-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, T726ZLKqE8zb/vfuknv9pOvK9cHWVIOwhfIjizob9lN0XIFbEvdnmMYqDpIlBQ3R c49vRRUBE5lJsp0TJOyHBA== 0000950123-99-009520.txt : 19991027 0000950123-99-009520.hdr.sgml : 19991027 ACCESSION NUMBER: 0000950123-99-009520 CONFORMED SUBMISSION TYPE: S-1/A PUBLIC DOCUMENT COUNT: 17 FILED AS OF DATE: 19991026 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SPANISH BROADCASTING SYSTEM INC CENTRAL INDEX KEY: 0000927720 STANDARD INDUSTRIAL CLASSIFICATION: RADIO BROADCASTING STATIONS [4832] IRS NUMBER: 133827791 STATE OF INCORPORATION: DE FISCAL YEAR END: 0926 FILING VALUES: FORM TYPE: S-1/A SEC ACT: SEC FILE NUMBER: 333-85519 FILM NUMBER: 99733843 BUSINESS ADDRESS: STREET 1: 3191 CORAL WAY CITY: MIAMI STATE: FL ZIP: 33145 BUSINESS PHONE: 3054416901 MAIL ADDRESS: STREET 1: 3191 CORAL WAY CITY: MIAMI STATE: FL ZIP: 33145 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SPANISH BROADCASTING SYSTEM INC /NJ/ CENTRAL INDEX KEY: 0000927721 STANDARD INDUSTRIAL CLASSIFICATION: RADIO BROADCASTING STATIONS [4832] IRS NUMBER: 133181941 STATE OF INCORPORATION: DE FISCAL YEAR END: 0926 FILING VALUES: FORM TYPE: S-1/A SEC ACT: SEC FILE NUMBER: 333-85519-01 FILM NUMBER: 99733844 BUSINESS ADDRESS: STREET 1: 3191 CORAL WAY CITY: MIAMI STATE: NY ZIP: 33145 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SPANISH BROADCASTING SYSTEM OF CALIFORNIA INC CENTRAL INDEX KEY: 0000927722 STANDARD INDUSTRIAL CLASSIFICATION: RADIO BROADCASTING STATIONS [4832] IRS NUMBER: 923952357 STATE OF INCORPORATION: CA FISCAL YEAR END: 0926 FILING VALUES: FORM TYPE: S-1/A SEC ACT: SEC FILE NUMBER: 333-85519-02 FILM NUMBER: 99733845 BUSINESS ADDRESS: STREET 1: 3191 CORAL WAY CITY: MIAMI STATE: FL ZIP: 33145 BUSINESS PHONE: 3054416901 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SPANISH BROADCASTING SYSTEM OF FLORIDA INC CENTRAL INDEX KEY: 0000927723 STANDARD INDUSTRIAL CLASSIFICATION: RADIO BROADCASTING STATIONS [4832] IRS NUMBER: 581700848 STATE OF INCORPORATION: FL FISCAL YEAR END: 0926 FILING VALUES: FORM TYPE: S-1/A SEC ACT: SEC FILE NUMBER: 333-85519-03 FILM NUMBER: 99733846 BUSINESS ADDRESS: STREET 1: 3191 CORAL WAY CITY: MIAMI STATE: FL ZIP: 33145 BUSINESS PHONE: 3054416901 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ALARCON HOLDINGS INC CENTRAL INDEX KEY: 0000927725 STANDARD INDUSTRIAL CLASSIFICATION: RADIO BROADCASTING STATIONS [4832] IRS NUMBER: 133475833 STATE OF INCORPORATION: NY FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: S-1/A SEC ACT: SEC FILE NUMBER: 333-85519-05 FILM NUMBER: 99733847 BUSINESS ADDRESS: STREET 1: 3191 CORAL WAY CITY: MIAMI STATE: FL ZIP: 33145 BUSINESS PHONE: 3054416901 MAIL ADDRESS: STREET 1: 3191 CORAL WAY CITY: MIAMI STATE: FL ZIP: 33145 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SPANISH BROADCASTING SYSTEM NETWORK INC CENTRAL INDEX KEY: 0000927726 STANDARD INDUSTRIAL CLASSIFICATION: RADIO BROADCASTING STATIONS [4832] IRS NUMBER: 133511101 STATE OF INCORPORATION: NY FISCAL YEAR END: 0926 FILING VALUES: FORM TYPE: S-1/A SEC ACT: SEC FILE NUMBER: 333-85519-04 FILM NUMBER: 99733848 BUSINESS ADDRESS: STREET 1: 3191 CORAL WAY CITY: MIAMI STATE: FL ZIP: 33145 BUSINESS PHONE: 3054416901 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SBS PROMOTIONS INC CENTRAL INDEX KEY: 0000927727 STANDARD INDUSTRIAL CLASSIFICATION: RADIO BROADCASTING STATIONS [4832] IRS NUMBER: 133456128 STATE OF INCORPORATION: NY FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: S-1/A SEC ACT: SEC FILE NUMBER: 333-85519-06 FILM NUMBER: 99733849 BUSINESS ADDRESS: STREET 1: 3191 CORAL WAY CITY: MIAMI STATE: FL ZIP: 33145 BUSINESS PHONE: 3054416901 MAIL ADDRESS: STREET 1: 3191 CORAL WAY CITY: MIAMI STATE: FL ZIP: 33145 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SBS OF GREATER NEW YORK INC CENTRAL INDEX KEY: 0001017144 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 133888732 STATE OF INCORPORATION: FL FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: S-1/A SEC ACT: SEC FILE NUMBER: 333-85519-07 FILM NUMBER: 99733850 BUSINESS ADDRESS: STREET 1: 3191 CORAL WAY CITY: MIAMI STATE: FL ZIP: 33145 BUSINESS PHONE: 3054416901 MAIL ADDRESS: STREET 1: 3191 CORAL WAY CITY: MIAMI STATE: FL ZIP: 33145 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SPANISH BROADCASTING SYSTEM OF GREATER MIAMI INC CENTRAL INDEX KEY: 0001096126 STANDARD INDUSTRIAL CLASSIFICATION: RADIO BROADCASTING STATIONS [4832] IRS NUMBER: 650774450 STATE OF INCORPORATION: FL FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: S-1/A SEC ACT: SEC FILE NUMBER: 333-85519-08 FILM NUMBER: 99733851 BUSINESS ADDRESS: STREET 1: 3191 CORAL WAY CITY: MIAMI STATE: FL ZIP: 33145 BUSINESS PHONE: 3054416901 MAIL ADDRESS: STREET 1: 3191 CORAL WAY CITY: MIAMI STATE: FL ZIP: 33145 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SPANISH BROADCASTING SYSTEM OF ILLINOIS INC CENTRAL INDEX KEY: 0001096127 STANDARD INDUSTRIAL CLASSIFICATION: RADIO BROADCASTING STATIONS [4832] IRS NUMBER: 364174296 STATE OF INCORPORATION: IL FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: S-1/A SEC ACT: SEC FILE NUMBER: 333-85519-09 FILM NUMBER: 99733852 BUSINESS ADDRESS: STREET 1: 3191 CORAL WAY CITY: MIAMI STATE: FL ZIP: 33145 BUSINESS PHONE: 3054416901 MAIL ADDRESS: STREET 1: 3191 CORAL WAY CITY: MIAMI STATE: FL ZIP: 33145 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SPANISH BROADCASTING SYSTEM OF SAN ANTONIO INC CENTRAL INDEX KEY: 0001096128 STANDARD INDUSTRIAL CLASSIFICATION: RADIO BROADCASTING STATIONS [4832] IRS NUMBER: 650820776 STATE OF INCORPORATION: DE FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: S-1/A SEC ACT: SEC FILE NUMBER: 333-85519-10 FILM NUMBER: 99733853 BUSINESS ADDRESS: STREET 1: 3191 CORAL WAY CITY: MIAMI STATE: FL ZIP: 33145 BUSINESS PHONE: 3054416901 MAIL ADDRESS: STREET 1: 3191 CORAL WAY CITY: MIAMI STATE: FL ZIP: 33145 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SPANISH BROADCASTING SYSTEM OF PUERTO RICO INC /DE/ CENTRAL INDEX KEY: 0001096129 STANDARD INDUSTRIAL CLASSIFICATION: RADIO BROADCASTING STATIONS [4832] IRS NUMBER: 650820776 STATE OF INCORPORATION: DE FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: S-1/A SEC ACT: SEC FILE NUMBER: 333-85519-11 FILM NUMBER: 99733854 BUSINESS ADDRESS: STREET 1: 3191 CORAL WAY CITY: MIAMI STATE: FL ZIP: 33145 BUSINESS PHONE: 3054416901 MAIL ADDRESS: STREET 1: 3191 CORAL WAY CITY: MIAMI STATE: FL ZIP: 33145 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SBS FUNDING INC CENTRAL INDEX KEY: 0001096130 STANDARD INDUSTRIAL CLASSIFICATION: RADIO BROADCASTING STATIONS [4832] STATE OF INCORPORATION: DE FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: S-1/A SEC ACT: SEC FILE NUMBER: 333-85519-12 FILM NUMBER: 99733855 BUSINESS ADDRESS: STREET 1: 3191 CORAL WAY CITY: MIAMI STATE: FL ZIP: 33145 BUSINESS PHONE: 3054416901 MAIL ADDRESS: STREET 1: 3191 CORAL WAY CITY: MIAMI STATE: FL ZIP: 33145 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SPANISH BROADCASTING SYSTEM OF PUERTO RICO INC /PR/ CENTRAL INDEX KEY: 0001096342 STANDARD INDUSTRIAL CLASSIFICATION: RADIO BROADCASTING STATIONS [4832] STATE OF INCORPORATION: DE FISCAL YEAR END: 0926 FILING VALUES: FORM TYPE: S-1/A SEC ACT: SEC FILE NUMBER: 333-85519-14 FILM NUMBER: 99733856 BUSINESS ADDRESS: STREET 1: 3191 CORAL WAY CITY: MIAMI STATE: FL ZIP: 33145 BUSINESS PHONE: 3054416901 MAIL ADDRESS: STREET 1: 3191 CORAL WAY CITY: MIAMI STATE: FL ZIP: 33145 S-1/A 1 AMENDMENT NO. 4 TO FORM S-1 1 AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER 26, 1999 REGISTRATION NO. 333-85519 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ------------------------ AMENDMENT NO. 4 TO FORM S-1 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 ------------------------ SPANISH BROADCASTING SYSTEM, INC. (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) DELAWARE 4832 13-3827791 (STATE OR OTHER JURISDICTION (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER OF INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER) IDENTIFICATION NO.)
------------------------ SEE TABLE OF ADDITIONAL REGISTRANTS ------------------------ RAUL ALARCON, JR. 3191 CORAL WAY 3191 CORAL WAY MIAMI, FLORIDA 33145 MIAMI, FLORIDA 33145 (305) 441-6901 (305) 441-6901 (ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, (NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE INCLUDING AREA CODE, OF AGENT FOR SERVICE) OFFICES)
------------------------ COPIES TO: JASON L. SHRINSKY, ESQ. BONNIE A. BARSAMIAN, ESQ. WILLIAM E. WALLACE, JR., ESQ. G. DAVID BRINTON, ESQ. KAYE, SCHOLER, FIERMAN, HAYS & HANDLER, LLP ROGERS & WELLS LLP 425 PARK AVENUE 200 PARK AVENUE NEW YORK, NEW YORK 10022 NEW YORK, NEW YORK 10166 (212) 836-8000 (212) 878-8000
------------------------ APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as practicable after this Registration Statement becomes effective. If any of the securities being registered on this form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box. [ ] If this form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ] If this form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ] If this form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ] If delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box. [ ] ------------------------ THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a), MAY DETERMINE. - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 2 TABLE OF ADDITIONAL REGISTRANTS - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- STATE OR OTHER PRIMARY STANDARD JURISDICTION OF INDUSTRIAL I.R.S. EMPLOYER NAME INCORPORATION CLASSIFICATION NUMBER IDENTIFICATION NUMBER - ---------------------------------------------------------------------------------------------------------------------------- Spanish Broadcasting System of California, Inc. ........................................... California 4832 92-3952357 - ---------------------------------------------------------------------------------------------------------------------------- Spanish Broadcasting System Network, Inc. ...... New York 4899 13-3511101 - ---------------------------------------------------------------------------------------------------------------------------- SBS Promotions, Inc. ........................... New York 7999 13-3456128 - ---------------------------------------------------------------------------------------------------------------------------- SBS Funding, Inc. .............................. Delaware 6159 52-6999475 - ---------------------------------------------------------------------------------------------------------------------------- Alarcon Holdings, Inc. ......................... New York 6512 13-3475833 - ---------------------------------------------------------------------------------------------------------------------------- SBS of Greater New York, Inc. .................. New York 4832 13-3888732 - ---------------------------------------------------------------------------------------------------------------------------- Spanish Broadcasting System of Florida, Inc. ... Florida 4832 58-1700848 - ---------------------------------------------------------------------------------------------------------------------------- Spanish Broadcasting System of Greater Miami, Inc. ........................................... Delaware 4832 65-0774450 - ---------------------------------------------------------------------------------------------------------------------------- Spanish Broadcasting System of Puerto Rico, Inc. ........................................... Delaware 4832 52-2139546 - ---------------------------------------------------------------------------------------------------------------------------- Spanish Broadcasting System, Inc. .............. New Jersey 4832 13-3181941 - ---------------------------------------------------------------------------------------------------------------------------- Spanish Broadcasting System of Illinois, Inc. ........................................... Delaware 4832 36-4174296 - ---------------------------------------------------------------------------------------------------------------------------- Spanish Broadcasting System of San Antonio, Inc. ........................................... Delaware 4832 65-082076 - ---------------------------------------------------------------------------------------------------------------------------- Spanish Broadcasting System of Puerto Rico, Inc. ........................................... Puerto Rico 4832 66-0564244 - ---------------------------------------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------------------------------
3 PART II INFORMATION NOT REQUIRED IN PROSPECTUS ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION. The following is an itemized statement of estimated expenses in connection with the issuance and sale of the securities being registered by this registration statement. Securities and Exchange Commission registration fee......... $ 65,330.00 Printing.................................................... 75,000.00 Accounting fees and expenses................................ 325,000.00 Legal fees and expenses..................................... 450,000.00 Blue sky fees and expenses.................................. -- Miscellaneous............................................... 84,670.00 ------------- Total............................................. $1,000,000.00 =============
ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS. Section 145 of the Delaware General Corporation Law ("DGCL") provides that a corporation may indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or complete action, suit or proceeding whether civil, criminal, administrative or investigative (other than an action by or in the right of the corporation) by reason of the fact that he is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him in connection with such action, suit or proceeding if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful. Section 145 further provides that a corporation similarly may indemnify any such person serving in any such capacity who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the corporation to procure a judgment in its favor, against expenses actually and reasonably incurred in connection with the defense or settlement of such action or suit if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the corporation and except that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable to the corporation unless and only to the extent that the Delaware Court of Chancery or such other court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which the Court of Chancery or such other court shall deem proper. Our third amended and restated certificate of incorporation has a provision which limits the liability of directors and officers to us to the maximum extent permitted by Delaware law. The third amended and restated certificate of incorporation specifies that our directors and officers will not be personally liable for monetary damages for breach of fiduciary duty as a director or officer, as applicable. This limitation does not apply to actions by a director or officer that do not meet the standards of conduct which make it permissible under the Delaware General Corporation Law for the Company to indemnify such director or officer. II-1 4 Additionally, insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of SBS pursuant to this prospectus, we have been advised that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue. Our amended and restated by-laws provide for indemnification of directors and officers (and others) in the manner, under the circumstances and to the fullest extent permitted by the Delaware General Corporation Law. This generally authorizes indemnification as to all expenses incurred or imposed as a result of actions, suits or proceedings if the indemnified parties act in good faith and in a manner they reasonably believe to be in or not opposed to the best interests of SBS. Upon completion of the Class A Common Stock offering, it is intended that each director will enter into an indemnification agreement with us that provides for indemnification to the fullest extent provided by law. We believe that these provisions are necessary or useful to attract and retain qualified persons as directors and officers. We have obtained insurance for the benefit of our directors and officers that provides for coverage of up to $100.0 million. ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES. On March 25, 1996 we sold 37,500 shares of our redeemable series A preferred stock and $35.0 million of our 12 1/4% senior secured notes due 2001, in a transaction not registered under the Securities Act in reliance upon the exemption provided in Section 4(2) of the Securities Act. We also issued to the holders of the preferred stock and notes warrants to purchase, in the aggregate, 6% of our common stock on a fully diluted basis which are exercisable no later than June 29, 1998. We received gross proceeds of $72.5 million from this offering. The securities were sold to certain qualified institutional buyers through CIBC Wood Gundy Securities Corp., as exclusive placement agent. In June 1996, September 1996 and December 1996, we elected to satisfy interest due on the notes through the issuance of $3,384,843 additional notes issued at face value. In June 1996, September 1996 and December 1996, we elected to satisfy the dividends due of $3,773,000 through the issuance of 3,773 additional shares of preferred stock. On March 27, 1997, the notes, the preferred stock and the warrants were repurchased or redeemed by SBS. In lieu of paying dividends on the senior preferred stock, we paid dividends in the form of shares of senior preferred stock on each of September 15, 1997, March 15, 1998 and September 15, 1998 of 11,706, 13,303 and 14,251, respectively. On March 27, 1997, we sold 175,000 units comprised of 175,000 shares of our series A senior exchangeable preferred stock, liquidation preference $1,000 per share, and warrants to purchase 74,900 shares of our Class B Common Stock, par value $.01 per share and (b) $75.0 million aggregate principal amount of our 11% notes due 2004 in transactions not registered under the Securities Act, in reliance upon the exemption provided in Section 4(2) of the Act. We received gross proceeds of $250,000,000 from these offerings. The securities were sold to II-2 5 certain qualified institutional buyers through CIBC Wood Gundy Securities Corp., as exclusive placement agent. ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES. (a) EXHIBITS 1.1 Form of Underwriting Agreement with Lehman Brothers Inc. and CIBC World Markets Corp., dated October , 1999. 3.1 Third Amended and Restated Certificate of Incorporation of the Company, dated September 29, 1999 (Exhibit A to this exhibit 3.1 is incorporated by reference to the Company's Current Report on Form 8-K, dated March 25, 1996 (the "Current Report")).* 3.2 Certificate of Amendment to the Third Amended and Restated Certificate of Incorporation of the Company, dated September 29, 1999.* 3.3 Amended and Restated By-Laws of the Company.* 4.1 Article V of the Third Amended and Restated Certificate of Incorporation of the Company, dated September 29, 1999. (See Exhibit 3.1) 4.2 Certificate of Designation filed as Exhibit A to the Third Amended and Restated Certificate of Incorporation of the Company, dated September 29, 1999. (See Exhibit 3.1) 4.3 Indenture dated June 29, 1994 among the Company, IBJ Schroder Bank & Trust Company, as Trustee, the Guarantors named therein and the Purchasers named therein (incorporated by reference to Exhibit 4.1 of the Company's 1994 Registration Statement on Form S-4, the "1994 Registration Statement"). 4.4 First Supplemental Indenture dated as of March 25, 1996 to the Indenture dated as of June 29, 1994 among the Company, the Guarantors named therein and IBJ Schroder Bank & Trust Company, as Trustee (incorporated by reference to the Current Report). 4.5 Second Supplemental Indenture dated as of March 21, 1997 to the Indenture dated as of June 29, 1994 among the Company, the Guarantors named therein and IBJ Schroder Bank & Trust Company, as Trustee (incorporated by reference to the Current Report). 4.6 Supplemental Indenture dated as of October 21, 1999 to the Indenture dated as of June 29, 1994 among the Company, the Guarantors named therein and IBJ Schroder Bank & Trust Company, as Trustee. 4.7 Indenture dated as of March 15, 1997, among the Company, the Guarantors named therein and IBJ Schroder Bank & Trust Company, as Trustee (incorporated by reference to the Current Report). 4.8 Supplemental Indenture dated as of October 15, 1999 to the Indenture dated as of March 15, 1997, among the Company, the Guarantors named therein and IBJ Schroder Bank & Trust Company, as Trustee. 4.9 Exchange Debenture Indenture dated as of March 15, 1997, among the Company, the Guarantors named therein and , U.S. Trust Company of New York, as Trustee, (incorporated by reference to the Current Report).
- --------------- * Previously filed. II-3 6 4.10 Form of Indenture with respect to % Senior Subordinated Notes due 2009 with The Bank of New York, as Trustee, dated , 1999. 5.1 Form of Opinion of Kaye, Scholer, Fierman, Hays & Handler, LLP regarding legality. 10.1 Securities Purchase Agreement dated as of March 24, 1997 among the Company, the Guarantors named therein and CIBC Wood Gundy Securities Corp., as Initial Purchaser (incorporated by reference to the Current Report). 10.2 Unit Agreement dated as of March 15, 1997 among the Company, the Guarantors and IBJ Schroder Bank & Trust Company, as Trustee (incorporated by reference to the Current Report). 10.3 Warrant Agreement dated as of March 15, 1997 among the Company and IBJ Schroder Bank & Trust Company, as Warrant Agent (incorporated by reference to the Current Report). 10.4 Common Stock Registration Rights and Stockholders Agreement dated as of March 15, 1997 among the Company, certain Management Stockholders named therein and CIBC Wood Gundy Securities Corp., as Initial Purchaser (incorporated by reference to the Current Report). 10.5 Notes Registration Rights Agreement dated as of March 15, 1997 among the Company, the Guarantors named therein and CIBC Wood Gundy Securities Corp., as Initial Purchaser (incorporated by reference to the Current Report). 10.6 Preferred Stock Registration Rights Agreement dated as of March 15, 1997 among the Company, the Guarantors named therein and CIBC Wood Gundy Securities Corp., as Initial Purchaser (incorporated by reference to the Current Report). 10.7 National Radio Sales Representation Agreement dated as of February 3, 1997 between Caballero Spanish Media, L.L.C. and the Company (incorporated by reference to the Current Report). 10.8 Common Stock Registration Rights and Stockholders Agreement dated as of June 29, 1994 among the Company, certain Management Stockholders named therein and each of the purchasers named therein (incorporated by reference to the 1994 Registration Statement). 10.09 Amended and Restated Employment Agreement dated as of October 25, 1999, by and between the Company and Raul Alcaron, Jr. 10.10 Employment Agreement dated February 5, 1997 between Carey Davis and the Company. 10.11 Employment Agreement dated as of October 25, 1999, by and between the Company and Joseph A. Garcia. 10.12 Employment Agreement dated as of October 25, 1999, by and between the Company and Luis Diaz-Albertini. 10.13 Employment Agreement, dated April 1, 1999, between Spanish Broadcasting System of Greater Miami, Inc. and Jesus Salas. 10.14 Letter Agreement dated January 13, 1997 between the Company and Caballero Spanish Media, LLC (incorporated by reference to the Current Report). 10.15 1994 Stock Option Plan of the Company (incorporated by reference to Exhibit 10.4 of the 1994 Registration Statement).
- --------------- * Previously filed. II-4 7 10.16 Ground Lease dated December 18, 1995 between Louis Viola Company and SBS-NJ (incorporated by reference to the 1996 Current Report). 10.17 Ground Lease dated December 18, 1995 between Frank F. Viola and Estate of Thomas C. Viola and SBS-NJ (incorporated by reference to the 1996 Current Report). 10.18 Lease and License Agreement dated February 1, 1991 between Empire State Building Company, as landlord, and SBS-NY, as tenant (incorporated by reference to Exhibit 10.15.1 of the 1994 Registration Statement). 10.19 Modification of Lease and License dated June 30, 1992 between Empire State Building Company and SBS-NY related to WSKQ-FM (incorporated by reference to Exhibit 10.15.2 of the 1994 Registration Statement). 10.20 Lease and License Modification and Extension Agreement dated as of June 30, 1992 between Empire State Building Company, as landlord, and SBS-NY as tenant (incorporated by reference to Exhibit 10.15.3 of the 1994 Registration Statement). 10.21 Promissory Note, dated as of December 31, 1995 of Raul Alarcon, Sr. to SBS-NJ in the principal amount of $577,323 (incorporated by reference to Exhibit 10.26 to the Company's 1995 Annual Report on Form 10-K). 10.22 Promissory Note, dated as of December 31, 1995 of Raul Alarcon, Jr. to SBS-NJ in the principal amount of $1,896,913 (incorporated by reference to Exhibit 10.27 to the Company's 1995 Annual Report on Form 10-K). 10.23 Lease Agreement dated June 1, 1992 among Pablo Raul Alarcon, Sr., Raul Alarcon, Jr., and SBS-Fla (incorporated by reference to Exhibit 10.30 of the 1994 Registration Statement). 10.24 Indenture dated October 12, 1988 between Alarcon Holdings, Inc. and SBS-NJ related to the studio located at 26 West 56th Street, NY, NY (incorporated by reference to Exhibit 10.32 of the 1994 Registration Statement). 10.25 Agreement of Lease dated as of March 1, 1996. No. WT-1744-A119 1067 between The Port Authority of New Jersey and SBS-GNY as assignee of Park Radio (incorporated by reference to the 1996 Current Report). 10.26 Asset Purchase Agreement dated as of July 2, 1997, by and between Spanish Broadcasting System, Inc. (New Jersey), Spanish Broadcasting System of California, Inc., Spanish Broadcasting System of Florida, Inc., Spanish Broadcasting System, Inc., and One-on-One Sports, Inc. (incorporated by reference to Exhibit 10.62 of the Company's Registration Statement on Form S-4 (Commission File No. 333-26295)). 10.27 Amendment No. 1 dated as of September 29, 1997 to the Asset Purchase Agreement dated as of July 2, 1997, by and between Spanish Broadcasting System, Inc. (New Jersey), Spanish Broadcasting System of California, Inc., Spanish Broadcasting System of Florida, Inc., Spanish Broadcasting System, Inc., and One-on-One Sports, Inc. (incorporated by referent to the Company's Registration Statement on Form S-1, dated January 21, 1999). 10.28 Promissory Note dated July 16, 1997 of Raul Alarcon, Jr. to the Company in the principal amount of $1,050,229.63 (incorporated by reference to Exhibit 10.63 of the Company's Registration Statement on Form S-4 (Commission File No. 333-26295)).
- --------------- * Previously filed. II-5 8 10.29 Asset Purchase Agreement dated January 28, 1998 by and between Spanish Broadcasting System of San Antonio, Inc. and Radio KRIO, Ltd. (incorporated by reference to the Company's Form 10-Q dated February 12, 1998). 10.30 Asset Purchase Agreement dated June 16, 1998 by and between Spanish Broadcasting System of Puerto Rico, Inc. and Pan Caribbean Broadcasting Corporation (incorporated by reference to the Company's Form 10-Q dated July 12, 1998). 10.31 Extension of lease of a Condominium Unit (Metropolitan Tower Condominium) between Raul Alarcon, Jr. ("Landlord") and Spanish Broadcasting System, Inc. ("Tenant") (incorporated by reference to the Company's 1998 Annual Report on Form 10-K). 10.32 Asset Purchase Agreement dated January 8, 1999 by and between Spanish Broadcasting System of Puerto Rico, Inc. and Guayama Broadcasting Company, Inc. and LaMega Estacion, Inc. (incorporated by reference to the Company's Registration Statement on Form S-1, dated January 21, 1999). 10.33 Stock Purchase Agreement among JuJu Media, Inc., each of the individual sellers, and Spanish Broadcasting System, Inc., dated April 26, 1999.* 10.34 Asset Purchase Agreement, dated as of October 25, 1999, by and between Spanish Broadcasting System of Florida, Inc. and Pablo Raul Alarcon, Sr. 10.35 Form of Indemnification Agreement.* 10.36 Spanish Broadcasting System 1999 Stock Option Plan. 10.37 Spanish Broadcasting System 1999 Company Stock Option Plan for Nonemployee Directors. 10.38 Time Brokerage Agreement, dated as of October 25, 1999, by and between Spanish Broadcasting System of Florida, Inc. and Pablo Raul Alarcon, Sr. 10.39 Form of Lock-up Letter Agreement. 10.40 Form of Option Grant not under Stock Option Plans. 12.1 Statement re: Computation of Ratios.* 13.1 Annual Report of the Company (incorporated by reference to the Company's 1998 Annual Report on Form 10-K). 21.1 List of Subsidiaries of the Company.* 23.1 Consent of KPMG LLP.* 23.2 Consent of Kaye, Scholer, Fierman, Hays & Handler, LLP (included in Exhibit 5.1). 23.3 Consent of Roman Martinez IV.* 23.4 Consent of Jason L. Shrinsky.* 24.1 Power of Attorney (included herein). 25.1 Statement of Eligibility of Trustee.
- --------------- * Previously filed. II-6 9 (b) FINANCIAL STATEMENT SCHEDULES The financial statement schedule -- "Valuation and Qualifying Accounts" -- appears on page F-31. All other schedules are omitted because they either are not applicable or the required information is included in the financial statements or corresponding notes appearing elsewhere in this registration statement. ITEM 17. UNDERTAKINGS. (a) Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of SBS pursuant to the foregoing provisions, or otherwise, we have been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act of 1933 and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by SBS of expenses incurred or paid by a director, officer or controlling person of SBS in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, we will, unless in the opinion of our counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification is against public policy as expressed in the Securities Act of 1933 and will be governed by the final adjudication of such issue. (b) We hereby undertake: (1) To supply by means of a post-effective amendment all information concerning a transaction, and the company being acquired involved in the transaction, that was not the subject of and included in the registration statement when it became effective. (2) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement: - To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933; - To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20 percent change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective registration statement; - To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement. (3) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement II-7 10 relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (4) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. II-8 11 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, SBS has duly caused this Amendment No. 4 to Form S-1 to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of New York, State of New York, on the 26th day of October, 1999. SPANISH BROADCASTING SYSTEM, INC. By: * ------------------------------------ Name: Raul Alarcon, Jr. Title: Chief Executive Officer and President Pursuant to the requirements of the Securities Act of 1933, this Amendment No. 4 to Form S-1 has been signed below by the following persons in the capacities indicated on the 26th day of October, 1999. Each person whose signature appears below hereby authorizes Raul Alarcon, Jr. and Joseph A. Garcia, and each of them, as attorney-in-fact, to sign and file in his behalf, individually and in each capacity stated below, all amendments and post-effective amendments to this registration statement.
SIGNATURE --------- * Chief Executive Officer, President and a - -------------------------------------------------------- Director (principal executive officer) Raul Alarcon, Jr. /s/ JOSEPH A. GARCIA Executive Vice President, Chief - -------------------------------------------------------- Financial Officer, and Assistant Joseph A. Garcia Secretary (principal financial and accounting officer) * Chairman of the Board of Directors - -------------------------------------------------------- Pablo Raul Alarcon, Sr. * Secretary and a Director - -------------------------------------------------------- Jose Grimalt
- --------------- * The undersigned by signing his name hereto, does hereby sign and execute this Amendment No. 4 to the Form S-1 Registration Statement on behalf of the above named officers and directors of the Company pursuant to the Power of Attorney executed by such officers and directors previously filed with the Securities and Exchange Commission. /s/ JOSEPH A. GARCIA --------------------------------------------------- Joseph A. Garcia
II-9 12 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, Spanish Broadcasting System of California, Inc. has duly caused this Amendment No. 4 to Form S-1 to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of New York, State of New York, on the 26th day of October, 1999. SPANISH BROADCASTING SYSTEM OF CALIFORNIA, INC. By: * ------------------------------------ Name: Raul Alarcon, Jr. Title: Chief Executive Officer and President Pursuant to the requirements of the Securities Act of 1933, this Amendment No. 4 to Form S-1 has been signed below by the following persons in the capacities indicated on the 26th day of October, 1999. Each person whose signature appears below hereby authorizes Raul Alarcon, Jr. and Joseph A. Garcia, and each of them, as attorney-in-fact, to sign and file in his behalf, individually and in each capacity stated below, all amendments and post-effective amendments to this registration statement.
SIGNATURE --------- * Chief Executive Officer, President and a - -------------------------------------------------------- Director (principal executive officer) Raul Alarcon, Jr. /s/ JOSEPH A. GARCIA Executive Vice President, Chief - -------------------------------------------------------- Financial Officer, Treasurer and Joseph A. Garcia Assistant Secretary (principal financial and accounting officer) * Chairman of the Board of Directors - -------------------------------------------------------- Pablo Raul Alarcon, Sr. * Vice President, Secretary and a Director - -------------------------------------------------------- Jose Grimalt
- --------------- * The undersigned by signing his name hereto, does hereby sign and execute this Amendment No. 4 to the Form S-1 Registration Statement on behalf of the above named officers and directors of the Company pursuant to the Power of Attorney executed by such officers and directors previously filed with the Securities and Exchange Commission. /s/ JOSEPH A. GARCIA --------------------------------------------------- Joseph A. Garcia
II-10 13 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, Spanish Broadcasting System Network, Inc. has duly caused this Amendment No. 4 to Form S-1 to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of New York, State of New York, on the 26th day of October, 1999. SPANISH BROADCASTING SYSTEM NETWORK, INC. By: * ------------------------------------ Name: Raul Alarcon, Jr. Title: Chief Executive Officer and President Pursuant to the requirements of the Securities Act of 1933, this Amendment No. 4 to Form S-1 has been signed below by the following persons in the capacities indicated on the 26th day of October, 1999. Each person whose signature appears below hereby authorizes Raul Alarcon, Jr. and Joseph A. Garcia, and each of them, as attorney-in-fact, to sign and file in his behalf, individually and in each capacity stated below, all amendments and post-effective amendments to this registration statement.
SIGNATURE --------- * Chief Executive Officer, President and a --------------------------------------------------- Director (principal executive officer) Raul Alarcon, Jr. /s/ JOSEPH A. GARCIA Executive Vice President, Chief --------------------------------------------------- Financial Officer, Treasurer and Joseph A. Garcia Assistant Secretary (principal financial and accounting officer) * Chairman of the Board of Directors --------------------------------------------------- Pablo Raul Alarcon, Sr. * Vice President, Secretary and a Director --------------------------------------------------- Jose Grimalt
- --------------- * The undersigned by signing his name hereto, does hereby sign and execute this Amendment No. 4 to the Form S-1 Registration Statement on behalf of the above named officers and directors of the Company pursuant to the Power of Attorney executed by such officers and directors previously filed with the Securities and Exchange Commission. /s/ JOSEPH A. GARCIA --------------------------------------------------- Joseph A. Garcia
II-11 14 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, SBS Promotions, Inc. has duly caused this Amendment No. 4 to Form S-1 to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of New York, State of New York, on the 26th day of October, 1999. SBS PROMOTIONS, INC. By: * ------------------------------------ Name: Raul Alarcon, Jr. Title: Chief Executive Officer and President Pursuant to the requirements of the Securities Act of 1933, this Amendment No. 4 to Form S-1 has been signed below by the following persons in the capacities indicated on the 26th day of October, 1999. Each person whose signature appears below hereby authorizes Raul Alarcon, Jr. and Joseph A. Garcia, and each of them, as attorney-in-fact, to sign and file in his behalf, individually and in each capacity stated below, all amendments and post-effective amendments to this registration statement.
SIGNATURE --------- * Chief Executive Officer, President and a --------------------------------------------------- Director (principal executive officer) Raul Alarcon, Jr. /s/ JOSEPH A. GARCIA Executive Vice President, Chief --------------------------------------------------- Financial Officer, Treasurer and Joseph A. Garcia Assistant Secretary (principal financial and accounting officer) * Chairman of the Board of Directors --------------------------------------------------- Pablo Raul Alarcon, Sr. * Vice President, Secretary and a Director --------------------------------------------------- Jose Grimalt
- --------------- * The undersigned by signing his name hereto, does hereby sign and execute this Amendment No. 4 to the Form S-1 Registration Statement on behalf of the above named officers and directors of the Company pursuant to the Power of Attorney executed by such officers and directors previously filed with the Securities and Exchange Commission. /s/ JOSEPH A. GARCIA --------------------------------------------------- Joseph A. Garcia
II-12 15 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, SBS Funding, Inc., has duly caused this Amendment No. 4 to Form S-1 to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of New York, State of New York, on the 26th day of October, 1999. SBS FUNDING, INC. By: * ------------------------------------ Name: Raul Alarcon, Jr. Title: President Pursuant to the requirements of the Securities Act of 1933, this Amendment No. 4 to Form S-1 has been signed below by the following persons in the capacities indicated on the 26th day of October, 1999. Each person whose signature appears below hereby authorizes Raul Alarcon, Jr. and Joseph A. Garcia, and each of them, as attorney-in-fact, to sign and file in his behalf, individually and in each capacity stated below, all amendments and post-effective amendments to this registration statement.
SIGNATURE --------- * President and a Director (principal --------------------------------------------------- executive officer) Raul Alarcon, Jr. /s/ JOSEPH A. GARCIA Vice President, Chief Financial Officer, --------------------------------------------------- and Assistant Secretary (principal Joseph A. Garcia financial and accounting officer) * Secretary and a Director --------------------------------------------------- Jose Grimalt
- --------------- * The undersigned by signing his name hereto, does hereby sign and execute this Amendment No. 4 to the Form S-1 Registration Statement on behalf of the above named officers and directors of the Company pursuant to the Power of Attorney executed by such officers and directors previously filed with the Securities and Exchange Commission. /s/ JOSEPH A. GARCIA --------------------------------------------------- Joseph A. Garcia
II-13 16 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, Alarcon Holdings, Inc. has duly caused this Amendment No. 4 to Form S-1 to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of New York, State of New York, on the 26th day of October, 1999. ALARCON HOLDINGS, INC. By: * ------------------------------------ Name: Raul Alarcon, Jr. Title: Chief Executive Officer and President Pursuant to the requirements of the Securities Act of 1933, this Amendment No. 4 to Form S-1 has been signed below by the following persons in the capacities indicated on the 26th day of October, 1999. Each person whose signature appears below hereby authorizes Raul Alarcon, Jr. and Joseph A. Garcia, and each of them, as attorney-in-fact, to sign and file in his behalf, individually and in each capacity stated below, all amendments and post-effective amendments to this registration statement.
SIGNATURE --------- * Chief Executive Officer, President and a --------------------------------------------------- Director (principal executive officer) Raul Alarcon, Jr. /s/ JOSEPH A. GARCIA Vice President, Chief Financial Officer, --------------------------------------------------- Treasurer and Assistant Secretary Joseph A. Garcia (principal financial and accounting officer) * Chairman of the Board of Directors --------------------------------------------------- Pablo Raul Alarcon, Sr. * Executive Vice President, Secretary and --------------------------------------------------- a Director Jose Grimalt
- --------------- * The undersigned by signing his name hereto, does hereby sign and execute this Amendment No. 4 to the Form S-1 Registration Statement on behalf of the above named officers and directors of the Company pursuant to the Power of Attorney executed by such officers and directors previously filed with the Securities and Exchange Commission. /s/ JOSEPH A. GARCIA --------------------------------------------------- Joseph A. Garcia
II-14 17 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, SBS of Greater New York, Inc. has duly caused this Amendment No. 4 to Form S-1 to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of New York, State of New York, on the 26th day of October, 1999. SBS OF GREATER NEW YORK, INC. By: * ------------------------------------ Name: Raul Alarcon, Jr. Title: Chief Executive Officer and President Pursuant to the requirements of the Securities Act of 1933, this Amendment No. 4 to Form S-1 has been signed below by the following persons in the capacities indicated on the 26th day of October, 1999. Each person whose signature appears below hereby authorizes Raul Alarcon, Jr. and Joseph A. Garcia, and each of them, as attorney-in-fact, to sign and file in his behalf, individually and in each capacity stated below, all amendments and post-effective amendments to this registration statement.
SIGNATURE --------- * Chief Executive Officer, President and a --------------------------------------------------- Director (principal executive officer) Raul Alarcon, Jr. /s/ JOSEPH A. GARCIA Executive Vice President, Chief --------------------------------------------------- Financial Officer, Treasurer and Joseph A. Garcia Assistant Secretary (principal financial and accounting officer) * Chairman of the Board of Directors --------------------------------------------------- Pablo Raul Alarcon, Sr. * Vice President, Secretary and a Director --------------------------------------------------- Jose Grimalt
- --------------- * The undersigned by signing his name hereto, does hereby sign and execute this Amendment No. 4 to the Form S-1 Registration Statement on behalf of the above named officers and directors of the Company pursuant to the Power of Attorney executed by such officers and directors previously filed with the Securities and Exchange Commission. /s/ JOSEPH A. GARCIA --------------------------------------------------- Joseph A. Garcia
II-15 18 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, Spanish Broadcasting System of Florida, Inc. has duly caused this Amendment No. 4 to Form S-1 to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of New York, State of New York, on the 26th day of October, 1999. SPANISH BROADCASTING SYSTEM OF FLORIDA, INC. By: * ------------------------------------ Name: Raul Alarcon, Jr. Title: Chief Executive Officer and President Pursuant to the requirements of the Securities Act of 1933, this Amendment No. 4 to Form S-1 has been signed below by the following persons in the capacities indicated on the 26th day of October, 1999. Each person whose signature appears below hereby authorizes Raul Alarcon, Jr. and Joseph A. Garcia, and each of them, as attorney-in-fact, to sign and file in his behalf, individually and in each capacity stated below, all amendments and post-effective amendments to this registration statement.
SIGNATURE --------- * Chief Executive Officer, President and a --------------------------------------------------- Director (principal executive officer) Raul Alarcon, Jr. /s/ JOSEPH A. GARCIA Executive Vice President, Chief --------------------------------------------------- Financial Officer, Treasurer and Joseph A. Garcia Assistant Secretary (principal financial and accounting officer) * Chairman of the Board of Directors --------------------------------------------------- Pablo Raul Alarcon, Sr. * Vice President, Secretary and a Director --------------------------------------------------- Jose Grimalt
- --------------- * The undersigned by signing his name hereto, does hereby sign and execute this Amendment No. 4 to the Form S-1 Registration Statement on behalf of the above named officers and directors of the Company pursuant to the Power of Attorney executed by such officers and directors previously filed with the Securities and Exchange Commission. /s/ JOSEPH A. GARCIA --------------------------------------------------- Joseph A. Garcia
II-16 19 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, Spanish Broadcasting System of Greater Miami, Inc. has duly caused this Amendment No. 4 to Form S-1 to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of New York, State of New York, on the 26th day of October, 1999. SPANISH BROADCASTING SYSTEM OF GREATER MIAMI, INC. By: * ------------------------------------ Name: Raul Alarcon, Jr. Title: Chief Executive Officer and President Pursuant to the requirements of the Securities Act of 1933, this Amendment No. 4 to Form S-1 has been signed below by the following persons in the capacities indicated on the 26th day of October, 1999. Each person whose signature appears below hereby authorizes Raul Alarcon, Jr. and Joseph A. Garcia, and each of them, as attorney-in-fact, to sign and file in his behalf, individually and in each capacity stated below, all amendments and post-effective amendments to this registration statement.
SIGNATURE --------- * Chief Executive Officer, President and a --------------------------------------------------- Director (principal executive officer) Raul Alarcon, Jr. /s/ JOSEPH A. GARCIA Executive Vice President, Chief --------------------------------------------------- Financial Officer, Treasurer and Joseph A. Garcia Secretary (principal financial and accounting officer) * Director --------------------------------------------------- Pablo Raul Alarcon, Sr. * Director --------------------------------------------------- Jose Grimalt
- --------------- * The undersigned by signing his name hereto, does hereby sign and execute this Amendment No. 4 to the Form S-1 Registration Statement on behalf of the above named officers and directors of the Company pursuant to the Power of Attorney executed by such officers and directors previously filed with the Securities and Exchange Commission. /s/ JOSEPH A. GARCIA --------------------------------------------------- Joseph A. Garcia
II-17 20 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, Spanish Broadcasting System of Puerto Rico, Inc. has duly caused this Amendment No. 4 to Form S-1 to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of New York, State of New York, on the 26th day of October, 1999. SPANISH BROADCASTING SYSTEM OF PUERTO RICO, INC. By: * ------------------------------------ Name: Raul Alarcon, Jr. Title: President Pursuant to the requirements of the Securities Act of 1933, this Amendment No. 4 to Form S-1 has been signed below by the following persons in the capacities indicated on the 26th day of October, 1999. Each person whose signature appears below hereby authorizes Raul Alarcon, Jr. and Joseph A. Garcia, and each of them, as attorney-in-fact, to sign and file in his behalf, individually and in each capacity stated below, all amendments and post-effective amendments to this registration statement.
SIGNATURE --------- * President and a Director (principal --------------------------------------------------- executive officer) Raul Alarcon, Jr. /s/ JOSEPH A. GARCIA Vice President and Assistant Secretary --------------------------------------------------- (principal financial and accounting Joseph A. Garcia officer) * Secretary and a Director --------------------------------------------------- Jose Grimalt
- --------------- * The undersigned by signing his name hereto, does hereby sign and execute this Amendment No. 4 to the Form S-1 Registration Statement on behalf of the above named officers and directors of the Company pursuant to the Power of Attorney executed by such officers and directors previously filed with the Securities and Exchange Commission. /s/ JOSEPH A. GARCIA --------------------------------------------------- Joseph A. Garcia
II-18 21 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, Spanish Broadcasting System of Puerto Rico, Inc. has duly caused this Amendment No. 4 to Form S-1 to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of New York, State of New York, on the 26th day of October, 1999. SPANISH BROADCASTING SYSTEM OF PUERTO RICO, INC. By: * ------------------------------------ Name: Raul Alarcon, Jr. Title: President Pursuant to the requirements of the Securities Act of 1933, this Amendment No. 4 to Form S-1 has been signed below by the following persons in the capacities indicated on the 26th day of October, 1999. Each person whose signature appears below hereby authorizes Raul Alarcon, Jr. and Joseph A. Garcia, and each of them, as attorney-in-fact, to sign and file in his behalf, individually and in each capacity stated below, all amendments and post-effective amendments to this registration statement.
SIGNATURE --------- * President and a Director (principal --------------------------------------------------- executive officer) Raul Alarcon, Jr. /s/ JOSEPH A. GARCIA Vice President, Assistant Secretary and --------------------------------------------------- a director (principal financial and Joseph A. Garcia accounting officer) * Secretary and a Director --------------------------------------------------- Jose Grimalt
- --------------- * The undersigned by signing his name hereto, does hereby sign and execute this Amendment No. 4 to the Form S-1 Registration Statement on behalf of the above named officers and directors of the Company pursuant to the Power of Attorney executed by such officers and directors previously filed with the Securities and Exchange Commission. /s/ JOSEPH A. GARCIA --------------------------------------------------- Joseph A. Garcia
II-19 22 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, Spanish Broadcasting System, Inc., a New Jersey corporation, has duly caused this Amendment No. 4 to Form S-1 to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of New York, State of New York, on the 26th day of October, 1999. SPANISH BROADCASTING SYSTEM, INC. By: * ------------------------------------ Name: Raul Alarcon, Jr. Title: Chief Executive Officer and President Pursuant to the requirements of the Securities Act of 1933, this Amendment No. 4 to Form S-1 has been signed below by the following persons in the capacities indicated on the 26th day of October, 1999. Each person whose signature appears below hereby authorizes Raul Alarcon, Jr. and Joseph A. Garcia, and each of them, as attorney-in-fact, to sign and file in his behalf, individually and in each capacity stated below, all amendments and post-effective amendments to this registration statement.
SIGNATURE --------- * Chief Executive Officer, President and a --------------------------------------------------- Director (principal executive officer) Raul Alarcon, Jr. /s/ JOSEPH A. GARCIA Executive Vice President, Chief --------------------------------------------------- Financial Officer, Treasurer and Joseph A. Garcia Assistant Secretary (principal financial and accounting officer) * Chairman of the Board of Directors --------------------------------------------------- Pablo Raul Alarcon, Sr. * Vice President, Secretary and a Director --------------------------------------------------- Jose Grimalt
- --------------- * The undersigned by signing his name hereto, does hereby sign and execute this Amendment No. 4 to the Form S-1 Registration Statement on behalf of the above named officers and directors of the Company pursuant to the Power of Attorney executed by such officers and directors previously filed with the Securities and Exchange Commission. /s/ JOSEPH A. GARCIA --------------------------------------------------- Joseph A. Garcia
II-20 23 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, Spanish Broadcasting System of Illinois, Inc. has duly caused this Amendment No. 4 to Form S-1 to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of New York, State of New York, on the 26th day of October, 1999. SPANISH BROADCASTING SYSTEM OF ILLINOIS, INC. By: * ------------------------------------ Name: Raul Alarcon, Jr. Title: Chief Executive Officer and President Pursuant to the requirements of the Securities Act of 1933, this Amendment No. 4 to Form S-1 has been signed below by the following persons in the capacities indicated on the 26th day of October, 1999. Each person whose signature appears below hereby authorizes Raul Alarcon, Jr. and Joseph A. Garcia, and each of them, as attorney-in-fact, to sign and file in his behalf, individually and in each capacity stated below, all amendments and post-effective amendments to this registration statement.
SIGNATURE --------- * Chief Executive Officer, President and a - -------------------------------------------------------- Director (principal executive officer) Raul Alarcon, Jr. /s/ JOSEPH A. GARCIA Executive Vice President, Chief - -------------------------------------------------------- Financial Officer, Treasurer and Joseph A. Garcia Secretary (principal financial and accounting officer) * Director - -------------------------------------------------------- Pablo Raul Alarcon, Sr. * Director - -------------------------------------------------------- Jose Grimalt
- --------------- * The undersigned by signing his name hereto, does hereby sign and execute this Amendment No. 4 to the Form S-1 Registration Statement on behalf of the above named officers and directors of the Company pursuant to the Power of Attorney executed by such officers and directors previously filed with the Securities and Exchange Commission. /s/ JOSEPH A. GARCIA --------------------------------------------------- Joseph A. Garcia
II-21 24 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, Spanish Broadcasting System of San Antonio, Inc. has duly caused this Amendment No. 4 to Form S-1 to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of New York, State of New York, on the 26th day of October, 1999. SPANISH BROADCASTING SYSTEM OF SAN ANTONIO, INC. By: * ------------------------------------ Name: Raul Alarcon, Jr. Title: Chief Executive Officer and President Pursuant to the requirements of the Securities Act of 1933, this Amendment No. 4 to Form S-1 has been signed below by the following persons in the capacities indicated on the 26th day of October, 1999. Each person whose signature appears below hereby authorizes Raul Alarcon, Jr. and Joseph A. Garcia, and each of them, as attorney-in-fact, to sign and file in his behalf, individually and in each capacity stated below, all amendments and post-effective amendments to this registration statement.
SIGNATURE --------- * Chief Executive Officer, President and a - -------------------------------------------------------- Director (principal executive officer) Raul Alarcon, Jr. /s/ JOSEPH A. GARCIA Executive Vice President, Chief - -------------------------------------------------------- Financial Officer, Treasurer and Joseph A. Garcia Secretary (principal financial and accounting officer) * Director - -------------------------------------------------------- Pablo Raul Alarcon, Sr. * Director - -------------------------------------------------------- Jose Grimalt
- --------------- * The undersigned by signing his name hereto, does hereby sign and execute this Amendment No. 4 to the Form S-1 Registration Statement on behalf of the above named officers and directors of the Company pursuant to the Power of Attorney executed by such officers and directors previously filed with the Securities and Exchange Commission. /s/ JOSEPH A. GARCIA --------------------------------------------------- Joseph A. Garcia
II-22 25 EXHIBIT INDEX
EXHIBIT NO. - ------- 1.1 Form of Underwriting Agreement with Lehman Brothers Inc. and CIBC World Markets Corp., dated October , 1999. 3.1 Third Amended and Restated Certificate of Incorporation of the Company, dated September 29, 1999 (Exhibit A to this Exhibit 3.1 is incorporated by reference to the Company's Current Report on Form 8-K, dated March 25, 1996 (the "Current Report")).* 3.2 Certificate of Amendment to the Third Amended and Restated Certificate of Incorporation of the Company, dated September 29, 1999.* 3.3 Amended and Restated By-Laws of the Company.* 4.1 Article V of the Third Amended and Restated Certificate of Incorporation of the Company, dated September 29, 1999. (See Exhibit 3.1) 4.2 Certificate of Designation filed as Exhibit A to the Third Amended and Restated Certificate of Incorporation of the Company, dated September 29, 1999. (See Exhibit 3.1) 4.3 Indenture dated June 29, 1994 among the Company, IBJ Schroder Bank & Trust Company, as Trustee, the Guarantors named therein and the Purchasers named therein (incorporated by reference to Exhibit 4.1 of the Company's 1994 Registration Statement on Form S-4, the "1994 Registration Statement"). 4.4 First Supplemental Indenture dated as of March 25, 1996 to the Indenture dated as of June 29, 1994 among the Company, the Guarantors named therein and IBJ Schroder Bank & Trust Company, as Trustee (incorporated by reference to the Current Report). 4.5 Second Supplemental Indenture dated as of March 21, 1997 to the Indenture dated as of June 29, 1994 among the Company, the Guarantors named therein and IBJ Schroder Bank & Trust Company, as Trustee (incorporated by reference to the Current Report). 4.6 Supplemental Indenture dated as of October 21, 1999 to the Indenture dated as of June 29, 1994 among the Company, the Guarantors named therein and IBJ Schroder Bank & Trust Company, as Trustee. 4.7 Indenture dated as of March 15, 1997, among the Company, the Guarantors named therein and IBJ Schroder Bank & Trust Company, as Trustee (incorporated by reference to the Current Report). 4.8 Supplemental Indenture dated as of October 15, 1999 to the Indenture dated as of March 15, 1997, among the Company, the Guarantors named therein and, IBJ Schroder Bank & Trust Company, as Trustee. 4.9 Exchange Debenture Indenture dated as of March 15, 1997, among the Company, the Guarantors named therein and U.S. Trust Company of New York, as Trustee (incorporated by reference to the Current Report). 4.10 Form of Indenture with respect to % Senior Subordinated Notes due 2009 with The Bank of New York, as Trustee, dated , 1999. 5.1 Form of Opinion of Kaye, Scholer, Fierman, Hays & Handler, LLP regarding legality.
- --------------- * Previously filed. 26
EXHIBIT NO. - ------- 10.1 Securities Purchase Agreement dated as of March 24, 1997 among the Company, the Guarantors named therein and CIBC Wood Gundy Securities Corp., as Initial Purchaser (incorporated by reference to the Current Report). 10.2 Unit Agreement dated as of March 15, 1997 among the Company, the Guarantors and IBJ Schroder Bank & Trust Company, as Trustee (incorporated by reference to the Current Report). 10.3 Warrant Agreement dated as of March 15, 1997 among the Company and IBJ Schroder Bank & Trust Company, as Warrant Agent (incorporated by reference to the Current Report). 10.4 Common Stock Registration Rights and Stockholders Agreement dated as of March 15, 1997 among the Company, certain Management Stockholders named therein and CIBC Wood Gundy Securities Corp., as Initial Purchaser (incorporated by reference to the Current Report). 10.5 Notes Registration Rights Agreement dated as of March 15, 1997 among the Company, the Guarantors named therein and CIBC Wood Gundy Securities Corp., as Initial Purchaser (incorporated by reference to the Current Report). 10.6 Preferred Stock Registration Rights Agreement dated as of March 15, 1997 among the Company, the Guarantors named therein and CIBC Wood Gundy Securities Corp., as Initial Purchaser (incorporated by reference to the Current Report). 10.7 National Radio Sales Representation Agreement dated as of February 3, 1997 between Caballero Spanish Media, L.L.C. and the Company (incorporated by reference to the Current Report). 10.8 Common Stock Registration Rights and Stockholders Agreement dated as of June 29, 1994 among the Company, certain Management Stockholders named therein and each of the purchasers named therein (incorporated by reference to the 1994 Registration Statement). 10.09 Amended and Restated Employment Agreement dated as of October 25, 1999, by and between the Company and Raul Alcaron, Jr. 10.10 Employment Agreement dated February 5, 1997 between Carey Davis and the Company. 10.11 Employment Agreement dated as of October 25, 1999, by and between the Company and Joseph A. Garcia. 10.12 Employment Agreement dated as of October 25, 1999, by and between the Company and Luis Diaz-Albertini. 10.13 Employment Agreement, dated April 1, 1999, between Spanish Broadcasting System of Greater Miami, Inc. and Jesus Salas. 10.14 Letter Agreement dated January 13, 1997 between the Company and Caballero Spanish Media, LLC (incorporated by reference to the Current Report). 10.15 1994 Stock Option Plan of the Company (incorporated by reference to Exhibit 10.4 of the 1994 Registration Statement).
- --------------- * Previously filed. 27
EXHIBIT NO. - ------- 10.16 Ground Lease dated December 18, 1995 between Louis Viola Company and SBS-NJ (incorporated by reference to the 1996 Current Report). 10.17 Ground Lease dated December 18, 1995 between Frank F. Viola and Estate of Thomas C. Viola and SBS-NJ (incorporated by reference to the 1996 Current Report). 10.18 Lease and License Agreement dated February 1, 1991 between Empire State Building Company, as landlord, and SBS-NY, as tenant (incorporated by reference to Exhibit 10.15.1 of the 1994 Registration Statement). 10.19 Modification of Lease and License dated June 30, 1992 between Empire State Building Company and SBS-NY related to WSKQ-FM (incorporated by reference to Exhibit 10.15.2 of the 1994 Registration Statement). 10.20 Lease and License Modification and Extension Agreement dated as of June 30, 1992 between Empire State Building Company, as landlord, and SBS-NY as tenant (incorporated by reference to Exhibit 10.15.3 of the 1994 Registration Statement). 10.21 Promissory Note, dated as of December 31, 1995 of Raul Alarcon, Sr. to SBS-NJ in the principal amount of $577,323 (incorporated by reference to Exhibit 10.26 to the Company's 1995 Annual Report on Form 10-K). 10.22 Promissory Note, dated as of December 31, 1995 of Raul Alarcon, Jr. to SBS-NJ in the principal amount of $1,896,913 (incorporated by reference to Exhibit 10.27 to the Company's 1995 Annual Report on Form 10-K). 10.23 Lease Agreement dated June 1, 1992 among Pablo Raul Alarcon, Sr., Raul Alarcon, Jr., and SBS-Fla (incorporated by reference to Exhibit 10.30 of the 1994 Registration Statement). 10.24 Indenture dated October 12, 1988 between Alarcon Holdings, Inc. and SBS-NJ related to the studio located at 26 West 56th Street, NY, NY (incorporated by reference to Exhibit 10.32 of the 1994 Registration Statement). 10.25 Agreement of Lease dated as of March 1, 1996. No. WT-1744-A119 1067 between The Port Authority of New Jersey and SBS-GNY as assignee of Park Radio (incorporated by reference to the 1996 Current Report). 10.26 Asset Purchase Agreement dated as of July 2, 1997, by and between Spanish Broadcasting System, Inc. (New Jersey), Spanish Broadcasting System of California, Inc., Spanish Broadcasting System of Florida, Inc., Spanish Broadcasting System, Inc., and One-on-One Sports, Inc. (incorporated by reference to Exhibit 10.62 of the Company's Registration Statement on Form S-4 (Commission File No. 333-26295)). 10.27 Amendment No. 1 dated as of September 29, 1997 to the Asset Purchase Agreement dated as of July 2, 1997, by and between Spanish Broadcasting System, Inc. (New Jersey), Spanish Broadcasting System of California, Inc., Spanish Broadcasting System of Florida, Inc., Spanish Broadcasting System, Inc., and One-on-One Sports, Inc. (incorporated by referent to the Company's Registration Statement on Form S-1, dated January 21, 1999). 10.28 Promissory Note dated July 16, 1997 of Raul Alarcon, Jr. to the Company in the principal amount of $1,050,229.63 (incorporated by reference to Exhibit 10.63 of the Company's Registration Statement on Form S-4 (Commission File No. 333-26295)).
- --------------- * Previously filed. 28
EXHIBIT NO. - ------- 10.29 Asset Purchase Agreement dated January 28, 1998 by and between Spanish Broadcasting System of San Antonio, Inc. and Radio KRIO, Ltd. (incorporated by reference to the Company's Form 10-Q dated February 12, 1998). 10.30 Asset Purchase Agreement dated June 16, 1998 by and between Spanish Broadcasting System of Puerto Rico, Inc. and Pan Caribbean Broadcasting Corporation (incorporated by reference to the Company's Form 10-Q dated July 12, 1998). 10.31 Extension of lease of a Condominium Unit (Metropolitan Tower Condominium) between Raul Alarcon, Jr. ("Landlord") and Spanish Broadcasting System, Inc. ("Tenant") (incorporated by reference to the Company's 1998 Annual Report on Form 10-K). 10.32 Asset Purchase Agreement dated January 8, 1999 by and between Spanish Broadcasting System of Puerto Rico, Inc. and Guayama Broadcasting Company, Inc. and LaMega Estacion, Inc. (incorporated by reference to the Company's Registration Statement on Form S-1, dated January 21, 1999). 10.33 Stock Purchase Agreement among JuJu Media, Inc., each of the individual sellers, and Spanish Broadcasting System, Inc., dated April 26, 1999.* 10.34 Asset Purchase Agreement, dated as of October 25, 1999, by and between Spanish Broadcasting System of Florida, Inc. and Pablo Raul Alarcon, Sr. 10.35 Form of Indemnification Agreement.* 10.36 Spanish Broadcasting System 1999 Stock Option Plan. 10.37 Spanish Broadcasting System 1999 Company Stock Option Plan for Nonemployee Directors. 10.38 Time Brokerage Agreement, dated as of October 25, 1999, by and between Spanish Broadcasting System of Florida, Inc. and Pablo Raul Alarcon, Sr. 10.39 Form of Lock-up Letter Agreement. 10.40 Form of Option Grant not under Stock Option Plans. 12.1 Statement re: Computation of Ratios.* 13.1 Annual Report of the Company (incorporated by reference to the Company's 1998 Annual Report on Form 10-K). 21.1 List of Subsidiaries of the Company.* 23.1 Consent of KPMG LLP.* 23.2 Consent of Kaye, Scholer, Fierman, Hays & Handler, LLP (included in Exhibit 5.1). 23.3 Consent of Roman Martinez IV.* 23.4 Consent of Jason L. Shrinsky.* 24.1 Power of Attorney (included herein). 25.1 Statement of Eligibility of Trustee.
