<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON SEPTEMBER 2, 1997
REGISTRATION NO. 333-33371
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-----------------
AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
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CLEAR CHANNEL COMMUNICATIONS, INC.
(Exact name of Registrant as specified in its charter)
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TEXAS 74-1787539
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
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CCCI CAPITAL TRUST I
CCCI CAPITAL TRUST II
CCCI CAPITAL TRUST III
(Exact name of Registrant as specified in its charter)
-----------------
74-6456072
74-6456074
DELAWARE 74-6456077
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
-----------------
200 CONCORD PLAZA, SUITE 600
SAN ANTONIO, TEXAS 78216
(210) 822-2828
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices for each registrant)
-----------------
L. LOWRY MAYS
CLEAR CHANNEL COMMUNICATIONS, INC.
200 CONCORD PLAZA, SUITE 600
SAN ANTONIO, TEXAS 78216
(210) 822-2828
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(Name, address, including zip code, and telephone number, including area code,
of agent for service for each registrant)
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<PAGE> 2
COPIES TO:
STEPHEN C. MOUNT, ESQ. JOHN W. WHITE, ESQ.
AKIN, GUMP, STRAUSS, HAUER & FELD, L.L.P. CRAVATH, SWAINE & MOORE
1500 NATIONSBANK PLAZA WORLDWIDE PLAZA
300 CONVENT STREET 825 EIGHTH AVENUE
SAN ANTONIO, TEXAS 78205 NEW YORK, NEW YORK 10019
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From
time to time after this Registration Statement becomes effective.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
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, other than securities offered only in connection with
dividend or interest reinvestment plans, check the following box. [x]
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 earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. [ ]
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE
OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933, 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.
<PAGE> 3
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any State in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such State.
PROSPECTUS Subject To Completion
September 2, 1997
$1,500,000,000
CLEAR CHANNEL COMMUNICATIONS, INC.
DEBT SECURITIES, JUNIOR SUBORDINATED DEBT SECURITIES,
PREFERRED STOCK, COMMON STOCK, WARRANTS,
STOCK PURCHASE CONTRACTS, AND STOCK PURCHASE UNITS
CCCI CAPITAL TRUST I
CCCI CAPITAL TRUST II
CCCI CAPITAL TRUST III
PREFERRED SECURITIES, GUARANTEED TO THE EXTENT SET FORTH HEREIN BY
CLEAR CHANNEL COMMUNICATIONS, INC.
Clear Channel Communications, Inc., a Texas corporation (the
"Company"), may issue from time to time, together or separately, (i) unsecured
senior debt securities (the "Senior Debt Securities"), (ii) unsecured
subordinated debt securities (the "Subordinated Debt Securities" and, together
with the Senior Debt Securities, the "Debt Securities"), (iii) unsecured junior
subordinated debt securities ("Junior Subordinated Debt Securities"); (iv)
warrants to purchase Debt Securities or Junior Subordinated Debt Securities
(the "Debt Warrants"), (v) shares of preferred stock, par value $1.00 per
share, of the Company (the "Preferred Stock"), (vi) warrants to purchase shares
of Preferred Stock (the "Preferred Stock Warrants"), (vii) shares of common
stock, par value $.10 per share, of the Company (the "Common Stock"), (viii)
warrants to purchase shares of Common Stock (the "Common Stock Warrants"), (ix)
stock purchase contracts ("Stock Purchase Contracts") to purchase Common Stock
or Preferred Stock and (x) stock purchase units ("Stock Purchase Units"), each
representing ownership of a Stock Purchase Contract and Debt Securities, Junior
Subordinated Debt Securities, debt obligations of third parties, including the
United States of America or agencies or instrumentalities thereof ("U.S.
Obligations") or Preferred Securities (as defined below), securing the holder's
obligation to purchase Common Stock or Preferred Stock under the Stock Purchase
Contract, or any combination of the foregoing, either individually or as units
consisting of one or more of the foregoing in amounts, at prices and on terms
to be determined by market conditions at the time of offering. The Debt
Warrants, Preferred Stock Warrants and Common Stock Warrants are referred to
herein collectively as the "Warrants", and the Debt Securities, the Junior
Subordinated Debt Securities, Preferred Stock, Common Stock, the Warrants,
Stock Purchase Contracts and Stock Purchase Units are referred to herein
collectively as the "Company Securities".
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.
Additional information regarding the Securities is set forth on the inside
front cover.
For a discussion of certain risks associated with an investment in the
Securities, see "General Description of Securities and Risk Factors" on page 9.
<PAGE> 4
CCCI Capital Trust I, CCCI Capital Trust II and CCCI Capital
Trust III (each, a "CCCI Trust" and collectively, the "CCCI Trusts"), each a
statutory business trust formed under Delaware law, may offer, from time to
time, preferred securities (the "Preferred Securities") with the payment of
distributions and payments on liquidation or redemption of the Preferred
Securities issued by each such CCCI Trust guaranteed on a subordinated basis by
the Company to the extent described herein and in an accompanying prospectus
supplement (the "Guarantees"). The Company will be the owner of the trust
interests represented by common securities (the "Common Securities") to be
issued by each CCCI Trust. Unless indicated otherwise in a prospectus
supplement, each CCCI Trust exists for the sole purpose of issuing its trust
interests and investing the proceeds thereof in Junior Subordinated Debt
Securities. The Company Securities and the Preferred Securities are referred
to herein collectively as the "Offered Securities".
The Offered Securities may be issued in one or more series or
issuances and will be limited to $1,500,000,000 in aggregate public offering
price (or its equivalent, based on the applicable exchange rate, to the extent
Debt Securities or Junior Subordinated Debt Securities are issued for one or
more foreign currencies or currency units). The Offered Securities may be sold
for U.S. dollars, or any foreign currency or currencies or currency units, and
the principal of, any premium on, and any interest on, the Debt Securities or
Junior Subordinated Debt Securities may be payable in U.S. dollars, or any
foreign currency or currencies or currency units.
The Offered Securities may be offered separately or as units with
other Offered Securities, in separate series, in amounts, at prices and on
terms to be determined at or prior to the time of sale. The sale of other
securities under the Registration Statement of which this Prospectus forms a
part or under a Registration Statement to which this Prospectus relates will
reduce the amount of Offered Securities which may be sold hereunder.
The specific terms of the Offered Securities in respect of which this
Prospectus is being delivered are set forth in the accompanying Prospectus
Supplement (the "Prospectus Supplement"), including, where applicable, (i) in
the case of Debt Securities or Junior Subordinated Debt Securities, the
specific designation, aggregate principal amount, ranking as senior or
subordinated debt, authorized denomination, initial offering price, maturity
(which may be fixed or extendible), premium (if any), interest rate (which may
be fixed or floating), time of and method of calculating the payment of
interest, if any, the currency in which principal, premium, if any, and
interest, if any, are payable, any exchangeability, conversion, redemption or
sinking fund terms, the right of the Company, if any, to defer payment or
interest on the Junior Subordinated Debt Securities and the maximum length of
such deferral period, put options, if any, public offering price, and other
specific terms; (ii) in the case of Preferred Stock or Preferred Securities,
the designation, number of shares, liquidation preference per share, initial
public offering price, dividend or distribution rate (or method of calculation
thereof), dates on which dividends or distributions shall be payable and dates
from which dividends or distributions shall accrue, any redemption or sinking
fund provisions, any voting rights, any conversion or exchange provisions, and
any other rights, preferences, privileges, limitations or restrictions relating
to the Preferred Stock or Preferred Securities of a specific series and the
terms upon which the proceeds of the sale of the Preferred Securities will be
used to purchase a specific series of Junior Subordinated Debt Securities of
the Company; (iii) in the case of Common Stock, the number of shares, public
offering price and the terms of the offering and sale thereof; (iv) in the case
of Warrants, the number and terms thereof, the designation and description of
the Common Stock, Preferred Stock, Debt Securities, Junior Subordinated Debt
Securities, or Preferred Securities issuable thereunder, the number of
securities issuable upon exercise, the exercise price, the terms of the
offering and sale thereof and, where applicable, the duration and detachability
thereof; (v) in the case of Stock Purchase
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Contracts, the designation and number of shares of Common Stock or Preferred
Stock issuable thereunder, the purchase price of the Common Stock or Preferred
Stock, the date or dates on which the Common Stock or Preferred Stock is
required to be purchased by the holders of the Stock Purchase Contracts, any
periodic payments required to be made by the Company to the holders of the
Stock Purchase Contracts or vice versa, and the terms of the offering and sale
thereof; (vi) in the case of Stock Purchase Units, the specific terms of the
Stock Purchase Contracts and any Preferred Stock, Debt Securities, Junior
Subordinated Debt Securities or debt obligations or securities of third parties
or Preferred Securities securing the holder's obligation to purchase the
Preferred Stock or Common Stock under the Stock Purchase Contracts, and the
terms of the offering and sale thereof; and (vii) in the case of all Offered
Securities, whether such Offered Securities will be offered separately or as a
unit with other Offered Securities. The Prospectus Supplement will also contain
information, where applicable, about certain federal income tax considerations
relating to, and any listing on a securities exchange of, the Offered
Securities covered by the Prospectus Supplement.
The Offered Securities will be sold directly, through agents, dealers
or underwriters as designated from time to time, or through a combination of
such methods. If any agents of the Company or the CCCI Trusts or any dealers or
underwriters are involved in the sale of the Offered Securities in respect of
which this Prospectus is being delivered, the names of such agents, dealers or
underwriters and any applicable agent's commission, dealer's purchase price or
underwriter's discount will be set forth in or may be calculated from the
Prospectus Supplement. The net proceeds to the Company or the CCCI Trusts from
such sale will be the purchase price less such commission in the case of an
agent, the purchase price in the case of a dealer, or the public offering price
less such discount in the case of an underwriter and less, in each case, other
applicable issuance expenses. See "Plan of Distribution".
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The date of this Prospectus is , 1997.
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IN CONNECTION WITH THIS OFFERING, CERTAIN PERSONS PARTICIPATING IN
THIS OFFERING MAY ENGAGE IN PASSIVE MARKET MAKING TRANSACTIONS IN THE COMMON
STOCK ON THE NEW YORK STOCK EXCHANGE IN ACCORDANCE WITH RULE 103 UNDER
REGULATION M. SEE "PLAN OF DISTRIBUTION".
CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN
TRANSACTIONS THAT STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE PRICE OF THE DEBT
SECURITIES, INCLUDING STABILIZING AND SYNDICATE COVERING TRANSACTIONS. THE
UNDERWRITERS MAY OVER-ALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN
THE MARKET PRICE OF THE COMMON STOCK OF THE COMPANY AT A LEVEL ABOVE THAT WHICH
MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. FOR A DESCRIPTION OF THESE
ACTIVITIES. SEE "PLAN OF DISTRIBUTION".
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AVAILABLE INFORMATION
The Company is subject to the information requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and, in
accordance therewith, files reports, proxy statements and other information
with the Securities and Exchange Commission (the "Commission"). Reports, proxy
and information statements filed by the Company with the Commission pursuant to
the information requirements of the Exchange Act may be inspected and copied at
the public reference facilities maintained by the Commission at 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, Citicorp Center,
500 West Madison Street, 14th Floor, Chicago, Illinois 60661. Copies of such
material may be obtained from the Public Reference Section of the Commission at
450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates. The
Commission also maintains a site on the World Wide Web at http://www.sec.gov
that contains reports, proxies and information statements and other information
regarding registrants (including the Company) that file electronically. In
addition, reports, proxy statements and other information concerning the
Company can be inspected and copied at the offices of the New York Stock
Exchange, Inc. ("NYSE"), 20 Broad Street, New York, New York 10005, on which
the Common Stock of the Company (symbol: "CCU") is listed.
No separate financial statements of the CCCI Trusts have been included
or incorporated by reference herein. Neither the CCCI Trusts nor the Company
considers such financial statements material to holders of Preferred Securities
because (i) all of the voting securities of each CCCI Trust will be owned,
directly or indirectly, by the Company, a reporting company under the Exchange
Act, (ii) no CCCI Trust has independent operations but rather each exists for
the purpose of issuing securities representing undivided beneficial interests
in the assets of such CCCI Trust and investing the proceeds thereof in Junior
Subordinated Debt Securities, and (iii) the obligations of the CCCI Trusts
under the Preferred Securities are fully and unconditionally guaranteed on a
subordinated basis by the Company to the extent set forth herein. See "The CCCI
Trusts" and "Description of Guarantees."
The Company and the CCCI Trusts have filed with the Commission a joint
registration statement (the "Registration Statement") under the Securities Act
of 1933, as amended (the "Securities Act"), with respect to the securities
offered hereby. This Prospectus does not contain all the information set forth
in the Registration Statement, certain parts of which are omitted in accordance
with the rules and regulations of the Commission. Reference is made to the
Registration Statement and to the exhibits relating thereto for further
information with respect to the Company, the CCCI Trusts and the securities
offered hereby.
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INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents, heretofore filed by the Company with the
Commission pursuant to the Exchange Act, are hereby incorporated by reference
into this Prospectus and made a part hereof:
1. The Company's Annual Report on Form 10-K for the fiscal
year ended December 31, 1996.
2. The Company's Quarterly Report on Form 10-Q for the
quarter ended March 31, 1997.
3. The Company's Quarterly Report on Form 10-Q for the
quarter ended June 30, 1997.
4. The Company's Current Report on Form 8-K dated April 17,
1997.
5. The Company's Current Report on Form 8-K dated May 24,
1996.
6. The Company's Current Report on Form 8-K dated June 5,
1996.
Any documents filed by the Company pursuant to Sections 13(a), 13(c),
14 or 15(d) of the Exchange Act after the date of this Prospectus and prior to
the termination of the Offering of the Offered Securities offered hereby shall
be deemed to be incorporated by reference in this Prospectus and to be a part
hereof from the date of filing of such documents.
Any statement contained 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
such statement so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute a part of this Prospectus. To the extent
that any proxy statement is incorporated by reference herein, such
incorporation shall not include any information contained in such proxy
statement which is not, pursuant to the Commission's rules, deemed to be
"filed" with the Commission or subject to the liabilities of Section 18 of the
Exchange Act.
The Company will provide without charge to each person, including any
beneficial owner, to whom a copy of this Prospectus is delivered, upon the
written or oral request of any such person, a copy of any document described
above (other than exhibits, unless such exhibits are specifically incorporated
by reference). Requests for such copies should be directed to Houston Lane,
Clear Channel Communications, Inc., 200 Concord Plaza, Suite 600, San Antonio,
Texas 78216 (telephone: (210) 822-2828).
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THE COMPANY
The Company, which began operations in 1974, is a diversified media
company in three primary lines of business: radio, television, and outdoor
advertising. In addition, the Company owns a 50% equity interest in the
Australian Radio Network Pty. Ltd., which operates radio stations in Australia,
a one-third equity interest in New Zealand Radio Network which operates radio
stations in New Zealand, and a 32.3% non-voting equity interest in Heftel
Broadcasting Corporation (Nasdaq: HBCCA), a Spanish-language broadcaster which
operates radio stations in domestic markets.
The radio stations currently owned or programmed by the Company are
located principally in the South, Southeast, Northeast and Midwest. These radio
stations employ a wide variety of programming formats, such as
News/Talk/Sports, Country, Adult Contemporary, Urban and Album Rock. The
television stations currently owned or programmed by the Company are located in
the South, Southeast, Northeast and Midwest. These television stations are
typically affiliated with one of the television networks, including the FOX
television network, the UPN television network, the ABC television network, the
NBC television network, or the CBS television network. Additionally, the
Company operates radio networks serving Oklahoma, Texas, Iowa, Kentucky and
Virginia. The Company's outdoor advertising properties are located primarily in
the South, Southeast, Midwest, and West.
The Company has its principal executive offices at 200 Concord Plaza,
Suite 600, San Antonio, Texas 78216 (telephone: 210-822-2828).
THE CCCI TRUSTS
Each of CCCI Capital Trust I, CCCI Capital Trust II and CCCI Capital
Trust III is a statutory business trust formed under Delaware law pursuant to
(i) a separate Declaration of Trust executed by the Company, as depositor for
such CCCI Trust, and the Trustees (as defined herein) of such trust and (ii)
the filing of a certificate of trust with the Delaware Secretary of State. The
declarations will be amended and restated in their entirety (each as so amended
and restated, a "Declaration") substantially in the form filed as an exhibit to
the Registration Statement of which this Prospectus is a part and will be
qualified as Indentures under the Trust Indenture Act of 1939, as amended (the
"Trust Indenture Act"). Unless an accompanying Prospectus Supplement provides
otherwise, each CCCI Trust exists for the sole purposes of (i) issuing the
Preferred Securities, (ii) investing the gross proceeds of the sale of the
Preferred Securities in a specific series of Junior Subordinated Debt
Securities, and (iii) engaging in only those other activities necessary or
incidental thereto. All of the Common Securities will be owned by the Company.
The Common Securities will rank pari passu, and payments will be made thereon
pro rata, with the Preferred Securities, except that upon the occurrence and
continuance of an event of default under the applicable Declaration, the rights
of the holders of the applicable Common Securities to payment in respect of
distributions and payments upon liquidation, redemption and otherwise will be
subordinated to the rights of the holders of the applicable Preferred
Securities. The Company will acquire Common Securities having an aggregate
liquidation amount equal to a minimum of 1% of the total capital of each CCCI
Trust. Each CCCI Trust will have a term of at least 20 but not more than 50
years, but may terminate earlier as provided in the applicable Declaration.
Each CCCI Trust's business and affairs will be conducted by the Trustees. The
holder of the Common Securities will be entitled to appoint, remove or replace
any of, or increase or reduce the number of, the Trustees of each CCCI Trust.
The duties and obligations of the Trustees shall be governed by the Declaration
of such CCCI Trust. At least one of the Trustees of each CCCI Trust will be a
person who is an employee or officer of or who is affiliated with the Company
(a "Regular Trustee"). One Trustee of each CCCI Trust will be a financial
institution that is not affiliated with the Company, which shall act as
property trustee and as indenture trustee for the purposes of
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the Trust Indenture Act, pursuant to the terms set forth in a Prospectus
Supplement (the "Property Trustee"). In addition, unless the Property Trustee
maintains a principal place of business in the State of Delaware and otherwise
meets the requirements of applicable law, one Trustee of each CCCI Trust will
be a legal entity having a principal place of business in, or an individual
resident of, the State of Delaware (the "Delaware Trustee"). The Company will
pay all fees and expenses related to each CCCI Trust and the offering of the
Preferred Securities. Unless otherwise set forth in the Prospectus Supplement,
the Property Trustee will be The Bank of New York, and the Delaware Trustee
will be The Bank of New York (Delaware). The office of the Delaware Trustee in
the State of Delaware is 100 White Clay Center, Newark, Delaware 19711. The
principal place of business of each CCCI Trust is c/o Clear Channel
Communications, Inc., 200 Concord Plaza, Suite 600, San Antonio, Texas 78216
(telephone: (210) 822-2828).
RATIO OF EARNINGS TO COMBINED FIXED CHARGES
AND PREFERRED STOCK DIVIDENDS
Years Ended December 31,
<TABLE>
<CAPTION>
Six Months Ended
June 30, 1997 1996 1995 1994 1993 1992
------------- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
2.10 3.63 3.32 5.54 3.81 2.55
</TABLE>
The ratio of earnings to combined fixed charges and preferred stock
dividends has been computed on a total enterprise basis. Earnings represent
income from continuing operations before income taxes less equity in
undistributed net income (loss) of unconsolidated affiliates plus fixed
charges. Fixed charges represent interest, amortization of debt discount and
expense, and the estimated interest portion of rental charges. The Company had
no Preferred Stock outstanding and paid no dividends thereon for any period
presented.
USE OF PROCEEDS
Unless otherwise specified in the Prospectus Supplement, the net
proceeds from the sale of the Company Securities offered hereby will be used
for general corporate purposes, including repayment of borrowings, working
capital, capital expenditures, stock repurchase programs and acquisitions.
Unless otherwise specified in the Prospectus Supplement, each CCCI Trust will
use all proceeds received from the sale of Preferred Securities to purchase
Junior Subordinated Debt Securities of the Company. Additional information on
the use of net proceeds from the sale of the Offered Securities offered hereby
may be set forth in the Prospectus Supplement relating to such Offered
Securities.
HOLDING COMPANY STRUCTURE
The Company is a holding company and its assets consist primarily of
investments in its subsidiaries and majority-owned partnerships. The Company's
rights and the rights of its creditors, including holders of Debt Securities or
Junior Subordinated Debt Securities, to participate in the distribution of
assets of any person in which the Company owns an equity interest (including
any subsidiary and majority-owned partnerships) upon such person's liquidation
or reorganization will be subject to prior claims of such person's creditors,
including trade creditors, except to the extent that the Company may itself be
a creditor with recognized claims
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against such person (in which case the claims of the Company would still be
subject to the prior claims of any secured creditor or such person and of any
holder of indebtedness of such person that is senior to that held by the
Company). Accordingly, the holder of Debt Securities or Junior Subordinated
Debt Securities may be deemed to be effectively subordinated to such claims.
GENERAL DESCRIPTION OF SECURITIES AND RISK FACTORS
The Company may offer shares of Common Stock, Preferred Stock, Debt
Securities, Junior Subordinated Debt Securities, Warrants, Stock Purchase
Contracts, Stock Purchase Units, or any combination of the foregoing either
individually or as units consisting of one or more Securities under this
Prospectus. Each CCCI Trust may offer Preferred Securities under this
Prospectus.
CERTAIN OF THE SECURITIES TO BE OFFERED HEREBY THEMSELVES MAY INVOLVE
A HIGH DEGREE OF RISK. SUCH RISKS WILL BE SET FORTH IN THE PROSPECTUS
SUPPLEMENT RELATING TO SUCH SECURITY. IN ADDITION, CERTAIN RISK FACTORS, IF
ANY, RELATING TO THE COMPANY'S BUSINESS WILL BE SET FORTH IN A PROSPECTUS
SUPPLEMENT.
DESCRIPTION OF DEBT SECURITIES
The following description of the terms of the Debt Securities
summarizes certain general terms and provisions of the Debt Securities to which
any Prospectus Supplement may relate. The particular terms of the Debt
Securities and the extent, if any, to which such general provisions may apply
to any series of Debt Securities will be described in the Prospectus Supplement
relating to such series.
Senior Debt Securities may be issued, from time to time, in one or
more series under an Indenture (the "Senior Indenture"), between the Company
and The Bank of New York, as trustee, or such other trustee as shall be named
in a Prospectus Supplement (the "Senior Trustee"). The form of Senior Indenture
is filed as an exhibit to the Registration Statement of which this Prospectus
is a part. Subordinated Debt Securities may be issued, from time to time, in
one or more series under an indenture (the "Subordinated Indenture") between
the Company and The Bank of New York or such other trustee as shall be named in
a Prospectus Supplement (the "Subordinated Trustee"). The form of Subordinated
Indenture is filed as an Exhibit to the Registration Statement of which this
Prospectus is a part. The Senior Indenture and the Subordinated Indenture are
sometimes referred to collectively as the "Indentures," and the Senior Trustee
and the Subordinated Trustee are sometimes referred to collectively as the
"Debt Trustees." None of the Indentures will limit the amount of Debt
Securities that may be issued hereunder, and each Indenture will provide that
Debt Securities may be issued thereunder up to an aggregate principal amount
authorized from time to time by the Company and may be payable in any currency
or currency unit designated by the Company or in amounts determined by
reference to an index. The following statements are subject to the detailed
provisions of the Indentures. Wherever any particular provisions of the
Indentures or terms defined therein are referred to, such provisions and terms
are incorporated by reference as a part of the statements made herein and such
statements are qualified in their entirety by such references, including the
definitions therein of certain terms. Capitalized terms used herein but not
defined herein shall have the meanings ascribed to them in the Indentures.
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GENERAL
The Senior Debt Securities will be unsecured and will rank equally and
ratably with other unsecured and unsubordinated debt of the Company, unless the
Company shall be required to secure the Senior Debt Securities as described
below under "--Senior Debt Securities." The obligations of the Company pursuant
to any Subordinated Debt Securities will be subordinate in right of payment to
all Senior Indebtedness of the Company with respect to such Subordinated Debt
Securities, and will be described in an accompanying Prospectus Supplement.
Debt Securities will be issued from time to time and offered on terms
determined by market conditions at the time of sale.
The Debt Securities may be issued in one or more series with the same
or various maturities, at par, at a premium, or at a discount. Any Debt
Securities bearing no interest or interest at a rate which at the time of
issuance is below market rates will be sold at a discount (which may be
substantial) from their stated principal amount. Federal income tax
consequences and other special considerations applicable to any such
substantially discounted Debt Securities will be described in the Prospectus
Supplement relating thereto.
Reference is made to the Prospectus Supplement for the following terms
of the Debt Securities offered hereby: (i) the designation, aggregate principal
amount and authorized denominations of such Debt Securities; (ii) the
percentage of their principal amount at which such Debt Securities will be
issued; (iii) the date or dates on which the Debt Securities will mature (which
may be fixed or extendible); (iv) the rate or rates (which may be fixed or
floating) per annum at which the Debt Securities will bear interest, if any, or
the method of determining such rate or rates; (v) the date or dates on which
any such interest will be payable, the date or dates on which payment of any
such interest will commence and the Regular Record Dates for such Interest
Payment Dates; (vi) the terms of any mandatory or optional redemption
(including any provisions for any sinking, purchase or other analogous fund) or
repayment option; (vii) the currency, currencies or currency units for which
the Debt Securities may be purchased and the currency, currencies or currency
units in which the principal thereof, any premium thereon and any interest
thereon may be payable; (viii) if the currency, currencies or currency units
for which the Debt Securities may be purchased or in which the principal
thereof, any premium thereon and any interest thereon may be payable is at the
election of the Company or the purchaser, the manner in which such election may
be made; (ix) if the amount of payments on the Debt Securities is determined
with reference to an index based on one or more currencies or currency units,
changes in the price of one or more securities or changes in the price of one
or more commodities, the manner in which such amounts may be determined; (x)
the extent to which any of the Debt Securities will be issuable in temporary or
permanent global form, or the manner in which any interest payable on a
temporary or permanent Global Security will be paid; (xi) the terms and
conditions upon which the Debt Securities may be convertible into or exchanged
for Common Stock, Preferred Stock, or indebtedness or other securities of any
kind of the Company or any Third Party Securities (as defined herein); (xii)
information with respect to book-entry procedures, if any; (xiii) a discussion
of certain federal income tax, accounting and other special considerations,
procedures and limitations with respect to the Debt Securities; and (xiv) any
other specific terms of the Debt Securities not inconsistent with the
applicable Indenture.
In the event Debt Securities of any series are to be offered that are
convertible into or exchangeable for securities of third parties ("Third Party
Securities"), the Prospectus Supplement will identify the Third Party
Securities, the issuer of such Third Party Securities (the "Third Party
Company"), all documents filed by the Third Party Company pursuant to Sections
13(a), 13(c), 14 or 15(d) of the Exchange Act since the end of such Third Party
Company's last completed fiscal year for which a Form 10-K annual report has
been filed and the document or documents filed under the Exchange Act which
contain a description of the Third Party Securities being sold or, if no such
document or documents exist, the Prospectus Supplement will include a
description of the Third Party Securities being sold. Third Party Securities
will only be securities of third parties that are eligible to use Form S-3 (or
any successor form) for primary offerings under the rules and regulations of
the Commission or securities that are registered under Section 12 of the
Exchange Act. To the extent the
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Securities Act requires registration of the Third Party Securities by the Third
Party Company, such as where the Third Party Company is an affiliate of the
Company, in connection with the issuance, conversion and/or exchange of such
Debt Securities, the Company will cause the Third Party Company to file a third
party registration statement ("Third Party Registration Statement") under the
Securities Act. Where the conversion and/or exchange of the Debt Securities
would require an effective Third Party Registration Statement at the time of
such exchange or conversion, the exchange or conversion will be subject to the
effectiveness of such registration statement. For example, Debt Securities
that are convertible into or exchangeable for Third Party Securities may be
convertible or exchangeable by their terms at the election of the Company or
mandatorily at the expiration of a specified period or at other times under
specified circumstances ("Mandatory Debt Securities") or may be convertible or
exchangeable by their terms at the election of the holder at any time during a
specified period or periods or on a specified date or dates ("Voluntary Debt
Securities"). In the case of both Mandatory Debt Securities and Voluntary Debt
Securities, if the Company is an affiliate of the Third Party Company, the
Third Party Securities into which they may be converted or for which they may
be exchanged will be the subject of a registration statement filed under the
Securities Act by the Third Party Company prior to any offer of such Mandatory
or Voluntary Debt Securities, and a Third Party Registration Statement with
respect to such Third Party Securities will have been declared effective prior
to any sale of such Mandatory or Voluntary Debt Securities, except in the case
of Voluntary Debt Securities that are not immediately exercisable or
convertible, in which case, such a Third Party Registration Statement would
have to be effective, absent an exemption, when the holder of such securities
elects to convert such Voluntary Debt Securities into or exchange them for
Third Party Securities.
If any of the Debt Securities are sold for one or more foreign
currencies or foreign currency units or if the principal of, premium, if any,
or any interest on any series of Debt Securities is payable in one or more
foreign currencies or foreign currency units, the restrictions, elections,
federal income tax consequences, specific terms and other information with
respect to such issue of Debt Securities and such currencies or currency units
will be set forth in the Prospectus Supplement relating thereto.
Unless otherwise specified in the Prospectus Supplement, the principal
of, any premium on, and any interest on the Debt Securities will be payable,
and the Debt Securities will be transferable, at the Corporate Trust Office of
the applicable Debt Trustee in New York, New York, provided that payment of
interest, if any, may be made at the option of the Company by check mailed on
or before the payment date, first class mail, to the address of the person
entitled thereto as it appears on the registry books of the Company or its
agent.
Unless otherwise specified in the Prospectus Supplement, the Debt
Securities will be issued only in fully registered form and in denominations of
$1,000 and any integral multiple thereof. No service charge will be made for
any transfer or exchange of any Debt Securities, but the Company may, except in
certain specified cases not involving any transfer, require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith. Unless otherwise set forth in the Prospectus Supplement, interest
on outstanding Debt Securities will be paid to holders of record on the date
which is 15 days immediately prior to the date such interest is to be paid.
The Company's rights and the rights of its creditors (including
holders of Debt Securities) to participate in any distribution of assets of any
subsidiary of the Company upon its liquidation or reorganization or otherwise
is necessarily subject to the prior claims of creditors of the subsidiary,
except to the extent that claims of the Company itself as a creditor of the
subsidiary may be recognized. The operations of the Company are conducted
through its subsidiaries and, therefore, the Company is dependent upon the
earnings and cash flow of its subsidiaries to meet its obligations, including
obligations under the Debt Securities. The Debt Securities will be effectively
subordinated to all indebtedness of the Company's subsidiaries.
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<PAGE> 14
GLOBAL SECURITIES
The Debt Securities of a series may be issued in whole or in part in
the form of one or more Global Securities that will be deposited with, or on
behalf of, a depositary (the "Depositary") identified in the Prospectus
Supplement relating to such series. Global Securities may be issued only in
fully registered form and in either temporary or permanent form. Unless and
until it is exchanged in whole or in part for the individual Debt Securities
represented thereby, a Global Security may not be transferred except as a whole
by the Depositary for such Global Security to a nominee of such Depositary or
by a nominee of such Depositary to such Depositary or another nominee of such
Depositary or by the Depositary or any nominee of such Depositary to a
successor Depositary or any nominee of such successor.
The specific terms of the depositary arrangement with respect to a
series of Debt Securities will be described in the Prospectus Supplement
relating to such series. The Company anticipates that the following provisions
will generally apply to depositary arrangements.
Upon the issuance of a Global Security, the Depositary for such Global
Security or its nominee will credit, on its book entry registration and
transfer system, the respective principal amounts of the individual Debt
Securities represented by such Global Security to the accounts of persons that
have accounts with such Depositary. Such accounts shall be designated by the
dealers, underwriters or agents with respect to such Debt Securities or by the
Company if such Debt Securities are offered and sold directly by the Company.
Ownership of beneficial interests in a Global Security will be limited to
persons that have accounts with the applicable Depositary ("participants") or
persons that may hold interests through participants. Ownership of beneficial
interests in such Global Security will be shown on, and the transfer of that
ownership will be effected only through, records maintained by the applicable
Depositary or its nominee (with respect to interests of participants) and the
records of participants (with respect to interests of persons other than
participants). The laws of some states require that certain purchasers of
securities take physical delivery of such securities in definitive form. Such
limits and such laws may impair the ability to transfer beneficial interests in
a Global Security.
So long as the Depositary for a Global Security, or its nominee, is
the registered owner of such Global Security, such Depositary or such nominee,
as the case may be, will be considered the sole owner or holder of the Debt
Securities represented by such Global Security for all purposes under the
applicable Indenture. Except as provided below, owners of beneficial interests
in a Global Security will not be entitled to have any of the individual Debt
Securities of the series represented by such Global Security registered in
their names, will not receive or be entitled to receive physical delivery of
any such Debt Securities of such series in definitive form and will not be
considered the owners or holders thereof under the applicable Indenture
governing such Debt Securities.
Payments of principal of, any premium on, and any interest on,
individual Debt Securities represented by a Global Security registered in the
name of a Depositary or its nominee will be made to the Depositary or its
nominee, as the case may be, as the registered owner of the Global Security
representing such Debt Securities. Neither the Company, the applicable Debt
Trustee for such Debt Securities, any Paying Agent, nor the Security Registrar
for such Debt Securities will have any responsibility or liability for any
aspect of the records relating to or payments made on account of beneficial
ownership interests of the Global Security for such Debt Securities or for
maintaining, supervising or reviewing any records relating to such beneficial
ownership interests.
The Company expects that the Depositary for a series of Debt
Securities or its nominee, upon receipt of any payment of principal, premium or
interest in respect of a permanent Global Security representing any
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<PAGE> 15
of such Debt Securities, immediately will credit participants' accounts with
payments in amounts proportionate to their respective beneficial interests in
the principal amount of such Global Security for such Debt Securities as shown
on the records of such Depositary or its nominee. The Company also expects that
payments by participants to owners of beneficial interests in such Global
Security 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 in bearer form or registered in "street name".
Such payments will be the responsibility of such participants.
If the Depositary for a series of Debt Securities is at any time
unwilling, unable or ineligible to continue as depositary and a successor
depositary is not appointed by the Company within 90 days, the Company will
issue individual Debt Securities of such series in exchange for the Global
Security representing such series of Debt Securities. In addition, the Company
may at any time and in its sole discretion, subject to any limitations
described in the Prospectus Supplement relating to such Debt Securities,
determine not to have any Debt Securities of a series represented by one or
more Global Securities and, in such event, will issue individual Debt
Securities of such series in exchange for the Global Security or Securities
representing such series of Debt Securities. Further, if the Company so
specifies with respect to the Debt Securities of a series, an owner of a
beneficial interest in a Global Security representing Debt Securities of such
series may, on terms acceptable to the Company, the applicable Debt Trustee and
the Depositary for such Global Security, receive individual Debt Securities of
such series in exchange for such beneficial interests, subject to any
limitations described in the Prospectus Supplement relating to such Debt
Securities. In any such instance, an owner of a beneficial interest in a Global
Security will be entitled to physical delivery of individual Debt Securities of
the series represented by such Global Security equal in principal amount to
such beneficial interest and to have such Debt Securities registered in its
name. Individual Debt Securities of such series so issued will be issued in
denominations, unless otherwise specified by the Company, of $1,000 and
integral multiples thereof.
CONSOLIDATION, MERGER, CONVEYANCE OR TRANSFER
Each Indenture provides that the Company may not consolidate with or
merge into any other corporation or convey or transfer its properties and
assets substantially as an entirety to any person, unless (i) the successor
corporation shall be a corporation organized and existing under the laws of the
United States or any State thereof or the District of Columbia, and shall
expressly assume by a supplemental indenture the due and punctual payment of
the principal of, any premium on, and any interest on, all the outstanding Debt
Securities and the performance of every covenant in the applicable Indenture on
the part of the Company to be performed or observed; (ii) 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 happened and be continuing; and (iii) the Company shall have delivered to
the applicable Debt Trustee an Officers' Certificate and an Opinion of Counsel,
each stating that such consolidation, merger, conveyance or transfer and such
supplemental indenture comply with the foregoing provisions relating to such
transaction. In case of any such consolidation, merger, conveyance or transfer,
such successor corporation will succeed to and be substituted for the Company
as obligor on the Debt Securities, with the same effect as if it had been named
in the applicable Indenture as the Company. Other than the restrictions on
Mortgages described below, the Indentures and the Debt Securities do not
contain any covenants or other provisions designed to protect holders of Debt
Securities in the event of a highly leveraged transaction involving the Company
or any Subsidiary.
EVENTS OF DEFAULT; WAIVER AND NOTICE THEREOF; DEBT SECURITIES IN FOREIGN
CURRENCIES
As to any series of Debt Securities, an Event of Default is defined in
each Indenture as (i) default for 30 days in payment of any interest on the
Debt Securities of such series, or, in the case of the Subordinated Debt
Indenture, for a period of 90 days; (ii) default in payment of principal of or
any premium on the Debt
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Securities of such series at maturity; (iii) default in payment of any sinking
or purchase fund or analogous obligation, if any, on the Debt Securities of
such series; (iv) default by the Company in the performance of any other
covenant or warranty contained in the applicable Indenture for the benefit of
such series which shall not have been remedied for a period of 90 days after
notice is given as specified in the applicable Indenture; and (v) certain
events of bankruptcy, insolvency and reorganization of the Company.
A default under other indebtedness of the Company will not be a
default under the Indentures and a default under one series of Debt Securities
will not necessarily be a default under another series.
Each Indenture provides that (i) if an Event of Default described in
clause (i), (ii), (iii) or (iv) above (if the Event of Default under clause
(iv) is with respect to less than all series of Debt Securities then
outstanding) shall have occurred and be continuing with respect to any series,
either the applicable Debt Trustee or the holders of not less than 25% in
aggregate principal amount of the Debt Securities of such series then
outstanding (each such series acting as a separate class) may declare the
principal (or, in the case of Original Issue Discount Securities, the portion
thereof specified in the terms thereof) of all outstanding Debt Securities of
such series and the interest accrued thereon, if any, to be due and payable
immediately and (ii) if an Event of Default described in clause (iv) or (v)
above (if the Event of Default under clause (iv) is with respect to all series
of Debt Securities then outstanding) shall have occurred and be continuing,
either the applicable Debt Trustee or the holders of at least 25% in aggregate
principal amount of all Debt Securities then outstanding (treated as one class)
may declare the principal (or, in the case of Original Issue Discount
Securities, the portion thereof specified in the terms thereof) of all Debt
Securities then outstanding and the interest accrued thereon, if any, to be due
and payable immediately, but upon certain conditions such declarations may be
annulled and past defaults (except for defaults in the payment of principal of,
any premium on, or any interest on, such Debt Securities and in compliance with
certain covenants) may be waived by the holders of a majority in aggregate
principal amount of the Debt Securities of such series then outstanding.
Under each Indenture the applicable Debt Trustee must give to the
holders of each series of Debt Securities notice of all uncured defaults known
to it with respect to such series within 90 days after such a default occurs
(the term "default" to include the events specified above without notice or
grace periods, except that in the case of any default of the type described in
clause (iv) above, no such notice shall be given until at least 90 days after
the occurrence thereof); provided that, except in the case of default in the
payment of principal of, any premium on, or any interest on, any of the Debt
Securities, or default in the payment of any sinking or purchase fund
installment or analogous obligations, the applicable Debt Trustee shall be
protected in withholding such notice if it in good faith determines that the
withholding of such notice is in the interests of the holders of the Debt
Securities of such series.
No holder of any Debt Securities of any series may institute any
action under either Indenture unless (i) such holder shall have given the Debt
Trustee thereunder written notice of a continuing Event of Default with respect
to such series, (ii) the holders of not less than 25% in aggregate principal
amount of the Debt Securities of such series then outstanding shall have
requested the Debt Trustee thereunder to institute proceedings in respect of
such Event of Default, (iii) such holder or holders shall have offered the Debt
Trustee thereunder such reasonable indemnity as such Debt Trustee may require,
(iv) the Debt Trustee thereunder shall have failed to institute an action for
60 days thereafter and (v) no inconsistent direction shall have been given to
the Debt Trustee thereunder during such 60-day period by the holders of a
majority in aggregate principal amount of Debt Securities of such series then
outstanding.
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The holders of a majority in aggregate principal amount of the Debt
Securities of any series affected and then outstanding will have the right,
subject to certain limitations, to direct the time, method and place of
conducting any proceeding for any remedy available to the applicable Debt
Trustee or exercising any trust or power conferred on such Debt Trustee with
respect to such series of Debt Securities. Each Indenture provides that, in
case an Event of Default shall occur and be continuing, the Debt Trustee
thereunder, in exercising its rights and powers under such Indenture, will be
required to use the degree of care of a prudent person in the conduct of such
person's own affairs. Each Indenture further provides that the Debt Trustee
thereunder shall not be required to expend or risk its own funds or otherwise
incur any financial liability in the performance of any of its duties under
such Indenture unless it has reasonable grounds for believing that repayment of
such funds or adequate indemnity against such risk or liability is reasonably
assured to it.
The Company must furnish to the Debt Trustees within 120 days after
the end of each fiscal year a statement signed by one of certain officers of
the Company to the effect that a review of the activities of the Company during
such year and of its performance under the applicable Indenture and the terms
of the Debt Securities has been made, and, to the best of the knowledge of the
signatories based on such review, the Company has complied with all conditions
and covenants of such Indenture through such year or, if the Company is in
default, specifying such default.
If any Debt Securities are denominated in a coin or currency other
than that of the United States, then for the purposes of determining whether
the holders of the requisite principal amount of Debt Securities have taken any
action as herein described, the principal amount of such Debt Securities shall
be deemed to be that amount of United States dollars that could be obtained for
such principal amount on the basis of the spot rate of exchange into United
States dollars for the currency in which such Debt Securities are denominated
(as evidenced to the applicable Debt Trustee by an Officers' Certificate) as of
the date the taking of such action by the holders of such requisite principal
amount is evidenced to the applicable Debt Trustee as provided in the
respective Indenture.
If any Debt Securities are Original Issue Discount Securities, then
for the purposes of determining whether the holders of the requisite principal
amount of Debt Securities have taken any action herein described, the principal
amount of such Debt Securities shall be deemed to be the portion of such
principal amount that would be due and payable at the time of the taking of
such action upon a declaration of acceleration of maturity thereof.
MODIFICATION OF THE INDENTURES
The Indentures provide that the Company and the applicable Debt
Trustee may, without the consent of any holders of Debt Securities, enter into
supplemental indentures for the purposes, among other things, of adding to the
Company's covenants, adding additional Events of Default, establishing the form
or terms of any series of Debt Securities or curing ambiguities or
inconsistencies in such Indenture or making other provisions.
With certain exceptions, the applicable Indenture or the rights of the
holders of the Debt Securities may be modified by the Company and the
applicable Debt Trustee with the consent of the holders of a majority in
aggregate principal amount of the Debt Securities of each series affected by
such modification then outstanding, but no such modification may be made
without the consent of the holder of each outstanding Debt Security affected
thereby which would (i) change the maturity of any payment of principal of, or
any premium on, or any installment of interest on any Debt Security, or reduce
the principal amount thereof or the interest or any premium thereon, or change
the method of computing the amount of principal thereof or interest thereon
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<PAGE> 18
on any date or change any place of payment where, or the coin or currency in
which, any Debt Security or any premium or interest thereon is payable, or
impair the right to institute suit for the enforcement of any such payment on
or after the maturity thereof (or, in the case of redemption or repayment, on
or after the redemption date or the repayment date, as the case may be), (ii)
reduce the percentage in principal amount of the outstanding Debt Securities of
any series, the consent of whose holders is required for any such modification,
or the consent of whose holders is required for any waiver of compliance with
certain provisions of the applicable Indenture or certain defaults thereunder
and their consequences provided for in such Indenture, or (iii) modify any of
the provisions of certain Sections of the applicable Indenture, including the
provisions summarized in this paragraph, except to increase any such percentage
or to provide that certain other provisions of such Indenture cannot be
modified or waived without the consent of the holder of each outstanding Debt
Security affected thereby.
SATISFACTION AND DISCHARGE OF THE INDENTURES; DEFEASANCE
The Indentures shall generally cease to be of any further effect with
respect to a series of Debt Securities if (i) the Company has delivered to the
applicable Debt Trustee for cancellation all Debt Securities of such series
(with certain limited exceptions) or (ii) all Debt Securities of such series
not theretofore delivered to the applicable Debt Trustee for cancellation shall
have become due and payable, or are by their terms to become due and payable
within one year or are to be called for redemption within one year, and the
Company shall have deposited with the applicable Debt Trustee as trust funds
the entire amount sufficient (in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification thereof
delivered to the applicable Debt Trustee) without consideration of any
reinvestment and after payment of all taxes or other charges and assessments in
respect thereof payable by the applicable Debt Trustee to pay at maturity or
upon redemption all such Debt Securities, no default with respect to the Debt
Securities has occurred and is continuing on the date of such deposit, such
deposit does not result in a breach or violation of, or constitute a default
under, the applicable Indenture or any other agreement or instrument to which
the Company is a party and the Company delivered an officers' certificate and
an opinion of counsel each stating that such conditions have been complied with
(and if, in either case, the Company shall also pay or cause to be paid all
other sums payable under the applicable Indenture by the Company).
In addition, the Company shall have a "legal defeasance option"
(pursuant to which it may terminate, with respect to the Debt Securities of a
particular series, all of its obligations under such Debt Securities and the
applicable Indenture with respect to such Debt Securities) and a "covenant
defeasance option" (pursuant to which it may terminate, with respect to the
Debt Securities of a particular series, its obligations with respect to such
Debt Securities under certain specified covenants contained in the applicable
Indenture). If the Company exercises its legal defeasance option with respect
to a series of Debt Securities, payment of such Debt Securities may not be
accelerated because of an Event of Default. If the Company exercises its
covenant defeasance option with respect to a series of Debt Securities, payment
of such Debt Securities may not be accelerated because of an Event of Default
related to the specified covenants.
The Company may exercise its legal defeasance option or its covenant
defeasance option with respect to the Debt Securities of a series only if (i)
the Company irrevocably deposits in trust with the applicable Debt Trustee cash
or U.S. Government Obligations (as defined in the applicable Indenture) for the
payment of principal, premium, if any, and interest with respect to such Debt
Securities to maturity or redemption, as the case may be, (ii) the Company
delivers to the applicable Debt Trustee a certificate from a nationally
recognized firm of independent public accountants expressing their opinion that
the payments of principal and interest when due and without reinvestment on the
deposited U.S. Government Obligations
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plus any deposited money without investment will provide cash at such times and
in such amounts as will be sufficient to pay the principal, premium, if any,
and interest when due with respect to all the Debt Securities of such series to
maturity or redemption, as the case may be, (iii) 91 days pass after the
deposit is made and during the 91-day period no default described in clause (v)
under "-- Events of Default, Waiver and Notice Thereof; Debt Securities in
Foreign Currencies" above with respect to the Company occurs that is continuing
at the end of such period, (iv) no Default has occurred and is continuing on
the date of such deposit and after giving effect thereto, (v) the deposit does
not constitute a default under any other agreement binding on the Company, (vi)
the Company delivers to the applicable Debt Trustee an opinion of counsel to
the effect that the trust resulting from the deposit does not constitute, or is
qualified as, a regulated investment company under the Investment Company Act
of 1940, (vii) the Company shall have delivered to the applicable Debt Trustee
an opinion of counsel addressing certain federal income tax matters relating to
the defeasance, and (viii) the Company delivers to the applicable Debt Trustee
an officers' certificate and an opinion of counsel, each stating that all
conditions precedent to the defeasance and discharge of the Debt Securities of
such series as contemplated by the applicable Indenture have been complied
with.
The applicable Debt Trustee shall hold in trust cash or U.S.
Government Obligations deposited with it as described above and shall apply the
deposited cash and the proceeds from deposited U.S. Government Obligations to
the payment of principal, premium, if any, and interest with respect to the
Debt Securities of the defeased series.
CONCERNING THE DEBT TRUSTEEs
The Debt Trustee for the Senior Debt Securities and the Debt Trustee
for the Subordinated Debt Securities will be identified in the relevant
Prospectus Supplement. In certain instances, the Company or the holders of a
majority of the then outstanding principal amount of the Debt Securities issued
under an indenture may remove the Debt Trustee and appoint a successor Debt
Trustee. The Debt Trustee may become the owner or pledgee of any of the Debt
Securities with the same rights, subject to certain conflict of interest
restrictions, it would have if it were not the Debt Trustee. The Debt Trustee
and any successor trustee must be a corporation organized and doing business as
a commercial bank or trust company under the laws of the United States or of
any state thereof, authorized under such laws to exercise corporate trust
powers, having a combined capital and surplus of at least $50,000,000 and
subject to examination by federal or state authority. From time to time and
subject to applicable law relating to conflicts of interest, the Debt Trustee
may also serve as trustee under other indentures relating to Debt Securities
issued by the Company or affiliated companies and may engage in commercial
transactions with the Company and affiliated companies. The initial Debt
Trustee under each Indenture is The Bank of New York, who currently serves as
the transfer agent and registrar for the Common Stock and is a lender to the
Company under the Company's Amended and Restated Credit Agreement dated April
10, 1997.
SENIOR DEBT SECURITIES
In addition to the provisions previously described herein and
applicable to all Debt Securities, the following description of the Senior Debt
Securities summarizes certain general terms and provisions of the Senior Debt
Securities to which any Prospectus Supplement may relate. The particular terms
of the Senior Debt Securities offered by any Prospectus Supplement and the
extent, if any, to which such general provisions may apply to any series of
Senior Debt Securities will be described in the Prospectus Supplement relating
thereto.
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Ranking of Senior Debt Securities
Unless otherwise specified in a Prospectus Supplement for a particular
series of Debt Securities, all series of Senior Debt Securities will be senior
indebtedness of the Company and will be direct, unsecured obligations of the
Company, ranking on a parity with all other unsecured and unsubordinated
indebtedness of the Company. The Company is a holding company and the Debt
Securities will be effectively subordinated to all existing and future
liabilities, including indebtedness, of the Company's subsidiaries. See
"Holding Company Structure."
Covenants of the Company
The Senior Indenture contains the covenants summarized below, which
will be applicable (unless waived or amended) so long as any of the Senior Debt
Securities are outstanding, unless stated otherwise in the Prospectus
Supplement.
Limitation on Mortgages. The Company will not, nor will it permit any
Restricted Subsidiary to, create, assume, incur or suffer to exist (i) any
Mortgage upon any stock or indebtedness of any Restricted Subsidiary,
whether owned on the date of the Senior Indenture or thereafter acquired, to
secure any Debt of the Company or any other person (other than the Senior
Debt Securities), or (ii) any Mortgage upon any Principal Property, whether
owned or leased on the date of the Senior Indenture, or thereafter acquired,
to secure any Debt of the Company or any other person (other than the Senior
Debt Securities), without in any such case making effective provision
whereby all the outstanding Senior Debt Securities shall be directly secured
equally and ratably with such Debt. There will be excluded from this
restriction any Mortgage upon stock or indebtedness of a corporation
existing at the time such corporation becomes a Subsidiary or at the time
stock or indebtedness of a Subsidiary is acquired and any extension, renewal
or replacement of any such Mortgage; provided, however, that the principal
amount of Debt secured thereby shall not exceed the principal amount of Debt
so secured at the time of such extension, renewal or replacement; and
provided further, that such Mortgage shall be limited to all or such part of
the stock or indebtedness which secured the Mortgage so extended, renewed or
replaced.
There will be excluded from the restriction referred to in the next
preceding paragraph the following Mortgages (the Mortgages set forth in the
following clauses (i) through (viii) the "Permitted Mortgages"): (i) any
Mortgage upon property owned or leased by a corporation existing at the time
such corporation becomes a Restricted Subsidiary, (ii) any Mortgage upon
property existing at the time of the acquisition thereof or to secure
payment of any part of the purchase price thereof or any Debt incurred to
finance the purchase thereof, (iii) any Mortgage upon property to secure any
part of the cost of development, construction, alteration, repair or
improvement of such property, or Debt incurred to finance such cost, (iv)
any Mortgage securing Debt of a Restricted Subsidiary owing to the Company
or to another Restricted Subsidiary, (v) any Mortgage existing on the date
of the Senior Indenture, (vi) any Mortgage on property of the Company or a
Restricted Subsidiary in favor of the United States of America or any State
or political subdivision thereof, or in favor of any other country or any
political subdivision thereof, to secure payment pursuant to any contract or
statute or to secure any indebtednes incurred for the purpose of financing
all or part of the purchase price or the cost of construction or improvement
of the property subject to such Mortgage, (vii) any Mortgage on any property
subsequently acquired by the
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Company or any Restricted Subsidiary, contemporaneously with such
acquisition or within 120 days thereafter, to secure or provide for the
payment of any part of the purchase price of such property, or any Mortgage
assumed by the Company or any Restricted Subsidiary upon any property
subsequently acquired by the Company or any Restricted Subsidiary which were
existing at the time of such acquisition, provided that the amount of any
Indebtedness secured by any such Mortgage created or assumed does not exceed
the cost to the Company or Restricted Subsidiary, as the case may be, of the
property covered by such Mortgage, and (viii) any extension, renewal or
replacement, in whole or in part, of any Mortgage referred to in the
foregoing clauses (i) through (vii); provided, however, that the principal
amount of Debt secured thereby shall not exceed the principal amount of Debt
so secured at the time of such extension, renewal or replacement; and
provided, further, that such Mortgage shall be limited to all or such part
of the property which secured the Mortgage so extended, renewed or replaced.
Notwithstanding the foregoing, the Company may, and may permit any
Restricted Subsidiary to, create, assume, incur or suffer to exist any
Mortgage upon any Principal Property without equally and ratably securing
the Senior Debt Securities if the aggregate amount of all Debt then
outstanding secured by such Mortgage and all similar Mortgages does not
exceed 15% of the total consolidated shareholders' equity (including
Preferred Stock) of the Company as shown on the audited consolidated balance
sheet contained in the latest annual report to shareholders of the Company;
provided that Debt secured by Permitted Mortgages shall not be included in
the amount of such secured Debt.
Sale and Leaseback Transactions. The Company will not, nor will it
permit any Restricted Subsidiary to, enter into any arrangement with any
person providing for the leasing by the Company or a Restricted Subsidiary
as lessee of any Principal Property (except for temporary leases for a term,
including renewals, of not more than three years), which property has been
or is to be sold or transferred by the Company or such Restricted Subsidiary
to such person (herein referred to as a "Sale-Leaseback Transaction"),
unless (i) such Sale-Leaseback Transaction occurs within 120 days from the
date of acquisition of such Principal Property or the date of the completion
of construction or commencement of full operations on such Principal
Property, whichever is later, or (ii) the Company, within 120 days after
such Sale-Leaseback Transaction, applies or causes to be applied to the
retirement of Funded Debt of the Company or any Subsidiary (other than
Funded Debt of the Company which by its terms or the terms of the instrument
pursuant to which it was issued is subordinate in right of payment to the
Senior Debt Securities) an amount not less than the net proceeds of the sale
of such Principal Property. Notwithstanding the foregoing provisions, the
Company may, and may permit any Restricted Subsidiary to, effect any
Sale-Leaseback Transaction involving any Principal Property, provided that
the net sale proceeds from such Sale-Leaseback Transaction, together with
all Debt secured by Mortgages other than Permitted Mortgages, does not
exceed 15% of the total consolidated shareholders' equity of the Company as
shown on the audited consolidated balance sheet contained in the latest
annual report to shareholders of the Company.
Definitions
For the purposes of the description of the Senior Debt Securities:
"Debt" means indebtedness for money borrowed.
"Funded Debt" of any person means all indebtedness for borrowed money
created, incurred, assumed or guaranteed in any manner by such person, and all
indebtedness, contingent or otherwise, incurred or assumed by such person in
connection with the acquisition of any business, property or asset, which in
each case matures more than one year after, or which by its terms is renewable
or extendible or payable out of the proceeds of similar indebtedness incurred
pursuant to the terms of any revolving credit agreement or any similar
agreement at the option of such person for a period ending more than one year
after the date as of which
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Funded Debt is being determined; provided, however, that Funded Debt shall not
include (i) any indebtedness for the payment, redemption or satisfaction of
which money (or evidences of indebtedness, if permitted under the instrument
creating or evidencing such indebtedness) in the necessary amount shall have
been irrevocably deposited in trust with a trustee or proper depository either
on or before the maturity or redemption date thereof or (ii) any indebtedness
of such person to any of its Subsidiaries or of any Subsidiary to such person
or any other Subsidiary or (iii) any indebtedness incurred in connection with
the financing of operating, construction or acquisition projects, provided that
the recourse for such indebtedness is limited to the assets of such projects.
"Mortgage" means any mortgage, pledge, lien, encumbrance, charge or
security interest of any kind.
"Principal Property" means any radio broadcasting, television
broadcasting or outdoor advertising property located in the United States owned
or leased by the Company or any subsidiary, unless, in the opinion of the Board
of Directors of the Company, any of such properties are not in the aggregate of
material importance to the total business conducted by the Company and its
Subsidiaries as an entirety.
"Restricted Subsidiary" means each Subsidiary as of the date of the
Indenture and each Subsidiary thereafter created or acquired, unless expressly
excluded by resolution of the Board of Directors of the Company before, or
within 120 days following, such creation or acquisition.
"Subsidiary", when used with respect to the Company, means any
corporation of which a majority of the outstanding voting stock is owned,
directly or indirectly, by the Company or by one or more other Subsidiaries, or
both.
SUBORDINATED DEBT SECURITIES
In addition to the provisions previously described herein and
applicable to all Debt Securities, the following description of the
Subordinated Debt Securities summarizes certain general terms and provisions of
the Subordinated Debt Securities to which any Prospectus Supplement may relate.
The particular terms of the Subordinated Debt Securities offered by any
Prospectus Supplement and the extent, if any, to which such general provisions
may apply to any series of Subordinated Debt Securities will be described in
the Prospectus Supplement relating thereto.
Ranking of Subordinated Debt Securities
The Subordinated Debt Securities will be subordinated in right of
payment to certain other indebtedness of the Company to the extent set forth in
the applicable Prospectus Supplement.
The payment of the principal of, premium, if any, and interest on the
Subordinated Debt Securities will be subordinated in right of payment to the
prior payment in full of all Senior Indebtedness of the Company and pari passu
with the Company's trade creditors. No payment on account of principal of,
premium, if any, or interest on the Subordinated Debt Securities and no
acquisition of, or payment on account of any sinking fund for, the Subordinated
Debt Securities may be made unless full payment of amounts then due for
principal, premium, if any, and interest then due on all Senior Indebtedness by
reason of the maturity thereof (by lapse of time, acceleration or otherwise)
has been made or duly provided for in cash or in a manner satisfactory to the
holders of such Senior Indebtedness. In addition, the Subordinated Indenture
provides that if a default has occurred giving the holders of such Senior
Indebtedness the right to accelerate the maturity thereof, or an event has
occurred which, with the giving of notice, or lapse of time, or both, would
constitute such an event of
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default, then unless and until such event shall have been cured or waived or
shall have ceased to exist, no payment on account of principal, premium, if
any, or interest on the Subordinated Debt Securities and no acquisition of, or
payment on account of a sinking fund for, the Subordinated Debt Securities may
be made. The Company shall give prompt written notice to the Subordinated
Trustee of any default under any Senior Indebtedness or under any agreement
pursuant to which Senior Indebtedness may have been issued. The Subordinated
Indenture provisions described in this paragraph, however, do not prevent the
Company from making a sinking fund payment with Subordinated Debt Securities
acquired prior to the maturity of Senior Indebtedness or, in the case of
default, prior to such default and notice thereof. Upon any distribution of
its assets in connection with any dissolution, liquidation or reorganization of
the Company, all Senior Indebtedness must be paid in full before the holders of
the Subordinated Debt Securities are entitled to any payments whatsoever. As a
result of these subordination provisions, in the event of the Company's
insolvency, holders of the Subordinated Debt Securities may recover ratably
less than senior creditors of the Company.
For purposes of the description of the Subordinated Debt Securities,
the term "Senior Indebtedness" means the principal of and premium, if any, and
interest on the following, whether outstanding on the date of execution of the
Subordinated Indenture or thereafter incurred or created (i) indebtedness of
the Company for money borrowed by the Company (including purchase money
obligations with an original maturity in excess of one year) or evidenced by
securities (other than the Subordinated Debt Securities or Junior Subordinated
Debt Securities), notes, bankers' acceptances or other corporate debt
securities or similar instruments issued by the Company; (ii) obligations with
respect to letters of credit; (iii) indebtedness of the Company constituting a
guarantee of indebtedness of others of the type referred to in the preceding
clauses (i) and (ii); or (iv) renewals, extensions or refundings of any of the
indebtedness referred to in the preceding clauses (i), (ii) and (iii) unless,
in the case of any particular indebtedness, renewal, extension or refunding,
under the express provisions of the instrument creating or evidencing the same,
or pursuant to which the same is outstanding, such indebtedness or such
renewal, extension or refunding thereof is not superior in right of payment to
the Subordinated Debt Securities.
DESCRIPTION OF JUNIOR SUBORDINATED DEBT SECURITIES
The following description of the terms of the Junior Subordinated Debt
Securities summarizes certain general terms and provisions of the Junior
Subordinated Debt Securities to which any Prospectus Supplement may relate. The
particular terms of the Junior Subordinated Debt Securities offered by any
Prospectus Supplement and the extent, if any, to which such general provisions
may apply to any series of Junior Subordinated Debt Securities will be
described in the Prospectus Supplement relating thereto.
Junior Subordinated Debt Securities may be issued from time to time in
one or more series under an Indenture (the "Junior Subordinated Indenture")
between the Company and The Bank of New York or such other trustee as may be
named in a Prospectus Supplement (the "Junior Subordinated Indenture Trustee").
The form of Junior Subordinated Indenture has been filed as an exhibit to the
Registration Statement of which this Prospectus forms a part. The following
description summarizes the material terms of the Junior Subordinated Indenture
and is qualified in its entirety by reference to the Junior Subordinated
Indenture and the Trust Indenture Act. Whenever particular provisions or
defined terms in the Junior Subordinated Indenture are referred to herein, such
provisions or defined terms are incorporated by reference herein.
GENERAL
The Junior Subordinated Debt Securities will be unsecured, junior
subordinated obligations of the Company. The Junior Subordinated Indenture
does not limit the amount of additional indebtedness the
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Company or any of its subsidiaries may incur. Since the Company is a holding
company, the Company's rights and the rights of its creditors, including the
holders of Junior Subordinated Debt Securities, to participate in the assets of
any subsidiary upon the latter's liquidation or recapitalization will be
subject to the prior claims of the subsidiary's creditors, except to the extent
that the Company may itself be a creditor with recognized claims against the
subsidiary.
The Junior Subordinated Indenture does not limit the aggregate
principal amount of indebtedness which may be issued thereunder and provides
that Junior Subordinated Debt Securities may be issued thereunder from time to
time in one or more series. The Junior Subordinated Debt Securities are
issuable in one or more series pursuant to a board resolution or an indenture
supplemental to the Junior Subordinated Indenture.
In the event Junior Subordinated Debt Securities are issued to a CCCI
Trust or a Trustee of such CCCI Trust in connection with the issuance of
Preferred Securities by such CCCI Trust, such Junior Subordinated Debt
Securities subsequently may be distributed pro rata to the holders of such
Preferred Securities in connection with the dissolution of such CCCI Trust upon
the occurrence of certain events described in the applicable Prospectus
Supplement. Only one series of Junior Subordinated Debt Securities will be
issued to a CCCI Trust or a Trustee of such CCCI Trust in connection with the
issuance of Preferred Securities by such CCCI Trust.
Reference is made to the Prospectus Supplement for the following terms
of the series of Junior Subordinated Debt Securities being offered hereby (to
the extent such terms are applicable to the Junior Subordinated Debt
Securities): (i) the specific designation of such Junior Subordinated Debt
Securities, aggregate principal amount and purchase price; (ii) any limit on
the aggregate principal amount of such Junior Subordinated Debt Securities;
(iii) the date or dates on which the principal of such Junior Subordinated Debt
Securities is payable and the right, if any, to extend such date or dates; (iv)
the rate or rates at which such Junior Subordinated Debt Securities will bear
interest or the method of calculating such rate or rates, if any; (v) the date
or dates from which such interest shall accrue, the interest payment dates on
which such interest will be payable or the manner of determination of such
interest payment dates and the record dates for the determination of holders to
whom interest is payable on any such interest payment dates; (vi) the right, if
any, to extend the interest payment periods and the duration of such extension;
(vii) the period or periods within which, the price or prices at which, and the
terms and conditions upon which, such Junior Subordinated Debt Securities may
be redeemed, in whole or in part, at the option of the Company; (viii) the
obligation, if any, of the Company to redeem or purchase such Junior
Subordinated Debt Securities pursuant to any sinking fund or analogous
provisions or at the option of the holder thereof and the period or periods
within which, the price or prices at which, and the terms and conditions upon
which, such Junior Subordinated Debt Securities shall be redeemed or purchased,
in whole or part, pursuant to such obligation; (ix) any applicable federal
income tax consequences, including whether and under what circumstances the
Company will pay additional amounts on the Junior Subordinated Debt Securities
held by a person who is not a U.S. person in respect of any tax, assessment or
governmental charge withheld or deducted and, if so, whether the Company will
have the option to redeem such Junior Subordinated Debt Securities rather than
pay such additional amounts; (x) the form of such Junior Subordinated Debt
Securities; (xi) if other than denominations of $25 or any integral multiple
thereof, the denominations in which such Junior Subordinated Debt Securities
shall be issuable; (xii) any and all other terms with respect to such series,
including any modification of or additions to the events of default or
covenants provided for with respect to the Junior Subordinated Debt Securities,
and any terms which may be required by or advisable under applicable laws or
regulations not inconsistent with the Junior Subordinated Indenture; (xiii) the
terms and conditions upon which the Junior Subordinated Debt Securities may be
convertible into or exchanged for Common Stock, Preferred Stock, Preferred
Securities, or indebtedness or other securities of any kind of the Company or
any Third Party Securities; and (xiv) whether such
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Junior Subordinated Debt Securities are issuable as a global security, and in
such case, the identity of the depositary.
Unless otherwise indicated in the applicable Prospectus Supplement,
the Junior Subordinated Debentures will be issued in United States dollars in
fully registered form without coupons in denominations of $25 or integral
multiples thereof. No service charge will be made for any transfer or exchange
of any Junior Subordinated Debt Securities, but the Company may, except in
certain specified cases not involving any transfer, require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith. Unless otherwise set forth in the Prospectus Supplement, interest
on outstanding Junior Subordinated Debt Securities will be paid to holders of
record on the date which is 15 days immediately prior to the date such interest
is to be paid.
Junior Subordinated Debt Securities may bear interest at a fixed rate
or a floating rate. Junior Subordinated Debt Securities bearing no interest or
interest at a rate that at the time of issuance is below the prevailing market
rate will be sold at a discount below their stated principal amount. Special
federal income tax considerations applicable to any such discounted Junior
Subordinated Debt Securities or to certain Junior Subordinated Debt Securities
issued at par which are treated as having been issued at a discount for federal
income tax purposes will be described in the applicable Prospectus Supplement.
GLOBAL SECURITIES
If any Junior Subordinated Debt Securities of a series are represented
by one or more Global Securities, the applicable Prospectus Supplement will
describe the circumstances, if any, under which beneficial owners of interests
in any such Global Security may exchange such interests for Junior Subordinated
Debt Securities of such series and of like tenor and principal amount in any
authorized form and denomination. Principal of, and any premium and interest
on, a Global Security will be payable in the manner described in the applicable
Prospectus Supplement.
The specific terms of the depositary arrangement with respect to any
portion of a series of Junior Subordinated Debt Securities to be represented by
a Global Security will be described in the applicable Prospectus Supplement.
CONSOLIDATION, MERGER, CONVEYANCE OR TRANSFER
The Junior Subordinated Indenture provides that the Company may not
consolidate with or merge into any other corporation or convey or transfer its
properties and assets substantially as an entirety to any person, unless (i)
the successor corporation shall be a corporation organized and existing under
the laws of the United States or any State thereof or the District of Columbia,
and shall expressly assume by a supplemental indenture the due and punctual
payment of the principal of, any premium on, and any interest on, all the
outstanding Junior Subordinated Debt Securities and the performance of every
covenant in the Junior Subordinated Indenture on the part of the Company to be
performed or observed; (ii) 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 happened and be
continuing; and (iii) the Company shall have delivered to the applicable Junior
Subordinated Indenture Trustee an Officers' Certificate and an Opinion of
Counsel, each stating that such consolidation, merger, conveyance or transfer
and such supplemental indenture comply with the foregoing provisions relating
to such transaction. In case of any such consolidation, merger, conveyance or
transfer, such successor corporation will succeed to and be substituted for the
Company as obligor on the Junior Subordinated Debt Securities, with the same
effect as if it had been named in the Junior Subordinated Indenture as the
Company. The Junior Subordinated Indentures and the Junior Subordinated Debt
Securities
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do not contain any covenants or other provisions designed to protect holders of
Junior Subordinated Debt Securities in the event of a highly leveraged
transaction involving the Company or any Subsidiary.
EVENTS OF DEFAULT; WAIVER AND NOTICE THEREOF; JUNIOR SUBORDINATED DEBT
SECURITIES IN FOREIGN CURRENCIES
As to any series of Junior Subordinated Debt Securities, an Event of
Default is defined in each Junior Subordinated Indenture as (i) default for 90
days in payment of any interest on the Junior Subordinated Debt Securities of
such series (subject to the deferral of any due date in the case of an
Extension Period); (ii) default in payment of principal of or any premium on
the Junior Subordinated Debt Securities of such series at maturity; (iii)
default in payment of any sinking or purchase fund or analogous obligation, if
any, on the Junior Subordinated Debt Securities of such series; (iv) default by
the Company in the performance, or breach, of any other covenant or warranty
contained in the Junior Subordinated Indenture for the benefit of such series
which shall not have been remedied for a period of 90 days after notice is
given as specified in the Junior Subordinated Indenture; and (v) certain events
of bankruptcy, insolvency and reorganization of the Company.
A default under other indebtedness of the Company will not be a
default under the Junior Subordinated Indentures and a default under one series
of Debt Securities or Junior Subordinated Debt Securities will not necessarily
be a default under another series.
The Junior Subordinated Indenture provides that (i) if an Event of
Default described in clause (i), (ii), (iii) or (iv) above (if the Event of
Default under clause (iv) above is with respect to less than all series of
Junior Subordinated Debt Securities outstanding) shall have occurred and be
continuing with respect to any series, either the Junior Subordinated Indenture
Trustee or the holders of not less than 25% in aggregate principal amount of
the Junior Subordinated Debt Securities of such series then outstanding (each
such series acting as a separate class) may declare the principal (or, in the
case of Original Issue Discount Securities, the portion thereof specified in
the terms thereof) of all outstanding Junior Subordinated Debt Securities of
such series and the interest accrued thereon, if any, to be due and payable
immediately, and (ii) if an Event of Default described in clause (iv) or (v)
above (if the Event of Default under clause (iv) above is with respect to all
series of Junior Subordinated Debt Securities then outstanding) shall have
occurred and be continuing, either the Junior Subordinated Indenture Trustee or
the holders of at least 25% in aggregate principal amount of all Junior
Subordinated Debt Securities then outstanding (treated as one class) may
declare the principal (or, in the case of Original Issue Discount Securities,
the portion thereof specified in the terms thereof) of all Junior Subordinated
Debt Securities then outstanding and the interest accrued thereon, if any, to
be due and payable immediately, but upon certain conditions such declarations
may be annulled and past defaults (except for defaults in the payment of
principal of, any premium on, or any interest on, such Junior Subordinated Debt
Securities and in compliance with certain covenants) may be waived by the
holders of a majority in aggregate principal amount of the Junior Subordinated
Debt Securities of such series then outstanding (subject to, in the case of any
series of Junior Subordinated Debt Securities held as trust assets of a CCCI
Trust and with respect to which a Security Exchange has not theretofore
occurred, such consent of the holders of the Preferred Securities and the
Common Securities of such CCCI Trust as may be required under the Declaration
of Trust of such CCCI Trust).
"Security Exchange" when used with respect to the Securities of any
series which are held as trust assets of a CCCI Trust pursuant to the
Declaration of Trust of such CCCI Trust means the distribution of the
Securities of such series by such CCCI Trust in exchange for the Preferred
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Securities and the Common Securities of such CCCI Trust in dissolution of such
CCCI Trust pursuant to the Declaration of Trust of such CCCI Trust.
Under the Junior Subordinated Indenture the Junior Subordinated
Indenture Trustee must give to the holders of each series of Junior
Subordinated Debt Securities notice of all uncured defaults known to it with
respect to such series within 90 days after such a default occurs (the term
"default" to include the events specified above without notice or grace
periods, except that in the case of any default of the type described in clause
(d) above, no such notice shall be given until at least 90 days after the
occurrence thereof); provided that, except in the case of default in the
payment of principal of, any premium on, or any interest on, any of the Junior
Subordinated Debt Securities, or default in the payment of any sinking or
purchase fund installment or analogous obligations, the applicable Junior
Subordinated Indenture Trustee shall be protected in withholding such notice if
it in good faith determines that the withholding of such notice is in the
interests of the holders of the Junior Subordinated Debt Securities of such
series.
No holder of any Junior Subordinated Debt Securities of any series may
institute any action under the Junior Subordinated Indenture unless (i) such
holder shall have given the Junior Subordinated Indenture Trustee thereunder
written notice of a continuing Event of Default with respect to such series,
(ii) the holders of not less than 25% in aggregate principal amount of the
Junior Subordinated Debt Securities of such series then outstanding shall have
requested the Junior Subordinated Indenture Trustee thereunder to institute
proceedings in respect of such Event of Default, (iii) such holder or holders
shall have offered the Junior Subordinated Indenture Trustee thereunder such
reasonable indemnity as such Junior Subordinated Indenture Trustee may require,
(iv) the Junior Subordinated Indenture Trustee thereunder shall have failed to
institute an action for 60 days thereafter and (v) no inconsistent direction
shall have been given to the Junior Subordinated Indenture Trustee thereunder
during such 60-day period by the holders of a majority in aggregate principal
amount of Junior Subordinated Debt Securities of such series then outstanding
(subject to, in the case of any series of Junior Subordinated Debt Securities
held as trust assets of a CCCI Trust and with respect to which a Security
Exchange has not theretofore occurred, such consent of the holders of the
Preferred Securities and the Common Securities of such CCCI Trust as may be
required under the Declaration of Trust of such CCCI Trust).
The holders of a majority in aggregate principal amount of the Junior
Subordinated Debt Securities of any series affected and then outstanding
(subject to, in the case of any series of Junior Subordinated Debt Securities
held as trust assets of a CCCI Trust and with respect to which a Security
Exchange has not theretofore occurred, such consent of the holders of the
Preferred Securities and the Common Securities of such CCCI Trust as may be
required under the Declaration of Trust of such CCCI Trust) will have the
right, subject to certain limitations, to direct the time, method and place of
conducting any proceeding for any remedy available to the applicable Junior
Subordinated Indenture Trustee or exercising any trust or power conferred on
such Junior Subordinated Indenture Trustee with respect to such series of
Junior Subordinated Debt Securities. The Junior Subordinated Indenture
provides that, in case an Event of Default shall occur and be continuing, the
Junior Subordinated Indenture Trustee thereunder, in exercising its rights and
powers under such Junior Subordinated Indenture, will be required to use the
degree of care of a prudent person in the conduct of such person's own affairs.
Each Junior Subordinated Indenture further provides that the Junior
Subordinated Indenture Trustee thereunder shall not be required to expend or
risk its own funds or otherwise incur any financial liability in the
performance of any of its duties under such Junior Subordinated Indenture
unless it has reasonable grounds for believing that repayment of such funds or
adequate indemnity against such risk or liability is reasonably assured to it.
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The Company must furnish to the Junior Subordinated Indenture Trustee
within 120 days after the end of each fiscal year a statement signed by one of
certain officers of the Company to the effect that a review of the activities
of the Company during such year and of its performance under the Junior
Subordinated Indenture and the terms of the Junior Subordinated Debt Securities
has been made, and, to the best of the knowledge of the signatories based on
such review, the Company has complied with all conditions and covenants of such
Junior Subordinated Indenture through such year or, if the Company is in
default, specifying such default.
If any Junior Subordinated Debt Securities are denominated in a coin
or currency other than that of the United States, then for the purposes of
determining whether the holders of the requisite principal amount of Junior
Subordinated Debt Securities have taken any action as herein described, the
principal amount of such Junior Subordinated Debt Securities shall be deemed to
be that amount of United States dollars that could be obtained for such
principal amount on the basis of the spot rate of exchange into United States
dollars for the currency in which such Junior Subordinated Debt Securities are
denominated (as evidenced to the applicable Junior Subordinated Indenture by an
Officers' Certificate) as of the date the taking of such action by the holders
of such requisite principal amount is evidenced to the applicable Junior
Subordinated Indenture as provided in the respective Junior Subordinated
Indenture.
If any Junior Subordinated Debt Securities are Original Issue Discount
Securities, then for the purposes of determining whether the holders of the
requisite principal amount of Junior Subordinated Debt Securities have taken
any action herein described, the principal amount of such Junior Subordinated
Debt Securities shall be deemed to be the portion of such principal amount that
would be due and payable at the time of the taking of such action upon a
declaration of acceleration of maturity thereof.
