binding for all
purposes of this Warrant.
(c) In case at any time after the date hereof the Company shall in
any manner issue or sell any Convertible Securities at an Effective Price less
than the Exercise Price in effect immediately prior to such issuance or sale,
whether or not such rights to convert or exchange any such Convertible
Securities are immediately exercisable, then such issuance or sale shall be
deemed to be an issuance or sale (as of the date of issuance or sale of such
Convertible Securities) of the maximum number of shares of Common Stock
necessary to be issued as of that date to effect the conversion or exchange of
all such Convertible Securities, and the gross amount received or receivable by
the Company as consideration for the issuance or sale of such Convertible
Securities, plus the minimum aggregate amount of additional consideration (if
any) payable to the Company upon such conversion or exchange, shall be deemed
to be the consideration actually received (as of the date of the issue or sale
of such Convertible Securities) for the issuance or sale of such Common Stock;
provided, however, that upon the termination of the right to convert or to
exchange such Convertible Securities for Common Stock, the Exercise Price shall
forthwith be adjusted to such Exercise Price which would have been obtained had
the adjustments made upon the issuance of such Convertible Securities been made
upon the basis of the issuance of only the number of shares of Common Stock
actually issued upon the conversion or exchange thereof, and upon the basis of
the consideration applicable only to the Convertible Securities so converted or
exchanged, and no shares issuable upon the conversion or exchange of such
Convertible Securities which were not actually so issued shall thereafter be
deemed to be outstanding and the consideration applicable thereto shall not
thereafter be deemed to have been received. No adjustment of the Exercise Price
shall be made pursuant to this Section 7.2(c) upon any issuance or sale of
Convertible Securities if such issuance or sale has been made upon the exercise
of any rights to subscribe for or to purchase, or any options to purchase, any
such Convertible Securities for which an adjustment of the Exercise Price has
been made pursuant to Section 7.2(b) above.
(d) If the amount of consideration payable to the Company upon the
exercise of any right or option to which Section 7.2(b) above is applicable or
upon the conversion or
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exchange of any Convertible Securities referred to in Section 7.2(b) or (c)
above shall change at any time (other than under or by reason of provisions
designed to protect against dilution), then, forthwith upon each such change
becoming effective, all such rights or options or all such rights of conversion
or exchange not theretofore exercised shall be deemed to have expired or
terminated, as the case may be, and the Exercise Price shall forthwith be
adjusted in accordance with the proviso contained in Section 7.2(b) or (c)
above, as the case may be, and further adjusted as though such rights or
options or Convertible Securities deemed expired or terminated were newly
issued and convertible or exercisable upon the payment of such changed
consideration.
(e) If the consideration payable to the Company upon the exercise
of any right or option to which Section 7.2(b) above is applicable or upon the
conversion or exchange of any Convertible Securities referred to in Section
7.2(b) or (c) above shall decrease at any time under or by reason of provisions
with respect thereto designed to protect the holders thereof against dilution,
the Exercise Price which would apply if this Warrant were being exercised
immediately prior to such event shall forthwith be decreased to the Exercise
Price that would have been obtained had the adjustments made upon the issuance
of such right, option or Convertible Securities been made upon the basis of (i)
the issuance of (and the total consideration received for) the shares of Common
Stock theretofore delivered upon the exercise of such rights or options or upon
the conversion or exchange of such Convertible Securities, and (ii) the
issuance of (and the total minimum consideration thereafter receivable for) the
maximum number of shares of Common Stock thereafter deliverable upon the
exercise of such rights or options or upon the conversion or exchange of such
Convertible Securities. Any right or option to purchase shares of Common Stock
or any Convertible Securities issued after the date hereof which shall contain
provisions designed to protect the holders thereof against dilution shall
expressly provide that adjustments of the Exercise Price hereunder or of the
number of Warrant Shares purchasable hereunder or the issuance of any shares of
Warrant Stock upon the exercise hereof shall be excluded from the operation of
such provisions protecting the holders of such rights, options or Convertible
Securities against dilution, so that in the event of any such adjustment of the
Exercise Price hereunder or of the number of Warrant Shares purchasable
hereunder or the issuance of any shares of Warrant Stock upon the exercise
hereof, there shall be no adjustment in the amount of consideration payable to
or receivable by the Company upon the exercise of any such rights or options or
the conversion or exchange of any such Convertible Securities.
(f) In case any dividends on any class of Capital Stock (other than
Common Stock) of the Company, payable in Common Stock, shall be declared or
paid by the Company, the Common Stock so issued shall be deemed to have been
issued without consideration.
(g) In case any shares of Common Stock or Convertible Securities or
any rights or options to purchase any such Common Stock or Convertible
Securities shall be issued or sold for cash, the consideration received by the
Company therefor shall be deemed to be the amount received by the Company
therefor, after deducting therefrom all underwriting commissions, discounts or
concessions and all finder's fees paid or allowed by the Company in connection
therewith.
(h) In case any shares of Common Stock or Convertible Securities or
any rights or options to purchase any such Common Stock or Convertible
Securities shall be issued or sold for a consideration other than cash, then,
in any such event, the amount of the consideration
-10-
(other than cash) received by the Company shall be the fair market value of
such consideration, as determined in good faith by the Board of Directors of
the Company, after deducting all underwriting commissions, discounts or
concessions and all finder's fees paid or incurred by the Company in connection
therewith. Such fair market value and the calculations used in determining such
fair market value shall be set forth in a certificate delivered promptly to the
holder of this Warrant. At its election, the holder of this Warrant may confirm
the valuations noted on the certificate by causing such valuations to be
determined by an independent certified public accountant acceptable to the
holder of this Warrant at the expense of the Company. The determination of such
independent certified public accountant shall be final, conclusive and binding
for all purposes of this Warrant.
(i) If (and on each occasion that) the Company shall, at any time,
(i) issue any shares of Common Stock as a dividend upon Common Stock, or (ii)
issue any shares of Common Stock in subdivision of outstanding shares of Common
Stock by reclassification or otherwise, or (iii) combine outstanding shares of
Common Stock by reclassification or otherwise, the then current Exercise Price
shall be adjusted to a price determined by dividing (x) the number of shares of
Common Stock outstanding immediately prior to such dividend, subdivision or
combination, multiplied by the then current Exercise Price, by (y) the total
number of shares of Common Stock outstanding immediately after such issue, and
the resulting quotient shall be the adjusted Exercise Price per share.
7.3. Additional Provisions.
(a) In determining the number of shares of Common Stock outstanding
at any time, shares of Common Stock owned by the Company or any Subsidiary
thereof shall not be deemed to be outstanding.
(b) The parties intend that an adjustment of the number of Warrant
Shares pursuant to Section 7.1 hereof and an adjustment to the Exercise Price
pursuant to 7.2 hereof may arise from the same transaction or circumstances
and, in such event, each of the provisions of Sections 7.1 and 7.2 hereof shall
be applicable to such transaction or circumstances as set forth in such
Sections.
(c) In case at any time the Company shall fix a record date
applicable to the holders of Common Stock for the purpose of entitling them (x)
to receive a dividend or other distribution payable in shares of Common Stock
or in Convertible Securities, or (y) to subscribe for or purchase shares of
Common Stock or Convertible Securities, then such record date shall be deemed
to be the date of the issuance or sale of the shares of Common Stock deemed to
have been issued or sold upon the declaration of such dividend or of such other
distribution, or the date of the granting of such right of subscription or
purchase, as the case may be.
7.4. Other Securities. In case any Other Securities shall have been
issued, or shall then be subject to issue upon the conversion or exchange of
any Capital Stock (or Other Securities) of the Company (or any other issuer of
Other Securities or any other Person referred to in Section 6 hereof) or to
subscription, purchase or other acquisition pursuant to any rights or options
granted by the Company (or such other issuer or entity), the holder hereof
shall be entitled to receive upon exercise hereof such amount of Other
Securities (in lieu of or in addition to Class A Common Stock) as is determined
in accordance with the terms hereof, treating all references to Common
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Stock herein as references to Other Securities to the extent applicable, and the
computations, adjustments and readjustments provided for in this Section 7 with
respect to the number of shares of Class A Common Stock issuable upon exercise
of this Warrant shall be made as nearly as possible in the manner so provided
and applied to determine the amount of Other Securities from time to time
receivable on the exercise of this Warrant, so as to provide the holder of this
Warrant with the benefits intended by this Section 7 and the other provisions
of this Warrant.
8. NO DILUTION OR IMPAIRMENT. The Company will not, by amendment of its Charter
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 of this
Warrant, but will at all times in good faith assist in the carrying out of all
such terms and in the taking of all such action as may be necessary or
appropriate in order to protect the rights of the holder of this Warrant
hereunder. Without limiting the generality of the foregoing, the Company (i)
will not increase the par value of any shares of Class A Common Stock
receivable on the exercise of this Warrant above the amount payable therefor on
such exercise, (ii) will take all such action as may be necessary or
appropriate in order that the Company may validly and legally issue fully paid
and non-assessable shares of Class A Common Stock on the exercise of this
Warrant from time to time outstanding, (iii) will not issue any Capital Stock
which is preferred as to dividends or as to the distribution of assets upon
voluntary or involuntary dissolution, liquidation or winding up, unless the
rights of the holders thereof shall be limited to a fixed sum or percentage of
par value in respect of participation in dividends and in any such distribution
of assets and (iv) will not transfer all or substantially all of its assets to
any other Person or consolidate with or merge into any other Person, or permit
any such Person to consolidate with or merge into the Company (if the Company
is not the surviving entity), unless such other Person shall expressly assume
in writing and will be bound by all the terms of this Warrant, the Consent
Agreement and the Registration Rights Agreement.
9. CERTIFICATES AS TO ADJUSTMENTS. In each case of any event that may require
any adjustment or readjustment in the shares of Class A Common Stock issuable
on the exercise of this Warrant, the Company at its expense will promptly
prepare a certificate setting forth such adjustment or readjustment, or stating
the reasons why no adjustment or readjustment is being made, and showing, in
detail the facts upon which any such adjustment or readjustment is based,
including a statement of (i) the number of shares of the Company's Common Stock
then outstanding on a fully diluted basis, and (ii) the number of shares of
Class A Common Stock to be received upon exercise of this Warrant, in effect
immediately prior to such adjustment or readjustment and as adjusted and
readjusted (if required by Section 7 hereof) on account thereof. The Company
will forthwith mail a copy of each such certificate to each holder of a
Warrant, and will, on the written request at any time of any holder of a
Warrant, furnish to such holder a like certificate setting forth the
calculations used to determine such adjustment or readjustment. At its
election, the holder of this Warrant may confirm the adjustment noted on the
certificate by causing such adjustment to be computed by an independent
certified public accountant acceptable to the holder of this Warrant at the
expense of the Company. The determination of such independent certified public
accountant shall be final, conclusive and binding for all purposes of this
Warrant.
10. NOTICES OF RECORD DATE AND OTHER EVENTS. In the event of:
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(a) any taking by the Company of a record of the holders of any
class of securities for the purpose of determining the holders thereof
who are entitled to receive any dividend or other distribution, or any
right to subscribe for, purchase or otherwise acquire any shares of
Capital Stock or any other securities or Property, or to receive any
other right; or
(b) any capital reorganization of the Company, any reclassification
or recapitalization of the Capital Stock of the Company or any transfer
of all or substantially all the assets of the Company to or any
consolidation or merger of the Company with or into any other Person; or
(c) any voluntary or involuntary dissolution, liquidation or
winding-up of the Company; or
(d) any proposed issuance or grant by the Company of any shares of
Capital Stock or any Other Securities, or any right or option to
subscribe for, purchase or otherwise acquire any shares of Capital Stock
or any Other Securities (other than the issuance of Class A Common Stock
on the exercise of this Warrant);
then, and in each such event, the Company will mail or cause to be mailed to
the holder of this Warrant a notice specifying (i) the record date fixed for
the purpose of such dividend, distribution or right, and stating the amount and
character of such dividend, distribution or right, (ii) the date on which any
such reorganization, reclassification, recapitalization, transfer,
consolidation, merger, dissolution, liquidation or winding-up is to take place,
and the time, if any is to be fixed, as of which the holders of record of
Common Stock (or Other Securities) shall be entitled to exchange their shares
of Common Stock (or Other Securities) for securities or other Property
deliverable on such reorganization, reclassification, recapitalization,
transfer, consolidation, merger, dissolution, liquidation or winding-up and
(iii) the amount and character of any stock or other securities, or rights or
options with respect thereto, proposed to be issued or granted, the date of
such proposed issue or grant and the Persons or class of Persons to whom such
proposed issue or grant is to be offered or made. Such notice shall be mailed
at least sixty (60) days prior to the date specified in such notice on which
any such action is to be taken.