- --------------- * Previously filed. EX-1.1 2 FORM OF UNDERWRITING AGREEMENT 1 Exhibit 1.1 SPANISH BROADCASTING SYSTEM, INC. [____%] SENIOR SUBORDINATED NOTES FORM OF UNDERWRITING AGREEMENT October [28], 1999 LEHMAN BROTHERS INC . CIBC WORLD MARKETS CORP. c/o Lehman Brothers Inc. Three World Financial Center New York, New York 10285 Dear Sirs: Spanish Broadcasting System, Inc., a Delaware corporation (the "Company") proposes to issue and sell to the several underwriters named in Schedule 1 hereto (the "Underwriters"), an aggregate of $235 million principal amount of [____%] Senior Subordinated Notes due 2009 (the "Notes") to be issued under an indenture (the "Indenture") dated October [28], 1999, by and between the Company and the Bank of New York, as trustee (the "Trustee"). It is understood that the Company is currently entering into an agreement (the "Equity Underwriting Agreement"), pursuant to which an aggregate of 22,227,400 shares (the "Firm Stock") of the Company's Class A Common Stock, par value $.0001 share (the "Class A Common Stock") , will be sold by the Company and certain selling stockholders of the Company to the several Underwriters named in Schedule 1 to the Equity Underwriting Agreement (the "Underwriters"). Section 1. Representations, Warranties and Agreements of the Company. The Company represents, warrants and agrees that: (a) A registration statement on Form S-1 with respect to the Notes has (i) been prepared by the Company in conformity with the requirements of the Securities Act of 1933, as amended (the "Securities Act"), and the rules and regulations (the "Rules and Regulations") of the Securities and Exchange Commission (the "Commission") thereunder, (ii) been filed with the Commission under the Securities Act, and (iii) become effective under the Securities Act (other than any Rule 462 Registration Statement to be filed after the execution of this Agreement which will become effective no later than the day after the execution of this Agreement). Copies of such registration statement and each of the amendments thereto have been delivered by the Company to you. As used in this Agreement, "Effective Time" means the date and the time as of which such registration statement, or the most recent post-effective amendment thereto, if any, was declared effective by the Commission; "Effective Date" means the date of the Effective Time; "Preliminary Prospectus" means each prospectus, included in such registration statement, or amendments thereof, before it became effective under the Securities Act and any prospectus filed with the Commission by the Company with the consent of the Underwriters pursuant to Rule 424(a) of the Rules and Regulations; "Registration Statement" means such registration statement, including all material incorporated by reference therein, as amended at the Effective Time, including all information contained in the final prospectus filed with the Commission pursuant to Rule 424(b) of the Rules and Regulations and deemed to be a part of the registration statement as of the Effective Time 2 2 pursuant to Rule 430A of the Rules and Regulations; and "Prospectus" means the prospectus in the form first used to confirm sales of the Notes. If the Company has filed an abbreviated registration statement to register additional Notes pursuant to Rule 462(b) under the Securities Act (the "Rule 462 Registration Statement"), then any reference herein to the term "Registration Statement" shall be deemed to include such Rule 462 Registration Statement. The Commission has not issued any order preventing or suspending the use of any Preliminary Prospectus. (b) The Registration Statement conforms, and the Prospectus and any further amendments or supplements to the Registration Statement or the Prospectus will, when they become effective or are filed with the Commission, as the case may be, conform in all respects to the requirements of the Securities Act and the Rules and Regulations and do not and will not, as of the applicable effective date (as to the Registration Statement and any amendment thereto) and as of the applicable filing date (as to the Prospectus and any amendment or supplement thereto) contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading; provided that no representation or warranty is made as to information contained in or omitted from the Registration Statement or the Prospectus in reliance upon and in conformity with written information furnished to the Company by or on behalf of any Underwriter specifically for inclusion therein. (c) The Company and each of its subsidiaries (as defined in Section 14) have been duly incorporated and are validly existing as corporations in good standing under the laws of their respective jurisdictions of incorporation, are duly qualified to do business and are in good standing as foreign corporations in each jurisdiction in which their respective ownership or lease of property or the conduct of their respective businesses requires such qualification, except where the failure to be so qualified would not have a material adverse effect on the general affairs, management, consolidated financial position, stockholders' equity or results of operation of the Company and its subsidiaries taken as whole (a "Material Adverse Effect"). The Company and each of its subsidiaries have all power and authority necessary to own or hold their respective properties and to conduct the businesses in which they are engaged; and none of the subsidiaries of the Company other than [ ] is a "significant subsidiary," as such term is defined in Rule 405 of the Rules and Regulations. (d) The Company has an authorized capitalization as set forth in the Prospectus, and all of the issued shares of capital stock of the Company have been duly and validly authorized and issued, are fully paid and non-assessable and conform to the description thereof contained in the Prospectus; and all of the issued shares of capital stock of each subsidiary of the Company have been duly and validly authorized and issued and are fully paid and non-assessable and (except for directors' qualifying shares) are owned directly or indirectly by the Company, free and clear of all liens, encumbrances, equities or claims and none of such shares of capital stock was issued in violation of preemptive or other similar rights arising by operation of law, under the charter and by-laws of the Company or under any agreement to which the Company or any subsidiary is a party or otherwise. (e) This Agreement has been duly authorized, executed and delivered by the Company and each of the other documents relating to this Agreement to which the Company is a party has been duly authorized, executed and delivered by the Company. (f) The Indenture between the Company and the Trustee has been duly qualified under the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act") and has been duly authorized, executed and delivered by the Company and is a valid and legally binding agreement of the Company, enforceable in accordance with its terms except as (i) the enforceability thereof may be limited by bankruptcy, insolvency or similar laws affecting creditor's rights generally and (ii) rights of 2 3 acceleration and the availability of equitable remedies may be limited by equitable principles of general applicability. (g) The Notes have been duly authorized and, when executed, authenticated and issued in accordance with the provisions of the Indenture and delivered to and paid for by the purchasers thereof, will be in the form contemplated by and will be entitled to the benefits of, the Indenture and will be validly issued and free and clear of all liens and restrictions on transfer and will constitute valid and legally binding obligations of the Company, enforceable in accordance with their respective terms except as (i) enforceability thereof may be limited by bankruptcy, insolvency or similar laws affecting creditors' rights generally and (ii) rights of acceleration and the availability of equitable remedies may be limited by equitable principles of general applicability. (h) The execution, delivery and performance of this Agreement, the Indenture and the Notes and the consummation of the transactions contemplated hereby, thereby and in the Registration Statement and the Prospectus (including the issuance and sale of the Notes and the use of proceeds from the sale of the Notes as described under the caption "Use of Proceeds") will not conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under, any indenture, mortgage, deed of trust, loan agreement or other agreement, license or instrument to which the Company or any of its subsidiaries is a party or by which the Company or any of its subsidiaries is bound or to which any of the property or assets of the Company or any of its subsidiaries is subject, except for such defaults which, individually or in the aggregate, would not result in a Material Adverse Effect, nor will such actions result in any violation of the provisions of the charter, certificate of designation, by-laws or similar governing document of the Company or any of its subsidiaries or any statute or any order, rule or regulation of any court or governmental agency or body having jurisdiction over the Company or any of its subsidiaries or any of their properties or assets; and except for the registration of the Notes under the Securities Act and such consents, approvals, authorizations, registrations or qualifications as may be required under the Exchange Act of 1934, as amended (the "Exchange Act") and applicable state securities laws in connection with the purchase and distribution of the Notes by the Underwriters, no consent, approval, authorization or order of, or filing or registration with, any such court or governmental agency or body is required for the execution, delivery and performance of this Agreement, the Indenture or the Notes and the consummation of the transactions contemplated hereby or thereby, including the issuance, sale and delivery of the Notes to be issued, sold and delivered by the Company hereunder. (i) Except as described in the Prospectus, there are no contracts, agreements or understandings between the Company and any person granting such person the right to require the Company to file a registration statement under the Securities Act with respect to any securities of the Company owned or to be owned by such person or to require the Company to include such securities in the securities registered pursuant to the Registration Statement or in any securities being registered pursuant to any other registration statement filed by the Company under the Securities Act. (j) Except as described in the Prospectus, the Company has not sold or issued any securities, or securities that are convertible into other securities, with terms that are substantially similar to the Notes during the six-month period preceding the date of the Prospectus, including any sales pursuant to Rule 144A under, or Regulations D or S of, the Securities Act. (k) The Company has not taken and will not take, directly or indirectly, any action designed to cause or result in, or which constitutes or which might reasonably be expected to constitute, the stabilization or manipulation of the price of the Notes to facilitate the sale or resale of the Notes. (l) Neither the Company nor any of its subsidiaries has sustained, since the date of the latest audited financial statements included in the Prospectus, any loss or interference with its business 3 4 from fire, explosion, flood or other calamity, whether or not covered by insurance, or from any labor dispute or court or governmental action, order or decree, otherwise than as set forth or contemplated in the Prospectus that would result in a Material Adverse Effect; and, since such date, there has not been any change in the capital stock or long-term debt of the Company or any of its subsidiaries or any material adverse change, or any development involving a prospective material adverse change, in or affecting the general affairs, management, consolidated financial position, stockholders' equity, results of operations, business or prospects of the Company and its subsidiaries, otherwise than as set forth or contemplated in the Prospectus. (m) The financial statements (including the related notes and supporting schedules) filed as part of the Registration Statement or included in the Prospectus present fairly the financial condition and results of operations of the entities purported to be shown thereby, at the dates and for the periods indicated, and have been prepared in conformity with generally accepted accounting principles applied on a consistent basis throughout the periods involved. (n) Immediately after the sale of the Notes by the Company hereunder, the aggregate amount of Notes which shall have been issued and sold by the Company hereunder and of any debt securities of the Company (other than the Notes) that shall have been issued and sold pursuant to the Registration Statement will not exceed the amount of debt securities registered under the Registration Statement. (o) No default or event of default with respect to any Indebtedness (as such term is defined in the Indenture) or will exist as a result of the execution and delivery of this Agreement or the consummation of the transactions contemplated hereby and each of the Company and its subsidiaries has duly performed or observed all material obligations, agreements, covenants or conditions contained in any contract, indenture, mortgage, agreement or instrument relating to any Indebtedness. (p) None of the Company or its subsidiaries, or any agent acting on their behalf, has taken or will take any action that might cause this Agreement or the sale of the Notes to violate Regulation G, T, U or X of the Board of Governors of the Federal Reserve System, in each case as in effect, or as the same may hereafter be in effect, on the Closing Date. (q) The Notes and the Indenture conform, in all material respects, to the descriptions thereof in the Prospectus. (r) Immediately after the consummation of the transactions contemplated by this Agreement, the fair value and present fair saleable value of the assets of the Company will exceed the sum of its stated liabilities and identified contingent liabilities; the Company is not, nor will the Company be, after giving effect to the execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby, (i) left with unreasonably small capital with which to carry on its business as it is proposed to be conducted, (ii) unable to pay its debts (contingent and otherwise) as they mature or (iii) otherwise insolvent. (s) To the best knowledge of the Company, KPMG LLP, who have certified certain financial statements of the Company, whose report appears in the Prospectus and who have delivered the initial letter referred to in Section 7(e) hereof, are independent public accountants as required by the Securities Act and the Rules and Regulations. (t) The Company and each of its subsidiaries have good and marketable title in fee simple to all real property and good and valid title to all material personal property owned by them, in each case free and clear of all liens, encumbrances and defects, except such as are described in the 4 5 Prospectus or such as do not materially affect the value of such property and do not materially interfere with the use made and proposed to be made of such property by the Company and its subsidiaries; and all assets held under lease by the Company and its subsidiaries are held by them under valid, subsisting and enforceable leases, with such exceptions as are not material and do not interfere with the use made and proposed to be made of such property and buildings by the Company and its subsidiaries. (u) The Company and each of its subsidiaries carry, or are covered by, insurance in such amounts and covering such risks as is reasonably adequate for the conduct of their respective businesses and the value of their respective properties and as is customary for companies engaged in similar businesses in similar industries. (v) The Company and each of its subsidiaries own, license or possess adequate rights to use all material patents, patent applications, trademarks, service marks, trade names, trademark registrations, service mark registrations, copyrights and licenses necessary for the conduct of their respective businesses and have no reason to believe that the conduct of their respective businesses will conflict with, and have not received any notice of any claim of conflict with, any such rights of others, except as disclosed in the Prospectus or where the failure to so own, license or possess such rights would not, individually or in the aggregate, have a Material Adverse Effect. (w) There are no legal or governmental proceedings pending to which the Company or any of its subsidiaries is a party or of which any property or assets of the Company or any of its subsidiaries is the subject which, if determined adversely to the Company or any of its subsidiaries, might have a Material Adverse Effect; and to the best of the Company's knowledge, no such proceedings are threatened or contemplated by governmental authorities or threatened by others. (x) There are no contracts, arrangements or other documents which are required to be described in the Prospectus or filed as exhibits to the Registration Statement by the Securities Act or by the Rules and Regulations which have not been described in the Prospectus or filed as exhibits to the Registration Statement or incorporated by reference therein as permitted by the Rules and Regulations. (y) No relationship, direct or indirect, exists between or among the Company on the one hand, and any of its former or present directors, officers, stockholders, customers or suppliers on the other hand, which is required to be described in the Prospectus which is not so described. (z) No labor disturbance by the employees of the Company exists or, to the knowledge of the Company, is imminent, which might be expected to have a Material Adverse Effect. (aa) The Company is in compliance in all material respects with all presently applicable provisions of the Employee Retirement Income Security Act of 1974, as amended, including the regulations and published interpretations thereunder ("ERISA"); no "reportable event" (as defined in Section 4043 of ERISA) has occurred with respect to any "defined benefit plan" (as defined in Section 3(35) of ERISA) for which the Company would have any liability; the Company has not incurred and does not expect to incur liability under (i) Title IV of ERISA with respect to termination of, or withdrawal from, any "defined benefit plan" or (ii) Sections 412 or 4971 of the Internal Revenue Code of 1986, as amended, including the regulations and published interpretations thereunder (the "Code"); and each "defined benefit plan" for which the Company has any liability or to which it makes contributions that is intended to be qualified under Section 401(a) of the Code is so qualified in all material respects and nothing has occurred, whether by action or by failure to act, which would cause the loss of such qualification. 5 6 (bb) The Company has filed all federal, state and local income and franchise tax returns required to be filed through the date hereof and has paid all taxes shown as due thereon, and no tax deficiency has been determined adversely to the Company or any of its subsidiaries which has had (nor does the Company have any knowledge of any tax deficiency which, if determined adversely to the Company or any of its subsidiaries, might have) a Material Adverse Effect. The are no tax audits presently being conducted which, if determined adversely to the Company or any of its subsidiaries, could have a Material Adverse Effect. (cc) Since the date as of which information is given in the Prospectus through the date hereof, and except as may otherwise be disclosed in the Prospectus, the Company has not (i) issued or granted any securities, (ii) incurred any material liability or obligation, direct or contingent, other than liabilities and obligations which were incurred in the ordinary course of business, (iii) entered into any transaction not in the ordinary course of business, or (iv) declared or paid any dividend on its capital stock. (dd) The Company (i) makes and keeps accurate books and records, and (ii) maintains internal accounting controls which provide reasonable assurance that (A) transactions are executed in accordance with management's general or specific authorization, (B) transactions are recorded as necessary to permit preparation of its financial statements and to maintain accountability for its assets, (C) access to its assets is permitted only in accordance with management's general or specific authorization and (D) the reported accountability for its assets is compared with existing assets at reasonable intervals. (ee) Neither the Company nor any of its subsidiaries (i) is in violation of its charter, certificate of designation, by-laws or similar governing document, (ii) is in default in any material respect, and no event has occurred which, with notice or lapse of time or both, would constitute such a default, in the due performance or observance of any term, covenant or condition contained in any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which it is a party or by which it is bound or to which any of its properties or assets is subject or (iii) is in violation in any material respect of any law, ordinance, governmental rule, regulation or court decree to which it or its property or assets may be subject. (ff) Each of the radio stations owned, operated, programmed, or to which sales and marketing services are provided, by the Company and its subsidiaries is validly licensed by the Federal Communications Commission (the "FCC") and no administrative or judicial proceedings are pending before or, to the knowledge of the Company or its subsidiaries, threatened by the FCC with respect to such licenses; the Company and its subsidiaries possess adequate certificates, authorizations, consents, orders, approvals, licenses or permits which are in full force and effect issued by all appropriate governmental agencies or bodies necessary to the ownership of their respective properties and the conduct of the businesses now operated by them and have not received any notice of proceedings relating to the revocation or modification of any such certificate, authority, consent, order, approval, license or permit and the Company and its subsidiaries are in compliance in all material respects with the Communications Act of 1934, as amended, and the rules, regulations and policies of the FCC. (gg) The Company believes the statistical and market-related data included in the Prospectus are accurate and are based on or derived from reliable sources. (hh) There has been no storage, disposal, generation, manufacture, refinement, transportation, handling or treatment of toxic wastes, medical wastes, hazardous wastes or hazardous substances by the Company or any of its subsidiaries (or, to the knowledge of the Company, any of their predecessors in interest) at, upon or from any of the property now or previously owned or leased by the Company or its subsidiaries in violation of any applicable law, ordinance, rule, regulation, order, 6 7 judgment, decree or permit or which would require remedial action under any applicable law, ordinance, rule, regulation, order, judgment, decree or permit, except for any violation or remedial action which would not have, or could not be reasonably likely to have, singularly or in the aggregate with all such violations and remedial actions, a Material Adverse Effect; there has been no material spill, discharge, leak, emission, injection, escape, dumping or release of any kind onto such property or into the environment surrounding such property of any toxic wastes, medical wastes, solid wastes, hazardous wastes or hazardous substances due to or caused by the Company or any of its subsidiaries or with respect to which the Company or any of its subsidiaries have knowledge, except for any such spill, discharge, leak, emission, injection, escape, dumping or release which would not have or would not be reasonably likely to have, singularly or in the aggregate with all such spills, discharges, leaks, emissions, injections, escapes, dumpings and releases, a Material Adverse Effect; and the terms "hazardous wastes", "toxic wastes", "hazardous substances" and "medical wastes" shall have the meanings specified in any applicable local, state, federal and foreign laws or regulations with respect to environmental protection. (ii) Neither the Company nor any subsidiary is, or, as of the Closing Date after giving effect to the application of the net proceeds as described in the Prospectus, will be, an "investment company" as defined in the Investment Company Act of 1940, as amended. (jj) The Company has complied with, and is and will be in compliance with, the provisions of that certain Florida act relating to disclosure of doing business with Cuba, codified as Section 517.075 of the Florida statutes, and the rules and regulations thereunder or is exempt therefrom. Section 2. Purchase of the Notes by the Underwriters. On the basis of the representations and warranties contained in, and subject to the terms and conditions of, this Agreement, the Company agrees to sell the Notes to the several Underwriters and each of the Underwriters, severally and not jointly, agrees to purchase the aggregate principal amount of Notes set opposite that Underwriter's name in Schedule 1 hereto. Each Underwriter will purchase such aggregate principal amount of Notes at an aggregate purchase price equal to ___% of the principal amount thereof (the "Purchase Price"). The Company shall not be obligated to deliver any of the Notes to be delivered on the Delivery Date (as hereinafter defined), except upon payment for all the Notes to be purchased on the Delivery Date as provided herein. Section 3. Offering of Notes by the Underwriters. Upon authorization by the Underwriters of the release of the Notes, the several Underwriters propose to offer the Notes for sale upon the terms and conditions set forth in the Prospectus. Section 4. Delivery of and Payment for the Notes. Delivery of and payment for the Notes shall be made at the office of Rogers & Wells LLP, 200 Park Avenue, New York, New York 10166 at 10:00 A.M., New York City time, on the fifth full business day following the date of this Agreement or at such other date or place as shall be determined by agreement between the Underwriters and the Company. This date and time are sometimes referred to as the "Delivery Date." On the Delivery Date, the Company shall deliver or cause to be delivered certificates representing the Notes to the Underwriters for the account of each Underwriter against payment to or upon the order of the Company of the purchase price by certified or official bank check or checks payable in or wire transfer in immediately available funds; provided, that the amount of such payment shall be reduced by one days' interest on the amount of gross proceeds at the Underwriters' cost of borrowing such funds plus any other expenses associated with such payment of immediately available funds. Time shall be of the essence, and delivery at the time and place specified pursuant to this Agreement is a further condition of the obligation of each Underwriter hereunder. Upon delivery, the Notes shall be registered in such names and in such denominations as the Underwriters shall request in writing not less than two full business days prior to the Delivery Date. For 7 8 the purpose of expediting the checking and packaging of the certificates for the Notes, the Company shall make the certificates representing the Notes available for inspection by the Underwriters in New York, New York, not later than 2:00 P.M., New York City time, on the business day prior to the Delivery Date. Section 5. Further Agreements of the Company. The Company agrees: (a) To prepare the Prospectus in a form approved by the Underwriters and to file such Prospectus pursuant to Rule 424(b) under the Securities Act not later than Commission's close of business on the second business day following the execution and delivery of this Agreement or, if applicable, such earlier time as may be required by Rule 430A(a)(3) under the Securities Act; to make no further amendment or any supplement to the Registration Statement or to the Prospectus except as permitted herein; to advise the Underwriters, promptly after it receives notice thereof, of the time when any amendment to the Registration Statement has been filed or becomes effective or any supplement to the Prospectus or any amended Prospectus has been filed and to furnish the Underwriters with copies thereof; to advise the Underwriters, promptly after it receives notice thereof, of the issuance by the Commission of any stop order or of any order preventing or suspending the use of any Preliminary Prospectus or the Prospectus, of the suspension of the qualification of the Notes for offering or sale in any jurisdiction, of the initiation or threatening of any proceeding for any such purpose, or of any request by the Commission for the amending or supplementing of the Registration Statement or the Prospectus or for additional information; and, in the event of the issuance of any stop order or of any order preventing or suspending the use of any Preliminary Prospectus or the Prospectus or suspending any such qualification, to use promptly its best efforts to obtain its withdrawal; (b) To furnish promptly to each of the Underwriters and to counsel for the Underwriters a signed copy of the Registration Statement as originally filed with the Commission, and each amendment thereto filed with the Commission, including all consents and exhibits filed therewith; (c) To deliver promptly to the Underwriters such number of the following documents as the Underwriters shall reasonably request: (i) conformed copies of the Registration Statement as originally filed with the Commission and each amendment thereto (in each case excluding exhibits other than this Agreement and the computation of the Ratio of Earnings to Fixed Charges) and (ii) each Preliminary Prospectus, the Prospectus and any amended or supplemented Prospectus; and, if the delivery of a prospectus is required at any time after the Effective Time in connection with the offering or sale of the Notes or any other securities relating thereto and if at such time any events shall have occurred as a result of which the Prospectus as then amended or supplemented would include an untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made when such Prospectus is delivered, not misleading, or, if for any other reason it shall be necessary to amend or supplement the Prospectus in order to comply with the Securities Act, to notify the Underwriters and, upon their request, to prepare and furnish without charge to each Underwriter and to any dealer in securities as many copies as the Underwriters may from time to time reasonably request of an amended or supplemented Prospectus which will correct such statement or omission or effect such compliance. (d) To file promptly with the Commission any amendment to the Registration Statement or the Prospectus or any supplement to the Prospectus that may, in the judgment of the Company or the Underwriters, be required by the Securities Act or requested by the Commission; (e) Prior to filing with the Commission any amendment to the Registration Statement or supplement to the Prospectus or any Prospectus pursuant to Rule 424 of the Rules and Regulations, to furnish a copy thereof to the Underwriters and counsel for the Underwriters and obtain the consent of the Underwriters to the filing; 8 9 (f) As soon as practicable after the Effective Date, to make generally available to the Company's security holders and to deliver to the Underwriters an earnings statement of the Company and its subsidiaries (which need not be audited) complying with Section 11(a) of the Securities Act and the Rules and Regulations (including, at the option of the Company, Rule 158); (g) For a period of five years following the Effective Date, to furnish to the Underwriters copies of all materials furnished by the Company to its shareholders and holders of Notes and all public reports and all reports and financial statements furnished by the Company to the principal national securities exchange upon which the Class A Common Stock or Notes may be listed pursuant to requirements of or agreements with such exchange or to the Commission pursuant to the Exchange Act or any rule or regulation of the Commission thereunder; (h) Promptly from time to time to take such action as the Underwriters may reasonably request to qualify the Notes for offering and sale under the securities laws of such jurisdictions as the Underwriters may request and to comply with such laws so as to permit the continuance of sales and dealings therein in such jurisdictions for as long as may be necessary to complete the distribution of the Notes; provided that in connection therewith the Company shall not be required to qualify as a foreign corporation or to file a general consent to service of process in any jurisdiction; (i) To apply the net proceeds from the sale of the Notes as set forth in the Prospectus; and (j) To take such steps as shall be necessary to ensure that neither the Company nor any subsidiary shall become an "investment company" as defined in the Investment Company Act of 1940, as amended. Section 6. Expenses. The Company agrees to pay (a) the costs incident to the authorization, issuance, sale and delivery of the Notes and any taxes payable in that connection; (b) the costs incident to the preparation, printing and filing under the Securities Act of the Registration Statement and any amendments and exhibits thereto; (c) the costs of distributing the Registration Statement as originally filed and each amendment thereto and any post-effective amendments thereof (including, in each case, exhibits), any Preliminary Prospectus, the Prospectus and any amendment or supplement to the Prospectus, all as provided in this Agreement; (d) the costs of producing and distributing this Agreement and the Indenture, and any other related documents in connection with the offering, purchase, sale and delivery of the Notes; (e) the filing fees incident to securing the review by the National Association of Securities Dealers, Inc. of the terms of sale of the Notes; (f) any applicable listing or other fees; (g) the fees and expenses (not in excess, in the aggregate, of $10,000) of qualifying the Notes under the securities laws of the several jurisdictions as provided in Section 5(h) and of preparing, printing and distributing a Blue Sky Memorandum (including related fees and expenses of counsel to the Underwriters); (h) any fees charged by securities rating agencies for rating the Notes; (i) the costs and expenses of the Company relating to investor presentations on any "road show" undertaken in connection with the marketing of the offering of the Notes, including, without limitation, expenses associated with the production of road show slides and graphics, fees and expenses of any consultants engaged in connection with the road show presentations with the prior approval of the Company, travel and lodging expenses of the representatives and officers of the Company and any such consultants, and the cost of any aircraft chartered in connection with the road show (i) and (j) all other costs and expenses incident to the performance of the obligations of the Company under this Agreement; provided that, except as provided in this Section 6 and in Section 10 the Underwriters shall pay their own costs and expenses, including the costs and expenses of their counsel, any transfer taxes on the Notes which they may sell and the expenses of advertising any offering of the Notes made by the Underwriters. 9 10 Section 7. Conditions of Underwriters' Obligations. The respective obligations of the Underwriters hereunder are subject to the accuracy, when made and on the Delivery Date, of the representations and warranties of the Company contained herein, to the performance by the Company of its obligations hereunder, and to each of the following additional terms and conditions: (a) The Prospectus shall have been timely filed with the Commission in accordance with Section 5(a); no stop order suspending the effectiveness of the Registration Statement or any part thereof shall have been issued and no proceeding for that purpose shall have been initiated or threatened by the Commission; and any request of the Commission for inclusion of additional information in the Registration Statement or the Prospectus or otherwise shall have been complied with. (b) No Underwriter shall have discovered and disclosed to the Company on or prior to the Delivery Date that the Registration Statement or the Prospectus or any amendment or supplement thereto contains an untrue statement of fact which, in the opinion of Rogers & Wells LLP, counsel for the Underwriters, is material or omits to state a fact which, in the opinion of such counsel, is material and is required to be stated therein or is necessary to make the statements therein not misleading. (c) All corporate proceedings and other legal matters incident to the authorization, form and validity of this Agreement, the Indenture, the Notes, the Registration Statement and the Prospectus, and all other legal matters relating to this Agreement, and the transactions contemplated hereby shall be reasonably satisfactory in all material respects to counsel for the Underwriters, and the Company shall have furnished to such counsel all documents and information that they may reasonably request to enable them to pass upon such matters. (d) Kaye, Scholer, Fierman, Hays & Handler LLP shall have furnished to the Underwriters their written opinion, as counsel to the Company, addressed to the Underwriters and dated the Delivery Date, in form and substance reasonably satisfactory to the Underwriters, to the effect that: (i) The Company and each of its subsidiaries have been duly incorporated and are validly existing as corporations in good standing under the laws of their respective jurisdictions of incorporation, are duly qualified to do business and are in good standing as foreign corporations in each jurisdiction in which their respective ownership or lease of property or the conduct of their respective businesses requires such qualification and have all power and authority necessary to own or hold their respective properties and conduct the businesses in which they are engaged; (ii) The Company has an authorized capitalization as set forth in the Prospectus, and all of the issued shares of capital stock of the Company have been duly and validly authorized and issued, are fully paid and nonassessable and conform to the description thereof contained in the Prospectus; and all of the issued shares of capital stock of each subsidiary of the Company have been duly and validly authorized and issued and are fully paid, non-assessable and (except for directors' qualifying shares) are owned directly or indirectly by the Company, free and clear of all liens, encumbrances, equities or claims and none of such shares of capital stock was issued in violation of preemptive or other similar rights arising by operation of law, under the charter and by-laws of the Company or under any agreement known to such counsel to which the Company or any subsidiary is a party or otherwise; (iii) The Notes have been duly authorized, executed and issued by the Company and, assuming due authentication thereof by the Trustee and upon payment and delivery in accordance with the terms of the Underwriting Agreement, will be entitled to the benefits of the Indenture and will be validly issued and free and clear of all liens and restrictions on transfer and will constitute valid and legally binding obligations of the Company enforceable against the Company in accordance 11 11 with their terms except as (i) enforceability thereof may be limited by bankruptcy, insolvency or similar laws affecting creditors' rights generally and (ii) rights of acceleration and the availability of equitable remedies may be limited by equitable principles of general applicability; (iv) The Notes conform to the descriptions thereof contained in the Registration Statement, the Prospectus and the Indenture. The Indenture conforms to the description thereof in the Registration Statement and the Prospectus; (v) To the best of such counsel's knowledge and other than as set forth in the Prospectus, there are no legal or governmental proceedings pending to which the Company or any of its subsidiaries is a party or of which any property or assets of the Company or any of its subsidiaries is the subject which, if determined adversely to the Company or any of its subsidiaries, might have a material adverse effect on the consolidated financial position, stockholders' equity, results of operations, business or prospects of the Company and its subsidiaries taken as a whole; and, to the best of such counsel's knowledge, no such proceedings are threatened or contemplated by governmental authorities or threatened by others; (vi) The Registration Statement has been declared effective under the Securities Act and the Indenture was qualified under the Trust Indenture Act, the Prospectus was filed with the Commission pursuant to the subparagraph of Rule 424(b) of the Rules and Regulations specified in such opinion on the date specified therein and no stop order suspending the effectiveness of the Registration Statement has been issued and, to the knowledge of such counsel, no proceeding for that purpose is pending or threatened by the Commission; (vii) The Registration Statement and the Prospectus and any further amendments or supplements thereto made by the Company prior to such Delivery Date (except for the financial statements and financial schedules and other financial and statistical data included therein, as to which such counsel need express no belief) comply as to form in all material respects with the requirements of the Securities Act and the Rules and Regulations; (viii) The statements contained in the Prospectus under the captions "Risk Factors- Government Regulation," "Risk Factors- Antitrust Matters," "Description of Notes," "Description of Other Indebtedness," "Certain Federal Income Tax Considerations," "Business -- Antitrust," "Business -- Federal Regulation of Radio Broadcasting," "Business- FCC Licenses," "Executive Compensation- Employment Agreement and Arrangements," "Executive Compensation- Option Plan," "Executive Compensation- Limitation on Directors' and Officers' Liability," insofar as they describe contracts, agreements or other legal documents or they describe federal statutes, rules and regulations, constitute a fair summary thereof; (ix) To the best of such counsel's knowledge, there are no contracts, arrangements or other documents which are required to be described in the Prospectus or filed as exhibits to the Registration Statement by the Securities Act or by the Rules and Regulations which have not been described or filed as exhibits to the Registration Statement or incorporated therein as permitted by the Rules and Regulations; (x) This Agreement has been duly authorized, executed and delivered by the Company; and each of the other documents relating to the this Agreement to which the Company is a party has been duly authorized, executed and delivered by the Company; (xi) The Indenture has been duly authorized, executed and delivered by the Company and duly qualified under the Trust Indenture Act of 1939, as amended (the "Trust Indenture 11 12 Act") and assuming due authorization, execution and delivery thereof by the Trustee, constitutes a valid and, legally binding obligation of the Company enforceable against the Company in accordance with its terms except as (i) enforceability thereof may be limited by bankruptcy, insolvency or similar laws affecting creditors' rights generally and (ii) rights of acceleration and the availability of equitable remedies may be limited by equitable principles of general applicability; (xii) The issue and sale of the Notes being delivered on the Delivery Date by the Company pursuant to this Agreement and the execution, delivery and compliance by the Company with all of the provisions of this Agreement, the Indenture, the Notes and each of the other documents to be entered into in connection with the consummation of the transactions contemplated hereby, thereby and in the Registration Statement and the Prospectus (including the issuance and sale of the Notes and the use of proceeds from the sale of the Notes as described under the caption "Use of Proceeds") will not conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under, any indenture, mortgage, deed of trust, loan agreement or other agreement, license (including FCC Licenses (as hereinafter defined )) or instrument known to such counsel to which the Company or any of its subsidiaries is a party or by which the Company or any of its subsidiaries is bound or to which any of the property or assets of the Company or any of its subsidiaries is subject, nor will such actions result in any violation of the provisions of the charter, certificate of designation, by-laws or similar governing document of the Company or any of its subsidiaries or any New York or federal statute, rule or regulation (including the Federal Communications Laws (as hereinafter defined)) or any order, judgment or decree known to such counsel; and, except for the registration of the Notes under the Securities Act and such consents, approvals, authorizations, registrations or qualifications as may be required under the Exchange Act and applicable state securities laws in connection with the purchase and distribution of the Notes by the Underwriters, no consent, approval, authorization or order of, or filing or registration with, any such court or governmental agency or body (including pursuant to the Communications Act of 1934, as amended and the rules, regulations and administrative orders promulgated thereunder (collectively, the Federal Communications Laws")) is required for the execution, delivery and performance of this Agreement, the Indenture, the Notes or any of the other documents to be entered into in connection with this Agreement by the Company and the consummation of the transactions contemplated hereby or thereby, including the issue, sale and delivery of the Notes to be issued, sold and delivered by the Company hereunder; (xiii) To such counsel's knowledge, except as described in the Prospectus, there are no contracts, agreements or understandings between the Company and any person granting such person the right to require the Company to file a registration statement under the Securities Act with respect to any securities of the Company owned or to be owned by such person or to require the Company to include such securities in the securities registered pursuant to the Registration Statement or in any securities being registered pursuant to any other registration statement filed by the Company under the Securities Act; (xiv) Except as described in the Prospectus, to the best of such counsel's knowledge, there are no contracts, agreements or understandings between the Company and any person granting such person the right (other than rights which have been waived or satisfied) to require the Company to file a registration statement under the Securities Act with respect to any securities of the Company owned or to be owned by such person or to require the Company to include such securities in the securities registered pursuant to the Registration Statement or in any securities being registered pursuant to any other registration statement filed by the Company under the Securities Act; (xv) The Company and its subsidiaries are the holders of the FCC licenses listed in an attachment to such opinion (the "FCC Licenses"), all of which are in full force and effect, for the maximum term customarily issued, with no material conditions, restrictions or qualifications other 12 13 than as described in the Prospectus, and to such counsel's knowledge, such FCC Licenses constitute all of the commercial radio station licenses necessary for the Company and the subsidiaries to operate their radio stations as described in the Prospectus; (xvi) There are no published or, to such counsel's knowledge, unpublished FCC orders, decrees or rulings outstanding against the Company or any of its subsidiaries or any pending or threatened actions, suits or proceedings against the Company or any of its subsidiaries by or before the FCC that seek to revoke, or if determined adversely to the Company or any of its subsidiaries, would have a material adverse effect on the Company and its subsidiaries taken as whole or would result in a revocation or nonrenewal of, any of the FCC Licenses, other than as disclosed in the Registration Statement or Prospectus; (xvii) Neither the Company nor any subsidiary is an "investment company" as defined in the Investment Company Act of 1940, as amended; In rendering such opinion, such counsel may state that their opinion is limited to matters governed by the Federal laws of the United States of America, the laws of the State of New York and the General Corporation Law of the State of Delaware. Such opinion shall also be to the effect that (x) such counsel has acted as counsel to the Company in connection with the preparation of the Registration Statement and (y) based on the foregoing, no facts have come to the attention of such counsel which lead them to believe that the Registration Statement (except for the financial statements and financial schedules and other financial, statistical and market data included therein, as to which such counsel need express no belief) as of the Effective Date, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein not misleading, or that the Prospectus (except as stated above) contains any untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading. The foregoing opinion and statement may be qualified by a statement to the effect that such counsel does not assume any responsibility for the accuracy, completeness or fairness of the statements contained in the Registration Statement or the Prospectus (other than as set forth in clause (viii) above). (e) The Underwriters shall have received from Rogers & Wells LLP, counsel for the Underwriters, such opinion or opinions, dated the Delivery Date, with respect to the issuance and sale of the Notes, the Registration Statement, the Prospectus and other related matters as the Underwriters may reasonably require, and the Company shall have furnished to such counsel such documents as they reasonably request for the purpose of enabling them to pass upon such matters. (f) At the time of execution of this Agreement, the Underwriters shall have received from each of KPMG LLP and PricewaterhouseCoopers LLP, a letter, in form and substance satisfactory to the Underwriters, addressed to the Underwriters and dated the date hereof (i) confirming that they are independent public accountants within the meaning of the Securities Act and are in compliance with the applicable requirements relating to the qualification of accountants under Rule 2-01 of Regulation S-X of the Commission and (ii) stating, as of the date hereof (or, with respect to matters involving changes or developments since the respective dates as of which specified financial information is given in the Prospectus, as of a date not more than five days prior to the date hereof), the conclusions and findings of such firm with respect to the financial information and other matters ordinarily covered by accountants' "comfort letters" to underwriters in connection with registered public offerings. (g) With respect to the letters of each of KPMG LLP and PricewaterhouseCoopers LLP referred to in the preceding paragraph and delivered to the Underwriters concurrently with the execution of this Agreement (the "initial letters"), the Company shall have furnished to the Underwriters letters (the "bring-down letters") of such 13 14 accountants, addressed to the Underwriters and dated the Delivery Date (i) confirming that they are independent public accountants within the meaning of the Securities Act and are in compliance with the applicable requirements relating to the qualification of accountants under Rule 2-01 of Regulation S-X of the Commission, (ii) stating, as of the date of the bring-down letters (or, with respect to matters involving changes or developments since the respective dates as of which specified financial information is given in the Prospectus, as of a date not more than five days prior to the date of the bring-down letters), the conclusions and findings of such firms with respect to the financial information and other matters covered by the initial letters and (iii) confirming in all material respects the conclusions and findings set forth in the initial letters. (h) The Company shall have furnished to the Underwriters a certificate, dated such Delivery Date, of its Chairman of the Board, its President or a Vice President and its chief financial officer stating that: (i) The representations, warranties and agreements of the Company in Section 1 are true and correct as of the Delivery Date; the Company has complied with all its agreements contained herein; and the conditions set forth in Sections 7(a), 7(i) and 7(j) have been fulfilled; and (ii) They have carefully examined the Registration Statement and the Prospectus and, in their opinion (A) as of the Effective Date, the Registration Statement and Prospectus did not include any untrue statement of a material fact and did not omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading, and (B) since the Effective Date no event has occurred which should have been set forth in a supplement or amendment to the Registration Statement or the Prospectus. (i) Neither the Company nor any of its subsidiaries shall have sustained since the date of the latest audited financial statements included in the Prospectus (A) any loss or interference with its business from fire, explosion, flood or other calamity, whether or not covered by insurance, or from any labor dispute or court or governmental action, order or decree, otherwise than as set forth or contemplated in the Prospectus or (B) since such date there shall not have been any change in the capital stock or long-term debt of the Company or any of its subsidiaries or any change, or any development involving a prospective change, in or affecting the general affairs, management, financial position, stockholders' equity or results of operations of the Company and its subsidiaries, otherwise than as set forth or contemplated in the Prospectus, the effect of which, in any such case described in clause (A) or (B), is, in the judgment of the Underwriters, so material and adverse as to make it impracticable or inadvisable to proceed with the public offering or the delivery of the Notes being delivered on the Delivery Date on the terms and in the manner contemplated in the Prospectus. (j) Subsequent to the execution and delivery of this Agreement (i) no downgrading shall have occurred in the rating accorded the Company's debt securities by any "nationally recognized statistical rating organization", as that term is defined by the Commission for purposes of Rule 436(g)(2) of the Rules and Regulations and (ii) no such organization shall have publicly announced that it has under surveillance or review, with possible negative implications, its rating of any of the Company's debt securities. (k) Subsequent to the execution and delivery of this Agreement there shall not have occurred any of the following: (i) trading in securities generally on the New York Stock Exchange, the American Stock Exchange, the Nasdaq Stock Market's National Market or in the over-the-counter market, or trading in any securities of the Company on any exchange or in the over-the-counter market, shall have been suspended or minimum prices shall have been established on any such exchange or such market by the Commission, by such exchange or by any other regulatory body or governmental authority 14 15 having jurisdiction, (ii) a banking moratorium shall have been declared by Federal or state authorities, (iii) the United States shall have become engaged in hostilities, there shall have been an escalation in hostilities involving the United States or there shall have been a declaration of a national emergency or war by the United States or (iv) there shall have occurred such a material adverse change in general economic, political or financial conditions (or the effect of international conditions on the financial markets in the United States shall be such) as to make it, in the judgment of the Underwriters, impracticable or inadvisable to proceed with the public offering or delivery of the Notes being delivered on the Delivery Date on the terms and in the manner contemplated in the Prospectus. (l) The closing under the Equity Underwriting Agreement shall have occurred prior to the closing hereunder on the Delivery Date. (m) The Company shall have commenced a tender offer and consent solicitation with respect to its 11% Senior Notes due 2004 (the "2004 Notes") and 12-1/2% Senior Notes due 2002 (the "2002 Notes"), and shall have accepted and paid for, not less than a majority in aggregate principal amount of the outstanding 2004 Notes and 2002 Notes. All opinions, letters, evidence and certificates mentioned above or elsewhere in this Agreement shall be deemed to be in compliance with the provisions hereof only if they are in form and substance reasonably satisfactory to counsel for the Underwriters. Section 8. Indemnification and Contribution. (a) The Company and Spanish Broadcasting System, Inc., a New Jersey corporation, Spanish Broadcasting System of Greater Miami, Inc., a Delaware corporation, Spanish Broadcasting System of Illinois, Inc., a Delaware corporation, Spanish Broadcasting System of San Antonio, Inc., a Delaware corporation (collectively, the "Principal Subsidiaries"), jointly and severally, shall indemnify and hold harmless each Underwriter, its officers and employees and each person, if any, who controls any Underwriter within the meaning of the Securities Act, from and against any loss, claim, damage or liability, joint or several, or any action in respect thereof (including, but not limited to, any loss, claim, damage, liability or action relating to purchases and sales of the Notes), to which that Underwriter, officer, employee or controlling person may become subject, under the Securities Act or otherwise, insofar as such loss, claim, damage, liability or action arises out of, or is based upon, (i) any untrue statement or alleged untrue statement of a material fact contained in any Preliminary Prospectus, the Registration Statement or the Prospectus or in any amendment or supplement thereto, (ii) the omission or alleged omission to state in any Preliminary Prospectus, the Registration Statement or the Prospectus, or in any amendment or supplement thereto, any material fact required to be stated therein or necessary to make the statements therein not misleading, or (iii) any act or failure to act or any alleged act or failure to act by any Underwriter in connection with, or relating in any manner to, the Notes or the offering contemplated hereby, and which is included as part of or referred to in any loss, claim, damage, liability or action arising out of or based upon matters covered by clause (i) or (ii) above (provided that the Company and the Principal Subsidiaries shall not be liable under this clause (iii) to the extent that it is determined in a final judgment by a court of competent jurisdiction that such loss, claim, damage, liability or action resulted directly from any such acts or failures to act undertaken or omitted to be taken by such Underwriter through its gross negligence or willful misconduct), and shall reimburse each Underwriter and each such officer, employee or controlling person promptly upon demand for any legal or other expenses reasonably incurred by that Underwriter, officer, employee or controlling person in connection with investigating or defending or preparing to defend against any such loss, claim, damage, liability or action as such expenses are incurred; provided, however, that the Company and the Principal Subsidiaries shall not be liable in any such case to the extent that any such loss, claim, damage, liability or action arises out of, or is based upon, any untrue statement or alleged untrue statement or omission or alleged 15 16 omission made in any Preliminary Prospectus, the Registration Statement or the Prospectus, or in any such amendment or supplement, in reliance upon and in conformity with written information concerning such Underwriter furnished to the Company by or on behalf of any Underwriter specifically for inclusion therein which information consists solely of the information specified in Section 8(e) provided, further however, that the Company and the Principal Subsidiaries shall not be liable to any Underwriter under the agreement in this subsection 8(a) with respect to any Prospectus to the extent that any such loss, claim, damage or liability of such Underwriter results from the fact that such Underwriter sold Notes to a person as to whom there was not sent or given, at or prior to written confirmation of such sale, a copy of the Prospectus or of the Prospectus as then amended or supplemented in any case where such delivery is required by the Securities Act if the Company previously furnished copies thereof in the quantity requested in accordance with Section 5(c) hereof to such Underwriter and the loss, claim, damage or liability of such Underwriter results from an untrue statement or omission of a material fact contained in the Prospectus and corrected in the Prospectus or the Prospectus as then amended or supplemented. The foregoing indemnity agreement is in addition to any liability which the Company and the Principal Subsidiaries may otherwise have to any Underwriter or to any officer, employee or controlling person of that Underwriter. The foregoing indemnity agreement is in addition to any liability which the Company and the Principal Subsidiaries may otherwise have to any Underwriter or to any officer, employee or controlling person of that Underwriter. (b) Each Underwriter, severally and not jointly, shall indemnify and hold harmless the Company, its officers and employees, each of its directors, and each person, if any, who controls the Company within the meaning of the Securities Act, from and against any loss, claim, damage or liability, joint or several, or any action in respect thereof, to which the Company or any such director, officer or controlling person may become subject, under the Securities Act or otherwise, insofar as such loss, claim, damage, liability or action arises out of, or is based upon, (i) any untrue statement or alleged untrue statement of a material fact contained in any Preliminary Prospectus, the Registration Statement or the Prospectus or in any amendment or supplement thereto, or (ii) the omission or alleged omission to state in any Preliminary Prospectus, the Registration Statement or the Prospectus, or in any amendment or supplement thereto, any material fact required to be stated therein or necessary to make the statements therein not misleading, but in each case only to the extent that the untrue statement or alleged untrue statement or omission or alleged omission was made in reliance upon and in conformity with written information concerning such Underwriter furnished to the Company by or on behalf of that Underwriter specifically for inclusion therein, and shall reimburse the Company and any such director, officer or controlling person for any legal or other expenses reasonably incurred by the Company or any such director, officer or controlling person in connection with investigating or defending or preparing to defend against any such loss, claim, damage, liability or action as such expenses are incurred. The foregoing indemnity agreement is in addition to any liability which any Underwriter may otherwise have to the Company or any such director, officer, employee or controlling person. (c) Promptly after receipt by an indemnified party under this Section 8 of notice of any claim or the commencement of any action, the indemnified party shall, if a claim in respect thereof is to be made against the indemnifying party under this Section 8, notify the indemnifying party in writing of the claim or the commencement of that action; provided, however, that the failure to notify the indemnifying party shall not relieve it from any liability which it may have under this Section 8 except to the extent it has been materially prejudiced by such failure and, provided further, that the failure to notify the indemnifying party shall not relieve it from any liability which it may have to an indemnified party otherwise than under this Section 8. If any such claim or action shall be brought against an indemnified party, and it shall notify the indemnifying party thereof, the indemnifying party shall be entitled to participate therein and, to the extent that it wishes, jointly with any other similarly notified indemnifying party, to assume the defense thereof with counsel reasonably satisfactory to the indemnified party. After notice from the indemnifying party to the indemnified party of its election to assume the defense of such 16 17 claim or action, the indemnifying party shall not be liable to the indemnified party under this Section 8 for any legal or other expenses subsequently incurred by the indemnified party in connection with the defense thereof other than reasonable costs of investigation; provided, however, that the Underwriters shall have the right to employ counsel to represent jointly the Underwriters and their respective officers, employees and controlling persons who may be subject to liability arising out of any claim in respect of which indemnity may be sought by the Underwriters against the Company or the Principal Subsidiaries under this Section 8 if, in the reasonable judgment of the Underwriters, it is advisable for the Underwriters and their officers, employees and controlling persons to be jointly represented by separate counsel, and in that event the fees and expenses of such separate counsel shall be paid by the Company or the Principal Subsidiaries, as the case may be. No indemnifying party shall (i) without the prior written consent of the indemnified parties (which consent shall not be unreasonably withheld), settle or compromise or consent to the entry of any judgment with respect to any pending or threatened claim, action, suit or proceeding in respect of which indemnification or contribution may be sought hereunder (whether or not the indemnified parties are actual or potential parties to such claim or action) unless such settlement, compromise or consent includes an unconditional release of each indemnified party from all liability arising out of such claim, action, suit or proceeding, or (ii) be liable for any settlement of any such action effected without its written consent (which consent shall not be unreasonably withheld), but if settled with the consent of the indemnifying party or if there be a final judgment of the plaintiff in any such action, the indemnifying party agrees to indemnify and hold harmless any indemnified party from and against any loss or liability by reason of such settlement or judgment. (d) If the indemnification provided for in this Section 8 shall for any reason be unavailable to or insufficient to hold harmless an indemnified party under Section 8(a) or 8(b) in respect of any loss, claim, damage or liability, or any action in respect thereof, referred to therein, then each indemnifying party shall, in lieu of indemnifying such indemnified party, contribute to the amount paid or payable by such indemnified party as a result of such loss, claim, damage or liability, or action in respect thereof, (i) in such proportion as shall be appropriate to reflect the relative benefits received by the Company and the Principal Subsidiaries on the one hand and the Underwriters on the other from the offering of the Notes or (ii) if the allocation provided by clause (i) above is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of the Company and the Principal Subsidiaries on the one hand and the Underwriters on the other with respect to the statements or omissions which resulted in such loss, claim, damage or liability, or action in respect thereof, as well as any other relevant equitable considerations. The relative benefits received by the Company and the Principal Subsidiaries on the one hand and the Underwriters on the other with respect to such offering shall be deemed to be in the same proportion as the total net proceeds from the offering of the Notes purchased under this Agreement (before deducting expenses) received by the Company and the Principal Subsidiaries, on the one hand, and the total underwriting discounts and commissions received by the Underwriters with respect to the Notes purchased under this Agreement, on the other hand, bear to the total gross proceeds from the offering of the Notes under this Agreement, in each case as set forth in the table on the cover page of the Prospectus. The relative fault shall be determined by reference to whether the untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact relates to information supplied by the Company and the Principal Subsidiaries or the Underwriters, the intent of the parties and their relative knowledge, access to information and opportunity to correct or prevent such statement or omission. For purposes of the preceding two sentences, the net proceeds deemed to be received by the Company shall be deemed to be also for the benefit of the Principal Subsidiaries and information supplied by the Company shall also be deemed to have been supplied by the Principal Subsidiaries. The Company and the Principal Subsidiaries and the Underwriters agree that it would not be just and equitable if contributions pursuant to this Section were to be determined by pro rata allocation (even if the Underwriters were treated as one entity for such purpose) or by any other method of allocation which does not take into account the equitable considerations referred to herein. The amount paid or payable by an indemnified party as a 17 18 result of the loss, claim, damage or liability, or action in respect thereof, referred to above in this Section shall be deemed to include, for purposes of this Section 8(e), any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this Section 8(e), no Underwriter shall be required to contribute any amount in excess of the amount by which the total price at which the Notes underwritten by it and distributed to the public was offered to the public exceeds the amount of any damages which such Underwriter has otherwise paid or become liable to pay by reason of any untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. The Underwriters' obligations to contribute as provided in this Section 8(d) are several in proportion to their respective underwriting obligations and not joint. (e) The Underwriters severally confirm and the Company acknowledges that the statements with respect to the public offering of the Notes by the Underwriters set forth on the cover page of, and the concession and reallowance figures appearing under the caption "Underwriting" in, the Prospectus are correct and constitute the only information concerning such Underwriters furnished in writing to the Company by or on behalf of the Underwriters specifically for inclusion in the Registration Statement and the Prospectus. Section 9. Termination. The obligations of the Underwriters hereunder may be terminated by the Underwriters by notice given to and received by the Company prior to delivery of and payment for the Notes if, prior to that time, any of the events described in Sections 7(i), 7(j) or 7(k), shall have occurred or if the Underwriters shall decline to purchase the Notes for any reason permitted under this Agreement. Section 10. Reimbursement of Underwriters' Expense. If the Company shall fail to tender the Notes for delivery to the Underwriters by reason of any failure, refusal or inability on the part of the Company to perform any agreement on its part to be performed, or because any other condition of the Underwriters' obligations hereunder required to be fulfilled by the Company is not fulfilled, the Company will reimburse the Underwriters for all reasonable out-of-pocket expenses (including fees and disbursements of counsel) incurred by the Underwriters in connection with this Agreement and the proposed purchase of the Notes, and upon demand the Company shall pay the full amount thereof to the Underwriters. Section 11. Notices, Etc. All statements, requests, notices and agreements hereunder shall be in writing, and: (a) if to the Underwriters, shall be delivered or sent by mail, telex or facsimile transmission to Lehman Brothers Inc., Three World Financial Center, New York, New York 10285, Attention: Syndicate Department (Fax: 212-526-6588), with a copy, in the case of any notice pursuant to Section 8(c), to the Director of Litigation, Office of the General Counsel, Lehman Brothers Inc., 3 World Financial Center, 10th Floor, New York, NY 10285; (b) if to the Company, shall be delivered or sent by mail, telex or facsimile transmission to the address of the Company set forth in the Registration Statement, Attention: [ ] (Fax: ); provided, however, that any notice to an Underwriter pursuant to Section 8(c) shall be delivered or sent by mail, telex or facsimile transmission to such Underwriter at its address set forth in its acceptance telex to the Underwriters, which address will be supplied to any other party hereto by the Underwriters upon request. Any such statements, requests, notices or agreements shall take effect at the time of receipt 18 19 thereof. The Company shall be entitled to act and rely upon any request, consent, notice or agreement given or made on behalf of the Underwriters by Lehman Brothers Inc. Section 12. Persons Entitled to Benefit of Agreement. This Agreement shall inure to the benefit of and be binding upon the Underwriters and the Company, and their respective personal representatives and successors. This Agreement and the terms and provisions hereof are for the sole benefit of only those persons, except that (A) the representations, warranties, indemnities and agreements of the Company contained in this Agreement shall also be deemed to be for the benefit of the person or persons, if any, who control any Underwriter within the meaning of Section 15 of the Securities Act and (B) the indemnity agreement of the Underwriters contained in Section 8(b) of this Agreement shall be deemed to be for the benefit of directors of the Company, officers of the Company who have signed the Registration Statement and any person controlling the Company within the meaning of Section 15 of the Securities Act. Nothing in this Agreement is intended or shall be construed to give any person, other than the persons referred to in this Section 13, any legal or equitable right, remedy or claim under or in respect of this Agreement or any provision contained herein. Section 13. Survival. The respective indemnities, representations, warranties and agreements of the Company, the Principal Subsidiaries and the Underwriters contained in this Agreement or made by or on behalf on them, respectively, pursuant to this Agreement, shall survive the delivery of and payment for the Notes and shall remain in full force and effect, regardless of any investigation made by or on behalf of any of them or any person controlling any of them. Section 14. Definition of the Terms "Business Day" and "subsidiary". For purposes of this Agreement, (a) "business day" means each Monday, Tuesday, Wednesday, Thursday or Friday which is not a day on which banking institutions in New York are generally authorized or obligated by law or executive order to close and (b) "subsidiary" has the meaning set forth in Rule 405 of the Rules and Regulations. Section 15. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of New York. Section 16. Counterparts. This Agreement may be executed in one or more counterparts and, if executed in more than one counterpart, the executed counterparts shall each be deemed to be an original but all such counterparts shall together constitute one and the same instrument. Section 17. Headings. The headings herein are inserted for convenience of reference only and are not intended to be part of, or to affect the meaning or interpretation of, this Agreement. 