AMENDMENT NO. 1
TO
AGREEMENT AND PLAN OF MERGER
AMONG
SBI HOLDING CORPORATION,
SBI RADIO ACQUISITION CORPORATION
AND
SFX BROADCASTING, INC.
AMENDMENT NO. 1 TO AGREEMENT AND PLAN OF MERGER dated as of February
9, 1998, among SBI Holding Corporation, a Delaware corporation ("Parent"), SBI
Radio Acquisition Corporation, a Delaware corporation and a wholly owned
subsidiary of Parent ("Sub"), and SFX Broadcasting, Inc., a Delaware
corporation (the "Company").
WHEREAS, Parent, Sub and the Company have entered into an Agreement
and Plan of Merger, dated as of August 24, 1997 (the "Merger Agreement"),
pursuant to which, among other things, the parties agreed to the merger of Sub
with and into the Company (the "Merger"), upon the terms and subject to the
conditions set forth in the Merger Agreement;
WHEREAS, the parties to the Merger Agreement desire to amend certain
terms and conditions thereof, as set forth herein; and
WHEREAS, capitalized terms used herein have the meanings ascribed to
them in the Merger Agreement;
NOW, THEREFORE, the parties to the Merger Agreement further agree as
follows:
1. Section 1.02 of the Merger Agreement is hereby amended to delete the words
"January 2, 1998" and to insert the words "the date that is fifteen (15)
business days after the Merger Approval (as defined in Section 6.01(a)) is
obtained so long as the Merger Approval is obtained on or before April 24,
1998" in lieu thereof.
2. Section 2.02(a) of the Merger Agreement is hereby amended to delete the
words "bank or trust Company" and to insert the words "bank or trust company"
in lieu thereof.
3. Section 2.03(a)(iv) of the Merger Agreement is hereby amended to delete the
words "the Company" and to insert the word "MMR" in lieu thereof.
4. Section 3.01(d)(4) of the Merger Agreement is hereby amended to delete the
words "a certificate of amendment" and to insert the words "one or more
certificates of amendment" in lieu thereof.
5. The first sentence of Section 3.01(k) of the Merger Agreement is hereby
amended and restated in its entirety as follows:
"The affirmative vote of the holders of a majority of the voting power
of all outstanding shares of Common Stock voting as a single class,
and the affirmative vote of the holders of a majority of the voting
power of all outstanding shares of Class A Common Stock, Series D
Preferred Stock and/or Series E Preferred Stock, each voting as a
separate class, at the Stockholders Meeting or by written consent in
lieu thereof are the only votes of holders of any class or series of
the Company's capital stock necessary to approve or adopt the
Amendments."
6. Section 3.01(s) of the Merger Agreement is hereby amended to delete the
words "Stockholder Meeting" and to insert the words "Stockholders Meeting" in
lieu thereof.
7. The last sentence of Section 4.01(a) of the Merger Agreement is hereby
amended and restated in its entirety as follows:
"Notwithstanding anything herein to the contrary, the Company and its
Subsidiaries may engage in any of the transactions contemplated by
Section 5.07, including, without limitation, any (x) acquisitions by
any of the Delsener/Xxxxxx Group, whether or not the performance of
any obligations under the agreements related to such acquisitions are
guaranteed by the Company (provided that any such guarantee shall
terminate as of or before the Effective Time), (y) financing related
to the Delsener/Xxxxxx Group and/or such acquisitions (including,
without limitation, any incurrence of indebtedness), whether or not
incurred or guaranteed by the Company (provided that any such
guarantee shall terminate as of or before the Effective Time), and (z)
issuance of shares of Delsener/Xxxxxx Holdings common stock."
8. Section 4.01(a)(ii) of the Company Disclosure Schedule is hereby amended by
the addition of the following:
"The Company may transfer the option related to the Meadow Shares (as
defined in Section 5.07(i) upon such terms and conditions as
reasonably acceptable to Parent, which consent shall not be
unreasonably withheld."
