CONSENT AGREEMENT
CONSENT AGREEMENT, dated May 17, 1996, by and among The Xxxx
Alternative Income Fund, L.P., a Delaware limited partnership (the "Fund"),
Multi-Market Radio, Inc., a Delaware corporation ("MMR") and SFX Broadcasting,
Inc., a Delaware corporation ("SFX").
WHEREAS, the Fund and MMR are also party to a Registration Rights
Agreement dated as of March 27, 1995 (the "MMR Registration Rights
Agreement"), pursuant to which the Fund has been granted certain registration
rights with respect to the shares of Class A Common Stock of MMR issued or
issuable upon exercise of the Old MMR Warrants;
WHEREAS, SFX, SFX Merger Company, a Delaware corporation and a
direct wholly-owned subsidiary of SFX ("Acquisition Sub"), and MMR have
entered into an Amended and Restated Agreement and Plan of Merger dated as of
April 15, 1996, as amended as of May 6, 1996, each as attached as Exhibit A
hereto (the "Merger Agreement"), pursuant to which Acquisition Sub, upon the
terms and subject to the conditions of the Merger Agreement, intends to merge
with and into MMR (the "Merger");
WHEREAS, pursuant to a letter dated April 15, 1996, addressed to
the Fund from MMR (the "Consent Letter") and annexed hereto as Exhibit B, MMR
and the Fund agreed in principal, inter alia, that at or immediately prior to
the Effective Time (as defined in the Merger Agreement), and as a condition to
the consummation of the Merger, MMR shall (i) repay and redeem in full, in
cash, the Debenture and the MMR Preferred Stock for an aggregate purchase
price of $21,000,000, plus accrued and unpaid interest and dividends to the
date of repayment and redemption, respectively, and (ii) as a fee to the Fund
for the Fund entering into this Consent Agreement, issue to the Fund the
warrants specified in the Consent Letter (the "New MMR Warrants");
WHEREAS, pursuant to the Consent Letter, the Fund consented under
the Securities Purchase Agreement solely to the execution by MMR of the Merger
Agreement, but reserved all of its rights with respect thereto, and the
Securities Purchase Agreement prohibits MMR from consummating the Merger
without the consent of the Fund;
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements herein contained, and intending to be legally bound
hereby, the Fund, SFX and MMR hereby agree as follows:
1. Repurchase of Debenture and MMR Preferred Stock. MMR agrees
that at or immediately prior to the Effective Time it shall repay and redeem
in full, in cash, the Debenture and the MMR Preferred Stock for an aggregate
purchase price of $21,000,000, plus accrued and unpaid interest and dividends
to the date of repayment and redemption, respectively (the "Purchase Price"),
and the Fund agrees to the cancellation of the Debenture and the MMR Preferred
Stock at that time upon payment of the Purchase Price.
2. Exchange of Old MMR Warrants. SFX agrees that at the
Effective Time it shall issue to the Fund a Common Stock Purchase Warrant,
dated the Effective Date, and exercisable for such number of shares of Class A
Common Stock, par value $.01 per share, of SFX ("SFX Class A Common Stock"),
as required under Section 2.05 of the Merger Agreement and Section 6 of the
Old MMR Warrants (rounded up to the nearest whole number of shares), in the
form of Exhibit C annexed hereto, in exchange for the Old MMR Warrants (the
"SFX Exchange Warrant"). The exercise price per share of SFX Class A Common
Stock of each SFX Exchange Warrant shall be the quotient of the exercise price
of the Old MMR Warrant for each share of MMR Class A Common Stock divided by
the Exchange Ratio.
3. Issuance of New SFX Warrants. As a fee for the consent
given in Section 8 hereof, SFX agrees that at or immediately prior to the
Effective Time it shall issue to the Fund Common Stock Purchase Warrants,
dated the Effective Date, and exercisable, in the aggregate, for such number
of shares of SFX Class A Common Stock (rounded up to the nearest whole number
of shares) equal to the product of 175,000 multiplied by the Exchange Ratio
(as defined in the Merger Agreement), in the form of Xxxxxxxx X-0, X-0, X-0
and D-4 annexed hereto (the "New SFX Warrants"). The New SFX Warrants shall
be issued in lieu of the New MMR Warrants. The exercise price per share of
SFX Class A Common Stock of each New SFX Warrant shall be the quotient of the
exercise price of the related New MMR Warrant for each share of MMR Class A
Common Stock divided by the Exchange Ratio.