19 20 If the foregoing correctly sets forth the agreement between the Company and the Underwriters, please indicate your acceptance in the space provided for that purpose below. Very truly yours, SPANISH BROADCASTING SYSTEM, INC. By -------------------------------- Name: Title: SPANISH BROADCASTING SYSTEM, INC. (a New Jersey corporation) By -------------------------------- Name: Title: SPANISH BROADCASTING SYSTEM OF GREATER MIAMI, INC. By -------------------------------- Name: Title: SPANISH BROADCASTING SYSTEM OF ILLINOIS, INC. By -------------------------------- Name: Title: SPANISH BROADCASTING SYSTEM OF SAN ANTONIO, INC. By -------------------------------- Name: Title: Accepted: LEHMAN BROTHERS INC. CIBC WORLD MARKETS CORP. By LEHMAN BROTHERS INC. By ------------------------------- Authorized Representative 20 21 SCHEDULE 1 Principal Amount of U.S. Underwriters Notes to be Purchased - ----------------- --------------------- Lehman Brothers Inc....................... CIBC World Markets Corp................... Total..................................... $ 235,000,000 EX-4.6 3 SUPPLEMENTAL INDENTURE 1 EXHIBIT 4.6 SUPPLEMENTAL INDENTURE SUPPLEMENTAL INDENTURE (the "Supplemental Indenture"), dated as of October 21, 1999, by and between SPANISH BROADCASTING SYSTEM, INC., a Delaware corporation (the "Company"), the Guarantors and THE BANK OF NEW YORK, a banking organization organized under the laws of New York, as trustee (the "Trustee"). WITNESSETH: WHEREAS, in accordance with Section 8.02 of the Indenture, relating to the 12 1/2% Senior Notes due 2002, (the "Notes") of the Company, dated as of June 29, 1994, as amended by the First Supplemental Indenture dated as of March 25, 1996 and the Second Supplemental Indenture dated as of March 21, 1997, by and between the Company, the Guarantors and the Trustee (the "Indenture"), the Trustee, the Guarantors, the Company and the Holders of more than a majority in principal amount of the Notes outstanding as of the date hereof desire to amend certain terms of the Indenture as described below (the "Proposed Amendments"); and WHEREAS, the Company intends to consummate a series of reorganization transactions (collectively, the "Reorganization") designed to simplify its corporate and capital structure, which include among other transactions: (i) the redesignation of the Company's previously outstanding shares of Class A Common Stock into shares of Class B Common Stock and the fifty-to-one stock split of the Company's Class B Common Stock; (ii) an initial public offering of the Company's Class A Common Stock, par value $.0001 per share (the "IPO"), as described in the registration statement on Form S-1 originally filed on August 18, 1999 (Registration No. 333-85499), as amended, with the Securities and Exchange Commission (the "Commission"); (iii) a public offering by the Company of $235.0 million aggregate principal amount of its senior subordinated notes due 2009 (the "Debt Offering"), as described in the registration statement on Form S-1 originally filed on August 18, 1999 (Registration No. 333-85519), as amended, with the Commission; (iv) the use by the Company of the net proceeds of the IPO to redeem its 14 1/4% Senior Exchangeable Preferred Stock; and (v) a concurrent tender offer for the Company's 11% Senior Notes due 2004, Series B (the "11% Notes"). WHEREAS, the Company has solicited (the "Solicitation") consents from the Holders to the amendments contained in this Supplemental Indenture and the Company has received consents from Holders of more than a majority in principal amount of the Notes outstanding as of the date hereof; and WHEREAS, the Board of Directors of the Company has authorized this Supplemental Indenture; and 2 WHEREAS, concurrent with the Solicitation, the Company has offered to purchase for cash any and all of the outstanding Notes from the Holders thereof upon the terms and conditions set forth in the Offer to Purchase and Consent Solicitation Statement dated September 30, 1999, as amended from time to time (the "Offer"); and WHEREAS, it is intended that this Supplemental Indenture become effective upon acceptance for purchase by the Company pursuant to the Offer of the Notes tendered into the Offer; and WHEREAS, all things necessary to make this Supplemental Indenture a valid supplement to the Indenture according to its terms and the terms of the Indenture have been done: NOW, THEREFORE, the parties hereto agree as follows: SECTION 1. Certain Terms Defined in the Indenture. All capitalized terms used and not otherwise defined herein shall have the meanings ascribed to them in the Indenture. SECTION 2. Deletion of Certain Definitions. The following definitions in Section 1.01 of the Indenture are hereby deleted in their entirety: Acquisition Indebtedness Asset Sale Asset Sale Proceeds Attributable Indebtedness Available Asset Sale Proceeds Change of Control Offer Change of Control Payment Date Change of Control Purchase Price Consolidated Interest Expense Consolidated Net Income Corporate Trust Office EBITDA Excess Proceeds Offer Investments Lien Net Income Offer Period Offering Memorandum Permitted Investments Permitted Liens Property Purchase Date 2 3 Reinvestment Date Responsible Officer Restricted Payment Sale and Leaseback Transaction Temporary Cash Investments Units SECTION 3. Waiver of Application of Covenants. Subject to Section 8(b) hereof, the application of the covenants contained in the Indenture is hereby waived to the extent required to effect the Reorganization that is consummated substantially concurrently with the consummation of the Offer (the "Waiver"). SECTION 4. Deletion of Certain Covenants. The text of Sections 4.02 (SEC Reports), 4.03 (Waiver of Stay, Extension or Usury Laws), 4.04 (Compliance Certificate), 4.05 (Taxes), 4.06 (Limitation on Additional Indebtedness), 4.07 (Limitation on Preferred Stock of Restricted Subsidiaries), 4.08 (Limitation on Capital Stock of Subsidiaries), 4.09 (Limitation on Restricted Payments), 4.10 (Limitations on Certain Asset Sales), 4.11 (Limitations on Transactions with Affiliates), 4.12 (Limitation on Liens), 4.13 (Limitations on Investments), 4.14 (Limitation on Creation of Subsidiaries), 4.15 (Limitation on Sale and Lease-Back Transactions), 4.16 (Payments for Consent), 4.17 (Corporate Existence), 4.18 (Change of Control) and 4.19 (Maintenance of Office or Agency) of the Indenture is hereby deleted in its entirety and is hereby replaced in each such Section, with "[Intentionally Deleted by Amendment]." SECTION 5. Deletion of Certain Restrictions with Respect to Consolidations and Mergers. The text of Section 5.01(a)(iii) (Limitations on Consolidation, Merger, and Sale of Assets) of the Indenture is hereby deleted in its entirety. SECTION 6. Deletion of Certain Events of Default. The text of paragraph (3) of Section 6.01 of the Indenture is hereby deleted in its entirety and is hereby replaced with "[Intentionally Deleted by Amendment]." Any reference to the text "or any Restricted Subsidiary" in paragraphs 6.01(4), (5), (6) and (8) is hereby deleted in its entirety. SECTION 7. Deletion of Certain Cross-References. Any reference to Section 4.02, 4.03, 4.04, 4.05, 4.06, 4.07, 4.08, 4.09, 4.10, 4.11, 4.12, 4.13, 4.14, 4.15, 4.16, 4.17, 4.18, 4.19, 5.01(a)(iii) and 6.01(3) in the Indenture is hereby deleted. SECTION 8. Effect of Supplemental Indenture. (a) Upon the execution and delivery of this Supplemental Indenture by the Company, the Guarantors and the Trustee, the Indenture shall be amended and supplemented in accordance herewith, and this Supplemental Indenture shall form a part of the Indenture for all purposes, and every Holder of Securities heretofore or hereafter authenticated and delivered under the Indenture shall be bound thereby, as hereby amended and supplemented; provided, however, the Proposed Amendments, except as described in (b) with respect to the Waiver, shall not become operative until the Company has notified the Trustee that it has accepted for payment at least a majority of the outstanding principal amount of the Securities pursuant to the offer to purchase for cash any and all of the 3 4 Notes, (and at such time the Proposed Amendments shall automatically become operative without the requirement of any further action by or notice to the Company, the Guarantor Subsidiaries, the Trustee or any Holder of Securities). (b) The Waiver shall become operative immediately upon execution and delivery of this Supplemental Indenture by the Company, the Guarantors and the Trustee. However, if the Offer is terminated or withdrawn or the tendered Notes are not accepted for payment pursuant to the Offer, the Waiver will cease to be operative. SECTION 9. Governing Law. This Supplemental Indenture shall be governed by the laws of the State of New York. SECTION 10. Counterparts. This Supplemental Indenture may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. [Signature pages to follow] 4 5 IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture to be duly executed as of the date first above written. SPANISH BROADCASTING SYSTEM, INC. a Delaware corporation By: /s/ Joseph A. Garcia _______________________________________ Name: Joseph A. Garcia Title: Chief Financial Officer SPANISH BROADCASTING SYSTEM, INC. a New Jersey corporation By: /s/ Joseph A. Garcia _______________________________________ Name: Joseph A. Garcia Title: Chief Financial Officer SPANISH BROADCASTING SYSTEM OF CALIFORNIA, INC. By: /s/ Joseph A. Garcia _______________________________________ Name: Joseph A. Garcia Title: Chief Financial Officer SPANISH BROADCASTING SYSTEM OF FLORIDA, INC. By: /s/ Joseph A. Garcia _______________________________________ Name: Joseph A. Garcia Title: Chief Financial Officer 6 SPANISH BROADCASTING SYSTEM NETWORK, INC. By: /s/ Joseph A. Garcia _______________________________________ Name: Joseph A. Garcia Title: Chief Financial Officer SBS PROMOTIONS, INC. By: /s/ Joseph A. Garcia _______________________________________ Name: Joseph A. Garcia Title: Chief Financial Officer ALARCON HOLDINGS, INC. By: /s/ Joseph A. Garcia _______________________________________ Name: Joseph A. Garcia Title: Chief Financial Officer SBS OF GREATER NEW YORK, INC. By: /s/ Joseph A. Garcia _______________________________________ Name: Joseph A. Garcia Title: Chief Financial Officer SPANISH BROADCASTING SYSTEM OF ILLINOIS, INC. By: /s/ Joseph A. Garcia _______________________________________ Name: Joseph A. Garcia Title: Chief Financial Officer 7 SPANISH BROADCASTING SYSTEM OF GREATER MIAMI, INC. By: /s/ Joseph A. Garcia _______________________________________ Name: Joseph A. Garcia Title: Chief Financial Officer SPANISH BROADCASTING SYSTEM OF SAN ANTONIO, INC. By: /s/ Joseph A. Garcia _______________________________________ Name: Joseph A. Garcia Title: Chief Financial Officer SPANISH BROADCASTING SYSTEM OF PUERTO RICO, INC. a Delaware corporation By: /s/ Joseph A. Garcia _______________________________________ Name: Joseph A. Garcia Title: Chief Financial Officer SPANISH BROADCASTING SYSTEM OF PUERTO RICO, INC. a Puerto Rico corporation By: /s/ Joseph A. Garcia _______________________________________ Name: Joseph A. Garcia Title: Chief Financial Officer JUJU MEDIA, INC. By: /s/ Joseph A. Garcia _______________________________________ Name: Joseph A. Garcia Title: Chief Financial Officer 8 THE BANK OF NEW YORK, as Trustee By: /s/ Walter N. Gitlin _______________________________________ Name: Walter N. Gitlin Title: Vice President EX-4.8 4 SUPPLEMENTAL INDENTURE 1 EXHIBIT 4.8 SUPPLEMENTAL INDENTURE SUPPLEMENTAL INDENTURE (the "Supplemental Indenture"), dated as of October 15, 1999, by and between SPANISH BROADCASTING SYSTEM, INC., a Delaware corporation (the "Company"), the Guarantors and THE BANK OF NEW YORK, a banking organization organized under the laws of New York, as trustee (the "Trustee"). WITNESSETH: WHEREAS, in accordance with Section 9.02 of the Indenture, relating to the 11% Senior Notes due 2004, Series B (the "Notes") of the Company, dated as of March 15, 1997, by and between the Company, the Guarantor Subsidiaries and the Trustee (the "Indenture"), the Trustee, the Guarantor Subsidiaries, the Company and the Holders of more than a majority in principal amount of the Notes outstanding as of the date hereof desire to amend certain terms of the Indenture as described below (the "Proposed Amendments"); and WHEREAS, the Company intends to consummate a series of reorganization transactions (collectively, the "Reorganization") designed to simplify its corporate and capital structure, which include among other transactions: (i) the redesignation of the Company's previously outstanding shares of Class A Common Stock into shares of currently outstanding Class B Common Stock and the fifty-to-one stock split of the Company's Class B Common Stock; (ii) an initial public offering of the Company's Class A Common Stock, par value $.0001 per share (the "IPO"), as described in the registration statement on Form S-1 originally filed on August 18, 1999 (Registration No. 333-85499), as amended, with the Securities and Exchange Commission (the "Commission"); (iii) a public offering by the Company of $235.0 million aggregate principal amount of its senior subordinated notes due 2009 (the "Debt Offering"), as described in the registration statement on Form S-1 originally filed on August 18, 1999 (Registration No. 333-85519), as amended, with the Commission; (iv) the use by the Company of the net proceeds of the IPO to redeem its 14 1/4% Senior Exchangeable Preferred Stock; and (v) a concurrent tender offer for the Company's 12 1/2% Senior Notes due 2002 (the "12 1/2% Notes"). WHEREAS, the Company has solicited (the "Solicitation") consents from the Holders to the amendments contained in this Supplemental Indenture and the Company has received consents from Holders of more than a majority in principal amount of the Notes outstanding as of the date hereof; and WHEREAS, the Board of Directors of the Company has authorized this Supplemental Indenture; and WHEREAS, concurrent with the Solicitation, the Company has offered to purchase for cash any and all of the outstanding Notes from the Holders thereof upon the terms 2 and conditions set forth in the Offer to Purchase and Consent Solicitation Statement dated September 30, 1999, as amended from time to time (the "Offer"); and WHEREAS, it is intended that this Supplemental Indenture become effective upon acceptance for purchase by the Company pursuant to the Offer of the Notes tendered into the Offer; and WHEREAS, all things necessary to make this Supplemental Indenture a valid supplement to the Indenture according to its terms and the terms of the Indenture have been done: NOW, THEREFORE, the parties hereto agree as follows: SECTION 1. Certain Terms Defined in the Indenture. All capitalized terms used and not otherwise defined herein shall have the meanings ascribed to them in the Indenture. SECTION 2. Deletion of Certain Definitions. The following definitions in Section 1.01 of the Indenture are hereby deleted in their entirety: Acquisition Indebtedness Affiliate Transaction Attributable Debt Bank Indebtedness Capitalized Lease Obligations Certificate of Designation Consolidated Interest Expense Consolidated Net Income Credit Facility EBITDA Exchange Debentures fair market value FCC Independent Financial Advisor Infinity Note Investments Net income Old Warrants Permitted Investments Permitted Liens Property Ratio Indebtedness Redeemable Dividend Refinancing Indebtedness 2 3 Restricted Payment Sale and Leaseback Transaction Senior Preferred Stock Temporary Cash Investments Warrants Wholly Owned Subsidiary SECTION 3. Amendment of Certain Definitions. The following definition in Section 1.01 of the Indenture shall be amended as indicated: Guarantee. The text of the definition of Guarantee is hereby restated to read in its entirety as follows: "Guarantee" means an unconditional guarantee executed by an Unrestricted Subsidiary. SECTION 4. Waiver of Application of Covenants. Subject to Section 9(b) hereof, the application of the covenants contained in the Indenture is hereby waived to the extent required to effect the Reorganization that is consummated substantially concurrently with the consummation of the Offer (the "Waiver"). SECTION 5. Deletion of Certain Covenants. The text of Sections 4.03 (Limitation on Additional Indebtedness), 4.04 (Limitation on Restricted Payments), 4.05 (Corporate Existence), 4.06 (Payment of Taxes and Other Claims), 4.07 (Maintenance of Properties and Insurance), 4.08 (Compliance Certificate; Notice of Default), 4.09 (Compliance with Laws), 4.10 (SEC Reports), 4.11 (Waiver of Stay, Extension or Usury Laws), 4.13 (Limitation on Investments), 4.14 (Limitation on Preferred Stock of Restricted Subsidiaries), 4.15 (Limitation on Liens), 4.18 (Limitations on Transactions with Affiliates), 4.19 (Limitation on Creation of Subsidiaries), 4.20 (Limitation on Capital Stock of Restricted Subsidiaries), 4.21 (Lines of Business), 4.22 (Payment for Consent) and 4.23 (Limitation on Sale and Lease-Back Transactions) of the Indenture is hereby deleted in its entirety and is hereby replaced, in each such Section, with "[Intentionally Deleted by Amendment]." SECTION 6. Deletion of Certain Restrictions with Respect to Mergers and Consolidations. The text of Sections 5.01(a)(ii) and 5.01(c)(iv) (Limitations on Mergers and Consolidations) of the Indenture are hereby deleted in their entirety and replaced with "[Intentionally Deleted by Amendment]." SECTION 7. Deletion of Certain Events of Default. The text of paragraphs (3), (4) and (7) of Section 6.01 of the Indenture are hereby deleted in their entirety and are hereby replaced with "[Intentionally Deleted by Amendment]." Any reference to the text "or any Restricted Subsidiary" in paragraphs 6.01(5) and (6) is hereby deleted in its entirety. SECTION 8. Deletion of Certain Cross-References. Any reference to Section 4.03, 4.04, 4.05, 4.06, 4.07, 4.08, 4.09, 4.10, 4.11, 4.13, 4.14, 4.15, 4.18, 4.19, 4.20, 4.21, 4.22, 4.23, 5.01(a)(ii), 5.01(c)(iv), 6.01(3), 6.01(4) and 6.01(7) in the Indenture is hereby deleted. 3 4 SECTION 9. Effect of Supplemental Indenture. (a) Upon the execution and delivery of this Supplemental Indenture by the Company, the Guarantors and the Trustee, the Indenture shall be amended and supplemented in accordance herewith, and this Supplemental Indenture shall form a part of the Indenture for all purposes, and every Holder of Securities heretofore or hereafter authenticated and delivered under the Indenture shall be bound thereby, as hereby amended and supplement; provided, however, the Proposed Amendments, except as described in (b) with respect to the Waiver, shall not become operative until the Company has notified the Trustee that it has accepted for payment at least a majority of the outstanding principal amount of the Securities pursuant to the offer to purchase for cash any and all of the Notes, (and at such time the Proposed Amendments shall automatically become operative without the requirement of any further action by or notice to the Company, the Guarantor Subsidiaries, the Trustee or any Holder of Securities). (b) The Waiver shall become operative immediately upon execution and delivery of this Supplemental Indenture by the Company, the Guarantors and the Trustee. However, if the Offer is terminated or withdrawn or the tendered Notes are not accepted for payment pursuant to the Offer, the Waiver will cease to be operative. SECTION 10. Governing Law. This Supplemental Indenture shall be governed by the laws of the State of New York. SECTION 11. Counterparts. This Supplemental Indenture may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. [Signature pages to follow] 4 5 IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture to be duly executed as of the date first above written. SPANISH BROADCASTING SYSTEM, INC. a Delaware corporation By: /S/ Joseph A. Garcia _________________________________ Name: Joseph A. Garcia Title: Chief Financial Officer SPANISH BROADCASTING SYSTEM, INC. a New Jersey corporation By: /s/ Joseph A. Garcia _________________________________ Name: Joseph A. Garcia Title: Chief Financial Officer SPANISH BROADCASTING SYSTEM OF CALIFORNIA, INC. By: /s/ Joseph A. Garcia _________________________________ Name: Joseph A. Garcia Title: Chief Financial Officer SPANISH BROADCASTING SYSTEM OF FLORIDA, INC. By: /s/ Joseph A. Garcia _________________________________ Name: Joseph A. Garcia Title: Chief Financial Officer 6 SPANISH BROADCASTING SYSTEM NETWORK, INC. By: /s/ Joseph A. Garcia _________________________________ Name: Joseph A. Garcia Title: Chief Financial Officer SBS PROMOTIONS, INC. By: /s/ Joseph A. Garcia _________________________________ Name: Joseph A. Garcia Title: Chief Financial Officer ALARCON HOLDINGS, INC. By: /s/ Joseph A. Garcia _________________________________ Name: Joseph A. Garcia Title: Chief Financial Officer SBS OF GREATER NEW YORK, INC. By: /s/ Joseph A. Garcia _________________________________ Name: Joseph A. Garcia Title: Chief Financial Officer SPANISH BROADCASTING SYSTEM OF ILLINOIS, INC. By: /s/ Joseph A. Garcia _________________________________ Name: Joseph A. Garcia Title: Chief Financial Officer 7 SPANISH BROADCASTING SYSTEM OF GREATER MIAMI, INC. By: /s/ Joseph A. Garcia _________________________________ Name: Joseph A. Garcia Title: Chief Financial Officer SPANISH BROADCASTING SYSTEM OF SAN ANTONIO, INC. By: /s/ Joseph A. Garcia _________________________________ Name: Joseph A. Garcia Title: Chief Financial Officer SPANISH BROADCASTING SYSTEM OF PUERTO RICO, INC. a Delaware corporation By: /s/ Joseph A. Garcia _________________________________ Name: Joseph A. Garcia Title: Chief Financial Officer SPANISH BROADCASTING SYSTEM OF PUERTO RICO, INC. a Puerto Rico corporation By: /s/ Joseph A. Garcia _________________________________ Name: Joseph A. Garcia Title: Chief Financial Officer JUJU MEDIA, INC. By: /s/ Joseph A. Garcia _________________________________ Name: Joseph A. Garcia Title: Chief Financial Officer 8 THE BANK OF NEW YORK, as Trustee By: /s/ Walter N. Gitlin _________________________________ Name: Walter N. Gitlin Title: Vice President EX-4.10 5 FORM OF INDENTURE 1 EXHIBIT 4.10 FORM OF SPANISH BROADCASTING SYSTEM, INC. _____% SENIOR SUBORDINATED NOTES DUE 2009 ------------------------------- INDENTURE Dated as of October ___, 1999 ------------------------------- ------------------------------- THE BANK OF NEW YORK ------------------------------- Trustee 2 CROSS-REFERENCE TABLE* Trust Indenture Act Section Indenture Section 310(a)(1)............................................ 7.10 (a)(2)............................................... 7.10 (a)(3)............................................... N.A. (a)(4)............................................... N.A. (a)(5)............................................... 7.10 (i)(b)............................................... 7.10 (ii)(c).............................................. N.A. 311(a)............................................... 7.11 (b).................................................. 7.11 (iii)(c)............................................. N.A. 312(a)............................................... 2.05 (b).................................................. 12.03 (iv)(c).............................................. 12.03 313(a)............................................... 7.06 (b)(2)............................................... 7.07 (v)(c)............................................... 7.06; 12.02 (vi)(d).............................................. 7.06 314(a)............................................... 4.03;12.02 (c)(1)............................................... 12.04 (c)(2)............................................... 12.04 (c)(3)............................................... N.A. (vii)(e)............................................. 11.05 (f).................................................. NA 315(a)............................................... 7.01 (b).................................................. 7.05,12.02 (A)(c)............................................... 7.01 (d).................................................. 7.01 (e).................................................. 6.11 316(a)(last sentence)................................ 2.09 (a)(1)(A)............................................ 6.05 (a)(1)(B)............................................ 6.04 (a)(2)............................................... N.A. (b).................................................. 6.07 (B)(c)............................................... 2.12 317(a)(1)............................................ 6.08 (a)(2)............................................... 6.09 (b).................................................. 2.04 N.A. means not applicable. *This Cross-Reference Table is not part of the Indenture. 3 TABLE OF CONTENTS
PAGE ---- ARTICLE I DEFINITIONS AND INCORPORATION BY REFERENCE................................................. 1 Section 1.01. Definitions........................................................................... 1 Section 1.02. Other Definitions.................................................................... 15 Section 1.03. Incorporation By Reference Of Trust Indenture Act.................................... 16 Section 1.04. Rules Of Construction................................................................ 16 ARTICLE II THE NOTES................................................................................. 17 Section 2.01. Form And Dating...................................................................... 17 Section 2.02. Execution And Authentication......................................................... 17 Section 2.03. Registrar And Paying Agent........................................................... 18 Section 2.04. Paying Agent To Hold Money In Trust.................................................. 18 Section 2.05. Holder Lists......................................................................... 19 Section 2.06. Transfer And Exchange................................................................ 19 Section 2.07. Replacement Notes.................................................................... 22 Section 2.08. Outstanding Notes.................................................................... 23 Section 2.09. Treasury Notes....................................................................... 23 Section 2.10. Temporary Notes...................................................................... 23 Section 2.11. Cancellation......................................................................... 24 Section 2.12. Defaulted Interest................................................................... 24 Section 2.13. CUSIP Numbers........................................................................ 24 ARTICLE III REDEMPTION AND PREPAYMENT................................................................. 24 Section 3.01. Notices To Trustee................................................................... 24 Section 3.02. Selection Of Notes To Be Redeemed.................................................... 25 Section 3.03. Notice Of Redemption................................................................. 25 Section 3.04. Effect Of Notice Of Redemption....................................................... 26 Section 3.05. Deposit Of Redemption Price.......................................................... 26 Section 3.06. Notes Redeemed In Part............................................................... 26 Section 3.07. Optional Redemption.................................................................. 27 Section 3.08. Mandatory Redemption................................................................. 27 Section 3.09. Offer To Purchase By Application Of Excess Proceeds.................................. 27 ARTICLE IV COVENANTS................................................................................. 29 Section 4.01. Payment Of Notes..................................................................... 29
i 4
PAGE ---- Section 4.02. Maintenance Of Office Or Agency...................................................... 29 Section 4.03. Reports.............................................................................. 30 Section 4.04. Compliance Certificate............................................................... 31 Section 4.05. Taxes................................................................................ 31 Section 4.06. Stay, Extension And Usury Laws....................................................... 31 Section 4.07. Restricted Payments.................................................................. 32 Section 4.08. Dividend And Other Payment Restrictions Affecting Subsidiaries....................... 34 Section 4.09. Incurrence Of Indebtedness And Issuance Of Preferred Stock........................... 35 Section 4.10. Asset Sales.......................................................................... 37 Section 4.11. Transactions With Affiliates......................................................... 38 Section 4.12. Liens................................................................................ 39 Section 4.13. Asset Swaps.......................................................................... 39 Section 4.14. Corporate Existence.................................................................. 40 Section 4.15. Offer To Repurchase Upon Change Of Control........................................... 40 Section 4.16. No Senior Subordinated Debt.......................................................... 41 Section 4.17. Issuances And Sales Of Equity Interests In Restricted Subsidiaries................... 41 Section 4.18. Limitation On Sale And Leaseback Transactions........................................ 41 Section 4.19. Payments For Consent................................................................. 42 Section 4.20. Additional Subsidiary Guarantees..................................................... 42 ARTICLE V SUCCESSORS................................................................................ 42 Section 5.01. Merger, Consolidation, Or Sale Of Assets............................................. 42 Section 5.02. Successor Corporation Substituted.................................................... 43 ARTICLE VI DEFAULTS AND REMEDIES..................................................................... 43 Section 6.01. Events Of Default.................................................................... 43 Section 6.02. Acceleration......................................................................... 45 Section 6.03. Other Remedies....................................................................... 45 Section 6.04. Waiver Of Past Defaults.............................................................. 46 Section 6.05. Control By Majority.................................................................. 46 Section 6.06. Limitation On Suits.................................................................. 46 Section 6.07. Rights Of Holders Of Notes To Receive Payment........................................ 47 Section 6.08. Collection Suit By Trustee........................................................... 47
ii 5
PAGE ---- Section 6.09. Trustee May File Proofs Of Claim..................................................... 47 Section 6.10. Priorities........................................................................... 48 Section 6.11. Undertaking For Costs................................................................ 48 Section 6.12. No Personal Liability Of Directors, Officers, Employees And Stockholders............. 48 ARTICLE VII TRUSTEE................................................................................... 48 Section 7.01. Duties Of Trustee.................................................................... 49 Section 7.02. Rights Of Trustee.................................................................... 50 Section 7.03. Individual Rights Of Trustee......................................................... 51 Section 7.04. Trustee's Disclaimer................................................................. 51 Section 7.05. Notice Of Defaults................................................................... 51 Section 7.06. Reports By Trustee To Holders Of The Notes........................................... 51 Section 7.07. Compensation And Indemnity........................................................... 52 Section 7.08. Replacement Of Trustee............................................................... 52 Section 7.09. Successor Trustee By Merger, Etc..................................................... 53 Section 7.10. Eligibility; Disqualification........................................................ 53 Section 7.11. Preferential Collection Of Claims Against Company.................................... 54 ARTICLE VIII LEGAL DEFEASANCE AND COVENANT DEFEASANCE.................................................. 54 Section 8.01. Option To Effect Legal Defeasance Or Covenant Defeasance............................. 54 Section 8.02. Legal Defeasance And Discharge....................................................... 54 Section 8.03. Covenant Defeasance.................................................................. 55 Section 8.04. Conditions To Legal Or Covenant Defeasance........................................... 55 Section 8.05. Deposited Money And Government Securities To Be Held In Trust; Other Miscellaneous Provisions........................................................................... 56 Section 8.06. Repayment To Company................................................................. 57 Section 8.07. Reinstatement........................................................................ 57 ARTICLE IX AMENDMENT, SUPPLEMENT AND WAIVER.......................................................... 58 Section 9.01. Without Consent Of Holders Of Notes.................................................. 58 Section 9.02. With Consent Of Holders Of Notes..................................................... 58 Section 9.03. Compliance With Trust Indenture Act.................................................. 60 Section 9.04. Revocation And Effect Of Consents.................................................... 60 Section 9.05. Notation On Or Exchange Of Notes..................................................... 60
iii 6
PAGE ---- Section 9.06. Trustee To Sign Amendments, Etc...................................................... 60 ARTICLE X SUBORDINATION..................................................................................... 61 Section 10.01. Agreement To Subordinate............................................................. 61 Section 10.02. Certain Definitions.................................................................. 61 Section 10.03. Liquidation; Dissolution; Bankruptcy................................................. 62 Section 10.04. Default On Designated Senior Debt.................................................... 62 Section 10.05. Acceleration Of Securities........................................................... 63 Section 10.06. When Distribution Must Be Paid Over.................................................. 63 Section 10.07. Notice By Company.................................................................... 64 Section 10.08. Subrogation.......................................................................... 64 Section 10.09. Relative Rights...................................................................... 64 Section 10.10. Subordination May Not Be Impaired By Company......................................... 64 Section 10.11. Distribution Or Notice To Representative............................................. 65 Section 10.12. Rights Of Trustee And Paying Agent................................................... 65 Section 10.13. Authorization To Effect Subordination................................................ 65 Section 10.14. Amendments........................................................................... 66 ARTICLE XI SUBSIDIARY GUARANTEES..................................................................... 66 Section 11.01. Guarantee............................................................................ 66 Section 11.02. Subordination Of Subsidiary Guarantee................................................ 67 Section 11.03. Limitation On Guarantor Liability.................................................... 67 Section 11.04. Execution And Delivery Of Note Guarantee............................................. 67 Section 11.05. Guarantors May Consolidate, Etc., On Certain Terms................................... 68 Section 11.06. Releases Following Sale Of Assets.................................................... 69 ARTICLE XII MISCELLANEOUS............................................................................. 69 Section 12.01. Trust Indenture Act Controls......................................................... 69 Section 12.02. Notices.............................................................................. 69 Section 12.03. Communication By Holders Of Notes With Other Holders Of Notes........................ 70 Section 12.04. Certificate And Opinion As To Conditions Precedent................................... 71 Section 12.05. Statements Required In Certificate Or Opinion........................................ 71 Section 12.06. Rules By Trustee And Agents.......................................................... 71
iv 7
PAGE ---- Section 12.07. No Personal Liability Of Directors, Officers, Employees And Stockholders............. 71 Section 12.08. Governing Law........................................................................ 72 Section 12.09. No Adverse Interpretation Of Other Agreements........................................ 72 Section 12.10. Successors........................................................................... 72 Section 12.11. Severability......................................................................... 72 Section 12.12. Counterpart Originals................................................................ 72 Section 12.13. Table Of Contents, Headings, Etc..................................................... 72
EXHIBITS Exhibit A FORM OF NOTE Exhibit B FORM OF CERTIFICATE OF TRANSFER Exhibit C FORM OF CERTIFICATE OF EXCHANGE Exhibit D FORM OF CERTIFICATE FROM ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR Exhibit E FORM OF SUBSIDIARY GUARANTEE Exhibit F FORM OF SUPPLEMENTAL INDENTURE SCHEDULES Schedule I Schedule of Guarantors v 8 INDENTURE dated as of October ___, 1999 among Spanish Broadcasting System, Inc., a Delaware corporation (the "Company"), each of the entities listed on Schedule I hereto (collectively, the "Guarantors") and The Bank of New York, a New York banking corporation, as trustee (the "Trustee"). The Company, the Guarantors and the Trustee agree as follows for the benefit of each other and for the equal and ratable benefit of the Holders (as defined below) of the ___% Senior Subordinated Notes due 2009: ARTICLE I DEFINITIONS AND INCORPORATION BY REFERENCE SECTION 1.01 DEFINITIONS. "Acquired Debt" means, with respect to any specified Person, (i) Indebtedness of any other Person existing at the time such other Person is merged with or into or became a Subsidiary of such specified Person, including, without limitation, Indebtedness incurred in connection with, or in contemplation of, such other Person merging with or into or becoming a Subsidiary of such specified Person and (ii) Indebtedness secured by a Lien encumbering any asset acquired by such specified Person. "Acquisition Indebtedness" means Indebtedness incurred by the Company or by a Restricted Subsidiary the proceeds of which are used for the acquisition of a Permitted Business and related facilities and assets or for the construction of a facility pursuant to a construction permit issued by the FCC. "Affiliate" of any specified Person means any other Person which directly or indirectly through one or more intermediaries controls, or is controlled by, or is under common control with, such specified Person. For the purposes of this definition, "control" (including, with correlative meanings, the terms "controlling," "controlled by," and "under common control with"), as used with respect to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such Person, whether through the ownership of voting securities, by agreement or otherwise; provided that (a) beneficial ownership of at least 10% of the Voting Stock of a Person shall be deemed to be control and (b) for purposes of the "Transactions with Affiliates" covenant contained in Section 4.11, for so long as Raul Alarcon Sr., Raul Alarcon Jr. or Jose Grimalt are directors, officers or shareholders of the Company, they, their respective spouses, lineal descendants and any Person controlled by any of them shall be Affiliates of the Company and its Subsidiaries. "Agent" means any Registrar, Paying Agent or co-registrar. "Applicable Procedures" means, with respect to any transfer or exchange of or for beneficial interests in the Global Note, the rules and procedures of the Depositary, that apply to such transfer or exchange. "Asset Sale" means (i) the sale, lease, conveyance or other disposition of any assets or rights (including, without limitation, by way of a sale and leaseback), excluding sales of services and goods in the ordinary course of business consistent with past practices (provided 1 9 that the sale, lease, conveyance or other disposition of all or substantially all of the assets of the Company and its Restricted Subsidiaries taken as a whole will be governed by the provisions of Section 4.15 hereof and/or the provisions of Section 5.01 hereof and not by the provisions of Section 4.10 hereof) and (ii) the issue or sale by the Company or any of its Subsidiaries of Equity Interests of any of the Company's Subsidiaries, in the case of either clause (i) or (ii), whether in a single transaction or a series of related transactions (a) that have a fair market value in excess of $5.0 million or (b) for net proceeds in excess of $5.0 million. Notwithstanding the foregoing, the following items will not be deemed to be Asset Sales: (i) a transfer of assets by the Company to a Guarantor or by a Guarantor to the Company or to another Guarantor, (ii) an issuance of Equity Interests by a Guarantor to the Company or to another Guarantor, (iii) the sale, lease or other disposition of equipment or other assets in the ordinary course of business, (iv) the sale and leaseback of any assets within 90 days of the acquisition of such assets, (v) a Restricted Payment that is permitted by Section 4.07 hereof, (vi) a transfer of any FCC License to a Non-Guarantor Subsidiary, described in clause (i) of the definition thereof, and (vii) an Asset Swap. "Asset Swap" means the execution of a definitive agreement, subject only to regulatory approval and other customary closing conditions, that the Company in good faith believes will be satisfied, for a substantially concurrent purchase and sale, or exchange, of assets used or useful in a Permitted Business between the Company or any of its Restricted Subsidiaries and another person or group of affiliated persons; provided that any amendment to or waiver of any closing conditions which individually or in the aggregate is material to the Asset Swap shall be deemed to be a new Asset Swap. "Attributable Debt" in respect of a sale and leaseback transaction means, at the time of determination, the present value (discounted at the rate of interest implicit in such transaction, determined in accordance with GAAP) of the obligation of the lessee for net rental payments during the remaining term of the lease included in such sale and leaseback transaction (including any period for which such lease has been extended or may, at the option of the lessor, be extended). "Bank Indebtedness" means (i) Indebtedness of the Company incurred in accordance with this Indenture owing to one or more commercial banking institutions that are members of the Federal Reserve System and (ii) any guarantee by a Guarantor of any Indebtedness of the Company of the type set forth in clause (i) of this definition. "Bankruptcy Law" means Title 11, U.S. Code or any similar federal or state law for the relief of debtors. "Beneficial Owner" has the meaning assigned to such term in Rule 13d-3 and Rule 13d-5 under the Exchange Act, except that in calculating the beneficial ownership of any particular "person," as such term is used in Section 13(d)(3) of the Exchange Act, such "person" shall be deemed to have beneficial ownership of all securities that such "person" has the right to acquire, whether such right is currently exercisable or is exercisable only upon the occurrence of a subsequent condition. "Board of Directors" means the Board of Directors of the Company, or any authorized committee of the Board of Directors. 2 10 "Business Day" means any day other than a Legal Holiday. "Capital Lease Obligation" means, at the time any determination thereof is to be made, the amount of the liability in respect of a capital lease that would at such time be required to be capitalized on a balance sheet in accordance with GAAP. "Capital Stock" means (i) in the case of a corporation, corporate stock, (ii) in the case of an association or business entity, any and all shares, interests, participations, rights or other equivalents (however designated) of corporate stock, (iii) in the case of a partnership or limited liability company, partnership or membership interests (whether general or limited) and (iv) any other interest or participation that confers on a Person the right to receive a share of the profits and losses of, or distributions of assets of, the issuing Person. "Cash Equivalents" means (i) United States dollars, (ii) securities issued or directly and fully guaranteed or insured by the United States government or any agency or instrumentality thereof having maturities of not more than one year from the date of acquisition, (iii) certificates of deposit and eurodollar time deposits with maturities of one year or less from the date of acquisition, bankers' acceptances with maturities not exceeding six months and overnight bank deposits, in each case with any domestic commercial bank having capital and surplus in excess of $500.0 million and a Thompson Bank Watch Rating of "B" or better, (iv) repurchase obligations with a term of not more than seven days for underlying securities of the types described in clauses (ii) and (iii) above entered into with any financial institution meeting the qualifications specified in clause (iii) above and (v) commercial paper having the highest rating obtainable from Moody's Investors Service, Inc. or Standard & Poor's Corporation and in each case maturing within 270 days after the date of acquisition and (vi) money market funds at least 95% of the assets of which constitute Cash Equivalents of the kinds described in clauses (i) - (v) of this definition. "Change of Control" means the occurrence of any of the following: (i) the sale, lease, transfer, conveyance or other disposition (or by way of merger or consolidation), in one or a series of related transactions, of all or substantially all of the assets of the Company and its Subsidiaries taken as a whole to any "person" (as such term is used in Section 13(d)(3) of the Exchange Act) other than the Principal or a Related Party of the Principal, (ii) the adoption of a plan relating to the liquidation or dissolution of the Company, (iii) the consummation of any transaction (including, without limitation, any merger or consolidation) the result of which is that any "person" (as defined above), other than the Principal and his Related Parties, becomes the "Beneficial Owner," directly or indirectly, of more than 35% of the Voting Stock of the Company or (iv) the first day on which a majority of the members of the Board of Directors of the Company are not Continuing Directors. "Company" means Spanish Broadcasting System, Inc., a Delaware corporation, and any and all successors thereto. "Consolidated Cash Flow" means, with respect to any Person for any period, the Consolidated Net Income of such Person for such period plus, without duplication, (i) an amount equal to any extraordinary loss plus any net loss realized in connection with an Asset Sale, to the extent such losses were deducted in computing such Consolidated 3 11 Net Income, plus (ii) provision for taxes based on income or profits of such Person and its Restricted Subsidiaries for such period, to the extent that such provision for taxes was deducted in computing such Consolidated Net Income, plus (iii) consolidated interest expense of such Person and its Restricted Subsidiaries for such period, whether paid or accrued and whether or not capitalized (including, without limitation, amortization of debt issuance costs and original issue discount, non-cash interest payments, the interest component of any deferred payment obligations, the interest component of all payments associated with Capital Lease Obligations, imputed interest with respect to Attributable Debt, commissions, discounts and other fees and charges incurred in respect of letter of credit or bankers' acceptance financings, and net payments (if any) pursuant to Hedging Obligations), to the extent that any such expense was deducted in computing such Consolidated Net Income, plus (iv) depreciation expense for such period, to the extent the same was deducted in computing such Consolidated Net Income, plus (v) all amortization expense and other non-cash expenses (excluding any such non-cash expense to the extent that it represents an accrual of or reserve for cash expenses in any future period) for such period, to the extent the same was deducted in computing such Consolidated Net Income, minus (vi) non-cash items increasing such Consolidated Net Income for such period. Consolidated Cash Flow shall be calculated on a pro forma basis after giving effect to any acquisition as if such acquisition (including any Consolidated Cash Flow associated with such acquisition) occurred on the first day of the most recently ended four quarter period, giving pro forma effect to any non-recurring expenses, non-recurring costs and cost reductions within the first year after such acquisition which the Company anticipates if the Company delivers to the Trustee an officer's certificate executed by its chief financial or accounting officer certifying to and describing and quantifying with reasonable specificity such non-recurring expenses, non-recurring costs and cost reductions. "Consolidated Indebtedness" means, with respect to any Person as of any date of determination, the sum, without duplication, of (i) the total amount of Indebtedness and Attributable Debt of such Person and its Restricted Subsidiaries, plus (ii) the total amount of Indebtedness and Attributable Debt of any other Person, to the extent that such Indebtedness or Attributable Debt has been guaranteed by the referent Person or by one or more of its Restricted Subsidiaries or is secured by a Lien on assets of the referent Person or any of its Restricted Subsidiaries, plus (iii) the aggregate liquidation value of all Disqualified Stock of such Person and all preferred stock of Restricted Subsidiaries of such Person, in each case, determined on a consolidated basis in accordance with GAAP. "Consolidated Interest Expense" means, with respect to any Person for any period, the sum of: (i) the consolidated interest expense of such Person and its Restricted Subsidiaries for such period, whether paid or accrued (including, without limitation, amortization of original issue discount, non-cash interest payments, the interest component of any deferred payment obligations, the interest component of all payments associated with Capital Lease Obligations, imputed interest with respect to Attributable Debt, commissions, discounts and other fees and charges incurred in respect of letters of credit or bankers' acceptance financing, and net payments (if any) pursuant to Hedging Obligations); and (ii) the consolidated interest expense of such Person and its Restricted Subsidiaries that was capitalized during such period; and (iii) any interest expense on Indebtedness or Attributable Debt of another Person that is guaranteed by such Person or one of its Restricted Subsidiaries or secured by a Lien on assets of such Person or one of its Restricted Subsidiaries (whether or not such guarantee or Lien is called upon). 4 12 "Consolidated Net Income" means, with respect to any Person for any period, the aggregate of the Net Income of such Person and its Subsidiaries for such period, on a consolidated basis, determined in accordance with GAAP; provided that (i) except as otherwise provided in clause (v) below, the positive Net Income of any Person that is not a Restricted Subsidiary or that is accounted for by the equity method of accounting shall be included only to the extent of the amount of dividends or distributions paid in cash to the referent Person or a Restricted Subsidiary thereof, (ii) the Net Income of any Restricted Subsidiary shall be excluded to the extent that the declaration or payment of dividends or similar distributions by that Restricted Subsidiary of that Net Income is not at the date of determination permitted without any prior governmental approval (that has not been obtained) or, directly or indirectly, by operation of the terms of its charter or any agreement, instrument, judgment, decree, order, statute, rule or governmental regulation applicable to that Restricted Subsidiary or its stockholders, (iii) the Net Income of any Person acquired in a pooling of interests transaction for any period prior to the date of such acquisition shall be excluded, (iv) the cumulative effect of a change in accounting principles shall be excluded and (v) the Net Income of any Unrestricted Subsidiary shall be excluded, whether or not distributed to the Company or one of its Restricted Subsidiaries. "Continuing Directors" means, as of any date of determination, any member of the Board of Directors of the Company who (i) was a member of such Board of Directors on the date hereof or (ii) was nominated for election or elected to such Board of Directors with the approval of a majority of the Continuing Directors who were members of such Board at the time of such nomination or election. "Corporate Trust Office of the Trustee" shall be at the address of the Trustee specified in Section 12.02 hereof or such other address as to which the Trustee may give notice to the Company. "Credit Facility" or "Credit Facilities" means one or more debt facilities (including, without limitation, the Senior Credit Facilities) or commercial paper facilities with banks or other institutional lenders providing for revolving credit loans, term loans, receivables financing (including through the sale of receivables to such lenders or to special purpose entities formed to borrow from such lenders against such receivables) or letters of credit, in each case, as now in effect or at any time hereafter entered into and as amended, restated, modified, renewed, refunded, replaced or refinanced in whole or in part from time to time. Indebtedness under Credit Facilities outstanding on the date on which Notes are first issued and authenticated under this Indenture shall be deemed to have been incurred on such date in reliance on the exception provided by clause (i) of the definition of Permitted Debt. "Custodian" means the Trustee, as custodian with respect to the Notes in global form, or any successor entity thereto. "Debt to Cash Flow Ratio" means, with respect to any Person as of any date of determination (the "Calculation Date"), the ratio of (a) the Consolidated Indebtedness of such Person as of such date to (b) the Consolidated Cash Flow of such Person for the four most recent full fiscal quarters ending immediately prior to such date for which internal financial statements are available, determined on a pro forma basis after giving effect to all acquisitions and dispositions of assets made by such Person and its Restricted Subsidiaries from the beginning of such four-quarter period through and including such date of determination (including any related 5 13 financing transactions) as if such acquisitions and dispositions had occurred at the beginning of such four-quarter period. For purposes of making the computation referred to above, (i) acquisitions that have been made by such Person or any of its Restricted Subsidiaries, including through mergers or consolidations and including any related financing transactions, during the four-quarter reference period or subsequent to such reference period and on or prior to the Calculation Date shall be deemed to have occurred on the first day of the four-quarter reference period and Consolidated Cash Flow for such reference period shall be calculated without giving effect to clause (iii) of the proviso set forth in the definition of Consolidated Net Income and (ii) the Consolidated Cash Flow attributable to discontinued operations, as determined in accordance with GAAP, and operations or businesses disposed of by the Company or any of its Restricted Subsidiaries prior to the Calculation Date, shall be excluded. "Default" means any event that is or with the passage of time or the giving of notice or both would be an Event of Default. "Definitive Note" means a certificated Note registered in the name of the Holder thereof and issued in accordance with Section 2.06 hereof, in the form of Exhibit A hereto except that such Note shall not bear the Global Note Legend and shall not have the "Schedule of Exchanges of Interests in the Global Note" attached thereto. "Depositary" means, with respect to the Notes issuable or issued in whole or in part in global form, the Person specified in Section 2.03 hereof as the Depositary with respect to the Notes, and any and all successors thereto appointed as depositary hereunder and having become such pursuant to the applicable provision of this Indenture. "Disqualified Stock" means any Capital Stock that, by its terms (or by the terms of any security into which it is convertible or for which it is exchangeable at the option of the holder thereof), or upon the happening of any event, matures or is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or is redeemable at the option of the holder thereof, in whole or in part, on or prior to the date that is 91 days after the date on which the Notes mature, provided, however, that any Capital Stock that would constitute Disqualified Stock solely because the holders thereof have the right to require the Company to repurchase such Capital Stock upon the occurrence of a Change of Control or an Asset Sale shall not constitute Disqualified Stock if the terms of such Capital Stock provide that the Company may not repurchase or redeem any such Capital Stock pursuant to such provisions unless such repurchase or redemption complies with Section 4.07 hereof. "Equity Interests" means Capital Stock and all warrants, options or other rights to acquire Capital Stock (but excluding any debt security that is convertible into, or exchangeable for, Capital Stock). "Exchange Act" means the Securities Exchange Act of 1934, as amended. "Existing Indebtedness" means Indebtedness in existence on the date hereof (other than Indebtedness under Credit Facilities), until such Indebtedness is repaid. "FCC License" means [DEFINITION TO BE PROPOSED BY KAYE SCHOLER]. "GAAP" means generally accepted accounting principles set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified 6 14 Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or in such other statements by such other entity as have been approved by a significant segment of the accounting profession, which are in effect from time to time. "Global Notes" means, the Global Notes, in the form of Exhibit A hereto issued in accordance with Section 2.01 or 2.06(d)(i) hereof. "Global Note Legend" means the legend set forth in Section 2.06(g)(ii), which is required to be placed on all Global Notes issued under this Indenture. "Government Securities" means direct obligations of, or obligations guaranteed by, the United States of America, and the payment for which the United States pledges its full faith and credit. "Guarantee" means a guarantee (other than by endorsement of negotiable instruments for collection in the ordinary course of business), direct or indirect, in any manner (including, without limitation, by way of a pledge of assets or through letters of credit and reimbursement agreements in respect thereof), of all or any part of any Indebtedness. "Guarantor" means any Subsidiary of the Company that executes a Subsidiary Guarantee. "Hedging Obligations" means, with respect to any Person, the obligations of such Person under (i) interest rate swap agreements, interest rate cap agreements and interest rate collar agreements and (ii) other agreements or arrangements designed to protect such Person against fluctuations in interest rates. "Holder" means a Person in whose name a Note is registered. "Indebtedness" means, with respect to any Person, without duplication, (i) any indebtedness of such Person, whether or not contingent, in respect of borrowed money or evidenced by bonds, notes, debentures or similar instruments or letters of credit (or reimbursement agreements in respect thereof) or banker's acceptances or representing Capital Lease Obligations or the balance deferred and unpaid of the purchase price of any property or representing any Hedging Obligations, except any such balance that constitutes an accrued expense or trade payable, if and to the extent any of the foregoing indebtedness (other than letters of credit and Hedging Obligations) would appear as a liability upon a balance sheet of such Person prepared in accordance with GAAP, (ii) all indebtedness of others secured by a Lien on any asset of such Person (whether or not such indebtedness is assumed by such Person) and (iii) to the extent not otherwise included, the guarantee by such Person of any indebtedness of any other Person. Notwithstanding the foregoing, the term "Indebtedness" shall not include Non-Recourse Debt or indebtedness that constitutes "Indebtedness" merely by virtue of a pledge of Equity Interests of an Unrestricted Subsidiary. The amount of any Indebtedness outstanding as of any date shall be (A) the accreted value thereof, in the case of any Indebtedness issued with original issue discount, (B) the principal amount of the Indebtedness secured, together with any interest thereon that is more than 30 days past due, in the case of any Indebtedness of the type described in clause (ii) above, (C) the principal amount of the Indebtedness guaranteed, together with any interest thereon that is more than 30 days past due, in the case of any Indebtedness of the type described in clause (iii) above, (D) the amount of the net settlement payment payable on termination, in the case of any Indebtedness constituting a Hedging Obligation (assuming for this 7 15 purpose that the Hedging Obligation was terminated on the date as of which the calculation of the amount of Indebtedness is being made), and (E) the principal amount thereof, together with any interest thereon that is more than 30 days past due, in the case of any other Indebtedness. "Indenture" means this Indenture, as amended or supplemented from time to time. "Indirect Participant" means a Person who holds a beneficial interest in a Global Note through a Participant. "Investments" means, with respect to any Person, all investments by such Person in other Persons (including Affiliates) in the forms of direct or indirect loans (including guarantees of Indebtedness or other obligations), advances or capital contributions (excluding commission, travel and similar advances to officers and employees made in the ordinary course of business), purchases or other acquisitions for consideration of Indebtedness, Equity Interests or other securities, together with all items that are or would be classified as investments on a balance sheet prepared in accordance with GAAP. If the Company or any Subsidiary of the Company sells or otherwise disposes of any Equity Interests of any direct or indirect Subsidiary of the Company such that, after giving effect to any such sale or disposition, such Person is no longer a Subsidiary of the Company, the Company shall be deemed to have made an Investment on the date of any such sale or disposition equal to the fair market value of the Equity Interests of such Subsidiary not sold or disposed of in an amount determined as provided in the third paragraph of Section 4.07 hereof. "Legal Holiday" means a Saturday, a Sunday or a day on which banking institutions in the City of New York or at a place of payment are authorized by law, regulation or executive order to remain closed. If a payment date is a Legal Holiday at a place of payment, payment may be made at that place on the next succeeding day that is not a Legal Holiday, and no interest shall accrue on such payment for the intervening period. "Lien" means, with respect to any asset, any mortgage, lien, pledge, charge, security interest or encumbrance of any kind in respect of such asset, whether or not filed, recorded or otherwise perfected under applicable law (including any conditional sale or other title retention agreement, any lease in the nature thereof, any option or other agreement to sell or give a security interest in and any filing of or agreement to give any financing statement under the Uniform Commercial Code (or equivalent statutes) of any jurisdiction). "Make-Whole Premium" means, with respect to any Note, an amount equal to the excess, if any, of the Discounted Value of the Remaining Scheduled Payments with respect to the Called Principal of such Note over the amount of such Called Principal, provided that the Make-Whole Premium may in no event be less than zero. For the purposes of determining the Make-Whole Premium, the following terms have the following meanings: "Called Principal" means, with respect to any Note, the principal of such Note that is declared to be immediately due and payable. "Discounted Value" means, with respect to the Called Principal of any Note, the amount obtained by discounting all Remaining Scheduled Payments with respect to such Called Principal from their respective scheduled due dates to the Settlement Date with respect to such Called Principal, in accordance with accepted financial practice and at a discount 8 16 factor (applied on the same periodic basis as that on which interest on the Notes is payable) equal to the Reinvestment Yield with respect to such Called Principal. "Reinvestment Yield" means, with respect to the Called Principal of any Note, 0.5% over the yield to maturity implied by (i) the yields reported, as of 10:00 A.M. (Eastern Standard time) on the second Business Day preceding the Settlement Date with respect to such Called Principal, on the display designated as "Page 678" on the Telerate Access Service (or such other display as may replace Page 678 on the Telerate Access Service) for actively traded U.S. Treasury securities having a maturity equal to the Remaining Average Life of such Called Principal as of such Settlement Date, or (ii) if such yields are not reported as of such time or the yields reported as of such time are not ascertainable, the Treasury Constant Maturity Series Yields reported, for the latest day for which such yields have been so reported as of the second Business Day preceding the Settlement Date with respect to such Called Principal, in Federal Reserve Statistical Release H.15 (519) (or any comparable successor publication) for actively traded U.S. Treasury securities having a constant maturity equal to the Remaining Average Life of such Called Principal as of such Settlement Date. Such implied yield will be determined, if necessary, by (a) converting U.S. Treasury bill quotations to bond-equivalent yields in accordance with accepted financial practice and (b) interpolating linearly between (1) the actively traded U.S. Treasury security with the duration closest to and greater than the Remaining Average Life and (2) the actively traded U.S. Treasury security with the duration closest to and less than the Remaining Average Life. "Remaining Average Life" means, with respect to any Called Principal, the number of years (calculated to the nearest one-twelfth year) obtained by dividing (i) such Called Principal into (ii) the sum of the products obtained by multiplying (a) the principal component of each Remaining Scheduled Payment with respect to such Called Principal by (b) the number of years (calculated to the nearest one-twelfth year) that will elapse between the Settlement Date with respect to such Called Principal and the scheduled due date of such Remaining Scheduled Payment. "Remaining Scheduled Payments" means, with respect to the Called Principal of any Note, all payments of such Called Principal and interest thereon that would be due after the Settlement Date with respect to such Called Principal if no payment of such Called Principal were made prior to its scheduled due date, provided that if such Settlement Date is not a date on which interest payments are due to be made under the terms of the Notes, then the amount of the next succeeding scheduled interest payment will be reduced by the amount of interest accrued to such Settlement Date and required to be paid on such Settlement Date. "Settlement Date" means, with respect to the Called Principal of any Note, the date on which such Called Principal is declared to be immediately due and payable. "Net Income" means, with respect to any Person, the net income (loss) of such Person, determined in accordance with GAAP and before any reduction in respect of preferred stock dividends, excluding, however, (i) any gain (but not loss), together with any related provision for taxes on such gain (but not loss), realized in connection with (a) any Asset Sale (including, without limitation, dispositions pursuant to sale and leaseback transactions) or (b) the disposition of any securities by such Person or any of its Restricted Subsidiaries or the extinguishment of any Indebtedness of such Person or any of its Restricted Subsidiaries and (ii) 9 17 any extraordinary gain (but not loss), together with any related provision for taxes on such extraordinary gain (but not loss). "Net Proceeds" means the aggregate cash proceeds received by the Company or any of its Restricted Subsidiaries in respect of any Asset Sale (including, without limitation, any cash received upon the sale or other disposition of any non-cash consideration received in any Asset Sale), net of the direct costs relating to such Asset Sale or disposition (including, without limitation, legal, accounting and investment banking fees, and sales commissions) and any relocation expenses incurred as a result thereof, taxes paid or payable as a result thereof (after taking into account any available tax credits or deductions and any tax sharing arrangements), amounts required to be applied to the repayment of Indebtedness secured by a Lien on the asset or assets that were the subject of such Asset Sale and any reserve for indemnities, reimbursements or adjustment in respect of the sale price of such asset or assets established in accordance with GAAP. "Non-Guarantor Subsidiaries" means (i) those single-purpose Restricted Subsidiaries of the Company created or acquired after the date of this Indenture which own one or more FCC Licenses and related rights and no other material assets, (ii) those Subsidiaries of the Company created or acquired after the date of the Indenture that are not incorporated under the laws of the United States of America or a state of the United States of America, and (iii) JuJu Media, Inc., a New York corporation. "Non-Recourse Debt" means Indebtedness: (i) as to which neither the Company nor any of its Restricted Subsidiaries (a) provides credit support of any kind (including any undertaking, agreement or instrument that would constitute Indebtedness), (b) is directly or indirectly liable (as a guarantor or otherwise) or (c) constitutes the lender; (ii) no default with respect to which (including any rights that the holders thereof may have to take enforcement action against an Unrestricted Subsidiary) would permit (upon notice, lapse of time or both) any holder of any other Indebtedness (other than the Notes being offered hereby) of the Company or any of its Restricted Subsidiaries to declare a default on such other Indebtedness or cause the payment thereof to be accelerated or payable prior to its stated maturity; and (iii) as to which the lenders have been notified in writing that they will not have any recourse to the stock or assets of the Company or any of its Restricted Subsidiaries. "Non-U.S. Person" means a Person who is not a U.S. Person. "Notes" means the ___% Senior Subordinated Notes due 2009, authenticated and issued by the Company pursuant to this Indenture. "Obligations" means any principal, interest, prepayment or make-whole premium, penalties, fees, indemnifications, reimbursements, damages and other liabilities payable under the documentation governing any Indebtedness or any guarantee thereof. "Offering" means the offering of the Notes by the Company. "Officer" means, with respect to any Person, the Chairman of the Board, the Chief Executive Officer, the President, the Chief Operating Officer, the Chief Financial Officer, the Treasurer, any Assistant Treasurer, the Controller, the Secretary or any Vice-President of such Person. 10 18 "Officers' Certificate" means a certificate signed on behalf of the Company by two Officers of the Company, one of whom must be the principal executive officer, the principal financial officer, the treasurer or the principal accounting officer of the Company, that meets the requirements of Section 12.05 hereof. "Opinion of Counsel" means an opinion from legal counsel who is reasonably acceptable to the Trustee, that meets the requirements of Section 12.05 hereof. The counsel may be an employee of or counsel to the Company, any Subsidiary of the Company or the Trustee. "Participant" means, with respect to the Depositary, a Person who has an account with the Depositary. "Participating Broker-Dealer" has the meaning set forth in the Registration Rights Agreement. "Permitted Business" means the media business and any business reasonably similar, complementary, ancillary or related thereto, including, the operation of latin music Web sites and internet portals. "Permitted Investments" means (i) any Investment in the Company or in a Restricted Subsidiary; (ii) any Investment in Cash Equivalents; (iii) any Investment by the Company or any Restricted Subsidiary of the Company in a Person engaged in a Permitted Business, if (a) as a result of, or concurrently with, such Investment such Person becomes a Restricted Subsidiary or (b) as a result of, or concurrently with, such Investment such Person is merged, consolidated or amalgamated with or into, or transfers or conveys substantially all of its assets to, or is liquidated into, the Company or a Restricted Subsidiary; or (c) the Company or a Restricted Subsidiary has entered into a binding agreement to acquire such Person or all or substantially all of the assets of such Person, which agreement is in effect on the date of such Investment, and such Person becomes a Restricted Subsidiary or such transaction is consummated, in each case, within 180 days of the date of such Investment; (iv) any Restricted Investment made as a result of the receipt of non-cash consideration from an Asset Sale that was made pursuant to and in compliance with Section 4.10 hereof; (v) any obligations or shares of Capital Stock received in connection with or as a result of a bankruptcy, workout or reorganization of the issuer of such obligations or shares of Capital Stock; (vi) any Investment received involuntarily; (vii) any acquisition of assets solely in exchange for the issuance of Equity Interests (other than Disqualified Stock) of the Company; (viii) other Investments in Persons engaged in Permitted Businesses (measured on the date each such Investment was made and without giving effect to subsequent changes in value), when taken together with all other Investments made pursuant to this clause (viii) that are at the time outstanding, not to exceed $7.5 million; (ix) Investments by the Company or any of its Restricted Subsidiaries in any other person pursuant to the terms of a "local marketing agreement" or similar arrangement relating to a radio station owned or licensed by such Person; (x) Hedging Obligations; (xi) the incurrence by the Company or any of its Restricted Subsidiaries of performance, bid or advance payment bonds, surety bonds, custom bonds, utility bonds and similar obligations arising in the ordinary course of business; (xii) endorsements of instruments for collection or deposit in the ordinary course of business; (xiii) loans and advances to employees and officers not to exceed $2.5 million outstanding in the aggregate at any time; (xiv) loans to employees, directors and officers in connection with the purchase by such Persons of Equity Interests of the Company; (xv) investments in account debtors received in connection with the bankruptcy or 11 19 reorganization, or in settlement of delinquent obligations, of customers; and (xvi) investments in existence on the date of this Indenture. "Permitted Liens" means (i) Liens securing Senior Debt that was permitted by the terms hereof to be incurred; (ii) Liens in favor of the Company or any of its Restricted Subsidiaries; (iii) Liens on property of a Person existing at the time such Person is merged into or consolidated with the Company or any Restricted Subsidiary of the Company; provided that such Liens were not incurred in contemplation of such merger or consolidation and do not extend to any assets other than those of the Person merged into or consolidated with the Company; (iv) Liens on property existing at the time of acquisition thereof by the Company or any Restricted Subsidiary of the Company, provided that such Liens were in existence prior to the contemplation of such acquisition; (v) Liens to secure the performance of statutory obligations, surety or appeal bonds, performance bonds or other obligations of a like nature incurred in the ordinary course of business; (vi) Liens existing on the date hereof; (vii) Liens for taxes, assessments or governmental charges or claims that are not yet delinquent or that are being contested in good faith by appropriate proceedings promptly instituted and diligently concluded, provided that any reserve or other appropriate provision as shall be required in conformity with GAAP shall have been made therefor; (viii) Liens incurred in the ordinary course of business of the Company or any Restricted Subsidiary of the Company with respect to obligations that do not exceed $2.5 million at any one time outstanding; (ix) Liens securing industrial revenue bonds; (x) Liens to secure Purchase Money Indebtedness that is otherwise permitted under the Indenture, provided that (a) any such Lien is created solely for the purpose of securing Indebtedness representing, or incurred to finance, refinance or refund, the cost (including sales and excise taxes, installation and delivery charges and other direct costs of, and other direct expenses paid or charged in connection with, such purchase or construction) of such Property, (b) the principal amount of the Indebtedness secured by such Lien does not exceed 100% of such costs, and (c) such Lien does not extend to or cover any Property other than such item of Property and any improvements on such item; (xi) Liens securing Obligations in respect of the Senior Credit Facilities; (xii) Liens securing Bank Indebtedness; (xiii) Liens securing Acquisition Indebtedness, provided that such Liens do not extend to or cover any Property other than the Property acquired with the proceeds of such Acquisition Indebtedness and any improvements thereto; (xiv) Liens securing Permitted Refinancing Indebtedness; and (xv) Liens securing Ratio Indebtedness; (xvi) Liens to secure Indebtedness (including Capital Lease Obligations) permitted to be incurred by the section entitled "Incurrence of Indebtedness and Issuance of Preferred Stock," covering only the assets acquired with such Indebtedness; (xvii) zoning restrictions, easements, licenses, covenants and other similar restrictions and encumbrances affecting the use of real property not interfering in any material respect with the ordinary conduct of business of the Company and its Restricted Subsidiaries; (xviii) judgment liens not giving rise to an Event of Default; (xix) Liens, rights to setoff and credit balances with respect to deposit accounts and other Cash Equivalents; (xx) deposits with the owner or lessor of premises leased and operated in the ordinary course of business; (xxi) nonconsensual liens that do not individually or in the aggregate detract materially from the value of transferability of the assets of the Company or any of its Restricted Subsidiaries, or impair materially the use of any such assets in the operation of the respective businesses of the Company and its Restricted Subsidiaries; and (xxii) Liens securing Hedging Obligations. 12 20 "Permitted Refinancing Indebtedness" means any Indebtedness of the Company or any of its Restricted Subsidiaries or any Disqualified Stock of the Company issued in exchange for, or the net proceeds of which are used to extend, refinance, renew, replace, defease or refund other Indebtedness of the Company or any of its Restricted Subsidiaries; provided that: (i) the principal amount (or accreted value or liquidation preference, if applicable) of such Permitted Refinancing Indebtedness does not exceed the principal amount of (or accreted value, if applicable), plus accrued interest on, the Indebtedness so extended, refinanced, renewed, replaced, defeased or refunded (plus the amount of reasonable expenses and premiums incurred in connection therewith); (ii) such Permitted Refinancing Indebtedness has a final maturity date later than the final maturity date of, and has a Weighted Average Life to Maturity equal to or greater than the Weighted Average Life to Maturity of, the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded; (iii) if the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded is pari passu with the Notes, such Permitted Refinancing Indebtedness is pari passu with or subordinated in right of payment to the Notes or is Disqualified Stock; (iv) if the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded is subordinated in right of payment to the Notes, such Permitted Refinancing Indebtedness is subordinated in right of payment to the Notes on terms at least as favorable to the Holders of Notes as those contained in the documentation governing the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded or is Disqualified Stock; and (v) such Indebtedness is incurred either by the Company or by the Restricted Subsidiary that is the obligor on the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded, or such Disqualified Stock is issued by the Company, as applicable. "Person" means any individual, corporation, partnership, joint venture, association, joint-stock company, trust, unincorporated organization or government or agency or political subdivision thereof (including any subdivision or ongoing business of any such entity or substantially all of the assets of any such entity, subdivision or business). "Principal" means Raul Alarcon, Jr. "Property" of any Person means all types of real, Personal, tangible, intangible or mixed property owned by such Person whether or not included in the most recent consolidated balance sheet of such Person and its Subsidiaries under GAAP. "Purchase Money Indebtedness" means any Indebtedness incurred in the ordinary course of business by a Person to finance the cost (including the cost of construction) of an item of property, the principal amount of which Indebtedness does not exceed the sum of (i) 100% of such cost and (ii) reasonable fees and expenses of such Person incurred in connection therewith. "Ratio Indebtedness" means (i) Indebtedness of the Company incurred in compliance with the first paragraph of Section 4.09 which is not Permitted Refinancing Indebtedness and (ii) any guarantee by a Restricted Subsidiary of any Indebtedness of the Company of the type set forth in clause (i) of this definition. "Related Party" with respect to the Principal means (i) any spouse or immediate family member of the Principal or (ii) any trust, corporation, partnership or other entity, the beneficiaries, stockholders, partners, owners or Persons beneficially holding an 50% or more 13 21 controlling interest of which consist of the Principal and/or such other Persons referred to in the immediately preceding clause (i). "Responsible Officer," when used with respect to the Trustee, means any officer within the corporate trust department of the Trustee (or any successor group of the Trustee) or any other officer of the Trustee customarily performing functions similar to those performed by any of the above designated officers and also means, with respect to a particular corporate trust matter, any other officer to whom such matter is referred because of his knowledge of and familiarity with the particular subject. "Restricted Investment" means an Investment other than a Permitted Investment. "Restricted Subsidiary" of a Person means any Subsidiary of the referent Person that is not an Unrestricted Subsidiary. "Rule 903" means Rule 903 promulgated under the Securities Act. "Rule 904" means Rule 904 promulgated the Securities Act. "SEC" means the Securities and Exchange Commission. "Securities Act" means the Securities Act of 1933, as amended. "Senior Credit Facilities" means the senior credit facilities contemplated to be entered into by the Company, and Lehman Commercial Paper Inc. as amended, restated, modified, renewed, refunded, replaced or refinanced in whole or in part from time to time. "Significant Subsidiary" means any Restricted Subsidiary that would be a "significant subsidiary" as defined in Article 1, Rule 1-02 of Regulation S-X, promulgated pursuant to the Securities Act, as such Regulation is in effect on the date hereof. "Stated Maturity" means, with respect to any installment of interest or principal on any series of Indebtedness, the date on which such payment of interest or principal was scheduled to be paid in the original documentation governing such Indebtedness, and shall not include any contingent obligations to repay, redeem or repurchase any such interest or principal prior to the date originally scheduled for the payment thereof. "Subsidiary" means, with respect to any Person, any corporation, association or other business entity of which more than 50% of the total voting power of shares of Capital Stock entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees thereof is at the time owned or controlled, directly or indirectly, by such Person or one or more of the other Subsidiaries of that Person (or a combination thereof). "Subsidiary Guarantee" means the Guarantee by each Guarantor of the Company's payment obligations under this Indenture and the Notes, executed pursuant to the provisions of this Indenture. "TIA" means the Trust Indenture Act of 1939 (15 U.S.C. Sections 77aaa-77bbbb) as in effect on the date on which this Indenture is qualified under the TIA, except as provided by Section 9.03 hereof. 14 22 "Trustee" means the party named as such above until a successor replaces it in accordance with the applicable provisions of this Indenture and thereafter means the successor serving hereunder. "Unrestricted Subsidiary" means (i) any Subsidiary that is designated by the Board of Directors as an Unrestricted Subsidiary pursuant to a resolution of the Board of Directors, but only to the extent that such Subsidiary: (a) has no Indebtedness other than Non-Recourse Debt; (b) is not party to any agreement, contract, arrangement or understanding with the Company or any Restricted Subsidiary unless the terms of any such agreement, contract, arrangement or understanding are no less favorable to the Company or such Restricted Subsidiary than those that might be obtained at the time from Persons who are not Affiliates of the Company; (c) is a Person with respect to which neither the Company nor any of its Restricted Subsidiaries has any direct or indirect obligation (1) to subscribe for additional Equity Interests or (2) to maintain or preserve such Person's financial condition or to cause such Person to achieve any specified levels of operating results; (d) has not guaranteed or otherwise directly or indirectly provided credit support for any Indebtedness of the Company or any of its Restricted Subsidiaries; and (e) has at least one director on its board of directors that is not a director or executive officer of the Company or any of its Restricted Subsidiaries and has at least one executive officer that is not a director or executive officer of the Company or any of its Restricted Subsidiaries. "U.S. Person" means a U.S. person as defined in Rule 902(o) under the Securities Act. "Voting Stock" of any Person as of any date means the Capital Stock of such Person that is at the time entitled to vote in the election of the Board of Directors of such Person. "Weighted Average Life to Maturity" means, when applied to any Indebtedness at any date, the number of years obtained by dividing (i) the sum of the products obtained by multiplying (a) the amount of each then remaining installment, sinking fund, serial maturity or other required payments of principal, including payment at final maturity, in respect thereof, by (b) the number of years (calculated to the nearest one-twelfth) that will elapse between such date and the making of such payment, by (ii) the then outstanding principal amount of such Indebtedness. "Wholly Owned Restricted Subsidiary" of any Person means a Restricted Subsidiary of such Person all of the outstanding Capital Stock or other ownership interests of which (other than directors' qualifying shares) shall at the time be owned by such Person or by one or more Wholly Owned Restricted Subsidiaries of such Person and one or more Wholly Owned Restricted Subsidiaries of such Person. SECTION 1.02. OTHER DEFINITIONS.
