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Exhibit 4.1
SECOND SUPPLEMENTAL INDENTURE
This Second Supplemental Indenture (the "Supplemental
Indenture") is made and entered into as of the 2lst day of March, 1997 by and
among Spanish Broadcasting System, Inc., a Delaware corporation (the "Company"),
Spanish Broadcasting System, Inc., a New Jersey corporation, Spanish
Broadcasting System of California, Inc., a California corporation, Spanish
Broadcasting System of Florida, Inc., a Florida corporation, Spanish
Broadcasting System Network, Inc., a New York corporation, SBS Promotions, Inc.,
a New York corporation, ▇▇▇▇▇▇▇ Holdings, Inc., a New York corporation, and SBS
of Greater New York, Inc., a New York corporation (each individually, a
"Guarantor" and collectively, the "Guarantors"), and IBJ ▇▇▇▇▇▇▇▇ Bank & Trust
Company, as trustee (the "Trustee")
WHEREAS, on February 21, 1997, Spanish Broadcasting System of
New York, Inc. ("SBS of New York"), a Guarantor, merged into Spanish
Broadcasting System, Inc., a New Jersey corporation ("SBS-NJ"), with SBS-NJ as
the surviving corporation (the "Merger");
WHEREAS, the Company, the Guarantors and the Trustee have
heretofore executed and delivered an Indenture dated as of June 29, 1994 (as
supplemented by the First Supplemental Indenture dated as of March 26, 1996,
the "Indenture") providing for the issuance by the Company of $107,059,000
aggregate principal amount of 12 1/2% Senior Notes Due 2002 (the "Notes");
WHEREAS, the Company and the Guarantors desire to amend the
Indenture as set forth in this Supplemental Indenture for the purpose of
changing certain provisions of the Indenture as hereinafter set forth;
WHEREAS, all of the conditions set forth in Article 8 of the
Indenture with respect to the execution, delivery, and validity of this
Supplemental Indenture have been performed and fulfilled and the execution and
delivery hereof have been in all respects duly authorized;
NOW, THEREFORE, the Company, the Guarantors and the Trustee
hereby agree as follows:
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ARTICLE I
AMENDMENTS PURSUANT TO
SECTION 8.02. OF THE INDENTURE
Section 1.1. Amendments of Section 1.01 of the Indenture.
(a) Effective as of the Operative Date (as defined in Section
2.1), Section 1.01 of the Indenture shall be amended by replacing the definition
of "Permitted Indebtedness" in Section 1.01 of the Indenture in its entirety
with the following:
"Permitted Indebtedness" means:
(i) Indebtedness of the Company or any Restricted
Subsidiary arising under or in connection with the
Credit Facility;
(ii) Indebtedness under the Notes and the Guarantees;
(iii) Indebtedness not covered by any other clause of
this definition which is outstanding on the date
of the Indenture;
(iv) Indebtedness of the Company to any Restricted
Subsidiary and Indebtedness of any Restricted
Subsidiary to the Company or another Restricted
Subsidiary;
(v) Purchase Money Indebtedness and Capitalized Lease
Obligations incurred to acquire property in the
ordinary course of business which Indebtedness and
Capitalized Lease Obligations do not in the aggregate
exceed 5% of the Company's consolidated total assets;
(vi) Refinancing Indebtedness;
(vii) Indebtedness under the New Notes and the New Notes
Guarantees; provided that New Notes and related New
Notes Guarantees issued upon exchange of Series A
Preferred Stock shall constitute Permitted
Indebtedness only to the extent the principal amount
thereof does not exceed the
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principal amount of Notes redeemed or otherwise
retired after the date of original issuance of the
New Notes and Series A Preferred Stock;
(viii) the Series A Preferred Stock and all dividends
with respect thereto;
(ix) Indebtedness under the New Senior Notes and the
New Senior Notes Guarantees; and
(x) Indebtedness under the Infinity Note.