4. Registration Rights Agreement. Concurrently with entering
into this Consent Agreement, SFX has executed and delivered to the Fund a
Registration Rights Agreement with the Fund, dated as of the date hereof, in
the form of Exhibit E annexed hereto (the "SFX Registration Rights
Agreement"). Upon the consummation of the Merger and the delivery of the SFX
Exchange Warrant and the New SFX Warrants, the SFX Registration Rights
Agreement shall become effective and shall supersede the MMR Registration
Rights Agreement in its entirety.
5. Incorporation of Provisions under the Securities Purchase
Agreement.
(a) Each of the covenants contained in Sections 8.1, 8.2, 8.3,
8.4, 8.5(a) and 8.6 of the Securities Purchase Agreement (as in effect on the
date of this Consent Agreement, without regard to any amendment, modification
or waiver of such provisions), together with all related definitions and
ancillary provisions, are hereby incorporated into this Consent Agreement as
fully as if set forth herein in their entirety; provided that: (i) references
to the "Company" shall mean and be a reference to SFX as defined herein; (ii)
references to "Securities" shall mean and be a reference to the SFX Exchange
Warrant and the New SFX Warrants (collectively, the "SFX Warrants"); (iii)
references to "Warrant" shall mean and be a reference to the SFX Warrants as
defined herein; and (iv) references to "Warrant Stock" shall mean and be a
reference to the Warrant Stock as defined in the SFX Warrants. Section 10 of
the Securities Purchase Agreement shall continue to be applicable to the SFX
Exchange Warrant (on terms determined in accordance with such Agreement
applying the Exchange Ratio thereto) but not to the New SFX Warrants. Except
as set forth in this Consent Agreement, none of the other provisions of the
Securities Purchase Agreement shall survive or be of any force or effect after
the Effective Time and the satisfaction of the conditions set forth in Section
9 hereof.
(b) The representation and warranty contained in Section 4.03 of
the Merger Agreement (as in effect on the date of this Consent Agreement,
without regard to any amendment, modification or waiver thereof), together
with all related definitions and ancillary provisions, is hereby incorporated
into this Consent Agreement as fully as if set forth herein in its entirety.
(c) This Section 5 shall become effective at the Effective Time
and upon the satisfaction of the conditions precedent set forth in Section 9
hereof.
6. Board Deliberations. The parties hereto acknowledge that
Xx. Xxxxxxx Xxxxxxxx abstained from the voting of the Board of Directors of
MMR in connection with the Merger.
7. Directors' and Officers' Liability Insurance;
Indemnification of Directors. (a) MMR has obtained the removal of the
exclusion contained in its directors' and officers' liability insurance
relating to transactions with affiliates (including, without limitation, the
Merger and the other transactions contemplated by the Merger Agreement and
this Consent Agreement).
(b) SFX shall, without limiting the terms of the Merger
Agreement, (i) indemnify, defend and hold harmless each person who is, or has
been at or prior to the Effective Time, a director or officer of MMR from and
against any loss or claim to the same extent as such persons are presently
indemnified by MMR and (ii) maintain a directors' and officers' liability and
corporate indemnification insurance policy covering such loss or claim for a
period of six (6) years after the Effective Time.
8. Consent to Consummation of the Merger. Upon the
satisfaction in full of the conditions precedent set forth in Section 9 hereof
by April 30, 1997, the Fund will consent to the consummation of the Merger and
the nonassumption of the Securities Purchase Agreement pursuant to Section 6
of the Old MMR Warrants. In the event that the conditions precedent set forth
in Section 9 hereof shall not be satisfied on or before such date (or December
31, 1997, if extended as provided herein) then this Consent shall be null and
void and the Securities Purchase Agreement, the Transaction Documents and the
Related Agreements (as such terms are defined in the Securities Purchase
Agreement) shall continue in full force and effect; provided, however, that if
on or before April 30, 1997, the Fund receives the Purchase Price by wire
transfer in immediately available funds and the fully executed New MMR
Warrants having such terms as are set forth in the Consent Letter and
otherwise in the form of the New SFX Warrants (included, respectively, as
Xxxxxxxx X-0, X-0, X-0 and D-4 annexed hereto), which receipt shall be
considered irrevocable, such date shall be extended to December 31, 1997.