9. The first sentence of Section 4.03(a) of the Merger Agreement is hereby
amended and restated in its entirety as follows:
"The Company will, as soon as practicable following the date of this
Agreement, (i) duly call, give notice of, convene and hold a meeting
of its stockholders (the "Stockholders Meeting") for the purpose of
obtaining Stockholder Approval of (A) the Amendments to Sections 5.1,
5.2 and 5.6 of the Company's Restated Certificate of Incorporation and
(B) this Agreement and the Merger and (ii) will commence one or more
solicitations of written consents in lieu of a meeting for the purpose
of obtaining the Stockholder Approval of the Amendments not referenced
in item (i) above."
10. Item (b) of the first paragraph of Section 5.07 of the Merger Agreement is
hereby amended to insert the words ", to the holders of Series D Preferred
Stock and (if the Company so elects) to the holders of interests in the
Company's Director Deferred Stock Purchase Plan" immediately following the
words "distribute pro rata to the holders of Common Stock".
11. The penultimate sentence of the first paragraph of Section 5.07 of the
Merger Agreement is hereby amended and restated to delete the words "document
the contractual relationship between
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Delsener/Xxxxxx and the Company" and to insert the words "document the
contractual relationship between Delsener/Xxxxxx Holdings and the Company" in
lieu thereof.
12. Section 5.07(f)(iii) of the Merger Agreement is hereby amended and restated
in its entirety as follows:
"(iii) The Company shall, or shall cause its Subsidiaries to, as
applicable, contribute, transfer or convey to Delsener/Xxxxxx
Holdings, prior to the Spin Off (or at such time contemplated by
Section 5.07(h)), the assets described in Section 5.07(f)(iii) of the
Company Disclosure Schedule, and Delsener/Xxxxxx Holdings shall assume
all of the Company's and such Subsidiaries' obligations under such
agreements to the extent set forth on such schedule."
13. Section 5.07(h) of the Merger Agreement is hereby amended by inserting the
words "; provided, however, that the Delsener/Xxxxxx Group may solicit and
contract for the employment, effective no earlier than the Effective Time, of
Spin Off Employees" immediately following the words "not currently engaged in
the Entertainment Business".
14. Item (v) of the paragraph that immediately follows Section 5.07(i)(iv) of
the Merger Agreement is hereby amended to delete the words "permitted by
Section 4.01(a)(viii)" and to insert the words "permitted by Section
4.01(a)(vii)" in lieu thereof.
15. The paragraph that immediately follows Section 5.07(i)(iv) of the Merger
Agreement is hereby amended to insert the following at the end of the
paragraph:
", and (xii) be reduced by the amount of the Series E Premium (as
defined below).
The term "Series E Premium" shall mean the difference between (i) the
Average Trading Price times 142,032 and (ii) 14,203,200. The term
"Average Trading Price" shall mean the highest of the following
averages: (i) the average of the last sales price of the Series E
Preferred Stock during the 15 consecutive business days ending on the
Closing Date, or (ii) the average of the last sales price of the
Series E Preferred Stock during the 15 consecutive business days
immediately preceding February 9, 1998.
16. Section 5.07(k) of the Merger Agreement is hereby amended to insert the
words "place deposits on and" immediately prior to the words "consummate such
acquisitions and capital improvements."
17. Section 6.01(a) of the Merger Agreement is hereby amended and restated in
its entirety as follows:
"(a) Merger Approval. The Stockholder Approval shall have been
obtained with respect to (i) the approval and adoption of this
Agreement and the
3
Merger and (ii) the Amendments that modify Sections 5.1 and 5.6 of the
Company's Restated Certificate of Incorporation (collectively, the
"Merger Approval")."
18. Section 6.03 of the Merger Agreement is hereby amended by the addition of
the following paragraph (c) thereto:
"(c) Grace Period If Stockholder Approval Is Not Obtained for
Other Amendments. If the Stockholder Approval of the Amendments other
than those contained in Sections 5.1 and 5.6 of the Company's Restated
Certificate of Incorporation is not obtained by the date the Merger
Approval is obtained at the Stockholders Meeting, then at least
forty-five (45) days shall have passed from such date; provided,
however, that if such forty-five day period would end after May 14,
1998, such period shall be deemed to end on May 14, 1998."
