<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON NOVEMBER 12, 1998
REGISTRATION NO. 333-61179
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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AMENDMENT NO. 1
TO
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------------------
COX RADIO, INC.
(Exact name of Registrant as specified in its charter)
<TABLE>
<S> <C> <C>
DELAWARE 4832 58-1620022
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer Identification
incorporation or organization) Classification Code Number) Number)
</TABLE>
1400 LAKE HEARN DRIVE, N.E., ATLANTA, GEORGIA 30319
(Address, including zip code, and telephone number, including area code, of
Registrant's principal executive office)
---------------------
MARITZA C. PICHON
CHIEF FINANCIAL OFFICER
COX RADIO, INC.
1400 LAKE HEARN DRIVE, N.E.
ATLANTA, GEORGIA 30319
(404) 843-5000
(Name, address, including zip code, and telephone number, including area code,
of Registrant's agent for service)
---------------------
PLEASE ADDRESS A COPY OF ALL COMMUNICATIONS TO:
STUART A. SHELDON, ESQ.
DOW, LOHNES & ALBERTSON, PLLC
1200 NEW HAMPSHIRE AVENUE, N.W.
WASHINGTON, D.C. 20036
(202) 776-2000
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
As soon as practicable after this Registration Statement becomes effective.
---------------------
If the securities being registered on this Form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, 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, 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 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. [X]
CALCULATION OF REGISTRATION FEE
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<CAPTION>
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PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF EACH CLASS OF SECURITIES AMOUNT TO BE OFFERING AGGREGATE AMOUNT OF
TO BE REGISTERED REGISTERED PRICE PER UNIT(1) OFFERING PRICE(1) REGISTRATION FEE(2)
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
6.250% Notes due 2003............ $100,000,000 100% $100,000,000 $29,500.00
6.375% Notes due 2005............ $100,000,000 100% $100,000,000 $29,500.00
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</TABLE>
(1) Estimated solely for the purpose of calculating the registration fee in
accordance with Rule 457 of the Securities Act of 1933, as amended.
(2) Previously paid.
---------------------
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, AS AMENDED, OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(A), MAY DETERMINE.
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<PAGE> 2
EXPLANATORY NOTE
This Registration Statement covers the registration of the $100,000,000
aggregate principal amount of 6.250% Notes due 2003 (the "2003 Notes") and of
the $100,000,000 aggregate principal amount of 6.375% Notes due 2005 (the "2005
Notes" and, together with the 2003 Notes, the "New Notes"), which are being
issued by Cox Radio, Inc. (the "Company") in exchange for 6.250% Notes due 2003
and the 6.375% Notes due 2005 with terms substantially identical to the New
Notes (collectively, the "Old Notes"). The Old Notes were previously issued and
sold by the Company in an offering exempt from the registration requirements of
the Securities Act of 1933, as amended. The complete Prospectus contained herein
relates to the issuance and exchange of the New Notes for the Old Notes.
ii
<PAGE> 3
PROSPECTUS
SUBJECT TO COMPLETION DATED NOVEMBER 12, 1998
(COX RADIO INC. LOGO)
OFFER TO EXCHANGE 6.250% NOTES DUE 2003
AND 6.375% NOTES DUE 2005
WHICH HAVE BEEN REGISTERED UNDER THE SECURITIES ACT
FOR ANY AND ALL OUTSTANDING 6.250% NOTES DUE 2003
AND 6.375% NOTES DUE 2005
THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M.,
NEW YORK CITY TIME, ON DECEMBER 14, 1998, UNLESS EXTENDED
Cox Radio, Inc. ("Cox Radio" or the "Company") hereby offers, upon the terms
and subject to the conditions set forth in this Prospectus and the accompanying
Letter of Transmittal (which together constitute the "Exchange Offer"), to
exchange $1,000 principal amount of 6.250% Notes due 2003 (the "2003 New Notes")
and $1,000 principal amount of 6.375% Notes due 2005 (the "2005 New Notes" and,
together with the 2003 New Notes, the "New Notes"), which have been registered
under the Securities Act of 1933, as amended (the "Securities Act"), pursuant to
a Registration Statement (as defined herein) of which this Prospectus
constitutes a part, in exchange, respectively, for each $1,000 principal amount
of 6.250% Notes due 2003 (the "2003 Old Notes") and $1,000 principal amount of
6.375% Notes due 2005 (the "2005 Old Notes" and, together with the 2003 Old
Notes, the "Old Notes" and, collectively with the New Notes, the "Notes"),
respectively. As of the date of this Prospectus, $100,000,000 aggregate
principal amount of 2003 Old Notes and $100,000,000 aggregate principal amount
of 2005 Old Notes are outstanding.
The form and terms of the New Notes are the same in all material respects as
the form and terms of the Old Notes for which they are to be exchanged, except
that (i) the issuance of the New Notes will have been registered under the
Securities Act and, therefore, the New Notes will not bear legends restricting
the transfer thereof and (ii) holders of the New Notes will not be entitled to
certain rights of holders of Old Notes under the Registration Rights Agreement
(as defined herein). The New Notes will evidence the same debts as the Old Notes
(which they replace) and will be issued under and be entitled to the benefits of
the Indenture dated as of May 26, 1998 (the "Indenture") by and between the
Company and The Bank of New York, as Trustee (the "Trustee"), governing the Old
Notes. See "The Exchange Offer" and "Description of the Notes."
The Company will accept for exchange any and all Old Notes that are validly
tendered on or prior to 5:00 p.m., New York City time, on the Expiration Date.
The Exchange Offer is not conditioned upon any minimum aggregate principal
amount of Old Notes being tendered for exchange. However, the Exchange Offer is
subject to certain conditions, which may be waived by the Company, and to the
terms and provisions of the Registration Rights Agreement. Old Notes may be
tendered only in denominations of $1,000 and integral multiples thereof. The
Exchange Offer will expire at 5:00 p.m., New York City time, on December 14,
1998 (the "Expiration Date"), unless the Company, in its sole discretion,
extends the Exchange Offer (in which case the term "Expiration Date" shall mean
the latest date and time to which the Exchange Offer is extended). Old Notes
tendered pursuant to the Exchange Offer may be withdrawn at any time prior to
5:00 p.m. New York City time on the business day prior to the Expiration Date;
otherwise such tenders are irrevocable.
SEE "RISK FACTORS" BEGINNING ON PAGE 18 FOR A DISCUSSION OF CERTAIN FACTORS
THAT SHOULD BE CONSIDERED BY PARTICIPANTS IN THE EXCHANGE OFFER.
---------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
The New Notes are redeemable, at the option of the Company, in whole at any
time or in part from time to time, at a redemption price equal to the greater of
(i) 100% of their principal amount and (ii) the sum of the present values of the
principal amount and the remaining scheduled payments of interest thereon,
discounted to the redemption date on a semiannual basis at the Treasury Rate (as
defined herein) plus 10 basis points in the case of the 2003 New Notes and 15
basis points in the case of the 2005 New Notes, plus in either case, accrued
interest thereon to the date of redemption. See "Description of the Notes." The
New Notes will mature on May 15, 2003 with respect to the 2003 New Notes and May
15, 2005 with respect to the 2005 New Notes, unless redeemed prior thereto.
The New Notes are senior unsecured obligations of the Company and rank pari
passu with all existing and future unsecured and unsubordinated obligations of
the Company. Each of the Company's existing or future subsidiaries (the "Note
Guarantors") that guarantees amounts payable by the Company under the Credit
Agreement (as defined herein) or under any future senior, unsecured credit
facility between the Company and its lenders thereunder will fully and
unconditionally guarantee (each, a "New Note Guarantee") all amounts payable
under the New Notes as long as such Subsidiary is a guarantor under the Credit
Agreement or such future credit facility. The New Note Guarantees, if any, will
be senior unsecured obligations of the applicable Note Guarantors and will rank
pari passu with all existing and future unsecured and unsubordinated obligations
of such Note Guarantors. The New Note Guarantees, if any, will be the same in
all material respects as the form and terms of the guarantees in respect of the
Old Notes. The initial note guarantors for the Old Notes were WSB, Inc. and
WHIO, Inc., each a Delaware corporation (collectively, the "Initial Note
Guarantors"). WSB, Inc. was merged with and into the Company on November 10,
1998 and WHIO, Inc. was merged with and into the Company on November 1, 1998,
and, therefore, are no longer Note Guarantors. As of the date of this
Prospectus, the Notes do not have the benefit of any Note Guarantees.
November 12, 1998
<PAGE> 4
(Cover page continued)
The Exchange Offer is being made to satisfy certain obligations of the
Company under the Registration Rights Agreement dated as of May 26, 1998 (the
"Registration Rights Agreement") among the Company, the Initial Note Guarantors
and NationsBanc Montgomery Securities LLC ("NationsBanc"), Chase Securities Inc.
("Chase") and J.P. Morgan Securities Inc. ("J.P. Morgan" and together with
NationsBanc and Chase, the "Initial Purchasers"). Upon consummation of the
Exchange Offer, holders of Old Notes that were not prohibited from participating
in the Exchange Offer and did not tender their Old Notes will not have any
registration rights under the Registration Rights Agreement with respect to such
untendered Old Notes and, accordingly, such Old Notes will continue to be
subject to the restrictions on transfer contained in the legend thereon.
Based upon interpretations by the staff of the Securities and Exchange
Commission (the "Commission") set forth in certain no-action letters issued to
third parties, the Company believes that the New Notes issued pursuant to the
Exchange Offer in exchange for Old Notes may be offered for resale, resold and
otherwise transferred by any holder thereof (other than a broker-dealer, as set
forth below, or any such holder that is an "affiliate" of the Company within the
meaning of Rule 405 under the Securities Act of 1933, as amended (the
"Securities Act")) without compliance with the registration and prospectus
delivery requirements of the Securities Act, provided that such New Notes are
acquired in the ordinary course of such holder's business and that such holder
has no arrangement or understanding with any person to participate in the
distribution of such New Notes. See "The Exchange Offer -- Resale of the New
Notes." Holders of Old Notes wishing to accept the Exchange Offer must represent
to the Company, as required by the Registration Rights Agreement, that such
conditions have been met and that such holder is not an "affiliate" of the
Company within the meaning of Rule 405 under the Securities Act. Each
broker-dealer that is the beneficial owner (within the meaning of Rule 13d-3
under the Securities Exchange Act of 1934, as amended (the "Exchange Act")), of
New Notes for its own account pursuant to the Exchange Offer (a "Participating
Broker-Dealer") must represent that the Old Notes tendered in exchange therefor
were acquired as a result of market-making activities or other trading
activities and must acknowledge that it will deliver a prospectus in connection
with any resale of such New Notes. The Letter of Transmittal states that by so
acknowledging and by delivering a prospectus, a Participating Broker-Dealer will
not be deemed to admit that it is an "underwriter" within the meaning of the
Securities Act. This Prospectus, as it may be amended or supplemented from time
to time, may be used by any broker-dealer (other than an affiliate of the
Company) in connection with resales of New Notes received in exchange for Old
Notes where such Old Notes were acquired by such broker-dealer as a result of
market-making activities or other trading activities. The Company has agreed
that, for a period of up to 90 days after the Expiration Date, it will make this
Prospectus available to any broker-dealer for use in connection with any such
resale. See "Plan of Distribution." Any holder who tenders in the Exchange Offer
with the intention to participate, or for the purpose of participating, in a
distribution of the New Notes or who is an affiliate of the Company may not rely
on the position of the staff of the Commission enunciated in no-action letters
and, in the absence of an exemption therefrom, must comply with the registration
and prospectus delivery requirements of the Securities Act in connection with a
secondary resale transaction. Failure to comply with such requirements in such
instance may result in such holder incurring liability under the Securities Act
for which the holder is not indemnified by the Company. No affiliate of the
Company may rely on such no-action letters and any such affiliate must comply
with the registration and prospectus delivery requirements of the Securities Act
in connection with a secondary resale transaction.
The Company has not entered into any arrangement or understanding with any
person to distribute the New Notes to be received in the Exchange Offer.
The Old Notes were originally issued and sold on May 26, 1998 in an
offering of $200,000,000 aggregate principal amount of the Old Notes (the
"Offering"). The Offering was exempt from registration under the Securities Act
in reliance upon the exemptions provided by Rule 144A under the Securities Act
and Section 4(2) of the Securities Act. Accordingly, the Old Notes may not be
reoffered, resold or otherwise pledged, hypothecated or transferred in the
United States unless so registered or unless an exemption from the registration
requirements of the Securities Act and applicable state securities laws is
available. Upon completion of the Exchange Offer, Old Notes which have not been
exchanged for New Notes will remain outstanding. See "The Exchange
Offer -- Consequences of Failure to Exchange."
i
<PAGE> 5
The Company will not receive any proceeds from the Exchange Offer.
There has not previously been any public market for the Old Notes or the
New Notes. The Company does not intend to list the New Notes on any securities
exchange or to seek approval for quotation through any automated quotation
system. The Initial Purchasers (as defined herein) indicated to the Company that
they intend to effect offers and sales of the New Notes in market-making
transactions at negotiated prices related to prevailing market prices at the
time of sale, but are not obligated to do so and such market-making activities
may be discontinued at any time. The Initial Purchasers may act as principal or
agent in such transactions. There can be no assurance that an active market for
the New Notes will develop or that such trading market will be liquid. See "Risk
Factors -- Lack of Public Market for the Notes." Moreover, to the extent that
Old Notes are tendered and accepted in the Exchange Offer, the trading market
for untendered and tendered but unaccepted Old Notes could be adversely
affected.
THE EXCHANGE OFFER IS NOT BEING MADE TO, NOR WILL THE OBLIGOR ACCEPT
SURRENDERS FOR EXCHANGE FROM, HOLDERS OF OLD NOTES IN ANY JURISDICTION IN WHICH
THE EXCHANGE OFFER OR THE ACCEPTANCE THEREOF WOULD NOT BE IN COMPLIANCE WITH THE
SECURITIES OR BLUE SKY LAWS OF SUCH JURISDICTION.
NO PERSON IS AUTHORIZED IN CONNECTION WITH ANY OFFERING HEREBY TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS OR
THE ACCOMPANYING LETTER OF TRANSMITTAL, AND, IF GIVEN OR MADE, SUCH INFORMATION
OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE
COMPANY. NEITHER THE DELIVERY OF THIS PROSPECTUS OR THE ACCOMPANYING LETTER OF
TRANSMITTAL NOR ANY EXCHANGE MADE HEREUNDER SHALL UNDER ANY CIRCUMSTANCES CREATE
ANY IMPLICATION THAT THE INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY DATE
SUBSEQUENT TO THE DATE HEREOF.
---------------------
TABLE OF CONTENTS
<TABLE>
<S> <C>
Available Information....................................... iv
Incorporation of Certain Documents by Reference............. iv
Prospectus Summary.......................................... 1
Pro Forma Combined Statement of Operations.................. 15
Certain Definitions and Market and Industry Data............ 17
Risk Factors................................................ 18
Use of Proceeds............................................. 22
Capitalization.............................................. 23
The Company................................................. 24
Business.................................................... 25
Legislation and Regulation.................................. 36
Management.................................................. 37
Security Ownership of Certain Beneficial Owners............. 38
Description of Certain Indebtedness......................... 39
The Exchange Offer.......................................... 40
Description of the Notes.................................... 50
Certain United States Federal Income Tax Considerations..... 61
Plan of Distribution........................................ 67
Legal Matters............................................... 67
Experts..................................................... 67
</TABLE>
ii
<PAGE> 6
CAUTIONARY STATEMENT REGARDING
FORWARD LOOKING STATEMENTS
THIS PROSPECTUS INCLUDES "FORWARD-LOOKING STATEMENTS" WITHIN THE MEANING OF
SECTION 27A OF THE SECURITIES ACT OF 1933, AS AMENDED, AND SECTION 21E OF THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. ALL STATEMENTS REGARDING THE
COMPANY'S AND ITS SUBSIDIARIES EXPECTED FINANCIAL POSITION, BUSINESS AND
FINANCING PLANS ARE FORWARD-LOOKING STATEMENTS. ALTHOUGH THE COMPANY AND ITS
SUBSIDIARIES BELIEVE THAT THE EXPECTATIONS REFLECTED IN SUCH FORWARD-LOOKING
STATEMENTS ARE REASONABLE, THEY CAN GIVE NO ASSURANCE THAT SUCH EXPECTATIONS
WILL PROVE TO HAVE BEEN CORRECT. IMPORTANT FACTORS THAT COULD CAUSE ACTUAL
RESULTS TO DIFFER MATERIALLY FROM SUCH EXPECTATIONS ("CAUTIONARY STATEMENTS")
ARE DISCLOSED IN THIS PROSPECTUS, INCLUDING, WITHOUT LIMITATION, IN CONJUNCTION
WITH THE FORWARD-LOOKING STATEMENTS INCLUDED IN THIS PROSPECTUS AND UNDER "RISK
FACTORS." ALL SUBSEQUENT WRITTEN AND ORAL FORWARD-LOOKING STATEMENTS
ATTRIBUTABLE TO THE COMPANY, ITS SUBSIDIARIES OR PERSON ACTING ON BEHALF OF ANY
OF THEM ARE EXPRESSLY QUALIFIED IN THEIR ENTIRETY BY THE CAUTIONARY STATEMENTS.
iii
<PAGE> 7
AVAILABLE INFORMATION
The Company has filed with the Commission a Registration Statement on Form
S-4 (of which this Prospectus is a part and which term shall encompass any
amendments thereto) pursuant to the Securities Act with respect to the Exchange
Offer. As permitted by the rules and regulations of the Commission, this
Prospectus does not contain all of the information set forth in the Registration
Statement and the exhibits and schedules thereto. For further information about
the Company and the Exchange Offer, reference is hereby made to the Registration
Statement and to such exhibits and schedules. Statements contained herein
concerning the provisions of any documents filed as an exhibit to the
Registration Statement or otherwise filed with the Commission are not
necessarily complete, and in each instance reference is made to the copy of such
document so filed. Each such statement is qualified in its entirety by such
reference.
As of the date of this Prospectus, the Company is subject to the
information reporting requirements of the Exchange Act. In addition, under the
Indenture governing the Notes, the Company will be required to furnish to the
Trustee and to registered holders of the Notes audited annual consolidated
financial statements, unaudited quarterly consolidated financial reports and
certain other reports. The Registration Statement, the exhibits and schedules
forming a part thereof and the reports and other information filed by the
Company with the Commission pursuant to the informational requirements of the
Exchange Act may be inspected without charge and copied upon payment of certain
fees at the public reference facilities maintained by the Commission at Room
1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, and at
the following Regional Offices of the Commission: New York Regional Office,
Seven World Trade Center, 13th Floor, New York, New York 10048, and Chicago
Regional Office, Northwestern Atrium, 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661. The Commission also maintains a World Wide Web site on
the Internet at http://www.sec.gov that contains reports and other information
regarding registrants that file electronically with the Commission.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
GENERAL
The following documents filed by the Company with the Commission are
incorporated into this Prospectus by reference:
1. The Company's Current Report on Form 8-K dated April 14, 1997
(Commission File No. 1-12187);
2. The Company's Annual Report on Form 10-K for the year ended
December 31, 1997 (Commission File No. 1-12187);
3. The Company's Quarterly Report on Form 10-Q for the quarter ended
June 30, 1998 (Commission File No. 1-12187);
4. The Company's Proxy Statement for the 1998 Annual Meeting of
Stockholders filed pursuant to Section 14(A) of the Exchange Act; and
5. The Company's Current Report on Form 8-K dated June 4, 1998
(Commission File No. 1-12187).
All documents subsequently filed by the Company pursuant to Section 13(a),
13(c), 14 or 15(d) of the Exchange Act after the date hereof and prior to the
termination of this Exchange Offer shall be deemed to be incorporated by
reference into this Prospectus and to be a part of this Prospectus from the date
of filing of such document. Any statement contained herein or in a document
incorporated or deemed to be incorporated by reference herein shall be deemed to
be modified or superseded for purposes of this Prospectus to the extent that a
statement contained herein or in any other subsequently filed document which
also is or is deemed to be incorporated by reference herein modifies or
supersedes such statement. Any statement so modified or superseded shall not be
deemed, except as so modified or superseded, to constitute a part of this
Prospectus.
As used herein, the terms "Prospectus" and "herein" mean this Prospectus,
including the documents incorporated or deemed to be incorporated herein by
reference, as the same may be amended, supplemented or otherwise modified from
time to time. Statements contained in this Prospectus as to the contents of any
iv
<PAGE> 8
contract or other document referred to herein do not purport to be complete, and
where reference is made to the particular provisions of such contract or other
document, such provisions are qualified in all respects by reference to all of
the provisions of such contract or other document.
The Company will provide without charge to any person to whom this
Prospectus is delivered, on the written or oral request of such person, a copy
of any or all of the future documents incorporated by reference herein (other
than exhibits, unless such exhibits are specifically incorporated by reference
in such documents). Requests for such documents should be directed to: Maritza
Pichon, Chief Financial Officer, Cox Radio, Inc., 1400 Lake Hearn Drive, N.E.,
Atlanta, Georgia 30319.
v
<PAGE> 9
PROSPECTUS SUMMARY
The following information is qualified in its entirety by the more detailed
information and financial statements appearing elsewhere in, or incorporated by
reference in, this Prospectus. The information in, or incorporated by reference
in, this Prospectus, other than the historical financial data, gives effect to
certain planned acquisitions and dispositions by the Company. See
"Business -- Pending Transactions." Consummation of the Pending Transactions (as
defined herein) is contingent on certain approvals; there can be no assurance
that the approval of the Federal Communications Commission ("FCC") to the
Pending Transactions will be obtained or that other closing conditions to the
Pending Transactions will be satisfied or waived.
THE COMPANY
Cox Radio, Inc., a Delaware corporation ("Cox Radio" or the "Company"), is
one of the ten largest radio broadcasting companies in the United States, based
on both net revenues and number of stations as of August 1, 1998. Cox Radio,
upon completion of the Pending Transactions, will own or operate, or provide
sales and marketing services for 58 radio stations (41 FM and 17 AM) clustered
in 13 markets, including the 18 stations acquired from NewCity Communications,
Inc. ("NewCity") during 1997 (the "NewCity Acquisition"). On a pro forma basis
after giving effect to the Recent Transactions and the Pending Transactions for
the entire year, Cox Radio would have generated net revenue of $237.4 million
and Broadcast Cash Flow (as defined herein) of $80.2 million for the year ended
December 31, 1997.
Cox Radio is an indirect majority-owned subsidiary of Cox Enterprises,
Inc., a Delaware corporation ("CEI"). CEI indirectly owns approximately 69% of
the Company's Common Stock (as herein defined) and has approximately 96% of the
voting power of Cox Radio. The Company has two classes of common stock
outstanding, Class A Common Stock, par value $1.00 per share (the "Class A
Common Stock"), and Class B Common Stock, par value $1.00 per share (the "Class
B Common Stock"), collectively defined as the "Common Stock." The Class A Common
Stock is publicly traded on The New York Stock Exchange ("NYSE") under the
symbol "CXR." CEI's wholly-owned subsidiary, Cox Broadcasting, Inc., a Delaware
corporation ("Cox Broadcasting"), is the sole stockholder of the shares of the
Company's Class B Common Stock. CEI, a privately-held corporation headquartered
in Atlanta, is one of the largest media companies in the United States, with
consolidated 1997 revenues of approximately $4.9 billion. CEI, which has
approximately 100 years of experience in the media and communications industry
and over 60 years experience in the radio broadcasting business, publishes 16
daily and 11 weekly newspapers, owns and/or operates eleven television stations
and owns approximately 75% of Cox Communications, Inc. ("CCI"), a publicly
traded broadband communications company (NYSE: COX) with approximately 3.8
million cable television customers. CEI is also the world's largest operator of
auto auctions through Manheim Auctions.
Cox Radio, as part of CEI, has been a pioneer in radio broadcasting,
building its first radio station in 1934, acquiring its flagship station, WSB-AM
in Atlanta in 1939 and launching its first FM station, WSB-FM in Atlanta in
1948. Prior to Cox Radio's initial public offering in September 1996, CEI
transferred all of its U.S. radio operations to Cox Radio (the "Cox Radio
Consolidation").
Cox Radio seeks to maximize the revenues and Broadcast Cash Flow of its
radio stations by operating and developing clusters of stations in
demographically attractive and rapidly growing markets, including major markets
such as Los Angeles and Atlanta and Sunbelt markets such as Miami, Tampa,
Orlando, San Antonio and Birmingham. During the past five years, the 13 markets
in which the Company's stations currently operate generated, on an aggregate
basis, greater radio advertising revenue growth than the average of 5.3%, which
was calculated using revenue projections obtained from the Radio Advertising
Bureau, for the U.S. radio industry as a whole. The NewCity Acquisition enhanced
the clustering of the Company's radio stations by increasing the total number of
markets in which Cox Radio owned and/or operated radio stations to 12 and by
strengthening the Company's penetration in those markets. The Long Island
Acquisition increased the number of markets where Cox Radio owns and/or operates
radio stations to 13. Cox Radio owns or operates four or more stations in 10 of
its 13 markets.
As a result of the Company's management, programming and sales efforts, the
Company's radio stations are characterized by strong ratings and above average
power ratios. The Company's stations are diversified in terms of format, target
audience, geographic location and stage of development. Cox Radio has a track
record of acquiring, repositioning and improving the operating performance of
previously underperforming stations.
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<PAGE> 10
Management believes that a number of the Company's stations have significant
growth opportunities or turnaround potential and can therefore be characterized
as start-up or developing stations. Generally, the Company considers start-up or
developing stations to include those which have been recently acquired by the
Company and offer the greatest potential for growth. Currently, the Company
considers 29 of its stations to be start-up or developing stations. Cox Radio
believes these stations can achieve significant Broadcast Cash Flow growth by
employing the Company's operating strategy. Management believes that its mix of
stations in different stages of development enables it to maximize the Company's
growth potential.
Cox Radio's senior operating management is comprised of six individuals
with an average of over 24 years of experience in the radio broadcasting
industry, including an average of over 15 years with Cox Radio. The Company
believes that this experienced senior management team is well positioned to
manage larger radio station clusters and take advantage of new opportunities
arising in the U.S. radio broadcasting industry.
The following table sets forth certain information with respect to Cox
Radio and its markets:
<TABLE>
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PRO FORMA COMPANY DATA MARKET DATA
------------------------------------------------- -------------------------------------------------
1997
COMBINED POWER 1997
NUMBER 1997 STATION RATIO FOR MARKET 1997 ADVERTISING
OF COMBINED GROUP RADIO RADIO MARKET REVENUE 1997
STATIONS STATION AUDIENCE STATIONS ADVERTISING RADIO GROWTH METRO
--------- GROUP MARKET OWNED OR REVENUE ADVERTISING CAGR MARKET
MARKET FM AM MARKET SHARE SHARE(A) OPERATED(B) RANK(C) REVENUE(D) 1992-97 RANK(E)
- ------ --- --- ------------ -------- ----------- ----------- ----------- ----------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Los Angeles.......... 3 1 13.2 9.1 1.5 1 $575 6.3% 2
Atlanta.............. 2 2 30.6 18.5 1.7 10 222 14.8 12
Miami................ 2 -- 9.9 11.0 0.9 12 198 12.7 11
Tampa................ 3 1 13.3 13.9 1.0 19 102 10.0 21
Orlando.............. 5 2 31.7 30.6 1.0 28 76 9.2 38
San Antonio.......... 5 3 33.9 30.5 1.1 32 68 8.7 33
Long Island.......... 3 -- 27.0(f) 9.6 2.8 48 41 5.7 16
Louisville........... 3 -- 7.3 8.5 0.9 47 41 7.2 52
Birmingham........... 5 2 41.5 36.3 1.1 50 40 9.2 55
Tulsa................ 3 2 40.0 32.8 1.2 55 35 10.1 60
Dayton............... 3 2 31.2 22.8 1.4 58 34 7.2 54
Syracuse............. 3 2 49.9 32.1 1.6 71 24 4.8 71
Bridgeport........... 1 -- 18.8 14.6 1.3 90 17 7.2 114
</TABLE>
- ---------------
(a) Audience share data based upon all persons aged 25-54.
(b) A station's or station group's power ratio is defined as such station's or
station group's revenue market share divided by audience market share of
adults 25-54.
(c) Ranking of the principal radio market served by the stations among all radio
markets in the United States by 1997 market revenue, according to BIA's
Investing in Radio, 1998 ("BIA").
(d) In millions of dollars.
(e) Ranks assigned by BIA based on population in the market.
(f) Revenue market share obtained from Inside Radio's Who Owns What, May 4,
1998.
OPERATING STRATEGY
The following is a summary of the key elements of the Company's operating
strategy:
Clustering of Stations. Cox Radio operates its stations in clusters
to (i) enhance net revenue growth by increasing the appeal of the Company's
stations to advertisers and enabling such stations to compete more
effectively with other forms of advertising and (ii) achieve operating
efficiencies by consolidating broadcast facilities, eliminating duplicative
positions in management and production and reducing overhead expenses.
Management believes that operating several radio stations in each of its
markets will enable its sales teams to offer advertisers more attractive
advertising packages.
2
<PAGE> 11
Development of Underperforming Stations. The Company's management has
demonstrated its ability to acquire underperforming radio stations and
develop them into consistent ratings and revenue leaders. The Company's
historic margins reflect the acquisition and continued development of
underperforming stations, as well as the fact that increases in net revenue
are typically realized subsequently to increases in audience share.
Implementation of the Company's Management Philosophy. The Company's
local station operations are supported by a lean corporate staff which
employs a management philosophy emphasizing (i) market research and
targeted programming; (ii) a customer-focused selling strategy; and (iii)
marketing and promotional activities.
Market Research and Targeted Programming. Cox Radio's research,
programming and marketing strategy combines extensive research with an
assessment of competitors' vulnerabilities and market dynamics in order
to identify specific audience opportunities within each market. Cox
Radio also retains consultants and research organizations to continually
evaluate listener preferences. Using this information, Cox Radio tailors
the programming, marketing and promotions of each Cox Radio station to
maximize its appeal to its target audience. Cox Radio's disciplined
application of market research enables each of its stations to be
responsive to the changing preferences of its targeted listeners.
Customer-Focused Selling Strategy. The Company utilizes a unique,
customer-focused approach to selling advertising known as the
Consultative Selling System. The Company's sales personnel are trained
to approach each advertiser with a view towards solving the marketing
needs of the customer. In this regard, the sales staff consults with
customers, attempts to understand their business goals and offers
comprehensive marketing solutions, including the use of radio
advertising. Instead of merely selling station advertising time, the
Company's sales personnel are encouraged to develop innovative marketing
strategies for the station's advertising customers.
Marketing and Promotional Activities. The Company's stations
regularly engage in significant local promotional activities, including
advertising on local television and in local print media, participating
in telemarketing and direct mailings and sponsoring contests, concerts
and events. Cox Radio also engages in joint promotional activities with
other media in its markets to further leverage the Company's promotional
spending.
Strong Management Teams. In addition to relying upon its experienced
senior operating management, the Company places great importance on the
hiring and development of strong local management teams and has been
successful in retaining experienced management teams that have strong ties
to their communities and customers. The Company invests significant
resources in identifying and training employees to create a talented team
of managers at all levels of station operations. Local managers are
empowered to run the day-to-day operations of their stations and to develop
and implement policies that will improve station performance and establish
long-term relationships with listeners and advertisers.
ACQUISITION STRATEGY
In the ordinary course of its business, Cox Radio seeks opportunities to
acquire radio stations that it believes will provide added value to the Company.
During the last several years, the Company has implemented its strategy of
clustering radio stations in several of its existing markets by acquiring
additional radio stations. The radio stations acquired by Cox Radio in the past
have primarily been underperforming, and Cox Radio has generally improved the
operating and financial performance of such stations. The Company intends to
continue to make acquisitions where permissible in the markets in which it
operates and may also make opportunistic acquisitions in additional markets in
which the Company believes that it can cost-effectively achieve a leading
position in terms of audience and revenue share. The nature and timing of
further acquisitions are uncertain and difficult to estimate.
3
<PAGE> 12
RECENT TRANSACTIONS
Orlando Acquisition
In March 1997, the Company exchanged WCKG-FM and WYSY-FM in Chicago for
WHOO-AM, WHTQ-FM and WMMO-FM in Orlando (the "Orlando Acquisition"). The Orlando
Acquisition resulted in a pre-tax gain of approximately $49 million. In addition
to receiving the three Orlando stations, Cox Radio also received cash proceeds
of approximately $20 million. Prior to the NewCity Acquisition, the Orlando
stations were operated by NewCity since July 1996 under an LMA (as defined
herein).
Tampa Acquisition
In March 1997, the Company acquired WFNS-AM in Tampa for an aggregate
consideration of $1.5 million (the "Tampa Acquisition"). The Company had been
operating this station pursuant to an LMA or a JSA (as defined herein) since
June 1995.
Los Angeles Acquisition
In April 1997, Cox Radio completed its acquisition of the license and
certain assets of KRTO-FM in Los Angeles for $19 million in cash (the "Los
Angeles Acquisition").
NewCity Acquisition
In April 1997, the Company, through the merger of its wholly owned
subsidiary, New Cox Radio II, Inc., with and into NewCity, with NewCity
surviving as a wholly owned subsidiary of Cox Radio, acquired all of the issued
and outstanding capital stock of NewCity in the NewCity Acquisition. Cox Radio
purchased the stock of NewCity for an aggregate consideration of approximately
$253 million, including approximately $87 million in assumption of NewCity
indebtedness and approximately $3 million in working capital adjustments. To
consummate the NewCity Acquisition, the Company utilized approximately $56
million of amounts due from CEI and borrowed approximately $110 million pursuant
to the Company's $300 million, five-year, senior, unsecured revolving credit
facility with certain banks (the "Credit Agreement"), including Chase Bank of
Texas, N.A. (formerly Texas Commerce Bank National Association), as
Administrative Agent. On April 2, 1997, NewCity was merged with and into the
Company, with the Company as the surviving corporation. NewCity's subsidiaries
were subsequently consolidated into Cox Radio. In October 1997, the Company
disposed of the assets of American Comedy Network, a former subsidiary of
NewCity, for aggregate proceeds of approximately $1.1 million including certain
non-compete agreements.
Birmingham Acquisitions I and II and Birmingham Disposition
In November 1998, the Company consummated the acquisition of radio stations
WBHJ-FM and WBHK-FM in Birmingham, Alabama (the "Birmingham Acquisition I") for
an aggregate consideration of $17 million. Since August 1, 1997, the Company had
been operating WBHJ-FM and WBHK-FM under an LMA.
In May 1997, the Company agreed to acquire WENN-FM and WAGG-AM in
Birmingham, Alabama, for consideration of $15 million (the "Birmingham
Acquisition II"). In July 1997, the Company assigned its right to purchase
WENN-FM for consideration of $14.5 million to a third party (the "Birmingham
Disposition"). The Company consummated these transactions during November 1997.
San Antonio Transactions
In September 1997, the Company acquired KISS-FM, KSMG-FM and KLUP-AM in San
Antonio, Texas for an aggregate consideration of $30.4 million plus certain
non-compete agreements (the "San Antonio Acquisition I").
In March 1998, the Company acquired KONO-FM and KONO-AM in San Antonio for
$23 million (the "San Antonio Acquisition II").
4
<PAGE> 13
In December 1997, the Company acquired an option to purchase radio station
KRIO-FM, serving the San Antonio market, for a purchase price of $9 million. The
Company entered into an agreement to assign this option in January 1998 for an
aggregate consideration of $250,000 (the "San Antonio Disposition"). The closing
of the San Antonio Disposition occurred in May 1998.
Dayton Acquisition
In October 1998, the Company consummated the acquisition of radio stations
WCLR-FM, WZLR-FM and WPTW-AM, serving the Dayton, Ohio market for approximately
$6 million (the "Dayton Acquisition"). The Company had been operating these
stations pursuant to an LMA since December 1997.
Long Island Acquisition
In May 1998, the Company acquired the assets of radio stations WBLI-FM,
WBAB-FM, WHFM-FM and WGBB-AM, serving the Nassau-Suffolk, New York market for
consideration of $48 million (the "Long Island Acquisition").
The Orlando Acquisition, the Tampa Acquisition, the Los Angeles
Acquisition, the NewCity Acquisition, the Birmingham Acquisitions I and II, the
Birmingham Disposition, the San Antonio Acquisition I, the San Antonio
Acquisition II, the San Antonio Disposition, the Dayton Acquisition and the Long
Island Acquisition are collectively referred to herein as the "Recent
Transactions".
PENDING TRANSACTIONS
Birmingham Acquisition III
In September 1997, the Company announced that it had entered into an
agreement in principle with a third party to construct, program and own WEDA-FM,
a new Class A FM radio station, in Homewood, Alabama to serve the Birmingham
market (the "Birmingham Acquisition III"). The FCC approved the third party's
application for the new construction permit and settlement of the comparative
hearing among the three applicants for the construction permit. As part of the
agreement in principle, the third party has constructed the station and the
Company has agreed to enter into an LMA for the station commencing in November
1998. The Company also acquired an option to purchase the station for an
aggregate consideration of $5.5 million and the assumption of debt in an amount
not to exceed $200,000. The Company expects to consummate the Birmingham
Acquisition III in the fourth quarter of 1998 or the first half of 1999.
Orlando Exchange
In February 1998, the Company entered into an agreement to acquire the
assets of radio station WTLN-FM serving the Orlando, Florida market for
consideration of $14.5 million. In a related transaction, the Company entered
into an agreement to dispose of the assets of radio station WTLN-AM (formerly
known as WZKD-AM), also serving the Orlando, Florida market, for $500,000 (the
"Orlando Exchange"). Pending certain regulatory approvals, the Company
anticipates closing the Orlando Exchange in the fourth quarter of 1998 or the
first half of 1999.
Long Island Disposition
In October 1998, the Company entered into an agreement with a third party
to dispose of the assets of radio station WGBB-AM (the "Long Island
Disposition") for $1.7 million. Pending certain regulatory approvals, the
Company anticipates closing the Long Island Disposition in the first half of
1999.
Tampa Exchange
In September 1998, the Company entered into an agreement in principle to
acquire the assets of radio station WLVU-FM, serving the Tampa, Florida market.
The Company has entered into a TBA for WLVU-FM commencing in September 1998. In
a related transaction, the Company entered into an agreement to dispose of the
assets of radio station WSUN-FM, also serving the Tampa, Florida market (the
5
<PAGE> 14
"Tampa Exchange"). Pending certain regulatory approvals, the Company anticipates
closing the Tampa Exchange in the first half of 1999.
The Birmingham Acquisition III, the Orlando Exchange, the Long Island
Disposition and the Tampa Exchange are collectively referred to herein as the
"Pending Transactions".
WSB, INC. AND WHIO, INC. MERGERS
WSB, Inc., a Delaware corporation ("WSB"), and WHIO, Inc., a Delaware
corporation ("WHIO" and, together with WSB, the "Initial Note Guarantors"), were
merged with and into the Company on November 10, 1998, and November 1, 1998,
respectively (collectively, the "Mergers"). As a result of such Mergers, the
Initial Note Guarantors are no longer Note Guarantors and, as of the date
hereof, the Notes do not have the benefit of any Note Guarantees.
LICENSE DROP-DOWN
The Company anticipates transferring the licenses, permits and
authorizations it holds from the Federal Communications Commission (the "FCC")
in respect of the radio stations it owns (other than in respect of the radio
stations it owns in the states of California and Florida) to CXR Holdings, Inc.,
a Nevada corporation and a wholly-owned subsidiary of the Company ("CXR
Holdings"), upon receipt of consent from the FCC and the satisfaction of certain
other conditions (the "License Drop-Down"). The Company has received the consent
of the FCC with respect to most of the stations that will be involved in the
License Drop-Down and expects to apply for and receive such FCC consents in
respect of the remaining stations. The Company currently anticipates that the
License Drop-Down will be consummated in the first quarter of 1999. If the
License Drop-Down is consummated, CXR Holdings will become a Note Guarantor.
There can be no assurance as to the timing of the License Drop-Down or if the
License Drop-Down shall occur at all (in which case, CXR Holdings will not
become a Note Guarantor).
6
<PAGE> 15
THE EXCHANGE OFFER
Securities Offered......... $100,000,000 aggregate principal amount of 6.250%
Notes due 2003 (the "2003 New Notes") and
$100,000,000 aggregate principal amount of 6.375%
Notes due 2005 (the "2005 New Notes" and,
together with the 2003 New Notes, the "New
Notes").
The Exchange Offer......... $1,000 principal amount of 2003 New Notes will be
issued in exchange for each $1,000 principal
amount of 2003 Old Notes and $1,000 principal
amount of 2005 New Notes will be issued in
exchange for each $1,000 original principal
amount of 2005 Old Notes. As of the date hereof,
$200,000,000 principal amount of Old Notes are
outstanding. The Company will issue the New Notes
to holders on or promptly after the Expiration
Date.
Based upon interpretations by the staff of the
Commission set forth in no-action letters issued
to third parties, the Company believes that New
Notes issued pursuant to the Exchange Offer in
exchange for Old Notes may be offered for resale,
resold and otherwise transferred by any holder of
such New Notes (other than a broker-dealer as set
forth below, or any such holder which is an
"affiliate" of the Company within the meaning of
Rule 405 under the Securities Act) without
compliance with the registration and prospectus
delivery requirements of the Securities Act,
provided that such New Notes are acquired in the
ordinary course of such holder's business and
that such holder has no arrangement or
understanding with any person to participate in
the distribution of such New Notes. Holders of
Old Notes wishing to accept the Exchange Offer
must represent to the Company, as required by the
Registration Rights Agreement, that such
conditions have been met and that such holder is
not an "affiliate" of the Company within the
meaning of Rule 405 under the Securities Act.
Any Participating Broker-Dealer that acquired Old
Notes for its own account as a result of
market-making activities or other trading
activities may be a statutory underwriter. Each
Participating Broker-Dealer that is the
beneficial owner (within the meaning of Rule
13d-3 under the Exchange Act) of New Notes for
its own account pursuant to the Exchange Offer
must represent that the Old Notes tendered in
exchange therefor were acquired as a result of
market-making activities and acknowledge that it
will deliver a prospectus in connection with any
resale of such New Notes. The Letter of
Transmittal states that by so acknowledging and
by delivering a prospectus, a Participating
Broker-Dealer will not be deemed to admit that it
is an "underwriter" within the meaning of the
Securities Act. This Prospectus, as it may be
amended or supplemented from time to time, may be
used by any broker-dealer (other than an
affiliate of the Company) in connection with
resales of New Notes received in exchange for Old
Notes where such Old Notes were acquired by such
broker-dealer as a result of market-making
activities or other trading activities. The
Company has agreed that, for a period of up to 90
days after the Expiration Date, it will make this
Prospectus available to any broker-dealer for use
in connection with any such resale. Any holder
who tenders in the Exchange Offer with the
intention to participate, or for the purpose of
participating, in a distribution of the New Notes
or who is an affiliate of the Company may not
rely on the position of the staff of the
7
<PAGE> 16
Commission enunciated in such no-action letters
and, in the absence of an exemption therefrom,
must comply with the registration and prospectus
delivery requirements of the Securities Act in
connection with a secondary resale transaction.
Failure to comply with such requirements in such
instance may result in such holder incurring
liability under the Securities Act for which the
holder is not indemnified by the Company.
Expiration Date............ 5:00 p.m., New York City time, on December 14, 1998
unless the Exchange Offer is extended, in which
case the term "Expiration Date" means the latest
date and time to which the Exchange Offer is
extended.
Conditions to the Exchange
Offer...................... The Exchange Offer is subject to certain
conditions, which may be waived by the Company.
See "The Exchange Offer -- Conditions." The
Exchange Offer is not conditioned upon any
minimum principal amount of Old Notes being
tendered.
Procedures for Tendering
Old Notes.................. Each holder of Old Notes wishing to accept the
Exchange Offer must complete, sign and date the
accompanying Letter of Transmittal, or a
facsimile thereof or transmit an Agents' Message
(as defined herein) in connection with a
book-entry transfer, in accordance with the
instructions contained herein and therein, and
mail or otherwise deliver such Letter of
Transmittal, or such facsimile on such Agent's
Message, together with the Old Notes and any
other required documentation to the Exchange
Agent (as defined herein) at the address set
forth herein prior to 5:00 p.m., New York City
time, on the Expiration Date. By executing the
Letter of Transmittal or Agent's Message, each
holder will represent to the Company that, among
other things, the New Notes acquired pursuant to
the Exchange Offer are being obtained in the
ordinary course of business of the person
receiving such New Notes, whether or not such
person is the holder, that neither the holder nor
any such other person has any arrangement or
understanding with any person to participate in
the distribution of such New Notes and that
neither the holder nor any such other person is
an "affiliate," as defined under Rule 405 of the
Securities Act, of the Company. See "The Exchange
Offer -- Purpose and Effect of the Exchange
Offer" and "-- Procedures for Tendering."
Untendered Old Notes....... Following the consummation of the Exchange Offer,
holders of Old Notes eligible to participate, but
who do not tender their Old Notes, will not have
any further exchange rights and such Old Notes
will continue to be subject to certain
restrictions on transfer. Accordingly, the
liquidity of the market for such Old Notes could
be adversely affected.
Consequences of Failure to
Exchange................. The Old Notes that are not exchanged pursuant to
the Exchange Offer will remain restricted
securities. Accordingly, within the time period
referred to in Rule 144(k) under the Securities
Act, such Old Notes may be resold only (i) to the
Company, (ii) to a "qualified institutional
buyer" (as defined in Rule 144A under the
Securities Act) in compliance with Rule 144A,
(ii) inside the United States to an
8
<PAGE> 17
institutional "accredited investor" (as defined
in Rule 501(a)(1), (2), (3) or (7) under the
Securities Act) that, prior to such transfer,
furnishes to the Trustee a signed letter
containing certain representations and agreements
relating to the restrictions on transfer of the
Old Notes (the form of which letter can be
obtained from the Trustee and, if such transfer
is in respect of an aggregate principal amount of
Old Notes of less than $100,000, an opinion of
counsel acceptable to the Company that such
transfer is in compliance with the Securities
Act, (iv) outside the United States in compliance
with Rule 904 under the Securities Act, (v)
pursuant to the exemption from registration
provided by Rule 144 under the Securities Act (if
available) or (vi) pursuant to an effective
registration statement under the Securities Act.
See "The Exchange Offer -- Consequences of
Failure to Exchange."
Shelf Registration
Statement................ If, because of any change in law, regulation or in
the applicable interpretations of the staff of
the Commission, the Company is not permitted to
effect the Exchange Offer or, for any reason, the
Exchange Offer Registration Statement is not
declared effective within 180 days after the date
of issuance of the Old Notes or in certain other
circumstances, then the Company shall use its
best efforts to (a) as promptly as practicable,
file a shelf registration statement (the "Shelf
Registration Statement") covering the Old Notes,
(b) cause the shelf registration statement to be
declared effective under the Securities Act and
(c) keep the shelf registration statement
effective until the earlier of two years after
the initial sale of the Old Notes to the Initial
Purchasers (as defined herein) or such time as
all of the applicable Old Notes have been sold
thereunder or otherwise cease to be registrable
securities within the meaning of the Registration
Rights Agreement.
Special Procedures for
Beneficial Owners........ Any beneficial owner whose Old Notes are registered
in the name of a broker, dealer, commercial bank,
trust company or other nominee and who wishes to
tender should contact such registered holder
promptly and instruct such registered holder to
tender on such beneficial owner's behalf. If such
beneficial owner wishes to tender on such owner's
own behalf, such owner must, prior to completing
and executing the Letter of Transmittal and
delivering its Old Notes, either make appropriate
arrangements to register ownership of the Old
Notes in such owner's name or obtain a properly
completed bond power from the registered holder.
The transfer of registered ownership may take
considerable time. The Company will keep the
Exchange Offer open for not less than thirty
calendar days in order to provide for the
transfer of registered ownership.
Guaranteed Delivery
Procedures............... Holders of Old Notes who wish to tender their Old
Notes and whose Old Notes are not immediately
available or who cannot deliver their Old Notes,
the Letter of Transmittal or any other documents
required by the Letter of Transmittal to the
Exchange Agent (or comply with the procedures for
book-entry transfer) prior to the Expiration Date
must tender their Old Notes according to the
guaranteed delivery proce-
9
<PAGE> 18
dures set forth in "The Exchange
Offer -- Guaranteed Delivery Procedures."
Withdrawal Rights.......... Tenders may be withdrawn at any time prior to 5:00
p.m., New York City time, on the Expiration Date.
Acceptance of Old Notes and
Delivery of New Notes.... The Company will accept for exchange any and all
Old Notes which are properly tendered in the
Exchange Offer prior to 5:00 p.m., New York City
time, on the Expiration Date. The New Notes
issued pursuant to the Exchange Offer will be
delivered promptly following the Expiration Date.
See "The Exchange Offer -- Terms of the Exchange
Offer."
Federal Income Tax
Consequences............. The exchange pursuant to the Exchange Offer will
not be a taxable event for federal income tax
purposes. See "Certain United States Federal
Income Tax Considerations."
Use of Proceeds............ There will be no cash proceeds to the Company from
the Exchange Offer.
Exchange Agent............. The Bank of New York.
10
<PAGE> 19
THE NEW NOTES
The New Notes.............. $100,000,000 aggregate principal amount of 6.250%
Notes due 2003 (the "2003 New Notes") and
$100,000,000 aggregate principal amount of 6.375%
Notes due 2005 (the "2005 New Notes" and,
together with the 2003 New Notes, the "New
Notes").
General.................... The form and terms of the New Notes are the same in
all material respects as the form and terms of
the Old Notes (which they replace), except that
(i) the New Notes have been registered under the
Securities Act and, therefore, will not bear
legends restricting the transfer thereof, and
(ii) the holders of New Notes will not be
entitled to certain rights under the Registration
Rights Agreement, including the provisions
providing for an increase in the interest rate on
the Old Notes in certain circumstances relating
to the timing of the Exchange Offer, which rights
will terminate when the Exchange Offer is
consummated. See "The Exchange Offer -- Purpose
and Effect of the Exchange Offer." The New Notes
will evidence the same debts as the Old Notes and
will be entitled to the benefits of the
Indenture. See "Description of the Notes."
Interest Payment Dates..... May 15 and November 15.
Stated Maturity Dates...... May 15, 2003 in the case of the 2003 New Notes and
May 15, 2005 in the case of the 2005 New Notes.
Note Guarantees............ Pursuant to the Note Guarantees, the New Notes will
be fully and unconditionally guaranteed by the
Note Guarantors, if any. The Note Guarantors will
be each existing or future subsidiary of the
Company that guarantees amounts payable under the
Credit Agreement or under any future senior
unsecured credit facility between the Company and
the third party lenders thereunder on the date
hereof or in the future. Each Note Guarantor's
Note Guarantee shall terminate immediately upon
the termination of such Note Guarantor's
guarantee pursuant to the Credit Agreement or any
such future credit facility without further
action by any party. As of the date of this
Prospectus, the Notes do not have the benefit of
any Note Guarantee. WSB, Inc. was merged with and
into the Company on November 10, 1998 and WHIO,
Inc. was merged with and into the Company on
November 1, 1998, and, therefore, are no longer
Note Guarantors.
Optional Redemption........ The New Notes will be redeemable at the option of
the Company, in whole or in part, at any time or
from time to time, for an amount equal to the
greater of (i) 100% of the principal amount of
the New Notes to be redeemed, and (ii) the sum,
as determined by the Quotation Agent, of the
present values of the principal amount and the
remaining scheduled payments of interest on the
New Notes to be redeemed from the redemption date
to May 15, 2003 in the case of the 2003 New Notes
and May 15, 2005 in the case of the 2005 New
Notes, in each case, discounted on a semiannual
basis (assuming a 360-day year consisting of
30-day months) at the Treasury Rate plus 10 basis
points in the case of the 2003 New Notes and 15
basis points in the case of the 2005 New Notes,
plus in either case, accrued interest thereon to
the date of redemption. See "Description of the
Notes -- Optional Redemption."
11
<PAGE> 20
Ranking.................... The New Notes will be senior unsecured obligations
of the Company ranking pari passu in right of
payment with all other existing and future
unsubordinated unsecured indebtedness of the
Company, which, as of March 31, 1998, on a pro
forma basis after giving effect to the Offering,
the application of the net proceeds of the
Offering, the Pending Transactions and the Long
Island Acquisition totalled approximately $315.2
million. The New Notes will be effectively
subordinated to all indebtedness and other
liabilities of the Company's subsidiaries, except
in respect of the Note Guarantees of the Note
Guarantors.
Certain Covenants.......... The Indenture contains covenants for the New Notes
including, but not limited to, covenants with
respect to the following matters: (i) limitations
on liens of the Company and Restricted
Subsidiaries (as defined herein); (ii)
limitations on consolidation, merger and sale of
assets by the Company and the Note Guarantors;
and (iii) limitations on the indebtedness of the
Company's Restricted Subsidiaries. See
"Description of the Notes -- Certain Covenants."
RISK FACTORS
Potential investors should consider carefully certain factors relating to
an investment in the New Notes. See "Risk Factors."
12
<PAGE> 21
SUMMARY CONSOLIDATED FINANCIAL AND OTHER DATA
The following summary consolidated financial and other data have been
derived from the Consolidated Financial Statements of Cox Radio. The
consolidated statement of operations data and other operating data for the years
ended December 31, 1993, 1994, 1995, 1996 and 1997 and the consolidated balance
sheet data as of December 31, 1994, 1995, 1996 and 1997 have been derived from
the audited Consolidated Financial Statements of Cox Radio. The statement of
operations data and other operating data for the six-month periods ended June
30, 1997 and 1998, and the balance sheet data as of December 31, 1993 and June
30, 1997 and 1998 have been derived from unaudited Consolidated Financial
Statements of Cox Radio, which, in the opinion of management, include all
adjustments (consisting only of normal recurring adjustments) necessary for a
fair presentation of the Company's results of operations for such period or
financial position at such date. The pro forma combined financial data for the
year ended December 31, 1997 assume the Recent Transactions and the Pending
Transactions had occurred at the beginning of the year. See "Incorporation of
Certain Documents by Reference." See "Certain Definitions and Market Industry
Data" following "Pro Forma Combined Statement of Operations" for certain defined
terms and information concerning market and industry data used herein.
<TABLE>
<CAPTION>
AS OF AND
FOR THE
SIX MONTH PERIOD
AS OF AND FOR THE YEAR ENDED DECEMBER 31, ENDED JUNE 30,
--------------------------------------------------------------- -----------------
PRO FORMA
1993 1994 1995 1996 1997 1997 1997 1998
------ ------ ------ ------ ------- --------- ------ ------
(DOLLARS IN MILLIONS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Net revenues(1)................. $ 95.0 $111.5 $123.6 $132.9 $ 199.6 $237.4 $ 83.5 $121.2
Station operating expenses...... 67.9 76.3 90.0 91.9 129.8 157.1 55.6 80.4
Corporate general and
administrative expenses(2).... 2.5 2.7 5.9 5.3 6.9 7.4 3.5 3.9
Depreciation and amortization... 7.3 6.9 7.2 8.1 17.5 22.0 7.2 11.0
------ ------ ------ ------ ------- ------ ------ ------
Operating income................ 17.3 25.6 20.5 27.6 45.4 50.9 17.2 25.9
Interest expense................ 5.6 5.2 6.0 4.6 9.4 19.4 2.1 7.7
Net income (loss)............... (1.1)(3) 11.2 8.2 14.9 49.7(4) 17.0 38.1(4) 9.1
Basic earnings (loss) per common
share......................... (.06) .57 .42 .69 1.75 .60 1.35 .32
Diluted earnings (loss) per
common share.................. (.06) .57 .42 .69 1.75 .60 1.34 .32
BALANCE SHEET DATA:
Cash and cash equivalents....... $ 1.7 $ 1.9 $ 1.7 $ 10.6(5) $ 6.2 $ 6.2 $ 11.6 $ 7.1
Intangible assets, net.......... 114.2 120.1 126.8 138.1 518.9 622.3 496.0 578.3
Total assets.................... 168.3 180.0 191.8 261.7 654.6 735.0 620.8 735.7
Total debt (including amounts
due to/from CEI).............. 89.7 120.3 125.1 -- 232.6 315.6 222.2 287.8
Shareholders' equity............ 64.2 40.4 47.2 235.8 287.3 254.6 274.2 297.3
OTHER OPERATING DATA AND
FINANCIAL DATA:
Broadcast cash flow(6).......... $ 27.1 $ 35.2 $ 33.6(7) $ 41.0 $ 69.8 $ 80.3 $ 27.9 $ 40.8
Broadcast cash flow margin(6)... 28.5% 31.6% 27.2% 30.9% 35.0% 33.8% 33.4% 33.7%
EBITDA.......................... $ 24.6 $ 32.5 $ 27.7(7) $ 35.7 $ 62.9 $ 72.9 $ 24.4 $ 36.9
EBITDA to interest ratio........ 4.4x 6.3x 4.6x 7.8x 6.7x 3.8x 11.6x 4.8x
Debt to EBITDA ratio............ 3.6x 3.7x 4.5x -- 3.7x 4.3x 5.1x 3.8x
Earnings to fixed charges
ratio......................... 3.1x 4.9x 3.4x 6.0x 4.8x 2.6x 8.2x 3.4x
Net cash provided by operating
activities.................... $ 11.4 $ 14.1 $ 14.0 $ 26.9 $ 42.2 $ 52.6 $ 12.4 $ 17.1
Net cash used in investing
activities.................... (6.1) (12.3) (17.3) (62.6) (285.1) (368.1) (285.3) (74.8)
Net cash provided by (used in)
financing activities.......... (4.8) (1.6) 3.1 44.6 238.5 321.5 273.8 58.6
</TABLE>
13
<PAGE> 22
- ---------------
(1) Total revenues less advertising agency commissions.
(2) Certain executives participated in CEI's Unit Appreciation Plan ("UAP").
Because CEI is, and Cox Radio was, a private company, the benefits under the
UAP are generally payable in cash. This cash payment option resulted in
charges to compensation expense of $0.9 million, $0.8 million, $1.6 million,
and $2.5 million for the years ended December 31, 1993, 1994, 1995 and 1996,
respectively. This compensation expense is included in historical corporate
general and administrative expenses. Public companies traditionally
implement stock award plans that provide for the issuance of stock to
participants and do not result in compensation expense under applicable
accounting standards. The Company implemented the Cox Radio, Inc. Long-Term
Incentive Plan in 1996 and, therefore, has not incurred this expense since
1996. In addition, for the year ended December 31, 1995, corporate general
and administrative expenses include a nonrecurring corporate charge.
(3) Includes a $7.6 million noncash charge for the cumulative effect of
accounting changes.
(4) Includes an after-tax gain on the sale of WCKG-FM/WYSY-FM (Chicago) of
approximately $29.3 million.
(5) 1996 amount includes $9.1 million in restricted cash, representing the net
proceeds from the disposal of WIOD-AM (Miami), net of the cash used to
acquire radio stations KRAV-FM and KGTO-AM (Tulsa).
(6) "Broadcast cash flow" consists of operating income plus depreciation and
amortization and corporate general and administrative expenses. "Broadcast
cash flow margin" is broadcast cash flow as a percentage of net revenues.
"EBITDA" is operating income plus depreciation and amortization. Although
broadcast cash flow, broadcast cash flow margin and EBITDA are not
recognized under GAAP, they are accepted by the broadcasting industry as
generally recognized measures of performance and are used by analysts who
report publicly on the condition and performance of broadcasting companies.
For the foregoing reasons, the Company believes that these measures are
useful to investors. However, investors should not consider these measures
to be an alternative to operating income as determined in accordance with
GAAP, an alternative to cash flows from operating activities (as a measure
of liquidity) or an indicator of the Company's performance under GAAP.
(7) Declines in broadcast cash flow and EBITDA from the prior year are due
mainly to the impact of the baseball strike on advertiser spending, the cost
of sports programming rights in Atlanta, start-up costs related to
acquisitions or LMAs consummated in late 1994 and early 1995 and a
nonrecurring corporate charge in 1995.
14
<PAGE> 23
PRO FORMA COMBINED STATEMENT OF OPERATIONS
(UNAUDITED)
The pro forma combined statement of operations assumes the Recent
Transactions and the Pending Transactions had occurred at the beginning of the
year. No pro forma adjustments have been made for the Tampa Acquisition, the
Birmingham III Acquisition, the Los Angeles Acquisition, the Long Island
Disposition and the Tampa Exchange due to immateriality. Additionally, a pro
forma balance sheet at June 30, 1998 and a pro forma statement of operations for
the six months ended June 30, 1998 are not included as the effect of pro forma
adjustments is immaterial.
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, 1997
-------------------------------------------------------------------------------------------------------
PRO FORMA
ADJUSTMENTS
FOR THE RECENT
TRANSACTIONS
(EXCLUDING THE PRO FORMA FOR
PRO FORMA NEWCITY THE RECENT
ADJUSTMENTS FOR PRO FORMA FOR ACQUISITION) AND TRANSACTIONS AND
HISTORICAL HISTORICAL THE NEWCITY THE NEWCITY THE PENDING THE PENDING
COX RADIO NEWCITY(1) ACQUISITION ACQUISITION(1) TRANSACTIONS(2) TRANSACTIONS
---------- ---------- --------------- --------------- ------------------- -------------------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C>
Net revenues.......... $199,572 $15,683 $ 547(3) $214,708 $ 22,650 $237,358
Costs and expenses:
Operating........... 50,220 5,628 -- 55,848 5,821 61,669
Selling, general and
administrative.... 79,544 6,625 (71)(3) 86,098 9,357 95,455
Corporate general
and
administrative.... 6,885 476 -- 7,361 -- 7,361
Depreciation and
amortization...... 17,456 837 1,063(4) 19,356 2,653 22,009
-------- ------- ------- -------- -------- --------
Operating income...... 45,467 2,117 (1,539) 46,046 4,819 50,865
Interest expense...... (9,364) (2,389) (499)(5) (12,252) (7,190) (19,442)
Other, net............ 48,428 (521) 521(6) 48,428 (49,129)(7) (701)
-------- ------- ------- -------- -------- --------
Income (loss) before
income taxes........ 84,531 (793) (1,517) 82,222 (51,500) 30,721
Income taxes(8)....... 34,807 250 (457) 34,600 (20,861) 13,738
-------- ------- ------- -------- -------- --------
Net income (loss)..... $ 49,724 $(1,043) $(1,059) $ 47,622 $(30,639) $ 16,983
======== ======= ======= ======== ======== ========
Per share data:
Basic and diluted
net income per
common share...... $ 1.75 $ .60
======== ========
Basic pro forma
shares
outstanding....... 28,344 28,344
======== ========
Diluted pro forma
shares
outstanding....... 28,494 28,494
======== ========
</TABLE>
- ---------------
(1) Represents the historical operations of NewCity for the three month period
ended March 31, 1997. Such financial statements were prepared in accordance
with generally accepted accounting principles.
