ASSUMPTION OF WARRANTS
ASSUMPTION OF WARRANTS, dated as of this 22nd day of
November, 1996, executed by SFX Broadcasting, Inc., a Delaware corporation (the
"Company") and delivered to American Stock Transfer & Trust Company (the
"Warrant Agent").
W I T N E S S E T H
WHEREAS, pursuant to that certain Warrant Agreement, dated as
of March 23, 1994, by and among Multi-Market Radio, Inc., a Delaware
corporation ("MMR"), the Warrant Agent, X.X. Xxxxx Investment Banking
Corporation, a New York corporation ("Xxxxx"), and Americorp Securities, Inc.,
a Delaware corporation ("Americorp"), MMR issued an aggregate of 2,000,000
Class A Warrants and 2,000,000 Class B Warrants, each of which entitles the
holder to purchase one share of Class A Common Stock, par value $.01 per share
(the "MMR Class A Common Stock"), of MMR at an exercise price of $7.50 and
$11.50, respectively (the Class A Warrants and the Class B Warrants are
collectively referred to as the "Warrants");
WHEREAS, on November 8, 1996 MMR redeemed all of the then
outstanding Class A Warrants, other than those contained in the 160,000 Unit
Purchase Options, dated March 30, 1994, issued to Xxxxx, Americorp and their
designees;
WHEREAS, Section 9(c) of the Warrant Agreement provides that
in case of any merger of MMR with or into another corporation (other than a
merger in which MMR is the continuing corporation and which does not result in
any reclassification, capital reorganization or change of the outstanding
common stock of MMR), MMR shall cause effective provision (the "Warrant
Assumption") to be made so that each holder of a Warrant then outstanding shall
have the right thereafter, by exercising such Warrant, to purchase the kind and
number of shares of stock or other securities or property (including cash)
receivable upon such merger by a holder of the number of shares of MMR Class A
Common Stock that might have been purchased upon exercise of such Warrant
immediately prior to the merger;
WHEREAS, Section 9(c) of the Warrant Agreement further
provides that the Warrant Assumption shall include provision for adjustments
that shall be as nearly equivalent as may be practicable to the adjustments
provided for in Section 9 of the Warrant Agreement, which sets forth
adjustments to the exercise price of, and number of shares purchasable pursuant
to, the Warrants which must be made under certain circumstances;
WHEREAS, Section 9(c) of the Warrant Agreement further
provides that MMR shall not effect any merger with or into another corporation
unless prior or simultaneously with the consummation thereof the successor
corporation resulting from such merger shall execute and deliver to the Warrant
Agent the Warrant Assumption;
WHEREAS, the Company, MMR and Acquisition Sub entered into an
Amended and
Restated Agreement and Plan of Merger dated as of April 15, 1996, amended on
May 6, 1996, July 30, 1996 and September 30, 1996 (the "Merger Agreement"),
pursuant to which MMR agreed to merge with Acquisition Sub and thereby become a
wholly-owned subsidiary the Company (the "Merger");
WHEREAS, pursuant to Section 2.01 of the Merger Agreement,
upon the consummation of the Merger on November 22, 1996, each outstanding
share of MMR Class A Common Stock was converted into the right to receive that
number of shares of the Class A Common Stock, $.01 par value per share, of the
Company ("Company Class A Common Stock") equal to the Exchange Ratio (as such
term is defined in the Merger Agreement);
WHEREAS, the Exchange Ratio is .2983; and
WHEREAS, Section 2.05 of the Merger Agreement provides that
each outstanding Warrant shall be assumed by the Company and that the holders
of such Warrants shall continue to have, and be subject to, the same terms and
conditions set forth in the Warrants except that (i) such Warrants shall be
exercisable for the number of shares of Company Class A Common Stock equal to
the product of the number of shares of MMR Class A Common Stock covered by the
Warrant immediately prior to the consummation of the Merger multiplied by the
Exchange Ratio, and (ii) the per share exercise price for the shares of Company
Class A Common Stock issuable upon the exercise of such assumed Warrant shall
be equal to the quotient determined by dividing the exercise price per share of
MMR Class A Common Stock specified for the Warrants immediately prior to the
consummation of the Merger (the "Original Exercise Price") by the Exchange
Ratio, rounding the resulting exercise price down to the nearest whole cent.
NOW, THEREFORE, intending to be legally bound, the Company
hereby agrees as follows:
1. The Company hereby assumes the obligations, rights and duties of
MMR contained in the Warrants (including those set forth in Section 9 of the
Warrants).
2. Each Warrant outstanding at the consummation of the Merger shall
continue to evidence the same rights and shall be subject to the same terms and
conditions set forth in the Warrants except that (i) the holder(s) of each
Warrant shall have the right, upon exercise of such Warrant, to receive .2983
shares of Company Class A Common Stock and (ii) the per share exercise price
for the shares of Company Class A Common Stock issuable upon the exercise of
each Class A Warrant shall be $25.98 and the per share exercise price of the
shares of Company Common Stock issuable upon the exercise of each Class B
Warrant shall be $38.55.
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IN WITNESS WHEREOF, the Company has caused this instrument to be
signed by its duly authorized officer and delivered to American Stock Transfer
& Trust Company on this 22nd day of November, 1996.
SFX BROADCASTING, INC.
By: /s/ Xxxxxx X.X. Sillerman
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Name: Xxxxxx X.X. Xxxxxxxxx
Title: Chief Executive Officer
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