11. RESERVATION OF STOCK ISSUABLE ON EXERCISE OF WARRANT. The Company will at
all times reserve and keep available, solely for issuance and delivery on the
exercise of this Warrant, a number of shares of Class A Common Stock equal to
the total number of shares of Class A Common Stock from time to time issuable
upon exercise of this Warrant, and, from time to time, will take all steps
necessary to amend its Charter to provide sufficient reserves of shares of
Class A Common Stock issuable upon exercise of this Warrant.
12. REMEDIES. The Company stipulates that the remedies at law of the holder of
this Warrant in the event of any default or threatened default by the Company
in the performance of or compliance with any of the terms of this Warrant are
not and will not be adequate, and that such terms may be specifically enforced
by a decree for the specific performance of any agreement contained herein or
by an injunction against a violation of any of the terms hereof or otherwise.
13. NOTICES. Any notice or other communication in connection with this Warrant
or any Warrant Stock shall be deemed to be delivered if in writing (or in the
form of a telecopy)
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addressed as provided below and if either (a) actually delivered or telecopied
to said address, (b) in the case of overnight delivery of a notice, the next
Business Day after properly posted with postage prepaid, or (c) in the case of
a letter, 3 Business Days shall have elapsed after the same shall have been
deposited in the United States mails, postage prepaid and registered or
certified:
If to the Company, then to SFX Broadcasting, Inc., 000 Xxxx
00xx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention:
Xxxxxx F.X. Sillerman, Telecopy No.: (000) 000-0000 or at such
other address as the Company shall have specified by notice
actually received by the addressor.
If to the Fund, then to The Xxxx Alternative Income Fund, L.P., 00
Xxxx Xxxxx, Xxxxx Xxxxx, Xxxxxxxxxx, Xxx Xxxxxx 00000, Attention: General
Partner, Telecopy No.: (000) 000-0000, or at such other address as the
Fund shall have specified by notice actually received by the addressor.
If to any other holder of record of this Warrant or any Warrant
Stock, to it at its address set forth on the books and records of the
Company.
The failure to deliver a copy of any notice to any party's counsel
shall not affect the validity of such notice.
14. ASSIGNMENT. This Warrant and all Warrant Stock shall be transferable,
in whole or in part, by the holder hereof or thereof, subject to the
conditions specified in Section 13 of the Consent Agreement.
15. MISCELLANEOUS. In case any provision of this Warrant shall be invalid,
illegal or unenforceable, or partially invalid, illegal or unenforceable, the
provision shall be enforced to the extent, if any, that it may legally be
enforced and the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby. This Warrant
and any term hereof may be changed, waived, discharged or terminated only by a
statement in writing signed by the holder of this Warrant and the Company. This
Warrant shall be governed by and construed in accordance with the laws of the
State of New York applicable to agreements made and to be performed entirely
within such State. The headings in this Warrant are for purposes of reference
only, and shall not limit or otherwise affect any of the terms hereof.
IN WITNESS WHEREOF, the Company has caused this Warrant to be
executed by its duly authorized officer.
Dated as of November 22, 1996 SFX BROADCASTING, INC.
By:
-----------------------------------
Name:
Title:
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FORM OF SUBSCRIPTION
(To be signed only on exercise
of Common Stock Purchase Warrant)
TO: SFX Broadcasting, Inc.
The undersigned, the Holder of the within Common Stock Purchase
Warrant, hereby irrevocably elects to exercise this Common Stock Purchase
Warrant for, and to purchase thereunder __________ shares of Class A Common
Stock of SFX Broadcasting, Inc. and herewith [makes payment of
$___________________ therefor] [instructs you herein, in payment of the
Exercise Price, to deduct shares of Class A Common Stock and to deliver the net
number of shares, being _____ shares of Class A Common Stock], and requests
that the certificates for such shares be issued in the name of, and delivered
to _______________________, whose address is _________________________________.
Dated:
---------------------------------------
(Signature must conform in all respects
to name of Holder as specified on the
face of the Warrant or its assigns)
---------------------------------------
(Address)
FORM OF ASSIGNMENT
(To be signed only on transfer of Warrant)
For value received, the undersigned hereby sells, assigns, and
transfers unto ______________________ the right represented by the within
Common Stock Purchase Warrant (the "Warrant") to purchase ____________ shares
of Class A Common Stock of SFX Broadcasting, Inc., a Delaware corporation, to
which the Warrant relates, and appoints ____________________ attorney to
transfer such right on the books of SFX Broadcasting, Inc., with full power of
substitution in the premises.
[NAME OF HOLDER]
Dated: By:
-------------------------- -----------------------------------
Title:
--------------------------------
Address:
------------------------------
Signed in the presence of:
--------------------------------
EXHIBIT A
[SAMPLE CALCULATION OF APPLICABLE PERCENTAGE]
Right to Purchase 7,458 Shares of Class A
Common Stock of SFX Broadcasting, Inc.
THIS WARRANT HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, AND MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH
REGISTRATION OR AN EXEMPTION THEREFROM UNDER SUCH ACT OR ANY APPLICABLE STATE
SECURITIES LAWS. FURTHERMORE, THIS WARRANT MAY BE SOLD OR OTHERWISE TRANSFERRED
ONLY IN COMPLIANCE WITH THE CONDITIONS SPECIFIED IN SECTION 13 OF THE CONSENT
AGREEMENT, DATED AS OF MAY 17, 1996, BY AND AMONG MULTI-MARKET RADIO, INC., THE
XXXX ALTERNATIVE INCOME FUND, L.P. AND SFX BROADCASTING, INC., A COMPLETE AND
CORRECT COPY OF WHICH IS AVAILABLE FOR INSPECTION AT THE PRINCIPAL OFFICES OF
SFX BROADCASTING, INC. AND WILL BE FURNISHED WITHOUT CHARGE TO THE HOLDER OF
THIS WARRANT UPON WRITTEN REQUEST.
EXERCISE OF THIS WARRANT MAY BE SUBJECT TO THE RESTRICTIONS IMPOSED
BY THE COMMUNICATIONS ACT OF 1934, AS AMENDED.
SFX BROADCASTING, INC.
Common Stock Purchase Warrant
SFX Broadcasting, Inc., a Delaware corporation (the "Company"),
hereby certifies that, for value received, THE XXXX ALTERNATIVE INCOME FUND,
L.P., a Delaware limited partnership (the "Fund"), or assigns, is entitled,
subject to the terms set forth below, to purchase from the Company at any time
or from time to time after the date hereof and prior to the expiration hereof
pursuant to Section 2.2 hereof, an aggregate of 7,458 fully paid and
non-assessable shares of Class A Common Stock, at an initial purchase price per
share of $40.22. (Such number of shares as adjusted from time to time as
provided herein is referred to as the "Warrant Shares" and such price per share
as adjusted from time to time as provided herein is referred to herein as the
"Exercise Price".)
This Warrant, together with the Other Warrants (as defined below),
is being issued pursuant to the Consent Agreement, dated as of May 17, 1996,
among the Company, Multi-Market Radio, Inc. ("MMR") and the Fund (the "Consent
Agreement"). The holder of this Warrant shall be entitled to all of the
benefits and shall be subject to all of the obligations of the Consent
Agreement and the Registration Rights Agreement, dated as of May 17, 1996,
between the Company and the Fund (the "Registration Rights Agreement"). Copies
of each of the Consent Agreement and the Registration Rights Agreement are on
file at the principal offices of the Company.
1. DEFINITIONS. The following terms shall have the meanings set forth
below:
"Additional Shares of Common Stock" means any shares of Common Stock
issued by the Company after the date hereof, other than Warrant Stock and
shares of Common Stock issuable upon exercise or conversion of the securities
listed on Exhibit A hereto. For purposes of this
Warrant, only the securities of the Company listed on Exhibit A shall be deemed
outstanding on the date hereof and any securities not listed on Exhibit A shall
be deemed issued after the date hereof and, therefore, the issuance thereof
shall be subject to Sections 5, 6 and 7 hereof.
"Applicable Percentage" means the quotient of (x) the number of Warrant
Shares which would be purchasable from time to time hereunder upon the exercise
of this Warrant divided by (y) the total number of shares of Common Stock then
outstanding and deemed (in accordance with Section 7.1 hereof) to be then
outstanding, including the Warrant Shares issuable upon exercise of this
Warrant, provided, however, that for purposes of computing clause (y) above at
any time, any Additional Shares of Common Stock issued or sold or deemed issued
or sold after the date hereof at an Effective Price greater than the Exercise
Price in effect immediately prior to such issuance or sale or deemed issuance
or sale shall be disregarded. On the date of the issuance of this Warrant, the
Applicable Percentage is .000494 percent (.0494%). A sample calculation of the
Applicable Percentage as of the date hereof is set forth on Exhibit A hereto.
"Average Closing Price" means, as of any specified date, (x) if shares of
the Company's Class A Common Stock are listed on a national securities
exchange, the average of the closing sales prices therefor on the largest
securities exchange on which such shares are traded on the last fifteen (15)
trading days immediately prior to, but not including, such date; (y) if such
shares are listed on the NASDAQ National Market System but not on any national
securities exchange, the average of the closing sales prices therefor on the
NASDAQ National Market System on the last fifteen (15) trading days immediately
prior to, but not including, such date; or (z) if such shares are not listed on
either a national securities exchange or the NASDAQ National Market System, the
average of the mean of the high and low bid and asked quotations therefor on
the last thirty (30) trading days immediately prior to, but not including, such
date.
"Business Day" means any day other than a Saturday, Sunday or other day
on which commercial banks in New York City are required to be closed.
"Capital Stock" means, with respect to any Person, any and all shares,
interests, participations, rights in, other shares of beneficial interest or
other equivalents (however designated and whether voting or non-voting, or
preferred or common) of such Person's capital stock, whether outstanding on the
date hereof or issued thereafter, and any and all warrants, options and other
rights to acquire such capital stock (including, without limitation, by way of
conversion or exchange).
"Charter" means the articles or certificate of incorporation, statute,
constitution, joint venture, operating or partnership agreement or articles or
other organizational document of any Person other than an individual, each as
from time to time amended or modified.
"Common Stock" means, collectively, (i) the Class A Common Stock, par
value $.01 per share (the "Class A Common Stock"), the Class B Common Stock,
par value $.01 per share, and the Class C Common Stock, par value $.01 per
share, of the Company, (ii) any other Capital Stock of the Company, the holders
of which shall have the right, without limitation as to amount, either to all
or to a share of the balance of current dividends and liquidating dividends
after the payment of dividends and distributions on any shares entitled to
preference, and (iii) any other securities into which or for which any of the
securities described in clause (i) or (ii) above have
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been converted or exchanged pursuant to a plan of recapitalization,
reorganization, merger, sale of assets or otherwise.
"Company" means SFX Broadcasting, Inc., a Delaware corporation, and any
corporation which shall succeed to or assume (whether in writing or otherwise)
the obligations of the Company hereunder.
"Effective Price" means: (a) with respect to any issuance or sale of
Capital Stock, the lowest consideration per share received by the Company upon
such issuance or sale; (b) with respect to any issuance or sale of any rights
to subscribe for or to purchase, or grant of options for the purchase of,
shares of Capital Stock or Convertible Securities, the price per share
determined by dividing:
(x) the total amount, if any, received or receivable by the
Company as consideration for the issuance or sale of such rights or
the granting of such options, plus the minimum aggregate amount of
additional consideration payable to the Company upon the exercise
of such rights or options, plus, in the case of such Convertible
Securities, the minimum aggregate amount of additional
consideration, if any, payable to the Company upon the conversion
or exchange thereof; by
(y) the maximum number of shares of Common Stock issuable
upon the exercise of such rights or options or upon the conversion
or exchange of the maximum number of such Convertible Securities
issuable on the exercise of such rights or options;
and (c) with respect to any issuance or sale of Convertible Securities, the
price per share determined by dividing:
(x) the total amount, if any, received or receivable by the
Company as a consideration for the issuance or sale of such
Convertible Securities, plus the minimum aggregate amount of
additional consideration (if any) payable to the Company upon such
conversion or exchange; by
(y) the maximum number of shares of Common Stock issuable as
of the date of issue of such Convertible Securities to effect the
conversion or exchange of all such Convertible Securities.