19. Section 7.01(b)(i) of the Merger Agreement is hereby amended and restated
in its entirety as follows:
"(i) (A) if, upon a vote at a duly held Stockholders Meeting or
any adjournment thereof at which the Merger Approval shall have been
voted upon, any portion of the Merger Approval shall not have been
obtained or (B) unless (1) prohibited by an event described in either
clause (iii) or (v) of this Section 7.01(b) or (2) resulting from any
act or omission of Parent or Sub or their Affiliates, as of the day
immediately prior to the Termination Date either (x) no Stockholders
Meeting shall have been held or (y) if held no vote shall have been
taken in respect of the Merger Approval;"
20. Section 7.01(c) of the Merger Agreement is hereby amended to delete the
words "Stockholder Approval," and to insert "Merger Approval," in lieu thereof.
21. Annex A to the Merger Agreement is hereby amended and restated in its
entirety as set forth on Annex A hereto.
22. Pursuant to Section 4.01(a) of the Merger Agreement, Buyer hereby consents
to, and waives the application of any representations, warranties and covenants
of the Merger Agreement otherwise prohibiting, the solicitation of consents of
the holders of 2006 Notes and Series E Preferred Stock as described in the two
consent solicitations of the Company dated January 7, 1998, as amended,
relating thereto.
23. Except to the extent expressly set forth in this Amendment No. 1 to
Agreement and Plan of Merger, no terms and conditions of the Merger Agreement
are amended or modified hereby, and all such terms and conditions shall remain
in full force and effect.
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IN WITNESS WHEREOF, Parent, Sub and the Company have caused this
Amendment No. 1 to the Merger Agreement to be signed by their respective
officers thereunto duly authorized, all as of the date first written above.
SBI HOLDING CORPORATION
By: /s/ Xxxx Xxxxxx
-------------------------------
Name: Xxxx Xxxxxx
Title: Vice President
SBI RADIO ACQUISITION CORPORATION
By: /s/ Xxxx Xxxxxx
-------------------------------
Name: Xxxx Xxxxxx
Title: Vice President
SFX BROADCASTING, INC.
By: /s/ Xxxxxx F.X. Sillerman
-------------------------------
Name: Xxxxxx F.X. Sillerman
Title: Executive Chairman
ANNEX A
FORM OF AMENDMENTS TO THE
CORPORATION'S CERTIFICATE OF INCORPORATION
Section 5.1 of the Corporation's Restated Certificate of Incorporation
shall be amended to read in its entirety as follows (except for the section
heading, underlined language is new):
5.1 Identical Rights. Except as herein otherwise expressly
provided in this Restated Certificate of Incorporation, including,
without limitation, in connection with any transactions excepted from
Sections 5.2 or 5.6 hereof, all Common Shares shall be identical and
shall entitle the holders thereof to the same rights and privileges.
Section 5.2(a) of the Corporation's Restated Certificate of
Incorporation shall be amended to read in its entirety as follows (except for
the section heading, underlined language is new):
5.2. Dividends. (a) When, as, and if dividends are declared
by the Corporation's Board of Directors (the "Board of Directors"),
whether payable in cash, in property, or in securities of the
Corporation, the holders of Common Shares shall be entitled to share
equally in and to receive, in accordance with the number of Common
Shares held by each such holder, all such dividends, except that if
dividends are declared that are payable in Common Shares, such stock
dividends shall be payable at the same rate on each class of Common
Shares and shall be payable only in Class A Shares to holders of Class
A Shares, in Class B Shares to holders of Class B Shares and in Class
C Shares to holders of Class C Shares, and except that the holders of
the Class A Shares shall receive shares of class A common stock of SFX
Live Entertainment, Inc. in the Spin Off (as defined in the Agreement
and Plan of Merger, dated as of August 24, 1997, as it may be amended
from time to time, among SBI Holding Corporation, SBI Radio
Acquisition Corporation and the Corporation) having rights, powers and
privileges similar to the Class A Shares, and the holders of the Class
B Shares shall receive shares of class B common stock of SFX Live
Entertainment, Inc. in the Spin Off having rights, powers and
privileges similar to the Class B Shares.