MODIFICATION OF THE JUNIOR SUBORDINATED INDENTURE
The Junior Subordinated Indenture provides that the Company and the
Junior Subordinated Indenture Trustee may, without the consent of any holders
of Junior Subordinated Debt Securities, enter into supplemental indentures for
the purposes, among other things, of adding to the Company's covenants, adding
additional Junior Subordinated Indenture Events of Default, establishing the
form or terms of any series of Junior Subordinated Debt Securities or curing
ambiguities or inconsistencies in the Junior Subordinated Indenture or making
other provisions.
With certain exceptions, the Junior Subordinated Indenture or the
rights of the holders of the Junior Subordinated Debt Securities may be
modified by the Company and the Junior Subordinated Indenture Trustee with the
consent of the holders of a majority in aggregate principal amount of the
Junior Subordinated Debt Securities of each series affected by such
modification then outstanding (subject to, in the case of any series of Junior
Subordinated Debt Securities held as trust assets of a CCCI Trust and with
respect to which a Security Exchange has not theretofore occurred, such consent
of the holders of the Preferred Securities and the Common Securities of such
CCCI Trust as may be required under the Declaration of Trust of such CCCI
Trust), but no such modification may be made without the consent of the holder
of each outstanding Junior Subordinated Debt Security affected thereby (subject
to, in the case of any series of Junior Subordinated Debt Securities held as
trust assets of a CCCI Trust and with respect to which a Security Exchange has
not theretofore occurred, such consent of the holders of the Preferred
Securities and the Common Securities of such CCCI Trust as may be required
under the Declaration of Trust of such CCCI Trust) which would (i) change the
maturity of any payment of principal of, or any premium on, or any installment
of interest on any Junior Subordinated Debt Security, or reduce the principal
amount thereof or the interest or any premium thereon, or change the method of
computing the amount of principal thereof or interest thereon on any date or
change any place of payment where, or the coin or currency in which,
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any Junior Subordinated Debt Security or any premium or interest thereon is
payable, or impair the right to institute suit for the enforcement of any such
payment on or after the maturity thereof (or, in the case of redemption or
repayment, on or after the redemption date or the repayment date, as the case
may be), (ii) reduce the percentage in principal amount of the outstanding
Junior Subordinated Debt Securities of any series, the consent of whose holders
is required for any such modification, or the consent of whose holders is
required for any waiver of compliance with certain provisions of the Junior
Subordinated Indenture or certain defaults thereunder and their consequences
provided for in such Indenture, or (iii) modify any of the provisions of
certain Sections of the Junior Subordinated Indenture, including the provisions
summarized in this paragraph, except to increase any such percentage or to
provide that certain other provisions of the Junior Subordinated Indenture
cannot be modified or waived without the consent of the holder of each
outstanding Junior Subordinated Debt Security affected thereby.
SATISFACTION AND DISCHARGE OF THE JUNIOR SUBORDINATED INDENTURE; DEFEASANCE
The Junior Subordinated Indenture shall generally cease to be of any
further effect with respect to a series of Junior Subordinated Debt Securities
if (i) the Company has delivered to the Junior Subordinated Indenture Trustee
for cancellation all Junior Subordinated Debt Securities of such series (with
certain limited exceptions) or (ii) all Junior Subordinated Debt Securities of
such series not theretofore delivered to the Junior Subordinated Indenture
Trustee for cancellation shall have become due and payable, or are by their
terms to become due and payable within one year or are to be called for
redemption within one year, and the Company shall have deposited with the
Junior Subordinated Indenture Trustee as trust funds the entire amount
sufficient (in the opinion of a nationally recognized firm of independent
public accountants expressed in a written certification thereof delivered to
the Junior Subordinated Indenture Trustee) without consideration of any
reinvestment and after payment of all taxes or other charges and assessments in
respect thereof payable by the Junior Subordinated Indenture Trustee to pay at
maturity or upon redemption all such Junior Subordinated Debt Securities, no
default with respect to the Junior Subordinated Debt Securities has occurred
and is continuing on the date of such deposit, such deposit does not result in
a breach or violation of, or constitute a default under, the Junior
Subordinated Indenture or any other agreement or instrument to which the
Company is a party and the Company delivered an officers' certificate and an
opinion of counsel each stating that such conditions have been complied with
(and if, in either case, the Company shall also pay or cause to be paid all
other sums payable under the Junior Subordinated Indenture by the Company).
In addition, the Company shall have a "legal defeasance option"
(pursuant to which it may terminate, with respect to the Junior Subordinated
Debt Securities of a particular series, all of its obligations under such
Junior Subordinated Debt Securities and the Junior Subordinated Indenture with
respect to such Junior Subordinated Debt Securities) and a "covenant defeasance
option" (pursuant to which it may terminate, with respect to the Junior
Subordinated Debt Securities of a particular series, its obligations with
respect to such Junior Subordinated Debt Securities under certain specified
covenants contained in the Junior Subordinated Indenture). If the Company
exercises its legal defeasance option with respect to a series of Junior
Subordinated Debt Securities, payment of such Junior Subordinated Debt
Securities may not be accelerated because of an Event of Default. If the
Company exercises its covenant defeasance option with respect to a series of
Junior Subordinated Debt Securities, payment of such Junior Subordinated Debt
Securities may not be accelerated because of an Event of Default related to the
specified covenants.
The Company may exercise its legal defeasance option or its covenant
defeasance option with respect to the Junior Subordinated Debt Securities of a
series only if (i) the Company irrevocably deposits in trust with the Junior
Subordinated Indenture Trustee cash or U.S. Government Obligations (as defined
in
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the Junior Subordinated Indenture) for the payment of principal, premium, if
any, and interest with respect to such Junior Subordinated Debt Securities to
maturity or redemption, as the case may be, (ii) the Company delivers to the
Junior Subordinated Indenture Trustee a certificate from a nationally
recognized firm of independent public accountants expressing their opinion that
the payments of principal and interest when due and without reinvestment on the
deposited U.S. Government Obligations plus any deposited money without
investment will provide cash at such times and in such amounts as will be
sufficient to pay the principal, premium, if any, and interest when due with
respect to all the Junior Subordinated Debt Securities of such series to
maturity or redemption, as the case may be, (iii) 91 days pass after the
deposit is made and during the 91-day period no default described in clause (v)
under "-- Events of Default, Waiver and Notice Thereof; Junior Subordinated
Debt Securities in Foreign Currencies" above with respect to the Company occurs
that is continuing at the end of such period, (iv) no Default has occurred and
is continuing on the date of such deposit and after giving effect thereto, (v)
the deposit does not constitute a default under any other agreement binding on
the Company, (vi) the Company delivers to the Junior Subordinated Indenture
Trustee an opinion of counsel to the effect that the trust resulting from the
deposit does not constitute, or is qualified as, a regulated investment company
under the Investment Company Act of 1940, (vii) the Company shall have
delivered to the Junior Subordinated Indenture Trustee an opinion of counsel
addressing certain federal income tax matters relating to the defeasance, and
(viii) the Company delivers to the Junior Subordinated Indenture Trustee an
officers' certificate and an opinion of counsel, each stating that all
conditions precedent to the defeasance and discharge of the Junior Subordinated
Debt Securities of such series as contemplated by the Junior Subordinated
Indenture have been complied with.
The Junior Subordinated Indenture Trustee shall hold in trust cash or
U.S. Government Obligations deposited with it as described above and shall
apply the deposited cash and the proceeds from deposited U.S. Government
Obligations to the payment of principal, premium, if any, and interest with
respect to the Junior Subordinated Debt Securities of the defeased series.
CONCERNING THE JUNIOR SUBORDINATED INDENTURE TRUSTEE
The Junior Subordinated Indenture Trustee for the Junior Subordinated
Debt Securities will be identified in the relevant Prospectus Supplement. In
certain instances, the Company or the holders of a majority of the then
outstanding principal amount of the Junior Subordinated Debt Securities issued
under an Junior Subordinated Indenture may remove the Junior Subordinated
Indenture Trustee and appoint a successor Junior Subordinated Indenture
Trustee. The Junior Subordinated Indenture Trustee may become the owner or
pledgee of any of the Junior Subordinated Debt Securities with the same rights,
subject to certain conflict of interest restrictions, it would have if it were
not the Junior Subordinated Indenture Trustee. The Junior Subordinated
Indenture Trustee and any successor trustee must be a corporation organized and
doing business as a commercial bank or trust company under the laws of the
United States or of any state thereof, authorized under such laws to exercise
corporate trust powers, having a combined capital and surplus of at least
$50,000,000 and subject to examination by federal or state authority. From
time to time and subject to applicable law relating to conflicts of interest,
the Junior Subordinated Indenture Trustee may also serve as trustee under other
indentures relating to Debt Securities or Junior Subordinated Debt Securities
issued by the Company or affiliated companies and may engage in commercial
transactions with the Company and affiliated companies. Initially, the Junior
Subordinated Indenture Trustee is The Bank of New York, who currently serves as
the transfer agent and registrar for the Common Stock and is a lender to the
Company under the Company's Amended and Restated Credit Agreement dated April
10, 1997.
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CERTAIN COVENANTS OF THE COMPANY APPLICABLE TO THE JUNIOR SUBORDINATED DEBT
SECURITIES
If Junior Subordinated Debt Securities are issued to a CCCI Trust in
connection with the issuance of Preferred Securities by such CCCI Trust, the
Company covenants in the Junior Subordinated Indenture that, so long as the
Preferred Securities of such CCCI Trust remain outstanding, the Company will
not declare or pay any dividends on, or redeem, purchase, acquire or make a
distribution or liquidation payment with respect to, any Common Stock or
Preferred Stock or make any guarantee payments with respect thereto if at such
time (i) the Company shall be in default with respect to its Guarantee Payments
(as defined herein) or other payment obligations under the related Guarantee,
(ii) there shall have occurred any Junior Subordinated Indenture Event of
Default with respect to such Junior Subordinated Debt Securities, or (iii) in
the event that Junior Subordinated Debt Securities are issued to the applicable
CCCI Trust in connection with the issuance of Preferred Securities by such CCCI
Trust, the Company shall have given notice of its election to defer payments of
interest on such Junior Subordinated Debt Securities by extending the interest
payment period as provided in the terms of the Junior Subordinated Debt
Securities and such period, or any extension thereof, is continuing; provided,
however, that the foregoing restrictions shall not apply to (a) dividends,
redemptions, purchases, acquisitions, distributions or payments made by the
Company by way of issuance of shares of its capital stock, (b) any declaration
of a dividend under a shareholder rights plan or in connection with the
implementation of a shareholder rights plan, the issuance of capital stock of
the Company under a shareholder rights plan or the redemption or repurchase of
any such right distributed pursuant to a shareholder rights plan, (c) payments
of accrued dividends by the Company upon the redemption, exchange or conversion
of any Preferred Stock as may be outstanding from time to time in accordance
with the terms of such Preferred Stock, (d) cash payments made by the Company
in lieu of delivering fractional shares upon the redemption, exchange or
conversion of any Preferred Stock as may be outstanding from time to time in
accordance with the terms of such Preferred Stock, (e) payments under the
Guarantees, or (f) purchases of Common Stock related to the issuance of Common
Stock or rights under any of the Company's benefit plans for its directors,
officers or employees, or related to the issuance of Common Stock or rights
under a dividend reinvestment and stock purchase plan. In addition, if Junior
Subordinated Debt Securities are issued to a CCCI Trust in connection with the
issuance of Preferred Securities by such CCCI Trust, for so long as the
Preferred Securities of such CCCI Trust remain outstanding, the Company has
agreed (1) to remain the sole direct or indirect owner of all the outstanding
Common Securities issued by such CCCI Trust and not to cause or permit such
Common Securities to be transferred except to the extent permitted by the
Declaration of such CCCI Trust; provided that any permitted successor of the
Company under the Junior Subordinated Indenture may succeed to the Company's
ownership of such Common Securities, (2) to comply fully with all its
obligations and agreements under such Declaration and (3) not to take any
action which would cause such CCCI Trust to cease to be treated as a grantor
trust for federal income tax purposes, except in connection with a distribution
of Junior Subordinated Debt Securities.
SUBORDINATION
The Junior Subordinated Debt Securities will be subordinated and
junior in right of payment to certain other indebtedness of the Company to the
extent set forth in the applicable Prospectus Supplement.
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The payment of the principal of, premium, if any, and interest on the
Junior Subordinated Debt Securities will be subordinated in right of payment to
the prior payment in full of all Senior Indebtedness of the Company and pari
passu with the Company's trade creditors. No payment on account of principal
of, premium, if any, or interest on the Junior Subordinated Debt Securities and
no acquisition of, or payment on account of any sinking fund for, the Junior
Subordinated Debt Securities may be made unless full payment of amounts then
due for principal, premium, if any, and interest then due on all Senior
Indebtedness by reason of the maturity thereof (by lapse of time, acceleration
or otherwise) has been made or duly provided for in cash or in a manner
satisfactory to the holders of such Senior Indebtedness. In addition, the
Junior Subordinated Indenture provides that if a default has occurred giving
the holders of such Senior Indebtedness the right to accelerate the maturity
thereof, or an event has occurred which, with the giving of notice, or lapse of
time, or both, would constitute such an event of default, then unless and until
such event shall have been cured or waived or shall have ceased to exist, no
payment on account of principal, premium, if any, or interest on the Junior
Subordinated Debt Securities and no acquisition of, or payment on account of a
sinking fund for, the Junior Subordinated Debt Securities may be made. The
Company shall give prompt written notice to the Junior Subordinated Indenture
Trustee of any default under any Senior Indebtedness or under any agreement
pursuant to which Senior Indebtedness may have been issued. The Junior
Subordinated Indenture provisions described in this paragraph, however, do not
prevent the Company from making a sinking fund payment with Junior Subordinated
Debt Securities acquired prior to the maturity of Senior Indebtedness or, in
the case of default, prior to such default and notice thereof. Upon any
distribution of its assets in connection with any dissolution, liquidation or
reorganization of the Company, all Senior Indebtedness must be paid in full
before the holders of the Junior Subordinated Debt Securities are entitled to
any payments whatsoever. As a result of these subordination provisions, in the
event of the Company's insolvency, holders of the Junior Subordinated Debt
Securities may recover ratably less than senior creditors of the Company.
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For purposes of the description of the Junior Subordinated Debt
Securities, the term "Senior Indebtedness" means the principal of and premium,
if any, and interest on the following, whether outstanding on the date of
execution of the Junior Subordinated Indenture or thereafter incurred or
created, (i) indebtedness of the Company for money borrowed by the Company
(including purchase money obligations with an original maturity in excess of
one year) or evidenced by securities (other than the Junior Subordinated Debt
Securities), notes, bankers' acceptances or other corporate debt securities or
similar instruments issued by the Company; (ii) obligations with respect to
letters of credit; (iii) indebtedness of the Company constituting a guarantee
of indebtedness of others of the type referred to in the preceding clauses (i)
and (ii); or (iv) renewals, extensions or refundings of any of the indebtedness
referred to in the preceding clauses (i), (ii) and (iii) unless, in the case of
any particular indebtedness, renewal, extension or refunding, under the express
provisions of the instrument creating or evidencing the same, or pursuant to
which the same is outstanding, such indebtedness or such renewal, extension or
refunding thereof is not superior in right of payment to the Junior
Subordinated Debt Securities.
DESCRIPTION OF PREFERRED STOCK
The Board of Directors has the authority to issue up to 2,000,000
shares of Preferred Stock, in one or more series, and to fix the rights,
preferences, privileges and qualifications thereof without any further vote or
action by the shareholders. The issuance of Preferred Stock could decrease the
amount of earnings and assets available for distribution to holders of Common
Stock, and adversely affect the rights and powers, including voting rights, of
such holders and may have the effect of delaying, deferring or preventing a
change in control of the Company. No shares of Preferred Stock have ever been
issued. The particular terms of any series of Preferred Stock will be
described in the applicable Prospectus Supplement.
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DESCRIPTION OF COMMON STOCK
Holders of Common Stock are entitled to one vote per share on all
matters submitted to a vote of shareholders of the Company and to ratably
receive dividends, if any, as may be declared from time to time by the Board of
Directors from funds legally available therefor, subject to the payment of any
preferential dividends declared with respect to any Preferred Stock that from
time to time may be outstanding. Upon liquidation, dissolution or winding up of
the Company, holders of Common Stock are entitled to share ratably in any
assets available for distribution to shareholders after payment of all
obligations of the Company, subject to the rights to receive preferential
distributions of the holders of any shares of Preferred Stock then outstanding.
Shareholders do not have cumulative voting rights or preemptive or
other rights to acquire or subscribe to additional, unissued or treasury
shares. The shares of Common Stock currently outstanding are, and the shares of
Common Stock offered hereby will be, upon issuance thereof, validly issued,
fully paid and nonassessable.
REPURCHASE AGREEMENT
In May 1977, the Company and its then shareholders, including L. Lowry
Mays and B.J. McCombs, entered into a Buy-Sell Agreement (the "Repurchase
Agreement") restricting the disposition of the outstanding shares of Common
Stock owned by L. Lowry Mays and B.J. McCombs and their heirs, legal
representatives, successors and assigns (collectively, the "Restricted
Parties"). The Repurchase Agreement provides that in the event that a
Restricted Party desires to dispose of his shares, other than by disposition by
will or intestacy or through gifts to such Restricted Party's spouse or
children, such shares must be offered for a period of 30 days to the Company.
Any shares not purchased by the Company must then be offered for a period of 30
days to the other Restricted Parties. If all of the offered shares are not
purchased by the Company or the other Restricted Parties, the Restricted Party
offering his shares may sell them to a third party during a period of 90 days
thereafter at a price and on terms not more favorable than those offered to the
Company and the other Restricted Parties. In addition, a Restricted Party may
not individually or in concert with others sell any shares so as to deliver
voting control to a third party without providing in any such sale that all
Restricted Parties will be offered the same price and terms for their shares.
The Repurchase Agreement will continue in effect following the Offering and may
preserve the control of the present principal shareholders.
TEXAS BUSINESS COMBINATION LAW
The Company will be governed by the provisions of the Texas Business
Combination Law, Part 13 of the Texas Business Corporation Act, which takes
effect on September 1, 1997. In general, the law prohibits a Texas "issuing
public corporation" from engaging in a "business combination" with an
"affiliated shareholder," or an affiliate or associate thereof, for a period of
three years after the date of the transaction in which the person became an
affiliate shareholder, unless the business combination is approved in a
prescribed manner. "Business combinations" include mergers, asset sales and
other transactions resulting in a financial benefit to the affiliated
shareholder. An "affiliated shareholder" is a person who, together with
affiliates and associates, owns (or within three years, did own) 20% or more of
the corporation's voting stock. The applicability of the Texas Business
Combination Law to the Company may have an anti-takeover effect.
FOREIGN OWNERSHIP
As a consequence of the restrictions imposed by the Communications Act
of 1934 on ownership of Common Stock by aliens, the Company's bylaws were
amended effective December 31, 1983 to provide that (i) not more than one-fifth
of the shares outstanding shall at any time be owned of record, or voted, by or
for
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the account of aliens, their representatives, a foreign government or a
corporation organized under the laws of a foreign country, (ii) the Company
shall not be owned or controlled directly or indirectly by any other
corporation of which any officer or more than one-fourth of the directors are
aliens or of which more than one-fourth of the shares are owned of record or
voted by aliens, (iii) no person who is an alien may be elected or serve as an
officer or director of the Company, and (iv) if the stock records of the
Company shall at any time reflect one-fifth ownership, no transfers of
additional shares to aliens shall be made and, if it shall thereafter be found
that any such additional shares are in fact held by or for the account of an
alien, such shares shall not be entitled to vote, to receive dividends or to
have any other rights. The holder of such shares will be required to transfer
them to a United States citizen or to the Company. This restriction will be
applicable to the shares of Common Stock offered hereby and to the issuance or
transfer of such shares after the date of this Prospectus. The Company's stock
certificates may bear a legend setting forth this restriction. Since the
bylaws were amended, the Communications Act of 1934 has been revised to remove
the limitations on alien officers and directors.
DESCRIPTION OF WARRANTS
The Company may issue Warrants for the purchase of Debt Securities or
Junior Subordinated Debt Securities, or shares of Preferred Stock or Common
Stock. Warrants may be issued independently or together with any Debt
Securities, Junior Subordinated Debt Securities, or shares of Preferred Stock
or Common Stock offered by any Prospectus Supplement and may be attached to or
separate from such Debt Securities, Junior Subordinated Debt Securities, or
shares of Preferred Stock or Common Stock. The Warrants are to be issued under
Warrant Agreements to be entered into between the Company and The Bank of New
York, as Warrant Agent, or such other bank or trust company as is named in the
Prospectus Supplement relating to the particular issue of Warrants (the
"Warrant Agent"). The Warrant Agent will act solely as an agent of the Company
in connection with the Warrants and will not assume any obligation or
relationship of agency or trust for or with any holders of Warrants or
beneficial owners of Warrants. The following summaries of certain provisions of
the form of Warrant Agreement and Warrants do not purport to be complete and
are subject to, and are qualified in their entirety by reference to, all the
provisions of the applicable Warrant Agreement and the Warrants.
GENERAL
If Warrants are offered, the Prospectus Supplement will describe the
terms of the Warrants, including the following: (i) the offering price; (ii)
the currency, currencies or currency units for which Warrants may be purchased;
(iii) the designation, aggregate principal amount, currency, currencies or
currency units and terms of the Debt Securities or Junior Subordinated Debt
Securities purchasable upon exercise of the Debt Warrants and the price at
which such Debt Securities or Junior Subordinated Debt Securities may be
purchased upon such exercise; (iv) the designation, number of shares and terms
of the Preferred Stock purchasable upon exercise of the Preferred Stock
Warrants and the price at which such shares of Preferred Stock may be purchased
upon such exercise; (v) the designation, number of shares and terms of the
Common Stock purchasable upon exercise of the Common Stock Warrants and the
price at which such shares of Common Stock may be purchased upon such exercise;
(vi) if applicable, the designation and terms of the Debt Securities, Junior
Subordinated Debt Securities, Preferred Stock or Common Stock with which the
Warrants are issued and the number of Warrants issued with each such Debt
Security, Junior Subordinated Debt Security or share of Preferred Stock or
Common Stock; (vii) if applicable, the date on and after which the Warrants and
the related Debt Securities, Junior Subordinated Debt Securities, Preferred
Stock or Common Stock will be separately transferable; (viii) the date on which
the right to exercise the Warrants shall commence and the date (the "Expiration
Date") on which such right shall expire; (ix) whether the Warrants will be
issued
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in registered or bearer form; (x) a discussion of certain federal income tax,
accounting and other special considerations, procedures and limitations
relating to the Warrants; and (xi) any other terms of the Warrants.
Warrants may be exchanged for new Warrants of different denominations,
may (if in registered form) be presented for registration of transfer, and may
be exercised at the corporate trust office of the Warrant Agent or any other
office indicated in the Prospectus Supplement. Before the exercise of their
Warrants, holders of Warrants will not have any of the rights of holders of the
Debt Securities, Junior Subordinated Debt Securities or shares of Preferred
Stock or Common Stock purchasable upon such exercise, including the right to
receive payments of principal of, any premium on, or any interest on, the Debt
Securities or Junior Subordinated Debt Securities purchasable upon such
exercise or to enforce the covenants in the Indenture or to receive payments of
dividends, if any, on the Preferred Stock or Common Stock purchasable upon such
exercise or to exercise any applicable right to vote. If the Company maintains
the ability to reduce the exercise price of any Stock Warrant and such right is
triggered, the Company will comply with the federal securities laws, including
Rule 13e-4 under the Exchange Act, to the extent applicable.
EXERCISE OF WARRANTS
Each Warrant will entitle the holder to purchase such principal amount
of Debt Securities or Junior Subordinated Debt Securities or such number of
shares of Preferred Stock or Common Stock at such exercise price as shall in
each case be set forth in, or calculable from, the Prospectus Supplement
relating to the Warrant. Warrants may be exercised at such times as are set
forth in the Prospectus Supplement relating to such Warrants. After the close
of business on the Expiration Date (or such later date to which such Expiration
Date may be extended by the Company), unexercised Warrants will become void.
Subject to any restrictions and additional requirements that may be
set forth in the Prospectus Supplement relating thereto, Warrants may be
exercised by delivery to the Warrant Agent of the certificate evidencing such
Warrants properly completed and duly executed and of payment as provided in the
Prospectus Supplement of the amount required to purchase the Debt Securities,
Junior Subordinated Debt Securities or shares of Preferred Stock or Common
Stock purchasable upon such exercise. The exercise price will be the price
applicable on the date of payment in full, as set forth in the Prospectus
Supplement relating to the Warrants. Upon receipt of such payment and the
certificate representing the Warrants to be exercised, properly completed and
duly executed at the corporate trust office of the Warrant Agent or any other
office indicated in the Prospectus Supplement, the Company will, as soon as
practicable, issue and deliver the Debt Securities, Junior Subordinated Debt
Securities or shares of Preferred Stock or Common Stock purchasable upon such
exercise. If fewer than all of the Warrants represented by such certificate are
exercised, a new certificate will be issued for the remaining amount of
Warrants.
ADDITIONAL PROVISIONS
The exercise price payable and the number of shares of Common or
Preferred Stock purchasable upon the exercise of each Stock Warrant will be
subject to adjustment in certain events, including the issuance of a stock
dividend to holders of Common or Preferred Stock, respectively, or a
combination, subdivision or reclassification of Common or Preferred Stock,
respectively. In lieu of adjusting the number of shares of Common or Preferred
Stock purchasable upon exercise of each Stock Warrant, the Company may elect to
adjust the number of Stock Warrants. No adjustment in the number of shares
purchasable upon exercise of the Stock Warrants will be required until
cumulative adjustments require an adjustment of at least 1% thereof. The
Company may, at its option, reduce the exercise price at any time. No
fractional shares will be issued upon exercise of Stock Warrants, but the
Company will pay the cash value of any fractional shares otherwise issuable.
Notwithstanding the foregoing, in case of any consolidation, merger, or sale or
conveyance of the
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property of the Company as an entirety or substantially as an entirety, the
holder of each outstanding Stock Warrant shall have the right upon the exercise
thereof to the kind and amount of shares of stock and other securities and
property (including cash) receivable by a holder of the number of shares of
Common Stock or Preferred Stock into which such Stock Warrants were exercisable
immediately prior thereto.
NO RIGHTS AS SHAREHOLDERS
Holders of Stock Warrants will not be entitled, by virtue of being
such holders, to vote, to consent, to receive dividends, to receive notice as
shareholders with respect to any meeting of shareholders for the election of
directors of the Company or any other matter, or to exercise any rights
whatsoever as shareholders of the Company.
DESCRIPTION OF STOCK PURCHASE
CONTRACTS AND STOCK PURCHASE UNITS
The Company may issue Stock Purchase Contracts, which are contracts
obligating holders to purchase from the Company, and the Company to sell to the
holders, a specified number of shares of Common Stock or Preferred Stock at a
future date or dates. The price per share of Common Stock or Preferred Stock
may be fixed at the time the Stock Purchase Contracts are issued or may be
determined by reference to a specific formula set forth in the Stock Purchase
Contracts. Any such formula may include anti-dilution provisions to adjust the
number of shares issuable pursuant to Stock Purchase Contracts upon certain
events. The Stock Purchase Contracts may be issued separately or as a part of
Stock Purchase Units each representing ownership of a Stock Purchase Contract
and Debt Securities, Preferred Securities or debt obligations of third parties,
including U.S. Obligations, securing the holders' obligations to purchase the
Common Stock or the Preferred Stock under the Purchase Contracts.
Except as otherwise described in the applicable Prospectus Supplement,
in the case of Stock Purchase Units that include debt obligations of third
parties, unless a holder of Stock Purchase Units settles its obligations under
the Stock Purchase Contracts early through the delivery of consideration to the
Company or its agent in the manner discussed below, the principal of such debt
obligations, when paid at maturity, will automatically be applied to satisfy
the holder's obligation to purchase Common Stock or Preferred Stock under the
Stock Purchase Contracts.
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Except as otherwise described in the applicable Prospectus Supplement,
in the case of Stock Purchase Units that include Debt Securities or Preferred
Securities, in the absence of any such early settlement or the election by a
holder to pay the consideration specified in the Stock Purchase Contracts, the
Debt Securities or Preferred Securities will automatically be presented to the
applicable CCCI Trust for redemption at 100% of face or liquidation value and
the CCCI Trust will present Junior Subordinated Debt Securities in an equal
principal amount to the Company for redemption at 100% of principal amount.
Amounts received in respect of such redemption will automatically be
transferred to the Company and applied to satisfy in full the holder's
obligation to purchase Common Stock or Preferred Stock under the Stock Purchase
Contracts. The Stock Purchase Contracts may require the Company to make
periodic payments to the holders of the Stock Purchase Units or vice versa, and
such payments may be unsecured or refunded on some basis. The Stock Purchase
Contracts may require holders to secure their obligations thereunder in a
specified manner.
Except as otherwise described in the applicable Prospectus Supplement,
holders of Stock Purchase Units may be entitled to settle the underlying Stock
Purchase Contracts prior to the stated settlement date by surrendering the
certificate evidencing the Stock Purchase Units, accompanied by the payment
due, in such form and calculated pursuant to such formula as may be prescribed
in the Stock Purchase Contracts and described in the applicable Prospectus
Supplement. Upon early settlement, the holder would receive the number of
shares of Common Stock or Preferred Stock deliverable under such Stock Purchase
Contracts, subject to adjustment in certain cases. Holders of Stock Purchase
Units may be entitled to exchange their Stock Purchase Units together with
appropriate collateral, for separate Stock Purchase Contracts and Preferred
Securities, Debt Securities, Junior Subordinated Debt Securities or debt
obligations or securities of third parties. In the event of either such early
settlement or exchange, the Preferred Securities, Debt Securities, Junior
Subordinated Debt Securities or debt obligations that were pledged as security
for the obligation of the holder to perform under the Stock Purchase Contracts
would be transferred to the holder free and clear of the Company's security
interest therein.
The applicable Prospectus Supplement will describe the terms of any
Stock Purchase Contracts or Stock Purchase Units including differences, if any,
from the term described above.
DESCRIPTION OF PREFERRED SECURITIES
PREFERRED SECURITIES
Each CCCI Trust may issue, from time to time, only one series of
Preferred Securities having terms described in the Prospectus Supplement
relating thereto. The Declaration of each CCCI Trust authorizes the Regular
Trustees of such CCCI Trust to issue on behalf of such CCCI Trust one series of
Preferred Securities. Each Declaration will be qualified as an indenture under
the Trust Indenture Act. The Preferred Securities will have such terms,
including distributions, redemption, voting, liquidation rights and such other
preferred, deferred or other special rights or such restrictions as shall be
set forth in the related Declaration or made part of such Declaration by the
Trust Indenture Act. Reference is made to the Prospectus Supplement relating
to the Preferred Securities of a CCCI Trust for specific terms, including (i)
the specific designation of such Preferred Securities, (ii) the number of
Preferred Securities issued by such CCCI Trust, (iii) the annual distribution
rate (or method of calculation thereof) for Preferred Securities issued by such
CCCI Trust, the date or dates upon which such distributions shall be payable
and the record date or dates for the payment of such distributions, (iv)
whether distributions on Preferred Securities issued by such CCCI Trust shall
be cumulative, and, in the case of Preferred Securities having such cumulative
distribution rights, the date or dates or method of determining the date or
dates from which distributions on Preferred Securities issued by such CCCI
Trust shall be cumulative, (v) the amount or amounts which shall be paid out of
the
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assets of such CCCI Trust to the holders of Preferred Securities of such CCCI
Trust upon voluntary or involuntary liquidation, dissolution, winding-up or
termination of such CCCI Trust, (vi) the obligation or right, if any, of such
CCCI Trust to purchase or redeem Preferred Securities issued by such CCCI Trust
and the price or prices at which, the period or periods within which and the
terms and conditions upon which Preferred Securities issued by such CCCI Trust
shall or may be purchased or redeemed, in whole or in part, pursuant to such
obligation or right, (vii) the voting rights, if any, of Preferred Securities
issued by such CCCI Trust in addition to those required by law, including the
number of votes per Preferred Security and any requirement for the approval by
the holders of Preferred Securities, or of Preferred Securities issued by one
or more CCCI Trusts, or of both, as a condition to specified actions or
amendments to the Declaration of such CCCI Trust, (viii) the terms and
conditions upon which the Preferred Securities may be convertible into or
exchanged for Common Stock, Preferred Stock, Debt Securities, Junior
Subordinated Debt Securities, or indebtedness or other securities of any kind
of the Company; and (ix) any other relevant rights, preferences, privileges,
limitations or restrictions of Preferred Securities issued by such CCCI Trust
consistent with the Declaration of such CCCI Trust or with applicable law. All
Preferred Securities offered hereby will be guaranteed by the Company as and to
the extent set forth below under "Description of the Guarantees." Certain
federal income tax considerations applicable to any offering of Preferred
Securities will be described in the Prospectus Supplement relating thereto.
In connection with the issuance of Preferred Securities, each CCCI
Trust will issue one series of Common Securities. The Declaration of each CCCI
Trust authorizes the Regular Trustees of such CCCI Trust to issue on behalf of
such CCCI Trust one series of Common Securities having such terms including
distributions, redemption, voting, liquidation rights or such restrictions as
shall be set forth therein. The terms of the Common Securities issued by a
CCCI Trust will be substantially identical to the terms of the Preferred
Securities issued by such CCCI Trust and the Common Securities will rank pari
passu and payments will be made thereon on a pro rata basis with the Preferred
Securities except that, if a Declaration Event of Default occurs and is
continuing, the rights of the holders of such Common Securities to payment in
respect of distributions and payments upon liquidation, redemption and maturity
will be subordinated to the rights of the holders of such Preferred Securities.
Except in certain limited circumstances, the Common Securities issued by a CCCI
Trust will also carry the right to vote and to appoint, remove or replace any
of the Trustees of such CCCI Trust. All the Common Securities of a CCCI Trust
will be directly or indirectly owned by the Company.
As long as payments of interest and other payments are made when due
on the Junior Subordinated Debt Securities, such payments will be sufficient to
cover distributions and other payments due on the Preferred Securities
primarily because (i) the aggregate principal amount of Junior Subordinated
Debt Securities held as trust assets will be equal to the sum of the aggregate
stated liquidation amount of the Preferred Securities; and (ii) the interest
rate and interest and other payment dates on the Junior Subordinated Debt
Securities will match the distribution rate and distribution and other payment
dates for the Preferred Securities.
If an Event of Default with respect to the Declaration of any CCCI
Trust occurs and is continuing, then the holders of Preferred Securities of
such CCCI Trust would rely on the enforcement by the Property Trustee of its
rights as a holder of the Junior Subordinated Debt Securities deposited in such
CCCI Trust against the Company. In addition, the holders of a majority in
liquidation amount of such Preferred Securities will have the right to direct
the time, method, and place of conducting any proceeding for any remedy
available to the Property Trustee or to direct the exercise of any trust or
power conferred upon the Property Trustee under such Declaration, including the
right to direct the Property Trustee to exercise the remedies available to it
as a holder of such Junior Subordinated Debt Securities. If the Property
Trustee fails
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to enforce its rights under such Junior Subordinated Debt Securities deposited
in such CCCI Trust, any holder of such Preferred Securities may, to the extent
permitted by applicable law, after a period of 60 days has elapsed from such
holder's written request, institute a legal proceeding against the Company to
enforce the Property Trustee's rights under such Junior Subordinated Debt
Securities without first instituting any legal proceeding against the Property
Trustee or any other person or entity. If an Event of Default with respect to
the Declaration of any CCCI Trust occurs and is continuing and such event is
attributable to the failure of the Company to pay interest or principal on the
Junior Subordinated Debt Securities on the date such interest or principal is
otherwise payable (or in the case of redemption, on the redemption date), then
a holder of Preferred Securities of such CCCI Trust may also directly institute
a proceeding for enforcement of payment to such holder of the principal of or
interest on such Junior Subordinated Debt Securities having a principal amount
equal to the aggregate liquidation amount of such Preferred Securities held by
such holder (a "Direct Action") on or after the respective due date specified
in such Junior Subordinated Debt Securities without first (i) directing the
Property Trustee to enforce the terms of such Junior Subordinated Debt
Securities or (ii) instituting a legal proceeding against the Company to
enforce the Property Trustee's rights under such Junior Subordinated Debt
Securities. In connection with such Direct Action, the Company will be
subrogated to the rights of such holder of such Preferred Securities under such
Declaration to the extent of any payment made by the Company to such holder of
such Preferred Securities in such Direct Action. The holders of Preferred
Securities of a CCCI Trust will not be able to exercise directly any other
remedy available to the holders of the Junior Subordinated Debt Securities
unless the Property Trustee first fails to do so.
Certain federal income tax considerations applicable to an investment
in Preferred Securities will be described in the Prospectus Supplement relating
thereto.
The Property Trustee and its affiliates provide customary commercial
banking services to the Company and certain of its subsidiaries and participate
in various financing agreements of the Company in the ordinary course of their
business. Initially, the Property Trustee is The Bank of New York, who
currently serves as the transfer agent and registrar for the Common Stock and
is a lender to the Company under the Company's Amended and Restated Credit
Agreement dated April 10, 1997.
DESCRIPTION OF GUARANTEES
Set forth below is a summary of information concerning the Guarantees
that will be executed and delivered by the Company for the benefit of the
holders from time to time of Preferred Securities of a CCCI Trust. Each
Preferred Security Guarantee will be separately qualified under the Trust
Indenture Act and will be held by The Bank of New York, acting in its capacity
as indenture trustee with respect thereto (the "Guarantee Trustee"), for the
benefit of holders of the Preferred Securities of the applicable CCCI Trust.
The terms of each Guarantee will be those set forth in such Guarantee and those
made part of such Guarantee by the Trust Indenture Act. This description
summarizes the material terms of the Guarantees and is qualified in its
entirety by reference to the form of Guarantee, which is filed as an exhibit to
the Registration Statement of which this Prospectus forms a part, and the Trust
Indenture Act.
GENERAL
Pursuant to each Guarantee, the Company will irrevocably and
unconditionally agree, to the extent set forth therein, to pay in full, to the
holders of the Preferred Securities issued by the applicable CCCI Trust, the
Guarantee Payments (as defined herein), to the extent not paid by such CCCI
Trust, regardless of any
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defense, right of set-off or counterclaim that such CCCI Trust may have or
assert. The following distributions and other payments with respect to
Preferred Securities issued by a CCCI Trust to the extent not made or paid by
such CCCI Trust (the "Guarantee Payments"), will be subject to the Guarantee
(without duplication): (i) any accrued and unpaid distributions on such
Preferred Securities, but only if and to the extent that in each case the
Company has made a payment to the Property Trustee of interest on the Junior
Subordinated Debt Securities, (ii) the redemption price, including all accrued
and unpaid distributions to the date of redemption, with respect to any
Preferred Securities called for redemption by such CCCI Trust, but only if and
to the extent that in each case the Company has made a payment to the Property
Trustee of interest or principal on the Junior Subordinated Debt Securities
deposited in such CCCI Trust as trust assets, and (iii) upon a voluntary or
involuntary liquidation, dissolution, winding-up or termination of such CCCI
Trust (other than in connection with the distribution of such Junior
Subordinated Debt Securities to the holders of such Preferred Securities or the
redemption of all such Preferred Securities upon the maturity or redemption of
such Junior Subordinated Debt Securities) the lesser of (a) the aggregate of
the liquidation amount and all accrued and unpaid distributions on such
Preferred Securities to the date of payment, to the extent such CCCI Trust has
funds available therefor, and (b) the amount of assets of such CCCI Trust
remaining available for distribution to holders of such Preferred Securities
upon liquidation of such CCCI Trust. The Company's obligation to make a
Guarantee Payment may be satisfied by direct payment of the required amounts by
the Company to the holders of the applicable Preferred Securities or by causing
the applicable CCCI Trust to pay such amounts to such holders.
The Guarantee is a full and unconditional guarantee from the time of
issuance of the applicable Preferred Securities, but the Guarantee covers
distributions and other payments on such Preferred Securities only if and to
the extent that the Company has made a payment to the Property Trustee of
interest or principal on the Junior Subordinated Debt Securities deposited in
the applicable CCCI Trust as trust assets. If the Company does not make
interest or principal payments on the Junior Subordinated Debt Securities
deposited in the applicable CCCI Trust as trust assets, the Property Trust will
not make distributions on the Preferred Securities of such CCCI Trust and the
CCCI Trust will not have funds available therefor.
The Company's obligations under the Declaration for each CCCI Trust,
the Guarantee issued with respect to Preferred Securities issued by such CCCI
Trust, the Junior Subordinated Debt Securities purchased by such CCCI Trust and
the Junior Subordinated Indenture in the aggregate will provide a full and
unconditional guarantee on a subordinated basis by the Company of payments due
on the Preferred Securities issued by such CCCI Trust.
CERTAIN COVENANTS OF THE COMPANY
In each Guarantee, the Company will covenant that, so long as any
Preferred Securities issued by the applicable CCCI Trust remain outstanding,
the Company will not declare or pay any dividends on, or redeem, purchase,
acquire or make a distribution or liquidation payment with respect to, any
Common Stock or Preferred Stock or make any guarantee payment with respect
thereto, if at such time (i) the Company shall be in default with respect to
its Guarantee Payments or other payment obligations under such Guarantee, (ii)
there shall have occurred any Event of Default under the related Declaration or
(iii) in the event that Junior Subordinated Debt Securities are issued to the
applicable CCCI Trust in connection with the issuance of Preferred Securities
by such CCCI Trust, the Company shall have given notice of its election to
defer payments of interest on such Junior Subordinated Debt Securities by
extending the interest payment period as provided in the terms of the Junior
Subordinated Debt Securities and such period, or any extension thereof, is
continuing; provided, however, that the foregoing restrictions shall not apply
to (a) dividends, redemptions, purchases, acquisitions, distributions or
payments made by the Company by way of issuance of
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shares of its capital stock, (b) any declaration of a dividend under a
shareholder rights plan or in connection with the implementation of a
shareholder rights plan, the issuance of capital stock of the Company under a
shareholder rights plan or the redemption or repurchase of any such right
distributed pursuant to a shareholder rights plan, (c) payments of accrued
dividends by the Company upon the redemption, exchange or conversion of any
Preferred Stock as may be outstanding from time to time in accordance with the
terms of such Preferred Stock, (d) cash payments made by the Company in lieu of
delivering fractional shares upon the redemption, exchange or conversion of any
Preferred Stock as may be outstanding from time to time in accordance with the
terms of such Preferred Stock, (e) payments under the Guarantees, or (f)
purchases of Common Stock related to the issuance of Common Stock or rights
under any of the Company's benefit plans for its directors, officers or
employees, or related to the issuance of Common Stock or rights under a
dividend reinvestment and stock purchase plan. In addition, so long as any
Preferred Securities of a CCCI Trust remain outstanding, the Company has agreed
(1) to remain the sole direct or indirect owner of all the outstanding Common
Securities issued by such CCCI Trust and not to cause or permit such Common
Securities to be transferred except to the extent permitted by the Declaration
of such CCCI Trust, provided that any permitted successor of the Company under
the Junior Subordinated Indenture may succeed to the Company's ownership of
such Common Securities, and (2) to use reasonable efforts to cause such CCCI
Trust to continue to be treated as a grantor trust for federal income tax
purposes, except in connection with a distribution of Junior Subordinated Debt
Securities.
AMENDMENTS AND ASSIGNMENT
Except with respect to any changes that do not adversely affect the
rights of holders of the applicable Preferred Securities (in which case no
consent will be required), each Guarantee may be amended only with the prior
approval of the holders of not less than 66 2/3% in liquidation amount of the
outstanding Preferred Securities issued by the applicable CCCI Trust. The
manner of obtaining any such approval of holders of such Preferred Securities
will be set forth in an accompanying Prospectus Supplement. All guarantees and
agreements contained in a Guarantee shall bind the successors, assignees,
receivers, trustees and representatives of the Company and shall inure to the
benefit of the holders of the Preferred Securities of the applicable CCCI Trust
then outstanding. Except in connection with a consolidation, merger,
conveyance, or transfer of assets involving the Company that is permitted under
the Junior Subordinated Indenture, the Company may not assign its obligations
under any Guarantee.
TERMINATION OF THE GUARANTEES
Each Guarantee will terminate and be of no further force and effect as
to the Preferred Securities issued by the applicable CCCI Trust upon full
payment of the redemption price of all Preferred Securities of such CCCI Trust,
or upon distribution of the Junior Subordinated Debt Securities to the holders
of the Preferred Securities of such CCCI Trust in exchange for all the
Preferred Securities issued by such CCCI Trust, or upon full payment of the
amounts payable upon liquidation of such CCCI Trust. Notwithstanding the
foregoing, each Guarantee will continue to be effective or will be reinstated,
as the case may be, if at any time any holder of Preferred Securities issued by
the applicable CCCI Trust must restore payment of any sums paid under such
Preferred Securities or such Guarantee.
STATUS OF THE GUARANTEES
The Company's obligations under each Guarantee to make the Guarantee
Payments will constitute an unsecured obligation of the Company and will rank
(i) subordinate and junior in right of payment to all other indebtedness,
liabilities and obligations of the Company and any guarantees, endorsements or
other
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<PAGE> 43
contingent obligations of the Company in respect of such indebtedness,
liabilities or obligations, including the Junior Subordinated Debt Securities,
except those made pari passu or subordinate by their terms, and (ii) senior to
all capital stock now or hereafter issued by the Company and to any guarantee
now or hereafter entered into by the Company in respect of any of its capital
stock. The Company's obligations under each Guarantee will rank pari passu
with each other Guarantee. Because the Company is a holding company, the
Company's obligations under each Guarantee are also effectively subordinated to
all existing and future liabilities, including trade payables, of the Company's
subsidiaries, except to the extent that the Company is a creditor of the
subsidiaries recognized as such. Each Declaration provides that each holder of
Preferred Securities issued by the applicable CCCI Trust, by acceptance
thereof, agrees to the subordination provisions and other terms of the related
Guarantee.
Each Guarantee will constitute a guarantee of payment and not of
collection (that is, the guaranteed party may institute a legal proceeding
directly against the Company to enforce its rights under such Guarantee without
first instituting a legal proceeding against any other person or entity). Each
Guarantee will be deposited with the Guarantee Trustee, to be held for the
benefit of the holders of the Preferred Securities issued by the applicable
CCCI Trust. The Guarantee Trustee shall enforce such Guarantee on behalf of
the holders of such Preferred Securities. The holders of not less than a
majority in aggregate liquidation amount of the Preferred Securities issued by
the applicable CCCI Trust have the right to direct the time, method and place
of conducting any proceeding for any remedy available in respect of the related
Guarantee, including the giving of directions to the Guarantee Trustee. If the
Guarantee Trustee fails to enforce a Guarantee as above provided, any holder of
Preferred Securities issued by the applicable CCCI Trust may institute a legal
proceeding directly against the Company to enforce its rights under such
Guarantee, without first instituting a legal proceeding against the applicable
CCCI Trust, or any other person or entity. Notwithstanding the foregoing, if
the Company has failed to make a Guarantee Payment, a holder of Preferred
Securities may directly institute a proceeding against the Company for
enforcement of such holder's right to receive payment under the Guarantee. The
Company waives any right or remedy to require that any action be brought first
against a CCCI Trust or any other person or entity before proceeding directly
against the Company.
MISCELLANEOUS
The Company will be required to provide annually to the Guarantee
Trustee a statement as to the performance by the Company of certain of its
obligations under each Guarantee and as to any default in such performance.
The Company is required to file annually with the Guarantee Trustee an
officer's certificate as to the Company's compliance with all conditions to be
complied with by it under each Guarantee.
The Guarantee Trustee, prior to the occurrence of a default,
undertakes to perform only such duties as are specifically set forth in the
applicable Guarantee and, after default with respect to a Guarantee, shall
exercise the same degree of care as a prudent individual would exercise under
the circumstances in the conduct of his or her own affairs. Subject to such
provision, the Guarantee Trustee is under no obligation to exercise any of the
powers vested in it by a Preferred Securities Guarantee at the request of any
holder of Preferred Securities unless it is offered reasonable security and
indemnity against the costs, expenses and liabilities that might be incurred
thereby.
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ERISA MATTERS
The Company and its affiliates may each be considered a "party in
interest" (within the meaning of the Employee Retirement Income Security Act of
1974, as amended ("ERISA")) or a "disqualified person" (within the meaning of
Section 4975 of the Internal Revenue Code of 1986, as amended (the "Code"))
with respect to many employee benefit plans ("Plans") that are subject to
ERISA. The purchase of Offered Securities by a Plan that is subject to the
fiduciary responsibility provisions of ERISA or the prohibited transaction
provisions of Section 4975 of the Code (including individual retirement
arrangements and other plans described in Section 4975(e)(1) of the Code) and
with respect to which the Company or any affiliate of the Company is a service
provider (or otherwise is a party in interest or a disqualified person) may
constitute or result in a prohibited transaction under ERISA or Section 4975 of
the Code, unless such Offered Securities are acquired pursuant to and in
accordance with an applicable exemption. Any pension or other employee benefit
plan proposing to acquire any Offered Securities should consult with its
counsel.
PLAN OF DISTRIBUTION
The Company or the CCCI Trusts may sell the Offered Securities offered
hereby (i) through underwriters or dealers, (ii) through agents, (iii) directly
to purchasers, or (iv) through a combination of any such methods of sale. Any
such underwriter, dealer or agent may be deemed to be an underwriter within the
meaning of the Securities Act. The Prospectus Supplement relating to the
Offered Securities will set forth their offering terms, including the name or
names of any underwriters, dealers or agents, the purchase price of the Offered
Securities and the proceeds to the Company or the CCCI Trusts from such sale,
any underwriting discounts, commissions and other items constituting
compensation to underwriters, dealers or agents, any initial public offering
price, any discounts or concessions allowed or reallowed or paid by
underwriters or dealers to other dealers, and any securities exchanges on which
the Offered Securities may be listed.
If underwriters or dealers are used in the sale, the Offered
Securities will be acquired by the underwriters or dealers for their own
account and may be resold from time to time in one or more transactions, at a
fixed price or prices, which may be changed, or at market prices prevailing at
the time of sale, or at prices related to such prevailing market prices, or at
negotiated prices. The Offered Securities may be offered to the public either
through underwriting syndicates represented by one or more managing
underwriters or directly by one or more of such firms. Unless otherwise set
forth in the Prospectus Supplement, the obligations of underwriters or dealers
to purchase the Offered Securities will be subject to certain conditions
precedent and the underwriters or dealers will be obligated to purchase all the
Offered Securities if any are purchased. Any public offering price and any
discounts or concessions allowed or reallowed or paid by underwriters or
dealers to other dealers may be changed from time to time.
Offered Securities may be sold directly by the Company or the CCCI
Trusts or through agents designated by the Company or the CCCI Trusts from time
to time. Any agent involved in the offer or sale of the Offered Securities in
respect of which this Prospectus is delivered will be named, and any
commissions payable by the Company or the CCCI Trusts to such agent will be set
forth, in the Prospectus Supplement. Unless otherwise indicated in the
Prospectus Supplement, any such agent will be acting on a best efforts basis
for the period of its appointment.
If so indicated in the Prospectus Supplement, the Company or the CCCI
Trusts will authorize underwriters, dealers or agents to solicit offers by
certain specified institutions to purchase Offered Securities from the Company
or the CCCI Trusts at the public offering price set forth in the Prospectus
Supplement pursuant to delayed delivery contracts providing for payment and
delivery on a specified date in the future. Such contracts will be subject to
any conditions set forth in the Prospectus Supplement and the Prospectus
Supplement will set forth the commission payable for solicitation of such
contracts. The underwriters and other
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persons soliciting such contracts will have no responsibility for the validity
or performance of any such contracts.
Underwriters, dealers and agents may be entitled under agreements
entered into with the Company or the CCCI Trusts to indemnification by the
Company or the CCCI Trusts against certain civil liabilities, including
liabilities under the Securities Act, or to contribution by the Company or the
CCCI Trusts to payments they may be required to make in respect thereof. The
terms and conditions of such indemnification will be described in an applicable
Prospectus Supplement. Underwriters, dealers and agents may be customers of,
engage in transactions with, or perform services for, the Company or the CCCI
Trusts in the ordinary course of business.
Each series of Offered Securities will be a new issue of securities
with no established trading market. Any underwriters to whom Offered Securities
are sold by the Company or the CCCI Trusts for public offering and sale may
make a market in such Offered Securities, but such underwriters will not be
obligated to do so and may discontinue any market making at any time without
notice. No assurance can be given as to the liquidity of the trading market for
any Offered Securities.
Any underwriter may engage in stabilizing and syndicate covering
transactions in accordance with Rule 104 under the Exchange Act. Rule 104
permits stabilizing bids to purchase the underlying security so long as the
stabilizing bids do not exceed a specified maximum. The underwriters may over-
allot shares of the Common Stock in connection an offering of Common Stock,
thereby creating a short position in the underwriters' account. Syndicate
covering transactions involve purchases of the Debt Securities or Junior
Subordinated Debt Securities in the open market after the distribution has been
completed in order to cover syndicate short positions. Stabilizing and
syndicate covering transactions may cause the price of the Debt Securities or
Junior Subordinated Debt Securities to be higher than it would otherwise be in
the absence of such transactions. These transactions, if commenced, may be
discontinued at any time.
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LEGAL OPINIONS
The validity of the Company Securities will be passed upon for the
Company by its special counsel, Akin, Gump, Strauss, Hauer & Feld, L.L.P. (a
partnership including professional corporations), San Antonio, Texas. Certain
matters relating to the validity of the Preferred Securities will be passed
upon for the Company and the CCCI Trusts by Morris, Nichols, Arsht & Tunnell,
Wilmington, Delaware, special Delaware counsel to the Company and the CCCI
Trusts. The validity of the Offered Securities will be passed upon for the
underwriters, dealers or agents, if any, by Cravath, Swaine & Moore, New York,
New York. Alan D. Feld, the sole shareholder of a professional corporation
which is a partner of Akin, Gump, Strauss, Hauer & Feld, L.L.P., is a director
of the Company and owns approximately 48,000 shares of Common Stock (including
presently exercisable nonqualified options to acquire approximately 40,000
shares).
EXPERTS
The consolidated financial statements (and schedules) of the Company
included or incorporated by reference in the Company's Annual Report on Form
10-K for the year ended December 31, 1996, have been audited by Ernst & Young
LLP, independent auditors, as set forth in their reports thereon included or
incorporated by reference therein and incorporated herein by reference which,
as to the years 1995 and 1996, are based in part on the report of KPMG,
independent auditors. The financial statements and schedules referred to above
are incorporated herein by reference in reliance upon such reports given upon
the authority of such firms as experts in accounting and auditing.
The consolidated financial statements of Australian Radio Network Pty
Ltd not separately presented in the Company's Annual Report on Form 10-K for
the year ended December 31, 1996, have been audited by KPMG, independent
auditors, as set forth in their report thereon included therein and
incorporated herein by reference. Such report referred to above is incorporated
herein by reference in reliance upon the authority of such firm as experts in
accounting and auditing.
The consolidated financial statements of Eller Media Corporation as of
December 31, 1996 and 1995 and for the year ended December 31, 1996 and for the
period from August 18, 1995 through December 31, 1995, together with the
consolidated financial statements of PMG Holdings, Inc. and subsidiaries and
the combined financial statements of Eller Investment Company, Inc. for the
period from January 1, 1995 to August 17, 1995, incorporated by reference in
this Prospectus and elsewhere in the registration statement are included in the
Company's current report on Form 8-K, filed on April 17, 1997, have been
audited by Arthur Andersen LLP, independent public accountants, as indicated in
their report with respect thereto, and are incorporated by reference herein in
reliance upon the authority of said firm as experts in accounting and auditing
in giving said reports.
The combined financial statements of Eller Investment Company, Inc. as
of and for the period ended December 31, 1994, incorporated by reference in
this prospectus and elsewhere in the registration statement are included in the
Company's current report on form 8-K, filed April 17, 1997, have been audited
by Arthur Andersen LLP, independent public accountants, as indicated in their
report with respect thereto and are incorporated by reference herein in
reliance upon the authority of said firm as experts in accounting and auditing
in giving said reports.
The consolidated financial statements of PMG Holdings, Inc. and
Subsidiaries as of December 31, 1994 and for the year then ended included in
the Company's current report on Form 8-K dated April 17,
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<PAGE> 47
1997, have been incorporated herein by reference in reliance on the report of
KPMG Peat Marwick LLP, independent accountants, incorporated by reference
herein, and upon the authority of said firm as experts in auditing and
accounting.
The consolidated financial statements of US Radio, Inc. for the years
ended December 31, 1995 and 1994, included in the Company's current report on
Form 8-K dated May 24, 1996, have been audited by Ernst & Young LLP,
independent auditors, as set forth in their report thereon included therein and
incorporated herein by reference. Such consolidated financial statements are
incorporated herein by reference in reliance upon such report given upon the
authority of such firm as experts in accounting and auditing.
The combined financial statements of Ragan Henry Communications Group,
L.P., US Radio, L.P. and US Radio Stations, L.P. for the year ended December
31, 1994, included in the Company's current report on Form 8-K dated May 24,
1996 have been audited by Ernst & Young LLP, independent auditors, as set forth
in their report thereon incorporated herein by reference. Such combined
financial statements are incorporated herein by reference in reliance upon such
report given upon the authority of such firm as experts in accounting and
auditing.
The consolidated financial statements of Radio Equity Partners, L.P.
and its subsidiary as of December 31, 1995 and 1994, and for the years then
ended have been incorporated herein by reference in reliance upon the report of
KPMG Peat Marwick LLP, independent certified public accountants, appearing in
the Company's current report on Form 8-K dated June 5, 1996, and upon the
authority of said firm as experts in accounting and auditing.
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- --------------------------------------------------------------------------------
NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED IN CONNECTION
WITH THE OFFERING MADE HEREBY TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION NOT CONTAINED OR INCORPORATED IN THIS PROSPECTUS AND, IF GIVEN
OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING
BEEN AUTHORIZED BY THE COMPANY OR ANY UNDERWRITER. NEITHER THE DELIVERY OF THIS
PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL UNDER ANY CIRCUMSTANCES CREATE ANY
IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE
THE DATES HEREOF OR THEREOF. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO
SELL OR A SOLICITATION OF ANY OFFER TO BUY ANY OF THE SECURITIES OFFERED HEREBY
TO ANY PERSON OR BY ANYONE IN ANY JURISDICTION IN WHICH IT IS UNLAWFUL TO MAKE
SUCH OFFER OR SOLICITATION. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY
SALE 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.
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TABLE OF CONTENTS
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<S> <C>
Available Information . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Incorporation of Certain Documents by Reference . . . . . . . . . . . . . 6
The Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
The CCCI Trusts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Ratio of Earnings to Combined Fixed Charges
and Preferred Stock Dividends . . . . . . . . . . . . . . . . . . . . . 8
Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Holding Company Structure . . . . . . . . . . . . . . . . . . . . . . . . 8
General Description of the Securities and Risk Factors . . . . . . . . . 9
Description of Debt Securities . . . . . . . . . . . . . . . . . . . . . 9
Description of Junior Subordinated Debt Securities . . . . . . . . . . . 21
Description of Preferred Stock . . . . . . . . . . . . . . . . . . . . . 31
Description of Common Stock . . . . . . . . . . . . . . . . . . . . . . . 32
Description of Warrants . . . . . . . . . . . . . . . . . . . . . . . . . 33
Description of Stock Purchase Contracts and Stock
Purchase Units . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Description of Preferred Securities . . . . . . . . . . . . . . . . . . . 36
Description of Guarantees . . . . . . . . . . . . . . . . . . . . . . . 38
ERISA Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
Plan of Distribution . . . . . . . . . . . . . . . . . . . . . . . . . . 42
Legal Opinions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
Experts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
$1,500,000,000
[LOGO]
CLEAR CHANNEL
COMMUNICATIONS, INC.
DEBT SECURITIES
JUNIOR SUBORDINATED DEBT SECURITIES
PREFERRED STOCK
COMMON STOCK
WARRANTS
STOCK PURCHASE CONTRACTS
STOCK PURCHASE UNITS
CCCI CAPITAL TRUST I
CCCI CAPITAL TRUST II
CCCI CAPITAL TRUST III
PREFERRED SECURITIES
GUARANTEED TO THE EXTENT SET FORTH HEREIN BY CLEAR CHANNEL
COMMUNICATIONS, INC.
----------------
PROSPECTUS
----------------
_________, 1997
- --------------------------------------------------------------------------------
46
<PAGE> 49
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The estimated expenses (other than underwriting discounts and
commissions) in connection with the issuance and distribution of the Common
Stock registered hereby are as follows:
<TABLE>
<S> <C>
SEC registration fee . . . . . . . . . . . . . . . $ 454,545
Trustee's fees and expenses . . . . . . . . . . . . 50,000
Rating Agency fees . . . . . . . . . . . . . . . . 150,000
Legal fees and expenses . . . . . . . . . . . . . . 250,000
Accounting fees and expenses . . . . . . . . . . . 100,000
Blue Sky fees and expenses . . . . . . . . . . . . 20,000
Printing and engraving expenses . . . . . . . . . . 200,000
Miscellaneous . . . . . . . . . . . . . . . . . . . 75,455
-----------
Total . . . . . . . . . . . . . . . . . . . . $ 1,300,000
===========
</TABLE>
The foregoing expenses will be paid by the registrants.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS OF THE COMPANY.
Article 2.02-1 of the Texas Business Corporation Act provides for
indemnification of directors and officers in certain circumstances. In
addition, the Texas Miscellaneous Corporation Law provides that a corporation
may amend its Articles of Incorporation to provide that no director shall be
liable to the Company or its shareholders for monetary damages for an act or
omission in the director's capacity as a director, provided that the liability
of a director is not eliminated or limited (i) for any breach of the director's
duty of loyalty to the Company or its shareholders, (ii) for acts or omissions
not in good faith or which involve intentional misconduct or knowing violation
of law, (iii) any transaction from which such director derived an improper
personal benefit, or (iv) an act or omission for which the liability of a
director is expressly provided by an applicable statute. The Company has
amended its Articles of Incorporation and added Article Eleven adopting such
limitations on a director's liability. The Company's Articles of Incorporation
also provide in Article Nine, for indemnification of directors or officers in
connection with the defense or settlement of suits brought against them in
their capacities as directors or officers of the Company, except in respect of
liabilities arising from gross negligence or willful misconduct in the
performance of their duties.
Article IX(8) of the Company's bylaws provides for indemnification of
any person made a party to a proceeding by reason of such person's status as a
director, officer, employee, partner or trustee of the Company, except in
respect of liabilities arising from negligence or misconduct in the performance
of their duties.
The Underwriting Agreement provides for indemnification by the
underwriters of the registrants, their directors, officers, and trustees, and
by the registrants of the underwriters, for certain liabilities, including
liabilities arising under the Securities Act.
II-1
<PAGE> 50
An insurance policy obtained by the registrant provides for
indemnification of officers and directors of the Company and certain other
persons against liabilities and expenses incurred by any of them in certain
stated proceedings and under certain stated conditions.
INDEMNIFICATION OF TRUSTEES OF THE CCCI TRUSTS.
Each Declaration pursuant to which each CCCI Trust is organized will
provide that no Regular Trustee, or affiliate of any Regular Trustee, or
officer, director, shareholder, member, partner, employee, representative or
agent of any Regular Trustee or of any such affiliate, or employee or agent of
the applicable CCCI Trust or its affiliates (each an "Indemnified Person") shall
be liable, responsible or accountable in damages or otherwise to such CCCI
Trust or any employee or agent of such CCCI Trust or its affiliates for any
loss, damage or claim incurred by reason of any act or omission performed or
omitted by such Indemnified Person in good faith on behalf of such CCCI Trust
and in a manner such Indemnified Person reasonably believed to be within the
scope of the authority conferred on such Indemnified Person by such Declaration
or by law, except that an Indemnified Person shall be liable for any such loss,
damage or claim incurred by reason of such Indemnified Person's gross negligence
or willful misconduct with respect to such act or omission. Each Declaration
also provides that to the fullest extent permitted by applicable law, the
Company shall indemnify and hold harmless each Indemnified Person from and
against any loss, damage or claim incurred by such Indemnified Person by reason
of any act or omission performed or omitted by such Indemnified Person in good
faith on behalf of the applicable CCCI Trust and in a manner such Indemnified
Person reasonably believed to be within the scope of authority conferred on such
Indemnified Person by such Declaration, except that no Indemnified Person shall
be entitled to be indemnified in respect of any loss, damage or claim incurred
by such Indemnified Person by reason of gross negligence or willful misconduct
with respect to such act or omission. Each Declaration further provides that,
to the fullest extent permitted by applicable law, expenses (including legal
fees) incurred by an Indemnified Person in defending any claim, demand, action,
suit or proceeding shall, from time to time, be advanced by the Company prior to
the final disposition of such claim, demand, action, suit or proceeding upon
receipt of an undertaking by or on behalf of the Indemnified Person to repay
such amount if it shall be determined that the Indemnified Person is not
entitled to be indemnified for the underlying cause of action as authorized by
such Declaration.
ITEM 16. EXHIBITS
EXHIBITS.
<TABLE>
<S> <C>
1.1* -- Form of Underwriting Agreement (Equity).
1.2* -- Form of Underwriting Agreement (Debt).
1.3** -- Form of Underwriting Agreement (Preferred Securities).
1.4** -- Form of Underwriting Agreement (Stock Purchase Contracts).
1.5** -- Form of Underwriting Agreement (Stock Purchase Units).
3.1+ -- Current Articles of Incorporation of the Company.
2.1 -- Stock Purchase Agreement by and among Clear Channel
Communications, Inc. Eller Media Corporation and the
Stockholders of Eller Media Corporation, dated February
25, 1997. (Incorporated by reference to the exhibits of
the Company's Form 10-K dated March 31, 1997.)
</TABLE>
II-2
<PAGE> 51
<TABLE>
<S> <C>
2.2 -- Amendment to Stock Purchase Agreement by and among Clear
Channel Communications, Inc. Eller Media Corporation and
the Stockholders of Eller Media Corporation, dated April
10, 1997. (Incorporated by reference to the exhibits of the
Company's Current Report on Form 8-K dated April 17, 1997.)
2.3 -- Registration Rights Agreement by and between Clear Channel
Media Corporation, dated April 10, 1997. (Incorporated by
reference to the exhibits of the Company's Current Report
on Form 8-K dated April 17, 1997.)
2.4 -- Stockholders Agreement by and between Clear Channel
Communications, Inc., and EM Holdings LLC, dated April 10,
1997. (Incorporated by reference to the exhibits of the
Company's Current Report on Form 8-K dated April 17,
1997.)
2.5 -- Escrow Agreement by and among Eller Media Corporation,
Clear Channel Communications, Inc., EM Holdings LLC, and
Chase Trust Company of California, dated April 10, 1997.
(Incorporated by reference to the exhibits of the
Company's Current Report on Form 8-K dated April 17,
1997.)
2.6* -- Asset Purchase Agreement by and among Paxson
Communications Corporation, Clear Channel Metroplex, Inc.,
Clear Channel Metroplex Licenses, Inc., and Clear Channel
Communications, Inc., dated August 25, 1997.
2.7* -- Asset Purchase Agreement by and among Paxson
Communications Corporation, L. Paxson, Inc., Clear
Channel Metroplex, Inc., Clear Channel Metroplex Licenses,
Inc., and Clear Channel Communications, Inc., dated August
25, 1997.
3.2+ -- Second Amended and Restated Bylaws of the Company.
4.1 -- Buy-Sell Agreement by and between Clear Channel
Communications, Inc., L. Lowry Mays, B. J. McCombs, John
M. Schaefer, and John W. Barger, dated May 31, 1977.
(Incorporated by reference to the exhibits of the
Company's Registration Statement on Form S-1 (Reg. No.
33-289161) dated April 19, 1984).
4.2 -- Third Amended and Restated Credit Agreement by and among
Clear Channel Communications, Inc., NationsBank of Texas,
N.A., as administrative lender, the First National Bank
of Boston, as documentation agent, the Bank of Montreal
and Toronto Dominion (Texas), Inc., as co-syndication
agents, and certain other lenders dated April 10, 1997.
(Incorporated by reference to the exhibits of the
Company's Amendment No. 1 to the Registration Statement on
Form S-3 (Reg. No. 333-25497) dated May 9, 1997).
4.3* -- Form of Senior Indenture.
4.4 -- Form of Senior Debt Security (included in Form of Senior
Indenture filed as Exhibit 4.3).
4.5* -- Form of Subordinated Indenture.
4.6 -- Form of Subordinated Debt Security (included in Form of
Subordinated Indenture filed as Exhibit 4.5).
4.7* -- Form of Junior Subordinated Indenture.
</TABLE>
II-3
<PAGE> 52
<TABLE>
<S> <C>
4.8 -- Form of Junior Subordinated Debt Security (included in
Form of Junior Subordinated Indenture filed as Exhibit
4.7).
4.9 -- Form of Preferred Securities Certificate (included in
Forms of Amended and Restated Declaration of CCCI Capital
Trusts I, II, and III filed as Exhibits 4.18, 4.19, and
4.20, respectively).
4.10+ -- Form of Warrant Agreement.
4.11+ -- Form of Standard Stock Warrant Agreement Provisions.
4.12+ -- Certificate of Trust of CCCI Capital Trust I.
4.13+ -- Certificate of Trust of CCCI Capital Trust II.
4.14+ -- Certificate of Trust of CCCI Capital Trust III.
4.15+ -- Declaration of CCCI Capital Trust I.
4.16+ -- Declaration of CCCI Capital Trust II.
4.17+ -- Declaration of CCCI Capital Trust III.
4.18+ -- Form of Amended and Restated Declaration of CCCI Capital
Trust I.
4.19+ -- Form of Amended and Restated Declaration of CCCI Capital
Trust II.
4.20+ -- Form of Amended and Restated Declaration of CCCI Capital
Trust III.
4.21+ -- Form of Pledge Agreement.
4.22+ -- Form of Deposit Agreement.
4.23+ -- Form of Stock Purchase Contract Agreement.
4.24+ -- Form of Guarantee of CCCI Capital Trust I.
4.25+ -- Form of Guarantee of CCCI Capital Trust II.
</TABLE>
II-4
<PAGE> 53
<TABLE>
<S> <C>
4.26+ -- Form of Guarantee of CCCI Capital Trust III.
5.1* -- Opinion of Akin, Gump, Strauss, Hauer & Feld, L.L.P.,
special counsel for the Company, regarding the Senior Debt
Securities, the Subordinated Debt Securities, the
Preferred Stock, the Common Stock, the Warrants, the Stock
Purchase Contracts, and the Stock Purchase Units.
5.2* -- Opinion of Morris, Nichols, Arsht & Tunnell, special
Delaware counsel for the Company and the CCCI Trusts,
regarding the Preferred Securities.
12* -- Computation of Ratio of Earnings to Fixed Charges.
23.1* -- Consent of Ernst & Young LLP.
23.2* -- Consent of Ernst & Young LLP.
23.3* -- Consent of Ernst & Young LLP.
23.4* -- Consent of KPMG.
23.5* -- Consent of KPMG Peat Marwick LLP.
23.6* -- Consent of Arthur Andersen LLP.
23.7* -- Consent of KPMG Peat Marwick LLP.
23.8 -- Consent of Akin, Gump, Strauss, Hauer & Feld, L.L.P.
(included in opinion filed as Exhibit 5.1).
23.9 -- Consent of Morris, Nichols, Arsht & Tunnell (included in
opinion filed as Exhibit 5.2).
24 -- Power of Attorney for Clear Channel Communications, Inc.
(included on Signature Page previously filed).
25.1+ -- Statement on Form T-1 of the eligibility of The Bank of
New York, as trustee under the Senior Indenture.
25.2+ -- Statement on Form T-1 of the eligibility of The Bank of
New York, as trustee under the Subordinated Indenture.
25.3+ -- Statement on Form T-1 of the eligibility of The Bank of
New York, as trustee under the Junior Subordinated
Indenture.
25.4+ -- Statement on Form T-1 of the eligibility of The Bank of
New York, as trustee under the Declaration of Trust of
CCCI Capital Trust I.
25.5+ -- Statement on Form T-1 of the eligibility of The Bank of
New York, as trustee under the Declaration of Trust of
CCCI Capital Trust II.
25.6+ -- Statement on Form T-1 of the eligibility of The Bank of
New York, as trustee under the Declaration of Trust of
CCCI Capital Trust III.
</TABLE>
II-5
<PAGE> 54
<TABLE>
<S> <C>
25.7+ -- Statement on Form T-1 of the eligibility of The Bank of
New York, as trustee under the Trust Guarantee of the
Company for the benefit of the holders of Preferred
Securities of the CCCI Capital Trust I.
25.8+ -- Statement on Form T-1 of the eligibility of The Bank of
New York, as trustee under the Trust Guarantee of the
Company for the benefit of the holders of Preferred
Securities of the CCCI Capital Trust II.
25.9+ -- Statement on Form T-1 of the eligibility of The Bank of
New York, as trustee under the Trust Guarantee of the
Company for the benefit of the holders of Preferred
Securities of the CCCI Capital Trust III.
</TABLE>
-------------------
* Filed herewith.
-------------------
** To be filed by subsequent Form 8-K.
+ Previously filed.
II-6
<PAGE> 55
ITEM 17. UNDERTAKINGS
The undersigned Registrants hereby undertake:
(1) To file, during any period in which offers or sales are being
made of the securities registered hereby, 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 this 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; provided,
however, that notwithstanding the foregoing, any
increase or decrease in volume of securities offered
(if the total dollar value of securities offered would
not exceed that which was registered) and any
deviation from the low or high end of the estimated
maximum offering range may be reflected in the form
of prospectus filed with the Securities and Exchange
Commission pursuant to Rule 424(b) if, in the
aggregate, the changes in volume and price represent
no more than a 20% change in the maximum aggregate
offering price set forth in the "Calculation of
Registration Fee" table in the effective
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;
provided, however, that the undertakings set forth in
clauses (i) and (ii) above do not apply if the
information required to be included in a
post-effective amendment by those clauses is contained
in periodic reports filed by the Company pursuant to
Section 13 or 15(d) of the Securities and Exchange
Act of 1934 that are incorporated by reference in this
Registration Statement;
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment
shall be deemed to be a new registration statement 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;
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain
unsold at the termination of the offering; and
(4) That, for the purposes of determining any liability under the
Securities Act of 1933, each filing of the Company's annual
report pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 that is incorporated by reference in this
Registration Statement 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.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the Registrants pursuant to the provisions described under Item 15 above or
otherwise, the Registrants have been advised that in the opinion of the
Securities and Exchange
II-7
<PAGE> 56
Commission such indemnification is against public policy as expressed in the
Securities Act of 1933 and is therefore unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the Registrants of expenses incurred or paid by a director, officer or
controlling person of the Registrants in the successful defense of any action,
suit or proceeding) is asserted against the Registrants by such director,
officer or controlling person in connection with the securities being
registered, the Registrants will, unless in the opinion of their respective
counsels 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 of 1933 and will be
governed by the final adjudication of such issue.
The undersigned registrant hereby undertakes to file an application
purpose of determining the eligibility of the trustee to act under subsection
(a) of Section 310 of the Trust Indenture Act in accordance with the rules and
regulations prescribed by the Commission under Section 305(b)(2) of the Act.
II-8
<PAGE> 57
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this Amendment
No. 1 to this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of San Antonio, State of
Texas, on September 2, 1997.
CLEAR CHANNEL COMMUNICATIONS, INC.
By: /s/ L. LOWRY MAYS
------------------------------------
L. Lowry Mays
Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
Amendment No. 1 to this Registration Statement has been signed below by the
following persons in the capacities and on the dates indicated below.
NAME TITLE DATE
---- ----- ----
Chief Executive
/s/ L. LOWRY MAYS Officer and Director September 2, 1997
- ------------------------
L. Lowry Mays
Senior Vice President/Chief
/s/ RANDALL T. MAYS Financial Officer (Principal September 2, 1997
- ------------------------ Financial Officer)
Randall T. Mays
/s/ HERBERT W. HILL, JR. Officer (Principal Accounting September 2, 1997
- ------------------------ Officer
Herbert W. Hill, Jr.
/s/ B. J. MCCOMBS* Director September 2, 1997
- ------------------------
B.J. McCombs
/s/ ALAN D. FELD* Director September 2, 1997
- ------------------------
Alan D. Feld
/s/ THEODORE H. STRAUSS* Director September 2, 1997
- ------------------------
Theodore H. Strauss
/s/ JOHN H. WILLIAMS* Director September 2, 1997
- ------------------------
John H. Williams
/s/ KARL ELLER* Director September 2, 1997
- ------------------------
Karl Eller
* By L. Lowry Mays, attorney-in-fact pursuant
to a Power of Attorney previously filed.
II-9
<PAGE> 58
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, each of
CCCI Capital Trust I, CCCI Capital Trust II and CCCI Capital Trust III certifies
that it has reasonable grounds to believe that it meets all of the requirements
for filing on Form S-3 and has duly caused this Amendment No. 1 to this
Registration Statement to be signed on its behalf by the undersigned thereunto
duly authorized, in the City of San Antonio, Texas on the 2nd day of September
2, 1997.
CCCI CAPITAL TRUST I,
a Delaware business trust
By: CLEAR CHANNEL COMMUNICATIONS, INC.,
as Depositor
By: /s/ L. LOWRY MAYS
-----------------------------------
L. Lowry Mays
Chief Executive Officer
CCCI CAPITAL TRUST II,
a Delaware business trust
By: CLEAR CHANNEL COMMUNICATIONS, INC.,
as Depositor
By: /s/ L. LOWRY MAYS
-------------------------------
L. Lowry Mays
Chief Executive Officer
CCCI CAPITAL TRUST III,
a Delaware business trust
By: CLEAR CHANNEL COMMUNICATIONS, INC.,
as Depositor
By: /s/ L. LOWRY MAYS
-------------------------------
L. Lowry Mays
Chief Executive Officer
II-10
<PAGE> 59
EXHIBIT INDEX
EXHIBITS.