"Other Securities" means any Capital Stock (other than Common Stock) and
other securities of the Company or any other entity (corporate or otherwise)
(i) which the holder of this Warrant at any time shall be entitled to receive,
or shall have received, on the exercise of this Warrant, in lieu of or in
addition to Common Stock, or (ii) which at any time shall be issuable or shall
have been issued in exchange for or in replacement of Common Stock or Other
Securities, in each case pursuant to Section 5 or 6 hereof.
"Other Warrants" means the Common Stock Purchase Warrants issued by the
Company to the Fund, dated the date hereof, and exercisable for (i) shares of
Class A Common Stock of the Company in exchange for the Common Stock Purchase
Warrants issued by MMR to the Fund,
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dated March 27, 1995, and September 26, 1995, and exercisable, respectively,
into 595,000 and 133,201.54 shares of MMR Class A Common Stock, and (ii) shares
of Class A Common Stock of the Company issued in consideration, together with
this Warrant, for the Fund entering into the Consent Agreement.
"Person" means any individual, corporation, general or limited
partnership, limited liability company, joint venture, association, enterprise,
joint stock company, trust, unincorporated organization or other entity.
"Property" means all types of real, personal or mixed property and all
types of tangible or intangible property.
"Subsidiary" means any Person of which the Company now or hereafter shall
at the time own directly or indirectly through a Subsidiary at least a majority
of the outstanding Capital Stock entitled to vote generally in the election of
directors.
"Warrants" means (a) this Warrant, (b) all other warrants transferred to
any other holders in respect of this Warrant and (c) any warrants issued as
replacements for or in substitution of any of the foregoing pursuant to
Sections 11 or 12 of the Consent Agreement.
"Warrant Stock" means Common Stock issuable upon exercise of the Warrants
in accordance with their terms and any Capital Stock or Other Securities into
which or for which such Common Stock shall have been converted or exchanged
pursuant to any recapitalization, reorganization or merger of the Company.
2. EXERCISE OF WARRANT.
2.1. Exercise; Cashless Exercise. (a) This Warrant may be exercised by
the holder hereof at any time or from time to time prior to its expiration by
surrender of this Warrant, with the form of subscription at the end hereof,
duly executed by such holder, to the Company at its principal office,
accompanied by payment, by certified or official bank check payable to the
order of the Company, by wire transfer to an account designated by the Company,
or as provided in Section 2.1(b) below, in the amount obtained by multiplying
the number of shares of Class A Common Stock for which this Warrant is then
being exercised by the Exercise Price then in effect with respect to such
shares. In the event this Warrant is not exercised in full, the Company, at its
expense, will forthwith issue and deliver to or upon the order of the holder
hereof a new Warrant or Warrants of identical tenor, in the name of the holder
hereof or as such holder may request, calling in the aggregate on the face or
faces thereof for the number of shares of Class A Common Stock equal (before
application of any adjustment required pursuant hereto) to the number of such
shares called for on the face of this Warrant minus the number of such shares
(before application of any adjustment required pursuant hereto) for which this
Warrant shall have been exercised.
(b) The holder of this Warrant shall have the right, at its
election, in lieu of delivering the Exercise Price in cash, to instruct the
Company in the form of subscription to retain, in payment of the Exercise
Price, a number of shares of Class A Common Stock (the "Payment Shares") equal
to the quotient of (i) the aggregate Exercise Price of the shares as to which
this
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Warrant is then being exercised divided by (ii) the Average Closing Price as of
the date of exercise and to deduct the number of Payment Shares from the shares
to be delivered to the holder hereof.
2.2. Expiration of the Warrant. This Warrant shall expire on November 22,
2002; provided, however, that in the event that this Warrant has not been
exercised in full, this Warrant (or any warrant issued in exchange for this
Warrant or pursuant to Section 2.1(a) above) shall not expire until November
22, 2006, unless the holder of this Warrant shall have notified the Company in
writing, prior to November 22, 2002.
3. CALL OPTION; REGISTRATION RIGHTS.
(a) The Company has the option to repurchase this Warrant at the
time and in the manner specified in Section 14 of the Consent Agreement.
Upon the initial exercise, in whole or in part, by the holder of this
Warrant of its rights under Section 2.1 above, the Company shall (i) have
ten (10) days from the date of such exercise to deliver a written notice
(the "Repurchase Notice") to the holder exercising the Company's rights
under such Section 14 to repurchase this Warrant and (ii) be obligated to
consummate the repurchase of this Warrant no later than ninety (90) days
from the date of such exercise of this Warrant under Section 2.1 above;
provided, that notwithstanding anything to the contrary in the Consent
Agreement, if (x) the Repurchase Notice shall not be so delivered or (y)
the Repurchase Notice shall be delivered but this Warrant shall not be so
repurchased within such 90-day period, the Company's right to repurchase
this Warrant shall terminate without further action by any party and the
holder of this Warrant shall be entitled to the full benefits of this
Warrant.
(b) The holder of this Warrant has the right to cause the Company
to register and to maintain the registration of the shares of Warrant
Stock under the Securities Act and any blue sky or securities laws of any
jurisdictions within the United States at the time and in the manner
specified in the Registration Rights Agreement.
4. DELIVERY OF STOCK CERTIFICATES ON EXERCISE. As soon as practicable after the
exercise of this Warrant in full or in part, and in any event within five (5)
Business Days thereafter, the Company at its expense (including the payment by
it of any applicable issue taxes) will cause to be issued in the name of and
delivered to the holder hereof, or as such holder (upon payment by such holder
of any applicable transfer taxes then due) may direct, a certificate or
certificates for the number of fully paid and non-assessable shares of Class A
Common Stock (or Other Securities) to which such holder shall be entitled on
such exercise, together with any other Capital Stock or Other Securities and
Property (including cash, where applicable) to which such holder is entitled
upon such exercise.
5. ADJUSTMENT FOR DIVIDENDS, DISTRIBUTIONS AND RECLASSIFICATIONS. In case at
any time or from time to time, the holders of Common Stock shall have received,
or (on or after the record date fixed for the determination of shareholders
eligible to receive) shall have become entitled to receive, without payment
therefor:
(a) other or additional Capital Stock or Other Securities or
Property (other than cash) by way of dividend; or
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(b) other or additional (or less) Capital Stock or Other Securities
or Property (including cash) by way of spin-off, split-up,
reclassification, recapitalization, combination of shares or similar
corporate restructuring;
other than additional shares of Common Stock issued as a stock dividend or in a
stock-split (adjustments in respect of which are provided for in Section 7
hereof), then and in each such case the holder of this Warrant, on the exercise
hereof as provided in Section 2 hereof, shall be entitled to receive from the
Company the amount of Capital Stock and Other Securities and Property
(including cash in the case referred to in clause (b) of this Section 5) which
such holder would have received prior to or would have held on the date of such
exercise if on the date hereof he had been the holder of record of the number
of shares of Class A Common Stock called for on the face of this Warrant.
During the period from the date hereof to and including the date of such
exercise, such shares and all such other or additional Capital Stock and Other
Securities and Property (including cash in the case referred to in clause (b)
of this Section 5) receivable by such holder as aforesaid, giving effect to all
further adjustments called for during such period by Sections 6 and 7 hereof,
shall be held by the Company in trust for the benefit of the holder of this
Warrant.
6. ADJUSTMENT FOR CERTAIN CAPITAL TRANSACTIONS.
6.1. Certain Adjustments. In case at any time or from time to time, the
Company shall (i) effect a capital reorganization, reclassification or
recapitalization, (ii) consolidate with or merge into any other Person, or
(iii) transfer all or substantially all of its assets to any Person (each of
the transactions in (i), (ii) or (iii) above being a "Capital Transaction"),
then in each such case, the holder of this Warrant, on the exercise hereof as
provided in Section 2 hereof at any time after the consummation of such Capital
Transaction shall receive, in lieu of the Class A Common Stock (or Other
Securities) issuable on such exercise prior to such consummation or effective
date, the Capital Stock and Other Securities and Property (including cash) to
which such holder would have been entitled upon such consummation or in
connection with such Capital Transaction if such holder had so exercised this
Warrant immediately prior thereto, all subject to further adjustment thereafter
as provided in Sections 5 and 7 hereof.
6.2. Continuation of Terms. Upon the occurrence of any Capital
Transaction, this Warrant shall continue in full force and effect and the terms
hereof shall be applicable to the shares of Capital Stock and Other Securities
and Property receivable on the exercise of this Warrant after the consummation
of such Capital Transaction and shall be binding upon the issuer of any such
Capital Stock or Other Securities, including, in the case of any transaction
specified in Section 6.1(iii), the Person acquiring all or substantially all of
the assets of the Company, whether or not such Person shall have expressly
assumed the terms of this Warrant as provided in Section 8 hereof.
7. ADJUSTMENTS FOR ISSUANCE OF COMMON STOCK AND CONVERTIBLE SECURITIES.
7.1. Adjustment of Number of Warrant Shares. In case at any time after
the date hereof, the Company shall issue or sell, or shall be deemed to have
issued or sold pursuant to Section 7.1(b) below, any Additional Shares of
Common Stock at an Effective Price less than the Exercise Price in effect
immediately prior to such issuance or sale or deemed issuance or sale, the
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number of Warrant Shares purchasable upon the exercise of this Warrant shall be
forthwith increased so that such issuance or sale does not change the then
Applicable Percentage existing immediately prior to such issuance or sale. For
purposes of this Section 7.1, the following provisions shall also be
applicable:
(a) Adjustment of Exercise Price. Upon an adjustment of the number
of Warrant Shares pursuant to this 7.1, no adjustment to the Exercise Price
shall be made, except as required by Section 7.2 hereof.
(b) Constructive Issuance of Common Stock; Convertible
Securities; Rights and Options.
(i) In case at any time after the date hereof the Company
shall in any manner issue or sell any rights or options to subscribe for or to
purchase (x) any Common Stock or (y) any Capital Stock or Other Securities
convertible into or exchangeable for shares of Common Stock (such convertible
or exchangeable capital stock or securities being hereinafter referred to as
"Convertible Securities") at an Effective Price less than the Exercise Price in
effect immediately prior to such issuance or sale, whether or not such rights
or options or the right to convert or exchange any such Convertible Securities
are immediately exercisable, then the total maximum number of shares of Common
Stock issuable upon the exercise of such rights or options or upon conversion
of exchange of the total maximum amount of such Convertible Securities issuable
upon the exercise of such rights or options shall (on the date of the granting
of such rights or options) be deemed constructively issued and shall (on and
after the date of the issuance or sale of such rights or options) be deemed
outstanding. Except as provided in Section 7.1(c) below, no further adjustments
of the number of Warrant Shares shall be made pursuant to this Section 7.1 upon
the actual exercise of such rights or options or upon the actual issuance of
shares of Common Stock upon conversion or exchange of such Convertible
Securities.
(ii) In case at any time the Company shall in any manner
issue or sell any Convertible Securities at an Effective Price less than the
Exercise Price in effect immediately prior to such issuance or sale, whether or
not the rights to exchange or convert thereunder are immediately exercisable,
then the total maximum number of shares of Common Stock issuable upon
conversion or exchange of all such Convertible Securities shall (on the date of
the issuance or sale of such Convertible Securities) be deemed constructively
issued and shall (on and after the date of the issuance or sale of such
Convertible Securities) be deemed outstanding, provided, that, except as
otherwise specified in Section 7.1(c) below, (x) no further adjustments of the
number of Warrant Shares shall be made pursuant to this Section 7.1 upon the
actual issuance of Common Stock upon conversion or exchange of such Convertible
Securities, and (y) if any such issuance or sale of such Convertible Securities
is made upon exercise of any rights to subscribe for or to purchase or any
option to purchase any such Convertible Securities for which adjustments of the
number of Warrant Shares have been or are to be made pursuant to clause (i) of
this Section 7.1(b), no further adjustment of the number of Warrant Shares
shall be made pursuant to this clause (ii) by reason of such issuance or sale.
(c) Readjustment; Lapse. If the number of shares of Common Stock
purchasable upon the exercise of any right or option referred to in Section
7.1(b)(i) hereof or purchasable upon the conversion of any Convertible
Securities referred to in Section 7.1(b) or (b)(ii) hereof shall change or a
different number of such shares than originally set out by the terms
-7-
of such rights, options or Convertible Securities shall be issued upon such
exercise or conversion at any time or from time to time or if such right or
option or Convertible Security shall terminate, be cancelled or otherwise lapse
without exercise in whole or in part, then, upon the effectiveness of such
event, the number of Warrant Shares shall forthwith be changed to such number of
shares of Common Stock as would have been obtained had all adjustments made
under this Section 7.1 been made at the time of such event based upon (x) the
number of shares of Common Stock theretofore actually delivered upon the
exercise of any options or rights or upon the conversion or exchange of any
Convertible Securities, and (y) the number of shares of Common Stock then
purchasable upon the exercise of all of the rights, options and Convertible
Securities to the extent and in the form then outstanding.