(2) Reflects the historical operations and related pro forma adjustments for the
Recent Transactions (excluding the NewCity Acquisition) and the Pending
Transactions. Pro forma adjustments have been made for the Orlando
Acquisition, consummated in March 1997; the Birmingham Acquisition I,
consummated in November 1998; the San Antonio Acquisition I, consummated in
September 1997; the Dayton Acquisition, consummated in October 1998; the San
Antonio Acquisition II, consummated in March 1998; the Long Island
Acquisition, consummated in May 1998; and the Orlando Exchange which is
expected to be consummated in the fourth quarter of 1998 or the first half
of 1999. For each of the above acquisitions, amortization was calculated
assuming an amortization period of 40 years.
(3) Represents LMA fees and expenses charged between the Company and NewCity
related to certain of the Company's stations that were operated under LMA
agreements by NewCity.
15
<PAGE> 24
(4) Reflects additional amortization expense related to approximately $250
million in intangibles and goodwill arising from the NewCity Acquisition.
Intangible assets and goodwill are being amortized over 40 years.
(5) Reflects adjustments to interest expense resulting from the borrowing of
approximately $192.1 million to consummate the NewCity Acquisition and
related tender for certain senior subordinated notes issued by NewCity.
(6) Reflects adjustments to other expenses representing costs incurred by
NewCity directly related to the NewCity Acquisition.
(7) Reflects adjustments to the pre-tax gain on the disposition of WCKG-FM and
WYSY-FM related to the Orlando Acquisition.
(8) An effective tax rate of 45% was used to calculate the adjustments reflected
in footnotes 2, 3, 5, and 6. No tax effect is reflected for a portion of the
adjustment in footnote 4 because the amortization of goodwill arising from
the NewCity Acquisition is not deductible for tax purposes.
16
<PAGE> 25
CERTAIN DEFINITIONS AND MARKET AND INDUSTRY DATA
The terms "Broadcast Cash Flow," "broadcast cash flow margin" and "EBITDA"
are referred to in various places in this Prospectus. Broadcast Cash Flow
consists of operating income plus depreciation and amortization and corporate
general and administrative expenses. Broadcast cash flow margin is Broadcast
Cash Flow as a percentage of net revenues. EBITDA consists of operating income
plus depreciation and amortization. Although Broadcast Cash Flow, broadcast cash
flow margin and EBITDA are not recognized under generally accepted accounting
principles ("GAAP"), the Company believes they are accepted by the broadcasting
industry as generally recognized measures of performance and are used by
analysts who report publicly on the condition and performance of broadcasting
companies. For the foregoing reasons, the Company believes that these measures
will be useful to investors. However, Broadcast Cash Flow, broadcast cash flow
margin and EBITDA should not be considered as an alternative or as a substitute
for net income, cash flows from operating activities and other income and cash
flow statement data prepared in accordance with GAAP, or as a measure of
liquidity or profitability.
Unless otherwise indicated herein, (i) market ranking by radio advertising
revenue, radio market advertising revenue and radio market advertising data used
to calculate compounded annual growth rate ("CAGR") have been obtained from
Investing in Radio 1998 Market Report, a publication of Broadcasting Investor
Analysts ("BIA"); (ii) total industry listener and revenue levels have been
obtained from the Radio Advertising Bureau ("RAB"); (iii) all audience share
data and audience rankings, including ranking by population, except where
specifically stated to the contrary, have been derived from surveys of Adults 25
to 54, listening Monday through Sunday, 6 a.m. to 12 midnight, and are based on
the average of the Winter, Spring, Summer and Fall Market Reports (each an
"Arbitron Market Report") either ending in the year presented or the four most
recent Arbitron Market Reports, as reported by Arbitron, Radio Market Reports,
Metro or Target Audience Trends, The Arbitron Company ("Arbitron"); (iv) revenue
share data in each market presented have been obtained from the Miller, Kaplan
Market Revenue Report (published monthly), a publication of Miller, Kaplan,
Arase & Co., Certified Public Accountants ("Miller Kaplan") or The Hungerford
Market Report, a publication of Hungerford, Aldrin, Nichols & Carter Certified
Public Accountants ("Hungerford"); and (v) total advertising revenue has been
obtained from Duncan's Radio Market Guide (1997 ed.) ("Duncan's") compiled by
Duncan's American Radio. Duncan's definition of "total advertising revenue"
includes television, radio, newspaper, outdoor and cable.
The terms local marketing agreement ("LMA"), joint sales agreement ("JSA")
and time brokerage agreement ("TBA") are referred to in various places in this
Prospectus. An LMA or TBA refers to an agreement under which a radio station
agrees to provide, on a cooperative basis, all or certain of the programming,
sales, marketing and similar services for a different radio station in the same
market. A JSA refers to an agreement, similar to an LMA, under which a radio
station agrees to provide all or certain of the sales and marketing services for
another station while the owner of such other radio station provides all of the
programming for such other radio station in the same market. The term "duopoly,"
as used in various places in this Prospectus, refers to the ownership of two or
more AM or two or more FM radio stations in the same geographic market. A
station's or station group's "power ratio" is defined as such station's or
station group's revenue market share divided by audience market share of adults
25-54.
17
<PAGE> 26
RISK FACTORS
An investment in the New Notes offered hereby involves certain risks.
Prospective investors should carefully consider the following risk facts, in
addition to the other information contained elsewhere in this Prospectus.
CONSEQUENCES OF EXCHANGING OR FAILURE TO FOLLOW EXCHANGE OFFER PROCEDURES
Holders of Old Notes who do not exchange their Old Notes for New Notes
pursuant to the Exchange Offer will continue to be subject to the restrictions
on transfer of such Old Notes set forth in the legends thereon. In general, the
Old Notes may not be offered or sold, unless registered under the Securities
Act, except pursuant to an exemption from, or in a transaction not subject to,
the Securities Act and applicable state securities laws. After the Exchange
Offer, the Company does not intend to register the Old Notes under the
Securities Act. Based upon interpretations by the staff of the Commission set
forth in certain no-action letters issued to third parties, the Company believes
that New Notes issued pursuant to the Exchange Offer in exchange for Old Notes
may be offered for resale, resold and otherwise transferred by any holder of
such New Notes (other than a broker-dealer, as set forth below, or any such
holder which is an "affiliate" of the Company within the meaning of Rule 405
under the Securities Act) without compliance with the registration and
prospectus delivery requirements of the Securities Act, provided that such New
Notes are acquired in the ordinary course of such holder's business and that
such holder has no arrangement or understanding with any person to participate
in the distribution of such New Notes. Each Participating Broker-Dealer that is
the beneficial owner (within the meaning of Rule 13d-3 under the Exchange Act)
of New Notes for its own account pursuant to the Exchange Offer must represent
that the Old Notes tendered in exchange therefor were acquired as a result of
market-making activities or other trading activities and must acknowledge that
it will deliver a prospectus in connection with any resale of such New Notes.
The Letter of Transmittal states that by so acknowledging and by delivering a
prospectus, a Participating Broker-Dealer will not be deemed to admit that it is
an "underwriter" within the meaning of the Securities Act. This Prospectus, as
it may be amended or supplemented from time to time, may be used by any
broker-dealer (other than an affiliate of the Company) in connection with
resales of New Notes received in exchange for Old Notes where such Old Notes
were acquired by such broker-dealer as a result of market-making activities or
other trading activities. The Company has agreed that, for a period of 90 days
after the Expiration Date, it will make this Prospectus available to any
broker-dealer for use in connection with any such resale. Any holder who tenders
in the Exchange Offer with the intention to participate, or for the purpose of
participating, in a distribution of the New Notes or who is an affiliate of the
Company may not rely on the position of the staff of the Commission enunciated
in Exxon Capital Holdings Corporation (available May 13, 1988) or similar
no-action letters and, in the absence of an exemption therefrom, must comply
with the registration and prospectus delivery requirements of the Securities Act
in connection with a secondary resale transaction. Failure to comply with such
requirements in such instance may result in such holder incurring liability
under the Securities Act for which the holder is not indemnified by the Company.
See "Plan of Distribution." No affiliate of the Company may rely on such
no-action letters and any such affiliate must comply with the registration and
prospectus delivery requirements of the Securities Act in connection with a
secondary resale transaction.
The Company has not entered into any arrangement or understanding with any
person to distribute the New Notes to be received in the Exchange Offer.
To comply with the securities laws of certain jurisdictions, it may be
necessary to qualify for sale or register the New Notes prior to offering or
selling such New Notes. The Company currently does not intend to register or
qualify the sale of the New Notes in any such jurisdiction. Upon consummation of
the Exchange Offer, holders that were not prohibited from participating in the
Exchange Offer and did not tender their Old Notes will not have any registration
rights under the Registration Rights Agreement with respect to such nontendered
Old Notes, and accordingly, such Old Notes will continue to be subject to the
restrictions on transfer contained in the legend thereon. See "The Exchange
Offer -- Consequences of Failure to Exchange."
Issuance of the New Notes in exchange for the Old Notes pursuant to the
Exchange Offer will be made only after a timely receipt by the Company of such
Old Notes, a properly completed and duly executed Letter
18
<PAGE> 27
of Transmittal and all other required documents. Therefore, holders of the Old
Notes desiring to tender such Old Notes in exchange for New Notes should allow
sufficient time to ensure timely delivery. The Company is under no duty to give
notification of defects or irregularities with respect to the tenders of Old
Notes for exchange. Old Notes that are not tendered or are tendered but not
accepted will, following the consummation of the Exchange Offer, continue to be
subject to the existing restrictions upon transfer thereof, and, upon
consummation of the Exchange Offer, certain registration rights with respect to
the Old Notes under the Registration Rights Agreement will terminate. In
addition, any holder of Old Notes who tenders in the Exchange Offer for the
purpose of participating in a distribution of the New Notes may be deemed to
have received restricted securities, and if so, will be required to comply with
the registration and prospectus delivery requirements of the Securities Act in
connection with any resale transaction. Each broker-dealer that is the
beneficial owner (within the meaning of Rule 13d-3 under the Exchange Act) of
New Notes for its own account pursuant to the Exchange Offer must acknowledge
that it will deliver a prospectus in connection with any resale of such New
Notes. See "Plan of Distribution." To the extent that Old Notes are tendered and
accepted in the Exchange Offer, the trading market for untendered and tendered
but unaccepted Old Notes could be adversely affected. See "The Exchange Offer."
RISKS ASSOCIATED WITH ACQUISITION STRATEGY
A principal component of the Company's business strategy is the acquisition
of additional radio stations. In addition to the Pending Transactions, Cox Radio
intends to continue to evaluate the acquisition of additional radio stations or
radio station groups. There can be no assurance that future acquisitions will be
available on attractive terms. In addition, there can be no assurance that any
synergies or savings will be achieved as a result of any acquisitions, that the
integration of Cox Radio and new stations or management groups can be
accomplished successfully or on a timely basis or that the Company's acquisition
strategy can be implemented. Although Cox Radio has entered into definitive
agreements regarding the Pending Transactions, there can be no assurance that
any of the Pending Transactions will be consummated. Consummation of each of the
Pending Transactions is subject to certain closing conditions, including the
receipt of FCC approval, which receipt cannot be assured.
COMPETITION
The radio broadcasting industry is a highly competitive business. The
Company's radio stations compete against other radio stations and other media
(including new media technologies that are being developed or introduced) for
audience share and advertising revenue. Factors that are material to a station's
competitive position include management experience, the station's audience share
rank in its market, transmitter power, assigned frequency, audience
characteristics, local program acceptance, and the number and characteristics of
other stations in the market area. Recent changes in the law and in FCC rules
and policies have increased the number of radio stations a broadcaster may own
in a given market and permit, within limits, joint arrangements with other
stations in a market relating to programming, advertising sales, and station
operations. Management believes that radio stations that elect to take advantage
of these opportunities may, in certain circumstances, have lower operating costs
and may be able to offer advertisers more attractive rates and services. No
assurance can be given that any of the Company's stations will be able to
maintain or increase its current audience ratings and advertising revenue share.
GOVERNMENT REGULATION OF BROADCASTING INDUSTRY
The radio broadcasting industry is subject to extensive and changing
regulation. Among other things, the Communications Act of 1934, as amended (the
"Communications Act"), and FCC rules and policies limit the number of stations
that one entity can own in a given market. The Communications Act and FCC rules
and policies also require FCC approval for transfers of control of licensees and
assignments of FCC licenses. The filing of petitions or complaints against Cox
Radio or other FCC licensees could result in the FCC delaying the grant of, or
refusing to grant, its consent to the assignment of licenses to or from an FCC
licensee or the transfer of control of an FCC licensee. In certain
circumstances, the Communications Act and FCC rules will operate to impose
limitations on alien ownership and voting of the Common Stock. There can be no
19
<PAGE> 28
assurance that there will not be changes in the current regulatory scheme, the
imposition of additional regulations or the creation of new regulatory agencies,
which changes could restrict or curtail the ability of Cox Radio to acquire,
operate and dispose of stations or, in general, to compete profitably with other
operators of radio and other media properties.
Each of the Company's radio stations operates pursuant to one or more
licenses issued by the FCC. Pursuant to Congress' mandate in the
Telecommunications Act of 1996 (the "1996 Act"), which significantly amended the
Communications Act, the FCC adopted a rule extending radio license terms from
seven to eight years. All licenses renewed as part of the current renewal cycle
will have a term of eight years. The Company's licenses expire at various times
through the year 2006. Although Cox Radio has applied or will apply to renew
these licenses, third parties may challenge the Company's renewal applications.
While Cox Radio is not aware of facts or circumstances that would prevent the
Company from having its current licenses renewed, there can be no assurance that
the licenses will be renewed. Failure to obtain the renewal of any of Cox
Radio's broadcast licenses or to obtain FCC approval for an assignment or
transfer to Cox Radio of a license in connection with a radio station
acquisition may have a material adverse effect on the Company's business and
operations. In addition, if Cox Radio or any of its officers, directors or
significant stockholders materially violates the FCC's rules and regulations or
the Communications Act, is convicted of a felony or is found to have engaged in
unlawful anticompetitive conduct or fraud upon another government agency, the
FCC may, in response to a petition from a third party or on its own initiative,
in its discretion, commence a proceeding to impose sanctions upon Cox Radio
which could involve the imposition of monetary fines, the revocation of Cox
Radio's broadcast licenses or other sanctions. If the FCC were to issue an order
denying a license renewal application or revoking a license, Cox Radio would be
required to cease operating the applicable radio station only after Cox Radio
had exhausted all rights to administrative and judicial review without success.
IMPORTANCE OF LOS ANGELES AND ATLANTA RADIO STATIONS
In 1997, the Company's four radio stations in Los Angeles and four radio
stations in Atlanta generated approximately 26.7% and 23.8%, respectively, of
Cox Radio's net revenues. On a pro forma basis after giving effect to the Recent
Transactions and Pending Transactions, such radio stations in Los Angeles and
Atlanta would have generated approximately 24.3% and 21.5%, respectively, of Cox
Radio's net revenues in 1997. A significant decline in net revenues from the
Company's stations in these markets, as a result of a ratings decline or
otherwise, could have a material adverse effect on Cox Radio's financial
position and results of operations.
CONTROL BY CEI; POTENTIAL CONFLICTS OF INTEREST
CEI, through wholly-owned subsidiaries, owns approximately 69% of the
outstanding Common Stock and has approximately 96% of the voting power of Cox
Radio. As a result, CEI has sufficient voting power to elect all the members of
the Board of Directors of Cox Radio (the "Cox Radio Board") and effect
transactions without the approval of Cox Radio's public stockholders. Cox
Radio's Amended and Restated Certificate of Incorporation (the "Cox Radio
Certificate") and Amended and Restated Bylaws (the "Bylaws") also contain
certain anti-takeover provisions. The interests of CEI, which operates
businesses in other industries, including television broadcasting, broadband
communications, auto auctions and newspapers, may from time to time diverge from
the interests of Cox Radio. In addition, from time to time, the Company enters
into transactions with CEI or its affiliates and has entered into a credit
facility with CEI. Conflicts of interest between Cox Radio and CEI could arise
with respect to business dealings between them, including potential acquisitions
of businesses or properties, the issuance of additional securities and the
election of new or additional members of the Cox Radio Board. The Audit
Committee of the Cox Radio Board consists of independent directors and addresses
certain potential conflicts of interest that may arise between the Company and
CEI. There can be no assurance that any conflicts of interest will be resolved
in favor of Cox Radio.
ABSENCE OF PUBLIC MARKET; RESTRICTIONS ON RESALES
There presently is no active trading market for the Notes and none may
develop. If the New Notes are traded after their initial issuance, they may
trade at a discount from their initial offering price, depending upon
20
<PAGE> 29
prevailing interest rates, the market for similar securities, the financial
condition, performance and prospects of the Company and other factors beyond the
control of the Company, including general economic conditions. There can be no
assurance as to the development or liquidity of any market for the New Notes.
FORWARD LOOKING STATEMENTS
This Prospectus contains forward-looking statements which can be identified
by terminology such as "believes," "anticipates," "intends," "expects" and words
of similar import. Such forward-looking statements involve known and unknown
risks, uncertainties and other factors that may cause the actual results, events
or developments to be materially different from any future results, events or
developments expressed or implied by such forward-looking statements. Such
factors include, among others, the following: general economic and business
conditions, both nationally and in the regions in which the Company operates;
technology changes; competition; changes in business strategy or development
plans; the ability to attract and retain qualified personnel; existing
governmental regulations and changes in, or the failure to comply with,
governmental regulations; liability and other claims asserted against the
Company; Year 2000 issues and Year 2000 readiness disclosures; and other factors
referenced in this Prospectus, including, without limitation, under the captions
"Summary," "Risk Factors," "Management's Discussion and Analysis of Financial
Condition and Results of Operations" and "Business." GIVEN THESE UNCERTAINTIES,
PROSPECTIVE INVESTORS ARE CAUTIONED NOT TO PLACE UNDUE RELIANCE ON SUCH
FORWARD-LOOKING STATEMENTS. The Company disclaims any obligation to update any
such factors or to publicly announce the result of any revisions to any of the
forward-looking statements contained herein to reflect future results, events or
developments.
21
<PAGE> 30
USE OF PROCEEDS
This Exchange Offer is intended to satisfy certain of the Company's
obligations under the Purchase Agreement and the Registration Rights Agreement.
The Company will not receive any cash proceeds from the issuance of the New
Notes offered hereby. In consideration for issuing the New Notes contemplated in
this Prospectus, the Company will receive Old Notes in like principal amount,
the form and terms of which are the same in all material respects as the form
and terms of the New Notes (which replace such Old Notes), except as otherwise
described herein.
The net proceeds to the Company from the Offering were approximately $198.4
million, after deducting the discount due the Initial Purchasers and commissions
and other expenses payable by the Company. The Company used the net proceeds
from the Offering to repay indebtedness outstanding under the Credit Agreement,
as a result of which the aggregate principal amount of borrowings outstanding
under the Credit Agreement, as of June 30, 1998, was approximately $100.0
million and, as of June 30, 1998, approximately $200.0 million was available for
the Company to borrow on a revolving basis to finance future acquisitions
thereunder. The weighted average per annum interest rate applicable to
borrowings under the Company's Credit Agreement for the six months ended June
30, 1998 was 6.5%, and the maturity date for such borrowings was March 7, 2002.
See "Description of Certain Indebtedness." Affiliates of NationsBanc Montgomery
Securities LLC, Chase Securities Inc. and J.P. Morgan Securities Inc. are
lenders under the Credit Agreement and received their proportionate share of the
repayment thereof.
22
<PAGE> 31
CAPITALIZATION
The following table sets forth the capitalization of the Company as of June
30, 1998. Such capitalization reflects the proceeds from the sale of the Old
Notes, which occurred on May 26, 1998. No effect on the capitalization of the
Company will occur upon consummation of the Exchange Offer herein.
<TABLE>
<CAPTION>
AS OF JUNE 30,
1998
--------------
(IN THOUSANDS)
ACTUAL
--------------
<S> <C>
LONG-TERM DEBT:
Credit Agreement............................................ $100,000
Amounts due from CEI........................................ (12,612)
Other long-term debt........................................ 740
2003 Notes.................................................. 99,910
2005 Notes.................................................. 99,725
--------
Total long-term debt.............................. 287,763
SHAREHOLDERS' EQUITY:
Preferred Stock, $1.00 par value;
5,000,000 shares authorized; none outstanding............... --
Common Stock
Class A Common Stock, $1.00 par value;
70,000,000 shares authorized
8,874,361 shares issued and outstanding................ 8,874
Class B Common Stock, $1.00 par value;
45,000,000 shares authorized
19,577,672 shares issued and outstanding............... 19,578
Additional paid-in capital.................................. 251,454
Retained earnings........................................... 17,355
--------
Total shareholders' equity........................ 297,261
--------
Total capitalization.............................. $585,024
========
</TABLE>
23
<PAGE> 32
THE COMPANY
Cox Radio, Inc. ("Cox Radio" or the "Company") is one of the ten largest
radio broadcasting companies in the United States, based on both net revenues
and number of stations as of November 1, 1998. Upon completion of all the
Pending Transactions, Cox Radio will own or operate, or provide sales and
marketing services for, 58 radio stations (41 FM and 17 AM) clustered in 13
markets, including 18 stations acquired from NewCity Communications, Inc.
("NewCity") during 1997 (the "NewCity Acquisition"). On a pro forma basis, after
giving effect to the Recent Transactions and the Pending Transactions, Cox Radio
would have generated net revenue of $237.4 million and Broadcast Cash Flow of
$80.2 million for the year ended December 31, 1997.
Cox Radio is an indirect majority-owned subsidiary of Cox Enterprises, Inc.
("CEI"). CEI indirectly owns approximately 69% of the Company's Common Stock
(defined below) and has approximately 96% of the voting power of Cox Radio. The
Company has two classes of common stock outstanding, Class A Common Stock, par
value $1.00 per share (the "Class A Common Stock"), and Class B Common Stock,
par value $1.00 per share (the "Class B Common Stock"), collectively defined as
the "Common Stock." CEI's wholly-owned subsidiary, Cox Broadcasting, Inc. ("Cox
Broadcasting"), is the sole stockholder of shares of the Company's Class B
Common Stock. CEI, a privately-held corporation headquartered in Atlanta,
Georgia, is one of the largest media companies in the United States, with
consolidated 1997 revenues of approximately $4.9 billion. Prior to Cox Radio's
initial public offering in September 1996, CEI transferred all of its U.S. radio
operations to Cox Radio (the "Cox Radio Consolidation"). Cox Radio, as part of
CEI, was a pioneer in radio broadcasting, building its first station in 1934,
acquiring its flagship station, WSB-AM (Atlanta), in 1939 and launching its
first FM station, WSB-FM (Atlanta), in 1948.
The Company's principal executive offices are located at 1400 Lake Hearn
Drive, N.E., Atlanta, Georgia 30319, and its telephone number is (404) 843-5000.
24
<PAGE> 33
BUSINESS
Cox Radio seeks to maximize the revenues and Broadcast Cash Flow of its
radio stations by operating and developing clusters of stations in
demographically attractive and rapidly growing markets, including major markets
such as Los Angeles and Atlanta and Sunbelt markets such as Miami, Tampa,
Orlando, San Antonio and Birmingham. During the past five years, the 13 markets
in which the Company's stations now operate have generated, on an aggregate
basis, greater radio advertising revenue growth than the average of 5.3%, which
was calculated using revenue projections obtained from the Radio Advertising
Bureau (the "RAB"), for the U.S. radio industry as a whole. The NewCity
Acquisition enhanced the clustering of the Company's radio stations by
increasing the total number of markets in which Cox Radio owned and/or operated
radio stations to 12 and by strengthening the Company's penetration in those
markets. The Long Island Acquisition increased the number of markets in which
Cox Radio owns or operates radio stations to 13. Cox Radio operates four or more
radio stations in 10 of its 13 markets.
As a result of the Company's management, programming and sales efforts, the
Company's radio stations are characterized by strong ratings and above average
power ratios (defined as revenue share divided by audience share). The Company's
stations are diversified in terms of format, target audience, geographic
location and stage of development. Cox Radio has a track record of acquiring,
repositioning and improving the operating performance of previously
underperforming stations. Management believes that a number of the Company's
stations have significant growth opportunities or turnaround potential and can
therefore be characterized as start-up or developing stations. Generally, the
Company considers start-up or developing stations to include those which have
been recently acquired by the Company and offer the greatest potential for
growth. Currently, the Company considers 29 of its stations to be start-up or
developing stations. Cox Radio believes these stations can achieve significant
Broadcast Cash Flow growth by employing the Company's operating strategy.
Management believes that its mix of stations in different stages of development
enables it to maximize the Company's growth potential.
Cox Radio's senior operating management is comprised of six individuals
with an average of over 24 years of experience in the radio broadcasting
industry, including an average of over 15 years with Cox Radio. The Company
believes that this experienced senior management team is well positioned to
manage larger radio station clusters and take advantage of new opportunities
arising in the U.S. radio broadcasting industry.
OPERATING STRATEGY
The following is a description of the key elements of the Company's
operating strategy:
Clustering of Stations. Cox Radio operates its stations in clusters
to (i) enhance net revenue growth by increasing the appeal of the Company's
stations to advertisers and enabling such stations to compete more
effectively with other forms of advertising and (ii) achieve operating
efficiencies by consolidating broadcast facilities, eliminating duplicative
positions in management and production and reducing overhead expenses.
Management believes that operating several radio stations in each of its
markets will enable its sales teams to offer advertisers more attractive
advertising packages. Furthermore, as radio groups achieve significant
audience share, they can deliver to advertisers the audience reach that
historically only television and newspapers could offer, with the added
benefit of frequent exposure to advertisers' target customers. Management
believes that the Company's clusters of stations, and their corresponding
audience share, provide opportunities to capture an increased share of
total advertising revenue in each of the Company's markets.
Development of Underperforming Stations. The Company's management has
demonstrated its ability to acquire underperforming radio stations and
develop them into consistent ratings and revenue leaders. The Company's
historic margins reflect the acquisition and continued development of
underperforming stations, as well as the fact that increases in net revenue
are typically realized subsequently to increases in audience share.
Management believes that a number of the Company's stations have
significant growth opportunities or turnaround potential and can therefore
be characterized as developing stations.
25
<PAGE> 34
Implementation of the Company's Management Philosophy. The Company's
local station operations are supported by a lean corporate staff which
employs a management philosophy emphasizing (i) market research and
targeted programming; (ii) a customer-focused selling strategy; and (iii)
marketing and promotional activities.
Market Research and Targeted Programming. Cox Radio's research,
programming and marketing strategy combines extensive research with an
assessment of competitors' vulnerabilities and market dynamics in order
to identify specific audience opportunities within each market. Cox
Radio also retains consultants and research organizations to continually
evaluate listener preferences. Using this information, Cox Radio tailors
the programming, marketing and promotions of each Cox Radio station to
maximize its appeal to its target audience. Cox Radio's disciplined
application of market research enables each of its stations to be
responsive to the changing preferences of its targeted listeners. This
approach focuses on the needs of the listener and its community and is
designed to improve ratings and maximize the impact of advertising for
the Company's customers. Through its research, programming and
marketing, Cox Radio also seeks to create a distinct and marketable
local identity for each of its stations in order to enhance audience
share and listener loyalty and to protect against direct format
competition. To achieve this objective, the Company employs and promotes
distinct high-profile on-air personalities and local sports programming
at many of its stations. For example, the Company broadcasts (i) "Dr.
Laura" in Los Angeles, Atlanta, Dayton, Syracuse, Tulsa and Orlando;
(ii) "Rush Limbaugh" in Los Angeles, Orlando, Syracuse and Tulsa; (iii)
"Clark Howard" in Atlanta, Orlando, Dayton and Syracuse; (iv) the
Atlanta Braves in Atlanta and Tampa; and (v) the Orlando Magic in
Orlando.
Customer-Focused Selling Strategy. The Company utilizes a unique,
customer-focused approach to selling advertising known as the
Consultative Selling System. The Company's sales personnel are trained
to approach each advertiser with a view towards solving the marketing
needs of the customer. In this regard, the sales staff consults with
customers, attempts to understand their business goals and offers
comprehensive marketing solutions, including the use of radio
advertising. Instead of merely selling station advertising time, the
Company's sales personnel are encouraged to develop innovative marketing
strategies for the station's advertising customers.
Marketing and Promotional Activities. The Company's stations
regularly engage in significant local promotional activities, including
advertising on local television and in local print media, participating
in telemarketing and direct mailings and sponsoring contests, concerts
and events. Special events may include charitable athletic events,
events centered around a major local occasion or local ethnic group and
special community or family events. Cox Radio also engages in joint
promotional activities with other media in their markets to further
leverage the Company's promotional spending. These promotional efforts
help the Company's stations add new listeners and increase the amount of
time spent listening to the stations.
Strong Management Teams. In addition to relying upon its experienced
senior operating management, the Company places great importance on the
hiring and development of strong local management teams and has been
successful in retaining experienced management teams that have strong ties
to their communities and customers. The Company invests significant
resources in identifying and training employees to create a talented team
of managers at all levels of station operations. These resources include:
(i) Gallup/SRI, which helps the Company identify and select talented
individuals for management and sales positions; (ii) Center for Sales
Strategy ("CSS"), an independent sales and management training company
which trains and develops managers and sales executives; and (iii) a
program of leadership development conducted by the Company's senior
operating management and outside consultants. Local managers are empowered
to run the day-to-day operations of their stations and to develop and
implement policies that will improve station performance and establish
long-term relationships with listeners and advertisers. The compensation of
the senior operating management team and local station managers is largely
dependent upon financial performance and linked to participation in the
Company's Long-Term Incentive Plan.
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<PAGE> 35
ACQUISITION STRATEGY
In the ordinary course of its business, Cox Radio seeks opportunities to
acquire radio stations that it believes will provide added value to the Company.
During the last several years, the Company has implemented its strategy of
clustering radio stations in several of its existing markets. The radio stations
acquired by Cox Radio in the past have primarily been underperforming, and Cox
Radio has generally improved the operating and financial performance of such
stations. The Company intends to continue to make acquisitions where permissible
in the markets in which it operates and may also make opportunistic acquisitions
in additional markets in which the Company believes that it can cost-effectively
achieve a leading position in terms of audience and revenue share. The nature
and timing of further acquisitions, are uncertain and difficult to estimate.
Market Selection Considerations. Cox Radio's acquisition strategy has been
focused primarily on clustering stations in its existing markets; however, in
the future, Cox Radio will increasingly seek to make opportunistic acquisitions
in additional markets. Management believes that Cox Radio will have the
financial resources and management expertise to continue to pursue its
acquisition strategy. Certain future acquisitions may be limited by the multiple
and cross-ownership rules of the Federal Communications Commission ("FCC"). See
"Legislation and Regulation."
Station Considerations. Cox Radio expects to concentrate on acquiring
radio stations that offer, through application of Cox Radio's operating
philosophy, the potential for improvement in the station's performance,
particularly its Broadcast Cash Flow. Such stations may be in various stages of
development, presenting Cox Radio with an opportunity to apply its management
techniques and to enhance asset value. In evaluating potential acquisitions, the
Company considers the strength of a station's broadcast signal. A powerful
broadcast signal enhances delivery range and clarity, thereby influencing
listener preference and loyalty. Cox Radio also assesses the strategic fit of an
acquisition with its existing clusters of radio stations. When entering a new
market, Cox Radio expects to acquire a "platform" upon which to expand its
portfolio of stations and to build a leading cluster of stations.
STATION OPERATIONS
The Company's stations, including the stations to be acquired in the
Pending Transactions, are located in markets which, during the last five years,
have generated, on an aggregate basis, greater radio advertising revenue growth
than the average of 5.3% for the U.S. radio industry as a whole, in each case
calculated using revenue projections obtained from RAB. These markets include
six Sunbelt markets and four markets which management believes have a
disproportionately small number of radio stations relative to the size of the
potential market audience. In most of the Company's markets, radio captures a
small percentage of the total advertising dollars spent, with local advertisers
accounting for the majority of the spending. Clustering creates an opportunity
to increase radio's share of a market's advertising revenues.
The following table summarizes certain information relating to radio
stations owned or operated by the Company, assuming the consummation of the
Pending Transactions:
<TABLE>
<CAPTION>
AUDIENCE 1997
SHARE IN RANK IN AUDIENCE SHARE IN
TARGET TARGET ADULTS 25-54
MARKET AND STATION TARGET DEMOGRAPHIC DEMOGRAPHIC DEMOGRAPHIC DEMOGRAPHIC
CALL LETTERS(1) FORMAT GROUP GROUP GROUP GROUP
- ------------------------------- ------------------ ------------------ ----------- ----------- -----------------
<S> <C> <C> <C> <C> <C>
LOS ANGELES
KFI-AM....................... Talk Adults 35-54 4.5 5 3.5
KOST-FM...................... Adult Contemporary Women 25-44 5.0 3 4.0
KACE-FM...................... R&B Oldies African American 11.4(2) 4(2) 1.6(2)
Adults 35-54
KRTO-FM...................... R&B Oldies African American -- -- --
Adults 35-54
</TABLE>
27
<PAGE> 36
<TABLE>
<CAPTION>
AUDIENCE 1997
SHARE IN RANK IN AUDIENCE SHARE IN
TARGET TARGET ADULTS 25-54
MARKET AND STATION TARGET DEMOGRAPHIC DEMOGRAPHIC DEMOGRAPHIC DEMOGRAPHIC
CALL LETTERS(1) FORMAT GROUP GROUP GROUP GROUP
- ------------------------------- ------------------ ------------------ ----------- ----------- -----------------
<S> <C> <C> <C> <C> <C>
ATLANTA
WSB-AM....................... News/Talk Adults 35-64 11.4 1 8.0
WSB-FM....................... Adult Contemporary Women 25-54 7.9 4 6.1
WJZF-FM...................... Jazz Men 25-54 3.6 13 3.4
WCNN-AM(3)................... News/Talk Adults 35-64 1.2 18 1.0
MIAMI
WFLC-FM...................... Hot Adult Adults 25-54 4.5 6 4.5
Contemporary
WHQT-FM...................... Urban Adult Adults 25-54 6.5 1 6.5
Contemporary
TAMPA(4)
WWRM-FM...................... Soft Adult Women 35-54 10.9 1 6.8
Contemporary
WCOF-FM...................... 70's Oldies Adults 25-44 7.5(5) 5(5) 6.7(5)
WFNS-AM...................... 70's Oldies Adults 25-44 -- -- --
WSUN-AM(6)................... News Adults 25-54 .4 27 .4
ORLANDO
WDBO-AM...................... News/Talk Adults 35-64 6.3 5 4.1
WWKA-FM...................... Country Adults 25-54 8.4 1 8.4
WCFB-FM...................... Urban Adult Women 25-54 5.3(7) 7(7) 4.7(7)
Contemporary
WTLN-AM(8)................... Urban Adult Women 25-54 -- -- --
Contemporary
WHOO-AM...................... Standards Adults 55+ 14.0 2 .8
WHTQ-FM...................... Classic Rock Men 25-54 8.0 2 5.3
WMMO-FM...................... Rock Adult Adults 25-54 6.2 5 6.2
Contemporary
WTLN-FM(9)................... Religious Adults 25-54 1.1 18 1.1
SAN ANTONIO
KCYY-FM...................... Country Adults 25-54 6.2 6 6.2
KKYX-AM...................... Classic Country Adults 35-64 2.5 15 1.2
KCJZ-FM...................... Smooth Jazz Adults 25-54 3.6 11 3.6
Adult Oriented
KISS-FM...................... Rock Adults 18-49 7.1 4 4.7
KSMG-FM...................... Hot Adult Adults 25-54 7.2 3 7.2
Contemporary
KLUP-AM...................... Adult Standards Adults 35-64 2.2 16 .7
KONO-FM...................... Oldies Adults 25-54 6.9(10) 4(10) 6.9(10)
KONO-AM...................... Oldies Adults 25-54 -- -- --
LOUISVILLE
WRKA-FM...................... Oldies Adults 35-54 8.6 4 6.3
WRVI-FM...................... Rock Adult Adults 25-49 1.9 15 1.7
Contemporary
WLSY-FM...................... R&B Oldies Adults 35-54 .5 27 .5
BIRMINGHAM(11)
WZZK-FM...................... Country Adults 25-54 11.6 1 11.6
WEZN-AM(12).................. Stardust Adults 50+ 7.8 4 1.7
WODL-FM...................... Oldies Adults 25-54 6.7 6 6.7
WBHJ-FM...................... Contemporary Hit Adults 18-34 13.6 1 4.5
Urban
WBHK-FM...................... Urban Adult Adults 25-54 8.1 3 8.1
Contemporary
WAGG-AM...................... Gospel Adults 25-54 3.7 11 3.7
</TABLE>
28
<PAGE> 37
<TABLE>
<CAPTION>
AUDIENCE 1997
SHARE IN RANK IN AUDIENCE SHARE IN
TARGET TARGET ADULTS 25-54
MARKET AND STATION TARGET DEMOGRAPHIC DEMOGRAPHIC DEMOGRAPHIC DEMOGRAPHIC
CALL LETTERS(1) FORMAT GROUP GROUP GROUP GROUP
- ------------------------------- ------------------ ------------------ ----------- ----------- -----------------
<S> <C> <C> <C> <C> <C>
DAYTON
WHIO-AM...................... News/Talk Adults 35-64 5.4 4 3.9
WHKO-FM...................... Country Adults 25-54 14.2 1 14.2
WCLR-FM...................... Oldies Adults 35-54 6.4(13) 4(13) 4.7(13)
WZLR-FM...................... Oldies Adults 35-54 -- -- --
WPTW-AM...................... Local Programming Adults 35+ .3 39 --
TULSA
KRMG-AM...................... News/Talk Adults 25-54 7.2 4 7.2
KWEN-FM...................... Country Adults 25-54 11.1 2 11.1
KJSR-FM...................... 70's Oldies Adults 25-54 8.1 3 8.1
KRAV-FM...................... Adult Contemporary Adults 25-54 5.7 7 5.7
KGTO-AM...................... Standards Adults 55+ 10.2 3 .7
BRIDGEPORT
WEZN-FM...................... Adult Contemporary Adults 25-54 14.6(14) 1(14) 14.6(14)
SYRACUSE
WSYR-AM...................... News/Talk Adults 35-64 8.6 4 5.4
WYYY-FM...................... Adult Contemporary Adults 25-54 9.8 2 9.8
WBBS-FM...................... Country Adults 25-54 12.1 1 12.1
WHEN-AM...................... Sports/Talk Men 25-54 3.6 9 2.1
WWHT-FM...................... Adult Hit Radio Women 18-34 10.1 4 2.7
LONG ISLAND
WBLI-FM...................... Hot Adult Adults 25-54 4.5 5 4.5
Contemporary
WBAB-FM...................... Adult Oriented Men 25-54 6.1(15) 3(15) 5.1(15)
Rock
WHFM-FM...................... Adult Oriented Men 25-54 -- -- --
Rock
WGBB-AM(16).................. To be determined Not Applicable -- -- --
Source: Arbitron 1997 Market Reports four-book average
</TABLE>
- ---------------
<TABLE>
<S> <C>
(1) Metropolitan market served; city of license may differ.
(2) Audience share and audience rank information for KACE-FM and
KRTO-FM are combined because the stations are simulcast.
(3) Station operated by Cox Radio pursuant to an LMA.
(4) WLVU-FM, which Cox Radio has been operating pursuant to an
LMA only since September 12, 1998, is excluded from this
listing because no audience data are available.
(5) Audience share and audience rank information for WCOF-FM and
WFNS-AM are combined because the stations are simulcast.
(6) Station to be sold by Cox Radio pursuant to the Tampa
Exchange.
(7) Audience share and audience rank information for WCFB-FM and
WTLN-AM are combined because the stations are simulcast.
(8) Formerly known as WZKD-AM. Station to be sold by Cox Radio
pursuant to the Orlando Exchange.
(9) Station to be acquired by Cox Radio pursuant to the Orlando
Exchange.
(10) Audience share and audience rank information for KONO-FM and
KONO-AM are combined because the stations are simulcast.
(11) WEDA-FM, which Cox Radio has been operating pursuant to an
LMA since November 1998, is excluded from this listing
because the station has just commenced operations and no
audience data are available yet.
(12) Audience share and rank data is based only on Arbitron
Market Report for Fall 1997 because format was only
applicable for that period.
(13) Audience share and audience rank information for WCLR-FM and
WZLR-FM are combined because the stations are simulcast.
(14) Audience share and rank data is based only on Arbitron
Market Reports for Fall 1997 and Spring 1997 because
Arbitron does not produce Summer and Winter Arbitron Market
Reports for the Bridgeport/Fairfield County market.
(15) Audience share and audience rank information for WBAB-FM and
WHFM-FM are combined because the stations are simulcast.
(16) Station to be sold by Cox Radio pursuant to the Long Island
Disposition.
</TABLE>
29
<PAGE> 38
The following table sets forth certain information relating to each of the
markets in which the Company's stations operate or will operate upon
consummation of the Pending Transactions:
<TABLE>
<CAPTION>
1997 MARKET RADIO'S
RADIO 1997 1997 MARKET PERCENTAGE OF ADVERTISING
ADVERTISING METRO TOTAL RADIO 1997 TOTAL REVENUE GROWTH
REVENUE MARKET ADVERTISING ADVERTISING ADVERTISING CAGR
MARKET RANK(A) RANK(B) REVENUE(C) REVENUE(D) REVENUE 1992-97
- ------ ----------- -------- ------------ ----------- ------------- --------------
<S> <C> <C> <C> <C> <C> <C>
Los Angeles.......... 1 2 $3,293 $575 16.3% 6.3%
Atlanta.............. 10 12 886 222 21.7 14.8
Miami................ 12 11 918 198 19.0 12.7
Tampa................ 19 21 524 102 17.4 10.0
Orlando.............. 28 38 387 76 18.3 9.2
San Antonio.......... 32 33 384 68 19.8 8.7
Louisville........... 47 52 224 41 15.4 7.2
Long Island.......... 48 16 --(e) 41 --(e) 5.7
Birmingham........... 50 55 207 40 17.3 9.2
Tulsa................ 55 60 159 35 20.2 10.1
Dayton............... 58 54 197 34 15.1 7.2
Syracuse............. 71 71 123 24 18.7 4.8
Bridgeport........... 90 114 151 17 18.4 7.2
</TABLE>
- ---------------
(a)Ranking of the principal radio market served by the stations among all radio
markets in the United States by 1997 market revenue, according to BIA's
Investing in Radio, 1998.
(b)Ranks assigned by BIA based on population in the market.
(c)Includes television, radio, newspaper, outdoor and cable. Source, Duncan's
Radio Market Guide, 1997. Dollars in millions.
(d)Dollars in millions.
(e)Because the Long Island/Nassau-Suffolk market advertising dollars, exclusive
of radio advertising dollars, are commingled with the New York City market,
this information is not applicable for comparative purposes.
As a result of the Company's management, programming and sales efforts, the
Company's radio stations are characterized by strong ratings and above average
power ratios. A third of the Company's stations are ranked first or second in
terms of audience share in their target demographic groups. In five of the
Company's markets, the Company's station groups ranked number one with respect
to combined station revenue market share.
RECENT TRANSACTIONS
Orlando Acquisition
In March 1997, the Company exchanged WCKG-FM and WYSY-FM in Chicago for
WHOO-AM, WHTQ-FM and WMMO-FM in Orlando (the "Orlando Acquisition"). The Orlando
Acquisition resulted in a pre-tax gain of approximately $49 million. In addition
to receiving the three Orlando stations, Cox Radio also received cash proceeds
of approximately $20 million. Prior to the NewCity Acquisition, the Orlando
stations were operated by NewCity since July 1996 under an LMA.
Tampa Acquisition
In March 1997, the Company acquired WFNS-AM in Tampa for an aggregate
consideration of $1.5 million (the "Tampa Acquisition"). The Company had been
operating this station pursuant to an LMA or a JSA since June 1995.
Los Angeles Acquisition
In April 1997, Cox Radio completed its acquisition of the license and
certain assets of KRTO-FM in Los Angeles for $19 million in cash (the "Los
Angeles Acquisition").
30
<PAGE> 39
NewCity Acquisition
In April 1997, the Company, through the merger of its wholly owned
subsidiary New Cox Radio II, Inc. with and into NewCity, with NewCity surviving
as a wholly owned subsidiary of Cox Radio, acquired all of the issued and
outstanding capital stock of NewCity in the NewCity Acquisition. Cox Radio
purchased the stock of NewCity for an aggregate consideration of approximately
$253 million, including approximately $87 million in assumption of NewCity
indebtedness and approximately $3 million in working capital adjustments. To
consummate the NewCity Acquisition, the Company utilized approximately $56
million of amounts due from CEI and borrowed approximately $110 million pursuant
to the Company's Credit Agreement. On April 2, 1997, NewCity was merged with and
into the Company, with the Company as the surviving corporation. NewCity's
subsidiaries were subsequently consolidated into Cox Radio. In October 1997, the
Company disposed of the assets of American Comedy Network, a former subsidiary
of NewCity, for aggregate proceeds of approximately $1.1 million including
certain non-compete agreements.
Birmingham Acquisitions I and II and Birmingham Disposition
In November 1998, the Company consummated the acquisition of radio stations
WBHJ-FM and WBHK-FM in Birmingham, Alabama (the "Birmingham Acquisition I") for
an aggregate consideration of $17 million. Since August 1, 1997, the Company had
been operating WBHJ-FM and WBHK-FM under an LMA.
In May 1997, the Company agreed to acquire WENN-FM and WAGG-AM in
Birmingham, Alabama, for consideration of $15 million (the "Birmingham
Acquisition II"). In July 1997, the Company assigned its right to purchase
WENN-FM for consideration of $14.5 million to a third party (the "Birmingham
Disposition"). The Company consummated these transactions during November 1997.
San Antonio Transactions
In September 1997, the Company acquired KISS-FM, KSMG-FM and KLUP-AM in San
Antonio, Texas for an aggregate consideration of $30.4 million plus certain
non-compete agreements (the "San Antonio Acquisition I"). In March 1998, the
Company acquired KONO-FM and KONO-AM in San Antonio for $23 million (the "San
Antonio Acquisition II").
In December 1997, the Company acquired an option to purchase radio station
KRIO-FM, serving the San Antonio market, for a purchase price of $9 million. The
Company entered into an agreement to assign this option in January 1998 for an
aggregate consideration of $250,000 (the "San Antonio Disposition"). The closing
of the San Antonio Disposition occurred in May 1998.
Dayton Acquisition
In October 1998, the Company consummated the acquisition of radio stations
WCLR-FM, WZLR-FM and WPTW-AM, serving the Dayton, Ohio market for approximately
$6 million (the "Dayton Acquisition"). The Company had been operating these
stations pursuant to an LMA since December 1997.
Long Island Acquisition
In May 1998, the Company acquired the assets of radio stations WBLI-FM,
WBAB-FM, WHFM-FM and WGBB-AM, serving the Nassau-Suffolk, New York market for
consideration of $48 million (the "Long Island Acquisition").
The Orlando Acquisition, the Tampa Acquisition, the Los Angeles
Acquisition, the NewCity Acquisition, the Birmingham Acquisitions I and II, the
Birmingham Disposition, the San Antonio Acquisition I, the San Antonio
Acquisition II, the San Antonio Disposition, the Dayton Acquisition and the Long
Island Acquisition are collectively referred to herein as the "Recent
Transactions".
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<PAGE> 40
PENDING TRANSACTIONS
Birmingham Acquisition III
In September 1997, the Company announced that it had entered into an
agreement in principle with a third party to construct, program and own WEDA-FM,
a new Class A FM radio station in Homewood, Alabama to serve the Birmingham
market (the "Birmingham Acquisition III"). The FCC approved the third party's
application for the new construction permit and settlement of the comparative
hearing among the three applicants for the construction permit. As part of the
agreement in principle, the third party has constructed the station and the
Company has agreed to enter into an LMA for the station commencing in November
1998. The Company also acquired an option to purchase the station for an
aggregate consideration of $5.5 million and the assumption of debt in an amount
not to exceed $200,000. The Company expects to consummate the Birmingham
Acquisition III in the fourth quarter of 1998 or the first half of 1999.
Orlando Exchange
In February 1998, the Company entered into an agreement to acquire the
assets of WTLN-FM serving the Orlando, Florida market for consideration of $14.5
million. In a related transaction, the Company entered into an agreement to
dispose of the assets of WTLN-AM (formerly known as WZKD-AM), also serving the
Orlando, Florida market for $500,000 (the "Orlando Exchange"). Pending certain
regulatory approvals, the Company expects to complete the Orlando Exchange in
the fourth quarter of 1998 or the first half of 1999.
Long Island Disposition
In October 1998, the Company entered into an agreement with a third party
to dispose of the assets of radio station WGBB-AM (the "Long Island
Disposition") for $1.7 million. Pending certain regulatory approvals, the
Company anticipates closing the Long Island Disposition in the first half of
1999.
Tampa Exchange
In September 1998, the Company entered into an agreement in principle to
acquire the assets of radio station WLVU-FM, serving the Tampa, Florida market.
The Company has entered into a TBA for WLVU-FM commencing in September 1998. In
a related transaction, the Company entered into an agreement to dispose of the
assets of radio station WSUN-FM, also serving the Tampa, Florida market (the
"Tampa Exchange"). Pending certain regulatory approvals, the Company anticipates
closing the Tampa Exchange in the first half of 1999.
The Birmingham Acquisition III, the Orlando Exchange, the Long Island
Disposition and the Tampa Exchange are collectively referred to herein as the
"Pending Transactions".
WSB, INC. AND WHIO, INC. MERGERS
WSB, Inc., a Delaware corporation ("WSB"), and WHIO, Inc., a Delaware
corporation ("WHIO" and, together with WSB, the "Initial Note Guarantors"), were
merged with and into the Company on November 10, 1998 and November 1, 1998,
respectively (collectively, the "Mergers"). As a result of such Mergers, the
Initial Note Guarantors are no longer Note Guarantors and, as of the date
hereof, the Notes do not have the benefit of any Note Guarantees.
LICENSE DROP-DOWN
The Company anticipates transferring the licenses, permits and
authorizations it holds from the FCC in respect of the radio stations it owns
(other than in respect of the radio stations it owns in the states of California
and Florida) to CXR Holdings, Inc., a Nevada corporation and a wholly-owned
subsidiary of the Company ("CXR Holdings"), upon receipt of consent from the FCC
and the satisfaction of certain other conditions (the "License Drop-Down"). The
Company has received the consent of the FCC with respect to most of the stations
that will be involved in the License Drop-Down and expects to apply for and
receive such FCC consents in respect of the remaining stations. The Company
currently anticipates that the License Drop-
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<PAGE> 41
Down will be consummated in the first quarter of 1999. If the License Drop-Down
is consummated, CXR Holdings will become a Note Guarantor. There can be no
assurance as to the timing of the License Drop-Down or if the License Drop-Down
shall occur at all (in which case, CXR Holdings will not become a Note
Guarantor).
COMPETITION; CHANGES IN THE BROADCASTING INDUSTRY
The radio broadcasting industry is a highly competitive business. The
success of each of the Company's stations depends largely upon its audience
ratings and its share of the overall advertising revenue within its market. The
Company's radio stations compete for listeners directly with other radio
stations in their respective markets primarily on the basis of program content
that appeals to a target demographic group. By building a strong listener base
consisting of a specific demographic in each of its markets, Cox Radio is able
to attract advertisers seeking to reach those listeners. The Company's stations
compete for advertising revenue directly with other radio stations and with
other electronic and print media within their respective markets.
Factors that are material to a station's competitive position include
management experience, the station's audience share rank in its market,
transmitter power, assigned frequency, audience characteristics, local program
acceptance, and the number and characteristics of other stations in the market
area. Cox Radio attempts to improve its competitive position with promotional
campaigns aimed at the demographics targeted by its stations and by sales
efforts designed to attract advertisers. Recent changes in the law and in FCC
rules and policies have increased the number of radio stations a broadcaster may
own in a given market and permit, within limits, joint arrangements with other
stations in a market relating to programming, advertising sales, and station
operations. Management believes that radio stations that elect to take advantage
of these opportunities may, in certain circumstances, have lower operating costs
and may be able to offer advertisers more attractive rates and services.
Although the radio broadcasting industry is highly competitive, some
barriers to entry exist. The operation of a radio broadcast station requires a
license from the FCC and the number of radio stations that a single entity may
own and operate in a given market is limited by the availability of FM and AM
radio frequencies allotted by the FCC to communities in that market, as well as
by the FCC's multiple ownership rules, which regulate the number of stations
that may be owned and controlled by a single entity. The FCC recently adopted
rules to implement the use of competitive bidding procedures (auctions) to award
licenses or construction permits for new broadcast stations and to resolve
pending and future applications by licensees proposing major changes to their
existing facilities, where such applications are mutually exclusive with other
licensees' applications.
The Company's stations compete for advertising revenue with other radio
stations and with other electronic and print media. Potential advertisers can
substitute advertising through broadcast television, cable television systems
(which can offer concurrent exposure on a number of cable networks to enlarge
the potential audience), daily, weekly, and free-distribution newspapers, other
print media, direct mail, and on-line computer services for radio advertising.
Competing media commonly target the customers of their competitors, and
advertisers regularly shift dollars from radio to these competing media and vice
versa. Accordingly, there can be no assurance that any of the Company's stations
will be able to maintain or increase its current audience ratings and
advertising revenue share. In addition, the radio broadcasting industry is
subject to competition from new media technologies that are being developed or
introduced, such as the delivery of audio programming by cable television
systems, by satellite digital audio radio service ("satellite DARS" or "SDARS"),
and by digital audio broadcasting ("DAB"), and the possible authorization by the
FCC of a new service of microbroadcasting (low powered, limited coverage radio
stations). DAB and SDARS provide for the delivery by terrestrial or satellite
means of multiple new audio programming formats with compact disc quality sound
to local and national audiences. The delivery of information through the
Internet also could create a new form of competition. The radio broadcasting
industry historically has grown despite the introduction of new technologies for
the delivery of entertainment and information, such as broadcast television,
cable television, audio tapes and compact discs. A growing population and
greater availability of radios, particularly car and portable radios, have
contributed to this growth. There can be no assurance,
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<PAGE> 42
however, that the development or introduction in the future of any new media
technology will not have an adverse effect on the radio broadcasting industry.
Cox Radio cannot predict what other matters might be considered in the
future by the FCC, nor can it assess in advance what impact, if any, the
implementation of any FCC proposals or changes might have on its business.
YEAR 2000 ISSUES AND YEAR 2000 READINESS DISCLOSURE
The Company recognizes the importance of the Year 2000 issue and is taking
a proactive approach intended to facilitate an appropriate transition into the
year 2000. The "Year 2000 issue" is the result of computer programs and embedded
computer microprocessors being unable to distinguish between the year 1900 and
the year 2000, or misinterpreting the date field. Any of the Company's systems
that have time-sensitive software may recognize a date using "00" as the year
1900 rather than the year 2000, which could result in miscalculations or system
failures. A system or application is deemed "Year 2000 compliant" when it
continues to produce understandable, accurate and predictable results which
conform to the original functional specifications, regardless of the millennium
change.
State of Readiness
The Company has implemented a project team utilizing both internal and
external resources, including those of majority shareholder, Cox Broadcasting,
Inc., to develop its Year 2000 initiative, which may, as necessary, involve
upgrading or replacing affected computer systems, software and equipment with
embedded chips, and preparing contingency and disaster recovery plans.
The Company has substantially completed an inventory of current systems and
operations to identify any information technology and non-information technology
systems (including equipment with embedded chips) that do not properly recognize
dates after December 31, 1999. The project team has developed a plan to assess,
remediate, test, and, sufficiently in advance of the Year 2000, ascertain that
the systems of the Company that are critical to the Company's operations will
properly recognize such dates. The plan includes on-site audits at each of the
Company's radio stations. The project team has commenced the audit process which
is scheduled to be complete by the end of the second quarter of 1999.
Based on the results of the inventory, the Company began in second quarter
of 1998 to remediate noncompliant systems. The Company anticipates that
remediation will be complete by the end of third quarter 1999. The Company uses
CEI's financial and human resources information systems, which are being tested
by CEI.
The Company has substantially completed a formal communication program with
its significant vendors to determine the extent to which the Company is
vulnerable to those third parties who fail to remediate their own Year 2000
non-compliance. The Company is to a large degree dependent on vendor remediation
and testing of vendor systems. The Company's two most significant vendors are
Marketron, which provides the Company's traffic and billing system, and ADP,
which provides payroll services. The Company uses Marketron's Version 28 running
on DOS 6.2, which Marketron has indicated is Year 2000 compliant and ADP Version
2.5 running on Windows 95, which ADP has indicated is Year 2000 compliant. The
Company has not performed its own tests on these systems, and no assurance can
be given at this time that these systems are compliant.
Costs
As of September 30, 1998, approximately $120,000 of outside consulting
costs have been incurred related to the Company's Year 2000 initiative. The
Company will incur capital expenditures and internal staff costs as well as
additional outside consulting and other expenditures related to this initiative.
The Company expects these costs to total approximately $2 million, based on
currently available information. Total incremental expenses (including
depreciation and amortization) of bringing current systems into compliance,
writing off existing non-compliant systems, and capital replacements have not
had a material impact on the Company's
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<PAGE> 43
financial condition to date and are not at present, based on known facts,
expected to have a material impact on the Company's financial condition.
Risks and Most Reasonably Likely Worst Case Scenario
If systems critical to the Company's operations are not Year 2000
compliant, the most reasonably likely worst case scenario would include service
interruptions resulting from failure in electrical power and satellite feeds
providing news, weather and syndicated shows for broadcast and failure of
equipment with embedded chips including master clocks, studio equipment,
transmission equipment and telephone, security and environmental control
systems.
Based on the information currently available, the Company is not aware of
any likely Year 2000 non-compliance by the Company or its vendors or customers
that will materially affect the Company's business operations; however, the
Company does not control the systems of other companies, and cannot assure that
such systems will be timely converted and, if not converted, would not have an
adverse effect on the Company's business operations. Furthermore, no assurance
can be given at this time that any or all of the Company's systems are or will
be Year 2000 compliant, or that the ultimate costs required to address the Year
2000 issue or the impact of any failure to achieve substantial Year 2000
compliance by the Company, its vendors or customers will not have a material
adverse effect on the Company's financial condition.
Like most other businesses, the Company is dependent on general service
outside vendors including providers of electrical power, telephony, water, fuel
for vehicles and other necessary commodities. The Company also relies upon the
interstate banking system and related electronic communications for such
functions as transmitting financial data from field locations to the home office
and sweeping cash into lockboxes. The Company is currently not aware of any
material non-compliance by these providers that will materially affect the
Company's business operations, however, the Company does not control these
systems and cannot assure that they will be converted in a timely fashion and if
not converted would not have an adverse effect on the Company's business
operations.
Contingency Plans
The Year 2000 project team is working with each station to expand and
modify existing emergency contingency plans to encompass potential Year 2000
exposures, including increased risk of loss of electrical power, and satellite
failures resulting in need for alternate delivery system for programming,
potential multiple systems failures and other relevant issues. It is anticipated
that contingency plans will be in place for each station by third quarter 1999.
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<PAGE> 44
LEGISLATION AND REGULATION
The ownership, operation and sale of radio stations, including those
licensed to Cox Radio, are subject to the jurisdiction of the FCC, which acts
under authority granted by the Communications Act of 1934, as amended (the
"Communications Act"). Among other things, the FCC assigns frequency bands for
broadcasting, determines the particular frequencies, locations and operating
power of stations, issues, renews and modifies station licenses, determines
whether to approve changes in ownership or control of station licenses,
regulates equipment used by stations, adopts and implements regulations and
policies that directly or indirectly affect the ownership, operation, program
content, employment practices, and business of stations, and has the power to
impose penalties, including license revocations, for violations of its rules or
the Communications Act.
The Telecommunications Act of 1996 (the "1996 Act"), which significantly
amended the Communications Act in numerous respects, dramatically changed the
ground rules for competition and regulation in virtually all sectors of the
telecommunications industry, including broadcasting, local and long-distance
telephone services, cable television services and telecommunications equipment
manufacturing. In addition, the 1996 Act imposed numerous requirements on the
FCC to launch new inquiries and rulemaking proceedings, perhaps 80 in all,
involving a multitude of telecommunications issues, including those described
herein that will directly affect the broadcast industry. The 1996 Act mandated
that such rulemaking proceedings be completed within certain time frames, in
some cases as short as six months. Some of these proceedings have been completed
while others remain pending.
Broadcast station licenses are subject to renewal upon application to the
FCC. Pursuant to Congress' mandate in the 1996 Act, the FCC adopted a rule
extending radio license terms from seven to eight years. All licenses renewed as
part of the current renewal cycle will have a term of eight years. The FCC will
renew a broadcast license if it determines that the "public convenience,
interest or necessity" will be served thereby. Each of the Company's radio
stations operates pursuant to one or more licenses issued by the FCC that
presently have a maximum term of seven years. The Company's licenses expire at
various times through the year 2006. Although Cox Radio has applied or will
apply to renew these licenses, third parties may challenge the Company's renewal
applications. Historically, Cox Radio's management has not experienced any
material difficulty in obtaining renewal from the FCC of any of the broadcast
licenses for stations under its control. See "Risk Factors-Government Regulation
of the Broadcasting Industry."
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<PAGE> 45
MANAGEMENT
The following table sets forth the name and age of the directors and
executive officers of Cox Radio as of November 1, 1998:
<TABLE>
<CAPTION>
NAME AGE POSITION WITH COX RADIO
---- --- -----------------------
<S> <C> <C>
Nicholas D. Trigony.................... 58 Chairman of the Board of Directors
Robert F. Neil......................... 39 President and Chief Executive Officer,
Director
Richard A. Ferguson.................... 53 Vice President and Chief Operating
Officer, Director
Maritza Pichon......................... 44 Chief Financial Officer
Marc W. Morgan......................... 49 Senior Group Vice President
Robert B. Green........................ 45 Group Vice President
James T. Morely........................ 49 Senior Group Vice President
Richard A. Reis........................ 44 Group Vice President
James C. Kennedy....................... 50 Director
David E. Easterly...................... 56 Director
Ernest D. Fears, Jr.................... 66 Director
Paul M. Hughes......................... 60 Director
</TABLE>
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<PAGE> 46
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table provides information as of March 18, 1998 with respect
to the shares of Class A Common Stock and Class B Common Stock beneficially
owned by each person known by the Company to own more than 5% of any class of
the outstanding voting securities of the Company.
<TABLE>
<CAPTION>
PERCENT OF PERCENT OF VOTE
CLASS A CLASS B CLASS OF OF ALL CLASSES OF
NAME OF BENEFICIAL OWNER COMMON STOCK COMMON STOCK COMMON STOCK COMMON STOCK
- ------------------------ ------------ ------------ ------------ -----------------
<S> <C> <C> <C> <C>
Cox Enterprises, Inc.(1)(2)(3).......... -- 19,577,672 100.00% 95.67%
J.&W. Seligman & Co. Incorporated(4).... 1,189,000 -- 13.41 0.58
Baron Capital Group, Inc.(5)............ 920,000 -- 10.37 0.45
Massachusetts Financial Services
Company(6)............................ 864,600 -- 9.75 0.42
College Retirement Equities Fund(7)..... 636,800 -- 7.18 0.31
Mellon Bank Corporation(8).............. 458,250 -- 5.17 0.22
</TABLE>
- ---------------
(1) The address for CEI is 1400 Lake Hearn Drive, N.E., Atlanta, Georgia 30319.