<TABLE>
<S> <C>
1.1* -- Form of Underwriting Agreement (Equity).
1.2* -- Form of Underwriting Agreement (Debt).
1.3** -- Form of Underwriting Agreement (Preferred Securities).
1.4** -- Form of Underwriting Agreement (Stock Purchase Contracts).
1.5** -- Form of Underwriting Agreement (Stock Purchase Units).
3.1+ -- Current Articles of Incorporation of the Company.
2.1 -- Stock Purchase Agreement by and among Clear Channel
Communications, Inc. Eller Media Corporation and the Stockholders
of Eller Media Corporation, dated February 25, 1997.
(Incorporated by reference to the exhibits of the Company's Form
10-K dated March 31, 1997.)
2.2 -- Amendment to Stock Purchase Agreement by and among Clear Channel
Communications, Inc. Eller Media Corporation and the Stockholders
of Eller Media Corporation, dated April 10, 1997. (Incorporated by
reference to the exhibits of the Company's Current Report on Form
8-K dated April 17, 1997.)
2.3 -- Registration Rights Agreement by and between Clear Channel
Communications, Inc., and the Stockholders of Eller Media
Corporation, dated April 10, 1997. (Incorporated by reference to
the exhibits of the Company's Current Report on Form 8-K dated
April 17, 1997.)
2.4 -- Stockholders Agreement by and between Clear Channel
Communications, Inc., and EM Holdings LLC, dated April 10, 1997.
(Incorporated by reference to the exhibits of the Company's
Current Report on Form 8-K dated April 17, 1997.)
2.5 -- Escrow Agreement by and among Eller Media Corporation, Clear
Channel Communications, Inc., EM Holdings LLC, and Chase Trust
Company of California, dated April 10, 1997. (Incorporated by
reference to the exhibits of the Company's Current Report on Form
8-K dated April 17, 1997.)
2.6* -- Asset Purchase Agreement by and among Paxson Communications
Corporation, Clear Channel Metroplex, Inc., Clear Channel
Metroplex Licenses, Inc., and Clear
Channel Communications, Inc., dated August 25, 1997.
2.7* -- Asset Purchase Agreement by and among Paxson Communications
Corporation, L. Paxson, Inc., Clear Channel Metroplex, Inc.,
Clear Channel Metroplex Licenses, Inc., and Clear Channel
Communications, Inc., dated August 25, 1997.
</TABLE>
<PAGE> 60
<TABLE>
<S> <C>
3.2+ -- Second Amended and Restated Bylaws of the Company.
4.1 -- Buy-Sell Agreement by and between Clear Channel
Communications, Inc., L. Lowry Mays, B. J. McCombs, John M.
Schaefer, and John W. Barger, dated May 31, 1977.
(Incorporated by reference to the exhibits of the Company's
Registration Statement on Form S-1 (Reg. No. 33-289161) dated
April 19, 1984).
4.2 -- Third Amended and Restated Credit Agreement by and among Clear
Channel Communications, Inc., NationsBank of Texas, N.A., as
administrative lender, the First National Bank of Boston, as
documentation agent, the Bank of Montreal and Toronto Dominion
(Texas), Inc., as co-syndication agents, and certain other
lenders dated April 10, 1997. (Incorporated by reference to the
exhibits of the Company's Amendment No. 1 to the Registration
Statement on Form S-3 (Reg. No. 333-25497) dated May 9, 1997).
4.3* -- Form of Senior Indenture.
4.4 -- Form of Senior Debt Security (included in Form of Senior
Indenture filed as Exhibit 4.3).
4.5* -- Form of Subordinated Indenture.
4.6 -- Form of Subordinated Debt Security (included in Form of
Subordinated Indenture filed as Exhibit 4.5).
4.7* -- Form of Junior Subordinated Indenture.
4.8 -- Form of Junior Subordinated Debt Security (included in Form of
Junior Subordinated Indenture filed as Exhibit 4.7).
4.9 -- Form of Preferred Securities Certificate (included in Forms of
Amended and Restated Declaration of CCCI Capital Trusts I, II,
and III filed as Exhibits 4.18, 4.19, and 4.20, respectively).
4.10+ -- Form of Warrant Agreement.
4.11+ -- Form of Standard Stock Warrant Agreement Provisions.
4.12+ -- Certificate of Trust of CCCI Capital Trust I.
4.13+ -- Certificate of Trust of CCCI Capital Trust II.
4.14+ -- Certificate of Trust of CCCI Capital Trust III.
4.15+ -- Declaration of CCCI Capital Trust I.
4.16+ -- Declaration of CCCI Capital Trust II.
4.17+ -- Declaration of CCCI Capital Trust III.
4.18+ -- Form of Amended and Restated Declaration of CCCI Capital Trust I.
4.19+ -- Form of Amended and Restated Declaration of CCCI Capital Trust II.
</TABLE>
<PAGE> 61
<TABLE>
<S> <C>
4.20+ -- Form of Amended and Restated Declaration of CCCI Capital
Trust III.
4.21+ -- Form of Pledge Agreement.
4.22+ -- Form of Deposit Agreement.
4.23+ -- Form of Stock Purchase Contract Agreement.
4.24+ -- Form of Guarantee of CCCI Capital Trust I.
4.25+ -- Form of Guarantee of CCCI Capital Trust II.
4.26+ -- Form of Guarantee of CCCI Capital Trust III.
5.1* -- Opinion of Akin, Gump, Strauss, Hauer & Feld, L.L.P., special
counsel for the Company, regarding the Senior Debt Securities,
the Subordinated Debt Securities, the Preferred Stock, the
Common Stock, the Warrants, the Stock Purchase Contracts, and
the Stock Purchase Units.
5.2* -- Opinion of Morris, Nichols, Arsht & Tunnell, special Delaware
counsel for the Company and the CCCI Trusts, regarding the
Preferred Securities.
12* -- Computation of Ratio of Earnings to Fixed Charges.
23.1* -- Consent of Ernst & Young LLP.
23.2* -- Consent of Ernst & Young LLP.
23.3* -- Consent of Ernst & Young LLP.
23.4* -- Consent of KPMG.
23.5* -- Consent of KPMG Peat Marwick LLP.
23.6* -- Consent of Arthur Andersen LLP.
23.7* -- Consent of KPMG Peat Marwick LLP.
23.8 -- Consent of Akin, Gump, Strauss, Hauer & Feld, L.L.P. (included
in opinion filed as Exhibit 5.1).
</TABLE>
--------------
* Filed herewith.
** To be filed by subsequent Form 8-K.
+ Previously filed.
<PAGE> 1
EXHIBIT 1.1
================================================================================
SHARES
CLEAR CHANNEL COMMUNICATIONS, INC.
COMMON STOCK
______________________________
UNDERWRITING AGREEMENT
______________________________
___________ _____, 199_
================================================================================
<PAGE> 2
_______ SHARES
CLEAR CHANNEL COMMUNICATIONS, INC.
COMMON STOCK
UNDERWRITING AGREEMENT
________ _, 199_
[Note: Modifications will be made for other types of securities as
appropriate.]
[Underwriters]
c/o
Ladies and Gentlemen:
Clear Channel Communications, Inc., a Texas corporation (the
"Company"), proposes to sell to the several underwriters (the "Underwriters")
named in Schedule I hereto shares of the Company's Common Stock,
$.10 par value (the "Firm Shares"), of which shares are to be sold
by the Company (the "Shares"). The respective amounts of the Firm Shares to be
so purchased by the several Underwriters are set forth opposite their names in
Schedule I hereto. The Company also proposes to sell at the Underwriters'
option an aggregate of up to [ ] additional shares of the Company's
Common Stock (the "Option Shares") as set forth below.
As the Underwriters, you have advised the Company (a) that you
are authorized to enter into this Agreement, and (b) that the Underwriters are
willing, acting severally and not jointly, to purchase the numbers of Firm
Shares set forth opposite their respective names in Schedule I, plus their pro
rata portion of the Option Shares if you elect to exercise the over-allotment
option in whole or in part. The Firm Shares and the Option Shares (to the
extent the aforementioned option is exercised) are herein collectively called
the "Shares".
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In consideration of the mutual agreements contained herein and
of the interests of the parties in the transactions contemplated hereby, the
parties hereto agree as follows:
1. Representations and Warranties of the Company. The
Company represents and warrants as follows:
(a) A registration statement on Form S-3 (File No. )
with respect to the Shares has been carefully prepared by the Company
in conformity in all material respects with the requirements of the
Securities Act of 1933, as amended, (the "Act") and the Rules and
Regulations (the "Rules and Regulations") of the Securities and
Exchange Commission (the "Commission") thereunder and has been filed
with the Commission under the Act. The Company has complied with the
conditions for the use of Form S-3. Copies of such registration
statement, including any amendments thereto, the preliminary
prospectuses (meeting the requirements of Rules 430A, 415 and 424(b) of
the Rules and Regulations) contained therein and the exhibits,
financial statements and schedules, as finally amended and revised,
have heretofore been delivered by the Company to you. Such
registration statement, together with any registration statement filed
by the Company pursuant to Rule 462(b) of the Act, herein referred to
as the "Registration Statement," which shall be deemed to include all
information omitted therefrom in reliance upon Rule 430A and contained
in the Prospectus referred to below, has been declared effective by
the Commission under the Act and no post-effective amendment to the
Registration Statement has been filed as of the date of this
Agreement. "Prospectus" means (i) the form of prospectus and/or
prospectus supplement first filed by the Company with the Commission
pursuant to its Rule 424(b) or (ii) the last preliminary prospectus
included in the Registration Statement filed prior to the time it
becomes effective or filed pursuant to Rule 424(a) under the Act that
is delivered by the Company to the Underwriters for delivery to
purchasers of the Shares, together with any term sheet or abbreviated
term sheet filed with the Commission pursuant to Rule 424(b)(7) under
the Act. Each preliminary prospectus and/or preliminary prospectus
supplement included in the Registration Statement prior to the time it
becomes effective is herein referred to as a "Preliminary Prospectus."
Except as specifically set forth herein, (i) any reference herein to
any Preliminary Prospectus or the Prospectus shall be deemed to refer
to and include the documents incorporated by reference
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therein, as of the date of such Preliminary Prospectus or Prospectus,
as the case may be, and (ii) in the case of any reference herein to
any Prospectus, also shall be deemed to include any documents
incorporated by reference therein, and any supplements or amendments
thereto, filed with the Commission after the date of filing of the
Prospectus under Rules 415, 424(b) and 430A, and prior to the
termination of the offering of the Shares by the Underwriters.
(b) The Company has been duly organized and is validly
existing as a corporation in good standing under the laws of the State
of Texas, with corporate power and authority to own its properties and
conduct its business as described in the Registration Statement; each
of the subsidiaries of the Company as listed on Schedule II hereto
(collectively, the "Subsidiaries") has been duly organized and, is
validly existing as a corporation in good standing under the laws of
the jurisdiction of its incorporation, with corporate power and
authority to own or lease its properties and conduct its business as
described in the Registration Statement; the Company and each of the
Subsidiaries are duly qualified to transact business in all
jurisdictions in which the conduct of their business requires such
qualification and a failure to qualify would have a materially adverse
effect upon the business or financial condition of the Company and the
Subsidiaries taken as a whole; except as set forth on Schedule II
hereto, the outstanding shares of capital stock of each of the
Subsidiaries owned by the Company or a Subsidiary have been duly
authorized and validly issued, are fully paid and nonassessable and
are owned by the Company or another subsidiary free and clear of all
liens, encumbrances and security interests and no options, warrants or
other rights to purchase, agreements or other obligations to issue or
other rights to convert any obligations into shares of capital stock
or ownership interests in the Subsidiaries are outstanding.
(c) The authorized shares of Common Stock of the Company have
been duly authorized. The outstanding shares of Common Stock of the
Company have been duly authorized and are validly issued, fully-paid
and non-assessable; the Shares to be issued and sold by the Company
have been duly authorized and when issued and paid for as contemplated
herein will be validly issued, fully-paid and non-assessable; and no
preemptive rights of stockholders exist with respect to any of the
Shares
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or the issue and sale thereof. Neither the filing of the Registration
Statement nor the offering or sale of the Shares as contemplated by
this Agreement gives rise to any rights, other than those which have
been waived or satisfied, for or relating to the registration of any
shares of Common Stock.
(d) This Agreement has been duly authorized, executed and
delivered by the Company and is a legal, valid and binding obligation
of the Company enforceable against the Company in accordance with its
terms.
(e) The information set forth under the caption
"Capitalization" in the Prospectus is true and correct. The Shares
conform in all material respects with the statements concerning them
in the Registration Statement.
(f) The Commission has not issued an order preventing or
suspending the use of any Prospectus relating to the proposed offering
of the Shares nor instituted proceedings for that purpose. The
Registration Statement contains and the Prospectus and any amendments
or supplements thereto will contain all statements which are required
to be stated therein by, and in all material respects conform or will
conform, as the case may be, to the requirements of, the Act and the
Rules and Regulations. The documents incorporated by reference in the
Prospectus, at the time they were filed with the Commission conformed
in all material respects to the requirements of the Securities
Exchange Act of 1934 or the Act, as applicable, and the Rules and
Regulations of the Commission thereunder. Neither the Registration
Statement nor any amendment thereto, and neither the Prospectus nor
any supplement thereto, including any documents incorporated by
reference therein, contains or will contain, as the case may be, any
untrue statement of a material fact or omits or will omit to state any
material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they
were made, not misleading; provided, however, that the Company makes
no representations or warranties as to information contained in or
omitted from the Registration Statement or the Prospectus, or any such
amendment or supplement, or any documents incorporated by reference
therein, in reliance upon, and in conformity with, written information
furnished to the Company by or on behalf of any Underwriter,
specifically for use in the preparation thereof.
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(g) The consolidated financial statements of the Company and
the Subsidiaries, together with related notes and schedules
incorporated by reference in the Registration Statement, present
fairly the financial position and the results of operations of the
Company and its subsidiaries consolidated, at the indicated dates and
for the indicated periods. Such financial statements have been
prepared in accordance with generally accepted principles of
accounting, consistently applied throughout the periods involved, and
all adjustments necessary for a fair presentation of results for such
periods have been made. The selected and summary financial and
statistical data included in the Registration Statement present fairly
the information shown therein and have been compiled on a basis
consistent with the financial statements incorporated by reference
therein and the books and records of the Company. The pro forma
financial information included in the Registration Statement and the
Prospectus present fairly the information shown therein, have been
properly compiled on the pro forma bases described therein, and, in
the opinion of the Company, the assumptions used in the preparation
thereof are reasonable and the adjustments used therein are
appropriate to give effect to the transactions or circumstances
referred to therein.
(h) Except for those license renewal applications of the
Company or its Subsidiaries currently pending before the Federal
Communications Commission (the "FCC"), a description of which is set
forth on Schedule II hereto or as set forth in the Registration
Statement, there is no action or proceeding pending or, to the
knowledge of the Company, threatened against the Company or any of the
Subsidiaries before any court or administrative agency which could
reasonably be likely to result in any material adverse change in the
earnings, business, management, properties, assets, rights,
operations, condition (financial or otherwise) of the Company and of
the Subsidiaries (taken as a whole).
(i) The Company and the Subsidiaries have good and marketable
title to all of the properties and assets reflected in the financial
statements hereinabove described (or as described in the Registration
Statement) subject to no material lien, mortgage, pledge, charge or
encumbrance of any kind, except those reflected in such financial
statements or as described in the Registration Statement or set forth
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on Schedule II. The Company and the Subsidiaries occupy their leased
properties under valid leases with such exceptions as are not material
to the Company and the Subsidiaries taken as a whole and do not
materially interfere with the use made and proposed to be made of such
properties by the Company and the Subsidiaries.
(j) The Company and the Subsidiaries have filed all Federal,
State and foreign income tax returns which have been required to be
filed and have paid all taxes indicated by said returns and all
assessments received by them or any of them to the extent that such
taxes have become due and are not being contested in good faith. The
Company has no knowledge of any tax deficiency that has been or might
be asserted against the Company.
(k) Since the respective dates as of which information is
given in the Registration Statement, as it may be amended or
supplemented, there has not been any material adverse change or any
development involving a prospective material adverse change in or
affecting the earnings, business, management, properties, assets,
rights, operations, condition (financial or otherwise) or business
prospects of the Company and its Subsidiaries (taken as a whole),
whether or not occurring in the ordinary course of business, other
than general economic and industry conditions changes in the ordinary
course of business and changes or transactions described or
contemplated in the Registration Statement and there has not been any
material transaction entered into by the Company or the Subsidiaries,
other than transactions in the ordinary course of business and changes
and transactions contemplated by the Registration Statement, as it may
be amended or supplemented. None of the Company or the Subsidiaries
have any material contingent obligations which are not disclosed in
the Registration Statement, as it may be amended or supplemented.
(l) Neither the Company nor any of the Subsidiaries is or
with the giving of notice or lapse of time or both, will be in default
under its Articles of Incorporation or By-Laws or any agreement,
lease, contract, indenture or other instrument or obligation to which
it is a party or by which it, or any of its properties, is bound and
which default is of material significance in respect of the business
or financial condition of the Company and its Subsidiaries (taken as
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a whole). The execution and delivery of this Agreement and the
consummation of the transactions herein contemplated and the
fulfillment of the terms hereof will not conflict with or result in a
breach of any of the terms or provisions of, or constitute a default
under, any indenture, mortgage, deed of trust or other material
agreement or instrument to which the Company or any Subsidiary is a
party, or of the Articles of Incorporation or by-laws of the Company
or any order, rule or regulation applicable to the Company or any
Subsidiary, or of any court or of any regulatory body or
administrative agency or other governmental body having jurisdiction,
except in all cases a conflict, breach or default which would not have
a materially adverse effect on the business or financial condition of
the Company and the Subsidiaries (taken as a whole).
(m) Each approval, consent, order, authorization,
designation, declaration or filing by or with any regulatory,
administrative or other governmental body necessary in connection with
the execution and delivery by the Company of this Agreement and the
consummation of the transactions herein contemplated (except such
additional steps as may be required by the National Association of
Securities Dealers, Inc. (the "NASD") or the New York Stock Exchange
("NYSE") or may be necessary to qualify the Shares for public offering
by the Underwriters under State securities or Blue Sky laws) has been
obtained or made and is in full force and effect.
(n) The Company and each of the Subsidiaries hold all
material licenses, certificates and permits from governmental
authorities, including without limitation, the FCC, which are
necessary to the conduct of their businesses; and neither the Company
nor any of the Subsidiaries has received notice of any infringement of
any material patents, patent rights, trade names, trademarks or
copyrights, which infringement is material to the business of the
Company and the Subsidiaries (taken as a whole).
(o) _________________, ____ and _________________, each of
whom have certified certain of the financial statements incorporated
by reference in the Registration Statement and Prospectus, are to the
knowledge of the Company independent public accountants as required by
the Act and the Rules and Regulations.
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(p) To the Company's knowledge, there are no affiliations or
associations between any member of the NASD and any of the Company's
officers, directors or 5% or greater security holders except as
otherwise disclosed in writing to [name specific underwriter].
(q) Neither the Company, nor to the Company's knowledge, any
of the Subsidiaries, has taken or may take, directly or indirectly,
any action designed to cause or result in, or which has constituted or
which might reasonably be expected to constitute, the stabilization or
manipulation of the price of the shares of Common Stock to facilitate
the sale or resale of the Shares. The Company acknowledges that the
Underwriters may engage in passive market making transactions in the
Shares on The NYSE in accordance (and in compliance) with Regulation M
under the Exchange Act.
(r) Neither the Company nor any Subsidiary is an "investment
company" within the meaning of such term under the Investment Company
Act of 1940 and the rules and regulations of the Commission
thereunder.
(s) The Company maintains a system of internal accounting
controls sufficient to provide reasonable assurances that (i)
transactions are executed in accordance with management's general or
specific authorization; (ii) transactions are recorded as necessary to
permit preparation of financial statements in conformity with
generally accepted accounting principles and to maintain
accountability for assets; (iii) access to assets is permitted only in
accordance with management's general or specific authorization; and
(iv) the recorded accountability for assets is compared with existing
assets at reasonable intervals and appropriate action is taken with
respect to any differences.
(t) The Company and each of its Subsidiaries carry, or are
covered by, insurance in such amounts and covering such risks as is
adequate for the conduct of their respective businesses and the value
of their respective properties and as is customary for companies
engaged in similar industries.
(u) The Company is in compliance in all material respects
with all presently applicable provisions of the Employee Retirement
Income Security Act of 1974, as amended, including the regulations and
published
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interpretations thereunder ("ERISA"); no "reportable event" (as
defined in ERISA) for which the Company would have any liability has
occurred and is continuing; the Company has not incurred and does not
expect to incur liability under (i) Title IV of ERISA with respect to
termination of, or withdrawal from, any "pension plan" or (ii)
Sections 412 or 4971 of the Internal Revenue Code of 1986, as amended,
including the regulations and published interpretations thereunder
(the "Code"); and each "pension plan" for which the Company would have
any liability that is intended to be qualified under Section 401(a) of
the Code is so qualified in all material respects and nothing has
occurred, whether by action or by failure to act, which would cause
the loss of such qualification.
(v) The Company confirms as of the date hereof that it is in
compliance with all provisions of Section 1 of Laws of Florida,
Chapter 92-198, An Act Relating to Disclosure of doing Business with
Cuba, and the Company further agrees that if it commences engaging in
business with the government of Cuba or with any person or affiliate
located in Cuba after the date the Registration Statement becomes or
has become effective with the Commission or with the Florida
Department of Banking and Finance (the "Department"), whichever date
is later, or if the information reported or incorporated by reference
in the Prospectus, if any, concerning the Company's business with Cuba
or with any person or affiliate located in Cuba changes in any
material way, the Company will provide the Department notice of such
business or change, as appropriate, in a form acceptable to the
Department.
(w) The information set forth in the Prospectus under the
caption "Prospectus Summary-Recent Developments" is true and correct
in all material respects.
Any certificate signed by any officer of the Company and
delivered to the Underwriters in connection with the offering of the Shares
should be deemed a representation and warranty of the Company, as to matters
covered thereby, to each Underwriter.
2. Purchase, Sale and Delivery of the Shares. (a) On the
basis of the representations, warranties and covenants herein contained, and
subject to the conditions herein set forth, the Company agrees to sell to the
Underwriters the Shares, and each Underwriter agrees, severally and not
jointly, to purchase at a price of $______ per share, the number of Firm Shares
set forth opposite the name of each Underwriter in Schedule I hereof, subject
to adjustments in accordance with Section 9 hereof.
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(b) Payment for the Firm Shares to be sold hereunder by the
Company is to be made via wire transfer of immediately available funds or such
other payment procedures agreed to by the parties. Such payment and delivery
are to be made at the offices of [name specific underwriter], at 10:00 a.m.,
time, on the third business day after the date of this Agreement or at such
other time and date not later than five business days thereafter as you and the
Company shall agree upon, such time and date being herein referred to as the
"Closing Date." (As used herein, "business day" means a day on which the New
York Stock Exchange is open for trading and on which banks in New York are open
for business and not permitted by law or executive order to be closed.) The
certificates for the Firm Shares will be delivered in such denominations and in
such registrations as the Underwriters request in writing not later than the
second full business day prior to the Closing Date, and will be made available
for inspection by the Underwriters at least one business day prior to the
Closing Date.
(c) In addition, on the basis of representations and
warranties herein contained and subject to the terms and conditions herein set
forth, the Company hereby grants an option to the several Underwriters to
purchase the Option Shares at the price per share as set forth in the first
paragraph of this Section 2. The option granted hereby may be exercised in
whole or in part by giving written notice only once within 30 days after the
date of this Agreement, by you, the Underwriters, to the Company, setting forth
the number of Option Shares as to which the several Underwriters are exercising
the option, the names and denominations in which the Option Shares are to be
registered and the time and date at which such certificates are to be
delivered. The time and date at which certificates for Option Shares are to be
delivered shall be determined by the Underwriters but shall not be earlier than
three nor later than ten full business days after the exercise of such option,
nor in any event prior to the Closing Date (such time and date being herein
referred to as the "Option Closing Date"). If the date of exercise of the
option is three or more days before the Closing Date, the notice of exercise
shall set the Closing Date as the Option Closing Date. The option with respect
to the Option Shares granted hereunder may be exercised only to cover
over-allotments in the sale of the Firm Shares by the Underwriters. You, the
Underwriters, may cancel such option at any time prior to its expiration by
giving written notice of such cancelation to the Company. To the extent, if
any, that the option is exercised, payment for the Option Shares shall be made
on the Option Closing
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Date via wire transfer of immediately available funds or other payment
procedures agreed to by the parties against delivery of certificates therefor
at the offices of [name specific underwriter].
3. Offering by the Underwriters. It is understood that the
Underwriters are to make a public offering of the Firm Shares as soon as the
Underwriters deem it advisable to do so. The Firm Shares are to be initially
offered to the public at the public offering price set forth in the Prospectus.
The Underwriters may from time to time thereafter change the public offering
price and other selling terms. To the extent, if at all, that any Option
Shares are purchased pursuant to Section 2 hereof, the Underwriters will offer
them to the public on the foregoing terms.
It is further understood that you will act as the Underwriters
in the offering and sale of the Shares will take place in accordance with a
Master Agreement Among Underwriters entered into by you and the several other
Underwriters.
4. Covenants of the Company. The Company covenants and
agrees with the several Underwriters that:
(a) The Company will (i) prepare and timely file with the
Commission under Rule 424(b) of the Rules and Regulations a Prospectus
containing information previously omitted at the time of effectiveness
of the Registration Statement in reliance on Rule 430A of the Rules
and Regulations, (ii) not file any amendment to the Registration
Statement or any Rule 462(b) registration statement or supplement to
the Prospectus or documents incorporated by reference therein of which
the Underwriters shall not previously have been advised and furnished
with a copy or to which the Underwriters shall have reasonably
objected in writing or which is not in compliance with the Rules and
Regulations and (iii) file on a timely basis all reports and any
definitive proxy or information statements required to be filed by the
Company with the Commission subsequent to the date of the Prospectus
and prior to the termination of the offering of the Shares by the
Underwriters.
(b) The Company will advise the Underwriters promptly of any
request of the Commission for amendment of the Registration Statement
or for supplement to the Prospectus or for any additional information,
or of the issuance by the Commission of any stop order suspending
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the effectiveness of the Registration Statement or the use of the
Prospectus or of the institution of any proceedings for that purpose,
and the Company will use reasonable efforts to prevent the issuance of
any such stop order preventing or suspending the use of the Prospectus
and to obtain as soon as possible the lifting thereof, if issued.
(c) The Company will deliver to, or upon the order of, the
Underwriters, from time to time, as many copies of any Preliminary
Prospectus as the Underwriters may reasonably request. The Company
will deliver to, or upon the order of, the Underwriters during the
period when delivery of a Prospectus is required under the Act, as
many copies of the Prospectus in final form, or as thereafter amended
or supplemented, as the Underwriters may reasonably request. The
Company will deliver to the Underwriters at or before the Closing
Date, four signed copies of the Registration Statement and all
amendments thereto including all exhibits filed therewith, and will
deliver to the Underwriters such number of copies of the Registration
Statement, but without exhibits, and of all amendments thereto, as the
Underwriters may reasonably request, including documents incorporated
by reference therein.
(d) The Company will make generally available to its security
holders, as soon as it is practicable to do so, but in any event not
later than 15 months after the effective date of the Registration
Statement, an earnings statement (which need not be audited) in
reasonable detail, covering a period of at least 12 consecutive months
beginning after the effective date of the Registration Statement,
which earnings statement shall satisfy the requirements of Section
11(a) of the Act and Rule 158 of the Rules and Regulations and will
advise you in writing when such statement has been so made available.
(e) The Company will, for a period of five years from the
Closing Date, deliver or make available to the Underwriters copies of
annual reports and copies of all other documents, reports and
information furnished by the Company to its stockholders or filed with
any securities exchange pursuant to the requirements of such exchange
or with the Commission pursuant to the Act or the Securities Exchange
Act of 1934, as amended (the "Exchange Act").
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(f) No offering, sale, short sale or other disposition of any
Common Stock or other securities convertible into or exchangeable or
exercisable for shares of Common Stock of the Company will be made by
the Company for a period of [ ] days after the date of this Agreement,
directly or indirectly, by the Company otherwise than hereunder, or
with the prior written consent of [name specific underwriter], except
that the Company may, without such consent, grant options or issue
shares of Common Stock pursuant to the exercise of options granted
under the Company's current stock option plans and may offer or issue
shares of Common Stock in connection with the acquisition of stock or
assets of another person.
(g) The Company will comply with the Act and the Rules and
Regulations, and the Exchange Act, and the rules and regulations of
the Commission thereunder, so as to permit the completion of the
distribution of the Shares as contemplated in this Agreement and the
Prospectus. If during the period in which a prospectus is required by
law to be delivered by an Underwriter or dealer, any event shall occur
as a result of which, in the judgment of the Company or in the
reasonable opinion of the Underwriters, it becomes necessary to amend
or supplement the Prospectus in order to make the statements therein,
in the light of the circumstances existing at the time the Prospectus
is delivered to a purchaser, not misleading, or, if it is necessary at
any time to amend or supplement the Prospectus to comply with any law,
the Company promptly will either (i) prepare and file with the
Commission an appropriate amendment to the Registration Statement or
supplement to the Prospectus or (ii) prepare and file with the
Commission an appropriate filing under the Exchange Act which shall be
incorporated by reference in the Prospectus so that the Prospectus as
so amended or supplemented will not, in the light of the circumstances
when it is so delivered, be misleading, or so that the Prospectus will
comply with the law.
(h) The Company will use its best efforts to list, subject to
notice of issuance, the Shares on the NYSE.
[(i) The Company has caused each of _____________ and ______
_______ to furnish to you, or prior to the date of this agreement, a
letter or letters, in form and substance satisfactory to the
Underwriters, pursuant to which each such person has agreed not to
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offer, sell, sell short or otherwise dispose of any shares of Common
Stock of the Company or other capital stock of the Company, or any
other securities convertible, exchangeable or exercisable for common
stock or derivative of common stock owned by such person or request
the registration for the offer or sale of any of the foregoing (or as
to which such person has the right to direct the disposition of) for a
period of [ ] days after the date of this Agreement, directly or
indirectly, except with the prior written consent of [name specific
underwriter] ("Lockup Agreements").]
(j) The Company shall not invest, or otherwise use the
proceeds received by the Company from its sale of the Shares in such a
manner as would require the Company or any of the Subsidiaries to
register as an investment company under the Investment Company Act of
1940, as amended (the "1940 Act").
(k) The Company will maintain a transfer agent and, if
necessary under the jurisdiction of incorporation of the Company, a
registrar for the Common Stock.
(l) The Company will not take, directly or indirectly, any
action designed to cause or result in, or that has constituted or
might reasonably be expected to constitute, the stabilization or
manipulation of the price of any securities of the Company.
5. Costs and Expenses. The Company will pay all costs,
expenses and fees incident to the performance of the obligations of the Company
under this Agreement, including, without limiting the generality of the
foregoing, the following: accounting fees of the Company; the fees and
disbursements of counsel for the Company; the cost of printing and delivering
to, or as requested by, the Underwriters copies of the Registration Statement,
Preliminary Prospectuses, the Prospectus, this Agreement; fees and expenses
related to Blue Sky matters; the filing fees of the Commission; and the filing
fees of the NASD. The Company shall not, however, be required to pay for any
of the Underwriters' expenses except that, if this Agreement shall not be
consummated because the conditions in Section 8 hereof are not satisfied, or
because this Agreement is terminated by the Underwriters pursuant to Section 7
hereof, or by reason of any failure, refusal or inability on the part of the
Company to perform any undertaking or satisfy any condition of this Agreement
or to comply with any of the terms hereof on its part to be performed, unless
such
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failure to satisfy said condition or to comply with said terms is due to the
default or omission of any Underwriter, then the Company shall reimburse the
several Underwriters for reasonable out-of-pocket expenses, including fees and
disbursements of counsel, reasonably incurred in connection with investigating,
marketing and proposing to market the Shares or in contemplation of performing
their obligations hereunder; but the Company shall not in any event be liable
to any of the several Underwriters for damages on account of loss of
anticipated profits from the sale by them of the Shares.
6. Conditions of Obligations of the Underwriters. The
several obligations of the Underwriters to purchase the Firm Shares on the
Closing Date and the Option Shares, if any, on the Option Closing Date are
subject to the accuracy, as of the Closing Date or the Option Closing Date, as
the case may be, of the representations and warranties of the Company contained
herein, and to the performance by the Company of its covenants and obligations
hereunder and to the following additional conditions:
(a) The Registration Statement and all post-effective
amendments thereto shall have become effective and any and all filings
required by Rule 415, Rule 424 and Rule 430A of the Rules and
Regulations shall have been made, and any request of the commission
for additional information (to be included in the Registration
Statement or otherwise) shall have been disclosed to the Underwriters
and complied with to their reasonable satisfaction. No stop order
suspending the effectiveness of the Registration Statement, as amended
from time to time, shall have been issued and no proceedings for that
purpose shall have been taken or, to the knowledge of the Company,
shall be contemplated by the Commission and no injunction, restraining
order, or order of any nature by a Federal or state court of competent
jurisdiction shall have been issued as of the Closing Date which would
prevent the issuance of the Shares.
(b) The Underwriters shall have received on the Closing Date
or the Option Closing Date, as the case may be, the opinion of Akin,
Gump, Strauss, Hauer & Feld, L.L.P., counsel for the Company, dated
the Closing Date or the Option Closing Date, as the case
<PAGE> 17
16
may be, addressed to the Underwriters to the effect that:
(i) The Company is validly existing as a corporation
in good standing under the laws of the State of Texas, with
corporate power and authority to own or lease its properties
and conduct its business as described in the Prospectus; each
of the Subsidiaries is validly existing as a corporation in
good standing under the laws of the jurisdiction of its
incorporation, with corporate power and authority to own its
properties and conduct its business as described in the
Prospectus; and the outstanding shares of capital stock of
each of the Subsidiaries have been duly authorized and validly
issued, are fully paid and non-assessable and, to the best of
such counsel's knowledge, except (A) as reflected in the
Company's financial statements, (B) as described in the
Registration Statement, are owned by the Company or a
Subsidiary or (C) as set forth on Schedule II hereto; and, to
such counsel's knowledge, the outstanding shares of capital
stock of each of the Subsidiaries are owned free and clear of
all liens, encumbrances and security interests and no options,
warrants or other rights to purchase, agreements or other
obligations to issue, or other rights to convert any
obligations into any shares of capital stock or of ownership
interests in the Subsidiaries are outstanding.
(ii) The Company has authorized and outstanding
capital stock as set forth under the caption "Capitalization"
in the Prospectus; the authorized shares of its Common Stock
have been duly authorized; the outstanding shares of its
Common Stock have been duly authorized and validly issued and
are fully-paid and non-assessable; all of the Shares conform
to the description thereof contained in the Prospectus; the
Shares, including the Option Shares, if any, to be sold by the
Company pursuant to this Agreement have been duly authorized
and will be validly issued, fully paid and non-assessable when
issued and paid for as contemplated by this Agreement; and, to
the knowledge of such counsel, no preemptive rights of
stockholders exist with respect to any of the Shares or the
issue and sale thereof.
<PAGE> 18
17
(iii) Except as described in or contemplated by the
Prospectus, to the knowledge of such counsel, there are no
outstanding securities of the Company convertible or
exchangeable into or evidencing the right to purchase or
subscribe for any shares of capital stock of the Company and
there are no outstanding or authorized options, warrants, or
rights of any character obligating the Company to issue any
shares of its capital stock or any securities convertible or
exchangeable into or evidencing the right to purchase or
subscribe for any shares of such stock; and except as
described in the Prospectus, to the knowledge of such counsel,
no holder of any securities of the Company or any other person
has the right, contractual or otherwise, which has not been
satisfied or effectively waived, to cause the Company to sell
or otherwise issue to them, or to permit them to underwrite
the sale of, any of the Shares or the right to have any Common
Stock or other securities of the Company included in the
Registration Statement or the right, as a result of the filing
of the Registration Statement, to require registration under
the Act of any shares of Common Stock or other securities of
the Company.
(iv) The Registration Statement has become effective
under the Act and, to the best of the knowledge of such
counsel, no stop order proceedings with respect thereto have
been instituted or are pending or threatened under the Act.
(v) The Registration Statement, all Preliminary
Prospectuses, the Prospectus and each amendment or supplement
thereto and documents incorporated by reference therein (each
as amended to date) comply as to form in all material respects
with the requirements of the Act or the Exchange Act, as
applicable and the applicable rules and regulations thereunder
(except that such counsel need express no opinion as to, the
statistical information contained in the Prospectus or
financial statements, schedules and other financial
information incorporated by reference therein).
(vi) The statements under the captions "___________",
"________________" and
<PAGE> 19
18
"Description of Capital Stock" in the Prospectus, insofar as
such statements constitute a summary of documents referred to
therein or matters of law, are accurate summaries and fairly
and correctly present the information called for with respect
to such documents and matters.
(vii) To such counsel's knowledge, there are no
contracts or documents required to be filed as exhibits to the
Registration Statement or described in the Registration
Statement or the Prospectus (including any document
incorporated therein by reference) which are not so filed or
described as required, and such contracts and documents as are
summarized in the Registration Statement or the Prospectus
(including any document incorporated therein by reference) are
fairly summarized in all material respects.
(viii) To such counsel's knowledge, there are no
material legal proceedings pending or threatened against the
Company or any of the Subsidiaries which is of a character
required to be disclosed in the Prospectus and which has not
been properly disclosed therein.
(ix) The execution and delivery of this Agreement
and the consummation of the transactions herein contemplated
do not and will not conflict with or result in a breach of any
of the terms or provisions of, or constitute a default under,
the Articles of Incorporation or By-laws of the Company, or to
such counsel's knowledge, any agreement or instrument to which
the Company or any of the Subsidiaries is a party or by which
the Company or any of the Subsidiaries may be bound (other
than licenses or permits granted by the FCC, on which such
counsel need not express any opinion), except a conflict,
breach or default which would not have a materially adverse
effect on the business or financial condition of the Company
and its subsidiaries taken as a whole.
(x) This Agreement has been duly authorized,
executed and delivered by the Company.
(xi) No approval, consent, order, authorization,
designation, declaration or filing by or with any regulatory,
administrative or other
<PAGE> 20
19
governmental body having jurisdiction over the Company is
necessary in connection with the execution and delivery of
this Agreement and the consummation of the transactions herein
contemplated (other than as may be required by the NASD or
NYSE or as required by State securities and Blue Sky laws as
to which such counsel need express no opinion) except such as
have been obtained or made, specifying the same.
(xii) The Company is not, and will not become, as a
result of the consummation of the transactions contemplated by
this Agreement, and application of the net proceeds therefor
as described in the Prospectus, required to register as an
investment company under the 1940 Act.
In rendering such opinion, such counsel may rely (A) as to matters
governed by the laws of states other than Texas or Federal laws on
local counsel in such jurisdictions, provided that in each case such
counsel shall state that they believe that they and the Underwriters
are justified in relying on such other counsel and (B) as to matters
of fact, on certificates of responsible officers of the Company and
certificates or other written statements of officers or departments of
various jurisdictions having custody of documents respecting the
corporate existence or good standing of the Company and any
Subsidiary. In addition to the matters set forth above, such opinion
shall also include a statement to the effect that nothing has come to
the attention of such counsel which leads them to believe that the
Registration Statement, as of the time it became effective under the
Act, the Prospectus or any amendment or supplement thereto, on the
date it was filed pursuant to Rule 424(b) and the Registration
Statement and the Prospectus, or any amendment or supplement thereto,
as of the Closing Date or the Option Closing Date, as the case may be,
contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading (except that such counsel need
express no view as to matters pertaining to statistical information
contained in the Prospectus or financial statements, schedules and
other financial information contained or incorporated by reference in
the Prospectus). With respect to such statement, such counsel may
state that their belief is based upon the procedures set forth
<PAGE> 21
20
therein, but is without independent check and verification.
[(c) The Underwriters shall also have received on the Closing
Date the opinion of local counsel for the Company experienced in such
matters, in certain of the major jurisdictions in which the Company
conducts business, dated the Closing Date or the Option Closing Date,
as the case may be, addressed to the Underwriters substantially to the
effect that the statements under the caption "Risk Factors-Government
Regulation" insofar as such statements constitute a summary of
regulatory matters in the applicable jurisdiction relating to the
outdoor advertising industry, fairly describes the regulatory matters
relating to the Company's business as that business is conducted in
the applicable metropolitan area.]
(d) The Underwriters shall have received on the Closing Date
or the Option Closing Date, as the case may be, the opinion of Wiley,
Rein and Fielding, special FCC counsel to the Company, dated the
Closing Date or the Option Closing Date, as the case may be, addressed
to the Underwriters as is reasonably acceptable to the Underwriters.
<PAGE> 22
21
(e) The Underwriters shall have received from Cravath, Swaine
& Moore, counsel for the Underwriters, an opinion dated the Closing
Date or the Option Closing Date, as the case may be, substantially to
the effect specified in subparagraphs (ii), (iv), (v) and (x) of
<PAGE> 23
22
Paragraph (b) of this Section 7, and that the Company is a validly
organized and existing corporation under the laws of the State of
Texas. In rendering such opinion Cravath, Swaine & Moore, may rely as
to all matters governed other than by the laws of the State of
New York or Federal laws on the opinion of counsel referred to in
paragraph (b) of this Section 7. In addition to the matters set forth
above, such opinion shall also include a statement to the effect that
nothing has come to the attention of such counsel which leads them to
believe that the Registration Statement, as of the time it became
effective under the Act, and the Prospectus or any amendment or
supplement thereto, on the date it was filed pursuant to Rule 424(b)
and the Registration Statement and the Prospectus, or any amendment or
supplement thereto, as of the Closing Date or the Option Closing Date,
as the case may be, contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading (except that
such counsel need express no view as to financial statements,
schedules and other financial information included therein). With
respect to such statement, Cravath, Swaine & Moore may state that
their belief is based upon the procedures set forth therein, but is
without independent check and verification.
(f) The Underwriters shall have received on each of the date
hereof, the Closing Date or the Option Closing Date, as the case may
be, signed letters from _________________, _____________________ and
_______, dated the Closing Date or the Option Closing Date, as the case
may be, which shall confirm, on the basis of a review in accordance
with the procedures set forth in the letters signed by such firms and
dated and delivered to the Underwriters on the date hereof that
nothing has come to their attention during the period from the date
five days prior to the date hereof, to a date not more than five days
prior to the Closing Date or the Option Closing Date, as the case may
be, which would require any change in their letter dated the date
hereof if it were required to be dated and delivered on the Closing
Date or the Option Closing Date, as the case may be. All such letters
shall be in form and substance satisfactory to the Underwriters.
(g) The Underwriters shall have received on the Closing Date
or the Option Closing Date, as the case may be, a certificate or
certificates of the President or Chief Executive Officer and the
Senior Vice
<PAGE> 24
23
President and Chief Accounting Officer of the Company to the effect
that, as of the Closing Date or the Option Closing Date, as the case
may be, each of them severally represents as follows:
(i) The Registration Statement has become effective
under the Act and no stop order suspending the effectiveness
of the Registration Statement has been issued, and no
proceedings for such purpose have been taken or are, to his
knowledge, contemplated by the Commission.
(ii) There is no litigation instituted or threatened
against the Company of a character required to be disclosed in
the Registration Statement which is not so disclosed.
(iii) He has carefully examined the Registration
Statement and the Prospectus and, as of the effective date of
the Registration Statement, the statements contained in the
Registration Statement were true and correct in all material
respects, and such Registration Statement and Prospectus did
not omit to state a material fact required to be stated
therein or necessary in order to make the statements therein
not misleading and, in his opinion, since the effective date
of the Registration Statement, no event has occurred which
should have been set forth in a supplement to or an amendment
of the Prospectus which has not been so set forth in such
supplement or amendment.
(h) The Company shall have furnished to the Underwriters such
further certificates and documents confirming the representations and
warranties contained herein and related matters as the Underwriters
may reasonably have requested.
(i) The Shares and Option Shares, if any, have been approved
for listing upon official notice of issuance on the NYSE.
The opinions and certificates mentioned in this Agreement
shall be deemed to be in compliance with the provisions hereof only if they are
in all material respects reasonably satisfactory to the Underwriters and to
Cravath, Swaine & Moore, counsel for the Underwriters.
<PAGE> 25
24
If any of the conditions hereinabove provided for in this
Section 6 shall not have been fulfilled when and as required by this Agreement
to be fulfilled, the obligations of the Underwriters hereunder may be
terminated by the Underwriters by notifying the Company of such termination in
writing or by telegram at or prior to the Closing Date or the Option Closing
Date, as the case may be. In such event, the Company and the Underwriters
shall not be under any obligation to each other (except to the extent provided
in Sections 5 and 8 hereof).
7. Conditions of the Obligations of the Company. The
obligations of the Company to sell and deliver the Shares required to be
delivered as and when specified in this Agreement are subject to the conditions
that at the Closing Date or the Option Closing Date, as the case may be, no
stop order suspending the effectiveness of the Registration Statement shall
have been issued and in effect or proceedings therefor initiated or threatened.
8. Indemnification. (a) The Company agrees to indemnify and
hold harmless each Underwriter and each person, if any, who controls any
Underwriter within the meaning of the Act against any losses, claims, damages
or liabilities to which such Underwriter or such controlling person may become
subject under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) arise out of or are
based upon (i) any untrue statement or alleged untrue statement of any material
fact contained in the Registration Statement, any Preliminary Prospectus, the
Prospectus or any amendment or supplement thereto, or (ii) the omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, and will reimburse
each Underwriter and each such controlling person for any legal or other
expenses reasonably incurred by such Underwriter or such controlling person in
connection with investigating or defending any such loss, claim, damage,
liability, action or proceeding; provided, however, that the Company will not
be liable in any such case to the extent that any such loss, claim, damage or
liability arises out of or is based upon an untrue statement or alleged untrue
statement, or omission or alleged omission made in the Registration Statement,
any Preliminary Prospectus, the Prospectus, or such amendment or supplement, in
reliance upon and in conformity with written information furnished to the
Company by or through the Underwriters specifically for use in the preparation
thereof, and provided further that the Company shall not be liable with respect
to any untrue statement contained in or
<PAGE> 26
25
any omission from a Preliminary Prospectus if the untrue statement contained in
or such omission from such Preliminary Prospectus was corrected in the
applicable Prospectus and the person asserting any such loss, liability, claim
or damage was not given or sent a copy of the applicable Prospectus (excluding
the documents incorporated by reference therein) in the manner and at such time
as required by the Act, provided the Company has furnished you copies of such
applicable Prospectus. This indemnity agreement will be in addition to any
liability which the Company may otherwise have.
(b) Each Underwriter will indemnify and hold harmless the
Company, each of its directors or nominees for director, each of its officers
who have signed the Registration Statement, and each person, if any, who
controls the Company within the meaning of the Act, against any losses, claims,
damages or liabilities to which the Company or any such director, nominee for
director, officer, or controlling person may become subject under the Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions
or proceedings in respect thereof) arise out of or are based upon any untrue
statement or alleged untrue statement of any material fact contained in the
Registration Statement, any Preliminary Prospectus, the Prospectus or any
amendment or supplement thereto, or arise out of or are based upon the omission
or the alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading in the light
of the circumstances under which they were made; and will reimburse any legal
or other expenses reasonably incurred by the Company, any such director,
nominee for director, officer, or controlling person in connection with
investigating or defending any such loss, claim, damage, liability, action or
proceeding; provided, however, that each Underwriter will be liable in each
case to the extent, but only to the extent, that such untrue statement or
alleged untrue statement or omission or alleged omission has been made in the
Registration Statement, any Preliminary Prospectus, the Prospectus or such
amendment or supplement, in reliance upon and in conformity with written
information furnished to the Company by such Underwriter or through the
Underwriters on behalf of such Underwriter specifically for use in the
preparation thereof. This indemnity agreement will be in addition to any
liability which such Underwriter may otherwise have.
(c) In case any proceeding (including any governmental
investigation) shall be instituted involving any person in respect of which
indemnity may be sought
<PAGE> 27
26
pursuant to this Section 8, such person (the "indemnified party") shall
promptly notify the person against whom such indemnity may be sought (the
"indemnifying party") in writing. No indemnification provided for in Section
8(a) or (b) shall be available to any party who shall fail to give notice as
provided in this Section 8(c) if the party to whom notice was not given was
unaware of the proceeding to which such notice would have related and was
prejudiced by the failure to give such notice, but the failure to give such
notice shall not relieve the indemnifying party or parties from any liability
which it or they may have to the indemnified party for contribution or
otherwise than on account of the provisions of Section 8(a) or (b). In case
any such proceeding shall be brought against any indemnified party and it shall
notify the indemnifying party of the commencement thereof, the indemnifying
party shall be entitled to participate therein and, to the extent that it shall
wish, jointly with any other indemnifying party similarly notified, to assume
the defense thereof, with counsel satisfactory to such indemnified party and
shall pay as incurred the fees and disbursements of such counsel related to
such proceeding. In any such proceeding, any indemnified party shall have the
right to retain its own counsel at its own expense. Notwithstanding the
foregoing, the indemnifying party shall pay as incurred (or within 30 days of
presentation) the fees and expenses of the counsel retained by the indemnified
party (and, if any reasonably necessary, one additional local counsel) in the
event (i) the indemnifying party and the indemnified party shall have mutually
agreed to the retention of such counsel or (ii) the named parties to any such
proceeding (including any impleaded parties) include both the indemnifying
party and the indemnified party and representation of both parties by the same
counsel would be inappropriate due to actual or potential differing interests
between them. It is understood that the indemnifying party shall not, in
connection with any proceeding or related proceedings in the same jurisdiction,
be liable for the reasonable fees and expenses of more than one separate firm
for all such indemnified parties. Such firm shall be selected by you in the
case of parties indemnified pursuant to Section 8(a) and by the Company in the
event of parties indemnified pursuant to Section 8(b). The indemnifying party
shall not be liable for any settlement of any proceeding effected without its
written consent but if settled with such consent or if there be a final
judgment for the plaintiff, the indemnifying party agrees to indemnify the
indemnified party from and against any loss or liability by reason of such
settlement or judgment.
<PAGE> 28
27
(d) If the indemnification provided for in this Section 8 is
unavailable to or insufficient to hold harmless an indemnified party under
Section 8(a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) referred to therein,
then each indemnifying party shall contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) in such proportion
as is appropriate to reflect the relative benefits received by the Company on
the one hand and the Underwriters on the other from the offering of the Shares.
If, however, the allocation provided by the immediately preceding sentence is
not permitted by applicable law, then each indemnifying party shall contribute
to such amount paid or payable by such indemnified party in such proportion as
is appropriate to reflect not only such relative benefits but also the relative
fault of the Company on the one hand and the Underwriters on the other in
connection with the statements or omissions which resulted in such losses,
claims, damages or liabilities (or actions or proceedings in respect thereof),
as well as any other relevant equitable considerations. The relative benefits
received by the Company on the one hand and the Underwriters on the other shall
be deemed to be in the same proportion as the total net proceeds from the
offering (before deducting expenses) received by the Company bear to the total
underwriting discounts and commissions received by the Underwriters, in each
case as set forth in the table on the cover page of the Prospectus. The
relative fault shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by
the Company on the one hand or the Underwriters on the other and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission. No party shall be held liable for
contribution with respect to any claim or action settled without its consent
which shall not be unreasonably withheld. Such consent shall be given within
three business days from the date on which the party requesting consent
provides a written request to the other party.
The Company and the Underwriters agree that it would not be
just and equitable if contributions pursuant to this Section 8(d) were
determined by pro rata allocation (even if the Underwriters were treated as one
entity for such purpose) or by any other method of allocation which does not
take account of the equitable considerations
<PAGE> 29
28
referred to above in this Section 8(d). The amount paid or payable by an
indemnified party as a result of the losses, claims, damages or liabilities (or
actions or proceedings in respect thereof) referred to above in this Section
8(d) shall be deemed to include any legal or other expenses reasonably incurred
by such indemnified party in connection with investigating or defending any
such action or claim. Notwithstanding the provisions of this subsection (d),
(i) no Underwriter shall be required to contribute any amount in excess of the
underwriting discounts and commissions applicable to the Shares purchased by
such Underwriter and (ii) no person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations in this Section 8(d) to
contribute are several in proportion to their respective underwriting
obligations and not joint.
(e) In any proceeding relating to the Registration Statement,
any Preliminary Prospectus, the Prospectus or any supplement or amendment
thereto, each party against whom contribution may be sought under this Section
8 hereby consents to the jurisdiction of any court having jurisdiction over any
other contributing party, agrees that process issuing from such court may be
served upon him or it by any other contributing party and consents to the
service of such process and agrees that any other contributing party may join
him or it as an additional defendant in any such proceeding in which such other
contributing party is a party.
(f) Any losses, claims, damages, liabilities or expenses for
which an indemnified party is entitled to indemnification or contribution under
this Section 8 shall be paid by the indemnifying party to the indemnified party
as such losses, claims, damages, liabilities or expenses are incurred. The
indemnity and contribution agreements contained in this Section 8 and the
representations and warranties of the Company set forth in this Agreement shall
remain operative and in full force and effect, regardless of (i) any
investigation made by or on behalf of any Underwriter or any person controlling
any Underwriter, the Company, or its directors, nominees for director or
officers or any persons controlling the Company, (ii) acceptance of any Shares
and payment therefor hereunder, and (iii) any termination of this Agreement. A
successor to any Underwriter, or to the Company, or their respective directors
or officers, or any person controlling the Company, shall be entitled to the
benefits of the indemnity,
<PAGE> 30
29
contribution and reimbursement agreements contained in this Section 8.
9. Default by Underwriters. If on the Closing Date or the
Option Closing Date, as the case may be, any Underwriter shall fail to purchase
and pay for the portion of the Shares which such Underwriter has agreed to
purchase and pay for on such date (otherwise than by reason of any default on
the part of the Company, the non-defaulting Underwriters shall use their best
efforts to procure within 24 hours thereafter one or more of the other
Underwriters, or any others, to purchase from the Company such amounts as may
be agreed upon and upon the terms set forth herein, the Firm Shares or Option
Shares, as the case may be, which the defaulting Underwriter or Underwriters
failed to purchase. If during such 24 hours you, the non-defaulting
Underwriters, shall not have procured such other Underwriters, or any others,
to purchase the Firm Shares or Option Shares, as the case may be, agreed to be
purchased by the defaulting Underwriter or Underwriters, then (a) if the
aggregate number of shares with respect to which such default shall occur does
not exceed 10% of the Firm Shares or Option Shares, as the case may be, covered
hereby, the other Underwriters shall be obligated, severally, in proportion to
the respective numbers of Firm Shares or Option Shares, as the case may be,
which they are obligated to purchase hereunder, to purchase the Firm Shares or
Option Shares, as the case may be, which such defaulting Underwriter or
Underwriters failed to purchase, or (b) if the aggregate number of shares of
Firm Shares or Option Shares, as the case may be, with respect to which such
default shall occur exceeds 10% of the Firm Shares or Option Shares, as the
case may be, covered hereby, the Company or you as the Underwriters will have
the right, by written notice given within the next 24-hour period to the
parties to this Agreement, to terminate this Agreement without liability on the
part of the non-defaulting Underwriters or of the Company except to the extent
provided in Section 9 hereof. In the event of a default by any Underwriter or
Underwriters, as set forth in this Section 9, the Closing Date or Option
Closing Date, as the case may be, may be postponed for such period, not
exceeding seven days, as you, the non-defaulting Underwriters, may determine in
order that the required changes in the Registration Statement or in the
Prospectus or in any other documents or arrangements may be effected. The term
"Underwriter" includes any person substituted for a defaulting Underwriter.
Any action taken under this Section 9 shall not relieve any defaulting
Underwriter from liability in respect of any default of such Underwriter under
this Agreement.
<PAGE> 31
30
10. Notices. All communications hereunder shall be in
writing and, except as otherwise provided herein, will be mailed, delivered or
telegraphed and confirmed as follows: if to the Underwriters, to __________,
__________, Attention: __________, Managing Director; if to the Company, to
Clear Channel Communications, Inc., 20 Concord Plaza, Suite 600, San Antonio,
Texas 78216, attention: Randall Mays, Vice President.
11. Termination. This Agreement may be terminated by you by
notice to the Company as follows:
(a) at any time prior to the earlier of (i) the time the
Shares are released by you for sale by notice to the Underwriters, or
(ii) 11:30 A.M. on the date of this Agreement;
(b) at any time prior to the Closing Date if any of the
following has occurred: (i) since the effective date of the
Registration Statement, any material adverse change or any development
involving a prospective material adverse change in or affecting the
condition, financial or otherwise, of the Company and its Subsidiaries
taken as a whole or the earnings, business affairs, management or
business prospects of the Company and its Subsidiaries taken as a
whole, whether or not arising in the ordinary course of business, (ii)
any outbreak of hostilities or other national or international
calamity or crisis or change in economic or political conditions if
the effect of such outbreak, calamity, crisis or change on the
financial markets of the United States would, in your reasonable
judgment, make the offering or delivery of the Shares impracticable,
(iii) suspension of trading in securities on the NYSE or limitation on
prices for securities on the NYSE, (iv) the enactment, publication,
decree or other promulgation of any federal or state statute,
regulation, rule or order of any court or other governmental authority
which in your reasonable opinion materially and adversely affects or
will materially or adversely affect the business or operations of the
Company and the Subsidiaries taken as a whole, (v) declaration of a
banking moratorium by either federal or New York State authorities or
(vi) the taking of any action by any federal, state or local
government or agency in respect of its monetary or fiscal affairs
which in your reasonable opinion has a material adverse effect on the
securities markets in the United States; or
<PAGE> 32
31
(c) as provided in Sections 6 and 9 of this Agreement.
This Agreement also may be terminated by you, by notice to the
Company, as to any obligation of the Underwriters to purchase the Option
Shares, upon the occurrence at any time prior to the Option Closing Date of any
of the events described in subparagraph (b) above or as provided in Sections 6
and 9 of this Agreement.
12. Successors. This Agreement has been and is made solely
for the benefit of the Underwriters, the Company and their respective
successors, executors, administrators, heirs and assigns, and the officers,
directors and controlling persons referred to herein, and no other person will
have any right or obligation hereunder. The term "successors" shall not
include any purchaser of the Shares merely because of such purchase.
13. Information Provided by Underwriters. The Company and
the Underwriters acknowledge and agree that the only information furnished or
to be furnished by any Underwriter to the Company for inclusion in any
Prospectus or the Registration Statement consists of the information set forth
in the last paragraph on the front cover page (insofar as such information
relates to the Underwriters), legends required by Item 502(d) of Regulation S-K
and Regulation M under the Act and the information under the caption
"Underwriting" in the Prospectus.
14. Miscellaneous. The reimbursement, indemnification and
contribution agreements contained in this Agreement and the representations,
warranties and covenants in this Agreement shall remain in full force and
effect regardless of (a) any termination of this Agreement, (b) any
investigation made by or on behalf of any Underwriter or controlling person
thereof, or by or on behalf of the Company or its directors or officers and (c)
delivery of and payment for the Shares under this Agreement.
This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
This Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York.
<PAGE> 33
32
If the foregoing letter is in accordance with your
understanding of our agreement, please sign and return to us the enclosed
duplicates hereof, whereupon it will become a binding agreement among the
Company and the several Underwriters in accordance with its terms.
Very truly yours,
CLEAR CHANNEL COMMUNICATIONS, INC.
By
----------------------------------
Name:
Title:
The foregoing Underwriting Agreement is hereby confirmed and accepted
as of the date first above written.
- ------------------------------
- ------------------------------
- ------------------------------
- ------------------------------
- ------------------------------
By
By
---------------------------
Authorized Officer
<PAGE> 34
SCHEDULE I
SCHEDULE OF UNDERWRITERS
<TABLE>
<CAPTION>
NUMBER OF
FIRM SHARES
UNDERWRITER TO BE PURCHASED
----------- ---------------
<S> <C>
---------------
Total . . . . . . . . . . . . . .
</TABLE>
<PAGE> 35
SCHEDULE II
DISCLOSURE ITEMS
1. Material Subsidiaries
2. Liens, capitalization except for Subsidiary Stock
3. Pending Renewal applications
4. Clear Channel Common Stock exceptions
5. [other]
<PAGE> 1
EXHIBIT 1.2
Clear Channel Communications, Inc.
Form of Underwriting Agreement
[Note: Modifications will be made for other types of securities as
appropriate.]
New York, New York
, 19
To the Representatives
named in Schedule I
hereto of the Under-
writers named in
Schedule II hereto
Ladies and Gentlemen:
Clear Channel Communications Inc., a Texas corporation (the
"Company"), proposes to sell to the underwriters named in Schedule II hereto
(the "Underwriters"), for whom you (the "Representatives") are acting as
representatives, the principal amount of its securities identified in Schedule
I hereto (the "Securities"), to be issued under an indenture (the "Indenture")
dated as of , 1997, between the Company and The Bank of New York, as
trustee (the "Trustee"). If the firm or firms listed in Schedule II hereto
include only the firm or firms listed in Schedule I hereto, then the terms
"Underwriters" and "Representatives", as used herein, shall each be deemed to
refer to such firm or firms. To the extent there are no additional
Underwriters listed on Schedule I other than you, the term Representatives as
used herein shall mean you, as Underwriters, and the terms Representatives and
Underwriters shall mean either the singular or plural as the context requires.
Any reference herein to the Registration Statement, the Basic Prospectus, any
Preliminary Final Prospectus or the Final Prospectus shall be deemed to refer
to and include the documents incorporated by reference therein pursuant to Item
12 of Form S-3 which were filed under the Exchange Act on or before the
Effective Date of the Registration Statement or the issue date of the Basic
Prospectus, any Preliminary Final Prospectus or the Final Prospectus, as the
case may be; and any reference herein to the terms "amend", "amendment" or
"supplement" with respect to the Registration Statement, the Basic Prospectus,
any Preliminary Final Prospectus or the Final Prospectus shall be deemed to
refer to and include the filing of any document under the Exchange Act after
the Effective Date of the Registration Statement or the issue date of the Basic
Prospectus, any Preliminary Final Prospectus or the Final Prospectus, as the
case may be, deemed to be incorporated therein by reference.
1. Representations and Warranties. The Company represents
and warrants to, and agrees with, each Underwriter as set forth below in this
Section 1. Certain terms used in this Section 1 are defined in Section 17
hereof.
(a) The Company meets the requirements for the use of Form
S-3 under the Act and has filed with the Commission a registration
statement (the file number
<PAGE> 2
2
of which is set forth in Schedule I hereto) on such Form, including a
basic prospectus, for registration under the Act of the offering and
sale of the Securities. The Company may have filed one or more
amendments thereto, including a Preliminary Final Prospectus, each of
which has previously been furnished to you. The Company will next
file with the Commission either (x) a final prospectus supplement
relating to the Securities in accordance with Rules 430A and 424(b)(1)
or (4), or (y) prior to the Effective Date of such registration
statement, an amendment to such registration statement, including the
form of final prospectus supplement. In the case of clause (x), the
Company has included in such registration statement, as amended at the
Effective Date, all information (other than Rule 430A Information)
required by the Act and the rules thereunder to be included in such
registration statement and the Final Prospectus. As filed, such final
prospectus supplement or such amendment and form of final prospectus
supplement shall contain all Rule 430A Information, together with all
other such required information, and, except to the extent the
Representatives shall agree in writing to a modification, shall be in
all substantive respects in the form furnished to you prior to the
Execution Time or, to the extent not completed at the Execution Time,
shall contain only such specific additional information and other
changes (beyond that contained in the Basic Prospectus and any
Preliminary Final Prospectus) as the Company has advised you, prior to
the Execution Time, will be included or made therein.
(b) On the Effective Date, the Registration Statement did or
will, and when the Final Prospectus is first filed (if required) in
accordance with Rule 424(b) and on the Closing Date, the Final
Prospectus (and any supplement thereto) will, comply in all material
respects with the applicable requirements of the Act, the Exchange
Act and the Trust Indenture Act and the respective rules thereunder;
on the Effective Date and at the Execution Time, the Registration
Statement did not or will not contain any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements therein not
misleading; on the Effective Date and on the Closing Date the
Indenture did or will comply in all material respects with the
requirements of the Trust Indenture Act and the rules thereunder; and,
on the Effective Date, the Final Prospectus, if not filed pursuant to
Rule 424(b), will not, and on the date of any filing pursuant to Rule
424(b) and on the Closing Date, the Final Prospectus (together with
any supplement thereto) will not, include any untrue statement of a
material fact or omit to state a material fact necessary in order to
make the statements therein, in the light of the circumstances under
which they were made, not misleading; provided, however, that the
Company makes no representations or warranties as to (i) that part of
the Registration Statement which shall constitute the Statement of
Eligibility and Qualification (Form T-1) under the Trust Indenture Act
of the Trustee or (ii) the information contained in or omitted from
the Registration Statement or the Final Prospectus (or any supplement
thereto) in reliance upon and in conformity with information furnished
herein or in writing to the Company by or on behalf of any Underwriter
through the Representatives specifically for inclusion in the
Registration Statement or the Final Prospectus (or any supplement
thereto).
<PAGE> 3
3
Any certificate signed by any officer of the Company and delivered to
the Representatives or counsel for the Underwriters in connection with the
offering of the Securities shall be deemed solely to be a representation and
warranty by the Company, as to matters covered thereby, to each Underwriter.
2. Purchase and Sale. Subject to the terms and conditions
and in reliance upon the representations and warranties herein set forth, the
Company agrees to sell to each Underwriter, and each Underwriter agrees,
severally and not jointly, to purchase from the Company, at the purchase price
set forth in Schedule I hereto the principal amount of the Securities set forth
opposite such Underwriter's name in Schedule II hereto.
3. Delivery and Payment. Delivery of and payment for the
Securities shall be made on the date and at the time specified in Schedule I
hereto (or at such time on such later date not more than three Business Days
after the foregoing date as the Representatives shall designate), which date
and time may be postponed by agreement between the Representatives and the
Company or as provided in Section 8 hereof (such date and time of delivery and
payment for the Securities being herein called the "Closing Date"). Delivery
of the Securities shall be made to the Representatives for the respective
accounts of the several Underwriters against payment by the several
Underwriters through the Representatives of the purchase price thereof to or
upon the order of the Company by wire transfer payable in same-day funds to an
account specified by the Company. Delivery of the Securities shall be made
through the facilities of The Depository Trust Company unless the
Representatives shall otherwise instruct.
4. Agreements. The Company agrees with the several
Underwriters that:
(a) The Company will use its best efforts to cause the
Registration Statement, if not effective at the Execution Time, and
any amendment thereto, to become effective. Prior to the termination
of the offering of the Securities, the Company will not file any
amendment of the Registration Statement or supplement (including the
Final Prospectus or any Preliminary Final Prospectus) to the Basic
Prospectus or any Rule 462(b) Registration Statement unless the
Company has furnished you a copy for your review prior to filing and
will not file any such proposed amendment or supplement to which you
reasonably object in writing. Subject to the foregoing sentence, the
Company will cause the Final Prospectus, properly completed, and any
supplement thereto to be filed with the Commission pursuant to the
applicable paragraph of Rule 424(b) within the time period prescribed
and will provide evidence satisfactory to the Representatives of such
timely filing. The Company will promptly advise the Representatives
(i) when the Registration Statement, if not effective at the Execution
Time, shall have become effective, (ii) when the Final Prospectus, and
any supplement thereto, shall have been filed with the Commission
pursuant to Rule 424(b) or when any Rule 462(b) Registration Statement
shall have been filed with the Commission, (iii) when, prior to
termination of the offering of the Securities, any amendment to the
Registration Statement shall have been filed or become effective, (iv)
of any request by the Commission or its staff for any amendment of the
Registration Statement, or any Rule 462(b) Registration Statement, or
for any supplement to the Final Prospectus or of any additional
information, (v) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or the
institution or threatening of any proceeding for that purpose and (vi)
of the receipt by the
<PAGE> 4
4
Company of any notification with respect to the suspension of the
qualification of the Securities for sale in any jurisdiction or the
initiation or threatening of any proceeding for such purpose. The
Company will use its reasonable efforts to prevent the issuance of any
such stop order or the suspension of any such qualification and, if
issued, to obtain as soon as possible the withdrawal thereof.
(b) If, at any time when a prospectus relating to the
Securities is required to be delivered under the Act, any event occurs
as a result of which the Final Prospectus as then supplemented would
include any untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein in the light of
the circumstances under which they were made not misleading, or if it
shall be necessary to amend the Registration Statement or supplement
the Final Prospectus to comply with the Act or the Exchange Act or the
respective rules thereunder, the Company promptly will (i) prepare and
file with the Commission, subject to the second sentence of paragraph
(a) of this Section 4, an amendment or supplement, or, if appropriate,
a filing under the Exchange Act, which will correct such statement or
omission or effect such compliance and (ii) supply any supplemented
Final Prospectus to you in such quantities as you may reasonably
request.
(c) As soon as practicable, the Company will make generally
available to its security holders and to the Representatives an
earnings statement or statements of the Company and its subsidiaries
which will satisfy the provisions of Section 11(a) of the Act and Rule
158 under the Act.
(d) The Company will furnish to the Representatives and
counsel for the Underwriters, without charge, copies of the
Registration Statement (including exhibits thereto) and, so long as
delivery of a prospectus by an Underwriter or dealer may be required
by the Act, as many copies of any Preliminary Final Prospectus and the
Final Prospectus and any supplement thereto as the Representatives may
reasonably request. The Company will pay the expenses of printing or
other production of all documents relating to the offering.
(e) The Company will arrange, if necessary, for the
qualification of the Securities for sale under the laws of such
jurisdictions as the Representatives may designate, will maintain such
qualifications in effect so long as required for the distribution of
the Securities, will arrange for the determination of the legality of
the Securities for purchase by institutional investors and will pay
any fee of the National Association of Securities Dealers, Inc., in
connection with its review of the offering, provided that the Company
will not the required to file a consent to service of process in any
state in which it is not qualified or for which consent has not been
given.
(f) Until the business date set forth on Schedule I hereto,
the Company will not, without the consent of _____________, offer,
sell or contract to sell, or otherwise dispose of (or enter into any
transaction which is designed to, or could be expected to, result in
the disposition (whether by actual disposition or effective economic
disposition due to cash settlement or otherwise) by the Company or any
affiliate of the Company or any person in privity with the Company or
any affiliate of the Company) directly or indirectly, or announce the
offering of, any debt securities issued or guaranteed by the Company
(other than the Securities).
<PAGE> 5
5
5. Conditions to the Obligations of the Underwriters. The
obligations of the Underwriters to purchase the Underwriters' Securities shall
be subject to the accuracy of the representations and warranties on the part of
the Company contained herein as of the Execution Time and the Closing Date, to
the accuracy of the statements of the Company made in any certificates pursuant
to the provisions hereof, to the performance by the Company of its obligations
hereunder and to the following additional conditions:
(a) If the Registration Statement has not become effective
prior to the Execution Time, unless the Representatives agree in
writing to a later time, the Registration Statement will become
effective not later than (i) 6:00 PM New York City time, on the date
of determination of the public offering price, if such determination
occurred at or prior to 3:00 PM New York City time on such date or
(ii) 9:30 AM on the Business Day following the day on which the public
offering price was determined, if such determination occurred after
3:00 PM New York City time on such date; if filing of the Final
Prospectus, or any supplement thereto, is required pursuant to Rule
424(b), the Final Prospectus, and any such supplement, shall have been
filed in the manner and within the time period required by Rule
424(b); and no stop order suspending the effectiveness of the
Registration Statement shall have been issued and no proceedings for
that purpose shall have been instituted or threatened.
(b) The Company shall have furnished to the Representatives
the opinion of Akin, Gump, Strauss, Hauer & Feld, L.L.P., counsel for
the Company, dated the Closing Date, to the effect that:
(i) the Company ____ and ____ (individually a
"Subsidiary" and collectively the "Subsidiaries") has been
duly incorporated and is validly existing as a corporation in
good standing under the laws of the jurisdiction in which it
is chartered or organized, with full corporate power and
authority to own its properties and conduct its business as
described in the Final Prospectus;
(ii) all the outstanding shares of capital stock of
each Subsidiary have been duly and validly authorized and
issued and are fully paid and nonassessable, and, except as
otherwise set forth in the Final Prospectus [or in a schedule
attached to such opinion], all outstanding shares of capital
stock of the Subsidiaries are owned by the Company either
directly or through wholly owned subsidiaries free and clear
of any perfected security interest and, to the knowledge of
such counsel, after due inquiry, any other security interests,
claims, liens or encumbrances;
(iii) the Company's authorized equity capitalization
is as set forth in the Final Prospectus; the Securities
conform in all material aspects to the description thereof
contained in the Final Prospectus; and, if the Securities are
to be listed on any securities exchange, authorization
therefor has been given, subject to official notice of
issuance and evidence of satisfactory distribution, or the
Company has filed a preliminary listing application and all
required supporting documents with respect to the Securities
with such
<PAGE> 6
6
securities exchange and such counsel has no reason to believe
that the Securities will not be authorized for listing,
subject to official notice of issuance and evidence of
satisfactory distribution;
(iv) the Indenture has been duly authorized, executed
and delivered, has been duly qualified under the Trust
Indenture Act, and constitutes a legal, valid and binding
instrument enforceable against the Company in accordance with
its terms (subject, as to enforcement of remedies, to
applicable bankruptcy, reorganization, insolvency, moratorium
or other laws affecting creditors' rights generally from time
to time in effect); and the Securities have been duly
authorized and, when executed and authenticated in accordance
with the provisions of the Indenture and delivered to and paid
for by the Underwriters pursuant to this Agreement, will
constitute legal, valid and binding obligations of the Company
entitled to the benefits of the Indenture;
(v) to the knowledge of such counsel, there is no
pending or threatened action, suit or proceeding by or before
any court or governmental agency, authority or body or any
arbitrator involving the Company or any of its subsidiaries,
of a character required to be disclosed in the Registration
Statement which is not adequately disclosed in the Final
Prospectus and, to the knowledge of such counsel, there is no
franchise, contract or other document of a character required
to be described in the Registration Statement or Final
Prospectus, or to be filed as an exhibit thereto which is not
described or filed or incorporated by reference as required;
and the statements included or incorporated in the Final
Prospectus describing any legal proceedings [or material
contacts or agreements relating to the Company] [and the
statements in the Final Prospectus under the headings "Tax
Matters", " " and " " fairly summarize such matters];
(vi) the Registration Statement has become effective
under the Act; any required filing of the Basic Prospectus,
any Preliminary Final Prospectus and the Final Prospectus, and
any supplements thereto, pursuant to Rule 424(b) has been made
in the manner and within the time period required by Rule
424(b); to the knowledge of such counsel, no stop order
suspending the effectiveness of the Registration Statement has
been issued, no proceedings for that purpose have been
instituted or threatened, and the Registration Statement and
the Final Prospectus (other than the financial statements and
other financial information contained therein, as to which
such counsel need express no opinion) comply as to form in all
material respects with the applicable requirements of the Act,
the Exchange Act and the Trust Indenture Act and the
respective rules thereunder;
(vii) this Agreement has been duly authorized,
executed and delivered by the Company;
(viii) the Company is not and, after giving effect to
the offering and sale of the Securities and the application of
the proceeds thereof as described in the Final Prospectus,
will not be an "investment company" as defined in the
Investment Company Act of 1940, as amended;
<PAGE> 7
7
(ix) no consent, approval, authorization, filing with
or order of any court or governmental agency or body is
required in connection with the transactions contemplated
herein, except such as have been obtained under the Act and
such as may be required under the blue sky laws of any
jurisdiction in connection with the purchase and distribution
of the Securities by the Underwriters in the manner
contemplated in this Agreement and in the Final Prospectus
[and such other approvals (specified in such opinion) as have
been obtained];
(x) neither the execution and delivery of the
Indenture, the issue and sale of the Securities, nor the
consummation of any other of the transactions herein
contemplated nor the fulfillment of the terms hereof will
conflict with, result in a breach or violation or imposition
of any lien, charge or encumbrance upon any property or assets
of the Company or its subsidiaries pursuant to, (i) the
charter or by-laws of the Company or its subsidiaries, or (ii)
to such counsel's knowledge, the terms of any indenture,
contract, lease, mortgage, deed of trust, note agreement, loan
agreement or other agreement, obligation, condition, covenant
or instrument and to which the Company or its subsidiaries is
a party or bound or to which its property is subject or (iii)
any statute, law, rule, regulation, judgment, order or decree
applicable to the Company or its subsidiaries of any court,
regulatory body, administrative agency, governmental body,
arbitrator or other authority having jurisdiction over the
Company or its subsidiaries or any of its or their properties,
except for such as would not have a material adverse effect on
the Company and its subsidiaries taken as a whole; and
(ix) [except as set forth on Schedule ___ attached
hereto, which rights have been waived,] no holders of
securities of the Company have rights to the registration of
such securities under the Registration Statement.
In addition, such counsel shall also state that they have no reason to
believe that on the Effective Date or at the Execution Time the
Registration Statement contains or contained any untrue statement of a
material fact or omitted or omits to state any material fact required
to be stated therein or necessary to make the statements therein not
misleading or that the Final Prospectus as of its date and on the
Closing Date includes any untrue statement of a material fact or
omitted or omits to state a material fact necessary to make the
statements therein, in the light of the circumstances under which they
were made, not misleading (in each case, other than the financial
statements and other financial information contained therein, as to
which such counsel need express no opinion with respect to such
statement, such counsel may state that their belief is based upon the
procedures set forth therein, but is without independent
verification);
In rendering such opinion, such counsel may rely (A) as to matters
involving the application of laws of any jurisdiction other than the
State of Texas or the Federal laws of the United States, to the extent
deemed proper and specified in such opinion, upon the opinion of other
counsel of good standing believed to be reliable and who are
reasonably satisfactory to counsel for the Underwriters and (B) as to
matters of fact, on certificates [or other written statements] of
responsible officers
<PAGE> 8
8
of the Company and public officials. References to the Final
Prospectus in this paragraph (b) include any supplements thereto at
the Closing Date.