Section 5.6 of the Corporation's Restated Certificate of Incorporation
shall be amended to read in its entirety as follows (except for the section
heading, underlined language is new):
5.6 Consideration on Merger, Consolidation, etc. In any
merger, consolidation, or business combination, the consideration to
be received per share by the holders of Class A Shares, Class B Shares
and Class C Shares must be identical for each class of stock, except
that in any such transaction in which shares of
common stock are to be distributed, such shares may differ as to
voting rights to the extent that voting rights now differ among the
Class A Shares, the Class B Shares and the Class C Shares, except
that, in connection with the transactions contemplated by the
Agreement and Plan of Merger, dated as of August 24, 1997, as it may
be amended from time to time (the "Merger Agreement"), among SBI
Holding Corporation, SBI Radio Acquisition Corporation and the
Corporation, each Class A Share shall receive the Class A Common Stock
Merger Consideration (as such term is defined in the Merger Agreement)
and each Class B Share shall receive the Class B Common Stock Merger
Consideration (as such term is defined in the Merger Agreement), and
except that the provisions of this Section 5.6 (other than this
exception to such provisions) shall not be applicable to any other
consideration to be received or which may be deemed to be received by
the holders of the Common Shares (including the holders of Class B
Shares) pursuant to (i) the Spin Off or the Alternate Transaction (as
such terms are defined in the Merger Agreement), (ii) any of the
agreements contemplated by the Merger Agreement, including, without
limitation, the Consulting, Non-Compete and Termination Agreement
among SBI Holding Corporation, the Corporation and Xxxxxx F.X.
Sillerman and the Stockholder Agreement among SBI Holding Corporation,
SBI Acquisition Corporation, the Corporation and Xxxxxx F.X. Sillerman
or (iii) the employment agreements, as presently in force or as
amended or entered into from time to time, of Xxxxxx F.X.
Sillerman and Xxxxxxx X. Xxxxxx.
Section 4(x) of the of the Corporation's Certificate of Designations,
Preferences and Relative, Participating, Optional and other Special Rights of
Preferred Stock and Qualifications, Limitations and Restrictions Thereof of
6 1/2% Series D Cumulative Convertible Exchangeable Preferred Stock Due May 31,
2007 as contained in the Corporation's Restated Certificate of Incorporation
shall be amended to read in its entirety as follows (underlined language is
new):
(x) The Corporation shall not pay any dividend or make any
distribution to, or on behalf of, the holders of any class or series
of Common Stock unless the holders of Class A Common Stock share
therein on an equal share for share basis, except that the holders of
Class A Common Stock shall receive shares of class A common stock of
SFX Live Entertainment, Inc. in the Spin Off (as defined in the
Agreement and Plan of Merger, dated as of August 24, 1997, as it may
be amended from time to time, among SBI Holding Corporation, SBI Radio
Acquisition Corporation and the Corporation) having rights, powers and
privileges similar to the Class A Common Stock, and the holders of
Class B Common Stock shall receive shares of class B common stock of
SFX Live Entertainment, Inc. in the Spin Off having rights, powers and
privileges similar to the Class B Common Stock.
The Corporation's Certificate of Designations, Preferences and
Relative, Participating, Optional and other Special Rights of Preferred Stock
and Qualifications, Limitations and Restrictions Thereof of 12 5/8% Series E
Cumulative Exchangeable Preferred Stock Due October 31,
2006 as contained in the Corporation's Restated Certificate of Incorporation
shall be amended to read in the indicated sections as follows (except for the
section headings, underlined language is new; deletions are indicated by a
caret (^)):
1. Certain Definitions.
. . .