(2) All the shares of Common Stock of the Company that are beneficially owned by
CEI are held of record by Cox Broadcasting. Cox Broadcasting holds
19,577,672 shares of Class B Common Stock that are convertible into the same
number of shares of Class A Common Stock. All the shares of outstanding
capital stock of Cox Broadcasting are beneficially owned by Cox Holdings,
Inc., and all of the shares of outstanding capital stock of Cox Holdings,
Inc. are beneficially owned by CEI. The beneficial ownership of the
outstanding capital stock of CEI is described in footnote (3) below.
(3) There are 202,448,312 shares of common stock of CEI outstanding, with
respect to which (i) Barbara Cox Anthony, as trustee of the Anne Cox
Chambers Atlanta Trust, exercises beneficial ownership over 58,316,422
shares (28.8%); (ii) Anne Cox Chambers, as trustee of the Barbara Cox
Anthony Atlanta Trust, exercises beneficial ownership over 58,316,422 shares
(28.8%); (iii) Barbara Cox Anthony, Anne Cox Chambers and Richard L.
Braunstein, as trustees of the Dayton Cox Trust A, exercise beneficial
ownership over 82,745,685 shares (40.9%); and (iv) 244 individuals and
trusts exercise beneficial ownership over the remaining 3,069,783 shares
(1.5%). Thus, Barbara Cox Anthony and Anne Cox Chambers, who are sisters,
together exercise sole or shared beneficial ownership over 199,378,529
shares (98.5%) of the common stock of CEI. In addition, Garner Anthony, the
husband of Barbara Cox Anthony, holds beneficially and of record 14,578
shares of common stock of CEI. Barbara Cox Anthony disclaims beneficial
ownership of such shares. Barbara Cox Anthony and Anne Cox Chambers are the
mother and aunt, respectively, of James C. Kennedy, the Chairman of the
Board of Directors and Chief Executive Officer of CEI and a director of the
Company.
(4) The information contained in this table with respect to J.&W. Seligman & Co.
Incorporated is based on a Schedule 13G reporting ownership as of January
31, 1998 by J.&W. Seligman & Co. Incorporated; William C. Morris; and
Seligman Communications & Information Fund, Inc. The address for the
reporting persons is 100 Park Avenue, New York, New York 10017.
(5) The information contained in this table with respect to Baron Capital Group,
Inc. is based on a joint filing on Schedule 13G reporting ownership as of
December 31, 1997 by Baron Capital Group, Inc., BAMCO, Inc., Baron Capital
Management, Inc., Baron Asset Fund, and Ronald Baron. The address for each
of the reporting parties is 767 Fifth Avenue, 24th Floor, New York, New York
10153.
(6) The information contained in this table with respect to Massachusetts
Financial Services Company is based on a filing on Schedule 13G reporting
ownership as of December 31, 1997. The address for the reporting person is
500 Boylston Street, Boston, Massachusetts 02116.
(7) The information contained in this table with respect to College Retirement
Equities Fund is based on a joint filing on Schedule 13G reporting ownership
as of December 31, 1997 by College Retirement Equities Fund and TIAA-CREF
Mutual Funds. The address for each reporting party is 730 Third Avenue, New
York, New York 10017.
(8) The information contained in this table with respect to Mellon Bank
Corporation is based on a joint filing on Schedule 13G reporting ownership
as of December 31, 1997 by the following direct or indirect subsidiaries of
Mellon Bank Corporation: Boston Safe Deposit and Trust Company; Mellon Bank,
N.A.; Mellon Capital Management Corporation; Mellon Equity Associates; The
Boston Company Asset Management, Inc.; The Dreyfus Corporation; Boston Group
Holdings, Inc.; The Boston Company, Inc.; and MBC Investment Corporation.
The address of Mellon Bank Corporation and for all reporting persons is One
Mellon Bank Center, Pittsburgh, Pennsylvania 15258.
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<PAGE> 47
DESCRIPTION OF CERTAIN INDEBTEDNESS
THE CREDIT AGREEMENT
On March 7, 1997, Cox Radio entered into a $300 million, five-year, senior,
unsecured revolving credit facility (the "Credit Agreement") with certain
guarantors and banks, including Chase Bank of Texas, N.A. (formerly Texas
Commerce Bank National Association), as Administrative Agent, NationsBank of
Texas, N.A., as Syndications Agent, and Citibank, N.A., as Documentation Agent.
The loan proceeds were used to finance the payment of the consideration payable
in the NewCity Acquisition, repay certain secured debt of NewCity and finance
certain acquisitions. The remaining credit availability may be used to finance
additional acquisitions and for other corporate purposes. The Credit Agreement
has restrictions on the payment of dividends, certain mergers, consolidations or
dispositions of assets and establishes limitations on, among other things,
additional indebtedness and transactions with affiliates. The total principal
amount outstanding under the Credit Agreement was $100.0 million as of June 30,
1998 and the weighted average per annum interest rate applicable to borrowings
thereunder for the six months ended June 30, 1998 was 6.5%. Future borrowings
under the Credit Agreement will accrue interest at the London Interbank Offered
Rate plus a specified margin.
THE CEI CREDIT FACILITY
The Company has entered into a revolving credit facility with CEI (the "CEI
Credit Facility"). Borrowings by the Company under the CEI Credit Facility are
typically repaid by the Company within 30 days. Borrowings under the CEI Credit
Facility accrue interest at CEI's commercial paper rate plus .40%. As of June
30, 1998, no amounts were outstanding under the CEI Credit Facility.
ADDITIONAL FINANCING
The Company expects to enter into a new credit facility pursuant to which
the lenders thereunder would commit to lend $100 million to the Company on a
revolving basis for acquisitions and general corporate purposes. Loans pursuant
to such commitment are expected to bear interest on terms similar to the terms
of the Credit Agreement.
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<PAGE> 48
THE EXCHANGE OFFER
PURPOSE AND EFFECT OF THE EXCHANGE OFFER
The Old Notes were originally sold by the Company on May 26, 1998 to the
Initial Purchasers pursuant to the Purchase Agreement. The Initial Purchasers
subsequently placed the Old Notes with qualified institutional buyers pursuant
to Rule 144A under the Securities Act. As a condition of the Purchase Agreement,
the Company entered into the Registration Rights Agreement with the Initial
Purchasers pursuant to which the Company has agreed, for the benefit of the
holders of the Old Notes, at the Company's cost, to use its best efforts to (i)
cause the Exchange Offer Registration Statement to be declared effective under
the Securities Act within 180 days after the date of the original issuance of
the Old Notes and (ii) keep the Exchange Offer open for not less than 30
calendar days (or longer if required by applicable law) after the date on which
notice of the Exchange Offer is mailed to the holders of the Old Notes. For each
2003 Old Note validly tendered pursuant to the Exchange Offer and not validly
withdrawn by the holder thereof, the holder of such 2003 Old Note will receive a
2003 New Note having a principal amount equal to that of the surrendered 2003
Old Note and for each 2005 Old Note validly tendered pursuant to the Exchange
Offer and not validly withdrawn by the holder thereof, the holder of such 2005
Old Note will receive a 2005 New Note having a principal amount equal to that of
the surrendered 2005 Old Note.
Based upon interpretations by the staff of the Commission set forth in
certain no-action letters issued to third parties, the Company believes that the
New Notes issued pursuant to the Exchange Offer in exchange for Old Notes may be
offered for resale, resold and otherwise transferred by any holder thereof
(other than a broker-dealer, as set forth below, or any such holder that is an
"affiliate" of the Company within the meaning of Rule 405 under the Securities
Act) without compliance with the registration and prospectus delivery
requirements of the Securities Act, provided that such New Notes are acquired in
the ordinary course of such holder's business and that such holder has no
arrangement or understanding with any person to participate in the distribution
of such New Notes. See "The Exchange Offer -- Resale of the New Notes." Holders
of Old Notes wishing to accept the Exchange Offer must represent to the Company,
as required by the Registration Rights Agreement, that such conditions have been
met and that such holder is not an "affiliate" of the Company within the meaning
of Rule 405 under the Securities Act. Each Participating Broker-Dealer must
represent that the Old Notes tendered in exchange therefor were acquired as a
result of market-making activities or other trading activities and must
acknowledge that it will deliver a prospectus in connection with any resale of
such New Notes. The Letter of Transmittal states that by so acknowledging and by
delivering a prospectus, a Participating Broker-Dealer will not be deemed to
admit that it is an "underwriter" within the meaning of the Securities Act. This
Prospectus, as it may be amended or supplemented from time to time, may be used
by any broker-dealer (other than an affiliate of the Company) in connection with
resales of New Notes received in exchange for Old Notes where such Old Notes
were acquired by such broker-dealer as a result of market-making activities or
other trading activities. The Company has agreed that, for a period of up to 90
days after the Expiration Date, it will make this Prospectus available to any
broker-dealer for use in connection with any such resale. See "Plan of
Distribution." Any holder who tenders in the Exchange Offer with the intention
to participate, or for the purpose of participating, in a distribution of the
New Notes or who is an affiliate of the Company may not rely on the position of
the staff of the Commission enunciated in Exxon Capital Holdings Corporation
(May 13, 1988) or similar no-action letters and, in the absence of an exemption
therefrom, must comply with the registration and prospectus delivery
requirements of the Securities Act in connection with a secondary resale
transaction. Failure to comply with such requirements in such instance may
result in such holder incurring liability under the Securities Act for which the
holder is not indemnified by the Company. No affiliate of the Company may rely
on such no-action letters and any such affiliate must comply with the
registration and prospectus delivery requirements of the Securities Act in
connection with a secondary resale transaction.
As contemplated by the above-mentioned no-action letters and the
Registration Rights Agreement, each holder accepting the Exchange Offer is
required to represent to the Company in the Letter of Transmittal that (i) the
New Notes are to be acquired by the holder or the person receiving such New
Notes, whether or not such person is the holder, in the ordinary course of
business, (ii) the holder or any such other person (other
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<PAGE> 49
than a broker-dealer referred to in the next sentence) is not engaging and does
not intend to engage, in a distribution of the New Notes, (iii) the holder or
any such other person has no arrangement or understanding with any person to
participate in the distribution of the New Notes, (iv) neither the holder nor
any such other person is an "affiliate" of the Company within the meaning of
Rule 405 under the Securities Act, and (v) the holder or any such other person
acknowledges that if such holder or any other person participates in the
Exchange Offer for the purpose of distributing the New Notes, it must comply
with the registration and prospectus delivery requirements of the Securities Act
in connection with any resale of the New Notes and cannot rely on such no-action
letters. As indicated above, each Participating Broker-Dealer that receives New
Notes for its own account in exchange for Old Notes must acknowledge that it (i)
acquired the Old Notes for its own account as a result of market-making
activities or other trading activities, (ii) has not entered into any
arrangement or understanding with the Company or any "affiliate" of the Company
(within the meaning of Rule 405 under the Securities Act) to distribute the New
Notes to be received in the Exchange Offer and (iii) will deliver a prospectus
meeting the requirements of the Securities Act in connection with any resale of
such New Notes. For a description of the procedures for resales by Participating
Broker-Dealers, see "Plan of Distribution."
The Company has not entered into any arrangement or understanding with any
person to distribute the New Notes to be received in the Exchange Offer.
If, because of any change in law, regulation or in the applicable
interpretations of the staff of the Commission, the Company is not permitted to
effect the Exchange Offer or, for any reason, the Exchange Offer Registration
Statement is not declared effective within 180 days after the date of issuance
of the Old Notes or in certain other circumstances, then the Company shall use
its best efforts to (a) as promptly as practicable, file a shelf registration
statement (the "Shelf Registration Statement") covering the Old Notes, (b) cause
the shelf registration statement to be declared effective under the Securities
Act and (c) keep the shelf registration statement effective until the earlier of
two years after the initial sale of the Old Notes to the Initial Purchasers or
such time as all of the applicable Old Notes have been sold thereunder or
otherwise cease to be registrable securities within the meaning of the
Registration Rights Agreement.
The Company will, in the event of the filing of the Shelf Registration
Statement, provide to each applicable holder of the Old Notes copies of the
prospectus which is a part of the Shelf Registration Statement, notify each such
holder when the Shelf Registration Statement has become effective and take
certain other actions as are required to permit unrestricted resales of the Old
Notes. A holder of the Old Notes that sells such Old Notes pursuant to the Shelf
Registration Statement generally will be required to be named as a selling
security holder in the related prospectus and to deliver a prospectus to
purchasers, will be subject to certain of the civil liability provisions under
the Securities Act in connection with such sales and will be bound by the
provisions of the Registration Rights Agreement which are applicable to such a
holder (including certain indemnification obligations). In addition, each holder
of the Old Notes will be required to deliver information to be used in
connection with the Shelf Registration Statement and to provide comments on the
Shelf Registration Statement within the time periods set forth in the
Registration Rights Agreement in order to have their Old Notes included in the
Shelf Registration Statement and to benefit from the provisions set forth below.
Each holder will be deemed to have agreed that, upon receipt of notice from
the Company of the occurrence of any event which makes any statement in the
prospectus which is part of the Shelf Registration Statement (or, in the case of
Participating Broker-Dealers, the prospectus which is part of the Exchange Offer
Registration Statement) untrue in any material respect or which requires the
making of any changes in such prospectus in order to make the statements therein
not misleading or of certain other events specified in the Registration Rights
Agreement, such holder (or Participating Broker-Dealer, as the case may be) will
suspend the sale of Old Notes pursuant to such prospectus until the Company has
amended or supplemented such prospectus to correct such misstatement or omission
and has furnished copies of the amended or supplemented prospectus to such
holder (or Participating Broker-Dealer, as the case may be) or the Company has
given notice that the sale of the Notes may be resumed.
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<PAGE> 50
If the Company shall give such notice to suspend the sale of the Old Notes,
it shall extend the relevant period referred to above during which the Company
and the Note Guarantors, if any, are required to keep effective the Shelf
Registration Statement (or the period during which Participating Broker-Dealers
are entitled to use the prospectus included in the Exchange Offer Registration
Statement in connection with the resale of New Notes) by the number of days
during the period from and including the date of the giving of such notice to
and including the date when holders shall have received copies of the
supplemented or amended prospectus necessary to permit resales of the Notes or
to and including the date on which the Company has given notice that the sale of
Notes may be resumed.
If the Company or any Note Guarantor, if any, fails to comply with the
Registration Rights Agreement or if the Exchange Offer Registration Statement or
the Shelf Registration Statement fails to become effective, then liquidated
damages (the "Liquidated Damages") shall become payable in respect of the Notes
as follows:
(i) If neither the Exchange Offer Registration Statement nor the Shelf
Registration Statement is declared effective by the Commission on or prior
to the 180th day after the Closing Date (in the case of an Exchange Offer
Registration Statement) or on or prior to the later of (A) the 40th day
after the date such Registration Statement was required to be filed and (B)
the 180th day after the Closing Date (in the case of a Shelf Registration
Statement), then Liquidated Damages shall accrue on the principal amount of
the Notes at a rate of 0.25% per annum; or
(ii) if (A) the Company has not exchanged the New Notes for all Old
Notes validly tendered or any Note Guarantor has not executed a New Note
Guarantee, if any, in respect of such New Notes, in accordance with the
terms of the Exchange Offer on or prior to the 45th day after the date on
which the Exchange Offer Registration Statement was declared effective or
(B) if applicable, the Shelf Registration Statement has been declared
effective and such Shelf Registration Statement ceases to be effective or
usable for resales at any time prior to the second anniversary of the
Closing Date (other than after such time as all Notes have been disposed of
thereunder or otherwise cease to be registrable securities within the
meaning of the Registration Rights Agreement), then Liquidated Damages
shall accrue on the principal amount of the Notes at a rate of 0.25% per
annum, commencing on (x) the 46th day after such effective date, in the
case of (A) above, or (y) the day such Shelf Registration Statement ceases
to be effective or useable for resales, in the case of (B) above;
provided, however, that the Liquidated Damages rate on the principal amount of
Notes may not exceed in the aggregate 0.25% per annum; provided, further,
however, that (1) upon the effectiveness of the Exchange Offer Registration
Statement or a Shelf Registration Statement (in the case of clause (i) above),
(2) upon the exchange of New Notes for all Old Notes validly tendered and
execution by each Note Guarantor of a Note Guarantee, if any, in respect thereof
(in the case of clause (ii) (A) above) or upon the effectiveness or availability
of the Shelf Registration Statement which had ceased to remain effective or
useable for resales (in the case of clause (ii) (B) above), then Liquidated
Damages on the principal amount of Old Notes as a result of such clause (or the
relevant subclause thereof) shall cease to accrue.
Any amounts of Liquidated Damages due pursuant to the foregoing paragraphs
will be payable in cash on May 15 and November 15 of each year to the holders of
record on the last day of the month preceding the month in which the relevant
payment date falls.
The summary herein of certain provisions of the Registration Rights
Agreement does not purport to be complete and is subject to, and is qualified in
its entirety by, all the provisions of the Registration Rights Agreement, a copy
of which is filed as an exhibit to the Registration Statement of which this
Prospectus is a part.
Following the consummation of the Exchange Offer, holders of the Old Notes
who were eligible to participate in the Exchange Offer but who did not tender
their Old Notes will not have any further registration rights and such Old Notes
will continue to be subject to certain restrictions on transfer. Accordingly,
the liquidity of the market for such Old Notes could be adversely affected.
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<PAGE> 51
TERMS OF THE EXCHANGE OFFER
Upon the terms and subject to the conditions set forth in this Prospectus
and in the Letter of Transmittal, the Company will accept any and all Old Notes
validly tendered and not withdrawn prior to 5:00 p.m., New York City time, on
the Expiration Date. The Company will issue $1,000 principal amount of 2003 New
Notes in exchange for each $1,000 principal amount of 2003 Old Notes and $1,000
principal amount of 2005 New Notes in exchange for each $1,000 principal amount
of 2005 Old Notes accepted in the Exchange Offer. Holders may tender some or all
of their Old Notes pursuant to the Exchange Offer. However, Old Notes may be
tendered only in integral multiples of $1,000.
The form and terms of the New Notes are the same in all material respects
as the form and terms of the Old Notes, except that (i) the New Notes have been
registered under the Securities Act and hence will not bear legends restricting
the transfer thereof and (ii) the holders of the New Notes will not be entitled
to certain rights under the Registration Rights Agreement, including the
provisions providing for an increase in the interest rate on the Old Notes in
certain circumstances relating to the timing of the Exchange Offer, all of which
rights will terminate when the Exchange Offer is terminated. The New Notes will
evidence the same debts as the Old Notes (which they replace) and will be
entitled to the benefits of the Indenture. The forms and terms of any New Note
Guarantee, if any, will be the same in all material respects as the guarantees
in respect of the Old Notes.
As of the date of this Prospectus, $200,000,000 aggregate principal amount
of Old Notes are outstanding. The Company has fixed the close of business on
November 12, 1998 as the record date for the Exchange Offer for purposes of
determining the persons to whom this Prospectus and the Letter of Transmittal
will be mailed initially.
Holders of Old Notes do not have any appraisal or dissenters' rights under
the Delaware General Corporation Law or the Indenture in connection with the
Exchange Offer. The Company intends to conduct the Exchange Offer in accordance
with the applicable requirements of the Exchange Act and the rules and
regulations of the Commission thereunder.
The Company shall be deemed to have accepted validly tendered Old Notes
when, as and if the Company has given oral or written notice thereof to the
Exchange Agent. The Exchange Agent will act as agent for the tendering holders
for the purpose of receiving the New Notes from the Company.
If any tendered Old Notes are not accepted for exchange because of an
invalid tender, the occurrence of certain other events set forth herein or
otherwise, the certificates for any such unaccepted Old Notes will be returned,
without expense, to the tendering holder thereof as promptly as practicable
after the Expiration Date.
Holders who tender Old Notes in the Exchange Offer will not be required to
pay brokerage commissions or fees or, subject to the instructions in the Letter
of Transmittal, transfer taxes with respect to the exchange of Old Notes
pursuant to the Exchange Offer. The Company will pay all charges and expenses,
other than transfer taxes in certain circumstances, in connection with the
Exchange Offer. See "-- Fees and Expenses."
EXPIRATION DATE; EXTENSIONS; AMENDMENTS
The term "Expiration Date" shall mean 5:00 p.m., New York City time, on
December 14, 1998, unless the Company, in its sole discretion, extends the
Exchange Offer, in which case the term "Expiration Date" shall mean the latest
date and time to which the Exchange Offer is extended.
In order to extend the Exchange Offer, the Company will notify the Exchange
Agent of any extension by oral or written notice and will mail to the registered
holders an announcement thereof, each prior to 9:00 a.m., New York City time, on
the next business day after the previously scheduled expiration date.
The Company reserves the right, in its sole discretion, (i) to delay
accepting any Old Notes, to extend the Exchange Offer or to terminate the
Exchange Offer if any of the conditions set forth below under "-- Conditions"
shall not have been satisfied, by giving oral or written notice of such delay,
extension or termination to the Exchange Agent or (ii) to amend the terms of the
Exchange Offer in any manner. Any such delay in acceptance, extension,
termination or amendment will be followed as promptly as practicable by oral or
written notice thereof to the registered holders.
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<PAGE> 52
PROCEDURES FOR TENDERING
Only a holder of Old Notes may tender such Old Notes in the Exchange Offer.
To tender in the Exchange Offer, a holder must complete, sign and date the
Letter of Transmittal, or a facsimile thereof, have the signatures thereon
guaranteed if required by the Letter of Transmittal or transmit an Agent's
Message (as defined below) in connection with a book-entry transfer, and mail or
otherwise deliver such Letter of Transmittal or such facsimile, or Agent's
Message, together with the Old Notes and any other required documents, to the
Exchange Agent prior to 5:00 p.m., New York City time, on the Expiration Date.
To be tendered effectively, the Old Notes, Letter of Transmittal or Agent's
Message, and other required documents must be completed and received by the
Exchange Agent at the address set forth below under "Exchange Agent" prior to
5:00 p.m., New York City time, on the Expiration Date. In addition, either (i)
certificates for such Old Notes must be received by the Exchange Agent prior to
the Expiration Date along with the Letter of Transmittal, (ii) a timely
confirmation of a book-entry transfer (a "Book-Entry Confirmation") of such Old
Notes into the Exchange Agent's account at The Depository Trust Company ("DTC"
or the "Book-Entry Transfer Facility") pursuant to the procedure for book-entry
transfer described below, must be received by the Exchange Agent prior to the
Expiration Date or (iii) the holder must comply with the guaranteed delivery
procedures described below. Delivery of the Old Notes may be made by book-entry
transfer in accordance with the procedures described below. Confirmation of such
book-entry transfer must be received by the Exchange Agent prior to the
Expiration Date. DELIVERY OF DOCUMENTS TO THE BOOK ENTRY TRANSFER FACILITY IN
ACCORDANCE WITH ITS PROCEDURE DOES NOT CONSTITUTE DELIVERY TO THE EXCHANGE
AGENT.
DTC has authorized DTC participants that hold Old Notes on behalf of
beneficial owners of Old Notes through DTC to tender their Old Notes as if they
were holders. To effect a tender of Old Notes, DTC participants should either
(i) complete and sign the Letter of Transmittal (or a manually signed facsimile
thereof), have the signature thereon guaranteed if required by the instructions
to the Letter of Transmittal, and mail or deliver the Letter of Transmittal (or
such manually signed facsimile) to the Exchange Agent pursuant to the procedure
set forth in "Procedures for Tendering" or (ii) transmit their acceptance to DTC
through the DTC Automated Tender Offer Program ("ATOP") for which the
transaction will be eligible and follow the procedure for book-entry transfer
set forth in "-- Book-Entry Transfer."
By executing the Letter of Transmittal or Agent's Message, each holder will
make to the Company the representations set forth above under the heading
"-- Purpose and Effect of the Exchange Offer."
The tender by a holder and the acceptance thereof by the Company will
constitute an agreement between such holder and the Company in accordance with
the terms and subject to the conditions set forth herein and in the Letter of
Transmittal or Agent's Message.
THE METHOD OF DELIVERY OF OLD NOTES AND THE LETTER OF TRANSMITTAL OR
AGENT'S MESSAGE AND ALL OTHER REQUIRED DOCUMENTS TO THE EXCHANGE AGENT IS AT THE
ELECTION AND SOLE RISK OF THE HOLDER. AS AN ALTERNATIVE TO DELIVERY BY MAIL,
HOLDERS MAY WISH TO CONSIDER OVERNIGHT OR HAND DELIVERY SERVICE. IN ALL CASES,
SUFFICIENT TIME SHOULD BE ALLOWED TO ASSURE DELIVERY TO THE EXCHANGE AGENT
BEFORE THE EXPIRATION DATE. NO LETTER OF TRANSMITTAL OR OLD NOTES SHOULD BE SENT
TO THE COMPANY. HOLDERS MAY REQUEST THEIR RESPECTIVE BROKERS, DEALERS,
COMMERCIAL BANKS, TRUST COMPANIES OR NOMINEES TO EFFECT THE ABOVE TRANSACTIONS
FOR SUCH HOLDERS.
Any beneficial owner whose Old Notes are registered in the name of a
broker, dealer, commercial bank, trust company or other nominee and who wishes
to tender should contact the registered holder promptly and instruct such
registered holder to tender on such beneficial owner's behalf. See "Instructions
to Registered Holder and/or Book-Entry Transfer Facility Participant from
Beneficial Owner" included with the Letter of Transmittal.
Signatures on a Letter of Transmittal or a notice of withdrawal, as the
case may be, must be guaranteed by an Eligible Institution (as defined below)
unless the Old Notes tendered pursuant thereto are tendered
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<PAGE> 53
(i) by a registered holder who has not completed the box entitled "Special
Registration Instructions" or "Special Delivery Instructions" on the Letter of
Transmittal or (ii) for the account of an Eligible Institution. In the event
that signatures on a Letter of Transmittal or a notice of withdrawal, as the
case may be, are required to be guaranteed, such guarantee must be by a member
firm of a registered national securities exchange or of the National Association
of Securities Dealers, Inc., or a commercial bank or trust company having an
office or correspondent in the United States or an "eligible guarantor
institution" within the meaning of Rule 17Ad-15 under the Exchange Act (an
"Eligible Institution").
If the Letter of Transmittal is signed by a person other than the
registered holder of any Old Notes listed therein, such Old Notes must be
endorsed or accompanied by a properly completed bond power, signed by such
registered holder as such registered holder's name appears on such Old Notes
with the signature thereon guaranteed by an Eligible Institution.
If the Letter of Transmittal or any Old Notes or bond powers are signed by
trustees, executors, administrators, guardians, attorneys-in-fact, officers of
corporations or others acting in a fiduciary or representative capacity, such
persons should so indicate when signing, and evidence satisfactory to the
Company of its authority to so act must be submitted with the Letter of
Transmittal.
All questions as to the validity, form, eligibility (including time of
receipt), acceptance of tendered Old Notes and withdrawal of tendered Old Notes
will be determined by the Company in its sole discretion, which determination
will be final and binding. The Company reserves the absolute right to reject any
and all Old Notes not properly tendered or any Old Notes the Company's
acceptance of which would, in the opinion of counsel for the Company, be
unlawful. The Company also reserves the right in its sole discretion to waive
any defects, irregularities or conditions of tender as to particular Old Notes.
The Company's interpretation of the terms and conditions of the Exchange Offer
(including the instructions in the Letter of Transmittal) will be final and
binding on all parties. Unless waived, any defects or irregularities in
connection with tenders of Old Notes must be cured within such time as the
Company shall determine. Although the Company intends to notify holders of
defects or irregularities with respect to tenders of Old Notes, neither the
Company, the Exchange Agent nor any other person shall incur any liability for
failure to give such notification. Tenders of Old Notes will not be deemed to
have been made until such defects or irregularities have been cured or waived.
Any Old Notes received by the Exchange Agent that are not properly tendered and
as to which the defects or irregularities have not been cured or waived will be
returned by the Exchange Agent to the tendering holders, unless otherwise
provided in the Letter of Transmittal, as soon as practicable following the
Expiration Date.
ACCEPTANCE OF OLD NOTES FOR EXCHANGE; DELIVERY OF NEW NOTES
For each Old Note accepted for exchange, the holder of such Old Note will
receive a New Note having a principal amount equal to that of the surrendered
Old Note. For purposes of the Exchange Offer, the Company shall be deemed to
have accepted properly tendered Old Notes for exchange when, as and if the
Company has given oral or written notice thereof to the Exchange Agent.
In all cases, the issuance of New Notes for Old Notes that are accepted for
exchange pursuant to the Exchange Offer will be made only after timely receipt
by the Exchange Agent of certificates for such Old Notes or a timely Book-Entry
Confirmation of such Old Notes into the Exchange Agent's account at the
Book-Entry Transfer Facility, a properly completed and duly executed Letter of
Transmittal or Agent's Message and all other required documents. If any tendered
Old Notes are not accepted for any reason set forth in the terms and conditions
of the Exchange Offer, such unaccepted or non-exchanged Old Notes will be
returned without expense to the tendering holder thereof (or, in the case of Old
Notes tendered by book-entry transfer into the Exchange Agent's account at the
Book-Entry Transfer Facility pursuant to the book-entry transfer procedures
described below, such non-exchanged Old Notes will be credited to an account
maintained with such Book-Entry Transfer Facility) as promptly as practicable
after the Expiration Date.
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<PAGE> 54
BOOK-ENTRY TRANSFER
The Exchange Agent will establish a new account or utilize an existing
account with respect to the Old Notes at DTC promptly after the date of this
Prospectus, and any financial institution that is a participant in DTC and whose
name appears on a security position listing as the owner of Old Notes may make a
book-entry tender of Old Notes by causing DTC to transfer such Old Notes into
the Exchange Agent's account in accordance with DTC's procedures for such
transfer. However, although tender of Old Notes may be effected through
book-entry transfer into the Exchange Agent's account at DTC, the Letter of
Transmittal (or a manually signed facsimile thereof), properly completed and
validly executed, with any required signature guarantees, or an Agent's Message
in lieu of the Letter of Transmittal, and any other required documents, must, in
any case, be received by the Exchange Agent at its address set forth below under
the caption "Exchange Agent" on or prior to the Expiration Date, or the
guaranteed delivery procedures described below must be complied with. The
confirmation of book-entry transfer of Old Notes into the Exchange Agent's
account at DTC as described above is referred to herein as a "Book-Entry
Confirmation." Delivery of documents to DTC in accordance with DTC's procedures
does not constitute delivery to the Exchange Agent.
The term "Agent's Message" means a message transmitted by DTC to, and
received by, the Exchange Agent and forming a part of a Book-Entry Confirmation,
which states that DTC has received an express acknowledgment from the
participant in DTC tendering the Old Notes stating (i) the aggregate principal
amount of Old Notes which have been tendered by such participant, (ii) that such
participant has received and agrees to be bound by the terms of the Letter of
Transmittal and (iii) that the Company may enforce such agreement against the
participant.
GUARANTEED DELIVERY PROCEDURES
Holders who wish to tender their Old Notes and (i) whose Old Notes are not
immediately available, (ii) who cannot deliver their Old Notes, the Letter of
Transmittal or any other required documents to the Exchange Agent or (iii) who
cannot complete the procedures for book-entry transfer, prior to the Expiration
Date, may effect a tender if:
(a) the tender is made through an Eligible Institution;
(b) prior to the Expiration Date, the Exchange Agent receives from
such Eligible Institution a properly completed and duly executed Notice of
Guaranteed Delivery (by facsimile transmission, mail or hand delivery)
setting forth the name and address of the holder, the certificate number(s)
of such Old Notes and the principal amount of Old Notes tendered, stating
that the tender is being made thereby and guaranteeing that, within five
New York Stock Exchange trading days after the Expiration Date, the Letter
of Transmittal (or facsimile thereof) (or in the case of a book-entry
transfer, an Agent's Message) together with the certificate(s) representing
the Old Notes (or a confirmation of book-entry transfer of such Notes into
the Exchange Agent's account at the Book-Entry Transfer Facility), and any
other documents required by the Letter of Transmittal will be deposited by
the Eligible Institution with the Exchange Agent; and
(c) the certificate(s) representing all tendered Old Notes in proper
form for transfer (or a confirmation of book-entry transfer of such Old
Notes into the Exchange Agent's account at the Book-Entry Transfer
Facility), together with a Letter of Transmittal (or facsimile thereof),
properly completed and duly executed, with any required signature
guarantees (or, in the case of a book-entry transfer, an Agent's Message)
and all other documents required by the Letter of Transmittal are received
by the Exchange Agent within five New York Stock Exchange trading days
after the Expiration Date.
Upon request to the Exchange Agent, a Notice of Guaranteed Delivery will be
sent to holders who wish to tender their Old Notes according to the guaranteed
delivery procedures set forth above.
WITHDRAWAL OF TENDERS
Except as otherwise provided herein, tenders of Old Notes may be withdrawn
at any time prior to 5:00 p.m., New York City time, on the Expiration Date.
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<PAGE> 55
To withdraw a tender of Old Notes in the Exchange Offer, a telegram, telex,
letter or facsimile transmission notice of withdrawal must be received by the
Exchange Agent at its address set forth herein prior to 5:00 p.m., New York City
time, on the business day prior to the Expiration Date. Any such notice of
withdrawal must (i) specify the name of the person having deposited the Old
Notes to be withdrawn (the "Depositor"), (ii) identify the Old Notes to be
withdrawn (including the certificate number(s) and principal amount of such Old
Notes, or, in the case of Old Notes transferred by book-entry transfer, the name
and number of the account at the Book-Entry Transfer Facility to be credited),
(iii) be signed by the holder in the same manner as the original signature on
the Letter of Transmittal by which such Old Notes were tendered (including any
required signature guarantees) or be accompanied by documents of transfer
sufficient to have the Trustee with respect to the Old Notes register the
transfer of such Old Notes into the name of the person withdrawing the tender
and (iv) specify the name in which any such Old Notes are to be registered, if
different from that of the Depositor. All questions as to the validity, form and
eligibility (including time of receipt) of such notices will be determined by
the Company, whose determination shall be final and binding on all parties. Any
Old Notes so withdrawn will be deemed not to have been validly tendered for
purposes of the Exchange Offer and no New Notes will be issued with respect
thereto unless the Old Notes so withdrawn are validly retendered. Any Old Notes
which have been tendered but which are not accepted for exchange will be
returned to the holder thereof without cost to such holder as soon as
practicable after withdrawal, rejection of tender or termination of the Exchange
Offer. Properly withdrawn Old Notes may be retendered by following one of the
procedures described above under "-- Procedures for Tendering" at any time prior
to Expiration Date.
CONDITIONS
Notwithstanding any other term of the Exchange Offer, the Company shall not
be required to accept for exchange, or exchange New Notes for, any Old Notes,
and may terminate or amend the Exchange Offer as provided herein before the
Expiration Date, if:
(a) any action or proceeding is instituted or threatened in any court
or by or before any governmental agency with respect to the Exchange Offer
which, in the sole judgment of the Company, might materially impair the
ability of the Company to proceed with the Exchange Offer or any material
adverse development has occurred in any existing action or proceeding with
respect to the Company or any of its subsidiaries; or
(b) any law, statute, rule, regulation or interpretation by the staff
of the Commission is proposed, adopted or enacted, which, in the sole
judgment of the Company, might materially impair the ability of the Company
to proceed with the Exchange Offer or materially impair the contemplated
benefits of the Exchange Offer to the Company; or
(c) any governmental approval has not been obtained, which approval
the Company shall, in its sole discretion, deem necessary for the
consummation of the Exchange Offer as contemplated hereby.
If the Company determines in its reasonable discretion that any of the
conditions are not satisfied, the Company may (i) refuse to accept any Old Notes
and return all tendered Old Notes to the tendering holders, (ii) extend the
Exchange Offer and retain all Old Notes tendered prior to the expiration of the
Exchange Offer, subject, however, to the rights of holders to withdraw such Old
Notes (see "-- Withdrawal of Tenders") or (iii) waive such unsatisfied
conditions with respect to the Exchange Offer and accept all properly tendered
Old Notes which have not been withdrawn.
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<PAGE> 56
EXCHANGE AGENT
The Bank of New York has been appointed as Exchange Agent for the Exchange
Offer. Questions and requests for assistance, requests for additional copies of
this Prospectus or of the Letter of Transmittal and requests for Notice of
Guaranteed Delivery should be directed to the Exchange Agent addressed as
follows:
<TABLE>
<S> <C>
By Registered or Certified Mail: By Overnight Courier:
The Bank of New York The Bank of New York
101 Barclay Street 101 Barclay Street
Floor 7 East Ground Level
New York, New York 10286 Corporate Trust Services Window
Attention: Reorganization Section New York, New York 10286
Attention: Reorganization Section
By Hand: By Facsimile Transmission (For Eligible
Institutions Only)
The Bank of New York (212) 815-6339
101 Barclay Street
Ground Level
Corporate Trust Services Window
New York, New York 10286
Attention: Reorganization Section
</TABLE>
Confirm by Telephone:
Christopher Davis
(212) 815-4997
DELIVERY TO AN ADDRESS OR TRANSMISSION VIA A FACSIMILE NUMBER OTHER THAN SET
FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY.
FEES AND EXPENSES
The expenses of soliciting tenders will be borne by the Company. The
principal solicitation is being made by mail; however, additional solicitation
may be made by telegraph, telecopy, telephone or in person by officers and
regular employees of the Company and its affiliates.
The Company has not retained any dealer-manager in connection with the
Exchange Offer and will not make any payments to brokers, dealers or others
soliciting acceptances of the Exchange Offer. The Company, however, will pay the
Exchange Agent reasonable and customary fees for its services and will reimburse
it for its reasonable out-of-pocket expenses in connection therewith.
The cash expenses to be incurred in connection with the Exchange Offer will
be paid by the Company. Such expenses include fees and expenses of the Exchange
Agent and Trustee, accounting and legal fees and printing costs, among others.
ACCOUNTING TREATMENT
The New Notes will be recorded at the same carrying value as the Old Notes,
which is face value, as reflected in the Company's accounting records on the
date of exchange. Accordingly, no gain or loss for accounting purposes will be
recognized by the Company. The expenses of the Exchange Offer will be expensed
over the term of the New Notes.
CONSEQUENCES OF FAILURE TO EXCHANGE
The Old Notes that are not exchanged for New Notes pursuant to the Exchange
Offer will remain restricted securities. Accordingly, such Old Notes may be
resold only (i) to "qualified institutional buyers"
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<PAGE> 57
(as defined in Rule 144A under the Securities Act) in compliance with Rule 144A,
(ii) to a limited number of institutional "accredited investors" (as defined in
Rule 501(a)(1), (2), (3) or (7) under the Securities Act) that, prior to such
transfer, furnish to the Trustee a signed letter containing certain
representations and agreements relating to the restrictions on transfer of the
Old Notes (the form of which letter can be obtained from the Trustee) and, if
such transfer is in respect of an aggregate principal amount of Old Notes at the
time of transfer of less than $100,000, an opinion of counsel acceptable to the
Company that such transfer is in compliance with the Securities Act, (iii)
outside the United States in compliance with Rule 904 under the Securities Act,
(iv) pursuant to the exemption from registration provided by Rule 144 under the
Securities Act (if available) or (v) pursuant to an effective registration
statement under the Securities Act.
RESALE OF THE NEW NOTES
Based upon interpretations by the staff of the Commission set forth in
certain no-action letters issued to third parties, the Company believes that the
New Notes issued pursuant to the Exchange Offer in exchange for Old Notes may be
offered for resale, resold and otherwise transferred by any holder thereof
(other than a broker-dealer, as set forth below, or any such holder that is an
"affiliate" of the Company within the meaning of Rule 405 under the Securities
Act) without compliance with the registration and prospectus delivery
requirements of the Securities Act, provided that such New Notes are acquired in
the ordinary course of such holder's business and that such holder has no
arrangement or understanding with any person to participate in the distribution
of such New Notes. See "The Exchange Offer -- Resale of the New Notes." Holders
of Old Notes wishing to accept the Exchange Offer must represent to the Company,
as required by the Registration Rights Agreement, that such conditions have been
met and that such holder is not an "affiliate" of the Company within the meaning
of Rule 405 under the Securities Act. Each Participating Broker-Dealer that
receives New Notes for its own account pursuant to the Exchange Offer must
represent that the Old Notes tendered in exchange therefor were acquired as a
result of market-making activities or other trading activities and must
acknowledge that it will deliver a prospectus in connection with any resale of
such New Notes. The Letter of Transmittal states that by so acknowledging and by
delivering a prospectus, a Participating Broker-Dealer will not be deemed to
admit that it is an "underwriter" within the meaning of the Securities Act. This
Prospectus, as it may be amended or supplemented from time to time, may be used
by any broker-dealer (other than an affiliate of the Company) in connection with
resales of New Notes received in exchange for Old Notes where such Old Notes
were acquired by such broker-dealer as a result of market-making activities or
other trading activities. The Company has agreed that, for a period of up to 90
days after the Expiration Date, it will make this Prospectus available to any
broker-dealer for use in connection with any such resale. See "Plan of
Distribution." Any holder who tenders in the Exchange Offer with the intention
to participate, or for the purpose of participating, in a distribution of the
New Notes or who is an affiliate of the Company may not rely on the position of
the staff of the Commission enunciated in such no-action letters and, in the
absence of an exemption therefrom, must comply with the registration and
prospectus delivery requirements of the Securities Act in connection with a
secondary resale transaction. Failure to comply with such requirements in such
instance may result in such holder incurring liability under the Securities Act
for which the holder is not indemnified by the Company. No affiliate of the
Company may rely on such no-action letters and any such affiliate must comply
with the registration and prospectus delivery requirements of the Securities Act
in connection with a secondary resale transaction.
The Company has not entered into any arrangement or understanding with any
person to distribute the New Notes to be received in the Exchange Offer.
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DESCRIPTION OF THE NOTES
GENERAL
Each of the 2003 New Notes and the 2005 New Notes, like the Old Notes, will
be a separate series of securities issued under the Indenture, dated as of May
26, 1998 (the "Indenture"), among the Company, the Initial Note Guarantors (as
defined herein) and The Bank of New York, as trustee (the "Trustee"). Copies of
the Indenture are available upon request from the Company. The following summary
of certain provisions of the Indenture does not purport to be complete and is
subject to, and is qualified in its entirety by reference to, all the provisions
of the Indenture, including the definitions of certain terms therein and those
terms made a part thereof by the Trust Indenture Act of 1939, as amended (the
"Trust Indenture Act"). Whenever particular defined terms of the Indenture not
otherwise defined herein are referred to, such defined terms are incorporated
herein by reference.
The form and terms of the New Notes are the same in all material respects
as the form and terms of the Old Notes (which they replace) except that (i) the
issuance of the New Notes have been registered under the Securities Act and,
therefore, the New Notes will not bear legends restricting the transfer thereof,
and (ii) the holders of New Notes will not be entitled to certain rights under
the Registration Rights Agreement, including the provisions providing for an
increase in the interest rate on the Old Notes in certain circumstances relating
to the timing of the Exchange Offer, which rights will terminate when the
Exchange Offer is consummated. A copy of the Indenture has been filed as an
exhibit to the Registration Statement of which this Prospectus forms a part.
Certain definitions of terms used in the following summary are set forth under
"-- Certain Definitions" below. The Old Notes and the New Notes are sometimes
referred to herein collectively as the "Notes."
The 2003 New Notes and the 2005 New Notes will be senior unsecured
obligations of the Company ranking pari passu in right of payment with all other
existing and future unsubordinated unsecured obligations of the Company,
initially limited to $100 million and $100 million aggregate principal amount,
respectively, and will mature on May 15, 2003 and May 15, 2005, respectively,
unless previously redeemed.
Interest on the New Notes will accrue at the rates shown on the front cover
of this Prospectus from the Closing Date or from the most recent Interest
Payment Date to which interest has been paid or provided for, payable
semiannually (to Holders of record at the close of business on April 30 or
October 31 immediately preceding the Interest Payment Date) on May 15 and
November 15 of each year. Principal of, and premium, if any, and interest on,
the Notes will be payable at the office or agency of the Company in the Borough
of Manhattan, the City of New York (which initially will be the principal
corporate trust office of the Trustee at 101 Barclay Street, Floor 21W, New
York, New York 10286); provided, that, at the option of the Company, payment of
interest may be made by check mailed to the Holders at their addresses as they
appear in the Security Register. Interest will be computed on the basis of a
360-day year of twelve 30-day months.
The New Notes will be issued only in fully registered form, without
coupons, in denominations of $1,000 principal amount and any integral multiple
thereof. See "-- Book-Entry; Delivery and Form." No service charge will be made
for any registration of transfer or exchange of Notes, but the Company may
require payment of a sum sufficient to cover any transfer tax or other similar
governmental charge payable in connection therewith.
Subject to the covenants described below under "Covenants" and applicable
law, the Company may issue additional Notes under the Indenture. The New Notes
offered hereby, the Old Notes and any such additional Notes subsequently issued
would be treated as a single class for all purposes under the Indenture.
OPTIONAL REDEMPTION
The New Notes will be redeemable at the option of the Company, in whole at
any time or in part from time to time, on at least 30 days but not more than 60
days prior written notice mailed to the registered holders thereof, at a
redemption price equal to the greater of (i) 100% of the principal amount of the
Notes to be
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redeemed, and (ii) the sum, as determined by the Quotation Agent (as defined
herein), of the present values of the principal amount and the remaining
scheduled payments of interest on the Notes to be redeemed from the redemption
date to May 15, 2003 in the case of the 2003 New Notes and May 15, 2005 in the
case of the 2005 New Notes (the "Remaining Life"), in each case, discounted on a
semiannual basis (assuming a 360-day year consisting of 30-day months) at the
Treasury Rate (as defined herein) plus 10 basis points in the case of the 2003
New Notes and 15 basis points in the case of the 2005 New Notes, plus in either
case, accrued interest thereon to the date of redemption.
If money sufficient to pay the redemption price of and accrued interest on
all of the Notes of a particular series (or portions thereof) to be redeemed on
the redemption date is deposited with the Trustee or a Paying Agent on or before
the redemption date and certain other conditions are satisfied, then on and
after such date, interest will cease to accrue on such Notes (or such portion
thereof) called for redemption.
"Comparable Treasury Issue" means the United States Treasury security
selected by the Quotation Agent as having a maturity comparable to the Remaining
Life that would be utilized, at the time of selection and in accordance with
customary financial practice, in pricing new issues of corporate debt securities
of comparable maturity with the Remaining Life of the Notes to be redeemed.
"Comparable Treasury Price" means, with respect to any redemption date, the
average of five Reference Treasury Dealer Quotations for such redemption date,
after excluding the highest and lowest of such Reference Treasury Dealer
Quotations, or, if the Trustee obtains fewer than three such Reference Treasury
Dealer Quotations, the average of all such quotations.
"Quotation Agent" means the Reference Treasury Dealer appointed by the
Company. "Reference Treasury Dealer" means (i) NationsBanc Montgomery Securities
LLC, Chase Securities Inc. and J.P. Morgan Securities Inc. and their respective
successors; provided, however, that if the foregoing shall cease to be primary
U.S. Government securities dealers in New York City (a "Primary Treasury
Dealer"), the Company shall substitute therefor another Primary Treasury Dealer,
and (ii) any other Primary Treasury Dealer selected by the Company.
"Reference Treasury Dealer Quotations" means, with respect to each
Reference Treasury Dealer and any redemption date, the average, as determined by
the Trustee, of the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount) quoted in
writing to the Trustee by such Reference Treasury Dealer at 5:00 p.m., New York
City time, on the third business day preceding such redemption date.
"Treasury Rate" means, with respect to any redemption date, the rate per
annum equal to the semiannual yield to maturity of the Comparable Treasury
Issue, calculated on the third business day preceding such redemption date using
a price for the Comparable Treasury Issue (expressed as a percentage of its
principal amount) equal to the Comparable Treasury Price for such redemption
date.
NOTE GUARANTEES
The Indenture requires the Company to cause each of its Subsidiaries that
guarantee, on the date hereof or in the future, indebtedness under the Credit
Agreement and indebtedness under any future senior unsecured credit facility
between the Company and the third party lenders thereunder to fully and
unconditionally guarantee, as primary obligors and not merely as sureties,
pursuant to a Note Guarantee, on an unsubordinated, unsecured basis, the due and
punctual payment of the principal of, interest on and other amounts payable
under the Notes, when and if the same shall become due and payable, whether at
stated maturity, by declaration of acceleration, upon redemption or otherwise;
provided, however, that in the event that any such Subsidiary is released from
its guarantee of indebtedness under the Credit Agreement or such future credit
facility, then such Subsidiary will also be immediately released from its
obligations under its Note Guarantee without further action by any party. The
Old Notes were initially guaranteed by WSB and WHIO. WSB and WHIO were merged
with and into Cox Radio on November 10, 1998 and November 1, 1998, respectively
(collectively, the "Mergers"), and, therefore, no longer guarantee indebtedness
under the Credit Agreement or any other senior unsecured credit facility between
the Company and third party lenders.
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Consequently, WSB and WHIO no longer guarantee the due and punctual payment of
the principal or interest on or other amounts payable under the Notes. If the
License Drop-Down is consummated, CXR Holdings will become a Note Guarantor;
however, there can be no assurance that the License Drop-Down will be
consummated by any particular date or at all.
Each Note Guarantee, if any, will be limited to an amount not to exceed the
maximum amount that can be guaranteed by the applicable Note Guarantor without
rendering such Note Guarantee, as it relates to such Note Guarantor, voidable
under applicable law relating to fraudulent conveyance or fraudulent transfer or
similar laws affecting creditors' rights generally.
CERTAIN COVENANTS
The Indenture contains certain covenants including, among others, the
following:
Limitation on Liens. The Company will not, and will not permit any
Restricted Subsidiary to, create, incur or assume any Lien (other than
Permitted Liens) on Restricted Property to secure the payment of
Indebtedness of the Company or any Restricted Subsidiary if, immediately
after the creation, incurrence or assumption of such Lien, the aggregate
outstanding principal amount of all Indebtedness of the Company and the
Restricted Subsidiaries that is secured by Liens (other than Permitted
Liens) on Restricted Property would exceed the greater of (i) $30 million
or (ii) 15% of the aggregate outstanding principal amount of all
Indebtedness of the Company and the Restricted Subsidiaries (whether or not
so secured), unless effective provision is made whereby the Notes (together
with, if the Company shall so determine, any other Indebtedness ranking
equally with the Notes, whether then existing or thereafter created) are
secured equally and ratably with (or prior to) such Indebtedness (but only
for so long as such Indebtedness is so secured). The foregoing limitation
does not apply to (i) Liens existing on the Closing Date; (ii) Liens
granted after the Closing Date on any assets or Capital Stock of the
Company or its Restricted Subsidiaries created in favor of the Holders;
(iii) Liens with respect to the assets of a Restricted Subsidiary granted
by such Restricted Subsidiary to the Company or another Restricted
Subsidiary to secure Indebtedness owing to the Company or such other
Restricted Subsidiary; (iv) Liens securing Indebtedness which is incurred
to refinance secured Indebtedness which is permitted to be incurred under
the "Limitation on Indebtedness of Restricted Subsidiaries" covenant;
provided that such Liens do not extend to or cover any property or assets
of the Company or any Restricted Subsidiary other than the property or
assets securing the Indebtedness being refinanced; (v) Liens securing
Indebtedness permitted under the "Limitation on Indebtedness of Restricted
Subsidiaries" covenant; or (vii) Permitted Liens.
Limitation on Indebtedness of Restricted Subsidiaries. The Company
will not permit any Restricted Subsidiary to incur any Indebtedness if,
immediately after the incurrence or assumption of such Indebtedness, the
aggregate outstanding principal amount of all Indebtedness of the
Restricted Subsidiaries would exceed the greater of (i) $30 million or (ii)
15% of the aggregate outstanding principal amount of all Indebtedness of
the Company and the Restricted Subsidiaries; provided that, in any event, a
Restricted Subsidiary may incur Indebtedness to extend, renew or replace
Indebtedness of such Restricted Subsidiary to the extent that the principal
amount of the Indebtedness so incurred does not exceed the principal amount
of the Indebtedness extended, renewed or replaced thereby immediately prior
to such extension, renewal or replacement plus any premium, accrued and
unpaid interest or capitalized interest payable thereon.
Designation of Subsidiaries. The Company may designate a Restricted
Subsidiary as an Unrestricted Subsidiary or designate an Unrestricted
Subsidiary as a Restricted Subsidiary at any time, provided that (i)
immediately after giving effect to such designation, the Leverage Ratio of
the Restricted Group is not greater than 7:1 and the Company and the
Restricted Subsidiaries are in compliance with the "Limitation on Liens"
and "Limitation on Indebtedness of Restricted Subsidiaries" covenants, and
(ii) an Officers' Certificate with respect to such designation is delivered
to the Trustee within 75 days after the end of the fiscal quarter of the
Company in which such designation is made (or, in the case of a designation
made during the last fiscal quarter of the Company's fiscal year, within
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120 days after the end of such fiscal year), which Officers' Certificate
shall state the effective date of such designation.
Mergers or Sales of Assets. The Indenture will provide that neither
the Company nor any Note Guarantor may merge into or consolidate with
another corporation or sell or lease all or substantially all its assets to
another corporation unless (i) either (A) the Company or such Note
Guarantor is the surviving corporation or (B) the resulting, surviving or
transferee corporation is organized under the laws of a state of the United
States or the District of Columbia and expressly assumes all obligations
under the Notes or the Note Guarantees, as applicable, and all other
applicable covenants and conditions of the Indenture, and (ii) immediately
after and giving effect to such transaction, no Event of Default has
occurred.
The Indenture will not contain any provisions affording holders of Notes
any additional protection in the event that the Company enters into a highly
leveraged transaction.
DEFINITIONS
"Asset Acquisition" means (i) an investment by the Company or any of its
Restricted Subsidiaries in any other Person where such Person shall become a
Restricted Subsidiary or shall be merged into or consolidated with the Company
or any of its Restricted Subsidiaries; or (ii) an acquisition by the Company or
any of its Restricted Subsidiaries of the property and assets of any Person
other than the Company or any of its Restricted Subsidiaries that constitute
substantially all of a division or line of business of such Person.
"Asset Disposition" means the sale or other disposition by the Company or
any of its Restricted Subsidiaries (other than to the Company or another
Restricted Subsidiary) of (i) all or substantially all of the Capital Stock of
any Restricted Subsidiary or (ii) all or substantially all of the assets that
constitute a division or line of business of the Company or any of its
Restricted Subsidiaries.
"Capital Stock" means, with respect to any Person, any and all shares,
interests, participations or other equivalents (however designated, whether
voting or non-voting) in equity of such Person, whether outstanding on the
Closing Date or issued thereafter.
"Capitalized Lease" means, as applied to any Person, any lease of any
property (whether real, personal or mixed) of which the discounted present value
of the rental obligations of such Person as lessee, in conformity with GAAP, is
required to be capitalized on the balance sheet of such Person.
"Closing Date" means the date on which the Old Notes were originally issued
under the Indenture.
"Currency Agreement" means any foreign exchange contract, currency swap
agreement or other similar agreement or arrangement.
"Default" means any event which is, or after notice or passage of time or
both would be, an Event of Default.
"GAAP" means such accounting principles as are generally accepted in the
United States of America as of the date or time of any particular computation.
"Indebtedness" means, without duplication, with respect to any Person: (i)
any indebtedness of such Person (A) for borrowed money or (B) evidenced by a
note, debenture or similar instrument (including a purchase money obligation)
given in connection with the acquisition of any property or assets, including
securities; (ii) any guarantee by such Person of any indebtedness of others
described in the preceding clause (i); and (iii) any amendment, extension,
renewal or refunding of any such indebtedness or guarantee. The term
"Indebtedness" excludes (i) any indebtedness of the Company or any Restricted
Subsidiary to the Company or another Restricted Subsidiary, (ii) any guarantee
by the Company or any Restricted Subsidiary of indebtedness of the Company or
another Restricted Subsidiary, (iii) trade accounts payable, (iv) money borrowed
and set aside at the time of the incurrence of any Indebtedness in order to
prefund the payment of the interest on such Indebtedness so long as such money
is held to secure the payment of such interest, (v) liabilities for federal,
state, local or other taxes and (vi) letters of credit, performance bonds and
similar
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obligations issued in favor of governmental authorities as a term of any
governmental franchise, license, permit or authorization held by such Person or
any of its Subsidiaries. The amount of Indebtedness of any Person at any date
shall be the outstanding balance at such date of all unconditional obligations
as described above and, with respect to contingent obligations, the maximum
liability upon the occurrence of the contingency giving rise to the obligation.
The amount of Indebtedness issued with original issue discount is the face
amount of such Indebtedness less the remaining unamortized portion of the
original issue discount of such Indebtedness at such time as determined in
conformity with GAAP.
"Interest Rate Agreement" means any interest rate protection agreement,
interest rate future agreement, interest rate option agreement, interest rate
swap agreement, interest rate cap agreement, interest rate collar agreement,
interest rate hedge agreement, option or future contract or other similar
agreement or arrangement.
"Leverage Ratio" with respect to the Restricted Group means, as of the date
of and after giving effect to any designation of an Unrestricted Subsidiary as a
Restricted Subsidiary or any designation of a Restricted Subsidiary as an
Unrestricted Subsidiary, in each case in accordance with the "Designation of
Subsidiaries" covenant, the ratio of (i) the aggregate outstanding principal
amount of all Indebtedness of the Restricted Group as of such date to (ii) the
product of four times the Restricted Group Cash Flow for the most recent full
fiscal quarter for which financial information is available on such date;
provided that, in making the foregoing calculation, (A) pro forma effect shall
be given to any Indebtedness to be incurred or repaid on the date of incurrence
of any Indebtedness (the "Transaction Date"); (B) pro forma effect shall be
given to Asset Dispositions and Asset Acquisitions (including giving pro forma
effect to the application of proceeds of any Asset Disposition) that occur from
the beginning of the fiscal quarter through the Transaction Date (the "Reference
Period"), as if they had occurred and such proceeds had been applied on the
first day of such Reference Period and, in the case of any Asset Acquisition,
giving pro forma effect to any cost reductions the Company anticipates if the
Company delivers to the Trustee an officer's certificate executed by the Chief
Financial Officer of the Company certifying to and describing and quantifying
with reasonable specificity the cost reductions expected to be attained within
the first year after such Asset Acquisition; and (C) pro forma effect shall be
given to asset dispositions and asset acquisitions (including giving pro forma
effect to the application of proceeds of any asset disposition) that have been
made by any Person that has become a Restricted Subsidiary or has been merged
with or into the Company or any Restricted Subsidiary during such Reference
Period and that would have constituted Asset Dispositions or Asset Acquisitions
had such transactions occurred when such Person was a Restricted Subsidiary as
if such asset dispositions or asset acquisitions were Asset Dispositions or
Asset Acquisitions that occurred on the first day of such Reference Period;
provided that to the extent that clause (B) or (C) of this sentence requires
that pro forma effect be given to an Asset Acquisition or Asset Disposition,
such pro forma calculation shall be based upon the fiscal quarter immediately
preceding the Transaction Date of the Person, or division or line of business of
the Person, that is acquired or disposed of for which financial information is
available.
"Lien" means any mortgage, pledge, security interest, encumbrance, lien or
charge of any kind (including any conditional sale or other title retention
agreement or lease in the nature thereof).
"Permitted Liens" means: (i) Liens for taxes, assessments, governmental
charges or claims that are not yet delinquent or are being contested in good
faith by appropriate legal proceedings promptly instituted and diligently
conducted and for which a reserve or other appropriate provision, if any, as
shall be required in conformity with GAAP shall have been made; (ii) statutory
and common law Liens of landlords and carriers, warehousemen, mechanics,
suppliers, materialmen, repairmen or other similar Liens arising in the ordinary
course of business and with respect to amounts not yet delinquent or being
contested in good faith by appropriate legal proceedings promptly instituted and
diligently conducted and for which a reserve or other appropriate provision, if
any, as shall be required in conformity with GAAP shall have been made; (iii)
Liens incurred or deposits made in the ordinary course of business in connection
with workers' compensation, unemployment insurance and other types of social
security; (iv) Liens incurred or deposits made to secure the performance of
tenders, bids, leases, statutory or regulatory obligations (including
obligations under franchise agreements), bankers' acceptances, surety and appeal
bonds, government contracts, performance and return-of-money bonds and other
obligations of a similar nature incurred in the ordinary course of business
(exclusive
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of obligations for the payment of borrowed money); (v) easements, rights-of-way,
municipal and zoning ordinances and similar charges, encumbrances, title defects
or other irregularities that do not materially interfere with the ordinary
course of business of the Company or any of its Restricted Subsidiaries; (vi)
Liens upon real or personal property acquired after the Closing Date; provided
that (a) such Lien is created solely for the purpose of securing Indebtedness
incurred, in accordance with the "Limitation on Indebtedness of Restricted
Subsidiaries" covenant to finance the cost (including the cost of design,
development, acquisition, installation, integration, improvement or
construction) of the item of property or assets subject thereto and such Lien is
created prior to, at the time of or within six months after the later of the
acquisition, the completion of construction or the commencement of full
operation of such property, (b) the principal amount of the Indebtedness secured
by such Lien does not exceed 100% of such cost and (c) any such Lien shall not
extend to or cover any property or assets other than such item of property or
assets and any improvements on such item; (vii) Liens arising from filing
Uniform Commercial Code financing statements regarding leases; (viii) Liens on
property of, or on shares of Capital Stock or Indebtedness of, any Person
existing at the time such Person becomes, or becomes a part of, any Restricted
Subsidiary; provided that such Liens do not extend to or cover any property or
assets of the Company or any Restricted Subsidiary other than the property or
assets acquired; (ix) Liens in favor of the Company or any Restricted
Subsidiary; (x) Liens arising from the rendering of a final judgment or order
against the Company or any Restricted Subsidiary that does not give rise to an
Event of Default; (xi) Liens securing reimbursement obligations with respect to
letters of credit that encumber documents and other property relating to such
letters of credit and the products and proceeds thereof; (xii) Liens in favor of
customs and revenue authorities arising as a matter of law to secure payment of
customs duties in connection with the importation of goods; (xiii) Liens
encumbering customary initial deposits and margin deposits, and other Liens that
are within the general parameters customary in the industry and incurred in the
ordinary course of business, in each case, securing Indebtedness under Interest
Rate Agreements and Currency Agreements and forward contracts, options, future
contracts, futures options or similar agreements or arrangements designed solely
to protect the Company or any of its Restricted Subsidiaries from fluctuations
in interest rates, currencies or the price of commodities; (xiv) Liens arising
out of conditional sale, title retention, consignment or similar arrangements
for the sale of goods entered into by the Company or any of its Restricted
Subsidiaries in the ordinary course of business in accordance with industry
practice; (xv) Liens resulting from deposits made in connection with any
proposed Asset Acquisition; provided that such deposit does not exceed 10% of
the estimated purchase price for such Asset Acquisition; and (xvi) Liens on or
sales of receivables, including related intangible assets and proceeds thereof
where, in the good faith determination of the Company, the Company has received
the fair market value of such receivables.
"Person" means any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization, government
or any agency or political subdivision thereof or any other entity.