(d) Stock Dividends. In case at any time after the date hereof, the
Company shall declare a dividend or any other distribution upon any Capital
Stock of the Company which is payable in shares of Common Stock, then the
number of Warrant Shares immediately prior to the declaration of such dividend
or distribution shall be increased so that the then existing Applicable
Percentage does not change.
(e) Stock Splits and Reverse Splits. In case at any time after the
date hereof, the Company shall subdivide the outstanding shares of Common Stock
into a greater number of shares, the number of Warrant Shares immediately prior
to such subdivision shall be proportionately increased, and conversely, in case
at any time the Company shall combine the outstanding shares of Common Stock
into a smaller number of shares, the number of Warrant Shares immediately prior
to such combination shall be proportionately reduced, in each case, so that the
then existing Applicable Percentage does not change.
7.2. Adjustment of Exercise Price. The Exercise Price shall be
subject to adjustment from time to time after the date hereof as follows:
(a) In case at any time after the date hereof, the Company shall
issue or sell, or shall be deemed to have issued or sold pursuant to Section
7.2(b) or (c) below, any Additional Shares of Common Stock at an Effective
Price less than the Exercise Price in effect immediately prior to such issuance
or sale or deemed issuance or sale, then forthwith upon such issuance or sale
the Exercise Price in effect immediately prior to such issuance or sale shall
be reduced to a price equal to the Effective Price of such issuance or sale.
(b) In case at any time after the date hereof the Company shall in
any manner issue or sell any rights or options to subscribe for or to purchase
any Common Stock or Convertible Securities at an Effective Price less than the
Exercise Price in effect immediately prior to such issuance or sale, whether or
not such rights or options or the right to convert or exchange any such
Convertible Securities are immediately exercisable, then the maximum number of
shares of Common Stock issuable upon the exercise of such rights or options or
upon conversion or exchange of the maximum number of such Convertible
Securities issuable upon the exercise of such rights or options shall be deemed
to be issued or sold for such Effective Price; provided, however, that upon the
expiration of all, but not less than all, of such rights or options, and, in
the case of options to purchase Convertible Securities, upon the expiration in
whole, but not in part, of the right to convert or exchange such Convertible
Securities, the currently applicable Exercise Price in effect immediately prior
to such expiration shall forthwith be adjusted to such Exercise Price as would
have been obtained had the adjustments made upon the issuance of such rights of
-8-
the granting of such options been made upon the basis of the issuance of only
the number of shares of Common Stock actually issued on the exercise of such
rights or options or on the conversion or exchange of such Convertible
Securities (or in the case of rights or options to purchase Convertible
Securities, actually issued and at the time still issuable upon the conversion
or exchange of the Convertible Securities actually issued), and upon the basis
of only the consideration applicable thereto, and any shares issuable upon the
exercise of such rights or options which have expired or upon the conversion or
exchange of such Convertible Securities, the right to convert or exchange which
has expired, shall not thereafter be deemed to be outstanding and the
consideration applicable thereto shall not thereafter be deemed to have been
received. If such rights or options are issued or granted in conjunction with
the sale of Other Securities of the Company, the part of the consideration
allocable to such rights and options, and the part of the consideration
allocable to such Other Securities, shall be determined in good faith by Board
of Directors of the Company in a certificate delivered promptly to the holder
of this Warrant setting forth the calculations used in determining such
allocation. At its election, the holder of this Warrant may confirm the
allocation noted on the certificate by causing such allocation to be determined
by an independent certified public accountant acceptable to the holder of this
Warrant at the expense of the Company. The determination of such independent
certified public accountant shall be final, conclusive and binding for all
purposes of this Warrant.
(c) In case at any time after the date hereof the Company shall in
any manner issue or sell any Convertible Securities at an Effective Price less
than the Exercise Price in effect immediately prior to such issuance or sale,
whether or not such rights to convert or exchange any such Convertible
Securities are immediately exercisable, then such issuance or sale shall be
deemed to be an issuance or sale (as of the date of issuance or sale of such
Convertible Securities) of the maximum number of shares of Common Stock
necessary to be issued as of that date to effect the conversion or exchange of
all such Convertible Securities, and the gross amount received or receivable by
the Company as consideration for the issuance or sale of such Convertible
Securities, plus the minimum aggregate amount of additional consideration (if
any) payable to the Company upon such conversion or exchange, shall be deemed
to be the consideration actually received (as of the date of the issue or sale
of such Convertible Securities) for the issuance or sale of such Common Stock;
provided, however, that upon the termination of the right to convert or to
exchange such Convertible Securities for Common Stock, the Exercise Price shall
forthwith be adjusted to such Exercise Price which would have been obtained had
the adjustments made upon the issuance of such Convertible Securities been made
upon the basis of the issuance of only the number of shares of Common Stock
actually issued upon the conversion or exchange thereof, and upon the basis of
the consideration applicable only to the Convertible Securities so converted or
exchanged, and no shares issuable upon the conversion or exchange of such
Convertible Securities which were not actually so issued shall thereafter be
deemed to be outstanding and the consideration applicable thereto shall not
thereafter be deemed to have been received. No adjustment of the Exercise Price
shall be made pursuant to this Section 7.2(c) upon any issuance or sale of
Convertible Securities if such issuance or sale has been made upon the exercise
of any rights to subscribe for or to purchase, or any options to purchase, any
such Convertible Securities for which an adjustment of the Exercise Price has
been made pursuant to Section 7.2(b) above.
(d) If the amount of consideration payable to the Company upon the
exercise of any right or option to which Section 7.2(b) above is applicable or
upon the conversion or
-9-
exchange of any Convertible Securities referred to in Section 7.2(b) or (c)
above shall change at any time (other than under or by reason of provisions
designed to protect against dilution), then, forthwith upon each such change
becoming effective, all such rights or options or all such rights of conversion
or exchange not theretofore exercised shall be deemed to have expired or
terminated, as the case may be, and the Exercise Price shall forthwith be
adjusted in accordance with the proviso contained in Section 7.2(b) or (c)
above, as the case may be, and further adjusted as though such rights or
options or Convertible Securities deemed expired or terminated were newly
issued and convertible or exercisable upon the payment of such changed
consideration.
(e) If the consideration payable to the Company upon the exercise
of any right or option to which Section 7.2(b) above is applicable or upon the
conversion or exchange of any Convertible Securities referred to in Section
7.2(b) or (c) above shall decrease at any time under or by reason of provisions
with respect thereto designed to protect the holders thereof against dilution,
the Exercise Price which would apply if this Warrant were being exercised
immediately prior to such event shall forthwith be decreased to the Exercise
Price that would have been obtained had the adjustments made upon the issuance
of such right, option or Convertible Securities been made upon the basis of (i)
the issuance of (and the total consideration received for) the shares of Common
Stock theretofore delivered upon the exercise of such rights or options or upon
the conversion or exchange of such Convertible Securities, and (ii) the
issuance of (and the total minimum consideration thereafter receivable for) the
maximum number of shares of Common Stock thereafter deliverable upon the
exercise of such rights or options or upon the conversion or exchange of such
Convertible Securities. Any right or option to purchase shares of Common Stock
or any Convertible Securities issued after the date hereof which shall contain
provisions designed to protect the holders thereof against dilution shall
expressly provide that adjustments of the Exercise Price hereunder or of the
number of Warrant Shares purchasable hereunder or the issuance of any shares of
Warrant Stock upon the exercise hereof shall be excluded from the operation of
such provisions protecting the holders of such rights, options or Convertible
Securities against dilution, so that in the event of any such adjustment of the
Exercise Price hereunder or of the number of Warrant Shares purchasable
hereunder or the issuance of any shares of Warrant Stock upon the exercise
hereof, there shall be no adjustment in the amount of consideration payable to
or receivable by the Company upon the exercise of any such rights or options or
the conversion or exchange of any such Convertible Securities.
(f) In case any dividends on any class of Capital Stock (other than
Common Stock) of the Company, payable in Common Stock, shall be declared or
paid by the Company, the Common Stock so issued shall be deemed to have been
issued without consideration.
(g) In case any shares of Common Stock or Convertible Securities or
any rights or options to purchase any such Common Stock or Convertible
Securities shall be issued or sold for cash, the consideration received by the
Company therefor shall be deemed to be the amount received by the Company
therefor, after deducting therefrom all underwriting commissions, discounts or
concessions and all finder's fees paid or allowed by the Company in connection
therewith.
(h) In case any shares of Common Stock or Convertible Securities or
any rights or options to purchase any such Common Stock or Convertible
Securities shall be issued or sold for a consideration other than cash, then,
in any such event, the amount of the consideration
-10-
(other than cash) received by the Company shall be the fair market value of
such consideration, as determined in good faith by the Board of Directors of
the Company, after deducting all underwriting commissions, discounts or
concessions and all finder's fees paid or incurred by the Company in connection
therewith. Such fair market value and the calculations used in determining such
fair market value shall be set forth in a certificate delivered promptly to the
holder of this Warrant. At its election, the holder of this Warrant may confirm
the valuations noted on the certificate by causing such valuations to be
determined by an independent certified public accountant acceptable to the
holder of this Warrant at the expense of the Company. The determination of such
independent certified public accountant shall be final, conclusive and binding
for all purposes of this Warrant.
(i) If (and on each occasion that) the Company shall, at any time,
(i) issue any shares of Common Stock as a dividend upon Common Stock, or (ii)
issue any shares of Common Stock in subdivision of outstanding shares of Common
Stock by reclassification or otherwise, or (iii) combine outstanding shares of
Common Stock by reclassification or otherwise, the then current Exercise Price
shall be adjusted to a price determined by dividing (x) the number of shares of
Common Stock outstanding immediately prior to such dividend, subdivision or
combination, multiplied by the then current Exercise Price, by (y) the total
number of shares of Common Stock outstanding immediately after such issue, and
the resulting quotient shall be the adjusted Exercise Price per share.
7.3. Additional Provisions.
(a) In determining the number of shares of Common Stock outstanding
at any time, shares of Common Stock owned by the Company or any Subsidiary
thereof shall not be deemed to be outstanding.
(b) The parties intend that an adjustment of the number of Warrant
Shares pursuant to Section 7.1 hereof and an adjustment to the Exercise Price
pursuant to 7.2 hereof may arise from the same transaction or circumstances
and, in such event, each of the provisions of Sections 7.1 and 7.2 hereof shall
be applicable to such transaction or circumstances as set forth in such
Sections.
(c) In case at any time the Company shall fix a record date
applicable to the holders of Common Stock for the purpose of entitling them (x)
to receive a dividend or other distribution payable in shares of Common Stock
or in Convertible Securities, or (y) to subscribe for or purchase shares of
Common Stock or Convertible Securities, then such record date shall be deemed
to be the date of the issuance or sale of the shares of Common Stock deemed to
have been issued or sold upon the declaration of such dividend or of such other
distribution, or the date of the granting of such right of subscription or
purchase, as the case may be.
7.4. Other Securities. In case any Other Securities shall have been
issued, or shall then be subject to issue upon the conversion or exchange of
any Capital Stock (or Other Securities) of the Company (or any other issuer of
Other Securities or any other Person referred to in Section 6 hereof) or to
subscription, purchase or other acquisition pursuant to any rights or options
granted by the Company (or such other issuer or entity), the holder hereof
shall be entitled to receive upon exercise hereof such amount of Other
Securities (in lieu of or in addition to Class A Common Stock) as is determined
in accordance with the terms hereof, treating all references to Common
-11-
Stock herein as references to Other Securities to the extent applicable, and
the computations, adjustments and readjustments provided for in this Section 7
with respect to the number of shares of Class A Common Stock issuable upon
exercise of this Warrant shall be made as nearly as possible in the manner so
provided and applied to determine the amount of Other Securities from time to
time receivable on the exercise of this Warrant, so as to provide the holder of
this Warrant with the benefits intended by this Section 7 and the other
provisions of this Warrant.