Acquisition Agreements. The term "Acquisition Agreements"
shall mean the acquisition agreements relating to the Pending
Acquisitions (as defined in the Consent Solicitation of the
Corporation dated January 7, 1998, as supplemented by Supplement No. 1
thereto dated January 28, 1998) as they may be amended from time to
time and all transactions and agreements specifically contemplated
thereby or by instruments referred to therein.
. . .
Class A Common Stock. The term "Class A Common Stock" shall
mean the Corporation's Class A Common Stock, par value $.01 per share.
Class B Common Stock. The term "Class B Common Stock" shall
mean the Corporation's Class B Common Stock, par value $.01 per share.
. . .
Consolidated Cash Flow. The term "Consolidated Cash Flow"
shall mean, with respect to any Person for any period, the
Consolidated Net Income of such Person for such period plus (i) an
amount equal to any extraordinary loss plus any net loss realized in
connection with an Asset Sale by such Person or any of its
Subsidiaries during such period (to the extent such losses were
deducted in computing such Consolidated Net Income), plus (ii)
provision for taxes based on income or profits of such Person and its
Subsidiaries for such period, to the extent that such provision for
taxes was included in computing such Consolidated Net Income, plus
(iii) Consolidated Interest Expense of such Person for such period, to
the extent any such Consolidated Interest Expense was deducted in
computing such Consolidated Net Income, plus (iv) depreciation,
amortization (including amortization of goodwill and other intangibles
but excluding amortization of prepaid cash expenses that were paid in
a prior period) and other non-cash charges (excluding any such
non-cash charge to the extent that it represents an accrual of or
reserve for cash charges in any future period) of such Person and its
Subsidiaries for such period to the extent that such depreciation,
amortization and other non-cash charges were deducted in computing
such Consolidated Net Income, plus (v) the Specified Charges (as
defined in the Corporation's Consent Solicitation Statement relating
to
the Series E Preferred Stock dated January 7, 1998, as supplemented by
Supplement No. 1 thereto dated January 28, 1998, relating to the
Series E Preferred Stock), plus (vi) to the extent that such
Consolidated Net Income was reduced thereby (a) amortization of the
expenses incurred in connection with the Consulting, Non-Compete and
Termination Agreement among the Corporation, SBI Holding Corporation
and Xxxxxx F.X. Sillerman dated as of August 24, 1997, (b) consent
fees and expenses directly related to the Consent Solicitations, (c)
legal and other costs associated with pending or threatened litigation
in connection with the SBI Merger and (d) other unusual and
nonrecurring charges paid or accrued in 1997 or 1998 (including, but
not limited to, legal, accounting, investment banking, severance and
termination fees) relating to the SBI Merger, the Spin-Off, the
Pending Acquisitions or transactions related thereto less (vii) all
non-cash items increasing Consolidated Net Income for such period
(excluding any such non-cash income to the extent it represents an
accrual of cash income in any future period), in each case, on a
consolidated basis and determined in accordance with GAAP.
. . .
"Consent Solicitations" means the consent solicitations of
the Company made pursuant to the Consent Solicitation Statements dated
January 7, 1998, as supplemented by Supplement No. 1 thereto dated
January 28, 1998, to the holders of the Company's 10 3/4% Senior
Subordinated Notes due 2006 and to the holders of Series E Preferred
Stock and the related Information Statement.
. . .
Entertainment Companies. The term "Entertainment Companies"
shall mean SFX Entertainment and any and all of its direct and
indirect Subsidiaries.
. . .
Xxxxxxx Repurchase. The term "Xxxxxxx Repurchase" shall mean
the redemption by the Corporation of up to 250,838 shares of Class A
Common Stock for $33.00 per share, pursuant to the Agreement of
Merger, dated February 12, 1997, by and among the Corporation,
NOC-Acquisition Corp., CAPCO Acquisition Corp., QN Acquisition Corp.,
Nederlander of Connecticut, Inc., Connecticut Amphitheater Development
Corporation, QN Corp., Connecticut Performing Arts, Inc. and
Connecticut Performing Arts Partners and the Stockholders of
Nederlander of Connecticut, Inc., Connecticut Amphitheater Development
Corporation and QN Corp. listed on the signature page thereto.