"Principal Property" means, as of any date of determination, any property
or assets owned by any Restricted Subsidiary other than (i) any such property
which, in the good faith opinion of the Board of Directors, is not of material
importance to the business conducted by the Company and its Restricted
Subsidiaries taken as a whole and (ii) any shares of any class of stock or any
other security of any Unrestricted Subsidiary.
"Restricted Group" means, as of any date of determination, the Company and
the Restricted Subsidiaries as of such date.
"Restricted Property" means, as of any date of determination, any Principal
Property and any shares of stock of a Restricted Subsidiary owned by the Company
or a Restricted Subsidiary.
"Restricted Subsidiary" means each Subsidiary of the Company other than the
Unrestricted Subsidiaries.
"Stated Maturity" means, with respect to any security, the date specified
in such security as the fixed date on which the final payment of principal of
such security is due and payable, including pursuant to any mandatory redemption
provision (but excluding any provision providing for the repurchase of such
security at
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the option of the holder thereof upon the happening of any contingency unless
such contingency has occurred).
"Subsidiary" means, in respect of any Person, any corporation, association,
partnership or other business entity of which more than 50% of the total voting
power of shares of capital stock or other interests (including partnership
interests) 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 (i) such Person, (ii) such
Person and one or more Subsidiaries of such Person or (iii) one or more
Subsidiaries of such Person.
"Unrestricted Subsidiary" means (i) any Subsidiary of the Company that has
been designated as an Unrestricted Subsidiary as permitted by the covenant
described under "Designation of Subsidiaries" and not thereafter redesignated as
a Restricted Subsidiary as permitted thereby and (ii) each Subsidiary of any
Unrestricted Subsidiary.
DEFAULTS
An Event of Default with respect to the Notes of any series is defined in
the Indenture as (i) a default in the payment of interest on such Notes when
due, continued for 30 days, (ii) a default in the payment of principal of, or
premium, if any, on, any such Note when due at its Stated Maturity, upon
optional redemption, upon declaration or otherwise, (iii) the failure by the
Company or the Note Guarantors to comply with their respective obligations under
"-- Certain Covenants -- Mergers or Sales of Assets" above, (iv) the failure by
the Company to comply within 60 days after notice with any of its other
agreements contained in the Indenture, including its obligations under the
covenants described above in "-- Certain Covenants" under "-- Limitation on
Liens," "-- Limitation on Indebtedness of Restricted Subsidiaries" or
"-- Designation of Subsidiaries," (v) Indebtedness of the Company or any
Restricted Subsidiary is not paid within any applicable grace period after final
maturity or is accelerated by the holders thereof because of a default and the
total amount of such Indebtedness unpaid or accelerated exceeds the greater of
$25 million or 30% of the aggregate outstanding principal amount of all
Indebtedness of the Company and the Restricted Subsidiaries, (vi) certain events
of bankruptcy, insolvency or reorganization of the Company or a Restricted
Subsidiary (the "bankruptcy provisions") or (vii) the Company or any Restricted
Subsidiary shall fail within 60 days to pay, bond or otherwise discharge any
uninsured judgment or court order for the payment of money in excess of $25
million, which is not stayed on appeal or is not otherwise being appropriately
contested in good faith. However, a default under clause (iv) with respect to
the 2003 New Notes or the 2005 New Notes will not constitute an Event of Default
until the Trustee or the holders of 25% in principal amount of the outstanding
Notes of such series notify the Company of the default and the Company does not
cure such default within the time specified after receipt of such notice.
If an Event of Default (other than one relating to the bankruptcy
provisions) occurs and is continuing with respect to the 2003 New Notes or the
2005 New Notes, the Trustee or the holders of at least 25% in principal amount
of the outstanding Notes of such series may declare the principal of and accrued
but unpaid interest on all such Notes to be due and payable. Upon such a
declaration, such principal and interest shall be due and payable immediately.
Under certain circumstances, the holders of a majority in principal amount of
the outstanding 2003 New Notes or 2005 New Notes, as the case may be, may
rescind any such acceleration with respect to such Notes and its consequences.
If an Event of Default relating to the bankruptcy provisions occurs and is
continuing, the principal of and interest on all such Notes will ipso facto
become and be immediately due and payable without any declaration or other act
on the part of the Trustee or any holders of such Notes.
Subject to the provisions of the Indenture relating to the duties of the
Trustee, in case an Event of Default occurs and is continuing thereunder, the
Trustee will be under no obligation to exercise any of the rights or powers
under the Indenture at the request or direction of the holders of any Notes
unless such holders have offered to the Trustee reasonable indemnity or security
against any loss, liability or expense. Except to enforce the right to receive
payment of principal, premium (if any) or interest when due, no holder of a Note
may pursue any remedy with respect to the Indenture or the Notes unless (i) such
holder has previously given
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the Trustee notice that an Event of Default is continuing, (ii) holders of at
least 25% in principal amount of the outstanding 2003 New Notes or 2005 New
Notes, as applicable, have requested the Trustee to pursue the remedy, (iii)
such holders have offered the Trustee reasonable security or indemnity against
any loss, liability or expense, (iv) the Trustee has not complied with such
request within 60 days after the receipt thereof and the offer of security or
indemnity and (v) the holders of a majority in principal amount of such
outstanding Notes have not given the Trustee a direction inconsistent with such
request within such 60-day period. Subject to certain restrictions, the holders
of a majority in principal amount of the 2003 New Notes or 2005 New Notes, as
the case may be, are given the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee or of
exercising any trust or power conferred on the Trustee. The Trustee, however,
may refuse to follow any direction that conflicts with law or the Indenture or
that the Trustee determines is unduly prejudicial to the rights of any other
holder of a Note or that would involve the Trustee in personal liability.
The Indenture provides that if a Default occurs and is continuing and is
actually known to the Trustee, the Trustee must mail to each holder of the
applicable Notes notice of the Default within 90 days after it occurs. Except in
the case of a Default in the payment of principal of, premium (if any) or
interest on any Note, the Trustee may withhold notice if and so long as a
committee of its trust officers determines that withholding notice is not
opposed to the interest of the holders of such Notes. In addition, the Company
is required to deliver to the Trustee, within 120 days after the end of each
fiscal year, a certificate indicating whether the signers thereof know of any
Default that occurred during the previous year. The Company also is required to
deliver to the Trustee, within 30 days after the occurrence thereof, written
notice of any event which would constitute certain Defaults, their status and
what action the Company is taking or proposes to take in respect thereof.
MODIFICATION AND WAIVER
Modification and amendments of the Indenture may be made by the Company and
the Trustee with the consent of the holders of a majority in aggregate principal
amount of the Notes then outstanding of any series affected thereby (including
consents obtained in connection with a tender offer or exchange for the Notes)
and any past default or compliance with any provisions may also be waived with
such a consent of the holders of a majority in principal amount of such Notes
then outstanding; provided, however, that no such modification or amendment may,
without the consent of the holder of each Note affected thereby, (a) change the
Stated Maturity of the principal of, or any premium or installment of interest
on, or any Liquidated Damages payable in respect of, any Note, (b) reduce the
principal amount of, or the rate (or modify the calculation of such rate) of
interest on, or any Liquidated Damages with respect to, or any premium payable
upon redemption of, any Note, (c) change the obligation of the Company to pay
Liquidated Damages with respect to any Note or reduce the amount of any Note
provable in bankruptcy, (d) change the redemption provisions of any Note, (e)
change the place of payment or the coin or currency in which the principal of,
any premium or interest on or any Liquidated Damages with respect to any Note is
payable, (f) impair the right to institute suit for the enforcement of any
payment on or after the Stated Maturity of any Note (or, in the case of
redemption, on or after the Redemption Date), (g) reduce the percentage and
principal amount of the outstanding Notes, the consent of whose holders is
required in order to take certain actions, (h) reduce the requirements for
quorum or voting by holders of the Notes, (i) modify any of the provisions of
the Indenture regarding the waiver of past defaults or the waiver of certain
covenants by the holders of the Notes except to increase any percentage vote
required or to provide that certain other provisions of the Indenture cannot be
modified or waived without the consent of the holder or each Note affected
thereby, (j) make any changes that adversely affect the right to exchange any
Note for other securities in accordance with its terms, or (k) modify any of the
above provisions. The Indenture may be amended or supplemented without the
consent of any holder of a Note (i) to cure any ambiguity, defect or
inconsistency in the Indenture or in the Notes of any series; (ii) to provide
the assumption of all the obligations of the Company under the Notes or any Note
Guarantor under its Note Guarantee and, in each case, the Indenture by any
corporation in connection with a merger, consolidation, transfer or lease of
such entity's property and assets as an entirety or substantially as an
entirety, as provided for in the Indenture; (iii) to provide for uncertificated
Notes in addition to or in place of certificated Notes; (iv) to make any change
that does not adversely affect the rights of any holder of Notes;
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(v) to provide for the issuance of and establish the form and terms and
conditions of a series of Notes or to establish the form of any certifications
required to be furnished pursuant to the terms of the Indenture or any series of
Notes; (vi) to add to rights of holders of Notes; or (vii) to secure any Notes
as provided under "-- Certain Covenants -- Limitation on Liens" above.
The holders of a majority in aggregate principal amount of the Notes of any
series may, on behalf of the holders of all Notes of such series, waive
compliance by the Company with certain restrictive provisions of the Indenture.
The holders of a majority in aggregate principal amount of Notes of any series
may, on behalf of all holders of Notes of such series, waive any past default
and its consequences under the Indenture with respect to the Notes of such
series, except a default (a) in the payment of principal of (or premium, if any)
or any interest on or any Liquidated Damages with respect to Notes of such
series or (b) in respect of a covenant or provision of the Indenture that cannot
be modified or amended without the consent of the holder of each Note of any
series.
Under the Indenture, the Company and the Note Guarantors are required to
furnish the Trustee annually a statement as to the performance by the Company
and the Note Guarantors of their respective obligations under the Indenture and
as to any default in such performance. The Company is also required to deliver
to the Trustee, within five days after occurrence thereof, written notice of any
Event of Default or any event which after notice or lapse of time or both would
constitute an Event of Default.
The consent of the holders of the Notes is not necessary under the
Indenture to approve the particular form of any proposed amendment. It is
sufficient if such consent approves the substance of the proposed amendment.
After an amendment under the Indenture becomes effective, the Company is
required to mail to holders of the related Notes a notice briefly describing
such amendment. However, the failure to give such notice to all holders of such
Notes, or any defect therein, will not impair or affect the validity of the
amendment.
DISCHARGE, DEFEASANCE AND COVENANT DEFEASANCE
The Company may discharge certain obligations to holders of any series of
Notes that have not already been delivered to the Trustee for cancellation and
that either have become due and payable or will become due and payable within
one year (or scheduled for redemption within one year) by depositing with the
Trustee, in trust, funds in U.S. dollars in an amount sufficient to pay the
entire indebtedness on such Notes with respect to principal (and premium, if
any) and interest to the date of such deposit (if such Notes have become due and
payable) or to the Maturity thereof as the case may be.
The Indenture provides that, unless the following provisions are made
inapplicable to the Notes of or within any series, the Company may elect either
(a) to defease and be discharged from any and all obligations with respect to
such Notes (except for, among other things, the obligation to pay Liquidated
Damages, if any, and other obligations to register the transfer or exchange of
such Notes, to replace temporary or mutilated, destroyed, lost or stolen Notes,
to maintain an office or agency with respect to such Notes and to hold moneys
for payment in trust) ("defeasance"), or (b) to be released from its obligations
with respect to such Notes under the covenants described under "Certain
Covenants -- Limitation on Liens" and "-- Limitation on Indebtedness of
Restricted Subsidiaries" above and its obligations with respect to any other
specified covenant, and any omission to comply with such obligations shall not
constitute a default or an Event of Default with respect to such Notes
("covenant defeasance"). Defeasance or covenant defeasance, as the case may be,
shall be conditioned upon the irrevocable deposit by the Company with the
Trustee, in trust of an amount in U.S. dollars or Government Obligations (as
defined below), or both, which through the scheduled payment of principal and
interest in accordance with their terms will provide money in an amount
sufficient to pay the principal of (and premium, if any) and interest on such
Notes on the scheduled due date therefor.
Such a trust may only be established if, among other things, (i) the
applicable defeasance or covenant defeasance does not result in a breach or
violation of, or constitute a default under, the Indenture or any other material
agreement or instrument to which the Company is a party or by which it is bound,
(ii) no Event of Default or event which with notice or lapse of time or bother
would become an Event of Default with respect
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to the Notes to be defeased shall have occurred and be continuing on the date of
establishment of such a trust and, with respect to defeasance only, at any time
during the period ending on the 123rd day after such date and (iii) the Company
has delivered to the Trustee an Opinion of Counsel (as specified in the
Indenture) to the effect that the holders of such Notes will not recognize
income, gain or loss for U.S. federal income tax purposes as a result of such
defeasance or covenant defeasance and will be subject to U.S. federal income tax
on the same amounts, in the same manner and at the same times as would have been
the case if such defeasance or covenant defeasance had not occurred, and such
Opinion of Counsel, in the case of defeasance, must refer to and be based upon a
letter ruling of the Internal Revenue Service received by the Company, a Revenue
Ruling published by the Internal Revenue Service or a change in applicable U.S.
federal income tax law occurring after the date of the Indenture.
"Government Obligations" means securities which are (i) direct obligations
of the United States of America, for the payment of which its full faith and
credit is pledged or (ii) obligations of a Person controlled or supervised by
and acting as an agency or instrumentality of the United States of America, the
timely payment of which is unconditionally guaranteed as a full faith and credit
obligation by the United States of America which, in the case of clauses (i)
and(ii), are not callable or redeemable at the option of the issuer or issuers
thereof, and shall also include a depository receipt issued by a bank or trust
company as custodian with respect to any such Government Obligation or a
specific payment of interest on or principal of or any other amount with respect
to any such Government Obligation held by such custodian for the account of the
holder of such depository receipt, provided that (except as required by law)
such custodian is not authorized to make any deduction from the amount payable
to the holder of such depository receipt from any amount received by the
custodian with respect to the Government Obligation or the specific payment of
interest on or principal of or any other amount with respect to the Government
Obligation evidenced by such depository receipt.
In the event the Company effects covenant defeasance with respect to any
Notes and such Notes are declared due and payable because of the occurrence of
any Event of Default other than an Event of Default relating to a breach of the
related covenant (which would no longer be applicable to such Notes after such
covenant defeasance) or with respect to any other covenant as to which there has
been covenant defeasance, the Government Obligations on deposit with the Trustee
will be sufficient to pay amounts due on such Notes at the time of the Stated
Maturity but may not be sufficient to pay amounts due on such Notes at the time
of the acceleration resulting from such Event of Default. However, the Company
would remain liable to make payment of such amounts due at the time of
acceleration.
FORM, DENOMINATION AND REGISTRATION
Old Notes will be exchanged for one or more permanent global New Notes in
definitive, fully registered form without interest coupons (each a "Global
Note"; and collectively, the "Global Notes") and will be deposited with the
Trustee as custodian for, and registered in the name of a nominee of, DTC. The
New Notes will be issued only in fully registered form, without coupons, in
denominations of $1,000 and integral multiples thereof thereafter.
Ownership of beneficial interests in a Global Note will be limited to
persons who have accounts with DTC ("participants") or persons who hold
interests through participants. Ownership of beneficial interests in the Global
Notes will be shown on, and the transfer of these ownership interests will be
effected only through, records maintained by DTC or its nominee (with respect to
interests of participants) and the records of participants (with respect to
interests of persons other than participants).
So long as DTC or its nominee is the registered owner or holder of a Global
Note, DTC or such nominee, as the case may be, will be considered the sole owner
or holder of the Notes represented by such Global Note for all purposes under
the Indenture and the Notes. In addition, no beneficial owner of an interest in
a Global Note will be able to transfer that interest except in accordance with
DTC's applicable procedures (in addition to those under the Indenture referred
to herein).
Payment on Global Notes will be made to DTC or its nominee, as the
registered owner thereof. None of the Company, the Trustee or any Paying Agent
will have any responsibility or liability for any aspect of the
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records relating to or payments made on account of beneficial ownership
interests in the Global Notes or for maintaining, supervising or reviewing any
records relating to such beneficial ownership interests.
The Company expects that DTC or its nominee will credit direct
participants' accounts on the payment date with payments in respect of a Global
Note in amounts proportionate to their respective beneficial interest in the
principal amount of such Global Note as shown on the records of DTC or its
nominee, unless DTC has reason to believe that it will not receive payment on
the payment date. The Company also expects that payments by participants to
owners of beneficial interest in such Global Note held through such participants
will be governed by standing instructions and customary practices, as is now the
case with securities held for the accounts of customers registered in "street
name." Such payments will be the responsibility of such participants.
Transfers between participants in DTC will be effected in the ordinary way
in accordance with DTC rules. The laws of some states require that certain
persons take physical delivery of securities in definitive form. Consequently,
the ability to transfer beneficial interest in a Global Note to such persons may
be limited. Because DTC can only act on behalf of participants, who in turn act
on behalf of indirect participants and certain banks, the ability of a person
having a beneficial interest in a Global Note to pledge such interest to persons
or entities that do not participate in the DTC system, or otherwise take actions
in respect of such interest, may be affected by the lack of a physical
certificate of such interest.
The Company believes that it is the policy of DTC that it will take any
action permitted to be taken by a holder of Notes only at the direction of one
or more participants to whose account interests in the Global Notes are credited
and only in respect of such portion of the aggregate principal amount of the
Notes as to which such participant or participants has or have given such
direction.
The Indenture provides that if (i) the Depository notifies the Company that
it is unwilling or unable to continue as Depository or if the Depository ceases
to be eligible under the Indenture and a successor depository is not appointed
by the Company within 90 days, (ii) the Company determines that the Notes of any
series shall no longer be represented by Global Notes and executes and delivers
to the Trustee a Company Order to such effect or (iii) an Event of Default with
respect to the Notes of any series shall have occurred and be continuing, the
Global Notes will be exchanged for Notes in certificated form of like tenor and
of an equal aggregate principal amount, in authorized denominations. Such
certificated Notes shall be registered in such name or names as the Depository
shall instruct the Trustee. It is expected that such instructions may be based
upon directions received by the Depository from participants with respect to
ownership of beneficial interests in Global Notes.
DTC has advised the Company as follows: DTC is a limited-purpose trust
company organized under the New York Banking Law, a "banking organization"
within the meaning of the New York Banking Law, a member of the Federal Reserve
System, a "clearing corporation" within the meaning of the New York Uniform
Commercial Code and a "clearing agency" registered pursuant to the provisions of
Section 17A of the Exchange Act. DTC holds securities that its participants
deposit with DTC and facilitates the settlement among participants through
book-entry changes in participants' accounts, thereby eliminating the need for
physical movement of securities certificates. Direct participants include
securities brokers and dealers, banks, trust companies, clearing corporations
and certain other organizations. Access to the DTC system is also available to
others such as securities brokers and dealers, banks and trust companies that
clear through or maintain a custodial relationship with a direct participant,
either directly or indirectly. The rules applicable to DTC and its participants
are on file with the Commission.
Although DTC has agreed to the foregoing procedures in order to facilitate
transfers of interests in the Global Notes among participants of DTC, it is
under no obligation to perform or continue to perform such procedures, and such
procedures may be discontinued at any time. None of the Company, the Note
Guarantors and the Trustee will have any responsibility for the performance by
DTC or its participants or indirect participants of their respective obligations
under the rules and procedures governing their operations.
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CONCERNING THE TRUSTEE
The Bank of New York is the Trustee under the Indenture (the "Trustee") and
has been appointed by the Company as Registrar and Paying Agent with regard to
the Notes.
The holders of a majority in principal amount of the outstanding debt
securities of any series will have the right to direct the time, method and
place of conducting any proceeding for exercising any remedy available to the
Trustee, subject to certain exceptions. The Indenture provides that if an Event
of Default occurs (and is not cured), the Trustee will be required, in the
exercise of its power, to use the degree of care of a prudent man in the conduct
of his own affairs. Subject to such provisions, the Trustee will be under no
obligation to exercise any of its rights or powers under the Indenture at the
request of any holder of such Notes, unless such holder shall have offered to
the Trustee security and indemnity satisfactory to it against any loss,
liability or expense and then only to the extent required by the terms of the
Indenture.
GOVERNING LAW
The Indenture and the Notes are governed by, and construed in accordance
with, the laws of the State of New York without giving effect to applicable
principles of conflicts of law to the extent that the application of the law of
another jurisdiction would be required thereby.
CERTAIN UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS
GENERAL
The following is a summary of the material United States federal income,
estate and gift tax consequences of the purchase, ownership and disposition of
the Notes, but is not purported to be a complete analysis of all potential tax
effects. This summary is based upon the Internal Revenue Code of 1986, as
amended (the "Code"), existing and proposed regulations promulgated thereunder,
published rulings and court decisions, all as in effect and existing on the date
hereof and all of which are subject to change at any time, which change may be
retroactive or prospective. Unless otherwise specifically noted, this summary
applies only to those persons that hold the Notes as capital assets within the
meaning of Section 1221 of the Code. This discussion assumes that the Notes will
be treated as indebtedness for United States federal income tax purposes.
THIS SUMMARY IS FOR GENERAL INFORMATION ONLY AND DOES NOT ADDRESS THE TAX
CONSEQUENCES TO TAXPAYERS WHO ARE SUBJECT TO SPECIAL RULES (SUCH AS FINANCIAL
INSTITUTIONS, TAX-EXEMPT ORGANIZATIONS, INSURANCE COMPANIES, S CORPORATIONS,
REGULATED INVESTMENT COMPANIES, REAL ESTATE INVESTMENT TRUSTS, BROKER-DEALERS,
TAXPAYERS SUBJECT TO THE ALTERNATIVE MINIMUM TAX AND PERSONS THAT WILL HOLD THE
NOTES AS PART OF A POSITION IN A "STRADDLE" OR AS PART OF A "CONSTRUCTIVE SALE"
OR A "HEDGING" OR "CONVERSION" TRANSACTION) OR ADDRESS ASPECTS OF FEDERAL
TAXATION THAT MIGHT BE RELEVANT TO A PROSPECTIVE INVESTOR BASED UPON SUCH
INVESTOR'S PARTICULAR TAX SITUATION. THIS SUMMARY DOES NOT ADDRESS ANY TAX
CONSEQUENCES ARISING UNDER ANY STATE, MUNICIPALITY, FOREIGN COUNTRY OR OTHER
TAXING JURISDICTION. PROSPECTIVE INVESTORS ARE URGED TO CONSULT THEIR TAX
ADVISORS REGARDING THE UNITED STATES FEDERAL TAX CONSEQUENCES OF OWNING AND
DISPOSING OF THE NOTES (INCLUDING THE INVESTOR'S STATUS AS A UNITED STATES
HOLDER OR A NON-UNITED STATES HOLDER), AS WELL AS ANY TAX CONSEQUENCES THAT MAY
ARISE UNDER THE LAWS OF ANY STATE, MUNICIPALITY, FOREIGN COUNTRY OR OTHER TAXING
JURISDICTION.
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EFFECT OF EXCHANGE OF OLD NOTES FOR EXCHANGE NOTES
The Company believes that the exchange of Old Notes for New Notes pursuant
to the Exchange Offer will not be treated as an "exchange" for federal income
tax purposes because the New Notes will not be considered to differ materially
in kind or extent from the Old Notes. Rather, the New Notes received by a holder
will be treated as a continuation of the Old Notes in the hands of such holder.
As a result, holders will not recognize any taxable gain or loss or any interest
income as a result of exchanging Old Notes for New Notes pursuant to the
Exchange Offer. The holding period of the New Notes will include the holding
period of the Old Notes, and the basis of the New Notes will equal the basis of
the Old Notes immediately before the exchange.
UNITED STATES HOLDERS
General
The following is a general discussion of certain United States federal
income tax consequences of the ownership and sale or other disposition of the
Notes by a beneficial owner that, for United States federal income tax purposes,
is a "United States person" (a "United States Holder"). For purposes of this
discussion, a "United States person" means a citizen or individual resident (as
defined in Section 7701(b) of the Code) of the United States; a corporation or
partnership (including any entity treated as a corporation or partnership for
United States federal income tax purposes) created or organized in or under the
laws of the United States, any state thereof or the District of Columbia unless,
in the case of a partnership, Treasury regulations provide otherwise; an estate
the income of which is subject to United States federal income tax without
regard to its source; or a trust if a court within the United States is able to
exercise primary supervision over the administration of the trust and one or
more United States persons have the authority to control all substantial
decisions of the trust. Notwithstanding the preceding sentence, certain trusts
in existence on August 20, 1996, and treated as United States persons prior to
such date that elect to continue to be so treated also shall be considered
United States persons.
Payments of Interest
Payments of interest on a Note generally will be taxable to a United States
Holder as ordinary interest income at the time such payments are accrued or are
received (in accordance with the United States Holder's regular method of tax
accounting).
Amortizable Bond Premium
A United States Holder that purchases a Note for an amount in excess of its
principal amount will be considered to have purchased the Note at a premium and
may elect to amortize such premium, using a constant yield method, over the
remaining term of the Note (or, if a smaller amortization allowance would
result, by computing such allowance with reference to the amount payable on an
earlier call date and amortizing such allowance over the shorter period to such
call date). The amount amortized in any year will be treated as a reduction of
the United States Holder's interest income from the Note. Bond premium on a Note
held by a United States Holder that does not make such an election will decrease
the gain or increase the loss otherwise recognized on disposition of the Note.
The election to amortize bond premium on a constant yield method, once made,
applies to all debt obligations held or subsequently acquired by the electing
United States Holder on or after the first day of the first taxable year to
which the election applies and may not be revoked without the consent of the
Internal Revenue Service (the "Service").
Market Discount
If a United States Holder purchases, subsequent to its original issuance, a
Note for an amount that is less than its stated redemption price at maturity,
the amount of the difference generally will be treated as "market discount,"
unless such difference is less than a specified de minimis amount. The United
States Holder will be required to treat any gain recognized on the sale,
exchange, redemption, retirement or other disposition of the Note as ordinary
income to the extent of the accrued market discount that has not previously been
included in
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income. In addition, the United States Holder may be required to defer, until
the maturity date of the Note or its earlier disposition in a taxable
transaction, the deduction of all or a portion of the interest expense on any
indebtedness incurred or continued to purchase or carry such Note.
Any market discount will be considered to accrue ratably during the period
from the date of acquisition to the maturity date of the Note, unless the United
States Holder elects to accrue market discount on a constant interest method. A
United States Holder of a Note may elect to include market discount in income
currently as it accrues (under either the ratable or constant interest method).
This election to include currently, once made, applies to all market discount
obligations acquired in or after the first taxable year to which the election
applies and may not be revoked without the consent of the Service. If the United
States Holder of a Note makes such an election, the foregoing rules with respect
to the recognition of ordinary income on sales and other dispositions of such
instruments, and with respect to the deferral of interest deductions on debt
incurred or maintained to purchase or carry such debt instruments, would not
apply.
Sale, Exchange or Redemption of the Notes
Generally, a sale, exchange or redemption of the Notes will result in
taxable gain or loss equal to the difference between the amount of cash or other
property received and the United States Holder's adjusted tax basis in the Note.
A United States Holder's adjusted tax basis for determining gain or loss on the
sale or other disposition of a Note will initially equal the cost of the Note to
such Holder and will be increased by any market discount previously included in
income by such United States Holder, and decreased by any amortized premium
previously deducted from income by the United States Holder. Except as described
above with respect to market discount, such gain or loss will be capital gain or
loss. Capital gain or loss will be long-term gain or loss if the Note was held
by the United States Holder for more than one year, otherwise such gain or loss
will be short-term.
United States Holders that are corporations will generally be taxed on net
capital gains at a maximum rate of 35%. In contrast, United States Holders that
are individuals will generally be taxed on net capital gains at a maximum rate
of (i) 39.6% for property held 12 months or less, and (ii) 20% for property held
more than 12 months. Special rules (and generally lower maximum rates) apply for
individuals in lower tax brackets. Any capital losses realized by a United
States Holder that is a corporation generally may be used only to offset capital
gains. Any capital losses realized by a United States Holder that is an
individual generally may be used only to offset capital gains plus $3,000 of
other income per year.
FOREIGN HOLDERS
The following is a general discussion of certain United States federal
income and estate and gift tax consequences of the ownership and sale or other
disposition of the Notes by any beneficial owner of a Note that is not a United
States Holder (a "Non-United States Holder"). Resident alien individuals will be
subject to United States federal income tax with respect to the Notes as if they
were United States Holders.
Interest
Under current United States federal income tax law, and subject to the
discussion of backup withholding below, interest paid on the Notes to a
Non-United States Holder will not be subject to the normal 30% United States
federal withholding tax; provided that (i) the interest is "effectively
connected with the conduct of a trade or business in the United States" by the
Non-United States Holder and the Non-United States Holder timely furnishes the
Company with two duly executed copies of Internal Revenue Service Form 4224 (or
any successor form), or (ii) all of the following conditions of the portfolio
interest exception (the "Portfolio Interest Exception") are met: (A) the
Non-United States Holder does not, actually or constructively, own 10% or more
of the total combined voting power of all classes of stock of the Company
entitled to vote, (B) the Non-United States Holder is not a controlled foreign
corporation that is related, directly or indirectly, to the Company through
stock ownership, (C) the Non-United States Holder is not a bank receiving
interest pursuant to a loan agreement entered into in the ordinary course of its
trade or business, and (D) either (1) the Non-United States Holder certifies to
the Company or its agent, under penalties of perjury, that it is a
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Non-United States Holder and provides its name and address, or (2) a securities
clearing organization, bank or other financial institution that holds customers'
securities in the ordinary course of its trade or business (a "Financial
Institution"), and holds the Notes in such capacity, certifies to the Company or
its agent, under penalties of perjury, that such statement has been received
from the beneficial owner of the Notes by it or by a Financial Institution
between it and the beneficial owner and furnishes the Company or its agent with
a copy thereof. The foregoing certification may be provided by the Non-United
States Holder on Internal Revenue Service Form W-8 (or any successor form). Such
certificate is effective with respect to payments of interest made after the
issuance of the certificate in the calendar year of its issuance and the two
immediately succeeding calendar years.
On October 14, 1997, the final regulations were published in the Federal
Register (the "1997 Final Regulations") that affect the United States federal
income taxation of Non-United States Holders. The 1997 Final Regulations are
effective for payments after December 31, 1999, regardless of the issue date of
the instrument with respect to which such payments are made, subject to certain
transition rules discussed below. The discussion under this heading and under
"Backup Withholding Tax and Information Reporting," below, is not intended to be
a complete discussion of the provisions of the 1997 Final Regulations.
Prospective Holders of the Notes are urged to consult their tax advisors
concerning the tax consequences of their investment in light of the 1997 Final
Regulations.
The 1997 Final Regulations provide documentation procedures designed to
simplify compliance by withholding agents. The 1997 Final Regulations generally
do not affect the documentation rules described above, but add other
certification options. Under one such option, a withholding agent will be
allowed to rely on an intermediary withholding certificate furnished by a
"qualified intermediary" (as defined below) on behalf of one or more beneficial
owners (or other intermediaries) without having to obtain the beneficial owner
certificate described above. Qualified intermediaries include: (i) foreign
financial institutions or foreign clearing organizations (other than a United
States branch or United States office of such institution or organization), or
(ii) foreign branches or offices of United States financial institutions or
foreign branches or offices of United States clearing organizations, which, as
to both (i) and (ii), have entered into withholding agreements with the Service.
In addition to certain other requirements, qualified intermediaries must obtain
withholding certificates, such as revised Internal Revenue Service Form W-8
(discussed below), from each beneficial owner. Under another option, an
authorized foreign agent of a United States withholding agent will be permitted
to act on behalf of the United States withholding agent (including the receipt
of withholding certificates, the payment of amounts of income subject to
withholding and the deposit of tax withheld), provided that certain conditions
are met.
For purposes of the certification requirements, the 1997 Final Regulations
generally treat as the beneficial owners of payments on a Note those persons
that, under United States federal income tax principles, are the taxpayers with
respect to such payments, rather than persons such as nominees or agents legally
entitled to such payments. In the case of payments to an entity classified as a
foreign partnership under United States tax principles, the partners, rather
than the partnership, generally must provide the required certifications to
qualify for the withholding tax exemption described above (unless the
partnership has entered into a special agreement with the Service). A payment to
a United States partnership, however, is treated for these purposes as payment
to a United States payee, even if the partnership has one or more foreign
partners. The 1997 Final Regulations provide certain presumptions with respect
to withholding for Holders not furnishing the required certifications to qualify
for the withholding tax exemption described above. In addition, the 1997 Final
Regulations will replace a number of current tax certification forms (including
Internal Revenue Service Form W-8) with a single, revised Internal Revenue
Service Form W-8 (which, in certain circumstances, requires information in
addition to that previously required). Under the 1997 Final Regulations, this
revised Form W-8 will remain valid until the last day of the third calendar year
following the year in which the certificate is signed.
The 1997 Final Regulations provide transition rules concerning existing
certificates, such as Internal Revenue Service Form W-8. Valid withholding
certificates that are held on December 31, 1999 will generally remain valid
until the earlier of December 31, 2000 or the date of their expiration. Existing
certificates that
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expire in 1999 will not be effective after their expiration. Certificates dated
prior to January 1, 1998 will generally remain valid until the end of 1998,
irrespective of the fact that their validity expires during 1998.
In the event that the interest paid on the Notes is effectively connected
with the conduct of a trade or business within the United States of the
Non-United States Holder, the Non-United States Holder will generally be taxed
on a net income basis (that is, after allowance for applicable deductions) at
the graduated rates that are applicable to United States persons in essentially
the same manner as if the Notes were held by a United States person, as
discussed above. In the case of a Non-United States Holder that is a
corporation, such income may also be subject to the United States federal branch
profits tax (which is generally imposed on a foreign corporation upon the deemed
repatriation from the United States of effectively connected earnings and
profits) at a 30% rate, unless the rate is reduced or eliminated by an
applicable income tax treaty and the Non-United States Holder is a qualified
resident of the treaty country.
If the interest on the Notes is not "effectively connected" and does not
qualify for the Portfolio Interest Exception, then the interest will be subject
to United States federal withholding tax at a flat rate of 30% (or a lower
applicable income tax treaty rate upon delivery of the appropriate certification
of eligibility for treaty benefits).
Gain on Sale or Other Disposition
Subject to special rules applicable to individuals as described below, a
Non-United States Holder will generally not be subject to regular United States
federal income or withholding tax on gain recognized on a sale or other
disposition of the Notes, unless the gain is effectively connected with the
conduct of a trade or business within the United States of the Non-United States
Holder or of a partnership, trust or estate in which such Non-United States
Holder is a partner or beneficiary.
Gains realized by a Non-United States Holder that are effectively connected
with the conduct of a trade or business within the United States of the
Non-United States Holder will generally be taxed on a net income basis (that is,
after allowance for applicable deductions) at the graduated rates that are
applicable to United States persons, as described above, unless exempt by an
applicable income tax treaty. In the case of a Non-United States Holder that is
a corporation, such income may also be subject to the United States federal
branch profits tax (which is generally imposed on a foreign corporation upon the
deemed repatriation from the United States of effectively connected earnings and
profits) at a 30% rate, unless the rate is reduced or eliminated by an
applicable income tax treaty and the Non-United States Holder is a qualified
resident of the treaty country.
In addition to being subject to the rules described above, an individual
Non-United States Holder who holds the Notes as a capital asset will generally
be subject to tax at a 30% rate on any gain recognized on the sale or other
disposition of such Notes if (i) such gain is not effectively connected with the
conduct of a trade or business within the United States of the Non-United States
Holder, and (ii) such individual is present in the United States for 183 days or
more in the taxable year of the sale or other disposition and either (A) has a
"tax home" in the United States (as specially defined for purposes of the United
States federal income tax), or (B) maintains an office or other fixed place of
business in the United States and the gain from the sale or other disposition of
the Notes is attributable to such office or other fixed place of business.
Individual Non-United States Holders may also be subject to tax pursuant to
provisions of United States federal income tax law applicable to certain United
States expatriates (including certain former long-term residents of the United
States).
Under the 1997 Final Regulations, withholding of United States federal
income tax may apply to payments on a taxable sale or other disposition of the
Notes by a Non-United States Holder who does not provide appropriate
certification to the withholding agent with respect to such transaction.
Federal Estate and Gift Taxes
A Note beneficially owned by an individual who is neither a United States
citizen nor a domiciliary of the United States at the time of death will not be
subject to United States federal estate tax as a result of such
65
<PAGE> 74
individual's death; provided that any interest thereon would have been eligible
for the Portfolio Interest Exception described above in "Certain United States
Federal Income Tax Considerations -- Foreign Holders -- Interest," if such
interest had been received by the individual at the time of death.
An individual who is not a United States citizen will not be subject to
United States federal gift tax on a transfer of Notes, unless such person is a
domiciliary of the United States or such person is subject to provisions of
United States federal gift tax law applicable to certain United States
expatriates (including certain former long-term residents of the United States).
BACKUP WITHHOLDING TAX AND INFORMATION REPORTING
Under current United States federal income tax law, information reporting
requirements apply to interest paid to, and to the proceeds of sales or other
dispositions before maturity by, certain non-corporate persons. In addition, a
31% backup withholding tax applies if a non-corporate person (i) fails to
furnish such person's Taxpayer Identification Number ("TIN") (which, for an
individual, is his or her Social Security Number) to the payor in the manner
required, (ii) furnishes an incorrect TIN and the payor is so notified by the
Service, (iii) is notified by the Service that such person has failed properly
to report payments of interest and dividends, or (iv) in certain circumstances,
fails to certify, under penalties of perjury, that such person has not been
notified by the Service that such person is subject to backup withholding for
failure properly to report interest and dividend payments. Backup withholding
does not apply to payments made to certain exempt recipients, such as
corporations and tax-exempt organizations.
In the case of a Non-United States Holder, under current United States
federal income tax law, backup withholding and information reporting do not
apply to payments of interest with respect to a Note, or to payments on the sale
or other disposition of a Note, if such Holder has provided to the Company or
its paying agent the certification described in clause (ii)(D) of "Certain
United States Federal Income Tax Considerations -- Foreign Holders -- Interest"
or has otherwise established an exemption.
Under current United States federal income tax law, (i) interest payments
with respect to a Note collected outside the United States by a foreign office
of a custodian, nominee or broker acting on behalf of a beneficial owner of a
Note, and (ii) payments on the sale or other disposition of a Note to or through
a foreign office of a broker are not generally subject to backup withholding or
information reporting. However, if such custodian, nominee or broker is a
"United States Person" (as defined in Section 7701(a)(30) of the Code), a
controlled foreign corporation for United States tax purposes or a foreign
person 50% of more of whose gross income is effectively connected with the
conduct of a United States trade or business for a specified three-year period
(a "U.S. Related Person"), such custodian, nominee or broker may be subject to
certain information reporting (but not backup withholding) requirements with
respect to such payments, unless such custodian nominee or broker has in its
records documentary evidence that the beneficial owner is not a United States
person and certain conditions are met or the beneficial owner otherwise
establishes an exemption. Backup withholding may apply to any payment that such
custodian, nominee or broker is required to report if such person has actual
knowledge that the payee is a United States person. Payments to or through the
United States office of a broker will be subject to backup withholding and
information reporting unless the Holder certifies, under penalties of perjury,
that it is not a United States person or otherwise establishes an exemption.
The 1997 Final Regulations modify certain of the certification requirements
for backup withholding and expand the group of U.S. Related Persons. It is
possible that the Company or its paying agent may request new withholding
exemption forms from Holders in order to qualify for continued exemption from
backup withholding when the 1997 Final Regulations become effective.
Backup withholding tax is not an additional tax. Rather, any amounts
withheld from a payment to a Holder under the backup withholding rules are
allowed as a refund or a credit against such Holder's United States federal
income tax; provided that the required information is furnished to the Service.
66
<PAGE> 75
PLAN OF DISTRIBUTION
Each Participating Broker-Dealer that receives New Notes for its own
account pursuant to the Exchange Offer must acknowledge that it will deliver a
prospectus in connection with any resale of such New Notes. This Prospectus, as
it may be amended or supplemented from time to time, may be used by a
Participating Broker-Dealer (other than an affiliate of the Company) in
connection with resales of New Notes received in exchange for Old Notes where
such Old Notes were acquired as a result of market-making activities or other
trading activities. The Company has agreed that for a period of 90 days after
the Expiration Date, it will make this Prospectus, as amended or supplemented,
available to any Participating Broker-Dealer for use in connection with any such
resale.
The Company will not receive any proceeds from any sales of the New Notes
by Participating Broker-Dealers. New Notes received by Participating
Broker-Dealers for their own account pursuant to the Exchange Offer may be sold
from time to time in one or more transactions in the over-the-counter market, in
negotiated transactions, through the writing of options on the New Notes or a
combination of such methods of resale, at market prices prevailing at the time
of resale, at prices related to such prevailing market prices or negotiated
prices. Any such resale may be made directly to purchasers or to or through
brokers or dealers who may receive compensation in the form of commissions or
concessions from any such Participating Broker-Dealer and/or the purchasers of
any such New Notes. Any Participating Broker-Dealer that resells the New Notes
that were received by it for its own account pursuant to the Exchange Offer and
any broker or dealer that participates in a distribution of such New Notes may
be deemed to be an "underwriter" within the meaning of the Securities Act and
any profit on any such resale of New Notes and any commissions or concessions
received by any such persons may be deemed to be underwriting compensation under
the Securities Act. The Letter of Transmittal states that by acknowledging that
it will deliver and by delivering a prospectus, a Participating Broker-Dealer
will not be deemed to admit that it is an "underwriter" within the meaning of
the Securities Act.
For a period of 90 days after the Expiration Date, the Company will
promptly send additional copies of this Prospectus and any amendment or
supplement to this Prospectus to any Participating Broker-Dealer.
The Company has agreed to pay all expenses incident to the Exchange Offer
other than commissions or concessions of any brokers or dealers and will
indemnify the holders of the Old Notes (including any broker-dealers) against
certain liabilities, including liabilities under the Securities Act.
The Initial Purchasers have indicated to the Company that they intend to
effect offers and sales of the New Notes in market-making transactions at
negotiated prices related to prevailing market prices at the time of sale, but
are not obligated to do so, and such market-making activities may be
discontinued at any time. The Initial Purchasers may act as principal or agent
in such transactions. There can be no assurance that an active market for the
New Notes will develop.
The Company has not entered into any arrangements or understandings with
any person to distribute the New Notes to be received in the Exchange Offer.
LEGAL MATTERS
The validity of the New Notes offered hereby will be passed upon for the
Company by Dow, Lohnes & Albertson, PLLC, Washington, D.C.
EXPERTS
The consolidated financial statements of the Company incorporated in this
Prospectus by reference to the Company's Annual Report on Form 10-K for the year
ended December 31, 1997 have been audited by Deloitte & Touche LLP, independent
auditors, stated in their report thereon, which is incorporated in this
Prospectus by reference, and have been so incorporated by reliance upon the
report of such firm given upon their authority as experts in accounting and
auditing.
67
<PAGE> 76
The consolidated financial statements of NewCity Communications, Inc.
incorporated in this Prospectus by reference to the Company's Current Report on
Form 8-K dated April 14, 1997, have been audited by Ernst & Young LLP,
independent auditors, as set forth in their report thereon incorporated by
reference therein and incorporated herein by reference. Such financial
statements are incorporated by reference herein in reliance upon the report of
Ernst & Young LLP pertaining to such financial statements given upon the
authority of such firm as experts in accounting and auditing.
68
<PAGE> 77
(Cox Radio, Inc. Logo)
<PAGE> 78
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Reference is made to Section 102(b)(7) of the Delaware General Corporation
Law (the "DGCL"), which enables a corporation in its original certificate of
incorporation or an amendment thereto to eliminate or limit the personal
liability of a director for violations of the director's fiduciary duty, except
(i) for any breach of the director's duty of loyalty to the corporation or its
stockholders, (ii) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (iii) pursuant to Section
174 of the DGCL (providing for liability of directors for unlawful payment of
dividend) or (iv) for any transaction from which the director derived an
improper personal benefit. The Company's Amended and Restated Certificate of
Incorporation contains a provision which eliminates the liability of directors
to the extent permitted by Section 102(b)(7) of the DGCL.
Reference is made to Section 145 of the DGCL, which provides that a
corporation may indemnify directors and officers as well as other employees and
individuals against expenses (including attorneys' fees), judgments, fines and
amounts paid in settlement in connection with specified actions, suits or
proceedings, whether civil, criminal, administrative or investigative (other
than an action by or in the right of the corporation (a "derivative action")),
if they acted in good faith and in a manner they 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 their conduct
was unlawful. A similar standard is applicable in the case of derivative
actions, except that indemnification only extends to expenses (including
attorneys' fees) incurred in connection with the defense or settlement of such
action, and the statute requires court approval before there can be any
indemnification where the person seeking indemnification has been found liable
to the corporation. The statute provides that it is not exclusive of other
indemnification that may be granted by a corporation's charter, by-laws,
disinterested director vote, stockholder vote, agreement or otherwise. The
Amended and Restated Certificate of Incorporation of the Company provides that
the Company shall indemnify its directors and officers to the fullest extent
permitted by Delaware law.
ITEM 21. EXHIBITS AND FINANCIAL DATA SCHEDULES
<TABLE>
<S> <C> <C>
4.1 -- Indenture dated as of May 26, 1998
4.2 -- Registration Rights Agreement dated May 26, 1998*
5.1 -- Opinion of Dow, Lohnes & Albertson, PLLC regarding the
validity of the New Notes*
23.1 -- Consent of Deloitte & Touche LLP
23.2 -- Consent of Ernst & Young LLP
23.3 -- Consent of Dow, Lohnes & Albertson, PLLC (included in
Exhibit 5.1)*
25.1 -- Form T-1 Statement of Eligibility and Qualification under
the Trust Indenture Act of 1939, of The Bank of New York, as
Trustee for the 2003 Notes*
25.2 -- Form T-1 Statement of Eligibility and Qualification under
the Trust Indenture Act of 1939, of The Bank of New York, as
Trustee for the 2005 Notes*
99.1 -- Letter of Transmittal
99.2 -- Tender Instructions
99.3 -- Notice of Guaranteed Delivery
</TABLE>
- ---------------
* Previously filed with this Registration Statement
ITEM 22. UNDERTAKINGS
Insofar as indemnification for liabilities arising under the Securities Act
of 1933, as amended (the "Securities Act"), may be permitted to directors,
officers and controlling persons of the Registrant pursuant to the foregoing
provisions or otherwise, the Registrant has been advised that in the opinion of
the Securities and Exchange Commission such indemnification is against public
policy as expressed in the Securities Act and is,
II-1
<PAGE> 79
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 Securities Act and will be governed by the final
adjudication of such issue.
The Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) 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; and
(iii) 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; and
(2) That, for the purpose of determining any liability under the
Securities Act, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new registration statement 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.
II-2
<PAGE> 80
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, Cox
Radio, Inc. has duly caused this Amendment No. 1 to Registration Statement to be
signed on its behalf by the undersigned, thereunto duly authorized, on November
12, 1998.
COX RADIO, INC.
By: /s/ ROBERT F. NEIL
------------------------------------
Robert F. Neil
President and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Amendment No. 1 to Registration Statement has been signed below by the
following persons on behalf of the Registrant and in the capacities and on the
dates indicated.
Signatures appear on page II-4
A majority of the members of the Board of Directors of Cox Radio, Inc. has
signed this Amendment No. 1 to Registration Statement in accordance with the
requirements of the Securities Act of 1933, as amended.
II-3
<PAGE> 81
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
* Chairman of the Board of November 12, 1998
- --------------------------------------------------- Directors
Nicholas D. Trigony
/s/ ROBERT F. NEIL President and Chief Executive November 12, 1998
- --------------------------------------------------- Officer, Director
Robert F. Neil
* Chief Financial Officer November 12, 1998
- --------------------------------------------------- (Principal Financial Officer
Maritza C. Pichon and Principal Accounting
Officer)
* Director November 12, 1998
- ---------------------------------------------------
David E. Easterly
* Director November 12, 1998
- ---------------------------------------------------
Paul M. Hughes
* Director November 12, 1998
- ---------------------------------------------------
Richard A. Ferguson
</TABLE>
* POWER OF ATTORNEY
Robert F. Neil, by signing his name hereto, does sign this document on
behalf of each of the persons indicated above for whom he is attorney-in-fact
pursuant to a power of attorney duly executed by such person and filed with the
Securities and Exchange Commission.
By: /s/ ROBERT F. NEIL
------------------------------------
Robert F. Neil
Attorney-In-Fact
II-4
<PAGE> 1
================================================================================
COX RADIO, INC., Issuer
and
THE GUARANTORS PARTY HERETO, Guarantors
to
THE BANK OF NEW YORK, Trustee
---------------
INDENTURE
---------------
Dated as of May 26, 1998
Debt Securities
================================================================================
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C> <C>
ARTICLE I Definitions and Other Provisions of General Application.................................................1
Section 1.1. Definitions........................................................................................1
Act................................................................................................2
Additional Amounts.................................................................................2
Affiliate..........................................................................................2
Asset Acquisition..................................................................................2
Asset Disposition..................................................................................3
Authenticating Agent...............................................................................3
Authorized Newspaper...............................................................................3
Authorized Officer.................................................................................3
Bearer Security....................................................................................3
Board of Directors.................................................................................3
Board Resolution...................................................................................3
Business Day.......................................................................................3
Capitalized Lease..................................................................................3
Capital Stock......................................................................................4
Closing Date.......................................................................................4
Commission.........................................................................................4
Company............................................................................................4
Company Request and Company Order..................................................................4
Conversion Event...................................................................................4
Corporate Trust Office.............................................................................4
Corporation........................................................................................4
Coupon.............................................................................................5
Credit.............................................................................................5
Currency...........................................................................................5
Currency Agreement.................................................................................5
CUSIP number.......................................................................................5
Default............................................................................................5
Defaulted Interest.................................................................................5
Dollars or $.......................................................................................5
ECU................................................................................................5
European Monetary System...........................................................................5
European Union.....................................................................................5
Event of Default...................................................................................5
Foreign Currency...................................................................................5
GAAP...............................................................................................6
Government Obligations.............................................................................6
Guarantee or Guarantees............................................................................6
Guarantor or Guarantors............................................................................6
Guarantor's Board of Directors.....................................................................6
Guarantor's Board Resolution.......................................................................6
Guarantor's Officers' Certificate..................................................................6
Guarantor Request..................................................................................7
Holder.............................................................................................7
Indebtedness.......................................................................................7
</TABLE>
i
<PAGE> 3
<TABLE>
<S> <C> <C>
Indenture..........................................................................................7
Independent Public Accountants.....................................................................8
Indexed Security...................................................................................8
Initial Guarantor or Initial Guarantors............................................................8
Interest...........................................................................................8
Interest Payment Date..............................................................................8
Interest Rate Agreement............................................................................8
Judgment Currency..................................................................................8
Leverage Ratio.....................................................................................8
Lien...............................................................................................9
Maturity...........................................................................................9
New York Banking Day...............................................................................9
Office or Agency...................................................................................9
Officers' Certificate..............................................................................9
Opinion of Counsel................................................................................10
Original Issue Discount Security..................................................................10
Outstanding.......................................................................................10
Paying Agent......................................................................................11
Permitted Liens...................................................................................11
Person............................................................................................13
Place of Payment..................................................................................13
Predecessor Security..............................................................................13
Principal Property................................................................................13
Redemption Date...................................................................................13
Redemption Price..................................................................................13
Registered Security...............................................................................13
Regular Record Date...............................................................................13
Required Currency.................................................................................14
Responsible Officer...............................................................................14
Restricted Group..................................................................................14
Restricted Property...............................................................................14
Restricted Subsidiary.............................................................................14
Security or Securities............................................................................14
Security Register.................................................................................14
Special Record Date...............................................................................14
Stated Maturity...................................................................................14
Subsequent Guarantor..............................................................................14
Subsidiary........................................................................................14
Trustee...........................................................................................15
United States.....................................................................................15
United States Alien...............................................................................15
Unrestricted Subsidiary...........................................................................15
U.S. Depository or Depository.....................................................................15
Vice President....................................................................................15
Section 1.2. Compliance Certificates and Opinions..............................................................16
Section 1.3. Form of Documents Delivered to Trustee............................................................16
Section 1.4. Acts of Holders...................................................................................17
Section 1.5. Notices, etc., to Trustee, the Company and the Guarantors.........................................19
Section 1.6. Notice to Holders of Securities; Waiver...........................................................19
Section 1.7. Language of Notices...............................................................................20
Section 1.8. Effect of Headings and Table of Contents..........................................................20
Section 1.9. Successors and Assigns............................................................................21
Section 1.10. Separability Clause...............................................................................21
</TABLE>
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<TABLE>
<S> <C> <C>
Section 1.11. Benefits of Indenture.............................................................................21
Section 1.12. Governing Law.....................................................................................21
Section 1.13. Legal Holidays....................................................................................21
Section 1.14. Counterparts......................................................................................22
Section 1.15. Judgment Currency.................................................................................22
Section 1.16. No Security Interest Created......................................................................22
Section 1.17. Limitation on Individual Liability................................................................22
ARTICLE II Security Forms........................................................................................23
Section 2.1. Forms Generally...................................................................................23
Section 2.2. Form of Trustee's Certificate of Authentication...................................................23
Section 2.3. Securities in Global Form.........................................................................24
ARTICLE III The Securities.......................................................................................25
Section 3.1. Amount Unlimited; Issuable in Series..............................................................25
Section 3.2. Currency; Denominations...........................................................................29
Section 3.3. Execution, Authentication, Delivery and Dating....................................................29
Section 3.4. Temporary Securities..............................................................................31
Section 3.5. Registration, Transfer and Exchange...............................................................32
Section 3.6. Mutilated, Destroyed, Lost and Stolen Securities..................................................35
Section 3.7. Payment of Interest and Certain Additional Amounts; Rights to Interest and Certain Additional
Amounts Preserved.................................................................................36
Section 3.8. Persons Deemed Owners.............................................................................38
Section 3.9. Cancellation......................................................................................39
Section 3.10. Computation of Interest...........................................................................39
Section 3.11. Exempt Offerings..................................................................................39
Section 3.12. CUSIP Numbers.....................................................................................41
ARTICLE IV Satisfaction and Discharge............................................................................42
Section 4.1. Satisfaction and Discharge of Indenture...........................................................42
Section 4.2. Defeasance and Covenant Defeasance................................................................43
Section 4.3. Application of Trust Money........................................................................47
ARTICLE V Remedies...............................................................................................48
Section 5.1. Events of Default.................................................................................48
Section 5.2. Acceleration of Maturity; Rescission and Annulment................................................50
Section 5.3. Collection of Indebtedness and Suits for Enforcement by Trustee...................................51
Section 5.4. Trustee May File Proofs of Claim..................................................................52
Section 5.5. Trustee May Enforce Claims without Possession of Securities or Coupons............................53
Section 5.6. Application of Money Collected....................................................................53
Section 5.7. Limitations on Suits..............................................................................54
Section 5.8. Unconditional Right of Holders to Receive Principal and any Premium, Interest and Additional
Amounts...........................................................................................54
Section 5.9. Restoration of Rights and Remedies................................................................55
Section 5.10. Rights and Remedies Cumulative....................................................................55
Section 5.11. Delay or Omission Not Waiver......................................................................55
Section 5.12. Control by Holders of Securities..................................................................55
Section 5.13. Waiver of Past Defaults...........................................................................56
Section 5.14. Waiver of Usury, Stay or Extension Laws...........................................................56
Section 5.15. Undertaking for Costs.............................................................................56
ARTICLE VI The Trustee...........................................................................................57
</TABLE>
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<TABLE>
<S> <C> <C>
Section 6.1. Certain Duties and Responsibilities...............................................................57
Section 6.2. Notice of Defaults................................................................................59
Section 6.3. Not Responsible for Recitals or Issuance of Securities............................................59
Section 6.4. May Hold Securities...............................................................................60
Section 6.5. Money Held in Trust...............................................................................60
Section 6.6. Compensation and Reimbursement....................................................................60
Section 6.7. Corporate Trustee Required; Eligibility...........................................................61
Section 6.8. Disqualification; Conflicting Interests...........................................................61
Section 6.9. Resignation and Removal; Appointment of Successor.................................................61
Section 6.10. Acceptance of Appointment by Successor............................................................63
Section 6.11. Merger, Conversion, Consolidation or Succession to Business.......................................65
Section 6.12. Preferential Collection of Claims against the Company.............................................65
Section 6.13. Appointment of Authenticating Agent...............................................................65
ARTICLE VII Holders' Lists and Reports by Trustee, the Guarantors and Company....................................68
Section 7.1. Company and the Guarantors to Furnish Trustee Names and Addresses of Holders......................68
Section 7.2. Preservation of Information; Communications to Holders............................................68
Section 7.3. Reports by Trustee................................................................................68
Section 7.4. Reports by Company and the Guarantors.............................................................69
ARTICLE VIII Consolidation, Merger, Conveyance, Transfer or Lease................................................70
Section 8.1. Company May Consolidate, Etc., Only on Certain Terms..............................................70
Section 8.2. Successor Person Substituted for Company..........................................................71
Section 8.3. Guarantors May Consolidate, Etc., Only on Certain Terms...........................................71
Section 8.4. Successor Person Substituted for A Guarantor......................................................72
ARTICLE IX Supplemental Indentures...............................................................................72
Section 9.1. Supplemental Indentures Without Consent of Holders................................................72
Section 9.2. Supplemental Indentures with Consent of Holders...................................................73
Section 9.3. Execution of Supplemental Indentures..............................................................75
Section 9.4. Effect of Supplemental Indentures.................................................................75
Section 9.5. Reference in Securities to Supplemental Indentures................................................75
Section 9.6. Notice of Supplemental Indenture..................................................................76
ARTICLE X Covenants..............................................................................................76
Section 10.1. Payment of Principal, any Premium, Interest and Additional Amounts................................76
Section 10.2. Maintenance of Office or Agency...................................................................76
Section 10.3. Money for Securities Payments to Be Held in Trust.................................................78
Section 10.4. Additional Amounts................................................................................79
Section 10.5. Limitation on Liens...............................................................................80
Section 10.6. Limitation on Indebtedness of Restricted Subsidiaries.............................................81
Section 10.7. Designation of Subsidiaries.......................................................................81
Section 10.8. Corporate Existence...............................................................................81
Section 10.9. Waiver of Certain Covenants.......................................................................81
Section 10.10. Company Statement as to Compliance; Notice of Certain Defaults....................................82
Section 10.11. Guarantor's Statement as to Compliance; Notice of Certain Defaults................................82
Section 10.12. Subsequent Guarantor..............................................................................83
Section 10.13. Calculation of Original Issue Discount............................................................83
ARTICLE XI Redemption of Securities..............................................................................84
Section 11.1. Applicability of Article..........................................................................84
Section 11.2. Election to Redeem; Notice to Trustee.............................................................84
</TABLE>
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<TABLE>
<S> <C> <C>
Section 11.3. Selection by Trustee of Securities to be Redeemed.................................................84
Section 11.4. Notice of Redemption..............................................................................85
Section 11.5. Deposit of Redemption Price.......................................................................86
Section 11.6. Securities Payable on Redemption Date.............................................................86
Section 11.7. Securities Redeemed in Part.......................................................................87
ARTICLE XII Sinking Funds........................................................................................88
Section 12.1. Applicability of Article..........................................................................88
Section 12.2. Satisfaction of Sinking Fund Payments with Securities.............................................88
Section 12.3. Redemption of Securities for Sinking Fund.........................................................89
ARTICLE XIII Repayment at the Option of Holders..................................................................89
Section 13.1. Applicability of Article..........................................................................89
ARTICLE XIV Securities in Foreign Currencies.....................................................................90
Section 14.1. Applicability of Article..........................................................................90
ARTICLE XV Meetings of Holders of Securities.....................................................................90
Section 15.1. Purposes for Which Meetings May Be Called.........................................................90
Section 15.2. Call, Notice and Place of Meetings................................................................90
Section 15.3. Persons Entitled to Vote at Meetings..............................................................91
Section 15.4. Quorum; Action....................................................................................91
Section 15.5. Determination of Voting Rights; Conduct and Adjournment of Meetings...............................92
Section 15.6. Counting Votes and Recording Action of Meetings...................................................93
ARTICLE XVI Guarantee............................................................................................93
Section 16.1. Unconditional Guarantee...........................................................................93
Section 16.2. Operation of Guarantees...........................................................................95
Section 16.3. Termination of Guarantees.........................................................................95
</TABLE>
v
<PAGE> 7
INDENTURE, dated as of May 26, 1998 (the "Indenture"), between COX
RADIO, INC., a corporation duly organized and existing under the laws of the
State of Delaware (hereinafter called the "Company"), having its principal
executive office located at 1400 Lake Hearn Drive, NE, Atlanta, Georgia 30319,
THE BANK OF NEW YORK, a New York banking corporation, as trustee (hereinafter
called the "Trustee"), having its Corporate Trust Office located at 101 Barclay
Street, New York, New York 10286 and WSB, INC. and WHIO, INC., each a
corporation duly organized and existing under the laws of the State of Delaware,
as guarantors (each, an "Initial Guarantor", and collectively, the "Initial
Guarantors").
RECITALS OF THE COMPANY
The Company has duly authorized the execution and delivery of this
Indenture to provide for the issuance from time to time of its senior unsecured
debentures, notes or other evidences of indebtedness (hereinafter called the
"Securities"), unlimited as to principal amount, to bear interest at fixed or
floating rates, to mature or be subject to earlier redemption or repayment at
such time or times, to be issued in one or more series and to have such other
provisions as shall be fixed as hereinafter provided.
The Company has duly authorized the execution and delivery of this
Indenture. All things necessary to make this Indenture a valid agreement of the
Company, in accordance with its terms, have been done.
In addition, each Initial Guarantor has duly authorized, and each
Subsequent Guarantor will duly authorize, the execution and delivery of this
Indenture insofar as it relates to the Guarantees provided for herein. All
things necessary to make this Indenture a valid agreement of such Guarantor, in
accordance with its terms, have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the
Securities by the Holders thereof, it is mutually covenanted and agreed, for the
equal and proportionate benefit of all Holders of the Securities or of any
series thereof and any Coupons, as follows:
ARTICLE I
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
Section 1.1. Definitions.
For all purposes of this Indenture, except as otherwise expressly
provided in or pursuant to this Indenture or unless the context otherwise
requires:
(1) the terms defined in this Article have the meanings
assigned to them in this Article and include the plural as well as the
singular;
<PAGE> 8
(2) all other terms used herein which are defined in the Trust
Indenture Act, either directly or by reference therein, have the
meanings assigned to them therein;
(3) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted
accounting principles in the United States of America and, except as
otherwise herein expressly provided, the terms "generally accepted
accounting principles" or "GAAP" with respect to any computation
required or permitted hereunder shall mean such accounting principles
as are generally accepted in the United States of America at the date
or time of such computation;
(4) the words "herein", "hereof" and "hereunder" and other
words of similar import refer to this Indenture as a whole and not to
any particular Article, Section or other subdivision; and
(5) the word "or" is always used inclusively (for example, the
phrase "A or B" means "A or B or both", not "either A or B but not
both").
Certain terms used principally in certain Articles hereof are
defined in those Articles.
"Act", when used with respect to any Holders, has the meaning
specified in Section 1.4.