DEFINED IN TERM SECTION "Affiliate Transaction"............................................ 4.11 "Asset Sale Offer"................................................. 4.10 "Authentication Order"............................................. 2.02 "Change of Control Offer".......................................... 4.15
15 23 "Change of Control Payment"........................................ 4.15 "Change of Control Payment Date"................................... 4.15 "Covenant Defeasance".............................................. 8.03 "Designated Senior Debt"........................................... 10.02 "DTC".............................................................. 2.03 "Event of Default"................................................. 6.01 "Excess Proceeds".................................................. 4.10 "incur"............................................................ 4.09 "Legal Defeasance"................................................. 8.02 "Notice of Default"................................................ 6.01 "Offer Amount"..................................................... 3.09 "Offer Period"..................................................... 3.09 "Paying Agent"..................................................... 2.03 "Payment Blockage Notice".......................................... 10.04 "Payment Default".................................................. 6.01 "Permitted Debt"................................................... 4.09 "Permitted Junior Securities"...................................... 10.02 "Purchase Date".................................................... 3.09 "Registrar"........................................................ 2.03 "Representative"................................................... 10.02 "Restricted Payments".............................................. 4.07 "Senior Debt"...................................................... 10.02
SECTION 1.03. INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT. Whenever this Indenture refers to a provision of the TIA, the provision is incorporated by reference in and made a part of this Indenture. The following TIA terms used in this Indenture have the following meanings: "indenture securities" means the Notes; "indenture security Holder" means a Holder of a Note; "indenture to be qualified" means this Indenture; "indenture trustee" or "institutional trustee" means the Trustee; and "obligor" on the Notes and the Subsidiary Guarantees means the Company and the Guarantors, respectively, and any successor obligor upon the Notes and the Subsidiary Guarantees, respectively. All other terms used in this Indenture that are defined by the TIA, defined by TIA reference to another statute or defined by SEC rule under the TIA have the meanings so assigned to them. SECTION 1.04. RULES OF CONSTRUCTION. Unless the context otherwise requires: 16 24 (1) a term has the meaning assigned to it; (2) an accounting term not otherwise defined has the meaning assigned to it in accordance with GAAP; (3) "or" is not exclusive; (4) words in the singular include the plural, and in the plural include the singular; (5) provisions apply to successive events and transactions; and (6) references to sections of or rules under the Securities Act shall be deemed to include substitute, replacement of successor sections or rules adopted by the SEC from time to time. ARTICLE II THE NOTES SECTION 2.01. FORM AND DATING. (a) General. The Notes and the Trustee's certificate of authentication shall be substantially in the form of Exhibit A hereto. The Notes may have notations, legends or endorsements required by law, stock exchange rule or usage. Each Note shall be dated the date of its authentication. The Notes shall be in denominations of $1,000 and integral multiples thereof. (b) The terms and provisions contained in the Notes shall constitute, and are hereby expressly made, a part of this Indenture and the Company, the Guarantors and the Trustee, by their execution and delivery of this Indenture, expressly agree to such terms and provisions and to be bound thereby. However, to the extent any provision of any Note conflicts with the express provisions of this Indenture, the provisions of this Indenture shall govern and be controlling. (c) Global Notes. Notes issued in global form shall be substantially in the form of Exhibit A attached hereto (including the Global Note Legend thereon and the "Schedule of Exchanges of Interests in the Global Note" attached thereto). Notes issued in definitive form shall be substantially in the form of Exhibit A attached hereto (but without the Global Note Legend thereon and without the "Schedule of Exchanges of Interests in the Global Note" attached thereto). Each Global Note shall represent such of the outstanding Notes as shall be specified therein and each shall provide that it shall represent the aggregate principal amount of outstanding Notes from time to time endorsed thereon and that the aggregate principal amount of outstanding Notes represented thereby may from time to time be reduced or increased, as appropriate, to reflect exchanges and redemptions. Any endorsement of a Global Note to reflect 17 25 the amount of any increase or decrease in the aggregate principal amount of outstanding Notes represented thereby shall be made by the Trustee or the Note Custodian, at the direction of the Trustee, in accordance with instructions given by the Holder thereof as required by Section 2.06 hereof. SECTION 2.02. EXECUTION AND AUTHENTICATION. Two Officers shall sign the Notes for the Company by manual or facsimile signature. If an Officer whose signature is on a Note no longer holds that office at the time a Note is authenticated, the Note shall nevertheless be valid. A Note shall not be valid until authenticated by the manual signature of the Trustee. The signature shall be conclusive evidence that the Note has been authenticated under this Indenture. The Trustee shall, upon a written order of the Company signed by two Officers (an "Authentication Order"), authenticate Notes for original issue in any aggregate principal amount. The aggregate principal amount of Notes that may be authenticated and delivered under the Indenture is unlimited. The Trustee may appoint an authenticating agent acceptable to the Company to authenticate Notes. An authenticating agent may authenticate Notes whenever the Trustee may do so. Each reference in this Indenture to authentication by the Trustee includes authentication by such agent. An authenticating agent has the same rights as an Agent to deal with Holders or an Affiliate of the Company. SECTION 2.03. REGISTRAR AND PAYING AGENT. The Company shall maintain an office or agency where Notes may be presented for registration of transfer or for exchange ("Registrar") and an office or agency where Notes may be presented for payment ("Paying Agent"). The Registrar shall keep a register of the Notes and of their transfer and exchange. The Company may appoint one or more co-registrars and one or more additional paying agents. The term "Registrar" includes any co-registrar and the term "Paying Agent" includes any additional paying agent. The Company may change any Paying Agent or Registrar without notice to any Holder. The Company shall notify the Trustee in writing of the name and address of any Agent not a party to this Indenture. If the Company fails to appoint or maintain another entity as Registrar or Paying Agent, the Trustee shall act as such. The Company or any of its Subsidiaries may act as Paying Agent or Registrar. The Company initially appoints The Depository Trust Company ("DTC") to act as Depositary with respect to the Global Notes. The Company initially appoints the Trustee to act as the Registrar and Paying Agent and to act as Note Custodian with respect to the Global Notes. SECTION 2.04. PAYING AGENT TO HOLD MONEY IN TRUST. The Company shall require each Paying Agent other than the Trustee to agree in writing that the Paying Agent will hold in trust for the benefit of Holders or the Trustee all 18 26 money held by the Paying Agent for the payment of principal, premium, if any, or interest on the Notes, and will notify the Trustee of any default by the Company in making any such payment. While any such default continues, the Trustee may require a Paying Agent to pay all money held by it to the Trustee. The Company at any time may require a Paying Agent to pay all money held by it to the Trustee. Upon payment over to the Trustee, the Paying Agent (if other than the Company or a Subsidiary) shall have no further liability for the money. If the Company or a Subsidiary acts as Paying Agent, it shall segregate and hold in a separate trust fund for the benefit of the Holders all money held by it as Paying Agent. Upon any bankruptcy or reorganization proceedings relating to the Company, the Trustee shall serve as Paying Agent for the Notes. SECTION 2.05. HOLDER LISTS. The Trustee shall preserve in as current a form as is reasonably practicable the most recent list available to it of the names and addresses of all Holders and shall otherwise comply with TIA Section 312(a). If the Trustee is not the Registrar, the Company shall furnish to the Trustee at least fifteen days before each interest payment date and at such other times as the Trustee may request in writing, a list in such form and as of such date as the Trustee may reasonably require of the names and addresses of the Holders of Notes and the Company shall otherwise comply with TIA Section 312(a). SECTION 2.06. TRANSFER AND EXCHANGE. (a) Transfer and Exchange of Global Notes. A Global Note may not be transferred as a whole except by the Depositary to a nominee of the Depositary, by a nominee of the Depositary to the Depositary or to another nominee of the Depositary, or by the Depositary or any such nominee to a successor Depositary or a nominee of such successor Depositary. All Global Notes will be exchanged by the Company for Definitive Notes if (i) the Company delivers to the Trustee notice from the Depositary that it is unwilling or unable to continue to act as Depositary or that it is no longer a clearing agency registered under the Exchange Act and, in either case, a successor Depositary is not appointed by the Company within 120 days after the date of such notice from the Depositary or (ii) the Company in its sole discretion determines that the Global Notes (in whole but not in part) should be exchanged for Definitive Notes and delivers a written notice to such effect to the Trustee. Upon the occurrence of either of the preceding events in (i) or (ii) above, Definitive Notes shall be issued in such names as the Depositary shall instruct the Trustee. Global Notes also may be exchanged or replaced, in whole or in part, as provided in Sections 2.07 and 2.10 hereof. Every Note authenticated and delivered in exchange for, or in lieu of, a Global Note or any portion thereof, pursuant to this Section 2.06 or Section 2.07 or 2.10 hereof, shall be authenticated and delivered in the form of, and shall be, a Global Note. A Global Note may not be exchanged for another Note other than as provided in this Section 2.06(a), however, beneficial interests in a Global Note may be transferred and exchanged as provided in Section 2.06(b), (c) or (f) hereof. (b) Transfer and Exchange of Beneficial Interests in the Global Notes. The transfer and exchange of beneficial interests in the Global Notes shall be effected through the Depositary, in accordance with the provisions of this Indenture and the 19 27 Applicable Procedures. Transfers of beneficial interests in the Global Notes also shall require compliance with the following subparagraphs: (i) Transfer of Beneficial Interests in the Same Global Note. Beneficial interests in any Global Note may be transferred to Persons who take delivery thereof in the form of a beneficial interest in such Global Note. No written orders or instructions shall be required to be delivered to the Registrar to effect the transfers described in this Section 2.06(b)(i). (ii) All Other Transfers and Exchanges of Beneficial Interests in Global Notes. In connection with all transfers and exchanges of beneficial interests that are not subject to Section 2.06(b)(i) above, the transferor of such beneficial interest must deliver to the Registrar either (A) (1) a written order from a Participant or an Indirect Participant given to the Depositary in accordance with the Applicable Procedures directing the Depositary to credit or cause to be credited a beneficial interest in another Global Note in an amount equal to the beneficial interest to be transferred or exchanged and (2) instructions given in accordance with the Applicable Procedures containing information regarding the Participant account to be credited with such increase or (B) (1) a written order from a Participant or an Indirect Participant given to the Depositary in accordance with the Applicable Procedures directing the Depositary to cause to be issued a Definitive Note in an amount equal to the beneficial interest to be transferred or exchanged and (2) instructions given by the Depositary to the Registrar containing information regarding the Person in whose name such Definitive Note shall be registered to effect the transfer or exchange referred to in (1) above. (c) Transfer or Exchange of Beneficial Interests for Definitive Notes. (i) If any holder of a beneficial interest in a Global Note proposes to exchange such beneficial interest for a Definitive Note or to transfer such beneficial interest to a Person who takes delivery thereof in the form of a Definitive Note, then, upon satisfaction of the conditions set forth in Section 2.06(b)(ii) hereof, the Trustee shall cause the aggregate principal amount of the applicable Global Note to be reduced accordingly pursuant to Section 2.06(g) hereof, and the Company shall execute and the Trustee shall, upon receipt of an Authentication Order in accordance with Section 2.02 hereof, authenticate and deliver to the Person designated in the instructions a Definitive Note in the appropriate principal amount. Any Definitive Note issued in exchange for a beneficial interest pursuant to this Section 2.06(c) shall be registered in such name or names and in such authorized denomination or denominations as the holder of such beneficial interest shall instruct the Registrar through instructions from the Depositary and the Participant or Indirect Participant. The Trustee shall deliver such Definitive Notes to the Persons in whose names such Notes are so registered. (d) Transfer and Exchange of Definitive Notes for Beneficial Interests. (i) A Holder of Definitive Note may exchange such Note for a beneficial interest in Global Note or transfer such Definitive Notes to a Person who takes delivery thereof in the form of a beneficial interest in Global Note at any time. Upon receipt of a request for such an exchange or transfer, the Trustee shall cancel the applicable Definitive Note and increase or cause to be increased the aggregate principal amount of one of the Global Notes. 20 28 If any such exchange or transfer from a Definitive Note to a beneficial interest is effected at a time when Global Note has not yet been issued, the Company shall issue and, upon receipt of an Authentication Order in accordance with Section 2.02 hereof, the Trustee shall authenticate one or more Global Notes in an aggregate principal amount equal to the principal amount of Definitive Notes so transferred. (e) Transfer and Exchange of Definitive Notes for Definitive Notes. Upon request by a Holder of Definitive Notes and such Holder's compliance with the provisions of this Section 2.06(e), the Registrar shall register the transfer or exchange of Definitive Notes. Prior to such registration of transfer or exchange, the requesting Holder shall present or surrender to the Registrar the Definitive Notes duly endorsed or accompanied by a written instruction of transfer in form satisfactory to the Registrar duly executed by such Holder or by his attorney, duly authorized in writing. (f) Legend. The following legend shall appear on the face of all Global Notes issued under this Indenture unless specifically stated otherwise in the applicable provisions of this Indenture. "THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES EXCEPT THAT (I) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED PURSUANT TO SECTION 2.07 OF THE INDENTURE, (II) THIS GLOBAL NOTE MAY BE EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.06(a) OF THE INDENTURE, (III) THIS GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO SECTION 2.11 OF THE INDENTURE AND (IV) THIS GLOBAL NOTE MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF THE COMPANY." (g) Cancellation and/or Adjustment of Global Notes. At such time as all beneficial interests in a particular Global Note have been exchanged for Definitive Notes or a particular Global Note has been redeemed, repurchased or canceled in whole and not in part, each such Global Note shall be returned to or retained and canceled by the Trustee in accordance with Section 2.11 hereof. At any time prior to such cancellation, if any beneficial interest in a Global Note is exchanged for or transferred to a Person who will take delivery thereof in the form of a beneficial interest in another Global Note or for Definitive Notes, the principal amount of Notes represented by such Global Note shall be reduced accordingly and an endorsement shall be made on such Global Note by the Trustee or by the Depositary to reflect such reduction; and if the beneficial interest is being exchanged for or transferred to a Person who will take delivery thereof in the form of a beneficial interest in 21 29 another Global Note, such other Global Note shall be increased accordingly and an endorsement shall be made on such Global Note by the Trustee or by the Depositary to reflect such increase. (h) General Provisions Relating to Transfers and Exchanges. (i) To permit registrations of transfers and exchanges, the Company shall execute and the Trustee shall authenticate Global Notes and Definitive Notes upon the Company's order or at the Registrar's request. (ii) No service charge shall be made to a holder of a beneficial interest in a Global Note or to a Holder of a Definitive Note for any registration of transfer or exchange, but the Company may require payment of a sum sufficient to cover any transfer tax or similar governmental charge payable in connection therewith (other than any such transfer taxes or similar governmental charge payable upon exchange or transfer pursuant to Sections 2.10, 3.06, 3.09, 4.10, 4.15 and 9.05 hereof). (iii) The Registrar shall not be required to register the transfer of or exchange any Note selected for redemption in whole or in part, except the unredeemed portion of any Note being redeemed in part. (iv) All Global Notes and Definitive Notes issued upon any registration of transfer or exchange of Global Notes or Definitive Notes shall be the valid obligations of the Company, evidencing the same debt, and entitled to the same benefits under this Indenture, as the Global Notes or Definitive Notes surrendered upon such registration of transfer or exchange. (v) The Company shall not be required (A) to issue, to register the transfer of or to exchange any Notes during a period beginning at the opening of business 15 days before the day of mailing of a notice of redemption of Notes selected for redemption under Section 3.02 hereof and ending at the close of business on the day of such mailing, (B) to register the transfer of or to exchange any Note so selected for redemption in whole or in part, except the unredeemed portion of any Note being redeemed in part or (C) to register the transfer of or to exchange a Note between a record date and the next succeeding Interest Payment Date. (vi) Prior to due presentment for the registration of a transfer of any Note, the Trustee, any Agent and the Company may deem and treat the Person in whose name any Note is registered as the absolute owner of such Note for the purpose of receiving payment of principal of and interest on such Notes and for all other purposes, and none of the Trustee, any Agent or the Company shall be affected by notice to the contrary. (vii) The Trustee shall authenticate Global Notes and Definitive Notes in accordance with the provisions of Section 2.02 hereof. (viii) All certifications, certificates and Opinions of Counsel required to be submitted to the Registrar pursuant to this Section 2.06 to effect a registration of transfer or exchange may be submitted by facsimile. SECTION 2.07. REPLACEMENT NOTES. If any mutilated Note is surrendered to the Trustee or the Company and the Trustee receives evidence to its satisfaction of the destruction, loss or theft of any Note, the 22 30 Company shall issue and the Trustee, upon receipt of an Authentication Order, shall authenticate a replacement Note if the Trustee's requirements are met. If a Note is destroyed, lost or stolen, an indemnity bond must be supplied by the Holder that is sufficient in the reasonable judgment of the Trustee and the Company to protect the Company, the Trustee, any Agent and any authenticating agent from any loss that any of them may suffer if a Note is replaced. The Company may charge for its expenses in replacing a Note. Every replacement Note is an additional obligation of the Company and shall be entitled to all of the benefits of this Indenture equally and proportionately with all other Notes duly issued hereunder. SECTION 2.08. OUTSTANDING NOTES. The Notes outstanding at any time are all the Notes authenticated by the Trustee except for those canceled by it, those delivered to it for cancellation, those reductions in the interest in a Global Note effected by the Trustee in accordance with the provisions hereof, and those described in this Section as not outstanding. Except as set forth in Section 2.09 hereof, a Note does not cease to be outstanding because the Company or an Affiliate of the Company holds the Note; however, Notes held by the Company or a Subsidiary of the Company shall not be deemed to be outstanding for purposes of Section 3.07(b) hereof. If a Note is replaced pursuant to Section 2.07 hereof, it ceases to be outstanding unless the Trustee receives proof satisfactory to it that the replaced Note is held by a bona fide purchaser. If the principal amount of any Note is considered paid under Section 4.01 hereof, it ceases to be outstanding and interest on it ceases to accrue. If the Paying Agent (other than the Company, a Subsidiary or an Affiliate of any thereof) holds, on a redemption date or maturity date, money sufficient to pay Notes payable on that date, then on and after that date such Notes shall be deemed to be no longer outstanding and shall cease to accrue interest. SECTION 2.09. TREASURY NOTES. In determining whether the Holders of the required principal amount of Notes have concurred in any direction, waiver or consent, Notes owned by the Company, or by any Person directly or indirectly controlling or controlled by or under direct or indirect common control with the Company, shall be considered as though not outstanding, except that for the purposes of determining whether the Trustee shall be protected in relying on any such direction, waiver or consent, only Notes that a Responsible Officer of the Trustee actually knows are so owned shall be so disregarded. The Company agrees to notify the Trustee of the existence of any Notes owned by the Company, any Guarantor, or any Person directly or indirectly controlling or controlled by or under direct or indirect common control with the Company or any Guarantor. SECTION 2.10. TEMPORARY NOTES. Until certificates representing Notes are ready for delivery, the Company may prepare and the Trustee, upon receipt of an Authentication Order, shall authenticate temporary Notes. Temporary Notes shall be substantially in the form of certificated Notes but may have 23 31 variations that the Company considers appropriate for temporary Notes and as shall be reasonably acceptable to the Trustee. Without unreasonable delay, the Company shall prepare and the Trustee shall authenticate definitive Notes in exchange for temporary Notes. Holders of temporary Notes shall be entitled to all of the benefits of this Indenture. SECTION 2.11. CANCELLATION. The Company at any time may deliver Notes to the Trustee for cancellation. The Registrar and Paying Agent shall forward to the Trustee any Notes surrendered to them for registration of transfer, exchange or payment. The Trustee and no one else shall cancel all Notes surrendered for registration of transfer, exchange, payment, replacement or cancellation and shall dispose of such cancelled Notes in accordance with its customary procedures subject to any requirements imposed by law. The Company may not issue new Notes to replace Notes that it has paid or that have been delivered to the Trustee for cancellation. SECTION 2.12. DEFAULTED INTEREST. If the Company defaults in a payment of interest on the Notes, it shall pay the defaulted interest in any lawful manner plus, to the extent lawful, interest payable on the defaulted interest, to the Persons who are Holders on a subsequent special record date, in each case at the rate provided in the Notes and in Section 4.01 hereof. The Company shall notify the Trustee in writing of the amount of defaulted interest proposed to be paid on each Note and the date of the proposed payment. The Company shall fix or cause to be fixed each such special record date and payment date, provided that no such special record date shall be less than 10 days prior to the related payment date for such defaulted interest. At least 15 days before the special record date, the Company (or, upon the written request of the Company, the Trustee in the name and at the expense of the Company) shall mail or cause to be mailed to Holders a notice that states the special record date, the related payment date and the amount of such interest to be paid. SECTION 2.13. CUSIP NUMBERS. The Company in issuing the Notes may use "CUSIP" numbers (if then generally in use), and, if so, the Trustee shall use "CUSIP" numbers in notices of redemption as a convenience to Holders; provided that any such notice may state that no representation is made as to the correctness of such numbers either as printed on the Notes or as contained in any notice of a redemption and that reliance may be placed only on the other identification numbers printed on the Notes, and any such redemption shall not be affected by any defect in or omission of such numbers. The Company will promptly notify the Trustee of any change in the "CUSIP" numbers. 24 32 ARTICLE III REDEMPTION AND PREPAYMENT SECTION 3.01. NOTICES TO TRUSTEE. If the Company elects to redeem Notes pursuant to the optional redemption provisions of Section 3.07 hereof, it shall furnish to the Trustee, at least 45 days but not more than 60 days before a redemption date, an Officers' Certificate setting forth (i) the clause of this Indenture pursuant to which the redemption shall occur, (ii) the redemption date, (iii) the principal amount of Notes to be redeemed, (iv) the redemption price, and (v) the CUSIP numbers of the Notes to be redeemed. If the Company is required to make an offer to purchase Notes pursuant to the provisions of Section 3.09 or 4.15 hereof, it shall furnish to the Trustee an Officers' Certificate setting forth (i) the Section of this Indenture pursuant to which the purchase shall occur, (ii) the purchase date, (iii) the principal amount of Notes to be purchased, (iv) the purchase price and (v) a statement to the effect that (a) the Company or one of its Subsidiaries has effected an Asset Sale and the conditions set forth in Sections 3.09 and 4.10 have been satisfied or (b) a Change of Control has occurred and the conditions set forth in Section 4.15 have been satisfied, as applicable. SECTION 3.02. SELECTION OF NOTES TO BE REDEEMED. If less than all of the Notes are to be redeemed or purchased in an offer to purchase at any time, the Trustee shall select the Notes to be redeemed or purchased among the Holders of the Notes in compliance with the requirements of the principal national securities exchange, if any, on which the Notes are listed or, if the Notes are not so listed, on a pro rata basis, by lot or in accordance with any other method the Trustee considers fair and appropriate. In the event of partial redemption by lot, the particular Notes to be redeemed shall be selected, unless otherwise provided herein, not less than 30 nor more than 60 days prior to the redemption date by the Trustee from the outstanding Notes not previously called for redemption. The Trustee shall promptly notify the Company in writing of the Notes selected for redemption and, in the case of any Note selected for partial redemption, the principal amount thereof to be redeemed. Notes and portions of Notes selected shall be in amounts of $1,000 or whole multiples of $1,000; except that if all of the Notes of a Holder are to be redeemed, the entire outstanding amount of Notes held by such Holder, even if not a multiple of $1,000, shall be redeemed. Except as provided in the preceding sentence, provisions of this Indenture that apply to Notes called for redemption also apply to portions of Notes called for redemption. SECTION 3.03. NOTICE OF REDEMPTION. Subject to the provisions of Section 3.09 hereof, at least 30 days but not more than 60 days before a redemption date, the Company shall mail or cause to be mailed, by first class mail, a notice of redemption to each Holder whose Notes are to be redeemed at its registered address. 25 33 The notice shall identify the Notes to be redeemed, including the CUSIP numbers, and shall state: (a) the redemption date; (b) the redemption price; (c) if any Note is being redeemed in part, the portion of the principal amount of such Note to be redeemed and that, after the redemption date upon surrender of such Note, a new Note or Notes in principal amount equal to the unredeemed portion shall be issued upon cancellation of the original Note; (d) the name and address of the Paying Agent; (e) that Notes called for redemption must be surrendered to the Paying Agent to collect the redemption price; (f) that, unless the Company defaults in making such redemption payment, interest on Notes called for redemption ceases to accrue on and after the redemption date; (g) the paragraph of the Notes and/or Section of this Indenture pursuant to which the Notes called for redemption are being redeemed; and (h) that no representation is made as to the correctness or accuracy of the CUSIP number, if any, listed in such notice or printed on the Notes. At the Company's request, the Trustee shall give the notice of redemption in the Company's name and at its expense; provided, however, that the Company shall have delivered to the Trustee, at least 45 days prior to the redemption date, an Officers' Certificate requesting that the Trustee give such notice and setting forth the information to be stated in such notice as provided in the preceding paragraph. SECTION 3.04. EFFECT OF NOTICE OF REDEMPTION. Once notice of redemption is mailed in accordance with Section 3.03 hereof, Notes called for redemption become irrevocably due and payable on the redemption date at the redemption price. A notice of redemption may not be conditional. SECTION 3.05. DEPOSIT OF REDEMPTION PRICE. One Business Day prior to the redemption date, the Company shall deposit with the Trustee or with the Paying Agent money sufficient to pay the redemption price of and accrued interest on all Notes to be redeemed on that date. The Trustee or the Paying Agent shall promptly return to the Company any money deposited with the Trustee or the Paying Agent by the Company in excess of the amounts necessary to pay the redemption price of, and accrued interest on, all Notes to be redeemed. If the Company complies with the provisions of the preceding paragraph, on and after the redemption date, interest shall cease to accrue on the Notes or the portions of Notes 26 34 called for redemption. If a Note is redeemed on or after an interest record date but on or prior to the related interest payment date, then any accrued and unpaid interest shall be paid to the Person in whose name such Note was registered at the close of business on such record date. If any Note called for redemption shall not be so paid upon surrender for redemption because of the failure of the Company to comply with the preceding paragraph, interest shall be paid on the unpaid principal, from the redemption date until such principal is paid, and to the extent lawful on any interest not paid on such unpaid principal, in each case at the rate provided in the Notes and in Section 4.01 hereof. SECTION 3.06. NOTES REDEEMED IN PART. Upon surrender of a Note that is redeemed in part, the Company shall issue and, upon the Company's written request, the Trustee shall authenticate for the Holder at the expense of the Company a new Note equal in principal amount to the unredeemed portion of the Note surrendered. SECTION 3.07. OPTIONAL REDEMPTION. (a) Except as set forth in clause (b) of this Section 3.07, the Company shall not have the option to redeem the Notes pursuant to this Section 3.07 prior to [___________], 2004. Thereafter, the Company shall have the option to redeem the Notes, in whole or in part, upon not less than 30 nor more than 60 days' notice, at the redemption prices (expressed as percentages of principal amount) set forth below, plus accrued and unpaid interest and Liquidated Damages, if any, thereon to the applicable redemption date, if redeemed during the twelve-month period beginning on [____________] of the years indicated below:
YEAR PERCENTAGE 2004......................................... [____.___]% 2005......................................... [____.___]% 2006......................................... [____.___]% 2007 and thereafter.......................... 100.000%
(b) Notwithstanding the foregoing, prior to [___________], 2002, the Company may, on any one or more occasions, redeem up to 35% of the aggregate principal amount of Notes originally issued in the Offering at a redemption price of [____.___]% of the principal amount thereof, plus accrued and unpaid interest, thereon to the redemption date, with the net cash proceeds of an offering of common equity of the Company (other than Disqualified Stock); provided that (i) at least 65% of the aggregate principal amount of the Notes originally issued in the Offering remain outstanding immediately after the occurrence of each such redemption (excluding Notes held by the Company and its Subsidiaries) and (ii) each such redemption shall occur within 75 days after the date of the closing of any such offering of common equity of the Company. (c) Any redemption pursuant to this Section 3.07 shall be made pursuant to the provisions of Section 3.01 through 3.06 hereof. 27 35 SECTION 3.08. MANDATORY REDEMPTION. The Company shall not be required to make mandatory redemption payments with respect to the Notes. SECTION 3.09. OFFER TO PURCHASE BY APPLICATION OF EXCESS PROCEEDS. In the event that, pursuant to Section 4.10 hereof, the Company shall be required to commence an Asset Sale Offer, it shall follow the procedures specified below. The Asset Sale Offer shall remain open for a period of 20 Business Days following its commencement and no longer, except to the extent that a longer period is required by applicable law (the "Offer Period"). No later than five Business Days after the termination of the Offer Period (the "Purchase Date"), the Company shall purchase the principal amount of Notes required to be purchased pursuant to Section 4.10 hereof (the "Offer Amount") or, if less than the Offer Amount has been tendered, all Notes tendered in response to the Asset Sale Offer. Payment for any Notes so purchased shall be made in the same manner as interest payments are made. If the Purchase Date is on or after an interest record date and on or before the related interest payment date, any accrued and unpaid interest shall be paid to the Person in whose name a Note is registered at the close of business on such record date, and no additional interest shall be payable to Holders who tender Notes pursuant to the Asset Sale Offer. Upon the commencement of an Asset Sale Offer, the Company shall send, by first class mail, a notice to the Trustee and each of the Holders. The notice shall contain all instructions and materials necessary to enable such Holders to tender Notes pursuant to the Asset Sale Offer. The Asset Sale Offer shall be made to all Holders. The notice, which shall govern the terms of the Asset Sale Offer, shall state: (a) that the Asset Sale Offer is being made pursuant to this Section 3.09 and Section 4.10 hereof and the length of time the Asset Sale Offer shall remain open; (b) the Offer Amount, the purchase price and the Purchase Date; (c) that any Note not tendered or accepted for payment shall continue to accrete or accrue interest; (d) that, unless the Company defaults in making such payment, any Note accepted for payment pursuant to the Asset Sale Offer shall cease to accrete or accrue interest after the Purchase Date; (e) that Holders electing to have a Note purchased pursuant to an Asset Sale Offer may only elect to have all of such Note purchased and may not elect to have only a portion of such Note purchased; (f) that Holders electing to have a Note purchased pursuant to any Asset Sale Offer shall be required to surrender the Note, with the form entitled "Option of Holder to Elect Purchase" on the reverse of the Note completed, or transfer by book-entry transfer, to the 28 36 Company, a depositary, if appointed by the Company, or a Paying Agent at the address specified in the notice at least three days before the Purchase Date; (g) that Holders shall be entitled to withdraw their election if the Company, the depositary or the Paying Agent, as the case may be, receives, not later than the expiration of the Offer Period, a facsimile transmission or letter setting forth the name of the Holder, the principal amount of the Note the Holder delivered for purchase and a statement that such Holder is withdrawing his election to have such Note purchased; (h) that, if the aggregate principal amount of Notes surrendered by Holders exceeds the Offer Amount, the Company shall select the Notes to be purchased on a pro rata basis (with such adjustments as may be deemed appropriate by the Company so that only Notes in denominations of $1,000, or integral multiples thereof, shall be purchased); and (i) that Holders whose Notes were purchased only in part shall be issued new Notes equal in principal amount to the unpurchased portion of the Notes surrendered (or transferred by book-entry transfer). On or before the Purchase Date, the Company shall, to the extent lawful, accept for payment, on a pro rata basis to the extent necessary, the Offer Amount of Notes or portions thereof tendered pursuant to the Asset Sale Offer, or if less than the Offer Amount has been tendered, all Notes tendered, and shall deliver to the Trustee an Officers' Certificate stating that such Notes or portions thereof were accepted for payment by the Company in accordance with the terms of this Section 3.09. The Company, the Depositary or the Paying Agent, as the case may be, shall promptly (but in any case not later than five days after the Purchase Date) mail or deliver to each tendering Holder an amount equal to the purchase price of the Notes tendered by such Holder and accepted by the Company for purchase, and the Company shall promptly issue a new Note, and the Trustee, upon written request from the Company shall authenticate and mail or deliver such new Note to such Holder, in a principal amount equal to any unpurchased portion of the Note surrendered. Any Note not so accepted shall be promptly mailed or delivered by the Company to the Holder thereof. The Company shall publicly announce the results of the Asset Sale Offer on the Purchase Date. Other than as specifically provided in this Section 3.09, any purchase pursuant to this Section 3.09 shall be made pursuant to the provisions of Sections 3.01 through 3.06 hereof. 29 37 ARTICLE IV COVENANTS SECTION 4.01. PAYMENT OF NOTES. The Company or a Guarantor shall pay or cause to be paid the principal of, premium, if any, and interest, on the Notes on the dates and in the manner provided in the Notes. Principal, premium, if any, and interest, if any, shall be considered paid on the date due if the Paying Agent, if other than the Company or a Subsidiary thereof, holds as of 10:00 a.m. Eastern Time on the due date money deposited by the Company in immediately available funds and designated for and sufficient to pay all principal, premium, if any, and interest, then due. The Company or a Guarantor shall pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue principal at the rate equal to 1% per annum in excess of the then applicable interest rate on the Notes to the extent lawful; it shall pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue installments of interest and Liquidated Damages (without regard to any applicable grace period) at the same rate to the extent lawful. SECTION 4.02. MAINTENANCE OF OFFICE OR AGENCY. The Company shall maintain in the Borough of Manhattan, the City of New York, an office or agency (which may be an office of the Trustee or an affiliate of the Trustee, Registrar or co-registrar) where Notes may be surrendered for registration of transfer or for exchange and where notices and demands to or upon the Company in respect of the Notes and this Indenture may be served. The Company shall give prompt written notice to the Trustee of the location, and any change in the location, of such office or agency. If at any time the Company shall fail to maintain any such required office or agency or shall fail to furnish the Trustee with the address thereof, such presentations, surrenders, notices and demands may be made or served at the Corporate Trust Office of the Trustee. The Company may also from time to time designate one or more other offices or agencies where the Notes may be presented or surrendered for any or all such purposes and may from time to time rescind such designations; provided, however, that no such designation or rescission shall in any manner relieve the Company of its obligation to maintain an office or agency in the Borough of Manhattan, the City of New York for such purposes. The Company shall give prompt written notice to the Trustee of any such designation or rescission and of any change in the location of any such other office or agency. The Company hereby designates the Corporate Trust Office of the Trustee as one such office or agency of the Company in accordance with Section 2.03. SECTION 4.03. REPORTS. (a) Whether or not required by the rules and regulations of the SEC, so long as any Notes are outstanding, the Company shall furnish to the Trustee and the Holders of Notes (i) all quarterly and annual financial information that would be required to be contained in a filing with the SEC on Forms 10-Q and 10-K if the Company were required to file such forms, 30 38 including a "Management's Discussion and Analysis of Financial Condition and Results of Operations" that describes the financial condition and results of operations of the Company and its consolidated Subsidiaries (showing in reasonable detail, either on the face of the financial statements or in the footnotes thereto and in Management's Discussion and Analysis of Financial Condition and Results of Operations, the financial condition and results of operations of the Company and its Restricted Subsidiaries separate from the financial information and results of operations of the Unrestricted Subsidiaries of the Company) and, with respect to the annual information only, a report thereon by the Company's certified independent accountants and (ii) all current reports that would be required to be filed with the SEC on Form 8-K if the Company were required to file such reports, in each case, within the time periods specified in the SEC's rules and regulations. In addition, following consummation of the Exchange Offer, whether or not required by the rules and regulations of the SEC, the Company shall file a copy of all such information and reports with the SEC for public availability within the time periods specified in the SEC's rules and regulations (unless the SEC will not accept such a filing) and make such information available to securities analysts and prospective investors upon request. The Company shall at all times comply with TIA Section314(a). Delivery of such reports, information and documents to the Trustee is for informational purposes only and the Trustee's receipt of such reports, information and documents shall not constitute constructive notice of any information contained therein or determinable from the information contained therein, including the Company's compliance with any of its covenants hereunder (as to which the Trustee is entitled to rely exclusively on Officers' Certificates). SECTION 4.04. COMPLIANCE CERTIFICATE. (a) The Company and each Guarantor (to the extent that such Guarantor is so required under the TIA) shall deliver to the Trustee, within 90 days after the end of each fiscal year, an Officers' Certificate stating that a review of the activities of the Company and its Subsidiaries during the preceding fiscal year has been made under the supervision of the signing Officers with a view to determining whether the Company has kept, observed, performed and fulfilled its obligations under this Indenture, and further stating, as to each such Officer signing such certificate, that to the best of his or her knowledge the Company has kept, observed, performed and fulfilled each and every covenant contained in this Indenture and is not in default in the performance or observance of any of the terms, provisions and conditions of this Indenture (or, if a Default or Event of Default shall have occurred, describing all such Defaults or Events of Default of which he or she may have knowledge and what action the Company is taking or proposes to take with respect thereto) and that to the best of his or her knowledge no event has occurred and remains in existence by reason of which payments on account of the principal of or interest, if any, on the Notes is prohibited or if such event has occurred, a description of the event and what action the Company is taking or proposes to take with respect thereto. (b) So long as not contrary to the then current recommendations of the American Institute of Certified Public Accountants, the year-end financial statements delivered pursuant to Section 4.03(a) above shall be accompanied by a written statement of the Company's independent public accountants (who shall be a firm of established national reputation) that in making the examination necessary for certification of such financial statements, nothing has come to their attention that would lead them to believe that the Company has violated any provisions of Article 4 or Article 5 hereof or, if any such violation has occurred, specifying the 31 39 nature and period of existence thereof, it being understood that such accountants shall not be liable directly or indirectly to any Person for any failure to obtain knowledge of any such violation. (c) The Company shall, so long as any of the Notes are outstanding, deliver to the Trustee, forthwith upon any Officer becoming aware of any Default or Event of Default, an Officers' Certificate specifying such Default or Event of Default and what action the Company is taking or proposes to take with respect thereto. SECTION 4.05. TAXES. The Company shall pay, and shall cause each of its Subsidiaries to pay, prior to delinquency, all material taxes, assessments, and governmental levies except such as are contested in good faith and by appropriate proceedings or where the failure to effect such payment is not adverse in any material respect to the Holders of the Notes. SECTION 4.06. STAY, EXTENSION AND USURY LAWS. The Company and each of the Guarantors covenants (to the extent that it may lawfully do so) that it shall not at any time insist upon, plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay, extension or usury law wherever enacted, now or at any time hereafter in force, that may affect the covenants or the performance of this Indenture; and the Company and each of the Guarantors (to the extent that it may lawfully do so) hereby expressly waives all benefit or advantage of any such law, and covenants that it shall not, by resort to any such law, hinder, delay or impede the execution of any power herein granted to the Trustee, but shall suffer and permit the execution of every such power as though no such law has been enacted. SECTION 4.07. RESTRICTED PAYMENTS. The Company shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly: (i) declare or pay any dividend or make any other payment or distribution on account of the Company's or any of its Restricted Subsidiary's Equity Interests (including, without limitation, any payment in connection with any merger or consolidation involving the Company or any Restricted Subsidiary) or to any direct or indirect holders of the Company's Equity Interests in their capacity as such (other than dividends or distributions (a) payable in Equity Interests (other than Disqualified Stock) of the Company or (b) to the Company or any Wholly Owned Restricted Subsidiary of the Company); (ii) purchase, redeem or otherwise acquire or retire for value (including, without limitation, in connection with any merger or consolidation involving the Company) any Equity Interests of the Company or any of its Restricted Subsidiaries or any direct or indirect parent of the Company (other than any such Equity Interests owned by the Company or any Restricted Subsidiary of the Company or Permitted Investments); (iii) make any payment on or with respect to, or purchase, redeem, defease or otherwise acquire or retire for value any Indebtedness of the Company or any Restricted Subsidiary that is subordinated to the Notes or any guarantee of the Notes, except a payment of interest or principal at Stated Maturity; or (iv) make any Restricted Investment (all such payments and other actions set forth in clauses (i) through (iv) above being collectively 32 40 referred to as "Restricted Payments"), unless, at the time of and after giving effect to such Restricted Payment: (a) no Default or Event of Default shall have occurred and be continuing or would occur as a consequence thereof; and (b) the Company would, at the time of such Restricted Payment and after giving pro forma effect thereto as if such Restricted Payment had been made at the beginning of the applicable four-quarter period, have been permitted to incur at least $1.00 of additional Indebtedness pursuant to the Debt to Cash Flow Ratio test set forth in the first paragraph of Section 4.09 hereof, and (c) such Restricted Payment, together with the aggregate amount of all other Restricted Payments made by the Company and its Restricted Subsidiaries after the date of this Indenture (excluding Restricted Payments permitted by clauses (ii), (iii) and (iv) of the next succeeding paragraph), is less than the sum, without duplication, of (i) an amount equal to the Consolidated Cash Flow of the Company for the period (taken as one accounting period) from the beginning of the first fiscal quarter commencing after the date of this Indenture to the end of the Company's most recently ended full fiscal quarter for which financial statements have been filed with the SEC (the "Basket Period") less the product of 1.4 times the Consolidated Interest Expense of the Company for the Basket Period), plus (ii) 100% of the aggregate net cash proceeds received by the Company as a contribution to its common equity capital or from the issue or sale since the date of this Indenture of Equity Interests of the Company (other than Disqualified Stock) or from the issue or sale of Disqualified Stock or debt securities of the Company that have been converted into such Equity Interests (other than Equity Interests (or Disqualified Stock or convertible debt securities) sold to a Subsidiary of the Company and other than Disqualified Stock or convertible debt securities that have been converted into Disqualified Stock), plus (ii) to the extent that any Restricted Investment that was made after the date of this Indenture 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. The foregoing provisions will not prohibit (i) the payment of any dividend within 60 days after the date of declaration thereof, if at the date of declaration such payment would have complied with the provisions of this Indenture; (ii) the redemption, repurchase, retirement, defeasance or other acquisition of any Equity Interests of Company or subordinated Indebtedness of the Company or any Guarantor in exchange for, or out of the net cash proceeds of the substantially concurrent sale (other than to a Subsidiary of the Company) of, other Equity Interests of the Company (other than any Disqualified Stock); provided that the amount of any such net cash proceeds that are utilized for any such redemption, repurchase, retirement, defeasance or other acquisition shall be excluded from clause (c)(ii) of the preceding paragraph; and, provided further, that no Default or Event of Default shall have occurred and be continuing immediately after such transaction; (iii) the defeasance, redemption, repurchase or other acquisition of subordinated Indebtedness with the net cash proceeds from an incurrence of Permitted Refinancing Indebtedness; provided that no Default or Event of Default shall have occurred and be continuing immediately after such transaction; (iv) the payment of any dividend by a Restricted Subsidiary of the Company to the holders of Equity Interests on a pro rata basis; 33 41 (v) the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of the Company or any Restricted Subsidiary of the Company held by any member of the Company's (or any of its Restricted Subsidiaries') management or board of directors pursuant to any management equity subscription agreement, stock option agreement or other similar agreement; provided that the aggregate price paid for all such repurchased, redeemed, acquired or retired Equity Interests shall not exceed $5.0 million (excluding for purposes of calculating such amounts during any period, loans incurred to finance the purchase of such Equity Interests that are repaid contemporaneously) in any twelve-month period and no Default or Event of Default shall have occurred and be continuing immediately after such transaction; (vi) repurchases of stock deemed to have occurred by virtue of the exercise of stock options; and (vii) other Restricted Payments in an aggregate amount not to exceed $5 million in any twelve-month period so long as no Default or Event of Default shall have occurred and be continuing. The amount of all Restricted Payments (other than cash) shall be the fair market value on the date of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued by the Company or such Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment. The fair market value of any non-cash Restricted Payment shall be determined in good faith by the Board of Directors whose resolution with respect thereto shall be delivered to the Trustee. Not later than the date of making any Restricted Payment, the Company shall deliver to the Trustee an Officers' Certificate stating that such Restricted Payment is permitted and setting forth the basis upon which any calculation required by this Section 4.07 were computed. The Board of Directors may designate any Restricted Subsidiary to be an Unrestricted Subsidiary if such designation would not cause a Default. For purposes of making such determination, the aggregate fair market value of all outstanding Investments by the Company and its Restricted Subsidiaries in the Subsidiary so designated will be deemed to be a Restricted Payment at the time of such designation and will reduce the amount available for Restricted Payments under the first paragraph of this covenant. Such designation will only be permitted if such Restricted Payment would be permitted at such time and if such Subsidiary otherwise meets the definition of an Unrestricted Subsidiary. Any such designation by the Board of Directors shall be evidenced to the Trustee by filing with the Trustee a certified copy of the Board Resolution giving effect to such designation and an Officers' Certificate certifying that such designation complied with the foregoing conditions. If, at any time, any Unrestricted Subsidiary would fail to meet the definition of an Unrestricted Subsidiary, it shall thereafter cease to be an Unrestricted Subsidiary for purposes of this Indenture and any Indebtedness of such Subsidiary shall be deemed to be incurred by a Restricted Subsidiary of the Company as of such date (and, if such Indebtedness is not permitted to be incurred as of such date under Section 4.09 hereof, the Company shall be in default). The Board of Directors of the Company may at any time designate any Unrestricted Subsidiary to be a Restricted Subsidiary; provided that such designation shall be deemed to be an incurrence of Indebtedness by a Restricted Subsidiary of the Company of any outstanding Indebtedness of such Unrestricted Subsidiary and such designation shall only be permitted if (i) such Indebtedness is permitted under Section 4.09 hereof, calculated on a pro forma basis as if such designation had occurred at the beginning of the four-quarter reference period and (ii) no Default or Event of Default would be in existence immediately following such designation. 34 42 SECTION 4.08. DIVIDEND AND OTHER PAYMENT RESTRICTIONS AFFECTING SUBSIDIARIES. The Company shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create or otherwise cause or suffer to exist or become effective any encumbrance or restriction on the ability of any Restricted Subsidiary to (a)(i) pay dividends or make any other distributions to the Company or any of its Restricted Subsidiaries (A) on its Capital Stock or (B) with respect to any other interest or participation in, or measured by, its profits or (ii) pay any indebtedness owed to the Company or any of its Restricted Subsidiaries, (b) make loans or advances to the Company or any of its Restricted Subsidiaries or (c) transfer any of its properties or assets to the Company or any of its Restricted Subsidiaries, except for such encumbrances or restrictions existing under or by reason of (i) Existing Indebtedness as in effect on the date hereof, (ii) the Senior Credit Facilities and any amendments, modifications, restatements, renewals, increases, supplements, refundings, replacements or refinancings thereof, and any other agreement governing or relating to Senior Debt, provided that such amendments, modifications, restatements, renewals, increases, supplements, refundings, replacements or refinancings and other agreements are, taken as a whole, no more restrictive with respect to such dividend and other payment restrictions than those contained in the Senior Credit Facilities, (iii) this Indenture as in effect on the date hereof, the Notes and the Subsidiary Guarantees, (iv) applicable law, (v) any instrument governing Indebtedness or Capital Stock of a Person acquired by the Company or any of its Restricted Subsidiaries as in effect at the time of such acquisition (except to the extent such Indebtedness was incurred in connection with or in anticipation of such acquisition), which encumbrance or restriction is not applicable to any Person, or the properties or assets of any Person, other than the Person, or the property or assets of the Person, so acquired, provided that, in the case of Indebtedness, such Indebtedness was permitted by the terms of this Indenture to be incurred, (vi) by reason of customary non-assignment provisions in leases and other agreements entered into in the ordinary course of business and consistent with past practices, (vii) purchase money obligations (including Capital Lease Obligations) for property acquired in the ordinary course of business that impose restrictions of the nature described in clause (c) above on the property so acquired, (viii) Permitted Refinancing Indebtedness, provided that the restrictions contained in the agreements governing such Permitted Refinancing Indebtedness are no more restrictive, taken as a whole than those contained in the agreements governing the Indebtedness being refinanced, (ix) secured Indebtedness otherwise permitted to be incurred pursuant to the provisions of Section 4.12 hereof that limits the right of the debtor to dispose of the assets securing such Indebtedness, (x) provisions with respect to the disposition or distribution of assets or property in joint venture agreements and other similar agreements entered into in the ordinary course of business, (xi) restrictions on cash or other deposits or net worth imposed by customers under contracts entered into in the ordinary course of business, and (xii) any agreement for the sale or other disposition of a Restricted Subsidiary that restricts distributions by that Restricted Subsidiary pending its sale or other disposition. SECTION 4.09. INCURRENCE OF INDEBTEDNESS AND ISSUANCE OF PREFERRED STOCK. The Company shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, "incur") any Indebtedness (including Acquired Debt) or issue any shares of Disqualified Stock and will not 35 43 permit any of its Restricted Subsidiaries to issue any shares of preferred stock; provided, however, that, so long as no Default or Event of Default has occurred and is continuing, the Company may incur Indebtedness (including Acquired Debt) or issue shares of Disqualified Stock and the Guarantors may issue shares of preferred stock if, in each case, the Company's Debt to Cash Flow Ratio at the time of incurrence of such Indebtedness or the issuance of such Disqualified Stock or preferred stock, as the case may be, after giving pro forma effect to such incurrence or issuance as of such date and to the use of the proceeds therefrom as if the same had occurred at the beginning of the most recently ended four full fiscal quarter period of the Company for which internal financial statements are available, would have been no greater than 7.0 to 1.0. The provisions of the first paragraph of this covenant will not apply to the incurrence of any of the following (collectively, "Permitted Debt"): (i) the incurrence by the Company (and the guarantee thereof by any Restricted Subsidiary) of Indebtedness and Letters of Credit under one or more Credit Facilities in an aggregate principal amount at any time outstanding not to exceed $250.0 million (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company and the Restricted Subsidiaries thereunder), less the aggregate amount of all mandatory repayments of the principal of any term Indebtedness under a Credit Facility that have been made since the date hereof (other than from the proceeds of any other Credit Facility) and less the aggregate amount of all commitment reductions of any revolving Indebtedness under a Credit Facility pursuant to clause (i) of the third paragraph of Section 4.10 hereof; (ii) the incurrence by the Company and the guarantee thereof by the Guarantors of Indebtedness represented by the Notes and the Subsidiary Guarantees; (iii) the incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness; (iv) the incurrence by the Company or its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or Purchase Money Indebtedness, in each case incurred for the purpose of financing all or any part of the purchase price or cost of construction or improvement of property, plant or equipment used in the business of the Company or such Restricted Subsidiary, in an aggregate amount not to exceed $5.0 million at any time outstanding, including all Permitted Refinancing Debt incurred pursuant to clause (v) below to refund, replace or refinance any Indebtedness pursuant to this clause (iv); (v) the incurrence by the Company or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to refund, refinance or replace Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to be incurred by the first paragraph of this Section 4.09, or by clauses (ii), (iii), (iv), (v), (vii), (xviii), (ix), (x), (xi) or (xii) of this paragraph; (vi) the incurrence of Indebtedness between or among the Company and any of its Restricted Subsidiaries; provided, however, that (a) if the Company is the obligor on such Indebtedness, such Indebtedness is expressly subordinated to the prior payment in full of 36 44 all Senior Debt and all Obligations with respect to the Notes and (b) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Company or a Restricted Subsidiary, and any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Restricted Subsidiary, shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be; (vii) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging Obligations that are incurred for the purpose of fixing or hedging interest rate risk with respect to any floating rate Indebtedness that is permitted by the terms of this Indenture to be outstanding; (viii) the guarantee by the Company or any of the Guarantors (or, in the case of a Credit Facility, any Restricted Subsidiary) of Indebtedness that was permitted to be incurred by another provision of this Section 4.09; (ix) the accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, and the payment of dividends on Disqualified Stock in the form of additional shares of the same class of Disqualified Stock; (x) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness consisting of performance, bid or advance payment bonds, surety bonds, custom bonds, utility bonds and similar obligations arising in the ordinary course of business; (xi) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness arising from agreements providing for indemnification, adjustment of purchase price or similar obligations, in each case incurred or assumed in connection with the disposition of any business, asset or Subsidiary of the Company, provided that the maximum assumable Indebtedness shall at no time exceed the gross proceeds actually received by the Company and its Restricted Subsidiaries in connection with the disposition of any business, asset or Subsidiary of the Company; and (xii) the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness in an aggregate principal amount at any time outstanding, including all Permitted Refinancing Indebtedness incurred pursuant to clause (v) above to refund, refinance or replace any Indebtedness incurred pursuant to this clause (xii), not to exceed $10 million. For purposes of determining compliance with this covenant, in the event that an item of Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (i) through (xii) above or is entitled to be incurred pursuant to the first paragraph of this covenant, the Company shall, in its sole discretion, classify and reclassify such item of Indebtedness in whole or in part in any manner that complies with this Section 4.09 and such item of Indebtedness will be treated as having been incurred pursuant to such clauses or pursuant to the first paragraph hereof. Accrual of interest, the accretion of accreted value, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same 37 45 terms and the payment of dividends on Disqualified Stock in the form of additional shares of the same class of Disqualified Stock will not be deemed to be an incurrence of Indebtedness or an issuance of Disqualified Stock for purposes of this covenant. SECTION 4.10. ASSET SALES. The Company shall not, and shall not permit any of its Restricted Subsidiaries to, consummate an Asset Sale unless (i) the Company or such Restricted Subsidiary, as the case may be, receives consideration at the time of such Asset Sale at least equal to the fair market value (as determined in good faith by the Board of Directors of the Company or such Subsidiary) of the assets or Equity Interests issued or sold or otherwise disposed of and (ii) at least 75% of the consideration therefor received by the Company or such Restricted Subsidiary is in the form of cash or Cash Equivalents; provided that the amount of (a) any liabilities (as shown on the Company's or such Restricted Subsidiary's most recent balance sheet) of the Company or such Restricted Subsidiary (other than contingent liabilities and liabilities that are by their terms subordinated to the Notes or any guarantee thereof) that are assumed by the transferee of any such assets pursuant to a customary novation agreement that releases the Company or such Restricted Subsidiary from further liability, and (b) any securities, notes or other obligations received by the Company or such Restricted Subsidiary from such transferee that are immediately converted by the Company or such Restricted Subsidiary into cash (to the extent of the cash received), within 90 days following the closing of such Asset Sale, shall be considered cash for purposes of this clause (ii). Notwithstanding the immediately preceding paragraph, the Company and its Restricted Subsidiaries will be permitted to consummate an Asset Sale without complying with such paragraph if (i) the Company or the applicable Restricted Subsidiary, as the case may be, receives consideration at the time of such Asset Sale at least equal to the fair market value of the assets or other property sold, issued or otherwise disposed of (as evidenced by a resolution of the Company's Board of Directors set forth in an Officers' Certificate delivered to the Trustee) and (ii) at least 75% of the consideration for such Asset Sale constitutes a controlling interest in a Permitted Business, long-term assets used or useful in a Permitted Business and/or cash or Cash Equivalents; provided that any cash or Cash Equivalents received by the Company or any of its Restricted Subsidiaries in connection with any Asset Sale permitted to be consummated under this paragraph shall constitute Net Proceeds subject to the provisions of the next succeeding paragraph. Within 365 days of the receipt of any Net Proceeds from an Asset Sale, the Company may apply such Net Proceeds, at its option, (i) to repay Senior Debt under a Credit Facility (and to correspondingly reduce commitments with respect thereto in the case of revolving borrowings), (ii) to the acquisition of a controlling interest in a Permitted Business, or (iii) to the making of a capital expenditure or the acquisition of other long-term assets, in each case, used or useful in a Permitted Business. Pending the final application of any such Net Proceeds, the Company may temporarily reduce Senior Debt or otherwise invest such Net Proceeds in any manner that is not prohibited by this Indenture. Any Net Proceeds from Asset Sales that are not applied or invested as provided in the first sentence of this paragraph shall be deemed to constitute "Excess Proceeds." When the aggregate amount of Excess Proceeds exceeds $10.0 million, the Company shall be required to make an offer to all Holders of Notes and all holders of other pari passu Indebtedness containing provisions similar to those set forth in this Indenture with respect to offers to purchase or redeem such other pari passu Indebtedness with the 38 46 proceeds of sales of assets (an "Asset Sale Offer") to purchase the maximum principal amount of Notes and such other pari passu Indebtedness that may be purchased out of the Excess Proceeds at an offer price in cash in an amount equal to 100% of the principal amount thereof, plus accrued and unpaid interest, if any, thereon to the date of purchase, in accordance with the procedures set forth in this Indenture and in such other pari passu Indebtedness. To the extent that the aggregate amount of Notes and such other pari passu Indebtedness tendered pursuant to an Asset Sale Offer is less than the Excess Proceeds, the Company may use any remaining Excess Proceeds for any purpose not otherwise prohibited by this Indenture. If the aggregate principal amount of Notes and such other pari passu Indebtedness surrendered by Holders thereof exceeds the amount of Excess Proceeds, the Trustee shall select the Notes and such other pari passu Indebtedness to be purchased on a pro rata basis. Upon completion of an Asset Sale Offer, the amount of Excess Proceeds shall be reset at zero. SECTION 4.11. TRANSACTIONS WITH AFFILIATES. The Company shall not, and shall not permit any of its Restricted 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 transaction, 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 Company or such Restricted Subsidiary than those that would have been obtained in a comparable transaction by the Company or such Restricted Subsidiary with an unrelated Person and (ii) the Company delivers to the Trustee (a) with respect to any Affiliate Transaction or series of related Affiliate Transactions involving aggregate consideration in excess of $2.5 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 $10.0 million, an opinion as to the fairness to the Company 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) any transaction approved by the Board of Directors of the Company, with an officer or director of the Company or of any of its Subsidiaries in his or her capacity as an officer or director entered into in the ordinary course of business; (2) transactions between or among the Company and/or its Restricted Subsidiaries; (3) payment of reasonable directors fees to the Board of Directors of the Company and of its Restricted Subsidiaries; (4) fees and compensation paid to, and indemnity provided on behalf of, officers, directors or employees of the Company or any of its Restricted Subsidiaries, as determined in good faith by the Board of Directors of the Company or of any such Restricted Subsidiary, to the extent the same are reasonable and customary; (5) any Restricted Payment that is permitted by Section 4.07; and (6) agreements in effect on the date of this Indenture and any modification thereto or any transaction contemplated thereby (including pursuant to any modification thereto) in any replacement agreement therefor so long as such modification or replacement is not more disadvantageous to the holders of the Notes in any material respect than the original agreement as in effect on the date of this Indenture, in each case, shall not be deemed to be Affiliate Transactions. 39 47 SECTION 4.12. LIENS. The Company shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly create, incur, assume or suffer to exist any Lien securing Indebtedness or trade payables on any asset now owned or hereafter acquired, or any income or profits therefrom or assign or convey any right to receive income therefrom, except Permitted Liens. SECTION 4.13. ASSET SWAPS. The Company will not, and will not permit any of its Restricted Subsidiaries to, in one or a series of related transactions, directly or indirectly, engage in any Asset Swaps, unless: (i) at the time of entering into the agreement to swap assets and immediately after giving effect to the proposed Asset Swap, no Default or Event of Default shall have occurred and be continuing or would occur as a consequence thereof; (ii) the Company would, after giving pro forma effect to the proposed Asset Swap, have been permitted to incur at least $1.00 of additional Indebtedness pursuant to the Debt to Cash Flow Ratio in Section 4.09; (iii) the respective fair market values of the assets being purchased and sold by the Company or any of its Restricted Subsidiaries (as determined in good faith by the management of the Company or, if such Asset Swap includes consideration in excess of $1.0 million by the Board of Directors of the Company, as evidenced by a Board Resolution) are substantially the same at the time of entering into the agreement to swap assets; and (iv) at the time of the consummation of the proposed Asset Swap, the percentage of any decline in the fair market value (determined as aforesaid) of the asset or assets being acquired by the Company and its Restricted Subsidiaries shall not be significantly greater than the percentage of any decline in the fair market value (determined as aforesaid) of the assets being disposed of by the Company or its Restricted Subsidiaries, calculated from the time the agreement to swap assets was entered into. SECTION 4.14. CORPORATE EXISTENCE. Subject to Article 5 hereof, the Company shall do or cause to be done all things necessary to preserve and keep in full force and effect (i) its corporate existence, and the corporate, partnership or other existence of each of its Subsidiaries, in accordance with the respective organizational documents (as the same may be amended from time to time) of the Company or any such Subsidiary and (ii) the rights (charter and statutory), licenses and franchises of the Company and its Subsidiaries; provided, however, that the Company shall not be required to preserve any such right, license or franchise, or the corporate, partnership or other existence of any of its Subsidiaries, if the Board of Directors shall determine that the preservation thereof is no longer desirable in the conduct of the business of the Company and its Subsidiaries, taken as a whole, and that the loss thereof is not adverse in any material respect to the Holders of the Notes. SECTION 4.15. OFFER TO REPURCHASE UPON CHANGE OF CONTROL. (a) Upon the occurrence of a Change of Control, the Company shall be obligated to make an offer (a "Change of Control Offer") to each Holder of Notes to repurchase all or any part (equal to $1,000 or an integral multiple thereof) of such Holder's Notes at an offer price in cash equal to 101% of the principal amount thereof, plus accrued and unpaid interest thereon to 40 48 the date of purchase (the "Change of Control Payment"). Within ten days following a Change of Control, the Company will mail a notice to the Trustee and each Holder describing the transaction or transactions that constitute the Change of Control and offering to repurchase Notes on the date specified in such notice, which date shall be no earlier than 30 days and no later than 60 days from the date such notice is mailed (the "Change of Control Payment Date"), pursuant to the procedures required by this Indenture and described in such notice. The Company will comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder to the extent such laws and regulations are applicable in connection with the repurchase of the Notes as a result of a Change of Control. (b) On the Change of Control Payment Date, the Company will, to the extent lawful, (i) accept for payment all Notes or portions thereof properly tendered pursuant to the Change of Control Offer, (ii) deposit with the Paying Agent an amount equal to the Change of Control Payment in respect of all Notes or portions thereof so tendered and (iii) deliver or cause to be delivered to the Trustee the Notes so accepted together with an Officers' Certificate stating the aggregate principal amount of Notes or portions thereof being purchased by the Company. The Paying Agent will promptly mail to each Holder of Notes so tendered the Change of Control Payment for such Notes, and the Trustee will promptly authenticate and mail (or cause to be transferred by book entry) to each Holder a new Note equal in principal amount to any unpurchased portion of the Notes surrendered, if any; provided that each such new Note will be in a principal amount of $1,000 or an integral multiple thereof. The Change of Control provisions described above will be applicable whether or not any other provisions of this Indenture are applicable. (c) Notwithstanding anything to the contrary in this Section 4.15, the Company shall not be required to make a Change of Control Offer upon a Change of Control if a third party makes the Change of Control Offer in the manner, at the times and otherwise in compliance with the requirements set forth in this Section 4.15 and Section 3.09 hereof and purchases all Notes validly tendered and not withdrawn under such Change of Control Offer. SECTION 4.16. NO SENIOR SUBORDINATED DEBT. Notwithstanding the provisions of Section 4.09 hereof, (i) the Company shall not directly or indirectly incur any Indebtedness that is subordinate or junior in right of payment to any Senior Debt and senior in any respect in right of payment to the Notes and (ii) no Guarantor shall incur any Indebtedness that is subordinated or junior in right of payment to any Guarantees of Senior Debt and senior in any respect in right of payment to the Subsidiary Guarantees. SECTION 4.17. [INTENTIONALLY OMITTED] 41 49 SECTION 4.18. LIMITATION ON SALE AND LEASEBACK TRANSACTIONS. The Company shall not, and shall not permit any of its Restricted Subsidiaries to, enter into any sale and leaseback transaction; provided that the Company and the Guarantors may enter into a sale and leaseback transaction if (i) the Company or such Guarantor could have (a) incurred Indebtedness in an amount equal to the Attributable Debt relating to such sale and leaseback transaction pursuant to the Debt to Cash Flow Ratio test set forth in the first paragraph of Section 4.09 hereof and (b) incurred a Lien to secure such Attributable Debt pursuant to Section 4.12 hereof, (ii) the gross cash proceeds of such sale and leaseback transaction are at least equal to the fair market value (as determined in good faith by the Board of Directors in good faith) of the property that is the subject of such sale and leaseback transaction and (iii) the transfer of assets in such sale and leaseback transaction is permitted by, and the proceeds of such transaction are applied in compliance with Section 4.10 hereof. SECTION 4.19. PAYMENTS FOR CONSENT. Neither the Company nor any of its Subsidiaries shall, directly or indirectly, pay or cause to be paid any consideration, whether by way of interest, fee or otherwise, to any Holder of any Notes for or as an inducement to any consent, waiver or amendment of any of the terms or provisions of this Indenture or the Notes unless such consideration is offered to be paid or is paid to all Holders of the Notes that consent, waive or agree to amend in the time frame set forth in the solicitation documents relating to such consent, waiver or agreement. SECTION 4.20. ADDITIONAL SUBSIDIARY GUARANTEES. If the Company or any of its Restricted Subsidiaries shall acquire or create another Restricted Subsidiary after the date of this Indenture (other than a Subsidiary described in clauses (i) and (ii) of the definition of the Non-Guarantor Subsidiaries), or any Unrestricted Subsidiary (other than a Subsidiary described in clause (ii) of the definition of Non-Guarantor Subsidiary) shall become a Restricted Subsidiary of the Company, then such Subsidiary shall become a Guarantor by executing a Supplemental Indenture in the form attached hereto as Exhibit F and deliver an Opinion of Counsel to the Trustee to the effect that such Supplemental Indenture has been duly authorized, executed and delivered by such Subsidiary and constitutes a valid and binding obligation of such Subsidiary, enforceable against such Subsidiary in accordance with its terms (subject to customary exceptions). 42 50 ARTICLE V SUCCESSORS SECTION 5.01. MERGER, CONSOLIDATION, OR SALE OF ASSETS. The Company shall not consolidate or merge with or into (whether or not the Company is the surviving corporation), or sell, assign, transfer, lease, convey or otherwise dispose of all or substantially all of its properties or assets in one or more related transactions, to another corporation, Person or entity unless (i) the Company is the surviving corporation or the entity or the Person formed by or surviving any such consolidation or merger (if other than the Company) or to which such sale, assignment, transfer, lease, conveyance or other disposition shall have been made is a corporation organized or existing under the laws of the United States, any state thereof or the District of Columbia; (ii) the entity or Person formed by or surviving any such consolidation or merger (if other than the Company) or the entity or Person to which such sale, assignment, transfer, lease, conveyance or other disposition shall have been made assumes all the obligations of the Company under the Notes and the Indenture pursuant to a supplemental indenture in a form reasonably satisfactory to the Trustee; (iii) immediately after such transaction no Default or Event of Default exists; and (iv) except in the case of a merger of the Company with or into a Wholly Owned Restricted Subsidiary of the Company, the Company or the entity or Person formed by or surviving any such consolidation or merger (if other than the Company), or to which such sale, assignment, transfer, lease, conveyance or other disposition shall have been made would, both immediately prior to and immediately after giving pro forma effect thereto as if such transaction had occurred at the beginning of the applicable four-quarter period, be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Debt to Cash Flow Ratio test set forth in Section 4.09 hereof. SECTION 5.02. SUCCESSOR CORPORATION SUBSTITUTED. Upon any consolidation or merger, or any sale, assignment, transfer, lease, conveyance or other disposition of all or substantially all of the assets of the Company in accordance with Section 5.01 hereof, the successor corporation formed by such consolidation or into or with which the Company is merged or to which such sale, assignment, transfer, lease, conveyance or other disposition is made shall succeed to, and be substituted for (so that from and after the date of such consolidation, merger, sale, lease, conveyance or other disposition, the provisions of this Indenture referring to the "Company" shall refer instead to the successor corporation and not to the Company), and may exercise every right and power of the Company under this Indenture with the same effect as if such successor Person had been named as the Company herein; provided, however, that the predecessor Company shall not be relieved from the obligation to pay the principal of and interest on the Notes except in the case of a sale of all of the Company's assets that meets the requirements of Section 5.01 hereof. 