Merger Agreement. The term "Merger Agreement" shall mean the
Agreement and Plan of Merger dated as of August 24, 1997, as it may be
amended from time to
time, among the Corporation, SBI Holding Corporation and SBI Radio
Acquisition Corporation and all transactions and agreements
specifically contemplated thereby or by instruments referred to
therein.
. . .
SBI Merger. The term "SBI Merger" shall mean a merger of SBI
Radio Acquisition Corporation into the Corporation pursuant to the
Merger Agreement.
. . .
SFX Entertainment. The term "SFX Entertainment" shall mean
SFX Entertainment, Inc., a subsidiary of the Corporation, newly formed
in Delaware, to which the Corporation will contribute cash and all of
the capital stock of SFX Concerts, Inc. (formerly known as
Delsener/Xxxxxx Enterprises, Inc) that the Corporation directly or
indirectly owns.
. . .
Spin-Off. The term "Spin-Off" shall mean the distribution of
SFX Entertainment common stock pro rata to the holders of Class A
Common Stock and the Class B Common Stock (and the transfer to an
escrow account for delivery to the holders of certain warrants to
receive Class A Common Stock) or other disposition pursuant to, or as
permitted by, the Merger Agreement of all of the capital stock and
assets of the Entertainment Companies.
Spin-Off Transactions. The term "Spin-Off Transactions" shall
mean the Spin-Off, the Pending Acquisitions and the Merger Agreement
as it relates to the transactions described or referred to under the
"Proposed Amendments" and "Spin-Off" section of the Consent
Solicitation Statement of the Corporation dated January 7, 1998, as
supplemented by Supplement No. 1 thereto dated January 28, 1998,
relating to this Certificate of Designations.
Subsidiary. The term "Subsidiary" shall mean, with respect to
any person, (i) any corporation, association or other business entity
of which more than 50% of the total voting power of shares of Voting
Stock thereof is at the time owned or controlled, directly or
indirectly, by such person or one or more of the other Subsidiaries of
that person (or a combination thereof) and (ii) any partnership (a)
the sole general partner or the managing general partner of which is
such person or a Subsidiary of such person or (b) the only general
partners of which are such person or of one or more Subsidiaries of
such person (or any combination thereof); however, with respect to the
Corporation, "Subsidiary" does not include the Entertainment
Companies.
. . .
8. Certain Covenants
(a) Restricted Payments. The Corporation shall not, and shall
not permit any of its Subsidiaries to, directly or indirectly: (i)
declare or pay any dividend or make any other payment or distribution
on account of the Corporation's Parity Securities or Junior Securities
(including, without limitation, any payment in connection with any
merger or consolidation involving the Corporation) or to the direct or
indirect holders of the Corporation's Parity Securities or Junior
Securities in their capacity as such (other than dividends or
distributions payable in Capital Stock (other than Disqualified Stock)
of the Corporation); (ii) purchase, redeem or otherwise acquire or
retire for value any Parity Securities or Junior Securities of the
Corporation; (iii) make any payment on, or purchase, redeem, defease
or otherwise acquire or retire for value any Junior Securities, except
payments of the Liquidation Preference thereof at final maturity; or
(iv) make any Restricted Investment (all such payments and other
actions set forth in clauses (i) through (iv) above being collectively
referred to as "Restricted Payments"), unless, at the time of and
after giving effect to such Restricted Payment:
(a) no Voting Rights Triggering Event shall have
occurred and be continuing or would occur as a consequence
thereof, and
(b) the Corporation would, at the time of such
Restricted Payment and after giving pro forma effect thereto
as if such Restricted Payment had been made at the beginning
of the applicable four-quarter period, have been permitted to
incur at least $1.00 of additional Indebtedness (other than
Permitted Debt) pursuant to the Debt to Cash Flow Ratio test
set forth below under Section 8(b) hereof; and
(c) such Restricted Payment, together with the
aggregate amount of all other Restricted Payments declared or
made after the Initial Issue Date (other than Restricted
Payments permitted by clauses (2), (5), (6) ^, (10), (13) or
(14) of the following paragraph) shall not exceed, at the
date of determination, the sum of (1) an amount equal to the
Corporation's Consolidated Cash Flow from the Initial Issue