(b) Effective as of the Operative Date, Section 1.01 of the
Indenture shall be amended by adding the following definitions to Section 1.01
of the Indenture:
"Infinity Note" means the $3,000,000 aggregate principal
amount of Indebtedness issued by the Company to Infinity Holding Corp. of
Orlando in connection with the acquisition of radio station WYSY-FM in Chicago.
"New Senior Notes" means securities issued under the Indenture
(the "New Senior Notes Indenture") dated as of March 15, 1997 by and among the
Company, the Guarantors named therein and IBJ ▇▇▇▇▇▇▇▇ Bank & Trust Company, as
Trustee, not to exceed $75,000,000 aggregate principal amount at any one time
outstanding.
"New Senior Note Guarantees" means the guarantees of the New
Senior Notes issued by Subsidiaries of the Company pursuant to the New Senior
Notes Indenture.
"Primary Warrants" means the 45,557 warrants to purchase
Class A Common Stock of the Company issued pursuant to the Warrant Agreement
dated as of March 25, 1996 between the Company and IBJ ▇▇▇▇▇▇▇▇ Bank & Trust
Company, as Warrant Agent.
Section 1.2. Amendment of Section 4.09 of the Indenture.
Effective as of the Operative Date, Section 4.09 of the
Indenture shall be amended by replacing Section 4.09 in the Indenture in its
entirety with the following:
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Section 4.09. Limitation on Restricted Payments.
The Company will not make, and will not permit any of its
Restricted Subsidiaries to, directly or indirectly, make, any Restricted
Payment, unless:
(a) no Default or Event of Default shall have occurred and be
continuing at the time of or after giving effect to such Restricted
Payment;
(b) immediately after giving effect to such Restricted
Payment, the Company could incur $1.00 of additional Indebtedness
(other than Permitted Indebtedness) under Section 4.06: and
(i) immediately after giving effect to such Restricted
Payment, the aggregate of all Restricted Payments declared or made
after the Issue Date does not exceed the sum of (1) 50% of the
Company's cumulative Consolidated Net Income (or in the event such
Consolidated Net Income shall be a deficit, minus 100% of such deficit)
after June 26, 1994, and (2) 100% of the aggregate Net Proceeds and the
fair market value of marketable securities or other property received
by the Company from the issue or sale, after the Issue Date, of Capital
Stock (other than Disqualified Capital Stock, Series A Preferred Stock,
Capital Stock of the Company sold to any Subsidiary of the Company and
the proceeds from the issuance of capital stock pursuant to the
Warrants or Warrants issued in connection with the original issuance of
the New Notes and the Series A Preferred Stock) of the Company or any
Indebtedness or other securities of the Company convertible into,
exercisable or exchangeable for Capital Stock (other than Disqualified
Capital Stock) of the Company which has been so converted or exercised
or exchanged, as the case may be. For purposes of determining under
this clause (c) the amount expended for Restricted Payments, cash
distributed shall be valued at the face amount thereof and property
other than cash shall be valued at its fair market value.