43 51 ARTICLE VI DEFAULTS AND REMEDIES SECTION 6.01. EVENTS OF DEFAULT. An "Event of Default" occurs if: (a) the Company defaults for 30 days in the payment when due of interest on, the Notes, whether or not such payment is prohibited by the provisions of Article 10 hereof; (b) the Company defaults in payment when due of the principal of or premium, if any, on the Notes, whether or not such payment is prohibited by the provisions of Article 10 hereof; (c) the Company or any Restricted Subsidiary fails to comply with any of the provisions of Section 4.15 or 5.01 hereof; (d) the Company or any Restricted Subsidiary fails for 30 days after written notice by the Trustee or the Holders of at least 25% in principal amount of the then outstanding Notes to comply with the provisions of Section 3.09, 4.07, 4.09 or 4.10 hereof (such notice must specify the Default, demand that it be remedied and state that the notice is a "Notice of Default"); (e) the Company or any Restricted Subsidiary fails for 60 days after written notice by the Trustee or the Holders of at least 25% in principal amount of the then outstanding Notes to comply with any of its other agreements in this Indenture or the Notes (such notice must specify the Default, demand that it be remedied and state that the notice is a "Notice of Default"); (f) the Company or any Significant Subsidiary defaults under any mortgage, indenture or instrument under which there may be issued or by which there may be secured or evidenced any Indebtedness for money borrowed by the Company or any of its Significant Subsidiaries (or the payment of which is guaranteed by the Company or any of its Significant Subsidiaries), whether such Indebtedness or guarantee now exists or is created after the date hereof, which default (a) is caused by a failure to pay (a "Payment Default") principal of or premium, if any, or interest on such Indebtedness when due (after giving effect to any applicable grace period provided in such Indebtedness on the date of such default) or (b) results in the acceleration of such Indebtedness prior to its express maturity and, in each case, the principal amount of any such Indebtedness, together with the principal amount of any other such Indebtedness under which there has been a Payment Default or the maturity of which has been so accelerated, aggregates $5.0 million or more; (g) the Company or any of its Significant Subsidiaries fails to pay final judgments aggregating in excess of $5.0 million (net of amounts covered by insurance), which judgments are not paid, discharged or stayed for a period of 60 days; (h) except as permitted by this Indenture, any Subsidiary Guarantee shall be held in any judicial proceeding to be unenforceable or invalid or shall cease for any reason to be in 44 52 full force and effect or any Guarantor, or any Person acting on behalf of any Guarantor, shall deny or disaffirm its obligations under its Subsidiary Guarantee; (i) the Company or any of the Company's Restricted Subsidiaries that constitutes a Significant Subsidiary or any group of Restricted Subsidiaries of the Company that, taken together, would constitute a Significant Subsidiary pursuant to or within the meaning of Bankruptcy Law: (i) commences a voluntary case, (ii) consents to the entry of an order for relief against it in an involuntary case, (iii) consents to the appointment of a custodian of it or for all or substantially all of its property, (iv) makes a general assignment for the benefit of its creditors, or (v) generally is not paying its debts as they become due; (j) a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that: (i) is for relief against the Company or any of its Restricted Subsidiaries that constitutes a Significant Subsidiary or any group of Restricted Subsidiaries that, taken as a whole, would constitute a Significant Subsidiary in an involuntary case; (ii) appoints a custodian of the Company or any of its Restricted Subsidiaries that constitutes a Significant Subsidiary or any group of Restricted Subsidiaries that, taken as a whole, would constitute a Significant Subsidiary or for all or substantially all of the property of the Company or any of its Restricted Subsidiaries that constitutes a Significant Subsidiary or any group of Restricted Subsidiaries that, taken as a whole, would constitute a Significant Subsidiary; or (iii) orders the liquidation of the Company or any of its Restricted Subsidiaries that constitutes a Significant Subsidiary or any group of Restricted Subsidiaries that, taken as a whole, would constitute a Significant Subsidiary; and the order or decree remains unstayed and in effect for 60 consecutive days. SECTION 6.02. ACCELERATION. If any Event of Default (other than an Event of Default specified in clause (i) or (j) of Section 6.01 hereof with respect to the Company, any Significant Subsidiary or any group of Significant Subsidiaries that, taken as a whole, would constitute a Significant Subsidiary) occurs and is continuing, the Trustee or the Holders of at least 25% in principal amount of the then outstanding Notes may declare all the Notes to be due and payable immediately. Notwithstanding the foregoing, if an Event of Default specified in clause (i) or (j) of Section 6.01 hereof occurs with respect to the Company, any Restricted Subsidiary of the Company that constitutes a Significant Subsidiary or any group of Restricted Subsidiaries of the Company that, taken together, would constitute a Significant Subsidiary, all outstanding Notes will automatically become due and payable without further action or notice. Holders of the Notes may not enforce this Indenture or the Notes except as provided in this Indenture. Subject to certain limitations, Holders of a majority in principal amount of the then outstanding Notes may direct the Trustee in its exercise of any trust or power. The Trustee may withhold from Holders of the Notes notice of any continuing Default or Event of Default (except a Default or Event of 45 53 Default relating to the payment of principal or interest) if it determines that withholding notice is in their interest. If an Event of Default occurs on or after [_____________], 2004 by reason of any willful action (or inaction) taken (or not taken) by or on behalf of the Company with the intention of avoiding payment of the premium that the Company would have had to pay if the Company then had elected to redeem the Notes pursuant to Section 3.07 hereof, then, upon acceleration of the Notes, an equivalent premium shall also become and be immediately due and payable, to the extent permitted by law, anything in this Indenture or in the Notes to the contrary notwithstanding. If an Event of Default occurs prior to [_____________], 2004 by reason of any willful action (or inaction) taken (or not taken) by or on behalf of the Company with the intention of avoiding the prohibition on redemption of the Notes prior to such date, then, upon acceleration of the Notes, the Make Whole Premium shall also become and be immediately due and payable. The Holders of a majority in aggregate principal amount of the Notes then outstanding by notice to the Trustee may on behalf of the Holders of all of the Notes waive any existing Default or Event of Default and its consequences under this Indenture except a continuing Default or Event of Default in the payment of interest on, or the principal of, the Notes. The Company is required to deliver to the Trustee annually a statement regarding compliance with this Indenture, and the Company is required upon becoming aware of any Default or Event of Default, to deliver to the Trustee a statement specifying such Default or Event of Default. SECTION 6.03. OTHER REMEDIES. If an Event of Default occurs and is continuing, the Trustee may pursue any available remedy to collect the payment of principal, premium, if any, and interest on the Notes or to enforce the performance of any provision of the Notes or this Indenture. The Trustee may maintain a proceeding even if it does not possess any of the Notes or does not produce any of them in the proceeding. A delay or omission by the Trustee or any Holder of a Note in exercising any right or remedy accruing upon an Event of Default shall not impair the right or remedy or constitute a waiver of or acquiescence in the Event of Default. All remedies are cumulative to the extent permitted by law. SECTION 6.04. WAIVER OF PAST DEFAULTS. Holders of not less than a majority in aggregate principal amount of the then outstanding Notes by notice to the Trustee may on behalf of the Holders of all of the Notes waive an existing Default or Event of Default and its consequences hereunder, except a continuing Default or Event of Default in the payment of the principal of, premium, if any, or interest on, the Notes (including in connection with an offer to purchase) (provided, however, that the Holders of a majority in aggregate principal amount of the then outstanding Notes may rescind an acceleration and its consequences, including any related payment default that resulted from such acceleration). Upon any such waiver, such Default shall cease to exist, and any Event of Default arising therefrom shall be deemed to have been cured for every purpose of this 46 54 Indenture; but no such waiver shall extend to any subsequent or other Default or impair any right consequent thereon. SECTION 6.05. CONTROL BY MAJORITY. Holders of a majority in principal amount of the then outstanding Notes may direct the time, method and place of conducting any proceeding for exercising any remedy available to the Trustee or exercising any trust or power conferred on it. However, the Trustee may refuse to follow any direction that conflicts with law or this Indenture that the Trustee determines may be unduly prejudicial to the rights of other Holders of Notes or that may involve the Trustee in personal liability. SECTION 6.06. LIMITATION ON SUITS. A Holder of a Note may pursue a remedy with respect to this Indenture or the Notes only if: (a) the Holder of a Note gives to the Trustee written notice of a continuing Event of Default; (b) the Holders of at least 25% in principal amount of the then outstanding Notes make a written request to the Trustee to pursue the remedy; (c) such Holder of a Note or Holders of Notes offer and, if requested, provide to the Trustee indemnity satisfactory to the Trustee against any loss, liability or expense; (d) the Trustee does not comply with the request within 60 days after receipt of the request and the offer and, if requested, the provision of indemnity; and (e) during such 60-day period the Holders of a majority in principal amount of the then outstanding Notes do not give the Trustee a direction inconsistent with the request. A Holder of a Note may not use this Indenture to prejudice the rights of another Holder of a Note or to obtain a preference or priority over another Holder of a Note. SECTION 6.07. RIGHTS OF HOLDERS OF NOTES TO RECEIVE PAYMENT. Notwithstanding any other provision of this Indenture, the right of any Holder of a Note to receive payment of principal, premium, if any, and interest on the Note, on or after the respective due dates expressed in the Note (including in connection with an offer to purchase), or to bring suit for the enforcement of any such payment on or after such respective dates, shall not be impaired or affected without the consent of such Holder. SECTION 6.08. COLLECTION SUIT BY TRUSTEE. If an Event of Default specified in Section 6.01(a) or (b) occurs and is continuing, the Trustee is authorized to recover judgment in its own name and as trustee of an express trust against the Company for the whole amount of principal of, premium, if any, and interest remaining unpaid on the Notes and interest on overdue principal and, to the extent lawful, interest and such further amount as shall be sufficient to cover the costs and expenses of 47 55 collection, including the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel. SECTION 6.09. TRUSTEE MAY FILE PROOFS OF CLAIM. The Trustee is authorized to file such proofs of claim and other papers or documents as may be necessary or advisable in order to have the claims of the Trustee (including any claim for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel) and the Holders of the Notes allowed in any judicial proceedings relative to the Company (or any other obligor upon the Notes), its creditors or its property and shall be entitled and empowered to collect, receive and distribute any money or other property payable or deliverable on any such claims and any custodian in any such judicial proceeding is hereby authorized by each Holder to make such payments to the Trustee, and in the event that the Trustee shall consent to the making of such payments directly to the Holders, to pay to the Trustee any amount due to it for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the Trustee under Section 7.07 hereof. To the extent that the payment of any such compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the Trustee under Section 7.07 hereof out of the estate in any such proceeding shall be denied for any reason, payment of the same shall be secured by a Lien on, and shall be paid out of, any and all distributions, dividends, money, securities and other properties that after giving effect to Article 10 the Holders may be entitled to receive in such proceeding whether in liquidation or under any plan of reorganization or arrangement or otherwise. Nothing herein contained shall be deemed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any Holder any plan of reorganization, arrangement, adjustment or composition affecting the Notes or the rights of any Holder, or to authorize the Trustee to vote in respect of the claim of any Holder in any such proceeding. SECTION 6.10. PRIORITIES. If the Trustee collects any money pursuant to this Article, it shall pay out the money in the following order: First: to the Trustee, its agents and attorneys for amounts due under Section 7.07 hereof, including payment of all compensation, expense and liabilities incurred, and all advances made, by the Trustee and the costs and expenses of collection; Second: to Holders of Notes for amounts due and unpaid on the Notes for principal, premium, if any, and interest, ratably, without preference or priority of any kind, according to the amounts due and payable on the Notes for principal, premium, if any and interest, respectively; and Third: to the Company or to such party as a court of competent jurisdiction shall direct. The Trustee may fix a record date and payment date for any payment to Holders of Notes pursuant to this Section 6.10. 48 56 SECTION 6.11. UNDERTAKING FOR COSTS. In any suit for the enforcement of any right or remedy under this Indenture or in any suit against the Trustee for any action taken or omitted by it as a Trustee, a court in its discretion may require the filing by any party litigant in the suit of an undertaking to pay the costs of the suit, and the court in its discretion may assess reasonable costs, including reasonable attorneys' fees and expenses, against any party litigant in the suit, having due regard to the merits and good faith of the claims or defenses made by the party litigant. This Section does not apply to a suit by the Trustee, a suit by a Holder of a Note pursuant to Section 6.07 hereof, or a suit by Holders of more than 10% in principal amount of the then outstanding Notes. SECTION 6.12. NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS, EMPLOYEES AND STOCKHOLDERS. No director, officer, employee or stockholder of the Company or any Guarantor, as such, shall have any liability for any obligations of the Company or any Guarantor under the Notes, the Subsidiary Guarantees, the Indenture or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each Holder of Notes by accepting a Note waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Notes. Such waiver may not be effective to waive liabilities under the federal securities laws and it is the view of the SEC that such a waiver is against public policy. ARTICLE VII TRUSTEE SECTION 7.01. DUTIES OF TRUSTEE. (a) If an Event of Default has occurred and is continuing, the Trustee shall exercise such of the rights and powers vested in it by this Indenture, and use the same degree of care and skill in its exercise, as a prudent person would exercise or use under the circumstances in the conduct of such person's own affairs. (b) Except during the continuance of an Event of Default: (i) the duties of the Trustee shall be determined solely by the express provisions of this Indenture and the TIA and the Trustee need perform only those duties that are specifically set forth in this Indenture and no others, and no implied covenants or obligations shall be read into this Indenture or the TIA against the Trustee; and (ii) in the absence of bad faith on its part, the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Trustee and conforming to the requirements of this Indenture. However, in the case of any such certificates or opinions which by any provision hereof are specifically required to be furnished to the Trustee, the Trustee shall be under a duty to examine the same to determine whether or not they conform to the 49 57 requirements of this Indenture (but need not confirm or investigate the accuracy of mathematical calculations or other facts stated therein). (c) The Trustee may not be relieved from liabilities for its own negligent action, its own negligent failure to act, or its own willful misconduct, except that: (i) this paragraph does not limit the effect of paragraph (b) of this Section; (ii) the Trustee shall not be liable for any error of judgment made in good faith by a Responsible Officer, unless it is proved that the Trustee was negligent in ascertaining the pertinent facts; and (iii) the Trustee shall not be liable with respect to any action it takes or omits to take in good faith in accordance with a direction received by it pursuant to Section 6.05 hereof. (d) Whether or not therein expressly so provided, every provision of this Indenture that in any way relates to the Trustee is subject to paragraphs (a), (b), and (c) of this Section. (e) No provision of this Indenture shall require the Trustee to expend or risk its own funds or incur any liability. The Trustee shall be under no obligation to exercise any of its rights and powers under this Indenture at the request of any Holders, unless such Holder shall have offered to the Trustee security and indemnity satisfactory to it against any loss, liability or expense that might be incurred by it in compliance with such request or direction. (f) The Trustee shall not be liable for interest on any money received by it except as the Trustee may agree in writing with the Company. Money held in trust by the Trustee need not be segregated from other funds except to the extent required by law. SECTION 7.02. RIGHTS OF TRUSTEE. (a) The Trustee may conclusively rely upon any document believed by it to be genuine and to have been signed or presented by the proper Person. The Trustee need not investigate any fact or matter stated in the document. (b) Before the Trustee acts or refrains from acting, it may require an Officers' Certificate or an Opinion of Counsel or both. The Trustee shall not be liable for any action it takes or omits to take in good faith in reliance on such Officers' Certificate or Opinion of Counsel. The Trustee may consult with counsel of its reasonable discretion and the advice of such counsel or any Opinion of Counsel shall be full and complete authorization and protection from liability in respect of any action taken, suffered or omitted by it hereunder in good faith and in reliance thereon. (c) The Trustee may act through its attorneys and agents and shall not be responsible for the misconduct or negligence of any agent appointed with due care. 50 58 (d) The Trustee shall not be liable for any action it takes or omits to take in good faith that it believes to be authorized or within the rights or powers conferred upon it by this Indenture. (e) Unless otherwise specifically provided in this Indenture, any demand, request, direction or notice from the Company or any Guarantor shall be sufficient if signed by an Officer of the Company or Guarantor issuing such demand, request, direction or notice. (f) The Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture at the request or direction of any of the Holders unless such Holders shall have offered to the Trustee security or indemnity reasonably satisfactory to the Trustee against the costs, expenses and liabilities that might be incurred by it in compliance with such request or direction. (g) The Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, other evidence of indebtedness or other paper or document, but the Trustee, in its discretion, may make such reasonable further inquiry or investigation into such facts or matters as it may determine, and, if the Trustee makes such inquiry or investigation, it shall be entitled on reasonable prior notice to examine during customary business hours the books, records and premises of the Company, personally or by agent or attorney at the sole cost of the Company and shall incur no liability or additional liability of any kind by reason of such inquiry or investigation. (h) The Trustee shall not be deemed to have notice of any Default or Event of Default unless a Responsible Officer of the Trustee has actual knowledge thereof or unless written notice of any event which is in fact such a Default is received by the Trustee at the Corporate Trust Office of the Trustee, and such notice references the Notes and this Indenture. (i) The rights, privileges, protections, immunities and benefits given to the Trustee, including, without limitation, its right to be indemnified, are extended to, and shall be enforceable by, the Trustee in each of its capacities hereunder, and to each agent, custodian and other Person employed to act hereunder. SECTION 7.03. INDIVIDUAL RIGHTS OF TRUSTEE. The Trustee in its individual or any other capacity may become the owner or pledgee of Notes and may otherwise deal with the Company or any Affiliate of the Company with the same rights it would have if it were not Trustee. However, in the event that the Trustee acquires any conflicting interest it must eliminate such conflict within 90 days, apply to the SEC for permission to continue as trustee or resign. Any Agent may do the same with like rights and duties. The Trustee is also subject to Sections 7.10 and 7.11 hereof. SECTION 7.04. TRUSTEE'S DISCLAIMER. The Trustee shall not be responsible for and makes no representation as to the validity or adequacy of this Indenture or the Notes, it shall not be accountable for the Company's use of the proceeds from the Notes or any money paid to the Company or upon the Company's 51 59 direction under any provision of this Indenture, it shall not be responsible for the use or application of any money received by any Paying Agent other than the Trustee, and it shall not be responsible for any statement or recital herein or any statement in the Notes or any other document in connection with the sale of the Notes or pursuant to this Indenture other than its certificate of authentication. SECTION 7.05. NOTICE OF DEFAULTS. If a Default or Event of Default occurs and is continuing and if it is known to the Trustee, the Trustee shall mail to Holders of Notes a notice of the Default or Event of Default within 90 days after it occurs. Except in the case of a Default or Event of Default in payment of principal of, premium, if any, or interest on any Note, the Trustee may withhold the notice if and so long as a committee of its Responsible Officers in good faith determines that withholding the notice is in the interests of the Holders of the Notes. SECTION 7.06. REPORTS BY TRUSTEE TO HOLDERS OF THE NOTES. Within 60 days after each [September] 15 beginning with the [September] 15 following the date of this Indenture, and for so long as Notes remain outstanding, the Trustee shall mail to the Holders of the Notes a brief report dated as of such reporting date that complies with TIA Section 313(a) (but if no event described in TIA Section 313(a) has occurred within the twelve months preceding the reporting date, no report need be transmitted). The Trustee also shall comply with TIA Section 313(b)(2). The Trustee shall also transmit by mail all reports as required by TIA Section 313(c). A copy of each report at the time of its mailing to the Holders of Notes shall be mailed to the Company and filed with the SEC and each stock exchange on which the Notes are listed in accordance with TIA Section 313(d). The Company shall promptly notify the Trustee when the Notes are listed on any stock exchange or of any delisting thereof. SECTION 7.07. COMPENSATION AND INDEMNITY. The Company and the Guarantors shall pay to the Trustee from time to time such compensation for its acceptance of this Indenture and the rendering by it of the services required hereunder as shall be agreed in writing with the Company. The Trustee's compensation shall not be limited by any law on compensation of a trustee of an express trust. The Company and the Guarantors shall reimburse the Trustee promptly upon request for all reasonable disbursements, advances and expenses incurred or made by it in addition to the compensation for its services. Such expenses shall include the reasonable compensation, disbursements and expenses of the Trustee's agents and counsel. The Company and the Guarantors shall indemnify each of the Trustee and any predecessor of the Trustee against any and all losses, liabilities, damages, claims or expenses, including taxes (other than taxes based on the income of the Trustee) incurred by it arising out of or in connection with the acceptance or administration of its duties under this Indenture, including the costs and expenses of enforcing this Indenture against the Company and the Guarantors (including this Section 7.07) and defending itself against any claim (whether asserted by the Company and the Guarantors or any Holder or any other person) or liability in connection with the exercise or performance of any of its powers or duties hereunder, except to the extent 52 60 any such loss, liability or expense may be attributable to its gross negligence or bad faith. The Trustee shall notify the Company and the Guarantors promptly of any claim for which it may seek indemnity. The obligations of the Company and the Guarantors under this Section 7.07 shall survive the satisfaction and discharge of this Indenture. To secure the Company's and the Guarantors' payment obligations in this Section, the Trustee shall have a Lien prior to the Notes on all money or property held or collected by the Trustee, except that held in trust to pay principal and interest on particular Notes. Such Lien shall survive the satisfaction and discharge of this Indenture. Compensation, reimbursement and indemnification of the Trustee under this Section 7.07 is not subordinated to Senior Debt of the Company. When the Trustee incurs expenses or renders services after an Event of Default specified in Section 6.01(i) or (j) hereof occurs, the expenses and the compensation for the services (including the fees and expenses of its agents and counsel) are intended to constitute expenses of administration under any Bankruptcy Law. The Trustee shall comply with the provisions of TIA Section 313(b)(2) to the extent applicable. SECTION 7.08. REPLACEMENT OF TRUSTEE. A resignation or removal of the Trustee and appointment of a successor Trustee shall become effective only upon the successor Trustee's acceptance of appointment as provided in this Section. The Trustee may resign in writing at any time and be discharged from the trust hereby created by so notifying the Company. The Holders of Notes of a majority in principal amount of the then outstanding Notes may remove the Trustee by so notifying the Trustee and the Company in writing. The Company may remove the Trustee if: (a) the Trustee fails to comply with Section 7.10 hereof; (b) the Trustee is adjudged a bankrupt or an insolvent or an order for relief is entered with respect to the Trustee under any Bankruptcy Law; (c) a custodian or public officer takes charge of the Trustee or its property; or (d) the Trustee becomes incapable of acting. If the Trustee resigns or is removed or if a vacancy exists in the office of Trustee for any reason, the Company shall promptly appoint a successor Trustee. Within one year after the successor Trustee takes office, the Holders of a majority in principal amount of the then outstanding Notes may appoint a successor Trustee to replace the successor Trustee appointed by the Company. If a successor Trustee does not take office within 60 days after the retiring Trustee resigns or is removed, the retiring Trustee, the Company, or the Holders of Notes of at least 10% 53 61 in principal amount of the then outstanding Notes may petition, at the expense of the Company any court of competent jurisdiction for the appointment of a successor Trustee. If the Trustee, after written request by any Holder of a Note who has been a Holder of a Note for at least six months, fails to comply with Section 7.10, such Holder of a Note may petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee. A successor Trustee shall deliver a written acceptance of its appointment to the retiring Trustee and to the Company. Thereupon, the resignation or removal of the retiring Trustee shall become effective, and the successor Trustee shall have all the rights, powers and duties of the Trustee under this Indenture. The successor Trustee shall mail a notice of its succession to Holders of the Notes. The retiring Trustee shall promptly transfer all property held by it as Trustee to the successor Trustee, provided all sums owing to the Trustee hereunder have been paid and subject to the Lien provided for in Section 7.07 hereof. Notwithstanding replacement of the Trustee pursuant to this Section 7.08, the Company's obligations under Section 7.07 hereof shall continue for the benefit of the retiring Trustee. SECTION 7.09. SUCCESSOR TRUSTEE BY MERGER, ETC. If the Trustee consolidates, merges or converts into, or transfers all or substantially all of its corporate trust business to, another corporation, the successor corporation without any further act shall be the successor Trustee. SECTION 7.10. ELIGIBILITY; DISQUALIFICATION. There shall at all times be a Trustee hereunder that is a corporation organized and doing business under the laws of the United States of America or of any state thereof that is authorized under such laws to exercise corporate trustee power, that is subject to supervision or examination by federal or state authorities and that has a combined capital and surplus of at least $50.0 million as set forth in its most recent published annual report of condition. This Indenture shall always have a Trustee who satisfies the requirements of TIA Section 310(a)(1), (2) and (5). The Trustee is subject to TIA Section 310(b). SECTION 7.11. PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY. The Trustee is subject to TIA Section 311(a), excluding any creditor relationship listed in TIA Section 311(b). A Trustee who has resigned or been removed shall be subject to TIA Section 311(a) to the extent indicated therein. ARTICLE VIII LEGAL DEFEASANCE AND COVENANT DEFEASANCE SECTION 8.01. OPTION TO EFFECT LEGAL DEFEASANCE OR COVENANT DEFEASANCE. The Company may, at the option of its Board of Directors evidenced by a resolution set forth in an Officers' Certificate, at any time, elect to have either Section 8.02 or 54 62 8.03 hereof be applied to all outstanding Notes upon compliance with the conditions set forth below in this Article 8. SECTION 8.02. LEGAL DEFEASANCE AND DISCHARGE. Upon the Company's exercise under Section 8.01 hereof of the option applicable to this Section 8.02, the Company shall, subject to the satisfaction of the conditions set forth in Section 8.04 hereof, be deemed to have been discharged from its obligations with respect to all outstanding Notes and to have each Guarantor's obligation discharged with respect to its Subsidiary Guarantee on the date the conditions set forth below are satisfied (hereinafter, "Legal Defeasance"). For this purpose, Legal Defeasance means that the Company shall be deemed to have paid and discharged the entire Indebtedness represented by the outstanding Notes, which shall thereafter be deemed to be "outstanding" only for the purposes of Section 8.05 hereof and the other Sections of this Indenture referred to in (a) and (b) below, and to have satisfied all its other obligations under such Notes and this Indenture (and the Trustee, on demand of and at the expense of the Company, shall execute proper instruments acknowledging the same), except for the following provisions which shall survive until otherwise terminated or discharged hereunder: (a) the rights of Holders of outstanding Notes to receive solely from the trust fund described in Section 8.04 hereof, and as more fully set forth in such Section, payments in respect of the principal of and premium and interest, on such Notes when such payments are due, (b) the Company's obligations with respect to such Notes under Article 2 and Section 4.02 hereof, (c) the rights, powers, trusts, duties and immunities of the Trustee hereunder and the Company's obligations in connection therewith and (d) this Article 8. Subject to compliance with this Article 8, the Company may exercise its option under this Section 8.02 notwithstanding the prior exercise of its option under Section 8.03 hereof. SECTION 8.03. COVENANT DEFEASANCE. Upon the Company's exercise under Section 8.01 hereof of the option applicable to this Section 8.03, the Company and each Guarantor shall, subject to the satisfaction of the conditions set forth in Section 8.04 hereof, be released from their obligations under the covenants contained in Sections 4.07, 4.08, 4.09, 4.10, 4.11, 4.12, 4.13, 4.15, 4.16, 4.18, 4.19, 4.20, 5.01 and 11.01 hereof with respect to the outstanding Notes on and after the date the conditions set forth in Section 8.04 are satisfied (hereinafter, "Covenant Defeasance"), and the Notes shall thereafter be deemed not "outstanding" for the purposes of any direction, waiver, consent or declaration or act of Holders (and the consequences of any thereof) in connection with such covenants, but shall continue to be deemed "outstanding" for all other purposes hereunder (it being understood that such Notes shall not be deemed outstanding for accounting purposes). For this purpose, Covenant Defeasance means that, with respect to the outstanding Notes, the Company and each Guarantor may omit to comply with and shall have no liability in respect of any term, condition or limitation set forth in any such covenant, whether directly or indirectly, by reason of any reference elsewhere herein to any such covenant or by reason of any reference in any such covenant to any other provision herein or in any other document and such omission to comply shall not constitute a Default or an Event of Default under Section 6.01 hereof, but, except as specified above, the remainder of this Indenture and such Notes shall be unaffected thereby. In addition, upon the Company's exercise under Section 8.01 hereof of the option applicable to this Section 8.03 hereof, subject to the satisfaction of the conditions set forth in 55 63 Section 8.04 hereof, Sections 6.01(d) through 6.01(f) hereof shall not constitute Events of Default. SECTION 8.04. CONDITIONS TO LEGAL OR COVENANT DEFEASANCE. The following shall be the conditions to the application of either Section 8.02 or 8.03 hereof to the outstanding Notes: In order to exercise either Legal Defeasance or Covenant Defeasance: (a) the Company must irrevocably deposit with the Trustee, in trust, for the benefit of the Holders, cash in United States dollars, non-callable Government Securities, or a combination thereof, in such amounts as will be sufficient, in the opinion of a nationally recognized firm of independent public accountants, to pay the principal of, premium and, if any, and interest on the outstanding Notes on the stated date for payment thereof or on the applicable redemption date, as the case may be, and the Company must specify whether the Notes are being defeased to maturity or to a particular redemption date; (b) in the case of an election under Section 8.02 hereof, the Company shall have delivered to the Trustee an Opinion of Counsel in the United States reasonably acceptable to the Trustee confirming that (A) the Company has received from, or there has been published by, the Internal Revenue Service a ruling or (B) since the date of this Indenture, there has been a change in the applicable federal income tax law, in either case to the effect that, and based thereon such Opinion of Counsel shall confirm that, the Holders of the outstanding Notes will not recognize income, gain or loss for federal income tax purposes as a result of such Legal Defeasance and will be subject to federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such Legal Defeasance had not occurred; (c) in the case of an election under Section 8.03 hereof, the Company shall have delivered to the Trustee an Opinion of Counsel in the United States reasonably acceptable to the Trustee confirming that the Holders of the outstanding Notes will not recognize income, gain or loss for federal income tax purposes as a result of such Covenant Defeasance and will be subject to federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such Covenant Defeasance had not occurred; (d) no Default or Event of Default shall have occurred and be continuing on the date of such deposit (other than a Default or Event of Default resulting from the incurrence of Indebtedness all or a portion of the proceeds of which will be used to defease the Notes pursuant to this Article 8 concurrently with such incurrence) or insofar as Sections 6.01(i) or 6.01(j) hereof is concerned, at any time in the period ending on the 91st day after the date of deposit (or greater period of time in which any such deposit of trust funds may remain subject to bankruptcy or insolvency laws insofar as those apply to the deposit by the Company); (e) such Legal Defeasance or Covenant Defeasance shall not result in a breach or violation of, or constitute a default under, any material agreement or instrument (other than this Indenture) to which the Company or any of its Subsidiaries is a party or by which the Company or any of its Subsidiaries is bound; 56 64 (f) the Company shall have delivered to the Trustee an Opinion of Counsel (which may be subject to customary exceptions) to the effect that (A) on the 91st day following the deposit (or greater period of time in which any such deposit of trust funds may remain subject to bankruptcy or insolvency laws insofar as those apply to the deposit by the Company), the trust funds will not be subject to the effect of any applicable bankruptcy, insolvency, reorganization or similar laws affecting creditors' rights generally and (B) the trust funds will not be subject to the rights of holders of Indebtedness other than the Notes; (g) the Company shall have delivered to the Trustee an Officers' Certificate stating that the deposit was not made by the Company with the intent of preferring the Holders over any other creditors of the Company or with the intent of defeating, hindering, delaying or defrauding any other creditors of the Company or others; and (h) the Company shall have delivered to the Trustee an Officers' Certificate and an Opinion of Counsel, each stating that all conditions precedent provided for or relating to the Legal Defeasance or the Covenant Defeasance have been complied with. SECTION 8.05. DEPOSITED MONEY AND GOVERNMENT SECURITIES TO BE HELD IN TRUST; OTHER MISCELLANEOUS PROVISIONS. Subject to Section 8.06 hereof, all money and non-callable Government Securities (including the proceeds thereof) deposited with the Trustee (or other qualifying trustee, collectively for purposes of this Section 8.05, the "Trustee") pursuant to Section 8.04 hereof in respect of the outstanding Notes shall be held in trust and applied by the Trustee, in accordance with the provisions of such Notes and this Indenture, to the payment, either directly or through any Paying Agent (including the Company acting as Paying Agent) as the Trustee may determine, to the Holders of such Notes of all sums due and to become due thereon in respect of principal, premium, if any, and interest, but such money need not be segregated from other funds except to the extent required by law. The Company and the Guarantors shall pay and indemnify the Trustee against any tax, fee or other charge imposed on or assessed against the cash or non-callable Government Securities deposited pursuant to Section 8.04 hereof or the principal and interest received in respect thereof other than any such tax, fee or other charge which by law is for the account of the Holders of the outstanding Notes. Anything in this Article 8 to the contrary notwithstanding, the Trustee shall deliver or pay to the Company from time to time upon the request of the Company any money or non-callable Government Securities held by it as provided in Section 8.04 hereof which, in the opinion of a nationally recognized firm of independent public accountants expressed in a written certification thereof delivered to the Trustee (which may be the opinion delivered under Section 8.04(a) hereof), are in excess of the amount thereof that would then be required to be deposited to effect an equivalent Legal Defeasance or Covenant Defeasance. Any deposit made pursuant to this Article VIII shall be subject to the provisions of Article X only if payment in respect of the Notes is prohibited under Article X on the date such deposit is made. 57 65 SECTION 8.06. REPAYMENT TO COMPANY. Any money deposited with the Trustee or any Paying Agent, or then held by the Company, in trust for the payment of the principal of, premium, if any, or interest on any Note and remaining unclaimed for two years after such principal, and premium, if any, or interest has become due and payable shall be paid to the Company on its request or (if then held by the Company) shall be discharged from such trust; and the Holder of such Note shall thereafter, as a secured creditor, look only to the Company for payment thereof, and all liability of the Trustee or such Paying Agent with respect to such trust money, and all liability of the Company as trustee thereof, shall thereupon cease; provided, however, that the Trustee or such Paying Agent, before being required to make any such repayment, shall at the expense of the Company cause to be published once, in the New York Times and The Wall Street Journal (national edition), notice that such money remains unclaimed and that, after a date specified therein, which shall not be less than 30 days from the date of such notification or publication, any unclaimed balance of such money then remaining will be repaid to the Company. SECTION 8.07. REINSTATEMENT. If the Trustee or Paying Agent is unable to apply any United States dollars or non-callable Government Securities in accordance with Section 8.02 or 8.03 hereof, as the case may be, by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, then the Company's obligations under this Indenture and the Notes shall be revived and reinstated as though no deposit had occurred pursuant to Section 8.02 or 8.03 hereof until such time as the Trustee or Paying Agent is permitted to apply all such money in accordance with Section 8.02 or 8.03 hereof, as the case may be; provided, however, that, if the Company makes any payment of principal of, premium, if any, or interest on any Note following the reinstatement of its obligations, the Company shall be subrogated to the rights of the Holders of such Notes to receive such payment from the money held by the Trustee or Paying Agent. ARTICLE IX AMENDMENT, SUPPLEMENT AND WAIVER SECTION 9.01. WITHOUT CONSENT OF HOLDERS OF NOTES. Notwithstanding Section 9.02 of this Indenture, the Company, a Guarantor (with respect to a Subsidiary Guarantee or this Indenture to which it is a party) and the Trustee may amend or supplement this Indenture, the Subsidiary Guarantee or the Notes without the consent of any Holder of a Note: (a) to cure any ambiguity, defect or inconsistency; (b) to provide for uncertificated Notes in addition to or in place of certificated Notes or to alter the provisions of Article 2 hereof (including the related definitions) in a manner that does not materially adversely affect any Holder; 58 66 (c) to provide for the assumption of the Company's or a Guarantor's obligations to the Holders of the Notes by a successor to the Company or a Guarantor pursuant to Article 5 or Article 11 hereof; (d) to make any change that would provide any additional rights or benefits to the Holders of the Notes or that does not adversely affect the legal rights hereunder of any Holder of the Notes; (e) to comply with requirements of the SEC in order to effect or maintain the qualification of this Indenture under the TIA; Upon the request of the Company accompanied by a resolution of its Board of Directors authorizing the execution of any such amended or supplemental Indenture, and upon receipt by the Trustee of the documents described in Section 7.02 hereof, the Trustee shall join with the Company and the Guarantors in the execution of any amended or supplemental Indenture authorized or permitted by the terms of this Indenture and to make any further appropriate agreements and stipulations that may be therein contained, but the Trustee shall not be obligated to enter into such amended or supplemental Indenture that affects its own rights, duties or immunities under this Indenture or otherwise. SECTION 9.02. WITH CONSENT OF HOLDERS OF NOTES. Except as provided below in this Section 9.02, the Company and the Trustee may amend or supplement this Indenture (including Section 3.09, 4.10 and 4.15 hereof), the Subsidiary Guarantees and the Notes may be amended or supplemented with the consent of the Holders of at least a majority in principal amount of the Notes then outstanding voting as a single class (including consents obtained in connection with a tender offer or exchange offer for, or purchase of, the Notes), and, subject to Sections 6.04 and 6.07 hereof, any existing Default or Event of Default (other than a Default or Event of Default in the payment of the principal of, premium, if any, or interest on the Notes, except a payment default resulting from an acceleration that has been rescinded) or compliance with any provision of this Indenture, the Subsidiary Guarantees or the Notes may be waived with the consent of the Holders of a majority in principal amount of the then outstanding Notes voting as a single class (including consents obtained in connection with a tender offer or exchange offer for, or purchase of, the Notes). Section 2.08 hereof shall determine which Notes are considered to be "outstanding" for purposes of this Section 9.02. Upon the request of the Company accompanied by a resolution of its Board of Directors authorizing the execution of any such amended or supplemental Indenture, and upon the filing with the Trustee of evidence satisfactory to the Trustee of the consent of the Holders of Notes as aforesaid, and upon receipt by the Trustee of the documents described in Section 7.02 hereof, the Trustee shall join with the Company in the execution of such amended or supplemental Indenture unless such amended or supplemental Indenture directly affects the Trustee's own rights, duties or immunities under this Indenture or otherwise, in which case the Trustee may in its discretion, but shall not be obligated to, enter into such amended or supplemental Indenture. 59 67 It shall not be necessary for the consent of the Holders of Notes under this Section 9.02 to approve the particular form of any proposed amendment or waiver, but it shall be sufficient if such consent approves the substance thereof. After an amendment, supplement or waiver under this Section becomes effective, the Company shall mail to the Holders of Notes affected thereby a notice briefly describing the amendment, supplement or waiver. Any failure of the Company to mail such notice, or any defect therein, shall not, however, in any way impair or affect the validity of any such amended or supplemental Indenture or waiver. Subject to Sections 6.04 and 6.07 hereof, the Holders of a majority in aggregate principal amount of the Notes then outstanding voting as a single class may waive compliance in a particular instance by the Company with any provision of this Indenture or the Notes. However, without the consent of each Holder affected, an amendment or waiver under this Section 9.02 may not (with respect to any Notes held by a non-consenting Holder): (a) reduce the principal amount of Notes whose Holders must consent to an amendment, supplement or waiver; (b) reduce the principal of or change the fixed maturity of any Note or alter or waive any of the provisions with respect to the redemption of the Notes except as provided above with respect to Sections 3.09, 4.10 and 4.15 hereof; (c) reduce the rate of or change the time for payment of interest on any Note; (d) waive a Default or Event of Default in the payment of principal of or premium or interest on the Notes (except a rescission of acceleration of the Notes by the Holders of at least a majority in aggregate principal amount of the then outstanding Notes and a waiver of the payment default that resulted from such acceleration); (e) make any Note payable in money other than that stated in the Notes; (f) make any change in the provisions of this Indenture relating to waivers of past Defaults or the rights of Holders of Notes to receive payments of principal of or premium or interest on the Notes; (g) waive a redemption payment with respect to any Note (other than a payment required by one of the covenants described in Sections 3.09, 4.10 and 4.15). (h) release any Guarantor from its Subsidiary Guarantee; or (i) make any change in Section 6.04 or 6.07 hereof or in the foregoing amendment and waiver provisions. In addition, any amendment to the provisions of Article 10 of this Indenture (which relate to subordination) will require the consent of the Holders of at least 75% in aggregate principal amount of the Notes then outstanding if such amendment would adversely affect the rights of Holders of Notes. 60 68 SECTION 9.03. COMPLIANCE WITH TRUST INDENTURE ACT. Every amendment or supplement to this Indenture or the Notes shall be set forth in a amended or supplemental Indenture that complies with the TIA as then in effect. SECTION 9.04. REVOCATION AND EFFECT OF CONSENTS. Until an amendment, supplement or waiver becomes effective, a consent to it by a Holder of a Note is a continuing consent by the Holder of a Note and every subsequent Holder of a Note or portion of a Note that evidences the same debt as the consenting Holder's Note, even if notation of the consent is not made on any Note. However, any such Holder of a Note or subsequent Holder of a Note may revoke the consent as to its Note if the Trustee receives written notice of revocation before the date the waiver, supplement or amendment becomes effective. An amendment, supplement or waiver becomes effective in accordance with its terms and thereafter binds every Holder. SECTION 9.05. NOTATION ON OR EXCHANGE OF NOTES. The Trustee may place an appropriate notation about an amendment, supplement or waiver on any Note thereafter authenticated. The Company in exchange for all Notes may issue and the Trustee shall, upon receipt of an Authentication Order, authenticate new Notes that reflect the amendment, supplement or waiver. Failure to make the appropriate notation or issue a new Note shall not affect the validity and effect of such amendment, supplement or waiver. SECTION 9.06. TRUSTEE TO SIGN AMENDMENTS, ETC. The Trustee shall sign any amended or supplemental Indenture authorized pursuant to this Article 9 if the amendment or supplement does not adversely affect the rights, duties, liabilities or immunities of the Trustee. The Company may not sign an amendment or supplemental Indenture until the Board of Directors approves it. In executing any amended or supplemental indenture, the Trustee shall be entitled to receive and (subject to Section 7.01 hereof) shall be fully protected in relying upon, in addition to the documents required by Section 12.04 hereof, an Officers' Certificate and an Opinion of Counsel stating that (i) the execution of such amended or supplemental indenture is authorized or permitted by this Indenture, (ii) such amended or supplemental indenture complies with this Indenture and, (iii) in the event that such amendment or supplemental indenture is being executed pursuant to Section 5.01 or 11.01 hereof, the surviving Person assumes the Obligations of this Indenture and the Notes. ARTICLE X SUBORDINATION SECTION 10.01. AGREEMENT TO SUBORDINATE. The Company and the Guarantors agree, and each Holder by accepting a Note and Subsidiary Guarantee agrees, that the principal of and interest and premium (if any) on the Notes and all Subsidiary Guarantees in respect thereof are subordinated in right of payment, to the 61 69 extent and in the manner provided in this Article 10 and Section 11.03, to the prior payment in full in cash or Cash Equivalents of all Senior Debt (whether outstanding on the date hereof or hereafter created, incurred, assumed or guaranteed), and that the subordination is for the benefit of the holders of Senior Debt, each of whom shall be entitled to enforce this Article 10 and Section 11.02 as a third party beneficiary hereof. SECTION 10.02. CERTAIN DEFINITIONS. "Designated Senior Debt" means any Indebtedness outstanding under the Senior Credit Facilities until the Senior Credit Facilities have been paid in full in cash and discharged, and thereafter means any Credit Facility designated by the Company as "Designated Senior Debt" for the purposes of this Article 10. "Permitted Junior Securities" means Equity Interests in the Company or debt securities of the Company or the relevant Guarantor that are subordinated to all Senior Debt (and any debt securities issued in exchange for Senior Debt) or Guarantor Senior Debt (and any debt securities issued in exchange for Guarantor Senior Debt), as applicable, to substantially the same extent as, or to a greater extent than, the Notes are subordinated to Senior Debt or the Subsidiary Guarantees are subordinated to Guarantor Senior Debt, as applicable, pursuant to this Indenture. "Representative" means the indenture trustee or other trustee, agent or representative for any holder or holders of Senior Debt. "Senior Debt" means (i) all Indebtedness outstanding under Credit Facilities and all Hedging Obligations with respect thereto, (ii) any other Indebtedness of the Company or any Guarantor permitted to be incurred under the terms of this Indenture, unless the instrument under which such Indebtedness is incurred expressly provides that it is on a parity with or subordinated in right of payment to the Notes or the Subsidiary Guarantees and (iii) all Obligations of the Company or any Guarantor with respect to the foregoing. Notwithstanding anything to the contrary in the foregoing, Senior Debt will not include (a) any liability for federal, state, local or other taxes owed or owing by the Company, (b) any Indebtedness of the Company or any Guarantor to any of its Subsidiaries or other Affiliates, (c) any trade payables or (d) any Indebtedness that is incurred in violation of this Indenture; provided that Indebtedness under Credit Facilities will not cease to be Senior Debt if incurred based upon a written certificate from a purported officer of the Company to the effect that such Indebtedness was permitted by this Indenture to be incurred. A distribution may consist of cash, securities or other property, by set-off or otherwise. Any payment pursuant to an Asset Sale Offer or Change of Control Offer shall constitute a distribution subject to this Article 10. The making of any deposit pursuant to Article 8 shall constitute a distribution subject to this Article 10 to the extent provided in Article 8. SECTION 10.03. LIQUIDATION; DISSOLUTION; BANKRUPTCY. Upon any payment or distribution to creditors of the Company or any Guarantor in a liquidation or dissolution of the Company or any Guarantor or in a bankruptcy, reorganization, insolvency, receivership or similar proceeding relating to the Company or any Guarantor or its property, in an assignment for the benefit of creditors or any marshaling of the Company's or any Guarantor's assets and liabilities: 62 70 (1) holders of Senior Debt shall be entitled to receive payment in full in cash or Cash Equivalents of all Obligations due in respect of such Senior Debt (including interest after the commencement of any such proceeding at the rate and on the terms specified in the applicable Senior Debt whether or not the claim for such interest is allowable or enforceable in such proceeding) before Holders of the Notes shall be entitled to receive any payment or distribution with respect to the Notes (except that Holders may receive (i) Permitted Junior Securities and (ii) payments and other distributions made from any defeasance trust created pursuant to Section 8.01 hereof, if payment of the Notes was permitted on the date the defeasance deposit was made); and (2) until all Obligations with respect to Senior Debt (including interest after the commencement of any such proceeding at the rate and on the terms specified in the applicable Senior Debt whether or not the claim for such interest is allowable or enforceable in such proceeding) are paid in full in cash or Cash Equivalents, any payment or distribution to which the Holders of Notes would be entitled but for this Article 10 shall be made to holders of Senior Debt (except that Holders of Notes may receive (i) Permitted Junior Securities and (ii) payments and other distributions made from any defeasance trust created pursuant to Section 8.01 hereof, if payment of the Notes was permitted on the date the defeasance deposit was made), as their interests may appear. SECTION 10.04. DEFAULT ON DESIGNATED SENIOR DEBT. The Company may not make (and the Guarantors may not make) any payment or distribution to the Trustee or any Holder in respect of Obligations with respect to the Notes and may not acquire from the Trustee or any Holder any Notes for cash or property (other than (i) Permitted Junior Securities and (ii) payments and other distributions made from any defeasance trust created pursuant to Section 8.01 hereof) until all principal and other Obligations with respect to the Senior Debt have been paid in full in cash or Cash Equivalents if: (i) a default in the payment of any principal or other Obligations with respect to any Credit Facility occurs and is continuing beyond any applicable grace period in the agreement, indenture or other document governing such Credit Facility; or (ii) a default, other than a payment default, on Designated Senior Debt occurs and is continuing that then permits holders of the Designated Senior Debt to accelerate its maturity and the Trustee receives a notice of the default (a "Payment Blockage Notice") from a Person who may give it pursuant to Section 10.12 hereof. If the Trustee receives any such Payment Blockage Notice, no subsequent Payment Blockage Notice shall be effective for purposes of this Section unless and until (i) at least 360 days shall have elapsed since the effectiveness of the immediately prior Payment Blockage Notice and (ii) all scheduled payments of principal, premium, if any, and interest on the Notes that have come due have been paid in full in cash. No nonpayment default that existed or was continuing on the date of delivery of any Payment Blockage Notice to the Trustee shall be, or be made, the basis for a subsequent Payment Blockage Notice. The Company may and shall resume payments on and distributions in respect of the Notes and may acquire them upon the earlier of: (1) the date upon which the default is cured or waived, or 63 71 (2) in the case of a default referred to in Section 10.04(ii) hereof, 179 days after notice is received if the maturity of such Designated Senior Debt has not been accelerated, if this Article 10 otherwise permits the payment, distribution or acquisition at the time of such payment or acquisition. SECTION 10.05. ACCELERATION OF SECURITIES. If payment of the Securities is accelerated because of an Event of Default, the Company shall promptly notify holders of Senior Debt of the acceleration. SECTION 10.06. WHEN DISTRIBUTION MUST BE PAID OVER. In the event that the Trustee receives any payment or distribution in respect of any Obligations with respect to the Notes at a time when the Trustee has actual knowledge that such payment or distribution is prohibited by Section 10.03 or 10.04 hereof or in the event any Holder receives any payment of any Obligations with respect to the Notes at a time when such payment is prohibited by Section 10.03 or 10.04 hereof, such payment or distribution shall be held by the Trustee or such Holder in trust for the benefit of, and shall be paid forthwith over and delivered, upon written request, to, the holders of Senior Debt or their Representative under the indenture or other agreement (if any) pursuant to which Senior Debt may have been issued, as their respective interests may appear, for application to the payment of all Obligations with respect to Senior Debt remaining unpaid (including interest after the commencement of any such proceeding at the rate and on the terms specified in the applicable Senior Debt whether or not the claim for such interest is allowable or enforceable in such proceeding) to the extent necessary to pay such Obligations in full in cash or Cash Equivalents in accordance with their terms, after giving effect to any concurrent payment or distribution to or for the holders of Senior Debt. With respect to the holders of Senior Debt, the Trustee undertakes to perform only such obligations on the part of the Trustee as are specifically set forth in this Article 10, and no implied covenants or obligations with respect to the holders of Senior Debt shall be read into this Indenture against the Trustee. The Trustee shall not be deemed to owe any fiduciary duty to the holders of Senior Debt. SECTION 10.07. NOTICE BY COMPANY. The Company shall promptly notify the Trustee and the Paying Agent of any facts known to the Company that would cause a payment of any Obligations with respect to the Notes to violate this Article 10, but failure to give such notice shall not affect the subordination of the Notes to the Senior Debt or the rights of holders of Senior Debt as provided in this Article 10. SECTION 10.08. SUBROGATION. After all Senior Debt is paid in full in cash or Cash Equivalents and until the Notes are paid in full, Holders of Notes shall be subrogated (equally and ratably with all other Indebtedness pari passu with the Notes) to the rights of holders of Senior Debt to receive distributions applicable to Senior Debt to the extent that distributions otherwise payable to the Holders of Notes have been applied to the payment of Senior Debt, except that no right of subrogation shall apply to the extent any distribution is applied to pay any claim for interest that is not allowed or enforceable in any proceeding referred to in Section 10.03. A distribution made 64 72 under this Article 10 to holders of Senior Debt that otherwise would have been made to Holders of Notes is not, as between the Company and Holders, a payment by the Company on the Notes. SECTION 10.09. RELATIVE RIGHTS. This Article 10 defines the relative rights of Holders of Notes and holders of Senior Debt. Nothing in this Indenture shall: (1) impair, as between the Company and Holders of Notes, the obligation of the Company, which is absolute and unconditional, to pay principal of and interest on the Notes in accordance with their terms; (2) affect the relative rights of Holders of Notes and creditors of the Company other than their rights in relation to holders of Senior Debt; or (3) prevent the Trustee or any Holder of Notes from exercising its available remedies upon a Default or Event of Default, subject to the rights of holders and owners of Senior Debt to receive distributions and payments otherwise payable to Holders of Notes. If the Company fails because of this Article 10 to pay principal of or interest on a Note on the due date, the failure is still a Default or Event of Default. SECTION 10.10. SUBORDINATION NOT PREJUDICED. No right of any holder of any Senior Debt to enforce subordination as provided in this Article 10 shall at any time in any way be prejudiced, affected or impaired by any act or failure to act on the part of the Company or any of its Subsidiaries or by any act or failure to act on the part of any holder of Senior Debt or by any breach or default by the Company or any of its Subsidiaries in the performance or observance of any promise, covenant or obligation enforceable by any Holder of the Notes, regardless of any knowledge thereof that any holder of Senior Debt may have or otherwise be charged with. Without limiting the foregoing, each holder of any Senior Debt may at any time and from time to time, without the consent of or notice of any Holder of the Notes, without incurring any responsibility or liability to any Holder of the Notes and without in any manner prejudicing, affecting or impairing the obligations of any Holder of the Notes under this Article 10: (1) change the manner, place or terms of payment or extend the time of payment of, or increase (subject to Section 4.09), renew or alter, compromise, accelerate, extend or refinance, any Senior Debt or any agreement, guaranty, lien or obligation of the Company or any of its Subsidiaries or any other Person in any manner related thereto, or otherwise amend, supplement or change in any manner any Senior Debt or any such agreement, guaranty, lien or obligation; (2) take or fail to take any collateral security for any Senior Debt or take or fail to take any action which may be necessary or appropriate to ensure that any security interest or lien upon any property securing any Senior Debt is duly enforceable or perfected or entitled to priority as against any other lien or to ensure that any proceeds of any property subject to any security interest or lien are applied to the payment of any Senior Debt; (3) release, discharge or permit the lapse of any or all security interests or liens upon any property at any time securing any Senior Debt; or 65 73 (4) exercise or enforce, in any manner, order or sequence, or fail to exercise or enforce, any right or remedy against the Company or any of its Subsidiaries or any collateral security or any other Person or property in respect of any Senior Debt or any security interest or lien securing any Senior Debt or any right under this Indenture, and apply any payment or proceeds of collateral in any order of application. No exercise of, delay in exercising or failure to exercise any right arising under this Article 10, no act or omission of any holder of Senior Debt in respect of the Company or any of its Subsidiaries or any other Person or any collateral security for any Senior Debt or any right arising under this Article 10, no change, impairment, or suspension of any right or remedy of any holder of any Senior Debt, no other act, failure to act, circumstance, occurrence or event which, but for this provision, would or could act as a release or exoneration of the obligations of the Holders of the Notes under this Article 10 shall in any way affect, decrease, diminish or impair any of the obligations of the Holders of the Notes under this Article 10 or give any Holder of the Notes any recourse or defense against any holder of the Senior Debt in respect of any right arising under this Article 10. SECTION 10.11. DISTRIBUTION OR NOTICE TO REPRESENTATIVE. Whenever a distribution is to be made or a notice given to holders of Senior Debt, the distribution may be made and the notice given to their Representative. Upon any payment or distribution of assets of the Company referred to in this Article 10, the Trustee and the Holders of Notes shall be entitled to rely upon any order or decree made by any court of competent jurisdiction or upon any certificate of such Representative or of the liquidating trustee or agent or other Person making any distribution to the Trustee or to the Holders of Notes for the purpose of ascertaining the Persons entitled to participate in such distribution, the holders of the Senior Debt and other Indebtedness of the Company, the amount thereof or payable thereon, the amount or amounts paid or distributed thereon and all other facts pertinent thereto or to this Article 10. SECTION 10.12. RIGHTS OF TRUSTEE AND PAYING AGENT. Notwithstanding the provisions of this Article 10 or any other provision of this Indenture, the Trustee shall not be charged with knowledge of the existence of any facts that would prohibit the making of any payment or distribution by the Company, unless the Trustee shall have received at its Corporate Trust Office not later than the fifth Business Day immediately preceding the date of such payment written notice of facts that would cause the payment of any Obligations with respect to the Notes to violate this Article 10. Only the Company or a Representative (or, if there is no Representative for any holder of Senior Debt, such holder) may give the notice. Nothing in this Article 10 shall impair the claims of, or payments to, the Trustee under or pursuant to Section 7.07 hereof. The Trustee in its individual or any other capacity may hold Senior Debt with the same rights, and subject to the same obligations it would have if it were not Trustee. Any Agent may do the same with like rights and obligations. The Trustee shall not be deemed to owe any fiduciary duty to the holders of Senior Debt. 66 74 With respect to the holders of Senior Debt, the Trustee undertakes to perform or observe only such of its covenants or obligations as are specifically set forth in this Article and no implied covenants or obligations with respect to holders of Senior Debt shall be read into this Indenture against the Trustee. SECTION 10.13. AUTHORIZATION TO EFFECT SUBORDINATION. Each Holder of Notes, by the Holder's acceptance thereof, authorizes and directs the Trustee on such Holder's behalf to take such action as may be necessary or appropriate to effectuate the subordination as provided in this Article 10, and appoints the Trustee to act as such Holder's attorney-in-fact for any and all such purposes. If the Trustee does not file a proper proof of claim or proof of debt in the form required in any proceeding referred to in Section 6.09 hereof at least 30 days before the expiration of the time to file such claim, each Representative is hereby authorized to file an appropriate claim for and on behalf of the Holders of the Notes. SECTION 10.14. REINSTATEMENT. The provisions of this Article 10 shall continue to be effective or reinstated, as the case may be, if at any time any payment of any of the Senior Debt is rescinded or must otherwise be returned by the Representative or any other holder of Senior Debt upon the insolvency, bankruptcy or reorganization of the Company or any Guarantor or otherwise, all as though such payment had not been made. SECTION 10.15. AMENDMENTS. The provisions of this Article 10 and Section 11.02 and related definitions of terms used therein shall not be amended or modified without the written consent of the holders of all Senior Debt at the time outstanding. ARTICLE XI SUBSIDIARY GUARANTEES SECTION 11.01. GUARANTEE. Subject to this Article 11, each of the Guarantors hereby, jointly and severally, unconditionally guarantees to each Holder of a Note authenticated and delivered by the Trustee and to the Trustee and its successors and assigns, irrespective of the validity and enforceability of this Indenture, the Notes or the obligations of the Company hereunder or thereunder, that: (a) the principal of and interest on the Notes will be promptly paid in full when due, whether at maturity, by acceleration, redemption or otherwise, and interest on the overdue principal of and interest on the Notes, if any, if lawful, and all other obligations of the Company to the Holders or the Trustee hereunder or thereunder will be promptly paid in full or performed, all in accordance with the terms hereof and thereof; and (b) in case of any extension of time of payment or renewal of any Notes or any of such other obligations, that same will be promptly paid in full when due or performed in accordance with the terms of the extension or renewal, whether at stated maturity, by acceleration or otherwise. Failing payment when due of any amount so guaranteed 67 75 or any performance so guaranteed for whatever reason, the Guarantors shall be jointly and severally obligated to pay the same immediately. Each Guarantor agrees that this is a guarantee of payment and not a guarantee of collection. The Guarantors hereby agree that their obligations hereunder shall be unconditional, irrespective of the validity, regularity or enforceability of the Notes or this Indenture, the absence of any action to enforce the same, any waiver or consent by any Holder of the Notes with respect to any provisions hereof or thereof, the recovery of any judgment against the Company, any action to enforce the same or any other circumstance which might otherwise constitute a legal or equitable discharge or defense of a guarantor. Each Guarantor hereby waives diligence, presentment, demand of payment, filing of claims with a court in the event of insolvency or bankruptcy of the Company, any right to require a proceeding first against the Company, protest, notice and all demands whatsoever and covenant that this Note Guarantee shall not be discharged except by complete performance of the obligations contained in the Notes and this Indenture. If any Holder or the Trustee is required by any court or otherwise to return to the Company, the Guarantors or any custodian, trustee, liquidator or other similar official acting in relation to either the Company or the Guarantors, any amount paid by either to the Trustee or such Holder, this Note Guarantee, to the extent theretofore discharged, shall be reinstated in full force and effect. Each Guarantor agrees that it shall not be entitled to any right of subrogation in relation to the Holders in respect of any obligations guaranteed hereby until payment in full of all obligations guaranteed hereby. Each Guarantor further agrees that, as between the Guarantors, on the one hand, and the Holders and the Trustee, on the other hand, (x) the maturity of the obligations guaranteed hereby may be accelerated as provided in Article 6 hereof for the purposes of this Subsidiary Guarantee, notwithstanding any stay, injunction or other prohibition preventing such acceleration in respect of the obligations guaranteed hereby, and (y) in the event of any declaration of acceleration of such obligations as provided in Article 6 hereof, such obligations (whether or not due and payable) shall forthwith become due and payable by the Guarantors for the purpose of this Subsidiary Guarantee. The Guarantors shall have the right to seek contribution from any non-paying Guarantor so long as the exercise of such right does not impair the rights of the Holders under the Guarantee. SECTION 11.02. SUBORDINATION OF SUBSIDIARY GUARANTEE. The Obligations of each Guarantor under its Subsidiary Guarantee pursuant to this Article 11 shall be junior and subordinated to the Senior Debt of such Guarantor on the same basis as the Notes are junior and subordinated to Senior Debt of the Company. For the purposes of the foregoing sentence, the Trustee and the Holders shall have the right to receive and/or retain payments by any of the Guarantors only at such times as they may receive and/or retain payments in respect of the Notes pursuant to this Indenture, including Article 10 hereof. SECTION 11.03. LIMITATION ON GUARANTOR LIABILITY. Each Guarantor, and by its acceptance of Notes, each Holder, hereby confirms that it is the intention of all such parties that the Subsidiary Guarantee of such Guarantor not constitute a fraudulent transfer or conveyance for purposes of Bankruptcy Law, the Uniform 68 76 Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any similar federal or state law to the extent applicable to any Subsidiary Guarantee. To effectuate the foregoing intention, the Trustee, the Holders and the Guarantors hereby irrevocably agree that the obligations of such Guarantor under its Subsidiary Guarantee and this Article 11 shall be limited to the maximum amount as will, after giving effect to such maximum amount and all other contingent and fixed liabilities of such Guarantor that are relevant under such laws, and after giving effect to any collections from, rights to receive contribution from or payments made by or on behalf of any other Guarantor in respect of the obligations of such other Guarantor under this Article 11, result in the obligations of such Guarantor under its Subsidiary Guarantee not constituting a fraudulent transfer or conveyance. SECTION 11.04. EXECUTION AND DELIVERY OF NOTE GUARANTEE. To evidence its Subsidiary Guarantee set forth in Section 11.01, each Guarantor hereby agrees that a notation of such Subsidiary Guarantee substantially in the form included in Exhibit E shall be endorsed by an Officer of such Guarantor on each Note authenticated and delivered by the Trustee and that this Indenture shall be executed on behalf of such Guarantor by its President or one of its Vice Presidents. Each Guarantor hereby agrees that its Subsidiary Guarantee set forth in Section 11.01 shall remain in full force and effect notwithstanding any failure to endorse on each Subsidiary a notation of such Subsidiary Guarantee. If an Officer whose signature is on this Indenture or on the Subsidiary Guarantee no longer holds that office at the time the Trustee authenticates the Note on which a Subsidiary Guarantee is endorsed, the Subsidiary Guarantee shall be valid nevertheless. The delivery of any Note by the Trustee, after the authentication thereof hereunder, shall constitute due delivery of the Subsidiary Guarantee set forth in this Indenture on behalf of the Guarantors. In the event that the Company creates or acquires any new domestic Restricted Subsidiaries subsequent to the date of this Indenture, if required by Section 4.20 hereof, the Company shall cause such domestic Restricted Subsidiaries to execute supplemental indentures to this Indenture in the form included in Exhibit F and Subsidiary Guarantees in the form included in Exhibit E in accordance with Section 4.20 hereof and this Article 11, to the extent applicable. SECTION 11.05. GUARANTORS MAY CONSOLIDATE, ETC., ON CERTAIN TERMS. No Guarantor may consolidate with or merge with or into (whether or not such Guarantor is the surviving Person) another corporation, Person or entity whether or not affiliated with such Guarantor unless: (a) subject to the provisions of Section 11.06 hereof, the Person formed by or surviving any such consolidation or merger (if other than a Guarantor) assumes all the obligations of such Guarantor pursuant to a supplemental indenture in form and substance reasonably satisfactory to the Trustee, under the Notes, the Indenture and the Registration Rights Agreement; 69 77 (b) immediately after giving effect to such transaction, no Default or Event of Default exists; and (c) the Company would be permitted by virtue of the Company's pro forma Debt to Cash Flow Ratio, immediately after giving effect to such transaction, to incur at least $1.00 of additional Indebtedness pursuant to the Debt to Cash Flow Ratio test set forth in Section 4.09 hereof. In case of any such consolidation, merger, sale or conveyance and upon the assumption by the successor Person, by supplemental indenture, executed and delivered to the Trustee and satisfactory in form to the Trustee, of the Subsidiary Guarantee endorsed upon the Notes and the due and punctual performance of all of the covenants and conditions of this Indenture to be performed by the Guarantor, such successor Person shall succeed to and be substituted for the Guarantor with the same effect as if it had been named herein as a Guarantor. Such successor Person thereupon may cause to be signed any or all of the Subsidiary Guarantees to be endorsed upon all of the Notes issuable hereunder which theretofore shall not have been signed by the Company and delivered to the Trustee. All the Subsidiary Guarantees so issued shall in all respects have the same legal rank and benefit under this Indenture as the Subsidiary Guarantees theretofore and thereafter issued in accordance with the terms of this Indenture as though all of such Subsidiary Guarantees had been issued at the date of the execution hereof. Except as set forth in Articles 4 and 5 hereof, and notwithstanding clauses (a) and (b) above, nothing contained in this Indenture or in any of the Notes shall prevent any consolidation or merger of a Guarantor with or into the Company or another Guarantor, or shall prevent any sale or conveyance of the property of a Guarantor as an entirety or substantially as an entirety to the Company or another Guarantor. SECTION 11.06. RELEASES FOLLOWING SALE OF ASSETS. If any Guarantor at any time ceases to be a Subsidiary of the Company by reason of any Asset Sale, merger or consolidation or otherwise, or in the event of a sale or other disposition of all or substantially all of the assets of any Guarantor, then such Guarantor (in the event of any Asset Sale or other disposition, by way of merger, consolidation or otherwise, of capital stock of such Guarantor) or the Person acquiring the property (in the event of a sale or other disposition of all or substantially all of the assets of such Guarantor) will be released and relieved of any obligations (if any) under the Guarantor's Subsidiary Guarantee. Upon delivery by the Company to the Trustee of an Officers' Certificate and an Opinion of Counsel to the effect that such sale or other disposition was made by the Company in accordance with the applicable provisions of this Indenture, including without limitation Section 4.10 hereof (to the extent application to such sale or disposition at the time of consummation thereof), the Trustee shall execute any documents reasonably required in order to evidence the release of any Guarantor from its obligations under its Subsidiary Guarantee. Any Guarantor not released from its obligations under its Subsidiary Guarantee shall remain liable for the full amount of principal of and interest on the Notes and for the other obligations of any Guarantor under this Indenture as provided in this Article 11. 70 78 ARTICLE XII MISCELLANEOUS SECTION 12.01. TRUST INDENTURE ACT CONTROLS. If any provision of this Indenture limits, qualifies or conflicts with the duties imposed by a provision of the TIA or another provision that would be required or deemed under the TIA to be part of and govern this Indenture if this Indenture were subject thereto, the latter provision shall control. If any provision of this Indenture modifies or excludes any provision of the TIA that may be so modified or excluded, the later provision shall be deemed to apply to this Indenture as so modified or to be excluded, as the case may be. SECTION 12.02. NOTICES. Any notice or communication by the Company, any Guarantor or the Trustee to the others is duly given if in writing and delivered in Person or mailed by first class mail, telecopier or overnight air courier guaranteeing next day delivery, to the others' address: If to the Company and/or any Guarantor: Spanish Broadcasting System, Inc. 3191 Coral Way Miami, Florida 33145 Telecopier No.: (305) 446-5148 Attention: Joseph A. Garcia With a copy to: Kaye, Scholer, Fierman, Hays & Handler LLP 425 Park Avenue New York, New York 10022 Telecopier No. (212) 836-7152 Attention: Jason L. Shrinsky, Esq. William E. Wallace, Jr., Esq. If to the Trustee: The Bank of New York 101 Barclay Street, Floor 21 West New York, New York 10286 Telecopier No.: (212) 815-5915 Attention: Corporate Trust Trustee Administration The Company, any Guarantor or the Trustee, by notice to the others may designate additional or different addresses for subsequent notices or communications. All notices and communications (other than those sent to Holders) shall be deemed to have been duly given: at the time delivered by hand, if personally delivered; five Business Days after being deposited in the mail, postage prepaid, if mailed; when receipt 71 79 acknowledged, if telecopied; and the next Business Day after timely delivery to the courier, if sent by overnight air courier guaranteeing next day delivery. Any notice or communication to a Holder shall be mailed by first class mail or by overnight air courier guaranteeing next day delivery to its address shown on the register kept by the Registrar. Any notice or communication shall also be so mailed to any Person described in TIA Section 313(c), to the extent required by the TIA. Failure to mail a notice or communication to a Holder or any defect in it shall not affect its sufficiency with respect to other Holders. If a notice or communication is mailed in the manner provided above within the time prescribed, it is duly given, whether or not the addressee receives it. If the Company mails a notice or communication to Holders, it shall mail a copy to the Trustee and each Agent at the same time. SECTION 12.03. COMMUNICATION BY HOLDERS OF NOTES WITH OTHER HOLDERS OF NOTES. Holders may communicate pursuant to TIA Section 312(b) with other Holders with respect to their rights under this Indenture or the Notes. The Company, the Trustee, the Registrar and anyone else shall have the protection of TIA Section 312(c). SECTION 12.04. CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT. Upon any request or application by the Company to the Trustee to take any action under this Indenture, the Company shall furnish to the Trustee: (a) an Officers' Certificate in form and substance reasonably satisfactory to the Trustee (which shall include the statements set forth in Section 12.05 hereof) stating that, in the opinion of the signers, all conditions precedent and covenants, if any, provided for in this Indenture relating to the proposed action have been satisfied; and (b) an Opinion of Counsel in form and substance reasonably satisfactory to the Trustee (which shall include the statements set forth in Section 12.05 hereof) stating that, in the opinion of such counsel, all such conditions precedent and covenants have been satisfied. SECTION 12.05. STATEMENTS REQUIRED IN CERTIFICATE OR OPINION. Each certificate or opinion with respect to compliance with a condition or covenant provided for in this Indenture (other than a certificate provided pursuant to TIA Section 314(a)(4)) shall comply with the provisions of TIA Section 314(e) and shall include: (a) a statement that the Person making such certificate or opinion has read such covenant or condition; (b) a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based; (c) a statement that, in the opinion of such Person, he or she has made such examination or investigation as is necessary to enable him to express an informed opinion as to whether or not such covenant or condition has been satisfied; and 72 80 (d) a statement as to whether or not, in the opinion of such Person, such condition or covenant has been satisfied. SECTION 12.06. RULES BY TRUSTEE AND AGENTS. The Trustee may make reasonable rules for action by or at a meeting of Holders. The Registrar or Paying Agent may make reasonable rules and set reasonable requirements for its functions. SECTION 12.07. NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS, EMPLOYEES AND STOCKHOLDERS. No past, present or future director, officer, employee, incorporator or stockholder of the Company or any Guarantor, as such, shall have any liability for any obligations of the Company or such Guarantor under the Notes, the Subsidiary Guarantees, this Indenture or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each Holder by accepting a Note waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Notes. SECTION 12.08. GOVERNING LAW. THE INTERNAL LAW OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO CONSTRUE THIS INDENTURE, THE NOTES AND THE NOTE GUARANTEES WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY. SECTION 12.09. NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS. This Indenture may not be used to interpret any other indenture, loan or debt agreement of the Company or its Subsidiaries or of any other Person. Any such indenture, loan or debt agreement may not be used to interpret this Indenture. SECTION 12.10. SUCCESSORS. All agreements of the Company in this Indenture and the Notes shall bind its successors. All agreements of the Trustee in this Indenture shall bind its successors. SECTION 12.11. SEVERABILITY. In case any provision in this Indenture or in the Notes shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. SECTION 12.12. COUNTERPART ORIGINALS. The parties may sign any number of copies of this Indenture. Each signed copy shall be an original, but all of them together represent the same agreement. 73 81 SECTION 12.13. TABLE OF CONTENTS, HEADINGS, ETC. The Table of Contents, Cross-Reference Table and Headings of the Articles and Sections of this Indenture have been inserted for convenience of reference only, are not to be considered a part of this Indenture and shall in no way modify or restrict any of the terms or provisions hereof. [Signatures on following page] 74 82 SIGNATURES Dated as of October __, 1999 SPANISH BROADCASTING SYSTEM, INC. By: -------------------------------------------- Name: Title: SPANISH BROADCASTING SYSTEM OF CALIFORNIA, INC. By: -------------------------------------------- Name: Title: SPANISH BROADCASTING SYSTEM NETWORK, INC. By: -------------------------------------------- Name: Title: SBS PROMOTIONS, INC. By: -------------------------------------------- Name: Title: SBS FUNDING, INC. By: -------------------------------------------- Name: Title: ALARCON HOLDINGS, INC. By: -------------------------------------------- Name: Title: Indenture signature page - 1 83 SBS OF GREATER NEW YORK, INC. By: -------------------------------------------- Name: Title: SPANISH BROADCASTING SYSTEM OF FLORIDA, INC. By: -------------------------------------------- Name: Title: SPANISH BROADCASTING SYSTEM OF GREATER MIAMI, INC. By: -------------------------------------------- Name: Title: SPANISH BROADCASTING SYSTEM OF PUERTO RICO, INC. (DELAWARE) By: -------------------------------------------- Name: Title: SPANISH BROADCASTING SYSTEM, INC. (A NEW JERSEY CORPORATION) By: -------------------------------------------- Name: Title: SPANISH BROADCASTING SYSTEM OF ILLINOIS, INC. By: -------------------------------------------- Name: Title: Indenture signature page - 2 84 SPANISH BROADCASTING SYSTEM OF SAN ANTONIO, INC. By: -------------------------------------------- Name: Title: SPANISH BROADCASTING SYSTEM OF PUERTO RICO, INC. (PUERTO RICO) By: -------------------------------------------- Name: Title: THE BANK OF NEW YORK By: -------------------------------------------- Name: Title: Indenture signature page - 3 85 EXHIBIT A (Face of Note) [THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES EXCEPT THAT (I) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED PURSUANT TO SECTION 2.07 OF THE INDENTURE, (II) THIS GLOBAL NOTE MAY BE EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.06(a) OF THE INDENTURE, (III) THIS GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO SECTION 2.11 OF THE INDENTURE AND (IV) THIS GLOBAL NOTE MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF THE COMPANY.] CUSIP/CINS _________ [_____]% Senior Subordinated Notes due 2009 No.________ $__________ SPANISH BROADCASTING SYSTEM, INC. promises to pay to _________________________________________ registered assigns, the principal sum of _______________ Dollars on _________, 2008. Interest Payment Dates: ___________, and __________. Record Dates: ____________ and ____________. DATED: , 1999 SPANISH BROADCASTING SYSTEM, INC. BY: ------------------------------- Name: Title: BY: ------------------------------- Name: Title: This is one of the Global Notes referred to in the within-mentioned Indenture: The Bank of New York, as Trustee By: - ----------------------------------------- Date of Authentication: ------------------ A - 1 86 (Reverse face of Note) _____% Senior Subordinated Notes due 2009 Capitalized terms used herein shall have the meanings assigned to them in the Indenture referred to below unless otherwise indicated. 1. INTEREST. Spanish Broadcasting System, a Delaware corporation (the "Company"), promises to pay interest on the principal amount of this Note at _____% per annum from ____________, 1999 until maturity. The Company will pay interest semi-annually on [_____________] and [_____________] of each year, or if any such day is not a Business Day, on the next succeeding Business Day (each an "Interest Payment Date"). Interest on the Notes will accrue from the most recent date to which interest has been paid or, if no interest has been paid, from the date of issuance; provided that if there is no existing Default in the payment of interest, and if this Note is authenticated between a record date referred to on the face hereof and the next succeeding Interest Payment Date, interest shall accrue from such next succeeding Interest Payment Date; provided, further, that the first Interest Payment Date shall be [_____________], 2000. The Company shall pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue principal and premium, if any, from time to time on demand at a rate that is 1% per annum in excess of the rate then in effect; it shall pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue installments of interest (without regard to any applicable grace periods) from time to time on demand at the same rate to the extent lawful. Interest will be computed on the basis of a 360-day year of twelve 30-day months. 2. METHOD OF PAYMENT. The Company will pay interest on the Notes (except defaulted interest) to the Persons who are registered Holders of Notes at the close of business on the [_____________] or [_____________] next preceding the Interest Payment Date, even if such Notes are canceled after such record date and on or before such Interest Payment Date, except as provided in Section 2.12 of the Indenture with respect to defaulted interest. The Notes will be payable as to principal, premium, if any, and interest at the office or agency of the Company maintained for such purpose within or without the City and State of New York, or, at the option of the Company, payment of interest may be made by check mailed to the Holders at their addresses set forth in the register of Holders, and provided that payment by wire transfer of immediately available funds will be required with respect to principal of and interest and premium on, all Global Notes and all other Notes the Holders of which shall have provided written wire transfer instructions to the Company or the Paying Agent on or prior to the record date. Such payment shall be in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts. 3. PAYING AGENT AND REGISTRAR. Initially, The Bank of New York, the Trustee under the Indenture, will act as Paying Agent and Registrar. The Company may change any Paying Agent or Registrar without notice to any Holder. The Company or any of its Subsidiaries may act in any such capacity. 4. INDENTURE. The Company issued the Notes under an Indenture dated as of October [__], 1999 ("Indenture") between the Company and the Trustee. The terms of the Notes include those stated in the Indenture and those made part of the Indenture by reference to the Trust Indenture Act of 1939, as amended (15 U.S. Code Sections 77aaa-77bbbb). The Notes are A - 2 87 subject to all such terms, and Holders are referred to the Indenture and such Act for a statement of such terms. To the extent any provision of this Note conflicts with the express provisions of the Indenture, the provisions of the indenture shall govern and be controlling. The aggregate principal amount of the Notes that may be authenticated and delivered under the Indenture is unlimited. 5. OPTIONAL REDEMPTION. (a) Except as set forth in clause (b) of this Section 5, the Company shall not have the option to redeem the Notes pursuant to this Section 5 prior to [_____________], 2004. Thereafter, the Company shall have the option to redeem the Notes, in whole or in part, upon not less than 30 nor more than 60 days' notice, at the redemption prices (expressed as percentages of principal amount) set forth below, plus accrued and unpaid interest, thereon to the applicable redemption date, if redeemed during the twelve-month period beginning on [_____________] of the years indicated below:
YEAR PERCENTAGE 2004....................................... [___.___]% 2005....................................... [___.___]% 2006....................................... [___.___]% 2007 and thereafter........................ 100.000%
(b) Notwithstanding the foregoing, prior to [_____________], 2002, the Company may, on any one or more occasions, redeem up to 35% of the aggregate principal amount of Notes originally issued in the Offering at a redemption price of [___.___]% of the principal amount thereof, plus accrued and unpaid interest, thereon to the redemption date, with the net cash proceeds of an offering of common equity of the Company (other than Disqualified Stock); provided that (i) at least 65% of the aggregate principal amount of the Notes originally issued in the Offering remain outstanding immediately after the occurrence of each such redemption (excluding Notes held by the Company and its Subsidiaries) and (ii) each such redemption shall occur within 75 days after the date of the closing of any such offering of common equity of the Company. 6. MANDATORY REDEMPTION. Except as set forth in paragraph 7 below, the Company shall not be required to make mandatory redemption or sinking fund payments with respect to the Notes. 7. REPURCHASE AT OPTION OF HOLDER. (a) If there is a Change of Control, the Company shall be obligated to make an offer (a "Change of Control Offer") to each Holder of Notes to repurchase all or any part (equal to $1,000 or an integral multiple thereof) of such Holder's Notes at an offer price in cash equal to 101% of the principal amount thereof, plus accrued and unpaid interest, thereon to the date of purchase (the "Change of Control Payment"). Within ten days following a Change of Control, the Company will mail a notice to each Holder describing the transaction or transactions that constitute the Change of Control and offering to repurchase Notes on the date specified in such notice, which date shall be no earlier than 30 days and no later than 60 days from the date A - 3 88 such notice is mailed (the "Change of Control Payment Date"), pursuant to the procedures required by the Indenture and described in such notice. (b) If the Company or a Subsidiary consummates any Asset Sales, when the aggregate amount of Excess Proceeds exceeds $10.0 million, the Company shall be required to make an offer to all Holders of Notes and all holders of other pari passu Indebtedness containing provisions similar to those set forth in the Indenture with respect to offers to purchase or redeem such other pari passu Indebtedness with the proceeds of sales of assets (an "Asset Sale Offer") to purchase the maximum principal amount of Notes and such other pari passu Indebtedness that may be purchased out of the Excess Proceeds at an offer price in cash in an amount equal to 100% of the principal amount thereof, plus accrued and unpaid interest, thereon to the date of purchase, in accordance with the procedures set forth in the Indenture and in such other pari passu Indebtedness. To the extent that the aggregate amount of Notes and such other pari passu Indebtedness tendered pursuant to an Asset Sale Offer is less than the Excess Proceeds, the Company may use any remaining Excess Proceeds for any purpose not otherwise prohibited by the Indenture. If the aggregate principal amount of Notes and such other pari passu Indebtedness surrendered by Holders thereof exceeds the amount of Excess Proceeds, the Trustee shall select the Notes and such other pari passu Indebtedness to be purchased on a pro rata basis. Upon completion of an Asset Sale Offer, the amount of Excess Proceeds shall be reset at zero. 8. NOTICE OF REDEMPTION. Notice of redemption will be mailed at least 30 days but not more than 60 days before the redemption date to each Holder whose Notes are to be redeemed at its registered address. Notes in denominations larger than $1,000 may be redeemed in part but only in whole multiples of $1,000, unless all of the Notes held by a Holder are to be redeemed. On and after the redemption date interest ceases to accrue on Notes or portions thereof called for redemption. 9. DENOMINATIONS, TRANSFER, EXCHANGE. The Notes are in registered form without coupons in denominations of $1,000 and integral multiples of $1,000. The transfer of Notes may be registered and Notes may be exchanged as provided in the Indenture. The Registrar and the Trustee may require a Holder, among other things, to furnish appropriate endorsements and transfer documents and the Company may require a Holder to pay any taxes and fees required by law or permitted by the Indenture. The Company need not exchange or register the transfer of any Note or portion of a Note selected for redemption, except for the unredeemed portion of any Note being redeemed in part. Also, the Company need not exchange or register the transfer of any Notes for a period of 15 days before the mailing of a notice of redemption of Notes to be redeemed or during the period between a record date and the corresponding Interest Payment Date. 10. PERSONS DEEMED OWNERS. The registered Holder of a Note may be treated as its owner for all purposes. 11. AMENDMENT, SUPPLEMENT AND WAIVER. Subject to certain exceptions, the Indenture, the Subsidiary Guarantees or the Notes may be amended or supplemented with the consent of the Holders of at least a majority in principal amount of the then outstanding Notes voting as a single class (including without limitation, consents obtained in connection with a purchase of, or tender offer or exchange offer for, Notes), and any existing default or compliance with any provision of the Indenture, the Subsidiary Guarantees or the Notes may be waived with the consent of the Holders of a majority in principal amount of the A - 4 89 then outstanding Notes voting as a single class (including consents obtained in connection with a tender offer or exchange offer for Notes). Without the consent of any Holder of Notes, the Indenture, the Subsidiary Guarantees or the Notes may be amended or supplemented to cure any ambiguity, defect or inconsistency, to provide for uncertificated Notes in addition to or in place of certificated Notes, to provide for the assumption of the Company's or any Guarantor's obligations to Holders of the Notes in the case of a merger or consolidation or sale of substantially all of the Company's assets, to make any change that would provide any additional rights or benefits to the Holders of the Notes or that does not adversely affect the legal rights under the Indenture of any such Holder or to comply with the requirements of the SEC in order to effect or maintain the qualification of the Indenture under the Trust Indenture Act. 12. DEFAULTS AND REMEDIES. Events of Default include: (a) the Company defaults for 30 days in the payment when due of interest on, the Notes, whether or not such payment is prohibited by the provisions of Article 10 of the Indenture; (b) the Company defaults in payment when due of the principal of or premium, if any, on the Notes, whether or not such payment is prohibited by the provisions of Article 10 of the Indenture; (c) the Company or any Restricted Subsidiary fails to comply with any of the provisions of Section 4.15 or 5.01 of the Indenture; (d) the Company or any Restricted Subsidiary fails for 30 days after written notice by the Trustee or the Holders of at least 25% in principal amount of the then outstanding Notes to comply with the provisions of Section 3.09, 4.07, 4.09 or 4.10 of the Indenture; (e) the Company or any Restricted Subsidiary fails for 60 days after written notice by the Trustee or the Holders of at least 25% in principal amount of the then outstanding Notes to comply with any of its other agreements in the Indenture or the Notes; (f) the Company or any Significant Subsidiary defaults under any mortgage, indenture or instrument under which there may be issued or by which there may be secured or evidenced any Indebtedness for money borrowed by the Company or any of its Restricted Subsidiaries (or the payment of which is guaranteed by the Company or any of its Restricted Subsidiaries), whether such Indebtedness or guarantee now exists or is created after the date of the Indenture, which default (i) is caused by a failure to pay (a "Payment Default") principal, or interest on such Indebtedness when due (after giving effect to any applicable grace period provided in such Indebtedness on the date of such default) or (ii) results in the acceleration of such Indebtedness prior to its express maturity and, in each case, the principal amount of any such Indebtedness, together with the principal amount of any other such Indebtedness under which there has been a Payment Default or the maturity of which has been so accelerated, aggregates $5.0 million or more; (g) the Company or any of its Significant Subsidiaries fails to pay final judgments aggregating in excess of $5.0 million (net of amounts covered by insurance), which judgments are not paid, discharged or stayed for a period of 60 days; (h) except as permitted by the Indenture, any Subsidiary Guarantee shall be held in any judicial proceeding to be unenforceable or invalid or shall cease for any reason to be in full force and effect or any Guarantor, or any Person acting on behalf of any Guarantor, shall deny or disaffirm its obligations under its Subsidiary Guarantee; (i) certain events of bankruptcy or insolvency with respect to the Company or any of the Company's Restricted Subsidiaries that constitutes a Significant Subsidiary or any group of Restricted Subsidiaries of the Company that, taken together, would constitute a Significant Subsidiary. If any Event of Default occurs and is continuing, the Trustee or the Holders of at least 25% in principal amount of the then outstanding Notes may declare all the Notes to be due and payable immediately. Notwithstanding the foregoing, in the case of an Event of Default arising from certain events of bankruptcy or insolvency, with respect to the Company, any Restricted Subsidiary of the Company that A - 5 90 constitutes a Significant Subsidiary or any group of Restricted Subsidiaries of the Company that, taken together, would constitute a Significant Subsidiary, all outstanding Notes will become due and payable without further action or notice. Holders of the Notes may not enforce the Indenture or the Notes except as provided in the Indenture. Subject to certain limitations, Holders of a majority in principal amount of the then outstanding Notes may direct the Trustee in its exercise of any trust or power. The Trustee may withhold from Holders of the Notes notice of any continuing Default or Event of Default (except a Default or Event of Default relating to the payment of principal or interest) if it determines that withholding notice is in their interest. In the case of any Event of Default occurring by reason of any willful action (or inaction) taken (or not taken) by or on behalf of the Company with the intention of avoiding payment of the premium that the Company would have had to pay if the Company then had elected to redeem the Notes pursuant to Section 3.07 of the Indenture, an equivalent premium shall also become and be immediately due and payable to the extent permitted by law upon the acceleration of the Notes. If an Event of Default occurs on or after [ ], 2004 by reason of any willful action (or inaction) taken (or not taken) by or on behalf of the Company with the intention of avoiding payment of the premium that the Company would have had to pay if the Company then had elected to redeem the Notes pursuant to the redemption provisions contained in the Notes, then upon acceleration of the Notes, an equivalent premium shall also become and be immediately due and payable, to the extent permitted by law, anything in the Indenture or in the Notes to the contrary notwithstanding. If an Event of Default occurs prior to [_________], 2004 by reason of any willful action (or inaction) taken (or not taken) by or on behalf of the Company with the intention of avoiding the prohibition on redemption of the Notes prior to such date, then the Make Whole Premium specified in the Indenture shall also become immediately due and payable to the extent permitted by law upon the acceleration of the Notes. The Holders of a majority in aggregate principal amount of the Notes then outstanding by notice to the Trustee may on behalf of the Holders of all of the Notes waive any existing Default or Event of Default and its consequences under the Indenture except a continuing Default or Event of Default in the payment of interest on, or the principal of, the Notes. The Company is required to deliver to the Trustee annually a statement regarding compliance with the Indenture, and the Company is required upon becoming aware of any Default or Event of Default, to deliver to the Trustee a statement specifying such Default or Event of Default. 13. TRUSTEE DEALINGS WITH COMPANY. The Trustee, in its individual or any other capacity, may make loans to, accept deposits from, and perform services for the Company or its Affiliates, and may otherwise deal with the Company or its Affiliates, as if it were not the Trustee. 14. NO RECOURSE AGAINST OTHERS. A director, officer, employee, incorporator or stockholder, of the Company, as such, shall not have any liability for any obligations of the Company under the Notes or the Indenture or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each Holder by accepting a Note waives and releases all such liability. The waiver and release are part of the consideration for the issuance of the Notes. 15. AUTHENTICATION. This Note shall not be valid until authenticated by the manual signature of the Trustee or an authenticating agent. 16. ABBREVIATIONS. Customary abbreviations may be used in the name of a Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by the entireties), JT TEN (= joint tenants with right of survivorship and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts to Minors Act). 17. THE INTERNAL LAW OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO CONSTRUE THIS NOTE WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE A - 6 91 APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY. 18. SUBORDINATION. Principal of and interest and premium (if any) on this Note and all Subsidiary Guarantees in respect hereof are subordinated in right of payment, to the extent and in the manner provided in the Indenture, to the prior payment in full in cash or Cash Equivalents of all Senior Debt (each as defined in the Indenture). 19. CUSIP NUMBERS. Pursuant to a recommendation promulgated by the Committee on Uniform Security Identification Procedures, the Company has caused CUSIP numbers to be printed on the Notes and the Trustee may use CUSIP numbers in notices of redemption as a convenience to Holders. No representation is made as to the accuracy of such numbers either as printed on the Notes or as contained in any notice of redemption and reliance may be placed only on the other identification numbers placed thereon. The Company will furnish to any Holder upon written request and without charge a copy of the Indenture. Requests may be made to: Spanish Broadcasting System, Inc. 3191 Coral Way Miami, Florida 33145 Attention: Joseph A. Garcia A - 7 92 ASSIGNMENT FORM To assign this Note, fill in the form below: (I) or (we) assign and transfer this Note to __________________________________________________________________ (Insert assignee's soc. sec. or tax I.D. no.) _______________________________________________________________________________ _______________________________________________________________________________ _______________________________________________________________________________ _______________________________________________________________________________ (Print or type assignee's name, address and zip code) and irrevocably appoint ______________________ to transfer this Note on the books of the Company. The agent may substitute another to act for him. _______________________________________________________________________________ Date: __________________ Your Signature: _________________________________ (Sign exactly as your name appears on the face of this Note) Tax Identification No: __________________________ SIGNATURE GUARANTEE: _________________________________________________ Signatures must be guaranteed by an "eligible guarantor institution" meeting the requirements of the Registrar, which requirements include membership or participation in the Security Transfer Agent Medallion Program ("STAMP") or such other "signature guarantee program" as may be determined by the Registrar in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934, as amended. A - 8 93 OPTION OF HOLDER TO ELECT PURCHASE If you want to elect to have this Note purchased by the Company pursuant to Section 4.10 or 4.15 of the Indenture, check the box below: [ ] Section 4.10 [ ] Section 4.15 If you want to elect to have only part of the Note purchased by the Company pursuant to Section 4.10 or Section 4.15 of the Indenture, state the amount you elect to have purchased: $________ Date: ____________ Your Signature:___________________________ (Sign exactly as your name appears on the face of this Note) Tax Identification No:____________________ SIGNATURE GUARANTEE: __________________________________________ Signatures must be guaranteed by an "eligible guarantor institution" meeting the requirements of the Registrar, which requirements include membership or participation in the Security Transfer Agent Medallion Program ("STAMP") or such other "signature guarantee program" as may be determined by the Registrar in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934, as amended. A - 9 94 SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE The following exchanges of a part of this Global Note for an interest in another Global Note or for a Definitive Note, or exchanges of a part of another Global Note or Definitive Note for an interest in this Global Note, have been made:
Principal Amount of Amount of increase this Global Note Signature of Amount of decrease in Principal following such authorized officer in Principal Amount Amount of this decrease (or of Trustee or Note Date of Exchange of this Global Note Global Note increase) Custodian - ----------------------- --------------------- -------------------- --------------------- -------------------- - ----------------------- --------------------- -------------------- --------------------- -------------------- - ----------------------- --------------------- -------------------- --------------------- -------------------- - ----------------------- --------------------- -------------------- --------------------- -------------------- - ----------------------- --------------------- -------------------- --------------------- -------------------- - ----------------------- --------------------- -------------------- --------------------- -------------------- - ----------------------- --------------------- -------------------- --------------------- -------------------- - ----------------------- --------------------- -------------------- --------------------- -------------------- - ----------------------- --------------------- -------------------- --------------------- -------------------- - ----------------------- --------------------- -------------------- --------------------- -------------------- - ----------------------- --------------------- -------------------- --------------------- -------------------- - ----------------------- --------------------- -------------------- --------------------- -------------------- - ----------------------- --------------------- -------------------- --------------------- -------------------- - ----------------------- --------------------- -------------------- --------------------- -------------------- - ----------------------- --------------------- -------------------- --------------------- --------------------
A - 10 95 GUARANTY For good and valuable consideration received from the Company by the undersigned (hereinafter referred to as the "Guarantors," which term includes any successor or additional Guarantors), the receipt and sufficiency of which is hereby acknowledged, subject to Section 11.03 of the Indenture, each of the Guarantors hereby, jointly and severally, unconditionally guarantees, irrespective of the validity or enforceability of the Obligations of the Company under the Indenture, the Notes or the Obligations of any other party under the Notes or the Indenture: (a) the due and punctual payment of the principal and premium, if any, of and interest on the Notes, whether at maturity, or on an interest payment date, by acceleration, call for redemption or otherwise, (b) the due and punctual payment of interest on the overdue principal and premium, if any, of and interest on the Notes, if any, if lawful, (c) the due and punctual payment and performance of all other Obligations of the Company under the Indenture and the Notes, all in accordance with the terms set forth in the Indenture; and (d) in case of any extension of time of payment or renewal of any Notes or any of such other Obligations under the Indenture of the Notes, the due and punctual payment or performance thereof in accordance with the terms of the extension or renewal, whether at stated maturity, by acceleration or otherwise. Reference is made to Article 11 of the Indenture for a further description of the terms of this Guaranty. This Guaranty is subordinated in right of payment, to the extent and in the manner provided in the Indenture, to the prior payment in full in cash or Cash Equivalents of all Senior Debt (each as defined in the Indenture). SIGNATURES Dated as of October , 1999 SPANISH BROADCASTING SYSTEM, INC. By: ------------------------------------------ Name: Title: SPANISH BROADCASTING SYSTEM OF CALIFORNIA, INC. By: ------------------------------------------ Name: Title: SPANISH BROADCASTING SYSTEM NETWORK, INC. By: ------------------------------------------ Name: Title: SBS PROMOTIONS, INC. By: ------------------------------------------ Name: Title: SBS FUNDING, INC. By: ------------------------------------------ Name: Title: ALARCON HOLDINGS, INC. By: ------------------------------------------ Name: Title: SBS OF GREATER NEW YORK, INC. By: ------------------------------------------ Name: Title: SPANISH BROADCASTING SYSTEM OF FLORIDA, INC. By: ------------------------------------------ Name: Title: SPANISH BROADCASTING SYSTEM OF GREATER MIAMI, INC. By: ------------------------------------------ Name: Title: SPANISH BROADCASTING SYSTEM OF PUERTO RICO, INC. (DELAWARE) By: ------------------------------------------ Name: Title: SPANISH BROADCASTING SYSTEM, INC. (NEW JERSEY) By: ------------------------------------------ Name: Title: SPANISH BROADCASTING SYSTEM OF ILLINOIS, INC. By: ------------------------------------------ Name: Title: SPANISH BROADCASTING SYSTEM OF SAN ANTONIO, INC. By: ------------------------------------------ Name: Title: SPANISH BROADCASTING SYSTEM OF PUERTO RICO, INC. (PUERTO RICO) By: ------------------------------------------ Name: Title: EX-5.1 6 FORM OF OPINION OF KAYE, SCHOLER, FIERMAN, ET AL 1 Exhibit 5.1 [FORM OF KAYE, SCHOLER, FIERMAN, HAYS & HANDLER, LLP OPINION] November __, 1999 Spanish Broadcasting System, Inc. 3191 Coral Way Miami, Florida 33145 Re: Spanish Broadcasting System, Inc. - Registration Statements on Form S-1 Ladies and Gentlemen: We have acted as counsel to Spanish Broadcasting System, Inc., a Delaware corporation (the "Company"), in connection with the preparation of registration statements on Form S-1 (the "Registration Statements") and the amendments thereto filed with the Securities and Exchange Commission pursuant to the provisions of the Securities Act of 1933, relating to the issuance and sale of (i) up to 22,355,200 shares of the Company's Class A common stock, par value $0.0001 per share ("Class A Common Stock"), to the underwriters ("Stock Underwriters") named in the underwriting agreement proposed to be entered into among the Company and the underwriters party thereto (the "Stock Underwriting Agreement") and (ii) up to 3,353,280 shares of Class A Common Stock to the Stock Underwriters to the extent they exercise their over-allotment option and (iii) up to $235,000,000 aggregate principal amount of the Company's ___% Senior Subordinated Notes due 2009 (the "Notes") to the underwriters named in an underwriting agreement proposed to be entered into among the Company and the underwriters party thereto (the "Notes Underwriting Agreement"). In rendering the opinion set forth below, we have examined originals or copies, certified or otherwise identified to our satisfaction, of such documents, corporate records, certificates of public officials and other instruments as we have deemed necessary or advisable for the purpose of rendering this opinion. Based on and subject to the foregoing, it is our opinion that: 1. The shares of Class A common stock to be sold by the Company and certain selling stockholders of the Company have been duly authorized and, when issued and delivered in accordance with the terms of the Stock Underwriting Agreement, will be validly issued, fully paid and non-assessable. 2 2. The Notes have been duly authorized by the Company and when (i) the indenture (the "Indenture") between the Company and The Bank of New York, as Trustee, has been duly executed and delivered by the parties thereto and (ii) the Notes have been duly authenticated by the Trustee and have been duly executed, issued and delivered by the Company in accordance with the Indenture and sold in accordance with the Notes Underwriting Agreement, the Notes will constitute valid and binding obligations of the Company entitled to the benefits of the Indenture and enforceable against the Company in accordance with their terms, except to the extent enforcement thereof may be limited by bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or other similar laws relating to or affecting enforcement of creditors' rights generally and except as enforcement thereof is subject to general principles of equity (regardless of whether enforcement is considered in a proceeding in equity or at law) and except that certain of the remedies therein contained may not be enforceable or may be subject to available defenses and procedural requirements which are not necessarily reflected therein. Our opinions expressed above are limited to the General Corporation law of the State of Delaware and the laws of the State of New York which are normally applicable to transactions of the type contemplated by the Indenture and the Notes. We hereby consent to the use of this opinion as Exhibit 5.1 to the Registration Statements and to the reference to this firm under the caption "Legal Matters." In giving such opinion, we do not thereby admit that we are acting within the category of persons whose consent is required under Section 7 of the Securities Act of 1933 or the rules and regulations of the Securities and Exchange Commission thereunder. Very truly yours, Kaye, Scholer, Fierman, Hays & Handler, LLP 2 EX-10.9 7 AMENDED AND RESTATED EMPLOYMENT AGREEMENT-ALARCON 1 EXHIBIT 10.9 AMENDED AND RESTATED EMPLOYMENT AGREEMENT AMENDED AND RESTATED EMPLOYMENT AGREEMENT dated as of October 25, 1999 by and between Spanish Broadcasting System, Inc., a Delaware corporation having a place of business at 3191 Coral Way, Miami, Florida (the "Company") and Raul Alarcon, Jr. (the "Executive"). WHEREAS, the Company and the Executive are parties to an Employment Agreement, dated March 4, 1997 (the "Agreement"); WHEREAS, the Company and the Executive desire to amend and restate the Agreement as hereinafter provided; WHEREAS, Section 12 of the Agreement permits such amendment by written agreement of both parties; and WHEREAS, the Executive has served as President and Chief Executive Officer of the Company, and the Company desires to assure itself of the availability of the Executive's services in such capacities; NOW, THEREFORE, the Company and the Executive agree to amend and restate the Agreement as follows: 1. Employment. The Company shall employ the Executive and the Executive shall be employed by the Company as Chairman of the Board of Directors, Chief Executive Officer and President of the Company and its subsidiaries at the Company's 2 headquarters in Miami, Florida (or such other location as shall be mutually satisfactory to the Executive and the Company) for the term of this Agreement. 2. Term. The term of the Executive's employment pursuant to this Agreement shall commence on the date the registration statement relating to the Company's anticipated initial public offering is declared effective (the "Effective Date") and continue until December 31, 2004; provided, however, that, unless either party otherwise elects by notice in writing delivered to the other at least 90 days prior to December 31, 2004, or any succeeding December 31, such term shall be automatically renewed for successive one-year terms unless sooner terminated pursuant to the terms of this Agreement (the "Employment Term"). 3. Duties. The Executive shall, subject to overall direction consistent with the legal authority of the Board of Directors of the Company (the "Board"), serve as, and have all power and authority inherent in the offices of, Chairman of the Board, Chief Executive Officer and President of the Company and its subsidiaries during the Employment Term and, as such, shall supervise, control and be responsible for the acquisition and the business affairs and operations of the Company and its subsidiaries and have such other executive powers and duties as may from time to time be prescribed by the Board. The Executive shall also serve as a member of the Board and its Executive Committee and Compensation Committee, if any, during the Employment Term and as a member of any other committee of the Board. The Executive shall devote his business time and efforts to the business of the Company and its subsidiaries. 4. Compensation and Other Provisions. (a) Base Salary. The Company shall pay to the Executive (i) a base salary at a rate of not less than $1,000,000 for each year during the Employment Term, payable 2 3 in substantially equal semi-monthly installments (such amount, as it may be increased from time to time, the "Base Salary"), and (ii) a bonus determined as set forth on Exhibit A attached hereto or such greater amount as the Board of Directors may, in its sole discretion, determine. The Base Salary and the Executive's other compensation will be reviewed by the Board and the Compensation Committee of the Company at least annually during the Employment Term and may be increased or maintained as the Board may determine. (b) Participation in Benefit Plans. During the Employment Term, the Executive shall be eligible to participate in all employee benefit plans and arrangements now in effect or which may hereafter be established which are generally applicable to the other senior executives of the Company or any of its subsidiaries, including without limitation, all life, group insurance and medical care plans and all disability, retirement, stock option and other employee benefit plans of the Company or any of its subsidiaries. (c) Other Provisions. The Executive shall be furnished with similar office facilities and services generally available to senior executives of entities in the businesses in which the Company is engaged, the expenses of which will be paid by the Company. The Executive shall be entitled to the same vacation benefits as are generally available to other senior executives of the Company, but which in no event shall be less than six (6) weeks per year. The Executive shall be reimbursed for all reasonable expenses incurred by him in the discharge of his duties, including but not limited to expenses for entertainment and travel. Travel shall be first class. The Executive shall account to the Company for all such expenses. (d) Other Benefits. The Executive shall be entitled to receive during the Employment Term the non-salary benefits set forth on Exhibit B attached hereto. In the 3 4 event any expenses provided under this section shall not be deductible to the Company under the Internal Revenue Code of 1986, as amended, then the Company shall pay to the Executive additional compensation equal to the amount of expenses not so deductible and the Executive shall pay such expenses directly. All such additional compensation to the Executive shall be subject to applicable withholding taxes. (e) Options. The Company shall grant the Executive an option to purchase 100,000 shares of common stock of the Company upon the Effective Date (the "Option") with the exercise price to be equal to the public offering price of the Company's initial public offering. The Option shall be incentive stock options (within the meaning of Section 422 of the Internal Revenue Code of 1986, as amended (the "Code") to the maximum extent possible, (subject to qualification of such option or any portion thereof as incentive stock options, and shall be nonqualified stock options to the extent they do not so qualify). The Option shall vest effective on the closing of the Company's initial public offering. The Company shall grant Executive an option to purchase 100,000 shares on each anniversary of the Effective Date so long as the executive remains employed by the Company on such date. Notwithstanding the foregoing, the Executive shall be eligible to participate in any stock option or other equity-based program established by the Company during the Employment Term. 5. Termination. The Executive's employment hereunder shall terminate as a result of any of the following events: (a) the Executive's death; (b) upon the election of the Board of Directors of the Company, in the event the Executive shall have been unable to substantially perform his duties hereunder by 4 5 reason of illness, accident or other physical or mental disability for a continuous period of at least six months or an aggregate of nine months during any continuous twelve-month period ("Disability"); (c) for cause, where "Cause" shall mean the determination by a majority of the members of the Board of Directors, other than the Executive, that in the event (i) the Executive has engaged in material misconduct, neglect of duties or failure to act which materially and adversely affects the business or affairs of the Company or (ii) the Executive willfully refuses to carry out the reasonable instructions, consistent with the terms of this Agreement, of the Board of Directors; provided in each case, the Board of Directors shall have first notified the Executive thereof, and the Executive, at a regularly constituted or special meeting of the Board of Directors, on at least fifteen (15) days' notice shall have had a full opportunity to respond thereto prior to the vote of the Board of Directors. Any termination pursuant to subparagraph (b) or (c) of this section shall be communicated by a written notice ("Notice of Termination") which shall indicate the specific termination provision in this Agreement which is being relied upon and shall set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Executive's employment under such provision. The Executive's employment under this Agreement shall be deemed to have terminated as follows: (i) if the Executive's employment is terminated pursuant to subparagraph (a) above, on the date of his death; and (ii) if the Executive's employment is terminated pursuant to subparagraph (b) or (c) above, on the date on which Notice of 5 6 Termination is given. The date on which termination is deemed to have occurred pursuant to this paragraph is hereinafter referred to as the "Date of Termination." 6. Payments on Termination. (a) Disability. If the Company shall terminate the Executive's employment under subparagraph 5(b) for Disability or without cause, then, in consideration of the Executive's entering into this Agreement, the Company shall pay to the Executive such amount as the Board of Directors determines is appropriate but in no event less than: (i) The Executive's full Base Salary through the Date of Termination, together with all benefits, bonuses and incentive compensation and any other compensation through such date; (ii) An amount equal to the aggregate Base Salary payments which the Executive would have received during the Employment Term if such termination had not occurred. All payments provided for in this subparagraph (a)(ii) shall be made at the time when the same would have become due if termination had not occurred; and (iii) The Company shall, for the balance of the Employment Term (as if such termination had not occurred), keep in force for the Executive or provide equivalent coverage with a national insurance company of good repute, all life, group insurance and medical care plans and all disability and other employee benefit plans and arrangements from time to time applicable to senior executives of the Company or its subsidiaries or as specifically provided herein, whichever is greater. The 6 7 Company shall pay to the Executive cash equivalent amounts for benefits not capable of being maintained. In addition, all nonvested Options previously granted to Executive shall immediately vest and remain exercisable until the earlier of (i) two years from the Executive's Date of Termination and (ii) the remaining term of the Option. The Executive shall not be required to mitigate the amount of any payment provided for in this subparagraph by seeking other employment or otherwise, nor shall the amount of any payment or benefit provided for in this subparagraph (a) be reduced by any compensation or retirement benefits heretofore or hereafter earned by the Executive as the result of employment by any other person, firm or corporation. (b) Cause. If the Company shall terminate the Executive's employment under subparagraph 5(c) for Cause, then, in consideration of the Executive's entering into this Agreement, the Company shall pay to the Executive, as liquidated damages and not as a penalty, the amounts provided for in subparagraphs (i) and (ii), below, and the Company shall comply with the provisions provided as follows: (i) The Executive's full Base Salary through the Date of Termination, together with all benefits, bonuses and incentive compensation and any other compensation through such date; and (ii) An amount equal to 50% of the aggregate Base Salary payments which the Executive would have received during the Employment Term if such termination had not occurred. 7 8 Upon termination for Cause, all nonvested options shall terminate. The Executive shall not be required to mitigate the amount of any payment provided for in this subparagraph by seeking other employment or otherwise, nor shall the amount of any payment or benefit provided for in this subparagraph (b) be reduced by any compensation or retirement benefits heretofore or hereafter earned by the Executive as the result of employment by any other person, firm or corporation. (c) Death. Upon termination pursuant to subparagraph 5(a) hereof, the Company shall pay the Executive's estate, in a lump sum on the 30th day following the Date of Termination, the sum of the accrued Base Salary to which he is entitled through the Date of Termination together with all benefits, bonuses and incentive compensation through such date. For the balance of the Employment Term, the Company shall pay the estate of the Executive the Base Salary which the Executive would have received during the Employment Term had such termination not occurred, with such payments to be made at the time and when the same were to become due if termination had not occurred. The Company shall, for the balance of the Employment Term, for the benefit of the family of the Executive keep in force or provide equivalent coverage with a national insurance company of good repute all life group insurance and major medical plans and all disability and other benefits covering such family members. All nonvested Options previously granted to Executive shall immediately vest and remain exercisable until the earlier of (i) two years from the Executive's death and (ii) the remaining term of the Option. (d) Retention of Life Insurance. In the event of the termination of the Executive's employment for any reason, then the Executive shall have the option for a period of 8 9 90 days following the Date of Termination, upon written notice delivered to the Company during such 90-day period, to require that the Company transfer to him or any other entity designated by the Executive policies of insurance on the life of the Executive required to be retained by the Company under Section 4(c) of this Agreement; provided, however, that from the effective date of such transfer, the Executive shall be responsible for payment of any premiums connected therewith. (e) Expenses. At the request of the Executive the Company shall advance to the Executive funds for the payment by him for all legal fees and expenses incurred by the Executive as the result of any termination provided for in this Agreement (including without limitation all such fees and expenses, if any, incurred in contesting or disputing any such termination) or in seeking to obtain or enforce any right or benefit provided by this Agreement. Upon the final determination of any such contest, the Executive shall repay to the Company all such amounts so advanced. 7. Life Insurance. If requested by the Company, the Executive shall submit to such physical examinations and otherwise take such actions and execute and deliver such documents as may be reasonably necessary to enable the Company to obtain life insurance on the life of the Executive for the benefit of the Company and to insure for the Company's benefit its obligations under Section 6(c). 8. Representations and Warranties. (a) The Executive represents and warrants to the Company that the Executive is under no contractual or other restriction or obligation which would prevent the performance of his duties hereunder, or interfere with the rights of the Company hereunder. 9 10 (b) The Company represents and warrants to the Executive that (i) it has all requisite power and authority to execute, deliver, and perform this Agreement, (ii) all necessary corporate proceedings of the Company have been duly taken to authorize the execution, delivery, and performance of this Agreement, and (iii) this Agreement has been duly authorized, executed, and delivered by the Company, is the legal, valid and binding obligation of the Company, and is enforceable as to the Company in accordance with its terms. 9. Confidential Information. All confidential information which the Executive may obtain during the Employment Term relating to the business of the Company shall not be published, disclosed, or made accessible by him to any other person, firm, or corporation except in the business and for the benefit of the Company. The provisions of this Section 10 shall not apply to any information which is or becomes publicly available otherwise than by breach of this Section 10. 10. Survival. The covenants, agreements, representations and warranties contained in or made pursuant to this Agreement shall survive the Executive's termination of employment, irrespective of any investigation made by or on behalf of any party. 11. Entire Agreement; Modification. This Agreement sets forth the entire understanding of the parties with respect to the subject matter hereof, supersedes all existing agreements and undertakings, whether written or oral between them regarding the Executive's employment and compensation, and may be modified only by a written instrument duly executed by each party. 12. Notices. Any notice or other communication required or permitted to be given hereunder shall be in writing and shall be mailed by certified mail, return receipt requested, 10 11 or delivered against receipt to the party to whom it is to be given at the address of such party set forth below (or to such other address as the party shall have furnished in writing in accordance with the provisions of this Section 12). Notice to the estate of the Executive shall be sufficient if addressed to the Executive as provided in this Section 12. Any notice or other communication given by certified mail shall be deemed given at the time of certification thereof, except for a notice changing a party's address which shall be deemed given at the time of receipt thereof. (a) If to the Executive: Raul Alarcon, Jr. 445 Grand Bay Drive Apt. 1203 Key Biscayne, Florida 33149 (b) If to the Company: 3191 Coral Way Miami, Florida 33145 13. Waiver. Any waiver by either party of a breach of any provision of this Agreement shall not operate as or be construed to be a waiver of any other breach of such provision or of any breach of any other provision of this Agreement. The failure of a party to insist upon strict adherence to any term of this Agreement on one or more occasions shall not be considered a waiver or deprive that party of the right thereafter to insist upon strict adherence to that term or any other term of this Agreement. Any waiver must be in writing. 14. Binding Effect. The Executive's rights and obligations under this Agreement shall not be transferable by assignment or otherwise, and any attempt to do any of the foregoing shall be void. The provisions of this Agreement shall be binding upon and inure to the benefit of each of the Company, its successors and assigns. 11 12 15. No Third Party Beneficiaries. This Agreement does not create, and shall not be construed as creating, any rights enforceable by any person not a party to this Agreement. 16. Headings. The headings in this Agreement are solely for convenience of reference and shall be given no effect in the construction or interpretation of this Agreement. 17. Governing Law. This Agreement shall be governed by the laws of the State of New York, without regard to any conflicts of laws principles thereof that would call for the application of the laws of any other jurisdiction. 18. Invalidity. The invalidity or unenforceability of any term of this Agreement shall not invalidate, make unenforceable or otherwise affect any other term of this Agreement, which shall remain in full force and effect. IN WITNESS WHEREOF, the parties have executed this Amended and Restated Employment Agreement as of the date first hereinabove written. SPANISH BROADCASTING SYSTEM, INC. By: /s/Joseph A. Garcia --------------------------------- EXECUTIVE: /s/Raul Alarcon, Jr. ------------------------------------ Name: Raul Alarcon, Jr. 12 13 EXHIBIT A Bonus of Executive Bonus The bonus shall be equal to 7.5% of same station annual broadcast cash flow growth, including (on a pro rata basis from the date the station was acquired) acquired stations on a pro forma basis. 14 EXHIBIT B Benefits of Executive 1. One automobile of the type presently used by the Executive with reimbursement from the Company for insurance, maintenance, gasoline and cellular telephone. A driver of such automobile shall also be provided at the expense of the Company. 2. Health insurance similar to the health insurance presently retained by Company for the Executive. 3. Insurance on the life of the Executive payable to beneficiaries designated by the Executive in face amount of not less than $5,000,000. 4. Reimbursement for reasonable personal tax and accounting services. 5. An apartment or similar accommodation acceptable to the Executive in New York City consistent with the position of an executive of similar stature in the community not to exceed $150,000 per year. 6. Reimbursement of all expenses incurred by the Executive in the normal course of business solicitation either directly or indirectly for the Company. 7. Until the Executive's permanent residence has been constructed and he and his family have moved into such residence, an apartment or similar accommodation acceptable to the Executive in or near Miami, Florida not to exceed $175,000 per year.
EX-10.10 8 EMPLOYMENT AGREEMENT - CAREY DAVIS 1 Exhibit 10.10 Spanish Broadcasting System, Inc. 26 W. 56th Street New York, NY 10019 February 5, 1997 Carey Davis 400 Central Park West #15D NYC, NY 10025 RE: WPAT-FM, WSKQ-FM AND WXLX-AM Dear Mr. Davis: The following is a memorandum to confirm our understanding with respect to Spanish Broadcasting System, Inc. ("Employer") employing you to be the Vice President and General Manager of Radio Stations WPAT-FM, WSKQ-FM, and WXLX-AM ("Stations"). The terms are as follows: 1. Function - Vice President and General Manager of the Stations and reporting to Raul Alarcon, Jr. 2. Term - Commencing on February 17, 1997 and ending on midnight February 16, 2000. 3. Salary - $225,000 per year plus a bonus based upon cash flow of the Stations as outlined in Exhibit A attached hereto. There shall be no reduction in salary and the calculation of the bonus shall be equitably adjusted if a AM Station is sold. 4. Expenses and Benefits - Reimbursement for reasonable expenses including provision for entertainment as approved by Employer's CFO. Health insurance and other group benefits given to the executives of the Employer. An automobile and expenses for the automobile as approved by the Employer's CFO including parking. 5. Termination - Employment can be terminated for cause upon four weeks prior notice or pay in lieu of notice. Employer can terminate without cause upon prior notice given not earlier than nine months after the commencement of the term of the agreement and the payment of one year's severance pay plus health benefits per COBRA. 6. Attorney's Fees - In the event of any action involving this agreement, the prevailing party shall be entitled to its reasonable attorney's fees and disbursements in addition to damages. 2 7. Non-Compete - 3 months non-compete in Spanish radio in New York City. 8. Mitigation - There shall be no mitigation of the severance pay. 9. Other Provisions - There shall be other customary and usual provisions as set forth in an agreement for a General Manager. The foregoing memorandum shall serve as the agreement between the parties until a more definitive agreement is executed on or before March 15, 1997. If the foregoing is in accordance with our understanding please sign and return a copy to us. Very truly yours, Spanish Broadcasting System, Inc. By /s/ Raul Alarcon, Jr. ------------------------------ Raul Alarcon, Jr., President Accepted and Agreed: /s/ Carey Davis ------------------------------ Carey Davis 3 Exhibit A Bonus Based On Stations' Broadcast Cash Flow Achieving the budgeted Stations' broadcast cash flow would provide you with a quarterly bonus of $50,000. Exceeding the budgeted broadcast cash flow number would provide you an additional 5% for every 1% over the broadcast cash flow budget. Missing the broadcast cash flow budget by more than 20% results in no bonus and for each 1% of budget achieved over 80%, you would receive 5% of the bonus. The bonus would be calculated on a quarterly basis with the period from February 17, 1997 to March 31, 1997 being pro-rated. The quarterly bonus would be paid within 30 days after the end of a quarter. If any one of the Stations is sold, the revenue and expenses for that Station would be deleted from the calculation. EX-10.11 9 EMPLOYMENT AGREEMENT - JOSEPH A. GARCIA 1 Exhibit 10.11 EMPLOYMENT AGREEMENT EMPLOYMENT AGREEMENT dated as of October 25, 1999 by and between Spanish Broadcasting System, Inc., a Delaware corporation, having a place of business at 3191 Coral Way, Miami, Florida (the "Company") and Joseph A. Garcia (the "Executive"). WHEREAS, the Executive has been employed by the Company for a number of years as its Chief Financial Officer, Executive Vice President and Secretary; and WHEREAS, the Company desires to assure the continued services of the Executive and the Executive is willing to continue to serve in the employ of the Company for the period set forth herein upon the terms and conditions hereinafter provided; NOW, THEREFORE, in consideration of the mutual promises and agreements set forth below, the Company and the Executive agree as follows: 1. Term. Except as otherwise provided in Section 4 hereof, the Company agrees to employ the Executive, and the Executive agrees to serve, for a period of three years commencing on the date the registration statement relating to the Company's anticipated initial public offering is declared effective (the "Effective Date") and ending on the third anniversary of the Effective Date, provided that, unless either party otherwise elects by notice in writing to the other at least 90 days prior to the third anniversary of the Effective Date or any succeeding anniversary of the Effective Date, the employment term shall be automatically renewed for successive one-year terms unless sooner terminated pursuant to the terms of this Agreement (the "Employment Term"). 2 2. Positions and Duties; Place of Performance. (a) Positions and Duties. The Executive shall be employed as Chief Financial Officer, Executive Vice President and Secretary of the Company and shall have the duties, responsibilities and authority as may from time to time be assigned to him by the Company's Chief Executive Officer (the "CEO") that are consistent with and normally associated with such positions, and shall continue to have responsibility for those segments of the Company's business for which he is currently responsible. The Executive shall devote substantially all of his business time, effort and energies exclusively to the business of the Company, and shall not serve as an active principal or a director or officer of any other company or entity without the prior written consent of the CEO, except that the Executive may serve as a director or officer of any trade association, civic, religious, business, educational or charitable organization without such consent. (b) Place of Performance. The Executive shall be based in Miami, Florida, except for required travel on the Company's business. 3. Compensation and Benefits. (a) Base Salary. During the Employment Term, the Company shall pay the Executive a base salary at the annual rate of $300,000 per year (the "Base Salary"), payable in accordance with the Company's normal payroll practices for executive compensation, but not less frequently than monthly. The Executive shall be entitled to such increases (but not decreases) in his Base Salary as may be determined from time to time by the Company's Board of Directors (the "Board") or pursuant to its delegation, provided that the Executive's Base Salary will be reviewed not less often than annually. If the Base Salary is increased, the new salary shall thereafter constitute the "Base Salary" for purposes of this Agreement. 2 3 (b) Bonuses. In addition to the Base Salary, the Executive shall be entitled to receive a cash bonus each year in accordance with Schedule A. (c) Other Benefit Plans and Fringe Benefits. The Executive shall be eligible (i) to participate in any and all retirement, group health and insurance plans and in all other employee benefit plans in which he currently participates and/or in any such plans established or maintained by the Company during the Employment Term that are made available to its management executives generally, (ii) to receive all fringe benefits, for which his status and level of employment qualify him in accordance with the Company's usual policies and arrangements and the terms of such plans, policies and arrangements and (iii) to receive such other benefits as are specified on Schedule A. (d) Options. The Company shall grant the Executive an option to purchase 250,000 shares of common stock of the Company upon the Effective Date (the "Option") at an exercise price equal to the public offering price of the Company's initial public offering. The Options shall be incentive stock options (within the meaning of Section 422 of the Internal Revenue Code of 1986, as amended (the "Code")) to the maximum extent possible, (subject to qualification of such options or any portion thereof as incentive stock options, and shall be nonqualified stock options to the extent they do not so qualify). The Option for 50,000 shares shall vest effective on the closing of the Company's initial public offering; the remaining shares shall vest over the five years following the Effective Date (with 40,000 to vest each year on the first, second, third, fourth and fifth anniversary of the Effective Date), provided that the Executive is employed on each such date. Notwithstanding the foregoing, the Executive shall be eligible to participate in any stock option or other equity-based program established by the Company during the Employment Term. 3 4 (e) Expenses. The Company shall reimburse the Executive for any and all out-of-pocket expenses incurred by the Executive during the Employment Term in connection with his duties and responsibilities hereunder in accordance with the Company's usual policy of reimbursing senior executives. 4. Termination. (a) Compensation and Benefits. Except as otherwise provided in this section or in Section 6 hereof, upon termination of the Executive's employment hereunder, his right to any form of compensation hereunder shall cease, except that he shall be entitled to receive any salary or other benefits accrued but not paid up to his Date of Termination (as hereinafter defined in Section 4(f)) or for any period required by law and any out-of-pocket expenses reasonably incurred by the Executive prior to such date. (b) Death and Disability. The Executive's employment hereunder shall terminate upon his death, and may be terminated by the Company due to Disability. For purposes of this Agreement, "Disability" shall mean the determination by the Board that the Executive is physically or mentally incapacitated and has been unable for a period of six consecutive months, or for shorter periods aggregating six months in any period of twelve (12) consecutive months, to perform the duties for which he was responsible immediately before the onset of his incapacity. In order to assist the Board in making such a determination, the Executive shall, as reasonably requested by the Board, make himself available for medical examinations by a physician chosen by the Board and approved by the Executive. The determination of the physician chosen in accordance with the preceding sentence shall be final and binding on the Company and the Executive. 4 5 (c) Termination By the Company For Cause. The Executive's employment hereunder may be terminated by the Company for Cause at any time. For purposes of this Agreement, the term "Cause" shall mean the Executive's (i) commission of an illegal act or acts that was intended to and did defraud the Company or any of its affiliates, (ii) gross negligence or willful misconduct in the management of the Company's affairs which materially harms the Company and which is not remedied within 30 days of receiving notice of same, or (iii) breach of the provisions of Section 5(a) or (b) hereof. In any case described in this section, the Executive shall be given written notice, in accordance with Section 4(f), that the Company intends to terminate his employment for Cause. Such written notice shall specify the particular act or acts, or failure to act, that is or are the basis for the decision to so terminate the Executive's employment for Cause, and shall give the Executive the right to cure any breach so specified for a period of thirty (30) days. (d) Termination By the Executive For Good Reason. The Executive may terminate his employment hereunder for Good Reason. For purposes of this Agreement, the term "Good Reason" shall mean and shall be deemed to exist if, without the prior written consent of the Executive, (i) the Executive is assigned duties or responsibilities that are inconsistent in any material respect with the scope of the duties or responsibilities associated with his titles or positions, as set forth in this Agreement (or to which he is promoted), (ii) the Executive's duties or responsibilities are significantly reduced, (iii) benefits to which the Executive is entitled under the employee benefit plans of the Company are in the aggregate materially decreased, unless such decrease is required by law or is applicable to all employees of the Company eligible to participate in any plan so affected, not just those covered by employment agreements with the Company, (iv) the Executive's Base Salary is reduced or his annual bonus is reduced or eliminated, (v) the Company fails to perform any 5 6 material term or provision of this Agreement, (vi) the Executive's office location is relocated to one that is more than fifty (50) miles from the location at which the Executive was based immediately prior to the relocation, or (vii) the Company fails to obtain the full assumption of this Agreement by a successor. (e) Compensation Upon Termination Without Cause or for Death or Disability. (i) If the Company terminates the Executive's employment hereunder other than for Cause or other than in accordance with Section 4(b), or the Executive terminates his employment for Good Reason, notwithstanding any other provision of this Agreement to the contrary: (A) In addition to the amounts paid to the Executive pursuant to Section 4(a), in lieu of any further salary payments to the Executive for periods subsequent to the Date of Termination, the Company shall pay the Executive an amount equal to two times the Executive's annual Base Salary rate in effect as of the Date of Termination, plus two times the bonus paid him with respect to the year preceding such Date of Termination. Except as provided in Section 6(a)(i), this amount shall be paid in [substantially equal monthly payments during the two years following the Executive's Date of Termination, provided, however, that the Company may determine, in its sole discretion, to pay such amount (or any portion remaining during such period if periodic payments have commenced) in a single lump sum in cash. (B) The Company shall continue to provide the Executive (and his eligible dependents, if any) with group health and life insurance benefits and long-term disability insurance coverage (or the economic equivalent thereof) at the level (including, if applicable, the portion of 6 7 the premium paid by the Company for such coverage) in effect on the Date of Termination for the one-year period following such date, provided that such coverage shall cease to be provided if the Executive is employed by another employer within such one-year period, and further provided that, the date of the expiration of the extended period of coverage provided under this clause (i)(B) shall be treated as the date of the termination of the Executive's employment solely for the purpose of determining the rights of the Executive (and his eligible dependents, if any) to the continuation coverage provided under Section 4980B of the Code. (C) All nonvested Options previously granted to Executive shall immediately vest and remain exercisable until the earlier of (i) two years from the Executive's Date of Termination and (ii) the remaining term of the Option. (D) If the Executive's employment hereunder is terminated as a result of Death or Disability, he shall be paid a single lump sum in cash within thirty (30) days of his Date of Termination in an amount equal to fifty percent (50%) of his Base Salary. (f) Notice of Termination; Date of Termination. Any termination of the Executive's employment, other than by reason of his death, shall be communicated by the terminating party by a written notice of termination (the "Notice of Termination"). The Notice of Termination shall (i) indicate the specific termination provision in this Agreement relied upon, (ii) set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Executive's employment under the provision so indicated, and (iii) if the termination date is other than the date of receipt of such notice, specify the date on which the Executive's employment is to be terminated (which date shall not be earlier than the date on which such notice is actually received, or in the case of a termination for Disability, the sixtieth (60th) day 7 8 after such notice is received). In the case of a termination by the Company for Cause, the Notice of Termination shall be given within one hundred and eighty (180) business days after the Company's CEO has actual knowledge of the events justifying the purported termination, and in the case of a termination by the Executive for Good Reason, the notice shall be given within one hundred and eighty (180) days of the Executive's having actual knowledge of the events justifying such termination. For purposes of this Agreement, "Date of Termination" shall mean (i) if the Executive's employment is terminated by his death, the date of his death, and (ii) in all other cases, the later of the date of actual receipt of the Notice of Termination, or the date specified in such notice. (g) No Mitigation; No Offset. In the event of any termination of the Executive's employment under this Section 4, the Executive shall be under no obligation to seek other employment and there shall be no offset against any amounts due the Executive under this Agreement on account of any remuneration that the Executive may obtain from any subsequent employment. Any amounts due under this Section 4 are in the nature of liquidated damages, and not in the nature of a penalty. 5. Covenants. (a) Competitive Activity. During the Employment Term, and for a period of twelve (12) months after the Executive's Date of Termination, the Executive agrees that, without the prior written consent of the Board, he shall not render services in any capacity for a radio station competitive with the Company's radio business, nor shall he be directly or indirectly involved in any radio business or radio network competitive with the Company's radio business. (b) Solicitation or Interference. During the Employment Term and for a period of twelve (12) months after the Executive's Date of Termination, the Executive shall not, 8 9 either for himself or on behalf of any third party: (i) in any manner induce any employee, agent, representative, customer, former customer, or any other person or concern, dealing with or in some other way associated with the Company, to terminate such dealings or association; or (ii) do anything, directly or indirectly, to interfere with the relationship between the Company and any such person or concern. (c) Non-Disclosure of Proprietary Information. The Executive agrees that he will not disclose the trade secrets or confidential and proprietary information of the Company during the Employment Term or thereafter. The parties understand and agree that nothing contained herein shall prevent the Executive from disclosing: (1) information required to be disclosed pursuant to compulsory legal process, provided that he shall give the Company prompt notice of such process prior to disclosure; (2) information which was in his lawful possession at the time of or prior to its submission to him by the Company; or (3) information which is in the public domain. (d) Remedy for Breach. If any provision of this Section 4 is deemed invalid or unenforceable, such provision shall be deemed modified and limited to the extent necessary to make it valid and enforceable. The Executive acknowledges and agrees that the provisions of this section are reasonable and necessary for the protection of the Company and that the Company will be irrevocably damaged if such provisions are not specifically enforced. Accordingly, money damages from the Executive for a breach of this section would be difficult, if not impossible, to calculate and the most appropriate relief in the event of the Executive's breach would be injunctive relief. Nothing contained herein shall be deemed to prohibit the Company, for any such breach, from instituting or prosecuting any other proceeding in any court of competent jurisdiction, in either law or equity, to obtain damages for any breach of this Agreement. All 9 10 remedies given to the Company by this Agreement shall be construed as cumulative remedies and shall not be alternative or exclusive remedies. 6. Change in Control Provisions. (a) Impact of Event. In the event of a "Change in Control" of the Company, as defined in Section 6(b), the following provisions shall apply in addition to the other provisions of this Agreement: (i) If, on or before the second anniversary of the Change in Control, the Executive's employment hereunder is terminated by the Company for any reason other than for Cause or by the Executive for Good Reason, (A) Section 5(a) shall not be applicable to the Executive from and after his Date of Termination, (B) the Executive shall be entitled to receive the amount determined under Section 4(e)(i)(A) in a single lump sum in cash within thirty (30) days of the Executive's Date of Termination, and such amount shall not be discounted in any way to reflect its present value, (C) any and all Options the Executive then holds which are not exercisable shall vest and be exercisable immediately, and (D) notwithstanding Section 4(e)(B) hereof, at the Company's expense, the Executive shall continue to be a participant in any group health plan (which may be provided by payment of COBRA continuation coverage premiums) maintained by the Company (or the economic equivalent in cash) at the level in effect on the Executive's Date of Termination for a period of eighteen (18) months following his Date of Termination. (ii) All expenses (including, without limitation, legal fees and expenses) incurred by the Executive in connection with, or in prosecuting or defending, any claim or controversy arising out of or relating to this Agreement shall be paid by the Company, unless the Executive fails to prevail at least in part in any such claim or controversy and the Company receives 10 11 a written opinion of independent legal counsel, selected by the Board, to the effect that such expenses were not incurred by the Executive in good faith. Pending any such determination, such expenses shall be paid by the Company in advance on a monthly basis, upon an undertaking by the Executive to repay such advanced amounts if the Executive fails to prevail in any such claim or controversy and it should thus be determined that the expenses were not incurred by the Executive in good faith. (b) Definition of Change in Control. A Change in Control shall mean the happening of any of the following: (i) any "person," as such term is used in Section 13(d) and 14(d) of the Securities Exchange Act of 1934 (the "Exchange Act") (other than the Company or any subsidiary of the Company, or any trustee or other fiduciary holding securities under an employee benefit plan of the Company or any subsidiary) becomes the "beneficial owner" (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing forty percent (40%) or more of the combined voting power of the Company's then outstanding securities; (ii) during any period of two consecutive years beginning on or after the Effective Date hereof, individuals who at the beginning of such period constitute the Board, and any new director (other than a director designated by a person who has entered into an agreement with the Company to effect a transaction described in clause (i), (iii) or (iv)) whose election by the Board or nomination for election by the Company's shareholders was approved by a vote of at least two-thirds (2/3) of the directors then still in office who either were directors at the beginning of the period or whose election or nomination for election was previously so approved 11 12 (unless the approval of the election or nomination for election of such new directors was in connection with an actual or threatened election or proxy contest), cease for any reason to constitute at least a majority thereof; (iii) the shareholders of the Company approve a merger or consolidation of the Company with any other corporation, other than (x) a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) more than eighty percent (80%) of the combined voting power of the voting securities of the Company or such surviving entity outstanding immediately after such merger or consolidation or (y) a merger or consolidation effected to implement a recapitalization of the Company (or similar transaction) in which no "person" (as defined above in clause (i)) acquires more than fifty percent (50%) of the combined voting power of the Company's then outstanding securities; or (iv) the shareholders of the Company approve an agreement for the sale or disposition by the Company of all or substantially all of the Company's assets or any transaction having a similar effect, or the Company, directly or indirectly, begins proceedings to effect a complete liquidation. 7. Miscellaneous. (a) Governing Law. This Agreement shall be governed by the laws of the State of New York, without regard to any conflicts of laws principles thereof that would call for the application of the laws of any other jurisdiction. 12 13 (b) Notice. Any notice, consent, request or other communication made or given in connection with this Agreement shall be in writing and shall be deemed to have been duly given when delivered or mailed by registered or certified mail, return receipt requested, to those listed below at their following respective addresses or at such other address as each may specify by notice to the others: To the Executive: Joseph A. Garcia 7460 SW 121 Ct. Miami, Florida 33183 (305) 274-0624 To the Company: Spanish Broadcasting System, Inc. 3191 Coral Way Suite 805 Miami, Florida 33145 with a copy to: Jason L. Shrinsky, Esq. Kaye, Scholer, Fierman, Hays & Handler, LLP 425 Park Avenue New York, New York 10022 (c) Entire Agreement; Amendment. This Agreement shall supersede any and all existing agreements between the Executive and the Company or any of its affiliates relating to the terms of the Executive's employment during the Employment Term. It may not be amended except by a written agreement signed by both parties. (d) Waiver. The failure of a party to insist upon strict adherence to any term of this Agreement on any occasion shall not be considered a waiver thereof or deprive that party of the right thereafter to insist upon strict adherence to that term or any other term of this Agreement. 13 14 (e) Assignment. Except as otherwise provided in this Section 9(e), this Agreement shall inure to the benefit of and be binding upon the parties hereto and their respective heirs, representatives, successors and assigns. This Agreement shall not be assignable by the Executive, and shall be assignable by the Company only to any corporation or other entity resulting from the reorganization, merger or consolidation of the Company with any other corporation or entity or any corporation or entity to or with which the Company's business or substantially all of its business or assets may be sold, exchanged or transferred, and it must be so assigned by the Company to, and accepted as binding upon it by, such other corporation or entity in connection with any such reorganization, merger, consolidation, sale, exchange or transfer (the provisions of this sentence also being applicable to any successive such transaction). (f) Headings. Section headings are used herein for convenience of reference only and shall not affect the meaning of any provision of this Agreement. (g) Rules of Construction. Whenever the context so requires, the use of the masculine gender shall be deemed to include the feminine and vice versa, and the use of the singular shall be deemed to include the plural and vice versa. (h) Arbitration. Any dispute or controversy arising out of, or relating to this Agreement, shall be resolved by arbitration at the American Arbitration Association ("AAA") at its New York City office before a panel of three arbitrators under the then existing rules and regulations of the AAA. The determination of the arbitrators shall be final and binding on the parties hereto and judgment on it may be entered in any court of competent jurisdiction. In the event the Executive prevails in such proceedings, as determined by the arbitration panel, the Company shall reimburse the Executive for all expenses (including, without limitation, reasonable legal fees and 14 15 expenses) he incurred in connection with any such proceeding. All such amounts shall be paid promptly but in any event within ten (10) business days after the Executive provides the Company with a statement of the amounts to be reimbursed. In all other cases, each party shall be responsible for their own expenses incurred in connection with such proceedings. IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the day and year first above written. SPANISH BROADCASTING SYSTEM, INC. By: /s/Raul Alarcon, Jr. -------------------------------- JOSEPH A. GARCIA /s/Joseph A. Garcia ----------------------------------- 15 16 SCHEDULE A Bonus: $200,000. Based on the Company meeting projected Consolidated Broadcast Cash Flow for the next fiscal year. For the purpose of this bonus, projected broadcast cash flow is the consolidated amount approved by the CEO to compensate for performance all those executives with compensation plans that include bonuses based on meeting broadcast cash flow targets. Health Insurance: Health and dental insurance for the executive and family under the current Company's plan. Allowance: $5,040 payable in monthly installments. Car: Lease for a 300E Mercedes Benz, renewable every four years. 16 EX-10.12 10 EMPLOYMENT AGREEMENT - LUIS DIAZ-ALBERTINI 1 Exhibit 10.12 EMPLOYMENT AGREEMENT EMPLOYMENT AGREEMENT dated as of October 25, 1999, by and between Spanish Broadcasting Systems, Inc., a Delaware corporation (the "Company") and Luis Diaz-Albertini (the "Executive"). WHEREAS, the Executive has been employed by the Company for a number of years as its Vice President/Group Sales; and WHEREAS, the Company desires to assure the continued services of the Executive and the Executive is willing to continue to serve in the employ of the Company for the period set forth herein upon the terms and conditions hereinafter provided; NOW, THEREFORE, in consideration of the mutual promises and agreements set forth below, the Company and the Executive agree as follows: 1. Term. Except as otherwise provided in Section 4 hereof, the Company agrees to employ the Executive, and the Executive agrees to serve, for a period commencing on the date the Company's registration statement relating to its initial public offering is declared effective (the "Effective Date") and ending on the third anniversary of the Effective Date, provided that, unless either party otherwise elects by notice in writing to the other at least 90 days prior to the third anniversary of the Effective Date or any succeeding anniversary of the Effective Date, the employment term shall be automatically renewed for successive one-year terms unless sooner terminated pursuant to the terms of the Agreement (the "Employment Term"). 