Holders of the New MMR Warrants shall be entitled to the same registration and
other rights as the holders of the Old MMR Warrants as provided, among other
instruments, therein and in the Securities Purchase Agreement.
9. Conditions to Effectiveness. The effectiveness of Section 8
of this Consent Agreement shall be subject to the following:
(a) Payment by MMR to the Fund of the Purchase Price by wire
transfer in immediately available funds.
(b) The execution and delivery to the Fund by SFX of the SFX
Warrants and the SFX Registration Rights Agreement, each duly executed by SFX.
(c) The Fund shall have received true, complete and correct
copies of the Merger Documents.
(d) The Fund shall have received evidence satisfactory to it of
the removal by MMR of the exclusion contained in its directors' and officers'
liability insurance relating to transactions with affiliates (including,
without limitation, the Merger).
(e) The provisions of Sections 2.01, 2.02, 2.05, 6.01, 6.06,
7.01(a), 7.01(d), 7.01(e), 7.01(f), 7.02(a), 7.03(a) and 7.03(c) of the Merger
Agreement shall not have been amended, modified, deleted or waived directly or
indirectly by any other modification to the Merger Agreement or any other
instrument (a "Modification") in a manner that would be adverse, financially
or otherwise, to the MMR stockholders, to the Fund or to its current or former
designee to the MMR Board of Directors. The other provisions of the Merger
Agreement shall not otherwise have been subject to a Modification that would
be materially adverse, financially or otherwise, to any of such persons.
(f) Xxxxxxx Xxxx & Xxxxx, the Fund's special counsel, shall have
received promptly after having been invoiced therefor payment in full for all
reasonable legal fees charged, and all costs and expenses incurred by such
counsel through the Effective Date in connection with the transactions
involving SFX or MMR, including, without limitation, the preparation and
negotiation of this Consent Agreement and related instruments and the
preparation and filing of any Schedule 13D under the Securities Exchange Act
of 1934, as amended.
(g) The Fund shall have received evidence reasonably
satisfactory to it that (i) the conditions set forth in Sections 7.01(a),
7.01(d), 7.01(e), 7.01(f), 7.02(a), 7.03(a), and 7.03(c) of the Merger
Agreement have been fully satisfied and (ii) the Independent Committee of MMR
has approved the Merger and recommended that the Merger Agreement be approved
by MMR's stockholders, and such recommendation has not been withdrawn or
modified.
(h) The Fund shall have received a copy of the written fairness
opinion from Xxxxxxxxxxx & Co., Inc. dated as of the date of the Proxy
Statement (as such term is defined in the Merger Agreement).
10. Subsequent Holders of SFX Warrants. Whether or not any
express assignment has been made in this Consent Agreement, the provisions of
this Consent Agreement that are for the benefit of the Fund as the holder of
any SFX Warrants are also for the benefit of, and enforceable by, all
subsequent holders of any SFX Warrants.
11. Registration, Transfer and Exchange of SFX Warrants. SFX
shall keep at its principal offices a register in which shall be entered the
names and addresses of the holders of SFX Warrants and particulars of the
respective SFX Warrants held by each such holder and of all transfers of such
SFX Warrants. The holder of any of the SFX Warrants may at any time and from
time to time prior to exercise or redemption thereof surrender any SFX Warrant
held by it for exchange or (subject to compliance with Section 13 hereof)
transfer at such offices of SFX. On surrender for exchange or transfer of the
SFX Warrants, properly endorsed to SFX, SFX at its expense will issue and
deliver to or on the order of the holder thereof a new warrant or warrants of
identical tenor, in the name of such holder or, upon payment by such holder of
any applicable transfer taxes, as such holder may direct, calling in the
aggregate on the face or faces thereof for the number of shares of SFX Class A
Common Stock called for on the face or faces of the SFX Warrants so
surrendered.