"Additional Amounts" means any additional amounts which are
required hereby or by any Security, under circumstances specified
herein or therein, to be paid by the Company in respect of certain
taxes, assessments or other governmental charges imposed on Holders
specified therein and which are owing to such Holders.
"Affiliate" of any specified Person means any other Person
directly or indirectly controlling or controlled by or under direct or
indirect common control with such specified Person. For the purposes of
this definition, "control", when used with respect to any specified
Person, means the power to direct the management and policies of such
Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms "controlling" and
"controlled" have the meanings correlative to the foregoing.
"Asset Acquisition" means (i) an investment by the Company or
any of its Restricted Subsidiaries in any other Person where such
Person shall become a Restricted Subsidiary or shall be merged into or
consolidated with the Company or any of its Restricted Subsidiaries or
(ii) an acquisition by the Company or any of its Restricted
Subsidiaries of the property and assets of any Person other than the
Company or any of its Restricted Subsidiaries that constitute
substantially all of a division or line of business of such Person.
2
<PAGE> 9
"Asset Disposition" means the sale or other disposition by the
Company or any of its Restricted Subsidiaries (other than to the
Company or another Restricted Subsidiary) of (i) all or substantially
all of the Capital Stock of any Restricted Subsidiary or (ii) all or
substantially all of the assets that constitute a division or line of
business of the Company or any of its Restricted Subsidiaries.
"Authenticating Agent" means any Person authorized by the
Trustee pursuant to Section 6.13 to act on behalf of the Trustee to
authenticate Securities of one or more series.
"Authorized Newspaper" means a newspaper, in an official
language of the place of publication or in the English language,
customarily published on each day that is a Business Day in the place
of publication, whether or not published on Saturdays, Sundays or
holidays in the place of publication, and of general circulation in
each place in connection with which the term is used or in the
financial community of each such place. Where successive publications
are required to be made in Authorized Newspapers, the successive
publications may be made in the same or in different newspapers in the
same city meeting the foregoing requirements and in each case on any
day that is a Business Day in the place of publication.
"Authorized Officer" means, when used with respect to a
Corporation, the Chairman of the Board of Directors, a Vice Chairman,
the President, any Vice President, the Treasurer, an Assistant
Treasurer, the Secretary or an Assistant Secretary, of such
Corporation.
"Bearer Security" means any Security in the form established
pursuant to Section 2.1 which is payable to bearer.
"Board of Directors" means either the Board of Directors of
the Company or any duly authorized committee of that Board.
"Board Resolution" means a copy of one or more resolutions,
certified by the Secretary or an Assistant Secretary of the Company to
have been duly adopted by the Board of Directors, and to be in full
force and effect on the date such certification is delivered to the
Trustee.
"Business Day", with respect to any Place of Payment or other
location, means, unless otherwise specified with respect to any
Securities pursuant to Section 3.1, any day other than a Saturday,
Sunday or other day on which banking institutions in such Place of
Payment or other location are authorized or obligated by law,
regulation or executive order to close.
"Capitalized Lease" means, as applied to any Person, any lease
of any property (whether real, personal or mixed) of which the
discounted present value of the rental
3
<PAGE> 10
obligations of such Person as lessee, in conformity with GAAP, is
required to be capitalized on the balance sheet of such Person.
"Capital Stock" means, with respect to any Person, any and all
shares, interests, participations or other equivalents (however
designated, whether voting or non-voting) in equity of such Person,
whether outstanding on the Closing Date or issued thereafter.
"Closing Date" means the date on which the first series of
Securities is originally issued under the Indenture.
"Commission" means the Securities and Exchange Commission, as
from time to time constituted, created under the Securities Exchange
Act of 1934, as amended, or, if at any time after the execution of this
Indenture such Commission is not existing and performing the duties now
assigned to it under the Trust Indenture Act, then the body performing
such duties at such time.
"Company" means the Person named as the "Company" in the first
paragraph of this instrument until a successor Person shall have become
such pursuant to the applicable provisions of this Indenture, and
thereafter "Company" shall mean such successor Person, and any other
obligor upon the Securities.
"Company Request" and "Company Order" mean, respectively, a
written request or order, as the case may be, signed in the name of the
Company by the Chairman of the Board, a Vice Chairman, the President,
or a Vice President, and by the Treasurer, an Assistant Treasurer, the
Secretary or an Assistant Secretary, of the Company, and delivered to
the Trustee.
"Conversion Event" means the cessation of use of (i) a Foreign
Currency both by the government of the country or the confederation
which issued such Foreign Currency and for the settlement of
transactions by a central bank or other public institutions of or
within the international banking community, (ii) the ECU both within
the European Monetary System and for the settlement of transactions by
public institutions of or within the European Union or (iii) any
currency unit or composite currency other than the ECU for the purposes
for which it was established, and, unless otherwise specified with
respect to any Securities pursuant to Section 3.1, all payments of
principal of and premium, if any, and interest on any Debt Security
that are payable in a Foreign Currency that ceases to be used by the
government or confederation of issuance shall be made in U.S. dollars.
"Corporate Trust Office" means the principal corporate trust
office of the Trustee at which at any particular time its corporate
trust business shall be principally administered, which office as of
the date hereof is located at 101 Barclay Street, New York, New York
10286.
"Corporation" includes corporations and limited liability
companies and, except for purposes of Article VIII, associations,
companies and business trusts.
4
<PAGE> 11
"Coupon" means any interest coupon appertaining to a Bearer
Security.
"Credit Agreement" or "Credit Agreements" means (i) the $300
million, five-year, senior, unsecured revolving credit facility, dated
as of March 7, 1997, with certain guarantors and banks, including Chase
Bank of Texas, N.A. (formerly Texas Commerce Bank National
Association), as Administrative Agent, NationsBank of Texas, N.A., as
Syndication Agent and Citibank, N.A., as Documentation Agent or (ii)
any future senior unsecured credit facility between the Company and one
or more third party lenders.
"Currency", with respect to any payment, deposit or other
transfer in respect of the principal of or any premium or interest on
or any Additional Amounts with respect to any Security, means Dollars
or the Foreign Currency, as the case may be, in which such payment,
deposit or other transfer is required to be made by or pursuant to the
terms hereof or such Security and, with respect to any other payment,
deposit or transfer pursuant to or contemplated by the terms hereof or
such Security, means Dollars.
"Currency Agreement" means any foreign exchange contract,
currency swap agreement or other similar agreement or arrangement.
"CUSIP number" means the alphanumeric designation assigned to
a Security by Standard & Poor's Corporation, CUSIP Service Bureau.
"Default" means any event which is, or after notice or passage
of time or both would be, an Event of Default.
"Defaulted Interest" has the meaning specified in Section 3.7.
"Dollars" or "$" means a dollar or other equivalent unit of
legal tender for payment of public or private debts in the United
States of America.
"ECU" means the European Currency Units as defined and revised
from time to time by the Council of the European Community.
"European Monetary System" means the European Monetary System
established by the Resolution of December 5, 1978 of the Council of the
European Community.
"European Union" means the European Community, the European
Coal and Steel Community and the European Atomic Energy Community.
"Event of Default" has the meaning specified in Section 5.1.
"Foreign Currency" means any currency, currency unit or
composite currency, including, without limitation, the ECU, issued by
the government of one or more countries other than the United States of
America or by any recognized confederation or association of such
governments.
5
<PAGE> 12
"GAAP" means such accounting principles as are generally
accepted in the United States of America as of the date or time of any
computation required hereunder.
"Government Obligations" means securities which are (i) direct
obligations of the United States of America or the other government or
governments in the confederation which issued the Foreign Currency in
which the principal of or any premium or interest on such Security or
any Additional Amounts in respect thereof shall be payable, in each
case where the payment or payments thereunder are supported by the full
faith and credit of such government or governments or (ii) obligations
of a Person controlled or supervised by and acting as an agency or
instrumentality of the United States of America or such other
government or governments, in each case where the timely payment or
payments thereunder are unconditionally guaranteed as a full faith and
credit obligation by the United States of America or such other
government or governments, and which, in the case of (i) or (ii), are
not callable or redeemable at the option of the issuer or issuers
thereof, and shall also include a depository receipt issued by a bank
or trust company as custodian with respect to any such Government
Obligation or a specific payment of interest on or principal of or
other amount with respect to any such Government Obligation held by
such custodian for the account of the holder of a depository receipt,
provided that (except as required by law) such custodian is not
authorized to make any deduction from the amount payable to the holder
of such depository receipt from any amount received by the custodian in
respect of the Government Obligation or the specific payment of
interest on or principal of or other amount with respect to the
Government Obligation evidenced by such depository receipt.
"Guarantee" or "Guarantees" means each full and unconditional
guarantee of the payment of the principal of or any premium or interest
on or any Additional Amounts with respect to the Securities by a
Guarantor, as more fully set forth in Article XVI.
"Guarantor" or "Guarantors" means the Initial Guarantor and
any and all Subsequent Guarantors.
"Guarantor's Board of Directors" means the Board of Directors
of a Guarantor or any committee of that Board duly authorized to act
generally or in any particular respect for such Guarantor hereunder.
"Guarantor's Board Resolution" means a copy of one or more
resolutions, certified by the Secretary or an Assistant Secretary of a
Guarantor to have been duly adopted by such Guarantor's Board of
Directors and to be in full force and effect on the date such
certification is delivered to the Trustee.
"Guarantor's Officers' Certificate" means a certificate signed
by the Chairman of the Board, a Vice Chairman, the President, the Chief
Financial Officer or a Vice President and by the Treasurer, an
Assistant Treasurer, the Comptroller, the Assistant Comptroller, the
Secretary or an Assistant Secretary, of a Guarantor, and is delivered
to the Trustee. One of the officers signing a Guarantor's Officers'
Certificate given
6
<PAGE> 13
pursuant to Section 10.11 shall be the principal executive, financial
or accounting officer of such Guarantor.
"Guarantor Request" and "Guarantor Order" mean, respectively,
a written request or order, as the case may be, signed in the name of a
Guarantor by the Chairman of the Board, a Vice Chairman, the President
or a Vice President, and by the Treasurer, an Assistant Treasurer, the
Secretary or an Assistant Secretary, of such Guarantor, and delivered
to the Trustee.
"Holder", in the case of any Registered Security, means the
Person in whose name such Security is registered in the Security
Register and, in the case of any Bearer Security, means the bearer
thereof and, in the case of any Coupon, means the bearer thereof.
"Indebtedness" means, without duplication, with respect to any
Person: (i) any indebtedness of such Person (A) for borrowed money or
(B) evidenced by a note, debenture or similar instrument (including a
purchase money obligation) given in connection with the acquisition of
any property or assets, including securities; (ii) any guarantee by
such Person of any indebtedness of others described in the preceding
clause (i); and (iii) any amendment, extension, renewal or refunding of
any such indebtedness or guarantee. The term "Indebtedness" excludes
(i) any indebtedness of the Company or any Restricted Subsidiary to the
Company or another Restricted Subsidiary, (ii) any guarantee by the
Company or any Restricted Subsidiary of indebtedness of the Company or
another Restricted Subsidiary, (iii) trade accounts payable, (iv) money
borrowed and set aside at the time of the incurrence of any
Indebtedness in order to prefund the payment of the interest on such
Indebtedness so long as such money is held to secure the payment of
such interest, (v) liabilities for federal, state, local or other taxes
and (vi) letters of credit, performance bonds and similar obligations
issued in favor of governmental authorities as a term of any
governmental franchise, license, permit or authorization held by such
Person or any of its Subsidiaries. The amount of Indebtedness of any
Person at any date shall be the outstanding balance at such date of all
unconditional obligations as described above and, with respect to
contingent obligations, the maximum liability upon the occurrence of
the contingency giving rise to the obligation. The amount of
Indebtedness issued with original issue discount is the face amount of
such Indebtedness less the remaining unamortized portion of the
original issue discount of such Indebtedness at such time as determined
in conformity with GAAP.
"Indenture" means this instrument as it may from time to time
be supplemented or amended by one or more indentures supplemental
hereto entered into pursuant to the applicable provisions hereof and,
with respect to any Security, by the terms and provisions of such
Security and any Coupon appertaining thereto established pursuant to
Section 3.1 (as such terms and provisions may be amended pursuant to
the applicable provisions hereof).
7
<PAGE> 14
"Independent Public Accountants" means accountants or a firm
of accountants that, with respect to the Company and the Guarantors and
any other obligor under the Securities, the Coupons or the Guarantees,
are independent public accountants within the meaning of the Securities
Act of 1933, as amended, and the rules and regulations promulgated by
the Commission thereunder, who may be the independent public
accountants regularly retained by the Company or who may be other
independent public accountants. Such accountants or firm shall be
entitled to rely upon any Opinion of Counsel as to the interpretation
of any legal matters relating to this Indenture or certificates
required to be provided hereunder.
"Indexed Security" means a Security the terms of which provide
that the principal amount thereof payable at Stated Maturity may be
more or less than the principal face amount thereof at original
issuance.
"Initial Guarantor" or "Initial Guarantors" means each Person
named as an "Initial Guarantor" in the first paragraph of this
instrument until a successor Person shall have become such pursuant to
the applicable provisions of this Indenture, and thereafter "Initial
Guarantor" and "Initial Guarantors" shall mean such successor Person.
"Interest", with respect to any Original Issue Discount
Security which by its terms bears interest only after Maturity, means
interest payable after Maturity and, when used with respect to a
Security which provides for the payment of Additional Amounts pursuant
to Section 10.4 or other amounts pursuant to the terms of such
Security, includes such Additional Amounts or other amounts.
"Interest Payment Date", with respect to any Security, means
the Stated Maturity of an installment of interest on such Security.
"Interest Rate Agreement" means any interest rate protection
agreement, interest rate future agreement, interest rate option
agreement, interest rate swap agreement, interest rate cap agreement,
interest rate collar agreement, interest rate hedge agreement, option
or future contract or other similar agreement or arrangement.
"Judgment Currency" has the meaning specified in Section 1.15.
"Leverage Ratio" with respect to the Restricted Group means,
as of the date of and after giving effect to any designation of an
Unrestricted Subsidiary as a Restricted Subsidiary or any designation
of a Restricted Subsidiary as an Unrestricted Subsidiary, in each case
in accordance with Section 10.7, the ratio of (i) the aggregate
outstanding principal amount of all Indebtedness of the Restricted
Group as of such date to (ii) the product of four times the Restricted
Group Cash Flow for the most recent full fiscal quarter for which
financial information is available on such date; provided that, in
making the foregoing calculation, (A) pro forma effect shall be given
to any Indebtedness to be incurred or repaid on the date of incurrence
of any Indebtedness (the "Transaction Date"); (B) pro forma effect
shall be given to Asset Dispositions and Asset Acquisitions
8
<PAGE> 15
(including giving pro forma effect to the application of proceeds of
any Asset Disposition) that occur from the beginning of the fiscal
quarter through the Transaction Date (the "Reference Period"), as if
they had occurred and such proceeds had been applied on the first day
of such Reference Period and, in the case of any Asset Acquisition,
giving pro forma effect to any cost reductions the Company anticipates
if the Company delivers to the Trustee an officer's certificate
executed by the Chief Financial Officer of the Company certifying to
and describing and quantifying with reasonable specificity the cost
reductions expected to be attained within the first year after such
Asset Acquisition; and (C) pro forma effect shall be given to asset
dispositions and asset acquisitions (including giving pro forma effect
to the application of proceeds of any asset disposition) that have been
made by any Person that has become a Restricted Subsidiary or has been
merged with or into the Company or any Restricted Subsidiary during
such Reference Period and that would have constituted Asset
Dispositions or Asset Acquisitions had such transactions occurred when
such Person was a Restricted Subsidiary as if such asset dispositions
or asset acquisitions were Asset Dispositions or Asset Acquisitions
that occurred on the first day of such Reference Period; provided that
to the extent that clause (B) or (C) of this sentence requires that pro
forma effect be given to an Asset Acquisition or Asset Disposition,
such pro forma calculation shall be based upon the fiscal quarter
immediately preceding the Transaction Date of the Person, or division
or line of business of the Person, that is acquired or disposed of for
which financial information is available.
"Lien" means any mortgage, pledge, security interest,
encumbrance, lien or charge of any kind (including any conditional sale
or other title retention agreement or lease in the nature thereof).
"Maturity", with respect to any Security, means the date on
which the principal of such Security or an installment of principal
becomes due and payable as therein or herein provided, whether at the
Stated Maturity or by declaration of acceleration, notice of redemption
or repurchase, notice of option to elect repayment or otherwise, and
includes the Redemption Date.
"New York Banking Day" has the meaning specified in Section
1.15.
"Office" or "Agency", with respect to any Securities, means an
office or agency of the Company or a Guarantor maintained or designated
in a Place of Payment for such Securities pursuant to Section 10.2 or
any other office or agency of the Company or a Guarantor maintained or
designated for such Securities pursuant to Section 10.2 or, to the
extent designated or required by Section 10.2 in lieu of such office or
agency, the Corporate Trust Office of the Trustee.
"Officers' Certificate" means a certificate signed by the
Chairman of the Board, a Vice Chairman, the President, the Chief
Financial Officer or a Vice President, and by the Treasurer, an
Assistant Treasurer, the Controller, an Assistant Controller, the
Secretary or
9
<PAGE> 16
an Assistant Secretary, of the Company, and delivered to the Trustee.
One of the officers signing an Officers' Certificate given pursuant to
Section 10.10 shall be the principal executive, financial or accounting
officer of the Company.
"Opinion of Counsel" means a written opinion of counsel, who
may be an employee of or counsel for the Company or a Guarantor or
other counsel who shall be reasonably acceptable to the Trustee.
"Original Issue Discount Security" means a Security issued
pursuant to this Indenture which provides for declaration of an amount
less than the principal face amount thereof to be due and payable upon
acceleration pursuant to Section 5.2.
"Outstanding", when used with respect to any Securities,
means, as of the date of determination, all such Securities theretofore
authenticated and delivered under this Indenture, except:
(i) any such Security theretofore cancelled by the
Trustee or the Security Registrar or delivered to the Trustee
or the Security Registrar for cancellation;
(ii) any such Security for whose payment at the
Maturity thereof money in the necessary amount has been
theretofore deposited pursuant hereto (other than pursuant to
Section 4.2) with the Trustee or any Paying Agent (other than
the Company or a Guarantor) in trust or set aside and
segregated in trust by the Company or a Guarantor (if the
Company shall act as its own, or authorize a Guarantor to act
as, Paying Agent) for the Holders of such Securities and any
Coupons appertaining thereto; provided that, if such
Securities are to be redeemed, notice of such redemption has
been duly given pursuant to this Indenture or provision
therefor satisfactory to the Trustee has been made;
(iii) any such Security with respect to which the
Company has effected defeasance pursuant to the terms hereof,
except to the extent provided in Section 4.2;
(iv) any such Security which has been paid pursuant
to Section 3.6 or in exchange for or in lieu of which other
Securities have been authenticated and delivered pursuant to
this Indenture, unless there shall have been presented to the
Trustee proof satisfactory to it that such Security is held by
a bona fide purchaser in whose hands such Security is a valid
obligation of the Company; and
(v) any such Security converted or exchanged as
contemplated by this Indenture into other securities, if the
terms of such Security provide for such conversion or exchange
pursuant to Section 3.1;
10
<PAGE> 17
provided, however, that in determining whether the Holders of
the requisite principal amount of Outstanding Securities have
given any request, demand, authorization, direction, notice,
consent or waiver hereunder or are present at a meeting of
Holders of Securities for quorum purposes, (i) the principal
amount of an Original Issue Discount Security that may be
counted in making such determination and that shall be deemed
to be Outstanding for such purposes shall be equal to the
amount of the principal thereof that pursuant to the terms of
such Original Issue Discount Security would be declared (or
shall have been declared to be) due and payable upon a
declaration of acceleration thereof pursuant to Section 5.2 at
the time of such determination, and (ii) the principal amount
of any Indexed Security that may be counted in making such
determination and that shall be deemed Outstanding for such
purposes shall be equal to the principal face amount of such
Indexed Security at original issuance, unless otherwise
provided in or pursuant to this Indenture, and (iii) the
principal amount of a Security denominated in a Foreign
Currency shall be the Dollar equivalent, determined on the
date of original issuance of such Security, of the principal
amount (or, in the case of an Original Issue Discount
Security, the Dollar equivalent on the date of original
issuance of such Security of the amount determined as provided
in (i) above) of such Security, and (iv) Securities owned by
the Company or a Guarantor or any other obligor upon the
Securities or any Affiliate of the Company or a Guarantor or
such other obligor, shall be disregarded and deemed not to be
Outstanding, except that, in determining whether the Trustee
shall be protected in making any such determination or relying
upon any such request, demand, authorization, direction,
notice, consent or waiver, only Securities which a Responsible
Officer of the Trustee actually knows to be so owned shall be
so disregarded. Securities so owned which shall have been
pledged in good faith may be regarded as Outstanding if the
pledgee establishes to the satisfaction of the Trustee (A) the
pledgee's right so to act with respect to such Securities and
(B) that the pledgee is not the Company or a Guarantor or any
other obligor upon the Securities or any Coupons appertaining
thereto or an Affiliate of the Company or a Guarantor or such
other obligor.
"Paying Agent" means any Person authorized by the Company to
pay the principal of, or any premium or interest on, or any Additional
Amounts with respect to, any Security or any Coupon on behalf of the
Company.
"Permitted Liens" means: (i) Liens for taxes, assessments,
governmental charges or claims that are not yet delinquent or are being
contested in good faith by appropriate legal proceedings promptly
instituted and diligently conducted and for which a reserve or other
appropriate provision, if any, as shall be required in conformity with
GAAP shall have been made; (ii) statutory and common law Liens of
landlords and carriers, warehousemen, mechanics, suppliers,
materialmen, repairmen or other similar Liens arising the ordinary
course of business and with respect to amounts not yet delinquent or
being contested in good faith by appropriate legal proceedings promptly
instituted and
11
<PAGE> 18
diligently conducted and for which a reserve or other appropriate
provision, if any, as shall be required in conformity with GAAP shall
have been made; (iii) Liens incurred or deposits made in the ordinary
course of business in connection with workers' compensation,
unemployment insurance and other types of social security; (iv) Liens
incurred or deposits made to secure the performance of tenders, bids,
leases, statutory or regulatory obligations (including obligations
under franchise agreements), bankers' acceptances, surety and appeal
bonds, government contracts, performance and return-of-money bonds and
other obligations of a similar nature incurred in the ordinary course
of business (exclusive of obligations for the payment of borrowed
money); (v) easements, rights-of-way, municipal and zoning ordinances
and similar charges, encumbrances, title defects or other
irregularities that do not materially interfere with the ordinary
course of business of the Company or any of its Restricted
Subsidiaries; (vi) Liens upon real or personal property acquired after
the Closing Date; provided that (a) such Lien is created solely for the
purpose of securing Indebtedness incurred, in accordance with Section
10.6 to finance the cost (including the cost of design, development,
acquisition, installation, integration, improvement or construction) of
the item of property or assets subject thereto and such Lien is created
prior to, at the time of or within six months after the later of the
acquisition, the completion of construction or the commencement of full
operation of such property, (b) the principal amount of the
Indebtedness secured by such Lien does not exceed 100% of such cost and
(c) any such Lien shall not extend to or cover any property or assets
other than such item of property or assets and any improvements on such
item; (vii) Liens arising from filing Uniform Commercial Code financing
statements regarding leases; (viii) Liens on property of, or on shares
of Capital Stock or Indebtedness of, any Person existing at the time
such Person becomes, or becomes a part of, any Restricted Subsidiary;
provided that such Liens do not extend to or cover any property or
assets of the Company or any Restricted Subsidiary other than the
property or assets acquired; (ix) Liens in favor of the Company or any
Restricted Subsidiary; (x) Liens arising from the rendering of a final
judgment or order against the Company or any Restricted Subsidiary that
does not give rise to an Event of Default; (xi) Liens securing
reimbursement obligations with respect to letters of credit that
encumber documents and other property relating to such letters of
credit and the products and proceeds thereof; (xii) Liens in favor of
customs and revenue authorities arising as a matter of law to secure
payment of customs duties in connection with the importation of goods;
(xiii) Liens encumbering customary initial deposits and margin
deposits, and other Liens that are within the general parameters
customary in the industry and incurred in the ordinary course of
business, in each case, securing Indebtedness under Interest Rate
Agreements and Currency Agreements and forward contracts, options,
future contracts, futures options or similar agreements or arrangements
designed solely to protect the Company or any of its Restricted
Subsidiaries from fluctuations in interest rates, currencies or the
price of commodities; (xiv) Liens arising out of conditional sale,
title retention, consignment or similar arrangements for the sale of
goods entered into by the Company or any of its Restricted Subsidiaries
in the ordinary course of business in accordance with industry
practice; (xv) Liens resulting from deposits made in connection with
any proposed Asset Acquisition; provided that such deposit does not
exceed 10% of the
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estimated purchase price for such Asset Acquisition; and (xvi) Liens on
or sales of receivables, including related intangible assets and
proceeds thereof where, in the good faith determination of the Board of
Directors of the Company, the Company has received the fair market
value of such receivables.
"Person" means any individual, Corporation, partnership, joint
venture, joint stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
"Place of Payment", with respect to any Security, means the
place or places where the principal of, or any premium or interest on,
or any Additional Amounts with respect to, such Security are payable as
provided in or pursuant to this Indenture or such Security.
"Predecessor Security" of any particular Security means every
previous Security evidencing all or a portion of the same Indebtedness
as that evidenced by such particular Security; and, for the purposes of
this definition, any Security authenticated and delivered under Section
3.6 in exchange for or in lieu of a mutilated, destroyed, lost or
stolen Security or any Security to which a mutilated, destroyed, lost
or stolen Coupon appertains shall be deemed to evidence the same
Indebtedness as the mutilated, destroyed, lost or stolen Security or
the Security to which a mutilated, destroyed, lost or stolen Coupon
appertains.
"Principal Property" means, as of any date of determination,
any property or assets owned by any Restricted Subsidiary other than
(i) any such property which, in the good faith opinion of the Board of
Directors of the Company, is not of material importance to the business
conducted by the Company and its Restricted Subsidiaries taken as a
whole and (ii) any shares of any class of stock or any other security
of any Unrestricted Subsidiary.
"Redemption Date", with respect to any Security or portion
thereof to be redeemed, means the date fixed for such redemption by or
pursuant to this Indenture or such Security.
"Redemption Price", with respect to any Security or portion
thereof to be redeemed, means the price at which it is to be redeemed
as determined by or pursuant to this Indenture or such Security.
"Registered Security" means any Security established pursuant
to Section 2.1 which is registered in a Security Register.
"Regular Record Date" for the interest payable on any
Registered Security on any Interest Payment Date therefor means the
date, if any, specified in or pursuant to this Indenture or such
Security as the "Regular Record Date".
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"Required Currency" has the meaning specified in Section 1.15.
"Responsible Officer" means any vice president, any assistant
vice president, the secretary, any assistant secretary, the treasurer,
any assistant treasurer, or any trust officer or any other authorized
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 or her knowledge of and
familiarity with the particular subject.
"Restricted Group" means, as of any date of determination, the
Company and the Restricted Subsidiaries as of such date.
"Restricted Property" means, as of any date of determination,
any Principal Property and any shares of stock of a Restricted
Subsidiary owned by the Company or a Restricted Subsidiary.
"Restricted Subsidiary" means each Subsidiary of the Company
other than the Unrestricted Subsidiaries.
"Security" or "Securities" means any note or notes, bond or
bonds, debenture or debentures, or any other evidences of Indebtedness,
as the case may be, authenticated and delivered under this Indenture;
provided, however, that, if at any time there is more than one Person
acting as Trustee under this Indenture, "Securities", with respect to
any such Person, shall mean Securities authenticated and delivered
under this Indenture, exclusive, however, of Securities of any series
as to which such Person is not Trustee.
"Security Register" and "Security Registrar" have the
respective meanings specified in Section 3.5.
"Special Record Date" for the payment of any Defaulted
Interest on any Registered Security means a date fixed by the Trustee
pursuant to Section 3.7.
"Stated Maturity", with respect to any Security or any
installment of principal thereof or interest thereon or any Additional
Amounts with respect thereto, means the date established by or pursuant
to this Indenture or such Security as the fixed date on which the
principal of such Security or such installment of principal or interest
is, or such Additional Amounts are, due and payable.
"Subsequent Guarantor" means any Subsidiary that after the
date hereof guarantees indebtedness of the Company under a Credit
Agreement.
"Subsidiary" means, in respect of any Person, any corporation,
association, partnership or other business entity of which more than
50% of the total voting power of shares of capital stock or other
interests (including partnership interests) entitled (without regard to
the occurrence of any contingency) to vote in the election of
directors,
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managers or trustees thereof is at the time owned or controlled,
directly or indirectly, by (i) such Person, (ii) such Person and one or
more Subsidiaries of such Person or (iii) one or more Subsidiaries of
such Person.
"Trustee" means the Person named as the "Trustee" in the first
paragraph of this instrument until a successor Trustee shall have
become such with respect to one or more series of Securities pursuant
to the applicable provisions of this Indenture, and thereafter
"Trustee" shall mean each Person who is then a Trustee hereunder;
provided, however, that if at any time there is more than one such
Person, "Trustee" shall mean each such Person and as used with respect
to the Securities of any series shall mean the Trustee with respect to
the Securities of such series.
"United States", except as otherwise provided in or pursuant
to this Indenture or any Security, means the United States of America
(including the states thereof and the District of Columbia), its
territories and possessions and other areas subject to its
jurisdiction.
"United States Alien", except as otherwise provided in or
pursuant to this Indenture or any Security, means any Person who, for
United States Federal income tax purposes, is a foreign corporation, a
non-resident alien individual, a non-resident alien fiduciary of a
foreign estate or trust, or a foreign partnership one or more of the
members of which is, for United States Federal income tax purposes, a
foreign corporation, a non-resident alien individual or a non-resident
alien fiduciary of a foreign estate or trust.
"Unrestricted Subsidiary" means (i) any Subsidiary of the
Company that has been designated as an Unrestricted Subsidiary as
permitted by Section 10.7 and not thereafter redesignated as a
Restricted Subsidiary as permitted thereby and (ii) each Subsidiary of
any Unrestricted Subsidiary.
"U.S. Depository" or "Depository" means, with respect to any
Security issuable or issued in the form of one or more global
Securities, the Person designated as U.S. Depository or Depository by
the Company in or pursuant to this Indenture, which Person must be, to
the extent required by applicable law or regulation, a clearing agency
registered under the Securities Exchange Act of 1934, as amended, and,
if so provided with respect to any Security, any successor to such
Person. If at any time there is more than one such Person, "U.S.
Depository" or "Depository" shall mean, with respect to any Securities,
the qualifying entity which has been appointed with respect to such
Securities.
"Vice President", when used with respect to the Company, a
Guarantor or the Trustee, means any vice president (but shall not
include any assistant vice president), whether or not designated by a
number or a word or words added before or after the title "Vice
President".
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Section 1.2. Compliance Certificates and Opinions.
Except as otherwise expressly provided in this Indenture, upon any
application or request by the Company or a Guarantor to the Trustee to take any
action under any provision of this Indenture, the Company or such Guarantor, as
the case may be, shall furnish to the Trustee an Officers' Certificate or a
Guarantor's Officers' Certificate, as the case may be, stating that all
conditions precedent, if any, provided for in this Indenture relating to the
proposed action have been complied with and an Opinion of Counsel stating that,
in the opinion of such counsel, all such conditions precedent, if any, have been
complied with, except that in the case of any such application or request as to
which the furnishing of such documents or any of them is specifically required
by any provision of this Indenture relating to such particular application or
request, no additional certificate or opinion need be furnished.
Each such certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include:
(1) a statement that each individual signing such certificate
or opinion has read such condition or covenant and the definitions
herein relating thereto;
(2) 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;
(3) a statement that, in the opinion of each such individual,
he has made such examination or investigation as is necessary to enable
him to express an informed opinion as to whether or not such condition
or covenant has been complied with; and
(4) a statement as to whether, in the opinion of each such
individual, such condition or covenant has been complied with.
Section 1.3. Form of Documents Delivered to Trustee.
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company or a Guarantor
may be based, insofar as it relates to legal matters, upon a certificate or
opinion of, or representations by, counsel, unless such officer knows, or in the
exercise of reasonable care should know, that the certificate or opinion or
representations with respect to the matters upon which his certificate or
opinion is based are erroneous. Any such certificate or opinion of counsel may
be based, insofar as it relates to factual matters, upon a certificate or
opinion of, or representations by, an officer or officers of the Company or such
Guarantor, as the case may be, stating that the information with
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respect to such factual matters is in the possession of the Company or such
Guarantor, as the case may be, unless such counsel knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to such matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture or any Security, they may, but need not, be
consolidated and form one instrument.
Section 1.4. Acts of Holders.
Any request, demand, authorization, direction, notice, consent, waiver
or other action provided by or pursuant to this Indenture to be given or taken
by Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by an agent duly
appointed in writing. If, but only if, Securities of a series are issuable as
Bearer Securities, any request, demand, authorization, direction, notice,
consent, waiver or other action provided in or pursuant to this Indenture to be
given or taken by Holders of Securities of such series may, alternatively, be
embodied in and evidenced by the record of Holders of Securities of such series
voting in favor thereof, either in person or by proxies duly appointed in
writing, at any meeting of Holders of Securities of such series duly called and
held in accordance with the provisions of Article XV, or a combination of such
instruments and any such record. Except as herein otherwise expressly provided,
such action shall become effective when such instrument or instruments or record
or both are delivered to the Trustee and, where it is hereby expressly required,
to the Company and the Guarantors. Such instrument or instruments and any such
record (and the action embodied therein and evidenced thereby) are herein
sometimes referred to as the "Act" of the Holders signing such instrument or
instruments or so voting at any such meeting. Proof of execution of any such
instrument or of a writing appointing any such agent, or of the holding by any
Person of a Security, shall be sufficient for any purpose of this Indenture and
(subject to the provisions of Article VI) conclusive in favor of the Trustee,
the Company and a Guarantor and any agent of the Trustee, the Company or such
Guarantor, if made in the manner provided in this Section. The record of any
meeting of Holders of Securities shall be proved in the manner provided in
Section 15.6.
Without limiting the generality of this Section 1.4, unless otherwise
provided in or pursuant to this Indenture, a Holder, including a U.S. Depository
that is a Holder of a global Security, may make, give or take, by a proxy or
proxies duly appointed in writing, any request, demand, authorization,
direction, notice, consent, waiver or other Act provided in or pursuant to this
Indenture to be made, given or taken by Holders, and a U.S. Depository that is a
Holder of a global Security may provide its proxy or proxies to the beneficial
owners of interests in any such global Security through such U.S. Depository's
standing instructions and customary practices.
The Company shall fix a record date for the purpose of determining the
Persons who are beneficial owners of interest in any permanent global Security
held by a U.S. Depository entitled under the procedures of such U.S. Depository
to make, give or take, by a proxy or proxies duly appointed in writing, any
request, demand, authorization, direction, notice, consent, waiver or
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other Act provided in or pursuant to this Indenture to be made, given or taken
by Holders. If such a record date is fixed, the Holders on such record date or
their duly appointed proxy or proxies, and only such Persons, shall be entitled
to make, give or take such request, demand, authorization, direction, notice,
consent, waiver or other Act, whether or not such Holders remain Holders after
such record date. No such request, demand, authorization, direction, notice,
consent, waiver or other Act shall be valid or effective if made, given or taken
more than 90 days after such record date.
The fact and date of the execution by any Person of any such instrument
or writing referred to in this Section 1.4 may be proved in any reasonable
manner; and the Trustee may in any instance require further proof with respect
to any of the matters referred to in this Section.
The ownership, principal amount and serial numbers of Registered
Securities held by any Person, and the date of the commencement and the date of
the termination of holding the same, shall be proved by the Security Register.
The ownership, principal amount and serial numbers of Bearer Securities
held by any Person, and the date of the commencement and the date of the
termination of holding the same, may be proved by the production of such Bearer
Securities or by a certificate executed, as depositary, by any trust company,
bank, banker or other depositary reasonably acceptable to the Company, wherever
situated, if such certificate shall be deemed by the Company and the Trustee to
be satisfactory, showing that at the date therein mentioned such Person had on
deposit with such depositary, or exhibited to it, the Bearer Securities therein
described; or such facts may be proved by the certificate or affidavit of the
Person holding such Bearer Securities, if such certificate or affidavit is
deemed by the Trustee to be satisfactory. The Trustee, the Company and the
Guarantors may assume that such ownership of any Bearer Security continues until
(i) another certificate or affidavit bearing a later date issued in respect of
the same Bearer Security is produced, or (ii) such Bearer Security is produced
to the Trustee by some other Person, or (iii) such Bearer Security is
surrendered in exchange for a Registered Security, or (iv) such Bearer Security
is no longer Outstanding. The ownership, principal amount and serial numbers of
Bearer Securities held by the Person so executing such instrument or writing and
the date of the commencement and the date of the termination of holding the same
may also be proved in any other manner which the Company and the Trustee deem
sufficient.
If the Company or a Guarantor shall solicit from the Holders of any
Registered Securities any request, demand, authorization, direction, notice,
consent, waiver or other Act, the Company or such Guarantor, as the case may be,
may at its option (but is not obligated to), by Board Resolution or Guarantor's
Board Resolution, as the case may be, fix in advance a record date for the
determination of Holders of Registered Securities entitled to give such request,
demand, authorization, direction, notice, consent, waiver or other Act. If such
a record date is fixed, such request, demand, authorization, direction, notice,
consent, waiver or other Act may be given before or after such record date, but
only the Holders of Registered Securities of record at the close of business on
such record date shall be deemed to be Holders for the purpose of determining
whether Holders of the requisite proportion of Outstanding Securities have
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authorized or agreed or consented to such request, demand, authorization,
direction, notice, consent, waiver or other Act, and for that purpose the
Outstanding Securities shall be computed as of such record date; provided that
no such authorization, agreement or consent by the Holders of Registered
Securities shall be deemed effective unless it shall become effective pursuant
to the provisions of this Indenture not later than six months after the record
date.
Any request, demand, authorization, direction, notice, consent, waiver
or other Act by the Holder of any Security shall bind every future Holder of the
same Security and the Holder of every Security issued upon the registration of
transfer thereof or in exchange therefor or in lieu thereof in respect of
anything done or suffered to be done by the Trustee, any Security Registrar, any
Paying Agent, the Company or a Guarantor in reliance thereon, whether or not
notation of such Act is made upon such Security.
Section 1.5. Notices, etc., to Trustee, the Company and the Guarantors.
Any request, demand, authorization, direction, notice, consent, waiver
or other Act of Holders or other document provided or permitted by this
Indenture to be made upon, given or furnished to, or filed with,
(1) the Trustee by any Holder, a Guarantor or by the Company
shall be sufficient for every purpose hereunder if made, given,
furnished or filed in writing to or with the Trustee at its Corporate
Trust Office, or
(2) the Company or a Guarantor by the Trustee or by any Holder
shall be sufficient for every purpose hereunder (unless otherwise
herein expressly provided) if in writing and mailed, first-class
postage prepaid, to the Company or such Guarantor, as the case may be,
addressed to it at the address of its principal office specified in the
first paragraph of this instrument or at any other address previously
furnished in writing to the Trustee by the Company or such Guarantor,
as the case may be.
Section 1.6. Notice to Holders of Securities; Waiver.
Except as otherwise expressly provided in or pursuant to this
Indenture, where this Indenture provides for notice to Holders of Securities of
any event,
(1) such notice shall be sufficiently given to Holders of
Registered Securities if in writing and mailed, first-class postage
prepaid, to each Holder of a Registered Security affected by such
event, at his address as it appears in the Security Register, not later
than the latest date, and not earlier than the earliest date,
prescribed for the giving of such notice; and
(2) such notice shall be sufficiently given to Holders of
Bearer Securities, if any, if published in an Authorized Newspaper in
The City of New York and, if such Securities are then listed on any
stock exchange outside the United States, in an Authorized Newspaper in
such city as the Company shall advise the Trustee that such stock
exchange
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so requires, on a Business Day at least twice, the first such
publication to be not earlier than the earliest date and the second
such publication not later than the latest date prescribed for the
giving of such notice.
In any case where notice to Holders of Registered Securities is given
by mail, neither the failure to mail such notice, nor any defect in any notice
so mailed, to any particular Holder of a Registered Security shall affect the
sufficiency of such notice with respect to other Holders of Registered
Securities or the sufficiency of any notice to Holders of Bearer Securities
given as provided herein. Any notice which is mailed in the manner herein
provided shall be conclusively presumed to have been duly given or provided. In
the case by reason of the suspension of regular mail service or by reason of any
other cause it shall be impracticable to give such notice by mail, then such
notification as shall be made with the approval of the Trustee shall constitute
a sufficient notification for every purpose hereunder.
In case by reason of the suspension of publication of any Authorized
Newspaper or Authorized Newspapers or by reason of any other cause it shall be
impracticable to publish any notice to Holders of Bearers Securities as provided
above, then such notification to Holders of Bearer Securities as shall be given
with the approval of the Trustee shall constitute sufficient notice to such
Holders for every purpose hereunder. Neither failure to give notice by
publication to Holders of Bearer Securities as provided above, nor any defect in
any notice so published, shall affect the sufficiency of any notice mailed to
Holders of Registered Securities as provided above.
Where this Indenture provides for notice in any manner, such notice may
be waived in writing by the Person entitled to receive such notice, either
before or after the event, and such waiver shall be the equivalent of such
notice. Waivers of notice by Holders of Securities shall be filed with the
Trustee, but such filing shall not be a condition precedent to the validity of
any action taken in reliance upon such waiver.
Section 1.7. Language of Notices.
Any request, demand, authorization, direction, notice, consent,
election or waiver required or permitted under this Indenture shall be in the
English language, except that, if the Company or a Guarantor, as the case may
be, so elects, any published notice may be in an official language of the
country of publication.
Section 1.8. Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table of Contents are
for convenience only and shall not affect the construction hereof.
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Section 1.9. Successors and Assigns.
All covenants and agreements in this Indenture by the Company shall
bind its successors and assigns, whether so expressed or not. All covenants and
agreements in this Indenture by the Guarantors shall bind their respective
successors and assigns, whether so expressed or not.
Section 1.10. Separability Clause.
In case any provision in this Indenture, any Security or any Coupon
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 1.11. Benefits of Indenture.
Nothing in this Indenture, any Security or any Coupon, express or
implied, shall give to any Person, other than the parties hereto, any Security
Registrar, any Paying Agent, any Authenticating Agent and their successors
hereunder, and the Holders of Securities or Coupons, any benefit or any legal or
equitable right, remedy or claim under this Indenture.
Section 1.12. Governing Law.
THIS INDENTURE, THE SECURITIES, THE GUARANTEES AND ANY COUPONS SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK
APPLICABLE TO AGREEMENTS MADE OR INSTRUMENTS ENTERED INTO AND, IN EACH CASE,
PERFORMED IN SAID STATE.
Section 1.13. Legal Holidays.
Unless otherwise specified in or pursuant to this Indenture or any
Securities, in any case where any Interest Payment Date, Stated Maturity or
Maturity of any Security, or the last date on which a Holder has the right to
convert or exchange Securities of a series that are convertible or exchangeable,
shall not be a Business Day at any Place of Payment, then (notwithstanding any
other provision of this Indenture, any Security or any Coupon other than a
provision in any Security or Coupon that specifically states that such provision
shall apply in lieu hereof) payment need not be made at such Place of Payment on
such date, and such Securities need not be converted or exchanged on such date
but such payment may be made, and such Securities may be converted or exchanged,
on the next succeeding day that is a Business Day at such Place of Payment with
the same force and effect as if made on the Interest Payment Date or at the
Stated Maturity or Maturity or on such last day for conversion or exchange, and
no interest shall accrue on the amount payable on such date or at such time for
the period from and after such Interest Payment Date, Stated Maturity, Maturity
or last day for conversion or exchange, as the case may be, to such next
succeeding Business Day.
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Section 1.14. Counterparts.
This Indenture may be executed in several counterparts, each of which
shall be an original and all of which shall constitute but one and the same
instrument.
Section 1.15. Judgment Currency.
Each of the Company and the Guarantors agrees, to the fullest extent
that it may effectively do so under applicable law, that (a) if for the purpose
of obtaining judgment in any court it is necessary to convert the sum due in
respect of the principal of, or premium or interest, if any, on, or Additional
Amounts with respect to, the Securities of any series or the Guarantees (the
"Required Currency") into a currency in which a judgment will be rendered (the
"Judgment Currency"), the rate of exchange used shall be the rate at which in
accordance with normal banking procedures the Trustee could purchase in The City
of New York the requisite amount of the Required Currency with the Judgment
Currency on the New York Banking Day preceding the day on which a final
unappealable judgment is given and (b) its obligations under this Indenture to
make payments in the Required Currency (i) shall not be discharged or satisfied
by any tender, or any recovery pursuant to any judgment (whether or not entered
in accordance with clause (a)), in any currency other than the Required
Currency, except to the extent that such tender or recovery shall result in the
actual receipt, by the payee, of the full amount of the Required Currency
expressed to be payable in respect of such payments, (ii) shall be enforceable
as an alternative or additional cause of action for the purpose of recovering in
the Required Currency the amount, if any, by which such actual receipt shall
fall short of the full amount of the Required Currency so expressed to be
payable and (iii) shall not be affected by judgment being obtained for any other
sum due under this Indenture. For purposes of the foregoing, "New York Banking
Day" means any day except a Saturday, Sunday or a legal holiday in The City of
New York or a day on which banking institutions in The City of New York are
authorized or obligated by law, regulation or executive order to be closed.
Section 1.16. No Security Interest Created.
Subject to the provisions of Section 10.5, nothing in this Indenture or
in any Securities, express or implied, shall be construed to constitute a
security interest under the Uniform Commercial Code or similar legislation, as
now or hereafter enacted and in effect in any jurisdiction where property of the
Company or its Subsidiaries is or may be located.
Section 1.17. Limitation on Individual Liability.
No recourse under or upon any obligation, covenant or agreement
contained in this Indenture or in any Security or Guarantee, or for any claim
based thereon or otherwise in respect thereof, shall be had against any
incorporator, shareholder, officer or director, as such, past, present or
future, of the Company or any Guarantor, either directly or through the Company
or a Guarantor, whether by virtue of any constitution, statute or rule of law,
or by the enforcement of any assessment or penalty or otherwise; it being
expressly understood that this Indenture and the obligations issued hereunder
are solely corporate obligations, and that no such personal liability
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whatever shall attach to, or is or shall be incurred by, the incorporators,
shareholders, officers or directors, as such, of the Company or any Guarantor ,
or any of them, because of the creation of the indebtedness hereby authorized,
or under or by reason of the obligations, covenants or agreements contained in
this Indenture or in any Security or Guarantee or implied therefrom; and that
any and all such personal liability of every name and nature, either at common
law or in equity or by constitution or statute, of, and any and all such rights
and claims against, every such incorporator, shareholder, officer or director,
as such, because of the creation of the indebtedness hereby authorized, or under
or by reason of the obligations, covenants or agreements contained in this
Indenture or in any Security or Guarantee or implied therefrom, are hereby
expressly waived and released as a condition of, and as a consideration for, the
execution of this Indenture and the issuance of such Security or Guarantee.
ARTICLE II
SECURITY FORMS
Section 2.1. Forms Generally.
Each Registered Security, Bearer Security, Coupon and temporary or
permanent global Security issued pursuant to this Indenture shall be in the form
established by or pursuant to a Board Resolution or in one or more indentures
supplemental hereto, shall have such appropriate insertions, omissions,
substitutions and other variations as are required or permitted by or pursuant
to this Indenture or any indenture supplemental hereto and may have such
letters, numbers or other marks of identification and such legends or
endorsements placed thereon as may, consistently herewith, be determined by the
officers executing such Security or Coupon as evidenced by their execution of
such Security or Coupon.
Unless otherwise provided in or pursuant to this Indenture or any
Securities, the Securities shall be issuable in registered form without Coupons
and shall not be issuable upon the exercise of warrants.
Definitive Securities and definitive Coupons shall be printed,
lithographed or engraved or produced by any combination of these methods on a
steel engraved border or steel engraved borders or may be produced in any other
manner, all as determined by the officers of the Company executing such
Securities or Coupons, as evidenced by their execution of such Securities or
Coupons.
Section 2.2. Form of Trustee's Certificate of Authentication.
Subject to Section 6.13, the Trustee's certificate of authentication
shall be in substantially the following form:
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This is one of the Securities of the series designated therein
referred to in the within-mentioned Indenture.
Dated: THE BANK OF NEW YORK,
as Trustee
By
---------------------------------
Authorized Signatory
Section 2.3. Securities in Global Form.
Unless otherwise provided in or pursuant to this Indenture or any
Securities, the Securities shall not be issuable in temporary or permanent
global form. If Securities of a series shall be issuable in global form, any
such Security may provide that it or any number of such Securities shall
represent the aggregate amount of all Outstanding Securities of such series (or
such lesser amount as is permitted by the terms thereof) from time to time
endorsed thereon and may also provide that the aggregate amount of Outstanding
Securities represented thereby may from time to time be increased or reduced to
reflect exchanges. Any endorsement of any Security in global form to reflect the
amount, or any increase or decrease in the amount, or changes in the rights of
Holders, of Outstanding Securities represented thereby shall be made in such
manner and by such Person or Persons as shall be specified therein or in the
Company Order to be delivered pursuant to Section 3.3 or 3.4 with respect
thereto. Subject to the provisions of Section 3.3 and, if applicable, Section
3.4, the Trustee shall make available for delivery and redelivery, in each case
at the Company's expense, any Security in permanent global form in the manner
and upon instructions given by the Person or Persons specified therein or in the
applicable Company Order. If a Company Order pursuant to Section 3.3 or 3.4 has
been, or simultaneously is, delivered, any instructions by the Company with
respect to a Security in global form shall be in writing but need not be
accompanied by or contained in an Officers' Certificate and need not be
accompanied by an Opinion of Counsel.
Notwithstanding the provisions of Section 3.7, unless otherwise
specified in or pursuant to this Indenture or any Securities, payment of
principal of, any premium and interest on, and any Additional Amounts with
respect to, any Security in temporary or permanent global form shall be made to
the Person or Persons specified therein.
Notwithstanding the provisions of Section 3.8 and except as provided in
the preceding paragraph, the Company, the Trustee and any agent of the Company
or the Trustee shall treat as the Holder of such principal amount of Outstanding
Securities represented by a global Security (i) in the case of a global Security
in registered form, the Holder of such global Security in registered form, or
(ii) in the case of a global Security in bearer form, the Person or Persons
specified pursuant to Section 3.1.
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ARTICLE III
THE SECURITIES
Section 3.1. Amount Unlimited; Issuable in Series.
The aggregate principal amount of Securities which may be authenticated
and made available for delivery under this Indenture is unlimited.
The Securities may be issued in one or more series. With respect to
Securities to be authenticated and delivered hereunder, there shall be
established in or pursuant to a Board Resolution and set forth in an Officers'
Certificate, or established in one or more indentures supplemental hereto:
(1) the title of such Securities and the series in which such
Securities shall be included;
(2) any limit upon the aggregate principal amount of the
Securities of the series which may be authenticated and made available
for delivery under this Indenture (except for Securities authenticated
and made available for delivery upon registration of transfer of, or in
exchange for, or in lieu of, other Securities of such series pursuant
to Section 3.4, 3.5, 3.6, 9.5 or 11.7, upon repayment in part of any
Registered Security of such series pursuant to Article XIII, upon
surrender in part of any Registered Security for conversion into or
exchange for other securities pursuant to its terms, or pursuant to or
as contemplated by the terms of such Securities);
(3) if such Securities are to be issuable as Registered
Securities, as Bearer Securities or alternatively as Bearer Securities
and Registered Securities, and whether the Bearer Securities are to be
issuable with Coupons, without Coupons or both, and any restrictions
applicable to the offer, sale or delivery of the Bearer Securities and
the terms, if any, upon which Bearer Securities may be exchanged for
Registered Securities and vice versa;
(4) if any of such Securities are to be issuable in global
form, when any of such Securities are to be issuable in global form and
(i) whether such Securities are to be issued in temporary or permanent
global form or both, (ii) whether beneficial owners of interests in any
such global Security may exchange such interests for Securities of the
same series and of like tenor and of any authorized form and
denomination, and the circumstances under which any such exchanges may
occur, if other than in the manner specified in Section 3.5, and (iii)
the name of the Depository or the U.S. Depository, as the case may be,
with respect to any such global Security;
(5) if any of such Securities are to be issuable as Bearer
Securities or in global form, the date as of which any such Bearer
Security or global Security shall be dated (if other than the date of
original issuance of the first of such Securities to be issued);
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(6) if any of such Securities are to be issuable as Bearer
Securities, whether interest in respect of any portion of a temporary
Bearer Security in global form payable in respect of an Interest
Payment Date therefor prior to the exchange, if any, of such temporary
Bearer Security for definitive Securities shall be paid to any clearing
organization with respect to the portion of such temporary Bearer
Security held for its account and, in such event, the terms and
conditions (including any certification requirements) upon which any
such interest payment received by a clearing organization will be
credited to the Persons entitled to interest payable on such Interest
Payment Date;
(7) the date or dates, or the method or methods, if any, by
which such date or dates shall be determined, on which the principal of
such Securities is payable;
(8) the rate or rates at which such Securities shall bear
interest, if any, or the method or methods, if any, by which such rate
or rates are to be determined, the date or dates, if any, from which
such interest shall accrue or the method or methods, if any, by which
such date or dates are to be determined, the Interest Payment Dates, if
any, on which such interest shall be payable and the Regular Record
Date, if any, for the interest payable on Registered Securities on any
Interest Payment Date, whether and under what circumstances Additional
Amounts with respect to such Securities or any of them shall be
payable, the notice, if any, to Holders regarding the determination of
interest on a floating rate Security and the manner of giving such
notice, and the basis upon which interest shall be calculated if other
than that of a 360-day year of twelve 30-day months;
(9) if in addition to or other than the Borough of Manhattan,
The City of New York, the place or places where the principal of, any
premium and interest on or any Additional Amounts with respect to such
Securities shall be payable, any of such Securities that are Registered
Securities may be surrendered for registration of transfer or exchange,
any of such Securities may be surrendered for conversion or exchange
and notices or demands to or upon the Company or any Guarantor in
respect of such Securities, the Guarantee and this Indenture may be
served, the extent to which, or the manner in which, any interest
payment or Additional Amounts with respect to a global Security on an
Interest Payment Date will be paid and the manner in which any
principal of or premium, if any, on any global Security will be paid;
(10) whether any of such Securities are to be redeemable at
the option of the Company and, if so, the date or dates on which, the
period or periods within which, the price or prices at which and the
other terms and conditions upon which such Securities may be redeemed,
in whole or in part, at the option of the Company;
(11) whether the Company is obligated to redeem or purchase
any of such Securities pursuant to any sinking fund or analogous
provision or at the option of any Holder thereof and, if so, the date
or dates on which, the period or periods within which, the price or
prices at which and the other terms and conditions upon which such
Securities shall be redeemed, purchased or repaid, in whole or in part,
pursuant to such
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obligation, and any provisions for the remarketing of such Securities
so redeemed or purchased;
(12) the denominations in which any of such Securities that
are Registered Securities shall be issuable if other than denominations
of $1,000 and any integral multiple thereof, and the denominations in
which any of such Securities that are Bearer Securities shall be
issuable if other than the denomination of $5,000;
(13) whether the Securities of the series will be convertible
into and/or exchangeable for other securities, and if so, the terms and
conditions upon which such Securities will be so convertible or
exchangeable, and any deletions from or modifications or additions to
this Indenture to permit or to facilitate the issuance of such
convertible or exchangeable Securities or the administration thereof;
(14) if other than the principal amount thereof, the portion
of the principal amount of any of such Securities that shall be payable
upon declaration of acceleration of the Maturity thereof pursuant to
Section 5.2 or the method by which such portion is to be determined;
(15) if other than Dollars, the Foreign Currency in which
payment of the principal of, any premium or interest on or any
Additional Amounts with respect to any of such Securities shall be
payable;
(16) if the principal of, any premium or interest on or any
Additional Amounts with respect to any of such Securities are to be
payable, at the election of the Company or a Holder thereof or
otherwise, in Dollars or in a Foreign Currency other than that in which
such Securities are stated to be payable, the date or dates on which,
the period or periods within which, and the other terms and conditions
upon which, such election may be made, and the time and manner of
determining the exchange rate between the Currency in which such
Securities are stated to be payable and the Currency in which such
Securities or any of them are to be paid pursuant to such election, and
any deletions from or modifications of or additions to the terms of
this Indenture to provide for or to facilitate the issuance of
Securities denominated or payable, at the election of the Company or a
Holder thereof or otherwise, in a Foreign Currency;
(17) whether the amount of payments of principal of, any
premium or interest on or any Additional Amounts with respect to such
Securities may be determined with reference to an index, formula or
other method or methods (which index, formula or method or methods may
be based, without limitation, on one or more Currencies, commodities,
equity securities, equity indices or other indices), and, if so, the
terms and conditions upon which and the manner in which such amounts
shall be determined and paid or payable;
(18) any deletions from, modifications of or additions to the
Events of Default or covenants of the Company or the Guarantors with
respect to any of such Securities or
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Guarantees, whether or not such Events of Default or covenants are
consistent with the Events of Default or covenants set forth herein;
(19) whether either or both of Section 4.2(2) relating to
defeasance or Section 4.2(3) relating to covenant defeasance shall not
be applicable to the Securities of such series, or any covenants in
addition to those specified in Section 4.2(3) relating to the
Securities of such series which shall be subject to covenant of
defeasance, and any deletions from, or modifications or additions to,
the provisions of Article IV in respect of the Securities of such
series;
(20) whether any of such Securities are to be issuable upon
the exercise of warrants, and the time, manner and place for such
Securities to be authenticated and made available for delivery;
(21) if any of such Securities are to be issuable in global
form and are to be issuable in definitive form (whether upon original
issue or upon exchange of a temporary Security) only upon receipt of
certain certificates or other documents or satisfaction of other
conditions, then the form and terms of such certificates, documents or
conditions;
(22) if there is more than one Trustee, the identity of the
Trustee and, if not the Trustee, the identity of each Security
Registrar, Paying Agent or Authenticating Agent with respect to such
Securities;
(23) whether the provisions of Section 3.11 are applicable to
such Securities; and
(24) any other terms of such Securities and any other
deletions from or modifications or additions to this Indenture in
respect of such Securities.
All Securities of any one series and all Coupons, if any, appertaining
to Bearer Securities of such series shall be substantially identical except as
to Currency of payments due thereunder, denomination and the rate of interest
thereon, or method of determining the rate of interest, if any, Maturity, and
the date from which interest, if any, shall accrue and except as may otherwise
be provided by the Company in or pursuant to the Board Resolution and set forth
in the Officers' Certificate or in any indenture or indentures supplemental
hereto pertaining to such series of Securities. The terms of the Securities of
any series may provide, without limitation, that the Securities shall be
authenticated and made available for delivery by the Trustee on original issue
from time to time upon written order of persons designated in the Officers'
Certificate or supplemental indenture and that such persons are authorized to
determine, consistent with such Officers' Certificate or any applicable
supplemental indenture, such terms and conditions of the Securities of such
series as are specified in such Officers' Certificate or supplemental indenture.
All Securities of any one series need not be issued at the same time and, unless
otherwise so provided, a series may be reopened for issuances of additional
Securities of such series or to establish additional terms of such series of
Securities.
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If any of the terms of the Securities of any series shall be
established by action taken by or pursuant to a Board Resolution, the Board
Resolution shall be delivered to the Trustee at or prior to the delivery of the
Officers' Certificate setting forth the terms of such series.
Section 3.2. Currency; Denominations.
Unless otherwise provided in or pursuant to this Indenture, the
principal of, any premium and interest on and any Additional Amounts with
respect to the Securities shall be payable in Dollars. Unless otherwise provided
in or pursuant to this Indenture, Registered Securities denominated in Dollars
shall be issuable in registered form without Coupons in denominations of $1,000
and any integral multiple thereof, and Bearer Securities denominated in Dollars
shall be issuable in the denomination of $5,000. Securities not denominated in
Dollars shall be issuable in such denominations as are established with respect
to such Securities in or pursuant to this Indenture.
Section 3.3. Execution, Authentication, Delivery and Dating.
Securities shall be executed on behalf of the Company by its Vice
President or a Treasurer under its corporate seal reproduced thereon and
attested by its Secretary or one of its Assistant Secretaries. Coupons shall be
executed on behalf of the Company by the Treasurer or any Assistant Treasurer of
the Company. The signature of any of these officers on the Securities or any
Coupons appertaining thereto may be manual or facsimile.
Securities and any Coupons appertaining thereto bearing the manual or
facsimile signatures of individuals who were at any time the proper officers of
the Company shall bind the Company, notwithstanding that such individuals or any
of them have ceased to hold such offices prior to the authentication and
delivery of such Securities and Coupons or did not hold such offices at the date
of original issuance of such Securities or Coupons.
At any time and from time to time after the execution and delivery of
this Indenture, the Company may deliver Securities, together with any Coupons
appertaining thereto, executed by the Company, to the Trustee for authentication
and, provided that the Board Resolution and Officers' Certificate or
supplemental indenture or indentures with respect to such Securities referred to
in Section 3.1 and a Company Order for the authentication and delivery of such
Securities have been delivered to the Trustee, the Trustee in accordance with
the Company Order and subject to the provisions hereof and of such Securities
shall authenticate and make available for delivery such Securities. In
authenticating such Securities, and accepting the additional responsibilities
under this Indenture in relation to such Securities and any Coupons appertaining
thereto, the Trustee shall be entitled to receive, and (subject to the
provisions of Article VI) shall be fully protected in relying upon,
(1) an Opinion of Counsel to the effect that:
(a) the form or forms and terms of such Securities and
Coupons, if any, have been established in conformity with the
provisions of this Indenture;
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(b) all conditions precedent to the authentication and
delivery of such Securities and Coupons, if any, appertaining thereto
have been complied with and that such Securities and Coupons, when
completed by appropriate insertions, executed under the Company's
corporate seal and attested by duly authorized officers of the Company,
delivered by duly authorized officers of the Company to the Trustee for
authentication pursuant to this Indenture, and authenticated and made
available for delivery by the Trustee and issued by the Company in the
manner and subject to any conditions specified in such Opinion of
Counsel, will constitute legally valid and binding obligations of the
Company, enforceable against the Company in accordance with their
terms, except as enforcement thereof may be subject to or limited by
bankruptcy, insolvency, reorganization, moratorium, arrangement,
fraudulent conveyance, fraudulent transfer or other similar laws
relating to or affecting creditors' rights generally, and subject to
general principles of equity (regardless of whether enforcement is
sought in a proceeding in equity or at law) and will entitle the
Holders thereof to the benefits of this Indenture, including the
Guarantees; such Opinion of Counsel need express no opinion as to the
availability of equitable remedies; and
(c) all laws and requirements in respect of the execution and
delivery by the Company of such Securities and Coupons, if any, have
been complied with; and
(2) an Officers' Certificate and a Guarantor's Officers'
Certificate stating that all conditions precedent to the execution,
authentication and delivery of such Securities and Coupons, if any,
appertaining thereto have been complied with and that, to the best
knowledge of the Persons executing such certificate, no event which is,
or after notice or lapse of time would become, an Event of Default with
respect to any of the Securities shall have occurred and be continuing.