(c) The Representatives shall have received from Cravath,
Swaine & Moore, counsel for the Underwriters, such opinion or
opinions, dated the Closing Date, with respect to the issuance and
sale of the Securities, the Indenture, the Registration Statement, the
Final Prospectus (together with any supplement thereto) and other
related matters as the Representatives may reasonably require, and the
Company shall have furnished to such counsel such documents as they
request for the purpose of enabling them to pass upon such matters.
(d) The Company shall have furnished to the Representatives a
certificate of the Company, signed by the Chairman of the Board or the
President and the principal financial or accounting officer of the
Company, dated the Closing Date, to the effect that the signers of
such certificate have carefully examined the Registration Statement,
the Final Prospectus, any supplements to the Final Prospectus and this
Agreement and that:
(i) the representations and warranties of the Company
in this Agreement are true and correct in all material
respects on and as of the Closing Date with the same effect as
if made on the Closing Date and the Company has complied with
all the agreements and satisfied all the conditions on its
part to be performed or satisfied at or prior to the Closing
Date;
(ii) no stop order suspending the effectiveness of
the Registration Statement has been issued and no proceedings
for that purpose have been instituted or, to the Company's
knowledge, threatened; and
(iii) since the date of the most recent financial
statements included in the Final Prospectus (exclusive of any
supplement thereto), there has been no material adverse change
in the condition (financial or otherwise), prospects,
earnings, business or properties of the Company and its
subsidiaries, taken as a whole, whether or not arising from
transactions in the ordinary course of business, except as set
forth in or contemplated in the Final Prospectus (exclusive of
any supplement thereto).
(e) At the Closing Date, ____________, ______ and _______
shall have furnished to the Representatives letters (which may refer to
letters previously delivered to one or more of the Representatives),
dated as of the Closing Date, in form and substance satisfactory to the
Representatives.
<PAGE> 9
9
In addition, except as provided in Schedule I hereto, at the
Execution Time, ________________________ shall have furnished to the
Representatives a letter or letters, dated as of the Execution Time,
in form and substance satisfactory to the Representatives, to the
effect set forth above.
(f) Subsequent to the Execution Time or, if earlier, the
dates as of which information is given in the Registration Statement
(exclusive of any amendment thereof) and the Final Prospectus
(exclusive of any supplement thereto), there shall not have been (i)
any change or decrease specified in the letter or letters referred to
in paragraph (e) of this Section 5 or (ii) any change, or any
development involving a prospective change, in or affecting the
condition (financial or otherwise), earnings, business or properties
of the Company and its subsidiaries, taken as a whole, whether or not
arising from transactions in the ordinary course of business, except
as set forth in or contemplated in the Prospectus (exclusive of any
supplement thereto) the effect of which, in any case referred to in
clause (i) or (ii) above, is, in the sole judgment of the
Representatives, so material and adverse as to make it impractical or
inadvisable to proceed with the offering or delivery of the Securities
as contemplated by the Registration Statement (exclusive of any
amendment thereof) and the Final Prospectus (exclusive of any
supplement thereto).
(g) Subsequent to the Execution Time, there shall not have
been any decrease in the rating of any of the Company's debt
securities by any "nationally recognized statistical rating
organization" (as defined for purpose of Rule 436(g) under the Act) or
any notice given of any intended or potential decrease in any such
rating or of a possible change in any such rating that does not
indicate the direction of the possible change.
(h) Subsequent to the Execution Time, there shall not have
been any decrease in the rating of any of the Company's debt
securities by any "nationally recognized statistical rating
organization" (as defined for purposes of Rule 436(g) under the Act)
or any notice given of any intended or potential decrease in any such
rating or of a possible change in any such rating that does not
indicate the direction of the possible change.
(i) The Company shall have caused the Securities to be
eligible for trading on ______________ upon issuance.
(j) Prior to the Closing Date, the Company shall have
furnished to the Representatives such further information,
certificates and documents as the Representatives may reasonably
request.
If any of the conditions specified in this Section 5 shall not
have been fulfilled in all material respects when and as provided in this
Agreement, or if any of the opinions and certificates mentioned above or
elsewhere in this Agreement shall not be in all material respects reasonably
satisfactory in form and substance to the Representatives and counsel for the
Underwriters, this Agreement and all obligations of the Underwriters
<PAGE> 10
10
hereunder may be canceled at, or at any time prior to, the Closing Date by the
Representatives. Notice of such cancelation shall be given to the Company in
writing or by telephone or facsimile confirmed in writing.
The documents required to be delivered by this Section 5 shall
be delivered at the office of Cravath, Swaine & Moore, counsel for the
Underwriters, at Worldwide Plaza, 825 Eighth Avenue, New York, New York, on the
Closing Date.
6. Reimbursement of Underwriters' Expenses. If the sale of
the Securities provided for herein is not consummated because any condition to
the obligations of the Underwriters set forth in Section 5 hereof is not
satisfied, because of any termination pursuant to Section 9 hereof or because
of any refusal, inability or failure on the part of the Company to perform any
agreement herein or comply with any provision hereof other than by reason of a
default by any of the Underwriters, the Company will reimburse the Underwriters
severally through ____________________ on demand for all reasonable
out-of-pocket expenses (including reasonable fees and disbursements of counsel)
that shall have been incurred by them in connection with the proposed purchase
and sale of the Securities, but the Company shall not be liable in any event to
any of the Underwriters for damages on account of loss of anticipated profits
from the sale of the Securities.
7. Indemnification and Contribution. (a) The Company agrees
to indemnify and hold harmless each Underwriter, the directors, officers,
employees and agents of each Underwriter and each person who controls any
Underwriter within the meaning of either the Act or the Exchange Act against
any and all losses, claims, damages or liabilities, joint or several, to which
they or any of them may become subject under the Act, the Exchange Act or other
Federal or state statutory law or regulation, at common law or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement for the
registration of the Securities as originally filed or in any amendment thereof,
or in the Basic Prospectus, any Preliminary Final Prospectus or the Final
Prospectus, or in any amendment thereof or supplement thereto, or arise out of
or are based upon the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein
not misleading, and agrees to reimburse each such indemnified party, as
reasonably incurred, for any legal or other expenses reasonably incurred by
them in connection with investigating or defending any such loss, claim,
damage, liability or action; provided, however, that with respect to any untrue
statement or omission of material fact made in any Preliminary Prospectus, the
indemnity agreement contained in this Section 8(a) shall not inure to the
benefit of any Underwriter from whom the person asserting any such loss, claim,
damage or liability purchased the securities concerned, to the extent that any
such loss, claim, damage or liability of such Underwriter occurs under the
circumstance where it shall have been determined by a court of competent
jurisdiction by final and nonappealable judgment that (w) the Company had
previously furnished copies of the Final Prospectus to the Representatives, (x)
delivery of the Final Prospectus was required by the Act to be made to such
person, (y) the untrue statement or omission of a material fact contained in
the Preliminary Prospectus was corrected in the Final Prospectus and (z) there
was not sent or given to such person, at or prior to the written confirmation
of the sale of such securities to such person, a copy of the Final Prospectus.
This indemnity agreement will be in addition to any liability which the Company
may otherwise have.
<PAGE> 11
11
(b) Each Underwriter severally agrees to indemnify and hold
harmless the Company, each of its directors, each of its officers who signs the
Registration Statement, and each person who controls the Company within the
meaning of either the Act or the Exchange Act, to the same extent as the
foregoing indemnity from the Company to each Underwriter, but only with
reference to written information relating to such Underwriter furnished to the
Company by or on behalf of such Underwriter through the Representatives
specifically for inclusion in the documents referred to in the foregoing
indemnity. This indemnity agreement will be in addition to any liability which
any Underwriter may otherwise have. The Company acknowledges that the
statements set forth in [the [last] paragraph of the cover page regarding
delivery of the Securities, the stabilization legend in block capital letters
on page [2] and, under the heading "Underwriting" or "Plan of Distribution",
(i) the sentences related to concessions and reallowances and (ii) the
paragraph related to stabilization in any Preliminary Final Prospectus or the
Final Prospectus constitute the only information furnished in writing by or on
behalf of the several Underwriters for inclusion in the documents referred to
in the foregoing indemnity.
(c) Promptly after receipt by an indemnified party under this
Section 7 of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying
party under this Section 7, notify the indemnifying party in writing of the
commencement thereof; but the failure so to notify the indemnifying party (i)
will not relieve it from liability under paragraph (a) or (b) above unless and
to the extent it did not otherwise learn of such action and such failure
results in the prejudice by the indemnifying party of substantial rights and
defenses and (ii) will not, in any event, relieve the indemnifying party from
any obligations to any indemnified party other than the indemnification
obligation provided in paragraph (a) or (b) above. The indemnifying party
shall be entitled to appoint counsel of the indemnifying party's choice at the
indemnifying party's expense to represent the indemnified party in any action
for which indemnification is sought (in which case the indemnifying party shall
not thereafter be responsible for the fees and expenses of any separate counsel
retained by the indemnified party or parties except as set forth below);
provided, however, that such counsel shall be reasonably satisfactory to the
indemnified party. Notwithstanding the indemnifying party's election to
appoint counsel to represent the indemnified party in an action, the
indemnified party shall have the right to a total of one separate counsel (and,
if reasonably necessary, one additional local counsel) and the indemnifying
party shall bear the reasonable fees, costs and expenses of such separate
counsel if (i) the use of counsel chosen by the indemnifying party to represent
the indemnified party would present such counsel with a conflict of
interest,(ii) the indemnifying party shall not have employed counsel
satisfactory to the indemnified party to represent the indemnified party within
a reasonable time after notice of the institution of such action or (iii) the
indemnifying party shall authorize the indemnified party to employ separate
counsel at the expense of the indemnifying party. An indemnifying party will
not, without the prior written consent of the indemnified parties, settle or
compromise or consent to the entry of any judgment with respect to any pending
or threatened claim, action, suit or proceeding in respect of which
indemnification or contribution may be sought hereunder (whether or not the
indemnified parties are actual or potential parties to such claim or action)
unless such settlement, compromise or consent includes an unconditional
release of each indemnified party from all liability arising out of such claim,
action, suit or proceeding, in which case such consent shall not be
unreasonably withheld.
(d) In the event that the indemnity provided in paragraph (a)
or (b) of this Section 7 is unavailable to or insufficient to hold harmless an
indemnified party for any
<PAGE> 12
12
reason, the Company and the Underwriters agree to contribute to the aggregate
losses, claims, damages and liabilities (including legal or other expenses
reasonably incurred in connection with investigating or defending same)
(collectively "Losses") to which the Company and one or more of the
Underwriters may be subject in such proportion as is appropriate to reflect the
relative benefits received by the Company and by the Underwriters from the
offering of the Securities; provided, however, that in no case shall any
Underwriter (except as may be provided in any agreement among underwriters
relating to the offering of the Securities) be responsible for any amount in
excess of the underwriting discount or commission applicable to the Securities
purchased by such Underwriter hereunder. If the allocation provided by the
immediately preceding sentence is unavailable for any reason, the Company and
the Underwriters shall contribute in such proportion as is appropriate to
reflect not only such relative benefits but also the relative fault of the
Company and of the Underwriters in connection with the statements or omissions
which resulted in such Losses as well as any other relevant equitable
considerations. Benefits received by the Company shall be deemed to be equal
to the total net proceeds from the offering (before deducting expenses)
received by it, and benefits received by the Underwriters shall be deemed to be
equal to the total underwriting discounts and commissions, in each case as set
forth on the cover page of the Final Prospectus. Relative fault shall be
determined by reference to, among other things, whether any untrue or any
alleged untrue statement of a material fact or the omission or alleged omission
to state a material fact relates to information provided by the Company on the
one hand or the Underwriters on the other, the intent of the parties and their
relative knowledge, access to information and opportunity to correct or prevent
such untrue statement or omission. The Company and the Underwriters agree that
it would not be just and equitable if contribution were determined by pro rata
allocation or any other method of allocation which does not take account of the
equitable considerations referred to above. Notwithstanding the provisions of
this paragraph (d), no person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. For
purposes of this Section 7, each person who controls an Underwriter within the
meaning of either the Act or the Exchange Act and each director, officer,
employee and agent of an Underwriter shall have the same rights to contribution
as such Underwriter, and each person who controls the Company within the
meaning of either the Act or the Exchange Act, each officer of the Company who
shall have signed the Registration Statement and each director of the Company
shall have the same rights to contribution as the Company, subject in each case
to the applicable terms and conditions of this paragraph (d).
8. Default by an Underwriter. If any one or more
Underwriters shall fail to purchase and pay for any of the Securities agreed to
be purchased by such Underwriter or Underwriters hereunder and such failure to
purchase shall constitute a default in the performance of its or their
obligations under this Agreement, the remaining Underwriters shall be obligated
severally to take up and pay for within 24 hours (in the respective proportions
which the amount of Securities set forth opposite their names in Schedule II
hereto bears to the aggregate amount of Securities set forth opposite the names
of all the remaining Underwriters) the Securities which the defaulting
Underwriter or Underwriters agreed but failed to purchase; provided, however,
that in the event that the aggregate amount of Securities which the defaulting
Underwriter or Underwriters agreed but failed to purchase shall exceed 10% of
the aggregate amount of Securities set forth in Schedule II hereto, the
remaining Underwriters shall have the right to purchase within 24 hours all,
but shall not be under any obligation to purchase any, of the Securities, and
if such nondefaulting Underwriters do
<PAGE> 13
13
not purchase all the Securities, this Agreement will terminate without
liability to any nondefaulting Underwriter or the Company. In the event of a
default by any Underwriter as set forth in this Section 8, the Closing Date
shall be postponed for such period, not exceeding five Business Days, as the
Representatives shall determine in order that the required changes in the
Registration Statement and the Final Prospectus or in any other documents or
arrangements may be effected. Nothing contained in this Agreement shall
relieve any defaulting Underwriter of its liability, if any, to the Company and
any nondefaulting Underwriter for damages occasioned by its default hereunder.
9. Termination. This Agreement shall be subject to
termination in the absolute discretion of the Representatives, by notice given
to the Company prior to delivery of and payment for the Securities, if at any
time prior to such time (i) trading in the Company's Common Stock shall have
been suspended by the Commission or the New York Stock Exchange or trading in
securities generally on the New York Stock Exchange shall have been suspended
or limited or minimum prices shall have been established on such Exchange, (ii)
a banking moratorium shall have been declared either by Federal or New York
State authorities or (iii) there shall have occurred any outbreak or escalation
of hostilities, declaration by the United States of a national emergency or war
or other calamity or crisis the effect of which on financial markets is such as
to make it, in the sole judgment of the Representatives, impractical or
inadvisable to proceed with the offering or delivery of the Securities as
contemplated by the Final Prospectus (exclusive of any supplement thereto).
10. Representations and Indemnities to Survive. The
respective agreements, representations, warranties, indemnities and other
statements of the Company or its officers and of the Underwriters set forth in
or made pursuant to this Agreement will remain in full force and effect,
regardless of any investigation made by or on behalf of any Underwriter or the
Company or any of the officers, directors or controlling persons referred to in
Section 7 hereof, and will survive delivery of and payment for the Securities.
The provisions of Sections 6 and 7 hereof shall survive the termination or
cancelation of this Agreement.
11. Notices. All communications hereunder will be in writing
and effective only on receipt, and, if sent to the Representatives, will be
mailed or delivered to ____________________; or, if sent to the Company, will
be mailed or delivered to 200 Concord Plaza, Suite 600, San Antonio, Texas
78216, attention of the General Counsel or faxed to (210) 822-2299 and
confirmed to it at (210) 822-2828, attention of the Legal Department.
12. Successors. This Agreement will inure to the benefit of
and be binding upon the parties hereto and their respective successors and the
officers and directors and controlling persons referred to in Section 7 hereof,
and no other person will have any right or obligation hereunder. The term
"successors" shall not include any purchaser of the Securities merely because
of such purchase.
13. Applicable Law. This Agreement will be governed by and
construed in accordance with the laws of the State of New York.
<PAGE> 14
14
14. Counterparts. This Agreement may be signed in one or
more counterparts, each of which shall constitute an original and all of which
together shall constitute one and the same agreement.
16. Headings. The section headings used herein are for
convenience only and shall not affect the construction hereof.
17. Definitions. The terms which follow, when used in this
Agreement, shall have the meanings indicated.
"Act" shall mean the Securities Act of 1933, as amended.
"Basic Prospectus" shall mean the prospectus referred to in
paragraph 1(a) above contained in the Registration Statement at the
Effective Date including, any Preliminary Final Prospectus.
"Business Day" shall mean any day other than a Saturday, a
Sunday or a legal holiday or a day on which banking institutions or
trust companies are authorized or obligated by law to close in New
York City or San Antonio, Texas.
"Effective Date" shall mean each date and time that the
Registration Statement, any post-effective amendment or amendments
thereto and any Rule 462(b) Registration Statement became or become
effective.
"Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended.
"Execution Time" shall mean the date and time that this
Agreement is executed and delivered by the parties hereto.
"Final Prospectus" shall mean the form of final prospectus
relating to the Securities, including the Basic Prospectus, included
in the Registration Statement at the Effective Date.
"Preliminary Final Prospectus" shall mean any preliminary
prospectus supplement to the Basic Prospectus which describes the
Securities and the offering thereof and is used prior to filing of the
Final Prospectus.
"Preliminary Prospectus" shall mean any preliminary prospectus
referred to in paragraph 1(a) above and any preliminary prospectus
included in the Registration Statement at the Effective Date that
omits Rule 430A Information.
"Registration Statement" shall mean the registration statement
referred to in paragraph 1(a) above, including exhibits and financial
statements, as amended at the Execution Time (or, if not effective at
the Execution Time, in the form in which it shall become effective)
and, in the event any post-effective amendment thereto or any Rule
462(b) Registration Statement becomes effective prior to the Closing
Date (as hereinafter defined), shall also mean such registration
statement as so amended or such Rule 462(b) Registration Statement, as
the case may be. Such term shall include any Rule 430A Information
deemed to be included therein at the Effective Date as provided by
Rule 430A.
"Rule 424", "Rule 430A" and "Rule 462" refer to such rules
under the Act.
<PAGE> 15
15
"Rule 430A Information" shall mean information with respect to
the Securities and the offering thereof permitted to be omitted from
the Registration Statement when it becomes effective pursuant to Rule
430A.
"Rule 462(b) Registration Statement" shall mean a registration
statement and any amendments thereto filed pursuant to Rule 462(b)
relating to the offering covered by the initial registration
statement.
"Trust Indenture Act" shall mean the Trust Indenture Act of
1934, as amended.
<PAGE> 16
16
If the foregoing is in accordance with your understanding of
our agreement, please sign and return to us the enclosed duplicate hereof,
whereupon this letter and your acceptance shall represent a binding agreement
among the Company and the several Underwriters.
Very truly yours,
Clear Channel Communications, Inc.
By:
-----------------------------------
[Title]
The foregoing Agreement is
hereby confirmed and accepted
as of the date specified in
Schedule I hereto.
[names of Representatives]
By:
By:
-------------------------------
Vice President
For themselves and the other
several Underwriters, if any,
named in Schedule II to the
foregoing Agreement.
[or
[name of Underwriters]
By:
------------------------------
Vice President
For itself and the other
several Underwriters, if any,
named in Schedule II to the
foregoing Agreement.]
<PAGE> 17
17
SCHEDULE I
Underwriting Agreement dated
Registration Statement No.
Representative(s):
Title, Purchase Price and Description of Securities:
Title:
Principal amount:
Purchase price (include accrued
interest or amortization, if
any):
Sinking fund provisions:
Redemption provisions:
Other provisions:
Closing Date, Time and Location:
Type of Offering:
Date referred to in Section 4(f) after which the Company may offer or sell
debt securities issued or guaranteed by the
Company without the consent of the Representative(s):
Modification of items to be covered by the letter from
_________________ delivered pursuant to
Section 5(e) at the Execution Time:
<PAGE> 18
20
SCHEDULE II
<TABLE>
<CAPTION>
Principal Amount
of Securities to
Underwriters be Purchased
- ------------ ----------------
<S> <C>
[names of Underwriters].................... $
---------------
Total .................... $
===============
</TABLE>
<PAGE> 1
EXHIBIT 2.6
EXECUTION COPY
ASSET PURCHASE AGREEMENT
BY AND AMONG
PAXSON COMMUNICATIONS CORPORATION,
CLEAR CHANNEL
METROPLEX, INC.,
CLEAR CHANNEL METROPLEX LICENSES, INC.
AND
CLEAR CHANNEL
COMMUNICATIONS, INC.
DATED AS OF AUGUST 25, 1997
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
SECTION 1 CERTAIN DEFINITIONS..................................................................................2
1.1 Terms Defined in Appendix 1..............................................................2
1.2 Rule of Construction.....................................................................2
SECTION 2 PURCHASE AND SALE OF ASSETS; ASSET VALUE.............................................................2
2.1 Purchase and Sale........................................................................2
2.2 Excluded Assets..........................................................................4
2.3 Group II/III Assets, Group IV Assets and
Group V Assets. ....................................................................4
2.4 Purchase Price; Allocation...............................................................4
2.5 Prorations and Adjustments...............................................................4
2.6 Payment of Purchase Price and Prorations and
Adjustments..........................................................................7
2.7 Assumption of Liabilities and Obligations................................................8
SECTION 3 REPRESENTATIONS AND WARRANTIES OF SELLER.............................................................9
3.1 Organization and Authority of Seller.....................................................9
3.2 Authorization and Binding Obligation.....................................................9
3.3 Absence of Conflicting Agreements; Consents..............................................9
3.4 Governmental Licenses...................................................................10
3.5 Real Property...........................................................................11
3.6 Tangible Personal Property..............................................................12
3.7 Assumed Contracts.......................................................................12
3.8 Intangibles.............................................................................12
3.9 Financial Statements....................................................................13
3.10 Taxes and Tax Returns...................................................................13
3.11 Insurance...............................................................................13
3.12 Personnel...............................................................................13
3.13 Claims and Legal Actions................................................................13
3.14 Compliance with Laws....................................................................14
3.15 Conduct of Business in Ordinary Course..................................................14
3.16 Environmental Matters...................................................................14
3.17 Brokers.................................................................................16
3.18 Transactions With Affiliates............................................................16
3.19 Assets..................................................................................16
3.20 Employee Benefits.......................................................................16
3.21 Foreign Person..........................................................................17
3.22 Like-kind Exchange......................................................................17
3.23 Disclosure..............................................................................17
SECTION 4 REPRESENTATIONS AND WARRANTIES OF BUYER.............................................................17
4.1 Organization, Standing and Authority....................................................17
4.2 Authorization and Binding Obligation....................................................17
4.3 Absence of Conflicting Agreements and Required
Consents............................................................................18
4.4 Buyer Qualifications....................................................................18
4.5 Brokers.................................................................................18
</TABLE>
<PAGE> 3
ii
<TABLE>
<S> <C> <C>
4.6 Availability of Funds...................................................................19
4.7 Disclosure..............................................................................19
SECTION 5 CONDUCT OF THE BUSINESSES PRIOR TO
EFFECTIVE TIME..............................................................................19
5.1 Generally...............................................................................19
5.2 Dispositions............................................................................21
5.3 Liens...................................................................................21
5.4 Access to Information...................................................................21
5.5 Financial Information...................................................................22
5.6 Notice of Proceedings...................................................................22
5.7 Representations and Warranties..........................................................22
SECTION 6 SPECIAL COVENANTS AND AGREEMENTS....................................................................23
6.1 FCC Consent.............................................................................23
6.2 HSR Act Filing..........................................................................23
6.3 Confidentiality.........................................................................24
6.4 Cooperation.............................................................................25
6.5 Access to Books and Records.............................................................26
6.6 Employee Matters........................................................................26
6.7 Cure....................................................................................27
6.8 Environmental Reports...................................................................27
6.9 Fees of CEA.............................................................................28
6.10 Unwind Transaction......................................................................28
6.11 Updated Information.....................................................................29
6.12 Risk of Loss............................................................................30
6.13 Miscellaneous...........................................................................31
SECTION 7 CONDITIONS TO OBLIGATIONS OF BUYER AND SELLER........................................................32
7.1 Conditions to Obligations of Buyer at the
Closing.............................................................................32
7.2 Conditions to Obligations of Seller at the
Closing.............................................................................33
SECTION 8 CLOSING AND CLOSING DELIVERIES......................................................................34
8.1 Closing.................................................................................34
8.2 Deliveries by Seller....................................................................35
8.3 Deliveries by Buyer.....................................................................37
SECTION 9 TERMINATION.........................................................................................38
9.1 Termination of Agreement................................................................38
9.2 Procedure and Effect of Termination.....................................................39
9.3 Attorneys' Fees.........................................................................41
9.4 Specific Performance....................................................................41
SECTION 10 SURVIVAL OF REPRESENTATIONS AND WARRANTIES;
INDEMNIFICATION; CERTAIN REMEDIES.....................................................................41
10.1 Survival...............................................................................41
10.2 Indemnification by Seller..............................................................42
10.3 Indemnification by Buyer and Guarantor.................................................45
</TABLE>
<PAGE> 4
iii
<TABLE>
<S> <C> <C>
10.4 Procedure for Indemnification..........................................................47
SECTION 11 MISCELLANEOUS......................................................................................49
11.1 Fees and Expenses......................................................................49
11.2 Notices................................................................................49
11.3 Benefit and Binding Effect.............................................................50
11.4 Further Assurances.....................................................................51
11.5 GOVERNING LAW..........................................................................51
11.6 Entire Agreement.......................................................................51
11.7 Waiver of Compliance; Consents.........................................................52
11.8 Counterparts...........................................................................52
11.9 Severability...........................................................................52
11.10 Cooperation With Respect to Like-Kind
Exchange...........................................................................52
11.11 Guaranty...............................................................................53
</TABLE>
<PAGE> 5
iv
Appendices
Appendix 1 Definitions
Exhibits
Exhibit 2.3 Group II - V Asset Purchase Agreement
Exhibit 8.2(a) Assignment and Assumption Agreement
Schedules
Schedule 1.1(f) Excluded Contracts
Schedule 1.1(j) Excluded Assets
Schedule 3.1 Qualifications
Schedule 3.3 Absence of Conflicting Agreements; Consents
Schedule 3.4 FCC Licenses
Schedule 3.5 Real Property
Schedule 3.6 Tangible Personal Property
Schedule 3.7 Contracts
Schedule 3.8 Intangibles
Schedule 3.9 Financial Statements
Schedule 3.10 Tax and Tax Returns
Schedule 3.11 Insurance
Schedule 3.12 Personnel
Schedule 3.13 Claims and Legal Actions
Schedule 3.15 Conduct of Business in Ordinary Course
Schedule 3.16 Environmental
Schedule 3.18 Transactions with Affiliates
Schedule 3.20 Employee Benefits
Schedule 4.4 Buyer Qualifications
Schedule 5.1 Certain Changes
Schedule 5.2 Certain Dispositions
<PAGE> 6
ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement is dated as of August 25, 1997, by and
among Paxson Communications Corporation, a Delaware corporation ("PCC" or
"Seller"), Clear Channel Metroplex, Inc., a Nevada corporation ("Metroplex"),
Clear Channel Metroplex Licenses, Inc., a Nevada corporation ("CCL"; Metroplex
and CCL being referred to herein, collectively, as "Buyer"), and Clear Channel
Communications, Inc., a Texas corporation ("Guarantor" or "Clear Channel").
R E C I T A L S:
A. PCC owns certain assets used and useable in the following
businesses (collectively, the "PCC Billboard and Network Businesses"):
i. a commercial billboard outdoor advertising business in the
Orlando, Florida market (the "Orlando Billboard Business" or, the "Billboard
Business");
ii. the Alabama Radio Network (the "Alabama Radio Network");
iii. the Tennessee Radio Network (the "Tennessee Radio Network");
iv. the University of Miami Sports radio network (the "University
of Miami Sports Radio Network");
v. the Florida Radio Network (the "Florida Radio Network");
vi. the University of Florida Sports radio network (the
"University of Florida Sports Radio Network"); and
vii. the Penn State Sports radio network (the "Penn State Sports
Radio Network").
Each of the Billboard Business, the Alabama Radio Network, the
Tennessee Radio Network, the University of Miami Sports Radio Network, the
Florida Radio Network, the University of Florida Sports Radio Network and the
Penn State Sports Radio Network are herein referred to, individually, as a
"Business" and, collectively, as the "Businesses."
B. Seller desires to sell, and Buyer desires to purchase,
substantially all of the Assets of the Businesses, on the terms and conditions
hereinafter set forth.
<PAGE> 7
2
C. If so elected by Seller, subject to the terms and conditions of
this Agreement, Seller may enter into an exchange agreement with an
Intermediary providing that the sale and purchase of some or all of the Assets
described herein be effected in a transaction that will qualify, to the extent
permissible, as a "like-kind exchange" under Section 1031 of the Code.
A G R E E M E N T S:
In consideration of the above recitals and of the mutual agreements
and covenants contained in this Agreement, the parties to this Agreement,
intending to be bound legally, agree as follows:
SECTION 1 CERTAIN DEFINITIONS
1.1 Terms Defined in Appendix 1. The terms defined in Appendix 1
hereto, as used in this Agreement, have the meanings set forth in Appendix 1.
Section references in the definitions in the Appendix shall be deemed to refer
to this Agreement and the Appendix shall be deemed to be part of this
Agreement. Capitalized terms used, but not defined, herein or in Appendix 1
shall have the meanings ascribed to such terms in the Group II-V Asset Purchase
Agreement.
1.2 Rule of Construction. Except as specifically otherwise provided in
this Agreement in a particular instance, a reference to a Section, Schedule or
Exhibit is a reference to a Section of this Agreement or a Schedule or Exhibit
hereto, and the terms "hereof," "herein," and other like terms refer to this
Agreement as a whole, including the Schedules and Exhibits to this Agreement,
and not solely to any particular part of this Agreement. The Schedules and
Exhibits shall be deemed to be a part of this Agreement. The descriptive
headings in this Agreement are inserted for convenience of reference only and
are not intended to be part of or to affect the meaning or interpretation of
this Agreement.
SECTION 2 PURCHASE AND SALE OF ASSETS; ASSET VALUE
2.1 Purchase and Sale.
(a) Subject to the terms and conditions set forth in this
Agreement, Seller hereby agrees to transfer, convey, assign and deliver to
Buyer, and Buyer agrees to acquire, all of the following (collectively, the
"Assets"): all the tangible and intangible assets used or useful in connection
with the conduct
<PAGE> 8
3
of the business or operations of the Businesses, together with any additions
thereto between the date of this Agreement and the Closing Date in accordance
with the provisions of this Agreement, but excluding assets disposed of between
the date of this Agreement and the Closing Date in accordance with the terms
and provisions of this Agreement and excluding the Excluded Assets, free and
clear of any Liens, except for Permitted Liens, including
(i) the Tangible Personal Property;
(ii) the Real Property;
(iii) the Licenses;
(iv) the Assumed Contracts;
(v) the Intangibles;
(vi) all of Seller's proprietary information, technical
information and data, maps, computer discs and tapes, FCC logs, plans,
diagrams, blueprints and schematics, including filings with the FCC, relating
to the business and operations of the Businesses;
(vii) all books and records of Seller relating solely to
the business or operations of the Businesses, including executed copies of the
Assumed Contracts, other than account books of original entry and such files
and records that are maintained at Seller's corporate offices for tax and
accounting purposes;
(viii) all deposits and prepaid expenses of Seller with
respect to items in respect of the Businesses that are prorated in favor of
Seller pursuant to Section 2.5;
(ix) equipment warranties related to the Assets to the
extent transferable by Seller; and
(x) the Accounts Receivable due to Seller in respect of
the Businesses.
(b) It is understood and agreed that Metroplex shall acquire the
Non-License Assets included in the Assets and CCL shall acquire the License
Assets included in the Assets. Notwithstanding the foregoing, however, it is
understood and agreed that each of Metroplex and CCL shall be jointly and
severally liable to perform the obligations of Buyer provided for in this
Agreement and in the documents contemplated hereby.
<PAGE> 9
4
2.2 Excluded Assets. Notwithstanding anything in this Agreement to the
contrary, the Assets shall not include the Excluded Assets. Notwithstanding
anything to the contrary set forth in this Agreement, no representations,
warranties or covenants or agreements of any nature whatsoever are made by
Seller to Buyer with respect to the Excluded Assets.
2.3 Group II/III Assets, Group IV Assets and Group V Assets.
Simultaneously with the execution and delivery of this Agreement, PCC, Buyer
and L. Paxson, Inc., a Delaware corporation ("LPI"), are entering into an Asset
Purchase Agreement (the "Group II-V Asset Purchase Agreement"), in the form
attached hereto as Exhibit 2.3, and dated as of the date hereof, pursuant to
which PCC (and, in certain cases, LPI) will sell to Buyer, and Buyer will
purchase from Seller (and, in certain cases, LPI), the Group II/III Assets, the
Group IV Assets and the Group V Assets, on the terms and subject to the
conditions set forth therein.
2.4 Purchase Price; Allocation.
(a) Purchase Price. The purchase price for the Assets shall be
Twenty-Five Million Six Hundred Eighty-Eight Thousand Dollars ($25,688,000)
(the "Estimated Purchase Price"), which sum shall be subject to upward or
downward adjustment, as the case may be, pursuant to Section 2.5(a) below (the
Estimated Purchase Price, as so adjusted, the "Purchase Price").
(b) Appraisal and Allocation. Seller shall retain, at Seller's
expense, Bond & Pecaro, or another recognized independent appraisal firm
selected by Seller and reasonably acceptable to Buyer, to appraise the
Businesses and the Assets. Seller shall provide Buyer with copies of the
appraisals for the Assets within 90 days after the Closing Date. Seller and
Buyer agree to allocate the Purchase Price among the Businesses and the Assets
for all purposes, including financial accounting and tax purposes, including
Section 1060 of the Code and Temporary Treasury Regulations Section 1.1060-IT,
in accordance with such appraisals. Buyer and Seller agree to file with their
respective federal income tax returns initial asset acquisition statements on
Internal Revenue Service Form 8594 required by Temporary Treasury Regulation
Section 1.1060-IT, all in accordance with, and accurately reflecting, such
appraisals and allocations.
2.5 Prorations and Adjustments.
(a) Prorations and Adjustments. The Purchase Price shall be
determined by increasing or decreasing the Estimated Purchase Price as required
to effectuate the proration of revenues and expenses as provided for herein.
All revenues and all expenses arising from the operation of any of the
<PAGE> 10
5
Businesses, including billboard rental, business and license fees, utility
charges, real and personal property taxes and assessments levied against the
Assets, property and equipment rentals, applicable copyright or other fees,
including program license payments, sales and service charges, taxes (except
for taxes arising from the transfer of the Assets under this Agreement),
employee compensation, including wages, salaries, accrued vacation, sick leave,
personal days, and commissions for each employee of Seller who becomes an
employee of Buyer, license fees and similar prepaid and deferred items, shall
be prorated between Buyer and Seller in accordance with GAAP and to effect the
principle that Seller shall receive all revenues (other than Accounts
Receivable) and shall be responsible for all expenses, costs and liabilities
(including, without limitation, performance bonuses payable to the Assumed
Employees allocable to the period prior to the Effective Time based on the pro
rata accrual of such bonuses over the calendar year on a straight line basis)
allocable to the operations of the Businesses for the period prior to the
Effective Time, and Buyer shall receive all revenues and shall be responsible
for all expenses, costs and liabilities (including, without limitation,
performance bonuses payable to the Assumed Employees allocable to the period
after the Effective Time based on the pro rata accrual of such bonuses over the
calendar year on a straight line basis) allocable to the operations of the
Businesses for the period after the Effective Time in accordance with GAAP,
subject to the following:
(1) There shall be no adjustment for, and Seller shall
remain solely liable with respect to, any Excluded Contracts and any other
obligation or liability not being assumed by Buyer in accordance with Section
2.7.
(2) No adjustment or proration shall be made in favor of
Seller for the amount, if any, by which the value of the goods or services to
be received by all the Stations (as defined in the Group II-V Asset Purchase
Agreement) and the Businesses in the aggregate under their trade or barter
agreements as of the Effective Time exceeds the value of any advertising time
remaining to be run by such Stations and the Businesses as of the Effective
Time. For purposes of this Agreement, including, without limitation, this
Section 2.5 and Section 5.1, the liability for performance obligations relating
to advertising time under any trade or barter agreements shall be valued
according to the applicable prevailing rates as of the Effective Time, and
goods, services or other items being received shall be valued in accordance
with GAAP as of the Effective Time.
(3) An adjustment or proration shall be made in favor of
Buyer to the extent, if any, that (a) the value of the goods or services to be
received by all the Stations and the
<PAGE> 11
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Businesses under their trade or barter agreements as of the Effective Time in
the aggregate is more than $150,000 less than the value of any advertising time
remaining to be run by such Stations and the Businesses thereunder as of the
Effective Time (a "Negative Balance") and (b) Buyer has not expressly consented
to the trade or barter agreements giving rise to such Negative Balance (and the
allocation of such Negative Balance among the Businesses, Group II/III
Stations, Group IV Stations and Group V Stations shall be made by Seller in its
sole discretion).
(b) Manner of Determining Prorations and Adjustments. The
Purchase Price, taking into account the adjustments and prorations pursuant to
Section 2.5(a), will be determined in accordance with the following procedures:
(1) Seller shall prepare and deliver to Buyer not later
than five (5) Business Days before the Closing Date a preliminary settlement
statement which shall set forth Seller's good faith estimate of the adjustments
or prorations under Section 2.5(a) (a "Preliminary Settlement Statement"). The
Preliminary Settlement Statement (A) shall contain all information reasonably
necessary to determine the adjustments or prorations under Section 2.5(a),
including appropriate supporting documentation and such other information as
may be reasonably requested by Buyer, to the extent such adjustments or
prorations can be determined or estimated as of the date of the Preliminary
Settlement Statement and (B) shall be certified by an officer (but without
personal liability to such officer) on behalf of Seller to be true and complete
to Seller's knowledge. The "Preliminary Purchase Price" shall be determined by
adjusting the Estimated Purchase Price for the adjustments and prorations
contained in the Preliminary Settlement Statement.
(2) Not later than ninety days after the Closing Date,
Buyer shall deliver to Seller a statement setting forth Buyer's determination
of any changes to the adjustments and prorations made at the Closing. Buyer's
statement (A) shall contain all information reasonably necessary to determine
the adjustments and prorations to the Purchase Price under Section 2.5(a),
including appropriate supporting documentation, and such other information as
may be reasonably requested by Seller, and (B) shall be certified by an officer
(but without personal liability to such officer) on behalf of Buyer to be true
and complete to Buyer's knowledge. Seller (and its authorized representatives)
shall have the right to visit the Businesses during normal business hours to
verify and review such documentation upon providing reasonable notice to Buyer
(such access not to unreasonably interfere with the business or operations of
the Businesses). If Seller disputes the adjustments and prorations determined
by Buyer, it shall deliver
<PAGE> 12
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to Buyer, within fifteen (15) days after its receipt of Buyer's statement, a
statement setting forth its determination of such adjustments and prorations.
If Seller notifies Buyer of its acceptance of Buyer's statement, or if Seller
fails to deliver its statement within the fifteen-day period specified in the
preceding sentence, Buyer's determination of such adjustments and prorations
shall be conclusive and binding on the parties as of the last day of such
fifteen-day period.
(3) Buyer and Seller shall use good faith efforts to
resolve any dispute involving the determination of the adjustments and
prorations in connection with the Closing. If the parties are unable to resolve
any dispute within fifteen days following the delivery to Buyer of the
statement described in the penultimate sentence of Section 2.5(b)(2), Buyer and
Seller shall jointly designate an independent certified public accountant, who
shall be knowledgeable and experienced in the operation of businesses similar
to the Businesses, to resolve such dispute. If the parties are unable to agree
on the designation of an independent certified public accountant, the selection
of the accountant to resolve the dispute shall be submitted to arbitration in
accordance with the commercial arbitration rules of the American Arbitration
Association. The accountant's resolution of the dispute shall be final and
binding on the parties, and a judgment may be entered thereon in any court of
competent jurisdiction. Any fees of the accountant, and, if necessary, for
arbitration to select such accountant, shall be split equally between the
parties.
2.6 Payment of Purchase Price and Prorations and
Adjustments.
(a) At the Closing, Buyer shall pay or cause to be paid to Seller
(or to such party or parties designated by Seller in writing) the Preliminary
Purchase Price for the Assets by federal wire transfer of same-day funds in
accordance with wire instructions delivered to Buyer by Seller at least three
(3) Business Days prior to such Closing.
(b) Payments to Reflect Prorations and Adjustments.
(1) If the Purchase Price for the Assets as finally
determined pursuant to Section 2.5(b)(2) exceeds the Preliminary Purchase
Price, Buyer shall pay to Seller (or to such party or parties designated by
Seller in writing), by federal wire transfer of same-day funds within five
Business Days after the date on which the Purchase Price is determined pursuant
to Section 2.5(b)(2), the difference between such Purchase Price and the
Preliminary Purchase Price.
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(2) If the Purchase Price, as finally determined pursuant
to Section 2.5(b)(2), is less than the Preliminary Purchase Price, Seller shall
pay to Buyer, by federal wire transfer of same-day funds within five Business
Days after the date on which such Purchase Price is determined pursuant to
Section 2.5(b)(2), the difference between the Preliminary Purchase Price and
such Purchase Price.
(3) If any dispute arises over the amount to be refunded
or paid pursuant to this Section 2.6(b), such refund or payment shall
nevertheless be made to the extent any amount is not in dispute.
(c) It is understood and agreed that Buyer shall not be permitted
to offset any amounts in respect of the Assets against any amounts in respect
of the Group II/III Assets, the Group IV Assets or the Group V Assets that are
the subject of the Group II-V Asset Purchase Agreement. Notwithstanding the
foregoing, nothing contained in this Section 2.6(c) shall in any manner impair
any right, remedy or recourse Buyer may have against PCC for fraud in
connection with this Agreement.
2.7 Assumption of Liabilities and Obligations.
(a) Buyer shall assume and undertake to pay, discharge and
perform the Assumed Liabilities as of the Closing Date.
(b) Buyer shall not be required to assume any of the following:
(i) any obligations or liabilities under any Excluded Contract, (ii) any
obligations or liabilities under the Assumed Contracts relating to the period
prior to the Effective Time, except insofar as a proration or adjustment
therefor is made in favor of Buyer under Section 2.5(a), (iii) any liability or
obligation arising out of any litigation, proceeding or claim by any person or
entity relating to the business or operations of any of the Businesses or any
of the Assets with respect to any events or circumstances that occur or exist
prior to the Effective Time relating to such Businesses or the Assets, (iv) any
credit agreements, note purchase agreements, indentures or other financing
arrangements (other than any Assumed Contracts) of Seller and (v) any other
obligation or liability of Seller that is not an Assumed Liability (including,
without limitation, any increase in the Assumed Liabilities in violation of
Section 2.7(c)). Buyer shall perform all obligations arising out of the Assets
(including the Assumed Contracts and the Licenses) relating to the period on or
after the Effective Time. Seller shall retain all liabilities of Seller not
assumed by Buyer.
(c) Notwithstanding anything in this Agreement to the contrary,
the parties acknowledge that after the Effective Time,
<PAGE> 14
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Seller shall not, by any voluntary act or omission, increase the Assumed
Liabilities other than as permitted in accordance with the terms and provisions
of this Agreement, without the prior written consent of Buyer.
SECTION 3 REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants to Buyer as follows as of the date
hereof and as of the Effective Time:
3.1 Organization and Authority of Seller. Seller is a corporation duly
organized, validly existing and in good standing under the laws of the State of
its incorporation and, in respect of the operations of the Businesses, is
qualified to conduct business in the States set forth in Schedule 3.1. Except
as set forth in Schedule 3.1, Seller has the requisite corporate power and
authority to own and operate the Assets owned and operated by it, to carry on
the business of the Businesses now being conducted by it, and to execute,
deliver and perform this Agreement according to its terms.
3.2 Authorization and Binding Obligation. The execution, delivery and
performance of this Agreement and the consummation of the transactions
contemplated hereby by Seller have been duly and validly authorized by all
necessary corporate action on the part of Seller. This Agreement has been duly
executed and delivered by Seller and constitutes its legal, valid and binding
obligation, enforceable against it in accordance with its terms, except as the
enforceability of this Agreement may be affected by bankruptcy, insolvency or
similar laws affecting creditors' rights generally and by judicial discretion
in the enforcement of equitable remedies.
3.3 Absence of Conflicting Agreements; Consents. The execution and
delivery of this Agreement, and the performance of the transactions
contemplated herein, by Seller will not require any consent, approval,
authorization or other action by, or filing with or notification to, any Person
or governmental authority, except as follows: (a) applicable requirements under
the HSR Act; (b) consents to the assignment of the FCC Licenses to Buyer by the
FCC; (c) filings with respect to real estate, sales and other transfer taxes;
(d) consent of third parties to assignment of certain of the Assumed Contracts
as specified in Schedule 3.3; and (e) other immaterial consents, approvals,
authorizations, actions, filings or notifications. Subject to obtaining the
Consents, the execution, delivery and performance by Seller of this Agreement
(with or without the giving of notice, the lapse of time, or both): (a) do not
conflict with any provision of the Certificate of Incorporation and Bylaws of
<PAGE> 15
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Seller; (b) do not conflict with, result in a breach of, or constitute a
default in any material respect under, any applicable law, judgment, order,
ordinance, injunction, decree, rule, regulation or ruling of any court or
governmental authority applicable to Seller; (c) do not result in the breach in
any material respect of any contract or agreement to which Seller is a party or
by which Seller may be bound; and (d) will not create any Lien upon any of the
Assets, except for Permitted Liens.
3.4 Governmental Licenses.
(a) Schedule 3.4 identifies all FCC Licenses used in the
operation of the Businesses (collectively, "FCC Licenses") and the date on
which each expires. Except as described on Schedule 3.4, each FCC License is in
full force and effect, and Seller is the authorized legal holder thereof.
Except as set forth in Schedule 3.4, the conduct of the business and operations
of each earth station facility authorized by an FCC License (an "Earth
Station") is in accordance with the terms and conditions of the FCC Licenses
for such Earth Station and the Communications Act and the rules, regulations
and policies of the FCC in all material respects. Schedule 3.4 also sets forth
a true and complete list of all applications filed with respect to any Earth
Station that are pending at the FCC, true and complete copies of which have
been delivered by Seller to Buyer. All material reports and filings required to
be filed with the FCC by Seller with respect to each Earth Station have been
timely filed in all material respects. All such reports and filings are
accurate and complete in all material respects. Seller has received no notice
or communication, formal or informal, indicating that the FCC is considering
revoking, suspending, canceling, rescinding or terminating any FCC License.
Seller's operation of the Earth Stations complies in all material respects with
the requirements set forth in the "Radio Frequency Protection Guides"
recommended in "America National Standard Safety Levels with Respect to Human
Exposure to Radio Frequency Electromagnetic Fields 300 KHz to 100 GHz" (ANSI
C95.1-1982), issued by the American National Standards Institute.
(b) The FCC Licenses listed on Schedule 3.4 constitute all of the
material licenses and authorizations required under the Communications Act or
the current rules, regulations and policies of the FCC for the business and
operation of each Earth Station as currently operated. Except as set forth in
Schedule 3.13, and except for investigations or other proceedings affecting the
broadcasting industry generally, Seller has no knowledge of any pending or
threatened investigation by or before the FCC, or any order to show cause,
notice of violation, notice of apparent liability, notice of forfeiture or
material complaint by, before or with the FCC with respect to any Earth
Station.
<PAGE> 16
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Seller knows of no fact relating to Seller's ownership or operation of the
Earth Stations that would, under existing law and the existing rules,
regulations, policies and procedures of the FCC, cause the FCC to fail to
approve in a timely fashion any of the applications for the FCC Consents.
3.5 Real Property. Schedule 3.5 contains an accurate description as of
the date of this Agreement of all Real Property. Except as described in
Schedule 3.5, Seller has good and marketable fee simple title to all fee
estates included in the Real Property and good title to Seller's interests in
all other Real Property, in each case free and clear of all Liens, except for
Permitted Liens. Schedule 3.5 lists all leases and subleases pursuant to which
any of the Real Property included in the Assets is leased by Seller. Seller has
a valid leasehold interest in all such Real Property. Subject to obtaining the
consents to assignment set forth on Schedule 3.3, such leases and subleases are
assignable to Buyer. Seller is in compliance with such leases and subleases in
all material respects and is not in breach or default in any material respect
thereunder, and, to the knowledge of Seller, each other party to any such lease
or sublease is not in default thereunder in any material respect. The Real
Property includes sufficient access to the Businesses' facilities to conduct
the operations of the Businesses in the manner in which they are currently
operated in all material respects without the need to obtain other access
rights. Seller has delivered to Buyer a true and complete copy of any and all
title insurance policies, surveys, plans and maps relating to the Real Property
in the custody, possession or control of Seller. None of the Real Property is
subject to any lease, sublease, license or other agreement pursuant to which
Seller grants to any other person any right to the use, occupancy or enjoyment
of the Real Property or any part thereof, except as set forth on Schedule 3.5.
There is no pending or, to the knowledge of Seller, threatened condemnation or
similar proceeding affecting any Real Property. All buildings, billboards and
other improvements included within the Real Property are in working order and
repair. The use of the Real Property as currently used is in compliance with
applicable zoning and land-use laws in all material respects. As of the date
hereof, Seller has received no actual written notice of any increase in
property taxes affecting any item of Real Property to an amount in excess of
110% of the current taxes on such Real Property or of any other imposition
which is not materially consistent with existing impositions, the effect of
which is, if required, reflected on Seller's financial statements; provided
that the foregoing shall not relate to increases resulting from improvements to
the property made by Seller.
<PAGE> 17
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3.6 Tangible Personal Property. Schedule 3.6 lists as of the date
hereof all material items of Tangible Personal Property included in the Assets
owned by Seller. Except as described in Schedule 3.6, Seller owns and has good
title to the Tangible Personal Property listed thereon and none of the Tangible
Personal Property included in the Assets is subject to any Liens, except for
Permitted Liens. The Tangible Personal Property listed on Schedule 3.6 owned by
Seller necessary for the normal operations of the Businesses as presently
conducted is in satisfactory operating condition and adequate repair (given the
age of such property and the use to which such property is put and ordinary
wear and tear excepted).
3.7 Assumed Contracts. Schedules 3.5, 3.7 and 3.12 include a complete
list as of the date of this Agreement of all Assumed Contracts except (a)
contracts with advertisers for production or the sale of advertising time on
any Network for cash that may be canceled by Seller on not more than ninety
days' notice without penalty, (b) trade or barter advertising agreements
entered into in the ordinary course of business, (c) oral employment contracts
terminable at will, (d) miscellaneous service contracts terminable on not more
than thirty (30) days' notice, and (e) other Contracts entered into in the
ordinary course of business, not involving liabilities exceeding Two Thousand
Five Hundred Dollars($2,500) per contract per year and One Hundred Twenty-Five
Thousand Dollars ($125,000) in the aggregate for all such other contracts for
the Stations and the Businesses per year. Seller has delivered or made
available to Buyer true and complete copies of all written Assumed Contracts
and accurate descriptions of all oral Assumed Contracts listed in Schedules
3.5, 3.7 and 3.12. The Assumed Contracts are in full force and effect in all
material respects. Subject to obtaining the consents to assignment set forth on
Schedule 3.3, the Assumed Contracts are assignable to Buyer. Seller is in
compliance with the Assumed Contracts in all material respects and is not in
breach or default in any material respect thereunder, and, to the knowledge of
Seller, each other party to the Assumed Contracts is in compliance therewith in
all material respects and not in default in any material respect thereunder.
3.8 Intangibles. Schedule 3.8 is a complete list as of the date of
this Agreement of all material Intangibles (exclusive of Licenses listed on
Schedule 3.4). Seller has provided or made available to Buyer copies of all
documents establishing or evidencing the Intangibles listed in Schedule 3.8.
Other than with respect to matters generally affecting the industry of the
Businesses and not particular to Seller, as of the date hereof, except as set
forth in Schedule 3.8, Seller has not received any notice or demand alleging
that Seller is infringing upon any trademarks, trade names, service marks,
service names, copyrights
<PAGE> 18
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or similar intellectual property rights owned by any other Person.
3.9 Financial Statements. Seller has furnished Buyer with true and
complete copies of the financial statements with respect to the Businesses
described in Schedule 3.9 (the "Financial Statements"). Except as set forth in
Schedule 3.9, the Financial Statements have been prepared in accordance with
GAAP, and present fairly in all material respects the financial condition of
Seller with respect to the Businesses included in such Financial Statements as
at their respective dates and the results of operations for the periods then
ended.
3.10 Taxes and Tax Returns. Except as set forth in Schedule 3.10 and
except where the failure to file, pay or accrue any Taxes does not result in a
Lien on the Assets or in the imposition of transferee or other liability on
Buyer for the payment of Taxes, (a) all Tax Returns have been filed with the
appropriate governmental agencies in all jurisdictions in which such Tax
Returns are required to be filed, and (b) all Taxes shown on such Tax Returns
have been properly accrued or paid to the extent such Taxes have become due.
3.11 Insurance. Schedule 3.11 is a true and complete list of all
insurance policies of Seller with respect to the Businesses. All policies of
insurance listed in Schedule 3.11 are in full force and effect.
3.12 Personnel. Schedule 3.12 contains a true and complete list as of
the date of this Agreement of all employees of Seller engaged in the business
and operations of the Businesses (collectively, the "Employees"), and a
description of the compensation arrangements affecting them. Except as
described in Schedule 3.12, as of the date hereof, Seller has no written or
oral contracts of employment with any employee of the Businesses, other than
oral employment contracts which are terminable at will. Except as set forth in
Schedule 3.12, Seller is not a party to or subject to any collective bargaining
agreements with respect to the Businesses, and, no labor union or other
collective bargaining unit represents or, to Seller's knowledge, claims to
represent any of the employees of the Businesses. Seller has made available to
Buyer copies of all employee handbooks and employee rules and regulations, if
any.
3.13 Claims and Legal Actions. Except as disclosed in Schedule 3.13
and for any FCC rulemaking proceedings generally affecting the industry of the
Businesses and not particular to Seller, as of the date hereof, there is no
material claim, legal action, counterclaim, suit, arbitration, or other legal,
administrative, or tax proceeding, nor any material order,
<PAGE> 19
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decree, or judgment, in progress or pending, or to the knowledge of Seller
threatened, against Seller, the Assets, or the business or operations of any of
the Businesses.
3.14 Compliance with Laws. Seller is in compliance in all material
respects with all federal, state and local laws, rules, regulations and
ordinances applicable or relating to the ownership and operation of the Assets
and the Businesses, including, without limitation, laws, rules, regulations and
ordinances related to the operations and content of billboards.
3.15 Conduct of Business in Ordinary Course. Except as set forth in
Schedule 3.15, from January 1, 1997 through the date of this Agreement, Seller
has conducted the business and operations of the Businesses in the ordinary
course consistent with past practice in all material respects and has not (a)
made any material increase in compensation payable or to become payable to any
of the employees of the Businesses, except as disclosed in Schedule 3.12, or
any material change in personnel policies, insurance benefits or other
compensation arrangements affecting the employees of the Businesses, (b) made
any sale, assignment, lease or other transfer of any of Seller's properties,
other than obsolete assets no longer usable in the operations of the
Businesses, or other assets sold or disposed of in the normal course of
business with suitable replacements being obtained therefor, (c) incurred
material loss of, or material injury to, any of the Assets as a result of any
fire, explosion, windstorm, earthquake, labor trouble, riot, accident, act of
God or public authority or armed forces or other casualty or waived any rights
of substantial value related to the Assets, (d) made any material change in any
method of accounting or accounting practice, or (e) transferred to any
Affiliate of Seller any right, property or interest which is necessary or
useful in the operations of the Businesses.
3.16 Environmental Matters.
(a) For purposes of this Agreement, the following definitions
shall be applicable:
(i) "Applicable Environmental Law" shall mean any and all
laws, statutes, regulations, and judicial interpretations thereof of the United
States, of any state in which the Assets, or any portion thereof, or the
business of the Businesses, are located, and of any other government or
quasi-government authority having jurisdiction, that relate to the prevention,
abatement and elimination of pollution and/or protection of the environment,
including, but not limited to, the federal Comprehensive Environmental
Response, Compensation, and Liability Act, the Resource Conservation and
Recovery Act, the Federal
<PAGE> 20
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Water Pollution Control Act, the Clean Air Act, the Safe Drinking Water Act,
the Toxic Substances Control Act, the Hazardous Materials Transportation Act,
the Refuse Act and the Emergency Planning and Community Right to Know Act (each
as amended on or before the Effective Time), together with all state statutes
serving any similar or related purposes, as in effect on or before the
Effective Time.
(ii) "Hazardous Substance" means any substance designated
pursuant to Section 307(a) and 311(b)(2)(A) of the federal Clean Water Act, 33
USCA ss.ss. 1317(a), 1321(b)(2)(A), Section 112 of the federal Clean Air Act,
42 USCA ss. 3412, Section 3001 of the federal Resource Conversation and
Recovery Act, 42 USCA ss. 6921, Section 7 of the federal Toxic Substances
Control Act, 15 USCA ss. 2606, or Section 101(14) and Section 102 of the
Comprehensive Environmental Response, Compensation, and Liability Act, 42 USCA
ss.ss. 9601(14), 9602, as amended by the Superfund Amendments and
Reorganization Act of 1986.
(b) Seller has supplied to Buyer a true and complete copy of the
report for each environmental inspection or audit that Seller has caused to be
conducted with respect to any of the Real Property as listed in Schedule 3.16.
(c) (i) Except as set forth in Schedule 3.16, the improvements
owned or used by Seller on the owned Real Property and on the leased Real
Property do not contain any asbestos that would constitute a violation of or
noncompliance with any Applicable Environmental Law in any material respect.
The equipment owned or used by Seller on the owned Real Property or any leased
Real Property does not contain any polychlorinated biphenyls that would
constitute a violation of or noncompliance with any Applicable Environmental
Law in any material respect.
(ii) No contamination caused by Seller exists on or under
the owned Real Property or on or under any leased Real Property, or affecting
any natural resources therein that would constitute a violation of or
noncompliance with any Applicable Environmental Law in any material respect.
(iii) No contamination has been caused by Seller on or
under the owned Real Property or leased Real Property, or affecting any natural
resources therein that would constitute a violation of or noncompliance with
any Applicable Environmental Law in any material respect.
(iv) The Assets and the Businesses are in compliance with
all Applicable Environmental Laws in all material respects.
<PAGE> 21
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(v) Seller has no material liability relating to its
ownership and operation of any of the Businesses as a result of noncompliance
with any Applicable Environmental Law. No charge, complaint, action, suit,
proceeding, hearing, investigation, claim, demand, or notice has been filed or,
to Seller's knowledge, commenced against Seller in connection with its
ownership or operation of any of the Businesses alleging any failure to comply
in any material respect with any Applicable Environmental Law.
3.17 Brokers. Except for the fees payable to Communications Equity
Associates ("CEA"), which fees shall be paid by Buyer and Seller as set forth
in Section 6.11 of the Group II-V Asset Purchase Agreement, neither Seller nor
any Person acting on its behalf has incurred any liability for any finders' or
brokers' fees or commissions in connection with the transactions contemplated
by this Agreement.
3.18 Transactions With Affiliates. Except as set forth in Schedule
3.18, Seller is not, and since January 1, 1997, has not been a party, directly
or indirectly, to any contract, lease, arrangement or transaction which is
material to the business or operations of the Businesses, whether for the
purchase, lease or sale of property, for the rendition of services or
otherwise, with any Affiliate of Seller, or any officer, director, employee,
proprietor, partner or shareholder of Seller, and no such Person has any
interest in or right to any of the Assets. The terms and conditions of the
transactions involving Seller and any Affiliate of Seller which are identified
in Schedule 3.18 are described briefly therein.
3.19 Assets. Except for the Excluded Assets, the Assets include all of
the assets or property used in the conduct of the business of the Businesses as
currently operated.
3.20 Employee Benefits. Schedule 3.20 lists all Employee Plans
covering employees of the Businesses and, except as set forth in Schedule 3.20,
copies of such Employee Plans together with any trusts related thereto have
previously been made available to Buyer. All Employee Plans are in compliance
with their terms and with the applicable provisions of ERISA and the Code in
all material respects. No Employee Plan is, or within the past six years has
been, subject to Title IV of ERISA or Section 412 of the Code. Seller has at no
time contributed to, or been obligated to contribute to, any multi-employer
plan (as defined in ERISA Section 3(37)). There exists no action, suit or claim
(other than routine claims for benefits) with respect to any Employee Plan
pending, or to the knowledge of Seller threatened, against any Employee Plan
which is reasonably expected to result in any material liability to Seller.
Except
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as required by ERISA Sections 601 et seq. and Code Section 4980B, Seller does
not sponsor, maintain or contribute to any Employee Plan which provides medical
coverage to retirees or other former employees of Seller. Seller has not
engaged in any transaction described in ERISA Section 4069 within the past five
years. There is no governmental audit or examination of any Employee Plan. All
contributions and premium payments required by law have been made in all
material respects to each Employee Plan. Each Employee Plan that is intended to
be qualified under Section 401(a) of the Code has received a favorable
determination letter that it is so qualified.
3.21 Foreign Person. Seller is not a "foreign person" or a "foreign
corporation" as such terms are defined in Section 1445 of the Code.
3.22 Like-kind Exchange. If Seller elects under Section 11.10 to
effect the transfer of some or all of the Assets to Buyer in a manner
qualifying as part of a like-kind exchange of property by Seller within the
meaning of Section 1031 of the Code, Buyer's tax basis in the Assets shall not
be less than the tax basis Buyer would have had in the Assets had Seller not
made such an election under Section 11.10.
3.23 Disclosure. None of the representations or warranties of Seller
in this Agreement contains or will contain any untrue or misleading statement
of material fact or omits or will omit to state any material fact necessary to
make the statements herein or therein, in light of the circumstances under
which they were made, not misleading.
SECTION 4 REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to Seller as follows as of the date
hereof and as of the Effective Time:
4.1 Organization, Standing and Authority. Buyer is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Nevada and, at the Effective Time, will be duly qualified to conduct business
in each jurisdiction in which such qualification is necessary for Buyer to own
the Assets and operate the Businesses. Buyer has the requisite corporate power
and authority to (a) execute, deliver and perform this Agreement according to
its terms, and (b) own the Assets.
4.2 Authorization and Binding Obligation. The execution, delivery and
performance of this Agreement and the consummation of the transactions
contemplated hereby by Buyer have been duly and validly authorized by all
necessary corporate action on the
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part of Buyer. This Agreement has been duly executed and delivered by Buyer and
constitutes legal, valid and binding obligations of Buyer, enforceable against
Buyer in accordance with their respective terms, except as the enforceability
of this Agreement may be affected by bankruptcy, insolvency or similar laws
affecting creditors' rights generally and by judicial discretion in the
enforcement of equitable remedies.
4.3 Absence of Conflicting Agreements and Required Consents. Except
for the applicable requirements of the HSR Act and subject to the receipt of
the FCC Consent, the execution, delivery and performance by Buyer of this
Agreement (with or without the giving of notice, the lapse of time, or both):
(a) do not require the consent of any third party; (b) do not conflict with the
articles of incorporation or bylaws of Buyer; (c) do not conflict in any
material respect with, result in a material breach of, or constitute a material
default under, any applicable law, judgment, order, ordinance, injunction,
decree, rule, regulation, or ruling of any court or governmental authority
applicable to Buyer or any material contract or agreement to which Buyer is a
party or by which Buyer may be bound.
4.4 Buyer Qualifications. To Buyer's knowledge, except as set forth on
Schedule 4.4, Buyer is legally, financially and otherwise qualified to be the
licensee of, acquire, own and operate the Earth Stations under the
Communications Act, and the rules, regulations and policies of the FCC. Buyer
knows of no fact that would, under existing law and the existing rules,
regulations, policies and procedures of the FCC (a) disqualify Buyer as an
assignee of the FCC Licenses or as the owner and operator of any of the Earth
Stations or (b) cause the FCC to fail to approve in a timely fashion any of the
applications for the FCC Consents.
4.5 Brokers. Except for the fees payable to CEA, which fees shall be
paid by Buyer and Seller as set forth in Section 6.11 of the Group II-V Asset
Purchase Agreement, neither Buyer nor any Person acting on its behalf has
incurred any liability for any finders' or brokers' fees or commissions in
connection with the transactions contemplated by this Agreement.
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4.6 Availability of Funds. Buyer will have available sufficient funds
to enable it to consummate the transactions contemplated hereby.
4.7 Disclosure. None of the representations or warranties of Buyer in
this Agreement contains or will contain any untrue or misleading statement of
material fact or omits or will omit to state any material fact necessary to
make the statements herein or therein, in light of the circumstances under
which they were made, not misleading.
SECTION 5 CONDUCT OF THE BUSINESSES PRIOR TO EFFECTIVE TIME
The following covenants of Seller in Sections 5.1 through 5.7 below
shall apply between the date of this Agreement and the Effective Time with
respect to the Businesses and the Assets. Notwithstanding anything to the
contrary contained in this Agreement, Buyer and Seller acknowledge and agree
that nothing in this Agreement shall apply to, or in any way restrict or limit,
any of the businesses or operations of the Seller, other than the Businesses.
5.1 Generally. Seller shall conduct the Businesses in all material
respects in the ordinary course of business (except where such conduct would
conflict with the following covenants or with Seller's other obligations under
this Agreement). With respect to the Businesses, Seller shall maintain and
repair the facilities and equipment, maintain inventory of supplies, parts and
other materials and keep books of account, records and files, in each case in
the ordinary course of business consistent with past practice to the extent
commercially reasonable. Seller shall continue to operate the Businesses in
compliance in all material respects with all applicable laws and the FCC
Licenses, to the extent applicable.
Prior to the Effective Time, except as provided in Schedule 5.1 or as
otherwise permitted by any provision of this Section 5.1, Seller with respect
to the Businesses, will not, without the prior written consent of Buyer, which
consent shall not be unreasonably withheld:
(a) apply to the FCC for any construction permit that
would restrict any of the Earth Station's present operations, or make any
material change in any of the buildings, leasehold improvements or fixtures of
the Businesses that is not in the ordinary course of business;
(b) enter into, renew, amend or modify any contract,
lease, license or other agreement, provided that (1) Seller shall
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be permitted to enter into, renew, amend or modify any contract, lease, license
or other agreement in the ordinary course of business not involving liabilities
exceeding Two Thousand Five Hundred Dollars ($2,500) per contract, lease,
license or agreement per year and One Hundred Twenty-Five Thousand Dollars
($125,000) per year in the aggregate for the Businesses and the Stations (as
defined in the Group II-V Asset Purchase Agreement) for all such contracts,
leases, licenses and other agreements, (2) Seller shall be permitted to enter
into trade or barter agreements, in the ordinary course of business, consistent
with past practice, which do not result in a Negative Balance and as set forth
in Section 5.1(f) below, and (3) nothing contained herein shall be deemed to
prevent Seller from entering into any contract, lease, license or other
agreement not falling within the scope of the foregoing clauses of this Section
5.1(b), and, except as provided in clauses (1), (2) and (3) above and Schedule
5.1, any such contract, lease, license or other agreement entered into outside
the ordinary course of business shall not constitute an Assumed Contract,
unless expressly agreed to by Buyer;
(c) make any assignment for the benefit of creditors or
take any action in contemplation of, or which would constitute the basis for,
the institution of insolvency proceedings of any character, including, without
limitation, bankruptcy, receivership, reorganization, composition or
arrangement with creditors, voluntary or involuntary;
(d) except as required by law or the Assumed Contracts,
(i) hire any employee except in the ordinary course of business, (ii) enter
into, renew, amend or modify any contract of employment, collective bargaining
agreement or other labor contract or (iii) permit any increases in the
compensation of any of the employees of the Businesses, except for employees
without employment contracts, salary increases each January 1 and July 1
consistent with past practices not exceeding 5% per year; provided, however,
that Seller may pay bonuses to any of its employees so long as such bonuses do
not create any liability or obligation upon Buyer.
(e) discount or otherwise reduce any accounts receivable
of the Businesses, or collect any such receivables other than in the ordinary
course of business consistent with past practice; and
(f) enter into any trade or barter agreements which would
cause the value of goods or services to be received by all the Stations (as
defined in the Group II-V Asset Purchase Agreement) and the Businesses in the
aggregate to result in a Negative Balance; provided, however, that to the
extent that Seller determines in good faith that it is necessary to enter
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into such a trade or barter agreement, Seller may do so, but if such agreement
has not been consented to by Buyer and causes a Negative Balance, Buyer shall
have no obligation in respect of such agreement to the extent of the
obligations thereunder which cause such Negative Balance.
Whenever, pursuant to subsections (a) through (f) above, Seller shall request
the consent of Buyer, the request shall be sent in writing via facsimile to
Buyer in accordance with Section 11.2. With respect to requests for consent
under Section 5.1, unless Buyer gives or denies its written consent by the end
of the fifth Business Day after the request for consent is transmitted to
Buyer, Buyer's written consent will be presumed to have been given as of that
deadline. Prior to the Effective Time, Seller shall maintain in full force and
effect the insurance policies of Seller listed on Schedule 3.11 with respect to
the Businesses or policies providing similar coverage, and make and prosecute
all claims thereunder in respect of any loss or damage to any of the Assets in
accordance with past practice, and apply the proceeds thereof to the repair or
replacement of any such Assets.
5.2 Dispositions. Prior to the Effective Time, except as contemplated
by this Agreement or set forth on Schedule 5.2, Seller shall not sell, assign,
lease or otherwise transfer or dispose of any of the Assets, except any Assets
no longer used in the business or operations of the Businesses or any Assets
that are replaced with replacement property of equivalent value, kind and use.
Notwithstanding the foregoing or anything else contained in this Agreement, the
expiration by their terms of Contracts prior to the Effective Time shall not be
deemed to be a violation of this Agreement.
5.3 Liens. Prior to the Effective Time, Seller shall not create,
assume or permit to exist any Liens upon the Assets, except for Permitted Liens
and Liens that will be discharged prior to or on the Closing Date.
5.4 Access to Information. Prior to the Effective Time, Seller shall
give Buyer and its employees and other authorized representatives during normal
business hours and with reasonable prior notice, access to the Assets and to
all other books, records and documents of Seller relating to the Businesses
(such access not to unreasonably interfere with the business or operations of
the Businesses), including, without limitation, for purposes of conducting any
surveys and/or environmental assessments of Real Property included in the
Assets in accordance with Section 6.8, and will furnish or cause to be
furnished to Buyer or its authorized representatives, upon reasonable notice,
all information with respect to the business and operation of the Businesses
that Buyer may reasonably request; provided that the
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foregoing do not unreasonably disrupt the business of Seller. As soon as
practicable after the date hereof, and in any case prior to August 29, 1997,
Seller shall provide Buyer with a list of the names under which any of the
Businesses have been conducted by Seller or any Affiliate of Seller.
5.5 Financial Information. For all periods prior to the Effective
Time, Seller shall furnish Buyer within twenty (20) days after the end of each
calendar month after the date hereof an unaudited statement of income and
expense for such month of the Businesses owned by Seller and such other
financial information prepared by Seller relating to the operations of the
Businesses, as Buyer may reasonably request (the "Monthly Financial
Information"). The Monthly Financial Information shall be prepared in
accordance with GAAP (except for the absence of footnotes and year-end
adjustments otherwise required by GAAP) and shall present fairly in all
material respects the financial condition of Seller with respect to the
Businesses included in such Monthly Financial Information as at the date
thereof and for the periods then ended, as appropriate.
5.6 Notice of Proceedings. Prior to the Effective Time, Seller and
Buyer will promptly notify the other in writing upon becoming aware of any
order or decree or any complaint praying for an order or decree restraining or
enjoining the consummation of this Agreement, or the transactions contemplated
hereunder, or upon receiving any notice from any court or government authority
of its intention to institute an investigation into, or institute a suit or
proceeding to restrain or enjoin the consummation of this Agreement or the
transactions contemplated hereunder, or to nullify or render ineffective this
Agreement, or such transactions if consummated. Seller and Buyer will each use
commercially reasonable efforts to contest, defend and resolve any such suit,
proceeding or injunction brought against it, and to cause any temporary
restraining order or preliminary injunction against such consummation to be
lifted, promptly, so as to permit the consummation of the transactions
contemplated hereby and thereby.
5.7 Representations and Warranties. Prior to the Effective Time,
Seller shall give Buyer detailed written notice promptly upon becoming aware
(i) that any representation or warranty of Seller under this Agreement, or
under any document, instrument or agreement made or delivered by Seller in
connection herewith, is untrue or misleading in any material respect and (ii)
of any event or condition that would render any such representation or warranty
untrue or misleading in any material respect if such event or condition were
known to Seller when such representation or warranty was made.
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SECTION 6 SPECIAL COVENANTS AND AGREEMENTS
6.1 FCC Consent.
(a) Buyer and Seller acknowledge that Buyer and Seller
have prepared and, on July 16, 1997, filed with the FCC appropriate
applications for the FCC Consent. Buyer and PCC shall prosecute the
applications for the FCC Consent with commercially reasonable diligence and
otherwise use their commercially reasonable efforts to obtain the grants of the
applications as expeditiously as practicable. Each party will promptly provide
to the other party a copy of any pleading, order or other document served on it
relating to such applications. Buyer and Seller shall oppose any petitions to
deny or other objections filed with respect to any application for FCC Consent
and any requests for reconsideration or review of any FCC Consent.
(b) If the FCC shall not have granted the FCC Consent by
the date that is five Business Days prior to the date otherwise scheduled for
the Closing pursuant to Section 8.1(a), Buyer and Seller shall cooperate and
file with the FCC such requests and supporting information as may be required
to obtain as expeditiously as possible special temporary authority to permit
Buyer to operate the Earth Stations pending receipt of the FCC Consent.
(c) If the Closing shall not have occurred for any reason
within the original effective period of any FCC Consent, and neither party
shall have terminated this Agreement under Section 9, the parties shall jointly
request an extension of the effective period of the FCC Consent. No extension
of the effective period of the FCC Consent shall limit the exercise by either
party of its right to terminate the Agreement under Section 9.
6.2 HSR Act Filing. Seller and Buyer acknowledge that they have filed,
or caused to be filed, with the U.S. Department of Justice ("DOJ") and Federal
Trade Commission ("FTC") certain filings that are required in connection with
the transactions contemplated hereby under the HSR Act and submitted to the
other party, prior to the filing thereof, their respective HSR Act filings and
discussed with the other any comments the reviewing party may have had. Seller
and Buyer agree to file, or cause to be filed, on or before August 26, 1997
with the DOJ and FTC all additional filings that are required in connection
with the transactions contemplated hereby under the HSR Act, including
reflecting that the assets used and usable in connection with the Tampa
Billboard Business and the Sports Teams Business are to be excluded from the
Assets, and will submit to the other party,
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prior to the filing thereof, their respective HSR Act filing and discuss with
the other any comments the reviewing party may have. Buyer and Seller hereby
agree that Buyer will not buy from Seller, and Seller will not sell to Buyer,
the assets relating to the Tampa Billboard Business and the Sports Teams
Business. Buyer and Seller agree to (a) cooperate with each other in connection
with all such HSR Act filings, which cooperation shall include furnishing the
other with any information or documents that may be reasonably required in
connection with such filings; (b) promptly file, after any request by the FTC
or DOJ and after appropriate negotiation with the FTC or DOJ of the scope of
such request, any information or documents requested by the FTC or DOJ; and (c)
furnish each other with any correspondence from or to, and notify each other of
any other communications with, the FTC or DOJ that relates to the transactions
contemplated hereunder, and to the extent practicable, to permit each other to
participate in any conferences with the FTC or DOJ.
6.3 Confidentiality.
(a) Each party will not use or disclose to third parties
(except as may be necessary for the consummation of the transactions
contemplated hereby, or as required by law, including, without limitation, in
connection with legal proceedings relating to this Agreement, documents
delivered in connection herewith or pursuant hereto and the transactions
contemplated hereby and thereby, or otherwise pursuant to subpoena or the
request of a governmental authority, and then only with prior notice to the
other parties hereto, including delivery of a copy of the subpoena or request,
if applicable) this Agreement or any information (including, without
limitation, financial information and information regarding program contracts
and revenue) received from the other parties hereto or their agents in the
course of investigating, negotiating and performing the transactions
contemplated by this Agreement and the documents delivered in connection
herewith or pursuant hereto; provided, however, that each party may disclose
such information to such party's officers, directors, employees, lenders,
advisors, attorneys and accountants who need to know such information in
connection with the consummation of the transactions contemplated by this
Agreement and the documents delivered in connection herewith or pursuant hereto
and who are informed by such party of the confidential nature of such
information. Nothing shall be deemed to be confidential information that: (1)
is already in such party's possession, provided that such information is not
known by such party to be subject to another confidentiality agreement with or
other obligation of secrecy to the other party hereto or another party, or (2)
becomes generally available to the public other than as a result of a
disclosure by such party or such party's officers, directors, employees,
lenders,
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advisors, attorneys or accountants, or (3) becomes available to such party on a
non-confidential basis from a source other than the other party hereto or its
advisors, provided that such source is not known by such party to be bound by a
confidentiality agreement with, or other obligation of secrecy to, the other
party hereto or another party, or (4) is developed independently by either
party without resort to the confidential information of the other party. In the
event this Agreement is terminated and the purchase and sale contemplated
hereby abandoned, Buyer will return to Seller all copies of documents, work
papers and other written confidential material obtained by Buyer in connection
with the transactions contemplated hereby. If this Agreement is terminated,
each party will return to the other party all information (including all
documents, work papers and other written confidential material) obtained by
such party from any other party in connection with the transactions
contemplated by this Agreement.