8. NO DILUTION OR IMPAIRMENT. The Company will not, by amendment of its Charter
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 of this
Warrant, but will at all times in good faith assist in the carrying out of all
such terms and in the taking of all such action as may be necessary or
appropriate in order to protect the rights of the holder of this Warrant
hereunder. Without limiting the generality of the foregoing, the Company (i)
will not increase the par value of any shares of Class A Common Stock
receivable on the exercise of this Warrant above the amount payable therefor on
such exercise, (ii) will take all such action as may be necessary or
appropriate in order that the Company may validly and legally issue fully paid
and non-assessable shares of Class A Common Stock on the exercise of this
Warrant from time to time outstanding, (iii) will not issue any Capital Stock
which is preferred as to dividends or as to the distribution of assets upon
voluntary or involuntary dissolution, liquidation or winding up, unless the
rights of the holders thereof shall be limited to a fixed sum or percentage of
par value in respect of participation in dividends and in any such distribution
of assets and (iv) will not transfer all or substantially all of its assets to
any other Person or consolidate with or merge into any other Person, or permit
any such Person to consolidate with or merge into the Company (if the Company
is not the surviving entity), unless such other Person shall expressly assume
in writing and will be bound by all the terms of this Warrant, the Consent
Agreement and the Registration Rights Agreement.
9. CERTIFICATES AS TO ADJUSTMENTS. In each case of any event that may require
any adjustment or readjustment in the shares of Class A Common Stock issuable
on the exercise of this Warrant, the Company at its expense will promptly
prepare a certificate setting forth such adjustment or readjustment, or stating
the reasons why no adjustment or readjustment is being made, and showing, in
detail the facts upon which any such adjustment or readjustment is based,
including a statement of (i) the number of shares of the Company's Common Stock
then outstanding on a fully diluted basis, and (ii) the number of shares of
Class A Common Stock to be received upon exercise of this Warrant, in effect
immediately prior to such adjustment or readjustment and as adjusted and
readjusted (if required by Section 7 hereof) on account thereof. The Company
will forthwith mail a copy of each such certificate to each holder of a
Warrant, and will, on the written request at any time of any holder of a
Warrant, furnish to such holder a like certificate setting forth the
calculations used to determine such adjustment or readjustment. At its
election, the holder of this Warrant may confirm the adjustment noted on the
certificate by causing such adjustment to be computed by an independent
certified public accountant acceptable to the holder of this Warrant at the
expense of the Company. The determination of such independent certified public
accountant shall be final, conclusive and binding for all purposes of this
Warrant.
10. NOTICES OF RECORD DATE AND OTHER EVENTS. In the event of:
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(a) any taking by the Company of a record of the holders of any
class of securities for the purpose of determining the holders thereof
who are entitled to receive any dividend or other distribution, or any
right to subscribe for, purchase or otherwise acquire any shares of
Capital Stock or any other securities or Property, or to receive any
other right; or
(b) any capital reorganization of the Company, any reclassification
or recapitalization of the Capital Stock of the Company or any transfer
of all or substantially all the assets of the Company to or any
consolidation or merger of the Company with or into any other Person; or
(c) any voluntary or involuntary dissolution, liquidation or
winding-up of the Company; or
(d) any proposed issuance or grant by the Company of any shares of
Capital Stock or any Other Securities, or any right or option to
subscribe for, purchase or otherwise acquire any shares of Capital Stock
or any Other Securities (other than the issuance of Class A Common Stock
on the exercise of this Warrant);
then, and in each such event, the Company will mail or cause to be mailed to
the holder of this Warrant a notice specifying (i) the record date fixed for
the purpose of such dividend, distribution or right, and stating the amount and
character of such dividend, distribution or right, (ii) the date on which any
such reorganization, reclassification, recapitalization, transfer,
consolidation, merger, dissolution, liquidation or winding-up is to take place,
and the time, if any is to be fixed, as of which the holders of record of
Common Stock (or Other Securities) shall be entitled to exchange their shares
of Common Stock (or Other Securities) for securities or other Property
deliverable on such reorganization, reclassification, recapitalization,
transfer, consolidation, merger, dissolution, liquidation or winding-up and
(iii) the amount and character of any stock or other securities, or rights or
options with respect thereto, proposed to be issued or granted, the date of
such proposed issue or grant and the Persons or class of Persons to whom such
proposed issue or grant is to be offered or made. Such notice shall be mailed
at least sixty (60) days prior to the date specified in such notice on which
any such action is to be taken.
11. RESERVATION OF STOCK ISSUABLE ON EXERCISE OF WARRANT. The Company will at
all times reserve and keep available, solely for issuance and delivery on the
exercise of this Warrant, a number of shares of Class A Common Stock equal to
the total number of shares of Class A Common Stock from time to time issuable
upon exercise of this Warrant, and, from time to time, will take all steps
necessary to amend its Charter to provide sufficient reserves of shares of
Class A Common Stock issuable upon exercise of this Warrant.
12. REMEDIES. The Company stipulates that the remedies at law of the holder of
this Warrant in the event of any default or threatened default by the Company
in the performance of or compliance with any of the terms of this Warrant are
not and will not be adequate, and that such terms may be specifically enforced
by a decree for the specific performance of any agreement contained herein or
by an injunction against a violation of any of the terms hereof or otherwise.
13. NOTICES. Any notice or other communication in connection with this Warrant
or any Warrant Stock shall be deemed to be delivered if in writing (or in the
form of a telecopy)
-13-
addressed as provided below and if either (a) actually delivered or telecopied
to said address, (b) in the case of overnight delivery of a notice, the next
Business Day after properly posted with postage prepaid, or (c) in the case of
a letter, 3 Business Days shall have elapsed after the same shall have been
deposited in the United States mails, postage prepaid and registered or
certified:
If to the Company, then to SFX Broadcasting, Inc., 000 Xxxx
00xx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention:
Xxxxxx F.X. Sillerman, Telecopy No.: (000) 000-0000 or at such
other address as the Company shall have specified by notice
actually received by the addressor.
If to the Fund, then to The Xxxx Alternative Income Fund, L.P., 00
Xxxx Xxxxx, Xxxxx Xxxxx, Xxxxxxxxxx, Xxx Xxxxxx 00000, Attention: General
Partner, Telecopy No.: (000) 000-0000, or at such other address as the
Fund shall have specified by notice actually received by the addressor.
If to any other holder of record of this Warrant or any Warrant
Stock, to it at its address set forth on the books and records of the
Company.
The failure to deliver a copy of any notice to any party's counsel
shall not affect the validity of such notice.
14. ASSIGNMENT. This Warrant and all Warrant Stock shall be transferable,
in whole or in part, by the holder hereof or thereof, subject to the
conditions specified in Section 13 of the Consent Agreement.
15. MISCELLANEOUS. In case any provision of this Warrant shall be invalid,
illegal or unenforceable, or partially invalid, illegal or unenforceable, the
provision shall be enforced to the extent, if any, that it may legally be
enforced and the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby. This Warrant
and any term hereof may be changed, waived, discharged or terminated only by a
statement in writing signed by the holder of this Warrant and the Company. This
Warrant shall be governed by and construed in accordance with the laws of the
State of New York applicable to agreements made and to be performed entirely
within such State. The headings in this Warrant are for purposes of reference
only, and shall not limit or otherwise affect any of the terms hereof.
IN WITNESS WHEREOF, the Company has caused this Warrant to be
executed by its duly authorized officer.
Dated as of November 22, 1996 SFX BROADCASTING, INC.
By:
----------------------------------
Name:
Title:
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FORM OF SUBSCRIPTION
(To be signed only on exercise
of Common Stock Purchase Warrant)
TO: SFX Broadcasting, Inc.
The undersigned, the Holder of the within Common Stock Purchase
Warrant, hereby irrevocably elects to exercise this Common Stock Purchase
Warrant for, and to purchase thereunder __________ shares of Class A Common
Stock of SFX Broadcasting, Inc. and herewith [makes payment of
$___________________ therefor] [instructs you herein, in payment of the
Exercise Price, to deduct shares of Class A Common Stock and to deliver the net
number of shares, being _____ shares of Class A Common Stock], and requests
that the certificates for such shares be issued in the name of, and delivered
to _______________________, whose address is ________________________________.
Dated:
----------------------------------------
(Signature must conform in all respects
to name of Holder as specified on the
face of the Warrant or its assigns)
----------------------------------------
(Address)
FORM OF ASSIGNMENT
(To be signed only on transfer of Warrant)
For value received, the undersigned hereby sells, assigns, and
transfers unto ______________________ the right represented by the within
Common Stock Purchase Warrant (the "Warrant") to purchase ____________ shares
of Class A Common Stock of SFX Broadcasting, Inc., a Delaware corporation, to
which the Warrant relates, and appoints ____________________ attorney to
transfer such right on the books of SFX Broadcasting, Inc., with full power of
substitution in the premises.
[NAME OF HOLDER]
Dated: By:
----------------------- -------------------------
Title:
----------------------
Address:
--------------------
Signed in the presence of:
-----------------------------
EXHIBIT A
[SAMPLE CALCULATION OF APPLICABLE PERCENTAGE]
Right to Purchase 29,830 Shares of
Class A Common Stock of SFX Broadcasting, Inc.
THIS WARRANT HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, AND MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH
REGISTRATION OR AN EXEMPTION THEREFROM UNDER SUCH ACT OR ANY APPLICABLE STATE
SECURITIES LAWS. FURTHERMORE, THIS WARRANT MAY BE SOLD OR OTHERWISE TRANSFERRED
ONLY IN COMPLIANCE WITH THE CONDITIONS SPECIFIED IN SECTION 13 OF THE CONSENT
AGREEMENT, DATED AS OF MAY 17, 1996, BY AND AMONG MULTI-MARKET RADIO, INC., THE
XXXX ALTERNATIVE INCOME FUND, L.P. AND SFX BROADCASTING, INC., A COMPLETE AND
CORRECT COPY OF WHICH IS AVAILABLE FOR INSPECTION AT THE PRINCIPAL OFFICES OF
SFX BROADCASTING, INC. AND WILL BE FURNISHED WITHOUT CHARGE TO THE HOLDER OF
THIS WARRANT UPON WRITTEN REQUEST.
EXERCISE OF THIS WARRANT MAY BE SUBJECT TO THE RESTRICTIONS IMPOSED
BY THE COMMUNICATIONS ACT OF 1934, AS AMENDED.
SFX BROADCASTING, INC.
Common Stock Purchase Warrant
SFX Broadcasting, Inc., a Delaware corporation (the "Company"),
hereby certifies that, for value received, THE XXXX ALTERNATIVE INCOME FUND,
L.P., a Delaware limited partnership (the "Fund"), or assigns, is entitled,
subject to the terms set forth below, to purchase from the Company at any time
or from time to time after the date hereof and prior to the expiration hereof
pursuant to Section 2.2 hereof, an aggregate of 29,830 fully paid and
non-assessable shares of Class A Common Stock, at an initial purchase price per
share of $39.38. (Such number of shares as adjusted from time to time as
provided herein is referred to as the "Warrant Shares" and such price per share
as adjusted from time to time as provided herein is referred to herein as the
"Exercise Price".)
This Warrant, together with the Other Warrants (as defined below),
is being issued pursuant to the Consent Agreement, dated as of May 17, 1996,
among the Company, Multi-Market Radio, Inc. ("MMR") and the Fund (the "Consent
Agreement"). The holder of this Warrant shall be entitled to all of the
benefits and shall be subject to all of the obligations of the Consent
Agreement and the Registration Rights Agreement, dated as of May 17, 1996,
between the Company and the Fund (the "Registration Rights Agreement"). Copies
of each of the Consent Agreement and the Registration Rights Agreement are on
file at the principal offices of the Company.
1. DEFINITIONS. The following terms shall have the meanings set forth
below:
"Additional Shares of Common Stock" means any shares of Common Stock
issued by the Company after the date hereof, other than Warrant Stock and
shares of Common Stock issuable upon exercise or conversion of the securities
listed on Exhibit A hereto. For purposes of this Warrant, only the securities
of the Company listed on Exhibit A shall be deemed outstanding on the date
hereof and any securities not listed on Exhibit A shall be deemed issued after
the date hereof and, therefore, the issuance thereof shall be subject to
Sections 5, 6 and 7 hereof.
"Applicable Percentage" means the quotient of (x) the number of Warrant
Shares which would be purchasable from time to time hereunder upon the exercise
of this Warrant divided by (y) the total number of shares of Common Stock then
outstanding and deemed (in accordance with Section 7.1 hereof) to be then
outstanding, including the Warrant Shares issuable upon exercise of this
Warrant, provided, however, that for purposes of computing clause (y) above at
any time, any Additional Shares of Common Stock issued or sold or deemed issued
or sold after the date hereof at an Effective Price greater than the Exercise
Price in effect immediately prior to such issuance or sale or deemed issuance
or sale shall be disregarded. On the date of the issuance of this Warrant, the
Applicable Percentage is .001976 percent (.1976%). A sample calculation of the
Applicable Percentage as of the date hereof is set forth on Exhibit A hereto.