2 2. Positions and Duties; Place of Performance. (a) Positions and Duties. The Executive shall be employed as Vice President/Group Sales of the Company and shall have the duties, responsibilities and authority as may from time to time be assigned to him by the Company's Chief Executive Officer (the "CEO") that are consistent with and normally associated with such position, and shall continue to have responsibility for those segments of the Company's business for which he is currently responsible. The Executive shall devote substantially all of his business time, effort and energies exclusively to the business of the Company, and shall not serve as an active principal or a director or officer of any other company or entity without the prior written consent of the CEO, except that the Executive may serve as a director or officer of any trade association, civic, religious, business, educational or charitable organization without such consent. (b) Place of Performance. The Executive shall be based in Miami, Florida, but shall be required to visit and work with all Company broadcast stations wherever located on a regular and continuing basis. 3. Compensation and Benefits. (a) Base Salary. During the Employment Term, the Company shall pay the Executive a base salary at the annual rate of $225,000 per year (the "Base Salary"), payable in accordance with the Company's normal payroll practices for executive compensation, but not less frequently than monthly. The Executive shall be entitled to such increases (but not decreases) in his Base Salary as may be determined from time to time by the Company's Board of Directors (the "Board") or pursuant to its delegation, provided that the Executive's Base Salary will be reviewed 2 3 not less often than annually. If the Base Salary is increased, the new salary shall thereafter constitute the "Base Salary" for purposes of this Agreement. (b) Bonuses. In addition to the Base Salary, the Executive shall be entitled to receive a cash bonus each year in accordance with the formula set forth at Exhibit 1 attached hereto and made a part hereof, and/or any bonus program or arrangement established by the Company after the date hereof for the benefit of the Company's management executives. (c) Other Benefit Plans and Fringe Benefits. The Executive shall be eligible (i) to participate in any and all retirement, group health and insurance plans and in all other employee benefit plans in which he currently participates and/or in any such plans established or maintained by the Company during the Employment Term that are made available to its management executives generally, and (ii) to receive all fringe benefits, for which his status and level of employment qualify him in accordance with the Company's usual policies and arrangements and the terms of such plans, policies and arrangements. (d) Options. The Company shall grant the Executive options to purchase 50,000 shares of common stock of the Company upon the Effective Date (the "Option") with the exercise price to be equal to the public offering price of the Company's initial public offering. The Options shall be incentive stock options (within the meaning of Section 422 of the Internal Revenue Code of 1986, as amended (the "Code") to the maximum extent possible, (subject to qualification of such options or any portion thereof as incentive stock options, and shall be nonqualified stock options to the extent they do not so qualify). The Option shall vest over the three years following the Effective Date (i.e., 17,000 on each of the first and second anniversary of the Effective Date and 16,000 on the third anniversary of the Effective Date, provided the Executive is employed on each 3 4 such date. Notwithstanding the foregoing, the Executive shall be eligible to participate in any stock option or other equity-based program established by the Company during the Employment Term. (e) Expenses. The Company shall reimburse the Executive for any and all out-of-pocket expenses incurred by the Executive during the Employment Term in connection with his duties and responsibilities hereunder in accordance with the Company's usual policy of reimbursing senior executives. 4. Termination. (a) Compensation and Benefits. Except as otherwise provided in this section or Section 6 hereof, upon termination of the Executive's employment hereunder, his right to any form of compensation hereunder shall cease, except that he shall be entitled to receive any salary or other benefits accrued but not paid up to his Date of Termination (as hereinafter defined in Section 4(f) or for any period required by law and any out-of-pocket expenses reasonably incurred by the Executive prior to such date. (b) Death and Disability. The Executive's employment hereunder shall terminate upon his death, and may be terminated by the Company due to Disability. For purposes of this Agreement, "Disability" shall mean the determination by the Board that the Executive is physically or mentally incapacitated and has been unable for a period of six consecutive months, or for shorter periods aggregating six months in any period of twelve (12) consecutive months, to perform the duties for which he was responsible immediately before the onset of his incapacity. In order to assist the Board in making such a determination, the Executive shall, as reasonably requested by the Board, make himself available for medical examinations by a physician chosen by 4 5 the Board and approved by the Executive. The determination of the physician chosen in accordance with the preceding sentence shall be final and binding on the Company and the Executive. (c) Termination By the Company For Cause. The Executive's employment hereunder may be terminated by the Company for Cause at any time. For purposes of this Agreement, the term "Cause" shall mean the Executive's (i) commission of an illegal act or acts that was intended to and did defraud the Company or any of its affiliates, (ii) gross negligence or willful misconduct in the management of the Company's affairs which materially harms the Company and which is not remedied within 30 days of receiving notice of same, or (iii) breach of the provisions of Section 5(a) or (b) hereof. In any case described in this section, the Executive shall be given written notice, in accordance with Section 4(f), that the Company intends to terminate his employment for Cause. Such written notice shall specify the particular act or acts, or failure to act, that is or are the basis for the decision to so terminate the Executive's employment for Cause, and shall give the Executive the right to cure any breach so specified for a period of thirty (30) days. (d) Termination By the Executive For Good Reason. The Executive may terminate his employment hereunder for Good Reason. For purposes of this Agreement, the term "Good Reason" shall mean and shall be deemed to exist if, without the prior written consent of the Executive, (i) the Executive is assigned duties or responsibilities that are inconsistent in any material respect with the scope of the duties or responsibilities associated with his titles or positions, as set forth in this Agreement (or to which he is promoted), (ii) the Executive's duties or responsibilities are significantly reduced, (iii) benefits to which the Executive is entitled under the employee benefit plans of the Company are in the aggregate materially decreased, unless such decrease is required by law or is applicable to all employees of the Company eligible to participate in any plan so affected, 5 6 not just those covered by employment agreements with the Company, (iv) the Executive's Base Salary is reduced, (v) the Company fails to perform any material term or provision of this Agreement, (vi) the Executive's office location is relocated to one that is more than fifty (50) miles from the location at which the Executive was based immediately prior to the relocation, or (vii) the Company fails to obtain the full assumption of this Agreement by a successor. (e) Compensation Upon Termination Without Cause or for Death or Disability. (i) If the Company terminates the Executive's employment hereunder other than for Cause or other than in accordance with Section 4(b), or the Executive terminates his employment for Good Reason, notwithstanding any other provision of this Agreement to the contrary: (A) In addition to the amounts paid to the Executive pursuant to Section 4(a), in lieu of any further salary payments to the Executive for periods subsequent to the Date of Termination, the Company shall pay the Executive an amount equal to two times the Executive's annual Base Salary rate in effect as of the Date of Termination, plus two times the bonus paid him with respect to the year preceding such Date of Termination. Except as provided in Section 6(a)(i), this amount shall be paid in substantially equal monthly payments during the two years following the Executive's Date of Termination, provided, however, that the Company may determine, in its sole discretion, to pay such amount (or any portion remaining during such period if periodic payments have commenced) in a single lump sum in cash. (B) The Company shall continue to provide the Executive (and his eligible dependents, if any) with group health and life insurance benefits and long-term disability insurance 6 7 coverage (or the economic equivalent thereof) at the level (including, if applicable, the portion of the premium paid by the Company for such coverage) in effect on the Date of Termination for the one-year period following such date, provided that such coverage shall cease to be provided if the Executive is employed by another employer within such one-year period, and further provided that, the date of the expiration of the extended period of coverage provided under this clause (i)(B) shall be treated as the date of the termination of the Executive's employment solely for the purpose of determining the rights of the Executive (and his eligible dependents, if any) to the continuation coverage provided under Section 4980B of the Internal Revenue Code of 1986, as amended (the "Code"). (C) All nonvested Options previously granted to Executive shall immediately vest and remain exercisable until the earlier of (i) two years from the Executive's Date of Termination and (ii) the remaining term of the Option. (D) If the Executive's employment hereunder is terminated as a result of death or Disability, he shall be paid a single lump sum in cash within thirty (30) days of his Date of Termination in an amount equal to fifty percent (50%) of his Base Salary. (f) Notice of Termination; Date of Termination. Any termination of the Executive's employment, other than by reason of his death, shall be communicated by the terminating party by a written notice of termination (the "Notice of Termination"). The Notice of Termination shall (i) indicate the specific termination provision in this Agreement relied upon, (ii) set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Executive's employment under the provision so indicated, and (iii) if the termination date is other than the date of receipt of such notice, specify the date on which the 7 8 Executive's employment is to be terminated (which date shall not be earlier than the date on which such notice is actually received, or in the case of a termination for Disability, the sixtieth (60th) day after such notice is received). In the case of a termination by the Company for Cause, the Notice of Termination shall be given within one hundred and eighty (180) business days after the Company's CEO has actual knowledge of the events justifying the purported termination, and in the case of a termination by the Executive for Good Reason, the notice shall be given within one hundred and eighty (180) days of the Executive's having actual knowledge of the events justifying such termination. For purposes of this Agreement, "Date of Termination" shall mean (i) if the Executive's employment is terminated by his death, the date of his death, and (ii) in all other cases, the later of the date of actual receipt of the Notice of Termination, or the date specified in such notice. (g) No Mitigation; No Offset. In the event of any termination of the Executive's employment under this Section 4, the Executive shall be under no obligation to seek other employment and there shall be no offset against any amounts due the Executive under this Agreement on account of any remuneration that the Executive may obtain from any subsequent employment. Any amounts due under this Section 4 are in the nature of liquidated damages, and not in the nature of a penalty. 5. Covenants. (a) Competitive Activity. During the Term, and for a period of twelve (12) months after the Executive's Date of Termination, the Executive agrees that, without the prior written consent of the Board, he shall not render services in any capacity for a radio station competitive with the Company's radio business, nor shall he be directly or indirectly involved in any radio business competitive with the Company's radio business. 8 9 (b) Solicitation or Interference. During the Term and for a period of twelve (12) months after the Executive's Date of Termination, the Executive shall not, either for himself or on behalf of any third party: (i) in any manner induce any employee, agent, representative, customer, former customer, or any other person or concern, dealing with or in some other way associated with the Company, to terminate such dealings or association; or (ii) do anything, directly or indirectly, to interfere with the relationship between the Company and any such person or concern. (c) Non-Disclosure of Proprietary Information. The Executive agrees that he will not disclose the trade secrets or confidential and proprietary information of the Company during the Term or thereafter. The parties understand and agree that nothing contained herein shall prevent the Executive from disclosing: (1) information required to be disclosed pursuant to compulsory legal process, provided that he shall give the Company prompt notice of such process prior to disclosure; (2) information which was in his lawful possession at the time of or prior to its submission to him by the Company; or (3) information which is in the public domain. (d) Remedy for Breach. If any provision of this Section 4 is deemed invalid or unenforceable, such provision shall be deemed modified and limited to the extent necessary to make it valid and enforceable. The Executive acknowledges and agrees that the provisions of this section are reasonable and necessary for the protection of the Company and that the Company will be irrevocably damaged if such provisions are not specifically enforced. Accordingly, money damages from the Executive for a breach of this section would be difficult, if not impossible, to calculate and the most appropriate relief in the event of the Executive's breach would be injunctive relief. Nothing contained herein shall be deemed to prohibit the Company, for 9 10 any such breach, from instituting or prosecuting any other proceeding in any court of competent jurisdiction, in either law or equity, to obtain damages for any breach of this Agreement. All remedies given to the Company by this Agreement shall be construed as cumulative remedies and shall not be alternative or exclusive remedies. 6. Change in Control Provisions. (a) Impact of Event. In the event of a "Change in Control" of the Company, as defined in Section 6(b), the following provisions shall apply in addition to the other provisions of this Agreement: (i) If, on or before the first anniversary of the Change in Control, the Executive's employment hereunder is terminated by the Company for any reason other than for Cause or by the Executive for Good Reason, (A) Section 5(a) shall not be applicable to the Executive from and after his Date of Termination, (B) the Executive shall be entitled to receive the amount determined under Section 4(e)(i)(A) in a single lump sum in cash within thirty (30) days of the Executive's Date of Termination, and such amount shall not be discounted in any way to reflect its present value, (C) any and all Options the Executive then holds which are not exercisable shall vest and be exercisable immediately, and (D) notwithstanding Section 4(e)(B) hereof, at the Company's expense, the Executive shall continue to be a participant in any group health plan (which may be provided by payment of COBRA continuation coverage premiums) maintained by the Company (or the economic equivalent in cash) at the level in effect on the Executive's Date of Termination for a period of eighteen (18) months following his Date of Termination. (ii) All expenses (including, without limitation, legal fees and expenses) incurred by the Executive in connection with, or in prosecuting or defending, any claim 10 11 or controversy arising out of or relating to this Agreement shall be paid by the Company, unless the Executive fails to prevail at least in part in any such claim or controversy and the Company receives a written opinion of independent legal counsel, selected by the Board, to the effect that such expenses were not incurred by the Executive in good faith. Pending any such determination, such expenses shall be paid by the Company in advance on a monthly basis, upon an undertaking by the Executive to repay such advanced amounts if the Executive fails to prevail in any such claim or controversy and it should thus be determined that the expenses were not incurred by the Executive in good faith. (b) Definition of Change in Control. A Change in Control shall mean the happening of any of the following: (i) any "person," as such term is used in Section 13(d) and 14(d) of the Securities Exchange Act of 1934 (the "Exchange Act") (other than the Company or any subsidiary of the Company, or any trustee or other fiduciary holding securities under an employee benefit plan of the Company or any subsidiary) becomes the "beneficial owner" (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing forty percent (40%) or more of the combined voting power of the Company's then outstanding securities; (ii) during any period of two consecutive years beginning on or after the Effective Date hereof, individuals who at the beginning of such period constitute the Board, and any new director (other than a director designated by a person who has entered into an agreement with the Company to effect a transaction described in clause (i), (iii) or (iv)) whose election by the Board or nomination for election by the Company's shareholders was approved by 11 12 a vote of at least two-thirds (2/3) of the directors then still in office who either were directors at the beginning of the period or whose election or nomination for election was previously so approved (unless the approval of the election or nomination for election of such new directors was in connection with an actual or threatened election or proxy contest), cease for any reason to constitute at least a majority thereof; (iii) the shareholders of the Company approve a merger or consolidation of the Company with any other corporation, other than (x) a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) more than eighty percent (80%) of the combined voting power of the voting securities of the Company or such surviving entity outstanding immediately after such merger or consolidation or (y) a merger or consolidation effected to implement a recapitalization of the Company (or similar transaction) in which no "person" (as defined above in clause (i)) acquires more than forty percent (40%) of the combined voting power of the Company's then outstanding securities; or (iv) the shareholders of the Company approve an agreement for the sale or disposition by the Company of all or substantially all of the Company's assets or any transaction having a similar effect, or the Company, directly or indirectly, begins proceedings to effect a complete liquidation. 12 13 7. Miscellaneous. (a) Governing Law. This 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 in that State. (b) Notice. Any notice, consent, request or other communication made or given in connection with this Agreement shall be in writing and shall be deemed to have been duly given when delivered or mailed by registered or certified mail, return receipt requested, to those listed below at their following respective addresses or at such other address as each may specify by notice to the others: To the Executive: Luis Diaz-Albertini c/o Spanish Broadcasting System, Inc. 3191 Coral Way Suite 805 Miami, Florida 33145 To the Company: Spanish Broadcasting System, Inc. 3191 Coral Way Suite 805 Miami, Florida 33145 ATTN: Raul Alarcon, Jr. with a copy to: Jason L. Shrinsky, Esq. Kaye, Scholer, Fierman, Hays & Handler, LLP 901 15th Street, N.W. Suite 1100 Washington, D.C. 20005 13 14 (c) Entire Agreement; Amendment. This Agreement shall supersede any and all existing agreements between the Executive and the Company or any of its affiliates relating to the terms of the Executive's employment during the Employment Term. It may not be amended except by a written agreement signed by both parties. (d) Waiver. The failure of a party to insist upon strict adherence to any term of this Agreement on any occasion shall not be considered a waiver thereof or deprive that party of the right thereafter to insist upon strict adherence to that term or any other term of this Agreement. (e) Assignment. Except as otherwise provided in this Section 9(e), this Agreement shall inure to the benefit of and be binding upon the parties hereto and their respective heirs, representatives, successors and assigns. This Agreement shall not be assignable by the Executive, and shall be assignable by the Company only to any corporation or other entity resulting from the reorganization, merger or consolidation of the Company with any other corporation or entity or any corporation or entity to or with which the Company's business or substantially all of its business or assets may be sold, exchanged or transferred, and it must be so assigned by the Company to, and accepted as binding upon it by, such other corporation or entity in connection with any such reorganization, merger, consolidation, sale, exchange or transfer (the provisions of this sentence also being applicable to any successive such transaction). (f) Headings. Section headings are used herein for convenience of reference only and shall not affect the meaning of any provision of this Agreement. (g) Rules of Construction. Whenever the context so requires, the use of the masculine gender shall be deemed to include the feminine and vice versa, and the use of the singular shall be deemed to include the plural and vice versa. 14 15 (h) Arbitration. Any dispute or controversy arising out of, or relating to this Agreement, shall be resolved by arbitration at the American Arbitration Association ("AAA") at its New York City office before a panel of three arbitrators under the then existing rules and regulations of the AAA. The determination of the arbitrators shall be final and binding on the parties hereto and judgment on it may be entered in any court of competent jurisdiction. In the event the Executive prevails in such proceedings, as determined by the arbitration panel, the Company shall reimburse the Executive for all expenses (including, without limitation, reasonable legal fees and expenses) he incurred in connection with any such proceeding. All such amounts shall be paid promptly but in any event within ten (10) business days after the Executive provides the Company with a statement of the amounts to be reimbursed. In all other cases, each party shall be responsible for their own expenses incurred in connection with such proceedings. IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the day and year first above written. SPANISH BROADCASTING SYSTEM, INC. By: /s/Raul Alarcon, Jr. -------------------------------- Name: Raul Alarcon, Jr. Title: Chief Executive Officer and President LUIS DIAZ-ALBERTINI /s/ Luis Diaz-Albertini -------------------------------- 15 16 EXHIBIT 1 COMPENSATION 16 EX-10.13 11 EMPLOYMENT AGREEMENT - JESUS SALAS 1 Exhibit 10.13 EMPLOYMENT AGREEMENT THIS AGREEMENT is made as of April 1, 1999 between Spanish Broadcasting System of Greater Miami Inc., a corporation existing under the laws of Delaware with offices located at 1001 Ponce de Leon, Miami, Florida ("SBS"), and Jesus Salas (hereinafter referred to as "Employee"), an individual whose principal place of residence and mailing address is 5649 S.W. 140 Place, Miami, Florida 33183 ("Agreement"). RECITALS WHEREAS, SBS is the owner/operator of certain Spanish-language radio stations whose signals are broadcast throughout several U.S. metropolitan areas (the "Stations"); and WHEREAS, SBS wishes to engage Employee, and Employee wishes to become engaged to perform services for SBS as Vice President of Programming during the term of and pursuant to the terms and conditions set forth in this Agreement; NOW THEREFORE, in consideration of the premises and the mutual covenants contained herein, the parties understand and agree as follows: 1. Employment. Employee shall be employed to perform services as a Vice President of Programming reporting to Raul Alarcon, Jr., President/CEO. Employee's services will be rendered subject to and in accordance with, the direction, control, rules, and regulations of SBS. 2. Term. The term of this Agreement shall be from April 1, 1999 through and including March 31, 2004 and can be extended for an additional five-year period from April 1, 2004 through March 31, 2009 at the sole discretion of SBS. 3. Compensation and Benefits. See "Compensation Rider". (aa) Vacation - 3 weeks per year (paid). (a) Bonus. See "Compensation Rider". (b) Benefits. Employee shall be provided comparable health care coverage and other benefits extended to other SBS employees. (c) Expenses. SBS shall reimburse Employee for reasonable business and entertainment expenses that he incurs, and subject to the approval of Raul Alarcon, Jr. 4. Convenants. (a) Competitive Activity. During the term of this Agreement, and for a period of six (6) months after the termination of this Agreement for any reason, Employee shall not render services in any capacity for any radio station in any area competitive with SBS or any of its Stations, whether as on-air talent, host, producer of radio programs, program director or consultant 2 Employee further agrees that during the term of this Agreement, and for a period of six (6) months after the termination of this Agreement for any reason, Employee shall not render services, directly or indirectly, for any radio station competitive with any of SBS's radio stations wherever located. (b) SOLICITATION OR INTERFERENCE. During the term of this Agreement or for a period of twelve (12) months after the earlier termination hereof by either party for any reason (whichever period expires earlier), Employee shall not: (i) in any manner induce any employee, agent, representative, customer, former customer, or any other person or concern, dealing with or in some other way associated with SBS or its Stations, to terminate such dealings or association nor; (ii) do anything, directly or indirectly, to interfere in any fashion with such relationship between SBS or its Stations, on the one hand, and any such person or concern, on the other. (c) NON-DISCLOSURE OF PROPRIETARY INFORMATION. Employee shall not disclose the trade secrets or confidential and proprietary information of SBS or its Stations, whether during the employment term or thereafter. The parties understand and agree, moreover, that nothing contained herein shall prevent Employee from disclosing: (1) information required to be disclosed pursuant to compulsory legal process, provided that Employee shall give SBS immediate notice of such process prior to disclosure; (2) information which was in Employee's lawful possession at the time of or prior to its submission to Employee by SBS, or (3) information which is in the public domain. (d) SBS's RIGHT OF FIRST REFUSAL TO MATCH COMPETING OFFER. Without compromising in any way SBS's rights under this Section 4 or under law, SBS will have a right of first refusal to match all bona fide competing offers (and if Employee shall be ready, willing and able to accept such competing offer) for Employee's services at any non-SBS radio station wherever located ("competing offers") after the expiration of this Agreement. No less than forty-five days (45) prior to the expiration of this Agreement, Employee shall provide to SBS written notification of the terms and conditions of offers for his services after the expiration of this Agreement. No less than thirty (30) days prior to the expiration of this Agreement, and within fifteen days of the receipt of notification from Employee, SBS shall provide to Employee written notification of whether it intends to match each and every material term of each and every bona fide competing offer. If SBS declines to match each and every material term of a bona fide competing offer, Employee shall be free to accept that competing offer and to begin employment after the period of time as described in Section 2 has expired. The right of first refusal contained in this Section 4(d) shall not apply to any conduct other than the performance of "services" as defined in Section 1. For purposes of this Agreement, the phrase "material term" shall mean any and all conditions of the engagement of Employee contained in, or contemplated by, this Agreement. 3 (e) EMPLOYEE FIDELITY. Employee agrees that during the term of this Agreement Employee will not, directly or through third-party intermediaries, initiate or invite contact with, or solicit or entertain offers or proposals of employment from, employers that compete with SBS or its stations, wherever located. Employee expressly acknowledges that a breach of this covenant of fidelity shall constitute grounds for termination for cause under Section 7. (f) If any provision of this Section 4 is deemed invalid or unenforceable, such provision shall be deemed modified and limited to the extent necessary to make it valid and enforceable. 5. RESOLUTION OF DISPUTES. Employee acknowledges and agrees that the provisions of Section 4 are reasonable and necessary for protection of SBS and that SBS will be irrevocably damaged if such provisions are not specifically enforced. Accordingly, money damages from Employee's breach of Section 4 would be difficult, if not impossible, to calculate and the most appropriate relief in the event of Employee's breach would be injunctive relief. Nothing contained herein shall be deemed to prohibit SBS, for any such breach, from instituting or prosecuting any other proceeding in any court of competent jurisdiction, in either law or equity, to obtain damages for any breach of this Agreement. All remedies given to SBS by this Agreement shall be construed as cumulative remedies and shall not be alternative or exclusive remedies. In the event of breach or threatened breach by Employee of Section 4, Employee agrees to pay to SBS all costs and expenses, including reasonable attorney's fees, as may be expended by SBS relative to said breach or threatened breach. 6. COMPLIANCE WITH SECTION 508 OF THE COMMUNICATIONS ACT OF 1934. Employee shall comply with the provisions of Section 508 of the Communications Act of 1934, as amended, in that he will not accept money or any valuable consideration, including services, for the broadcast of any matter by the Stations and in that he will promptly complete the Annual Statement and Questionnaire and promptly return it to SBS. Without limiting SBS's right to terminate for any other cause, SBS shall have the right, upon violation of this provision by Employee, immediately to terminate this Agreement and Employee's employment hereunder for cause. 7. TERMINATION (b) WITH CAUSE. SBS may terminate this Agreement for cause at any time upon four (4) weeks' prior notice or pay, less withholdings, in lieu of notice. If Employee is terminated for cause, which shall include, but not be limited to, termination resulting from (i) expiration of the term of this Agreement without renewal, (ii) death of Employee, (iii) misconduct by Employee as described in (c) below; (iv) Employee disability which prevents Employee from performing his duties hereunder for nine (9) consecutive weeks or for a total of nine (9) weeks in any one-year period, he shall be entitled to only such compensation that has accrued up to the date of termination and no more. 4 (c) Misconduct by Employee permitting termination for cause hereunder shall include the following: (i) failure to comply with any of the terms and conditions of this Agreement, to perform any reasonable duties assigned by SBS, to follow any operating policies of SBS, any personnel policies of SBS (Employee acknowledges having read and understood SBS's Employee policy manual), to comply with any rule, regulation guideline or policy of the FCC or other governmental agency with jurisdiction over SBS; (ii) conviction of any criminal offense, other than a traffic violation or minor misdemeanor resulting in incarceration for less than forty-eight (48) hours; (iii) any act of dishonesty; (iv) use of illegal drugs or habitual use of alcohol; (v) any act that reflects unfavorably and egregiously on the reputation of SBS. 8 (a) ASSIGNMENT. SBS shall be entitled to assign this Agreement to any future licensee of SBS; provided, however, that such future licensee must agree to be bound by the terms and conditions in this Agreement. Employee may not assign his obligations under this Agreement. (b) NOTICE. Any notice or other communication under this Agreement shall be in writing and shall be considered given when mailed by registered or certified mail, return receipt requested or by a reputable overnight courier or service (i.e., Federal Express) to the parties at the address set forth below (or any other such address as one party may specify by notice to the other). As to SBS: Raul Alarcon, Jr. SBS 1001 Ponce de Leon Miami, Florida 33134 With a copy to: Kaye, Scholer, Fierman, Hays & Handler, LLP 425 Park Avenue New York, New York 10022 Attention: William C. Zifchak, Esq. As to Employee: Jesus Salas 5649 S.W. 140 Place Miami, Florida 33183 5 (c) NO WAIVER. The failure of either party hereto to object to the failure on the part of the other party to perform any of the terms, provisions, or conditions of this Agreement or to exercise any option or remedy herein given or to require at any time performance on the part of the other party of any term, provision, or condition hereof, or any delay in doing so, or any custom or practice of the parties at variance with the terms hereof, shall not constitute a waiver or modification thereof or of any subsequent breach of the same or a different nature nor affect the validity of this Agreement or any part thereof nor the right of either party thereafter to enforce the same not constitute a novation or laches. (d) CONFORMITY TO LAW. If any one or more provisions of this Agreement should ever be determined to be illegal, invalid, or otherwise unenforceable by a court of competent jurisdiction or be invalid or invalidated or unenforceable by reason of any law or statute, then to the extent and within the jurisdiction invalid or unenforceable, it shall be limited, construed or severed and deleted therefrom, and the remaining portions of this Agreement shall survive, remain in full force and effect, and continue to be binding and shall not be affected and shall be interpreted to give effect to the intention of the parties insofar as that is possible. (e) ATTORNEY'S FEES. In the event of any action involving this Agreement, the prevailing party shall be entitled to reimbursement of its reasonable attorney's fees and disbursements, in addition to any damages. (f) HEADINGS. The Headings used in this Agreement are for the convenience of the parties and for reference purposes only and shall not form a part of or affect the interpretation of this Agreement. (g) CONSTRUCTION. This Agreement shall be construed without regard to any presumption or other rule requiring construction against the party causing this Agreement to be drafted, since the attorneys for the respective parties have submitted revisions to the text hereof. (h) GOVERNING LAW. The validity of this Agreement, its interpretation and any disputes arising from, or relating in any way to, this Agreement or the relationship of the parties, shall be governed by the law of the State of Delaware without regard to conflicts of law principles. (i) ENTIRE AGREEMENT. The Agreement shall constitute the entire agreement concerning the subject matter hereof between the parties, superseding all previous agreements, memoranda of understanding, negotiations, and representations made prior to the effective date of this Agreement. This Agreement shall be modified or amended only by written agreement executed by Employee and SBS. (j) COUNTERPARTS. This Agreement may be executed simultaneously in one or more counterparts, each of which shall be deemed to be an original copy of this Agreement and all of which together shall constitute one and the same instrument. 6 IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed as of the day and year first written above. SPANISH BROADCASTING SYSTEM OF GREATER MIAMI, INC. By: /s/ Raul Alarcon, Jr. ------------------------------- Raul Alarcon, Jr. President /s/ Jesus Salas - ----------------------------------- Jesus Salas Vice President Programming /s/ Ivette Davidson - ----------------------------------- Witness 7 COMPENSATION RIDER Base Salary: ------------ 1st Year $350,000 2nd Year $375,000 3rd Year $400,000 4th Year $425,000 5th Year $450,000 Additional Bonus: a) Employee shall receive a one-time bonus of $25,000 whenever any SBS station achieves a #1 overall ranking (as published by Arbitron, 12+, 6:AM - 12:MID, Mon. - Sun.) in any SBS market and a continuing bonus of $5,000 for each subsequent #1 Arbitron published overall ranking in that particular market. Or b) Employee shall receive a one-time bonus of $10,000 whenever any SBS station achieves a #1 Hispanic ranking (as published by Arbitron, 12+, 6:AM - 12:MID, Mon. - Sun.) in any SBS market and a continuing bonus of $1,000 for each subsequent #1 Arbitron published Hispanic ranking in that particular market. EX-10.34 12 ASSET PURCHASE AGREEMENT 1 EXHIBIT 10.34 ASSET PURCHASE AGREEMENT ASSET PURCHASE AGREEMENT (the "Agreement"), dated as of October 25, 1999, by and between Spanish Broadcasting System of Florida, Inc.,a Florida corporation ("Seller"), and Pablo Raul Alarcon, Sr. ("Buyer"). W I T N E S S E T H: WHEREAS, Seller is the licensee of and owns and operates radio stations WZMQ(FM), Key Largo, Florida and WVMQ(FM), Key West, Florida (collectively, "Stations"), and related licenses and authorizations pursuant to licenses issued by the Federal Communications Commissions ("FCC"); and WHEREAS, Seller desires to sell certain properties and assets pertaining to the Stations, and Buyer desires to purchase the same, all subject to the terms and conditions set forth herein. NOW, THEREFORE, in consideration of the mutual covenants contained herein, Seller and Buyer agree as follows: SECTION 1. PURCHASE AND SALE OF PROPERTIES AND ASSETS. (a) STATIONS' ASSETS. Subject to and in reliance upon the representations, warranties and agreements set forth herein, and subject to the terms and conditions contained herein, on the Closing Date (as defined in Section 4), Seller agrees to convey, sell, assign, transfer and deliver to Buyer, and Buyer agrees to purchase, accept, assume and, as the case may be, perform the following (collectively, the "Stations' Assets"): 1 2 (i) LICENSES AND AUTHORIZATIONS. The licenses, permits and authorizations of the FCC listed on Schedule A attached hereto, together with any renewals, extensions or modifications thereof and additions thereto made between the date of this Agreement and the Closing Date (collectively, the "Licenses"), and the rights of Seller in and to the call letters "WVMQ(FM)" and "WZMQ(FM)". (ii) AGREEMENTS, ETC. The business agreements, leases and contracts listed individually or by category on Schedule B attached hereto, including any renewals, extensions, amendments or modifications thereof. (iii) COPYRIGHTS, ETC. All copyrights, trademarks, service marks or other similar rights or modifications thereto listed on Schedule C attached hereto, made by Seller in the ordinary course of business between the date of such schedule and the Closing Date. (iv) PERSONAL PROPERTY. All good will and all general intangibles and the tangible personal property owned by the Seller and used or useful in the operation of the Stations listed on Schedule D attached hereto. (v) REAL PROPERTY. All of Seller's right, title and interest in the real property leases described on Schedule E attached hereto. (vi) PUBLIC FILE. The Stations' local public inspection file together with all its contents. (b) EXCLUDED ASSETS. It is understood that no corporate records, accounts receivable, bank deposits, other cash equivalents and/or investment securities, contracts of insurance and insurance proceeds of settlement and revenue claims made by Seller relating to property, equipment repaired, replaced or restored by Seller prior to the Closing Date, unless 2 3 otherwise specified herein (all of which are hereinafter referred to as "Excluded Property") shall be sold, conveyed or assigned hereunder. (c) LIENS. Seller agrees that the Stations' Assets to be conveyed on the Closing Date pursuant to this Agreement will be conveyed free and clear of all liens, charges, claims, adverse interests and encumbrances of any kind whatsoever owed to, owned by, accruing to or in favor of any person whatsoever. (d) LIABILITIES TO BE ASSUMED. Except as otherwise expressly provided in this Agreement and as described on Schedule B attached hereto, Buyer will not assume, incur or be charged with, in connection with the transactions contemplated herein, any liabilities or obligations of any nature whatsoever, contingent or otherwise arising prior to the Closing or liabilities or obligations of Seller in connection with the Closing. SECTION 2. PURCHASE PRICE. The aggregate purchase price to be paid to Seller by Buyer shall be seven hundred thousand ($700,000) ("Purchase Price") payable at closing. 3 4 SECTION 3. ADJUSTMENTS AND ASSUMPTIONS. The operation of the Stations, and the cash income and the expenses attributable thereto, up to 12:01 A.M. on the Closing Date (the "Adjustment Time") shall be for the account of Seller and thereafter shall be for the account of Buyer. Expenses such as power and utility charges, lease rents, frequency discounts, prepaid time sales agreements, wages, commissions, vacation pay, payroll taxes and fringe benefits or employees of the Seller who enter the employment of Buyer, and similar prepaid and deferred items shall be prorated between the Seller and Buyer. All prorations shall be made and paid [insofar as feasible] on the Closing date, with a final settlement within ninety (90) days after the Closing Date. SECTION 4. THE CLOSING. (a) FCC CONSENT. Consummation of the transactions contemplated hereunder is conditioned upon the FCC having given its consent in writing to the assignment to Buyer of the FCC licenses and other authorizations set forth in subparagraph 1(a) hereof, and said consent becoming final. For purposes of this Agreement, such consent shall be deemed final when it is no longer subject to timely review by the FCC or by any court or, in the event of reconsideration upon its own motion or otherwise by the FCC to an appeal by any person to any court, upon the decision of such body becoming no longer subject to review. In all events, the Closing shall take place on a date not later than three (3) days from June 30, 2000 ("Outside Closing Date"). 4 5 (b) FCC APPLICATION. On or before September 15, 1999, the parties shall file an application requesting FCC consent to the transactions involved herein. The parties hereto shall each bear their own legal fees and any and all costs and expenses not specified herein with respect to the sale and purchase of the assets covered by this Agreement. All FCC filing fees shall be paid by Seller. (c) FAILURE OF FCC CONSENT. If the FCC has failed or refused to grant its consent to the assignment of the Licenses (as hereinafter defined) for a period of longer than nine months following the filing of the application, or if the application for consent to assignment of the Licenses is designated for hearing, Buyer may terminate this Agreement upon ten (10) days prior written notice to Seller, provided that the Buyer is not in material default or breach at the time of said notice. In no event shall the Closing take place later than the Outside Closing Date, unless mutually agreed to by the parties. The termination pursuant to this subsection shall not relieve either party of any liability previously incurred because of a party being in material default pursuant to the terms and conditions of this Agreement. (d) CLOSING. The date of the Closing and the time thereof (herein referred to as the "Closing Date"), shall be set by Seller. The Closing shall take place at the office of Seller. (e) CONTROL OF THE STATIONS AND ACCESS TO INFORMATION. Until the Closing, Seller shall have complete control of the Stations, their equipment and operation. Buyer shall be entitled, however, to reasonable inspection during normal business hours of the Stations' premises and Stations' Assets. SECTION 5. SELLER'S REPRESENTATIONS AND WARRANTIES. Seller represents, warrants and agrees now and as of the Closing as follows: 5 6 (a) DUE INCORPORATION. Seller is a corporation duly organized, validly existing and in good standing under the laws of the State of Florida, and has the full power and authority to own the Stations' Assets and to carry on the business of the Stations as now being conducted. (b) AUTHORIZATION OF AGREEMENT; NO BREACH. The execution, delivery and performance of this Agreement has been duly and validly authorized and approved by Seller's Board of Directors and Stockholders, and Seller has the full corporate power and authority to execute, deliver and perform this Agreement and to consummate the transactions contemplated hereby. Neither such execution, delivery and performance nor compliance by Seller with the terms and provisions hereof will (assuming receipt of all necessary approvals from the FCC) conflict with or result in a breach of any of the terms, conditions or provisions of the Articles of Incorporation or By-Laws of Seller or any judgment, order, injunction, decree, law, regulation, rule or ruling of any court or other governmental authority to which Seller is subject. (c) LICENSES AND AUTHORIZATIONS. Schedule A attached hereto includes a true and complete list of the Licenses and any other licenses, permits, and authorizations of any governmental or regulatory authority currently held by the Seller for the Stations. The Licenses constitute all of the licenses and authorizations used in the operation of the Stations as now operated and the Licenses are now and on the Closing Date will be in full force and effect and with no material impairment by any act or omission of the Seller. There is not now pending or, to the knowledge of Seller, threatened, any action by or before the FCC to revoke, cancel, rescind, modify, or refuse to renew any of the Licenses, or any investigation, order to show cause, notice of violation, notice of apparent liability of forfeiture or material complaint against Stations or Seller. In the event of any such action, or the filing or issuance of any order, notice or 6 7 complaint or knowledge of the threat thereof, Seller shall notify Buyer of same in writing within five (5) business days, and shall take all reasonable measures to contest in good faith or seek removal or recession of such action, order, notice or complaint, and shall pay any sanctions imposed. All material reports, forms, and statements required to be filed by Seller with the FCC with respect to the Stations have been filed and are complete and accurate in all material respects. Stations are now and on the Closing Date will be operating with the Licenses and in compliance with the Communications Act of 1934, as amended, and the rules and policies of the FCC. (d) PERSONAL PROPERTY. Schedule D attached hereto contains a complete and accurate list, as of the date hereof, of all material tangible personal property and interests therein owned by Seller and used by it in the operation of the Stations and the conduct of their business, except as disclosed in such schedule. The tangible assets included in the Personal Property listed on Schedule D attached hereto are now and will, on the Closing Date, be in proper operating condition, normal wear and tear excepted, and will permit the Stations to operate in accordance with the Rules and Regulations of the FCC and in accordance with the Stations' Licenses. Between the date hereof and the Closing Date, Seller will not transfer, convey or assign to any other person, any of the Personal Property unless, in the case of tangible assets included in the Personal Property, the same are replaced by assets of equal quality and usefulness. (e) LEASES AND OTHER AGREEMENTS. Schedule D attached hereto contains a complete and accurate list of, or reference to, as of the date hereof, all real estate leases, business agreements, leases and contracts of Seller (except for music license agreements) relating to the assets or operations of the Stations. The agreements, leases and contracts listed on Schedule B attached hereto constitute valid and binding obligations of Seller and, to the best of Sellers's 7 8 knowledge, of all other persons purported to be parties thereto and are in full force and effect as of the date hereof. (f) NO LITIGATION. There is as of the date hereof no suit (at law or in equity), action, legal or administrative, arbitration or other proceeding or governmental investigation pending or as to which Seller has received notice which could, individually or in the aggregate, materially adversely affect the title or interest of Seller in any of the Stations' Assets or the operation of the Stations and conduct of their business. (g) USE OF PREMISES. The occupancy and use of all leases or owned real property and the occupancy, use and placement of all structure thereon, are not at the present time, in violation in any material respect of any laws, zoning regulations, ordinances, orders or requirement of any federal, state or local governmental authority or in conflict with the rights of any other party therein or thereon. (h) PUBLIC FILE.Seller maintains a public file for the Stations which will contain all material required by the Rules and Regulations of the FCC on the Closing Date. Seller shall deliver to Buyer at the Closing the public file for the Stations. (i) INSURANCE. There is presently in force fire and liability insurance with respect to the properties and assets to be transferred and conveyed hereunder. Seller will maintain or cause to be maintained such insurance in full force until the Closing hereunder. (j) EMPLOYMENT BENEFIT PLANS. Seller does not maintain, or have any present or future obligation or liability with respect to any bonus, deferred compensation, pension, profit-sharing, retirement, severance pay, insurance, stock purchase, stock option, or other fringe benefit plan, as defined in Section 3(d) of the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), whether formal or informal. 8 9 (k) LABOR RELATIONS, TERMS AND CONDITIONS OF EMPLOYMENT. Seller has not recognized and has received no demand for recognition by any collective bargaining representative. Seller has substantially complied with and is not in default in any material respect under any laws, rules and regulations relating to employment of labor, including those relating to wages, hours, equal employment opportunities, employment of protected minorities (including women and persons over 40 years of age), collective bargaining and the withholding and payment of taxes and contributions and has withheld all amounts required or agreed to be withheld from wages and salaries of its employees, and is not liable for any arrearage or wages or for any tax or penalty or failure to comply with the foregoing. (l) TAXES. Seller has filed all federal, state, and local tax returns required by law and has paid all taxes, estimated taxes, interest, assessments, and penalties due and payable. There are no present disputes as to taxes of any nature payment by Seller which in any event could affect any of the Stations' Assets or the operation of the Stations. SECTION 6. BUYER'S REPRESENTATIONS AND WARRANTIES. Buyer represents, warrants and agrees now and as of the date of Closing as follows: (a) AUTHORITY AND DUE ORGANIZATION. Buyer will be a corporation duly organized, validly existing and in good standing under the laws of the State of Florida. Buyer has all requisite power and authority to own its property and to carry on its business as and where now conducted. Buyer has all requisite power and authority to enter into, perform, and carry out the transactions contemplated by this Agreement, and to execute, perform and carry out the terms and conditions of all documents and instruments executed in connection herewith. All signatures appearing for Buyer at the end of this Agreement are true and genuine, and this Agreement and all other documents or instruments executed by Buyer in connection herewith have been duly 9 10 authorized by all necessary corporate action and constitute the legal, valid and binding obligations of Buyer, enforceable in accordance with their respective terms. (b) QUALIFICATION. Buyer has no knowledge of any facts which would, under present law (including the Communications Act of 1934, as amended) and present rules, regulations and practices of the FCC, disqualify Buyer as an assignee of the licenses, permits and authorizations listed on Schedule A attached hereto, or as an owner and/or operator of the Stations' Assets, and Buyer will not take, or unreasonably fail to take, any action which Buyer knows or has reason to know would cause such disqualification. Buyer is financially qualified and able to meet all financial undertakings contracted for herein. (c) LITIGATION. There is no litigation or proceeding threatened or pending against Buyer that would affect Buyer's ability to carry out this Agreement. SECTION 7. PERFORMANCE BY BUYER. The obligations of Buyer hereunder are subject to the conditions that: (a) REPRESENTATIONS AND WARRANTIES. The representations and warranties of Seller contained in this Agreement shall be true and correct at the time of the Closing as though made at and as of such time, and each and all of the agreements of the Seller to be performed on or prior to the Closing pursuant to the terms of this Agreement shall have been duly performed, and Seller shall have delivered to Buyer certificates, dated as of the Closing Date, signed by a corporate officer to such effect. (b) LITIGATION, ETC. No litigation, investigation or proceeding of any kind shall have been instituted or threatened or be pending which would materially adversely affect or relate to the Stations' Assets or the business or operations of the Stations. 10 11 (c) FCC LICENSES. At the Closing, the Licenses shall be assigned and transferred to Buyer, and such Licenses shall be free and clear of conditions which would have a material adverse consequence to the operation of the Stations as presently authorized. (d) CONSENTS. All consents of third parties that are required for the valid and binding assignment from Seller to Buyer of the Stations' contracts, leases of business agreements needed to permit the operation of the Stations in all material respects in the same manner as heretofore or that are required shall be in full force and effect as of the Closing. (e) LEGAL OPINION. Buyer shall have received an opinion of counsel for Seller, dated the Closing Date, in form and content reasonably acceptable to Buyer's counsel to the effect that: (i) Seller is a corporation duly organized, validly existing and in good standing under the laws of the State of Florida. (ii) Seller has full power and authority to enter into and perform this Agreement and the transactions contemplated hereby. Seller has taken all actions necessary to authorize the execution, delivery and performance of this Agreement. This Agreement has been duly executed and delivered by Seller and is the valid and binding obligation of Seller enforceable in accordance with its respective terms. (iii) The execution, delivery and performance of this Agreement by Seller does not and will not, with the passage of time or the giving of notice or both, contravene the Articles of Incorporation or By-Laws of the Seller or to the best of such counsel's knowledge after due inquiry, conflict with or result in a breach, termination or modification of, or a default under any contract, instrument, authorization, license, permit, lease, easement, arrangement or understanding to which Buyer is a party or result in the violation of any law of any order, writ, 11 12 injunction, judgment, decree, rule or regulation of any court, administrative agency or governmental body. (iv) Seller is the authorized legal holder of the Licenses listed on Schedule A attached hereto. The Licenses are in full force and effect to the full extent to which they can be lawfully held under the rules and regulations of the Commission. To the best of such counsel's knowledge, except for administrative rulemaking proceedings of general applicability to the broadcasting industry, (i) there is no litigation, proceeding or investigation of any nature pending against Seller or the Stations affecting Seller or the Stations which may result in a materially adverse effect upon the Stations of the business or operation of the Stations or which seeks to enjoin, prohibit or otherwise challenge the transactions contemplated by this Agreement and (ii) no judgment, award, order or decrees has been rendered against or affecting Seller or the Stations which would result in a materially adverse effect upon the Stations or the business or operation of the Stations. (f) INITIAL PUBLIC OFFERING. Seller's Initial Public Offering ("IPO") shall have been consummated and Raul Alarcon, Sr. shall have received all payments due to him from the proceeds of the IPO as well as any and all other related benefits in accordance with the terms of his agreements with Seller. SECTION 8. SELLER'S PERFORMANCE. Seller's performance is subject to: (a) PAYMENTS, ETC. All payments due to Seller from Buyer as provided for herein in Section 2 shall have been made in accordance with the terms of this Agreement. (b) REPRESENTATIONS AND WARRANTIES. Each of Buyer's representations and warranties contained herein shall, to the extent applicable, be true at the time of the Closing, as 12 13 though made at and as of such time and Buyer shall have delivered to Seller certificates, dated as of the Closing Date, signed by a corporate officer to such effect. (c) PERFORMANCE. Buyer shall have performed and complied with all agreements, obligations and conditions required by this Agreement to be performed or complied with prior to or at the Closing hereunder. (d) LITIGATION. No litigation, investigation or proceeding of any kind shall have been instituted or threatened which would adversely affect the financial condition of Buyer to comply with the provisions of this Agreement. (e) LEGAL OPINION. Seller shall have received an opinion of counsel for Buyer, dated the Closing Date, in form and content reasonably acceptable to Seller's counsel to the effect that: (i) Buyer is duly organized, validly existing, in good standing and qualified to do business under the laws of the State of Florida, and has all requisite power and authority to conduct business and operations as currently conducted. (ii) Buyer has all requisite power and authority to execute, deliver and perform under this Agreement and to perform and carry out the transactions contemplated by this Agreement. Buyer has duly taken all actions necessary to authorize the execution, delivery and performance of this Agreement. This Agreement has been duly executed and delivered by Buyer and ratified by Buyer's corporation, and is the valid and binding obligations of Buyer and Buyer's corporation enforceable against each in accordance with its respective terms. (iii) The execution, delivery and performance of this Agreement by Buyer and as ratified by Buyer's corporation does not and will not, with the passage of time or the giving of notice or both, contravene the Articles of Incorporation of Buyer's corporation or, 13 14 to the best of our knowledge after due inquiry, conflict with or result in a breach, termination or modification of, or a default under any contract, instrument, authorization, license, permit, lease, easement, arrangement or understanding to which Buyer or Buyer's corporation is a party or result in the violation of any law or of any order, writ, injunction, judgment, decree, rule or regulation of any court, administrative agency or governmental body. (iv) No consent, approval or authorization of any person, or any state, local or federal governmental authority, not already obtained and no certificate, notice, application, report or other document required to be filed with any state, local or federal governmental authority which as not already been filed, is required to be obtained or filed prior to or on the Closing Date for the execution and delivery of the Agreement by Buyer and its ratification by Buyer's corporation, or the consummation of the transactions contemplated thereby. (v) There is no legal action, proceeding or investigation pending or, to the best of our knowledge after due inquiry, threatened, before any court or other governmental body or agency to which Buyer or Buyer's corporation is a party, nor is there any judgement, order, writ, injunction or decree outstanding against Buyer or Buyer's corporation or by which Buyer or Buyer's corporation is subject, bound or affected nor, to the best of Buyer's knowledge, after due inquiry, is there any basis for any such legal action, proceeding, investigation or controversy. (f) CONSENTS. Buyer and Buyer's corporation shall have used their respective best efforts consistent with commercial reasonableness to assist Seller in obtaining, prior to the Closing Date, all consents and approvals required, if any, for the assignment of the contracts, 14 15 leases and business agreements to be assigned hereunder by Seller to Buyer's corporation at Closing. SECTION 9. RIGHTS OF INDEMNIFICATION. (a) It is understood and agreed that Buyer does not assume and shall not be obligated to pay, any liabilities of the Seller under the terms of the Agreement or otherwise, and it shall not be obligated to perform any obligations of the Seller, of any kind or manner except by reason of the contracts, leases and business agreements expressly assigned to and assumed by Buyer hereunder. The Seller hereby agrees to indemnify and hold Buyer and its successors and assigns (collectively, "Indemnified Parties", and individually, an "Indemnified Party") harmless for a period of one (1) year from the Closing Date, from and against: (i) Any and all damage of deficiency resulting from any misrepresentation, breach of warranty, or non-fulfillment of any agreement on the part of the Seller under this Agreement, or from any misrepresentation in or omission from any certificate or other instrument furnished to any Indemnified Party pursuant to this Agreement or in connection with any of the transactions contemplated hereby; and (ii) Any and all actions, suits, proceeding, damages, assessments, judgments, costs and expenses, including reasonable attorney's fees incurred by any Indemnified Party as a result of the failure or refusal of Seller to compromise or defend any claim incident to, or otherwise fail to comply with, the foregoing provisions. (b) If any claim or liability shall be asserted against any Indemnified Party which would give rise to a claim by such Indemnified Party against Seller for indemnification under the provisions of this Section, such Indemnified Party shall promptly notify the Seller in 15 16 writing of the same and give all reasonable cooperation in the defense thereof and the Seller shall be entitled at its own expense to compromise or defend any such claim. (c) Buyer hereby agrees to indemnify and hold the Seller and its successors and assigns harmless, for a period of one (1) year from the Closing Date, from and against: (i) Any and all claims, liabilities and obligations of every kind and description, contingent or otherwise arising from or related to the ownership or operation of the Stations subsequent to the Closing hereunder including, but not limited to, any and all claims, liabilities and obligations arising or required to be performed subsequent to the Closing hereunder under any contract or instrument assumed by Buyer hereunder. (ii) Any and all damage or deficiency resulting from any misrepresentation, breach of warranty, non-fulfillment of any agreement or obligation assumed or required to be assumed by Buyer under this Agreement or from any misrepresentation in or omission from any certificate or other instrument furnished to the Seller pursuant to this Agreement, or in connection with any of the transactions contemplated hereby. (iii) Any and all actions, suits, proceedings, damages, assessment, judgments, costs and expenses, including reasonable attorney's fees incurred by Seller as the result of the failure or refusal by Buyer to defend or compromise any claim incident to, or otherwise fail to comply with, any of the foregoing provisions. (d) If any claim or liability shall be asserted against the Seller which would give rise to a claim by the Seller against Buyer for indemnification under the provisions of this section, the Seller shall promptly notify Buyer of the same and give all reasonable cooperation in the defense thereof and Buyer shall be entitled at its own expense to compromise or defend any such claim. 16 17 SECTION 10. RISK OF LOSS. The risk of any loss, damage or destruction to any of the Stations' Assets to be transferred hereunder from fire or other casualty or cause shall be borne by the Seller at all times prior to the Closing Date hereunder excepting that caused by Buyer. SECTION 11. SELLER'S PERFORMANCE AT CLOSING. At the closing hereunder, the Seller will: (a) FCC LICENSES. Deliver to Buyer assignments of the licensees and other pertinent authorizations set forth on Schedule A attached hereto, transferring the same to Buyer in customary form and substance. (b) PERSONAL PROPERTY. Deliver to Buyer a bill of sale and all other appropriate documents and instruments in customary form and substance assigning good and marketable title to all personal property described in Schedule D attached hereto, free and clear of any mortgages, liens, attachments, conditional sales contracts, claims or encumbrances of any kind whatsoever. Seller shall pay all state and local sales tax, if any, due upon such transfer. (c) ASSIGNMENT OF AGREEMENTS. Deliver to Buyer such assignments and further instruments of transfer a Buyer may reasonably require to effectuate the assignments to it of those business contracts, leases and agreements to be assigned to it as set on Schedule B attached to this Agreement. (d) ADJUSTMENTS AND PAYMENT. If the adjustments and assumptions provided for in Section 3 hereof result in a net amount owing by the Seller to Buyer, deliver a good check, subject to collection, at the Closing Date. (e) RESOLUTIONS, ETC. Deliver to Buyer a certified copy of a resolution of the Seller's Board of Directors and stockholders authorizing the execution of this Agreement and the 17 18 consummation of the transactions described herein, together with all other consents and approvals which counsel for Buyer may reasonable request. (f) OTHER DOCUMENTS. Deliver to Buyer such other documents as counsel for Buyer may reasonably request for the purpose of consummating the transactions described herein. SECTION 12. BUYER'S PERFORMANCE AT CLOSING. At the closing: (a) PAYMENTS, ETC. Buyer will cause to be delivered to Seller all monies from Buyer as provided for in this Agreement. (b) ASSUMPTION. Buyer will assume the contracts, leases and business agreements set forth on Schedule B attached hereto. (c) ADJUSTMENTS AND PAYMENT. Buyer will, if the adjustments and assumptions provided for in Section 3 hereof result in a net amount owing to the Seller by Buyer, deliver a good check, subject to collection, at the Closing. (d) OPINION. Deliver the written opinion of its counsel, dated as of the Closing Date, pursuant to the provisions of this Agreement. (e) OTHER DOCUMENTS. Deliver to the Seller such other documents as counsel for Seller may reasonably request for the purpose of consummating the transactions described herein. SECTION 13. DEFAULT. 18 19 In the event of a material breach by Seller prior to the Closing, Buyer shall have the right to specific performance or to sue for damages. SECTION 14. MISCELLANEOUS. (a) SCHEDULES AND EXHIBITS. All schedules and exhibits attached to this Agreement (and all other documents referred to therein) shall be deemed part of this Agreement and incorporated herein, where applicable, as if fully set forth herein. (b) NO ASSIGNMENT, SUCCESSORS, ASSIGNS, ETC. This Agreement shall not be assigned or conveyed by any party hereto to any other person or entity without the prior written consent of the other parties hereto. This Agreement shall be binding upon and shall inure or the benefit of the parties hereto, their heirs, personal representatives, involuntary successors and assigns. (c) CONSTRUCTION. This Agreement shall be construed and enforced in accordance with the laws of the State of Florida. (d) COUNTERPARTS. This Agreement may be executed simultaneously in any number of counterparts, each of which shall be deemed an original, but all of which shall constitute one and the same instrument. 19 20 (e) NOTICES. Any notice or other communications shall be in writing and shall be considered to have been duly given when personally delivered or deposited into first class certified mail, postage prepaid, return receipt requested: (i) If to the Seller to: Spanish Broadcasting System of Florida, Inc. 3191 Coral Way Suite 805 Miami, Florida 33145 ATTN: Mr. Raul Alarcon, Jr., President and CEO cc: Jason L. Shrinsky, Esq. Kaye, Scholer, Fierman, Hays & Handler 901 Fifteenth Street, N.W. Suite 1100 Washington, D.C. 20005 (ii) If to the Buyer to: Mr. Pablo Raul Alarcon, Sr. Spanish Broadcasting System of Florida, Inc. 1001 Ponce de Leon Blvd Coral Gables, Florida 33134 (f) INTEGRATION. Except as herein expressly provided, this Agreement embodies the entire agreement and understanding between Seller and Buyer, and supersedes all prior agreements and understandings, whether oral or in writing, with respect to the purchase and sale of the Stations' Assets. (g) AMENDMENT. This Agreement shall not be amended or modified in any manner except by written document executed by the party or parties whom enforcement of such amendment or modification may be sought. 20 21 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their duly authorized officers on the day and year first above written. ATTEST: SPANISH BROADCASTING SYSTEM OF FLORIDA, INC. /s/ Ivette Davidson ___________________ By: /s/ Raul Alarcon, Jr. _____________________________________ Raul Alarcon, Jr., President and CEO ATTEST: /s/ Ivette Davidson By: /s/Pablo Raul Alarcon, Sr. ___________________ ______________________________________ Pablo Raul Alarcon, Sr. 21 22 SCHEDULES AND EXHIBITS SCHEDULE A Licenses, Permits & Authorizations SCHEDULE B Contracts, Leases & Business Agreements SCHEDULE C Copyrights, etc. SCHEDULE D Personal Property SCHEDULE E Real Property Leases EXHIBIT 1 Escrow Agreement 22 EX-10.36 13 STOCK OPTION PLAN 1 EXHIBIT 10.36 SPANISH BROADCASTING SYSTEM 1999 STOCK OPTION PLAN 1. PURPOSES. The purposes of the Plan are to further the growth, development and financial success of Spanish Broadcasting System, Inc. (the "Company") and its Subsidiaries by providing incentives to those officers and key employees who have the capacity to contribute in substantial measure toward the growth and profitability of the Company and to assist the Company in attracting and retaining employees with the ability to make such contributions. To accomplish such purposes, the Plan provides that the Company may grant such employees either Nonqualified Stock and Incentive Stock Options, or both. 2. DEFINITIONS. Wherever the masculine gender is used in the Plan, it shall include the feminine and neuter and wherever a singular pronoun is used, it shall include the plural, unless the context clearly indicates otherwise. Whenever the following terms are used in the Plan, they shall have the meaning specified below, unless the context clearly indicates to the contrary. "Board" shall mean the Board of Directors of the Company. "Cause" shall mean an Employee's willful failure to perform his duties with the Company or a Subsidiary or the willful engaging in conduct which is injurious to the Company or a Subsidiary, monetarily or otherwise, as determined by the Committee in its sole discretion, provided that, if an Employee has entered into an employment agreement with the Company or a Subsidiary, the definition, if any, set forth in such agreement shall be substituted for the above. "Change in Control" shall mean: (a) any "person," as such term is defined in Section 13(d) and 14(d) of the Exchange Act , other than the Company, any Subsidiary, Raul Alarcon Jr. (or his spouse, heirs, assigns, legatees or trust for Mr. Alarcon's or any of the foregoing's benefit) or any trustee or other fiduciary holding securities under an employee benefit plan of the Company or any Subsidiary, becomes the "beneficial owner" (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing fifty percent (50%) or more of the combined voting power of the Company's then outstanding securities; (b) during any two consecutive years, individuals who at the beginning of such period constitute the Board, and any new director, whose election by the Board or nomination for election by the Company's shareholders was approved by a vote of at least two-thirds (2/3) of the directors then still in office who either were directors at the beginning of the period or whose 1 2 election or nomination for election was previously so approved, cease for any reason to constitute at least a majority of the Board; (c) the stockholders of the Company approve a merger or consolidation of the Company with any other company other than (i) a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) more than eighty percent (80%) of the combined voting power of the voting securities of the Company (or such surviving entity) outstanding immediately after such merger or consolidation, or (ii) a merger or consolidation effected to implement a recapitalization of the Company (or similar transaction) in which no "person" (as hereinabove defined) acquires more than fifty percent (50%) of the combined voting power of the Company's then outstanding securities; or (d) the stockholders of the Company adopt a plan of complete liquidation of the Company or an agreement for the sale or disposition by the Company of all or substantially all of the Company's assets. "Code" shall mean the Internal Revenue Code of 1986, as amended from time to time. "Committee" shall mean the Compensation Committee of the Board, appointed as provided in Section 5.1, or, if no such Committee has been appointed, the Board. "Company" shall mean Spanish Broadcasting System, Inc., a Delaware corporation, and any successor corporation. "Designated Beneficiary" shall mean any individual designated by an Optionee, in a manner determined by the Committee, to receive amounts due the Optionee in the event of the Optionee's death. In the absence of an effective designation by the Optionee, Designated Beneficiary shall mean the Optionee's estate. "Director" shall mean a member of the Board. "Employee" shall mean any employee (including any officer whether or not a Director) of the Company, or of any corporation which is then a Subsidiary, who has been designated by the Board to participate in the Plan. "Early Retirement" shall mean an Employee's retirement from active employment with the Company or a Subsidiary in accordance with the early retirement provisions of a pension plan maintained by the Company or a Subsidiary, provided that, if no such plan is in existence, it shall mean the attainment of age fifty-five (55) and the completion of fifteen (15) years of service. "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended. 2 3 "Fair Market Value" per Share as of a particular date shall mean, unless otherwise determined by the Committee: (a) the closing sales price per Share on a national securities exchange for the preceding ten days on which there was a sale of Shares on such exchange; or (b) if clause (a) does not apply and the Shares are then quoted on the National Association of Securities Dealers Automated Quotation system ("NASDAQ"), the closing price per Share as reported on NASDAQ for the preceding ten (10) days on which a sale was reported; or (c) if neither clause (a) or (b) applies and the Shares are then traded on an over-the-counter market, the average of the closing bid and asked prices for the Shares in such over-the counter market for the preceding ten (10) days on which such bid and asked prices were quoted; or (d) if the Shares are not then listed on a national securities exchange or traded in an over-the-counter market, such value as the Committee, in its sole discretion, may determine. "Incentive Stock Option" shall mean an Option intended to be and designated as an "incentive stock option" within the meaning of Section 422 of the Code. "Nonqualified Stock Option" shall mean an Option that is not an Incentive Stock Option. "Normal Retirement" shall mean an Employee's retirement from active employment with the Company or a Subsidiary in accordance with the normal retirement provisions of a pension plan maintained by the Company or a Subsidiary, provided that, if no such plan exists, it shall mean retirement on or after attainment of age sixty-five (65). "Option" shall mean an option to purchase Shares granted pursuant to Section 4.1. "Option Agreement" shall mean an Option Agreement, substantially in the form attached hereto as Exhibit A, to be entered into between the Company and an Optionee, which shall set forth the terms and conditions of the Options granted to such Optionee. "Optionee" shall mean an Employee to whom an Option has been granted pursuant to the Plan. "Permanent Disability" shall mean a physical or mental incapacity that renders an Optionee incapable of engaging in any substantial gainful employment, or that has lasted for a continuous period of no less than six consecutive months, or six months in any twelve-month period, as determined by the Committee in good faith in its sole discretion, provided that, if an Employee has entered into an employment agreement with the Company or a Subsidiary, the definition set forth in such agreement shall be substituted for the above definition. All determinations as to the date and 3 4 extent of disability of any Optionee shall be made by the Committee upon the basis of such evidence as it deems necessary or desirable. "Plan" shall mean the Spanish Broadcasting System 1999 Stock Option Plan, as amended from time to time. "Retirement" shall mean an Optionee's (a) Early Retirement which the Committee, in its sole discretion, has determined should be treated as a Retirement for purposes of the Plan, or (b) Normal Retirement. "Securities Act" shall mean the Securities Act of 1933, as amended. "Share" shall mean a share of the Company's Class A Common Stock, .01 par value per share. "Subsidiary" shall mean any corporation in an unbroken chain of corporations beginning with the Company, if each such corporation (other than the last corporation in the unbroken chain), or if each group of commonly controlled corporations, then owns fifty percent (50%) or more of the total combined voting power in one of the other corporations in such chain. "Ten-Percent Stockholder" shall mean an Employee, who, at the time an Incentive Stock Option is to be granted to him, owns (within the meaning of Section 422(b)(6) of the Code) stock possessing more than ten percent (10%) of the total combined voting power of all classes of stock of the Company or a Subsidiary (or, if applicable, a parent corporation within the meaning of Section 424(e) of the Code). "Termination of Employment" shall mean the Employee's termination of employment for any reason whatsoever, excluding any termination where there is a simultaneous reemployment by either the Company or a Subsidiary, provided that, if a corporation that is a Subsidiary ceases to be a Subsidiary as a result of a sale of stock, such sale shall be deemed to be a Termination of Employment of the Optionees who were employed by such corporation immediately prior to such sale. 3. ELIGIBILITY. Any Employee (whether or not a Director) who is an officer or who is designated by the Committee as a key Employee shall be eligible to be granted Options under the Plan. 4. TERMS OF OPTIONS. 4.1 TERMS OF OPTIONS. 4 5 (a) Price. The exercise price for the Shares subject to an Option, or the manner in which such exercise price is to be determined, shall be determined by the Committee, provided that, the exercise price per Share of any Incentive Stock Option shall not be less than 100% of the Fair Market Value of a Share as of the date the Option is granted (110% in the case of an Incentive Stock Option granted to a Ten-Percent Stockholder). (b) Term. Options shall be for such term as the Committee shall determine, provided that no Option shall be exercisable after the expiration of ten years from the date it is granted (five years in the case of an Incentive Stock Option granted to a Ten-Percent Stockholder). (c) Vesting. Options shall be exercisable in such installments (which need not be equal) and at such times as the Committee may designate, as set forth in an Option Agreement. To the extent not exercised, installments shall accumulate and may be exercised, in whole or in part, at any time after becoming exercisable, but not later than the date the Option expires. The Committee may accelerate the exercisability of an Option at any time. Notwithstanding the foregoing, any Options that are not exercisable prior to a Change in Control shall become exercisable on the date of such Change in Control and shall remain exercisable for the remainder of their Term. (d) Exercise of Option After Termination of Employment. Subject to the terms of any written employment agreement and reflected in an option agreement, an Option granted under the Plan is exercisable by an Optionee only while he is an Employee, provided that any Options that are exercisable preceding an Optionee's Termination of Employment for any reason other than Cause, shall remain exercisable for the following period. (i) If the Optionee dies while an Employee, or if his Termination of Employment is due to Permanent Disability or Retirement, the Optionee (or his Beneficiary or personal representative, as applicable) may exercise the Option no later than twelve (12) months after such death or determination; (ii) If the Optionee's Termination of Employment is for any reason other than those set forth in (i) above and is not for Cause, the Optionee may exercise the Option within three months after such termination; or (iii) If the Optionee dies during a period described in (i) or (ii) above, his Beneficiary may exercise such Option no later than the expiration of such extended period; (iv) Notwithstanding (i) through (iii) above or anything in an Option Agreement or the Plan to the contrary, at any time after the grant of an Option, the Committee, in its sole and absolute discretion and subject to whatever terms and conditions it selects, may provide that an Option may be exercised after the relevant extended period set forth above, but in no event later than the date that it would have expired under the Option Agreement. 5 6 4.2 NONTRANSFERABILITY. No Option granted hereunder shall be transferable by the Optionee to whom granted otherwise than by will or the laws of descent and distribution, and an Option may be exercised during the lifetime of such Optionee only by the Optionee or his guardian or legal representative; provided, however that an Optionee may designate a Beneficiary to exercise his Option or other rights under the Plan after his death and, in the discretion of the Committee, Options may be transferable pursuant to a Qualified Domestic Relations Order ("QDRO"), as determined by the Committee or its designee. 4.3 METHOD OF EXERCISE. An Option shall be exercised by delivery of a written notice (in person or by first class mail to the Secretary of the Company at the Company's principal executive office) which specifies the number of Shares to be purchased and is accompanied by full payment therefor and otherwise in accordance with the Option Agreement pursuant to which the Option was granted. The purchase price for any Shares purchased pursuant to the exercise of an Option shall be paid in full upon such exercise in cash, by check or, at the discretion of the Committee and upon such terms and conditions as the Committee shall approve, by transferring previously owned Shares to the Company, having Shares withheld or exercising pursuant to a "cashless exercise" procedure, or any combination thereof. Any Shares transferred to the Company as payment of the purchase price under an Option shall be valued at their Fair Market Value on the date of exercise of such Option. If requested by the Committee, the Optionee shall deliver the Option Agreement evidencing the Option to the Secretary of the Company who shall endorse thereon a notation of such exercise and return such Option Agreement to the Optionee. Not less than one hundred (100) Shares may be purchased at any time upon the exercise of an Option unless the number of Shares so purchased constitutes the total number of Shares then purchasable under the Option or the Committee determines otherwise, in its sole discretion. 5. ADMINISTRATION. 5.1 COMPOSITION OF COMPENSATION COMMITTEE. The Plan shall be administered by the Committee, which shall consist of at least two individuals appointed by and serving at the pleasure of the Board, provided that each Committee member must qualify as an "outside director" as such term is used in Section 162(m) of the Code, unless the Board determines otherwise, in its sole discretion. All Committee members shall be members of the Board. Appointment of Committee members shall be effective upon acceptance of appointment. Committee members may resign at any time by delivering thirty (30) days advance written notice to the Board and may be removed by the Board at any time for any reason. Vacancies in the Committee shall be filled by the Board. If no Committee has been appointed, the Plan shall 6 7 be administered by the Board acting by a majority of the Board. In such case, the Board shall have all the powers and duties as would have been delegated to the Committee hereunder. 