(b) No party shall publish any press release or make any
other public announcement concerning this Agreement or the transactions
contemplated hereby without the prior written consent of each other party,
which shall not be withheld unreasonably; provided, however, that nothing
contained in this Agreement shall prevent any party, after notification to each
other party, from taking any action required by law or from making any filings
with governmental authorities that, in its judgment, may be required or
advisable in connection with the execution and delivery of this Agreement or
the consummation of the transactions contemplated hereby.
6.4 Cooperation. Buyer and Seller shall cooperate fully with each
other and their respective counsel and accountants in connection with any
actions required to be taken as part of their respective obligations under this
Agreement, and Buyer and Seller shall execute such other documents as may be
necessary or desirable to the implementation and consummation of this
Agreement, including, without limitation, obtaining any Consents and Estoppel
Certificates and otherwise use their commercially reasonable efforts to
consummate the transactions contemplated hereby and to fulfill their
obligations under this Agreement. Seller and Buyer shall each diligently make,
and cooperate with the other in making, all commercially reasonable efforts to
obtain or cause to be obtained prior to the Closing Date all Consents and
Estoppel Certificates. Buyer agrees to use all commercially reasonable efforts
to assist Seller in obtaining such Consents and Estoppel Certificates, and to
take all commercially reasonable actions necessary or desirable to obtain such
Consents and Estoppel Certificates, including, without limitation, executing
such assumption instruments and other
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documents as may be reasonably required in connection with obtaining the
Consents and Estoppel Certificates.
6.5 Access to Books and Records. Seller shall provide Buyer access and
the right to copy for a period of two (2) years from the Closing Date any books
and records relating to the Assets, but not included in such Assets. Buyer
shall provide Seller access and the right to copy for a period of two (2) years
after the Closing Date any books and records relating to the Assets, that are
included in such Assets. Neither Buyer nor Seller will destroy any such books
and records during such two (2) year period. After the expiration of such two
(2) year period, Buyer and Seller shall use commercially reasonable efforts to
give the other parties to this Agreement reasonable prior written notice of
their intention to destroy any such books and records prior to destroying any
such books and records.
6.6 Employee Matters. The following provisions shall be for the
exclusive benefit of the parties to this Agreement and not for the benefit of
any other person or entity:
(a) (i) Effective as of the Effective Time, Buyer (A)
shall assume the Assumed Contracts listed on Schedule 3.12 and (B) may, in its
sole discretion, but shall not be obligated to, offer employment to any of
Seller's other employees with respect to the Businesses (collectively, those
employees to whom Buyer elects to offer employment and who are employed
pursuant to Assumed Contracts, the "Assumed Employees"). Except as otherwise
provided in any Assumed Contract, Buyer may offer employment to the Assumed
Employees on any terms and conditions that are determined by Buyer in its sole
discretion, including with respect to the provision of retirement and health
care benefits. Buyer shall assume the contracts of employment of the Assumed
Employees and, notwithstanding anything in the foregoing to the contrary, to
the extent such employment contracts assumed hereunder provide for terms and
conditions in addition to those referenced in the preceding sentence, Buyer
shall assume the terms thereof.
(b) To the extent the Purchase Price is reduced pursuant
to Section 2.5 in respect thereof, Buyer shall grant Assumed Employees credit
for and shall assume and be responsible for any liabilities with respect to
sick leave and personal days accrued but unused by any Assumed Employees as of
the Effective Time, and, to the extent of such Purchase Price reduction, Buyer
shall grant Assumed Employees credit for and shall assume and be responsible
for any liabilities with respect to any accrued but unused vacation for such
employees as of the Effective Time. No such credit shall exceed the number of
sick, personal and vacation days listed on Schedule 3.12.
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(c) Buyer agrees that Seller may inform its employees that
Buyer has agreed that the Assumed Employees will be offered employment as
provided in this Section 6.6; provided, however, that Buyer shall have the
right to approve any written statement to be made by Seller in connection
therewith.
(d) Seller shall comply with the provisions of the Worker
Adjustment and Retraining and Notification Act (the "WARN Act") and similar
laws and regulations, if applicable, and shall be solely responsible for any
and all liabilities, penalties, fines, or other sanctions that may be assessed
or otherwise due under such applicable laws and regulations on account of the
dismissal or termination of any of the employees of any of the Businesses by
Seller prior to the Effective Time. Buyer shall employ at least that proportion
of the employees of each Station as shall be necessary to prevent a "mass
layoff" or a "plant closing" as such terms are defined in the WARN Act and
Buyer shall comply with all applicable laws and regulations applicable in
connection with Buyer's exercise of discretion in offering employment to
employees of Seller, including, without limitation, those relating to
employment discrimination.
(e) Within a reasonable period of time after the Effective
Time, Seller shall transfer from the Paxson Communications 401(k) Profit
Sharing Plan (the "Seller 401(k) Plan") to the 401(k) Plan maintained by the
Guarantor or its Affiliates for the benefit of the employees of the Buyer
("Buyer's 401(k) Plan") an amount, in cash, equal to the aggregate account
balances held in the Seller 401(k) Plan as of the date of transfer with respect
to all Assumed Employees hired by Buyer as of the Effective Time, provided,
however, that Buyer shall have no obligation under this Section 6.6(e) if Buyer
reasonably believes such transfer shall cause Buyer's 401(k) Plan to not be
qualified under the Code. Prior to the date of any such transfer, and as
preconditions thereto: (i) Buyer shall use commercially reasonable efforts to
deliver to Seller a copy of the most recently issued Internal Revenue Service
("IRS") determination letter (or other proof reasonably satisfactory to counsel
for Seller) that Buyer's 401(k) Plan is qualified under the Code, and (ii)
Seller shall use commercially reasonable efforts to deliver to Buyer a copy of
the most recently issued IRS determination letter (or other proof reasonably
satisfactory to counsel for Buyer) that the Seller 401(k) Plan is qualified
under the Code. Seller and Buyer agree to cooperate with respect to any
government filing, including, but not limited to, the filing of IRS Forms
5310-A, if necessary, to effect the transfer of assets contemplated by this
Section 6.6(e).
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6.7 Cure. For all purposes under this Agreement, the existence or
occurrence of any events or circumstances that constitutes or causes a breach
of a representation or warranty of Seller or Buyer (including, without
limitation, in the case of Seller, under the information disclosed in the
Schedules hereto) on the date such representation or warranty is made shall be
deemed not to constitute a breach of such representation or warranty if such
event or circumstance is cured in all material respects on or before 30 days
after the receipt by such party of written notice thereof from the other party.
6.8 Environmental Reports.
(a) Seller has ordered, at Seller's cost, a Phase I
environmental report with respect to Seller's office building located at 1460
33rd Street, Orlando, Florida and Buyer has ordered Phase I environmental
reports on the following parcels of owned Real Property for which Seller does
not currently have a Phase I environmental report: billboard sites O-13, O-14,
O-18, O-23, O-24, O-29, O-30, O-33(1), O-33(2), O-37, O-43, O-46 and O- 47 (the
"New Phase I Reports"). Buyer and Seller shall each pay one-half of the
aggregate cost of obtaining the New Phase I Reports relating to such billboard
sites. The respective parties shall deliver to the other copies of each New
Phase I Report promptly upon receipt thereof. There are no other environmental
reports with respect to the Real Property that are in the possession, custody
or control of Seller.
(b) Seller will cooperate with Buyer in obtaining, at
Seller's expense, a Phase II environmental report for any parcel of Real
Property owned by Seller with respect to the Businesses to the extent expressly
recommended in any New Phase I Report (a "Phase II Report"). Seller and Buyer
shall use commercially reasonable efforts to obtain the Phase II Reports as
soon as practicable thereafter; provided, however, that no such Phase II
Reports (other than the Phase II Report which has been authorized by Seller
with respect to Seller's office building) shall be ordered or obtained before
the expiration of five (5) Business Days after the date hereof. The New Phase I
Reports and any Phase II Reports are hereinafter referred to as the
"Assessments."
(c) Copies of each Assessment shall be delivered to Seller
by Buyer promptly after receipt by Buyer. Seller and Buyer agree that the
results of any Assessment carried out pursuant to this Section shall not be
disclosed to any third party, unless such disclosure is required by law;
provided, however, that each party may disclose such information to such
party's officers, directors, employees, lenders, advisors, attorneys and
accountants who need to know such information in
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connection with the consummation of the transactions contemplated by this
Agreement and who are informed by such party of the confidential nature of such
information.
(d) From and after the Effective Time, in accordance with
and subject to the provisions of Section 10 hereof, Seller shall, at its sole
cost, either undertake, or reimburse Buyer for, any remediation or other action
required to eliminate noncompliance with Applicable Environmental Laws with
respect to any Real Property owned by Seller, in each case as specifically set
forth in any Phase II Report (irrespective of whether such Phase II Report is
received before or after the Effective Time).
6.9 Fees of CEA. No party shall have any liability to any other party
in respect of the fees of CEA to be paid by Buyer and Seller in accordance with
the terms of their respective agreements with CEA.
6.10 Unwind Transaction. (a) If the sale of the Repurchase Assets has
occurred hereunder and (i) the Group II-V Asset Purchase Agreement is
terminated with respect to (A) all Group Sales or (B) the Group II/III Sale and
the Group V Sale, or (ii) the Group II/III Closing and the Group V Closing have
not occurred on or before the Termination Date, the parties hereto shall have
the following rights and obligations:
(1) If the Group II-V Asset Purchase Agreement has
been terminated, other than as a result of Seller's breach or
default of its obligations thereunder, Seller shall have the
right, exercisable by written notice from Seller to Buyer
given within five (5) Business Days of such termination of
the Group II-V Asset Purchase Agreement or the Termination
Date, as the case may be, to cause Buyer to sell back to
Seller, and upon such request by Seller, Buyer shall sell
back to Seller, the Repurchase Assets.
(2) If the Group II-V Asset Purchase Agreement has
been terminated, other than as a result of Buyer's breach or
default of its obligations thereunder, Buyer shall have the
right, exercisable by written notice from Buyer to Seller
given within five (5) Business Days of such termination of
the Group II-V Asset Purchase Agreement, to cause Seller to
repurchase from Buyer, and upon the request of Buyer, Seller
shall repurchase from Buyer, the Repurchase Assets.
(b) Such sale and repurchase described in Section 6.10(a)
shall be effected on substantially the same terms as the terms on which the
Assets were acquired by Buyer pursuant
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to this Agreement, and the purchase price therefor shall be Three Million Six
Hundred Eighty-Eight Thousand Dollars ($3,688,000), subject to adjustment
consistent with Section 2.5(b)(2), paid by Buyer pursuant to this Agreement.
The consummation of such sale and repurchase shall be effected as soon as
practicable following such termination of the Group II-V Asset Purchase
Agreement or the Termination Date, as the case may be, subject to receipt of
all consents, permits and approvals of government authorities and other third
parties necessary to transfer the Assets back to Seller or otherwise to
consummate the sale and repurchase, including, without limitation, all
necessary consents of the FCC, DOJ and FTC pursuant to the HSR Act.
6.11 Updated Information. On the date which is three (3) Business Days
prior to the Closing Date, Seller shall deliver to Buyer a supplement to the
Schedules to this Agreement (the "Schedule Supplement"), certifying that Seller
has delivered to Buyer all notices required by Section 5.7 and setting forth
any matter which, if existing or occurring on the date hereof, would have been
required to be set forth or described on the Schedules hereto or that is
necessary to complete or correct any information contained therein. This
Section 6.11 does not, and shall not be construed to, permit any actions or
inactions by Seller not otherwise permitted under this Agreement. For purposes
of the conditions to the Closing, if the matters disclosed in the Schedule
Supplement fall within the exceptions set forth in clauses (1), (2) or (3) to
Section 7.1(a) or the exception to Section 7.1(b), then such exceptions shall
apply, but no such disclosure by Seller to Buyer shall otherwise affect any of
Buyer's rights or obligations hereunder, whether before or after the Closing.
Without limiting the foregoing, regardless of any such disclosure, all
representations and warranties of Seller in this Agreement shall survive the
Closing to the extent provided in Section 10.1 of this Agreement, and Buyer
shall be entitled to indemnification, in accordance with Section 10.2.
6.12 Risk of Loss.
(a) The risk of any loss, damage, impairment, confiscation
or condemnation of any Assets prior to the Effective Time (collectively, a
"Loss") shall be borne by Seller. In the event of any Loss prior to the
Effective Time that interferes with the normal operation of any of the
Businesses to which such Assets relate, Seller shall promptly notify Buyer of
same in writing, specifying with particularity the Loss incurred, the cause
thereof, if known or reasonably ascertainable, and the insurance coverage, if
any, applicable thereto.
(b) (i) Except as provided in Section 6.12(c), if the
Assets subject to such Loss have not been restored or replaced by
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the Effective Time, Buyer shall proceed to consummate the transactions to be
consummated at the Closing pursuant to this Agreement. Buyer and Seller shall
negotiate in good faith to agree on the amount of the costs necessary to
complete the restoration and replacement of such damaged Assets. To the extent
Buyer and Seller are unable to agree on the amount of such costs, Buyer and
Seller shall jointly designate an independent appraiser who shall be
knowledgeable and experienced in the operation of businesses similar to the
Businesses to resolve such dispute. If the parties are unable to agree on the
designation of an independent appraiser, the selection of the appraiser to
resolve the dispute shall be submitted to arbitration in accordance with the
commercial arbitration rules of the American Arbitration Association.
(ii) To the extent the parties agree to the amount
of such costs prior to the Effective Time or the appraiser is able to determine
the amount of such costs prior to the Effective Time, such amount shall be
deducted from the Preliminary Purchase Price. To the extent such amount is not
determined prior to the Closing Date, such amount shall be a Settled Claim and
shall be paid by Seller to Buyer pursuant to Section 10.2(a)(viii). The
appraiser's resolution of any such dispute shall be final and binding on the
parties. Any fees of the appraiser and, if necessary, for arbitration to select
such appraiser, shall be split equally between the parties.
(c) If any Assets have suffered a Loss which has had a
Material Adverse Effect, Seller shall give prompt written notice thereof to
Buyer. If on the Effective Time, such Loss continues to have a Material Adverse
Effect, (i) either and both of Buyer or Seller shall have the right, by giving
prompt written notice thereof to the other, to postpone the Closing Date for a
period of up to 90 days and shall close no later than such 90th day if the
Assets subject to such Loss have been repaired or replaced by such date;
provided, however, that the Closing shall occur as promptly as practicable
after such Assets are repaired or replaced. Notwithstanding the foregoing, if
such Assets are not repaired or replaced in all material respects by the
expiration of such 90-day period, Buyer shall have the right to terminate this
Agreement; such right to be exercised within ten (10) Business Days after the
expiration of such 90-day period.
In addition to the foregoing in this Section 6.12(c), if, prior to the
first applicable Effective Time under the Group II-V Asset Purchase Agreement,
the regular transmission of the Networks considered as a whole, are interrupted
for a period of five (5) or more consecutive days or fourteen (14) or more
periods of 24 consecutive hours, Seller shall give Buyer notice of such
interruption within five (5) Business Days of such
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interruption. After receipt of such notice, Buyer may terminate this Agreement
by giving written notice thereof to Seller within ten (10) Business Days of
receipt by Buyer of such notice. If Buyer chooses not to terminate this
Agreement or fails to give written notice within such ten (10) Business Day
period, Buyer shall have no further right to terminate this Agreement in
respect of such interruption and the remaining provisions of this Agreement
shall govern.
(d) The risk of loss, damage, impairment, confiscation or
condemnation of any of the Assets arising after the Effective Time shall be
borne by Buyer and no such loss, damage, impairment, confiscation or
condemnation of such Assets shall (i) give Buyer any claim against Seller with
respect thereto, including, without limitation, any claim for indemnification
pursuant to Section 10.2, or (ii) otherwise affect Buyer's obligation to
consummate the Closing or pay the Purchase Price.
(e) If before the Effective Time, the regular transmission
of any Network in the normal and usual manner is interrupted for a period of 12
continuous hours or more, Seller shall give prompt written notice thereof to
Buyer.
6.13 Miscellaneous. (a) As soon as practicable after the date hereof,
Seller shall notify Buyer in writing if Seller is subject to any law,
regulation or ordinance with respect to amortization or limitation on any right
to maintain, repair or rebuild any of the billboard faces included in the
Assets in the event of damage or decay.
(b) To the extent that any of the Assets constitute
billboard faces which are under construction on the date hereof, Seller will
have the construction of any such billboard faces completed prior to Closing,
at Seller's sole cost and expense; provided that to the extent such
construction is not completed by Closing, Seller shall be responsible for the
cost of completion of such construction (and, notwithstanding anything to the
contrary set forth herein, such obligation shall not be subject to the Hurdle
Amount, as defined below in Section 10).
SECTION 7 CONDITIONS TO OBLIGATIONS OF BUYER AND SELLER
7.1 Conditions to Obligations of Buyer at the Closing. The obligations
of Buyer at the Closing hereunder are subject, at Buyer's option, to the
fulfillment prior to or at the Closing of each of the following conditions:
(a) Representations and Warranties. The representations
and warranties of Seller shall be true and
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correct at and as of the Closing Date as though made at and as of that time,
except (1) to the extent any such representation or warranty is expressly
stated only as of a specified earlier date or dates, in which case such
representation or warranty shall be true and correct in all material respects
as of such earlier specified date or dates (subject to clause 3 below), (2) for
changes which are permitted or contemplated pursuant to this Agreement or (3)
where the consequence of the matter set forth in such representation or
warranty having failed to be true and correct as of the date when made, on the
Closing Date or on such earlier specified date, would not have a Material
Adverse Effect.
(b) Covenants. Seller shall have performed and complied
with all covenants and agreements required by this Agreement to be performed or
complied with by it prior to or on the Closing Date, except to the extent that
the consequence of the failure of Seller to have so performed or complied would
not have a Material Adverse Effect.
(c) FCC Consent. The FCC Consent shall have been granted
or, if the FCC Consent shall not have been granted, special temporary authority
shall have been granted by the FCC to permit Buyer to operate the Earth
Stations pending the grant of such FCC Consent.
(d) HSR Act. The waiting period under the HSR Act in
respect of the transactions to be consummated at the Closing shall have expired
or terminated and there shall not be pending any action or request for
information instituted by the FTC or the DOJ under the HSR Act relating to such
transactions.
(e) Legal Proceedings. No injunction, restraining order or
decree of any nature of any court or governmental authority of competent
jurisdiction shall be in effect which restrains or prohibits Buyer from
consummating the transactions at the Closing contemplated by this Agreement.
(f) Deliveries. Seller shall have made, or stand willing
to make, all the deliveries to Buyer described in Section 8.2.
(g) Required Consents. All Required Consents shall have
been obtained and delivered to Buyer.
7.2 Conditions to Obligations of Seller at the Closing. The
obligations of Seller at the Closing hereunder are subject, at Seller's option,
to the fulfillment prior to or at such Closings of each of the following
conditions:
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34
(a) Representations and Warranties. All representations
and warranties of Buyer contained in this Agreement shall be true and correct
in all material respects at and as of the Closing Date as though made at and as
of that time, except to the extent any such representation or warranty is
expressly stated only as of a specified earlier date or dates, in which case
such representation and warranty shall be true and accurate in all material
respects as of such earlier specified date or dates.
(b) Covenants. Buyer shall have performed and complied in
all material respects with all covenants and agreements required by this
Agreement to be performed or complied with by it prior to or on the Closing
Date.
(c) FCC Consent. The FCC Consent shall have been granted
or, if the FCC Consent shall not have been granted, special temporary authority
shall have been granted by the FCC to permit Buyer to operate the Earth
Stations pending the grant of such FCC Consent.
(d) HSR Act. The waiting period under the HSR Act in
respect of the transactions to be consummated at the Closing shall have expired
or terminated and there shall not be pending any action or request for
information instituted by the FTC or the DOJ under the HSR Act relating to such
transactions.
(e) Legal Proceedings. No injunction, restraining order or
decree of any nature of any court or governmental authority of competent
jurisdiction shall be in effect which restrains or prohibits Seller from
consummating the transactions at the Closing contemplated by this Agreement.
(f) Deliveries. Buyer shall have made or stand willing to
make all the deliveries described in Section 8.3.
SECTION 8 CLOSING AND CLOSING DELIVERIES
8.1 Closing.
(a) Closing Date.
(i) Subject to the satisfaction or, to the extent
permissible by law, waiver (by the party for whose benefit the Closing
condition is imposed) on the date scheduled for the Closing of the conditions
precedent set forth in Section 7.1 or 7.2, as appropriate, the parties hereto
agree that the Closing of the transactions contemplated by this Agreement shall
take place at 10:00 a.m., Washington, D.C. time, on the later of (x) October
<PAGE> 40
35
1, 1997, and (y) the date reasonably agreeable to Seller and Buyer not less
than five (5) Business Days nor more than ten (10) Business Days, following the
expiration or termination of the waiting period under the HSR Act in respect of
the transactions contemplated by this Agreement; provided, however, that,
notwithstanding clause (y) above, if the waiting period under the HSR Act in
respect of the transactions contemplated by this Agreement expires or
terminates prior to October 1, 1997, the Closing of the transactions
contemplated by this Agreement shall take place no later than October 1, 1997,
and, provided, further that in no event shall the Closing hereunder occur prior
to the earlier of (A) the making of the Group V Loan (as defined in the Group
II-V Asset Purchase Agreement) and (B) the consummation of the Group II/III and
Group V Closing (as defined in the Group II-V Asset Purchase Agreement) and the
Closing hereunder shall be scheduled to occur concurrently with the date that
is the earlier of the foregoing dates in clauses (A) and (B).
(ii) Notwithstanding the foregoing, if on the
date otherwise scheduled for the Closing pursuant to the preceding paragraph,
the conditions precedent set forth in Sections 7.1(c), 7.1(e), 7.1(g), 7.2(c),
or 7.2(e) have not been satisfied, the party for whose benefit such conditions
have been imposed may elect to postpone the Closing, and the Closing shall
thereafter take place on a date specified by not less than five (5) Business
Days' prior written notice from such party, which date shall be not less than
five (5) Business Days nor more than ten (10) Business Days after the
satisfaction or waiver of such conditions precedent. Notwithstanding the
foregoing, if the Closing has been postponed pursuant to Section 6.12, the
Closing shall take place in accordance with the provisions of Section 6.12, on
the date specified by not less than five (5) Business Days' nor more than ten
(10) Business Days' prior written notice from Seller to Buyer until the
expiration of the period set forth in Section 6.12. The parties shall seek any
extension of the FCC Consent that may be required for any such postponement of
the Closing.
(iii) In no event shall the Closing hereunder
occur later than the Termination Date, except as provided in
Section 9.1.
(b) Closing Place. The Closing shall be held at the
offices of Dow, Lohnes & Albertson, PLLC, 1200 New Hampshire Avenue, N.W.,
Suite 800, Washington, D.C. 20036, or any other place that is agreed upon by
Buyer and Seller.
8.2 Deliveries by Seller. Prior to or on the Closing Date, Seller
shall take the following actions and deliver to Buyer the
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following documents, in form and substance reasonably satisfactory to Buyer and
its counsel:
(a) Conveyancing Documents. Duly executed assignments and
other conveyancing documents that are sufficient to convey and vest good and,
in the case of owned Real Property, marketable, title to the Assets to the
Buyer, free and clear of all Liens, except for Permitted Liens. Such documents
shall include, but shall not be limited to, the following:
(i) Assignment and Assumption Agreement for the
Assumed Contracts, substantially in the form of Exhibit 8.2(a) annexed hereto
(the "Assignment and Assumption Agreement"), and assignment agreements in
recordable form for each Real Property lease (provided, however, that Seller
shall have no liability to Buyer with respect to the recording or recordability
of any such assignment agreements and the recording or recordability of any
such assignment agreements shall not be a condition to the satisfaction of this
Section 8.2(a)(i));
(ii) deeds (the "Deeds") in recordable form
conveying fee simple title to all Real Property owned by Seller and used in the
Businesses, subject to Permitted Liens and consistent with and subject to the
representations and warranties and the indemnity limitations set forth in this
Agreement;
(iii) bills of sale; and
(iv) an Assignment and Acceptance of FCC Licenses.
(b) Officer's Certificate. A certificate, dated as of the
Closing Date, executed on behalf of Seller by the President of Seller (but
without personal liability to such officer), certifying to the fulfillment of
the conditions set forth in Sections 7.1(a) and 7.1(b).
(c) Secretary's Certificate. A certificate, dated as of
the Closing Date, executed by the Secretary of Seller (but without liability to
such officer), certifying that the resolutions, as attached to such
certificate, were duly adopted by the Board of Directors and shareholders (if
required) of Seller, authorizing and approving the execution of this Agreement
and the consummation of the transactions contemplated hereby and that such
resolutions remain in full force and effect and that attached thereto are true,
correct and complete copies of the Certificate of Incorporation and bylaws of
Seller.
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(d) Consents and Estoppel Certificates. A copy of the
Required Consents and any other instrument evidencing any Consents and Estoppel
Certificates received.
(e) Releases. Any mortgage discharges or releases of Liens
that are necessary in order for the Assets to be free and clear of all Liens,
other than the Permitted Liens, or pay-off letters from any of Seller's lenders
providing for such discharges and releases upon payment by Seller of the
obligations owed to such lenders with the proceeds of the Preliminary Purchase
Price on the Closing Date.
(f) Good Standing Certificates. A certificate as to the
formation and good standing of Seller issued by the Secretary of State of the
state of its incorporation, dated not more than ten (10) days before the
Closing Date.
(g) Incumbency Certificate. A certificate signed by an
officer of Seller (but without personal liability to such officer) certifying
the signature and incumbency of the person executing this Agreement on behalf
of Seller.
(h) Title Commitments. ALTA title commitments issued by
Lawyers Title Insurance Corporation obtained by Seller at Buyer's expense (at
the minimum promulgated rates in the State of Florida plus reasonable title
search fees), insuring fee simple title in each fee estate included in the Real
Property, subject to standard survey exceptions and Permitted Liens, in an
amount reasonably determined by Buyer that permits such commitments to be
obtained.
(i) Lien Search Results. The results of a search for tax,
lien and judgment filings with respect to each of the names reasonably
requested by Buyer no later than 20 days before Closing, obtained by Seller, at
Buyer's expense, against the Secretary of State's records of the State of
Florida, Tennessee and Alabama (as applicable, with respect to such names) and
in the records of each county in Florida, Tennessee and Alabama (as applicable,
with respect to such names) in which any of the Assets are located, reflecting
the absence of Liens other than Permitted Liens and Liens removed concurrently
with, or prior to, Closing.
(j) Other. Such other documents expressly called for to be
delivered by Seller under the terms of this Agreement or as may reasonably be
requested by Buyer.
8.3 Deliveries by Buyer. Prior to or on the Closing Date, Buyer shall
take the following actions and deliver to Seller the
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38
following documents, in form and substance reasonably satisfactory to Seller
and its counsel:
(a) Closing Payment. Make the payment described in Section
2.6(a).
(b) Officer's Certificate. A certificate, dated as of the
Closing Date, executed on behalf of Buyer by the President of Buyer (but
without personal liability to such officer), certifying to the fulfillment of
the conditions set forth in Sections 7.2(a) and 7.2(b).
(c) Secretary's Certificate. A certificate, dated as of
the Closing Date, executed by Secretary of Buyer (but without personal
liability to such officer), certifying that the resolutions, as attached to
such certificate, were duly adopted by the Board of Directors and shareholders
(if required) of the Buyer, authorizing and approving the execution of this
Agreement and the consummation of the transactions contemplated hereby and that
such resolutions remain in full force and effect and that attached thereto are
true, correct and complete copies of the Certificate of Incorporation and
bylaws of Buyer.
(d) Assignment and Assumption Agreements. The duly
executed Assignment and Assumption Agreement and the Assignment and Acceptances
of FCC Licenses referenced in Section 8.2(a)(iv).
(e) Good Standing Certificate. A certificate as to the
existence and good standing of Buyer issued by the Secretary of State of the
State of organization of Buyer, dated not more than ten (10) days before the
Closing Date, and certificates issued by the appropriate governmental authority
as to the qualification of Buyer to do business in each jurisdiction in which
such qualification is necessary for Buyer to own the Assets and operate the
Businesses.
(f) Incumbency Certificate. A certificate signed by an
officer of Buyer and Guarantor (but without liability to such officers)
certifying the signatures and incumbency of the persons executing this
Agreement on behalf of Buyer and the Guarantor.
(g) Other. Such other documents expressly called for to be
delivered by Buyer under the terms of this Agreement or as may be reasonably
requested by Seller.
<PAGE> 44
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SECTION 9 TERMINATION
9.1 Termination of Agreement. This Agreement may be terminated only as
follows:
(a) at any time by written consent of each of Buyer,
Guarantor and Seller;
(b) by either Buyer or Seller, if the terminating party is
not in default or breach in any material respect of its obligations under this
Agreement, if the Closing hereunder has not taken place on or before the
Termination Date;
(c) by Seller, if Seller is not in default or breach in
any material respect of its obligations under this Agreement, if the conditions
precedent to Seller's obligations in Section 7.2 have not been satisfied (or
waived by Seller) by the date scheduled for such Closing pursuant to Section
8.1 (as such date may be postponed pursuant to Sections 6.12 and 8.1(a)(ii));
(d) by Buyer, if Buyer is not in default or breach in any
material respect of its obligations under this Agreement, if the conditions
precedent to Buyer's obligations in Sections 7.1 have not been satisfied (or
waived by Buyer) by the date scheduled for the Closing pursuant to Section 8.1
(as such date may be postponed pursuant to Sections 6.12 and 8.1(a)(ii));
(e) if the Closing under this Agreement has not occurred,
by either Buyer or Seller, if the terminating party is not in default or breach
in any material respect of its obligations under this Agreement and the Group
II-V Asset Purchase Agreement, if the Group II-V Asset Purchase Agreement is
terminated with respect to (i) the Group II/III Sale and the Group V Sale or
(ii) all Group Sales, in each case, pursuant to Section 9.1 thereof; and
(f) by Buyer, pursuant to Section 6.12(c).
Notwithstanding anything in this Section 9.1 to the
contrary, if on the Termination Date, the Closing has not occurred solely
because any required notice period for the Closing has not lapsed, the
Termination Date shall be extended until the lapse of such period.
Without limiting the generality of the foregoing or any
applicable law, neither Buyer, on the one hand, nor Seller, on the other hand,
may rely on the failure of any condition precedent set forth in Section 7 to be
satisfied as a ground for termination of this Agreement by such party if such
failure was caused by such party's failure to act in good faith, or a breach
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of or failure to perform its representations, warranties, covenants, agreements
or other obligations in accordance with the terms hereof.
9.2 Procedure and Effect of Termination.
(a) In the event of termination of this Agreement by
either or both of Buyer and/or Seller pursuant to Section 9.1, prompt written
notice thereof shall forthwith be given to the other party and this Agreement
shall terminate and the transactions contemplated hereby shall be abandoned
without further action by any of the parties hereto, but subject to and without
limiting any of the rights of the parties specified
herein in the event a party is in default or breach in any material respect of
its obligations under this Agreement. If this Agreement is terminated as
provided herein:
(i) None of the parties hereto shall have
any liability or further obligation to any other
party or any of their respective directors, officers,
shareholders, employees, agents, or Affiliates
pursuant to this Agreement or otherwise, except as
stated in Sections 6.3, 6.9, 9.2, 9.3 and 11.1
hereof;
(ii) Except for Guarantor, which shall have
liability as Guarantor hereunder, if applicable, and
Mr. Lowell W. Paxson, who shall have liability as
guarantor pursuant to the Guaranty set forth in
Section 6.10(a)(i)(6) of the Group II-V Asset
Purchase Agreement to the extent set forth therein,
if applicable, notwithstanding anything herein or in
applicable law to the contrary, none of the
respective directors, officers, shareholders,
employees, agents or Affiliates of any of the parties
hereto shall have any liability or obligation to any
other party or any of their respective directors,
officers, shareholders, employees, agents or
Affiliates pursuant to this Agreement or otherwise;
and
(iii) All filings, applications and other
submissions relating to the transactions contemplated
hereby as to which termination has occurred shall, to
the extent practicable, be withdrawn from the agency
or other Person to which made.
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(b) With respect to terminations pursuant to Section 9.1
hereof:
(i) If this Agreement is terminated
pursuant to Sections 9.1(a) or 9.1(f), then and in
that event, none of the parties hereto shall have any
recourse against or liability to the other parties
hereto, except as stated in this Section 9.2(b) and
Sections 6.3, 6.9, 9.2(a), 9.3 and 11.1 hereof or in
any written agreement entered into by the parties in
connection with such termination.
(ii) If this Agreement is terminated by
Seller pursuant to Section 9.1(b), 9.1(c) or 9.1(e),
and Buyer is in breach or default of its obligations
under this Agreement, then Seller shall have the
right to pursue all legal and equitable remedies
available to it against Buyer and Guarantor for
breach of contract; provided, that, notwithstanding
the foregoing, in the case of termination under
Section 9.1(e) if the Group V Loan (as defined in the
Group II-V Asset Purchase Agreement) has been made,
Seller shall be entitled only to the remedies, if
any, specified in the Group II-V Asset Purchase
Agreement.
(iii) If this Agreement is terminated by
Buyer pursuant to Section 9.1(b), 9.1(d) or 9.1(e),
and Seller is in breach or default of its obligations
under this Agreement, then Buyer shall have the right
to pursue all legal and equitable remedies available
to it against Seller for breach of contract.
9.3 Attorneys' Fees. In the event of a default by either party that
results in a lawsuit or other proceeding for any remedy available under this
Agreement, the prevailing party shall be entitled to reimbursement from the
other party of its reasonable legal fees and expenses incurred in connection
with
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such proceedings (whether incurred in arbitration, at trial, or on
appeal).
9.4 Specific Performance. In the event of a breach or threatened
breach by Buyer, Guarantor or Seller of any representation, warranty, covenant
or agreement under this Agreement, in addition to any other remedy available to
it (but subject to the proviso in Section 9.2(b)(ii) hereof), Seller or Buyer,
as the case may be, shall be entitled to an injunction restraining any such
breach or threatened breach by the other parties to this Agreement and, subject
to obtaining any requisite approval of the FCC, to enforcement of this
Agreement by a decree of specific performance requiring such other parties to
fulfill their respective obligations under this Agreement, in each case without
the necessity of showing economic loss or other actual damages and without any
bond or other security being required.
SECTION 10 SURVIVAL OF REPRESENTATIONS AND WARRANTIES; INDEMNIFICATION; CERTAIN
REMEDIES
10.1 Survival.
(a) The representations and warranties of Buyer, Guarantor
and Seller contained herein shall survive the Closing for a period expiring
eighteen (18) months after the Effective Time and shall terminate on such date,
except to the extent that any claims for indemnification in respect of a breach
of any such representation or warranty is made on or before the dates set forth
in the preceding clause, in which case such representation or warranty (but not
any others) shall survive until the resolution of such claim.
(b) Notwithstanding the foregoing, (1) any claims for
indemnification related to a breach of the representations and warranties
contained in Section 3.16 shall survive, and must be brought before the
expiration of the period expiring thirty-six (36) months after the Effective
Time and (2) any claims for indemnification pursuant to Section 10.2(a)(iv) or
related to a breach of the representations and warranties contained in Sections
3.10 and 3.22 shall survive, and must be brought before the expiration of, the
applicable statute of limitations.
(c) Buyer's obligation to pay, perform or discharge the
Assumed Liabilities shall survive until such Assumed Liabilities have been
paid, performed or discharged in full.
(d) Seller's obligations to pay, perform or discharge all
liabilities of Seller that are not Assumed Liabilities
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43
("Retained Liabilities"), and to indemnify Buyer in respect thereof, shall
survive until such liabilities have been paid, performed or discharged in full.
(e) Any claim for indemnification in respect of a covenant
or agreement of Buyer or Seller hereunder to be performed before the Closing
shall be made before the expiration of the eighteen (18) month anniversary of
the Effective Time. The covenants and agreements of the parties contained
herein and to be performed to any extent after the Closing Date shall survive
the Closing until fully paid, discharged and performed, and any claims for
indemnification in respect of a breach of such covenants to be performed after
the Closing Date shall survive until such covenants and agreements are so paid,
discharged and performed.
10.2 Indemnification by Seller. (a) After the Closing, Seller hereby
agrees to indemnify, defend and hold Buyer harmless against and with respect
to, and shall reimburse Buyer for:
(i) Any and all losses, liabilities or damages
resulting from any breach of any representation or warranty made pursuant to
this Agreement as of the date hereof or as of the Effective Time, or any
failure by Seller to perform any covenant of Seller set forth in this Agreement
or in any certificate, document or instrument prepared by Seller and delivered
to Buyer hereunder;
(ii) Any failure by Seller to pay, perform or
discharge any and all Retained Liabilities;
(iii) Any litigation, proceeding or claim by any
third party arising from the business or operations of the Businesses by Seller
prior to the Effective Time, except to the extent arising from the Assumed
Liabilities;
(iv) If Seller elects under Section 11.10 (the "1031
Election") to effect the transfer of some or all of the Assets to Buyer in a
manner qualifying as part of a like-kind exchange of property by Seller within
the meaning of Section 1031 of the Code (a "Like-kind Exchange"), (A) the
excess, if any, of (1) all reasonable out-of-pocket costs and expenses of Buyer
in consummating the transfer of any of the Assets to Buyer in a Like-kind
Exchange, including, without limitation, reasonable legal fees and expenses for
the review of any additional documentation to be executed and delivered by
Buyer as a result of the Like-kind Exchange, over (2) the costs and expenses of
Buyer in consummating the transfer of such Assets to Buyer if the 1031 Election
had not been made and (B) the excess,
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if any, of (1) if the 1031 Election causes Buyer to obtain a tax basis in such
assets less than the tax basis Buyer would have had in such Assets had Seller
not made a 1031 Election, the Taxes payable by Buyer, over (2) the Taxes that
would have been payable by Buyer had Seller not made the 1031 Election;
(v) With respect to any leased Real Property for
which a Lease Consent or Estoppel Certificate are not obtained by the date
which is twelve (12) months after the Closing Date related to such leased Real
Property only, any and all reasonable out-of-pocket costs and expenses,
including reasonable legal fees and expenses, arising from the termination of
any lease for such Real Property and the transfer of any Assets from the
related leased Real Property to a new site as a result thereof;
(vi) Any and all reasonable out-of-pocket costs and
expenses, including reasonable legal fees and expenses, of undertaking
remediation or such other action to eliminate any noncompliance with applicable
law with respect to any Real Property owned by Seller, in each case as
specifically set forth in any Phase II Report;
(vii) Any and all loss, liabilities or damages
resulting from those provisions of any employment contract between the
Businesses and an Assumed Employee which address the terms and conditions of
any grant by PCC to such Assumed Employee of an option to purchase common
stock;
(viii) The amount finally determined pursuant to
Section 6.12(b)(ii); and
(ix) Any and all reasonable out-of-pocket costs and
expenses, including reasonable legal fees and expenses, incident to any action,
suit, proceeding, claim, demand, assessment or judgment incident to the
foregoing or reasonably incurred in investigating or attempting to avoid the
same or to oppose the imposition thereof, or in enforcing this indemnity.
(b) Seller's obligation to indemnify Buyer pursuant to
Section 10.2(a) shall be subject to all of the following limitations:
(i) (1) No indemnification shall be required to be
made by Seller as the Indemnifying Party under Section 10.2(a) until the
aggregate amount of all Settled Claims of Buyer as Claimant pursuant to this
Agreement (and any agreements executed in connection herewith or delivered
pursuant hereto) and the Group II-V Asset Purchase Agreement (and any
agreements executed in connection therewith or delivered pursuant thereto)
<PAGE> 50
45
exceeds Five Hundred Thousand Dollars ($500,000) in the aggregate (the "Hurdle
Amount"); provided, however, that such limitation shall not apply to claims
made by Buyer with respect to indemnification pursuant to Section 10.2(a)(iv),
(v), (vi), (vii) and (viii) and prorations and adjustments to the Estimated
Purchase Price pursuant to Sections 2.5 and 6.13(b). Once the aggregate amount
of all such Settled Claims exceeds the Hurdle Amount, Seller shall provide
indemnification to Buyer in respect of all Settled Claims, whether occurring
before or after such time.
(2) Notwithstanding anything in this
Agreement or applicable law to the contrary, in no event shall Seller's
obligation for indemnification under this Agreement and the Group II-V Asset
Purchase Agreement (and agreements executed in connection herewith or therewith
or delivered pursuant hereto or thereto) in the aggregate for all such
agreements, exceed $56,967,153, and Buyer waives, releases and shall have no
recourse against Seller for amounts in excess of $56,967,153; provided,
however, that such limitation shall not apply to claims made by Buyer pursuant
to Section 10.2(a)(iv) and (viii).
(ii) Buyer shall be entitled to indemnification only
for those damages arising with respect to any claim as to which Buyer has given
Seller written notice within the appropriate time period set forth in Section
10.1 hereof for such claim.
(iii) All of Buyer's damages sought to be recovered
under Section 10.2(a) hereof shall be net of (i) any insurance proceeds
received by Buyer as Claimant, with respect to events giving rise to such
damages, and (ii) tax benefits finally received by or accruing to Buyer in
connection with such events.
(iv) Following the Closing, the sole and exclusive
remedy for Buyer for any claim arising out of a breach of any representation,
warranty, covenant or other agreement herein or otherwise arising out of or in
connection with the transactions contemplated by this Agreement (and agreements
executed in connection herewith or delivered pursuant hereto) or the operations
of the Businesses, other than in respect of claims arising in connection with
the WHNZ Option Agreement, the WYCL Option Agreement, the Services Agreements
and the TSAs, whether such claim is framed in tort, contract or otherwise,
shall be a claim for indemnification pursuant to this Section 10.
(v) Anything in this Agreement or any applicable law
to the contrary notwithstanding, it is understood and agreed
<PAGE> 51
46
by Buyer that, other than with respect to Seller (but not including any
shareholder, director, officer, employee, agent or Affiliate of Seller) as
expressly provided for in Section 10.2(a) and this Section 10.2(b), no
shareholder, director, officer, employee, agent or Affiliate of Seller shall
have (i) any personal liability to Buyer as a result of the breach of any
representation, warranty, covenant or agreement of Seller contained herein or
otherwise arising out of or in connection with the transactions contemplated
hereby or the operations of the Businesses or (ii) any personal obligation to
indemnify Buyer for any of Buyer's claims pursuant to Section 10.2(a) and Buyer
waives and releases and shall have no recourse against any of such parties
described in this Section 10.2(b)(v) as a result of the breach of any
representation, warranty, covenant or agreement of Seller contained herein or
otherwise arising out of or in connection with the transactions contemplated
hereby or the operations of the Businesses; provided, however, that the
foregoing shall not affect the liability and obligations of any of the parties
to the Clear Channel Loan Agreement and the Guaranty delivered to Buyer
pursuant to Section 6.10(a)(i)(6) of the Group II-V Asset Purchase Agreement
thereunder.
10.3 Indemnification by Buyer and Guarantor. (a) After the Closing,
Buyer and Guarantor hereby jointly and severally agree to indemnify, defend and
hold Seller harmless against and with respect to, and shall reimburse Seller
for:
(i) Any and all losses, liabilities or damages
resulting from any material breach of any representation or warranty made
pursuant to this Agreement, or any material failure by Buyer or Guarantor to
perform any covenant of Buyer or Guarantor set forth in this Agreement or in
any certificate, document or instrument delivered to Seller under this
Agreement;
(ii) Any failure by Buyer or Guarantor to pay,
perform or discharge any and all Assumed Liabilities or any other liabilities
of Buyer or Guarantor pursuant to this Agreement;
(iii) Any litigation, proceeding or claim arising
from the business or operations of the Assets or the Businesses on or after the
Effective Time;
(iv) Any and all reasonable out-of-pocket costs and
expenses, including reasonable legal fees and expenses, incident to any action,
suit, proceeding, claim, demand, assessment or judgment incident to the
foregoing or reasonably incurred in investigating or attempting to avoid the
same or to oppose the imposition thereof, or in enforcing this indemnity.
<PAGE> 52
47
(b) Buyer's and Guarantor's obligation to indemnify Seller
pursuant to Section 10.3(a) shall be subject to all of the following
limitations:
(i) (1) No indemnification shall be required to be
made by Buyer and Guarantor as the Indemnifying Party under Section 10.3(a)(i)
relating solely to material breaches of representations and warranties until
the aggregate amount of all Settled Claims of Seller as Claimant pursuant to
this Agreement (and any agreements executed in connection herewith or delivered
pursuant hereto) and the Group II-V Asset Purchase Agreement (and any
agreements executed in connection therewith or delivered pursuant thereto)
exceeds the Hurdle Amount in the aggregate; provided, however, that once the
aggregate amount of all such Settled Claims exceeds the Hurdle Amount, Buyer
shall provide indemnification to Seller in respect of all such Settled Claims,
whether occurring before or after such time.
(2) Notwithstanding anything in this Agreement
or applicable law to the contrary, in no event shall Buyer's or Guarantor's
obligation for indemnification relating solely to representations and
warranties under Section 10.3(a)(i) and Section 10.3(a)(i) of the Group II-V
Asset Purchase Agreement (and agreements executed in connection herewith or
therewith or delivered pursuant hereto or thereto) in the aggregate for all
such agreements, exceed $56,967,153, and Seller waives, releases and shall have
no recourse against Buyer for amounts in excess of $56,967,153 relating solely
to such matters; provided, however, that such limitation shall not apply to
claims made by Seller pursuant to any subsection of Section 10.3 or Section
10.3 of the Group II-V Purchase Agreement other than the provisions thereof
relating solely to material breaches of representations and warranties under
Section 10.3(a)(i)of this Agreement and Section 10.3(a)(i) of the Group II-V
Asset Purchase Agreement.
(ii) Seller shall be entitled to indemnification only
for those damages arising with respect to any claim as to which Seller has
given Buyer written notice within the appropriate time period set forth in
Section 10.1 hereof for such claim.
(iii) All of Seller's damages sought to be recovered
under Section 10.3(a) hereof shall be net of (A) any insurance proceeds
received by Seller as Claimant, with respect to events giving rise to such
damages, and (B) any tax benefits finally received or accruing to Seller in
connection with such events.
<PAGE> 53
48
(iv) Following the Closing, the sole and exclusive
remedy for Seller for any claim arising out of a breach of any representation,
warranty, covenant or other agreement herein or otherwise arising out of or in
connection with the transactions contemplated by this Agreement (and agreements
executed in connection herewith or delivered pursuant hereto) or the operations
of the Businesses, other than in respect of claims arising in connection with
the WHNZ Option Agreement, the WYCL Option Agreement, the Services Agreements
and the TSAs, whether such claim is framed in tort, contract or otherwise,
shall be a claim for indemnification pursuant to this Section 10.
(v) Anything in this Agreement or any applicable law
to the contrary notwithstanding, it is understood and agreed by Seller that,
other than with respect to Buyer and Guarantor (but not including any
shareholder, director, officer, employee, agent or other Affiliate of either of
them), as expressly provided for in Section 10.3(a) and this Section 10.3(b),
no shareholder, director, officer, employee, agent or Affiliate of Buyer or
Guarantor shall have (A) any personal liability to Seller as a result of the
breach of any representation, warranty, covenant or agreement of Buyer
contained herein or otherwise arising out of or in connection with the
transactions contemplated hereby or the operations of the Businesses or (B)
personal obligation to indemnify Seller for any of Seller's claims pursuant to
Section 10.3(a), and Seller waives and releases and shall have no recourse
against any one of such parties described in this Section 10.3(b)(v) as the
result of the breach of any representation, warranty, covenant or agreement of
Buyer contained herein or otherwise arising out of or in connection with the
transactions contemplated hereby or the operations of the Businesses.
10.4 Procedure for Indemnification. The procedure for indemnification
shall be as follows:
(a) The party claiming indemnification (the "Claimant")
shall promptly give notice to the party from which indemnification is claimed
(the "Indemnifying Party") of any claim, whether between the parties or brought
by a third party, specifying in reasonable detail the factual basis for the
claim, the amount thereof, estimated in good faith, and the method of
computation of such claim, all with reasonable particularity and containing a
reference to the provisions of this Agreement in respect of which such
indemnification claim shall have occurred. If the claim relates to an action,
suit, or proceeding filed by a third party against Claimant, such notice shall
be given by Claimant within ten Business Days after written notice of such
action, suit, or proceeding was given to Claimant.
<PAGE> 54
49
(b) With respect to claims solely between the parties,
following receipt of notice from the Claimant of a claim, the Indemnifying
Party shall have thirty days to make such investigation of the claim as the
Indemnifying Party deems necessary or desirable. For the purposes of such
investigation, the Claimant agrees to make available to the Indemnifying Party
and its authorized representatives the information relied upon by the Claimant
to substantiate the claim. If the Claimant and the Indemnifying Party agree at
or prior to the expiration of the thirty-day period (or any mutually agreed
upon extension thereof) to the validity and amount of such claim, the
Indemnifying Party shall immediately pay to the Claimant the full amount of the
claim, subject to the terms hereof (including Sections 10.2(b) and 10.3(b)). If
the Claimant and the Indemnifying Party do not agree within the thirty-day
period (or any mutually agreed upon extension thereof), the Claimant may seek
appropriate remedy at law or equity, as applicable, subject to the limitations
of Sections 10.2(b) and 10.3(b).
(c) With respect to any claim by a third party as to which
the Claimant is entitled to indemnification under this Agreement, the
Indemnifying Party shall have the right at its own expense, to participate in
or assume control of the defense of such claim, and the Claimant shall
cooperate fully with the Indemnifying Party, subject to reimbursement for
actual out-of-pocket expenses incurred by the Claimant as the result of a
request by the Indemnifying Party. If the Indemnifying Party elects to assume
control of the defense of any third-party claim, the Claimant shall have the
right to participate in the defense of such claim at its own expense. If the
Indemnifying Party does not elect to assume control or otherwise participate in
the defense of any third-party claim, then the Claimant may defend through
counsel of its own choosing and (so long as it gives the Indemnifying Party at
least fifteen (15) days' prior written notice of the terms of the proposed
settlement thereof and permits the Indemnifying Party to then undertake the
defense thereof) settle such claim, action or suit, and to recover from the
Indemnifying Party the amount of such settlement or of any judgment and the
costs and expenses of such defense. The Indemnifying Party shall not compromise
or settle any third party claim, action or suit without the prior written
consent of the Claimant, which consent will not be unreasonably withheld or
delayed.
(d) If a claim, whether between the parties or by a third
party, requires immediate action, the parties will make every effort to reach a
decision with respect thereto as expeditiously as practicable.
<PAGE> 55
50
(e) Any claim for indemnity pursuant to this Section 10
with respect to which (i) the Claimant and the Indemnifying Party agree as to
its validity and amount, (2) a final judgment, order or award of a court of
competent jurisdiction deciding such claim has been rendered, as evidence by a
certified copy of such judgment, provided that such judgment is not appealable
or the time for taking an appeal has expired or (3) the Indemnifying Party has
not given written notice to the Claimant disputing such claim in whole or in
part within thirty days of receiving notice thereof, is referred to as a
"Settled Claim."
SECTION 11 MISCELLANEOUS
11.1 Fees and Expenses. Except as otherwise specifically provided in
this Agreement, each party shall pay its own expenses incurred in connection
with the authorization, preparation, execution, and performance of this
Agreement and the documents and transactions contemplated hereby, including all
fees and expenses of counsel, accountants, agents and representatives;
provided, however, that all transfer taxes, recordation taxes, sales taxes and
document stamps in connection with the transactions contemplated by this
Agreement and all other filing fees (including all FCC and HSR Act filing fees)
and other charges levied by any governmental entity in connection with the
transactions contemplated by this Agreement shall be paid one-half by Buyer and
one-half by Seller. Notwithstanding the foregoing, Seller shall pay (a) all
Florida state sales tax, if any, arising from the conveyance of the Assets to
Buyer pursuant to this Agreement and (b) all federal, state or local income
taxes payable by Seller, and Buyer shall pay all federal, state or local income
taxes payable by Buyer. Buyer hereby waives compliance with the provisions of
any applicable bulk transfer laws.
11.2 Notices. All notices, demands and requests required or permitted
to be given under the provisions of this Agreement shall be (i) in writing,
(ii) sent by facsimile (with receipt personally confirmed by telephone),
delivered by personal delivery, or sent by commercial delivery service or
certified mail, return receipt requested, (iii) deemed to have been given on
the date telecopied with receipt confirmed, the date of personal delivery, or
the date set forth in the records of the delivery service or on the return
receipt, and (iv) addressed as follows:
<PAGE> 56
51
To Metroplex, CCL Clear Channel Metroplex,
or Guarantor: Inc.
200 Concord Plaza, Suite 600
San Antonio, Texas 78216
Attention: Mark P. Mays, President
Kenneth E. Wyker, Senior
Vice President for
Legal Affairs
Telecopy: (210) 822-2299
Telephone: (210) 822-2828
with a copy Wiley Rein & Fielding
(which shall 1776 K Street, N.W.
not constitute Washington, D.C. 20006
notice) to: Attention: Richard J. Bodorff, Esq.
Telecopy: (202) 429-7049
Telephone: (202) 429-7000
To Seller: Paxson Communications Corporation
601 Clearwater Park Road
West Palm Beach, FL 33401
Attention: Mr. Lowell W. Paxson
Mr. Anthony L. Morrison
Telecopy: (561) 655-9424
Telephone: (561) 659-4122
with a copy Dow, Lohnes & Albertson, PLLC
(which shall 1200 New Hampshire Avenue, N.W.
not constitute Suite 800
notice) to: Washington, DC 20036-6802
Attention: John R. Feore, Jr., Esq.
Telecopy: (202) 776-2222
Telephone: (202) 776-2000
or to any other or additional persons and addresses as the parties may from
time to time designate in a writing delivered in accordance with this Section
11.2.
11.3 Benefit and Binding Effect. Except as otherwise provided in
Section 11.10 and the following sentence of this Section 11.3, no party hereto
may assign this Agreement without the prior written consent of the other
parties hereto. Buyer may assign all of its rights and obligations under this
Agreement to Clear Channel Radio, Inc. ("CCRI") and Clear Channel Radio
License, Inc. ("CCRL"), so long as (i) CCRI and CCRL are wholly-owned
subsidiaries of the Guarantor and (ii) such assignment does not hinder, impair
or delay in any respect the grant by the FCC of the FCC Consent or the Closing;
provided that such assignment shall not release Buyer from any of its
obligations hereunder. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and permitted
assigns.
<PAGE> 57
52
11.4 Further Assurances. Subject to the terms and conditions of this
Agreement, from time to time prior to, at and after the Closing Date, each
party hereto will use commercially reasonable efforts to take, or cause to be
taken, all such actions and to do or cause to be done, all things, necessary,
proper or advisable under applicable laws and regulations to consummate and
make effective the purchase and sale contemplated by this Agreement and the
consummation of the other transactions contemplated hereby, including executing
and delivering such documents as the other party being advised by counsel shall
reasonably request in connection with the consummation of this Agreement and
the consummation of the other transactions contemplated hereby, including,
without limitation, the execution and delivery of any and all confirmatory and
other instruments, in addition to those to be delivered on the Closing Date.
11.5 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED, CONSTRUED AND
ENFORCED IN ACCORDANCE WITH THE LAWS OF FLORIDA (WITHOUT REGARD TO THE CHOICE
OF LAW PROVISIONS THEREOF).
11.6 Entire Agreement. This Agreement, the Appendices, Exhibits and
Schedules hereto, the Group II-V Asset Purchase Agreement and all documents,
certificates and other documents to be delivered by the parties pursuant hereto
and thereto, collectively, represent the entire understanding and agreement
between Buyer and Seller with respect to the subject matter of this Agreement.
This Agreement supersedes the Letter of Intent dated June 16, 1997, as amended,
and all prior negotiations between the parties and cannot be amended,
supplemented, or changed except by an agreement in writing that makes specific
reference to this Agreement and that is signed by the party against which
enforcement of any such amendment, supplement, or modification is sought. Buyer
acknowledges and agrees that Seller shall not be liable for or bound in any
manner by, and Buyer has not relied upon, any express or implied, oral or
written information, warranty, guaranty, promise, statement, inducement,
presentation or opinion (whether of, by or on behalf of Seller, any broker or
finder, or any officer, employee, agent or representative of any of the
foregoing, or any other person) pertaining to the transactions contemplated
hereby, the Seller, the Businesses, the Assets, or any part of any of the
foregoing (including, without limitation, any projections, budgets or other
financial forecasts or the physical condition of the Businesses or any of the
Assets, or the uses which can be made of the same or the value thereof), except
as is expressly set forth in this Agreement.
<PAGE> 58
53
11.7 Waiver of Compliance; Consents. Except as otherwise provided in
this Agreement, any failure of any of the parties to comply with any
obligation, representation, warranty, covenant, agreement, or condition herein
may be waived by the party entitled to the benefits thereof only by a written
instrument signed by the party granting such waiver, but such waiver or failure
to insist upon strict compliance with such obligation, representation,
warranty, covenant, agreement, or condition shall not operate as a waiver of,
or estoppel with respect to, any subsequent or other failure. Whenever this
Agreement requires or permits consent by or on behalf of any party hereto, such
consent shall be given in writing in a manner consistent with the requirements
for a waiver of compliance as set forth in this Section 11.7.
11.8 Counterparts. This Agreement may be signed in counterparts with
the same effect as if the signature on each counterpart were upon the same
instrument.
11.9 Severability. If any provision of this Agreement or the
application thereof to any person or circumstance shall be invalid or
unenforceable to any extent, the remainder of this Agreement and the
application of such provision to other persons or circumstances shall not be
affected thereby and shall be enforced to the greatest extent permitted by law
so long as the economic or legal substance of the transactions contemplated
hereby is not affected in any manner materially adverse to any party. Upon such
determination that any term or other provision is invalid or unenforceable, the
parties hereto shall negotiate in good faith to modify this Agreement so as to
effect the original intent of the parties as closely as possible in an
acceptable manner to the end that the transactions contemplated hereby are
fulfilled to the greatest extent possible.
11.10 Cooperation With Respect to Like-Kind Exchange. Seller may
assign some or all of its rights (but not its obligations) under this Agreement
to an escrow agent or other Person reasonably satisfactory to Buyer serving as
a Intermediary under United States Treasury Regulations promulgated under
Section 1031 of the Code; provided that (i) such assignment shall not deprive
Buyer of rights or benefits, or relieve Seller of any obligations or
liabilities, under this Agreement, (ii) Buyer shall not be obligated to expend
funds or incur obligations or liabilities in connection therewith and (iii)
Seller shall indemnify and hold harmless Buyer from and against any and all
loss, liability, cost and expense arising or resulting from any such
transaction. Seller intends for such exchange to constitute a like-kind
exchange pursuant to Section 1031 of the Code. However, nothing in this
Agreement shall be
<PAGE> 59
54
construed as a representation or warranty of any party to any other party as to
the tax characterization of the transaction.
11.11 Guaranty. (a) Guarantor irrevocably guarantees (the
"Guarantee"), as principal and not as surety, to Seller and its successors and
permitted assigns full and prompt performance by Buyer (which for all purposes
hereof shall include any assignee(s) of Buyer permitted under Section 11.3) of
all of its obligations under or pursuant to this Agreement and all documents
and instruments executed in connection herewith or delivered pursuant hereto in
accordance with the terms hereof and thereof (the "Guaranteed Obligations").
Such guarantee shall apply and survive until all obligations of Buyer under
this Agreement and all documents and instruments executed in connection
herewith or delivered pursuant hereto are performed and satisfied in accordance
with the terms thereof. Guarantor hereby waives any provision of any statute or
judicial decision otherwise applicable hereto which restricts or in any way
limits the rights of any obligee against a guarantor or surety following a
default or failure of performance by an obligor with respect to whose
obligations the guarantee is provided. To the fullest extent permitted by
applicable law, Guarantor hereby waives presentment to, demand of payment from
and protest of any Guaranteed Obligation, and also waives notice of acceptance
of its guarantee and notice of protest for nonpayment. To the fullest extent
permitted by applicable law, the obligations of Guarantor hereunder shall not
be affected by (a) the failure of the applicable obligee to assert any claim or
demand or to enforce any right or remedy against Guarantor pursuant to the
provisions of this Agreement or otherwise and (b) any rescission, waiver,
amendment or modification of, or any release from any of the terms or
provisions of this Section 11.11, unless consented to in writing by Buyer and
Seller.
(b) Guarantor hereby represents and warrants to Seller as
follows: (i) Guarantor is a corporation duly organized, validly existing and in
good standing under the laws of the State of Texas and has the requisite
corporate power and authority to execute, deliver and perform this Agreement
according to its terms; (ii) the execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated hereby by
Guarantor have been duly authorized by all necessary corporate action on the
part of Guarantor; (iii) this Agreement has been duly executed and delivered by
Guarantor and constitutes the legal, valid and binding obligation of Guarantor
enforceable against Guarantor in accordance with its terms, except as the
enforceability of this Agreement may be affected by bankruptcy, insolvency or
similar laws affecting creditors' rights generally and by judicial discretion
in the enforcement of equitable remedies; and (iv)
<PAGE> 60
55
the execution, delivery and performance of this Agreement: (1) do not require
the consent of any third party, (2) do not conflict with the Articles of
Incorporation or bylaws of Guarantor, and (3) do not conflict in any material
respect with, result in a material breach of, or constitute a material default
under any applicable law, judgment, order, ordinance, injunction, decree, rule,
regulation or ruling of any court or governmental authority applicable to
Guarantor or any material contract or agreement to which Guarantor is a party
or by which Guarantor may be bound.
<PAGE> 61
IN WITNESS WHEREOF, this Agreement has been executed by the duly
authorized officers of Buyer, Seller and Guarantor of the date first written
above.
CLEAR CHANNEL METROPLEX, INC.
By:
-------------------------------
Name:
Title:
CLEAR CHANNEL METROPLEX LICENSES, INC.
By:
-------------------------------
Name:
Title:
CLEAR CHANNEL COMMUNICATIONS, INC.
By:
-------------------------------
Name:
Title:
PAXSON COMMUNICATIONS CORPORATION
By:
-------------------------------
Name:
Title:
<PAGE> 62
APPENDIX 1
DEFINITIONS
"Accounts Receivable" means the rights of Seller as of the Closing
Date to payment for the sale of advertising time and other goods and services
by any of the Businesses.
"Affiliate" means, with respect to any Person any other Person that,
directly or indirectly through one or more intermediaries, controls, is
controlled by, or is under common control with such Person.
"Assumed Contracts" means (a) all Contracts listed on Schedules 3.5,
3.7 and 3.12 with respect to the Businesses and all Contracts of the type
described in Sections 3.5, 3.7 and 3.12 with respect to the Businesses that are
not required to be listed thereon pursuant to the exceptions set forth in such
Sections; (b) Contracts entered into with advertisers for the sale of
advertising time in the ordinary course of business with respect to the
Businesses; (c) any Contracts entered into by Seller between the date of this
Agreement and the Closing Date related to the Businesses that Buyer agrees in
writing to assume, and (d) other Contracts entered into by Seller between the
date of this Agreement and the Closing Date related to the Businesses pursuant
to this Agreement in compliance with Section 5.1; provided that Assumed
Contracts shall in no event include Excluded Contracts.
"Assumed Liabilities" means (a) any obligation or liability of Seller
under the Assets (including the Licenses and the Assumed Contracts) to the
extent that either (1) the obligations and liabilities relate to the period
after the Effective Time or (2) the Purchase Price was reduced pursuant to
Section 2.5(a) as a result of the proration or adjustment of such obligations
and liabilities; (b) any liability or obligation to any former employee of the
Businesses who has been hired by Buyer, attributable to any period of time on
or after the Effective Time; (c) any liability or obligation arising out of any
litigation, proceeding or claim by any person or entity relating to the
business or operations of any of the Businesses or any of the Assets with
respect to any events or circumstances that occur or arise on or after the
Effective Time; (d) all state and local sales or use taxes (or their
equivalent) and transfer taxes or recording fees payable as a consequence of
the sale of the Assets hereunder to the extent set forth in Section 11.1; and
(e) all other liabilities or obligations expressly assumed by Buyer hereunder
with respect to the Assets and the Businesses.
<PAGE> 63
2
"Business Day" means any day excluding Saturdays, Sundays and any day
that is a legal holiday under the laws of the United States or the State of
Florida or is a day on which banking institutions located in the State of
Florida are authorized or required by law or other governmental action to
close.
"Closing" means the consummation of the sale of the Assets pursuant to
this Agreement in accordance with the provisions of Section 8.
"Closing Date" means the date on which the Closing occurs, as
determined pursuant to Section 8.
"Code" means the Internal Revenue Code of 1986, as amended.
"Consents" means the consents, permits, or approvals of, notices to or
filings with, governmental authorities and other third parties necessary to
transfer the Assets to Buyer as contemplated hereunder or otherwise necessary
to consummate lawfully the transactions contemplated by this Agreement,
including, without limitation, the Required Consents.
"Contracts" means all contracts, leases, non-governmental licenses and
other agreements (including leases for personal or real property and employment
agreements), written or oral (including any amendments and other modifications
thereto) (A) of Seller or to which Seller is a party or that are binding upon
Seller and (B) that relate to or affect the Assets or the business or
operations of any of the Businesses, and (x) that are in effect on the date of
this Agreement or (y) that are entered into by Seller between the date of this
Agreement and the Closing Date, but excluding any Contracts that terminate
between the date of this Agreement and the Closing Date.
"Effective Time" means 12:01 a.m., Eastern Time on the Closing Date.
"Employee Plan" means any retirement, severance, medical, disability,
life insurance or any other employee benefit plan as defined in Section 3(3) of
ERISA to which either of Seller or any entity related to Seller (under the
terms of Sections 414 (b) or (c) of the Code) contributes or which either of
Seller or any entity related to Seller (under the terms of Sections 414 (b) or
(c)of the Code) sponsors or maintains.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"Estoppel Certificate" means an estoppel certificate executed by the
landlord under a lease for any leased Real
<PAGE> 64
3
Property, certifying a copy of such lease and stating that all rental payments
due thereunder are current and, to the knowledge of such landlord, there are no
defaults under such lease; provided, however, that to the extent any such
landlord refuses to execute such an estoppel certificate, but executes a Lease
Consent, such Lease Consent shall be deemed to be an Estoppel Certificate.
"Excluded Assets" means:
(a) any assets of any nature whatsoever of Seller that are
not used in the conduct of the business or operations of the Businesses,
including, without limitation, any assets of Seller (or its subsidiaries) used
or useful in the operations of the television stations owned or operated by
Seller (or its Subsidiaries);
(b) all cash, cash equivalents and cash items of any kind
whatsoever, certificates of deposit, money market instruments, bank balances,
and rights in and to bank accounts, Treasury bills and marketable securities
and other securities of Seller;
(c) contracts of insurance and insurance plans and the
assets thereof, promissory notes (except those made by account debtors),
amounts currently due from employees, bonds, letters of credit, certificates of
deposit, or other similar items, and any cash surrender value in regard
thereto;
(d) any pension, profit-sharing, retirement, bonus, stock
purchase, savings plans and trusts, 401(k) plans, health insurance plans
(including any insurance contracts or policies related thereto), and the assets
thereof and any rights thereto, and all other plans, agreements or
understandings to provide employee benefits of any kind for employees of
Seller;
(e) claims of Seller with respect to transactions
attributable to the operations of any of the Businesses prior to the Closing,
including, without limitation, rights and interests of Seller in and to any
claims for Tax refunds and causes of action and claims of Seller under
contracts and with respect to other transactions with respect to events
occurring prior to the Closing and all claims for other refunds or returns of
monies paid to any governmental agency or otherwise and all claims for
copyright royalties for broadcast prior to the Closing;
(f) Contracts that are not Assumed Contracts, including
those listed in Schedule 1.1(f) and those provisions of any employment contract
with respect to the Businesses between Seller and its Affiliates and an Assumed
Employee which
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4
address the terms and conditions of any grant by PCC to such Assumed Employee
of an option to purchase common stock of PCC (the "Excluded Contracts");
(g) Seller's interest in any of its subsidiaries, Seller's
corporate records and other books and records that pertain to internal
corporate matters of Seller and Seller's account books of original entry with
respect to any of the Businesses, and any other Assets, and all original
accounts, checks, payment records, tax records (including payroll,
unemployment, real estate and other tax records) and other similar books,
records and information of Seller relating to Seller's operation of the
Businesses and any other Assets prior to the Closing;
(h) the deposits and prepaid expenses of Seller with
respect to the items that are not subject to adjustment under Section 2.5
hereof and with respect to which Seller remains liable pursuant to Section 2.5
hereof;
(i) rights to the name "Paxson" or any logo, variation or
derivation thereof;
(j) Seller's interest in the assets described on Schedule
1.1(j);
(k) the tangible and intangible, real and personal assets
used or useful in connection with the business or operation of WYCL, WHNZ and
WEAT;
(l) the assets used in connection with a commercial
billboard outdoor advertising business in the Tampa, Florida market that are
not used in any other business (it being understood and agreed that in no event
shall any billboards in the Tampa, Florida market be included in the Assets)
(the "Tampa Billboard Business"); and
(m) the assets used in connection with the business of the
Miami Toros/Bulls Arena Football League franchise and the Florida Eagles
American Hockey League franchise (the "Sports Teams Business").
"FCC" means the Federal Communications Commission.
"FCC Consent" means actions by the FCC granting its
consent to the assignment of the authorizations by the FCC to operate satellite
earth stations E940489, Miami, FL and E860028, Nashville, TN (the "Earth
Station Licenses") by Seller to Buyer as contemplated by this Agreement.
<PAGE> 66
5
"FCC Licenses" means those Licenses issued by the FCC in connection
with the business and operations of the Businesses.
"GAAP" means generally accepted accounting principles, as in effect
from time to time, applied on a consistent basis.
"HSR Act" means the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended.
"Intangibles" means all copyrights, trademarks, trade names, service
marks, service names, licenses, computer programs and computer license
interests to the extent owned by and transferable by Seller, patents, permits,
jingles, proprietary information, technical information and data, and other
similar intangible or intellectual property rights and interests applied for,
issued to, or owned by Seller or under which Seller is licensed or franchised
and that are used or useful in the business and operations of any of the
Businesses, together with any additions thereto between the date of this
Agreement and the Closing.
"Intermediary" means an escrow agent or other Person serving as a
"qualified intermediary" under United States Treasury Regulations promulgated
pursuant to Section 1031 of the Code.
"Lease Consent" means the Consent of any landlord under any lease for
any leased Real Property.
"License Assets" means all FCC Licenses.
"Licenses" means all licenses, permits, construction permits and other
authorizations issued by any federal, state, or local governmental authorities
to Seller currently in effect and used in connection with the conduct of the
business or operations of any of the Businesses, including, without limitation,
the Earth Station Licenses, together with any additions thereto between the
date of this Agreement and the Closing Date.
"Lien" means any claims, liabilities, security interests, mortgages,
liens, pledges, conditions, charges, restrictions or encumbrances of any nature
whatsoever.
"Material Adverse Effect" means a material adverse effect on the
financial condition of the Stations' Business and the business of the
Businesses, taken as a whole; provided that the foregoing shall not include any
material adverse effect attributable to, resulting from or arising out of (a)
factors affecting the industries to which the Businesses relate and the
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6
radio broadcasting industry generally, (b) general national, regional or local
economic or financial conditions, (c) governmental or legislative laws, rules
or regulations, or (d) actions taken by Buyer or any Affiliate of Buyer.
"Network" means any of the Alabama Radio Network, the Tennessee Radio
Network, the University of Miami Sports Radio Network, the Florida Radio
Network, the University of Florida Sports Radio Network and the Penn State
Sports Radio Network.
"Non-License Assets" means all Assets other than the FCC Licenses.
"Permitted Liens" means (a) liens for taxes and assessments not yet
due and payable; (b) landlord's liens and liens for property taxes not
delinquent; (c) statutory liens that were created in the ordinary course of
business not delinquent; (d) restrictions or rights granted to governmental
authorities under applicable law; (e) zoning, building, or similar restrictions
relating to or affecting property; (f) all matters of record that do not
adversely affect in any material respect the use of the Real Property as
currently used (excluding, however, any mortgage, deed to secure debt, deed of
trust, security agreement, judgment lien, or statutory claim of lien or other
title exception or defect that is monetary in nature, other than those in favor
of Buyer); (g) the Assumed Liabilities; (h) any other encumbrances disclosed in
this Agreement or the Schedules hereto or in any title policy or survey
delivered to Buyer on or before the date hereof pursuant to this Agreement
(excluding, however, any mortgage, deed to secure debt, deed of trust, security
agreement, judgment lien, or statutory claim of lien or other title exception
or defect that is monetary in nature, other than those in favor of Buyer); (i)
any other easement, encroachment, encumbrance or other condition that does not
adversely affect in any material respect the use of the Real Property as
currently used.
"Person" means an individual, corporation, association, partnership,
joint venture, trust, estate, limited liability company, limited liability
partnership, or other entity or organization.
"Real Property" means (a) all fee estates in real property, and all
buildings and other improvements thereon, owned, leased or held by Seller that
are used or useful in the business or operations of any of the Businesses; and
(b) leases of any real property under which Seller is the lessee that are used
or useful in the business or operations of any of the Businesses, together with
any additions thereto between the date of this Agreement and the Closing.
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7
"Remaining Assets" means, as of the Further Closing Date, the Assets
not sold at the First Closing.
"Repurchase Assets" means all Assets other than the Assets which are
used or useful in the conduct or operations of the Billboard Business.
"Required Consents" means the Consents listed in Schedule 3.3 that are
designated with an asterisk.
"Tangible Personal Property" means all machinery, equipment, tools,
vehicles, furniture, office equipment, plant, inventory, spare parts and other
tangible personal property owned or held by Seller that is used or useful in
the conduct of the business or operations of any of the Businesses, together
with any additions thereto between the date of this Agreement and the Closing
Date.
"Tax" means any federal, state, local, or foreign income, gross
receipts, windfall profits, severance, property, production, sales, use,
license, excise, franchise, capital, transfer, employment, withholding, or
other tax or governmental assessment, together with any interest, additions, or
penalties with respect thereto and any interest in respect of such additions or
penalties.
"Tax Return" means any tax return, declaration of estimated tax, tax
report or other tax statement, or any other similar filing required to be
submitted by Seller relating to the Businesses to any governmental authority
with respect to any Tax.
"Termination Date" means the date which is eighteen (18) months from
the date hereof.
For purposes of this Agreement, the following terms have the meanings
set forth in the sections indicated:
<TABLE>
<CAPTION>
Term Section
- ---- -------
<S> <C>
Alabama Radio Network Recitals
Applicable Environmental Laws Section 3.16
Assessments Section 6.8
Assets Section 2.1
Assignment and Assumption Agreement Section 8.2(a)
Assumed Employees Section 6.6(a)
Billboard Business Recitals
Businesses Recitals
Buyer Preamble
CCL Preamble
</TABLE>
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8
<TABLE>
<S> <C>
CCML Section 2.3
CCRI Section 11.3
CCRL Section 11.3
CEA Section 3.17
Claimant Section 10.4(a)
Clear Channel Preamble
Deeds Section 8.2(a)
DOJ Section 6.2
Earth Station Section 3.4(a)
Employees Section 3.12
Estimated Purchase Price Section 2.4
FCC Appendix 1
FCC Licenses Section 3.4(a)
Final Purchase Price Section 2.6(b)
Financial Statements Section 3.9
Florida Radio Network Recitals
FTC Section 6.2
Group II-V Asset Purchase Agreement Section 2.3
Guarantee Section 11.11(a)
Guaranteed Obligations Section 11.11(a)
Guarantor Preamble
Hazardous Substance Section 3.16(a)
Hurdle Amount Section 10.2(b)
Indemnifying Party Section 10.4(a)
Like-kind Exchange Section 10.2
Loss Section 6.12(a)
LPI Section 2.3
Metroplex Preamble
Monthly Financial Information Section 5.5
Negative Balance Section 2.5(a)
New Phase I Report Section 6.8(d)
PCC Preamble
PCC Billboard and Network Business Recitals
Penn State Sports Radio Network Recitals
Phase II Report Section 6.8(b)
Preliminary Purchase Price Section 2.5(a)
Preliminary Settlement Statement Section 2.5(b)
Purchase Price Section 2.4(a)
Radio Frequency Protection Guides Section 3.4(a)
Retained Liabilities Section 10.1(d)
Schedule Supplement Section 6.11
Seller Preamble
Settled Claim Section 10.4(e)
Sports Team Business Appendix 1
Tampa Billboard Business Appendix 1
Tennessee Radio Network Recitals
University of Florida
Sports Radio Network Recitals
University of Miami Sports Radio
Network Recitals
WARN Act Section 6.6(d)
1031 Election Section 10.2(iv)
</TABLE>
<PAGE> 1
EXHIBIT 2.7
EXECUTION COPY
ASSET PURCHASE AGREEMENT
BY AND AMONG
PAXSON COMMUNICATIONS CORPORATION,
L. PAXSON, INC.,
CLEAR CHANNEL
METROPLEX, INC.,
CLEAR CHANNEL
METROPLEX LICENSES, INC.
AND
CLEAR CHANNEL
COMMUNICATIONS, INC.