If all the Securities of any series are not to be issued at one time,
it shall not be necessary to deliver an Opinion of Counsel and an Officers'
Certificate at the time of issuance of each Security, but such opinion and
certificate, with appropriate modifications, shall be delivered at or before the
time of issuance of the first Security of such series. After any such first
delivery, any separate written request by an Authorized Officer of the Company
that the Trustee authenticate and make available for delivery Securities of such
series for original issue will be deemed to be a certification by the Company
that all conditions precedent provided for in this Indenture relating to
authentication and delivery of such Securities continue to have been complied
with.
The Trustee shall not be required to authenticate or to cause an
Authenticating Agent to authenticate any Securities if the issue of such
Securities pursuant to this Indenture will affect the Trustee's own rights,
duties or immunities under the Securities and this Indenture or otherwise in a
manner which is not reasonably acceptable to the Trustee or if the Trustee,
being advised by counsel, determines that such action may not lawfully be taken.
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Each Registered Security shall be dated the date of its authentication.
Each Bearer Security and any Bearer Security in global form shall be dated as of
the date specified in or pursuant to this Indenture.
No Security or Coupon appertaining thereto shall be entitled to any
benefit under this Indenture or be valid or obligatory for any purpose unless
there appears on such Security a certificate of authentication substantially in
the form provided for in Section 2.2 or 6.13 executed by or on behalf of the
Trustee or by the Authenticating Agent by the manual signature of one of its
authorized officers. Such certificate upon any Security shall be conclusive
evidence, and the only evidence, that such Security has been duly authenticated
and made available for delivery hereunder. Except as permitted by Section 3.6 or
3.7, the Trustee shall not authenticate and make available for delivery any
Bearer Security unless all Coupons appertaining thereto then matured have been
detached and cancelled.
Section 3.4. Temporary Securities.
Pending the preparation of definitive Securities, the Company may
execute and deliver to the Trustee and, upon Company Order, the Trustee shall
authenticate and make available for delivery, in the manner provided in Section
3.3, temporary Securities in lieu thereof which are printed, lithographed,
typewritten, mimeographed or otherwise produced, in any authorized denomination,
substantially of the tenor of the definitive Securities in lieu of which they
are issued, in registered form or, if authorized in or pursuant to this
Indenture, in bearer form with one or more Coupons or without Coupons and with
such appropriate insertions, omissions, substitutions and other variations as
the officers of the Company executing such Securities may determine, as
conclusively evidenced by their execution of such Securities. Such temporary
Securities may be in global form.
Except in the case of temporary Securities in global form, which shall
be exchanged in accordance with the provisions thereof, if temporary Securities
are issued, the Company shall cause definitive Securities to be prepared without
unreasonable delay. After the preparation of definitive Securities of the same
series and containing terms and provisions that are identical to those of any
temporary Securities, such temporary Securities shall be exchangeable for such
definitive Securities upon surrender of such temporary Securities at an Office
or Agency for such Securities, without charge to any Holder thereof. Upon
surrender for cancellation of any one or more temporary Securities (accompanied
by any unmatured Coupons appertaining thereto), the Company shall execute and
the Trustee shall authenticate and make available for delivery in exchange
therefor a like principal amount of definitive Securities of authorized
denominations of the same series and containing identical terms and provisions;
provided, however, that no definitive Bearer Security, except as provided in or
pursuant to this Indenture, shall be delivered in exchange for a temporary
Registered Security; and provided, further, that a definitive Bearer Security
shall be delivered in exchange for a temporary Bearer Security only in
compliance with the conditions set forth in or pursuant to this Indenture.
Unless otherwise provided in or pursuant to this Indenture with respect to a
temporary global Security, until so exchanged the
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temporary Securities of any series shall in all respects be entitled to the same
benefits under this Indenture as definitive Securities of such series.
Section 3.5. Registration, Transfer and Exchange.
With respect to the Registered Securities of each series, if any, the
Company shall cause to be kept a register (each such register being herein
sometimes referred to as the "Security Register") at an Office or Agency for
such series in which, subject to such reasonable regulations as it may
prescribe, the Company shall provide for the registration of the Registered
Securities of such series and of transfers of the Registered Securities of such
series. Such Office or Agency shall be the "Security Registrar" for that series
of Securities. Unless otherwise specified in or pursuant to this Indenture or
the Securities, the Trustee shall be the initial Security Registrar for each
series of Securities. The Company shall have the right to remove and replace
from time to time the Security Registrar for any series of Securities; provided
that no such removal or replacement shall be effective until a successor
Security Registrar with respect to such series of Securities shall have been
appointed by the Company and shall have accepted such appointment by the
Company. In the event that the Trustee shall not be or shall cease to be
Security Registrar with respect to a series of Securities, it shall have the
right to examine the Security Register for such series at all reasonable times.
There shall be only one Security Register for each series of Securities.
Upon surrender for registration of transfer of any Registered Security
of any series at any Office or Agency for such series, the Company shall
execute, and the Trustee shall authenticate and make available for delivery, in
the name of the designated transferee or transferees, one or more new Registered
Securities of the same series denominated as authorized in or pursuant to this
Indenture, of a like aggregate principal amount bearing a number not
contemporaneously outstanding and containing identical terms and provisions.
At the option of the Holder, Registered Securities of any series may be
exchanged for other Registered Securities of the same series containing
identical terms and provisions, in any authorized denominations, and of a like
aggregate principal amount, upon surrender of the Securities to be exchanged at
any Office or Agency for such series. Whenever any Registered Securities are so
surrendered for exchange, the Company shall execute, and the Trustee shall
authenticate and make available for delivery, the Registered Securities which
the Holder making the exchange is entitled to receive.
If provided in or pursuant to this Indenture, with respect to
Securities of any series, at the option of the Holder, Bearer Securities of such
series may be exchanged for Registered Securities of such series containing
identical terms, denominated as authorized in or pursuant to this Indenture and
in the same aggregate principal amount, upon surrender of the Bearer Securities
to be exchanged at any Office or Agency for such series, with all unmatured
Coupons and all matured Coupons in default thereto appertaining. If the Holder
of a Bearer Security is unable to produce any such unmatured Coupon or Coupons
or matured Coupon or Coupons in default, such exchange may be effected if the
Bearer Securities are accompanied by payment in
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funds acceptable to the Company and the Trustee in an amount equal to the face
amount of such missing Coupon or Coupons, or the surrender of such missing
Coupon or Coupons may be waived by the Company and the Trustee if there is
furnished to them such security or indemnity as they may require to save each of
them and any Paying Agent harmless. If thereafter the Holder of such Bearer
Security shall surrender to any Paying Agent any such missing Coupon in respect
of which such a payment shall have been made, such Holder shall be entitled to
receive the amount of such payment; provided, however, that, except as otherwise
provided in Section 10.2, interest represented by Coupons shall be payable only
upon presentation and surrender of those Coupons at an Office or Agency for such
series located outside the United States. Notwithstanding the foregoing, in case
a Bearer Security of any series is surrendered at any such Office or Agency for
such series in exchange for a Registered Security of such series and like tenor
after the close of business at such Office or Agency on (i) any Regular Record
Date and before the opening of business at such Office or Agency on the next
succeeding Interest Payment Date, or (ii) any Special Record Date and before the
opening of business at such Office or Agency on the related date for payment of
Defaulted Interest, such Bearer Security shall be surrendered without the Coupon
relating to such Interest Payment Date or proposed date of payment, as the case
may be (or, if such Coupon is so surrendered with such Bearer Security, such
Coupon shall be returned to the Person so surrendering the Bearer Security), and
interest or Defaulted Interest, as the case may be, shall not be payable on such
Interest Payment Date or proposed date for payment, as the case may be, in
respect of the Registered Security issued in exchange for such Bearer Security,
but shall be payable only to the Holder of such Coupon when due in accordance
with the provisions of this Indenture.
If provided in or pursuant to this Indenture with respect to Securities
of any series, at the option of the Holder, Registered Securities of such series
may be exchanged for Bearer Securities upon such terms and conditions as may be
provided in or pursuant to this Indenture with respect to such series.
Whenever any Securities are surrendered for exchange as contemplated by
the immediately preceding two paragraphs, the Company shall execute, and the
Trustee shall authenticate and make available for delivery, the Securities which
the Holder making the exchange is entitled to receive.
Notwithstanding the foregoing, except as otherwise provided in or
pursuant to this Indenture, any global Security shall be exchangeable for
definitive Securities only if (i) the Depository is at any time unwilling,
unable or ineligible to continue as depository and a successor depository is not
appointed by the Company within 90 days of the date the Company is so informed
in writing, (ii) the Company executes and delivers to the Trustee a Company
Order to the effect that such global Security shall be so exchangeable, or (iii)
an Event of Default has occurred and is continuing with respect to the related
Securities. If the beneficial owners of interests in a global Security are
entitled to exchange such interests for definitive Securities as the result of
an event described in clause (i), (ii) or (iii) of the preceding sentence, then
without unnecessary delay but in any event not later than the earliest date on
which such interests may be so exchanged, the Company shall deliver to the
Trustee definitive Securities in such form and
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denominations as are required by or pursuant to this Indenture, and of the same
series, containing identical terms and in aggregate principal amount equal to
the principal amount of such global Security, executed by the Company. On or
after the earliest date on which such interests may be so exchanged, such global
Security shall be surrendered from time to time by the U.S. Depository or such
other Depository as shall be specified in the Company Order with respect
thereto, and in accordance with instructions given to the Trustee and the U.S.
Depository or such other Depository, as the case may be (which instructions
shall be in writing but need not be contained in or accompanied by an Officers'
Certificate or be accompanied by an Opinion of Counsel), as shall be specified
in the Company Order with respect thereto to the Trustee, as the Company's agent
for such purpose, to be exchanged, in whole or in part, for definitive
Securities as described above without charge. The Trustee shall authenticate and
make available for delivery, in exchange for each portion of such surrendered
global Security, a like aggregate principal amount of definitive Securities of
the same series of authorized denominations and of like tenor as the portion of
such global Security to be exchanged, which (unless such Securities are not
issuable both as Bearer Securities and as Registered Securities, in which case
the definitive Securities exchanged for the global Security shall be issuable
only in the form in which the Securities are issuable, as provided in or
pursuant to this Indenture) shall be in the form of Bearer Securities or
Registered Securities, or any combination thereof, as shall be specified by the
beneficial owner thereof, but subject to the satisfaction of any certification
or other requirements to the issuance of Bearer Securities; provided, however,
that no such exchanges may occur during a period beginning at the opening of
business 15 days before any selection of Securities of the same series to be
redeemed and ending on the relevant Redemption Date; and provided, further, that
(unless otherwise provided in or pursuant to this Indenture) no Bearer Security
delivered in exchange for a portion of a global Security shall be mailed or
otherwise delivered to any location in the United States. Promptly following any
such exchange in part, such global Security shall be returned by the Trustee to
such Depository or the U.S. Depository, as the case may be, or such other
Depository or U.S. Depository referred to above in accordance with the
instructions of the Company referred to above. If a Registered Security is
issued in exchange for any portion of a global Security after the close of
business at the Office or Agency for such Security where such exchange occurs on
or after (i) any Regular Record Date for such Security and before the opening of
business at such Office or Agency on the next succeeding Interest Payment Date,
or (ii) any Special Record Date for such Security and before the opening of
business at such Office or Agency on the related proposed date for payment of
interest or Defaulted Interest, as the case may be, interest shall not be
payable on such Interest Payment Date or proposed date for payment, as the case
may be, in respect of such Registered Security, but shall be payable on such
Interest Payment Date or proposed date for payment, as the case may be, only to
the Person to whom interest in respect of such portion of such global Security
shall be payable in accordance with the provisions of this Indenture.
All Securities issued upon any registration of transfer or exchange of
Securities shall be the valid obligations of the Company evidencing the same
debt and entitling the Holders thereof to the same benefits under this Indenture
and the Guarantees as the Securities surrendered upon such registration of
transfer or exchange.
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Every Registered Security presented or surrendered for registration of
transfer or for exchange or redemption shall (if so required by the Company or
the Security Registrar for such Security) be duly endorsed, or be accompanied by
a written instrument of transfer in form satisfactory to the Company and the
Security Registrar for such Security duly executed by the Holder thereof or his
attorney duly authorized in writing.
No service charge shall be made for any registration of transfer or
exchange, or redemption of Securities, but the Company may require payment of a
sum sufficient to cover any tax or other governmental charge and any other
expenses (including fees and expenses of the Trustee) that may be imposed in
connection with any registration of transfer or exchange of Securities, other
than exchanges pursuant to Section 3.4, 9.5 or 11.7 not involving any transfer.
Except as otherwise provided in or pursuant to this Indenture, the
Company shall not be required (i) to issue, register the transfer of or exchange
any Securities during a period beginning at the opening of business 15 days
before the day of the selection for redemption of Securities of like tenor and
the same series under Section 11.3 and ending at the close of business on the
day of such selection, or (ii) to register the transfer of or exchange any
Registered Security so selected for redemption in whole or in part, except in
the case of any Security to be redeemed in part, the portion thereof not to be
redeemed, or (iii) to exchange any Bearer Security so selected for redemption
except, to the extent provided with respect to such Bearer Security, that such
Bearer Security may be exchanged for a Registered Security of like tenor and the
same series, provided that such Registered Security shall be immediately
surrendered for redemption with written instruction for payment consistent with
the provisions of this Indenture or (iv) to issue, register the transfer of or
exchange any Security which, in accordance with its terms, has been surrendered
for repayment at the option of the Holder, except the portion, if any, of such
Security not to be so repaid.
Section 3.6. Mutilated, Destroyed, Lost and Stolen Securities.
If any mutilated Security or a Security with a mutilated Coupon
appertaining to it is surrendered to the Trustee, subject to the provisions of
this Section 3.6, the Company shall execute and the Trustee shall authenticate
and make available for delivery in exchange therefor a new Security of the same
series containing identical terms and of like principal amount and bearing a
number not contemporaneously outstanding, with Coupons appertaining thereto
corresponding to the Coupons, if any, appertaining to the surrendered Security.
If there be delivered to the Company and to the Trustee (i) evidence to
their satisfaction of the destruction, loss or theft of any Security or Coupon,
and (ii) such security or indemnity as may be required by them to save each of
them and any agent of either of them harmless, then, in the absence of notice to
the Company or the Trustee that such Security or Coupon has been acquired by a
bona fide purchaser, the Company shall execute and, upon the Company's request
the Trustee shall authenticate and make available for delivery, in exchange for
or in lieu of any such mutilated, destroyed, lost or stolen Security or in
exchange for the Security to which a destroyed, lost or stolen Coupon appertains
with all appurtenant Coupons not destroyed, lost or
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stolen, a new Security of the same series containing identical terms and of like
principal amount and bearing a number not contemporaneously outstanding, with
Coupons appertaining thereto corresponding to the Coupons, if any, appertaining
to such destroyed, lost or stolen Security or to the Security to which such
destroyed, lost or stolen Coupon appertains.
Notwithstanding the foregoing provisions of this Section 3.6, in case
any mutilated, destroyed, lost or stolen Security or Coupon has become or is
about to become due and payable, the Company in its discretion may, instead of
issuing a new Security, pay such Security or Coupon; provided, however, that
payment of principal of, any premium or interest on or any Additional Amounts
with respect to any Bearer Securities shall, except as otherwise provided in
Section 10.2, be payable only at an Office or Agency for such Securities located
outside the United States and, unless otherwise provided in or pursuant to this
Indenture, any interest on Bearer Securities and any Additional Amounts with
respect to such interest shall be payable only upon presentation and surrender
of the Coupons appertaining thereto.
Upon the issuance of any new Security under this Section 3.6, the
Company may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.
Every new Security, with any Coupons appertaining thereto issued
pursuant to this Section 3.6 in lieu of any destroyed, lost or stolen Security,
or in exchange for a Security to which a destroyed, lost or stolen Coupon
appertains shall constitute a separate obligation of the Company, whether or not
the destroyed, lost or stolen Security and Coupons appertaining thereto or the
destroyed, lost or stolen Coupon shall be at any time enforceable by anyone, and
shall be entitled to all the benefits of this Indenture and the Guarantees
equally and proportionately with any and all other Securities of such series and
any Coupons, if any, duly issued hereunder.
The provisions of this Section 3.6, as amended or supplemented pursuant
to this Indenture with respect to particular Securities or generally, shall be
exclusive and shall preclude (to the extent lawful) all other rights and
remedies with respect to the replacement or payment of mutilated, destroyed,
lost or stolen Securities or Coupons.
Section 3.7. Payment of Interest and Certain Additional Amounts; Rights
to Interest and Certain Additional Amounts Preserved.
Unless otherwise provided in or pursuant to this Indenture, any
interest on and any Additional Amounts with respect to any Registered Security
which shall be payable, and are punctually paid or duly provided for, on any
Interest Payment Date shall be paid to the Person in whose name such Security
(or one or more Predecessor Securities) is registered as of the close of
business on the Regular Record Date for such interest.
Unless otherwise provided in or pursuant to this Indenture, any
interest on and any Additional Amounts with respect to any Registered Security
which shall be payable, but shall not be punctually paid or duly provided for,
on any Interest Payment Date for such Registered
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Security (herein called "Defaulted Interest") shall forthwith cease to be
payable to the Holder thereof on the relevant Regular Record Date by virtue of
having been such Holder; and such Defaulted Interest may be paid by the Company,
at its election in each case, as provided in Clause (1) or (2) below:
(1) The Company may elect to make payment of any Defaulted
Interest to the Person in whose name such Registered Security (or a
Predecessor Security thereof) shall be registered at the close of
business on a Special Record Date for the payment of such Defaulted
Interest, which shall be fixed by the Company in the following manner.
The Company shall notify the Trustee in writing of the amount of
Defaulted Interest proposed to be paid on such Registered Security, the
Special Record Date therefor and the date of the proposed payment, and
at the same time the Company shall deposit with the Trustee an amount
of money equal to the aggregate amount proposed to be paid in respect
of such Defaulted Interest or shall make arrangements satisfactory to
the Trustee for such deposit on or prior to the date of the proposed
payment, such money when so deposited to be held in trust for the
benefit of the Person entitled to such Defaulted Interest as in this
Clause provided. The Special Record Date for the payment of such
Defaulted Interest shall be not more than 15 days and not less than 10
days prior to the date of the proposed payment and not less than 10
days after notification to the Trustee of the proposed payment. The
Trustee shall, in the name and at the expense of the Company, cause
notice of the proposed payment of such Defaulted Interest and the
Special Record Date therefor to be mailed, first-class postage prepaid,
to the Holder of such Registered Security (or a Predecessor Security
thereof) at his address as it appears in the Security Register not less
than 10 days prior to such Special Record Date. The Trustee may, if so
directed by the Company, in the name and at the expense of the Company,
cause a similar notice to be published at least once in an Authorized
Newspaper of general circulation in the Borough of Manhattan, The City
of New York, but such publication shall not be a condition precedent to
the establishment of such Special Record Date. Notice of the proposed
payment of such Defaulted Interest and the Special Record Date therefor
having been mailed as aforesaid, such Defaulted Interest shall be paid
to the Person in whose name such Registered Security (or a Predecessor
Security thereof) shall be registered at the close of business on such
Special Record Date and shall no longer be payable pursuant to the
following clause (2).
(2) The Company may make payment of any Defaulted Interest in
any other lawful manner not inconsistent with the requirements of any
securities exchange on which such Security may be listed, and upon such
notice as may be required by such exchange, if, after notice given by
the Company to the Trustee of the proposed payment pursuant to this
Clause, such payment shall be deemed practicable by the Trustee.
Unless otherwise provided in or pursuant to this Indenture or the
Securities of any particular series pursuant to the provisions of this
Indenture, at the option of the Company, interest on Registered Securities that
bear interest may be paid by mailing a check to the address
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of the Person entitled thereto as such address shall appear in the Security
Register or by transfer to an account maintained by the payee with a bank
located in the United States.
Subject to the foregoing provisions of this Section and Section 3.5,
each Security delivered under this Indenture upon registration of transfer of or
in exchange for or in lieu of any other Security shall carry the rights to
interest accrued and unpaid, and to accrue, which were carried by such other
Security.
In the case of any Registered Security of any series that is
convertible into or exchangeable for other securities, which Registered Security
is converted or exchanged after any Regular Record Date and on or prior to the
next succeeding Interest Payment Date (other than any Registered Security with
respect to which the Stated Maturity is prior to such Interest Payment Date),
interest with respect to which the Stated Maturity is on such Interest Payment
Date shall be payable on such Interest Payment Date notwithstanding such
conversion or exchange, and such interest (whether or not punctually paid or
duly provided for) shall be paid to the Person in whose name that Registered
Security (or one or more predecessor Registered Securities) is registered at the
close of business on such Regular Record Date. Except as otherwise expressly
provided in the immediately preceding sentence, in the case of any Registered
Security which is converted or exchanged, interest with respect to which the
Stated Maturity is after the date of conversion or exchange of such Registered
Security shall not be payable.
Section 3.8. Persons Deemed Owners.
Prior to due presentment of a Registered Security for registration of
transfer, the Company, the Guarantors, the Trustee and any agent of the Company,
a Guarantor or the Trustee may treat the Person in whose name such Registered
Security is registered in the Security Register as the owner of such Registered
Security for the purpose of receiving payment of principal of, any premium and
(subject to Sections 3.5 and 3.7) interest on and any Additional Amounts with
respect to such Registered Security and for all other purposes whatsoever,
whether or not any payment with respect to such Registered Security shall be
overdue, and none of the Company, the Guarantors, the Trustee or any agent of
the Company, a Guarantor or the Trustee shall be affected by notice to the
contrary.
The Company, the Guarantors, the Trustee and any agent of the Company,
a Guarantor or the Trustee may treat the bearer of any Bearer Security or the
bearer of any Coupon as the absolute owner of such Security or Coupon for the
purpose of receiving payment thereof or on account thereof and for all other
purposes whatsoever, whether or not any payment with respect to such Security or
Coupon shall be overdue, and none of the Company, the Guarantors, the Trustee or
any agent of the Company, a Guarantor or the Trustee shall be affected by notice
to the contrary.
No Holder of any beneficial interest in any global Security held on its
behalf by a Depository shall have any rights under this Indenture with respect
to such global Security, and such Depository may be treated by the Company, the
Guarantors or the Trustee, and any agent of
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the Company, a Guarantor or the Trustee as the owner of such global Security for
all purposes whatsoever. None of the Company, the Guarantors, the Trustee, any
Paying Agent or the Security Registrar will have any responsibility or liability
for any aspect of the records relating to or payments made on account of
beneficial ownership interests of a global Security or for maintaining,
supervising or reviewing any records relating to such beneficial ownership
interests.
Section 3.9. Cancellation.
All Securities and Coupons surrendered for payment, redemption,
registration of transfer, exchange or conversion or for credit against any
sinking fund payment shall, if surrendered to any Person other than the Trustee,
be delivered to the Trustee, and any such Securities and Coupons, as well as
Securities and Coupons surrendered directly to the Trustee for any such purpose,
shall be cancelled promptly by the Trustee. The Company may at any time deliver
to the Trustee for cancellation any Securities previously authenticated and
delivered hereunder which the Company may have acquired in any manner
whatsoever, and all Securities so delivered shall be cancelled promptly by the
Trustee. No Securities shall be authenticated in lieu of or in exchange for any
Securities cancelled as provided in this Section, except as expressly permitted
by or pursuant to this Indenture. All cancelled Securities and Coupons held by
the Trustee shall be returned to the Company pursuant to a Company Order.
Section 3.10. Computation of Interest.
Except as otherwise provided in or pursuant to this Indenture or in any
Security, interest on the Securities shall be computed on the basis of a 360-day
year of twelve 30-day months.
Section 3.11. Exempt Offerings.
(a) If specified pursuant to Section 3.01, the provisions set forth in
this Section 3.11 shall apply with respect to the related Securities until two
years after the later of the date of original issuance of the particular
Security and the last date on which the Company, any Guarantor or any Affiliate
of the Company or any Guarantor was the owner of such Security (or any
predecessor Security) (the "Resale Restriction Termination Date").
(b) Neither the Company nor any Guarantor shall, nor shall the Company
or any Guarantor permit any of its Affiliates that are Subsidiaries to, purchase
or agree to purchase or otherwise acquire any such Securities, whether as
beneficial owner or otherwise (except as agent on behalf of and for the account
of customers in the ordinary course of business as a securities broker in
unsolicited broker's transactions) unless, immediately upon any such purchase,
such Securities are submitted to the Trustee for cancellation.
(c) Until the Resale Restriction Termination Date, each such Security
shall bear substantially the following legend (the "Legend):
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE
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SECURITIES LAWS OR ANY OTHER APPLICABLE SECURITIES LAW. NEITHER THIS
SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED,
SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED
OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS
EXEMPT FROM, OR NOT SUBJECT TO, SUCH REGISTRATION.
THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO
OFFER, SELL OR OTHERWISE TRANSFER THIS SECURITY, PRIOR TO THE DATE (THE
"RESALE RESTRICTION TERMINATION DATE") WHICH IS TWO YEARS AFTER THE
LATER OF THE ORIGINAL ISSUANCE DATE HEREOF AND THE LAST DATE ON WHICH
THE COMPANY, ANY GUARANTOR OR ANY AFFILIATE OF THE COMPANY OR ANY
GUARANTOR WAS THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF THIS
SECURITY) ONLY (A) TO THE COMPANY OR ANY GUARANTOR, (B) PURSUANT TO A
REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE
SECURITIES ACT, (C) SO LONG AS THIS SECURITY IS ELIGIBLE FOR RESALE
PURSUANT TO RULE 144A UNDER THE SECURITIES ACT ("RULE 144A"), TO A
PERSON IT REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" (AS
DEFINED IN RULE 144A) THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE
ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT
THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D) TO AN
INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE MEANING OF SUBPARAGRAPH
(a)(1), (2), (3) OR (7) OF RULE 501 UNDER THE SECURITIES ACT THAT IS
ACQUIRING THIS SECURITY FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF SUCH
AN INSTITUTIONAL ACCREDITED INVESTOR, FOR INVESTMENT PURPOSES AND NOT
WITH A VIEW TO, OR FOR OFFER OR SALE IN CONNECTION WITH, ANY
DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT OR (E) PURSUANT TO ANY
OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS UNDER THE
SECURITIES ACT, SUBJECT TO THE RIGHT OF THE TRUSTEE, THE COMPANY AND
THE GUARANTORS PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER (i) PURSUANT
TO CLAUSE (D) OR (E) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL,
CERTIFICATIONS AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM
AND (ii) PURSUANT TO CLAUSE (D) TO REQUIRE THAT THE TRANSFEROR DELIVER
TO THE TRUSTEE A LETTER FROM THE TRANSFEREE SUBSTANTIALLY IN THE FORM
OF APPENDIX A HERETO. SUCH HOLDER FURTHER AGREES THAT IT WILL DELIVER
TO EACH PERSON TO WHOM THIS SECURITY IS TRANSFERRED A NOTICE
SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.
PRIOR TO REGISTRATION, THIS SECURITY WILL BE ISSUED AND MAY BE
TRANSFERRED ONLY IN MINIMUM DENOMINATIONS OF $100,000 AND INTEGRAL
MULTIPLES OF $1,000 IN EXCESS THEREOF. ANY ATTEMPTED
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TRANSFER OF LESS THAN $100,000 SHALL BE DEEMED TO BE VOID AND OF NO
LEGAL EFFECT WHATSOEVER, ANY SUCH PURPORTED TRANSFEREE SHALL BE DEEMED
NOT TO BE THE HOLDER FOR ANY PURPOSE, INCLUDING BUT NOT LIMITED TO THE
RECEIPT OF PAYMENTS HEREON, AND SUCH PURPORTED TRANSFEREE SHALL BE
DEEMED TO HAVE NO INTEREST WHATSOEVER HEREIN.
(d) Until the Resale Restriction Termination Date, the Trustee shall
not register the resale or other transfer of a Security unless such resale or
other transfer is made in accordance with the Legend set forth in clause (c)
above.
(e) If Securities are issued upon the transfer, exchange or replacement
of Securities bearing the Legend or if a request is made to remove the Legend on
a Security, the Securities so issued shall bear the Legend or the Legend shall
not be removed, as the case may be, unless there is delivered to the Company and
the Trustee such satisfactory evidence that neither the Legend nor the resale
and other transfer restrictions set forth therein are required to ensure that
transfers thereof comply with the relevant provisions of the Securities Act of
1933, as amended (the "Securities Act") or that such Securities are not
"restricted securities" within the meaning of Rule 144 under the Securities Act.
(f) Securities and related documentation (including this Indenture) may
be amended or supplemented from time to time by the Company, without the consent
of but upon notice to the Holders of the Securities, to modify the restrictions
on and procedures for resale and other transfers of the Securities and interests
therein to reflect any change in applicable law or regulation (or the
interpretation thereof) or in practices relating to the resale or other transfer
of securities generally if the Trustee shall have received an Opinion of Counsel
to the effect that such amendment or supplement is necessary or appropriate.
Section 3.12. CUSIP Numbers.
The Company in issuing the Securities 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 Securities or as contained in any notice of a
redemption and that reliance may be placed only on the other identification
numbers printed on the Securities, 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.
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ARTICLE IV
SATISFACTION AND DISCHARGE
Section 4.1. Satisfaction and Discharge of Indenture.
Upon the direction of the Company by a Company Order, this Indenture
shall cease to be of further effect with respect to any series of Securities
specified in such Company Order and any Coupons appertaining thereto, and the
Trustee, on receipt of a Company Order, at the expense of the Company, shall
execute proper instruments acknowledging satisfaction and discharge of this
Indenture as to such series, when
(1) either
(a) all Securities of such series theretofore authenticated
and made available for delivery and all Coupons appertaining thereto
(other than (i) Coupons appertaining to Bearer Securities of such
series surrendered in exchange for Registered Securities of such series
and maturing after such exchange whose surrender is not required or has
been waived as provided in Section 3.5, (ii) Securities and Coupons of
such series which have been destroyed, lost or stolen and which have
been replaced or paid as provided in Section 3.6, (iii) Coupons
appertaining to Securities of such series called for redemption and
maturing after the relevant Redemption Date whose surrender has been
waived as provided in Section 11.7, and (iv) Securities and Coupons of
such series for whose payment money has theretofore been deposited in
trust or segregated and held in trust by the Company and thereafter
repaid to the Company or discharged from such trust, as provided in
Section 10.3) have been delivered to the Trustee for cancellation; or
(b) all Securities of such series and, in the case of (i) or
(ii) below, any Coupons appertaining thereto not theretofore delivered
to the Trustee for cancellation
(i) have become due and payable, or
(ii) will become due and payable at their Stated
Maturity within one year, or
(iii) if redeemable at the option of the Company, are
to be called for redemption within one year under arrangements
satisfactory to the Trustee for the giving of notice of
redemption by the Trustee in the name, and at the expense, of
the Company,
and the Company, in the case of (i), (ii) or (iii) above, has
deposited or caused to be deposited with the Trustee as trust
funds in trust for such purpose, money in the Currency in
which such Securities are payable in an amount sufficient to
pay and discharge the entire indebtedness on such Securities
and any Coupons appertaining thereto not theretofore delivered
to the Trustee for cancellation,
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including the principal of, any premium and interest on, and
any Additional Amounts with respect to such Securities and any
Coupons appertaining thereto, to the date of such deposit (in
the case of Securities which have become due and payable) or
to the Maturity thereof, as the case may be;
(2) the Company or the Guarantors have paid or caused to be
paid all other sums payable hereunder by the Company and the Guarantors
with respect to the Outstanding Securities of such series and any
Coupons appertaining thereto; and
(3) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel and each Guarantor has delivered
to the Trustee a Guarantor's Officers' Certificate, each stating that
all conditions precedent herein provided for relating to the
satisfaction and discharge of this Indenture as to such series have
been complied with.
Upon the direction of the Company by a Company Order, this Indenture
shall cease to be of any further effect if no series of Securities or any
Coupons appertaining thereto are currently outstanding, and the Trustee, on
receipt of a Company Order, at the expenses of the Company, shall execute proper
instruments acknowledging satisfaction and discharge of this Indenture.
In the event there are Securities of two or more series hereunder, the
Trustee shall be required to execute an instrument acknowledging satisfaction
and discharge of this Indenture only if requested to do so with respect to
Securities of such series as to which it is Trustee and if the other conditions
thereto are met.
Notwithstanding the satisfaction and discharge of this Indenture with
respect to any series of Securities, the obligations of the Company to the
Trustee under Section 6.6 and, if money shall have been deposited with the
Trustee pursuant to subclause (b) of clause (1) of this Section, the obligations
of the Company, the Guarantors and the Trustee with respect to the Securities of
such series under Sections 3.5, 3.6, 4.3, 10.2 and 10.3, with respect to the
payment of Additional Amounts, if any, with respect to such Securities as
contemplated by Section 10.4 (but only to the extent that the Additional Amounts
payable with respect to such Securities exceed the amount deposited in respect
of such Additional Amounts pursuant to Section 4.1(1)(b)), and with respect to
any rights to convert or exchange such Securities into other securities shall
survive.
Section 4.2. Defeasance and Covenant Defeasance.
(1) Unless pursuant to Section 3.1, either or both of (i)
defeasance of the Securities of or within a series under clause (2) of
this Section 4.2 shall not be applicable with respect to the Securities
of such series or (ii) covenant defeasance of the Securities of or
within a series under clause (3) of this Section 4.2 shall not be
applicable with respect to the Securities of such series, then such
provisions, together with the other provisions of this Section 4.2
(with such modifications thereto as may be specified pursuant to
Section 3.1 with respect to any Securities), shall be applicable to
such Securities and any Coupons appertaining thereto, and the Company
may at its option by
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Board Resolution, at any time, with respect to such Securities and any
Coupons appertaining thereto, elect to have Section 4.2(2) or Section
4.2(3) be applied to such Outstanding Securities and any Coupons
appertaining thereto upon compliance with the conditions set forth
below in this Section 4.2.
(2) Upon the Company's exercise of the above option applicable
to this Section 4.2(2) with respect to any Securities of or within a
series, the Company shall be deemed to have been discharged from its
obligations with respect to such Outstanding Securities and any Coupons
appertaining thereto on the date the conditions set forth in clause (4)
of this Section 4.2 are satisfied (hereinafter, "defeasance"). For this
purpose, such defeasance means that the Company shall be deemed to have
paid and discharged the entire Indebtedness represented by such
Outstanding Securities and any Coupons appertaining thereto, which
shall thereafter be deemed to be "Outstanding" only for the purposes of
clause (5) of this Section 4.2 and the other Sections of this Indenture
referred to in clauses (i) and (ii) below, and to have satisfied all of
its other obligations under such Securities and any Coupons
appertaining thereto and this Indenture insofar as such Securities and
any Coupons appertaining thereto are concerned (and the Trustee, at the
expense of the Company, shall execute proper instruments acknowledging
the same), except for the following which shall survive until otherwise
terminated or discharged hereunder: (i) the rights of Holders of such
Outstanding Securities and any Coupons appertaining thereto to receive,
solely from the trust fund described in clause (4) of this Section 4.2
and as more fully set forth in such clause, payments in respect of the
principal of (and premium, if any) and interest, if any, on, and
Additional Amounts, if any, with respect to, such Securities and any
Coupons appertaining thereto when such payments are due, and any rights
of such Holder to convert such Securities into Common Stock or exchange
such Securities for other securities, (ii) the obligations of the
Company, the Guarantor and the Trustee with respect to such Securities
under Sections 3.5, 3.6, 10.2 and 10.3 and with respect to the payment
of Additional Amounts, if any, on such Securities as contemplated by
Section 10.4 (but only to the extent that the Additional Amounts
payable with respect to such Securities exceed the amount deposited in
respect of such Additional Amounts pursuant to Section 4.2(4)(a)
below), and with respect to any rights to convert such Securities into
or exchange for other securities, (iii) the rights, powers, trusts,
duties and immunities of the Trustee hereunder and (iv) this Section
4.2. The Company may exercise its option under this Section 4.2(2)
notwithstanding the prior exercise of its option under clause (3) of
this Section 4.2 with respect to such Securities and any Coupons
appertaining thereto.
(3) Upon the Company's exercise of the option to have this
Section 4.2(3) apply with respect to any Securities of or within a
series, the Company shall be released from its obligations under
Sections 10.5 and 10.6, and, to the extent specified pursuant to
Section 3.1(19), any other covenant applicable to such Securities, with
respect to such Outstanding Securities and any Coupons appertaining
thereto, on and after the date the conditions set forth in clause (4)
of this Section 4.2 are satisfied (hereinafter, "covenant defeasance"),
and such Securities and any Coupons appertaining thereto shall
thereafter
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be deemed to be 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 any such covenant, but shall
continue to be deemed "Outstanding" for all other purposes hereunder.
For this purpose, such covenant defeasance means that, with respect to
such Outstanding Securities and any Coupons appertaining thereto, the
Company may omit to comply with, and shall have no liability in respect
of, any term, condition or limitation set forth in any such Section or
such other covenant, whether directly or indirectly, by reason of any
reference elsewhere herein to any such Section or such other covenant
or by reason of reference in any such Section or such other 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 5.1(4) or 5.1(8) or otherwise, as the case may be, but, except
as specified above, the remainder of this Indenture and such Securities
and Coupons appertaining thereto shall be unaffected thereby.
(4) The following shall be the conditions to application of
clause (2) or (3) of this Section 4.2 to any Outstanding Securities of
or within a series and any Coupons appertaining thereto:
(a) The Company shall irrevocably have deposited or caused to
be deposited with the Trustee (or another trustee satisfying the
requirements of Section 6.7 who shall agree to comply with the
provisions of this Section 4.2 applicable to it) as trust funds in
trust for the purpose of making the following payments, specifically
pledged as security for, and dedicated solely to, the benefit of the
Holders of such Securities and any Coupons appertaining thereto, (1) an
amount in Dollars or in such Foreign Currency in which such Securities
and any Coupons appertaining thereto are then specified as payable at
Stated Maturity, or (2) Government Obligations applicable to such
Securities and Coupons appertaining thereto (determined on the basis of
the Currency in which such Securities and Coupons appertaining thereto
are then specified as payable at Stated Maturity) which through the
scheduled payment of principal and interest in respect thereof in
accordance with their terms will provide, not later than one day before
the due date of any payment of principal of (and premium, if any) and
interest, if any, on such Securities and any Coupons appertaining
thereto, money in an amount, or (3) a combination thereof, in any case,
in an amount, sufficient, without consideration of any reinvestment of
such principal and interest, in the opinion of a nationally recognized
firm of independent public accountants expressed in a written
certification thereof delivered to the Trustee, to pay and discharge,
and which shall be applied by the Trustee (or other qualifying trustee)
to pay and discharge, (y) the principal of (and premium, if any) and
interest, if any, on such Outstanding Securities and any Coupons
appertaining thereto at the Stated Maturity of such principal or
installment of principal or premium or interest and (z) any mandatory
sinking fund payments or analogous payments applicable to such
Outstanding Securities and any Coupons appertaining thereto on the days
on which such payments are due and payable in accordance with the terms
of this Indenture and of such Securities and any Coupons appertaining
thereto.
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(b) Such defeasance or covenant defeasance shall not result in
a breach or violation of, or constitute a default under, this Indenture
or any other material agreement or instrument to which the Company is a
party or by which it is bound.
(c) No Event of Default or event which with notice or lapse of
time or both would become an Event of Default with respect to such
Securities and any Coupons appertaining thereto shall have occurred and
be continuing on the date of such deposit and, with respect to
defeasance only, at any time during the period ending on the 123rd day
after the date of such deposit (it being understood that this condition
shall not be deemed satisfied until the expiration of such period).
(d) In the case of an election under clause (2) of this
Section 4.2, the Company shall have delivered to the Trustee an Opinion
of Counsel stating that (i) the Company has received from the Internal
Revenue Service a letter ruling, or there has been published by the
Internal Revenue Service a Revenue Ruling, or (ii) since the date of
execution 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 shall confirm that, the Holders of such
Outstanding Securities and any Coupons appertaining thereto will not
recognize income, gain or loss for Federal income tax purposes as a
result of such 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 defeasance had not occurred.
(e) In the case of an election under clause (3) of this
Section 4.2, the Company shall have delivered to the Trustee an Opinion
of Counsel to the effect that the Holders of such Outstanding
Securities and any Coupons appertaining thereto 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.
(f) The Company shall have delivered to the Trustee an Opinion
of Counsel to the effect that, after the 123rd day after the date of
deposit, all money and Government Obligations (or other property as may
be provided pursuant to Section 3.1) (including the proceeds thereof)
deposited or caused to be deposited with the Trustee (or other
qualifying trustee) pursuant to this clause (4) to be held in trust
will not be subject to any case or proceeding (whether voluntary or
involuntary) in respect of the Company under any Federal or State
bankruptcy, insolvency, reorganization or other similar law, or any
decree or order for relief in respect of the Company issued in
connection therewith.
(g) The Company shall have delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, each stating that all
conditions precedent to the defeasance or covenant defeasance under
clause (2) or (3) of this Section 4.2 (as the case may be) have been
complied with.
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(h) Notwithstanding any other provisions of this Section
4.2(4), such defeasance or covenant defeasance shall be effected in
compliance with any additional or substitute terms, conditions or
limitations which may be imposed on the Company in connection therewith
pursuant to Section 3.1.
(5) Unless otherwise specified in or pursuant to this
Indenture or any Security, if, after a deposit referred to in Section
4.2(4)(a) has been made, (a) the Holder of a Security in respect of
which such deposit was made is entitled to, and does, elect pursuant to
Section 3.1 or the terms of such Security to receive payment in a
Currency other than that in which the deposit pursuant to Section
4.2(4)(a) has been made in respect of such Security, or (b) a
Conversion Event occurs in respect of the Foreign Currency in which the
deposit pursuant to Section 4.2(4)(a) has been made, the indebtedness
represented by such Security and any Coupons appertaining thereto shall
be deemed to have been, and will be, fully discharged and satisfied
through the payment of the principal of (and premium, if any), and
interest, if any, on, and Additional Amounts, if any, with respect to,
such Security as the same becomes due out of the proceeds yielded by
converting (from time to time as specified below in the case of any
such election) the amount or other property deposited in respect of
such Security into the Currency in which such Security becomes payable
as a result of such election or Conversion Event based on (x) in the
case of payments made pursuant to clause (a) above, the applicable
market exchange rate for such Currency in effect on the second Business
Day prior to each payment date, or (y) with respect to a Conversion
Event, the applicable market exchange rate for such Foreign Currency in
effect (as nearly as feasible) at the time of the Conversion Event.
The Company shall pay and indemnify the Trustee (or other qualifying
trustee, collectively for purposes of this Section 4.2(5) and Section 4.3, the
"Trustee") against any tax, fee or other charge, imposed on or assessed against
the Government Obligations deposited pursuant to this Section 4.2 or the
principal or 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 such
Outstanding Securities and any Coupons appertaining thereto.
Anything in this Section 4.2 to the contrary notwithstanding, the
Trustee shall deliver or pay to the Company from time to time upon Company
Request any money or Government Obligations (or other property and any proceeds
therefrom) held by it as provided in clause (4) of this Section 4.2 which, in
the opinion of a nationally recognized firm of Independent Public Accountants
expressed in a written certification thereof delivered to the Trustee, are in
excess of the amount thereof which would then be required to be deposited to
effect a defeasance or covenant defeasance, as applicable, in accordance with
this Section 4.2.
Section 4.3. Application of Trust Money.
Subject to the provisions of the last paragraph of Section 10.3, all
money and Government Obligations (or other property as may be provided pursuant
to Section 3.1)
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(including the proceeds thereof) deposited with the Trustee pursuant to Section
4.1 or 4.2 in respect of any Outstanding Securities of any series and any
Coupons appertaining thereto shall be held in trust and applied by the Trustee,
in accordance with the provisions of such Securities and any Coupons
appertaining thereto and this Indenture, to the payment, either directly or
through any Paying Agent (including the Company acting as its own Paying Agent)
as the Trustee may determine, to the Holders of such Securities and any Coupons
appertaining thereto of all sums due and to become due thereon in respect of
principal (and premium, if any) and interest and Additional Amounts, if any; but
such money and Government Obligations need not be segregated from other funds
except to the extent required by law.
ARTICLE V
REMEDIES
Section 5.1. Events of Default.
"Event of Default", wherever used herein with respect to Securities of
any series, means any one of the following events (whatever the reason for such
Event of Default and whether it shall be voluntary or involuntary or be effected
by operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body),
unless such event is specifically deleted or modified in or pursuant to the
supplemental indenture, Board Resolution or Officers' Certificate establishing
the terms of such Series pursuant to this Indenture:
(1) default in the payment of any interest on any Security of
such series, or any Additional Amounts payable with respect thereto,
when such interest becomes or such Additional Amounts become due and
payable, and continuance of such default for a period of 30 days; or
(2) default in the payment of the principal of or any premium
on any Security of such series, or any Additional Amounts payable with
respect thereto, when such principal or premium becomes or such
Additional Amounts become due and payable at their Maturity; or
(3) default in the deposit of any sinking fund payment (if
applicable) when and as due by the terms of a Security of such series;
or
(4) default in the performance, or breach, of any covenant or
warranty of the Company or any Guarantor in this Indenture or the
Securities (other than a covenant or warranty a default in the
performance or the breach of which is elsewhere in this Section
specifically dealt with or which has been expressly included in this
Indenture solely for the benefit of a series of Securities other than
such series), and continuance of such default or breach for a period of
60 days after there has been given, by registered or certified mail, to
the Company or such Guarantor, as the case may be, by the Trustee or to
the Company or such Guarantor, as the case may be, and the Trustee by
the Holders of at
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least 25% in principal amount of the Outstanding Securities of such
series, a written notice specifying such default or breach and
requiring it to be remedied and stating that such notice is a "Notice
of Default" hereunder; or
(5) if any of default (as defined in any mortgage, indenture
or instrument under which there may be issued, or by which there may be
secured or evidenced, any Indebtedness of the Company or any Restricted
Subsidiary, whether such Indebtedness now exists or shall hereafter be
created) shall happen and shall result in such Indebtedness in
principal amount in excess of the greater of $25,000,000 or 30% of the
outstanding principal amount of all Indebtedness of the Company and the
Restricted Subsidiaries becoming due and payable or being declared due
and payable prior to the date on which it would otherwise become due
and payable, and such default shall not be cured within a period of 30
days after there shall have been given, by registered or certified
mail, to the Company by the Trustee or to the Company and the Trustee
by the Holders of at least 25% in principal amount of the Outstanding
Securities of such series, a written notice specifying such default and
requiring the Company to cause such default to be cured or to cause
such Indebtedness to be discharged and stating that such notice is a
"Notice of Default" hereunder; or
(6) the Company or any Restricted Subsidiary shall fail within
60 days to pay, bond or otherwise discharge any uninsured judgment or
court order for the payment of money in excess of $25,000,000, which is
not stayed on appeal or is not otherwise being appropriately contested
in good faith; or
(7) the entry by a court having competent jurisdiction of:
(a) a decree or order for relief in respect of the Company,
any Guarantor or any Restricted Subsidiary in an involuntary proceeding
under any applicable bankruptcy, insolvency, reorganization or other
similar law and such decree or order shall remain unstayed and in
effect for a period of 60 consecutive days; or
(b) a decree or order adjudging the Company, any Guarantor or
any Restricted Subsidiary to be insolvent, or approving a petition
seeking reorganization, arrangement, adjustment or composition of the
Company, any Guarantor or any Restricted Subsidiary and such decree or
order shall remain unstayed and in effect for a period of 60
consecutive days; or
(c) a final and non-appealable order appointing a custodian,
receiver, liquidator, assignee, trustee or other similar official of
the Company, any Guarantor or any Restricted Subsidiary or of any
substantial part of the property of the Company, any Guarantor or any
Restricted Subsidiary, or ordering the winding up or liquidation of the
affairs of the Company, any Guarantor or any Restricted Subsidiary; or
(8) the commencement by the Company, any Guarantor or any
Restricted Subsidiary of a voluntary proceeding under any applicable
bankruptcy, insolvency,
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reorganization or other similar law or of a voluntary proceeding
seeking to be adjudicated insolvent or the consent by the Company, any
Guarantor or any Restricted Subsidiary to the entry of a decree or
order for relief in an involuntary proceeding under any applicable
bankruptcy, insolvency, reorganization or other similar law or to the
commencement of any insolvency proceedings against it, or the filing by
the Company, any Guarantor or any Restricted Subsidiary of a petition
or answer or consent seeking reorganization, arrangement, adjustment or
composition of the Company, any Guarantor or any Restricted Subsidiary
or relief under any applicable law, or the consent by the Company, any
Guarantor or any Restricted Subsidiary to the filing of such petition
or to the appointment of or taking possession by a custodian, receiver,
liquidator, assignee, trustee or similar official of the Company, any
Guarantor or any Restricted Subsidiary or any substantial part of the
property of the Company, any Guarantor or any Restricted Subsidiary or
the making by the Company, any Guarantor or any Restricted Subsidiary
of an assignment for the benefit of creditors, or the taking of
corporate action by the Company, any Guarantor or any Restricted
Subsidiary in furtherance of any such action; or
(9) any other Event of Default provided in or pursuant to this
Indenture with respect to Securities of such series.
Section 5.2. Acceleration of Maturity; Rescission and Annulment.
If an Event of Default with respect to Securities of any series at the
time Outstanding (other than an Event of Default specified in clause (7) or (8)
of Section 5.1) occurs and is continuing, then the Trustee or the Holders of not
less than 25% in principal amount of the Outstanding Securities of such series
may declare the principal of all the Securities of such series, or such lesser
amount as may be provided for in the Securities of such series, to be due and
payable immediately, by a notice in writing to the Company (and to the Trustee
if given by the Holders), and upon any such declaration such principal or such
lesser amount shall become immediately due and payable.
If an Event of Default specified in clause (7) or (8) of Section 5.1
occurs, all unpaid principal of and accrued interest on the Outstanding
Securities of that series (or such lesser amount as may be provided for in the
Securities of such series) shall ipso facto become and be immediately due and
payable without any declaration or other act on the part of the Trustee or any
Holder of any Security of that series.
At any time after a declaration of acceleration with respect to the
Securities of any series has been made and before a judgment or decree for
payment of the money due has been obtained by the Trustee as hereinafter in this
Article provided, the Holders of not less than a majority in principal amount of
the Outstanding Securities of such series, by written notice to the Company and
the Trustee, may rescind and annul such declaration and its consequences if
(1) the Company or any Guarantor has paid or deposited with
the Trustee a sum of money sufficient to pay
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(a) all overdue installments of any interest on and Additional
Amounts with respect to all Securities of such series and any Coupon
appertaining thereto,
(b) the principal of and any premium on any Securities of such
series which have become due otherwise than by such declaration of
acceleration and interest thereon and any Additional Amounts with
respect thereto at the rate or rates borne by or provided for in such
Securities,
(c) to the extent that payment of such interest or Additional
Amounts is lawful, interest upon overdue installments of any interest
and Additional Amounts at the rate or rates borne by or provided for in
such Securities, and
(d) all sums paid or advanced by the Trustee hereunder and the
reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel and all other amounts due the Trustee
under Section 6.6; and
(2) all Events of Default with respect to Securities of such
series, other than the non-payment of the principal of, any premium and
interest on, and any Additional Amounts with respect to Securities of
such series which shall have become due solely by such declaration of
acceleration, shall have been cured or waived as provided in Section
5.13.
No such rescission shall affect any subsequent default or impair any
right consequent thereon.
Section 5.3. Collection of Indebtedness and Suits for Enforcement by
Trustee.
The Company covenants that if
(1) default is made in the payment of any installment of
interest on or any Additional Amounts with respect to any Security or
any Coupon appertaining thereto when such interest or Additional
Amounts shall have become due and payable and such default continues
for a period of 30 days, or
(2) default is made in the payment of the principal of or any
premium on any Security or any Additional Amounts with respect thereto
at their Maturity,
the Company shall, upon demand of the Trustee, pay to the Trustee, for the
benefit of the Holders of such Securities and any Coupons appertaining thereto,
the whole amount of money then due and payable with respect to such Securities
and any Coupons appertaining thereto, with interest upon the overdue principal,
any premium and, to the extent that payment of such interest shall be legally
enforceable, upon any overdue installments of interest and Additional Amounts at
the rate or rates borne by or provided for in such Securities, and, in addition
thereto, such further amount of money as shall be sufficient to cover the costs
and expenses of collection,
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including the reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel and all other amounts due to the Trustee
under Section 6.6.
If the Company fails to pay the money it is required to pay the Trustee
pursuant to the preceding paragraph forthwith upon the demand of the Trustee,
the Trustee, in its own name and as trustee of an express trust, may institute a
judicial proceeding for the collection of the money so due and unpaid, and may
prosecute such proceeding to judgment or final decree, and may enforce the same
against the Company or any Guarantor or any other obligor upon such Securities
and any Coupons appertaining thereto and collect the monies adjudged or decreed
to be payable in the manner provided by law out of the property of the Company
or any Guarantor or any other obligor upon such Securities and any Coupons
appertaining thereto, wherever situated.
If an Event of Default with respect to Securities of any series occurs
and is continuing, the Trustee may in its discretion proceed to protect and
enforce its rights and the rights of the Holders of Securities of such series
and any Coupons appertaining thereto by such appropriate judicial proceedings as
the Trustee shall deem most effectual to protect and enforce any such rights,
whether for the specific enforcement of any covenant or agreement in this
Indenture or such Securities or in aid of the exercise of any power granted
herein or therein, or to enforce any other proper remedy.
Section 5.4. Trustee May File Proofs of Claim.
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to the Company, any Guarantor or any Restricted
Subsidiary or any other obligor upon the Securities of any series or the
property of the Company, any Guarantor or any Restricted Subsidiary or such
other obligor or their creditors, the Trustee (irrespective of whether the
principal of the Securities shall then be due and payable as therein expressed
or by declaration or otherwise and irrespective of whether the Trustee shall
have made any demand on the Company or any Guarantor for the payment of any
overdue principal, premium, interest or Additional Amounts) shall be entitled
and empowered, by intervention in such proceeding or otherwise,
(1) to file and prove a claim for the whole amount, or such
lesser amount as may be provided for in the Securities of any
applicable series, of the principal and any premium, interest and
Additional Amounts owing and unpaid in respect of the Securities and
any Coupons appertaining thereto and to file such 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 or
counsel) and of the Holders of Securities or any Coupons appertaining
thereto allowed in such judicial proceeding, and
(2) to collect and receive any monies or other property
payable or deliverable on any such claims and to distribute the same;
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and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Holder of Securities or any Coupons 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 of Securities or any Coupons, 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 6.6.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder of a Security
or any Coupon any plan of reorganization, arrangement, adjustment or composition
affecting the Securities or Coupons or the rights of any Holder thereof, or to
authorize the Trustee to vote in respect of the claim of any Holder of a
Security or any Coupon in any such proceeding.
Section 5.5. Trustee May Enforce Claims without Possession of
Securities or Coupons.
All rights of action and claims under this Indenture or any of the
Securities or Coupons may be prosecuted and enforced by the Trustee without the
possession of any of the Securities or Coupons or the production thereof in any
proceeding relating thereto, and any such proceeding instituted by the Trustee
shall be brought in its own name as trustee of an express trust, and any
recovery or judgment, after provision for the payment of the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, shall be for the ratable benefit of each and every Holder of the
Securities or Coupons in respect of which such judgment has been recovered.
Section 5.6. Application of Money Collected.
Any money collected by the Trustee pursuant to this Article shall be
applied in the following order, at the date or dates fixed by the Trustee and,
in case of the distribution of such money on account of principal, or any
premium, interest or Additional Amounts, upon presentation of the Securities or
Coupons, or both, as the case may be, and the notation thereon of the payment if
only partially paid and upon surrender thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee and any
predecessor Trustee under Section 6.6;
SECOND: To the payment of the amounts then due and unpaid upon
the Securities and any Coupons for principal and any premium, interest
and Additional Amounts in respect of which or for the benefit of which
such money has been collected, ratably, without preference or priority
of any kind, according to the aggregate amounts due and payable on such
Securities and Coupons for principal and any premium, interest and
Additional Amounts, respectively;
THIRD: The balance, if any, to the Person or Persons entitled
thereto.
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Section 5.7. Limitations on Suits.
No Holder of any Security of any series or any Coupons appertaining
thereto shall have any right to institute any proceeding, judicial or otherwise,
with respect to this Indenture, or for the appointment of a receiver or trustee,
or for any other remedy hereunder, unless
(1) such Holder has previously given written notice to the
Trustee of a continuing Event of Default with respect to the Securities
of such series;
(2) the Holders of not less than 25% in principal amount of
the Outstanding Securities of such series shall have made written
request to the Trustee to institute proceedings in respect of such
Event of Default in its own name as Trustee hereunder;
(3) such Holder or Holders have offered to the Trustee such
indemnity as is reasonably satisfactory to it against the costs,
expenses and liabilities to be incurred in compliance with such
request;
(4) the Trustee for 60 days after its receipt of such notice,
request and offer of indemnity has failed to institute any such
proceeding; and
(5) no direction inconsistent with such written request has
been given to the Trustee during such 60-day period by the Holders of a
majority in principal amount of the Outstanding Securities of such
series;
it being understood and intended that no one or more of such Holders shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture or any Security to affect, disturb or prejudice the rights of
any other such Holders or Holders of Securities of any other series, or to
obtain or to seek to obtain priority or preference over any other Holders or to
enforce any right under this Indenture, except in the manner herein provided and
for the equal and ratable benefit of all such Holders.
Section 5.8. Unconditional Right of Holders to Receive Principal and
any Premium, Interest and Additional Amounts.
Notwithstanding any other provision in this Indenture, the Holder of
any Security or Coupon shall have the right, which is absolute and
unconditional, to receive payment of the principal of, any premium and (subject
to Sections 3.5 and 3.7) interest on, and any Additional Amounts with respect to
such Security or payment of such Coupon, as the case may be, on the respective
Stated Maturity or Maturities therefor specified in such Security or Coupon (or,
in the case of redemption, on the Redemption Date or, in the case of repayment
at the option of such Holder if provided in or pursuant to this Indenture, on
the date such repayment is due) and to institute suit for the enforcement of any
such payment, and such right shall not be impaired without the consent of such
Holder.
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Section 5.9. Restoration of Rights and Remedies.
If the Trustee or any Holder of a Security or a Coupon has instituted
any proceeding to enforce any right or remedy under this Indenture and such
proceeding has been discontinued or abandoned for any reason, or has been
determined adversely to the Trustee or to such Holder, then and in every such
case the Company, the Trustee and each such Holder shall, subject to any
determination in such proceeding, be restored severally and respectively to
their former positions hereunder, and thereafter all rights and remedies of the
Trustee and each such Holder shall continue as though no such proceeding had
been instituted.
Section 5.10. Rights and Remedies Cumulative.
Except as otherwise provided with respect to the replacement or payment
of mutilated, destroyed, lost or stolen Securities or Coupons in the last
paragraph of Section 3.6, no right or remedy herein conferred upon or reserved
to the Trustee or to each and every Holder of a Security or a Coupon is intended
to be exclusive of any other right or remedy, and every right and remedy, to the
extent permitted by law, shall be cumulative and in addition to every other
right and remedy given hereunder or now or hereafter existing at law or in
equity or otherwise. The assertion or employment of any right or remedy
hereunder, or otherwise, shall not, to the extent permitted by law, prevent the
concurrent assertion or employment of any other appropriate right or remedy.
Section 5.11. Delay or Omission Not Waiver.
No delay or omission of the Trustee or of any Holder of any Security or
Coupon to exercise any right or remedy accruing upon any Event of Default shall
impair any such right or remedy or constitute a waiver of any such Event of
Default or an acquiescence therein. Every right and remedy given by this Article
or by law to the Trustee or to any Holder of a Security or a Coupon may be
exercised from time to time, and as often as may be deemed expedient, by the
Trustee or by such Holder, as the case may be.
Section 5.12. Control by Holders of Securities.
The Holders of a majority in principal amount of the Outstanding
Securities of any series shall have the right to direct the time, method and
place of conducting any proceeding for any remedy available to the Trustee or
exercising any trust or power conferred on the Trustee with respect to the
Securities of such series and any Coupons appertaining thereto, provided that
(1) such direction shall not be in conflict with any rule of
law or with this Indenture or with the Securities of such series,
(2) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction, and
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(3) such direction is not unduly prejudicial to the rights of
the other Holders of Securities of such series not joining in such
action.
Section 5.13. Waiver of Past Defaults.
The Holders of not less than a majority in principal amount of the
Outstanding Securities of any series on behalf of the Holders of all the
Securities of such series and any Coupons appertaining thereto may waive any
past default hereunder with respect to such series and its consequences, except
a default
(1) in the payment of the principal of, any premium or
interest on, or any Additional Amounts with respect to, any Security of
such series or any Coupons appertaining thereto, or
(2) in respect of a covenant or provision hereof which under
Article IX cannot be modified or amended without the consent of the
Holder of each Outstanding Security of such series affected.
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 Indenture; but no such waiver shall extend to any subsequent or
other default or impair any right consequent thereon.
Section 5.14. Waiver of Usury, Stay or Extension Laws.
Each of the Company and the Guarantors covenants that (to the extent
that it may lawfully do so) it will not at any time insist upon, or plead, or in
any manner whatsoever claim or take the benefit or advantage of, any usury, stay
or extension law wherever enacted, now or at any time hereafter in force, which
may affect the covenants or the performance of this Indenture; and each of the
Company and the Guarantors expressly waives (to the extent that it may lawfully
do so) all benefit or advantage of any such law and covenants that it will not
hinder, delay or impede the execution of any power herein granted to the
Trustee, but will suffer and permit the execution of every such power as though
no such law had been enacted.
Section 5.15. Undertaking for Costs.
All parties to this Indenture agree, and each Holder of any Security by
his acceptance thereof shall be deemed to have agreed, that any court may in its
discretion require, 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 Trustee, the filing by any party litigant in such suit of any
undertaking to pay the costs of such suit, and that such court may in its
discretion assess reasonable costs, including reasonable attorneys' fees,
against any party litigant in such suit having due regard to the merits and good
faith of the claims or defenses made by such party litigant; but the provisions
of this Section 5.15 shall not apply to any suit instituted by the Trustee, to
any suit instituted by
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any Holder, or group of Holders, holding in the aggregate more than 10% in
principal amount of Outstanding Securities of any series, or to any suit
instituted by any Holder for the enforcement of the payment of the principal of
(or premium, if any) or interest, if any, on or Additional Amounts, if any, with
respect to any Security on or after the respective Stated Maturities expressed
in such Security (or, in the case of redemption, on or after the Redemption
Date, and, in the case of repayment, on or after the date for repayment) or for
the enforcement of the right, if any, to convert or exchange any Security into
or other securities in accordance with its terms.
ARTICLE VI
THE TRUSTEE
Section 6.1. Certain Duties and Responsibilities.