Date to the end of the Corporation's most recently ended full
fiscal quarter for which internal financial statements are
available, taken as a single accounting period, less the
product of 1.4 times the Corporation's Consolidated Interest
Expense from the Initial Issue Date to the end of the
Corporation's most recently ended full fiscal quarter for
which internal financial statements are available, taken as a
single accounting period, plus (2) an amount equal to the net
cash proceeds received by the Corporation from the issue or
sale after the Initial
Issue Date of Equity Interests of the Corporation (other than
(i) sales of Disqualified Stock and (ii) Equity Interests
sold to any of the Corporation's Subsidiaries) or of debt
securities or Disqualified Stock (other than the Series D
Preferred Stock) of the Corporation issued after the Initial
Issue Date that have been converted into such Equity
Interests plus (3) to the extent that any Restricted
Investment that was made after the Initial Issue Date is sold
for cash or otherwise liquidated or repaid for cash, the
lesser of (A) the cash return of capital with respect to such
Restricted Investment (less the cost of disposition, if any)
and (B) the initial amount of such Restricted Investment.
If no Voting Rights Triggering Event shall have occurred and
be continuing as a result thereof, the foregoing provisions will not
prohibit: (1) the payment of any dividend within 60 days after the
date of declaration thereof, if at said date of declaration such
payment would have complied with the provisions of this Certificate of
Designations; (2) the redemption, repurchase, retirement or other
acquisition of any Equity interests of the Corporation in exchange
for, or out of the proceeds of, the substantially concurrent sale
(other than to a Subsidiary of the Corporation) of other Equity
Interests of the Corporation (other than any Disqualified Stock);
provided that the amount of any such net cash proceeds that are
utilized for any such redemption, repurchase, retirement or other
acquisition shall be excluded from clause (c)(2) of the preceding
paragraph; (3) cash payments made in respect of fractional shares of
Capital Stock not to exceed $100,000 in the aggregate in any fiscal
year; (4) the payment of dividends on the shares of Series D Preferred
Stock in accordance with the terms thereof as in effect on the Initial
Issue Date; (5) the issuance of Series D Exchange Notes in exchange
for the Series D Preferred Stock; provided that such issuance is
permitted by Section 8(b) hereof; (6) the issuance of Exchange
Debentures in exchange for the Series E Preferred Stock; provided that
such issuance is permitted by Section 8(b) hereof; (7) in the event
that the Corporation elects to issue the Series D Exchange Notes in
exchange for the Series D Preferred Stock, cash payments made in lieu
of the issuance of Series D Exchange Notes having a face amount less
than $50 and any cash payments representing accrued and unpaid
dividends in respect thereof, not to exceed $100,000 in the aggregate
in any fiscal year; (8) in the event that the Corporation elects to
issue Exchange Debentures in exchange for Series E Preferred Stock,
cash payments made in lieu of the issuance of Exchange Debentures
having a face amount less than $1,000 and any cash payments
representing accrued and unpaid dividends in respect thereof, not to
exceed $100,000 in the aggregate in any fiscal year; (9) payments made
by the Corporation to SCMC for facilities maintenance and other
services and reimbursements pursuant to the Shared Facilities
Agreement, as amended from time to time, to the extent that such
payments do not exceed the amount of payments which would have been
due if calculated in accordance with the terms of the Shared
Facilities Agreement as in effect on the Initial Issue Date; (10)
payments by the Corporation pursuant to the Management Termination
Agreements in accordance with the terms thereof as in
effect on the Initial Issue Date; (11) the redemption by the
Corporation of its Series C Preferred Stock in accordance with the
terms thereof as in effect on the Initial Issue Date; ^ (12) the
redemption by the Corporation of its Series B Preferred Stock in
accordance with the terms thereof as in effect on the Initial Issue
Date; provided that payments made by the Corporation to redeem the
Series B Preferred Stock shall not exceed $1.0 million in any fiscal
year or $2.0 million in the aggregate since the Initial Issue Date;
(13) the Spin-Off Transactions; and (14) the Xxxxxxx Repurchase.