DATED AS OF AUGUST 25, 1997
<PAGE> 2
TABLE OF CONTENTS
-----------------
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
SECTION 1 CERTAIN DEFINITIONS ............................................ 3
1.1 Terms Defined in Appendix 1 ................................. 3
1.2 Rule of Construction ........................................ 3
SECTION 2 PURCHASE AND SALE OF ASSETS; ASSET VALUE ....................... 3
2.1 Purchase and Sale ........................................... 3
2.2 Excluded Assets ............................................. 3
2.3 Group I Assets .............................................. 3
2.4 Purchase Price; Allocation .................................. 4
2.5 Prorations and Adjustments .................................. 5
2.6 Payment of Purchase Price and Prorations and Adjustments .... 8
2.7 Assumption of Liabilities and Obligations ................... 9
SECTION 3 REPRESENTATIONS AND WARRANTIES OF SELLER ....................... 10
3.1 Organization and Authority of Seller ........................ 10
3.2 Authorization and Binding Obligation ........................ 10
3.3 Absence of Conflicting Agreements; Consents ................. 10
3.4 Governmental Licenses ....................................... 11
3.5 Real Property ............................................... 12
3.6 Tangible Personal Property .................................. 13
3.7 Assumed Contracts ........................................... 13
3.8 Intangibles ................................................. 14
3.9 Financial Statements ........................................ 14
3.10 Taxes and Tax Returns ....................................... 14
3.11 Insurance ................................................... 14
3.12 Personnel ................................................... 14
3.13 Claims and Legal Actions .................................... 15
3.14 Compliance with Laws ........................................ 15
3.15 Conduct of Business in Ordinary Course ...................... 15
3.16 Environmental Matters ....................................... 15
3.17 Brokers ..................................................... 17
3.18 Transactions With Affiliates ................................ 17
3.19 Assets ...................................................... 17
3.20 Employee Benefits ........................................... 17
3.21 Foreign Person .............................................. 18
3.22 Like-kind Exchange .......................................... 18
3.23 ARS APA ..................................................... 18
3.24 Disclosure .................................................. 19
3.25 Limitations ................................................. 19
SECTION 4 REPRESENTATIONS AND WARRANTIES OF BUYER ........................ 19
4.1 Organization, Standing and Authority ........................ 19
4.2 Authorization and Binding Obligation ........................ 19
4.3 Absence of Conflicting Agreements and Required Consents ..... 20
4.4 Buyer Qualifications ........................................ 20
4.5 Brokers ..................................................... 20
4.6 Availability of Funds ....................................... 20
</TABLE>
<PAGE> 3
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<TABLE>
<S> <C>
4.7 Disclosure .................................................. 21
SECTION 5 OPERATIONS OF THE STATIONS PRIOR TO EFFECTIVE TIME OR CLOSING .. 21
5.1 Generally ................................................... 21
5.2 Dispositions ................................................ 23
5.3 Liens ....................................................... 23
5.4 Access to Information ....................................... 24
5.5 Financial Information ....................................... 24
5.6 Notice of Proceedings ....................................... 24
5.7 ARS APA ..................................................... 25
5.8 Representations and Warranties .............................. 26
SECTION 6 SPECIAL COVENANTS AND AGREEMENTS ............................... 27
6.1 FCC Consent ................................................. 27
6.2 HSR Act Filing .............................................. 28
6.3 Confidentiality ............................................. 28
6.4 Cooperation ................................................. 30
6.5 Control of the Stations ..................................... 30
6.6 Access to Books and Records ................................. 30
6.7 Employee Matters ............................................ 31
6.8 Cure ........................................................ 32
6.9 Environmental Reports ....................................... 32
6.10 Other Transactions .......................................... 33
6.11 Fees of CEA ................................................. 43
6.12 Non-Competition Agreement ................................... 44
6.13 Updated Information ......................................... 44
6.14 Miscellaneous ............................................... 44
6.15 Risk of Loss; Interruption of Broadcast Transmission ........ 45
6.16 Computer Systems ............................................ 46
SECTION 7 CONDITIONS TO OBLIGATIONS OF BUYER AND SELLER ................... 46
7.1 Conditions to Obligations of Buyer at Group
II/III and Group V Closings ............................... 46
7.2 Conditions to Obligations of Seller at Group
II/III and Group V Closings ............................... 48
7.3 Conditions to Obligations of Buyer and Seller
at Group IV Closing ....................................... 49
SECTION 8 CLOSING AND CLOSING DELIVERIES ................................. 50
8.1 Closing ..................................................... 50
8.2 Deliveries by Seller ........................................ 52
8.3 Deliveries by Buyer ......................................... 54
SECTION 9 TERMINATION .................................................... 56
9.1 Termination of Agreement .................................... 56
9.2 Procedure and Effect of Termination ......................... 57
9.3 Other Agreements ............................................ 62
9.4 Attorneys' Fees ............................................. 62
9.5 Specific Performance ........................................ 62
</TABLE>
<PAGE> 4
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<TABLE>
<S> <C>
SECTION 10 SURVIVAL OF REPRESENTATIONS AND WARRANTIES;
INDEMNIFICATION; CERTAIN REMEDIES ........................... 62
10.1 Survival .................................................... 62
10.2 Indemnification by Seller ................................... 63
10.3 Indemnification by Buyer and Guarantor ...................... 66
10.4 Procedure for Indemnification ............................... 69
SECTION 11 MISCELLANEOUS ................................................. 70
11.1 Fees and Expenses ........................................... 70
11.2 Notices ..................................................... 71
11.3 Benefit and Binding Effect .................................. 72
11.4 Further Assurances .......................................... 72
11.5 GOVERNING LAW ............................................... 73
11.6 Entire Agreement ............................................ 73
11.7 Waiver of Compliance; Consents .............................. 73
11.8 Counterparts ................................................ 73
11.9 Severability ................................................ 73
11.10 Cooperation With Respect to Like-Kind Exchange .............. 74
11.11 Guaranty .................................................... 74
</TABLE>
<PAGE> 5
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Appendices
----------
Appendix 1 Definitions
Exhibits
--------
Exhibit 2.3 Group I Purchase Agreement
Exhibit 6.10-A LPI Promissory Note to Seller
Exhibit 6.10-B Subordinated Guaranty
Exhibit 6.10-C Clear Channel Loan Agreement
Exhibit 6.10-D Intercreditor and Subordination Agreement
Exhibit 6.10-E Security Agreement
Exhibit 6.10-F Guaranty
Exhibit 6.10-G Stock Pledge Agreement
Exhibit 6.10-H Group V TBA
Exhibit 6.10-I Group II/III TBA
Exhibit 6.10-J Forms of TSAs
Exhibit 6.10-K Form of Service Agreement
Exhibit 6.10-L Group IV TBA
Exhibit 6.12 Non-Competition Agreement
Exhibit 8.2(a)(i) Assignment and Assumption Agreement
Exhibit 8.2(j) WHNZ Option Agreement
Exhibit 8.2(k) WYCL Option Agreement
Exhibit 8.2(n) DP Media Assets
Schedules
---------
Schedule 1.1(f) Excluded Contracts
Schedule 1.1(j) Excluded Assets
Schedule 3.1 Qualifications
Schedule 3.3 Absence of Conflicting Agreements; Consents
Schedule 3.4 Governmental Licenses
Schedule 3.5 Real Property
Schedule 3.6 Tangible Personal Property
Schedule 3.7 Contracts
Schedule 3.8 Intangibles
Schedule 3.9 Financial Statements
Schedule 3.10 Tax and Tax Returns
Schedule 3.11 Insurance
Schedule 3.12 Personnel
Schedule 3.13 Claims and Legal Actions
Schedule 3.15 Conduct of Business in Ordinary Course
Schedule 3.16 Environmental
Schedule 3.18 Transactions with Affiliates
Schedule 3.20 Employee Benefits
Schedule 4.4 Buyer Qualifications
Schedule 5.1 Certain Changes
Schedule 5.2 Certain Dispositions
Schedule 6.14(b) WNLS(AM) Tower Remediation
<PAGE> 6
ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement is dated as of August 25, 1997, by and among
Paxson Communications Corporation, a Delaware corporation ("PCC" or "Seller"),
L. Paxson, Inc., a Delaware corporation ("LPI"), Clear Channel Metroplex, Inc.,
a Nevada corporation ("Metroplex"), Clear Channel Metroplex Licenses, Inc., a
Nevada corporation ("CCL"; Metroplex and CCL being referred to herein,
collectively, as "Buyer"), and Clear Channel Communications, Inc., a Texas
corporation ("Guarantor" or "Clear Channel").
R E C I T A L S:
A. Seller owns the following radio stations:
i. WTKS(FM), Cocoa Beach, FL; WPLL(FM), Ft. Lauderdale, FL; WSHF(FM),
Mexico Beach, FL; WJZT(FM), Midway, FL; WSHE(FM), Orlando, FL; WDIZ(AM), Panama
City, FL; WFSY(FM), Panama City, FL; WPAP-FM, Panama City, FL; WPBH(FM),
Parker, FL; WTLK(FM), Ponte Vedra Beach, FL; WXSR(FM), Quincy, FL; WNLS(AM),
Tallahassee, FL; WTNT(FM), Tallahassee, FL; WSNI(FM), Thomasville, GA; WTKX-FM,
Pensacola, FL (together with WKES, as defined below, each, individually, a
"Group II/III Station" and, collectively, the "Group II/III Stations") and
WYCL(FM), Pensacola, FL ("WYCL"); and
ii. WPLA(FM), Callahan, FL; WJRR(FM), Cocoa Beach, FL; WFTL(AM), Ft.
Lauderdale, FL; WNZS(AM), Jacksonville, FL; WROO(FM), Jacksonville, FL;
WZNZ(AM), Jacksonville, FL; WKRY(FM), Key West, FL; WZTM(AM), Largo, FL;
WAVK(FM), Marathon, FL; WSJT(FM), Lakeland, FL; WINZ(AM), Miami, FL; WIOD(AM),
Miami, FL; WLVE(FM), Miami Beach, FL; WZTA(FM), Miami Beach, FL; WMGF(FM),
Mount Dora, FL; WQTM(AM), Pine Hills, FL; WFKZ(FM), Plantation Key, FL;
WWNZ(AM), Orlando, FL; WHPT(FM), Sarasota, FL; WFSJ-FM, St. Augustine, FL;
WGIC(FM), Cookeville, TN; WGSQ(FM), Cookeville, TN; WHUB(AM), Cookeville, TN;
WPTN(AM), Cookeville, TN (each, individually, a "Group V Station" and,
collectively, the "Group V Stations") and the assets used or useful in
connection with the operation of Channel 7 of the Cookeville, TN cable
television system ("HUB-TV") and WHNZ(AM), Pinellas Park, FL ("WHNZ").
B. Seller is successor by merger to Paxson Broadcasting of Tampa, Limited
Partnership, a Florida limited partnership and wholly-owned subsidiary of PCC
("PBT"), which is a party to an Asset Purchase Agreement dated as of September
12, 1996, as amended by a First Amendment to Purchase Agreement dated as of
April 12, 1997 (as amended, the "WKES Purchase Agreement") with The Moody Bible
Institute of Chicago, an Illinois not-for-profit
<PAGE> 7
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corporation ("Moody"), pursuant to which Seller has acquired substantially all
of the assets of Radio Station WILV(FM), St. Petersburg, FL (for purposes of
this Agreement, "WKES").
C. Paxson Communications of West Palm Beach, Inc., a Florida corporation
and a wholly-owned subsidiary of Seller ("PCWPB"), is party to an Asset
Purchase Agreement, dated May 27, 1997 (the "ARS Asset Purchase Agreement")
with American Radio Systems Corporation, a Delaware corporation ("ARS"),
pursuant to which PCWPB will acquire substantially all the assets of Radio
Stations WKGR(FM), Ft. Pierce, Florida; WOLL(FM), Riviera Beach, Florida; and
WBZT(AM), West Palm Beach, Florida (each of the foregoing, individually, a
"Group IV Station" and, collectively, the "Group IV Stations") and WEAT(AM),
West Palm Beach, Florida ("WEAT").
D. Seller desires to sell, and Buyer desires to purchase, substantially
all of the assets of the Group II/III Stations, Group IV Stations and Group V
Stations, on the terms and conditions hereinafter set forth.
E. Under certain circumstances, and subject to the terms and conditions
herein set forth, PCC may sell the Group V Stations to LPI, subject to PCC's
agreement to sell such Stations to Buyer and to allow Buyer to time broker or
sell commercial time on such Stations, as the case may be, pending such sale,
each of which obligations would be assumed by LPI as a condition to any such
sale.
F. If so elected by Seller, subject to the terms and conditions of this
Agreement, Seller may enter into an exchange agreement with an Intermediary
providing that the sale and purchase of some or all of the assets described
herein be effected in a transaction that will qualify, to the extent
permissible, as a "like-kind exchange" under Section 1031 of the Code.
A G R E E M E N T S:
In consideration of the above recitals and of the mutual agreements and
covenants contained in this Agreement, the parties to this Agreement, intending
to be bound legally, agree as follows:
<PAGE> 8
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SECTION 1 CERTAIN DEFINITIONS
1.1 Terms Defined in Appendix 1. The terms defined in Appendix 1 hereto,
as used in this Agreement, have the meanings set forth in Appendix 1. Section
references in the definitions in the Appendix shall be deemed to refer to this
Agreement and the Appendix shall be deemed to be part of this Agreement.
1.2 Rule of Construction. Except as specifically otherwise provided in
this Agreement in a particular instance, a reference to a Section, Schedule or
Exhibit is a reference to a Section of this Agreement or a Schedule or Exhibit
hereto, and the terms "hereof," "herein," and other like terms refer to this
Agreement as a whole, including the Schedules and Exhibits to this Agreement,
and not solely to any particular part of this Agreement. The Schedules and
Exhibits shall be deemed to be a part of this Agreement. The descriptive
headings in this Agreement are inserted for convenience of reference only and
are not intended to be part of or to affect the meaning or interpretation of
this Agreement.
SECTION 2 PURCHASE AND SALE OF ASSETS; ASSET VALUE
2.1 Purchase and Sale. (a) Subject to the terms and conditions set forth
in this Agreement, Seller hereby agrees to transfer, convey, assign and deliver
to Buyer, and Buyer agrees to acquire all of Seller's right, title and interest
in the Group II/III Assets, the Group IV Assets and the Group V Assets.
(b) It is understood and agreed that Metroplex shall acquire the
Non-License Assets included in the Group II/III Assets, Group IV Assets and
Group V Assets and CCL shall acquire the License Assets included in the Group
II/III Assets, Group IV Assets and Group V Assets. Notwithstanding the
foregoing, however, it is understood and agreed that each of Metroplex and CCL
shall be jointly and severally liable to perform the obligations of Buyer
provided for in this Agreement and in the documents contemplated hereby.
2.2 Excluded Assets. Notwithstanding anything in this Agreement to the
contrary, the Assets shall not include the Excluded Assets. Notwithstanding
anything to the contrary set forth in this Agreement, no representations,
warranties or covenants or agreements of any nature whatsoever are made by
Seller to Buyer with respect to the Excluded Assets.
2.3 Group I Assets. Simultaneously with the execution and delivery of this
Agreement, Seller and Buyer are entering into an Asset Purchase Agreement (the
"Group I Purchase Agreement"), in
<PAGE> 9
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the form attached hereto as Exhibit 2.3, and dated as of the date hereof,
pursuant to which Seller will sell to Buyer, and Buyer will purchase from
Seller, the Group I Assets, on the terms and subject to the conditions set
forth therein.
2.4 Purchase Price; Allocation.
(a) Group II/III Assets. Subject to the provisions of Section 6.10
hereof, the purchase price for the Group II/III Assets shall be One Hundred
Thirty-Seven Million Two Hundred Six Thousand Dollars ($137,206,000) (the
"Group II/III Estimated Purchase Price"), which sum shall be subject to upward
or downward adjustment, as the case may be, pursuant to Section 2.5(a) below
(the Group II/III Estimated Purchase Price, as so adjusted, the "Group II/III
Purchase Price").
(b) Group IV Assets. Subject to the last sentence of Section 5.7, the
purchase price for the Group IV Assets shall be Thirty-One Million Two Hundred
Fifty Thousand Dollars ($31,250,000), subject to adjustment as provided for in
Section 6.10(c) hereof (the "Group IV Estimated Purchase Price"), which sum
shall be subject to upward or downward adjustment, as the case may be, pursuant
to Section 2.5(a) below (the Group IV Estimated Purchase Price, as so adjusted,
the "Group IV Purchase Price").
(c) Group V Assets. The purchase price for the Group V Assets shall be
Four Hundred Thirty-Four Million Six Hundred Six Thousand Dollars
($434,606,000) (the "Group V Estimated Purchase Price"), which sum shall be
subject to upward or downward adjustment, as the case may be, pursuant to
Section 2.5(a) below (the Group V Estimated Purchase Price, as so adjusted, the
"Group V Purchase Price").
(d) Appraisal and Allocation. Seller shall retain, at Seller's
expense, Bond & Pecaro, or another recognized independent appraisal firm
selected by Seller and reasonably acceptable to Buyer, to appraise the Stations
and the Assets. Seller shall provide Buyer with copies of the appraisals for
the Group II/III Assets, Group IV Assets and Group V Assets within 90 days
after Group II/III Closing Date, Group IV Closing Date, and Group V Closing
Date, respectively. Seller and Buyer agree to allocate the Purchase Price among
the Stations and the Assets for all purposes, including financial accounting
and tax purposes, including Section 1060 of the Code and Temporary Treasury
Regulations Section 1.1060-IT, in accordance with such appraisals. Buyer and
Seller agree to file with their respective federal income tax returns initial
asset acquisition statements on Internal Revenue Service Form 8594 required by
Temporary Treasury Regulation Section 1.1060-IT, all in accordance with and
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accurately reflecting such appraisals and allocations. No allocation of the
Purchase Price for any of the Assets shall be made to the Non-Competition
Agreement.
2.5 Prorations and Adjustments.
(a) Prorations and Adjustments. The Group II/III Purchase Price, the
Group IV Purchase Price and the Group V Purchase Price shall be determined by
increasing or decreasing the Estimated Purchase Price as required to effectuate
the proration of revenues and expenses as provided for herein and subject to
the provisions of Section 6.10 hereof with respect to the Group IV Stations.
All revenues and all expenses arising from the operation of any Station,
including tower rental, business and license fees, utility charges, real and
personal property taxes and assessments levied against its Assets, property and
equipment rentals, applicable copyright or other fees, including program
license payments, sales and service charges, taxes (except for taxes arising
from the transfer of the Assets under this Agreement), employee compensation,
including wages, salaries, accrued vacation, sick leave, personal days and
commissions for each employee of Seller who becomes an employee of Buyer, music
license fees and similar prepaid and deferred items, shall be prorated between
Buyer and Seller in accordance with GAAP and to effect the principle that
Seller shall receive all revenues (other than Accounts Receivable) and shall be
responsible for all expenses, costs and liabilities (including, without
limitation, performance bonuses payable to the Assumed Employees allocable to
the period prior to the Effective Time based on the pro rata accrual of such
bonuses over the calendar year on a straight line basis) allocable to the
operations of any Station for the period prior to the applicable Effective
Time, and Buyer shall receive all revenues and shall be responsible for all
expenses, costs and liabilities (including, without limitation, performance
bonuses payable to the Assumed Employees allocable to the period after the
Effective Time based on pro rata accrual of such bonuses over the calendar year
on a straight line basis) allocable to the operations of any Station for the
period after the applicable Effective Time in accordance with GAAP, subject to
the following:
(1) There shall be no adjustment for, and Seller shall remain
solely liable with respect to, any Excluded Contracts and any other
obligation or liability not being assumed by Buyer in accordance with
Section 2.7.
(2) No adjustment or proration shall be made in favor of Seller
for the amount, if any, by which the value of the goods or services to be
received by all the Stations in the aggregate under their trade or barter
agreements as
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of the Effective Time for such Stations exceeds the value of any
advertising time remaining to be run by such Stations as of the Effective
Time. For purposes of this Agreement, including, without limitation, this
Section 2.5 and Section 5.1, the liability for performance obligations
relating to advertising time under any trade or barter agreements shall be
valued according to the applicable Station's prevailing rates as of the
Effective Time, and goods, services or other items being received shall be
valued in accordance with GAAP as of the Effective Time.
(3) An adjustment or proration shall be made in favor of Buyer to
the extent, if any, that (a) the value of the goods or services to be
received by all the Group II/III Stations, the Group IV Stations, the
Group V Stations and the Businesses (as defined in the Group I Purchase
Agreement) under their trade or barter agreements as of the applicable
Effective Time in the aggregate is more than $150,000 less than the value
of any advertising time remaining to be run by such Stations and
Businesses (as defined in the Group I Purchase Agreement) thereunder as of
the applicable Effective Time (a "Negative Balance") and (b) Buyer has not
expressly consented to the trade or barter agreements giving rise to such
Negative Balance (and the allocation of such Negative Balance among the
Businesses, Group II/III Stations, Group IV and Group V Stations shall be
made by Seller, in its sole discretion).
(b) Manner of Determining Prorations and Adjustments. The Group II/III
Purchase Price, Group IV Purchase Price and Group V Purchase Price, taking into
account the adjustments and prorations pursuant to Section 2.5(a), will be
determined in accordance with the following procedures:
(1) Seller shall prepare and deliver to Buyer not later than five
(5) Business Days before each Closing Date a preliminary settlement
statement which shall set forth Seller's good faith estimate of the
adjustments or prorations under Section 2.5(a) (each, a "Preliminary
Settlement Statement"). The Preliminary Settlement Statement (A) shall
contain all information reasonably necessary to determine the adjustments
or prorations under Section 2.5(a), including appropriate supporting
documentation and such other information as may be reasonably requested by
Buyer, to the extent such adjustments or prorations can be determined or
estimated as of the date of the Preliminary Settlement Statement and (B)
shall be certified by an officer (but without personal liability to such
officer) on behalf of Seller to be true and complete to Seller's
knowledge. The "Preliminary
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Purchase Price" shall be determined by adjusting the Estimated Purchase
Price for the adjustments and prorations contained in the Preliminary
Settlement Statement.
(2) Not later than ninety days after each Closing Date, Buyer
shall deliver to Seller a statement setting forth Buyer's determination of
any changes to the adjustments and prorations made at such Closing.
Buyer's statement (A) shall contain all information reasonably necessary
to determine the adjustments and prorations to the Purchase Price under
Section 2.5(a), including appropriate supporting documentation, and such
other information as may be reasonably requested by Seller, and (B) shall
be certified by an officer (but without personal liability to such
officer) on behalf of Buyer to be true and complete to Buyer's knowledge.
Seller (and its authorized representatives) shall have the right to visit
the Stations during normal business hours to verify and review such
documentation upon providing reasonable notice to Buyer (such access not
to unreasonably interfere with the business or operations of any Station).
If Seller disputes the adjustments and prorations determined by Buyer, it
shall deliver to Buyer within fifteen days after its receipt of Buyer's
statement a statement setting forth its determination of such adjustments
and prorations. If Seller notifies Buyer of its acceptance of Buyer's
statement, or if Seller fails to deliver its statement within the
fifteen-day period specified in the preceding sentence, Buyer's
determination of such adjustments and prorations shall be conclusive and
binding on the parties as of the last day of such fifteen-day period.
(3) Buyer and Seller shall use good faith efforts to resolve any
dispute involving the determination of the adjustments and prorations in
connection with the Closings. If the parties are unable to resolve any
dispute within fifteen days following the delivery to Buyer of the
statement described in the penultimate sentence of Section 2.5(b)(2),
Buyer and Seller shall jointly designate an independent certified public
accountant, who shall be knowledgeable and experienced in the operation of
radio broadcasting stations, to resolve such dispute. If the parties are
unable to agree on the designation of an independent certified public
accountant, the selection of the accountant to resolve the dispute shall
be submitted to arbitration in accordance with the commercial arbitration
rules of the American Arbitration Association. The accountant's resolution
of the dispute shall be final and binding on the parties, and a judgment
may be entered thereon in any court of competent jurisdiction. Any fees of
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the accountant, and, if necessary, for arbitration to select such
accountant, shall be split equally between the parties.
2.6 Payment of Purchase Price and Prorations and Adjustments.
(a) At each Closing, subject to the provisions of Section 6.10, Buyer
shall pay or cause to be paid to Seller (or to such party or parties designated
by Seller in writing) the Preliminary Purchase Price for the Assets to be
transferred at such Closing, by federal wire transfer of same-day funds in
accordance with wire instructions delivered to Buyer by Seller at least three
(3) Business Days prior to such Closing.
(b) Payments to Reflect Prorations and Adjustments.
(1) If the Purchase Price for any Assets transferred pursuant to
this Agreement as finally determined pursuant to Section 2.5(b)(2) and
subject to any applicable provisions of Section 6.10 exceeds the
Preliminary Purchase Price for such Assets, Buyer shall pay to Seller (or
to such party or parties designated by Seller in writing), by federal wire
transfer of same-day funds within five Business Days after the date on
which such Purchase Price is determined pursuant to Section 2.5(b)(2), the
difference between such Purchase Price and such Preliminary Purchase
Price.
(2) If the Purchase Price for any Assets transferred pursuant to
this Agreement, as finally determined pursuant to Section 2.5(b)(2), and
subject to any applicable provisions of Section 6.10, is less than the
Preliminary Purchase Price for such Assets, Seller shall pay to Buyer, by
federal wire transfer of same-day funds within five Business Days after
the date on which such Purchase Price is determined pursuant to Section
2.5(b)(2), the difference between such Preliminary Purchase Price and such
Purchase Price.
(3) If any dispute arises over the amount to be refunded or paid
pursuant to this Section 2.6(b), such refund or payment shall nevertheless
be made to the extent any amount is not in dispute.
(c) It is understood and agreed that Buyer shall not be permitted to
offset any amounts in respect of the Group V Assets against any amounts in
respect of any other Assets that are the subject of this Agreement or the Group
I Purchase Agreement. Notwithstanding the foregoing, nothing contained in this
Section 2.6(c) shall in any manner impair any right, remedy
<PAGE> 14
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or recourse Buyer may have against PCC for fraud in connection with this
Agreement.
2.7 Assumption of Liabilities and Obligations.
(a) Without limiting any obligations of Buyer under any applicable
TBA, Buyer shall assume and undertake to pay, discharge and perform:
(i) the Group II/III Assumed Liabilities as of the Group II/III
Closing Date;
(ii) subject to the last sentence of Section 5.7, the Group IV
Assumed Liabilities as of the Group IV Closing Date; and
(iii) the Group V Assumed Liabilities as of the Group V Closing
Date.
(b) Buyer shall not be required to assume any of the following: (i)
any obligations or liabilities under any Excluded Contract, (ii) any
obligations or liabilities under the Assumed Contracts relating to the period
prior to the applicable Effective Time, except insofar as a proration or
adjustment therefor is made in favor of Buyer under Section 2.5(a), (iii) any
liability or obligation arising out of any litigation, proceeding or claim by
any person or entity relating to the business or operations of any Station or
any of the Assets with respect to any events or circumstances that occur or
exist prior to the applicable Effective Time relating to such Station or
Assets, (iv) any credit agreements, note purchase agreements, indentures, or
other financing arrangements (other than any Assumed Contracts) of Seller and
(v) any other obligation or liability of Seller, LPI or the Assignee that is
not an Assumed Liability (including, without limitation, any increase in the
Assumed Liabilities in violation of Section 2.7(c)). Buyer shall perform all
obligations arising out of the Assets (including the Assumed Contracts and the
Licenses) relating to the period on or after the applicable Effective Time.
Seller shall retain all liabilities of Seller not assumed by Buyer.
(c) Notwithstanding anything in this Agreement to the contrary, with
respect to each Station, the parties acknowledge that after the Effective Time
with respect to such Station, Seller shall not, by any voluntary act or
omission, increase the Assumed Liabilities other than as permitted in
accordance with the terms and provisions of this Agreement or the TBAs, without
the prior written consent of Buyer.
<PAGE> 15
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SECTION 3 REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants to Buyer as follows(i) as of the date
hereof, (ii) (subject to the provisions of Section 7.1(a) hereof) as of the
Group II/III Effective Time and the Group V Effective Time and (iii) (subject
to the provisions of Section 7.1(a) hereof) to the extent specifically
contemplated by Section 6.10(a)(iv)(1) hereof and subject to the limitations
therein, as of the Group II/III Closing Date and the Group V Closing Date:
3.1 Organization and Authority of Seller. Seller is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware and, in respect of the operations of the Stations, is qualified to
conduct business in the States set forth in Schedule 3.1. Except as set forth
in Schedule 3.1, Seller has the requisite corporate power and authority to own
and operate the Assets owned and operated by it, to carry on the business of
the Stations now being conducted by it, and to execute, deliver and perform
this Agreement according to its terms.
3.2 Authorization and Binding Obligation. The execution, delivery and
performance of this Agreement and the consummation of the transactions
contemplated hereby by Seller have been duly and validly authorized by all
necessary corporate action on the part of Seller. This Agreement has been duly
executed and delivered by Seller and constitutes its legal, valid and binding
obligation, enforceable against it in accordance with its terms, except as the
enforceability of this Agreement may be affected by bankruptcy, insolvency or
similar laws affecting creditors' rights generally and by judicial discretion
in the enforcement of equitable remedies.
3.3 Absence of Conflicting Agreements; Consents. The execution and
delivery of this Agreement, and the performance of the transactions
contemplated herein, by Seller will not require any consent, approval,
authorization or other action by, or filing with or notification to, any Person
or governmental authority, except as follows: (a) applicable requirements under
the HSR Act; (b) consents to the assignment of the FCC Licenses to Buyer (and,
as applicable, to LPI) by the FCC; (c) filings with respect to real estate,
sales and other transfer taxes; (d) consent of third parties to assignment of
certain of the Assumed Contracts as specified in Schedule 3.3; and (e) other
immaterial consents, approvals, authorizations, actions, filings or
notifications. Subject to obtaining the Consents, the execution, delivery and
performance by Seller of this Agreement (with or without the giving of notice,
the lapse of time, or both): (a) do not conflict with any provision of the
Certificate of
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Incorporation and Bylaws of Seller; (b) do not conflict with, result in a
breach of, or constitute a default in any material respect under, any
applicable law, judgment, order, ordinance, injunction, decree, rule,
regulation or ruling of any court or governmental authority applicable to
Seller; (c) do not result in the breach in any material respect of any contract
or agreement to which Seller is a party or by which Seller may be bound; and
(d) will not create any Lien upon any of the Assets, except for Permitted
Liens.
3.4 Governmental Licenses. (a) Schedule 3.4 identifies all FCC Licenses
used in the operation of the Stations (collectively, "Material Licenses") and
the date on which each expires. Except as described on Schedule 3.4, each
Material License is in full force and effect, and Seller is the authorized
legal holder thereof. Except as set forth in Schedule 3.4, the conduct of the
business and operations of each Station is in accordance in all material
respects with the terms and conditions of the Material Licenses for such
Station and the Communications Act and the rules, regulations and policies of
the FCC. Schedule 3.4 also sets forth a true and complete list of all
applications filed with respect to any Station that are pending at the FCC
(other than applications for auxiliary broadcast authorizations), true and
complete copies of which have been delivered by Seller to Buyer. All material
reports and filings required to be filed with the FCC by Seller with respect to
each Station have been timely filed in all material respects. All such reports
and filings are accurate and complete in all material respects. Seller has
received no notice or communication, formal or informal, indicating that the
FCC is considering revoking, suspending, canceling, rescinding or terminating
any Material License. Seller's operation of the Stations complies in all
material respects with the requirements set forth in the "Radio Frequency
Protection Guides" recommended in "American National Standard Safety Levels
with Respect to Human Exposure to Radio Frequency Electromagnetic Fields 300
KHz to 100 GHz" (ANSI C95.1-1982), issued by the American National Standards
Institute, and renewal of the FCC Licenses would not constitute a "major
action" within the meaning of Section 1.1301, et seq. of the FCC's rules.
(b) The FCC Licenses listed on Schedule 3.4 constitute all of the
material licenses and authorizations required under the Communications Act or
the current rules, regulations and policies of the FCC for the business and
operation of each Station for which such FCC Licenses are issued as currently
operated, except as set forth in Schedule 3.4. Except as set forth in Schedule
3.13, and except for investigations or other proceedings affecting the
broadcasting industry generally, Seller has no knowledge of any pending or
threatened investigation by or
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before the FCC, or any order to show cause, notice of violation, notice of
apparent liability, notice of forfeiture or material complaint by, before or
with the FCC with respect to any Station. Seller knows of no fact relating to
Seller's ownership or operation of the Stations that would, under existing law
and the existing rules, regulations, policies and procedures of the FCC, cause
the FCC to fail to approve in a timely fashion any of the applications for the
FCC Consents. As of the date hereof, Seller knows of no fact relating to ARS's
ownership or operation of the Group IV Stations that would, under existing law
and the existing rules, regulations, policies and procedures of the FCC, cause
the FCC to fail to approve in a timely fashion any of the applications for the
consent of the FCC to the assignment of the FCC Licenses included in the Group
IV Assets by ARS to PCWPB as contemplated by the ARS Asset Purchase Agreement.
3.5 Real Property. Schedule 3.5 contains an accurate description as of the
date of this Agreement of all Real Property. Except as described in Schedule
3.5, Seller has good and marketable fee simple title to all fee estates
included in the Real Property and good title to Seller's interests in all other
Real Property, in each case free and clear of all Liens, except for Permitted
Liens. Schedule 3.5 lists all leases and subleases pursuant to which any of the
Real Property included in the Assets is leased by Seller. Seller has a valid
leasehold interest in all such Real Property. Subject to obtaining the consents
to assignment set forth on Schedule 3.3, such leases and subleases are
assignable to Buyer. Seller is in compliance with such leases and subleases in
all material respects and is not in breach or default in any material respect
thereunder, and, to the knowledge of Seller, each other party to any such lease
or sublease is not in default thereunder in any material respect. The Real
Property includes sufficient access to the Stations' facilities to conduct the
operations of the Stations in the manner in which they are currently operated
without the need to obtain other access rights, except where the failure to
have such access would not be material. Seller has delivered to Buyer a true
and complete copy of any and all title insurance policies, surveys, plans and
maps relating to the Real Property in the custody, possession or control of
Seller. None of the Real Property is subject to any lease, sublease, license or
other agreement pursuant to which Seller grants to any other person any right
to the use, occupancy or enjoyment of the Real Property or any part thereof,
except as set forth on Schedule 3.5. There is no pending or, to the knowledge
of Seller, threatened condemnation or similar proceeding affecting any Real
Property. All buildings, towers and other improvements included within the Real
Property are in working order and repair. The use of the Real Property to
operate the Stations is in compliance in all material respects with applicable
zoning and land-use laws. As
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of the date hereof, Seller has received no actual written notice of any
increase in property taxes affecting any item of Real Property to an amount in
excess of 110% of the current taxes on such Real Property or of any other
imposition which is not materially consistent with existing impositions, the
effect of which is, if required, reflected on Seller's financial statements;
provided that the foregoing shall not relate to increases resulting from
improvements to the property made by Seller.
3.6 Tangible Personal Property. Schedule 3.6 lists as of the date hereof
all material items of Tangible Personal Property included in the Assets owned
by Seller. Except as described in Schedule 3.6, Seller owns and has good title
to the Tangible Personal Property listed thereon and none of the Tangible
Personal Property included in the Assets is subject to any Liens, except for
Permitted Liens. Except for the matters described on Schedule 6.14(b) with
respect to the WNLS(AM) transmitting towers, the Tangible Personal Property
listed on Schedule 3.6 owned by Seller necessary for the normal operations of
the Stations as presently conducted is in satisfactory operating condition and
adequate repair (given the age of such property and the use to which such
property is put and ordinary wear and tear excepted).
3.7 Assumed Contracts. Schedules 3.5, 3.7 and 3.12 include a complete list
as of the date of this Agreement of all Assumed Contracts except (a) contracts
with advertisers for production or the sale of advertising time on any Station
for cash that may be canceled by Seller on not more than ninety days' notice
without penalty, (b) trade or barter advertising agreements entered into in the
ordinary course of business, (c) oral employment contracts terminable at will,
(d) miscellaneous service contracts terminable on not more than thirty (30)
days' notice, and (e) other Contracts entered into in the ordinary course of
business, not involving liabilities exceeding Two Thousand Five Hundred Dollars
($2,500) per contract per year and One Hundred Twenty-Five Thousand Dollars
($125,000) per year in the aggregate for all Stations and the Businesses for
all such other contracts. Seller has delivered or made available to Buyer true
and complete copies of all written Assumed Contracts and accurate descriptions
of all oral Assumed Contracts listed in Schedules 3.5, 3.7 and 3.12. The
Assumed Contracts are in full force and effect in all material respects.
Subject to obtaining the consents to assignment set forth on Schedule 3.3, the
Assumed Contracts are assignable to Buyer. Seller is in compliance with the
Assumed Contracts in all material respects and is not in breach or default in
any material respect thereunder, and, to the knowledge of Seller, each other
party to the Assumed Contracts is
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in compliance therewith in all material respects and not in default in any
material respect thereunder.
3.8 Intangibles. Schedule 3.8 is a complete list as of the date of this
Agreement of all material Intangibles (exclusive of Licenses listed in Schedule
3.4). Seller has provided or made available to Buyer copies of all documents
establishing or evidencing the Intangibles listed in Schedule 3.8. Other than
with respect to matters generally affecting the radio broadcasting industry and
not particular to Seller, as of the date hereof, except as set forth in
Schedule 3.8, Seller has not received any notice or demand alleging that Seller
is infringing upon any trademarks, trade names, service marks, service names,
copyrights or similar intellectual property rights owned by any other Person.
3.9 Financial Statements. Seller has furnished Buyer with true and
complete copies of the financial statements with respect to the Stations
described in Schedule 3.9 (the "Financial Statements"). Except as set forth in
Schedule 3.9, the Financial Statements have been prepared in accordance with
GAAP, and present fairly in all material respects the financial condition of
Seller with respect to the Stations included in such Financial Statements as at
their respective dates and the results of operations for the periods then
ended.
3.10 Taxes and Tax Returns. Except as set forth in Schedule 3.10 and
except where the failure to file, pay or accrue any Taxes does not result in a
Lien on the Assets or in the imposition of transferee or other liability on
Buyer for the payment of Taxes, (a) all Tax Returns have been filed with the
appropriate governmental agencies in all jurisdictions in which such Tax
Returns are required to be filed, and (b) all Taxes shown on such Tax Returns
have been properly accrued or paid to the extent such Taxes have become due.
3.11 Insurance. Schedule 3.11 is a true and complete list of all insurance
policies of Seller with respect to the Stations' Business. All policies of
insurance listed in Schedule 3.11 are in full force and effect.
3.12 Personnel. Schedule 3.12 contains a true and complete list as of the
date of this Agreement of all employees of Seller engaged in the business and
operations of each Station (collectively, the "Employees"), and a description
of the compensation arrangements affecting them. Except as described in
Schedule 3.12, as of the date hereof, Seller has no written or oral contracts
of employment with any employee of the Stations other than oral employment
contracts which are terminable at will. Except as set forth in Schedule 3.12,
Seller is not a
<PAGE> 20
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party to or subject to any collective bargaining agreements with respect to the
Stations, and no labor union or other collective bargaining unit represents or,
to Seller's knowledge, claims to represent any of the employees of the
Stations. Seller has made available to Buyer copies of all employee handbooks
and employee rules and regulations, if any.
3.13 Claims and Legal Actions. Except as disclosed in Schedule 3.13 and
for any FCC rulemaking proceedings generally affecting the radio broadcasting
industry and not particular to Seller, as of the date hereof, there is no
material claim, legal action, counterclaim, suit, arbitration, or other legal,
administrative, or tax proceeding, nor any material order, decree, or judgment,
in progress or pending, or to the knowledge of Seller threatened, against
Seller, the Assets, or the business or operations of any Station.
3.14 Compliance with Laws. Seller is in compliance in all material
respects with all federal, state and local laws, rules, regulations and
ordinances applicable or relating to the ownership and operation of the
Stations.
3.15 Conduct of Business in Ordinary Course. Except as set forth in
Schedule 3.15, from January 1, 1997 through the date of this Agreement, Seller
has conducted the business and operations of the Stations in the ordinary
course consistent with past practice in all material respects and has not (a)
made any material increase in compensation payable or to become payable to any
of the employees of the Stations except as disclosed in Schedule 3.12, or any
material change in personnel policies, insurance benefits or other compensation
arrangements affecting the employees of the Stations, (b) made any sale,
assignment, lease or other transfer of any of Seller's properties, other than
obsolete assets no longer usable in the operation of such Station, or other
assets sold or disposed of in the normal course of business with suitable
replacements being obtained therefor, (c) incurred material loss of, or
material injury to, any of the Assets as a result of any fire, explosion,
windstorm, earthquake, labor trouble, riot, accident, act of God or public
authority or armed forces or other casualty or waived any rights of substantial
value related to the Assets, (d) made any material change in any method of
accounting or accounting practice, or (e) transferred to any Affiliate of
Seller any right, property or interest which is necessary or useful in the
operation of the Stations' Business.
<PAGE> 21
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3.16 Environmental Matters.
(a) For purposes of this Agreement, the following definitions shall be
applicable:
(i) "Applicable Environmental Law" shall mean any and all laws,
statutes, regulations, and judicial interpretations thereof of the United
States, of any state in which the Assets, or any portion thereof, or the
business of any Station, are located, and of any other government or
quasi-government authority having jurisdiction, that relate to the prevention,
abatement and elimination of pollution and/or protection of the environment,
including, but not limited to, the federal Comprehensive Environmental
Response, Compensation, and Liability Act, the Resource Conservation and
Recovery Act, the Federal Water Pollution Control Act, the Clean Air Act, the
Safe Drinking Water Act, the Toxic Substances Control Act, the Hazardous
Materials Transportation Act, the Refuse Act and the Emergency Planning and
Community Right to Know Act (each as amended on or before the applicable
Effective Time), together with all state statutes serving any similar or
related purposes, as in effect on or before the applicable Effective Time.
(ii) "Hazardous Substance" means any substance designated pursuant
to Section 307(a) and 311(b)(2)(A) of the federal Clean Water Act, 33 USCA
Sections 1317(a), 1321(b)(2)(A), Section 112 of the federal Clean Air Act, 42
USCA Section 3412, Section 3001 of the federal Resource Conversation and
Recovery Act, 42 USCA Section 6921, Section 7 of the federal Toxic Substances
Control Act, 15 USCA Section 2606, or Section 101(14) and Section 102 of the
Comprehensive Environmental Response, Compensation, and Liability Act, 42 USCA
Sections 9601(14), 9602, as amended by the Superfund Amendments and
Reorganization Act of 1986.
(b) Seller has supplied to Buyer a true and complete copy of the
report for each environmental inspection or audit that Seller has caused to be
conducted with respect to any of the Real Property as listed in Schedule 3.16.
(c) (i) Except as set forth in Schedule 3.16, the improvements owned
or used by Seller on the owned Real Property and on the leased Real Property do
not contain any asbestos that would constitute a violation of or noncompliance
with any Applicable Environmental Law in any material respect. The equipment
owned or used by Seller on the owned Real Property or any leased Real Property
does not contain any polychlorinated biphenyls that would constitute a
violation of or noncompliance with any Applicable Environmental Law in any
material respect.
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(ii) No contamination caused by Seller exists on or under the owned
Real Property or on or under any leased Real Property, or affecting any natural
resources therein that would constitute a violation of or noncompliance with
any Applicable Environmental Law in any material respect.
(iii) No contamination has been caused by Seller on or under the
owned Real Property or leased Real Property, or affecting any natural resources
therein that would constitute a violation of or noncompliance with any
Applicable Environmental Law in any material respect.
(iv) The Assets and the Stations' Business are in compliance with
all Applicable Environmental Laws in all material respects.
(v) Seller has no material liability relating to its ownership and
operation of any of the Stations as a result of noncompliance with any
Applicable Environmental Law. No charge, complaint, action, suit, proceeding,
hearing, investigation, claim, demand, or notice has been filed or, to Seller's
knowledge, commenced against Seller in connection with its ownership or
operation of any of the Stations alleging any failure to comply in any material
respect with any Applicable Environmental Law.
3.17 Brokers. Except for the fees payable to Communications Equity
Associates ("CEA"), which fees shall be paid by Buyer and Seller as set forth
in Section 6.11, neither Seller nor any Person acting on its behalf has
incurred any liability for any finders' or brokers' fees or commissions in
connection with the transactions contemplated by this Agreement.
3.18 Transactions With Affiliates. Except as set forth in Schedule 3.18,
Seller is not, and since January 1, 1997, has not been a party, directly or
indirectly, to any contract, lease, arrangement or transaction which is
material to the business or operations of any Station, whether for the
purchase, lease or sale of property, for the rendition of services or
otherwise, with any Affiliate of Seller, or any officer, director, employee,
proprietor, partner or shareholder of Seller, and no such Person has any
interest in or right to any of the Assets. The terms and conditions of the
transactions involving Seller and any Affiliate of Seller which are identified
in Schedule 3.18 are described briefly therein.
3.19 Assets. Except for the Excluded Assets, the Assets include all of the
assets or property used in the conduct of the business of the Stations as
currently operated.
<PAGE> 23
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3.20 Employee Benefits. Schedule 3.20 lists all Employee Plans covering
employees of the Stations and, except as set forth in Schedule 3.20, copies of
such Employee Plans together with any trusts related thereto have previously
been made available to Buyer. All Employee Plans are in compliance with their
terms and with the applicable provisions of ERISA and the Code in all material
respects. No Employee Plan is, or within the past six years has been, subject
to Title IV of ERISA or Section 412 of the Code. Seller has at no time
contributed to, or been obligated to contribute to, any multi-employer plan (as
defined in ERISA Section 3(37)). There exists no action, suit or claim (other
than routine claims for benefits) with respect to any Employee Plan pending, or
to the knowledge of Seller threatened, against any Employee Plan which is
reasonably expected to result in any material liability to Seller. Except as
required by ERISA Sections 601 et seq. and Code Section 4980B, Seller does not
sponsor, maintain or contribute to any Employee Plan which provides medical
coverage to retirees or other former employees of Seller. Seller has not
engaged in any transaction described in ERISA Section 4069 within the past five
years. There is no governmental audit or examination of any Employee Plan. All
contributions and premium payments required by law have been made in all
material respects to each Employee Plan. Each Employee Plan that is intended to
be qualified under Section 401(a) of the Code has received a favorable
determination letter that it is so qualified.
3.21 Foreign Person. Seller is not a "foreign person" or a "foreign
corporation" as such terms are defined in Section 1445 of the Code.
3.22 Like-kind Exchange. If Seller elects under Section 11.10 to effect
the transfer of some or all of the Assets to Buyer in a manner qualifying as
part of a like-kind exchange of property by Seller within the meaning of
Section 1031 of the Code, Buyer's tax basis in the Assets shall not be less
than the tax basis Buyer would have had in the Assets had Seller not made such
an election under Section 11.10.
3.23 ARS APA. Seller has delivered to Buyer a true, correct and complete
copy of the ARS Asset Purchase Agreement (including, without limitation, all
Schedules, Exhibits and other attachments thereto) as in effect on the date
hereof. The ARS Asset Purchase Agreement and the other agreements and documents
referred to therein set forth the entire agreement of PCWPB and ARS with
respect to the Group IV Stations. As of the date hereof, the ARS Asset Purchase
Agreement has not been terminated, amended or modified, and no material rights
of PCWPB or obligations of ARS thereunder have been waived. PCWPB is in
compliance with the ARS Asset Purchase Agreement in all material
<PAGE> 24
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respects and is not in material breach or default thereunder, and, to the
knowledge of Seller, as of the date hereof, ARS is in compliance therewith in
all material respects and not in material breach or default thereunder. To
Seller's knowledge, as of the date hereof, no event has occurred or condition
exists that with notice or the passage of time or both would result in a breach
or default thereunder by any party thereto.
3.24 Disclosure. None of the representations or warranties of Seller in
this Agreement contains or will contain any untrue or misleading statement of
material fact or omits or will omit to state any material fact necessary to
make the statements herein or therein, in light of the circumstances under
which they were made, not misleading.
3.25 Limitations. Buyer acknowledges and agrees that notwithstanding
anything to the contrary contained in this Agreement, none of the
representations and warranties of Seller contained herein shall apply in
respect of or be made or deemed to be made in respect of WKES or the Group IV
Assets, or any matter or item relating to or attributable to or otherwise
arising in connection with WKES or the Group IV Assets, except as they relate
solely to any period of time during which Seller or any of its Affiliates owned
the Assets related to WKES or the Group IV Assets, as the case may be, and
performed the Assumed Liabilities related to WKES or the Group IV Assumed
Liabilities, as the case may be.
SECTION 4 REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to Seller as follows (i) as of the date
hereof, (ii) (subject to the provisions of Section 7.2(a) hereof) as of the
Effective Time in respect of the Group II/III Assets and the Group V Assets and
(iii) (subject to the provisions of Section 7.2(a) hereof), to the extent
specifically contemplated by Section 6.10(a)(iv)(2) hereof, as of the Group
II/III Closing Date and the Group V Closing Date:
4.1 Organization, Standing and Authority. Buyer is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Nevada and, at the applicable Effective Time will be duly qualified to conduct
business in each jurisdiction in which such qualification is necessary for
Buyer to own the Assets and operate the Stations. Buyer has the requisite
corporate power and authority to (a) execute, deliver and perform this
Agreement according to its terms, and (b) own the Assets.
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4.2 Authorization and Binding Obligation. The execution, delivery and
performance of this Agreement and the consummation of the transactions
contemplated hereby by Buyer have been duly and validly authorized by all
necessary corporate action on the part of Buyer. This Agreement has been duly
executed and delivered by Buyer and constitutes legal, valid and binding
obligations of Buyer, enforceable against Buyer in accordance with their
respective terms, except as the enforceability of this Agreement may be
affected by bankruptcy, insolvency or similar laws affecting creditors' rights
generally and by judicial discretion in the enforcement of equitable remedies.
4.3 Absence of Conflicting Agreements and Required Consents. Except for
applicable requirements of the HSR Act and subject to the receipt of the FCC
Consent, the execution, delivery and performance by Buyer of this Agreement
(with or without the giving of notice, the lapse of time, or both): (a) do not
require the consent of any third party; (b) do not conflict with the articles
of incorporation or bylaws of Buyer; (c) do not conflict in any material
respect with, result in a material breach of, or constitute a material default
under, any applicable law, judgment, order, ordinance, injunction, decree,
rule, regulation, or ruling of any court or governmental authority applicable
to Buyer or any material contract or agreement to which Buyer is a party or by
which Buyer may be bound.
4.4 Buyer Qualifications. To Buyer's knowledge, except as set forth on
Schedule 4.4 and subject to receipt of the waivers described in Section 6.1
below, Buyer is legally, financially and otherwise qualified to enter into and
perform its obligations under each TBA and to be the licensee of, acquire, own
and operate each of the Stations under the Communications Act, and the rules,
regulations and policies of the FCC. Subject to receipt of the waivers
described in Section 6.1 below, Buyer knows of no fact that would, under
existing law and the existing rules, regulations, policies and procedures of
the FCC (a) prohibit Buyer from entering into and performing its obligations
under any TBA, (b) disqualify Buyer as an assignee of the FCC Licenses or as
the owner and operator of any Station or (c) cause the FCC to fail to approve
in a timely fashion any of the applications for the FCC Consents. To Buyer's
knowledge, except as described in Section 6.1 below, no waiver of any FCC rule
or policy is necessary to be obtained for the grant of the applications for the
assignment of the FCC Licenses to Buyer, nor will processing pursuant to any
exception to a rule of general applicability be requested or required in
connection with the consummation of the transactions contemplated hereby.
<PAGE> 26
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4.5 Brokers. Except for the fees payable to CEA, which fees shall be paid
by Buyer and Seller as set forth in Section 6.11, neither Buyer nor any Person
acting on its behalf has incurred any liability for any finders' or brokers'
fees or commissions in connection with the transactions contemplated by this
Agreement.
4.6 Availability of Funds. Buyer will have available sufficient funds to
enable it to consummate the transactions contemplated hereby, including,
without limitation, to make the loans under the Clear Channel Loan Agreement.
4.7 Disclosure. None of the representations or warranties of Buyer in this
Agreement contains or will contain any untrue or misleading statement of
material fact or omits or will omit to state any material fact necessary to
make the statements herein or therein, in light of the circumstances under
which they were made, not misleading.
SECTION 5 OPERATIONS OF THE STATIONS PRIOR TO EFFECTIVE TIME OR CLOSING
The following covenants of Seller in Sections 5.1 through 5.8 below shall
apply between the date of this Agreement and either the applicable Effective
Time or the applicable Closing, as specified, with respect to the Stations.
Notwithstanding anything to the contrary contained in this Agreement, Buyer and
Seller acknowledge and agree that nothing in this Agreement shall apply to, or
in any way restrict or limit, any of the businesses or operations of the
Seller, other than the businesses and operations of the Stations.
5.1 Generally. Between the date hereof and the relevant Effective Time,
Seller shall operate the Stations in all material respects in the ordinary
course of business (except where such conduct would conflict with the following
covenants or with Seller's other obligations under this Agreement). Between the
date hereof and the relevant Effective Time, Seller shall maintain and repair
Station facilities and equipment, maintain inventory of supplies, parts and
other materials and keep books of account, records and files, in each case in
the ordinary course of business consistent with past practice to the extent
commercially reasonable. Between the date hereof and the relevant Effective
Time, Seller shall continue to operate each Station in accordance with the
terms of its FCC Licenses in all material respects and in compliance in all
material respects with all applicable laws and FCC rules and regulations.
<PAGE> 27
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Prior to the relevant Closing, except as provided in Schedule 5.1 or as
otherwise permitted by any provision of this Section 5.1, and subject to and
except as provided in any applicable TBA pursuant to which Seller may take
actions thereunder, and without limiting any of Buyer's obligations thereunder,
Seller, with respect to the Stations, will not, without the prior written
consent of Buyer, which consent shall not be unreasonably withheld:
(a) apply to the FCC for any construction permit that would restrict
any Station's present operations, or make any material change in any Station's
buildings, leasehold improvements or fixtures that is not in the ordinary
course of business;
(b) enter into, renew, amend or modify any contract, lease, license or
other agreement; provided that prior to the relevant Effective Time (1) Seller
shall be permitted to enter into or renew, in the ordinary course of business,
any contract, lease, license or other agreement not involving liabilities
exceeding Two Thousand Five Hundred Dollars ($2,500) per contract, lease,
license or agreement per year and One Hundred Twenty-Five Thousand Dollars
($125,000) per year in the aggregate for all Stations and the Businesses (as
defined in the Group I Purchase Agreement) for all such contracts, leases,
licenses and other agreements, (2) Seller shall be permitted to enter into
trade or barter agreements, in the ordinary course of business, consistent with
past practice, which do not result in a Negative Balance and as set forth in
Section 5.1(f) below, and (3) nothing contained herein shall be deemed to
prevent Seller from entering into any contract, lease, license or other
agreement not falling within the scope of the foregoing clauses of this Section
5.1(b), provided, that, any such contract, lease, license or other agreement
shall not constitute an Assumed Contract unless expressly agreed to by Buyer;
(c) make any assignment for the benefit of creditors or take any
action in contemplation of, or which would constitute the basis for, the
institution of insolvency proceedings of any character, including without
limitation, bankruptcy, receivership, reorganization, composition or
arrangement with creditors, voluntary or involuntary;
(d) except as required by law or the Assumed Contracts, (i) hire any
employee except in the ordinary course of business, (ii) enter into, renew,
amend or modify any contract of employment, collective bargaining agreement or
other labor contract or (iii) permit any increases in the compensation of any
of the employees of any Station except for employees without employment
contracts, salary increases each January 1 and July 1
<PAGE> 28
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consistent with past practices not exceeding 5% per year; provided, however,
that (i) Seller may pay bonuses to any of its employees so long as such bonuses
do not create any liability or obligation upon Buyer, and (ii) Seller may amend
any contract of employment to delete the provisions thereof which grant to an
employee an option to purchase common stock of PCC;
(e) discount or otherwise reduce any accounts receivable of any
Station, or collect any such receivables other than in the ordinary course of
business consistent with past practice; and
(f) enter into any trade or barter agreements which would cause the
value of goods or services to be received by all the Stations and the
Businesses (as defined in the Group I Purchase Agreement) as of the related
Effective Time in the aggregate to result in a Negative Balance; provided,
however, that to the extent that Seller determines in good faith that it is
necessary to enter into such a trade or barter agreement, Seller may do so, but
if such agreement has not been consented to by Buyer and causes a Negative
Balance, Buyer shall have no obligation in respect of such agreement to the
extent of the obligations thereunder which cause such Negative Balance.
Whenever, pursuant to subsections (a) through (f) above, Seller shall request
the consent of Buyer, the request shall be sent in writing via facsimile to
Buyer in accordance with Section 11.2. With respect to requests for consent
under Section 5.1, unless Buyer gives or denies its written consent by the end
of the fifth Business Day after the request for consent is transmitted to
Buyer, Buyer's written consent will be presumed to have been given as of that
deadline. With respect to each Station, prior to the Closing applicable
thereto, Seller shall maintain in full force and effect the insurance policies
of Seller listed on Schedule 3.11 with respect to the Station or policies
providing similar coverage, and make and prosecute all claims thereunder in
respect of any loss or damage to any of the Assets in accordance with past
practice, and apply the proceeds thereof to the repair or replacement of any
such Assets. With respect to each Station, prior to the Effective Time
applicable thereto, Seller shall promote the Station in the ordinary course of
business, consistent with past practice.
5.2 Dispositions. Prior to the relevant Closing Date, except as
contemplated by this Agreement or set forth on Schedule 5.2, and subject to and
except as provided in any applicable TBA pursuant to which Seller may take
actions thereunder, and without limiting any of Buyer's obligations thereunder,
Seller shall not sell, assign, lease, or otherwise transfer or dispose of any
of the Assets, except any Assets no longer used in the business or
<PAGE> 29
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operations of any Station or any Assets that are replaced with replacement
property of equivalent value, kind and use. Notwithstanding the foregoing or
anything else contained in this Agreement, the expiration by their terms of
Contracts prior to such Closing shall not be deemed to be a violation of this
Agreement.
5.3 Liens. Prior to the relevant Closing Date, Seller shall not create,
assume or permit to exist any Liens upon the Assets, except for Permitted Liens
and Liens that will be discharged prior to or on the Closing Date.
5.4 Access to Information. Prior to the relevant Closing Date, Seller
shall give Buyer and its employees and other authorized representatives during
normal business hours and with reasonable prior notice, access to the Assets
and to all other books, records and documents of Seller relating to the
Stations (such access not to unreasonably interfere with the business or
operations of any Station), including, without limitation, for purposes of
conducting any surveys and/or environmental assessments of Real Property
included in the Assets in accordance with Section 6.9, and will furnish or
cause to be furnished to Buyer or its authorized representatives, upon
reasonable notice, all information with respect to the business and operation
of the Stations owned by Seller that Buyer may reasonably request; provided
that the foregoing do not unreasonably disrupt the business of Seller. As soon
as practicable after the date hereof, and in any case prior to August 29, 1997,
Seller shall provide Buyer with a list of all names under which any of the
Stations' Businesses have been conducted by Seller or any Affiliates of Seller.
5.5 Financial Information. For all periods prior to the relevant Effective
Time, Seller shall furnish Buyer within twenty (20) days after the end of each
calendar month after the date hereof an unaudited statement of income and
expense for such month of the Stations owned by Seller and such other financial
information prepared by Seller relating to the operations of the Stations owned
by Seller, as Buyer may reasonably request (the "Monthly Financial
Information"). The Monthly Financial Information shall be prepared in
accordance with GAAP (except for the absence of footnotes and year-end
adjustments otherwise required by GAAP) and shall present fairly in all
material respects the financial condition of Seller with respect to the
Stations included in such Monthly Financial Information as at the date thereof
and for the periods then ended, as appropriate.
5.6 Notice of Proceedings. Prior to the last Closing hereunder, Seller and
Buyer will promptly notify the other in writing upon becoming aware of any
order or decree or any
<PAGE> 30
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complaint praying for an order or decree restraining or enjoining the
consummation of this Agreement, or the transactions contemplated hereunder, or
upon receiving any notice from any court or government authority of its
intention to institute an investigation into, or institute a suit or proceeding
to restrain or enjoin the consummation of this Agreement or the transactions
contemplated hereunder, or to nullify or render ineffective this Agreement, or
such transactions if consummated. Seller and Buyer will each use commercially
reasonable efforts to contest, defend and resolve any such suit, proceeding or
injunction brought against it, and to cause any temporary restraining order or
preliminary injunction against such consummation to be lifted, promptly, so as
to permit the consummation of the transactions contemplated hereby and thereby.
5.7 ARS APA. Except as otherwise set forth in the last sentence of this
Section 5.7, until the Group IV Closing, Seller shall cause PCWPB to (i)use
commercially reasonable efforts to maintain the ARS Asset Purchase Agreement in
full force and effect in accordance with its terms, (ii) use commercially
reasonable efforts to comply with the terms of the ARS Asset Purchase Agreement
applicable to it, (iii) not terminate, amend, modify or waive any of Seller's
rights, or ARS's obligations under, the ARS Asset Purchase Agreement, without
Buyer's prior written consent which shall not be unreasonably withheld, (iv) at
Seller's sole cost, use commercially reasonable efforts to enforce PCWPB's
rights thereunder, (v) use commercially reasonable efforts to cause all
conditions precedent to PCWPB's obligation to close under the ARS Asset
Purchase Agreement to be satisfied, (vi) as soon as practicable after the time
of receipt or delivery by PCWPB, deliver to Buyer copies, of all notices and
other documents received or delivered by PCWPB under the ARS Asset Purchase
Agreement, including, without limitation, all written information received by
PCWPB from ARS or any Affiliate of ARS regarding the cash flow of the Group IV
Stations which is relevant to the applicability of Section 7.1G of the ARS
Asset Purchase Agreement or to the mechanism under Section 2.4 thereof pursuant
to which the purchase price under the ARS Asset Purchase Agreement may be
reduced, (vii) notify Buyer promptly upon learning of any (A) noncompliance
with the ARS Asset Purchase Agreement, (B) material breach or default under the
ARS Asset Purchase Agreement (or any event or condition that with notice or the
passage of time or both would constitute a material breach or default
thereunder), or (C) event or condition that renders any representation or
warranty in the ARS Asset Purchase Agreement untrue or misleading in any
material respect (or would have rendered any such representation or warranty
untrue or misleading in any material respect if such event or condition had
been known to the party making the same at the time made), (viii) use
commercially reasonable efforts to consummate the closing under
<PAGE> 31
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the ARS Asset Purchase Agreement on the earliest date permitted thereunder, and
(ix) use commercially reasonable efforts to otherwise afford Buyer the benefits
received by PCWPB under the ARS Asset Purchase Agreement. Notwithstanding
anything to the contrary contained herein, Seller, in its sole discretion and
without any liability to Buyer, may cause PCWPB to terminate the ARS Asset
Purchase Agreement in accordance with its terms; provided, however, that if the
condition set forth in Section 7.1G of the ARS Asset Purchase Agreement is not
satisfied, but Seller elects not to cause PCWPB to terminate the ARS Asset
Purchase Agreement, Seller shall (x) timely notify Buyer in writing of such
election and (y) provide Buyer with the opportunity, in Buyer's sole
discretion, upon timely written notice to Seller, to cause Seller to cause
PCWPB to terminate the ARS Asset Purchase Agreement in accordance with such
written notice and the provisions of the ARS Asset Purchase Agreement. If the
ARS Asset Purchase Agreement is terminated pursuant to this Section 5.7, the
Group IV Closing shall not take place and all provisions of this Agreement
related to the purchase of the Group IV Assets by Buyer and the Group IV TBA
shall terminate and be of no further force and effect.
5.8 Representations and Warranties. Prior to the relevant Effective Time
with respect to all representations and warranties contained in this Agreement,
and, with respect to the representations and warranties of Seller set forth in
Sections 3.1 and 3.2, the second sentence of Section 3.4 (with respect to Main
Station FCC Licenses only and other than as a result of any action or inaction
by Buyer), the second and fourth sentences of Section 3.5, the second sentence
of Section 3.6 and Section 3.10 only, prior to the relevant Closing Date,
Seller shall give Buyer detailed written notice promptly upon becoming aware
(i) that any such representation or warranty of Seller under this Agreement, or
under any document, instrument or agreement made or delivered by Seller in
connection herewith, is untrue or misleading in any material respect and (ii)
of any event or condition that would render any such representation or warranty
untrue or misleading in any material respect if such event or condition were
known to Seller when such representation or warranty was made.
5.9 Marketing. Prior to the related Effective Time, Seller shall provide
Buyer with reasonable access to its senior management at the Stations to enable
Buyer to develop marketing plans to be implemented by Buyer after such
Effective Time; provided, however, that such access shall be upon reasonable
prior notice and shall not unreasonably interfere with Seller's operations.
<PAGE> 32
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SECTION 6 SPECIAL COVENANTS AND AGREEMENTS
6.1 FCC Consent.
(a) The purchase and sale of the Assets as contemplated by this
Agreement is subject to the prior consent and approval of the FCC.
(b) Buyer and Seller acknowledge that (i) Seller and LPI have prepared
and, on June 23, 1997, filed with the FCC appropriate applications for the FCC
Pro Forma Consent and (ii) Buyer and Seller have prepared and, on June 27,
1997, filed with the FCC appropriate applications for the FCC Consents. Buyer
and PCC shall prosecute the applications to which they are a party with
commercially reasonable diligence and otherwise use their commercially
reasonable efforts to obtain the grants of the applications as expeditiously as
practicable. Each party will promptly provide to the other party a copy of any
pleading, order or other document served on it relating to such applications.
(c) Buyer's portion of the applications for the FCC Consents included
a request for a waiver of the FCC's one-to-a-market rule (47 C.F.R. 73.3555(c))
to permit the common ownership of radio stations WFSJ(FM), WZNZ(AM), WNZS(AM),
WROO(FM), WTLK(FM) and WPLA(FM) and Buyer's existing television station
WAWS(TV) (the "Jacksonville One-To-A-Market Waiver"). Buyer filed with the FCC
on July 25, 1997 a request for waiver of the FCC's one-to-a-market rule (47
C.F.R. 73.3555(c)) to permit common ownership of radio station WTKX(FM) and
Buyer's existing television station WPMI-TV (the "Pensacola One-To-A-Market
Waiver"). Notwithstanding any provision in this Agreement to the contrary,
Buyer's obligations to consummate the transactions contemplated by this
Agreement shall not be affected by the imposition of any condition in an FCC
Consent requiring compliance with the outcome in the pending television
ownership rulemaking proceeding, Review of Commission's Regulations Governing
Television Broadcast Ownership, Second Further Notice of Proposed Rulemaking,
MM Docket Nos. 91-221 and 87-8, FCC 96- 438 (released November 7, 1996); should
divestiture be required as a result of that proceeding, Buyer will file an
application for FCC consent to sell the necessary station(s) within any period
specified by the FCC from the release of the final Order in that proceeding.
Furthermore, each party agrees to comply with any other condition imposed on it
by any FCC Consent, provided that, except to the extent provided in the
previous sentence of this Section 6.1, no party shall be required to comply
with a condition if compliance with the condition would materially adversely
affect it. Buyer shall promptly provide to the FCC any information requested by
the FCC in connection with its consideration of the Jacksonville
One-To-A-Market Waiver and
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the Pensacola One-To-A-Market Waiver. Buyer and Seller shall oppose any
petitions to deny or other objections filed with respect to any application for
FCC Consent and any requests for reconsideration or review of any FCC Consent.
(d) If any Closing shall not have occurred for any reason within the
original effective period of any FCC Consent applicable to such Closing, and
neither party shall have terminated this Agreement under Section 9, the parties
shall jointly request an extension of the effective period of such FCC Consent.
No extension of the effective period of any FCC Consent shall limit the
exercise by either party of its right to terminate the Agreement under Section
9.
6.2 HSR Act Filing. Seller and Buyer acknowledge that they have filed, or
caused to be filed, with the U.S. Department of Justice ("DOJ") and Federal
Trade Commission ("FTC") certain filings that are required in connection with
the transactions contemplated hereby under the HSR Act and submitted to the
other party, prior to the filing thereof, their respective HSR Act filings and
discussed with the other any comments the reviewing party may have had. Seller
and Buyer agree to file, or cause to be filed, on or before August 26, 1997,
with the DOJ and FTC all additional filings that are required in connection
with the transactions contemplated hereby under the HSR Act, including
reflecting that the assets used and useable in connection with the Tampa
Billboard Business (as defined in the Group I Purchase Agreement) are to be
excluded from the Group I Assets and, will submit to the other party, prior to
the filing thereof, their respective HSR Act filing and discuss with the other
any comments the reviewing party may have. Buyer and Seller agree to (a)
cooperate with each other in connection with all such HSR Act filings, which
cooperation shall include furnishing the other with any information or
documents that may be reasonably required in connection with such filings; (b)
promptly file, after any request by the FTC or DOJ and after appropriate
negotiation with the FTC or DOJ of the scope of such request, any information
or documents requested by the FTC or DOJ; and (c) furnish each other with any
correspondence from or to, and notify each other of any other communications
with, the FTC or DOJ that relates to the transactions contemplated hereunder,
and to the extent practicable, to permit each other to participate in any
conferences with the FTC or DOJ.
6.3 Confidentiality.
(a) Each party will not use or disclose to third parties (except as
may be necessary for the consummation of the transactions contemplated hereby,
or as required by law, including, without limitation, in connection with legal
<PAGE> 34
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proceedings relating to this Agreement, documents delivered in connection
herewith or pursuant hereto and the transactions contemplated hereby and
thereby, or otherwise pursuant to subpoena or the request of a governmental
authority, and then only with prior notice to the other parties hereto,
including delivery of a copy of the subpoena or request, if applicable) this
Agreement or any information (including, without limitation, financial
information and information regarding program contracts and revenue) received
from the other parties hereto or their agents in the course of investigating,
negotiating and performing the transactions contemplated by this Agreement and
the documents delivered in connection herewith or pursuant hereto; provided,
however, that each party may disclose such information to such party's
officers, directors, employees, lenders, advisors, attorneys and accountants
who need to know such information in connection with the consummation of the
transactions contemplated by this Agreement and the documents delivered in
connection herewith or pursuant hereto and who are informed by such party of
the confidential nature of such information. Nothing shall be deemed to be
confidential information that: (1) is already in such party's possession,
provided that such information is not known by such party to be subject to
another confidentiality agreement with or other obligation of secrecy to the
other party hereto or another party, or (2) becomes generally available to the
public other than as a result of a disclosure by such party or such party's
officers, directors, employees, lenders, advisors, attorneys or accountants, or
(3) becomes available to such party on a non-confidential basis from a source
other than the other party hereto or its advisors, provided that such source is
not known by such party to be bound by a confidentiality agreement with, or
other obligation of secrecy to, the other party hereto or another party, or (4)
is developed independently by either party without resort to the confidential
information of the other party. In the event this Agreement is terminated and
the purchase and sale contemplated hereby abandoned, Buyer will return to
Seller all copies of documents, work papers and other written confidential
material obtained by Buyer in connection with the transactions contemplated
hereby. If this Agreement is terminated, each party will return to the other
party all information (including all documents, work papers and other written
confidential material) obtained by such party from any other party in
connection with the transactions contemplated by this Agreement.
(b) No party shall publish any press release or make any other public
announcement concerning this Agreement or the transactions contemplated hereby
without the prior written consent of each other party, which shall not be
withheld unreasonably; provided, however, that nothing contained in this
Agreement shall prevent any party, after notification to each
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other party, from taking any action required by law or from making any filings
with governmental authorities that, in its judgment, may be required or
advisable in connection with the execution and delivery of this Agreement or
the consummation of the transactions contemplated hereby.
6.4 Cooperation. Buyer and Seller shall cooperate fully with each other
and their respective counsel and accountants in connection with any actions
required to be taken as part of their respective obligations under this
Agreement, and Buyer and Seller shall execute such other documents as may be
necessary or desirable to the implementation and consummation of this
Agreement, including, without limitation, obtaining any Consents and Estoppel
Certificates, and otherwise use their commercially reasonable efforts to
consummate the transactions contemplated hereby and to fulfill their
obligations under this Agreement. Seller and Buyer shall each diligently make,
and cooperate with the other in making, all commercially reasonable efforts to
obtain or cause to be obtained prior to the relevant Closing Date all Consents
and Estoppel Certificates. Buyer agrees to use all commercially reasonable
efforts to assist Seller in obtaining such Consents and Estoppel Certificates,
and to take all commercially reasonable actions necessary or desirable to
obtain such Consents and Estoppel Certificates, including, without limitation,
executing such assumption instruments and other documents as may be reasonably
required in connection with obtaining the Consents and Estoppel Certificates.
6.5 Control of the Stations. Nothing contained in this Agreement shall
give Buyer any right from this date forward or at any time thereafter to
control the operations of any Station, and Seller shall have complete control
of the operations, consistent with, and subject to, the provisions of any
applicable TBA.
6.6 Access to Books and Records. Seller shall provide Buyer access and the
right to copy for a period of two (2) years from the applicable Closing Date
any books and records relating to the Assets sold at such Closing, but not
included in such Assets. Buyer shall provide Seller access and the right to
copy for a period of two (2) years after the applicable Closing Date any books
and records relating to the Assets sold at such Closing, that are included in
such Assets. Neither Buyer nor Seller will destroy any such books and records
during such two (2) year period. After the expiration of such two (2) year
period, Buyer and Seller shall use commercially reasonable efforts to give the
other parties to this Agreement reasonable prior written notice of their
intention to destroy any such books and records prior to destroying any such
books and records.
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6.7 Employee Matters. The following provisions shall be for the exclusive
benefit of the parties to this Agreement and not for the benefit of any other
person or entity:
(a) (i) Effective as of the applicable Effective Time, (but subject to
rescission if the applicable Closing does not occur), with respect to each
Station, except with respect to employees retained by Seller under any
applicable TBA ("Retained Employees"), Buyer (A) shall assume the Assumed
Contracts listed on Schedule 3.12 and (B) may, in its sole discretion, but
shall not be obligated to, offer employment to any of Seller's other employees
with respect to such Station and (ii) (1) effective as of any applicable
Closing Date, Buyer (A) shall assume any Retained Employee's Assumed Contracts
listed on Schedule 3.12 that are not assumed at the Effective Time and (B) may,
in its sole discretion, but shall not be obligated to, offer employment to any
of the other Retained Employees (collectively, those employees to whom Buyer
elects to offer employment and who are employed pursuant to Assumed Contracts,
the "Assumed Employees"). Except as otherwise provided in any Assumed Contract,
Buyer may offer employment to the Assumed Employees on any terms and conditions
that are determined by Buyer in its sole discretion, including with respect to
the provision of retirement and health care benefits. Buyer shall assume the
contracts of employment of the Assumed Employees and notwithstanding anything
in the foregoing to the contrary, to the extent such employment contracts
assumed hereunder provide for terms and conditions in addition to those
referenced in the preceding sentence, Buyer shall assume the terms thereof.
(b) To the extent the Purchase Price is reduced pursuant to Section
2.5 in respect thereof, Buyer shall grant Assumed Employees credit for and
shall assume and be responsible for any liabilities with respect to sick leave
and personal days accrued but unused by any Assumed Employees as of the
applicable Effective Time, and, to the extent of such Purchase Price reduction,
shall grant Assumed Employees credit for and shall assume and be responsible
for any liabilities with respect to any accrued but unused vacation for such
employees as of such Effective Time. No such credit shall exceed the number of
sick, personal and vacation days listed on Schedule 3.12.
(c) Buyer agrees that Seller may inform its employees that Buyer has
agreed that the Assumed Employees will be offered employment as provided in
this Section 6.7; provided, however, that Buyer shall have the right to approve
any written statement to be made by Seller in connection therewith.
(d) Seller shall comply with the provisions of the Worker Adjustment
and Retraining and Notification Act (the "WARN
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Act") and similar laws and regulations, if applicable, and shall be solely
responsible for any and all liabilities, penalties, fines, or other sanctions
that may be assessed or otherwise due under such applicable laws and
regulations on account of the dismissal or termination of any of the employees
of any of the Stations by Seller prior to the applicable Effective Time or
Closing Date, as the case may be. Buyer shall employ at least that proportion
of the employees of each Station as shall be necessary to prevent a "mass
layoff" or a "plant closing" as such terms are defined in the WARN Act and
Buyer shall comply with all applicable laws and regulations applicable in
connection with Buyer's exercise of discretion in offering employment to
employees of Seller, including, without limitation, those relating to
employment discrimination.
(e) With respect to any Assumed Employees, within a reasonable period
of time after the related Effective Time or within a reasonable period of time
after the related Closing Date, as the case may be, Seller shall transfer from
the Paxson Communications 401(k) Profit Sharing Plan (the "Seller 401(k) Plan")
to the 401(k) Plan maintained by the Guarantor or its Affiliates for the
benefit of the employees of the Buyer ("Buyer's 401(k) Plan") an amount, in
cash, equal to the aggregate account balances held in the Seller 401(k) Plan as
of the date of transfer with respect to all Assumed Employees hired by the
Buyer as of such Effective Time or such Closing Date, as the case may be;
provided, however, that Buyer shall have no obligation under this Section
6.7(e) if Buyer reasonably believes such transfer shall cause Buyer's 401(k)
Plan to not be qualified under the Code. Prior to the date of any such
transfer, and as preconditions thereto: (i) Buyer shall use commercially
reasonable efforts to deliver to Seller a copy of the most recently issued
Internal Revenue Service ("IRS") determination letter (or other proof
reasonably satisfactory to counsel for Seller) that Buyer's 401(k) Plan is
qualified under the Code, and (ii) Seller shall use commercially reasonable
efforts to deliver to Buyer a copy of the most recently issued IRS
determination letter (or other proof reasonably satisfactory to counsel for the
Buyer) that the Seller 401(k) Plan is qualified under the Code. Seller and
Buyer agree to cooperate with respect to any government filing, including, but
not limited to, the filing of IRS Forms 5310-A, if necessary, to effect the
transfer of assets contemplated by this Section 6.7(e).