12. Replacement of SFX Warrants. Upon receipt of a certificate
of the loss, theft, destruction of mutilation of any SFX Warrant and, in the
case of any such loss, theft or destruction, upon delivery of an indemnity
bond in such reasonable amount as SFX may determine (or, in the case of any
SFX Warrant held by the Fund or another institutional holder of an unsecured
indemnity agreement from the Fund or such other holder reasonably satisfactory
to SFX) or other assurance, or, in the case of any such mutilation, upon the
surrender of such mutilated SFX Warrant for cancellation to SFX at its
principal offices, SFX, at its own expense, will execute and deliver, in lieu
thereof, a new warrant of identical tenor.
13. Restrictions on Transfer. (a) The SFX Warrants and all
warrants issued in exchange therefor or upon conversion or exercise thereof
(the "Restricted Securities"), shall be transferable only upon satisfaction of
the conditions set forth in this Section 13.
(b) Prior to any transfer of any Restricted Securities, the
holder thereof shall be required to give written notice to SFX describing in
reasonable detail the manner and terms of the proposed transfer and the
identity of the proposed transferee (the "Transfer Notice"), accompanied by
the written agreement of the proposed transferee to be bound by all of the
provisions hereof applicable to holders of such Restricted Securities
hereunder. SFX may, if it is reasonable to do so under the circumstances
considering the identity of the proposed transferee and the method of
transfer, request an opinion of counsel from the Fund or such transferee to
the effect that such transfer may be made without registration of such
Restricted Securities under the Securities Act of 1933, as amended (the
"Securities Act").
(c) Except as otherwise permitted by this Section 13, each SFX
Warrant shall bear the following legend:
THIS WARRANT AND ANY SHARES ACQUIRED UPON THE EXERCISE OF THIS
WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, AND MAY NOT BE SOLD OR OTHERWISE TRANSFERRED IN
THE ABSENCE OF SUCH REGISTRATION OR ANY 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.
(d) The restrictions imposed by this Section 13 upon the
transferability of Restricted Securities shall terminate as to any particular
Restricted Securities when such Restricted Securities shall have been sold
pursuant to an effective registration statement under the Securities Act or
sold pursuant to Rule 144 or Rule 144A under the Securities Act. Whenever any
of such restrictions shall terminate as to any Restricted Securities, the
holder thereof shall be entitled to receive from SFX, at SFX's expense, new
warrants without such legends.
14. Right to Call SFX Warrants; Call Closing. (a) At any time
after the Effective Date, SFX may, on one occasion, by notice to the Fund (the
"Call Notice"), elect to purchase from the Fund (and the Fund hereby agrees to
sell to SFX) each SFX Warrant as is then outstanding on a date specified in
such notice not fewer than 30 nor more than 90 days after the date of the Call
Notice out of the funds legally available therefor, at an aggregate price
equal to the product of (x) the "New Call Price Per Share" (as defined below)
which is applicable to such SFX Warrant and (y) the number of shares of
Warrant Stock for which such SFX Warrant is then exercisable (the "New Call
Price"). Notwithstanding the foregoing, in the event of exercise of the SFX
Warrants, the provision of Section 3(a) of the SFX Warrants shall supersede
the foregoing to the extent inconsistent. The closing of the purchase of the
SFX Warrants shall take place at the offices of SFX at 10:00 a.m. local time
on the date so specified, or at such other time and place as SFX and the Fund
may agree. At such closing, the Fund will deliver to SFX the SFX Warrants to
be repurchased by SFX (properly endorsed or accompanied by assignments with
signature(s) guaranteed or similar appropriate documentation of authority to
transfer), and SFX shall pay to the Fund the New Call Price in immediately
available funds by wire transfer, at the Fund's direction. The "New Call
Price Per Share" with respect to each SFX Warrant per share of SFX Class A
Common Stock shall be the product of (i) the fraction the numerator of which
is the Call Price per share under Section 10.1 of the Securities Purchase
Agreement in effect at the Effective Time and the denominator of which is the
exercise price of the Old MMR Warrant per share of MMR Class A Common Stock in
effect at the Effective Time multiplied by (ii) the exercise price of such
SFX Warrant per share of SFX Class A Common Stock at the Effective Time. By
way of example, the Old MMR Warrants having an exercise price of $7.75 per
share of MMR Class A Common Stock would be converted, assuming an Exchange
Ratio of .3593, into SFX Exchange Warrants with an exercise price per share of
$21.57. The Call Price Per Share for such Warrant would be, assuming a $30
Call Price under Section 10.1 of the Securities Purchase Agreement, $21.57
multiplied by $30/$7.75 or $83.49. Assuming the same facts with respect to a
New MMR Warrant with an exercise price of $11.75 per share, such Warrant would
be converted into a New SFX Warrant with an exercise price of $32.70 per share
and have a Call Price Per Share of $126.58.