The amount of all Restricted Payments (other than cash) shall
be the Fair Market Value (evidenced by a resolution of the Board of
Directors set forth in an Officers' Certificate delivered to the Board
of Directors) on the date of the Restricted Payment of the asset(s) or
securities proposed to be transferred by the Corporation or such
Subsidiary, as the case may be, pursuant to the Restricted Payment.
Not later than the date of making any Restricted Payment, the
Corporation shall deliver to the Board of Directors an Officers'
Certificate stating that such Restricted Payment is permitted and
setting forth the basis upon which the calculations required by this
covenant were computed, which calculations may be based upon the
Corporation's latest available financial statements.
. . .
(d) Transactions with Affiliates. The Corporation shall not,
and shall not permit any of its Subsidiaries to, make any payment to,
or sell, lease, transfer or otherwise dispose of any of its properties
or assets to, or purchase any property or assets from, or enter into
or make or amend any contract, agreement, understanding, loan, advance
or guarantee with, or for the benefit of, any Affiliate (each of the
foregoing, an "Affiliate Transaction"), unless (i) such Affiliate
Transaction is on terms that are no less favorable to the Corporation
or the relevant Subsidiary than those that would have been obtained in
a comparable transaction by the Corporation or such Subsidiary with an
unrelated Person and (ii) the Corporation delivers to the Holders (a)
with respect to any Affiliate Transaction or series of related
Affiliate Transactions involving aggregate consideration in excess of
$1.0 million, a resolution of the Board of Directors set forth in an
Officers' Certificate certifying that such Affiliate Transaction
complies with clause (i) above and that such Affiliate Transaction has
been approved by a majority of the members of the Board of Directors
that are disinterested as to such Affiliate Transaction and (b) with
respect to any Affiliate Transaction or series of related Affiliate
Transactions involving aggregate consideration in excess of $5.0
million, an opinion as to the fairness to the Holders of such
Affiliate Transaction from a financial point of view issued by an
accounting, appraisal or investment banking firm of national standing;
provided that (1) transactions between or among the Corporation and/or
its Wholly-Owned Subsidiaries, (2) the redemption or repurchase of the
Existing MMR Indebtedness, (3) transactions and agreements
specifically contemplated by the Termination and
Assignment Agreement between the Corporation and SCMC as in effect on
the Initial Issue Date, (4) payments required by the terms of the
joint lease among the Corporation, SCMC and the landlord thereunder
for the Corporation's corporate headquarters located at 000 Xxxxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx and any agreements directly related
thereto, in each case, as the same are in effect on the Initial Issue
Date, (5) payments made by the Corporation to SCMC for the facilities
maintenance and other services and reimbursements pursuant to the
Shared Facilities Agreement, (6) payments and other transactions by
the Corporation pursuant to the Management Termination Agreements, ^
(7) any Restricted Payments that are permitted by Section 8(a) hereof
and any Permitted Investments, (8) the transactions and agreements
specifically contemplated by the Merger Agreement, the Acquisition
Agreements or by instruments referred to in any such agreements and
(9) any Spin-Off Transaction, in each case, shall not be deemed to be
Affiliate Transactions.
. . .
(h) Waiver Relating to Certain Transactions. [DELETED IN ITS
ENTIRETY]
The Corporation reserves the right to make any changes to this Form of
Amendments as may be necessary to effectuate the purpose hereof.