"Average Closing Price" means, as of any specified date, (x) if shares of
the Company's Class A Common Stock are listed on a national securities
exchange, the average of the closing sales prices therefor on the largest
securities exchange on which such shares are traded on the last fifteen (15)
trading days immediately prior to, but not including, such date; (y) if such
shares are listed on the NASDAQ National Market System but not on any national
securities exchange, the average of the closing sales prices therefor on the
NASDAQ National Market System on the last fifteen (15) trading days immediately
prior to, but not including, such date; or (z) if such shares are not listed on
either a national securities exchange or the NASDAQ National Market System, the
average of the mean of the high and low bid and asked quotations therefor on
the last thirty (30) trading days immediately prior to, but not including, such
date.
"Business Day" means any day other than a Saturday, Sunday or other day
on which commercial banks in New York City are required to be closed.
"Capital Stock" means, with respect to any Person, any and all shares,
interests, participations, rights in, other shares of beneficial interest or
other equivalents (however designated and whether voting or non-voting, or
preferred or common) of such Person's capital stock, whether outstanding on the
date hereof or issued thereafter, and any and all warrants, options and other
rights to acquire such capital stock (including, without limitation, by way of
conversion or exchange).
"Charter" means the articles or certificate of incorporation, statute,
constitution, joint venture, operating or partnership agreement or articles or
other organizational document of any Person other than an individual, each as
from time to time amended or modified.
"Common Stock" means, collectively, (i) the Class A Common Stock, par
value $.01 per share (the "Class A Common Stock"), the Class B Common Stock,
par value $.01 per share, and the Class C Common Stock, par value $.01 per
share, of the Company, (ii) any other Capital
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Stock of the Company, the holders of which shall have the right, without
limitation as to amount, either to all or to a share of the balance of current
dividends and liquidating dividends after the payment of dividends and
distributions on any shares entitled to preference, and (iii) any other
securities into which or for which any of the securities described in clause
(i) or (ii) above have been converted or exchanged pursuant to a plan of
recapitalization, reorganization, merger, sale of assets or otherwise.
"Company" means SFX Broadcasting, Inc., a Delaware corporation, and any
corporation which shall succeed to or assume (whether in writing or otherwise)
the obligations of the Company hereunder.
"Effective Price" means: (a) with respect to any issuance or sale of
Capital Stock, the lowest consideration per share received by the Company upon
such issuance or sale; (b) with respect to any issuance or sale of any rights
to subscribe for or to purchase, or grant of options for the purchase of,
shares of Capital Stock or Convertible Securities, the price per share
determined by dividing:
(x) the total amount, if any, received or receivable by the
Company as consideration for the issuance or sale of such rights or
the granting of such options, plus the minimum aggregate amount of
additional consideration payable to the Company upon the exercise
of such rights or options, plus, in the case of such Convertible
Securities, the minimum aggregate amount of additional
consideration, if any, payable to the Company upon the conversion
or exchange thereof; by
(y) the maximum number of shares of Common Stock issuable
upon the exercise of such rights or options or upon the conversion
or exchange of the maximum number of such Convertible Securities
issuable on the exercise of such rights or options;
and (c) with respect to any issuance or sale of Convertible Securities, the
price per share determined by dividing:
(x) the total amount, if any, received or receivable by the
Company as a consideration for the issuance or sale of such
Convertible Securities, plus the minimum aggregate amount of
additional consideration (if any) payable to the Company upon such
conversion or exchange; by
(y) the maximum number of shares of Common Stock issuable as
of the date of issue of such Convertible Securities to effect the
conversion or exchange of all such Convertible Securities.
"Other Securities" means any Capital Stock (other than Common Stock) and
other securities of the Company or any other entity (corporate or otherwise)
(i) which the holder of this Warrant at any time shall be entitled to receive,
or shall have received, on the exercise of this Warrant, in lieu of or in
addition to Common Stock, or (ii) which at any time shall be issuable or
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shall have been issued in exchange for or in replacement of Common Stock or
Other Securities, in each case pursuant to Section 5 or 6 hereof.
"Other Warrants" means the Common Stock Purchase Warrants issued by the
Company to the Fund, dated the date hereof, and exercisable for (i) shares of
Class A Common Stock of the Company in exchange for the Common Stock Purchase
Warrants issued by MMR to the Fund, dated March 27, 1995, and September 26,
1995, and exercisable, respectively, into 595,000 and 133,201.54 shares of MMR
Class A Common Stock, and (ii) shares of Class A Common Stock of the Company
issued in consideration, together with this Warrant, for the Fund entering into
the Consent Agreement.
"Person" means any individual, corporation, general or limited
partnership, limited liability company, joint venture, association, enterprise,
joint stock company, trust, unincorporated organization or other entity.
"Property" means all types of real, personal or mixed property and all
types of tangible or intangible property.
"Subsidiary" means any Person of which the Company now or hereafter shall
at the time own directly or indirectly through a Subsidiary at least a majority
of the outstanding Capital Stock entitled to vote generally in the election of
directors.
"Warrants" means (a) this Warrant, (b) all other warrants transferred to
any other holders in respect of this Warrant and (c) any warrants issued as
replacements for or in substitution of any of the foregoing pursuant to
Sections 11 or 12 of the Consent Agreement.
"Warrant Stock" means Common Stock issuable upon exercise of the Warrants
in accordance with their terms and any Capital Stock or Other Securities into
which or for which such Common Stock shall have been converted or exchanged
pursuant to any recapitalization, reorganization or merger of the Company.
2. EXERCISE OF WARRANT.
2.1. Exercise; Cashless Exercise. (a) This Warrant may be exercised by
the holder hereof at any time or from time to time prior to its expiration by
surrender of this Warrant, with the form of subscription at the end hereof,
duly executed by such holder, to the Company at its principal office,
accompanied by payment, by certified or official bank check payable to the
order of the Company, by wire transfer to an account designated by the Company,
or as provided in Section 2.1(b) below, in the amount obtained by multiplying
the number of shares of Class A Common Stock for which this Warrant is then
being exercised by the Exercise Price then in effect with respect to such
shares. In the event this Warrant is not exercised in full, the Company, at its
expense, will forthwith issue and deliver to or upon the order of the holder
hereof a new Warrant or Warrants of identical tenor, in the name of the holder
hereof or as such holder may request, calling in the aggregate on the face or
faces thereof for the number of shares of Class A Common Stock equal (before
application of any adjustment required pursuant hereto) to the number of such
shares called for on the face of this Warrant minus the number of such shares
(before
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application of any adjustment required pursuant hereto) for which this Warrant
shall have been exercised.
(b) The holder of this Warrant shall have the right, at its
election, in lieu of delivering the Exercise Price in cash, to instruct the
Company in the form of subscription to retain, in payment of the Exercise
Price, a number of shares of Class A Common Stock (the "Payment Shares") equal
to the quotient of (i) the aggregate Exercise Price of the shares as to which
this Warrant is then being exercised divided by (ii) the Average Closing Price
as of the date of exercise and to deduct the number of Payment Shares from the
shares to be delivered to the holder hereof.
2.2. Expiration of the Warrant. This Warrant shall expire on November 22,
2002; provided, however, that in the event that this Warrant has not been
exercised in full, this Warrant (or any warrant issued in exchange for this
Warrant or pursuant to Section 2.1(a) above) shall not expire until November
22, 2006, unless the holder of this Warrant shall have notified the Company in
writing, prior to November 22, 2002.
3. CALL OPTION; REGISTRATION RIGHTS.
(a) The Company has the option to repurchase this Warrant at the
time and in the manner specified in Section 14 of the Consent Agreement.
Upon the initial exercise, in whole or in part, by the holder of this
Warrant of its rights under Section 2.1 above, the Company shall (i) have
ten (10) days from the date of such exercise to deliver a written notice
(the "Repurchase Notice") to the holder exercising the Company's rights
under such Section 14 to repurchase this Warrant and (ii) be obligated to
consummate the repurchase of this Warrant no later than ninety (90) days
from the date of such exercise of this Warrant under Section 2.1 above;
provided, that notwithstanding anything to the contrary in the Consent
Agreement, if (x) the Repurchase Notice shall not be so delivered or (y)
the Repurchase Notice shall be delivered but this Warrant shall not be so
repurchased within such 90-day period, the Company's right to repurchase
this Warrant shall terminate without further action by any party and the
holder of this Warrant shall be entitled to the full benefits of this
Warrant.
(b) The holder of this Warrant has the right to cause the Company
to register and to maintain the registration of the shares of Warrant
Stock under the Securities Act and any blue sky or securities laws of any
jurisdictions within the United States at the time and in the manner
specified in the Registration Rights Agreement.
4. DELIVERY OF STOCK CERTIFICATES ON EXERCISE. As soon as practicable after the
exercise of this Warrant in full or in part, and in any event within five (5)
Business Days thereafter, the Company at its expense (including the payment by
it of any applicable issue taxes) will cause to be issued in the name of and
delivered to the holder hereof, or as such holder (upon payment by such holder
of any applicable transfer taxes then due) may direct, a certificate or
certificates for the number of fully paid and non-assessable shares of Class A
Common Stock (or Other Securities) to which such holder shall be entitled on
such exercise, together with any other Capital Stock or Other Securities and
Property (including cash, where applicable) to which such holder is entitled
upon such exercise.
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5. ADJUSTMENT FOR DIVIDENDS, DISTRIBUTIONS AND RECLASSIFICATIONS. In case at
any time or from time to time, the holders of Common Stock shall have received,
or (on or after the record date fixed for the determination of shareholders
eligible to receive) shall have become entitled to receive, without payment
therefor:
(a) other or additional Capital Stock or Other Securities
or Property (other than cash) by way of dividend; or
(b) other or additional (or less) Capital Stock or Other Securities
or Property (including cash) by way of spin-off, split-up,
reclassification, recapitalization, combination of shares or similar
corporate restructuring;
other than additional shares of Common Stock issued as a stock dividend or in a
stock-split (adjustments in respect of which are provided for in Section 7
hereof), then and in each such case the holder of this Warrant, on the exercise
hereof as provided in Section 2 hereof, shall be entitled to receive from the
Company the amount of Capital Stock and Other Securities and Property
(including cash in the case referred to in clause (b) of this Section 5) which
such holder would have received prior to or would have held on the date of such
exercise if on the date hereof he had been the holder of record of the number
of shares of Class A Common Stock called for on the face of this Warrant.
During the period from the date hereof to and including the date of such
exercise, such shares and all such other or additional Capital Stock and Other
Securities and Property (including cash in the case referred to in clause (b)
of this Section 5) receivable by such holder as aforesaid, giving effect to all
further adjustments called for during such period by Sections 6 and 7 hereof,
shall be held by the Company in trust for the benefit of the holder of this
Warrant.
6. ADJUSTMENT FOR CERTAIN CAPITAL TRANSACTIONS.
6.1. Certain Adjustments. In case at any time or from time to time, the
Company shall (i) effect a capital reorganization, reclassification or
recapitalization, (ii) consolidate with or merge into any other Person, or
(iii) transfer all or substantially all of its assets to any Person (each of
the transactions in (i), (ii) or (iii) above being a "Capital Transaction"),
then in each such case, the holder of this Warrant, on the exercise hereof as
provided in Section 2 hereof at any time after the consummation of such Capital
Transaction shall receive, in lieu of the Class A Common Stock (or Other
Securities) issuable on such exercise prior to such consummation or effective
date, the Capital Stock and Other Securities and Property (including cash) to
which such holder would have been entitled upon such consummation or in
connection with such Capital Transaction if such holder had so exercised this
Warrant immediately prior thereto, all subject to further adjustment thereafter
as provided in Sections 5 and 7 hereof.
6.2. Continuation of Terms. Upon the occurrence of any Capital
Transaction, this Warrant shall continue in full force and effect and the terms
hereof shall be applicable to the shares of Capital Stock and Other Securities
and Property receivable on the exercise of this Warrant after the consummation
of such Capital Transaction and shall be binding upon the issuer of any such
Capital Stock or Other Securities, including, in the case of any transaction
specified in Section 6.1(iii), the Person acquiring all or substantially all of
the assets of the Company, whether
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or not such Person shall have expressly assumed the terms of this Warrant as
provided in Section 8 hereof.