(b) In case, through a split, recapitalization or otherwise, (i)
at any time the outstanding shares of Common Stock of SFX shall be subdivided
into a greater number of shares, the New Call Price in effect immediately
prior to such subdivision shall be proportionately reduced, and (ii)
conversely, at any time the outstanding shares of Common Stock of SFX shall be
combined into a smaller number of shares, the New Call Price in effect
immediately prior to such combination shall be proportionately increased.
(c) In the event that any portion of the New Call Price is not
payable as a result of any insufficiency of legally available funds or
otherwise, the Fund may elect (i) to accept the portion of the New Call Price
that is so payable and retain all of its rights hereunder and under and in
connection with the SFX Warrants and Warrant Stock, including, without
limitation, under the SFX Registration Rights Agreement, as to that number of
shares of Warrant Stock or portion of the SFX Warrants exercisable for that
number of shares as such unpaid portion of the New Call Price and interest
thereon, determined as set forth below, shall be paid to the Fund in full or
(ii) to reject payment of any portion of the New Call Price (other than the
full amount thereof), in which case SFX's Call Notice shall be deemed revoked
and the Fund shall retain the Warrants and not be required to sell the SFX
Warrants to the Company pursuant to Section 14(a).
15. Indemnification under Securities Purchase Agreement.
Notwithstanding anything to the contrary contained herein, the provisions of
Section 17 of the Securities Purchase Agreement shall remain in full force and
effect and SFX hereby expressly assumes MMR's obligations thereunder.
16. Expense Reimbursement and Indemnification by SFX and MMR.
(a) Whether or not the transactions contemplated by this Consent
Agreement and the Merger Documents shall be consummated, MMR hereby agrees to
pay on demand all reasonable out-of-pocket expenses incurred by the Fund in
connection with such transactions hereunder and thereunder and in connection
with any amendments or waivers (whether or not the same become effective)
hereof or thereof and all reasonable out-of-pocket expenses incurred by the
Fund in connection with the enforcement of any rights hereunder, including
without limitation: (i) the cost and expenses of preparing and duplicating
this Consent Agreement, the Merger Documents and the SFX Warrants; (ii) the
reasonable fees, expenses and disbursements of Xxxxxxx Xxxx & Xxxxx, the
Fund's special counsel, in connection with the transactions contemplated by
this Consent Agreement or any Merger Document; and (iii) all taxes (other than
taxes determined with respect to income), including any filing fees and
documentary stamp and similar taxes at any time payable in respect of this
Consent Agreement, any Merger Document or the issuance of any of the SFX
Warrants.
(b) SFX and MMR hereby agree, jointly and severally, to
indemnify, defend, exonerate and hold the Fund and each of its affiliates or
partners, and their respective members, officers, directors, employees,
agents, representatives, successors and assigns (collectively, the
"Indemnitees") harmless from and against any and all actions, causes of
action, suits, losses, liabilities, obligations, damages, deficiencies,
demands, claims, judgments, taxes, assessments, settlement costs, court costs
and other costs and expenses, including, without limitation, interest,
penalties, fines, costs of investigation, discovery, case preparation,
reasonable attorneys' and paralegal fees and disbursements (collective,
"Losses"), incurred in any capacity by any of the Indemnitees based upon, or
arising out of, as a result of or relating to the execution, delivery or
performance of this Consent Agreement or enforcement by any of the Indemnities
hereof (including, without limitation, any failure by SFX or MMR to comply
with any of its covenants hereunder or the breach by it of any representations
or warranties hereunder), the Merger Documents or any instrument contemplated
hereby or thereby, except for any such Losses arising primarily from such
Indemnitee's gross negligence or willful misconduct.
(c) The obligations of SFX and MMR under this Section 16 shall
survive exercise or transfer of the SFX Warrants and the termination of this
Consent Agreement for any reason.