The provisions of this Section 4.09 shall not prohibit (1) the payment
of any distribution within 60 days after the date of declaration thereof, if at
such date of declaration such payment would comply with the provisions of the
Indenture, (ii)
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the retirement of any shares of Capital Stock of the Company or subordinated
Indebtedness by conversion into, or by or in exchange for, shares of Capital
Stock (other than Disqualified Capital Stock or Series A Preferred Stock), or
out of, the Net Proceeds of the substantially concurrent sale (other than to a
Subsidiary of the Company) of other shares of Capital Stock of the Company
(other than Disqualified Capital Stock or Series A Preferred Stock), (iii) the
redemption or retirement of Indebtedness of the Company subordinated to the
Notes in exchange for, by conversion into, or out of the Net Proceeds of, a
substantially concurrent sale or incurrence of Indebtedness which qualifies as
Refinancing Indebtedness (other than any Indebtedness owed to a Subsidiary),
(iv) the retirement of any shares of Disqualified Capital Stock or Series A
Preferred Stock by conversion into, or by exchange for, shares of Disqualified
Capital Stock, or out of the Net Proceeds of the substantially concurrent sale
(other than to a Subsidiary of the Company) of other shares of Disqualified
Capital Stock; provided that (a) such Disqualified Capital Stock is not subject
to mandatory redemption earlier than either the maturity of the Notes, the
Disqualified Capital Stock or the Series A Preferred Stock being so refunded or
refinanced, (b) the portion, if any, of the Disqualified Capital Stock that is
subject to mandatory redemption on or prior to the maturity date of the Notes
has a weighted average life to mandatory redemption at the time such
Disqualified Capital Stock is incurred that is equal to or greater than the
weighted average life to mandatory redemption of the portion of the Disqualified
Capital Stock or the Series A Preferred Stock being refunded or refinanced that
is subject to mandatory redemption on or prior to the maturity date of the
Notes, (c) such Disqualified Capital Stock is in an aggregate liquidation
preference that is equal to or less than the sum of (x) the aggregate
liquidation preference of Disqualified Capital Stock or Series A Preferred Stock
being refunded, refinanced or extended, (y) the amount of accrued and unpaid
dividends, if any, and premiums owed, if any, on the Disqualified Capital Stock
or Series A Preferred Stock being refunded or refinanced and (z) the amount of
customary fees, expenses and costs related to the incurrence of such
Disqualified Capital Stock or Series A Preferred Stock and (d) such Disqualified
Capital Stock is incurred by the same Person that initially incurred the
Disqualified Capital Stock or Series A Preferred Stock being refunded,
refinanced or extended, except that the Company may incur Disqualified Capital
Stock to refund or refinance
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Disqualified Capital Stock of any Wholly-Owned Restricted Subsidiary of the
Company, (v) the payment of dividends (whether in cash or in shares of Series A
Preferred Stock) on shares of Series A Preferred Stock in accordance with the
terms of the Certificate of Designation, the mandatory or optional redemption of
shares of Series A Preferred Stock in accordance with the terms of the
Certificate of Designation, the mandatory or optional redemption of shares of
Series A Preferred Stock in accordance with the terms of the Certificate of
Designation or the exchange of Series A Preferred Stock for New Notes in
accordance with the terms of the Certificate of Designation, provided that, for
purposes of calculating the amount of Restricted Payments previously made for
purposes of clause (c) of the preceding paragraph, (a) the amount of cash
dividends and the liquidation preference of Series A Preferred Stock dividends
paid on shares of Series A Preferred Stock, (b) the redemption price paid for
any redemption of Series A Preferred Stock and (c) the principal amount of any
New Notes issued in exchange for Series A Preferred Stock shall be included as
Restricted Payments in such calculation (x) for as long as any Series A
Preferred Stock remains outstanding, to the extent of such amounts, and (b) if
no Series A Preferred Stock shall remain outstanding, to the extent that such
amounts, in the aggregate, exceed $37,500,000, (vi) the repurchase by the
Company of the Primary Warrants in accordance with the terms thereof or (vii) so
long as no Default or Event of Default shall have occurred and be continuing,
the payment of dividends and distributions to the stockholders and
warrantholders of the Company in an amount not to exceed $4,000,000 in the
aggregate.
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 the
calculations required by this Section 4.09 were computed, which calculations may
be based upon the Company's latest available financial statements, and that no
Default or Event of Default exists and is continuing and no Default or Event of
Default will result from making the Restricted Payment.
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Section 1.3. Amendments to Section 4.10 of the Indenture.
Effective as of the Operative Date, Section 4.10 of the Indenture
shall be amended by replacing Section 4.10 in the Indenture in its entirety with
the following:
Section 4.10. Limitations on Certain Asset Sales.