Subject to the provisions hereof:
(1) the Trustee may conclusively rely and shall be fully
protected in acting or refraining from acting upon any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, coupon or other paper
or document reasonably believed by it to be genuine and to have been
signed or presented by the proper party or parties;
(2) any request or direction of the Company mentioned herein
shall be sufficiently evidenced by a Company Request or a Company Order
or of the Guarantor mentioned herein shall be sufficiently evidenced by
a Guarantor Request or Guarantor Order (in each case, other than
delivery of any Security, together with any Coupons appertaining
thereto, to the Trustee for authentication and delivery pursuant to
Section 3.3 which shall be sufficiently evidenced as provided therein)
and any resolution of the Board of Directors may be sufficiently
evidenced by a Board Resolution or by the Guarantor's Board of
Directors may be sufficiently evidenced by a Guarantor's Board
Resolution;
(3) whenever in the administration of this Indenture the
Trustee shall deem it desirable that a matter be proved or established
prior to taking, suffering or omitting any action hereunder, the
Trustee (unless other evidence shall be herein specifically prescribed)
may, in the absence of bad faith on its part, rely upon an Officers'
Certificate or, if such matter pertains to the Guarantor, a Guarantor's
Officers' Certificate;
(4) the Trustee may consult with counsel of its selection and
the advice of such counsel or any Opinion of Counsel shall be full and
complete authorization and protection in respect of any action taken,
suffered or omitted by it hereunder in good faith and in reliance
thereon;
(5) the Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by or pursuant to this
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Indenture at the request or direction of any of the Holders of
Securities of any series or any Coupons appertaining thereto pursuant
to this Indenture, unless such Holders shall have offered to the
Trustee such security or indemnity as is reasonably satisfactory to it
against the costs, expenses and liabilities which might be incurred by
it in compliance with such request or direction;
(6) 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, coupon or other paper or document, but
the Trustee, in its discretion, may but shall not be obligated to make
such further inquiry or investigation into such facts or matters as it
may see fit, and, if the Trustee shall determine to make such further
inquiry or investigation, it shall be entitled to examine, during
business hours and upon reasonable notice, the books, records and
premises of the Company and the Guarantors, personally or by agent or
attorney;
(7) the Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or
through agents or attorneys and the Trustee shall not be responsible
for any misconduct or negligence on the part of any agent or attorney
appointed with due care by it hereunder.
(8) in the event that 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 their exercise, as a prudent man would exercise or use under
the circumstances in the conduct of his own affairs;
(9) the Trustee shall not be liable for any action taken or
error of judgment made in good faith by a Responsible Officer or
Responsible Officers of the Trustee, unless it shall be proved that the
Trustee was negligent, acted in bad faith or engaged in willful
misconduct;
(10) the Trustee undertakes to perform such duties and only
such duties as are specifically set forth in or pursuant to this
Indenture, and no implied covenants or obligations shall be read into
this Indenture against the Trustee;
(11) 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; but 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 requirements of this
Indenture (but need not confirm or investigate the mathematical
calculations or other facts stated therein); and
(12) the Trustee shall not be liable with respect to any
action taken, suffered or omitted to be taken by it in good faith in
accordance with an Act of the Holders hereunder, and, to the extent not
so provided herein, with respect to any act requiring the Trustee to
exercise its own discretion, relating to the time, method and place of
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conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred upon the Trustee, under this
Indenture or any Securities, unless it shall be proved that, in
connection with any such action taken, suffered or omitted or any such
act, the Trustee was negligent, acted in bad faith or engaged in
willful misconduct.
(13) no provision of this Indenture shall require the Trustee
to expend or risk its own funds or otherwise incur any financial
liability in the performance of any of its duties hereunder, or in the
exercise of any of its rights or powers, if it shall have reasonable
grounds for believing that repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured to
it.
(14) whether or not herein expressly so provided, every
provision of this Indenture relating to the conduct or affecting the
liability of or affording protection to the Trustee shall be subject to
the provisions of this Section.
Section 6.2. Notice of Defaults.
Within 90 days after the occurrence of any default hereunder with
respect to the Securities of any series, the Trustee shall transmit by mail to
all Holders of Securities of such series entitled to receive reports pursuant to
Section 7.3(3), notice of such default hereunder actually known to a Responsible
Officer of the Trustee, unless such default shall have been cured or waived;
provided, however, that, except in the case of a default in the payment of the
principal of (or premium, if any), or interest, if any, on, or Additional
Amounts or any sinking fund or purchase fund installment with respect to, any
Security of such series, the Trustee shall be protected in withholding such
notice if and so long as the board of directors, the executive committee or a
trust committee of directors and/or Responsible Officers of the Trustee in good
faith determine that the withholding of such notice is in the best interest of
the Holders of Securities and Coupons of such series; and provided, further,
that in the case of any default of the character specified in Section 5.1(5)
with respect to Securities of such series, no such notice to Holders shall be
given until at least 30 days after the occurrence thereof. For the purpose of
this Section, the term "default" means any event which is, or after notice or
lapse of time or both would become, an Event of Default with respect to
Securities of such series.
The Trustee shall not be deemed to have knowledge or notice of any
Default or Event of Default unless a Responsible Officer of the Trustee has
actual knowledge thereof or, in the performance of its duties hereunder, should
have 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 Securities and this Indenture.
Section 6.3. Not Responsible for Recitals or Issuance of Securities.
The recitals contained herein and in the Securities, except the
Trustee's certificate of authentication, and in any Coupons shall be taken as
the statements of the Company and neither the Trustee nor any Authenticating
Agent assumes any responsibility for their correctness. The Trustee makes no
representations as to the validity or sufficiency of this Indenture or of the
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Securities or the Coupons, except that the Trustee represents that it is duly
authorized to execute and deliver this Indenture, authenticate the Securities
and perform its obligations hereunder and that the statements made by it in a
Statement of Eligibility on Form T-1 supplied to the Company are true and
accurate, subject to the qualifications set forth therein. Neither the Trustee
nor any Authenticating Agent shall be accountable for the use or application by
the Company of the Securities or the proceeds thereof.
Section 6.4. May Hold Securities.
The Trustee, any Authenticating Agent, any Paying Agent, any Security
Registrar or any other Person that may be an agent of the Trustee, the Company
or any Guarantor, in its individual or any other capacity, may become the owner
or pledgee of Securities or Coupons and, subject to Sections 6.8 and 6.12, may
otherwise deal with the Company or any Guarantor with the same rights it would
have if it were not the Trustee, Authenticating Agent, Paying Agent, Security
Registrar or such other Person.
Section 6.5. Money Held in Trust.
Except as provided in Section 4.3 and Section 10.3, money held by the
Trustee in trust hereunder need not be segregated from other funds except to the
extent required by law and shall be held uninvested. The Trustee shall be under
no liability for interest on any money received by it hereunder except as
otherwise agreed to in writing with the Company or any Guarantor.
Section 6.6. Compensation and Reimbursement.
The Company agrees:
(1) to pay to the Trustee such compensation as the Company and
the Trustee shall from time to time agree in writing for all services
rendered by the Trustee hereunder (which compensation shall not be
limited by any provision of law in regard to the compensation of a
trustee of an express trust);
(2) except as otherwise expressly provided herein, to
reimburse the Trustee upon its request for all reasonable expenses,
disbursements and advances incurred or made by the Trustee in
accordance with any provision of this Indenture or arising out of or in
connection with the acceptance or administration of the trust or trusts
hereunder (including the reasonable compensation and the expenses and
disbursements of its agents and counsel), except any such expense,
disbursement or advance as may be attributable to the Trustee's
negligence or bad faith; and
(3) to indemnify the Trustee and any predecessor Trustee and
their agents, officers, directors and employees for, and to hold them
harmless against, any loss, liability or expense including taxes (other
than taxes based upon, measured by or determined by the income of the
Trustee) incurred without negligence or bad faith on their part,
arising out of or in connection with the acceptance or administration
of the
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trust or trusts hereunder, including the costs and expenses of
defending themselves against any claim or liability in connection with
the exercise or performance of any of their powers or duties hereunder,
except to the extent that any such loss, liability or expense was due
to the Trustee's negligence or bad faith.
As security for the performance of the obligations of the Company under
this Section, the Trustee shall have a lien prior to the Securities of any
series upon all property and funds held or collected by the Trustee as such,
except funds held in trust for the payment of principal of, and premium or
interest on or any Additional Amounts with respect to Securities or any Coupons
appertaining thereto.
To the extent permitted by law, any compensation or expense incurred by
the Trustee after a default specified in or pursuant to Section 5.1 is intended
to constitute an expense of administration under any then applicable bankruptcy
or insolvency law. "Trustee" for purposes of this Section 6.6 shall include any
predecessor Trustee but the negligence or bad faith of any Trustee shall not
affect the rights of any other Trustee under this Section 6.6.
The provisions of this Section 6.6 shall survive the satisfaction and
discharge of this Indenture or the earlier resignation or removal of the Trustee
and shall apply with equal force and effect to the Trustee in its capacity as
Authenticating Agent, Paying Agent or Security Registrar.
Section 6.7. Corporate Trustee Required; Eligibility.
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, any
state thereof or the District of Columbia, that is eligible under Section
310(a)(1) of the Trust Indenture Act to act as trustee under an indenture
qualified under the Trust Indenture Act and that has a combined capital and
surplus (computed in accordance with Section 310(a)(2) of the Trust Indenture
Act) of at least $50,000,000, and that is subject to supervision or examination
by Federal or state authority. If at any time the Trustee shall cease to be
eligible in accordance with the provisions of this Section, it shall resign
immediately in the manner and with the effect hereinafter specified in this
Article.
Section 6.8. Disqualification; Conflicting Interests.
If the Trustee has or shall acquire a conflicting interest within the
meaning of the Trust Indenture Act, the Trustee shall either eliminate such
interest or resign, to the extent and in the manner provided by, and subject to
the provisions of, the Trust Indenture Act and this Indenture.
Section 6.9. Resignation and Removal; Appointment of Successor.
(1) No resignation or removal of the Trustee and no
appointment of a successor Trustee pursuant to this Article shall
become effective until the acceptance of appointment by the successor
Trustee pursuant to Section 6.10.
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(2) Subject to Section 6.9(1) above, the Trustee may resign at
any time with respect to the Securities of one or more series by giving
written notice thereof to the Company. If the instrument of acceptance
by a successor Trustee required by Section 6.10 shall not have been
delivered to the Trustee within 30 days after the giving of such notice
of resignation, the resigning Trustee may petition any court of
competent jurisdiction for the appointment of a successor Trustee with
respect to such series.
(3) The Trustee may be removed at any time with respect to the
Securities of any series by Act of the Holders of a majority in
principal amount of the Outstanding Securities of such series,
delivered to the Trustee and the Company. If the instrument of
acceptance by a successor Trustee required by Section 6.10 shall not
have been delivered to the Trustee within 30 days after the giving of
such notice of removal, the removed Trustee may petition any court of
competent jurisdiction for the appointment of a successor Trustee with
respect to such series.
(4) If at any time:
(a) the Trustee shall fail to comply with the obligations
imposed upon an indenture trustee under Section 310(b) of the Trust
Indenture Act with respect to Securities of any series after written
request therefor by the Company or any Holder of a Security of such
series who has been a bona fide Holder of a Security of such series for
at least six months, or
(b) the Trustee shall cease to be eligible under Section 6.7
and shall fail to resign after written request therefor by the Company
or any such Holder, or
(c) the Trustee shall become incapable of acting or shall be
adjudged a bankrupt or insolvent or a receiver of the Trustee or of its
property shall be appointed or any public officer shall take charge or
control of the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation,
then, in any such case, (i) the Company, by or pursuant to a Board Resolution,
may remove the Trustee with respect to all Securities or the Securities of such
series, or (ii) subject to Section 315(e) of the Trust Indenture Act, any Holder
of a Security who has been a bona fide Holder of a Security of such series for
at least six months may, on behalf of himself and all others similarly situated,
petition any court of competent jurisdiction for the removal of the Trustee with
respect to all Securities of such series and the appointment of a successor
Trustee or Trustees.
(5) If the Trustee shall resign, be removed or become
incapable of acting, or if a vacancy shall occur in the office of
Trustee for any cause, with respect to the Securities of one or more
series, the Company, by or pursuant to a Board Resolution, shall
promptly appoint a successor Trustee or Trustees with respect to the
Securities of such series (it being understood that any such successor
Trustee may be appointed with respect to the Securities of one or more
or all of such series and that at any time there shall be only one
Trustee with respect to the Securities of any particular series) and
shall comply with the
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applicable requirements of Section 6.10. If, within one year after such
resignation, removal or incapacity, or the occurrence of such vacancy,
a successor Trustee with respect to the Securities of any series shall
be appointed by Act of the Holders of a majority in principal amount of
the Outstanding Securities of such series delivered to the Company and
the retiring Trustee, the successor Trustee so appointed shall,
forthwith upon its acceptance of such appointment in accordance with
the applicable requirements of Section 6.10, become the successor
Trustee with respect to the Securities of such series and to that
extent supersede the successor Trustee appointed by the Company. If no
successor Trustee with respect to the Securities of any series shall
have been so appointed by the Company or the Holders of Securities and
accepted appointment in the manner required by Section 6.10, any Holder
of a Security who has been a bona fide Holder of a Security of such
series for at least six months may, on behalf of himself and all others
similarly situated, petition any court of competent jurisdiction for
the appointment of a successor Trustee with respect to the Securities
of such series.
(6) The Company shall give notice of each resignation and each
removal of the Trustee with respect to the Securities of any series and
each appointment of a successor Trustee with respect to the Securities
of any series by mailing written notice of such event by first-class
mail, postage prepaid, to the Holders of Registered Securities, if any,
of such series as their names and addresses appear in the Security
Register and, if Securities of such series are issued as Bearer
Securities, by publishing notice of such event once in an Authorized
Newspaper in each Place of Payment located outside the United States.
Each notice shall include the name of the successor Trustee with
respect to the Securities of such series and the address of its
Corporate Trust Office.
(7) In no event shall any retiring Trustee be liable for the
acts or omissions of any successor Trustee hereunder.
Section 6.10. Acceptance of Appointment by Successor.
(1) Upon the appointment hereunder of any successor Trustee
with respect to all Securities, such successor Trustee so appointed
shall execute, acknowledge and deliver to the Company and the retiring
Trustee an instrument accepting such appointment, and thereupon the
resignation or removal of the retiring Trustee shall become effective
and such successor Trustee, without any further act, deed or
conveyance, shall become vested with all the rights, powers, trusts and
duties hereunder of the retiring Trustee; but, on the request of the
Company or such successor Trustee, such retiring Trustee, upon payment
of its charges, shall execute and deliver an instrument transferring to
such successor Trustee all the rights, powers and trusts of the
retiring Trustee and, subject to Section 10.3, shall duly assign,
transfer and deliver to such successor Trustee all property and money
held by such retiring Trustee hereunder, subject nevertheless to its
claim, if any, provided for in Section 6.6.
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(2) Upon the appointment hereunder of any successor Trustee
with respect to the Securities of one or more (but not all) series, the
Company, the retiring Trustee and such successor Trustee shall execute
and deliver an indenture supplemental hereto wherein each successor
Trustee shall accept such appointment and which (a) shall contain such
provisions as shall be necessary or desirable to transfer and confirm
to, and to vest in, such successor Trustee all the rights, powers,
trusts and duties of the retiring Trustee with respect to the
Securities of that or those series to which the appointment of such
successor Trustee relates, (b) if the retiring Trustee is not retiring
with respect to all Securities, shall contain such provisions as shall
be deemed necessary or desirable to confirm that all the rights,
powers, trusts and duties of the retiring Trustee with respect to the
Securities of that or those series as to which the retiring Trustee is
not retiring shall continue to be vested in the retiring Trustee, and
(c) shall add to or change any of the provisions of this Indenture as
shall be necessary to provide for or facilitate the administration of
the trusts hereunder by more than one Trustee, it being understood that
nothing herein or in such supplemental indenture shall constitute such
Trustees co-trustees of the same trust, that each such Trustee shall be
trustee of a trust or trusts hereunder separate and apart from any
trust or trusts hereunder administered by any other such Trustee and
that no Trustee shall be responsible for any notice given to, or
received by, or any act or failure to act on the part of any other
Trustee hereunder, and, upon the execution and delivery of such
supplemental indenture, the resignation or removal of the retiring
Trustee shall become effective to the extent provided therein, such
retiring Trustee shall have no further responsibility for the exercise
of rights and powers or for the performance of the duties and
obligations vested in the Trustee under this Indenture with respect to
the Securities of that or those series to which the appointment of such
successor Trustee relates other than as hereinafter expressly set
forth, and such successor Trustee, without any further act, deed or
conveyance, shall become vested with all the rights, powers, trusts and
duties of the retiring Trustee with respect to the Securities of that
or those series to which the appointment of such successor Trustee
relates; but, on request of the Company or such successor Trustee, such
retiring Trustee, upon payment of its charges with respect to the
Securities of that or those series to which the appointment of such
successor Trustee relates and subject to Section 10.3 shall duly
assign, transfer and deliver to such successor Trustee, to the extent
contemplated by such supplemental indenture, the property and money
held by such retiring Trustee hereunder with respect to the Securities
of that or those series to which the appointment of such successor
Trustee relates, subject to its claim, if any, provided for in Section
6.6.
(3) Upon request of any Person appointed hereunder as a
successor Trustee, the Company and the Guarantors shall execute any and
all instruments for more fully and certainly vesting in and confirming
to such successor Trustee all such rights, powers and trusts referred
to in paragraph (1) or (2) of this Section, as the case may be.
(4) No Person shall accept its appointment hereunder as a
successor Trustee unless at the time of such acceptance such successor
Person shall be qualified and eligible under this Article.
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Section 6.11. Merger, Conversion, Consolidation or Succession to
Business.
Any Corporation into which the Trustee may be merged or converted or
with which it may be consolidated, or any Corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
Corporation succeeding to all or substantially all of the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto. In case any Securities shall have been authenticated
but not delivered by the Trustee then in office, any successor by merger,
conversion or consolidation to such authenticating Trustee may adopt such
authentication and deliver the Securities so authenticated with the same effect
as if such successor Trustee had itself authenticated such Securities.
Section 6.12. Preferential Collection of Claims against the Company.
If and when the Trustee shall be or become a creditor, directly or
indirectly, secured or unsecured, of the Company or any Guarantor (or any other
obligor upon the Securities of any series or the Coupons, if any, appertaining
thereto), the Trustee shall be subject to the provisions of Section 311 of the
Trust Indenture Act regarding the collection of claims against the Company or
such Guarantor (or any such other obligor).
Section 6.13. Appointment of Authenticating Agent.
The Trustee may appoint one or more Authenticating Agents acceptable to
the Company with respect to one or more series of Securities which shall be
authorized to act on behalf of the Trustee to authenticate Securities of that or
those series issued upon original issue, exchange, registration of transfer,
partial redemption or partial repayment or pursuant to Section 3.6, and
Securities so authenticated shall be entitled to the benefits of this Indenture
and shall be valid and obligatory for all purposes as if authenticated by the
Trustee hereunder. Wherever reference is made in this Indenture to the
authentication and delivery of Securities by the Trustee or the Trustee's
certificate of authentication, such reference shall be deemed to include
authentication and delivery on behalf of the Trustee by an Authenticating Agent
and a certificate of authentication executed on behalf of the Trustee by an
Authenticating Agent.
Each Authenticating Agent must be acceptable to the Company and, except
as provided in or pursuant to this Indenture, shall at all times be a
corporation that would be permitted by the Trust Indenture Act to act as trustee
under an indenture qualified under the Trust Indenture Act, is authorized under
applicable law and by its charter to act as an Authenticating Agent and has a
combined capital and surplus (computed in accordance with Section 310(a)(2) of
the Trust Indenture Act) of at least $50,000,000. If at any time an
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, it shall resign immediately in the manner and with
the effect specified in this Section.
Any Corporation into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any Corporation resulting
from any merger, conversion or consolidation to which such Authenticating Agent
shall be a party, or any Corporation
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succeeding to all or substantially all of the corporate agency or corporate
trust business of an Authenticating Agent, shall be the successor of such
Authenticating Agent hereunder, provided such Corporation shall be otherwise
eligible under this Section, without the execution or filing of any paper or any
further act on the part of the Trustee or the Authenticating Agent.
An Authenticating Agent may resign at any time by giving written notice
thereof to the Trustee and the Company. The Trustee may at any time terminate
the agency of an Authenticating Agent by giving written notice thereof to such
Authenticating Agent and the Company. Upon receiving such a notice of
resignation or upon such a termination, or in case at any time such
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, the Trustee may appoint a successor Authenticating
Agent which shall be acceptable to the Company and shall (i) mail written notice
of such appointment by first-class mail, postage prepaid, to all Holders of
Registered Securities, if any, of the series with respect to which such
Authenticating Agent shall serve, as their names and addresses appear in the
Security Register, and (ii) if Securities of the series are issued as Bearer
Securities, publish notice of such appointment at least once in an Authorized
Newspaper in the place where such successor Authenticating Agent has its
principal office if such office is located outside the United States. Any
successor Authenticating Agent, upon acceptance of its appointment hereunder,
shall become vested with all the rights, powers and duties of its predecessor
hereunder, with like effect as if originally named as an Authenticating Agent.
No successor Authenticating Agent shall be appointed unless eligible under the
provisions of this Section.
The Company agrees to pay each Authenticating Agent from time to time
reasonable compensation for its services under this Section. If the Trustee
makes such payments, it shall be entitled to be reimbursed for such payments,
subject to the provisions of Section 6.6.
The provisions of Sections 3.8, 6.3 and 6.4 shall be applicable to each
Authenticating Agent.
If an Authenticating Agent is appointed with respect to one or more
series of Securities pursuant to this Section, the Securities of such series may
have endorsed thereon, in addition to or in lieu of the Trustee's certificate of
authentication, an alternate certificate of authentication in substantially the
following form:
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This is one of the Securities of the series designated herein referred
to in the within-mentioned Indenture.
Dated:
THE BANK OF NEW YORK,
as Trustee
By
-----------------------
as Authenticating Agent
By
-----------------------
Authorized Signatory
If all of the Securities of any series may not be originally issued at
one time, and if the Trustee does not have an office capable of authenticating
Securities upon original issuance located in a Place of Payment where the
Company wishes to have Securities of such series authenticated upon original
issuance, the Trustee, if so requested in writing (which writing need not be
accompanied by or contained in an Officers' Certificate by the Company), shall
appoint in accordance with this Section an Authenticating Agent having an office
in a Place of Payment designated by the Company with respect to such series of
Securities.
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ARTICLE VII
HOLDERS' LISTS AND REPORTS BY TRUSTEE, THE GUARANTORS AND COMPANY
Section 7.1. Company and the Guarantors to Furnish Trustee Names and
Addresses of Holders.
The Company and the Guarantors shall furnish or cause to be furnished
to the Trustee:
(1) semi-annually with respect to Securities of each series
not later than January 15 and July 15 of the year, commencing January
15, 1999, or upon such other dates as are set forth in or pursuant to
the Board Resolution or indenture supplemental hereto authorizing such
series, a list, in each case in such form as the Trustee may reasonably
require, of the names and addresses of Holders as of the applicable
date, and
(a) at such other times as the Trustee may request in writing,
within 30 days after the receipt by the Company or a Guarantor of any
such request, a list of similar form and content as of a date not more
than 15 days prior to the time such list is furnished,
provided, however, that so long as the Trustee is the Security Registrar no such
list shall be requested to be furnished.
Section 7.2. Preservation of Information; Communications to Holders.
(1) The Trustee shall preserve, in as current a form as is
reasonably practicable, the names and addresses of Holders contained in
the most recent list furnished to the Trustee as provided in Section
7.1 and the names and addresses of Holders received by the Trustee in
its capacity as Security Registrar. The Trustee may destroy any list
furnished to it as provided in Section 7.1 upon receipt of a new list
so furnished.
(2) The rights of the Holders to communicate with other Holders
with respect to their rights under this Indenture or under the
Securities, and the corresponding rights and privileges of the Trustee,
shall be as provided by the Trust Indenture Act.
(3) Every Holder of Securities, by receiving and holding the
same, agrees with the Company, the Guarantors and the Trustee that
neither the Company, any Guarantor nor the Trustee nor any agent of
either of them shall be held accountable by reason of any disclosure of
information as to names and addresses of Holders made pursuant to the
Trust Indenture Act.
Section 7.3. Reports by Trustee.
(1) Within 60 days after September 15 of each year commencing
with the first September 15 following the first issuance of Securities
pursuant to Section 3.1, if
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required by Section 313(a) of the Trust Indenture Act, the Trustee
shall transmit, pursuant to Section 313(c) of the Trust Indenture Act,
a brief report dated as of such September 15 with respect to any of the
events specified in said Section 313(a) which may have occurred since
the later of the immediately preceding September 15 and the date of
this Indenture.
(2) The Trustee shall transmit the reports required by Section
313(a) of the Trust Indenture Act at the times specified therein.
(3) Reports pursuant to this Section shall be transmitted in
the manner and to the Persons required by Sections 313(c) and 313(d) of
the Trust Indenture Act.
Section 7.4. Reports by Company and the Guarantors.
The Company and the Guarantors, pursuant to Section 314(a) of the Trust
Indenture Act, shall:
(1) file with the Trustee, within 15 days after the Company or
any Guarantor, as the case may be, is required to file the same with
the Commission, copies of the annual reports and of the information,
documents and other reports (or copies of such portions of any of the
foregoing as the Commission may from time to time by rules and
regulations prescribe) which the Company or such Guarantor, as the case
may be, may be required to file with the Commission pursuant to Section
13 or Section 15(d) of the Securities Exchange Act of 1934, as amended;
or, if the Company or any Guarantor, as the case may be, is not
required to file information, documents or reports pursuant to either
of said Sections, then it shall file with the Trustee and the
Commission, in accordance with rules and regulations prescribed from
time to time by the Commission, such of the supplementary and periodic
information, documents and reports which may be required pursuant to
Section 13 of the Securities Exchange Act of 1934, as amended, in
respect of a security listed and registered on a national securities
exchange as may be prescribed from time to time in such rules and
regulations;
(2) file with the Trustee and the Commission, in accordance
with rules and regulations prescribed from time to time by the
Commission, such additional information, documents and reports with
respect to compliance by the Company or any Guarantor, as the case may
be, with the conditions and covenants of this Indenture as may be
required from time to time by such rules and regulations; and
(3) transmit within 30 days after the filing thereof with the
Trustee, in the manner and to the extent provided in Section 313(c) of
the Trust Indenture Act, such summaries of any information, documents
and reports required to be filed by the Company or any Guarantor
pursuant to paragraphs (1) and (2) of this Section as may be required
by rules and regulations prescribed from time to time by the
Commission.
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Delivery of such reports, information and documents to the Trustee is
for informational purposes only and the Trustee's receipt of such shall not
constitute constructive notice of any information contained therein or
determinable from 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).
ARTICLE VIII
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
Section 8.1. Company May Consolidate, Etc., Only on Certain Terms.
The Company shall not consolidate with or merge into any other Person
(whether or not affiliated with the Company), or convey, transfer or lease its
properties and assets as an entirety or substantially as an entirety to any
other Person (whether or not affiliated with the Company), and the Company shall
not permit any other Person (whether or not affiliated with the Company) to
consolidate with or merge into the Company or convey, transfer or lease its
properties and assets as an entirety or substantially as an entirety to the
Company; unless:
(1) in case the Company shall consolidate with or merge into
another Person or convey, transfer or lease its properties and assets
as an entirety or substantially as an entirety to any Person, the
Person formed by such consolidation or into which the Company is merged
or the Person which acquires by conveyance or transfer, or which
leases, the properties and assets of the Company as an entirety or
substantially as an entirety shall be a Corporation organized and
existing under the laws of the United States of America, any state
thereof or the District of Columbia and shall expressly assume, by an
indenture (or indentures, if at such time there is more than one
Trustee) supplemental hereto, executed by the successor Person and the
Guarantors and delivered to the Trustee the due and punctual payment of
the principal of, any premium and interest on and any Additional
Amounts with respect to all the Securities and the performance of every
obligation in this Indenture and the Outstanding Securities on the part
of the Company to be performed or observed and shall provide for
conversion or exchange rights in accordance with the provisions of the
Securities of any series that are convertible or exchangeable into
other securities;
(2) immediately after giving effect to such transaction and
treating any indebtedness which becomes an obligation of the Company,
any Guarantor or a Subsidiary as a result of such transaction as having
been incurred by the Company, such Guarantor or such Subsidiary at the
time of such transaction, no Event of Default or event which, after
notice or lapse of time, or both, would become an Event of Default,
shall have occurred and be continuing; and
(3) each of the Company and the successor Person has delivered
to the Trustee an Officers' Certificate and an Opinion of Counsel, each
stating that such consolidation, merger, conveyance, transfer or lease
and the required supplemental indenture comply
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with this Article and that all conditions precedent herein provided for
relating to such transaction have been complied with.
Section 8.2. Successor Person Substituted for Company.
Upon any consolidation by the Company with or merger of the Company
into any other Person or any conveyance, transfer or lease of the properties and
assets of the Company substantially as an entirety to any Person in accordance
with Section 8.1, the successor Person formed by such consolidation or into
which the Company is merged or to which such conveyance, transfer or lease is
made shall succeed to, and be substituted for, 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; and thereafter, except in
the case of a lease, the predecessor Person shall be released from all
obligations and covenants under this Indenture, the Securities and the Coupons.
Section 8.3. Guarantor May Consolidate, Etc., Only on Certain Terms.
A Guarantor shall not consolidate with or merge into any other Person
(whether or not affiliated with such Guarantor), or convey, transfer or lease
its properties and assets as an entirety or substantially as an entirety to any
other Person (whether or not affiliated with such Guarantor), and a Guarantor
shall not permit any other Person (whether or not affiliated with such
Guarantor) to consolidate with or merge into such Guarantor or convey, transfer
or lease its properties and assets as an entirety or substantially as an
entirety to such Guarantor; unless:
(1) in case the Guarantor shall consolidate with or merge into
another Person or convey, transfer or lease its properties and assets
as an entirety or substantially as an entirety to any Person, the
Person formed by such consolidation or into which such Guarantor is
merged or the Person which acquires by conveyance or transfer, or which
leases, the properties and assets of the Guarantor as an entirety or
substantially as an entirety shall be a Corporation organized and
existing under the laws of the United States of America, any state
thereof or the District of Columbia and shall expressly assume, by an
indenture (or indentures, if at such time there is more than one
Trustee) supplemental hereto, executed by the Company and the successor
Person and delivered to the Trustee, in form satisfactory to the
Trustee, all the obligations of such Guarantor under its Guarantee and
the performance of every other covenant of this Indenture on the part
of such Guarantor to be performed or observed;
(2) immediately after giving effect to such transaction, no
Event of Default and no event which, after notice or lapse of time or
both, would become an Event of Default, shall have occurred and be
continuing; and
(3) each of the Guarantor and the successor Person has
delivered to the Trustee a Guarantor's Officers' Certificate and an
Opinion of Counsel, each stating that such consolidation, merger,
conveyance, transfer or lease and the required supplemental
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indenture comply with this Article and that all conditions precedent
herein provided for relating to such transaction have been complied
with.
Section 8.4. Successor Person Substituted for Guarantor.
Upon any consolidation or merger or any conveyance, transfer or lease
of the properties and assets of a Guarantor as an entirety or substantially as
an entirety to any Person in accordance with Section 8.03, the successor Person
formed by such consolidation or into which the Guarantor is merged or to which
such conveyance, transfer or lease is made shall succeed to, and be substituted
for, and may exercise every right and power of, such Guarantor under this
Indenture with the same effect as if such successor Person had been named as a
Guarantor herein, and thereafter, except in the case of a lease to another
Person, the predecessor Person shall be released from all obligations and
covenants under this Indenture.
ARTICLE IX
SUPPLEMENTAL INDENTURES
Section 9.1. Supplemental Indentures Without Consent of Holders.
Without the consent of any Holders of Securities or Coupons, the
Company (when authorized by or pursuant to a Board Resolution), a Guarantor
(when authorized by such Guarantor's Board Resolution) and the Trustee, at any
time and from time to time, may enter into one or more indentures supplemental
hereto, for any of the following purposes:
(1) to evidence the succession of another Person to the
Company or a Guarantor, and the assumption by any such successor of the
covenants of the Company or such Guarantor, as the case may be,
contained herein and in the Securities; or
(2) to add to the covenants of the Company or a Guarantor for
the benefit of the Holders of all or any series of Securities (as shall
be specified in such supplemental indenture or indentures) or to
surrender any right or power herein conferred upon the Company or a
Guarantor; or
(3) to add to or change any of the provisions of this
Indenture to provide that Bearer Securities may be registrable as to
principal, to change or eliminate any restrictions on the payment of
principal of, any premium or interest on or any Additional Amounts with
respect to Securities, to permit Bearer Securities to be issued in
exchange for Registered Securities, to permit Bearer Securities to be
exchanged for Bearer Securities of other authorized denominations or to
permit or facilitate the issuance of Securities in uncertificated form,
provided any such action shall not adversely affect the interests of
the Holders of Outstanding Securities of any series or any Coupons
appertaining thereto in any material respect; or
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(4) to establish the form or terms of Securities of any series
and any Coupons appertaining thereto as permitted by Sections 2.1 and
3.1; or
(5) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to the Securities of one
or more series and to add to or change any of the provisions of this
Indenture as shall be necessary to provide for or facilitate the
administration of the trusts hereunder by more than one Trustee,
pursuant to the requirements of Section 6.10; or
(6) to cure any ambiguity or to correct or supplement any
provision herein which may be defective or inconsistent with any other
provision herein, or to make any other provisions with respect to
matters or questions arising under this Indenture which shall not
adversely affect the interests of the Holders of Securities of any
series then Outstanding or any Coupons appertaining thereto in any
material respect; or
(7) to add to, delete from or revise the conditions,
limitations and restrictions on the authorized amount, terms or
purposes of issue, authentication and delivery of Securities, as herein
set forth; or
(8) to add any additional Events of Default with respect to
all or any series of Securities (as shall be specified in such
supplemental indenture); or
(9) to supplement any of the provisions of this Indenture to
such extent as shall be necessary to permit or facilitate the
defeasance and discharge of any series of Securities pursuant to
Article IV, provided that any such action shall not adversely affect
the interests of any Holder of an Outstanding Security of such series
and any Coupons appertaining thereto or any other Outstanding Security
or Coupon in any material respect; or
(10) to secure the Securities pursuant to Section 10.5 or
otherwise; or
(11) to make provisions with respect to conversion or exchange
rights of Holders of Securities of any series; or
(12) to amend or supplement any provision contained herein or
in any supplemental indenture, provided that no such amendment or
supplement shall adversely affect the interests of the Holders of any
Securities then Outstanding.
Section 9.2. Supplemental Indentures with Consent of Holders.
With the consent of the Holders of not less than a majority in
principal amount of the Outstanding Securities of each series affected by such
supplemental indenture, by Act of said Holders delivered to the Company, the
Guarantors and the Trustee, the Company (when authorized by or pursuant to a
Company's Board Resolution), each Guarantor (when authorized by or pursuant to a
Guarantor's Board Resolutions), and the Trustee may enter into an indenture
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or indentures supplemental hereto for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of this Indenture or
of modifying in any manner the rights of the Holders of Securities of such
series under this Indenture or of the Securities of such series; provided,
however, that no such supplemental indenture, without the consent of the Holder
of each Outstanding Security affected thereby, shall
(1) change the Stated Maturity of the principal of, or any
premium or installment of interest on or any Additional Amounts or
other amounts payable with respect to, any Security, or reduce the
principal amount thereof or the rate (or modify the calculation of such
rate) of interest thereon or any Additional Amounts or other amounts
payable with respect thereto, or any premium payable upon the
redemption thereof or otherwise, or change the obligation of the
Company to pay Additional Amounts pursuant to Section 10.4 (except as
contemplated by Section 8.1(1) and permitted by Section 9.1(1)), or
reduce the amount of the principal of an Original Issue Discount
Security that would be due and payable upon a declaration of
acceleration of the Maturity thereof pursuant to Section 5.2 or the
amount thereof provable in bankruptcy pursuant to Section 5.4, change
the redemption provisions or adversely affect the right of repayment at
the option of any Holder as contemplated by Article XIII, or change the
Place of Payment, Currency in which the principal of, any premium or
interest on, or any Additional Amounts or other amounts payable with
respect to any Security is payable, or impair the right to institute
suit for the enforcement of any such payment on or after the Stated
Maturity thereof (or, in the case of redemption, on or after the
Redemption Date or, in the case of repayment at the option of the
Holder, on or after the date for repayment), or
(2) reduce the percentage in principal amount of the
Outstanding Securities of any series, the consent of whose Holders is
required for any such supplemental indenture, or the consent of whose
Holders is required for any waiver (of compliance with certain
provisions of this Indenture or certain defaults hereunder and their
consequences) provided for in this Indenture, or reduce the
requirements of Section 15.4 for quorum or voting, or
(3) modify or effect in any manner adverse to the Holders the
terms and conditions of the obligations of the Guarantors in respect of
the due and punctual payments of principal of, or any premium or
interest on or any sinking fund requirements or Additional Amounts or
other amounts payable with respect to, the Securities, or
(4) modify any of the provisions of this Section, Section 5.13
or Section 10.9, except to increase any such percentage or to provide
that certain other provisions of this Indenture cannot be modified or
waived without the consent of the Holder of each Outstanding Security
affected thereby, or
(5) make any change that adversely affects the right to
convert or exchange any Security into or for other securities in
accordance with its terms.
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A supplemental indenture which changes or eliminates any covenant or
other provision of this Indenture which shall have been included expressly and
solely for the benefit of one or more particular series of Securities, or which
modifies the rights of the Holders of Securities of such series with respect to
such covenant or other provision, shall be deemed not to affect the rights under
this Indenture of the Holders of Securities of any other series.
The Company may, but shall not be obligated to, fix a record date for
the purpose of determining the Persons entitled to consent to any indenture
supplemental hereto. If a record date is fixed, the Holders on such record date,
or their duly designated proxies, and only such Persons, shall be entitled to
consent to such supplemental indenture, whether or not such Holders remain
Holders after such record date; provided, that unless such consent shall have
become effective by virtue of the requisite percentage having been obtained
prior to the date which is 90 days after such record date, any such consent
previously given shall automatically and without further action by any Holder be
cancelled and of no further effect.
It shall not be necessary for any Act of Holders of Securities under
this Section to approve the particular form of any proposed supplemental
indenture, but it shall be sufficient if such Act shall approve the substance
thereof.
Section 9.3. Execution of Supplemental Indentures.
As a condition to executing, or accepting the additional trusts created
by, any supplemental indenture permitted by this Article or the modifications
thereby of the trust created by this Indenture, the Trustee shall be entitled to
receive, and (subject to Section 315 of the Trust Indenture Act) shall be fully
protected in relying upon, an Opinion of Counsel stating that the execution of
such supplemental indenture is authorized or permitted by this Indenture and an
Officers' Certificate and Guarantor's Officer Certificates stating that all
conditions precedent to the execution of such supplemental indenture have been
fulfilled. The Trustee may, but shall not be obligated to, enter into any such
supplemental indenture which affects the Trustee's own rights, duties or
immunities under this Indenture or otherwise.
Section 9.4. Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture under this Article,
this Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes; and every Holder
of a Security theretofore or thereafter authenticated and delivered hereunder
and of any Coupon appertaining thereto shall be bound thereby.
Section 9.5. Reference in Securities to Supplemental Indentures.
Securities of any series authenticated and delivered after the
execution of any supplemental indenture pursuant to this Article may, and shall
if required by the Trustee, bear a notation in form approved by the Trustee as
to any matter provided for in such supplemental indenture. If the Company shall
so determine, new Securities of any series so modified as to conform, in the
opinion of the Trustee and the Company, to any such supplemental indenture
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may be prepared and executed by the Company and authenticated and delivered by
the Trustee in exchange for Outstanding Securities of such series.
Section 9.6. Notice of Supplemental Indenture.
Promptly after the execution by the Company, the Guarantors and the
Trustee of any supplemental indenture pursuant to Section 9.2, the Company shall
transmit to the Holders of Outstanding Securities of any series affected thereby
a notice setting forth the substance of such supplemental indenture.
ARTICLE X
COVENANTS
Section 10.1. Payment of Principal, any Premium, Interest and
Additional Amounts.
The Company covenants and agrees for the benefit of the Holders of the
Securities of each series that it will duly and punctually pay the principal of,
any premium and interest on and any Additional Amounts and other amounts payable
with respect to the Securities of such series in accordance with the terms
thereof, any Coupons appertaining thereto and this Indenture. An installment of
principal, premium, if any, or interest shall be considered paid on the date due
if the Trustee or Paying Agent (other than the Company and the Guarantors) holds
on that date money designated for and sufficient to pay such installment. Any
interest due on any Bearer Security on or before the Maturity thereof, and any
Additional Amounts payable with respect to such interest, shall be payable only
upon presentation and surrender of the Coupons appertaining thereto for such
interest as they severally mature.
Section 10.2. Maintenance of Office or Agency.
The Company or a Guarantor shall maintain in each Place of Payment for
any series of Securities an Office or Agency where Securities of such series
(but not Bearer Securities, except as otherwise provided below, unless such
Place of Payment is located outside the United States) may be presented or
surrendered for payment, where Securities of such series may be surrendered for
registration of transfer or exchange, where Securities of such series that are
convertible or exchangeable may be surrendered for conversion or exchange, and
where notices and demands to or upon the Company or a Guarantor in respect of
the Securities of such series relating thereto and this Indenture may be served.
If Securities of a series are issuable as Bearer Securities, the Company or a
Guarantor shall maintain, subject to any laws or regulations applicable thereto,
an Office or Agency in a Place of Payment for such series which is located
outside the United States where Securities of such series and any Coupons
appertaining thereto may be presented and surrendered for payment; provided,
however, that if the Securities of such series are listed on The Stock Exchange
of the United Kingdom and the Republic of Ireland or the Luxembourg Stock
Exchange or any other stock exchange located outside the United States and such
stock exchange shall so require, the Company or a Guarantor shall maintain a
Paying Agent in London, Luxembourg or any other required city located outside
the United States, as
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the case may be, so long as the Securities of such series are listed on such
exchange. The Company or a Guarantor will 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 or the Guarantors 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, except that Bearer
Securities of such series and any Coupons appertaining thereto may be presented
and surrendered for payment at the place specified for the purpose with respect
to such Securities as provided in or pursuant to this Indenture, and the Company
and the Guarantors each hereby appoints the Trustee as its agent to receive all
such presentations, surrenders, notices and demands.
Except as otherwise provided in or pursuant to this Indenture, no
payment of principal, premium, interest or Additional Amounts with respect to
Bearer Securities shall be made at any Office or Agency in the United States or
by check mailed to any address in the United States or by transfer to an account
maintained with a bank located in the United States; provided, however, if
amounts owing with respect to any Bearer Securities shall be payable in Dollars,
payment of principal of, any premium or interest on and any Additional Amounts
with respect to any such Security may be made at the Corporate Trust Office of
the Trustee or any Office or Agency designated by the Company in the Borough of
Manhattan, The City of New York, if (but only if) payment of the full amount of
such principal, premium, interest or Additional Amounts at all offices outside
the United States maintained for such purpose by the Company in accordance with
this Indenture is illegal or effectively precluded by exchange controls or other
similar restrictions.
The Company or a Guarantor may also from time to time designate one or
more other Offices or Agencies where the Securities of one or more series 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 or the Guarantors of its
obligation to maintain an Office or Agency in each Place of Payment for
Securities of any series for such purposes. The Company or a Guarantor 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. Unless
otherwise provided in or pursuant to this Indenture, the Company and the
Guarantors each hereby designates as the Place of Payment for each series of
Securities the Borough of Manhattan, The City of New York, and initially
appoints the Corporate Trust Office of the Trustee as the Office or Agency of
the Company and the Guarantors, as the case may be, in the Borough of Manhattan,
The City of New York for such purpose. The Company or a Guarantor, as the case
may be, may subsequently appoint a different Office or Agency in the Borough of
Manhattan, The City of New York for the Securities of any series.
Unless otherwise specified with respect to any Securities pursuant to
Section 3.1, if and so long as the Securities of any series (i) are denominated
in a Foreign Currency or (ii) may be payable in a Foreign Currency, or so long
as it is required under any other provision of this
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Indenture, then the Company will maintain with respect to each such series of
Securities, or as so required, at least one exchange rate agent.
Section 10.3. Money for Securities Payments to Be Held in Trust.
If the Company shall at any time act as its own Paying Agent with
respect to any series of Securities, it shall, on or before each due date of the
principal of, any premium or interest on or Additional Amounts or other amounts
payable with respect to any of the Securities of such series, segregate and hold
in trust for the benefit of the Persons entitled thereto a sum in the currency
or currencies, currency unit or units or composite currency or currencies in
which the Securities of such series are payable (except as otherwise specified
pursuant to Section 3.1 for the Securities of such series) sufficient to pay the
principal or any premium, interest or Additional Amounts or other amounts so
becoming due until such sums shall be paid to such Persons or otherwise disposed
of as herein provided, and shall promptly notify the Trustee of its action or
failure so to act.
Whenever the Company shall have one or more Paying Agents for any
series of Securities, it shall, on or prior to each due date of the principal
of, any premium or interest on or any Additional Amounts or other amounts
payable with respect to any Securities of such series, deposit with any Paying
Agent a sum (in the currency or currencies, currency unit or units or composite
currency or currencies described in the preceding paragraph) sufficient to pay
the principal or any premium, interest or Additional Amounts or other amounts so
becoming due, such sum to be held in trust for the benefit of the Persons
entitled thereto, and (unless such Paying Agent is the Trustee) the Company will
promptly notify the Trustee of its action or failure so to act.
The Company shall cause each Paying Agent for any series of Securities
other than the Trustee to execute and deliver to the Trustee an instrument in
which such Paying Agent shall agree with the Trustee, subject to the provisions
of this Section, that such Paying Agent shall:
(1) hold all sums held by it for the payment of the principal
of, any premium or interest on or any Additional Amounts or other
amounts payable with respect to Securities of such series in trust for
the benefit of the Persons entitled thereto until such sums shall be
paid to such Persons or otherwise disposed of as provided in or
pursuant to this Indenture;
(2) give the Trustee notice of any default by the Company (or
any other obligor upon the Securities of such series) in the making of
any payment of principal, any premium or interest on or any Additional
Amounts or other amounts payable with respect to the Securities of such
series; and
(3) at any time during the continuance of any such default,
upon the written request of the Trustee, forthwith pay to the Trustee
all sums so held in trust by such Paying Agent.
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The Company or the Guarantor may at any time, for the purpose of
obtaining the satisfaction and discharge of this Indenture or for any other
purpose, pay, or by Company Order or the Guarantor Order direct any Paying Agent
to pay, to the Trustee all sums held in trust by the Company or such Paying
Agent, such sums to be held by the Trustee upon the same terms as those upon
which such sums were held by the Company or such Paying Agent; and, upon such
payment by any Paying Agent to the Trustee, such Paying Agent shall be released
from all further liability with respect to such sums.
Except as otherwise provided herein or pursuant hereto, 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, any premium or interest on or any
Additional Amounts or other amounts payable with respect to any Security of any
series or any Coupon appertaining thereto and remaining unclaimed for two years
after such principal or any such premium or interest or any such Additional
Amounts shall have become due and payable shall be paid to the Company on
Company Request (or if deposited by a Guarantor, paid to such Guarantor on
Guarantor Request), or (if then held by the Company or a Guarantor) shall be
discharged from such trust; and the Holder of such Security or any Coupon
appertaining thereto shall thereafter, as an unsecured general creditor, look
only to the Company and the Guarantors 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, may at the expense of the Company cause to be published
once, in an Authorized Newspaper in each Place of Payment for such series or to
be mailed to Holders of Registered Securities of such series, or both, 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 publication or
mailing nor shall it be later than two years after such principal and any
premium or interest or Additional Amounts shall have become due and payable, any
unclaimed balance of such money then remaining will be repaid to the Company or
the Guarantor, as the case may be.
Section 10.4. Additional Amounts.
If any Securities of a series provide for the payment of Additional
Amounts, the Company and the Guarantor agrees to pay to the Holder of any such
Security or any Coupon appertaining thereto Additional Amounts as provided in or
pursuant to this Indenture or such Securities. Whenever in this Indenture there
is mentioned, in any context, the payment of the principal of or any premium or
interest on, or in respect of, any Security of any series or any Coupon or the
net proceeds received on the sale or exchange of any Security of any series,
such mention shall be deemed to include mention of the payment of Additional
Amounts provided by the terms of such series established hereby or pursuant
hereto to the extent that, in such context, Additional Amounts are, were or
would be payable in respect thereof pursuant to such terms, and express mention
of the payment of Additional Amounts (if applicable) in any provision hereof
shall not be construed as excluding the payment of Additional Amounts in those
provisions hereof where such express mention is not made.
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Except as otherwise provided in or pursuant to this Indenture or the
Securities of the applicable series, if the Securities of a series provide for
the payment of Additional Amounts, at least 10 days prior to the first Interest
Payment Date with respect to such series of Securities (or if the Securities of
such series shall not bear interest prior to Maturity, the first day on which a
payment of principal is made), and at least 10 days prior to each date of
payment of principal or interest if there has been any change with respect to
the matters set forth in the below-mentioned Officers' Certificate, the Company
or the Guarantor, as the case may be, shall furnish to the Trustee and the
principal Paying Agent or Paying Agents, if other than the Trustee, an Officers'
Certificate instructing the Trustee and such Paying Agent or Paying Agents
whether such payment of principal of and premium, if any, or interest on the
Securities of such series shall be made to Holders of Securities of such series
or the Coupons appertaining thereto who are United States Aliens without
withholding for or on account of any tax, assessment or other governmental
charge described in the Securities of such series. If any such withholding shall
be required, then such Officers' Certificate shall specify by country the
amount, if any, required to be withheld on such payments to such Holders of
Securities or Coupons, and the Company and the Guarantor agree to pay to the
Trustee or such Paying Agent the Additional Amounts required by the terms of
such Securities. The Company and the Guarantor covenants to indemnify the
Trustee and any Paying Agent for, and to hold them harmless against, any loss,
liability or expense reasonably incurred without negligence or bad faith on
their part arising out of or in connection with actions taken or omitted by any
of them in reliance on any Officers' Certificate furnished pursuant to this
Section.
Section 10.5. Limitation on Liens.
The Company will not, and will not permit any Restricted Subsidiary to,
create, incur or assume any Lien (other than Permitted Liens) on Restricted
Property to secure the payment of Indebtedness of the Company or any Restricted
Subsidiary if, immediately after the creation, incurrence or assumption of such
Lien, the aggregate outstanding principal amount of all Indebtedness of the
Company and the Restricted Subsidiaries that is secured by Liens (other than
Permitted Liens) on Restricted Property would exceed the greater of (i) $30
million or (ii) 15% of the aggregate outstanding principal amount of all
Indebtedness of the Company and the Restricted Subsidiaries (whether or not so
secured), unless effective provision is made whereby the Securities (together
with, if the Company shall so determine, any other Indebtedness ranking equally
with the Securities, whether then existing or thereafter created) are secured
equally and ratably with (or prior to) such Indebtedness (but only for so long
as such Indebtedness is so secured). The foregoing limitation does not apply to
(i) Liens existing on the Closing Date; (ii) Liens granted after the Closing
Date on any assets or Capital Stock of the Company or its Restricted
Subsidiaries created in favor of the Holders; (iii) Liens with respect to the
assets of a Restricted Subsidiary granted by such Restricted Subsidiary to the
Company or another Restricted Subsidiary to secure Indebtedness owing to the
Company or such other Restricted Subsidiary; (iv) Liens securing Indebtedness
which is incurred to refinance secured Indebtedness which is permitted to be
incurred under Section 10.6; provided that such Liens do not extend to or cover
any property or assets of the Company or any Restricted Subsidiary other than
the
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property or assets securing the Indebtedness being refinanced; (v) Liens
securing Indebtedness permitted under Section 10.6; or (vii) Permitted Liens.
Section 10.6. Limitation on Indebtedness of Restricted Subsidiaries.
The Company will not permit any Restricted Subsidiary to incur any
Indebtedness if, immediately after the incurrence or assumption of such
Indebtedness, the aggregate outstanding principal amount of all Indebtedness of
the Restricted Subsidiaries would exceed the greater of (i) $30 million or (ii)
15% of the aggregate outstanding principal amount of all Indebtedness of the
Company and the Restricted Subsidiaries; provided that, in any event, a
Restricted Subsidiary may incur Indebtedness to extend, renew or replace
Indebtedness of such Restricted Subsidiary to the extent that the principal
amount of the Indebtedness so incurred does not exceed the principal amount of
the Indebtedness extended, renewed or replaced thereby immediately prior to such
extension, renewal or replacement plus any premium, accrued and unpaid interest
or capitalized interest payable thereon.
Section 10.7. Designation of Subsidiaries.
The Company may designate a Restricted Subsidiary as an Unrestricted
Subsidiary or designate an Unrestricted Subsidiary as a Restricted Subsidiary at
any time, provided that (i) immediately after giving effect to such designation,
the Leverage Ratio of the Restricted Group is not greater than 7:1 and the
Company and the Restricted Subsidiaries are in compliance with Sections 10.5 and
10.6, and (ii) an Officers' Certificate with respect to such designation is
delivered to the Trustee within 75 days after the end of the fiscal quarter of
the Company in which such designation is made (or, in the case of a designation
made during the last fiscal quarter of the Company's fiscal year, within 120
days after the end of such fiscal year), which Officers' Certificate shall state
the effective date of such designation.
Section 10.8. Corporate Existence.
Subject to Article VIII, the Company and the Guarantor shall do or
cause to be done all things necessary to preserve and keep in full force and
effect their respective corporate existences and that of each Restricted
Subsidiary and their respective rights (charter and statutory) and franchises;
provided, however, that the foregoing shall not obligate the Company, any
Guarantor or any Restricted Subsidiary to preserve any such right or franchise
if the Company or such Guarantor, as the case may be, or any Restricted
Subsidiary shall determine that the preservation thereof is no longer desirable
in the conduct of its business or the business of such Subsidiary and that the
loss thereof is not disadvantageous in any material respect to any Holder.
Section 10.9. Waiver of Certain Covenants.
The Company or the Guarantors, as the case may be, may omit in any
particular instance to comply with any term, provision or condition set forth in
Sections 10.5 or 10.6 with respect to the Securities of any series if before the
time for such compliance the Holders of at least a
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majority in principal amount of the Outstanding Securities of such series, by
Act of such Holders, either shall waive such compliance in such instance or
generally shall have waived compliance with such term, provision or condition,
but no such waiver shall extend to or affect such term, provision or condition
except to the extent so expressly waived, and, until such waiver shall become
effective, the obligations of the Company and the Guarantors and the duties of
the Trustee in respect of any such term, provision or condition shall remain in
full force and effect.
Section 10.10. Company Statement as to Compliance; Notice of Certain
Defaults.
(1) The Company shall deliver to the Trustee, within 120 days
after the end of each fiscal year, a written statement (which need not
be contained in or accompanied by an Officers' Certificate) signed by
the principal executive officer, the principal financial officer or the
principal accounting officer of the Company, stating that:
(a) a review of the activities of the Company during such year
and of its performance under this Indenture has been made under his or
her supervision, and
(b) to the best of his or her knowledge, based on such review,
(i) the Company has complied with all the conditions and covenants
imposed on it under this Indenture throughout such year, or, if there
has been a default in the fulfillment of any such condition or
covenant, specifying each such default known to him or her and the
nature and status thereof, and (ii) no event has occurred and is
continuing which is, or after notice or lapse of time or both would
become, an Event of Default, or, if such an event has occurred and is
continuing, specifying each such event known to him and the nature and
status thereof.
(2) The Company shall deliver to the Trustee, within five days
after the occurrence thereof, written notice of any Event of Default or
any event which after notice or lapse of time or both would become an
Event of Default pursuant to clause (4) of Section 5.1.
(3) The Trustee shall have no duty to monitor the Company's
compliance with the covenants contained in this Article X other than as
specifically set forth in this Section 10.8.
Section 10.11. Guarantor's Statement as to Compliance; Notice of
Certain Defaults.
(1) Each Guarantor shall deliver to the Trustee, within 120
days after the end of each fiscal year, a written statement (which need
not be contained in or accompanied by a Guarantor's Officers'
Certificate) signed by the principal executive officer, the principal
financial officer or the principal accounting officer of such
Guarantor, stating that
(a) a review of the activities of such Guarantor during such
year and of performance under this Indenture has been made under his or
her supervision, and
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(b) to the best of his or her knowledge, based on such review,
(i) such Guarantor has complied with conditions and covenants imposed
on it under this Indenture throughout such year, or, if there has been
a default in the fulfillment of any such condition or covenant,
specifying each such default known to him or her and the nature and
status thereof, and (ii) no event has occurred and is continuing which
constitutes, or which after notice or lapse of time or both would
become, and Event of Default, or, if such an event has occurred and is
continuing, specifying each such event known to him and the nature and
status thereof.
(2) Each Guarantor shall deliver to the Trustee, within five
days after the occurrence thereof, written notice of any event which
after notice or lapse of time or both would become an Event of Default
pursuant to clause (4) of Section 5.1.
Section 10.12. Subsequent Guarantor.
The Company shall cause each Subsidiary that guarantees amounts payable
under a Credit Agreement to, for so long as such Subsidiary is obligated to
guarantee the Company's indebtedness pursuant to such Credit Agreement, fully
and unconditionally guarantee the due and punctual payment of the principal of,
interest on and any other amounts payable under the Securities, when and if the
same shall become due and payable, whether at the Stated Maturity, by
declaration of acceleration, upon redemption, repurchase or repayment or
otherwise, by execution of an indenture supplemental hereto that adds such
Subsidiary as a Subsequent Guarantor.
Section 10.13. Calculation of Original Issue Discount.
The Company shall file with the Trustee promptly at the end of each
calendar year (i) a written notice specifying the amount, if any, of original
issue discount (including daily rates and accrual periods) accrued on
Outstanding Securities as of the end of such year and (ii) such other specific
information relating to such original issue discount as may then be relevant
under the Internal Revenue Code of 1986, as amended from time to time.
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ARTICLE XI
REDEMPTION OF SECURITIES
Section 11.1. Applicability of Article.
Redemption of Securities of any series at the option of the Company as
permitted or required by the terms of such Securities shall be made in
accordance with the terms of such Securities and (except as otherwise provided
herein or pursuant hereto) this Article.
Section 11.2. Election to Redeem; Notice to Trustee.
The election of the Company to redeem any Securities shall be evidenced
by or pursuant to a Board Resolution. In case of any redemption at the election
of the Company of (1) less than all of the Securities of any series or (2) all
of the Securities of any series, with the same issue date, interest rate or
formula, Stated Maturity and other terms, the Company shall, at least 60 days
prior to the Redemption Date fixed by the Company (unless a shorter notice shall
be satisfactory to the Trustee), notify the Trustee of such Redemption Date and
of the principal amount of Securities of such series to be redeemed.
Section 11.3. Selection by Trustee of Securities to be Redeemed.
If less than all of the Securities of any series with the same issue
date, interest rate or formula, Stated Maturity and other terms are to be
redeemed, the particular Securities to be redeemed shall be selected not more
than 60 days prior to the Redemption Date by the Trustee from the Outstanding
Securities of such series not previously called for redemption, by such method
as the Trustee shall deem fair and appropriate and which may provide for the
selection for redemption of portions of the principal amount of Registered
Securities of such series; provided, however, that no such partial redemption
shall reduce the portion of the principal amount of a Registered Security of
such series not redeemed to less than the minimum denomination for a Security of
such series established herein or pursuant hereto.
The Trustee shall promptly notify the Company and the Security
Registrar (if other than itself) in writing of the Securities selected for
redemption and, in the case of any Securities selected for partial redemption,
the principal amount thereof to be redeemed.
For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to the redemption of Securities shall relate,
in the case of any Securities redeemed or to be redeemed only in part, to the
portion of the principal of such Securities which has been or is to be redeemed.
Unless otherwise specified in or pursuant to this Indenture or the
Securities of any series, if any Security selected for partial redemption is
converted into Common Stock or exchanged for other securities in part before
termination of the conversion or exchange right with respect to the portion of
the Security so selected, the converted portion of such Security shall be deemed
(so far
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as may be) to be the portion selected for redemption. Securities which have been
converted or exchanged during a selection of Securities to be redeemed shall be
treated by the Trustee as Outstanding for the purpose of such selection.
Section 11.4. Notice of Redemption.
Notice of redemption shall be given in the manner provided in Section
1.6, not less than 30 nor more than 60 days prior to the Redemption Date, unless
a shorter period is specified in the Securities to be redeemed, to the Holders
of Securities to be redeemed. Failure to give notice by mailing in the manner
herein provided to the Holder of any Registered Securities designated for
redemption as a whole or in part, or any defect in the notice to any such
Holder, shall not affect the validity of the proceedings for the redemption of
any other Securities or portion thereof.
Any notice that is mailed to the Holder of any Registered Securities in
the manner herein provided shall be conclusively presumed to have been duly
given, whether or not such Holder receives the notice.
All notices of redemption shall state:
(1) the Redemption Date,
(2) the Redemption Price,
(3) if less than all Outstanding Securities of any series are
to be redeemed, the identification (and, in the case of partial
redemption, the principal amount) of the particular Security or
Securities to be redeemed,
(4) in case any Security is to be redeemed in part only, the
notice which relates to such Security shall state that on and after the
Redemption Date, upon surrender of such Security, the Holder of such
Security will receive, without charge, a new Security or Securities of
authorized denominations for the principal amount thereof remaining
unredeemed,
(5) that, on the Redemption Date, the Redemption Price shall
become due and payable upon each such Security or portion thereof to be
redeemed, and, if applicable, that interest thereon shall cease to
accrue on and after said date,
(6) the place or places where such Securities, together (in
the case of Bearer Securities) with all Coupons appertaining thereto,
if any, maturing after the Redemption Date, are to be surrendered for
payment of the Redemption Price and any accrued interest and Additional
Amounts pertaining thereto,
(7) that the redemption is for a sinking fund, if such is the
case,
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(8) that, unless otherwise specified in such notice, Bearer
Securities of any series, if any, surrendered for redemption must be
accompanied by all Coupons maturing subsequent to the date fixed for
redemption or the amount of any such missing Coupon or Coupons will be
deducted from the Redemption Price, unless security or indemnity
satisfactory to the Company, the Trustee and any Paying Agent is
furnished,
(9) if Bearer Securities of any series are to be redeemed and
no Registered Securities of such series are to be redeemed, and if such
Bearer Securities may be exchanged for Registered Securities not
subject to redemption on the Redemption Date pursuant to Section 3.5 or
otherwise, the last date, as determined by the Company, on which such
exchanges may be made,
(10) in the case of Securities of any series that are
convertible into Common Stock or exchangeable for other securities, the
conversion or exchange price or rate, the date or dates on which the
right to convert or exchange the principal of the Securities of such
series to be redeemed will commence or terminate and the place or
places where such Securities may be surrendered for conversion or
exchange, and
(11) the CUSIP number or the Euroclear or the Cedel reference
numbers of such Securities, if any (or any other numbers used by a
Depository to identify such Securities).