17. Notices. Any notice or other communication required or
permitted hereunder 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, three (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 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 MMR, then to Multi-Market Radio, Inc., Xxx Xxxxxxx
Xxxxx, Xxxxx 000, Xxxxxxxxxxx, Xxxxxxxxxxxxx 00000, Attention:
Xxxxxxx X. Xxxxxx, Telecopy No.: (000) 000-0000, or at such other
address as MMR shall have specified by notice actually received by
the addressor.
If to SFX, 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 SFX shall have specified by notice actually received by
the addressor.
If to any other holder of SFX Warrants, to it at its address
set forth on the books and records of SFX.
18. Successors and Assigns. This Consent Agreement shall be
binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns, including, without limitation, subsequent
holders of SFX Warrants agreeing to be bound by all of the terms and
conditions of this Consent Agreement.
19. Survival. All covenants, agreements, representations and
warranties made herein shall survive the execution and delivery hereof and the
delivery of the SFX Warrants.
20. Counterparts. This Consent Agreement and any amendments,
waivers, consents or supplements may be executed in two or more counterparts
and by the parties hereto in separate counterparts, each of which when so
executed shall be deemed to be an original and all of which taken together
shall constitute one and the same instrument. Subject to the satisfaction of
the conditions precedent set forth in Section 9 hereof, this Consent Agreement
shall become effective upon the execution of a counterpart by each of the
parties hereto.
21. Headings. Section and subsection headings in this Consent
Agreement are included herein for convenience of reference only and shall not
constitute a part of this Consent Agreement for any other purpose or be given
any substantive effect.
22. Governing Law. This Consent Agreement 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.
23. Consent to Jurisdiction; Waiver of Jury Trial. (a) Any
action, suit or proceeding arising out of or relating to this Consent
Agreement or the transactions contemplated hereby may be instituted in any
federal court of the Southern District of New York or any state court located
in New York County, State of New York, and each party agrees not to assert, by
way of motion, as a defense or otherwise, in any such action, suit or
proceeding, any claim that it is not subject personally to the jurisdiction of
such court, that the action, suit or proceeding is brought in an inconvenient
forum, that the venue of the action, suit or proceeding is improper or that
this Consent Agreement or the subject matter hereof may not be enforced in or
by such court. The parties irrevocably submit to the exclusive jurisdiction
of such court in any such action, suit or proceeding. Any and all service of
process and any other notice in any such action, suit or proceeding shall be
effective against any party if given personally or by registered or certified
mail, return receipt requested, or by any other means of mail that requires a
signed receipt, postage prepaid, mailed to such party as herein provided.
Nothing herein contained shall be deemed to affect the right of any party to
serve process in any manner permitted by law or to commence legal proceedings
or otherwise proceed against any other party in any other jurisdiction to
enforce judgments obtained in any action, suit or proceeding brought pursuant
to this Section 22.
(b) Each of the parties hereto hereby irrevocably waives trial
by jury in any action, suit, proceeding or counterclaim, whether at law or
equity, brought by either of them in connection with this Consent Agreement or
the transactions contemplated hereby.
24. Severability. The invalidity, illegality or
unenforceability in any jurisdiction of any provision in or obligation under
this Consent Agreement shall not affect or impair the validity, legality and
enforceability of the remaining provisions or obligations under this Consent
Agreement or of such provision or obligation in any other jurisdiction.
25. Entire Agreement. This Consent Agreement is intended by the
parties as a final expression of their agreement and intended to be a complete
and exclusive statement of the agreement and understanding of the parties
hereto in respect of the subject matter contained herein, other than the
provisions of any documents specifically referred to herein. This Consent
Agreement supersedes all prior agreements and understandings between the
parties with respect to such subject matter.
IN WITNESS WHEREOF, the parties have executed this Consent
Agreement as of the date first written above.
THE XXXX ALTERNATIVE INCOME FUND, L.P.
By: WHR Partners, L.L.C.,
General Manager
By:
------------------------------
Name:
Title: President of
General Manager
MULTI-MARKET RADIO, INC.
By:
-------------------------------
Name:
Title:
SFX BROADCASTING, INC.
By:
-------------------------------
Name:
Title:
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 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 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, 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:
(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.
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
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 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 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.
(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.
(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 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 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 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]