7. ADJUSTMENTS FOR ISSUANCE OF COMMON STOCK AND CONVERTIBLE SECURITIES.
7.1. Adjustment of Number of Warrant Shares. In case at any time after
the date hereof, the Company shall issue or sell, or shall be deemed to have
issued or sold pursuant to Section 7.1(b) below, any Additional Shares of
Common Stock at an Effective Price less than the Exercise Price in effect
immediately prior to such issuance or sale or deemed issuance or sale, the
number of Warrant Shares purchasable upon the exercise of this Warrant shall be
forthwith increased so that such issuance or sale does not change the then
Applicable Percentage existing immediately prior to such issuance or sale. For
purposes of this Section 7.1, the following provisions shall also be
applicable:
(a) Adjustment of Exercise Price. Upon an adjustment of the number
of Warrant Shares pursuant to this 7.1, no adjustment to the Exercise Price
shall be made, except as required by Section 7.2 hereof.
(b) Constructive Issuance of Common Stock; Convertible Securities;
Rights and Options.
(i) In case at any time after the date hereof the Company
shall in any manner issue or sell any rights or options to subscribe for or to
purchase (x) any Common Stock or (y) any Capital Stock or Other Securities
convertible into or exchangeable for shares of Common Stock (such convertible
or exchangeable capital stock or securities being hereinafter referred to as
"Convertible Securities") at an Effective Price less than the Exercise Price in
effect immediately prior to such issuance or sale, whether or not such rights
or options or the right to convert or exchange any such Convertible Securities
are immediately exercisable, then the total maximum number of shares of Common
Stock issuable upon the exercise of such rights or options or upon conversion
of exchange of the total maximum amount of such Convertible Securities issuable
upon the exercise of such rights or options shall (on the date of the granting
of such rights or options) be deemed constructively issued and shall (on and
after the date of the issuance or sale of such rights or options) be deemed
outstanding. Except as provided in Section 7.1(c) below, no further adjustments
of the number of Warrant Shares shall be made pursuant to this Section 7.1 upon
the actual exercise of such rights or options or upon the actual issuance of
shares of Common Stock upon conversion or exchange of such Convertible
Securities.
(ii) In case at any time the Company shall in any manner
issue or sell any Convertible Securities at an Effective Price less than the
Exercise Price in effect immediately prior to such issuance or sale, whether or
not the rights to exchange or convert thereunder are immediately exercisable,
then the total maximum number of shares of Common Stock issuable upon
conversion or exchange of all such Convertible Securities shall (on the date of
the issuance or sale of such Convertible Securities) be deemed constructively
issued and shall (on and after the date of the issuance or sale of such
Convertible Securities) be deemed outstanding, provided, that, except as
otherwise specified in Section 7.1(c) below, (x) no further adjustments of the
number of
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Warrant Shares shall be made pursuant to this Section 7.1 upon the actual
issuance of Common Stock upon conversion or exchange of such Convertible
Securities, and (y) if any such issuance or sale of such Convertible Securities
is made upon exercise of any rights to subscribe for or to purchase or any
option to purchase any such Convertible Securities for which adjustments of the
number of Warrant Shares have been or are to be made pursuant to clause (i) of
this Section 7.1(b), no further adjustment of the number of Warrant Shares
shall be made pursuant to this clause (ii) by reason of such issuance or sale.
(c) Readjustment; Lapse. If the number of shares of Common Stock
purchasable upon the exercise of any right or option referred to in Section
7.1(b)(i) hereof or purchasable upon the conversion of any Convertible
Securities referred to in Section 7.1(b) or (b)(ii) hereof shall change or a
different number of such shares than originally set out by the terms of such
rights, options or Convertible Securities shall be issued upon such exercise or
conversion at any time or from time to time or if such right or option or
Convertible Security shall terminate, be cancelled or otherwise lapse without
exercise in whole or in part, then, upon the effectiveness of such event, the
number of Warrant Shares shall forthwith be changed to such number of shares of
Common Stock as would have been obtained had all adjustments made under this
Section 7.1 been made at the time of such event based upon (x) the number of
shares of Common Stock theretofore actually delivered upon the exercise of any
options or rights or upon the conversion or exchange of any Convertible
Securities, and (y) the number of shares of Common Stock then purchasable upon
the exercise of all of the rights, options and Convertible Securities to the
extent and in the form then outstanding.
(d) Stock Dividends. In case at any time after the date hereof, the
Company shall declare a dividend or any other distribution upon any Capital
Stock of the Company which is payable in shares of Common Stock, then the
number of Warrant Shares immediately prior to the declaration of such dividend
or distribution shall be increased so that the then existing Applicable
Percentage does not change.
(e) Stock Splits and Reverse Splits. In case at any time after the
date hereof, the Company shall subdivide the outstanding shares of Common Stock
into a greater number of shares, the number of Warrant Shares immediately prior
to such subdivision shall be proportionately increased, and conversely, in case
at any time the Company shall combine the outstanding shares of Common Stock
into a smaller number of shares, the number of Warrant Shares immediately prior
to such combination shall be proportionately reduced, in each case, so that the
then existing Applicable Percentage does not change.
7.2. Adjustment of Exercise Price. The Exercise Price shall be
subject to adjustment from time to time after the date hereof as follows:
(a) In case at any time after the date hereof, the Company shall
issue or sell, or shall be deemed to have issued or sold pursuant to Section
7.2(b) or (c) below, any Additional Shares of Common Stock at an Effective
Price less than the Exercise Price in effect immediately prior to such issuance
or sale or deemed issuance or sale, then forthwith upon such issuance or sale
the Exercise Price in effect immediately prior to such issuance or sale shall
be reduced to a price equal to the Effective Price of such issuance or sale.
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(b) In case at any time after the date hereof the Company shall in
any manner issue or sell any rights or options to subscribe for or to purchase
any Common Stock or Convertible Securities at an Effective Price less than the
Exercise Price in effect immediately prior to such issuance or sale, whether or
not such rights or options or the right to convert or exchange any such
Convertible Securities are immediately exercisable, then the maximum number of
shares of Common Stock issuable upon the exercise of such rights or options or
upon conversion or exchange of the maximum number of such Convertible
Securities issuable upon the exercise of such rights or options shall be deemed
to be issued or sold for such Effective Price; provided, however, that upon the
expiration of all, but not less than all, of such rights or options, and, in
the case of options to purchase Convertible Securities, upon the expiration in
whole, but not in part, of the right to convert or exchange such Convertible
Securities, the currently applicable Exercise Price in effect immediately prior
to such expiration shall forthwith be adjusted to such Exercise Price as would
have been obtained had the adjustments made upon the issuance of such rights of
the granting of such options been made upon the basis of the issuance of only
the number of shares of Common Stock actually issued on the exercise of such
rights or options or on the conversion or exchange of such Convertible
Securities (or in the case of rights or options to purchase Convertible
Securities, actually issued and at the time still issuable upon the conversion
or exchange of the Convertible Securities actually issued), and upon the basis
of only the consideration applicable thereto, and any shares issuable upon the
exercise of such rights or options which have expired or upon the conversion or
exchange of such Convertible Securities, the right to convert or exchange which
has expired, shall not thereafter be deemed to be outstanding and the
consideration applicable thereto shall not thereafter be deemed to have been
received. If such rights or options are issued or granted in conjunction with
the sale of Other Securities of the Company, the part of the consideration
allocable to such rights and options, and the part of the consideration
allocable to such Other Securities, shall be determined in good faith by Board
of Directors of the Company in a certificate delivered promptly to the holder
of this Warrant setting forth the calculations used in determining such
allocation. At its election, the holder of this Warrant may confirm the
allocation noted on the certificate by causing such allocation to be determined
by an independent certified public accountant acceptable to the holder of this
Warrant at the expense of the Company. The determination of such independent
certified public accountant shall be final, conclusive and binding for all
purposes of this Warrant.
(c) In case at any time after the date hereof the Company shall in
any manner issue or sell any Convertible Securities at an Effective Price less
than the Exercise Price in effect immediately prior to such issuance or sale,
whether or not such rights to convert or exchange any such Convertible
Securities are immediately exercisable, then such issuance or sale shall be
deemed to be an issuance or sale (as of the date of issuance or sale of such
Convertible Securities) of the maximum number of shares of Common Stock
necessary to be issued as of that date to effect the conversion or exchange of
all such Convertible Securities, and the gross amount received or receivable by
the Company as consideration for the issuance or sale of such Convertible
Securities, plus the minimum aggregate amount of additional consideration (if
any) payable to the Company upon such conversion or exchange, shall be deemed
to be the consideration actually received (as of the date of the issue or sale
of such Convertible Securities) for the issuance or sale of such Common Stock;
provided, however, that upon the termination of the right to convert or to
exchange such Convertible Securities for Common Stock, the Exercise
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Price shall forthwith be adjusted to such Exercise Price which would have been
obtained had the adjustments made upon the issuance of such Convertible
Securities been made upon the basis of the issuance of only the number of
shares of Common Stock actually issued upon the conversion or exchange thereof,
and upon the basis of the consideration applicable only to the Convertible
Securities so converted or exchanged, and no shares issuable upon the
conversion or exchange of such Convertible Securities which were not actually
so issued shall thereafter be deemed to be outstanding and the consideration
applicable thereto shall not thereafter be deemed to have been received. No
adjustment of the Exercise Price shall be made pursuant to this Section 7.2(c)
upon any issuance or sale of Convertible Securities if such issuance or sale
has been made upon the exercise of any rights to subscribe for or to purchase,
or any options to purchase, any such Convertible Securities for which an
adjustment of the Exercise Price has been made pursuant to Section 7.2(b)
above.
(d) If the amount of consideration payable to the Company upon the
exercise of any right or option to which Section 7.2(b) above is applicable or
upon the conversion or exchange of any Convertible Securities referred to in
Section 7.2(b) or (c) above shall change at any time (other than under or by
reason of provisions designed to protect against dilution), then, forthwith
upon each such change becoming effective, all such rights or options or all
such rights of conversion or exchange not theretofore exercised shall be deemed
to have expired or terminated, as the case may be, and the Exercise Price shall
forthwith be adjusted in accordance with the proviso contained in Section
7.2(b) or (c) above, as the case may be, and further adjusted as though such
rights or options or Convertible Securities deemed expired or terminated were
newly issued and convertible or exercisable upon the payment of such changed
consideration.
(e) If the consideration payable to the Company upon the exercise
of any right or option to which Section 7.2(b) above is applicable or upon the
conversion or exchange of any Convertible Securities referred to in Section
7.2(b) or (c) above shall decrease at any time under or by reason of provisions
with respect thereto designed to protect the holders thereof against dilution,
the Exercise Price which would apply if this Warrant were being exercised
immediately prior to such event shall forthwith be decreased to the Exercise
Price that would have been obtained had the adjustments made upon the issuance
of such right, option or Convertible Securities been made upon the basis of (i)
the issuance of (and the total consideration received for) the shares of Common
Stock theretofore delivered upon the exercise of such rights or options or upon
the conversion or exchange of such Convertible Securities, and (ii) the
issuance of (and the total minimum consideration thereafter receivable for) the
maximum number of shares of Common Stock thereafter deliverable upon the
exercise of such rights or options or upon the conversion or exchange of such
Convertible Securities. Any right or option to purchase shares of Common Stock
or any Convertible Securities issued after the date hereof which shall contain
provisions designed to protect the holders thereof against dilution shall
expressly provide that adjustments of the Exercise Price hereunder or of the
number of Warrant Shares purchasable hereunder or the issuance of any shares of
Warrant Stock upon the exercise hereof shall be excluded from the operation of
such provisions protecting the holders of such rights, options or Convertible
Securities against dilution, so that in the event of any such adjustment of the
Exercise Price hereunder or of the number of Warrant Shares purchasable
hereunder or the issuance of any shares of Warrant Stock upon the exercise
hereof, there shall be no adjustment in the amount of
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consideration payable to or receivable by the Company upon the exercise of any
such rights or options or the conversion or exchange of any such Convertible
Securities.
(f) In case any dividends on any class of Capital Stock (other than
Common Stock) of the Company, payable in Common Stock, shall be declared or
paid by the Company, the Common Stock so issued shall be deemed to have been
issued without consideration.
(g) In case any shares of Common Stock or Convertible Securities or
any rights or options to purchase any such Common Stock or Convertible
Securities shall be issued or sold for cash, the consideration received by the
Company therefor shall be deemed to be the amount received by the Company
therefor, after deducting therefrom all underwriting commissions, discounts or
concessions and all finder's fees paid or allowed by the Company in connection
therewith.