5.2 DUTIES AND POWERS OF COMMITTEE. (a) Subject to the provisions hereof, the Committee shall have (a) the sole and complete authority to determine which Employees shall be granted options, the number of Shares to be covered by each Option, the exercise price therefor and the terms and conditions applicable to the exercise of the Option, (b) the authority to grant Incentive Stock Options, Nonqualified Stock Options or both. In the case of Incentive Stock Options, the terms and conditions of such grants shall be subject to and shall comply with Section 422 of the Code and any rules or regulations promulgated thereunder, including the requirement that the aggregate Fair Market Value (determined as of the date of grant) of the Shares granted under the Plan and all other option plans of the Company and any Subsidiary (and, if applicable, any parent corporation, within the meaning of Section 424(e) of the Code) that become exercisable by an Optionee during any calendar year shall not exceed $100,000. To the extent that the limitation set forth in the preceding sentence is exceeded for any reason (including the acceleration of the time for exercise of an Option), the Options with respect to such excess amount shall be treated as Nonqualified Stock Options. (b) It shall be the duty of the Committee to conduct the general administration of the Plan in accordance with its terms and provisions. The Committee shall have the power to interpret the Plan and to adopt such rules for the administration, interpretation and application of the Plan as are consistent therewith and to interpret, amend or revoke any such rules. All actions taken and all interpretations and determinations made by the Committee shall be binding upon all persons, including, but not limited to, the Company, stockholders, all Subsidiaries, Employees, Directors, Optionees and Designated Beneficiaries. 5.3 COMMITTEE ACTIONS. The Committee shall act by a majority of its members in office in attendance at a meeting at which a quorum is present or by a memorandum or other written instrument signed by all of the members of the Committee. 5.4 COMPENSATION; PROFESSIONAL ASSISTANCE. Members of the Committee shall receive such compensation for their services as members as may be determined by the Board. All expenses and liabilities incurred by members of the Committee in connection with the administration of the Plan shall be borne by the Company. The Committee may, with the approval of the Board, employ attorneys, consultants, accountants, appraisers, or other persons. The Committee, the Company and its officers and Directors shall be entitled to rely upon the advice, opinions or valuations of any such persons. 7 8 5.5 DELEGATION OF AUTHORITY. The Committee may, in its sole and absolute discretion, delegate to any proper officer of the Company, or more than one of them, any or all of the administrative duties of the Committee under this Plan. 5.6 NO LIABILITY. No member of the Board or the Committee, or Director, officer of the Company or other Employee shall be liable, responsible or accountable in damages or otherwise for any determination made or other action taken or any failure to act by such person with respect to the Plan so long as such person is not determined to be guilty by a final adjudication of willful misconduct with respect to such determination, action or failure to act. 5.7 INDEMNIFICATION. To the fullest extent permitted by law, each member of the Board and the Committee and each Director, officer of the Company or Employee shall be held harmless and be indemnified by the Company for any liability, loss (including amounts paid in settlement), damages or expenses (including reasonable attorneys' fees) suffered by virtue of any determinations, acts or failures to act, or alleged acts or failures to act, in connection with the administration of the Plan so long as such person is not determined by a final adjudication to be guilty of willful misconduct with respect to such determination, action or failure to act. 6. SHARES SUBJECT TO THE PLAN. 6.1 SHARES SUBJECT TO THE PLAN. The maximum number of Shares that may be issued upon the exercise of Options granted under the Plan is 3,000,000. The Company shall reserve such number of Shares for the purposes of the Plan, out of its authorized but unissued Shares or out of Shares held in the Company's treasury, or partly out of each. In the event that an Option expires or is terminated unexercised as to any Shares covered thereby, or is canceled or forfeited for any reason under the Plan without the delivery of Shares, or any Restricted Shares are forfeited for any reason, such Shares shall thereafter be again available for award pursuant to the Plan. The maximum number of Shares that may be granted to an Optionee in any year is 250,000. 6.2 EFFECT OF CHANGES IN COMPANY'S SHARES. In the event that the Committee determines that any stock dividend, extraordinary cash dividend, recapitalization, reorganization, merger, consolidation, split-up, spin-off, combination, exchange of shares, warrants or rights offering to purchase Shares at a price 8 9 substantially below fair market value, or other similar corporate event affects the Shares such that an adjustment is required in order to preserve the benefits or potential benefits intended to be made available under the Plan, the Committee shall, in its sole discretion, and in such manner as the Committee may deem equitable, adjust any or all of (a) the number and kind of shares subject to outstanding Options, and (b) the exercise price with respect to any outstanding Option and/or, if deemed appropriate, make provision for a cash payment to an Optionee, provided, however, that the number of Shares subject to any Option shall always be a whole number. 7. MISCELLANEOUS. 7.1 EFFECTIVE DATE; TERM OF PLAN. The Plan has been approved by the Board and by the Company's stockholders, and shall be effective as of the date of Board approval (the "Effective Date"). The Plan shall continue in effect until ten years after the date it was approved by the Company's stockholders. 7.2 AMENDMENT, SUSPENSION OR TERMINATION OF THE PLAN. The Plan may be wholly or partially amended or otherwise modified, suspended or terminated at any time or from time to time by the Board. Neither the amendment, suspension nor termination of the Plan shall, without the consent of an Optionee, alter or impair any rights or obligations under any option theretofore granted. No Options may be granted during any period of suspension nor after termination of the Plan, and in no event may any Options be granted under the Plan after September 30, 2009. 7.3 AMENDMENT OF OPTION. The Committee may amend, modify or terminate any outstanding Option with the Optionee's consent at any time prior to payment or exercise in any manner not inconsistent with the terms of the Plan, including without limitation, (a) to change the date or dates as of which an Option becomes exercisable or Restricted Shares become vested, or (b) to cancel and reissue an Option under such different terms and conditions as it determines appropriate. 7.4 NO RIGHTS AS STOCKHOLDER. No holder of an Option shall be deemed to be or to have the rights and privileges of an owner of Shares unless and until certificates representing such Shares have been issued to such holder. 9 10 7.5 EFFECT OF PLAN UPON OTHER COMPENSATION AND INCENTIVE PLANS. The adoption of the Plan shall not affect any other compensation or incentive plans in effect for the Company or any Subsidiary. Nothing in the Plan shall be construed to limit the right of the Company or any Subsidiary to establish any other forms of incentives or compensation for Employees. 7.6 REGULATIONS AND OTHER APPROVALS. (a) The obligation of the Company to sell or deliver Shares with respect to Options shall be subject to all applicable laws, rules and regulations, including all applicable federal and state securities laws, and the obtaining of all such approvals by governmental agencies as may be deemed necessary or appropriate by the Committee. (b) The Board may make such changes as may be necessary or appropriate to comply with the rules and regulations of any government authority or to obtain the tax benefits under the applicable provisions of the Code and regulations promulgated thereunder for Employees granted Incentive Stock Options. (c) Each Option is subject to the requirement that, if at any time the Committee determines, in its sole discretion, that the listing, registration or qualification of Shares issuable pursuant to the Plan is required by any securities exchange or under any state or federal law, or the consent or approval of any governmental regulatory body is necessary or desirable as a condition of, or in connection with, the grant of an Option or the issuance of Shares, no Options shall be granted or Shares issued, in whole or in part, unless listing, registration, qualification, consent or approval has been effected or obtained free of any conditions as acceptable to the Committee. (d) In the event that the disposition of Shares acquired pursuant to the Plan is not covered by a then current registration statement under the Securities Act, and is not otherwise exempt from such registration, such Shares shall be restricted against transfer to the extent required by the Securities Act or regulations thereunder, and the Committee may require any individual receiving Shares pursuant to the Plan, as a condition precedent to receipt of such Shares, to represent to the Company in writing that the Shares acquired by such individual are acquired for investment only and not with a view to distribution. The certificate for any Shares acquired pursuant to the Plan shall include any legend that the Committee deems appropriate to reflect any restrictions on transfer. 7.7 GOVERNING LAW. The Plan and the rights of all persons claiming hereunder shall be construed and determined in accordance with the laws of the State of New York without giving effect to the choice of law principles thereof. 10 11 7.8 WITHHOLDING OF TAXES. As a condition to the exercise of an Option and the continued holding of shares received upon exercise of an Option, to the extent required by law, no later than the date as to which an amount first becomes includible in the gross income of an Optionee for federal income tax purposes with respect to any award granted under the Plan, the Optionee shall pay to the Company, or make arrangements satisfactory to the Company regarding the payment of, any federal, state, or local taxes of any kind required by law or the Company to be withheld with respect to such amount. The obligations of the Company under the Plan shall be conditional on such payment or arrangements and the Company and its Subsidiaries shall, to the extent permitted by law, have the right to deduct any such taxes from any payment of any kind otherwise due to the Optionee. In its discretion, the Committee may permit an Optionee to satisfy withholding obligations by delivering previously owned Shares or by electing to have Shares withheld. 7.9 NO RIGHT TO CONTINUED EMPLOYMENT. Nothing in the Plan or in any award agreement shall confer upon any Employee any right to continue in the employ of the Company or any Subsidiary or shall interfere with or restrict in any way the right of the Company and its Subsidiaries, which are hereby expressly reserved, to remove, terminate or discharge any Employee at any time for any reason whatsoever, with or without Cause. 7.10 TITLES; CONSTRUCTION. Titles are provided herein for convenience only and are not to serve as a basis for interpretation or construction of the Plan. The masculine pronoun shall include the feminine and neuter and the singular shall include the plural, when the context so indicates. 11 12 EXHIBIT A FORM OF STOCK OPTION AGREEMENT THIS AGREEMENT, dated as of __________, is made by and between Spanish Broadcasting System, Inc. a Delaware corporation (the "Company") and __________ (the "Optionee"). WHEREAS, the Optionee has been selected by the Committee to receive a grant of stock options under the Spanish Broadcasting System 1999 Stock Option Plan (the "Plan"). NOW, THEREFORE, in consideration of the Optionee's employment with the Company, the Company and the Optionee agree as follows: 8. DEFINITIONS. Any capitalized term not defined herein shall have the meaning set forth in the Plan. 9. GRANT OF OPTION. a. Grant; Grant Date. Subject to the terms and conditions hereof, the Company hereby grants to the Optionee as of _________ (the "Grant Date") an option to purchase up to _________ Shares at an exercise price of $_________ per Share. b. Adjustments in Option. In the event that the outstanding Shares subject to the Option are changed into or exchanged for a different number or kind of shares or securities of the Company, or of another corporation, by reason of reorganization, merger or other subdivision, consolidation, recapitalization, reclassification, stock split, issuance of warrants, stock dividend or combination of shares or similar event, the Committee shall make an appropriate and equitable adjustment in the Option so that the Optionee's proportionate interest shall be maintained as before the occurrence of such event, provided that any such adjustment shall be consistent with the provisions of the Optionee's employment agreement, if applicable. c. Form of Option. [Committee must determine whether options are to be Incentive Stock Options, Nonqualified Stock Options, or a combination thereof, and this provision must so state.] d. Term. The Option shall expire on the tenth anniversary of the Grant Date, unless terminated earlier by the Committee. EX-A-1 13 e. Vesting. The Option shall become exercisable [Committee determines timing for each Optionee.] f. Exercise. The Optionee may exercise an Option in whole or in part at any time by delivering written notice of such exercise to the Secretary of the Company of the number of Shares as to which the Option is being exercised, and enclosing payment for the Shares with respect to which the Option is being exercised. Such payment shall be in cash or by check, or if approved by the Committee, by the delivery of Shares previously owned by the Employee, duly endorsed for transfer to the Company, with a Fair Market Value on the date of delivery equal to the aggregate purchase price of the Shares with respect to which the Option is being exercised, or pursuant to a "cashless exercise," or any combination of the foregoing approved by the Committee, in its sole discretion. Partial exercise shall be for whole Shares only and shall not be for less than one hundred (100) Shares unless the number of Shares purchased constitutes the total number of Shares then remaining subject to the Option or the Committee permits such smaller exercise in its sole discretion. g. Exercise Following Termination of Employment. In the event the Optionee's Termination of Employment is for Cause, the Option, whether exercisable or nonexercisable, at such time, shall be deemed to have terminated as of the day preceding such Termination of Employment. If such Termination of Employment is for any reason other than cause, any outstanding portion of the Option that has not become exercisable shall terminate on the date of such Termination of Employment, unless provided otherwise by the Board, in its sole discretion. Any outstanding exercisable portion shall be exercisable for the following periods: (1) If the Optionee's Termination of Employment is due to death, Permanent Disability, or Retirement, the Option shall be exercisable by the Optionee (or his personal representative or Beneficiary) for the shorter of twelve (12) months following the date of such Termination of Employment or the remainder of its original term. (2) In all other cases, the Option shall be exercisable for the shorter of three months following such Termination of Employment, or the remainder of its original term. h. Nontransferability. The Option shall not be transferable other than by will or the laws of descent and distribution, and no transfer so effected shall be effective to bind the Company unless the Company has been furnished with written notice thereof and a copy of the will and/or such other evidence as the Committee may deem necessary to establish the validity of the transfer and the acceptance by the transferee or transferees of the terms and conditions of the Option, provided, however, that, in the discretion of the Committee, Options may be transferred pursuant to a Qualified Domestic Relations Order (within the meaning of the Code). i. Conditions to Issuance of Stock Certificates. EX-A-2 14 i. The Shares deliverable upon the exercise of the Option, or any portion thereof, may be either previously authorized but unissued Shares or issued Shares which have been reacquired by the Company. Such Shares shall be fully paid and non-assessable. The stock certificates evidencing the Shares shall bear such legends restricting transferability as the Committee deems necessary or advisable. ii. The Company shall not be required to issue or deliver any certificate or certificates for Shares deliverable upon any exercise of the Option prior to fulfillment of all of the following conditions: (1) The completion of any registration or other qualification of such Shares under any state or federal law or under rulings or regulations of the Securities and Exchange Commission or of any other governmental regulatory body, or the obtaining of approval or other clearance from any state or federal governmental agency which the Committee shall, in its sole discretion, deem necessary or advisable. (2) If, in its sole discretion, the Committee deems it necessary or advisable, the execution by the Employee of a written representation and agreement, in a form satisfactory to the Committee, in which the Optionee represents that the Shares acquired by him upon exercise are being acquired for investment and not with a view to distribution thereof. j. Rights as Stockholder. The Optionee shall not be, nor have any of the rights or privileges of, a stockholder of the Company in respect of any Shares purchasable upon the exercise of the Option unless and until certificates representing such Shares have been issued by the Company. 10. MISCELLANEOUS. a. Administration. The Committee shall have the power to interpret the Plan and this Agreement, and to adopt such rules for the administration, interpretation and application of the Plan as are consistent therewith and to interpret or revoke any such rules. All actions taken and all interpretations and determinations made by the Committee shall be final and binding upon the Optionee, the Company, and all other interested persons. b. Withholding of Taxes. No later than the date as of which an amount first becomes includible in the gross income of the Optionee for federal income tax purposes with respect to the grant of the Option under this Agreement, the Optionee shall pay to the Company, or the Optionee (or his Designated Beneficiary) shall make arrangements satisfactory to the Company regarding the payment of, any federal, state, or local taxes of any kind required by law or the Company to be withheld with respect to such amount. The obligations of the Company under this Agreement shall be conditioned on such payment or arrangements, and the Company shall, to the extent permitted EX-A-3 15 by law, have the right to deduct any such taxes from any payment of any kind otherwise due to the Optionee. c. No Right to Continued Employment. Nothing in this Agreement or in the Plan shall confer upon the Optionee any right to continue in the employ of the Company or shall interfere with or restrict in any way the rights of the Company, which are hereby expressly reserved, to discharge the Optionee at any time for any reason whatsoever, with or without cause. d. Entire Agreement; Amendment. This Agreement, and the Plan, constitute the entire agreement between the parties with respect to the subject matter hereof, and supersedes all prior agreements and understandings between the parties with respect to such subject matter. Any term or provision of this Agreement may be waived at any time by the party which is entitled to the benefits thereof, and any term or provision of this Agreement may be amended or supplemented at any time by the mutual consent of the parties hereto, except that any waiver of any term or condition, or any amendment, of this Agreement must be in writing. e. Governing Law. The laws of the State of New York shall govern the interpretation, validity and performance of the terms of this Agreement regardless of the law that might be applied under principles of conflict of laws. f. Successors. This Agreement shall be binding upon and inure to the benefit of the successors, assigns and heirs of the respective parties. g. Notices. All notices or other communications made or given in connection with this Agreement shall be in writing and shall be deemed to have been duly given when delivered or mailed by registered or certified mail, return receipt requested, to those listed below at their following respective addresses or at such other address as each may specify by notice to the others: To the Optionee: -------------------- -------------------- -------------------- To the Company: Spanish Broadcasting System, Inc. 3191 Coral Way Miami, Florida 33145 Attention: Joseph A. Garcia EX-A-4 16 Copy to: Kaye, Scholer, Fierman, Hays & Handler, LLP The McPherson Building 901 Fifteenth Street, N.W. Suite 1100 Washington, D.C. 20005-2327 Attention: Jason L. Shrinsky, Esq. h. Waiver. The failure of a party to insist upon strict adherence to any term of this Agreement on any occasion shall not be considered a waiver thereof or deprive that party of the right thereafter to insist upon strict adherence to that term or any other term of this Agreement. i. Conflict with the Plan. In the event of any conflict or inconsistency between the provisions of this Agreement and the Plan, the provisions of the Plan shall control. j. Injunctive Relief. The Optionee acknowledges and agrees that a violation of Section 2(h) hereof will cause the Company irreparable injury for which adequate remedy at law is not available. Accordingly, the Optionee agrees that the Company shall be entitled to an injunction, restraining order or other equitable relief to prevent the breach of such provisions and to enforce the terms and provisions hereof in any court of competent jurisdiction in the United States or any state thereof, in addition to any other remedy to which it may be entitled at law or equity. k. Titles; Construction. Titles are provided herein for convenience only and are not to serve as a basis for interpretation or construction of the Agreement. The masculine pronoun shall include the feminine and neuter and the singular shall include the plural, when the context so indicates. IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the day and year first above written. Spanish Broadcasting System, Inc. By ___________________________ Name: Title: OPTIONEE -------------------------------- EX-A-5 EX-10.37 14 STOCK OPTION PLAN FOR NONEMPLOYEE DIRECTORS 1 EXHIBIT 10.37 SPANISH BROADCASTING SYSTEM 1999 STOCK OPTION PLAN FOR NONEMPLOYEE DIRECTORS 1. PURPOSE. The purpose of the Plan is to promote the interests of Spanish Broadcasting System, Inc. (the "Company") and its shareholders by increasing the proprietary and personal interest of nonemployee members of the Board in the growth and continued success of the Company by granting them Options to purchase shares of the Company's stock. 2. DEFINITIONS. Whenever the following terms are used in this Plan, they shall have the meaning specified below unless the context clearly indicates to the contrary. "Board" shall mean the Board of Directors of the Company. "Change in Control" shall mean the occurrence of any of the following: (a) any "person" as such term is defined in Sections 13(d) and 14(d) of the Exchange Act (other than the Company or any Subsidiary or any trustee or other fiduciary holding securities under an employee benefit plan of the Company or any Subsidiary), becomes the beneficial owner (within the meaning of Rule 13d-3 under the Exchange Act) directly or indirectly, of securities of the Company representing fifty percent (50%) or more of the combined voting power of the Company's then outstanding securities; (b) during any two consecutive years, individuals who at the beginning of such period constitute the Board, and any new director (whose election by the Board or nomination for election by the Company's shareholders was approved by a vote of at least two-thirds (2/3) of the directors then still in office who either were directors at the beginning of the period or whose election or nomination for election was previously so approved), cease for any reason to constitute at least a majority of the Board; (c) the stockholders of the Company approve a merger or consolidation of the Company with any other company other than (i) a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) more than eighty percent (80%) of the combined voting power of the voting securities of the Company (or such surviving entity) outstanding immediately after such merger or consolidation, or (ii) a merger or consolidation effected to implement a recapitalization of the Company (or similar transaction) in which no "person" (as hereinabove defined) acquires more than fifty percent (50%) of the combined voting power of the Company's then outstanding securities; or 2 (d) the stockholders of the Company adopt a plan of complete liquidation of the Company or an agreement for the sale or disposition by the Company of all or substantially all of the Company's assets. "Code" shall mean the Internal Revenue Code of 1986, as amended from time to time. "Company" shall mean Spanish Broadcasting System, Inc., a Delaware corporation, and any successor corporation. "Disability" shall mean the inability, by reason of bodily injury or physical or mental disease, or any combination thereof, of the Optionee to perform his duties as a member of the Board for a period of one hundred eighty (180) days (whether or not consecutive) in any period of three hundred and sixty-five (365) consecutive days. "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended. "Fair Market Value" per Share as of a particular date shall mean, unless otherwise determined by the Board: (i) the closing sales price per Share on a national securities exchange for the business day preceding the exercise date on which there was a sale of Shares on such exchange; (ii) if clause (i) does not apply and the Shares are then quoted on the National Association of Securities Dealers Automated Quotation system (known as "NASDAQ"), the closing price per Share as reported on such system for the business day preceding the exercise date on which a sale was reported; (iii) if clause (i) or (ii) does not apply and the Shares are then traded on an over-the-counter market, the closing price for the Shares in such over-the-counter market for the business day preceding the exercise date; or (iv) if the Shares are not then listed on a national securities exchange or traded in an over-the-counter market, such value as the Board in its discretion may determine. "Nonemployee Director" shall mean a member of the Board who is not an employee of the Company. "Option" shall mean an option to purchase Shares granted pursuant to the Plan. Options granted under the Plan are not intended to be "incentive stock options" within the meaning of Section 422 of the Code. "Option Agreement" shall mean an Option Agreement, substantially in the form attached hereto as Exhibit A, to be entered into between the Company and an Optionee, which shall set forth the terms and conditions of the Options granted to such Optionee. 2 3 "Participant" shall mean a Nonemployee Director who is granted an Option under the Plan. "Plan" shall mean this Spanish Broadcasting System 1999 Stock Option Plan for Nonemployee Directors, as hereinafter amended from time to time. "Share" shall mean a share of the Company's common stock, .01 par value. 3. SHARES SUBJECT TO THE PLAN. (a) Shares Subject to the Plan. Subject to adjustment as set forth in Section 3(b), the maximum number of Shares that may be issued or transferred pursuant to Options under this Plan shall be 300,000 which may be authorized but unissued Shares or Shares held in the Company's treasury, or a combination thereof. Any Shares subject to an Option that cease to be subject thereto may again be the subject of Options hereunder. (b) Changes in Company's Shares. In the event the Board determines that any stock dividend, extraordinary cash dividend, recapitalization, reorganization, merger, consolidation, split-up, spin-off, combination, exchange of shares, warrants or rights offering to purchase Shares, or other similar corporate event, affects the value of the Shares such that an adjustment is required in order to preserve the benefits or potential benefits intended to be made available under this Plan, the Board shall have the right, in its sole discretion, and in such manner as it may deem equitable, to adjust any or all of (a) the number and kind of Shares subject to outstanding Options, and (b) the exercise price with respect to any Option or (c) make provision for a cash payment to an Optionee or a person who has an outstanding Option (in an amount equal to the then difference between the exercise price and the Fair Market Value of a Share). 4. PARTICIPATION. Each Nonemployee Director shall be eligible to participate in the Plan, provided that the Board shall have the discretion to determine which, if any, Nonemployee Director shall receive a grant of Options hereunder. 5. TERMS OF OPTIONS AND SHARES. (a) Terms. The Options granted hereunder shall have the following terms and conditions: (i) Exercise Price. The exercise price of any Option shall be one hundred percent (100%) of the Fair Market Value of a Share as of the date the Option is granted, provided, however, that the Board, in its discretion may grant Options above or below Fair Market Value. 3 4 (ii) Term. Subject to the discretion of the Board, the term of an Option shall be ten years from the date it is granted. (iii) Vesting. Options shall be exercisable in such installments (which need not be equal) and at such times as the Board may designate, as embodied in the Option Agreement covering such Option, provided, however, that any Options granted hereunder as of the Effective Date shall vest and become exercisable at a rate of twenty percent (20%) immediately and an additional twenty percent (20%) each year, beginning on the first anniversary of the date of grant, and each anniversary thereof, provided that the Optionee is still a member of the Board on each such vesting date. In addition, any Option granted an individual who is elected to the Board as a Nonemployee Director during calendar year 2000 or thereafter shall vest and become exercisable at a rate of twenty percent (20%) per year, beginning on the date of grant and an additional twenty percent (20%) on the first anniversary of the date of grant and each anniversary thereafter, provided that the Optionee is still a member of the Board on each such date. Notwithstanding the foregoing, any Options that are not exercisable prior to a Change in Control shall become exercisable on the date of such Change in Control and shall remain exercisable for the remainder of their Term. (iv) Number. The Board shall have the discretion to determine the number of options to be granted any Nonemployee Director, and to determine the terms and conditions of any such grant, all as embodied in the Option Agreement covering such Option. (b) Termination of Service. An Optionee who ceases to be a member of the Board for any reason other than death, retirement on or after age 65, or Disability shall have thirty (30) days from the date of such cessation to exercise any then exercisable Options, after which all such Options shall terminate and be of no further force or effects. If an Optionee ceases to be a member of the Board due to death, retirement on or after age 65, or Disability, all outstanding Options held by such Optionee that are exercisable on such date shall remain exercisable for their Term, and shall thereafter terminate and be of no further force or effect. (c) Option Agreement. Options shall be granted only pursuant to a written Option Agreement, which shall be executed by the Optionee and an authorized officer of the Company and which shall contain such terms and conditions as the Board shall determine, consistent with the Plan. (d) Non-Transferability. No Option granted hereunder the Plan shall be transferable by the Optionee to whom granted otherwise than by will or the laws of descent and distribution, and an Option may be exercised during the lifetime of such Optionee only by the Optionee or his guardian or legal representative. The terms of such Option shall be binding upon the beneficiaries, executors, administrators, heirs and successors of the Optionee. (e) Method of Exercise. The exercise of an Option shall be made only by delivery of a written notice (in person or by first class mail to the Secretary of the Company at the Company's principal executive office) specifying the number of Shares to be purchased and accompanied by full payment therefor and otherwise in accordance with the Option Agreement pursuant to which the Option was granted. The exercise price for any Shares purchased pursuant to 4 5 the exercise of an Option shall be paid in full upon such exercise in cash, by check or, at the discretion of the Board and upon such terms and conditions as the Board shall approve, by transferring previously owned Shares to the Company, having Shares withheld, or pursuant to a "cashless exercise" procedure, or any combination thereof. Any Shares transferred to the Company as payment of the exercise price shall be valued at their Fair Market Value on the day preceding the date of exercise of such Option. If requested by the Board, the Optionee shall deliver the Option Agreement evidencing the Option to the Secretary of the Company who shall endorse thereon a notation of such exercise and return such Option Agreement to the Optionee. Not less than one hundred (100) Shares may be purchased at any time upon the exercise of an Option unless the number of Shares so purchased constitutes the total number of Shares then purchasable under the Option or the Board determines otherwise in its sole discretion. (f) Rights as Stockholder. No Optionee shall be deemed for any purpose to be or to have the rights and privileges of the owner of any Shares subject to any Option unless and until (a) the Option shall have been exercised pursuant to the terms thereof, and (b) the Company shall have issued the Shares to the Optionee. 6. ADMINISTRATION. The Plan shall be administered by the Board. Subject to the provisions of the Plan, the Board shall be authorized to interpret and construe the Plan and the Option Agreements, to establish, amend, and rescind any rules and regulations relating to the Plan, and to make all other determinations necessary or advisable for the administration of the Plan and to carry out its purpose. The determinations of the Board in the administration of the Plan, as described herein, shall be final and conclusive. The Secretary shall be authorized to implement the Plan in accordance with its terms and to take such actions of a ministerial nature as shall be necessary to effectuate the intent and purposes thereof. The Board may, in its sole and absolute discretion, delegate to any proper officer of the Company, or more than one of them, any or all of its administrative duties under this Plan. 7. OTHER PROVISIONS. (a) Effective Date. The Plan has been approved by the Board and by the Company's stockholders, and shall become effective as of the date the Board approved such Plan, (the "Effective Date"). The Plan shall continue in effect until ten years after the date it was approved by the Company's stockholders. (b) Amendment, Suspension or Termination of the Plan. The Plan may be wholly or partially amended or otherwise modified, suspended or terminated at any time or from time to time by the Board; provided, however, that, except as provided in Section 3(b), no amendment, suspension nor termination shall, without the consent of the Optionee, alter or impair any rights or obligations under any Option theretofore granted. 5 6 (c) Governing Law. The Plan and the rights of all persons claiming hereunder shall be construed and determined in accordance with the laws of the State of New York without giving effect to the choice of law principles thereof. (d) Regulations and Other Approvals. (i) The obligation of the Company to sell or deliver Shares with respect to Options granted under the Plan shall be subject to all applicable laws, rules and regulations, including all applicable federal and state securities laws, and the obtaining of all such approvals by governmental agencies as may be deemed necessary or appropriate by the Board. (ii) The Board may make such changes as may be necessary or appropriate to comply with the rules and regulations of any government authority. (iii) Each Option is subject to the requirement that, if at any time the Board determines, in its sole discretion, that the listing, registration or qualification of Shares issuable pursuant to the Plan is required by any securities exchange or under any state or federal law, or the consent or approval of any governmental regulatory body is necessary or desirable as a condition of, or in connection with, the grant of an Option or the issuance of Shares, no Options shall be granted or payment made or Shares issued, in whole or in part, unless listing, registration, qualification, consent or approval has been effected or obtained free of any conditions as acceptable to the Board. (iv) In the event that the disposition of Shares acquired pursuant to the Plan is not covered by a then current registration statement under the Securities Act, and is not otherwise exempt from such registration, such Shares shall be restricted against transfer to the extent required by the Securities Act or regulations thereunder, and the Board may require any individual receiving Shares pursuant to the Plan, as a condition precedent to receipt of such Shares, to represent to the Company in writing that the Shares acquired by such individual are acquired for investment only and not with a view to distribution. the certificate for such shall include any legend that the Board deems appropriate to reflect any restrictions on transfer. (e) Withholding of Taxes. As a condition to the exercise of an Option and to the extent required by law, no later than the date as of which an amount first becomes includible in the gross income of an Optionee for federal income tax purposes with respect to Options granted under this Agreement, the Optionee shall pay to the Company, or make arrangements satisfactory to the Company regarding the payment of, any federal, estate, or local taxes of any kind required by law to be withheld with respect to such amount. The obligations of the Company under this Agreement shall be conditioned on such payment or arrangements, and the Company shall, to the extent permitted by law, have the right to deduct any such taxes from any payment of any kind otherwise due to the employee. In its discretion, the Board may permit an Optionee to satisfy withholding obligations by delivering previously owned Shares or by having Shares withheld. (f) Titles; Construction. Titles are provided herein for convenience only and are not to serve as a basis for interpretation or construction of the Plan. The masculine pronoun shall 6 7 include the feminine and neuter and the singular shall include the plural, when the context so indicates. 7 8 EXHIBIT A FORM OF STOCK OPTION AGREEMENT THIS AGREEMENT, dated as of __________________, is made by and between Spanish Broadcasting System, Inc. a Delaware corporation (the "Company") and ________________ (the "Optionee"). WHEREAS, the Optionee has been selected by the Board to receive a grant of stock options under the Spanish Broadcasting System 1999 Stock Option Plan for Nonemployee Directors (the "Plan"). NOW, THEREFORE, in consideration of the Optionee's agreement to serve on the Board, the Company and the Optionee agree as follows: 1. Definitions. Any capitalized term not defined herein shall have the meaning set forth in the Plan. 2. Grant of Option. (a) Grant; Grant Date. Subject to the terms and conditions hereof and contingent on the consummation of the Company's initial public offering ("IPO"), the Company hereby grants to the Optionee as of _____________ (the "Grant Date") an Option to purchase ________ Shares at an exercise price equal to _____________. (b) Adjustments in Option. In the event that the outstanding Shares subject to the Option are changed into or exchanged for a different number or kind of shares or securities of the Company, or of another corporation, by reason of reorganization, merger or other subdivision, consolidation, recapitalization, reclassification, stock split, issuance of warrants, stock dividend or combination of shares or similar event, the Board shall make an appropriate and equitable adjustment in the Option so that the Optionee's proportionate interest shall be maintained as before the occurrence of such event, provided that any such adjustment shall be consistent with the provisions of the Optionee's employment agreement, if applicable. (c) Form of Option. The Option is intended to be a Nonqualified Stock Option, and not an Incentive Stock Option. (d) Term. The Option shall expire on the tenth anniversary of the Grant Date, unless terminated earlier by the Committee. EX-A-1 9 (e) Vesting. Twenty percent (20%) of the Options shall be vested and exercisable upon the Grant Date; an additional twenty percent (20%) of the Options shall vest and become exercisable on each of the first four anniversaries of the Grant Date, provided that the Optionee is still a member of the Board on such vesting dates. (f) Exercise. The Optionee may exercise an Option in whole or in part at any time by delivering written notice of such exercise to the Secretary of the Company of the number of Shares as to which the Option is being exercised, and enclosing payment for the Shares with respect to which the Option is being exercised. Such payment shall be in cash or by check, or if approved by the Committee, by the delivery of Shares previously owned by the Employee, duly endorsed for transfer to the Company, with a Fair Market Value on the date of delivery equal to the aggregate purchase price of the Shares with respect to which the Option is being exercised, or pursuant to a "cashless exercise," or any combination of the foregoing approved by the Committee, in its sole discretion. Partial exercise shall be for whole Shares only and shall not be for less than one hundred (100) Shares unless the number of Shares purchased constitutes the total number of Shares then remaining subject to the Option or the Committee permits such smaller exercise in its sole discretion. (g) Exercise Following Termination of Service as a Director. If the Optionee ceases to be a member of the Board due to death, Disability, or Retirement, all Options then vested and exercisable shall be exercisable by the Optionee (or his personal representative or beneficiary) for the remainder of their original term, and shall thereafter terminate and have no further force or effect. In all other cases, any then exercisable Options shall remain exercisable for thirty (30) days following such cessation of Board status. (h) Nontransferability. The Option shall not be transferable other than by will or the laws of descent and distribution, and no transfer so effected shall be effective to bind the Company unless the Company has been furnished with written notice thereof and a copy of the will and/or such other evidence as the Committee may deem necessary to establish the validity of the transfer and the acceptance by the transferee or transferees of the terms and conditions of the Option, provided, however, that, in the discretion of the Committee, Options may be transferred pursuant to a Qualified Domestic Relations Order (within the meaning of the Code). (i) Conditions to Issuance of Stock Certificates. (1) The Shares deliverable upon the exercise of the Option, or any portion thereof, may be either previously authorized but unissued Shares or issued Shares which have been reacquired by the Company. Such Shares shall be fully paid and non-assessable. The stock certificates evidencing the Shares shall bear such legends restricting transferability as the Committee deems necessary or advisable. EX-A-2 10 (2) The Company shall not be required to issue or deliver any certificate or certificates for Shares deliverable upon any exercise of the Option prior to fulfillment of all of the following conditions: (a) The completion of any registration or other qualification of such Shares under any state or federal law or under rulings or regulations of the Securities and Exchange Commission or of any other governmental regulatory body, or the obtaining of approval or other clearance from any state or federal governmental agency which the Committee shall, in its sole discretion, deem necessary or advisable. (b) If, in its sole discretion, the Committee deems it necessary or advisable, the execution by the Employee of a written representation and agreement, in a form satisfactory to the Committee, in which the Optionee represents that the Shares acquired by him upon exercise are being acquired for investment and not with a view to distribution thereof. (j) Rights as Stockholder. The Optionee shall not be, nor have any of the rights or privileges of, a stockholder of the Company in respect of any Shares purchasable upon the exercise of the Option unless and until certificates representing such Shares have been issued by the Company. 3. Miscellaneous. (a) Administration. The Committee shall have the power to interpret the Plan and this Agreement, and to adopt such rules for the administration, interpretation and application of the Plan as are consistent therewith and to interpret or revoke any such rules. All actions taken and all interpretations and determinations made by the Committee shall be final and binding upon the Optionee, the Company, and all other interested persons. (b) Withholding of Taxes. No later than the date as of which an amount first becomes includible in the gross income of the Optionee for federal income tax purposes with respect to the grant of the Option under this Agreement, the Optionee shall pay to the Company, or the Optionee (or his Designated Beneficiary) shall make arrangements satisfactory to the Company regarding the payment of, any federal, state, or local taxes of any kind required by law or the Company to be withheld with respect to such amount. The obligations of the Company under this Agreement shall be conditioned on such payment or arrangements, and the Company shall, to the extent permitted by law, have the right to deduct any such taxes from any payment of any kind otherwise due to the Optionee. (c) No Right to Continued Board Status. Nothing in this Agreement or in the Plan shall confer upon the Optionee any right to continue as a member of the Board. EX-A-3 11 (d) Entire Agreement; Amendment. This Agreement, and the Plan, constitute the entire agreement between the parties with respect to the subject matter hereof, and supersedes all prior agreements and understandings between the parties with respect to such subject matter. Any term or provision of this Agreement may be waived at any time by the party which is entitled to the benefits thereof, and any term or provision of this Agreement may be amended or supplemented at any time by the mutual consent of the parties hereto, except that any waiver of any term or condition, or any amendment, of this Agreement must be in writing. (e) Governing Law. The laws of the State of New York shall govern the interpretation, validity and performance of the terms of this Agreement regardless of the law that might be applied under principles of conflict of laws. (f) Successors. This Agreement shall be binding upon and inure to the benefit of the successors, assigns and heirs of the respective parties. (g) Notices. All notices or other communications made or given in connection with this Agreement shall be in writing and shall be deemed to have been duly given when delivered or mailed by registered or certified mail, return receipt requested, to those listed below at their following respective addresses or at such other address as each may specify by notice to the others: To the Optionee: -------------------- -------------------- -------------------- To the Company: Spanish Broadcasting System, Inc. 3191 Coral Way Miami, Florida 33145 Attention: Joseph A. Garcia Copy to: Kaye, Scholer, Fierman, Hays & Handler, LLP 425 Park Avenue New York, New York 10022 Attention: William E. Wallace, Jr., Esq. (h) Waiver. The failure of a party to insist upon strict adherence to any term of this Agreement on any occasion shall not be considered a waiver thereof or deprive that party of the right thereafter to insist upon strict adherence to that term or any other term of this Agreement. (i) Conflict with the Plan. In the event of any conflict or inconsistency between the provisions of this Agreement and the Plan, the provisions of the Plan shall control. EX-A-4 12 (j) Titles; Construction. Titles are provided herein for convenience only and are not to serve as a basis for interpretation or construction of the Agreement. The masculine pronoun shall include the feminine and neuter and the singular shall include the plural, when the context so indicates. IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the day and year first above written. Spanish Broadcasting System, Inc. By ___________________________ Name: Title: OPTIONEE _____________________________ EX-A-5 EX-10.38 15 TIME BROKERAGE AGREEMENT 1 EXHIBIT 10.38 TIME BROKERAGE AGREEMENT THIS AGREEMENT, is made as of this 25th day of October, 1999, by and between SPANISH BROADCASTING SYSTEM OF FLORIDA, INC., a Florida corporation ("Licensee"), and RAUL ALARCON, SR. ("Broker"). WHEREAS, Licensee is authorized to operate Radio Stations WZMQ(FM), Key Largo, Florida, and WVMQ(FM), Key West, Florida (collectively, "Stations"), pursuant to licenses issued by the Federal Communications Commission ("FCC"); and WHEREAS, the parties hereto have carefully considered the FCC's time brokerage policies and intend that this Agreement in all respects comply with such policies; and WHEREAS, the Key West and Key Largo, Florida area radio and advertising markets are highly competitive and will remain so, unaffected by the transactions contemplated hereunder; and WHEREAS, Licensee desires to enter into this Agreement to provide a regular source of diverse programming for the Stations; and WHEREAS, Broker desires to provide an over-the-air program service to the Key West and Key Largo, Florida area using the facilities of the Stations; and 2 WHEREAS, Licensee agrees to provide time exclusively to Broker on terms and conditions that conform to policies of the Stations and the FCC for time brokerage arrangements and that are as set forth herein; WHEREAS, Broker agrees to utilize the facilities of the Stations solely to select and broadcast programming that conforms with the policies of Licensee and with all rules, regulations, and policies of the FCC, and as set forth herein; and WHEREAS, Licensee and Broker have filed with the FCC an application seeking an assignment of the licenses, permits and authorizations for Stations from Licensee to Broker. NOW, THEREFORE, in consideration of the foregoing, and of the mutual promises set forth herein, Licensee and Broker, intending to be bound legally, hereby agree as follows: 1. FACILITIES. Licensee agrees to cause to be broadcast, Broker's programs which will originate from Broker's own studios, subject at all times to Licensee's right to reject any programming as specified in this Agreement, including but not limited to Section 9 below. The Broker's program service is described in Exhibit A hereto and made a part hereof. 2. TERM. The term of this Agreement shall be for the period commencing November 2, 1999 and ending upon consummation of the sale of the Stations to Broker, or five (5) 2 3 days following the FCC order refusing to approve the sale of Stations to Broker. 3. PROGRAMS. Broker shall furnish or cause to be furnished programs to be broadcast on the Stations which shall be in good taste and in accordance with the rules, regulations and policies of the Federal Communications Commission ("Commission" and/or "FCC") and the Communications Act of 1934, as amended ("Act"), as well as the programming policies of the Licensee. The Broker shall make available to Licensee its programming during a sufficient number of hours to enable the Stations to meet the minimum hours of operation required under the FCC's Rules. All advertising messages and promotional material or announcements to be furnished by Broker shall comply with all applicable federal, state and local laws, regulations and policies, and shall be subject to the review and approval of the Licensee. 4. STATIONS FACILITIES. A. OPERATION OF STATIONS. The Stations operate and will continue to operate throughout the term of this Agreement in accordance with the authorizations issued to it by the FCC. Throughout the term of this Agreement, Licensee shall make the Stations available to the Broker for program transmission for One Hundred Sixty-Seven (167) hours per week, Sunday through Saturday, except for downtime occasioned by routine maintenance 3 4 and a one-hour time period between 6:00 A.M. and 7:00 A.M. Sunday mornings to be broadcast with programming to be supplied by the Licensee at its option. Licensee shall provide at least 48-hours prior notice to Broker of any routine or non-emergency maintenance work affecting the operation of the Stations. B. INTERRUPTION OF NORMAL OPERATIONS. If the Stations suffer any loss or damage of any nature to its transmission or studio facilities which results in the interruption of service or the inability of the Stations to operate with their maximum authorized facilities, Licensee shall immediately notify Broker and Licensee shall undertake such repairs as are necessary to restore full-time operation of the Stations with their maximum authorized facilities as expeditiously as possible following the occurrence of any such loss or damage. If Broker or any of its agents or employees causes any damage to any of the Stations' Facilities, Broker shall promptly reimburse Licensee for any such damages. C. STUDIO LOCATION. Licensee shall maintain a main studio within the Stations' principal community of licensee and shall staff the Stations consistent with the FCC's Rules and policies, including maintaining a general manager who will, among other things, review and approve the programming of Broker. 5. PUBLIC FILE. Licensee is required to comply with Commission Rules and policies, including those regarding the 4 5 maintenance of the Stations' local public inspection file (which shall at all times remain the responsibility of the Licensee). Licensee shall also be required to receive or handle mail, faxes, cables, telegraph messages or telephone calls in connection with programs submitted by Broker and broadcast by the Stations. 6. PROGRAMMING AND THE PUBLIC INTEREST. The programming provided by Broker shall consist of such public affairs programming, public service announcements, music, news, weather reports, sports, promotional material, commercial and advertising, as are deemed appropriate by Broker. Licensee shall have the full and unrestricted right to delete and not broadcast any material contained in any part of the brokered programming provided by Broker which it regards as being unsuitable for broadcast or the broadcast of which it believes would be contrary to the public interest. Licensee shall have the unrestricted right not to broadcast programming as specified in Section 10 of this Agreement. 7. RESPONSIBILITY FOR EMPLOYEES AND EXPENSES. Broker shall be responsible for the salaries, commissions, taxes, insurance and all other related costs for all personnel involved in the production and sale of the programming and commercial messages submitted to and broadcast by the Stations, including, but not limited to, air personalities, salespersons, traffic personnel, etc. Broker shall be responsible for delivering the 5 6 programming and/or the broadcast signal to Licensee's Stations. Licensee shall be responsible for paying all direct operating costs of the Stations as follows: a. Lease payments for use of the Stations' transmitter and antenna sites; b. Utility bills for utility services at both the main studio location and the transmitter site of the Stations; c. Maintenance of the transmitting facilities of the Stations and of all equipment required by the FCC for the operation of the Stations in compliance with the rules and policies of the FCC; d. Salaries, payroll taxes, insurance and related costs of the minimum number and type of personnel required by the policies and rules of the FCC to be employed by Licensee for the Stations which shall consist of no more than a general manager and an office worker; e. Music performance rights license fees payable by Licensee to ASCAP, BMI and SESAC; f. Costs of equipment repair and supplies; and g. Costs of engineering or technical personnel necessary to assure compliance with FCC rules and policies and maintenance and repair of the Stations' technical facilities. 6 7 Broker shall be fully responsible for the supervision and direction of its employees, and Licensee shall be directly responsible for the supervision and direction of its employees, with the understanding that Broker's employees are subject to the supervision and direction of the Licensee consistent with this Agreement. Broker shall be solely responsible for payment of any and all copyright license fees attributable to its programming broadcast on the Stations pursuant to this Agreement, to the extent that the programming of the Broker to be broadcast on the Stations requires any copyright licenses other than those to be secured by Licensee under Licensee's music performance rights license agreements with ASCAP, BMI and SESAC. Licensee agrees to maintain performance rights licenses issued by ASCAP, BMI and SESAC as now are or hereinafter may be in general use by radio broadcasting Stations. In the event that ASCAP, BMI or SESAC demands that Broker obtain its own separate performance rights license with such performance rights society(ies), Broker shall promptly enter into such agreements and pay the required license fees to each of such performance rights societies. Broker shall also pay any and all other copyright license fees attributable to its programming to be broadcast on the Stations. 8. ADVERTISING AND PROGRAMMING REVENUES. Broker shall retain all revenues from the sale of advertising time on the programs it delivers to the Stations. 7 8 9. STATIONS' PROGRAMMING. Notwithstanding anything to the contrary in this Agreement, Licensee shall have full authority and power over the operation of the Stations during the period of this Agreement. Licensee shall retain control over the policies, programming and operations of the Stations, including, without limitation, the right to reject any programming or advertisements it believes unsuitable, contrary to the public interest, or contrary to the FCC's rules, the right to preempt any programs in order to broadcast a program deemed by Licensee to be of greater national, regional or local interest, the right to preempt any program in the event of a local, state or national emergency, and the right to take any other actions necessary for compliance with federal, state and local laws, the Communications Act of 1934, as amended (the "Communications Act") and the Rules, regulations and policies of the Commission (including the prohibition on unauthorized transfers of control) and the rules, regulations and policies of other federal government entities, including the Federal Trade Commission and the Department of Justice. Licensee shall at all times be solely responsible for meeting all of the Commission's requirements with respect to public service programming, for ascertaining the needs and interests of its licensee community ("local needs and interests"), maintaining the political and public inspection files and the Stations logs, and for the preparation of the Stations' quarterly issues/programs 8 9 lists. Broker shall, upon request by Licensee, provide Licensee with information with respect to Broker's programs responsive to the local needs and interests so as to assist Licensee in the preparation of required programming reports and will provide upon request such other information necessary to enable Licensee to prepare other records and reports required by the Commission or other local, state or federal government entities. 10. STATIONS' IDENTIFICATION. Licensee will be responsible for the proper broadcast of FCC-required Stations' identification announcements; however, Broker shall cooperate with Licensee to ensure that all required Stations identification announcements are broadcast with respect to the Stations in full compliance with FCC rules and policies. 11. SPECIAL EVENTS. Licensee reserves the right, in its discretion, to preempt any of the broadcasts of the programs referred to herein for broadcast of special programs of importance. This right of preemption is in addition to the preemption rights specified in Section 9. In all such cases of preemption under this section, Licensee will use its best efforts to give Broker reasonable notice of its intention to preempt Broker's programs, and, in the event of any preemption by Licensee for any reason, Broker shall receive relief from reimbursement of costs equal to the fair market value of the broadcast time preempted by Licensee's use. 9 10 12. POLITICAL ADVERTISING. Broker shall cooperate with Licensee as Licensee complies with the political broadcasting requirements of the Communications Act and the FCC's rules and policies thereunder. Broker shall supply such information promptly to Licensee as may be necessary to comply with the political time record keeping and lowest unit charge requirements of Section 315 of the Communications Act. To the extent that Licensee believes necessary, in Licensee's sole discretion, Broker shall release advertising availabilities to Licensee to permit it to comply with its reasonable access provisions of Section 312(a)(7) of the Communications Act and the equal opportunities provision of Section 315 of the Communications Act, and the rules and policies of the FCC thereunder; provided, however, that revenues realized by Licensee as a result of such a release of advertising time shall promptly be remitted to Broker. 13. LICENSEE'S RESPONSIBILITY FOR COMPLIANCE WITH FCC TECHNICAL RULES. Licensee shall be responsible for maintaining the transmission facilities of the Stations. Licensee shall be responsible for ensuring compliance by the Stations with the technical operating and reporting requirements established by the FCC. Licensee shall be responsible for ensuring that qualified control operators monitor and control the Stations' transmissions at all times, in full conformity with FCC requirements. 10 11 14. FORCE MAJEURE. Any failure or impairment of facilities or any delay or interruption in the broadcast of programs, or failure at any time to furnish facilities, in whole or in part, for broadcast, due to causes beyond the control of Licensee, shall not constitute a breach of this Agreement and Licensee will not be liable to Broker. In the event that the Stations remain off the air for a period of twelve (12) consecutive days due to causes beyond the control of Licensee, Broker shall have the right, upon five (5) days prior written notice to Licensee, to terminate this Agreement, provided that Broker is not in Default hereunder. 15. RIGHT TO USE THE PROGRAMS. The right to use the programs to be furnished hereunder by Broker and to authorize their use in any manner and in any media whatsoever shall be, and remain, vested in Broker, subject, however, to the rights of others (including, without limitation, copyright rights, trademark and service mark rights and other intellectual property rights) in and to the programs. In the event that: (a) Broker develops trade secrets in connection with the programming which it is to furnish to Licensee under this Agreement, and (b) Broker discloses such trade secrets to Licensee pursuant to this Agreement, and (c) such trade secrets are not otherwise available in the public domain or known publicly, Licensee agrees to maintain the confidentiality of such trade secrets and not to 11 12 disclose such trade secrets without the consent of Broker, which consent shall not be unreasonably withheld. 16. PAYOLA. Broker agrees that neither it nor any of its employees will accept any consideration, compensation or gift or gratuity of any kind whatsoever, regardless of its value or form, including, but not limited to, a commission, discount, bonus, material, supplies or other merchandise, services or labor (collectively, "Consideration"), whether or not pursuant to written contracts or agreements between Broker and merchants or advertisers, in consideration for the broadcast of any matter on the Stations unless the payer is identified, in the broadcast for which Consideration was provided, as having paid for or furnished such Consideration, in accordance with Sections 508 and 317 of the Communications Act and FCC rules and policies. 17. COMPLIANCE WITH LAW. Broker agrees that, throughout the term of this Agreement, Broker will comply with all laws, rules, regulations and policies applicable to the conduct of Licensee's business and Broker acknowledges that Licensee has not urged, counseled or advised the use of any unfair business practice. 18. INDEMNIFICATION WARRANTY. A. Broker will indemnify and hold Licensee harmless against all liability for libel, slander, unfair competition or trade practices, infringement of trade marks, service marks, 12 13 trade names or program titles, violation of rights of privacy and infringement of copyrights and other proprietary rights resulting from or caused by the actions of Broker, or the failure of the Broker to act when obligated to do so, and from and against any and all other claims, damages and causes of action resulting from the broadcast of programming furnished by Broker, or any liability resulting from the broadcast of Broker's programming. Further, Broker warrants that the broadcasting of its programs will not violate any applicable laws or any rights of others, and Broker agrees to hold Licensee, the Stations and their employees, harmless from any and all claims, damages, liabilities, costs and expenses, including reasonable attorneys' fees, arising from the broadcast of such programs. Broker's obligation to hold Licensee harmless against the liabilities specified above shall survive any termination of this Agreement until the expiration of all applicable statutes of limitation. B. Licensee will indemnify and hold Broker harmless against all liability for libel, slander, unfair competition or trade practices, infringement of trademarks, service marks, trade names or program titles, violation of rights of privacy and infringement of copyrights and to the proprietary rights resulting from or caused by the actions or inactions of Licensee, and from and against any and all other claims, damages and causes of action resulting from the broadcast on the Stations of the 13 14 programming furnished by Licensee. Licensee agrees to hold Broker and its employees harmless from any and all claims, damages, liabilities, costs and expenses, including reasonable attorneys' fees, accruing to Broker and arising from the broadcast on the Stations of the programs to be furnished to the Stations by Licensee. Licensee's obligation to hold Broker harmless against the liabilities specified above shall survive any termination of this Agreement until the expiration of all applicable statutes of limitation. 19. EVENTS OF DEFAULT; CURE PERIODS AND REMEDIES. The following shall, after the expiration of the applicable cure periods, constitute Events of Default; A. DEFAULT IN COVENANTS OR ADVERSE LEGAL ACTION. The default by either party hereto in the material observance or performance of any material covenant, condition or agreement contained herein. B. BREACH OF REPRESENTATION. If any material representation or warranty herein made by either party hereto, or in any certificate or document furnished by either party to the other pursuant to the provisions hereof, shall prove to have been false or misleading in any material respect as of the time made or furnished. 14 15 20. TERMINATION UPON ORDER OF GOVERNMENTAL AUTHORITY. In the event that a federal, state or local government authority designates a hearing with respect to the continuation or renewal of any license or authorization held by Licensee for the operation of the Stations or orders the termination of this Agreement and/or the curtailment in any manner material to the relationship between the parties hereto of the provision of programming by Broker hereunder, Broker, at its option, may: (a) seek administrative or judicial relief from such order(s) (in which event Licensee shall cooperate with Broker, providing that Broker shall be responsible for legal fees and costs incurred in such proceedings); or (b) notify Licensee that it will terminate this Agreement upon ten (10) days' prior written notice to Licensee. If the Commission designates the license renewal application of the Stations for a hearing as a consequence of this Agreement or for any other reason, or initiates any revocation or other proceeding with respect to the authorizations issued to the Licensee for the operation of the Stations, and Licensee elects to contest the action, then Licensee shall be responsible for its expenses incurred as a consequence of the Commission proceeding; provided, however, that Broker shall at its own expense cooperate and comply with any reasonable request of Licensee to assemble and provide to the Commission information relating to Broker's performance under this Agreement. In the 15 16 event of termination upon any government order(s), Licensee shall cooperate reasonably with Broker to the extent permitted to enable Broker to fulfill advertising or other programming contracts then outstanding, in which event Licensee shall receive no compensation for the carriage of such programming and shall pay to Broker monies received which otherwise would have been paid to Broker hereunder. In the event of termination of this Agreement upon any government order(s), Broker should be entitled to pursue collection of its own accounts receivable accrued from any advertiser which has contracted directly with broker for the purchase of advertising time on the Stations. 21. REPRESENTATIONS AND WARRANTIES. A. MUTUAL REPRESENTATIONS AND WARRANTIES. Both Licensee and Broker represent that they are legally qualified, empowered and able to enter into this Agreement, and that the execution, delivery and performance hereof shall not constitute a breach or violation of any agreement, contract or other obligation to which either party is subject or by which it is bound. B. LICENSEE'S REPRESENTATIONS, WARRANTIES AND COVENANTS. Licensee makes the following further representations, warranties and covenants: 1. AUTHORIZATIONS. Licensee owns and holds all licenses and other permits and authorizations necessary for the 16 17 operation of the Stations as presently conducted (including licenses, permits and authorizations issued by the Commission), and such licenses, permits and authorizations will be in full force and effect for the entire term hereof, unimpaired by any acts or omissions of Licensee, its principals, employees or agents. C. MAIN STUDIO. Licensee shall maintain a main studio, as that term is defined by the rules and regulations of the FCC, within the principal community contour of the Stations as required by the rules and regulations of the FCC. Licensee shall maintain an appropriate public inspection file at a publicly accessible locations within Key West and Key Largo, Florida, and shall, from time to time, place such documents in that file as may be required by present or future FCC rules and regulations. D. FINDERS. No broker, finder, or the like has been involved with Licensee in any manner in the negotiations leading up to the execution of this Agreement. 22. SALE OF STATIONS TO BROKER. Contemporaneously herewith, Broker and Licensee have contracted for the sale to Broker of Licensee's assets used in connection with the operation of the Stations, and assignment of the FCC licenses of the Stations to Broker, pursuant to the Asset Purchase Agreement. 17 18 23. NOTICES. All necessary notices, demands and requests permitted or required under this Agreement shall be in writing and shall be deemed given four (4) days after being mailed by certified mail, return receipt requested, postage prepaid, addressed as follows: If to Licensee: Spanish Broadcasting System of Florida, Inc. 3191 Coral Way Suite 805 Miami, Florida 33145 ATTN: Raul Alarcon, Jr. President with a copy to: Jason L. Shrinsky, Esq. Kaye, Scholer, Fierman, Hays & Handler, LLP 901 15th Street, N.W. Washington, D.C. 20005 If to Broker: Raul Alarcon, Sr. 1001 Ponce De Leon Blvd Coral Gables, Florida 33134 with a copy to: 24. MODIFICATION AND WAIVER. No modification of any provision of this Agreement shall in any event be effective unless the same shall be in writing and then such modification 18 19 shall be effective only in the specific instance and for the purpose for which given. 25. CONSTRUCTION. This Agreement shall be construed in accordance with the laws of the State of Florida, except for the choice of law rules utilized in that State, and the obligations of the parties hereto are subject to all federal, state and local laws and regulations now or hereafter in force and to the rules, regulations and policies of the Commission and all other government entities or authorities presently or hereafter to be constituted. 26. HEADINGS. The headings contained in this Agreement are included for convenience only and no such heading shall in any way alter the meaning of any provision. 27. ASSIGNMENT. This Agreement may not be assigned by either party hereto without the express written approval of the other party hereto, and such approval shall not be unreasonably withheld. 28. COUNTERPART SIGNATURE. This Agreement may be signed in one or more counterparts, each of which shall be deemed a duplicate original, binding on the parties hereto notwithstanding that the parties are not signatory to the original or the same counterpart. This Agreement shall be effective as of the date first above written. 19 20 29. ENTIRE AGREEMENT. This Agreement supersedes any prior agreements between the parties and contains all of the terms agreed upon with respect to the subject matter hereof. 30. NO PARTNERSHIP OR JOINT VENTURE CREATED. Nothing in this Agreement shall be construed to make Licensee and Broker partners or joint venturers or to afford any rights to any third party other than as expressly provided herein. 31. SEVERABILITY. Subject to the provisions of Paragraph 21, above, in the event any provision contained in this Agreement is held to be invalid, illegal or unenforceable, such holding shall not affect any other provision hereof and this Agreement shall be construed as if such invalid, illegal or unenforceable provision had not been contained herein. 32. LEGAL EFFECT. This Agreement shall be binding upon and shall inure to the benefit of the parties hereto, their heirs, executors, personal representatives, successors and assigns, and governed by the laws of the State of Florida. 33. CERTIFICATION. Licensee certifies that it maintains and will continue to maintain ultimate control over the Stations' facilities, including specifically ultimate control of the Stations' finances, personnel and programming as provided for herein. 20 21 IN WITNESS WHEREOF, the parties hereto have executed this Agreement to be effective as of the date above written. ATTEST: SPANISH BROADCASTING SYSTEM OF FLORIDA, INC. /s/ Jason L. Shrinsky By: /s/ Raul Alarcon, Jr. - ------------------------------- --------------------------------- Raul Alarcon, Jr., President ATTEST: RAUL ALARCON, SR. /s/ Jason L. Shrinsky /s/ Raul Alarcon, Sr. - ------------------------------- ----------------------------------- 21 22 EXHIBIT A DESCRIPTION OF PROGRAM SERVICE Broker will broadcast an entertainment format which may include sports, news, public affair programs, public service announcements, as well as promotions and contests. Programming provided by Broker may include commercial matter (in both program or spot announcement form), in addition to the programming. 22 EX-10.39 16 FORM OF LOCK-UP LETTER AGREEMENT 1 EXHIBIT 10.39 FORM OF LOCK-UP LETTER AGREEMENT LEHMAN BROTHERS INC. MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED CIBC WORLD MARKETS CORP. As Representatives of the several Underwriters named in Schedule 1, c/o Lehman Brothers Inc. Three World Financial Center New York, New York 10285 Dear Sirs: The undersigned understands that you and certain other firms propose to enter into an Underwriting Agreement (the "Underwriting Agreement") providing for the purchase by you and such other firms (the "Underwriters") of shares (the "Shares") of Class A Common Stock, par value $0.0001 per share (the "Common Stock"), of Spanish Broadcasting System, Inc., a Delaware corporation (the "Company"), and that the Underwriters propose to reoffer the Shares to the public (the "Offering"). In consideration of the execution of the Underwriting Agreement by the Underwriters, and for other good and valuable consideration, the undersigned hereby irrevocably agrees that, without the prior written consent of Lehman Brothers Inc., on behalf of the Underwriters, the undersigned will not, directly or indirectly, (1) offer for sale, sell, pledge, or otherwise dispose of (or enter into any transaction or device that is designed to, or could be expected to, result in the disposition by any person at any time in the future of) any shares of Common Stock (including, without limitation, shares of Common Stock that may be deemed to be beneficially owned by the undersigned in accordance with the rules and regulations of the Securities and Exchange Commission and shares of Common Stock that may be issued upon exercise of any option or warrant) or securities convertible into or exchangeable for Common Stock (other than the Shares) owned by the undersigned on the date of execution of this Lock-Up Letter Agreement or on the date of the completion of the Offering, or (2) enter into any swap or other derivatives transaction that transfers to another, in whole or in part, any of the economic benefits or risks of ownership of such shares of Common Stock, whether any such transaction described in clause (1) or (2) above is to be settled by delivery of Common Stock or other securities, in cash or otherwise, for a period of 180 days after the date of the final Prospectus relating to the Offering. In furtherance of the foregoing, the Company and its Transfer Agent are hereby authorized to decline to make any transfer of securities if such transfer would constitute a violation or breach of this Lock-Up Letter Agreement. It is understood that, if the Company notifies you that it does not intend to proceed with the Offering, if the Underwriting Agreement does not become effective, or if the Underwriting Agreement (other than the provisions thereof which survive termination) shall terminate or be terminated prior to payment for and delivery of the Shares, we will be released from our obligations under this Lock-Up Letter Agreement. The undersigned understands that the Company and the Underwriters will proceed with the Offering in reliance on this Lock-Up Letter Agreement. 1 2 Whether or not the Offering actually occurs depends on a number of factors, including market conditions. Any Offering will only be made pursuant to an Underwriting Agreement, the terms of which are subject to negotiation between the Company and the Underwriters. The undersigned hereby represents and warrants that the undersigned has full power and authority to enter into this Lock-Up Letter Agreement and that, upon request, the undersigned will execute any additional documents necessary in connection with the enforcement hereof. Any obligations of the undersigned shall be binding upon the heirs, personal representatives, successors and assigns of the undersigned. Very truly yours, By: ------------------------------------ Name: ------------------------------- Title: ------------------------------ Dated: ----------------------- EX-10.40 17 FORM OF OPTION GRANT NOT UNDER STOCK OPTION PLANS 1 Exhibit 10.40 [FORM OF OPTION GRANT NOT UNDER STOCK OPTION PLANS] October , 1999 [Addressee] Dear ___________: This letter is to advise you that, in recognition of your prior services, Spanish Broadcasting System, Inc. (the "Company") hereby grants you a nonqualified stock option (the "Option") to purchase shares of the Company's common stock, par value $.0001 (the "Shares") on the terms and conditions set forth below. 1. EXERCISE PRICE. The exercise price shall be the price at which the Shares are initially offered to the public (the "IPO") on the date hereof. 2. EXERCISABILITY. The Option shall be vested and exercisable on the date the IPO is consummated, and shall remain exercisable for a term of 10 years from the Date of Grant, provided that, if an IPO is not consummated on or before the close of business on December 31, 1999, the Option shall expire and be null and void. 3. FORM OF EXERCISE. You may exercise an Option in whole or in part at any time after it becomes exercisable by delivering written notice of such exercise to the Secretary of the Company of the number of Shares as to which the Option is being exercised, and enclosing payment for the Shares with respect to which the Option is being exercised. Such payment shall be in cash or by check, or if approved by the Committee, by the delivery of Shares previously owned by you, duly endorsed for transfer to the Company, with a Fair Market Value on the date of delivery equal to the aggregate purchase price of the Shares with respect to which the Option is being exercised, or pursuant to a "cashless exercise," or any combination of the foregoing approved by the Committee, in its sole discretion. Partial exercise shall be for whole Shares only and shall not be for less than one hundred (100) Shares unless the number of Shares purchased constitutes the total number of Shares then remaining subject to the Option or the Committee permits such smaller exercise in its sole discretion. 4. NONTRANSFERABILITY. The Option shall not be transferable other than by will or the laws of descent and distribution, and no transfer so effected shall be effective to bind the Company unless the Company has been furnished with written notice thereof and a copy of the will and/or such other evidence as the Committee may deem necessary to establish the validity of the transfer and the acceptance by the transferee or transferees of the terms and conditions of the 2 Option, provided, however, that, in the discretion of the Committee, Options may be transferred pursuant to a Qualified Domestic Relations Order (within the meaning of the Internal Revenue Code of 1986). 5. CONDITIONS TO ISSUANCE. (1) The Shares deliverable upon the exercise of the Option, or any portion thereof, may be either previously authorized but unissued Shares or issued Shares which have been reacquired by the Company. Such Shares shall be fully paid and non-assessable. The stock certificates evidencing the Shares shall bear such legends restricting transferability as the Committee deems necessary or advisable. (2) The Company shall not be required to issue or deliver any certificate or certificates for Shares deliverable upon any exercise of the Option prior to fulfillment of all of the following conditions: a. The completion of any registration or other qualification of such Shares under any state or federal law or under rulings or regulations of the Securities and Exchange Commission or of any other governmental regulatory body, or the obtaining of approval or other clearance from any state or federal governmental agency which the Committee shall, in its sole discretion, deem necessary or advisable. b. If, in its sole discretion, the Committee deems it necessary or advisable, the execution by you of a written representation and agreement, in a form satisfactory to the Committee, in which you represent that the Shares acquired by you upon exercise are being acquired for investment and not with a view to distribution thereof. 6. RIGHTS AS STOCKHOLDER. You shall not be, nor have any of the rights or privileges of, a stockholder of the Company in respect of any Shares purchasable upon the exercise of the Option unless and until certificates representing such Shares have been issued by the Company. 7. ADMINISTRATION. The Compensation Committee of the Company's Board of Directors shall have the power to interpret this Agreement, and all actions taken and all interpretations and determinations made by the Committee shall be final and binding upon the Optionee, the Company, and all other interested persons. 8. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement between the parties with respect to the subject matter hereof, and supersedes all prior agreements and understandings between the parties with respect to such subject matter. Any term or provision of this Agreement may be waived at any time by the party which is entitled to the benefits thereof, and any term or provision of this Agreement may be amended or supplemented at any time by the mutual consent of the parties hereto, except that any waiver of any term or condition, or any amendment, of this Agreement must be in writing. 9. NOTICES. All notices or other communications made or given in connection with this Agreement shall be in writing and shall be deemed to have been duly given when delivered or 3 mailed by registered or certified mail, return receipt requested, to you at the address noted above, and to the Company as set forth below or at such other address as each may specify by notice to the others: To the Company: Spanish Broadcasting System, Inc. 319 Coral Way Miami, Florida 33143 Attention: Joseph A. Garcia Copy to: Kaye, Scholer, Fierman, Hays & Handler, LLP 425 Park Avenue New York, New York 10022 Attention: William E. Wallace, Jr., Esq. Please acknowledge your understanding of the terms of, and acceptance of, the Option by signing the enclosed copy of this letter and returning it pursuant to the above. Sincerely, SPANISH BROADCASTING SYSTEM, INC. By:_____________________________ Name: Title: Understood & Accepted By:______________________ [Name] -----END PRIVACY-ENHANCED MESSAGE-----