(a) The Company will not, and will not permit any of its
Restricted Subsidiaries to, consummate an Asset Sale unless (i) the Company or
its Restricted Subsidiaries, as the case may be, receive consideration at the
time of such sale or other disposition at least equal to the fair market value
thereof (as determined in good faith by the Company's Board of Directors, and
evidenced by a Board Resolution); (ii) not less than 85% of the consideration
received by the Company or its Subsidiaries, as the case may be, is in the form
of cash or instruments included in the definition of Temporary Cash Investments;
and (iii) the Asset Sale Proceeds received by the Company or such Restricted
Subsidiary are applied (A) first, (1) to repay Indebtedness incurred in
compliance with this Indenture secured by Permitted Liens on assets or property
acquired after June 29, 1994 which are subject to such Asset Sale, to the extent
such payment is required by the terms of the agreements governing such
Indebtedness, or (2) to the extent the Company elects, to an investment in
assets (including Capital Stock or other securities purchased in connection with
the acquisition of Capital Stock or property of another person) used or useful
in the radio, television, publishing, programming or business related thereto,
provided that such investment occurs or the Company or a Restricted Subsidiary
enters into contractual commitments to make such investment, subject only to
customary conditions (other than the obtaining of financing), on or prior to the
181st day following receipt of such Asset Sale Proceeds (the "Reinvestment
Date") and Asset Sale Proceeds contractually committed are so applied within 360
days following the receipt of such Asset Sale Proceeds; and (B) second, if on
the Reinvestment Date with respect to any Asset Sale, the Available Asset Sale
Proceeds exceed $5 million, the Company shall apply an amount equal to the
Available Asset Sale Proceeds to an offer to repurchase the Notes, at a purchase
price in cash equal to 100% of the Accreted Value of the Notes, if the date of
purchase is prior to June 15, 1997, and 100% of the principal amount thereof, if
the date of purchase is on or after June 15, 1997, in each case plus accrued
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and unpaid interest, if any, to the date of repurchase (an "Excess Proceeds
Offer"). Notwithstanding the foregoing, (x) Asset Sale Proceeds received from an
Asset Sale including the radio broadcast licenses for the station operated as
WSKQ-FM, New York, or KLAX-FM, Los Angeles, on the Issue Date may not be applied
pursuant to clause (iii)(A) of the preceding sentence and the Reinvestment Date
with respect to such Asset Sale Proceeds shall be the date of receipt thereof
and (y) the greater of $25.0 million, the aggregate, of, or 50% of, the Asset
Sale Proceeds received from Asset Sales including the radio broadcast licenses
for the stations operated as WXLX-AM, New York, KXMG-AM, Los Angeles, and
WCMQ-AM, Miami, may not be applied pursuant to clause (iii)(A) of the preceding
sentence, the Reinvestment Date with respect to such Asset Sale Proceeds shall
be the date of receipt thereof and the purchase price with respect to the
applicable Excess Proceeds Offer with such Asset Sale Proceeds shall be 110% of
the Accreted Value of the Notes, if the date of purchase is prior to June 15,
1997, and 110% of the principal amount of the Notes, if the date of purchase is
on or after June 15, 1997, in each case plus accrued and unpaid interest, if
any, to the date of purchase. If an Excess Proceeds Offer is not fully
subscribed, the Company may retain the portion of the Available Asset Sale
proceeds not required to repurchase Notes.
Section 1.4. Merger.
Pursuant to the Merger, SBS-NJ hereby assumes all of the obligations
of SBS of New York under the Note and the In denture. The obligations under the
Indenture shall remain in full force and effect. The provisions of this Section
1.4 shall be effective as of the date hereof.
ARTICLE II
OPERATIVE DATE
Section 2.1. Operative Date.
(a) Other than in connection with Section 1.4 hereof, as used
in this Supplemental Indenture, the term "Operative Date" means the date on
which the Company delivers to the Trustee an Officers' Certificate (as defined
in the Indenture) certifying
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that the acquisitions of radio stations WYSY-FM in Chicago, Illinois and WRMA-FM
and WXDJ-FM in Miami, Florida have been consummated by the Company.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
Section 3.1. Representations of the Company and the Guarantors.