(h) In case any shares of Common Stock or Convertible Securities or
any rights or options to purchase any such Common Stock or Convertible
Securities shall be issued or sold for a consideration other than cash, then,
in any such event, the amount of the consideration (other than cash) received
by the Company shall be the fair market value of such consideration, as
determined in good faith by the Board of Directors of the Company, after
deducting all underwriting commissions, discounts or concessions and all
finder's fees paid or incurred by the Company in connection therewith. Such
fair market value and the calculations used in determining such fair market
value shall be set forth in a certificate delivered promptly to the holder of
this Warrant. At its election, the holder of this Warrant may confirm the
valuations noted on the certificate by causing such valuations to be determined
by an independent certified public accountant acceptable to the holder of this
Warrant at the expense of the Company. The determination of such independent
certified public accountant shall be final, conclusive and binding for all
purposes of this Warrant.
(i) If (and on each occasion that) the Company shall, at any time,
(i) issue any shares of Common Stock as a dividend upon Common Stock, or (ii)
issue any shares of Common Stock in subdivision of outstanding shares of Common
Stock by reclassification or otherwise, or (iii) combine outstanding shares of
Common Stock by reclassification or otherwise, the then current Exercise Price
shall be adjusted to a price determined by dividing (x) the number of shares of
Common Stock outstanding immediately prior to such dividend, subdivision or
combination, multiplied by the then current Exercise Price, by (y) the total
number of shares of Common Stock outstanding immediately after such issue, and
the resulting quotient shall be the adjusted Exercise Price per share.
7.3. Additional Provisions.
(a) In determining the number of shares of Common Stock outstanding
at any time, shares of Common Stock owned by the Company or any Subsidiary
thereof shall not be deemed to be outstanding.
(b) The parties intend that an adjustment of the number of Warrant
Shares pursuant to Section 7.1 hereof and an adjustment to the Exercise Price
pursuant to 7.2 hereof may
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arise from the same transaction or circumstances and, in such event, each of
the provisions of Sections 7.1 and 7.2 hereof shall be applicable to such
transaction or circumstances as set forth in such Sections.
(c) In case at any time the Company shall fix a record date
applicable to the holders of Common Stock for the purpose of entitling them (x)
to receive a dividend or other distribution payable in shares of Common Stock
or in Convertible Securities, or (y) to subscribe for or purchase shares of
Common Stock or Convertible Securities, then such record date shall be deemed
to be the date of the issuance or sale of the shares of Common Stock deemed to
have been issued or sold upon the declaration of such dividend or of such other
distribution, or the date of the granting of such right of subscription or
purchase, as the case may be.
7.4. Other Securities. In case any Other Securities shall have been
issued, or shall then be subject to issue upon the conversion or exchange of
any Capital Stock (or Other Securities) of the Company (or any other issuer of
Other Securities or any other Person referred to in Section 6 hereof) or to
subscription, purchase or other acquisition pursuant to any rights or options
granted by the Company (or such other issuer or entity), the holder hereof
shall be entitled to receive upon exercise hereof such amount of Other
Securities (in lieu of or in addition to Class A Common Stock) as is determined
in accordance with the terms hereof, treating all references to Common Stock
herein as references to Other Securities to the extent applicable, and the
computations, adjustments and readjustments provided for in this Section 7 with
respect to the number of shares of Class A Common Stock issuable upon exercise
of this Warrant shall be made as nearly as possible in the manner so provided
and applied to determine the amount of Other Securities from time to time
receivable on the exercise of this Warrant, so as to provide the holder of this
Warrant with the benefits intended by this Section 7 and the other provisions
of this Warrant.
8. NO DILUTION OR IMPAIRMENT. The Company will not, by amendment of its Charter
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 of this
Warrant, but will at all times in good faith assist in the carrying out of all
such terms and in the taking of all such action as may be necessary or
appropriate in order to protect the rights of the holder of this Warrant
hereunder. Without limiting the generality of the foregoing, the Company (i)
will not increase the par value of any shares of Class A Common Stock
receivable on the exercise of this Warrant above the amount payable therefor on
such exercise, (ii) will take all such action as may be necessary or
appropriate in order that the Company may validly and legally issue fully paid
and non-assessable shares of Class A Common Stock on the exercise of this
Warrant from time to time outstanding, (iii) will not issue any Capital Stock
which is preferred as to dividends or as to the distribution of assets upon
voluntary or involuntary dissolution, liquidation or winding up, unless the
rights of the holders thereof shall be limited to a fixed sum or percentage of
par value in respect of participation in dividends and in any such distribution
of assets and (iv) will not transfer all or substantially all of its assets to
any other Person or consolidate with or merge into any other Person, or permit
any such Person to consolidate with or merge into the Company (if the Company
is not the surviving entity), unless such other Person shall expressly assume
in writing and will be bound by all the terms of this Warrant, the Consent
Agreement and the Registration Rights Agreement.
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9. CERTIFICATES AS TO ADJUSTMENTS. In each case of any event that may require
any adjustment or readjustment in the shares of Class A Common Stock issuable
on the exercise of this Warrant, the Company at its expense will promptly
prepare a certificate setting forth such adjustment or readjustment, or stating
the reasons why no adjustment or readjustment is being made, and showing, in
detail the facts upon which any such adjustment or readjustment is based,
including a statement of (i) the number of shares of the Company's Common Stock
then outstanding on a fully diluted basis, and (ii) the number of shares of
Class A Common Stock to be received upon exercise of this Warrant, in effect
immediately prior to such adjustment or readjustment and as adjusted and
readjusted (if required by Section 7 hereof) on account thereof. The Company
will forthwith mail a copy of each such certificate to each holder of a
Warrant, and will, on the written request at any time of any holder of a
Warrant, furnish to such holder a like certificate setting forth the
calculations used to determine such adjustment or readjustment. At its
election, the holder of this Warrant may confirm the adjustment noted on the
certificate by causing such adjustment to be computed by an independent
certified public accountant acceptable to the holder of this Warrant at the
expense of the Company. The determination of such independent certified public
accountant shall be final, conclusive and binding for all purposes of this
Warrant.
10. NOTICES OF RECORD DATE AND OTHER EVENTS. In the event of:
(a) any taking by the Company of a record of the holders of any
class of securities for the purpose of determining the holders thereof
who are entitled to receive any dividend or other distribution, or any
right to subscribe for, purchase or otherwise acquire any shares of
Capital Stock or any other securities or Property, or to receive any
other right; or
(b) any capital reorganization of the Company, any reclassification
or recapitalization of the Capital Stock of the Company or any transfer
of all or substantially all the assets of the Company to or any
consolidation or merger of the Company with or into any other Person; or
(c) any voluntary or involuntary dissolution, liquidation or
winding-up of the Company; or
(d) any proposed issuance or grant by the Company of any shares of
Capital Stock or any Other Securities, or any right or option to
subscribe for, purchase or otherwise acquire any shares of Capital Stock
or any Other Securities (other than the issuance of Class A Common Stock
on the exercise of this Warrant);
then, and in each such event, the Company will mail or cause to be mailed to
the holder of this Warrant a notice specifying (i) the record date fixed for
the purpose of such dividend, distribution or right, and stating the amount and
character of such dividend, distribution or right, (ii) the date on which any
such reorganization, reclassification, recapitalization, transfer,
consolidation, merger, dissolution, liquidation or winding-up is to take place,
and the time, if any is to be fixed, as of which the holders of record of
Common Stock (or Other Securities) shall be entitled to exchange their shares
of Common Stock (or Other Securities) for securities or other Property
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deliverable on such reorganization, reclassification, recapitalization,
transfer, consolidation, merger, dissolution, liquidation or winding-up and
(iii) the amount and character of any stock or other securities, or rights or
options with respect thereto, proposed to be issued or granted, the date of
such proposed issue or grant and the Persons or class of Persons to whom such
proposed issue or grant is to be offered or made. Such notice shall be mailed
at least sixty (60) days prior to the date specified in such notice on which
any such action is to be taken.
11. RESERVATION OF STOCK ISSUABLE ON EXERCISE OF WARRANT. The Company will at
all times reserve and keep available, solely for issuance and delivery on the
exercise of this Warrant, a number of shares of Class A Common Stock equal to
the total number of shares of Class A Common Stock from time to time issuable
upon exercise of this Warrant, and, from time to time, will take all steps
necessary to amend its Charter to provide sufficient reserves of shares of
Class A Common Stock issuable upon exercise of this Warrant.
12. REMEDIES. The Company stipulates that the remedies at law of the holder of
this Warrant in the event of any default or threatened default by the Company
in the performance of or compliance with any of the terms of this Warrant are
not and will not be adequate, and that such terms may be specifically enforced
by a decree for the specific performance of any agreement contained herein or
by an injunction against a violation of any of the terms hereof or otherwise.
13. NOTICES. Any notice or other communication in connection with this Warrant
or any Warrant Stock shall be deemed to be delivered if in writing (or in the
form of a telecopy) addressed as provided below and if either (a) actually
delivered or telecopied to said address, (b) in the case of overnight delivery
of a notice, the next Business Day after properly posted with postage prepaid,
or (c) in the case of a letter, 3 Business Days shall have elapsed after the
same shall have been deposited in the United States mails, postage prepaid and
registered or certified:
If to the Company, then to SFX Broadcasting, Inc., 000 Xxxx
00xx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention:
Xxxxxx F.X. Sillerman, Telecopy No.: (000) 000-0000 or at such
other address as the Company shall have specified by notice
actually received by the addressor.
If to the Fund, then to The Xxxx Alternative Income Fund, L.P., 00
Xxxx Xxxxx, Xxxxx Xxxxx, Xxxxxxxxxx, Xxx Xxxxxx 00000, Attention: General
Partner, Telecopy No.: (000) 000-0000, or at such other address as the
Fund shall have specified by notice actually received by the addressor.
If to any other holder of record of this Warrant or any Warrant
Stock, to it at its address set forth on the books and records of the
Company.
The failure to deliver a copy of any notice to any party's counsel
shall not affect the validity of such notice.
14. ASSIGNMENT. This Warrant and all Warrant Stock shall be transferable,
in whole or in part, by the holder hereof or thereof, subject to the
conditions specified in Section 13 of the Consent Agreement.
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15. MISCELLANEOUS. In case any provision of this Warrant shall be invalid,
illegal or unenforceable, or partially invalid, illegal or unenforceable, the
provision shall be enforced to the extent, if any, that it may legally be
enforced and the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby. This Warrant
and any term hereof may be changed, waived, discharged or terminated only by a
statement in writing signed by the holder of this Warrant and the Company. This
Warrant shall be governed by and construed in accordance with the laws of the
State of New York applicable to agreements made and to be performed entirely
within such State. The headings in this Warrant are for purposes of reference
only, and shall not limit or otherwise affect any of the terms hereof.
IN WITNESS WHEREOF, the Company has caused this Warrant to be
executed by its duly authorized officer.
Dated as of November 22, 1996 SFX BROADCASTING, INC.
By:
---------------------------------
Name:
Title:
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FORM OF SUBSCRIPTION
(To be signed only on exercise
of Common Stock Purchase Warrant)
TO: SFX Broadcasting, Inc.
The undersigned, the Holder of the within Common Stock Purchase
Warrant, hereby irrevocably elects to exercise this Common Stock Purchase
Warrant for, and to purchase thereunder __________ shares of Class A Common
Stock of SFX Broadcasting, Inc. and herewith [makes payment of
$___________________ therefor] [instructs you herein, in payment of the
Exercise Price, to deduct shares of Class A Common Stock and to deliver the net
number of shares, being _____ shares of Class A Common Stock], and requests
that the certificates for such shares be issued in the name of, and delivered
to _______________________, whose address is _______________________________.
Dated:
---------------------------------------
(Signature must conform in all respects
to name of Holder as specified on the
face of the Warrant or its assigns)
---------------------------------------
(Address)
FORM OF ASSIGNMENT
(To be signed only on transfer of Warrant)
For value received, the undersigned hereby sells, assigns, and
transfers unto ______________________ the right represented by the within
Common Stock Purchase Warrant (the "Warrant") to purchase ____________ shares
of Class A Common Stock of SFX Broadcasting, Inc., a Delaware corporation, to
which the Warrant relates, and appoints ____________________ attorney to
transfer such right on the books of SFX Broadcasting, Inc., with full power of
substitution in the premises.
[NAME OF HOLDER]
Dated: By:
--------------------------- -------------------------------
Title:
----------------------------
Address:
--------------------------
Signed in the presence of:
---------------------------------
EXHIBIT A
[SAMPLE CALCULATION OF APPLICABLE PERCENTAGE]