A notice of redemption published as contemplated by Section 1.6 need
not identify particular Registered Securities to be redeemed.
Notice of redemption of Securities to be redeemed at the election of
the Company shall be given by the Company or, at the Company's request, by the
Trustee in the name and at the expense of the Company.
Section 11.5. Deposit of Redemption Price.
On or prior to any Redemption Date, the Company shall deposit, with
respect to the Securities of any series called for redemption pursuant to
Section 11.4, with the Trustee or with a Paying Agent (or, if the Company is
acting as its own Paying Agent, segregate and hold in trust as provided in
Section 10.3) an amount of money in the applicable Currency sufficient to pay
the Redemption Price of, and (except if the Redemption Date shall be an Interest
Payment Date, unless otherwise specified pursuant to Section 3.1 or in the
Securities of such series) any accrued interest on and Additional Amounts with
respect thereto, all such Securities or portions thereof which are to be
redeemed on that date.
Section 11.6. Securities Payable on Redemption Date.
Notice of redemption having been given as aforesaid, the Securities so
to be redeemed shall, on the Redemption Date, become due and payable at the
Redemption Price therein specified, and from and after such date (unless the
Company shall default in the payment of the
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Redemption Price and accrued interest) such Securities shall cease to bear
interest and the Coupons for such interest appertaining to any Bearer Securities
so to be redeemed, except to the extent provided below, shall be void. Upon
surrender of any such Security for redemption in accordance with said notice,
together with all Coupons, if any, appertaining thereto maturing after the
Redemption Date, such Security shall be paid by the Company at the Redemption
Price, together with any accrued interest and Additional Amounts to the
Redemption Date; provided, however, that, except as otherwise provided in or
pursuant to this Indenture or the Bearer Securities of such series, installments
of interest on Bearer Securities whose Stated Maturity is on or prior to the
Redemption Date shall be payable only upon presentation and surrender of Coupons
for such interest (at an Office or Agency located outside the United States
except as otherwise provided in Section 10.2), and provided, further, that,
except as otherwise specified in or pursuant to this Indenture or the Registered
Securities of such series, installments of interest on Registered Securities
whose Stated Maturity is on or prior to the Redemption Date shall be payable to
the Holders of such Securities, or one or more Predecessor Securities,
registered as such at the close of business on the Regular Record Dates therefor
according to their terms and the provisions of Section 3.7.
If any Bearer Security surrendered for redemption shall not be
accompanied by all appurtenant Coupons maturing after the Redemption Date, such
Security may be paid after deducting from the Redemption Price an amount equal
to the face amount of all such missing Coupons, or the surrender of such missing
Coupon or Coupons may be waived by the Company and the Trustee if there be
furnished to them such security or indemnity as they may require to save each of
them and any Paying Agent harmless. If thereafter the Holder of such Security
shall surrender to the Trustee or any Paying Agent any such missing Coupon in
respect of which a deduction shall have been made from the Redemption Price,
such Holder shall be entitled to receive the amount so deducted; provided,
however, that any interest or Additional Amounts represented by Coupons shall be
payable only upon presentation and surrender of those Coupons at an Office or
Agency for such Security located outside of the United States except as
otherwise provided in Section 10.2.
If any Security called for redemption shall not be so paid upon
surrender thereof for redemption, the principal and any premium, until paid,
shall bear interest from the Redemption Date at the rate prescribed therefor in
the Security.
Section 11.7. Securities Redeemed in Part.
Any Registered Security which is to be redeemed only in part shall be
surrendered at any Office or Agency for such Security (with, if the Company or
the Trustee so requires, due endorsement by, or a written instrument of transfer
in form satisfactory to the Company and the Trustee duly executed by, the Holder
thereof or his attorney duly authorized in writing) and the Company shall
execute and the Trustee shall authenticate and deliver to the Holder of such
Security without service charge, a new Registered Security or Securities of the
same series, containing identical terms and provisions, of any authorized
denomination as requested by such Holder in aggregate principal amount equal to
and in exchange for the unredeemed portion of the
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principal of the Security so surrendered. If a Security in global form is so
surrendered, the Company shall execute, and the Trustee shall authenticate and
deliver to the U.S. Depository or other Depository for such Security in global
form as shall be specified in the Company Order with respect thereto to the
Trustee, without service charge, a new Security in global form in a denomination
equal to and in exchange for the unredeemed portion of the principal of the
Security in global form so surrendered.
ARTICLE XII
SINKING FUNDS
Section 12.1. Applicability of Article.
The provisions of this Article shall be applicable to any sinking fund
for the retirement of Securities of a series, except as otherwise permitted or
required in or pursuant to this Indenture or any Security of such series issued
pursuant to this Indenture.
The minimum amount of any sinking fund payment provided for by the
terms of Securities of any series is herein referred to as a "mandatory sinking
fund payment", and any payment in excess of such minimum amount provided for by
the terms of Securities of such series is herein referred to as an "optional
sinking fund payment". If provided for by the terms of Securities of any series,
the cash amount of any sinking fund payment may be subject to reduction as
provided in Section 12.2. Each sinking fund payment shall be applied to the
redemption of Securities of any series as provided for by the terms of
Securities of such series and this Indenture.
Section 12.2. Satisfaction of Sinking Fund Payments with Securities.
The Company may, in satisfaction of all or any part of any sinking fund
payment with respect to the Securities of any series to be made pursuant to the
terms of such Securities (1) deliver Outstanding Securities of such series
(other than any of such Securities previously called for redemption or any of
such Securities in respect of which cash shall have been released to the
Company), together in the case of any Bearer Securities of such series with all
unmatured Coupons appertaining thereto, and (2) apply as a credit Securities of
such series which have been redeemed either at the election of the Company
pursuant to the terms of such series of Securities or through the application of
permitted optional sinking fund payments pursuant to the terms of such
Securities, provided that such series of Securities have not been previously so
credited. Such Securities shall be received and credited for such purpose by the
Trustee at the Redemption Price specified in such Securities for redemption
through operation of the sinking fund and the amount of such sinking fund
payment shall be reduced accordingly. If, as a result of the delivery or credit
of Securities of any series in lieu of cash payments pursuant to this Section
12.2, the principal amount of Securities of such series to be redeemed in order
to satisfy the remaining sinking fund payment shall be less than $100,000, the
Trustee need not call Securities of such series for redemption, except upon
Company Request, and such cash payment shall be held by the Trustee or a Paying
Agent and applied to the next succeeding sinking fund payment,
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provided, however, that the Trustee or such Paying Agent shall at the request of
the Company from time to time pay over and deliver to the Company any cash
payment so being held by the Trustee or such Paying Agent upon delivery by the
Company to the Trustee of Securities of that series purchased by the Company
having an unpaid principal amount equal to the cash payment requested to be
released to the Company.
Section 12.3. Redemption of Securities for Sinking Fund.
Not less than 75 days prior to each sinking fund payment date for any
series of Securities, the Company shall deliver to the Trustee an Officers'
Certificate specifying the amount of the next ensuing mandatory sinking fund
payment for that series pursuant to the terms of that series, the portion
thereof, if any, which is to be satisfied by payment of cash and the portion
thereof, if any, which is to be satisfied by delivering and crediting of
Securities of that series pursuant to Section 12.2, and the optional amount, if
any, to be added in cash to the next ensuing mandatory sinking fund payment, and
will also deliver to the Trustee any Securities to be so credited and not
theretofore delivered. If such Officers' Certificate shall specify an optional
amount to be added in cash to the next ensuing mandatory sinking fund payment,
the Company shall thereupon be obligated to pay the amount therein specified.
Not less than 60 days before each such sinking fund payment date the Trustee
shall select the Securities to be redeemed upon such sinking fund payment date
in the manner specified in Section 11.3 and cause notice of the redemption
thereof to be given in the name of and at the expense of the Company in the
manner provided in Section 11.4. Such notice having been duly given, the
redemption of such Securities shall be made upon the terms and in the manner
stated in Sections 11.6 and 11.7.
ARTICLE XIII
REPAYMENT AT THE OPTION OF HOLDERS
Section 13.1. Applicability of Article.
Securities of any series which are repayable at the option of the
Holders thereof before their Stated Maturity shall be repaid in accordance with
the terms of the Securities of such series. The repayment of any principal
amount of Securities pursuant to such option of the Holder to require repayment
of Securities before their Stated Maturity, for purposes of Section 3.9, shall
not operate as a payment, redemption or satisfaction of the Indebtedness
represented by such Securities unless and until the Company, at its option,
shall deliver or surrender the same to the Trustee with a directive that such
Securities be cancelled. Notwithstanding anything to the contrary contained in
this Section 13.1, in connection with any repayment of Securities, the Company
may arrange for the purchase of any Securities by an agreement with one or more
investment bankers or other purchasers to purchase such Securities by paying to
the Holders of such Securities on or before the close of business on the
repayment date an amount not less than the repayment price payable by the
Company on repayment of such Securities, and the obligation of the Company to
pay the repayment price of such Securities shall be satisfied and discharged to
the extent such payment is so paid by such purchasers.
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ARTICLE XIV
SECURITIES IN FOREIGN CURRENCIES
Section 14.1. Applicability of Article.
Whenever this Indenture provides for (i) any action by, or the
determination of any of the rights of, Holders of Securities of any series in
which not all of such Securities are denominated in the same Currency, or (ii)
any distribution to Holders of Securities, in the absence of any provision to
the contrary in the form of Security of any particular series or pursuant to
this Indenture or the Securities, any amount in respect of any Security
denominated in a Currency other than Dollars shall be treated for any such
action or distribution as that amount of Dollars that could be obtained for such
amount on such reasonable basis of exchange and as of the record date with
respect to Registered Securities of such series (if any) for such action,
determination of rights or distribution (or, if there shall be no applicable
record date, such other date reasonably proximate to the date of such action,
determination of rights or distribution) as the Company or a Guarantor may
specify in a written notice to the Trustee.
ARTICLE XV
MEETINGS OF HOLDERS OF SECURITIES
Section 15.1. Purposes for Which Meetings May Be Called.
A meeting of Holders of Securities of any series may be called at any
time and from time to time pursuant to this Article to make, give or take any
request, demand, authorization, direction, notice, consent, waiver or other Act
provided by this Indenture to be made, given or taken by Holders of Securities
of such series.
Section 15.2. Call, Notice and Place of Meetings.
(1) The Trustee may at any time call a meeting of Holders of
Securities of any series for any purpose specified in Section 15.1, to
be held at such time and at such place in the Borough of Manhattan, The
City of New York, or, if Securities of such series have been issued in
whole or in part as Bearer Securities, in London or in such place
outside the United States as the Trustee shall determine. Notice of
every meeting of Holders of Securities of any series, setting forth the
time and the place of such meeting and in general terms the action
proposed to be taken at such meeting, shall be given, in the manner
provided in Section 1.6, not less than 21 nor more than 180 days prior
to the date fixed for the meeting.
(2) In case at any time the Company (by or pursuant to a Board
Resolution), a Guarantor (by or pursuant to a Guarantor's Board
Resolution) or the Holders of at least 10% in principal amount of the
Outstanding Securities of any series shall have requested the Trustee
to call a meeting of the Holders of Securities of such series for any
purpose
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specified in Section 15.1, by written request setting forth in
reasonable detail the action proposed to be taken at the meeting, and
the Trustee shall not have mailed notice of or made the first
publication of the notice of such meeting within 21 days after receipt
of such request (whichever shall be required pursuant to Section 1.6)
or shall not thereafter proceed to cause the meeting to be held as
provided herein, then the Company, a Guarantor or the Holders of
Securities of such series in the amount above specified, as the case
may be, may determine the time and the place in the Borough of
Manhattan, The City of New York, or, if Securities of such series are
to be issued as Bearer Securities, in London for such meeting and may
call such meeting for such purposes by giving notice thereof as
provided in clause (1) of this Section.
Section 15.3. Persons Entitled to Vote at Meetings.
To be entitled to vote at any meeting of Holders of Securities of any
series, a Person shall be (1) a Holder of one or more Outstanding Securities of
such series, or (2) a Person appointed by an instrument in writing as proxy for
a Holder or Holders of one or more Outstanding Securities of such series by such
Holder or Holders. The only Persons who shall be entitled to be present or to
speak at any meeting of Holders of Securities of any series shall be the Persons
entitled to vote at such meeting and their counsel, any representatives of the
Trustee and its counsel, any representatives of a Guarantor and its counsel and
any representatives of the Company and its counsel.
Section 15.4. Quorum; Action.
The Persons entitled to vote a majority in principal amount of the
Outstanding Securities of a series shall constitute a quorum for any meeting of
Holders of Securities of such series. In the absence of a quorum within 30
minutes after the time appointed for any such meeting, the meeting shall, if
convened at the request of Holders of Securities of such series, be dissolved.
In any other case the meeting may be adjourned for a period of not less than 10
days as determined by the chairman of the meeting prior to the adjournment of
such meeting. In the absence of a quorum at any reconvened meeting, such
reconvened meeting may be further adjourned for a period of not less than 10
days as determined by the chairman of the meeting prior to the adjournment of
such reconvened meeting. Notice of the reconvening of any adjourned meeting
shall be given as provided in Section 15.2(1), except that such notice need be
given only once not less than five days prior to the date on which the meeting
is scheduled to be reconvened. Notice of the reconvening of an adjourned meeting
shall state expressly the percentage, as provided above, of the principal amount
of the Outstanding Securities of such series which shall constitute a quorum.
Except as limited by the proviso to Section 9.2, any resolution
presented to a meeting or adjourned meeting duly reconvened at which a quorum is
present as aforesaid may be adopted only by the affirmative vote of the Holders
of a majority in principal amount of the Outstanding Securities of that series;
provided, however, that, except as limited by the proviso to Section 9.2, any
resolution with respect to any request, demand, authorization, direction,
notice, consent,
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<PAGE> 98
waiver or other Act which this Indenture expressly provides may be made, given
or taken by the Holders of a specified percentage, which is less than a
majority, in principal amount of the Outstanding Securities of a series may be
adopted at a meeting or an adjourned meeting duly reconvened and at which a
quorum is present as aforesaid by the affirmative vote of the Holders of such
specified percentage in principal amount of the Outstanding Securities of such
series.
Any resolution passed or decision taken at any meeting of Holders of
Securities of any series duly held in accordance with this Section shall be
binding on all the Holders of Securities of such series and the Coupons
appertaining thereto, whether or not such Holders were present or represented at
the meeting.
Section 15.5. Determination of Voting Rights; Conduct and Adjournment
of Meetings.
(1) Notwithstanding any other provisions of this Indenture,
the Trustee may make such reasonable regulations as it may deem
advisable for any meeting of Holders of Securities of such series in
regard to proof of the holding of Securities of such series and of the
appointment of proxies and in regard to the appointment and duties of
inspectors of votes, the submission and examination of proxies,
certificates and other evidence of the right to vote, and such other
matters concerning the conduct of the meeting as it shall deem
appropriate. Except as otherwise permitted or required by any such
regulations, the holding of Securities shall be proved in the manner
specified in Section 1.4 and the appointment of any proxy shall be
proved in the manner specified in Section 1.4 or by having the
signature of the person executing the proxy witnessed or guaranteed by
any trust company, bank or banker authorized by Section 1.4 to certify
to the holding of Bearer Securities. Such regulations may provide that
written instruments appointing proxies, regular on their face, may be
presumed valid and genuine without the proof specified in Section 1.4
or other proof.
(2) The Trustee shall, by an instrument in writing, appoint a
temporary chairman of the meeting, unless the meeting shall have been
called by the Company or by Holders of Securities as provided in
Section 15.2(2), in which case the Company, the Guarantor or the
Holders of Securities of the series calling the meeting, as the case
may be, shall in like manner appoint a temporary chairman. A permanent
chairman and a permanent secretary of the meeting shall be elected by
vote of the Persons entitled to vote a majority in principal amount of
the Outstanding Securities of such series represented at the meeting.
(3) At any meeting, each Holder of a Security of such series
or proxy shall be entitled to one vote for each $1,000 principal amount
of Securities of such series held or represented by him; provided,
however, that no vote shall be cast or counted at any meeting in
respect of any Security challenged as not Outstanding and ruled by the
chairman of the meeting to be not Outstanding. The chairman of the
meeting shall have no right to vote, except as a Holder of a Security
of such series or proxy.
92
<PAGE> 99
(4) Any meeting of Holders of Securities of any series duly
called pursuant to Section 15.2 at which a quorum is present may be
adjourned from time to time by Persons entitled to vote a majority in
principal amount of the Outstanding Securities of such series
represented at the meeting; and the meeting may be held as so adjourned
without further notice.
Section 15.6. Counting Votes and Recording Action of Meetings.
The vote upon any resolution submitted to any meeting of Holders of
Securities of any series shall be by written ballots on which shall be
subscribed the signatures of the Holders of Securities of such series or of
their representatives by proxy and the principal amounts and serial numbers of
the Outstanding Securities of such series held or represented by them. The
permanent chairman of the meeting shall appoint two inspectors of votes who
shall count all votes cast at the meeting for or against any resolution and who
shall make and file with the secretary of the meeting their verified written
reports in triplicate of all votes cast at the meeting. A record, at least in
triplicate, of the proceedings of each meeting of Holders of Securities of any
series shall be prepared by the secretary of the meeting and there shall be
attached to said record the original reports of the inspectors of votes on any
vote by ballot taken thereat and affidavits by one or more persons having
knowledge of the facts setting forth a copy of the notice of the meeting and
showing that said notice was given as provided in Section 15.2 and, if
applicable, Section 15.4. Each copy shall be signed and verified by the
affidavits of the permanent chairman and secretary of the meeting and one such
copy shall be delivered to the Company and the Guarantors, and another to the
Trustee to be preserved by the Trustee, the latter to have attached thereto the
ballots voted at the meeting. Any record so signed and verified shall be
conclusive evidence of the matters therein stated.
ARTICLE XVI
GUARANTEES
Section 16.1. Unconditional Guarantee.
Subject to the provisions of this Article XVI, each of the Initial
Guarantors hereby fully, unconditionally and irrevocably guarantees, and each
Subsidiary required to execute a supplemental indenture as a Subsequent
Guarantor pursuant to Section 10.12 will be deemed to fully, unconditionally and
irrevocably guarantee, to each Holder and to the Trustee on behalf of the
Holders, the due and punctual payment of the principal of, and premium, if any,
and interest on, and Additional Amounts and other amounts payable with respect
to, each Security, the due and punctual payment of interest on the overdue
principal of, and premium, if any, and interest on, and Additional Amounts and
other amounts payable with respect to, the Securities, to the extent lawful, and
the due and punctual performance of all other obligations of the Company to the
Holders or the Trustee, all in accordance with the terms of such Securities and
this Indenture, when and as the same shall become due and payable, whether at
Stated Maturity, by declaration of acceleration, upon redemption, repurchase or
repayment or otherwise. In case of the failure of
93
<PAGE> 100
the Company punctually to pay any such principal, premium, interest, Additional
Amounts or other payment, each Guarantor hereby agrees to cause any such payment
to be made punctually when and as the same shall become due and payable, whether
at Stated Maturity, by declaration of acceleration, upon redemption, repurchase
or repayment or otherwise, and as if such payment were made by the Company.
Each Guarantor hereby agrees that its obligations hereunder shall be as
principal and not merely as surety, and shall be absolute, irrevocable and
unconditional, irrespective of, and shall be unaffected by, any invalidity,
irregularity or unenforceability of any Security or this Indenture, any failure
to enforce the provisions of any Security or this Indenture, or any waiver,
modification, consent or indulgence granted with respect thereto by the Holder
of such Security or the Trustee, the recovery of any judgment against the
Company or any action to enforce the same, or any other circumstances which may
otherwise constitute a legal or equitable discharge of a surety or guarantor.
Each Guarantor hereby waives diligence, presentment, demand of payment, filing
of claims with a court in the event of merger, insolvency or bankruptcy of the
Company, any right to require a proceeding first against the Company, the
benefit of discussion, protest or notice with respect to any such Security or
the debt evidenced thereby and all demands whatsoever, and covenants that no
Guarantee will be discharged as to any such Security except by payment in full
of all amounts due in respect of such Security and by the complete performance
of all other obligations contained in such Security and this Indenture.
The maturity of the obligations guaranteed hereby may be accelerated as
provided in Article V for the purposes of this Article XVI. In the event of any
declaration of acceleration of such obligations as provided in Article V, such
obligations (whether or not due and payable) shall forthwith become due and
payable by each Guarantor for the purpose of this Article XVI. In addition,
without limiting the foregoing provisions, upon the effectiveness of an
acceleration under Article V, the Trustee shall promptly make a demand for
payment on the Securities under each Guarantee provided for in this Article XVI.
If the Trustee or the Holder of any Security is required by any court
or otherwise to return to the Company or any Guarantor, or any custodian,
receiver, liquidator, trustee, sequestrator or other similar official acting in
relation to the Company or any Guarantor, any amount paid to the Trustee or such
Holder in respect of a Security, any Guarantee, to the extent theretofore
discharged, shall be reinstated in full force and effect. Each Guarantor further
agrees, to the fullest extent that it may lawfully do so, that, as between it,
on the one hand, and the Holders and the Trustee, on the other hand, the
maturity of the obligations guaranteed hereby may be accelerated as provided in
Article V hereof for the purposes of each Guarantee, notwithstanding any stay,
injunction or other prohibition issued or imposed under any applicable
bankruptcy law preventing such acceleration in respect of the obligations
guaranteed hereby.
A Guarantor shall be subrogated to all rights of the Holder of any
Security against the Company in respect of any amounts paid to the Trustee or
such Holder by such Guarantor pursuant to the provisions of its Guarantee;
provided, however, that no Guarantor shall be entitled to enforce, or to receive
any payments arising out of or based upon, such right of
94
<PAGE> 101
subrogation until the principal of, and premium, if any, and interest on, and
any Additional Amounts and other amounts payable with respect to, all Securities
shall have been paid in full and all other obligations contained in the
Securities and this Indenture shall have been performed. If any amount shall be
paid to any Guarantor in violation of the preceding sentence and all amounts
payable in respect of the Securities shall not have been paid in full, such
amount shall be deemed to have been paid to such Guarantor for the benefit of,
and held in trust for the benefit of, the Holders, and shall forthwith be paid
to the Trustee for the benefit of the Holders to be credited and applied upon
such amounts. Each Guarantor acknowledges that it will receive direct and
indirect benefits from the issuance of the Securities pursuant to this
Indenture.
Anything to the contrary in this Indenture notwithstanding, each
Guarantee shall be, and hereby is, limited to the maximum amount that can be
guaranteed by the applicable Guarantor without rendering such Guarantee, as it
relates to such Guarantor, voidable under any applicable law relating to
fraudulent conveyance, fraudulent transfer or similar laws affecting the rights
of creditors generally.
Each Guarantee set forth in this Section 16.1 shall be valid and
obligatory for any purpose with respect to a Security until the certificate of
authentication of such Security shall have been signed by or on behalf of the
Trustee.
Section 16.2. Operation of Guarantees.
By execution of this Agreement (in the case of the Initial Guarantors)
or a supplemental indenture (in the case of any Subsequent Guarantors), the
Guarantee of each Guarantor in respect of the Securities shall be set forth in
Section 16.1 and shall be effective for all purposes upon authentication of a
particular Security by or on behalf of the Trustee, regardless of whether such
authentication occurs prior to a Subsequent Guarantor's execution of the
required supplemental indenture, and shall not require any Guarantor's
endorsement on the Securities.
Section 16.3 Termination of Guarantees.
The Guarantee of any Guarantor (including the Initial Guarantors), and
the provisions of any supplemental indenture with respect to a Guarantee by such
Guarantor and this Indenture with respect to such Guarantor, shall be released,
terminated and of no further force and effect, without further action by any
party, immediately upon the release or termination of such Guarantor's guarantee
of indebtedness under all Credit Agreements to which it is a party.
* * * * *
95
<PAGE> 102
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed, and their respective corporate seals to be hereunto affixed and
attested, all as of the day and year first above written.
COX Radio, INC.,
As Company
By /s/ Richard J. Jacobson
---------------------------
Name: Richard J. Jacobson
Title: Treasurer
WSB, INC.,
As Initial Guarantor
By /s/ Andrew A. Merdek
---------------------------
Name: Andrew A. Merdek
Title: Secretary
WHIO INC.,
As Initial Guarantor
By /s/ Andrew A. Merdek
---------------------------
Name: Andrew A. Merdek
Title: Secretary
THE BANK OF NEW YORK,
As Trustee
By /s/ Robert A. Massimillo
---------------------------
Name: Robert A. Massimillo
Title: Assistant Vice President
96
<PAGE> 1
EXHIBIT 23.1
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Amendment No. 1
Registration Statement No. 333-61179 of Cox Radio, Inc. on Form S-4 of our
report dated February 6, 1998 (March 17, 1998 as to the KONO-FM/AM Acquisition
described in Note 4) appearing in the Annual Report on Form 10-K of Cox Radio,
Inc. for the year ended December 31, 1997 and to the reference to us under the
heading "Experts" in the Prospectus, which is part of this Registration
Statement.
/s/ DELOITTE & TOUCHE LLP
Atlanta, Georgia
November 10, 1998
<PAGE> 1
EXHIBIT 23.2
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in
Amendment No. 1 to Registration Statement No. 333-61179 on Form S-4 dated
November 12, 1998 for the registration of 6.25% and 6.375% Senior Notes due 2003
and 2005, respectively and to the incorporation by reference therein of our
report dated March 7, 1997, with respect to the financial statements of NewCity
Communications, Inc. for the three years in the period ended December 31, 1996
included in Cox Radio, Inc.'s Current Report on Form 8-K dated April 14, 1997
also incorporated herein by reference.
/s/ Ernst & Young LLP
Stamford, Connecticut
November 10, 1998
<PAGE> 1
EXHIBIT 99.1
===============================================================================
PURSUANT TO THE PROSPECTUS DATED NOVEMBER 12, 1998:
THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON
DECEMBER 14, 1998, UNLESS EXTENDED (THE "EXPIRATION DATE").
===============================================================================
LETTER OF TRANSMITTAL
COX RADIO, INC.
OFFER TO EXCHANGE
6.250% NOTES DUE 2003 FOR
ALL OUTSTANDING 6.250% NOTES DUE 2003
6.375% NOTES DUE 2005 FOR
ALL OUTSTANDING 6.250% NOTES DUE 2005
To: The Bank of New York, the Exchange Agent
By Registered or Certified Mail: By Overnight Courier:
The Bank of New York The Bank of New York
101 Barclay Street 101 Barclay Street
Floor 7 East Ground Level
New York, New York 10286 Corporate Trust Services Window
Attn: Reorganization Section New York, New York 10286
Attn: Reorganization Section
By Hand: By Facsimile (For Eligible
Institutions Only):
The Bank of New York (212) 815-6339
101 Barclay Street
Ground Level Confirm by telephone:
Corporate Trust Services Window Christopher Davis
New York, New York 10286 (212) 815-4997
Attn: Reorganization Section
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE
OR TRANSMISSION OF THIS INSTRUMENT VIA A FACSIMILE NUMBER OTHER THAN THE ONE
LISTED ABOVE WILL NOT CONSTITUTE A VALID DELIVERY. THE INSTRUCTIONS ACCOMPANYING
THIS LETTER OF TRANSMITTAL SHOULD BE READ CAREFULLY BEFORE THIS LETTER OF
TRANSMITTAL IS COMPLETED.
The undersigned acknowledges receipt of the Prospectus, dated November
12, 1998 (the "Prospectus"), of Cox Radio, Inc. (the "Obligor") and this Letter
of Transmittal (the "Letter of Transmittal"), which together describe the offer
by the Obligor (the "Exchange Offer") to exchange (i) $1,000 principal amount of
the 6.250% Notes due 2003 (the "New 2003 Notes"), which have been registered
under the Securities Act of 1933, as amended (the "Securities Act"), pursuant to
a Registration Statement, for each $1,000 principal amount of its outstanding
6.250% Notes due 2003 (the "Old 2003 Notes"); and (ii) $1,000 principal amount
of the 6.375% Notes due 2005 (the "New 2005 Notes" and, together with the 2003
New Notes, the "New Notes"), which have been registered under the Securities
Act, pursuant to a Registration Statement, for each $1,000 principal amount of
its outstanding 6.375% Notes due 2005 (the "Old 2005 Notes" and, together with
the
<PAGE> 2
2003 Old Notes, the "Old Notes") of which $200,000,000 aggregate principal
amount is outstanding. The term "Expiration Date" shall mean 5:00 p.m., New York
City time, on December 14, 1998, unless the Obligor, in its sole discretion,
extends the Exchange Offer, in which case the term shall mean the latest date
and time to which the Exchange Offer is extended. The term "Holder" with respect
to the Exchange Offer means any person: (i) in whose name Old Notes are
registered on the books of the Obligor or any other person who has obtained a
properly completed bond power from the registered Holder or (ii) whose Old Notes
are held of record by The Depository Trust Company ("DTC") and who desires to
deliver such Old Notes by book entry transfer at DTC. Capitalized terms used
herein, but not defined herein, shall have the respective meanings set forth in
the Prospectus.
2
<PAGE> 3
This Letter of Transmittal is to be used by Holders if: (i)
certificates representing Old Notes are to be physically delivered to the
Exchange Agent herewith by Holders; (ii) tender of Old Notes is to be made by
book-entry transfer to the Exchange Agent's account at DTC pursuant to the
procedures set forth in the Prospectus under "The Exchange Offer--Procedures for
Tendering" by any financial institution that is a participant in DTC and whose
name appears on a security position listing as the owner of Old Notes (such
participants, acting on behalf of Holders, are referred to herein as "Acting
Holders"); or (iii) tender of Old Notes is to be made according to the
guaranteed delivery procedures described in the Prospectus under the caption
"The Exchange Offer--Guaranteed Delivery Procedures." See Instruction 2 below.
Delivery of documents to DTC does not constitute delivery to the Exchange Agent.
The undersigned has completed, executed and delivered this Letter of
Transmittal to indicate the action the undersigned desires to take with respect
to the Exchange Offer. Holders who wish to tender their Old Notes must complete
this Letter of Transmittal in its entirety.
1. [_] CHECK HERE IF TENDERED OLD NOTES ARE BEING DELIVERED BY DTC TO
THE EXCHANGE AGENT'S ACCOUNT AT DTC AND COMPLETE THE
FOLLOWING:
Name of Tendering Institution:
----------------------------------------
DTC Book-Entry Account No.:
-------------------------------------------
Transaction Code No.:
-------------------------------------------------
2. [_] CHECK HERE IF TENDERED OLD NOTES ARE BEING DELIVERED PURSUANT
TO A NOTICE OF GUARANTEED DELIVERY DELIVERED TO THE EXCHANGE
AGENT AND COMPLETE THE FOLLOWING (SEE INSTRUCTION 2):
Name of Registered or Acting Holder(s):
-------------------------------
Window Ticket No. (if any):
-------------------------------------------
Date of Execution of Notice of Guaranteed Delivery:
-------------------
Name of Eligible Institution
that Guaranteed Delivery:
---------------------------------------------
If Delivered by Book-Entry Transfer,
DTC Book-Entry Account No.:
-------------------------------------------
Transaction Code Number:
----------------------------------------------
3. [_] CHECK HERE IF YOU ARE A BROKER-DEALER AND WISH TO RECEIVE 10
ADDITIONAL COPIES OF THE PROSPECTUS AND 10 COPIES OF ANY
AMENDMENTS OR SUPPLEMENTS THERETO.
PLEASE NOTE: THE OBLIGOR HAS AGREED THAT, FOR A PERIOD OF 180 DAYS
AFTER THE EXPIRATION DATE, IT WILL MAKE COPIES OF THE PROSPECTUS
AVAILABLE TO ANY PARTICIPATING BROKER-DEALER FOR USE IN CONNECTION WITH
RESALES OF THE NEW NOTES (PROVIDED THAT THE OBLIGOR RECEIVES NOTICE
FROM ANY PARTICIPATING BROKER-DEALER OF ITS STATUS AS A BROKER-DEALER).
Name:
-------------------------------------------------------------
Address:
-----------------------------------------------------------
--------------------------------------------------------------------
Attention:
---------------------------------------------------------
3
<PAGE> 4
PLEASE READ THIS ENTIRE LETTER OF TRANSMITTAL CAREFULLY
BEFORE COMPLETING ANY BOX BELOW
List below the Old Notes to which this Letter of Transmittal relates. If the
space provided below is inadequate, the certificate numbers and principal amount
of Old Notes should be listed on a separate signed schedule affixed hereto.
<TABLE>
<CAPTION>
================================================================================
DESCRIPTION OF OLD NOTES
================================================================================
Box 1
================================================================================
NAME(S) AND AGGREGATE
ADDRESS(ES)OF PRINCIPAL AMOUNT PRINCIPAL
REGISTERED HOLDER(S) SERIES OF NOTES CERTIFICATE REPRESENTED BY AMOUNT
(PLEASE FILL IN, IF 2003/2005 NUMBER(S)* CERTIFICATE(S) TENDERED**
BLANK)
<S> <C> <C> <C> <C>
Total:
================================================================================
* Need not be completed by Holders tendering by book-entry transfer.
** Must be in integral multiple of $1,000. Need not be completed by Holders
who wish to tender with respect to all Old Notes listed. See Instruction 4.
If the space provided above is inadequate, list the certificate numbers and
principal amounts on a separate signed schedule and affix the list to this
Letter of Transmittal.
================================================================================
</TABLE>
4
<PAGE> 5
<TABLE>
<S> <C>
====================================== ======================================
Box 2 Box 3
SPECIAL REGISTRATION INSTRUCTIONS SPECIAL DELIVERY INSTRUCTIONS
(See Instructions 4, 5 and 6) (See Instructions 4, 5 and 6)
To be completed ONLY if certificates To be completed ONLY if certificates
for Old Notes in a principal amount for Old Notes in a principal amount
not tendered, or New Notes issued in not tendered, or New Notes issued in
exchange for Old Notes accepted for exchange for Old Notes accepted for
exchange, are to be issued in a name exchange, are to be sent to an
other than the name appearing in Box 1 address other than the address
above. appearing in Box 1 above, or if Box 2
is filled in, to an address other
than the address appearing in Box 2.
ISSUE CERTIFICATE(S) TO: DELIVER CERTIFICATE(S) TO:
Name _________________________________ Name_________________________________
(Please Print) (Please Print)
Address ______________________________ Address______________________________
______________________________________ _____________________________________
(Include Zip Code) (Include Zip Code)
______________________________________ _____________________________________
(Tax Identification or Social (Tax Identification or Social
Security Number) Security Number)
====================================== ======================================
</TABLE>
Box 4
================================================================================
BROKER-DEALER STATUS
[_] Check this box if the beneficial owner of the Old Notes is a
Participating Broker-Dealer and such Participating Broker-Dealer
acquired the Old Notes for its own account as a result of market-making
activities or other trading activities.
================================================================================
NOTE: SIGNATURES MUST BE PROVIDED BELOW
PLEASE READ ACCOMPANYING INSTRUCTIONS CAREFULLY
Ladies and Gentlemen:
Subject to the terms and conditions of the Exchange Offer, the undersigned
hereby tenders to Cox Radio, Inc. (the "Obligor") the principal amount of Old
Notes indicated above.
Subject to and effective upon the acceptance for exchange of the principal
amount of Old Notes tendered in accordance with this Letter of Transmittal, the
undersigned sells, assigns and transfers to, or upon the order of, the Obligor
all right, title and interest in and to the Old Notes tendered hereby. The
undersigned hereby irrevocably constitutes and appoints the Exchange Agent as
its agent and attorney-in-fact (with full knowledge that the Exchange Agent also
acts as the agent of the Obligor) with respect to the tendered Old Notes with
the full power of substitution to (i) present such Old Notes and all evidences
of transfer and authenticity to, or transfer ownership of, such Old Notes on the
account books maintained by DTC to, or upon, the order of, the Obligor, (ii)
deliver certificates for such Old Notes to the Obligor and deliver all
accompanying evidences of transfer and authenticity to, or upon the order of,
the Obligor and (iii)
5
<PAGE> 6
present such Old Notes for transfer on the books of the Obligor and receive all
benefits and otherwise exercise all rights of beneficial ownership of such Old
Notes, all in accordance with the terms of the Exchange Offer.
The undersigned hereby represents and warrants that the undersigned has
full power and authority to tender, sell, assign and transfer the Old Notes
tendered hereby and that the Obligor will acquire good, valid and unencumbered
title thereto, free and clear of all liens, restrictions, charges and
encumbrances and not subject to any adverse claims, when the same are acquired
by the Obligor. The undersigned hereby further represents that (i) the New Notes
are to be acquired by the Holder or the person receiving such New Notes, whether
or not such person is the Holder, in the ordinary course of business, (ii) the
Holder or any such other person is not engaging and does not intend to engage in
the distribution of the New Notes, (iii) the Holder or any such other person has
no arrangement or understanding with any person to participate in the
distribution of the New Notes and (iv) neither the Holder nor any such other
person is an "affiliate" of the Obligor within the meaning of Rule 405 under the
Securities Act. As indicated above, each Participating Broker-Dealer that
receives a New Note for its own account in exchange for Old Notes must
acknowledge that it (i) acquired the Old Notes for its own account as a result
of market-making activities or other trading activities, (ii) has not entered
into any arrangement or understanding with the Obligor or any "affiliate" of the
Obligor (within the meaning of Rule 405 under the Securities Act) to distribute
the New Notes to be received in the Exchange Offer and (iii) will deliver a
Prospectus in connection with any resale of such New Notes; however, by so
acknowledging and by delivering a Prospectus, the undersigned will not be deemed
to admit that it is an "underwriter" within the meaning of the Securities Act.
If applicable, the undersigned shall use its reasonable best efforts to notify
the Obligor when it is no longer subject to such Prospectus delivery
requirements. Unless otherwise notified in accordance with the instructions set
forth herein in Box 4 under "Broker-Dealer Status," the Obligor will assume that
the undersigned is not a Participating Broker-Dealer. If the undersigned is not
a broker-dealer, the undersigned represents that it is not engaged in, and does
not intend to engage in, a distribution of New Notes.
For purposes of the Exchange Offer, the Obligor shall be deemed to have
accepted validly tendered Old Notes when, as and if the Obligor has given oral
or written notice thereof to the Exchange Agent.
If any Old Notes tendered herewith are not accepted for exchange pursuant
to the Exchange Offer for any reason, certificates for any such unaccepted Old
Notes will be returned (except as noted below with respect to tenders through
DTC), without expense, to the undersigned at the address shown below or to a
different address as may be indicated herein in Box 3 under "Special Delivery
Instructions" as promptly as practicable after the Expiration Date.
All authority conferred or agreed to be conferred by this Letter of
Transmittal shall survive the death, incapacity or dissolution of the
undersigned, and every obligation of the undersigned under this Letter of
Transmittal shall be binding upon the undersigned's heirs, personal
representatives, successors and assigns.
The undersigned understands that tenders of Old Notes pursuant to the
procedures described under the caption "The Exchange Offer--Procedures for
Tendering" in the Prospectus and in the instructions hereto will constitute a
binding agreement between the undersigned and the Obligor upon the terms and
subject to the conditions of the Exchange Offer, subject only to withdrawal of
such tenders on the terms set forth in the Prospectus under the caption "The
Exchange Offer--Withdrawal of Tenders."
6
<PAGE> 7
Unless otherwise indicated in Box 2 under "Special Registration
Instructions," please issue the certificates representing the New Notes issued
in exchange for the Old Notes accepted for exchange and any certificates for Old
Notes not tendered or not exchanged, in the name(s) of the registered Holder of
the Old Notes appearing in Box 1 above (or in such event in the case of Old
Notes tendered by DTC, by credit to the account of DTC). Similarly, unless
otherwise indicated in Box 3 under "Special Delivery Instructions," please send
the certificates, if any, representing the New Notes issued in exchange for the
Old Notes accepted for exchange and any certificates for Old Notes not tendered
or not exchanged (and accompanying documents, as appropriate) to the undersigned
at the address shown below in the undersigned's signature(s), unless tender is
being made through DTC. In the event that the box entitled "Special Registration
Instructions" and the box entitled "Special Delivery Instructions" both are
completed, please issue the certificates representing the New Notes issued in
exchange for the Old Notes accepted for exchange in the name(s) of, and return
any certificates for Old Notes not tendered or not exchanged to, the person(s)
so indicated. The undersigned understands that the Obligor has no obligation
pursuant to the "Special Registration Instructions" and "Special Delivery
Instructions" to transfer any Old Notes from the name of the registered
Holder(s) thereof if the Obligor does not accept for exchange any of the Old
Notes so tendered.
Holders who wish to tender their Old Notes and (i) whose Old Notes are not
immediately available or (ii) who cannot deliver the Old Notes, this Letter of
Transmittal or any other documents required hereby to the Exchange Agent prior
to the Expiration Date, may tender their Old Notes according to the guaranteed
delivery procedures set forth in the Prospectus under the caption "The Exchange
Offer--Guaranteed Delivery Procedures." See Instruction 2.
7
<PAGE> 8
The lines below must be signed by the registered Holder(s) exactly as its
name(s) appear(s) on the Old Notes or, if tendered by a participant in DTC,
exactly as such participant's name appears on a security position listing as the
owner of Old Notes, or by person(s) authorized to become registered Holder(s) by
a properly completed bond power from the registered Holder(s), a copy of which
must be transmitted with this Letter of Transmittal. If Old Notes to which this
Letter of Transmittal relates are held of record by two or more joint Holders,
then all such Holders must sign this Letter of Transmittal.
PLEASE SIGN HERE WHETHER OR NOT
OLD NOTES ARE BEING PHYSICALLY TENDERED HEREBY
x
- ---------------------------------------------------- -------------------
Date
x
- ---------------------------------------------------- -------------------
Signature(s) of Registered Holder(s) Date
or Authorized Signatory
Area Code and Telephone Number:
---------------------------
If signature is by a trustee, executor, administrator, guardian,
attorney-in-fact, officer of a corporation or other person acting in a fiduciary
or representative capacity, then such person must (i) set forth his or her full
title below and (ii) submit evidence satisfactory to the Obligor of such
person's authority so to act. See Instruction 5.
Name(s):
----------------------------------------------------------------------
(Please Print)
Capacity:
---------------------------------------------------------------------
Address:
----------------------------------------------------------------------
(Include Zip Code)
MEDALLION SIGNATURE GUARANTEE
(If required by Instruction 5)
Certain Signatures must be Guaranteed by an Eligible Institution
Signature(s) Guaranteed by an Eligible Institution:
- -------------------------------------------------------------------------------
(Authorized Signature)
- -------------------------------------------------------------------------------
(Title)
- -------------------------------------------------------------------------------
(Name of Firm)
- -------------------------------------------------------------------------------
(Address, Include Zip Code)
- -------------------------------------------------------------------------------
(Area Code and Telephone Number)
Dated: , 1998
------------
8
<PAGE> 1
EXHIBIT 99.2
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS
OF THE EXCHANGE OFFER
1. DELIVERY OF THIS LETTER OF TRANSMITTAL AND CERTIFICATES FOR OLD
NOTES OR BOOK-ENTRY CONFIRMATIONS. Certificates representing the tendered Old
Notes (or a confirmation of book-entry transfer of such Old Notes into the
Exchange Agent's account with DTC), as well as a properly completed and duly
executed copy of this Letter of Transmittal (or facsimile thereof) (or, in the
case of a book-entry transfer, an Agent's Message), a Substitute Form W-9 (or
facsimile thereof) and any other documents required by this Letter of
Transmittal must be received by the Exchange Agent at its address set forth
herein prior to the Expiration Date. The method of delivery of certificates for
Old Notes and all other required documents is at the election and sole risk of
the tendering Holder and delivery will be deemed made only when actually
received by the Exchange Agent. If delivery is by mail, registered mail with
return receipt requested, properly insured, is recommended. As an alternative to
delivery by mail, the Holder may wish to use an overnight or hand delivery
service. In all cases, sufficient time should be allowed to assure timely
delivery. Neither the Obligor nor the Exchange Agent is under an obligation to
notify any tendering Holder of the acceptance of tendered Old Notes prior to the
completion of the Exchange Offer.
2. GUARANTEED DELIVERY PROCEDURES. Holders who wish to tender their
Old Notes but whose Old Notes are not immediately available and who cannot
deliver their certificates for Old Notes (or comply with the procedures for
book-entry transfer prior to the Expiration Date), the Letter of Transmittal and
any other documents required by the Letter of Transmittal to the Exchange Agent
prior to the Expiration Date must tender their Old Notes according to the
guaranteed delivery procedures set forth below. Pursuant to such procedures:
(i) such tender must be made by or through a firm which is a
member of a registered national securities exchange or of the National
Association of Securities Dealers, Inc., or a commercial bank or trust
company having an office or correspondent in the United States or an
"eligible guarantor institution" within the meaning of Rule 17Ad-15
under the Exchange Act (an "Eligible Institution");
(ii) prior to the Expiration Date, the Exchange Agent must
have received from the Holder and the Eligible Institution a properly
completed and duly executed Notice of Guaranteed Delivery (by facsimile
transmission, mail or hand delivery) setting forth the name and address
of the Holder, the certificate number or numbers of the tendered Old
Notes and the principal amount of tendered Old Notes and stating that
the tender is being made thereby and guaranteeing that, within five New
York Stock Exchange trading days after the Expiration Date, the Letter
of Transmittal (or facsimile thereof) (or, in the case of a book-entry
transfer, an Agent's Message), together with the tendered Old Notes (or
a confirmation of book-entry transfer of such Old Notes into the
Exchange Agent's account with DTC) and any other required documents will
be deposited by the Eligible Institution with the Exchange Agent; and
(iii) the certificates representing the tendered Old Notes in
proper form for transfer (or a confirmation of book-entry transfer of
such Old Notes into the Exchange Agent's account with DTC), together
with the Letter of Transmittal (or facsimile thereof), properly
completed and duly executed, with any required signature guarantees (or,
in the case of a book-entry transfer, an Agent's Message) and all other
documents required by the Letter of Transmittal must be received by the
Exchange Agent within five New York Stock Exchange trading days after
the Expiration Date.
<PAGE> 2
Failure to complete the guaranteed delivery procedures outlined above
will not, of itself, affect the validity or effect a revocation of any Letter of
Transmittal form properly completed and executed by a Holder who attempted to
use the guaranteed delivery procedure.
3. TENDER BY HOLDER. Only a Holder or Acting Holder of Old Notes
may tender such Old Notes in the Exchange Offer. Any beneficial owner of Old
Notes who is not the registered Holder and who wishes to tender should arrange
with such Holder to execute and deliver this Letter of Transmittal on such
owner's behalf or must, prior to completing and executing this Letter of
Transmittal and delivering such Old Notes, either make appropriate arrangements
to register ownership of the Old Notes in such owner's name or obtain a properly
completed bond power from the registered Holder.
4. PARTIAL TENDERS. Tenders of Old Notes will be accepted only in
integral multiples of $1,000 principal amount. If less than the entire principal
amount of Old Notes is tendered, the tendering Holder should fill in the
principal amount tendered in the column labeled "Principal Amount Tendered" of
the box entitled "Description of Old Notes" (Box 1) above. The entire principal
amount of Old Notes delivered to the Exchange Agent will be deemed to have been
tendered unless otherwise indicated. If the entire principal amount of Old Notes
is not tendered, Old Notes for the principal amount of Old Notes not tendered
and New Notes exchanged for any Old Notes tendered will be sent to the Holder at
his or her registered address, unless a different address is provided in the
appropriate box on this Letter of Transmittal or unless tender is made through
DTC, as soon as practicable following the Expiration Date.
5. SIGNATURES ON THE LETTER OF TRANSMITTAL; BOND POWERS AND
ENDORSEMENTS; MEDALLION GUARANTEE OF SIGNATURE. If this Letter of Transmittal is
signed by the registered Holder(s) of the Old Notes tendered herewith, the
signatures must correspond with the name(s) as written on the face of the
tendered Old Notes without alteration, enlargement or any change whatsoever.
If any of the tendered Old Notes are owned of record by two or more
joint owners, all such owners must sign this Letter of Transmittal. If any
tendered Old Notes are held in different names on several Old Notes, it will be
necessary to complete, sign and submit as many separate copies of the Letter of
Transmittal documents as there are names in which tendered Old Notes are held.
If this Letter of Transmittal is signed by the registered Holder, and
New Notes are to be issued and any untendered or unaccepted principal amount of
Old Notes are to be reissued or returned to the registered Holder, then the
registered Holder need not and should not endorse any tendered Old Notes nor
provide a separate bond power. In any other case, the registered Holder must
either properly endorse the Old Notes tendered or transmit a properly completed
separate bond power with this Letter of Transmittal (executed exactly as the
name(s) of the registered Holder(s) appear(s) on such Old Notes), with the
signature(s) on the endorsement or bond power guaranteed by an Eligible
Institution unless such certificates or bond powers are signed by an Eligible
Institution.
If this Letter of Transmittal or any Old Notes or bond powers are signed
by trustees, executors, administrators, guardians, attorneys-in-fact, officers
of corporations or others acting in a fiduciary or representative capacity, such
persons should so indicate when signing and evidence satisfactory to the Obligor
of their authority to so act must be submitted with this Letter of Transmittal.
No medallion signature guarantee is required if (i) this Letter of
Transmittal is signed by the registered Holder(s) of the Old Notes tendered
herewith and the issuance of New Notes (and any Old Notes not tendered or not
accepted) are to be issued directly
2
<PAGE> 3
to such registered Holder(s) and neither the "Special Registration Instructions"
(Box 2) nor the "Special Delivery Instructions" (Box 3) has been completed. In
all other cases, all signatures on this Letter of Transmittal must be guaranteed
by an Eligible Institution.
6. SPECIAL REGISTRATION AND DELIVERY INSTRUCTIONS. Tendering
Holders should indicate, in the applicable box, the name and address in which
the New Notes and/or substitute Old Notes for principal amounts not tendered or
not accepted for exchange are to be sent, if different from the name and address
or account of the person signing this Letter of Transmittal. In the case of
issuance in a different name, the employer identification number or social
security number of the person named must also be indicated and the indicated and
the tendering Holders should complete the applicable box.
If no such instructions are given, the New Notes (and any Old Notes not
tendered or not accepted) will be issued in the name of and sent to the
registered Holder of the Old Notes.
7. TRANSFER TAXES. The Obligor will pay all transfer taxes, if any,
applicable to the sale and transfer of Old Notes to the Obligor or its order
pursuant to the Exchange Offer. If, however, a transfer tax is imposed for any
reason other than the transfer and sale of Old Notes to the Obligor or its order
pursuant to the Exchange Offer, then the amount of any such transfer taxes
(whether imposed on the registered Holder or on any other person) will be
payable by the tendering Holder. If satisfactory evidence of payment of such
taxes or exemption from such taxes is not submitted with this Letter of
Transmittal, the amount of such transfer taxes will be billed directly to such
tendering Holder.
Except as provided in this Instruction 7, it will not be necessary for
transfer tax stamps to be affixed to the Old Notes listed in this Letter of
Transmittal.
8. TAX IDENTIFICATION NUMBER. Under the federal income tax laws,
payments that may be made by the Obligor on account of New Notes issued pursuant
to the Exchange Offer may be subject to backup withholding at the rate of 31%.
In order to avoid such backup withholding, each tendering Holder should complete
and sign the Substitute Form W-9 included in this Letter of Transmittal and
either (a) provide the correct taxpayer identification number ("TIN") and
certify, under penalties of perjury, that the TIN provided is correct and that
(i) the Holder has not been notified by the Internal Revenue Service (the "IRS")
that the Holder is subject to backup withholding as a result of failure to
report all interest or dividends or (ii) the IRS has notified the Holder that
the Holder is no longer subject to backup withholding; or (b) provide an
adequate basis for exemption. If the tendering Holder has not been issued a TIN
and has applied for one, or intends to apply for one in the near future, such
holder should write "Applied For" in the space provided for the TIN in Part I of
the Substitute Form W-9, sign and date the Substitute Form W-9 and sign the
Certificate of Payee Awaiting Taxpayer Identification Number. If "Applied For"
is written in Part I, the Obligor (or the Exchange Agent with respect to the New
Notes or a broker or custodian) may still withhold 31% of the amount of any
payments made on account of the New Notes until the Holder furnishes the Obligor
or the Exchange Agent with respect to the New Notes, broker or custodian with
its TIN. In general, if a Holder is an individual, the taxpayer identification
number is the Social Security number of such individual. If the Exchange Agent
or the Obligor are not provided with the correct TIN, the Holder may be subject
to a $50 penalty imposed by the IRS. Certain Holders (including, among others,
all corporations and certain foreign individuals) are not subject to these
backup withholding and reporting requirements. In order for a foreign individual
to qualify as an exempt recipient, such Holder must submit a statement
(generally, IRS Form W-8),
3
<PAGE> 4
signed under penalties of perjury, attesting to that individual's exempt status.
Failure to complete the Substitute Form W-9 will not, by itself, cause
Old Notes to be deemed invalidly tendered, but may require the Obligor or the
Exchange Agent with respect to the New Notes, broker or custodian to withhold
31% of the amount of any payments made on account of the New Notes. Backup
withholding is not an additional federal income tax. Rather, the federal income
tax liability of a person subject to backup withholding will be reduced by the
amount of tax withheld. If withholding results in an overpayment of taxes, a
refund may be obtained from the IRS.
9. VALIDITY OF TENDERS. All questions as to the validity, form,
eligibility (including time of receipt) and acceptance of tendered Old Notes
will be determined by the Obligor, in its sole discretion, which determination
will be final and binding. The Obligor reserves the right to reject any and all
Old Notes not validly tendered or any Old Notes, the acceptance of which would,
in the opinion of the Obligor or its counsel, be unlawful. The Obligor also
reserves the right to waive any conditions of the Exchange Offer or defects or
irregularities in tenders of Notes as to any ineligibility of any Holder who
seeks to tender Old Notes in the Exchange Offer. The interpretation of the terms
and conditions of the Exchange Offer (including this Letter of Transmittal and
the instructions hereto) by the Obligor shall be final and binding on all
parties. Unless waived, any defects or irregularities in connection with tenders
of Old Notes must be cured within such time as the Obligor shall determine. The
Obligor will use reasonable efforts to give notification of defects or
irregularities with respect to tenders of Old Notes, but shall not incur any
liability for failure to give such notification.
10. WAIVER OF CONDITIONS. The Obligor reserves the absolute right to
amend, waive or modify specified conditions in the Exchange Offer in the case of
any tendered Old Notes.
11. NO CONDITIONAL TENDER. No alternative, conditional, irregular or
contingent tender of Old Notes will be accepted.
12. MUTILATED, LOST, STOLEN, OR DESTROYED OLD NOTES. Any tendering
Holder whose Old Notes have been mutilated, lost, stolen or destroyed should
contact the Exchange Agent at the address indicated above for further
instructions.
13. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Questions and
requests for assistance and requests for additional copies of the Prospectus may
be directed to the Exchange Agent at the address set forth on the first page of
this Letter of Transmittal. Holders may also contact their broker, dealer,
commercial bank, trust company or other nominee for assistance concerning the
Exchange Offer.
14. ACCEPTANCE OF TENDERED OLD NOTES AND ISSUANCE OF NEW NOTES;
RETURN OF OLD NOTES. Subject to the terms and conditions of the Exchange Offer,
the Obligor will accept for exchange all validly tendered Old Notes as soon as
practicable after the Expiration Date and will issue New Notes therefor as soon
as practicable thereafter. For purposes of the Exchange Offer, the Obligor shall
be deemed to have accepted tendered Old Notes when, as and if the Obligor has
given written and oral notice thereof to the Exchange Agent. If any tendered Old
Notes are not exchanged pursuant to the Exchange Offer for any reason, such
unexchanged Old Notes will be returned, without expense, to the undersigned at
the address shown above or at a different address as may be indicated under
"Special Delivery Instructions."
15. WITHDRAWAL. Tenders may be withdrawn only pursuant to the
limited withdrawal rights set forth in the Prospectus under the caption "The
Exchange Offer--Withdrawal of Tenders."
4
<PAGE> 5
(DO NOT WRITE IN SPACE BELOW)
<TABLE>
<CAPTION>
================================================================================
SERIES OF NOTES CERTIFICATE OLD NOTES OLD NOTES
2003/2005 SURRENDERED TENDERED ACCEPTED
<S> <C> <C> <C>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
================================================================================
</TABLE>
DELIVERY PREPARED BY: ___________ CHECKED BY: _______________ DATE: __________
5
<PAGE> 6
PAYOR'S NAME:
COX RADIO, INC.
<TABLE>
===============================================================================================================
<S> <C>
SUBSTITUTE Name (if joint names, list first and circle the name of the
person or entity whose number you enter in Part 1 below. See
FORM W-9 instructions if your name has changed.)
------------------------------------------------------------------------------------------
Department of Address
the Treasury
------------------------------------------------------------------------------------------
Internal City, State and ZIP Code
Revenue
Service
------------------------------------------------------------------------------------------
Part 1 - PLEASE PROVIDE YOUR TAXPAYER Social Security
IDENTIFICATION NUMBER ("TIN") IN THE Number or TIN
BOX AT RIGHT AND CERTIFY BY SIGNING AND
DATING BELOW
------------------------------------------------------------------------------------------
Part 2 - Check the box if you are NOT subject to
backup withholding under the provisions of section
3408(a)(1)(C) of the Internal Revenue Code because
(1) you have not been notified that you are subject
to backup withholding as a result of failure to
report all interest or dividends or (2) the Internal
Revenue Service has notified you that you are no
longer subject to backup withholding.
[ ]
------------------------------------------------------------------------------------------
CERTIFICATION--UNDER THE PENALTIES OF PERJURY, I Part 3 -
CERTIFY THAT THE INFORMATION PROVIDED ON THIS AWAITING
FORM IS TRUE, CORRECT AND COMPLETE. TIN
[ ]
Signature: _________________ Date: ___________
===============================================================================================================
</TABLE>
Note: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP
WITHHOLDING OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE
EXCHANGE OFFER.
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX IN PART 3 OF
SUBSTITUTE FORM W-9
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a Taxpayer Identification Number has
not been issued to me, and either (a) I have mailed or delivered an application
to receive a Taxpayer Identification Number to the appropriate Internal Revenue
Service Center or Social Security Administrative Office or (b) I intend to mail
or deliver an application in the near future. I understand that if I do not
provide a Taxpayer Identification Number by the time of the exchange, 31% of all
reportable payments made to me thereafter will be withheld until I provide a
number.
- --------------------------------------------- -----------------------------
Signature Date
6
<PAGE> 1
EXHIBIT 99.3
NOTICE OF GUARANTEED DELIVERY
FOR
COX RADIO, INC.
OFFER TO EXCHANGE
6.250% NOTES DUE 2003 FOR
ALL OUTSTANDING 6.250% NOTES DUE 2003
6.375% NOTES DUE 2005 FOR
ALL OUTSTANDING 6.250% NOTES DUE 2005
This form or one substantially equivalent hereto must be used to accept
the Exchange Offer of Cox Radio, Inc. (the "Obligor") made pursuant to the
Prospectus dated November 12, 1998 (the "Prospectus") if Holders of
certificates for the 6.250% Notes due 2003 or the 6.375% Notes due 2005
(collectively, the "Old Notes") who wish to tender their Old Notes but whose Old
Notes are not immediately available and who cannot deliver their certificates
for Old Notes (or comply with the procedures for book-entry transfer prior to
the Expiration Date), the Letter of Transmittal and any other documents required
by the Letter of Transmittal to the Exchange Agent prior to 5:00 P.M., New York
City time, on the Expiration Date (as defined in the Prospectus). Such form may
be delivered by hand or transmitted by facsimile transmission, overnight courier
or mail to the Exchange Agent. Capitalized terms used but not defined herein
have the meaning given to them in the Prospectus.
To: The Bank of New York, the Exchange Agent
By Registered or Certified Mail: By Overnight Courier:
The Bank of New York The Bank of New York
101 Barclay Street 101 Barclay Street
Floor 7 East Corporate Trust Services Window
New York, New York 10286 Ground Level
Attn: Reorganization Section New York, New York 10286
Attn: Reorganization Section
By Hand: By Facsimile
(For Eligible Institutions Only):
The Bank of New York (212) 815-6339
101 Barclay Street
Corporate Trust Services Window Confirm by telephone:
Ground Level Christopher Davis
New York, New York 10286 (212) 815-4997
Attn: Reorganization Section
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS, OR TRANSMISSION OF
INSTRUCTIONS VIA A FACSIMILE, OTHER THAN AS SET FORTH ABOVE, DOES NOT CONSTITUTE
A VALID DELIVERY.
This form is not to be used to guarantee signatures. If a signature on
the Letter of Transmittal to be used to tender Old Notes is required to be
guaranteed by an "Eligible Institution" under the instructions thereto, such
signature guarantee must appear in the applicable space provided in the Letter
of Transmittal.
<PAGE> 2
Ladies and Gentlemen:
The undersigned hereby tenders to Cox Radio, Inc. (the "Obligor"), upon
the terms and subject to the conditions set forth in the Prospectus and the
Letter of Transmittal (which together constitute the "Exchange Offer"), receipt
of which is hereby acknowledged, ____________ (number of Old Notes) Old Notes
pursuant to the guaranteed delivery procedures set forth in Instruction 2 of the
Letter of Transmittal.
<PAGE> 3
NOTE: SIGNATURES MUST BE PROVIDED WHERE INDICATED BELOW.
Certificate No(s). for Old Notes (if Name(s) of Record Holder(s)
available)
- ------------------------------------ -------------------------------------
- ------------------------------------ -------------------------------------
Please Print or Type
Address
-----------------------------
-------------------------------------
Telephone. No.( )
-----------------------
Signature(s)
-------------------------------------
Dated:
-------------------------------
GUARANTEE
(Not to be used for signature guarantee)
The undersigned, a member firm of a registered national securities
exchange or of the National Association of Securities Dealers, Inc., or a
commercial bank or trust company having an office or correspondent in the United
States or an "eligible guarantor institution" within the meaning of Rule 17Ad-15
under the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
hereby (a) represents that the above named person(s) "own(s)" the Old Notes
tendered hereby within the meaning of Rule 10b-4 under the Exchange Act, (b)
represents that such tender of Old Notes complies with Rule 10b-4 under the
Exchange Act and (c) guarantees that delivery to the Exchange Agent of
certificates for the Old Notes tendered hereby, in proper form for transfer,
with delivery of a properly completed and duly executed Letter of Transmittal
(or manually signed facsimile thereof) with any required signature and any other
required documents, will be received by the Exchange Agent at one of its
addresses set forth above within five business days after the Exchange Date.
Name of Firm
----------------------------- ------------------------------
Authorized Signature
Address Name
----------------------------------- ------------------------
Please Print or Type
Title
- ------------------------------------------ ------------------------
Zip Code
Telephone. No.( ) Date:
---------------------------- -------------------------
Dated: , 1998
NOTE: DO NOT SEND OLD NOTES WITH THIS FORM; OLD NOTES SHOULD BE SENT WITH YOUR
LETTER OF TRANSMITTAL SO THAT THEY ARE RECEIVED BY THE EXCHANGE AGENT WITHIN
FIVE BUSINESS DAYS AFTER THE EXPIRATION DATE.