The Company and the Guarantors jointly and severally, represent and
warrant that:
(a) This Supplemental Indenture has been duly authorized by
each of the Company and the Guarantors, and, assuming due authorization,
execution and delivery by the Trustee, will be a legal, valid and binding
agreement of each of the Company and the Guarantors enforceable against each of
the Company and the Guarantors in accordance with its terms, except as (1) the
enforceability thereof may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in effect
affecting creditors' rights generally, (ii) the availability of equitable
remedies may be limited by equitable principles of general applicability
(regardless of whether in a proceeding in equity or at law) and as may be
limited by the discretion of the court before which any proceeding therefor may
be brought and (iii) rights to indemnity and contribution may be limited by
state or Federal laws relating to securities or by policies underlying such
laws;
(b) The execution, delivery and performance by the Company and
the Guarantors of this Supplemental Indenture, and the consummation of the
transactions contemplated hereby, will not (i) 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, bank loan or credit
agreement, lease or other agreement or instrument to which the Company or any
Guarantor is a party or by which the Company or any of the Guarantors is bound
or to which any of the property or assets of the Company or any of the
Guarantors is subject, (ii) result in any violation of the provisions of the
Certificate
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of Incorporation or the By-laws, in each case as amended, of the Company or any
of the Guarantors 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
the Guarantors or any of their properties, (iii) result in or require the
creation or imposition of any Lien (as defined in the Indenture) upon or with
respect to any of the properties of the Company or any of the Guarantors, or
(iv) constitute a default under any ordinance, license or permit, except, in the
case of the events specified clauses (i), (iii) and (iv) above, for such
conflicts, violations or defaults which would not have a material adverse effect
upon the business, assets, condition (financial or otherwise), results of
operations or prospects of the Company and the Guarantors, taken as a whole, or
on the ability of each of the Company and the Guarantors to perform its
respective obligations under the Indenture; and
(c) No consent, approval, authorization, order, registration
or qualification of or with any court or governmental agency or body is required
for the consummation of the transactions contemplated by this Supplemental
Indenture; and each of the Company and the Guarantors has full power and
authority to enter into and perform its respective obligations under this
Supplemental Indenture.
Section 3.2. Representations of the Trustee.
The Trustee represents that it is duly authorized to execute and
deliver this Supplemental Indenture and perform its obligations hereunder and
that the statements made by it in a Statement of Eligibility on Form T-l, if
any, supplied to the Company are true and accurate subject to the qualifications
set forth therein.
ARTICLE IV
MISCELLANEOUS
Section 4.1. As amended by this Supplemental Indenture, the Indenture is in all
respects ratified and confirmed, and all the terms, conditions and provisions
thereof shall remain in full force and effect.
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Section 4.2. This Supplemental Indenture and the rights and obligations
hereunder shall be governed by, and construed in accordance with, the laws of
the State of New York but 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 4.3. This Supplemental Indenture may be executed in any number of
counterparts each of which shall be an original, but such counterparts shall
together constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Second
Supplemental Indenture to be duly executed as of this 21st day of March, 1997.
SPANISH BROADCASTING SYSTEM, INC.,
for itself and as successor by merger
to Spanish Broadcasting System of New
York, Inc.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇.
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Name: ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇.
Time: President
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Time: Executive V.P. and
Chief Financial Officer
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Guarantors:
SPANISH BROADCASTING SYSTEM
OF FLORIDA, INC.
SPANISH BROADCASTING SYSTEM
NETWORK, INC.
SPANISH BROADCASTING SYSTEM,
INC. (a New Jersey
corporation)
SBS PROMOTIONS, INC.
▇▇▇▇▇▇▇ HOLDINGS, INC.
SBS OF GREATER NEW YORK, INC.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇.
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Name: ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇.
Title: President
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Executive V.P. and
Chief Financial Officer
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Guarantor:
SPANISH BROADCASTING
SYSTEM OF CALIFORNIA, INC.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇.
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Name: ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇.
Title: President
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Executive V.P. and
Chief Financial Officer
IBJ ▇▇▇▇▇▇▇▇ BANK & TRUST
COMPANY, as Trustee
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Assistant Vice President
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