6.8 Cure. For all purposes under this Agreement, the existence or
occurrence of any events or circumstances that constitutes or causes a breach
of a representation or warranty of Seller or Buyer (including, without
limitation, in the case of Seller, under the information disclosed in the
Schedules hereto) on the date such representation or warranty is made shall be
<PAGE> 38
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deemed not to constitute a breach of such representation or warranty if such
event or circumstance is cured in all material respects on or before 30 days
after the receipt by such party of written notice thereof from the other party.
6.9 Environmental Reports.
(a) Seller has delivered to Buyer, at Seller's cost, copies of the
Phase I environmental reports that have been prepared by Dames and Moore with
respect to certain parcels of owned Real Property and all other environmental
reports with respect to the Real Property that are in the possession, custody
or control of Seller (collectively, the "Existing Phase I Reports").
(b) Buyer, at its election and cost, may obtain any updates of the
Existing Phase I Reports (the "Updated Reports"). Seller will cooperate with
Buyer in obtaining, at Seller's expense, a Phase II environmental report for
any parcel of Real Property owned by Seller with respect to the Stations to the
extent expressly recommended in any Existing Phase I Reports or any Updated
Report (a "Phase II Report"); provided, however, that no such Phase II Report
shall be ordered or obtained before the expiration of five (5) Business Days
after the date hereof. Notwithstanding the foregoing, Seller acknowledges that
Buyer has ordered, at Seller's expense, an analysis, to be performed by Dames &
Moore, of suspected asbestos containing materials (ACM) and suspected PCB
containing transformer dielectric fluid; provided, however, that in the event
such analysis confirms the presence of the suspected ACM and PCB containing
fluids, (i) Seller shall have no liability for the remediation of any ACM
unless and to the extent Dames & Moore recommends the immediate remediation of
any friable ACM and (ii) Seller shall have no liability for the remediation of
any PCB containing equipment which is not owned by Seller or which does not
require immediate remediation as recommended by Dames & Moore. Seller and Buyer
shall use commercially reasonable efforts to obtain the Phase II Reports as
soon as practicable thereafter. The Existing Phase I Reports, any Updated
Reports and any Phase II Reports are hereinafter referred to as the
"Assessments."
(c) Copies of each Assessment shall be delivered to Seller by Buyer
promptly after receipt by Buyer. Seller and Buyer agree that the results of any
Assessment carried out pursuant to this Section shall not be disclosed to any
third party, unless such disclosure is required by law; provided, however, that
each party may disclose such information to such party's officers, directors,
employees, lenders, advisors, attorneys and accountants who need to know such
information in connection with the consummation of the transactions
contemplated
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by this Agreement and who are informed by such party of the confidential nature
of such information.
(d) From and after the applicable Effective Time, in accordance with
and subject to the provisions of Section 10 hereof, Seller shall, at its sole
cost, either undertake, or reimburse Buyer for, any remediation or other action
required to eliminate noncompliance with Applicable Environmental Laws with
respect to any Real Property owned by Seller, in each case as specifically set
forth in any Phase II Report (irrespective of whether such Phase II Report is
received before or after the relevant Effective Time).
6.10 Other Transactions.
(a) Sale of Group V Assets to LPI. Notwithstanding any provision of
this Agreement to the contrary, Buyer and Seller hereby agree as follows:
(i) if the Group II/III Closing and Group V Closing have not
occurred, then and in such event, on the later of (x) October 1, 1997 and (y)
the date reasonably agreeable to Seller and Buyer not less than five (5)
Business Days nor more than ten (10) Business Days following the later of (1)
the grant by the FCC of the FCC Pro Forma Consent and (2) the date on which the
waiting period under the HSR Act in respect of the transactions to be
consummated under this Agreement shall have expired or terminated and there
shall not be pending any action or request for information instituted by the
FTC or the DOJ under the HSR Act relating to such transactions (the foregoing,
the "LPI Sale Date"), subject to the terms and conditions set forth in this
Section 6.10(a), the following provisions shall apply:
(1) PCC shall sell and transfer, on the LPI Sale Date, the
Group V Assets and Group V Assumed Liabilities to LPI, and, concurrently
therewith, PCC shall, pursuant to documentation reasonably acceptable to
PCC and Buyer (which documentation shall be submitted by Seller to Buyer
for review by Buyer a reasonable period of time prior to the LPI Sale
Date), assign all of its rights, liabilities and obligations under this
Agreement in respect of the Group V Sale to LPI, and LPI shall purchase
the Group V Assets and assume the liabilities and obligations of PCC under
the Group V Assumed Liabilities and the Group V Sale under this Agreement
(the "LPI Sale"); provided that such sale and assignment shall not release
PCC from any of its liabilities and obligations hereunder to Buyer. For
purposes hereof, except as otherwise provided in this Agreement or as the
context otherwise requires, in the event of such assignment,
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LPI shall be treated as the "Seller" hereunder in respect of the Group V
Assets and/or the Group V Sale.
(2) The LPI Sale shall be consummated between PCC and LPI on
the terms and conditions set forth in this Section 6.10(a), pursuant to
assignments and other conveyancing documents that are sufficient to convey
and vest good title to the Group V Assets to LPI, free and clear of all
Liens, other than Permitted Liens, in form and substance reasonably
acceptable to PCC, LPI and Buyer.
(3) LPI shall purchase the Group V Assets from PCC for a
purchase price of Four Hundred Twenty-Eight Million Two Hundred Eighty
Thousand Eight Hundred Seventy-Three Dollars ($428,280,873), which shall
be paid by LPI on the LPI Sale Date by federal wire transfer of same-day
funds to such account or accounts as PCC designates in writing to LPI on
or before the LPI Sale Date, including the account of any Intermediary
referred to in Section 6.10(a)(i)(8) hereof, in an amount equal to Three
Hundred Sixty-Nine Million Four Hundred Fifteen Thousand One Hundred
Dollars ($369,415,100) and by execution and delivery by LPI to PCC (or to
any such Intermediary) of a promissory note substantially in the form of
Exhibit 6.10-A hereto (the "LPI Note"), in a principal amount of
Fifty-Eight Million Eight Hundred Sixty-Five Thousand Seven Hundred
Seventy-Three Dollars ($58,865,773).
(4) In connection with the execution and delivery of the LPI
Note, LPI shall cause to be executed and delivered to PCC a subordinated
Guaranty from Mr. Lowell W. Paxson, substantially in the form of Exhibit
6-10B hereto (the "Subordinated Guaranty") and PCC shall execute and
deliver, and LPI shall acknowledge, the Intercreditor Agreement.
(5) Proration and adjustments relating to the Group V Assets
shall be made in accordance with the provisions of Section 2.5 as follows:
(A) On the Group V Closing Date, Buyer shall pay LPI the
Preliminary Purchase Price for the Group V Assets based upon the
prorations and adjustments reflected in the Preliminary Settlement
Statement for the Group V Assets, as required by Sections 2.5(b)(1)
and 2.6(a). If the Preliminary Purchase Price for the Group V Assets
exceeds $434,606,000, then LPI shall pay the amount of such excess to
PCC (or to any party designated by PCC in writing to Buyer). If
$434,606,000 exceeds the Preliminary Purchase Price for
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the Group V Assets, then PCC shall pay (or cause to be paid) the
amount of such excess to LPI.
(B) The Purchase Price for the Group V Assets shall be
finally determined pursuant to Section 2.5(b)(2). If the Purchase
Price as so determined for the Group V Assets exceeds the Preliminary
Purchase Price as so determined for the Group V Assets, Buyer shall
pay the amount of such excess to LPI in accordance with Section
2.6(b)(1), and LPI shall thereafter pay the amount of such excess to
PCC (or to any party designated by PCC in writing to LPI). If the
Preliminary Purchase Price for the Group V Assets exceeds the
Purchase Price as so determined for the Group V Assets, PCC shall pay
(or cause to be paid) the amount of such excess to LPI, and LPI shall
thereafter pay the amount of such excess to Buyer in accordance with
Section 2.6(b)(2).
(6) On the LPI Sale Date (A) Buyer and LPI shall enter into
the Clear Channel Loan Agreement, substantially in the form of Exhibit
6.10-C hereto (the "Clear Channel Loan Agreement") and pursuant to the
terms thereof, LPI shall make two promissory notes in favor of Buyer in
the forms of Exhibit A-1 and Exhibit A-2 to the Clear Channel Loan
Agreement; (B) Buyer and PCC shall execute and deliver, and LPI shall
acknowledge, the Intercreditor and Subordination Agreement, substantially
in the form of Exhibits 6.10-D hereto (the "Intercreditor Agreement"); LPI
shall execute and deliver to Buyer the Security Agreement, substantially
in the form of Exhibit 6.10-E hereto, and Mortgages on the owned Real
Property included in the Group V Assets, in forms enforceable under
Florida law and otherwise reasonably satisfactory to the parties, and
cause to be executed and delivered to Buyer a Guaranty from Mr. Lowell W.
Paxson, substantially in the form of Exhibit 6.10-F hereto, and Stock
Pledge Agreement, substantially in the form of Exhibit 6.10-G hereto,
together with UCC-1's and such other documents in connection therewith as
Buyer may reasonably request (collectively with the Intercreditor
Agreement, the "Security Documents"); (C) Buyer and LPI shall execute and
deliver the Group V Time Brokerage Agreement, substantially in the form of
Exhibit 6.10-H hereto, (the "Group V TBA"); (D) Buyer and PCC shall
execute and deliver the Group II/III Time Brokerage Agreement,
substantially, in the form of Exhibit 6.10-I hereto, (the "Group II/III
TBA"); (E) Buyer and LPI shall execute and deliver a TSA with respect to
WFSJ(FM) and Buyer and PCC shall execute and deliver a TSA with respect to
WHNZ(AM), each substantially in the form of
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Exhibit 6.10-J; (F) Buyer and PCC shall execute and deliver a TSA with
respect to WTLK(FM), substantially in the form of Exhibit 6.10-J; and (G)
if requested by PCC or LPI, Buyer, PCC and LPI shall execute and deliver
separate Service Agreements for logging, traffic, payroll, accounting and
similar services, with respect to each of WHNZ, WFSJ, WTLK, WYCL and WEAT,
substantially in the form of Exhibit 6.10-K hereto (collectively, the
"Services Agreements"). The "Group II/III TBA Date" and the "Group V TBA
Date" shall mean the dates on which the Group II/III TBA and Group V TBA,
respectively, are executed and delivered.
(7) Funding of the Clear Channel Loan shall be subject to
satisfaction of the conditions set forth in the Clear Channel Loan
Agreement. Subject to satisfaction of the conditions set forth in Section
6.10(a)(ii) below on the LPI Sale Date, Buyer shall advance to LPI, by
federal wire transfer of same-day funds, an amount equal to the Group V
Loan Amount pursuant to the Clear Channel Loan Agreement.
(8) PCC may assign some or all of its rights (but not its
obligations) under the LPI Sale as set forth in this Section 6.10(a)
(including its right to receive the LPI Note) to an Intermediary; provided
that (i) such assignment shall not deprive LPI or Buyer of rights or
benefits, or relieve PCC of any obligations or liabilities, under this
Agreement, (ii) neither LPI nor Buyer shall be obligated to expend funds
or incur obligations or liabilities in connection therewith and (iii) PCC
shall indemnify and hold harmless LPI and Buyer from and against any and
all loss, liability, cost and expense arising or resulting from any such
assignment to an Intermediary; provided that such indemnification of LPI
shall be subordinated to prior satisfaction in full of any applicable
indemnification of Buyer in respect of the Like-Kind Exchange (as
hereinafter defined) as provided in this Agreement. PCC intends to effect
a like-kind exchange pursuant to Section 1031 of the Code. However,
nothing in this Agreement shall be construed as a representation or
warranty of any party to any other party as to the tax characterization of
the transactions contemplated by this Agreement.
(9) Notwithstanding the foregoing, if on the date otherwise
scheduled for the LPI Sale pursuant to paragraph 6.10(a)(i) above, the
conditions precedent set forth herein, with respect to the LPI Sale, the
Clear Channel Loan and the other transactions to be consummated
concurrently therewith, have not been satisfied, the party for whose
benefit such conditions have been imposed may
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elect to postpone the LPI Sale, the Clear Channel Loan, and the other
transactions to be consummated concurrently therewith, and the LPI Sale,
the Clear Channel Loan, and such transactions shall thereafter take place
on a date specified by not less than five (5) Business Days' prior written
notice from such party, which date shall be not less than five (5)
Business Days nor more than ten (10) Business Days after the satisfaction
or waiver of such conditions precedent, but in no event later than the
Termination Date. The parties shall seek extension of the applicable FCC
Consents that may be required for any such postponement.
(10) Notwithstanding anything to the contrary set forth herein,
in the event LPI elects not to draw down the Clear Channel Loan, such
election shall not affect the parties' obligations to enter into the Group
II/III TBA or the Group V TBA.
(ii) The obligations of Buyer to consummate the transactions
contemplated under paragraphs (6) and (7) of Section 6.10(a)(i) on the LPI Sale
Date are subject, at Buyer's option, to the fulfillment at or prior to such
date, of each of the following conditions:
(1) PCC shall have satisfied the conditions precedent set
forth in Sections 7.1(a) and (b), and the condition precedent set forth in
Sections 7.1(d) and (e) shall apply, and for purposes of Sections 7.1(a)
and (b), the phrase "LPI Sale Date" shall be substituted for the phrase
"Closing Date for such Closings";
(2) each of PCC and LPI shall have taken, or stand ready,
willing and able to take, the actions contemplated under this Section
6.10(a);
(3) the conditions precedent set forth in the Clear Channel
Loan Agreement to the obligations of Buyer to make the Group V Loan shall
have been satisfied; and
(4) to the extent the conditions precedent to the obligations
of PCC to the consummation of the Group I Purchase Agreement have been
satisfied (or would be satisfied at consummation by delivery of documents
and the purchase price by Buyer), PCC shall stand ready, willing and able
to consummate the closing under the Group I Purchase Agreement
concurrently with the LPI Sale and the making of the Group V Loan;
provided it is understood and agreed that if such
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conditions precedent are not satisfied, Closing of the Group I Sale shall
not be a condition to consummation of the LPI Sale and the making of the
Group V Loan.
(iii) The obligations of PCC and LPI to consummate the
transactions contemplated under this Section 6.10(a) on the LPI Sale Date are
subject, at PCC's and LPI's option, to the fulfillment at or prior to such
date, of each of the following conditions:
(1) the conditions precedent set forth in Sections 7.2(a),
(b), (d) and (e) shall apply and, for purposes of Sections 7.2(a) and (b),
the phrase "LPI Sale Date" shall be substituted for the phrase "Closing
Date for such Closings";
(2) Buyer shall have taken, or stand ready, willing and able
to take, the actions contemplated under this Section 6.10(a); and
(3) to the extent the conditions precedent to the obligations
of Buyer to the consummation of the Group I Purchase Agreement have been
satisfied (or would be satisfied at consummation by delivery of documents
by the Sellers thereunder), Buyer shall stand ready, willing and able to
consummate the Closing under the Group I Purchase Agreement concurrently
with the LPI Sale and the making of the Group V Loan; provided it is
understood and agreed that if such conditions precedent are not satisfied,
Closing of the Group I Sale shall not be a condition to consummation of
the LPI Sale and the making of the Group V Loan.
(iv) It is understood and agreed by Buyer, PCC and LPI that from
and after the LPI Sale Date (assuming the LPI Sale occurs), notwithstanding
anything in this Agreement to the contrary, the only conditions precedent
applicable to the obligations of the parties at the Group II/III Closing and
the Group V Closing are as follows:
(1) for Buyer, (A) Sections 7.1(a), (b), (c), (e), (f)
(provided, however, that the officer's certificate required by Section
8.2(b) shall apply only with respect to the representations and warranties
identified in clause (B) below), (g), (h), (i) and (j); provided, however
that (B) Section 7.1(a) shall apply only with respect to the
representations and warranties set forth in Sections 3.1 and 3.2, the
second sentence of Section 3.4 (with respect to Main Station FCC Licenses
only and other than as a result of any action or inaction by Buyer), the
second and fourth
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sentences of Section 3.5, the second sentence of Section 3.6, Section 3.10
and Section 7.1(b) shall apply only with respect to those covenants and
agreements expressly to be performed or complied with after the applicable
Effective Time and prior to the applicable Closing;
(2) for PCC and LPI, Sections 7.2(a), (b), (c), (e), (f),
(g), (h) and (i);
(3) for Buyer, that, concurrently with the Group II/III
Closing and the Group V Closing, the LPI Note shall have been discharged
in full; provided that Buyer's right to reliance upon this condition
precedent is conditioned upon its compliance with its obligation to fund
the Clear Channel Loan and the Preliminary Purchase Price for the Group
II/III Assets and the Group V Assets on the Group II/III Closing Date and
Group V Closing Date; and
(4) for PCC and LPI, that, concurrently with the Group II/III
Closing and the Group V Closing, the Group V Loan (and related promissory
note) have been discharged in full and the related security interests of
Buyer pursuant to the Security Documents shall have been released;
provided, that PCC's and LPI's right to reliance upon this condition
precedent is conditioned upon PCC's compliance with its obligation to
consummate the LPI Sale.
(v) Notwithstanding anything in this Agreement or in any of the
documents or instruments delivered pursuant hereto or in connection herewith or
in any applicable law to the contrary, Buyer agrees that under no circumstances
shall PCC have any liability or obligation of any nature whatsoever with
respect to repayment of the Group V Loan or any other obligations of LPI
pursuant to the Clear Channel Loan, the related security interests of Buyer
pursuant to the Security Documents or any other documents delivered in
connection therewith or pursuant thereto and Buyer hereby waives and releases
all such claims. Notwithstanding the foregoing, nothing contained in this
Section 6.10(a)(v) shall in any manner impair any right, remedy or recourse
Buyer may have against PCC for fraud in connection with this Agreement.
(b) Group IV. On the date (the "Group IV Date") which is the latest of
(w) October 1, 1997, (x) the LPI Sale Date (assuming the LPI Sale occurs), (y)
the date agreeable to Buyer and Seller not less than five (5) Business Days nor
more than ten (10) Business Days following the date on which the waiting period
under the HSR Act in respect of the transaction to be consummated under this
Section 6.10(b) shall have expired or terminated and there shall not be pending
any action or request for information
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instituted by the FTC or the DOJ relating to such transaction and (z) provided
Seller has given Buyer not less than (5) Business Days' prior written notice
thereof, and, provided, further, that the provisions of Section 5.7 above have
been complied with in all material respects and the ARS Asset Purchase
Agreement has not been terminated, the date of Seller's acquisition of the
Group IV Assets, if the Group IV Closing has not yet occurred, then and in such
event: (1) Buyer and Seller shall execute and deliver the Group IV Time
Brokerage Agreement, substantially in the form of Exhibit 6.10-L hereto (the
"Group IV TBA"); (2) Buyer and Seller (or, if the Assignee is the owner of
WEAT, the Assignee) shall execute and deliver a TSA with respect to WEAT
substantially in the form of Exhibit 6.10-J hereto (the "WEAT TSA"); and (3)
Buyer shall loan to Seller the sum of Thirty-Three Million Dollars
($33,000,000), as adjusted pursuant to the provisions of the ARS Asset Purchase
Agreement, including, without limitation, pursuant to Section 2.4 thereof (the
"Group IV Advance"), evidenced by three (3) promissory notes (the "Group IV-A
Note," the "Group IV-B Note" and the "Group IV-C Note," respectively), by
federal wire transfer of same-day funds. The Group IV-A Note shall be in the
principal amount of Twenty-Eight Million One Hundred Twenty-Five Thousand
Dollars ($28,125,000), the Group IV-B Note shall be in the principal amount of
Three Million One Hundred Twenty-Five Thousand Dollars ($3,125,000) and the
Group IV-C Note shall be in the principal amount of One Million Seven Hundred
Fifty Thousand Dollars ($1,750,000), in each case, as adjusted in the aggregate
to reflect adjustment to the purchase price under the ARS Asset Purchase
Agreement. The Group IV Advance, the Group IV Loan Agreement, the Group IV-A
Note, the Group IV-B Note and the Group IV-C Note are hereinafter collectively
referred to as the "Group IV Loan." The terms and conditions of the Group IV
Loan shall be substantially similar to the terms and conditions of the Clear
Channel Loan and the promissory notes and Security Documents delivered pursuant
thereto; provided, however, that (a) the Group IV Loan shall be secured by the
Group IV Assets prior to the Group IV Closing Date and the WEAT Assets prior to
the transfer of WEAT by Seller; it being understood and agreed that (i) nothing
herein shall impair Seller's right to transfer WEAT to a third party and Buyer
shall immediately release all liens in the WEAT Assets in favor of Buyer in
connection with any such transfer and (ii) Buyer shall immediately release all
liens in the Group IV Assets in favor of Buyer in connection with the
acquisition by Buyer of the Group IV Assets notwithstanding that the Group IV-C
Note may still be outstanding hereunder; (b) the Group IV Loan shall bear
interest at a rate of ten percent (10%) per annum accruing from the date such
loan is made; provided that payments of interest in respect of the principal
amount of the Group IV Loan evidenced by the Group IV-C Note shall accrue and
be payable monthly in arrears in cash and not as an offset against any other
payments; (c) no
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payments in respect of interest shall be due with respect to that portion of
the principal of the Group IV Loan evidenced by the Group IV-A Note and the
Group IV-B Note if Buyer has not yet paid the programming fee due under the
Group IV TBA; (d) the Group IV-C Note shall be due and payable on the earlier
of twelve (12) months after the Group IV Effective Time and the date on which
Seller sells WEAT; (e) any Event of Default as defined in the Clear Channel
Loan Agreement shall be a default under the Group IV Loan Agreement; and (f)
the Group IV Loan and the Group IV-A Note, the Group IV-B Note and the Group
IV-C Note shall receive the benefit of a loan agreement (the "Group IV Loan
Agreement"), a security agreement and related financing statements, a stock
pledge agreement, a guaranty agreement of Mr. Lowell W. Paxson, and an
intercreditor subordination agreement, each substantially similar to the forms
of agreements referred to in Section 6.10(a)(i)(6) and attached hereto,
together with such other documents in connection therewith in substantially
similar forms as those contemplated by the Clear Channel Loan Agreement to the
extent requested by Buyer; provided, however, that references in the Clear
Channel Loan Agreement to the Group V TBA and TSA Agreements shall mean the
Group IV TBA and the TSA for WEAT, respectively. On the Group IV Date, the
following provisions shall also apply:
(1) PCC may elect, in its sole discretion, to transfer, on
the Group IV Date, the Group IV Assets and the Group IV Assumed
Liabilities, together with the tangible and intangible assets used or
useful in connection with the conduct of the business or operations of
WEAT (the "WEAT Assets") and certain related liabilities, to an entity
controlled by Mr. Lowell W. Paxson (the "Assignee"), and concurrently
therewith, PCC shall, pursuant to documentation reasonably acceptable to
Buyer (which documentation shall be submitted by Seller to Buyer for
review by Buyer a reasonable period of time prior to the Group IV Date),
assign all of its rights, liabilities and obligations under this Agreement
in respect of the Group IV Sale to the Assignee, and the Assignee shall
accept such transfer and assignment of the Group IV Assets and assume the
liabilities and obligations of PCC under the Group IV Assumed Liabilities
and the Group IV Sale under this Agreement (the "Group IV Transfer");
provided that such assignment shall not release PCC from any of its
liabilities and obligations hereunder to Buyer. For purposes hereof,
except as otherwise provided in this Agreement or as the context otherwise
requires, in the event of such assignment, the Assignee shall be treated
as the "Seller" hereunder in respect of the Group IV Assets and/or the
Group IV Transfer.
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(2) The Group IV Transfer shall be consummated between PCC and
the Assignee on the terms and conditions set forth in this Section
6.10(b)for a purchase price of Thirty-Three Million Dollars ($33,000,000),
and, to the extent applicable, as adjusted pursuant to the ARS Asset
Purchase Agreement, including, without limitation, pursuant to Section 2.4
thereof, pursuant to assignments and other conveyancing documents that are
sufficient to convey and vest good title to the Group IV Assets and the
WEAT Assets to the Assignee, free and clear of all Liens, other than
Permitted Liens, in form and substance reasonably acceptable to PCC, the
Assignee and Buyer. Prorations and adjustments relating to the Group IV
Assets and WEAT Assets shall be made in accordance with the provisions of
Section 2.5 in substantially the same manner as prorations and adjustments
made in connection with the LPI Sale.
(3) The funding of the Group IV Loan shall be subject to
satisfaction of the conditions set forth in the Group IV-A Note and the
Group IV-B Note (which shall be substantially similar to those set forth
in Section 6.10(a)(ii)) and Buyer shall advance to the Assignee, by
federal wire transfer of same-day funds, the amount of the Group IV Loan
upon satisfaction of conditions substantially similar to those set forth
in Section 6.10(a)(ii), but with respect to the Group IV Sale and/or the
Group IV Assets and WEAT Assets.
(4) Notwithstanding anything in this Agreement or in any of
the documents or instruments delivered pursuant hereto or in connection
herewith or in any applicable law to the contrary, Buyer agrees that, if
the Group IV Transfer is consummated, under no circumstances shall PCC
have any liability or obligation of any nature whatsoever with respect to
repayment of the Group IV Loan or the indebtedness evidenced by Group IV-A
Note and the Group IV-B Note or any other obligations of the Assignee
pursuant thereto, the related security documents or any other documents
delivered in connection therewith or pursuant thereto and Buyer hereby
waives and releases all such claims. Notwithstanding the foregoing,
nothing contained in this Section 6.10(b)(4) shall in any manner impair
any right, remedy or recourse Buyer may have against PCC for fraud in
connection with this Agreement.
In the event of termination of this Agreement with respect to the Group IV Sale
and the Group IV Assets, the Group IV Loan shall be repaid as provided for in
the Group IV-Loan Agreement and the Group IV-A Note, the Group IV-B Note and
the Group IV-C Note
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(subject to reduction as provided for in Section 9.2, the Group IV Loan
Agreement and the Group IV-B Note).
(c) Adjustments and Other Matters Relating to Group IV and WKES.
Notwithstanding any other provision of this Agreement to the contrary, Buyer
and Seller agree as follows:
(i) The Group IV Purchase Price shall be determined by increasing
or decreasing the Group IV Estimated Purchase Price under Section 2.5(a)
hereof, to take account of any adjustments or prorations (upward or downward)
to the purchase price under the ARS Asset Purchase Agreement (including any
preliminary adjustments or prorations thereunder and any final adjustments or
prorations thereunder, including, without limitation or duplication, pursuant
to the first sentence of Section 2.4 of the ARS Asset Purchase Agreement);
provided, however, that no purchase price increase shall be taken into account
to the extent Buyer does not receive the benefit giving rise thereto.
(ii) For purposes of the WKES Purchase Agreement and the ARS Asset
Purchase Agreement, after the Group II/III Closing with respect to WKES and the
Group IV Closing with respect to the Group IV Stations, Seller shall provide
Buyer with all of the rights and benefits received by Seller and its Affiliates
under the WKES Purchase Agreement and the ARS Asset Purchase Agreement, as the
case may be, and Buyer shall perform on behalf of PCC all obligations of, and
actions to be performed by, Seller and its Affiliates arising after such
Closings under such agreements and any agreements, documents and instruments
executed in connection therewith, including, without limitation, the
liabilities and obligations of Seller's Affiliates under Sections 2.3(b), 2.5,
6.4, 6.7, 6.11, 10.3, 10.6 and 11.1 of the WKES Purchase Agreement and Sections
2.4B, 2.5, 5.2, 6.3, 6.5, 6.6, 6.9, 6.10, 6.16 and 10.3 of the ARS Asset
Purchase Agreement; provided, however, that (w) Buyer shall not assume Seller's
obligations under Section 6.13 of the WKES Purchase Agreement, (x) Buyer's
obligations pursuant to Section 10.3 of the WKES Purchase Agreement and Section
10.3 of the ARS Asset Purchase Agreement shall not extend to any such
obligations arising (A)with respect to WKES or the Group IV Stations, as the
case may be, during the period of Seller's or its Affiliates' ownership of WKES
or the ARS Stations, if any, or (B) any indemnification obligations of Seller
or its Affiliates, as applicable, relating to any breach by Seller or its
Affiliates of any of their representations or warranties, as applicable, or the
failure to perform any covenant to be performed by Seller or its Affiliates, as
applicable, under the WKES Purchase Agreement or the ARS Asset Purchase
Agreement, respectively, to be performed by them prior to the Group II/III
Effective Time with respect to
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WKES and the Group IV Effective Time with respect to the Group IV Stations; (y)
Buyer shall not be responsible for payment of any applicable FCC fees or fees
payable in respect of HSR Act filings under the WKES Purchase Agreement or the
ARS Asset Purchase Agreement; and (z) except as otherwise provided herein,
Buyer shall have no, and Seller shall retain all, obligations with respect to
WEAT. Buyer shall execute such documentation evidencing Buyer's obligations
hereunder as Seller may reasonably request.
(iii) The conveyance of the Group IV Assets to Buyer by Seller
shall be effected by delivery of conveyancing documents substantially similar
to those used for the conveyance of the Group II/III Assets and Group V Assets,
modified to be consistent with the provisions of Section 6.10(c)(iv) below.
(iv) Except in respect of any liabilities arising out of the
operations of WKES or the Group IV Stations, as the case may be, after the
consummation of the acquisition of WKES or the Group IV Stations by Seller or
its Affiliates, as the case may be, but prior to the earlier of (1) the entry
by Buyer and Seller into the Group II/III TBA with respect to WKES or the Group
IV TBA with respect to the Group IV Stations, as the case may be, or (2) the
consummation of the purchase of the Group II/III Stations or the Group IV
Stations, as the case may be, by Buyer, and not assumed by Buyer hereunder
(which liabilities shall be subject to indemnification pursuant to the
provisions of Section 10 hereof and all limitations set forth therein), Seller
shall have no liability or obligation of any nature whatsoever to Buyer in
respect of WKES or the Group IV Stations, except to the extent that Seller or
its Affiliates receive indemnification in respect of any such liability or
obligation from Moody with respect to WKES or ARS with respect to the Group IV
Stations, as the case may be, and, in connection therewith, Seller shall
reasonably cooperate with Buyer (at Buyer's expense, except to the extent
Seller receives reimbursement of any such expenses by Moody or ARS, as the case
may be, under such agreements) in enforcing any rights that Seller may have
under the WKES Purchase Agreement or the ARS Asset Purchase Agreement, against
Moody and ARS, respectively.
6.11 Fees of CEA. No party shall have any liability to any other party in
respect of the fees of CEA to be paid by Buyer and Seller in accordance with
the terms of their respective agreements with CEA.
6.12 Non-Competition Agreement. At the Group II/III Closing and the Group
V Closing, Seller shall cause Mr. Lowell W. Paxson to execute and deliver the
Non-Competition Agreement, substantially in the form of Exhibit 6.12. No
portion of the
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Purchase Price (as defined in the Group I Purchase Agreement), Group II/III
Purchase Price, Group IV Purchase Price or Group V Purchase Price shall be
allocated to the Non-Competition Agreement.
6.13 Updated Information. On the date which is three (3) Business Days
prior to the relevant Effective Time, Seller shall deliver to Buyer a
supplement to the Schedules to this Agreement (the "Schedule Supplement"),
certifying that Seller has delivered to Buyer all notices required by Section
5.8 and setting forth any matter which, if existing or occurring on the date
hereof, would have been required to be set forth or described on the Schedules
hereto or that is necessary to complete or correct any information contained
therein. This Section 6.13 does not, and shall not be construed to, permit any
actions or inactions by Seller not otherwise permitted under this Agreement.
For purposes of the conditions to any Closing, if the matters disclosed in the
Schedule Supplement fall within the exceptions set forth in clauses (1), (2) or
(3) to Section 7.1(a) or the exception to Section 7.1(b), then such exceptions
shall apply, but no such disclosure by Seller to Buyer shall otherwise affect
any of Buyer's rights or obligations hereunder, whether before or after any
Closing. Without limiting the foregoing, regardless of any such disclosure, all
representations and warranties of Seller in this Agreement shall survive the
Closing to which they relate to the extent provided in Section 10.1 of this
Agreement, and Buyer shall be entitled to indemnification, in accordance with
Section 10.2.
6.14 Miscellaneous.
(a) Buyer hereby grants to Seller the unlimited, exclusive right to
use the four court-side seats at the present Miami Arena for so long as Buyer
or its Affiliates have such right in consideration of the payment of an amount
equal to the stated cost of the tickets therefor as printed on the face thereof
by Seller to Buyer to the extent Seller conveys to Buyer as a part of the
Assets all rights necessary to enable Buyer to perform Buyer's obligations
under this Section 6.14.
(b) Notwithstanding any provision herein to the contrary, Buyer hereby
acknowledges and agrees that, at any time after the date hereof, Seller may, in
its sole discretion, cancel the broadcast of the Ron & Ron Show on any Station
and terminate all affiliation and other agreements relating to the production
or broadcast of such show.
(c) Seller shall use commercially reasonable efforts to complete, as
soon as reasonably practicable, the replacement and repair work for the
WNLS(AM) transmitting towers as described
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in Schedule 6.14(b) and any FCC filings which may be necessary as a result
thereof and, if such work or filings have not been completed by the Group
II/III Effective Time, Seller shall, at the Group II/III Effective Time, pay
Twenty-Two Thousand Dollars ($22,000) to Buyer in immediately available funds.
Upon (i) the completion of such work and filings or (ii) the payment of such
amount to Buyer, as the case may be, Seller shall have no further obligation or
liability to Buyer hereunder with respect to the repair or replacement of the
WNLS(AM) transmitting towers; provided, however, that if any FCC filings are
required as a result of such work and have not been made by Seller, Seller
shall reimburse Buyer for expenses related thereto (including, without
limitation, antenna proof of performance, FCC filing fees and legal and
engineering costs) up to and including the sum of Ten Thousand Dollars
($10,000).
(d) Seller shall use commercially reasonable efforts to defend against
the World Class Rock Claims; provided, however, that Seller shall not be
obligated to appeal any judgment or award in connection therewith.
6.15 Risk of Loss; Interruption of Broadcast Transmission.
(a) The risk of any loss, damage, impairment, confiscation or
condemnation of any Assets prior to the Effective Time therefor (collectively,
a "Loss") shall be borne by Seller. In the event of any Loss prior to the
Effective Time that interferes with the normal operation of any of the Stations
to which such Assets relate, Seller shall promptly notify Buyer of same in
writing, specifying with particularity the Loss incurred, the cause thereof, if
known or reasonably ascertainable, and the insurance coverage, if any,
applicable thereto.
(b) (i) Except as provided in Section 6.15(c), if the Assets subject
to such Loss have not been restored or replaced by the applicable Effective
Time, Buyer shall proceed to consummate the transactions to be consummated at
such Effective Time pursuant to this Agreement. Buyer and Seller shall
negotiate in good faith to agree on the amount of the costs necessary to
complete the restoration and replacement of such damaged Assets. To the extent
Buyer and Seller are unable to agree on the amount of such costs, Buyer and
Seller shall jointly designate an independent appraiser who shall be
knowledgeable and experienced in the operation of radio broadcasting stations
to resolve such dispute. If the parties are unable to agree on the designation
of an independent appraiser, the selection of the appraiser to resolve the
dispute shall be submitted to arbitration in accordance with the commercial
arbitration rules of the American Arbitration Association.
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(ii) To the extent the parties agree upon the amount of such costs
prior to the applicable Closing Date or the appraiser is able to determine the
amount of such costs prior to the applicable Closing Date, such amount shall be
deducted from the applicable Preliminary Purchase Price. To the extent such
amount is not determined prior to such Closing Date, such amount shall be a
Settled Claim and shall be paid by Seller to Buyer pursuant to Section
10.2(a)(ix). The appraiser's resolution of any such dispute shall be final and
binding on the parties. Any fees of the appraiser and, if necessary, for
arbitration to select such appraiser, shall be split equally between the
parties.
(c) In the event of a Loss prior to the Effective Time which results
in a Material Broadcast Interruption, Seller shall give written notice thereof
(a "Broadcast Interruption Notice") to Buyer within five (5) Business Days of
such Loss resulting in a Material Broadcast Interruption. After receipt of a
Broadcast Interruption Notice, Buyer may terminate this Agreement by giving
written notice thereof to Seller within ten (10) Business Days of receipt by
Buyer of such Broadcast Interruption Notice. If Buyer chooses not to terminate
this Agreement or fails to give written notice within such ten (10) Business
Day period, Buyer shall have no further right to terminate this Agreement in
respect of such Material Broadcast Interruption and the remaining provisions of
this Agreement shall govern.
(d) The risk of loss, damage, impairment, confiscation or condemnation
of any of the Assets arising after the related Effective Time shall be borne by
Buyer and no such loss, damage, impairment, confiscation or condemnation of
such Assets shall (i) give Buyer any claim against Seller with respect thereto,
including, without limitation, any claim for indemnification pursuant to
Section 10.2, or (ii) otherwise affect Buyer's obligation to consummate the
related Closing or pay the related Purchase Price.
(e) If before the Effective Time for any Assets, the regular broadcast
transmission of any Station related thereto in the normal and usual manner is
interrupted for a period of 12 continuous hours or more, Seller shall give
prompt written notice thereof to Buyer.
6.16 Computer Systems. From each Effective Time through the Closing Date
for each Group Sale, Buyer shall not dismantle and shall keep in operation the
computer systems (which term includes the existing e-mail, traffic accounting
and wide area network system) currently operating at the Stations included in
such Group Sale. If the Group II/III Closing Date and the Group V Closing Date
is prior to January 1, 1998, for a period of four
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(4) months therefrom, upon request of Buyer, Seller shall provide Buyer,
without cost, with access to, and the right to use, the wide area network
system currently used by the Stations. Buyer and Seller agree to take all
reasonable steps required to maintain the integrity and security of their
respective computer and electronic data systems.
SECTION 7 CONDITIONS TO OBLIGATIONS OF BUYER AND SELLER
7.1 Conditions to Obligations of Buyer at Group II/III and Group V
Closings. Subject to the provisions of Section 6.10 hereof limiting such
conditions following the LPI Sale Date (assuming the LPI Sale occurs), the
obligations of Buyer at the Group II/III and the Group V Closings hereunder are
subject, at Buyer's option, to the fulfillment prior to or at such Closings of
each of the following conditions:
(a) Representations and Warranties. The representations and warranties
of Seller contained in this Agreement shall be true and correct at and as of
the Closing Date for such Closings as though made at and as of that time,
except (1) to the extent any such representation or warranty is expressly
stated only as of a specified earlier date or dates, in which case such
representation or warranty shall be true and correct in all material respects
as of such earlier specified date or dates (subject to clause 3 below), (2) for
changes which are permitted or contemplated pursuant to this Agreement or (3)
where the consequence of the matter set forth in such representation or
warranty having failed to be true and correct as of the date when made, on the
Closing Date or on such earlier specified date would not have a Material
Adverse Effect.
(b) Covenants. Seller shall have performed and complied with all
covenants and agreements required by this Agreement to be performed or complied
with by it prior to or on such Closing Date for such Closings, except to the
extent that the consequence of the failure of Seller to have so performed or
complied would not have a Material Adverse Effect.
(c) FCC Consent. The FCC Consent with respect to the FCC Licenses to
be transferred at such Closings shall have been granted or, if FCC Consent for
the assignment of an FCC License for any satellite earth station or private
operational fixed microwave station shall not have been granted, special
temporary authority shall have been granted to permit Buyer to operate such
Stations pending the grant of such FCC Consent.
(d) HSR Act. The waiting period under the HSR Act in respect of the
transactions to be consummated at such Closings
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shall have expired or terminated and there shall not be pending any action or
request for information instituted by the FTC or the DOJ under the HSR Act
relating to such transactions.
(e) Legal Proceedings. No injunction, restraining order or decree of
any nature of any court or governmental authority of competent jurisdiction
shall be in effect which restrains or prohibits Buyer from consummating the
transactions at such Closings contemplated by this Agreement.
(f) Deliveries. Seller shall have made, or stand willing to make, all
the deliveries to Buyer described in Section 8.2 applicable to such Closings.
(g) Simultaneous Closing. The Group II/III Closing and the Group V
Closing shall occur simultaneously.
(h) Discharge of Loans. The condition set forth in Section
6.10(a)(iv)(3) shall have been satisfied.
(i) Group I Closing. If the Group I Closing has not previously
occurred, to the extent the conditions precedent to the obligations of PCC to
the consummation of the Group I Purchase Agreement have been satisfied (or
would be satisfied at consummation by delivery of documents and the purchase
price by Buyer), PCC shall stand ready, willing and able to consummate the
Closing under the Group I Purchase Agreement concurrently with the Group II/III
Closing and the Group V Closing; provided it is understood and agreed that if
such conditions precedent are not satisfied, Closing of the Group I Sale shall
not be a condition to consummation of the Group II/III Closing and the Group V
Closing.
(j) Required Consents. All Required Consents shall have been obtained
and delivered to Buyer.
7.2 Conditions to Obligations of Seller at Group II/III and Group V
Closings. Subject to the provisions of Section 6.10 hereof limiting such
conditions following the LPI Sale Date (assuming the LPI Sale occurs), the
obligations of Seller at the Group II/III and Group V Closings hereunder are
subject, at Seller's option, to the fulfillment prior to or at such Closings of
each of the following conditions:
(a) Representations and Warranties. All representations and warranties
of Buyer contained in this Agreement shall be true and correct in all material
respects at and as of the Closing Date for such Closings as though made at and
as of that time, except to the extent any such representation or warranty is
expressly stated only as of a specified earlier
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date or dates, in which case such representation and warranty shall be true and
accurate in all material respects as of such earlier specified date or dates.
(b) Covenants. Buyer shall have performed and complied in all material
respects with all covenants and agreements required by this Agreement to be
performed or complied with by it prior to or on such Closing Date.
(c) FCC Consent. The FCC Consent with respect to the FCC Licenses to
be transferred at such Closings shall have been granted or, if FCC Consent for
the assignment of an FCC License for any satellite earth station or private
operational fixed microwave station shall not have been granted, special
temporary authority shall have been granted to permit Buyer to operate such
Stations pending the grant of such FCC Consent.
(d) HSR Act. The waiting period under the HSR Act in respect of the
transactions to be consummated at such Closings shall have expired or
terminated and there shall not be pending any action or request for information
instituted by the FTC or the DOJ under the HSR Act relating to such
transactions.
(e) Legal Proceedings. No injunction, restraining order or decree of
any nature of any court or governmental authority of competent jurisdiction
shall be in effect which restrains or prohibits Seller from consummating the
transactions at such Closings contemplated by this Agreement.
(f) Deliveries. Buyer shall have made or stand willing to make all the
deliveries described in Section 8.3 applicable to such Closings.
(g) Simultaneous Closings. The Group II/III Closing and the Group V
Closing shall occur simultaneously.
(h) Discharge of Loans. The condition set forth in Section
6.10(a)(iv)(4) shall have been satisfied.
(i) Group I Closing. If the Group I Closing has not previously
occurred, to the extent the conditions precedent to the obligations of Buyer to
the consummation of the Group I Purchase Agreement have been satisfied (or
would be satisfied at consummation by delivery of documents by the Sellers
thereunder), Buyer shall stand ready, willing and able to consummate the
Closing under the Group I Purchase Agreement concurrently with the Group II/III
Closing and the Group V Closing; provided it is understood and agreed that if
such conditions precedent are not satisfied, Closing of the Group I Sale shall
not be a condition
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to consummation of the Group II/II Closing and the Group V Closing.
7.3 Conditions to Obligations of Buyer and Seller at Group IV Closing.
Notwithstanding anything in this Agreement to the contrary, the obligations of
Buyer and Seller at the Group IV Closing hereunder are subject to the
fulfillment prior to or at such Closing of each of the following conditions
only:
(a) The Group II/III Closing and the Group V Closing shall have
occurred prior to, or shall occur simultaneously with, the Group IV Closing;
(b) For the benefit of Seller, cancellation and termination of all
indebtedness of Seller pursuant to the Group IV-A Note;
(c) For the benefit of Buyer, Seller shall have made, or stand willing
to make, all the deliveries described in Section 8.2 applicable to such
Closing;
(d) For the benefit of Seller, Buyer shall have made or taken, or
stand willing to make or take, all the actions and deliveries described in
Section 8.3 applicable to such Closing;
(e) For the benefit of Buyer, no injunction, restraining order or
decree of any nature of any court or governmental authority of competent
jurisdiction shall be in effect which restrains or prohibits Buyer from
consummating the transactions contemplated at the Group IV Closing;
(f) For the benefit of Seller, no injunction, restraining order or
decree of any nature of any court or governmental authority of competent
jurisdiction shall be in effect which restrains or prohibits Seller from
consummating the transactions contemplated at the Group IV Closing;
(g) For the benefit of Buyer, the conditions set forth in Section
7.1(c) and 7.1(d) as applicable to the Group IV Assets shall have been
satisfied;
(h) For the benefit of Seller, the conditions set forth in Section
7.2(c) and 7.2(d) applicable to the Group IV Assets shall have been satisfied;
and
(i) For the benefit of Buyer, Seller shall have complied in all
material respects with its obligations under Section 5.7 hereof, and the
representations set forth in Section 3.23 shall be true and correct in all
material respects as though made at and as of that time, except to the extent
any such representation is expressly stated only as of a specified earlier date
or dates, in which case such representation shall be true
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and correct in all material respects as of such earlier specified date or
dates.
(j) For the benefit of Seller, to the extent not previously made,
Buyer shall have made that portion of the Group IV Loan evidenced by the Group
IV-C Note to Seller or the Assignee, as the case may be.
(k) For the benefit of Buyer, to the extent that the Group IV Loan is
made by Buyer and not previously delivered the Group IV-C Note (and the related
security agreements and guaranty), duly executed by Seller or the Assignee, as
the case may be.
SECTION 8 CLOSING AND CLOSING DELIVERIES
8.1 Closing.
(a) Closing Date.
(i) Subject to (1) the provisions of Section 6.10 hereof and (2)
the satisfaction or, to the extent permissible by law, waiver (by the party for
whose benefit the Closing condition is imposed) on the date scheduled for the
applicable Closing of the applicable conditions precedent set forth in Section
7.1, 7.2 or 7.3, as appropriate, the parties hereto agree as follows:
(A) The Closing of the Group II/III Sale and Group V Sale
shall take place at 10:00 a.m., Washington, D.C. time, on the later of (x)
October 1, 1997 and (y) the date reasonably agreeable to Seller and Buyer not
less than five (5) Business Days nor more than ten (10) Business Days following
the grant of the Group II/III FCC Consent and the Group V FCC Consent;
provided, however, that if the Group II/III FCC Consent and the Group V FCC
Consent are granted prior to October 1, 1997, notwithstanding clause (y) above,
the Closing of the Group II/III Sale and the Group V Sale shall take place no
later than October 1, 1997.
(B) The Closing of the Group IV Sale shall take place at 10:00
a.m., Washington, D.C. time, on the latest of (x) the Closing of the Group
II/III Sale and the Group V Sale; (y) the date reasonably agreeable to Seller
and Buyer not less than five (5) Business Days nor more than ten (10) Business
Days following the grant of the Group IV FCC Consent and (z) the date specified
by Seller to Buyer, upon five (5) Business Days' prior written notice to Buyer,
that is concurrent with the date of consummation of the ARS Asset Purchase
Agreement and the acquisition of the Group IV Stations by Seller.
Notwithstanding clause (y) of the previous sentence, Buyer shall use
commercially reasonable efforts to consummate the Group IV Closing on the same
date that Seller or any of its Affiliates, as the case may be,
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acquires the Group IV Stations from ARS pursuant to the ARS Asset Purchase
Agreement.
(ii) Notwithstanding the foregoing, if on the date otherwise
scheduled for any Closing pursuant to the preceding paragraphs, the conditions
precedent set forth in Sections 7.1(d), 7.1(e), 7.1(i), 7.1(j), 7.2(d), 7.2(e),
7.2(i), 7.3(e), 7.3(f), 7.3(g) or 7.3(h) if applicable, with respect to such
Closing, have not been satisfied, the party for whose benefit such conditions
have been imposed may elect to postpone such Closing, and such Closing shall
thereafter take place on a date specified by not less than five (5) Business
Days' prior written notice from such party, which date shall be not less than
five (5) Business Days nor more than ten (10) Business Days after the
satisfaction or waiver of such conditions precedent. The parties shall seek
extensions of the applicable FCC Consents that may be required for any such
postponement of such Closing.
(iii) In no event shall any Closing hereunder occur later than
the Termination Date, except as provided in Section 9.1.
(b) Closing Place. Each Closing shall be held at the offices of
Dow, Lohnes & Albertson, PLLC, 1200 New Hampshire Avenue, N.W., Suite 800,
Washington, D.C. 20036, or any other place that is agreed upon by Buyer and
Seller.
8.2 Deliveries by Seller. With respect to the Closing for each Group
Sale, prior to or on the related Closing Date, Seller shall take the following
actions and deliver to Buyer the following documents, in form and substance
reasonably satisfactory to Buyer and its counsel:
(a) Conveyancing Documents. Subject to the provisions of Section 6.10,
duly executed assignments and other conveyancing documents that are sufficient
to convey and vest good and, in the case of owned Real Property, marketable,
title to the Assets which are part of such Group Sale to the Buyer, free and
clear of all Liens, except for Permitted Liens. Such documents shall include,
but shall not be limited to, the following:
(i) Assignment and Assumption Agreements for the Assumed
Contracts substantially in the form of Exhibit 8.2(a)(i) annexed hereto and
assignment agreements in recordable form for each Real Property lease
(provided, however, that Seller shall have no liability to Buyer with respect
to the recording or recordability of any such assignment agreements and the
recording or recordability of any such assignment agreements shall not be a
condition to the satisfaction of this Section 8.2(a)(i));
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(ii) deeds (the "Deeds") in recordable form conveying fee
simple title to all Real Property owned by Seller and used in the business of
the Stations which is part of such Group Sale, subject to Permitted Liens and
consistent with and subject to the representations and warranties and the
indemnity limitations set forth in this Agreement;
(iii) bills of sale; and
(iv) Assignment and Acceptances of FCC Licenses.
(b) Officer's Certificate. At the Group II/III and Group V Closing, a
certificate, dated as of such Closing Date, executed on behalf of Seller by the
President of Seller (but without personal liability to such officer),
certifying to the fulfillment of the conditions set forth in Sections 7.1(a)
and 7.1(b) with respect to such Group Sale.
(c) Secretary's Certificate. At the Group II/III and Group V Closing, a
certificate, dated as of the relevant Closing Date, executed by the Secretary
of Seller (but without personal liability to such officer), certifying that the
resolutions, as attached to such certificate, were duly adopted by the Board of
Directors and shareholders (if required) of Seller, authorizing and approving
the execution of this Agreement and the consummation of the transactions
contemplated hereby and that such resolutions remain in full force and effect
and that attached thereto are true, correct and complete copies of the
Certificate of Incorporation and bylaws of Seller.
(d) Consents and Estoppel Certificates. Any instruments evidencing
any Consents and any Estoppel Certificates received with respect to such Group
Sale, including any Required Consents.
(e) Releases. Subject to the provisions of Section 6.10, any mortgage
discharges or releases of liens that are necessary in order for the Assets
which are part of such Group Sale to be free and clear of all Liens, other than
the Permitted Liens or a pay-off letter from any of Seller's lenders providing
for such discharges and releases upon payment by Seller of the obligations owed
to such lenders with the proceeds of the Preliminary Purchase Price on such
relevant Closing Date.
(f) Good Standing Certificates. At the Group II/III and Group V
Closings, a certificate as to the formation and good standing of Seller issued
by the Secretary of State of the State of Delaware, dated not more than ten
(10) days before such Closing Date.
(g) Incumbency Certificate. A certificate signed by an officer of
Seller (but without personal liability to such
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officer) certifying the signature and incumbency of the person executing this
Agreement on behalf of Seller.
(h) Title Commitments. ALTA Title commitments issued by Lawyers Title
Insurance Corporation obtained by Seller at Buyer's expense, insuring fee
simple title in each fee estate included in the Real Property being conveyed as
part of such Group Sale, subject to standard survey exceptions and Permitted
Liens, in an amount reasonably determined by Buyer that permits such
commitments to be obtained; provided that if the Group II/III Closing and Group
V Closing take place hereunder without the Group V Loan being made, Seller
shall pay for the costs of the foregoing title commitments.
(i) Lien Search Results. The results of a search for tax, lien and
judgment filings with respect to each of the names reasonably requested by
Buyer no later than 20 days before such Closing, obtained by Seller, at Buyer's
expense, against the Secretary of State's records of the State of Florida and
Tennessee (as applicable, with respect to such names) and in the records of
each county in Florida and Tennessee (as applicable, with respect to such
names) in which any of the Assets being conveyed as part of such Group Sale are
located, reflecting the absence of Liens other than Permitted Liens on such
Assets and Liens removed concurrently with, or prior to, such Closing; provided
that if the Group II/III Closing and Group V Closing takes place hereunder
without the Group V Loan being made, Seller shall pay for the costs of the
foregoing lien searches.
(j) WHNZ Option Agreement. The Option Agreement related to the purchase
of WHNZ, substantially in the form of Exhibit 8.2(j) annexed hereto (the "WHNZ
Option Agreement").
(k) WYCL Option Agreement. The Option Agreement related to the purchase
of WYCL, substantially in the form of Exhibit 8.2(k) annexed hereto (the "WYCL
Option Agreement"), duly executed by Seller.
(l) Services Agreements. The Services Agreements, duly executed by
Seller.
(m) TSAs. To the extent not previously delivered at the Effective Time,
the TSAs with respect to WHNZ, WYCL and WEAT, duly executed by Seller, LPI or
the Assignee, as the case may be.
(n) DP Media Lease Agreement. A lease agreement between DP Media, Inc.
("DP Media") and Buyer pursuant to which DP Media shall lease from Buyer (i)
that portion of the Seller's studio building located at 2515 15th Street,
Panama City, Florida which DP Media currently uses and (ii) the assets set
forth in Exhibit 8.2(n) (the "DP Media Assets"), in each case
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for a period of six (6) months from the Group II/III Closing Date and without
charge (the "DP Media Agreement") to the extent that the foregoing does not
unreasonably interfere with Buyer's operations at such premises, duly executed
by DP Media.
(o) Other. Such other documents expressly called for to be delivered
by Seller under the terms of this Agreement or as may reasonably be requested
by Buyer.
8.3 Deliveries by Buyer. With respect to the Closing for each Group
Sale, prior to or on the related Closing Date, Buyer shall take the following
actions and deliver to Seller the following documents, in form and substance
reasonably satisfactory to Seller and its counsel:
(a) Closing Payment. Make the payment described in
Section 2.6(a) to be made with respect to such Group Sale.
(b) Officer's Certificate. At the Group II/III and Group V Closings, a
certificate, dated as of such Closing Date, executed on behalf of Buyer by the
President of Buyer (but without personal liability to such officer), certifying
to the fulfillment of the conditions set forth in Sections 7.2(a) and 7.2(b)
with respect to such Group Sale.
(c) Secretary's Certificate. At the Group II/III and Group V Closings,
a certificate, dated as of such Closing Date, executed by Secretary of Buyer
(but without personal liability to such officer), certifying that the
resolutions, as attached to such certificate, were duly adopted by the Board of
Directors and shareholders (if required) of the Buyer, authorizing and
approving the execution of this Agreement and the consummation of the
transactions contemplated hereby and that such resolutions remain in full force
and effect and that attached thereto are true, correct and complete copies of
the Certificate of Incorporation and bylaws of Buyer.
(d) Assignment and Assumption Agreements and
Assignment and Acceptance Agreements. The Assignment and Assumption Agreements
referenced in Section 8.2(a)(i) and the Assignment and Acceptances of FCC
Licenses referenced in Section 8.2(a)(iv).
(e) Good Standing Certificate. At the Group II/III and Group V
Closings, a certificate as to the existence and good standing of Buyer issued
by the Secretary of State of the State of organization of Buyer, dated not more
than ten (10) days before such Closing Date, and certificates issued by the
appropriate governmental authority as to the qualification of Buyer to do
business in each jurisdiction in which such qualification is necessary for
Buyer to own the Assets and operate the Stations which are part of such Group
Sale.
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(f) Incumbency Certificate. A certificate signed by
an officer of Buyer and Guarantor (but without liability to such
officer) certifying the signatures and incumbency of the persons
executing this Agreement on behalf of Buyer and the Guarantor.
(g) WHNZ Option Agreement. The WHNZ Option Agreement, duly executed
by Buyer.
(h) WYCL Option Agreement. The WYCL Option Agreement, duly executed
by Buyer.
(i) Services Agreements. The Services Agreements,
duly executed by Buyer.
(j) TSAs. To the extent not previously delivered at the Effective
Time, the TSAs with respect to WHNZ, WYCL and WEAT, duly executed by Buyer.
(k) DP Media Agreement. The DP Media Agreement, duly
executed by Buyer.
(l) Other. Such other documents expressly called for to be delivered
by Buyer under the terms of this Agreement or as may be reasonably requested by
Seller.
SECTION 9 TERMINATION
9.1 Termination of Agreement. This Agreement may be terminated only
as follows:
(a) at any time by written consent of each of Buyer, Guarantor,
PCC and LPI;
(b) by PCC, if PCC is not in default or breach in any material respect
of its obligations under this Agreement to consummate the transactions
contemplated under Section 6.10(a) and the other transactions to be consummated
on the LPI Sale Date under Section 6.10, if Buyer defaults under or breaches
its obligations under Section 6.10(a) or the other provisions of Section 6.10
that are applicable on the LPI Sale Date;
(c) by Buyer, if Buyer is not in default or breach in any material
respect of its obligations under this Agreement to consummate the transactions
contemplated under Section 6.10(a) and the other transactions to be consummated
on the LPI Sale Date under Section 6.10, if either PCC or LPI defaults under or
breaches its respective obligations under Section 6.10(a) or under the other
provisions of Section 6.10 that are applicable on the LPI Sale Date;
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(d) by Seller, with respect only to the Group Sale to be consummated at
any applicable Closing, if Seller is not in default or breach in any material
respect of its obligations under this Agreement with respect to such Group
Sale, if the applicable conditions precedent to Seller's obligations in
Sections 7.2 or 7.3 (as modified by the provisions of Section 6.10) with
respect to the Closing of such Group Sale have not been satisfied (or waived by
Seller) by the date scheduled for such Closing pursuant to Section 8.1 (as such
date may be postponed pursuant to Section 8.1(a)(ii)); provided that
notwithstanding the foregoing, if termination pursuant to this Section 9.1(d)
is in respect of the Group II/III Sale or the Group V Sale, such termination
shall then be effective with respect to this entire Agreement and all Group
Sales hereunder;
(e) by Buyer, with respect only to the Group Sale to be consummated at
any applicable Closing, if Buyer is not in default or breach in any material
respect of its obligations under this Agreement with respect to such Group
Sale, if the applicable conditions precedent to Buyer's obligations in Sections
7.1 or 7.3 (as modified by the provisions of Section 6.10) with respect to the
Closing of such Group Sale have not been satisfied (or waived by Buyer) by the
date scheduled for such Closing pursuant to Section 8.1 (as such date may be
postponed pursuant to Section 8.1(a)(ii)); provided that notwithstanding the
foregoing, if termination pursuant to this Section 9.1(e) is in respect of the
Group II/III Sale or the Group V Sale, such termination shall then be effective
with respect to this entire Agreement and all Group Sales hereunder;
(f) by either Buyer or Seller with respect only to such transactions
which are to be consummated at any Closing which have not occurred on or before
the Termination Date, except where the Closing related to such transactions has
been postponed pursuant to the provisions of Section 8.1(a)(ii), in which case
the applicable date shall be upon the expiration of the period referred to in
Section 8.1(a)(ii), if the terminating party is not in default or breach in any
material respect of its obligations under this Agreement in respect of such
Closings hereunder that have not taken place on or before the Termination Date;
and
(g) by Buyer, pursuant to Section 6.15(c).
Notwithstanding anything in this Section 9.1 to the contrary, if on the
Termination Date, a Closing has not occurred solely because any required notice
period for such Closing has not lapsed, the Termination Date shall be extended
until the lapse of such period.
Without limiting the generality of the foregoing, or
any applicable law, neither Buyer, on the one hand, nor Seller,
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on the other hand, may rely on the failure of any condition precedent set forth
in Section 7 to be satisfied as a ground for termination of this Agreement by
such party if such failure was caused by such party's failure to act in good
faith, or a breach of or failure to perform its representations, warranties,
covenants or other obligations in accordance with the terms hereof.
9.2 Procedure and Effect of Termination.
(a) In the event of termination of this Agreement in whole (or in part
with respect only to any particular Group Sale as expressly provided herein) by
either or both of Buyer and/or PCC or LPI pursuant to Section 9.1, prompt
written notice thereof shall forthwith be given to the other party and this
Agreement shall terminate (in whole or in part, as the case may be) and, to the
extent this Agreement is terminated, the transactions contemplated hereby shall
be abandoned without further action by any of the parties hereto, but subject
to and without limiting any of the rights of the parties specified herein in
the event a party is in default or breach in any material respect of its
obligations under this Agreement. If this Agreement is terminated as provided
herein, to the extent this Agreement is terminated:
(i) None of the parties hereto shall have any liability or further
obligation to any other party or any of their respective directors,
officers, shareholders, employees, agents, or Affiliates pursuant to
this Agreement or otherwise, except as stated in Sections 6.3, 6.11
(if applicable), 9.2, 9.3, 9.4 and 11.1 hereof;
(ii) Except for Guarantor, which shall have liability as Guarantor
hereunder to the extent set forth herein, if applicable, and Mr.
Lowell W. Paxson, who shall have liability as guarantor pursuant to
the Guaranty described in Section 6.10(a)(i)(6) to the extent set
forth therein, if applicable, notwithstanding anything herein or in
applicable law to the contrary, none of the respective directors,
officers, shareholders, employees, agents or Affiliates of any of the
parties hereto shall have any liability or obligation to any other
party or any of their respective directors, officers, shareholders,
employees, agents or Affiliates pursuant to this Agreement or
otherwise;
(iii) All filings, applications and other submissions relating to
the transactions contemplated hereby as to which termination has
occurred shall, to the extent practicable, be withdrawn from the
agency or other Person to which made.
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(b) With respect to terminations pursuant to Section
9.1 hereof:
(i) If this Agreement is terminated pursuant to Sections 9.1(a) or
9.1(g), then and in that event, none of the parties hereto shall have
any recourse against or liability to the other parties hereto, except
as stated in Sections 6.3, 6.11, 9.2, 9.3, 9.4 and 11.1 hereof or in
any written agreement entered into by the parties in connection with
such termination.
(ii) If this Agreement is terminated by PCC pursuant to Sections
9.1(b), PCC shall have the right to pursue all legal and equitable
remedies available against Buyer and Guarantor for breach of contract;
provided, however, that to the extent Buyer has defaulted or breached
in the manner referenced in Section 9.1(b), in determining Seller's
damages hereunder, Buyer shall be deemed to have breached its
obligations to make the Group V Loan and to consummate the Group I
Sale, the Group II/III Sale, the Group IV Sale and the Group V Sale.
(iii) If this Agreement is terminated by Buyer pursuant to Section
9.1(c), Buyer shall have the right to pursue all legal and equitable
remedies available to it for breach of contract.
(iv) If this Agreement is terminated by Seller pursuant to Section
9.1(d) or (f), and Buyer is in breach or default of its obligations
under this Agreement, then the following provisions shall apply:
(1) If termination is with respect to all Group Sales, and the
LPI Sale has not occurred, Seller shall have the right to pursue
all legal and equitable remedies available to it against Buyer or
Guarantor for breach of contract.
(2) If the LPI Sale has been consummated and termination is
with respect to all Group Sales, then and in that event (A) the
Group V Loan shall be reduced in a principal amount of
$56,967,153, which reduction shall also be provided for in the
Clear Channel Loan Agreement; and (B) the principal amount of the
Group IV Loan shall be reduced by $3,125,000 and the Group IV-B
Note shall be canceled in connection therewith. The foregoing
remedies shall constitute liquidated damages and the exclusive
remedies of Seller and LPI for Buyer's breach; provided, however,
that if the LPI Sale has been consummated, nothing contained
herein shall limit or otherwise restrict the rights and
liabilities of PCC
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and LPI with respect to each other in connection with a
termination of this Agreement with respect to any of the Group
Sales. Notwithstanding the foregoing, to the extent the following
agreements have been entered into and to the extent expressly
provided therein (but subject to the acceleration, termination and
other provisions thereof), the provisions of the TBAs applicable
in the event of termination, the Intercreditor Agreement, the
Clear Channel Loan Agreement (and the promissory note and Security
Documents delivered pursuant thereto), the LPI Note (and the
Subordinated Guaranty delivered therewith), the Group IV Loan
Agreement, the Group IV-A Note, the Group IV-B Note and the Group
IV-C Note (and the security documents delivered pursuant thereto)
shall remain in full force and effect and shall be unimpaired by
any termination of this Agreement or payments made by Buyer or
Guarantor pursuant to this Section.
(3) If the Group II/III Closing and Group V Closing have
occurred, and Buyer is in breach of its obligations to consummate
the Group IV Sale, then the principal amount of the Group IV Loan
shall be reduced by $3,125,000 and the Group IV-B Note shall be
canceled in connection therewith. The foregoing remedies shall
constitute liquidated damages and the exclusive remedies of PCC in
respect of Buyer's breach of its obligations with respect to the
Group IV Sale, but, to the extent they do not relate to such sale,
without impairing any of PCC's other rights under this Agreement
and the documents related hereto or delivered in connection
therewith.
(v) If this Agreement is terminated by Seller pursuant to Section
9.1(d) or (f), and Buyer is not in breach of its obligations under
this Agreement, then the following provisions shall apply:
(1) If the LPI Sale has occurred, and to the extent expressly
provided therein (but subject to the acceleration, termination and
other provisions thereof) the provisions of the TBAs applicable in
the event of termination, the Intercreditor Agreement, the Clear
Channel Loan Agreement (and the promissory note and the Security
Documents delivered pursuant thereto), and the LPI Note (and the
Subordinated Guaranty delivered therewith) shall remain in full
force and effect and shall be unimpaired by any termination of
this Agreement.
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(2) If termination is effective with respect to the Group IV
Assets, and to the extent expressly provided in the Group IV Loan
(but subject to the acceleration, termination and other provisions
thereof), the Group IV Loan shall be repaid in accordance with the
terms of the Group IV Loan.
(vi) If this Agreement is terminated by Buyer pursuant to Section
9.1(e) or (f), then the following provisions shall apply:
(1) If termination is with respect to all Group Sales and if
Seller is in breach of its obligations under this Agreement to
consummate such Group Sales, Buyer shall have the right to pursue
all legal and equitable remedies available to it.
(2) If termination is with respect only to the Group IV Sale
and if Seller is in breach of its obligations under this Agreement
to consummate such Group Sale, Buyer shall have the right to
pursue all legal and equitable remedies available to it in respect
of the Group IV Sale.
(3) If and to the extent the following agreements have been
entered into and to the extent expressly provided therein (but
subject to the acceleration, termination and other provisions
thereof), the provisions of the TBAs applicable in the event of
termination, the Intercreditor Agreement, the Clear Channel Loan
Agreement (and the promissory note and the Security Documents
delivered pursuant thereto), and the Group IV-A Note and the Group
IV-B Note (and the security documents delivered pursuant thereto)
shall remain in full force and effect and shall be unimpaired by
any termination of this Agreement.
(c) If the Group I Sale has been consummated pursuant to the Group
I Purchase Agreement with respect to any of the Repurchase Assets, and (i) this
Agreement is terminated with respect to (A) all Group Sales or (B) the Group
II/III Sale and the Group V Sale or (ii) the Group II/III Closing and the Group
V Closing have not occurred on or before the Termination Date, the parties
shall have the following rights and obligations:
(1) If this Agreement has been terminated other than as a
result of Seller's breach or default of its obligations hereunder,
PCC shall have the right to cause Buyer to sell back to PCC, and
upon request by PCC, Buyer shall sell back to PCC, the Group I
Repurchase Assets in accordance with and subject to
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the terms and conditions set forth in Section 6.10 of the Group I
Purchase Agreement.
(2) If this Agreement has been terminated other than as a
result of Buyer's breach or default of its obligations hereunder,
Buyer shall have the right to cause PCC to repurchase from Buyer,
and upon the request of Buyer, PCC shall repurchase from Buyer,
the Group I Repurchase Assets in accordance with and subject to
the terms and conditions set forth in Section 6.10 of the Group I
Purchase Agreement.
9.3 Other Agreements. Notwithstanding anything in this Agreement to
the contrary, if the transactions contemplated by this Agreement are not
consummated in whole or in part, as a result of termination of this Agreement
pursuant to Section 9.1 hereof, then, to the extent expressly provided therein
(but subject to the acceleration, termination and other provisions thereof),
the provisions of the TBAs applicable in the event of termination, the
Intercreditor Agreement, the Clear Channel Loan Agreement (and the promissory
notes and Security Documents delivered pursuant thereto), the Group IV Loan
Agreement, the Group IV-A Note, the Group IV-B Note and the Group IV-C Note
(and the security documents delivered pursuant thereto) shall remain in effect.
9.4 Attorneys' Fees. In the event of a default by either party that
results in a lawsuit or other proceeding for any remedy available under this
Agreement, the prevailing party shall be entitled to reimbursement from the
other party of its reasonable legal fees and expenses incurred in connection
with such proceedings (whether incurred in arbitration, at trial, or on
appeal).
9.5 Specific Performance. In the event of a breach or threatened
breach by Buyer, Guarantor or Seller of any representation, warranty, covenant
or agreement under this Agreement, in addition to any other remedy available to
it, Seller or Buyer, as the case may be, shall be entitled to an injunction
restraining any such breach or threatened breach by the other parties to this
Agreement and, subject to obtaining any requisite approval of the FCC, to
enforcement of this Agreement by a decree of specific performance requiring
such other parties to fulfill their respective obligations under this
Agreement, in each case without the necessity of showing economic loss or other
actual damages and without any bond or other security being required.
SECTION 10 SURVIVAL OF REPRESENTATIONS AND WARRANTIES;
INDEMNIFICATION; CERTAIN REMEDIES
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10.1 Survival. (a) The representations and warranties of Buyer,
Guarantor and Seller with respect to each Group Sale contained herein shall
survive the Closing related thereto for a period expiring eighteen (18) months
after the related Effective Time and shall terminate on such date, except to
the extent that any claims for indemnification in respect of a breach of any
such representation or warranty is made on or before the applicable dates set
forth in the preceding clause, in which case such representation or warranty
(but not any others) shall survive until the resolution of such claim.
(b) Notwithstanding the foregoing, (1) any claims for
indemnification related to a breach of the representations and warranties
contained in Section 3.16 shall survive, and must be brought before the
expiration of, the period expiring thirty-six (36) months after the applicable
Effective Time in respect of the Group Sale pursuant to which such claim is
brought and (2) any claims for indemnification pursuant to Section 10.2(a)(iv)
or related to a breach of the representations and warranties contained in
Sections 3.10 and 3.22 shall survive, and must be brought before the expiration
of, the applicable statute of limitations.
(c) Buyer's obligation to pay, perform or discharge the Assumed
Liabilities shall survive until such Assumed Liabilities have been paid,
performed or discharged in full.
(d) Seller's obligations to pay, perform or discharge all
liabilities of Seller that are not Assumed Liabilities ("Retained
Liabilities"), and to indemnify Buyer in respect thereof, shall survive until
such liabilities have been paid, performed or discharged in full.
(e) Any claim for indemnification in respect of a covenant or
agreement of Buyer or Seller hereunder to be performed before the Closing
related thereto shall be made before the expiration of the eighteen month
anniversary of the related Effective Time. The covenants and agreements of the
parties contained herein and to be performed to any extent after any Closing
Date shall survive the related Closing until fully paid, discharged and
performed, and any claims for indemnification in respect of a breach of such
covenants to be performed after such Closing Date shall survive until such
covenants and agreements are so paid, discharged and performed.
10.2 Indemnification by Seller. (a) With respect to any Group Sale,
after the Closing therefor, Seller hereby agrees to indemnify, defend and hold
Buyer harmless against and with respect to, and shall reimburse Buyer for:
(i) Any and all losses, liabilities or damages resulting
from any breach of any representation or warranty made
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pursuant to this Agreement as of the date hereof or as of the applicable
Effective Time or, to the extent specifically contemplated by Section
6.10(a)(iv)(1) hereof and subject to the limitations therein, as of the
applicable Closing Date, or any failure by Seller to perform any covenant of
Seller set forth in this Agreement or in any certificate, document or
instrument prepared by Seller and delivered to Buyer
hereunder;
(ii) Any failure by Seller to pay, perform or
discharge any and all Retained Liabilities;
(iii) Any litigation, proceeding or claim by any third party
arising from the business or operations of the Assets by Seller prior to the
Effective Time for the Group Sale in which such Assets were included, except to
the extent arising from Assumed Liabilities;
(iv) If Seller elects under Section 11.10 (the "1031
Election") to effect the transfer of some or all of the Assets to Buyer in a
manner qualifying as part of a like-kind exchange of property by Seller within
the meaning of Section 1031 of the Code (a "Like-kind Exchange"), (A) the
excess, if any, of (1) all reasonable out-of-pocket costs and expenses of Buyer
in consummating the transfer of any of the Assets to Buyer in a Like-kind
Exchange, including, without limitation, reasonable legal fees and expenses for
the review of any additional documentation to be executed and delivered by
Buyer as a result of the Like-kind Exchange, over (2) the costs and expenses of
Buyer in consummating the transfer of such Assets to Buyer if the 1031 Election
had not been made and (B) the excess, if any, of (1) if the 1031 Election
causes Buyer to obtain a tax basis in such assets less than the tax basis Buyer
would have had in such Assets had Seller not made a 1031 Election, the Taxes
payable by Buyer, over (2) the Taxes that would have been payable by Buyer had
Seller not made the 1031 Election;
(v) With respect to any leased Real Property for which a
Lease Consent or Estoppel Certificate are not obtained by the date which is
twelve (12) months after the Closing Date related to such leased Real Property
only, any and all reasonable out-of-pocket costs and expenses, including
reasonable legal fees and expenses, arising from the termination of any lease
for such Real Property and the transfer of any Assets from the related leased
Real Property to a new site as a result thereof;
(vi) Any and all reasonable out-of-pocket costs and expenses,
including reasonable legal fees and expenses, of undertaking remediation or
such other action to eliminate any noncompliance with applicable law with
respect to any Real Property owned by Seller, in each case as specifically set
forth in any Phase II Report;
<PAGE> 72
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(vii) Any and all losses, liabilities or damages resulting
from any claim by Marketing Magic, Inc. in respect of trade or barter
agreements for any period prior to January 1, 1997;
(viii) Any and all loss, liabilities or damages resulting from
those provisions of any employment contract between any Station and an Assumed
Employee which address the terms and conditions of any grant by PCC to such
Assumed Employee of an option to purchase common stock;
(ix) The amount finally determined pursuant to
Section 6.15(b)(ii);
(x) Any and all losses, liabilities or damages which Buyer
pays to Citicasters Co. or its Affiliates as a result of a judgment in the
World Class Rock Claims attributable to Seller's actions or inactions prior to
the relevant Effective Time; and
(xi) Any and all reasonable out-of-pocket costs and expenses,
including reasonable legal fees and expenses, incident to any action, suit,
proceeding, claim, demand, assessment or judgment incident to the foregoing or
reasonably incurred in investigating or attempting to avoid the same or to
oppose the imposition thereof, or in enforcing this indemnity.
(b) Seller's obligation to indemnify Buyer pursuant to Section 10.2(a)
shall be subject to all of the following limitations:
(i) (1) No indemnification shall be required to be made by
Seller as the Indemnifying Party under Section 10.2(a) until the aggregate
amount of all Settled Claims of Buyer as Claimant pursuant to this Agreement
(and any agreements executed in connection herewith or delivered pursuant
hereto) and the Group I Purchase Agreement (and any agreements executed in
connection therewith or delivered pursuant thereto) exceeds Five Hundred
Thousand Dollars ($500,000) in the aggregate (the "Hurdle Amount"); provided,
however, that such limitation shall not apply to claims made by Buyer with
respect to indemnification pursuant to Sections 10.2(a)(iv),(v), (vi), (vii),
(viii) and (ix) and prorations and adjustments to the Estimated Purchase Price
pursuant to Section 2.5. Once the aggregate amount of all such Settled Claims
exceeds the Hurdle Amount Seller shall provide indemnification to Buyer in
respect of all Settled Claims, whether occurring before or after such time.
(2) Notwithstanding anything in this Agreement or applicable
law to the contrary, in no event shall Seller's
<PAGE> 73
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obligation for indemnification under this Agreement and the Group I Purchase
Agreement (and agreements executed in connection herewith or therewith or
delivered pursuant hereto or thereto) in the aggregate for all such agreements,
exceed $56,967,153, and Buyer waives, releases and shall have no recourse
against Seller for amounts in excess of $56,967,153; provided, however, that
such limitation shall not apply to claims made by Buyer pursuant to Section
10.2(a)(iv) or (ix).
(ii) Buyer shall be entitled to indemnification only for those
damages arising with respect to any claim as to which Buyer has given Seller
written notice within the appropriate time period set forth in Section 10.1
hereof for such claim.
(iii) All of Buyer's damages sought to be recovered under
Section 10.2(a) hereof shall be net of (i) any insurance proceeds received by
Buyer as Claimant, with respect to events giving rise to such damages, and (ii)
tax benefits finally received by or accruing to Buyer in connection with such
events.
(iv) Following the Closing with respect to any Group Sale, the
sole and exclusive remedy for Buyer for any claim arising out of a breach of
any representation, warranty, covenant or other agreement herein or otherwise
arising out of or in connection with the transactions contemplated by this
Agreement (and agreements executed in connection herewith or delivered pursuant
hereto) related to such Group Sale or the operations of the Stations included
in such Group Sale, other than in respect of claims arising in connection with
the WHNZ Option Agreement, the WYCL Option Agreement, the Services Agreements
and the TSAs, whether such claim is framed in tort, contract or otherwise,
shall be a claim for indemnification pursuant to this Section 10.
(v) Anything in this Agreement or any applicable law to the
contrary notwithstanding, it is understood and agreed by Buyer that, other than
with respect to Seller (but not including any shareholder, director, officer,
employee, agent or Affiliate of Seller) as expressly provided for in Section
10.2(a) and this Section 10.2(b), no shareholder, director, officer, employee,
agent or Affiliate of Seller shall have (i) any personal liability to Buyer as
a result of the breach of any representation, warranty, covenant or agreement
of Seller contained herein or otherwise arising out of or in connection with
the transactions contemplated hereby or the operations of the Stations or (ii)
any personal obligation to indemnify Buyer for any of Buyer's claims pursuant
to Section 10.2(a) and Buyer waives and releases and shall have no recourse
against any of such parties described in this Section 10.2(b)(v) as a result of
the breach of any representation, warranty, covenant or
<PAGE> 74
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agreement of Seller contained herein or otherwise arising out of or in
connection with the transactions contemplated hereby or the operations of the
Stations; provided, however, that the foregoing shall not affect the liability
and obligations of any of the parties to the Clear Channel Loan Agreement and
the Guaranty delivered to Buyer pursuant to Section 6.10(a)(i)(6) thereunder.
(vi) Any obligations of Seller in respect of WKES and the
Group IV Stations shall be subject to the limitations set forth in Section 6.10
hereof.
(vii) Except as specifically provided in Section 10.2(a)(x)
and notwithstanding any other provision of this Agreement to the contrary,
Seller shall have no obligation to indemnify or hold harmless Buyer for or
against any loss, liabilities, damages, costs or expenses resulting from or
relating to the World Class Rock Claims.
10.3 Indemnification by Buyer and Guarantor.
(a) With respect to any Group Sale, after the Closing therefor, Buyer
and Guarantor hereby jointly and severally agree to indemnify, defend and hold
Seller harmless against and with respect to, and shall reimburse Seller for:
(i) Any and all losses, liabilities or damages resulting from
any material breach of any representation or warranty made pursuant to this
Agreement, or any material failure by Buyer or Guarantor to perform any
covenant of Buyer or Guarantor set forth in this Agreement or in any
certificate, document or instrument delivered to Seller under this Agreement;
(ii) Any failure by Buyer or Guarantor to pay, perform or
discharge any and all Assumed Liabilities or any other liabilities of Buyer or
Guarantor pursuant to this Agreement;
(iii) Any litigation, proceeding or claim arising from the
business or operations of the Assets or the Stations on or after the Effective
Time related thereto, other than as a result of any action or inaction by
Seller in violation of its obligations under this Agreement and the TBAs; and
(iv) Any and all reasonable out-of-pocket costs and expenses,
including reasonable legal fees and expenses, incident to any action, suit,
proceeding, claim, demand, assessment or judgment incident to the foregoing or
reasonably incurred in investigating or attempting to avoid the same or to
oppose the imposition thereof, or in enforcing this indemnity.
<PAGE> 75
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(b) Buyer's and Guarantor's obligation to indemnify Seller
pursuant to Section 10.3(a) shall be subject to all of the following
limitations:
(i) (1) No indemnification shall be required to be made by
Buyer and Guarantor as the Indemnifying Party under Section 10.3(a)(i) relating
solely to material breaches of representations and warranties until the
aggregate amount of all Settled Claims of Seller as Claimant pursuant to this
Agreement (and any agreements executed in connection herewith or delivered
pursuant hereto) and the Group I Purchase Agreement (and any agreements
executed in connection therewith or delivered pursuant thereto) exceeds the
Hurdle Amount in the aggregate; provided, however, that once the aggregate
amount of all such Settled Claims exceeds the Hurdle Amount, Buyer shall
provide indemnification to Seller in respect of all such Settled Claims,
whether occurring before or after such time.
(2) Notwithstanding anything in this
Agreement or applicable law to the contrary, in no event shall Buyer's or
Guarantor's obligation for indemnification relating solely to representations
and warranties under Section 10.3(a)(i) of this Agreement and Section
10.3(a)(i) of the Group I Purchase Agreement (and agreements executed in
connection herewith or therewith or delivered pursuant hereto or thereto) in
the aggregate for all such agreements, exceed $56,967,153, and Seller waives,
releases and shall have no recourse against Buyer for amounts in excess of
$56,967,153 relating solely to such matters; provided, however, that such
limitation shall not apply to claims made by Seller pursuant to any subsection
of Section 10.3 of this Agreement or Section 10.3 of the Group I Purchase
Agreement other than the provisions thereof relating solely to material
breaches of representations and warranties under Section 10.3(a)(i) of this
Agreement and Section 10.3(a)(i) of the Group I Purchase Agreement.
(ii) Seller shall be entitled to indemnification only for
those damages arising with respect to any claim as to which Seller has given
Buyer written notice within the appropriate time period set forth in Section
10.1 hereof for such claim.
(iii) All of Seller's damages sought to be recovered under
Section 10.3(a) hereof shall be net of (A) any insurance proceeds received by
Seller as Claimant, with respect to events giving rise to such damages, and (B)
any tax benefits finally received or accruing to Seller in connection with such
events.
(iv) Following the Closing with respect to any Group Sale, the
sole and exclusive remedy for Seller for any claim arising out of a breach of
any representation, warranty,
<PAGE> 76
- 71 -
covenant or other agreement herein or otherwise arising out of or in connection
with the transactions contemplated by this Agreement (and agreements executed
in connection herewith or delivered pursuant hereto) related to such Group Sale
or the operations of the Stations included in such Group Sale, other than in
respect of claims arising in connection with the WHNZ Option Agreement, the
WYCL Option Agreement, the Services Agreements and the TSAs, whether such claim
is framed in tort, contract or otherwise, shall be a claim for indemnification
pursuant to this Section 10.
(v) Anything in this Agreement or any applicable law to the
contrary notwithstanding, it is understood and agreed by Seller that, other
than with respect to Buyer and Guarantor (but not including any shareholder,
director, officer, employee, agent or other Affiliate of either of them), as
expressly provided for in Section 10.3(a) and this Section 10.3(b), no
shareholder, director, officer, employee, agent or Affiliate of Buyer or
Guarantor shall have (A) any personal liability to Seller as a result of the
breach of any representation, warranty, covenant or agreement of Buyer
contained herein or otherwise arising out of or in connection with the
transactions contemplated hereby or the operations of the Stations or (B)
personal obligation to indemnify Seller for any of Seller's claims pursuant to
Section 10.3(a), and Seller waives and releases and shall have no recourse
against any one of such parties described in this Section 10.3(b)(v) as the
result of the breach of any representation, warranty, covenant or agreement of
Buyer contained herein or otherwise arising out of or in connection with the
transactions contemplated hereby or the operations of the Stations.
10.4 Procedure for Indemnification. The procedure for
indemnification shall be as follows:
(a) The party claiming indemnification (the "Claimant") shall
promptly give notice to the party from which indemnification is claimed (the
"Indemnifying Party") of any claim, whether between the parties or brought by a
third party, specifying in reasonable detail the factual basis for the claim,
the amount thereof, estimated in good faith, and the method of computation of
such claim, all with reasonable particularity and containing a reference to the
provisions of this Agreement in respect of which such indemnification claim
shall have occurred. If the claim relates to an action, suit, or proceeding
filed by a third party against Claimant, such notice shall be given by Claimant
within ten Business Days after written notice of such action, suit, or
proceeding was given to Claimant.
(b) With respect to claims solely between the parties, following
receipt of notice from the Claimant of a claim, the Indemnifying Party shall
have thirty days to make
<PAGE> 77
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such investigation of the claim as the Indemnifying Party deems necessary or
desirable. For the purposes of such investigation, the Claimant agrees to make
available to the Indemnifying Party and its authorized representatives the
information relied upon by the Claimant to substantiate the claim. If the
Claimant and the Indemnifying Party agree at or prior to the expiration of the
thirty-day period (or any mutually agreed upon extension thereof) to the
validity and amount of such claim, the Indemnifying Party shall immediately pay
to the Claimant the full amount of the claim, subject to the terms hereof
(including Sections 10.2(b) and 10.3(b)). If the Claimant and the Indemnifying
Party do not agree within the thirty-day period (or any mutually agreed upon
extension thereof), the Claimant may seek appropriate remedy at law or equity,
as applicable, subject to the limitations of Sections 10.2(b) and 10.3(b).
(c) With respect to any claim by a third party as to which the
Claimant is entitled to indemnification under this Agreement, the Indemnifying
Party shall have the right at its own expense, to participate in or assume
control of the defense of such claim, and the Claimant shall cooperate fully
with the Indemnifying Party, subject to reimbursement for actual out-of-pocket
expenses incurred by the Claimant as the result of a request by the
Indemnifying Party. If the Indemnifying Party elects to assume control of the
defense of any third-party claim, the Claimant shall have the right to
participate in the defense of such claim at its own expense. If the
Indemnifying Party does not elect to assume control or otherwise participate in
the defense of any third-party claim, then the Claimant may defend through
counsel of its own choosing and (so long as it gives the Indemnifying Party at
least fifteen (15) days' prior written notice of the terms of the proposed
settlement thereof and permits the Indemnifying Party to then undertake the
defense thereof) settle such claim, action or suit, and to recover from the
Indemnifying Party the amount of such settlement or of any judgment and the
costs and expenses of such defense. The Indemnifying Party shall not compromise
or settle any third party claim, action or suit without the prior written
consent of the Claimant, which consent will not be unreasonably withheld or
delayed.
(d) If a claim, whether between the parties or by a third party,
requires immediate action, the parties will make every effort to reach a
decision with respect thereto as expeditiously as practicable.
(e) Any claim for indemnity pursuant to this Section 10 with
respect to which (i) the Claimant and the Indemnifying Party agree as to its
validity and amount, (2) a final judgment, order or award of a court of
competent jurisdiction deciding such claim has been rendered, as evidence by a
certified copy of such judgment, provided that such judgment is not appealable
or
<PAGE> 78
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the time for taking an appeal has expired or (3) the Indemnifying Party has not
given written notice to the Claimant disputing such claim in whole or in part
within thirty days of receiving notice thereof, is referred to as a "Settled
Claim."
SECTION 11 MISCELLANEOUS
11.1 Fees and Expenses. Except as otherwise specifically provided in
this Agreement, each party shall pay its own expenses incurred in connection
with the authorization, preparation, execution, and performance of this
Agreement and the documents and transactions contemplated hereby, including all
fees and expenses of counsel, accountants, agents and representatives;
provided, however, that all transfer taxes, recordation taxes, sales taxes and
document stamps in connection with the transactions contemplated by this
Agreement and all other filing fees (including all FCC and HSR Act filing
fees), and other charges levied by any governmental entity in connection with
the transactions contemplated by this Agreement shall be paid one-half by Buyer
and one-half by Seller. Notwithstanding the foregoing, Seller shall pay (a) all
Florida state sales tax, if any, arising from the conveyance of the Assets to
Buyer pursuant to this Agreement and (b) all federal, state or local income
taxes payable by Seller, and Buyer shall pay all federal, state or local income
taxes payable by Buyer. Buyer hereby waives compliance with the provisions of
any applicable bulk transfer laws.
11.2 Notices. All notices, demands and requests required or permitted
to be given under the provisions of this Agreement shall be (i) in writing,
(ii) sent by facsimile (with receipt personally confirmed by telephone),
delivered by personal delivery, or sent by commercial delivery service or
certified mail, return receipt requested, (iii) deemed to have been given on
the date telecopied with receipt confirmed, the date of personal delivery, or
the date set forth in the records of the delivery service or on the return
receipt, and (iv) addressed as follows:
<TABLE>
<S> <C>
To Metroplex, CCL Clear Channel Metroplex, Inc.
or Guarantor: 200 Concord Plaza
San Antonio, Texas 78216
Attention: Mark P. Mays, President and
Kenneth E. Wyker, Senior
Vice President for Legal
Affairs
Telecopy: (210) 822-2299
Telephone: (210) 822-2828
with a copy Wiley, Rein & Fielding
</TABLE>
<PAGE> 79
- 74 -
<TABLE>
<S> <C>
(which shall 1776 K Street, N.W.
not constitute Washington, DC 20006
notice) to: Attention: Richard J. Bodorff, Esq.
Telecopy: (202) 429-7049
Telephone: (202) 429-7000
To PCC: Paxson Communications Corporation
------ 601 Clearwater Park Road
West Palm Beach, Florida 33401
Attention: Mr. Lowell W. Paxson and
Mr. Anthony L. Morrison
Telecopy: (561) 655-9424
Telephone: (561) 659-4122
with a copy Dow, Lohnes & Albertson, PLLC
(which shall 1200 New Hampshire Avenue, N.W.
not constitute Suite 800
notice) to: Washington, DC 20036-6802
Attention: John R. Feore, Jr., Esq.
Telecopy: (202) 776-2222
Telephone: (202) 776-2000
To LPI: L. Paxson, Inc.
------
500 Australian Avenue South, Suite 501
West Palm Beach, FL 33401
Attention: Mr. James B. Bocock
Telecopy: (561) 655-3655
Telephone: (561) 655-9444
with a copy Dow, Lohnes & Albertson, PLLC
(which shall 1200 New Hampshire Avenue, N.W.
not constitute Suite 800
notice) to: Washington, DC 20036-6802
Attention: John R. Feore, Jr., Esq.
Telecopy: (202) 776-2222
Telephone: (202) 776-2000
</TABLE>
or to any other or additional persons and addresses as the parties may from
time to time designate in a writing delivered in accordance with this Section
11.2.
11.3 Benefit and Binding Effect. Except as otherwise provided in
Sections 6.10 and 11.10 and the following sentence of this Section 11.3, no
party hereto may assign this Agreement without the prior written consent of the
other parties hereto. Buyer may assign its rights and obligations under this
Agreement to Clear Channel Radio, Inc. ("CCRI") and Clear Channel Radio
License, Inc. ("CCRL") so long as (i) CCRI and CCRL are wholly-owned
subsidiaries of the Guarantor and (ii) such assignment
<PAGE> 80
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does not hinder, impair or delay in any respect the grant by the FCC of any FCC
Consent or any Closing hereunder; provided thatsuch assignment shall not
release Buyer from any of its obligations hereunder. This Agreement shall be
binding upon and inure to the benefit of the parties hereto and their
respective successors and permitted assigns.
11.4 Further Assurances. Subject to the terms and conditions of this
Agreement, from time to time prior to, at and after the Closing Date, each
party hereto will use commercially reasonable efforts to take, or cause to be
taken, all such actions and to do or cause to be done, all things, necessary,
proper or advisable under applicable laws and regulations to consummate and
make effective the purchase and sale contemplated by this Agreement and the
consummation of the other transactions contemplated hereby, including executing
and delivering such documents as the other party being advised by counsel shall
reasonably request in connection with the consummation of this Agreement and
the consummation of the other transactions contemplated hereby, including,
without limitation, the execution and delivery of any and all confirmatory and
other instruments, in addition to those to be delivered on the Closing Date.
11.5 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED, CONSTRUED
AND ENFORCED IN ACCORDANCE WITH THE LAWS OF FLORIDA (WITHOUT REGARD TO THE
CHOICE OF LAW PROVISIONS THEREOF).
11.6 Entire Agreement. This Agreement, the Appendices, Exhibits and
Schedules hereto and thereto, and all documents, certificates and other
documents to be delivered by the parties pursuant hereto, collectively,
represent the entire understanding and agreement between Buyer and Seller with
respect to the subject matter of this Agreement. This Agreement supersedes the
Letter of Intent dated June 16, 1997, as amended, and all prior negotiations
between the parties and cannot be amended, supplemented, or changed except by
an agreement in writing that makes specific reference to this Agreement and
that is signed by the party against which enforcement of any such amendment,
supplement, or modification is sought. Buyer acknowledges and agrees that
Seller shall not be liable for or bound in any manner by, and Buyer has not
relied upon, any express or implied, oral or written information, warranty,
guaranty, promise, statement, inducement, presentation or opinion (whether of,
by or on behalf of Seller, any broker or finder, or any officer, employee,
agent or representative of any of the foregoing, or any other person)
pertaining to the transactions contemplated hereby, the Seller, the Stations,
the Assets, or any part of any of the foregoing (including, without limitation,
any projections, budgets or other financial forecasts or the physical condition
of the Stations or any of the Assets, or the uses which can be made of the same
<PAGE> 81
- 76 -
or the value thereof), except as is expressly set forth in this Agreement.
11.7 Waiver of Compliance; Consents. Except as otherwise provided in
this Agreement, any failure of any of the parties to comply with any
obligation, representation, warranty, covenant, agreement, or condition herein
may be waived by the party entitled to the benefits thereof only by a written
instrument signed by the party granting such waiver, but such waiver or failure
to insist upon strict compliance with such obligation, representation,
warranty, covenant, agreement, or condition shall not operate as a waiver of,
or estoppel with respect to, any subsequent or other failure. Whenever this
Agreement requires or permits consent by or on behalf of any party hereto, such
consent shall be given in writing in a manner consistent with the requirements
for a waiver of compliance as set forth in this Section 11.7.
11.8 Counterparts. This Agreement may be signed in counterparts with
the same effect as if the signature on each counterpart were upon the same
instrument.
11.9 Severability. If any provision of this Agreement or the
application thereof to any person or circumstance shall be invalid or
unenforceable to any extent, the remainder of this Agreement and the
application of such provision to other persons or circumstances shall not be
affected thereby and shall be enforced to the greatest extent permitted by law
so long as the economic or legal substance of the transactions contemplated
hereby is not affected in any manner materially adverse to any party. Upon such
determination that any term or other provision is invalid or unenforceable, the
parties hereto shall negotiate in good faith to modify this Agreement so as to
effect the original intent of the parties as closely as possible in an
acceptable manner to the end that the transactions contemplated hereby are
fulfilled to the greatest extent possible.
11.10 Cooperation With Respect to Like-Kind Exchange. Seller may
assign some or all of its rights (but not its obligations) under this Agreement
to an escrow agent or other Person reasonably satisfactory to Buyer serving as
a Intermediary under United States Treasury Regulations promulgated under
Section 1031 of the Code; provided that (i) such assignment shall not deprive
Buyer of rights or benefits, or relieve Seller of any obligations or
liabilities, under this Agreement, (ii) Buyer shall not be obligated to expend
funds or incur obligations or liabilities in connection therewith and (iii)
Seller shall indemnify and hold harmless Buyer from and against any and all
loss, liability, cost and expense arising or resulting from any such
transaction. Seller intends for such exchange to constitute a like-kind
exchange pursuant to Section 1031 of the Code. However, nothing in this
Agreement shall be
<PAGE> 82
- 77 -
construed as a representation or warranty of any party to any other party as
to the tax characterization of the transaction.
11.11 Guaranty. (a) Guarantor irrevocably guarantees (the
"Guarantee"), as principal and not as surety, to Seller and its successors and
permitted assigns full and prompt performance by Buyer (which for all purposes
hereof shall include any assignee(s) of Buyer permitted under Section 11.3) of
all of its obligations under or pursuant to this Agreement and all documents
and instruments executed in connection herewith or delivered pursuant hereto in
accordance with the terms hereof and thereof (the "Guaranteed Obligations").
Such guarantee shall apply and survive until all obligations of Buyer under
this Agreement and all documents and instruments executed in connection
herewith or delivered pursuant hereto are performed and satisfied in accordance
with the terms thereof. Guarantor hereby waives any provision of any statute or
judicial decision otherwise applicable hereto which restricts or in any way
limits the rights of any obligee against a guarantor or surety following a
default or failure of performance by an obligor with respect to whose
obligations the guarantee is provided. To the fullest extent permitted by
applicable law, Guarantor hereby waives presentment to, demand of payment from
and protest of any Guaranteed Obligation, and also waives notice of acceptance
of its guarantee and notice of protest for nonpayment. To the fullest extent
permitted by applicable law, the obligations of Guarantor hereunder shall not
be affected by (a) the failure of the applicable obligee to assert any claim or
demand or to enforce any right or remedy against Guarantor pursuant to the
provisions of this Agreement or otherwise and (b) any rescission, waiver,
amendment or modification of, or any release from any of the terms or
provisions of this Section 11.11, unless consented to in writing by Buyer and
Seller.
(b) Guarantor hereby represents and warrants to Seller as follows: (i)
Guarantor is a corporation duly organized, validly existing and in good
standing under the laws of the State of Texas and has the requisite corporate
power and authority to execute, deliver and perform this Agreement according to
its terms; (ii) the execution, delivery and performance of this Agreement and
the consummation of the transactions contemplated hereby by Guarantor have been
duly authorized by all necessary corporate action on the part of Guarantor;
(iii) this Agreement has been duly executed and delivered by Guarantor and
constitutes the legal, valid and binding obligation of Guarantor enforceable
against Guarantor in accordance with its terms, except as the enforceability of
this Agreement may be affected by bankruptcy, insolvency or similar laws
affecting creditors' rights generally and by judicial discretion in the
enforcement of equitable remedies; and (iv) the execution, delivery and
performance of this Agreement: (1) do not require the consent of any third
party, (2) do not
<PAGE> 83
- 78 -
conflict with the Articles of Incorporation or bylaws of Guarantor, and (3) do
not conflict in any material respect with, result in a material breach of, or
constitute a material default Dunder any applicable law, judgment, order,
ordinance, injunction, decree, rule, regulation or ruling of any court or
governmental authority applicable to Guarantor or any material contract or
agreement to which Guarantor is a party or by which Guarantor may be bound.
<PAGE> 84
IN WITNESS WHEREOF, this Agreement has been executed by the duly
authorized officers of Buyer, Seller and Guarantor as of the date first written
above.
CLEAR CHANNEL METROPLEX, INC.
By:
-------------------------------------
Name:
Title:
CLEAR CHANNEL METROPLEX LICENSES, INC.
By:
-------------------------------------
Name:
Title:
PAXSON COMMUNICATIONS CORPORATION
By:
-------------------------------------
Name:
Title:
L. PAXSON, INC.
By:
-------------------------------------
Name:
Title:
CLEAR CHANNEL COMMUNICATIONS, INC.
By:
-------------------------------------
Name:
Title:
<PAGE> 85
- 1 -
APPENDIX 1
DEFINITIONS
"Accounts Receivable" means the rights of Seller as of the relevant
Closing Date to payment for the sale of advertising time and other goods and
services by any Station.
"Affiliate" means, with respect to any Person any other Person that,
directly or indirectly through one or more intermediaries, controls, is
controlled by, or is under common control with such Person.
"Assets" means the Group II/III Assets, Group IV Assets and Group V
Assets to be transferred or otherwise conveyed under this Agreement, as the
context requires.
"Assumed Contracts" means the Group II/III Assumed
Contracts, Group IV Assumed Contracts and the Group V Assumed
Contracts, as the context requires.
"Assumed Liabilities" means the Group II/III Assumed
Liabilities, Group IV Assumed Liabilities, Group V Assumed
Liabilities, as the case may be.
"Business Day" means any day excluding Saturdays, Sundays and any day
that is a legal holiday under the laws of the United States or the State of
Florida or is a day on which banking institutions located in the State of
Florida are authorized or required by law or other governmental action to
close.
"Clear Channel Loan" means all indebtedness under the Clear
Channel Loan Agreement.
"Clear Channel Loan Indebtedness" means all indebtedness at any time
outstanding of LPI to Buyer pursuant to the Clear Channel Loan.
"Closing" means the consummation of any of the Group II/III Sale, the
Group IV Sale or the Group V Sale pursuant to this Agreement in accordance with
the provisions of Section 8.
"Closing Date" means the date on which any Closing occurs, as
determined pursuant to Section 8.
"Code" means the Internal Revenue Code of 1986, as amended.
"Communications Act" means the Communications Act of 1934,
as amended.
<PAGE> 86
- 2 -
"Consents" means the consents, permits, or approvals of, notices to or
filings with, governmental authorities and other third parties necessary to
transfer the Assets to Buyer as contemplated hereunder or otherwise necessary
to consummate lawfully the transactions contemplated by this Agreement.
"Contracts" means all contracts, leases, non-governmental licenses and
other agreements (including leases for personal or real property and employment
agreements), written or oral (including any amendments and other modifications
thereto) (A) of Seller or to which Seller is a party or that are binding upon
Seller and (B) that relate to or affect the Assets or the business or
operations of any Station, and (x) that are in effect on the date of this
Agreement or (y) that are entered into by Seller between the date of this
Agreement and the Closing Date, but excluding any Contracts that terminate
between the date of this Agreement and the Closing Date.
"DP Media Assets" means the assets listed on Schedule
6.14(b).
"Effective Time" means with respect to each of the Group II/III
Assets, Group IV Assets and Group V Assets 12:01 a.m., Eastern Time on the
earlier of (a) the applicable TBA Date or (b) the applicable Closing Date.
"Employee Plan" means any retirement, severance, medical, disability,
life insurance or any other employee benefit plan as defined in Section 3(3) of
ERISA to which either of the Seller or any entity related to Seller (under the
terms of Sections 414 (b) or (c) of the Code) contributes or which either of
the Seller or any entity related to Seller (under the terms of Sections 414 (b)
or (c)of the Code) sponsors or maintains.
"ERISA" means the Employee Retirement Income Security Act
of 1974, as amended.
"Estimated Purchase Price" means the Group II/III Estimated Purchase
Price, Group IV Estimated Purchase Price and Group V Estimated Purchase Price,
as the context requires.
"Estoppel Certificate" means an estoppel certificate executed by the
landlord under a lease for any leased Real Property, certifying a copy of such
lease and stating that all rental payments due thereunder are current and, to
the knowledge of such landlord, there are no defaults under such lease;
provided, however, that to the extent any such landlord refuses to execute such
an estoppel certificate, but executes a Lease Consent, such Lease Consent shall
be deemed to be an Estoppel Certificate.
<PAGE> 87
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"Excluded Assets" means:
(a) any assets of any nature whatsoever of Seller that are not
used in the conduct of the business or operations of any Station, including,
without limitation, any assets of Seller (or its subsidiaries) used or useful
in the operations of the television stations owned or operated by Seller (or
its Subsidiaries) that are not used in the conduct of the business or
operations of any Station;
(b) all cash, cash equivalents and cash items of any kind
whatsoever, certificates of deposit, money market instruments, bank balances,
and rights in and to bank accounts, Treasury bills and marketable securities
and other securities of Seller;
(c) contracts of insurance and insurance plans and the assets
thereof, promissory notes (except those made by account debtors), amounts
currently due from employees, bonds, letters of credit, certificates of
deposit, or other similar items, and any cash surrender value in regard
thereto;
(d) any pension, profit-sharing, retirement, bonus, stock purchase,
savings plans and trusts, 401(k) plans, health insurance plans (including any
insurance contracts or policies related thereto), and the assets thereof and
any rights thereto, and all other plans, agreements or understandings to
provide employee benefits of any kind for employees of Seller;
(e) claims of Seller with respect to transactions attributable to
the operations of any Station prior to the Closing related to the transfer of
the Assets of such Station, including, without limitation, rights and interests
of Seller in and to any claims for Tax refunds and causes of action and claims
of Seller under contracts and with respect to other transactions with respect
to events occurring prior to such Closing and all claims for other refunds or
returns of monies paid to any governmental agency or otherwise and all claims
for copyright royalties for broadcast prior to such Closing;
(f) Contracts that are not Assumed Contracts, including those
listed in Schedule 1.1(f), and those provisions of any employment contract with
respect to any Station between Seller and its Affiliates and an Assumed
Employee which address the terms and conditions of any grant by PCC to such
Assumed Employee of an option to purchase common stock of PCC (the "Excluded
Contracts");
(g) Seller's interest in any of its subsidiaries, Seller's
corporate records and other books and records that pertain to internal
corporate matters of Seller and Seller's account books of original entry with
respect to any Station, and
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any other Assets, and all original accounts, checks, payment records, tax
records (including payroll, unemployment, real estate and other tax records)
and other similar books, records and information of Seller relating to Seller's
operation of the business of any Station and any other Assets prior to the
Closing related to the Assets of such Station;
(h) the deposits and prepaid expenses of Seller with respect to the
items that are not subject to adjustment under Section 2.5 hereof and with
respect to which Seller remains liable pursuant to Section 2.5 hereof;
(i) rights to the name "Paxson" or any logo, variation or
derivation thereof;
(j) Seller's interest in the assets described on Schedule
1.1(j);
(k) the tangible and intangible, real and personal assets
solely used or useful in connection with the business or operations of WYCL,
WHNZ and WEAT;
(l) the Tampa Billboard Business; and
(m) any assets used or useable in connection with the business of
the Miami Toros/Bulls Arena Football League franchise and the Florida Eagles
American Hockey League franchise.
"FCC" means the Federal Communications Commission.
"FCC Consent" means any of the Group II/III FCC Consent, Group IV FCC
Consent and Group V FCC Consent, as the context requires.
"FCC Licenses" means those Licenses issued by the FCC in connection
with the business and operations of any Station.
"FCC Pro Forma Consent" means actions by the FCC granting its consent
to the assignment of the Group V FCC Licenses by Seller to LPI as contemplated
by this Agreement.
"GAAP" means generally accepted accounting principles, as in effect
from time to time, applied on a consistent basis.
"Group Sale" means the Group II/III Sale, the Group IV Sale and the
Group V Sale, as the context requires.
"Group I Assets" means certain assets used and useful in the business
and operation of PCC's radio networks and Orlando billboard businesses, as more
particularly described in the Group I Purchase Agreement.
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"Group I Repurchase Assets" means the Repurchase Assets as defined in
the Group I Purchase Agreement.
"Group I Sale" means the transactions contemplated by the Group I
Purchase Agreement.
"Group II/III Assets" means the tangible and intangible assets used or
useful in connection with the conduct of the business or operations of the
Group II/III Stations, together with any additions thereto between the date of
this Agreement and the Group II/III Closing Date, but excluding assets disposed
of between the date of this Agreement and the Group II/III Closing Date in
accordance with the provisions of this Agreement and excluding the Group II/III
Excluded Assets, free and clear of any Liens, except for Permitted Liens,
including (a) the Group II/III Tangible Personal Property; (b) the Group II/III
Real Property; (c) the Group II/III Licenses; (d) the Group II/III Assumed
Contracts; (e) the Group II/III Intangibles; (f) all of Seller's proprietary
information, technical information and data, maps, computer discs and tapes,
FCC logs, plans, diagrams, blueprints and schematics, including filings with
the FCC, relating to the business and operation of any Group II/III Station;
(g) all books and records of Seller relating solely to the business or
operations of any Group II/III Station, including executed copies of the Group
II/III Assumed Contracts, and all records required by the FCC to be kept by any
Group II/III Station, other than account books of original entry and such files
and records that are maintained at Seller's corporate offices for tax and
accounting purposes; (h) all deposits and prepaid expenses of Seller with
respect to items in respect of the Group II/III Stations that are prorated in
favor of Seller pursuant to Section 2.5; (i) equipment warranties related to
the Group II/III Assets to the extent transferable by Seller; and (j) the
Accounts Receivable due to Seller in respect of the Group II/III Stations.
"Group II/III Assumed Contracts" means (a) all Contracts listed on
Schedules 3.5, 3.7 and 3.12, with respect to the Group II/III Stations, and all
Contracts of the type described in Sections 3.5, 3.7 and 3.12 with respect to
the Group II/III Stations that are not required to be listed thereon pursuant
to the exceptions set forth in such Sections; (b) Contracts entered into with
advertisers for the sale of advertising time in the ordinary course of business
with respect to the Group II/III Stations; (c) any Contracts entered into by
Seller between the date of this Agreement and the Group II/III Closing Date
related to the Group II/III Stations that Buyer agrees in writing to assume,
and (d) other Contracts entered into by Seller between the date of this
Agreement and the Group II/III Closing Date related to the Group II/III
Stations pursuant to this Agreement in compliance with Section 5.1; provided
that Group II/III
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Assumed Contracts shall in no event include Group II/III Excluded Contracts.
"Group II/III Assumed Liabilities" means (a) any obligation or
liability of Seller under the Group II/III Assets (including the Group II/III
Licenses and the Group II/III Assumed Contracts) to the extent that either (1)
the obligations and liabilities relate to the period after the Group II/III
Effective Time or (2) the Group II/III Estimated Purchase Price was reduced
pursuant to Section 2.5(a) as a result of the proration or adjustment of such
obligations and liabilities; (b) any liability or obligation to any former
employee of the Group II/III Stations who has been hired by Buyer, attributable
to any period of time on or after the Group II/III Effective Time; (c) any
liability or obligation arising out of any litigation, proceeding or claim by
any person or entity relating to the business or operations of any Group II/III
Station or any of the Group II/III Assets with respect to any events or
circumstances that occur or arise on or after the Group II/III Effective Time;
(d) all state and local sales or use taxes (or their equivalent) and transfer
taxes or recording fees payable as a consequence of the sale of the Group
II/III Assets hereunder to the extent set forth in Section 11.1; and (e) all
other liabilities or obligations expressly assumed by Buyer hereunder with
respect to the Group II/III Assets and the Group II/III Stations, including,
without limitation, the obligations referred to in Section 6.10(c) hereof.
"Group II/III Closing" means the consummation of the Group II/III Sale
in accordance with the provisions of Section 8.
"Group II/III Closing Date" means the date of consummation of the
Group II/III Sale.
"Group II/III Effective Time" means the Effective Time in respect of
the Group II/III Assets.
"Group II/III FCC Consent" means either (i) actions by the FCC
granting its consent to the assignment of the FCC Licenses included in the
Group II/III Assets by Seller to Buyer as contemplated by this Agreement or
(ii) if such consents have not been granted with respect to any satellite earth
station or private operational fixed microwave station, actions by the FCC
granting special temporary authority to permit Buyer to operate such stations
pending the grant of such consents.
"Group II/III Intangibles" means all copyrights, trademarks, trade
names, service marks, service names, licenses, computer programs and computer
license interests to the extent owned by and transferable by Seller, patents,
permits, jingles, proprietary information, technical information and data, and
<PAGE> 91
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other similar intangible or intellectual property rights and interests applied
for, issued to, or owned by Seller or under which Seller is licensed or
franchised and that are used or useful in the business and operations of any
Group II/III Station, together with any additions thereto between the date of
this Agreement and the Group II/III Closing Date.
"Group II/III Licenses" means all licenses, permits, construction
permits and other authorizations issued by the FCC, the Federal Aviation
Administration, or any other federal, state, or local governmental authorities
to Seller currently in effect and used in connection with the conduct of the
business or operations of any Group II/III Station, together with any additions
thereto between the date of this Agreement and the Group II/III Closing Date.
"Group II/III Real Property" means (a) all fee estates in real
property, and all buildings and other improvements thereon, owned, leased or
held by Seller that are used or useful in the business or operations of any
Group II/III Station; and (b) leases of any real property under which Seller is
the lessee that are used or useful in the business or operations of any Group
II/III Station, together with any additions thereto between the date of this
Agreement and the Group II/III Closing Date.
"Group II/III Sale" means the sale by Seller and acquisition by Buyer
of the Group II/III Assets pursuant to this Agreement.
"Group II/III Tangible Personal Property" means all machinery,
equipment, tools, vehicles, furniture, office equipment, plant, inventory,
spare parts and other tangible personal property owned or held by Seller that
is used or useful in the conduct of the business or operations of any Group
II/III Station, together with any additions thereto between the date of this
Agreement and the Group II/III Closing Date.
"Group II/III TBA Date" has the meaning set forth in
Section 6.10.
"Group IV Assets" means the tangible and intangible assets used or
useful in connection with the conduct of the business or operations of the
Group IV Stations, together with any additions thereto between the date of this
Agreement and the Group IV Closing Date, but excluding assets disposed of
between the date of this Agreement and the Group IV Closing Date in accordance
with the provisions of this Agreement and excluding the Group IV Excluded
Assets, including (a) the Group IV Tangible Personal Property; (b) the Group IV
Real Property; (c) the Group IV Licenses; (d) the Group IV Assumed Contracts;
(e) the Group IV Intangibles; (f) all of Seller's proprietary information,
<PAGE> 92
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technical information and data, maps, computer discs and tapes, FCC logs,
plans, diagrams, blueprints and schematics, including filings with the FCC,
relating to the business and operation of any Group IV Station; (g) all books
and records of Seller relating solely to the business or operations of any
Group IV Station, including executed copies of the Group IV Assumed Contracts,
and all records required by the FCC to be kept by any Group IV Station, other
than account books of original entry and such files and records that are
maintained at Seller's corporate offices for tax and accounting purposes; (h)
all deposits and prepaid expenses of Seller with respect to items in respect of
the Group IV Stations that are prorated in favor of Seller pursuant to Section
2.5; (i) equipment warranties related to the Group IV Assets to the extent
transferable by Seller; and (j) the Accounts Receivable due to Seller in
respect of the Group IV Stations.
"Group IV Assumed Contracts" means (a) all Contracts listed on
Schedules 3.5, 3.7 and 3.12, with respect to the Group IV Stations, and all
Contracts of the type described in Sections 3.5, 3.7 and 3.12 with respect to
the Group IV Stations that are not required to be listed thereon pursuant to
the exceptions set forth in such Sections; (b) Contracts entered into with
advertisers for the sale of advertising time in the ordinary course of business
with respect to the Group IV Stations; (c) any Contracts entered into by Seller
between the date of this Agreement and the Group IV Closing Date related to the
Group IV Stations that Buyer agrees in writing to assume, and (d) other
Contracts entered into by Seller between the date of this Agreement and the
Group IV Closing Date related to the Group IV Stations pursuant to this
Agreement in compliance with Section 5.1; provided that Group IV Assumed
Contracts shall in no event include Group IV Excluded Contracts.
"Group IV Assumed Liabilities" means (a) any obligation or liability
of Seller under the Group IV Assets (including the Group IV Licenses and the
Group IV Assumed Contracts) to the extent that either (1) the obligations and
liabilities relate to the period after the Group IV Effective Time or (2) the
Group IV Estimated Purchase Price was reduced pursuant to Section 2.5(a) as a
result of the proration or adjustment of such obligations and liabilities; (b)
any liability or obligation to any former employee of the Group IV Stations who
has been hired by Buyer, attributable to any period of time on or after the
Group IV Effective Time; (c) any liability or obligation arising out of any
litigation, proceeding or claim by any person or entity relating to the
business or operations of any Group IV Station or any of the Group IV Assets
with respect to any events or circumstances that occur or arise on or after the
Group IV Effective Time; (d) all state and local sales or use taxes (or their
equivalent) and transfer taxes or recording fees payable as a consequence of
the sale of the Group IV Assets hereunder to
<PAGE> 93
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the extent set forth in Section 11.1; and (e) all other liabilities or
obligations expressly assumed by Buyer hereunder with respect to the Group IV
Assets and the Group IV Stations, including, without limitation, the
obligations referred to in Section 6.10(c) hereof.
"Group IV Closing" means the consummation of the Group IV Sale in
accordance with the provisions of Section 8.
"Group IV Closing Date" means the date of consummation of the Group IV
Sale.
"Group IV Effective Time" means the Effective Time in respect of the
Group IV Assets.
"Group IV FCC Consent" means actions by the FCC granting its consent
to the assignment of the FCC Licenses included in the Group IV Assets by Seller
to Buyer as contemplated by this Agreement.
"Group IV Intangibles" means all copyrights, trademarks, trade names,
service marks, service names, licenses, computer programs and computer license
interests to the extent owned by and transferable by Seller, patents, permits,
jingles, proprietary information, technical information and data, and other
similar intangible or intellectual property rights and interests applied for,
issued to, or owned by Seller or under which Seller is licensed or franchised
and that are used or useful in the business and operations of any Group IV
Station, together with any additions thereto between the date of this Agreement
and the Group IV Closing Date.
"Group IV Licenses" means all licenses, permits, construction permits
and other authorizations issued by the FCC, the Federal Aviation
Administration, or any other federal, state, or local governmental authorities
to Seller currently in effect and used in connection with the conduct of the
business or operations of any Group IV Station, together with any additions
thereto between the date of this Agreement and the Group IV Closing Date.
"Group IV Real Property" means (a) all fee estates in real property,
and all buildings and other improvements thereon, owned, leased or held by
Seller that are used or useful in the business or operations of any Group IV
Station; and (b) leases of any real property under which Seller is the lessee
that are used or useful in the business or operations of any Group IV Station,
together with any additions thereto between the date of this Agreement and the
Group IV Closing Date.
"Group IV Sale" means the sale by Seller and acquisition by Buyer of
the Group IV Assets pursuant to this Agreement.
<PAGE> 94
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"Group IV Tangible Personal Property" means all machinery, equipment,
tools, vehicles, furniture, office equipment, plant, inventory, spare parts and
other tangible personal property owned or held by Seller that is used or useful
in the conduct of the business or operations of any Group IV Station, together
with any additions thereto between the date of this Agreement and the Group IV
Closing Date.
"Group IV TBA Date" has the meaning set forth in Section
6.10.
"Group V Assets" means the tangible and intangible assets used or
useful in connection with the conduct of the business or operations of the
Group V Stations and the tangible and intangible assets used or useful in
connection with HUB-TV, together with any additions thereto between the date of
this Agreement and the Group V Closing Date, but excluding assets disposed of
between the date of this Agreement and the Group V Closing Date in accordance
with the provisions of this Agreement and excluding the Group V Excluded
Assets, free and clear of any Liens, except for Permitted Liens, including (a)
the Group V Tangible Personal Property; (b) the Group V Real Property; (c) the
Group V Licenses; (d) the Group V Assumed Contracts; (e) the Group V
Intangibles; (f) all of Seller's proprietary information, technical information
and data, maps, computer discs and tapes, FCC logs, plans, diagrams, blueprints
and schematics, including filings with the FCC, relating to the business and
operation of any Group V Station; (g) all books and records of Seller relating
solely to the business or operations of any Group V Station, including executed
copies of the Group V Assumed Contracts, and all records required by the FCC to
be kept by any Group V Station, other than account books of original entry and
such files and records that are maintained at Seller's corporate offices for
tax and accounting purposes; (h) all deposits and prepaid expenses of Seller
with respect to items in respect of the Group V Stations that are prorated in
favor of Seller pursuant to Section 2.5; (i) equipment warranties related to
the Group V Assets to the extent transferable by Seller; and (j) the Accounts
Receivable due to Seller in respect of the Group V Stations.
"Group V Assumed Contracts" means (a) all Contracts listed on
Schedules 3.5, 3.7 and 3.12, with respect to the Group V Stations and HUB-TV,
and all Contracts of the type described in Sections 3.5, 3.7 and 3.12 with
respect to the Group V Stations that are not required to be listed thereon
pursuant to the exceptions set forth in such Sections; (b) Contracts entered
into with advertisers for the sale of advertising time in the ordinary course
of business with respect to the Group V Stations; (c) any Contracts entered
into by Seller between the date of this Agreement and the Group V Closing Date
related to the Group V Stations that Buyer agrees in writing to assume, and
<PAGE> 95
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(d) other Contracts entered into by Seller between the date of this Agreement
and the Group V Closing Date related to the Group V Stations pursuant to this
Agreement in compliance with Section 5.1; provided that Group V Assumed
Contracts shall in no event include Group V Excluded Contracts.
"Group V Assumed Liabilities" means (a) any obligation or liability of
Seller under the Group V Assets (including the Group V Licenses and the Group V
Assumed Contracts) to the extent that either (1) the obligations and
liabilities relate to the period after the Group V Effective Time or (2) the
Group V Estimated Purchase Price was reduced pursuant to Section 2.5(a) as a
result of the proration or adjustment of such obligations and liabilities; (b)
any liability or obligation to any former employee of the Group V Stations who
has been hired by Buyer, attributable to any period of time on or after the
Group V Effective Time; (c) any liability or obligation arising out of any
litigation, proceeding or claim by any person or entity relating to the
business or operations of any Group V Station or any of the Group V Assets with
respect to any events or circumstances that occur or arise on or after the
Group V Effective Time; (d) all state and local sales or use taxes (or their
equivalent) and transfer taxes or recording fees payable as a consequence of
the sale of the Group V Assets hereunder to the extent set forth in Section
11.1; and (e) all other liabilities or obligations expressly assumed by Buyer
hereunder with respect to the Group V Assets and the Group V Stations.
"Group V Closing" means the consummation of the Group V Sale in
accordance with the provisions of Section 8.
"Group V Closing Date" means the date of consummation of the Group V
Sale.
"Group V Effective Time" means the Effective Time in respect of the
Group V Assets.
"Group V FCC Consent" means either (i) actions by the FCC granting its
consent to the assignment of the FCC Licenses included in the Group V Assets by
Seller to Buyer as contemplated by this Agreement or (ii) if such consents have
not been granted with respect to any satellite earth station or private
operational fixed microwave station, actions by the FCC granting special
temporary authority to permit Buyer to operate such stations pending the grant
of such consents.
"Group V Intangibles" means all copyrights, trademarks, trade names,
service marks, service names, licenses, computer programs and computer license
interests to the extent owned by and transferable by Seller, patents, permits,
jingles, proprietary information, technical information and data, and other
similar intangible or intellectual property rights and
<PAGE> 96
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interests applied for, issued to, or owned by Seller or under which Seller is
licensed or franchised and that are used or useful in the business and
operations of any Group V Station, together with any additions thereto between
the date of this Agreement and the Group V Closing Date.
"Group V Licenses" means all licenses, permits, construction permits
and other authorizations issued by the FCC, the Federal Aviation
Administration, or any other federal, state, or local governmental authorities
to Seller currently in effect and used in connection with the conduct of the
business or operations of any Group V Station, together with any additions
thereto between the date of this Agreement and the Group V Closing Date.
"Group V Loan" means the loan contemplated by the Clear Channel Loan
Agreement.
"Group V Loan Amount" means $369,415,100.
"Group V Real Property" means (a) all fee estates in real property,
and all buildings and other improvements thereon, owned, leased or held by
Seller that are used or useful in the business or operations of any Group V
Station; and (b) leases of any real property under which Seller is the lessee
that are used or useful in the business or operations of any Group V Stations,
together with any additions thereto between the date of this Agreement and the
Group V Closing Date.
"Group V Sale" means the sale by Seller and acquisition by Buyer of
the Group V Assets pursuant to this Agreement.
"Group V Tangible Personal Property" means all machinery, equipment,
tools, vehicles, furniture, office equipment, plant, inventory, spare parts and
other tangible personal property owned or held by Seller that is used or useful
in the conduct of the business or operations of any Group V Station and HUB-TV,
together with any additions thereto between the date of this Agreement and the
Group V Closing Date.
"Group V TBA Date" has the meaning set forth in Section
6.10.
"HSR Act" means the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended.
"Intangibles" means the Group II/III Intangibles, Group IV Intangibles
and Group V Intangibles, as the context requires.
"Intermediary" means an escrow agent or other Person
serving as a "qualified intermediary" under United States
<PAGE> 97
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Treasury Regulations promulgated pursuant to Section 1031 of the Code.
"Lease Consent" means the Consent of any landlord under any lease for
any leased Real Property.
"License Assets" means all FCC Licenses.
"Licenses" means the Group II/III Licenses, Group IV Licenses and
Group V Licenses, as the context requires.
"Lien" means any claims, liabilities, security interests, mortgages,
liens, pledges, conditions, charges, restrictions or encumbrances of any nature
whatsoever.
"LPI" means L. Paxson, Inc., a Delaware corporation, all
the capital stock of which is owned by Second Crystal Diamond,
L.P., a Delaware limited partnership.
"LPI Sale Date" has the meaning set forth in Section 6.10.
"Material Adverse Effect" means a material adverse effect on the
Assets, taken as a whole, or the financial condition of the Stations' Business
and the business of Businesses (as defined in the Group I Purchase Agreement),
taken as a whole; provided that the foregoing shall not include any material
adverse effect attributable to, resulting from or arising out of (1) factors
affecting the radio broadcasting industry generally, (2) general national,
regional or local economic or financial conditions, (3) governmental or
legislative laws, rules or regulations, or (4) actions taken by Buyer or any
Affiliate of Buyer.
"Material Broadcast Interruption" means the interruption of the
broadcast transmission in the normal and usual manner of Stations which account
for 25% or more of the Cash Flow of all of the Stations, based upon the most
recently available quarterly financial statements of Seller, for (a) a period
of five (5) or more consecutive days or (b) fourteen (14) or more periods of 24
consecutive hours.
"Non-License Assets" means all Assets other than FCC
Licenses.
"Permitted Liens" means (a) liens for taxes and assessments not yet
due and payable; (b) landlord's liens and liens for property taxes not
delinquent; (c) statutory liens that were created in the ordinary course of
business not delinquent; (d) restrictions or rights granted to governmental
authorities under applicable law; (e) zoning, building, or similar restrictions
relating to or affecting property; (f) all matters of record that do not
adversely affect in any material respect the use of
<PAGE> 98
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the Real Property as currently used (excluding, however, any mortgage, deed to
secure debt, deed of trust, security agreement, judgment lien, or statutory
claim of lien or any other title exception or defect that is monetary in
nature, other than those in favor of Buyer); (g) the Assumed Liabilities; (h)
all Liens on any of the Assets in favor of Buyer pursuant to the Clear Channel
Loan Agreement and the Security Documents and as otherwise contemplated by the
Intercreditor Agreement; (i) any other encumbrances disclosed in this Agreement
or the Schedules hereto or in any title policy or survey delivered to Buyer on
or before the date hereof (excluding, however, any mortgage, deed to secure
debt, deed of trust, security agreement, judgment lien, or statutory claim of
lien or any other title exception or defect that is monetary in nature, other
than those in favor of Buyer); (j) any other easement, encroachment,
encumbrance or other condition that does not adversely affect in any material
respect the use of the Real Property as currently used; and (k) any Liens on
the Assets created or arising between the Effective Time and Closing Date for
such Assets, other than Liens created or permitted to exist by Seller due to
its action or inaction in violation of its covenants hereunder or under any
TBA.
"Person" means an individual, corporation, association, partnership,
joint venture, trust, estate, limited liability company, limited liability
partnership, or other entity or organization.
"Purchase Price" means the Group II/III Purchase Price, Group IV
Purchase Price and Group V Purchase Price, as the case may be.
"Real Property" means the Group II/III Real Property, Group
IV Real Property and Group V Real Property, as the context
requires.
"Required Consents" means the Consents listed on Schedule 3.3 that are
designated with an asterisk.
"Revenue" means gross revenue, including from the sale of advertising
time, arising out of the business and operations of the Cash Flow Assets and as
determined in accordance with GAAP for any applicable period.
"Stations" means, unless the context otherwise requires, the Group
II/III Stations, the Group IV Stations (once they are acquired by Seller) and
the Group V Stations and "Station" means any Station individually.
"Station's Business" means the business and operations
currently conducted by any of the Stations.
<PAGE> 99
- 15 -
"Stations' Business" means the business and operations currently
conducted by all of the Stations, taken as a whole.
"Tangible Personal Property" means the Group II/III Tangible Personal
Property, Group IV Tangible Personal Property and Group V Tangible Personal
Property, as the context requires.
"Tax" means any federal, state, local, or foreign income, gross
receipts, windfall profits, severance, property, production, sales, use,
license, excise, franchise, capital, transfer, employment, withholding, or
other tax or governmental assessment, together with any interest, additions, or
penalties with respect thereto and any interest in respect of such additions or
penalties.
"Tax Return" means any tax return, declaration of estimated tax, tax
report or other tax statement, or any other similar filing required to be
submitted by Seller relating to the Stations to any governmental authority with
respect to any Tax.
"TBA" means the Group II/III TBA, the Group IV TBA, the Group V TBA
and any Commercial Time Sale Agreement between Buyer and Seller or between
Buyer and LPI with respect to any Station (each, a "TSA"), as the context
requires.
"TBA Date" means the Group II/III TBA Date, Group IV TBA Date and
Group V TBA Date, as the case may be.
"Termination Date" means the date which is eighteen (18) months from
the date hereof.
"WKES Assets" means the tangible and intangible assets used or useful
in connection with the conduct of the business or operations of WKES, together
with any additions thereto between the date of this Agreement and the Group
II/III Closing Date, but excluding assets disposed of between the date of this
Agreement and the Group II/III Closing Date in accordance with the provisions
of this Agreement, acquired by Seller pursuant to the WKES Purchase Agreement.
"World Class Rock Claims" means all claims, including any
counter-claims, relating to or arising under the matter identified on Schedule
3.14 hereto as "Citicasters Co. V. Paxson Broadcasting of Tampa L.P."
<PAGE> 100
- 16 -
For purposes of this Agreement, the following terms have the meanings
set forth in the sections indicated:
<TABLE>
Term Section
<S> <C>
Applicable Environmental Laws Section 3.16
ARS Recitals
ARS Asset Purchase Agreement Recitals
Assessments Section 6.9
Assumed Employees Section 6.7
Assignee Section 6.10(b)
Broadcast Interruption Notice Section 6.13
Buyer Preamble
CCL Preamble
CEA Section 3.17
Claimant Section 10.4
Class 5 assets Section 2.4(d)
Clear Channel Preamble
Clear Channel Loan Agreement Section 6.10(a)
Closing Appendix 1
Closing Date Appendix 1
CCRI Section 11.3
CCRL Section 11.3
Deeds Section 8.2(a)
DOJ Section 6.2
DP Media Section 8.2
DP Media Agreement Section 8.2
DP Media Assets Section 8.2(n)
Employees Section 3.12
Estimated Purchase Price Appendix 1
Excluded Contracts Appendix 1, clause (f)
of definition of
Excluded Assets
Existing Phase I Reports Section 6.9(a)
Financial Statements Section 3.9
Foreign Corporation Section 3.21
Foreign Person Section 3.21
FTC Section 6.2
Group I Purchase Agreement Section 2.3
Group II/III Purchase Price Section 2.4(a)
Group II/III Estimated Purchase Price Section 2.4(a)
Group II/III Station Recitals
Group II/III TBA Section 6.10(a)
Group II/III TBA Date Section 6.10-B
Group IV Date Section 6.10(b)
Group IV Estimated Purchase Price Section 2.4(b)
Group IV Purchase Price Section 2.4(b)
Group IV Advance Section 6.10(b)
Group IV Loan Section 6.10(b)
Group IV Loan Agreement Section 6.10(b)
Group IV-A Note Section 6.10(b)
Group IV-B Note Section 6.10(b)
</TABLE>
<PAGE> 101
- 17 -
<TABLE>
<S> <C>
Group IV-C Note Section 6.10(b)
Group IV Station Recitals
Group IV TBA Section 6.10(b)
Group IV Transfer Section 6.10(b)
Group V Estimated Purchase Price Section 2.4(c)
Group V Purchase Price Section 2.4(c)
Group V Station Recitals
Group V TBA Section 6.10(a)
Group V TBA Date Section 6.10-6
Guarantor Preamble
Guarantee Section 11.11(a)
Guaranteed Obligations Section 11.11(a)
Hazardous Substance Section 3.16(a)
HUB TV Recitals
Hurdle Amount Section 10.2(b)
Indemnifying Party Section 10.4(a)
Intercreditor Agreement Section 6.10(a)
Jacksonville One-To-A-Market Waiver Section 6.1(c)
Like-kind Exchange Section 10.2
LPI Preamble
LPI Note Section 6.10(a)
LPI Sale Section 6.10(a)
LPI Sale Date Section 6.10(a)
Loss Section 6.15(a)
Material Licenses Section 3.4(a)
Metroplex Preamble
Monthly Financial Information Section 5.5
Moody Recitals
Negative Balance Section 2.5(a)
PBT Recitals
PCC Preamble
PCWPB Recitals
Phase II Reports Section 6.9(b)
Preliminary Settlement Statement Section 2.5(b)
Radio Frequency Protection Guides Section 3.4(a)
Retained Employees Section 6.7(a)
Retained Liabilities Section 10.1(d)
Schedule Supplement Section 6.13
Security Agreement Section 6.10(6)
Security Documents Section 6.10
Seller Preamble
Services Agreements Section 6.10
Settled Claim Section 10.4(e)
Subordinated Guaranty Section 6.10
Updated Reports Section 6.9(b)
WARN Act Section 6.7(d)
WEAT Recitals
WEAT Assets Section 6.10(b)
WEAT TSA Section 6.10(b)
WHNZ Recitals
WHNZ Option Agreement Section 8.2(j)
WKES Recitals
</TABLE>
<PAGE> 102
<TABLE>
<S> <C>
WKES Purchase Agreement Recitals
WYCL Recitals
WYCL Option Agreement Section 8.2(k)
1031 Election Section 10.2
</TABLE>
<PAGE> 1
EXHIBIT 4.3
============================================================
CLEAR CHANNEL COMMUNICATIONS, INC.
and
THE BANK OF NEW YORK
Trustee
FORM OF
SENIOR INDENTURE
Dated as of ________, 1997
Providing for Issuance of Securities in Series
============================================================
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
Recitals of the Company . . . . . . . . . . . . . . . . . . . . . . . . . 1
Agreements of the Parties . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE ONE
Definitions and Other Provisions of General Application
Section 101. Definitions . . . . . . . . . . . . . . . . . . . . . . . . 1
Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Affiliate . . . . . . . . . . . . . . . . . . . . . . . . . 2
Authenticating Agent . . . . . . . . . . . . . . . . . . . 2
Board of Directors . . . . . . . . . . . . . . . . . . . . 2
Board Resolution . . . . . . . . . . . . . . . . . . . . . 2
Business Day . . . . . . . . . . . . . . . . . . . . . . . 3
Commission. . . . . . . . . . . . . . . . . . . . . . . . . 3
Company . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Company Request, Company Order and Company Consent . . . . 3
Corporate Trust Office . . . . . . . . . . . . . . . . . . 3
Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Defaulted Interest . . . . . . . . . . . . . . . . . . . . 3
Depositary. . . . . . . . . . . . . . . . . . . . . . . . . 3
Event of Default . . . . . . . . . . . . . . . . . . . . . 3
Funded Debt . . . . . . . . . . . . . . . . . . . . . . . . 4
Global Security . . . . . . . . . . . . . . . . . . . . . . 4
Holder . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Indenture, this Indenture . . . . . . . . . . . . . . . . . 4
Interest . . . . . . . . . . . . . . . . . . . . . . . . . 5
Interest Payment Date . . . . . . . . . . . . . . . . . . . 5
Maturity . . . . . . . . . . . . . . . . . . . . . . . . . 5
Mortgage . . . . . . . . . . . . . . . . . . . . . . . . . 5
Officers' Certificate . . . . . . . . . . . . . . . . . . . 5
Opinion of Counsel . . . . . . . . . . . . . . . . . . . . 5
Original Issue Discount Security . . . . . . . . . . . . . 5
Outstanding . . . . . . . . . . . . . . . . . . . . . . . . 5
Paying Agent . . . . . . . . . . . . . . . . . . . . . . . 6
Permitted Mortgage . . . . . . . . . . . . . . . . . . . . 6
Person . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Place of Payment . . . . . . . . . . . . . . . . . . . . . 8
Predecessor Securities . . . . . . . . . . . . . . . . . . 8
Principal Property . . . . . . . . . . . . . . . . . . . . 8
Redemption Date . . . . . . . . . . . . . . . . . . . . . . 8
Redemption Price . . . . . . . . . . . . . . . . . . . . . 8
Regular Record Date . . . . . . . . . . . . . . . . . . . . 8
Repayment Date . . . . . . . . . . . . . . . . . . . . . . 8
</TABLE>
<PAGE> 3
Contents, p. 2
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
Repayment Price . . . . . . . . . . . . . . . . . . . . . . 8
Responsible Officer . . . . . . . . . . . . . . . . . . . . 8
Restricted Subsidiary . . . . . . . . . . . . . . . . . . . 9
Security or Securities . . . . . . . . . . . . . . . . . . 9
Security Register . . . . . . . . . . . . . . . . . . . . . 9
Security Registrar . . . . . . . . . . . . . . . . . . . . 9
Securityholder. . . . . . . . . . . . . . . . . . . . . . . 9
Special Record Date . . . . . . . . . . . . . . . . . . . . 9
Stated Maturity . . . . . . . . . . . . . . . . . . . . . . 9
Subsidiary . . . . . . . . . . . . . . . . . . . . . . . . 9
Trust Indenture Act or TIA . . . . . . . . . . . . . . . . 9
Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . 9
U.S. Government Obligations . . . . . . . . . . . . . . . . 10
Vice President. . . . . . . . . . . . . . . . . . . . . . . 10
Voting Stock . . . . . . . . . . . . . . . . . . . . . . . 10
Section 102. Compliance Certificates and Opinions . . . . . . . . . . . 10
Section 103. Form of Documents Delivered to Trustee . . . . . . . . . . 11
Section 104. Acts of Securityholders . . . . . . . . . . . . . . . . . . 11
Section 105. Notices, etc., to Trustee and Company . . . . . . . . . . . 13
Section 106. Notices to Securityholders; Waiver . . . . . . . . . . . . 13
Section 107. Conflict with Trust Indenture Act . . . . . . . . . . . . . 14
Section 108. Effect of Headings and Table of Contents . . . . . . . . . 14
Section 109. Successors and Assigns . . . . . . . . . . . . . . . . . . 14
Section 110. Separability Clause . . . . . . . . . . . . . . . . . . . . 14
Section 111. Benefits of Indenture . . . . . . . . . . . . . . . . . . . 14
Section 112. Governing Law . . . . . . . . . . . . . . . . . . . . . . . 14
Section 113. Counterparts . . . . . . . . . . . . . . . . . . . . . . . 14
Section 114. Judgment Currency . . . . . . . . . . . . . . . . . . . . . 14
ARTICLE TWO
Security Forms
Section 201. Forms Generally . . . . . . . . . . . . . . . . . . . . . . 15
Section 202. Forms of Securities . . . . . . . . . . . . . . . . . . . . 15
Section 203. Form of Trustee's Certificate of Authentication . . . . . . 16
Section 204. Securities Issuable in the Form of a Global Security . . . 16
</TABLE>
<PAGE> 4
Contents, p. 3
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
ARTICLE THREE
The Securities
Section 301. General Title; General Limitations; Issuable in
Series; Terms of Particular Series . . . . . . . . 18
Section 302. Denominations . . . . . . . . . . . . . . . . . . . . . . . 21
Section 303. Execution, Authentication and Delivery and Dating . . . . . 22
Section 304. Temporary Securities . . . . . . . . . . . . . . . . . . . 23
Section 305. Registration, Transfer and Exchange . . . . . . . . . . . . 24
Section 306. Mutilated, Destroyed, Lost and Stolen Securities . . . . . 25
Section 307. Payment of Interest; Interest Rights Preserved . . . . . . 26
Section 308. Persons Deemed Owners . . . . . . . . . . . . . . . . . . . 28
Section 309. Cancellation. . . . . . . . . . . . . . . . . . . . . . . . 28
Section 310. Computation of Interest . . . . . . . . . . . . . . . . . . 28
Section 311. Medium-Term Securities . . . . . . . . . . . . . . . . . . 28
Section 312. CUSIP Numbers . . . . . . . . . . . . . . . . . . . . . . . 29
Section 313. Global Securities . . . . . . . . . . . . . . . . . . . . . 29
ARTICLE FOUR
Satisfaction and Discharge of Indenture;
Defeasance; Unclaimed Moneys
Section 401. Applicability of Article . . . . . . . . . . . . . . . . . . 31
Section 402. Satisfaction and Discharge of Indenture; Defeasance . . . . 31
Section 403. Conditions of Defeasance . . . . . . . . . . . . . . . . . . 32
Section 404. Application of Trust Money . . . . . . . . . . . . . . . . . 34
Section 405. Repayment to Company . . . . . . . . . . . . . . . . . . . . 34
Section 406. Indemnity for U.S. Government Obligations . . . . . . . . . 34
Section 407. Reinstatement . . . . . . . . . . . . . . . . . . . . . . . 35
ARTICLE FIVE
Remedies
Section 501. Events of Default . . . . . . . . . . . . . . . . . . . . . 35
Section 502. Acceleration of Maturity; Rescission and Annulment . . . . 37
</TABLE>
<PAGE> 5
Contents, p. 4
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
Section 503. Collection of Indebtedness and Suits for
Enforcement by Trustee . . . . . . . . . . . . . . . 38
Section 504. Trustee May File Proofs of Claim . . . . . . . . . . . . . 39
Section 505. Trustee May Enforce Claims Without Possession
of Securities . . . . . . . . . . . . . . . . . . . 40
Section 506. Application of Money Collected . . . . . . . . . . . . . . 40
Section 507. Limitation on Suits . . . . . . . . . . . . . . . . . . . . 41
Section 508. Unconditional Right of Securityholders to Receive Principal,
Premium and Interest . . . . . . . . . . . . . . . 42
Section 509. Restoration of Rights and Remedies . . . . . . . . . . . . 42
Section 510. Rights and Remedies Cumulative . . . . . . . . . . . . . . 42
Section 511. Delay or Omission Not Waiver . . . . . . . . . . . . . . . 42
Section 512. Control by Securityholders . . . . . . . . . . . . . . . . 42
Section 513. Waiver of Past Defaults . . . . . . . . . . . . . . . . . . 43
Section 514. Undertaking for Costs . . . . . . . . . . . . . . . . . . . 43
Section 515. Waiver of Stay or Extension Laws . . . . . . . . . . . . . 44
ARTICLE SIX
The Trustee
Section 601. Certain Duties and Responsibilities . . . . . . . . . . . . 44
Section 602. Notice of Defaults . . . . . . . . . . . . . . . . . . . . 45
Section 603. Certain Rights of Trustee . . . . . . . . . . . . . . . . . 46
Section 604. Not Responsible for Recitals or Issuance of Securities . . 47
Section 605. May Hold Securities . . . . . . . . . . . . . . . . . . . . 47
Section 606. Money Held in Trust . . . . . . . . . . . . . . . . . . . . 47
Section 607. Compensation and Reimbursement . . . . . . . . . . . . . . 47
Section 608. Disqualification; Conflicting Interests . . . . . . . . . . 48
Section 609. Corporate Trustee Required; Eligibility . . . . . . . . . . 48
Section 610. Resignation and Removal; Appointment of Successor . . . . . 49
Section 611. Acceptance of Appointment by Successor . . . . . . . . . . 50
</TABLE>
<PAGE> 6
Contents, p. 5
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
Section 612. Merger, Conversion, Consolidation or Succession
to Business . . . . . . . . . . . . . . . . . . . . 51
Section 613. Preferential Collection of Claims Against Company . . . . . 51
Section 614. Appointment of Authenticating Agent . . . . . . . . . . . . 56
ARTICLE SEVEN
Securityholders' Lists and Reports by Trustee and Company
Section 701. Company to Furnish Trustee Names and Addresses
of Securityholders . . . . . . . . . . . . . . . . . 58
Section 702. Preservation of Information; Communications to
Securityholders . . . . . . . . . . . . . . . . . . 58
Section 703. Reports by Trustee . . . . . . . . . . . . . . . . . . . . 59
Section 704. Reports by Company . . . . . . . . . . . . . . . . . . . . 61
ARTICLE EIGHT
Consolidation, Merger, Conveyance or Transfer
Section 801. Company May Consolidate, etc., only on Certain Terms . . . 62
Section 802. Successor Corporation Substituted . . . . . . . . . . . . . 62
ARTICLE NINE
Supplemental Indentures
Section 901. Supplemental Indentures Without Consent of Securityholders 63
Section 902. Supplemental Indentures with Consent of Securityholders . . 64
Section 903. Execution of Supplemental Indentures . . . . . . . . . . . 65
Section 904. Effect of Supplemental Indentures . . . . . . . . . . . . . 65
Section 905. Conformity with Trust Indenture Act . . . . . . . . . . . . 65
Section 906. Reference in Securities to Supplemental Indentures . . . . 66
</TABLE>
<PAGE> 7
Contents, p. 6
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
ARTICLE TEN
Covenants
Section 1001. Payment of Principal, Premium and Interest . . . . . . . . 66
Section 1002. Maintenance of Office or Agency . . . . . . . . . . . . . . 66
Section 1003. Money for Security Payments to Be Held in Trust . . . . . . 66
Section 1004. Statement as to Compliance . . . . . . . . . . . . . . . . 68
Section 1005. Corporate Existence . . . . . . . . . . . . . . . . . . . . 68
Section 1006. Limitation on Mortgages . . . . . . . . . . . . . . . . . . 69
Section 1007. Limitation on Sale and Leaseback Transactions . . . . . . . 69
Section 1008. Waiver of Certain Covenants . . . . . . . . . . . . . . . . 70
ARTICLE ELEVEN
Redemption of Securities
Section 1101. Applicability of Article . . . . . . . . . . . . . . . . . 70
Section 1102. Election to Redeem; Notice to Trustee . . . . . . . . . . . 71
Section 1103. Selection by Trustee of Securities to Be Redeemed . . . . . 71
Section 1104. Notice of Redemption . . . . . . . . . . . . . . . . . . . 71
Section 1105. Deposit of Redemption Price . . . . . . . . . . . . . . . . 72
Section 1106. Securities Payable on Redemption Date . . . . . . . . . . . 72
Section 1107. Securities Redeemed in Part . . . . . . . . . . . . . . . . 73
Section 1108. Provisions with Respect to any Sinking Funds . . . . . . . 73
</TABLE>
<PAGE> 8
THIS SENIOR INDENTURE (the "Indenture")
between CLEAR CHANNEL COMMUNICATIONS, INC., a Texas
corporation (hereinafter called the "Company") having
its principal office at 200 Concord Plaza, Suite 600,
San Antonio, Texas 78216, and THE BANK OF NEW YORK, a
New York banking corporation, trustee (hereinafter
called the "Trustee"), is made and entered into as of
this __ day of ________, 1997.
Recitals of the Company
The Company has duly authorized the execution and delivery of
this Indenture to provide for the issuance of its Securities, notes, bonds or
other evidences of indebtedness, to be issued in one or more fully registered
series.
All things necessary to make this Indenture a valid agreement
of the Company, in accordance with its terms, have been done.
Agreements of the Parties
To set forth or to provide for the establishment of the terms
and conditions upon which the Securities are and are to be authenticated,
issued and delivered, and in consideration of the premises and the purchase of
Securities by the Holders thereof, it is mutually covenanted and agreed as
follows, for the equal and proportionate benefit of all Holders of the
Securities or of a series thereof, as the case may be:
ARTICLE ONE
Definitions and Other Provisions
of General Application
Section 101. Definitions. For all purposes of this Indenture
and of any indenture supplemental hereto, except as otherwise expressly
provided 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;
(2) all other terms used herein which are defined in the Trust
Indenture Act or by Commission rule under
<PAGE> 9
2
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 and, except as otherwise herein expressly
provided, the term "generally accepted accounting principles" 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 of such computation;
(4) all references in this instrument to designated
"Articles", "Sections" and other subdivisions are to the designated
Articles, Sections and other subdivisions of this instrument as
originally executed. 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) "including" and words of similar import shall be deemed to
be followed by "without limitation".
Certain terms, used principally in Article Six, are defined in
that Article.
"Act", when used with respect to any Security-holder, has the
meaning specified in Section 104.
"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 meanings
correlative to the foregoing.
"Authenticating Agent" means any Person authorized by the
Trustee to authenticate Securities under Section 614.
"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 a resolution 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 of such certification, and delivered to the Trustee.
<PAGE> 10
3
"Business Day" means each day which is neither a Saturday,
Sunday or other day on which banking institutions in the pertinent Place or
Places of Payment are authorized or required by law or executive order to be
closed.
"Commission" means the Securities and Exchange Commission, as
from time to time constituted, created under the Securities Exchange Act of
1934, or, if at any time after the execution of this instrument such Commission
is not existing and performing the duties now assigned to it under the Trust
Indenture Act, then the body performing such duties on such date.
"Company" means the Person named as the "Company" in the first
paragraph of this instrument until a successor corporation shall have become
such pursuant to the applicable provisions of this Indenture, and thereafter
"Company" shall mean such successor corporation.
"Company Request", "Company Order" and "Company Consent" mean,
respectively, a written request, order or consent signed in the name of the
Company by its Chairman of the Board, President or a Vice President, and by its
Treasurer, an Assistant Treasurer, Controller, an Assistant Controller,
Secretary or an Assistant Secretary, and delivered to the Trustee.
"Corporate Trust Office" means the principal office of the
Trustee in New York, New York at which at any particular time its corporate
trust business shall be principally administered, which office at the date
hereof is located at 101 Barclay Street, 21st Floor, New York, New York 10286,
except that with respect to the presentation of Securities for payment or for
registration of transfer and exchange, such term shall mean the office or the
agency of the Trustee in said city at which at any particular time its
corporate agency business shall be conducted, which office at the date hereof
is located at 101 Barclay Street, 21st Floor, New York, New York 10286.
"Debt" means indebtedness for money borrowed.
"Defaulted Interest" has the meaning specified in Section 307.
"Depositary" means, unless otherwise specified by the Company
pursuant to either Section 204 or 301, with respect to Securities of any series
issuable or issued as a Global Security, The Depository Trust Company, New
York, New York, or any successor thereto registered as a clearing agency under
the Securities Exchange Act of 1934, as amended, or other applicable statute or
regulation.
"Event of Default" has the meaning specified in Article Five.
<PAGE> 11
4
"Funded Debt" of any person means all indebtedness for
borrowed money created, incurred, assumed or guaranteed in any manner by such
person, and all indebtedness, contingent or otherwise, incurred or assumed by
such person in connection with the acquisition of any business, property or
asset, which in each case matures more than one year after, or which by its
terms is renewable or extendible or payable out of the proceeds of similar
indebtedness incurred pursuant to the terms of any revolving credit agreement
or any similar agreement at the option of such person for a period ending more
than one year after the date as of which Funded Debt is being determined;
provided, however, that Funded Debt shall not include (i) any indebtedness for
the payment, redemption or satisfaction of which money (or evidences of
indebtedness, if permitted under the instrument creating or evidencing such
indebtedness) in the necessary amount shall have been irrevocably deposited in
trust with a trustee or proper depository either on or before the maturity or
redemption date thereof or (ii) any indebtedness of such person to any of its
Subsidiaries or of any Subsidiary to such person or any other Subsidiary or
(iii) any indebtedness incurred in connection with the financing of operating,
construction or acquisition projects, provided that the recourse for such
indebtedness is limited to the assets of such projects.
"Global Security" means with respect to any series of
Securities issued hereunder, a Security which is executed by the Company and
authenticated and delivered by the Trustee to the Depositary or pursuant to the
Depositary's instruction, all in accordance with this Indenture and an
indenture supplemental hereto, if any, or Board Resolution and pursuant to a
Company Request, which shall be registered in the name of the Depositary or its
nominee and which shall represent, and shall be denominated in an amount equal
to the aggregate principal amount of, all of the Outstanding Securities of such
series or any portion thereof, in either case having the same terms, including,
without limitation, the same original issue date, date or dates on which
principal is due, and interest rate or method of determining interest.
"Holder", when used with respect to any Security, means a
Securityholder.
"Indenture" or "this Indenture" means this instrument as
originally executed or 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 shall include the terms of particular series
of Securities established as contemplated by Section 301.
<PAGE> 12
5
"Interest", when used with respect to an Original Issue
Discount Security which by its terms bears interest only after Maturity, means
interest payable after Maturity.
"Interest Payment Date", when used with respect to any series
of Securities, means the Stated Maturity of any installment of interest on
those Securities.
"Maturity", when used with respect to any Securities, means
the date on which the principal of any such Security becomes due and payable as
therein or herein provided, whether on a Repayment Date, at the Stated Maturity
or by declaration of acceleration, call for redemption or otherwise.
"Mortgage" means any mortgage, pledge, lien, encumbrance,
charge or security interest of any kind.
"Officers' Certificate" means a certificate signed by the
Chairman of the Board, the President or a Vice President, and by the Treasurer,
an Assistant Treasurer, the Controller, an Assistant Controller, the Secretary
or an Assistant Secretary of the Company, and delivered to the Trustee.
Wherever this Indenture requires that an Officers' Certificate be signed also
by an engineer or an accountant or other expert, such engineer, accountant or
other expert (except as otherwise expressly provided in this Indenture) may be
in the employ of the Company, and shall be acceptable to the Trustee.
"Opinion of Counsel" means a written opinion of counsel, who
may (except as otherwise expressly provided in this Indenture) be an employee
of or of counsel to the Company. Such counsel shall be acceptable to the
Trustee, whose acceptance shall not be unreasonably withheld.
"Original Issue Discount Security" means (i) any Security
which provides for an amount less than the principal amount thereof to be due
and payable upon a declaration of acceleration of the Maturity thereof, and
(ii) any other Security deemed an Original Issue Discount Security for United
States Federal income tax purposes.
"Outstanding", when used with respect to Securities or
Securities of any series, means, as of the date of determination, all such
Securities theretofore authenticated and delivered under this Indenture,
except:
<PAGE> 13
6
(i) such Securities theretofore canceled by the Trustee or
delivered to the Trustee for cancellation;
(ii) such Securities for whose payment or redemption money in
the necessary amount has been theretofore deposited with the Trustee
or any Paying Agent in trust for the Holders of such Securities;
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; and
(iii) such Securities in exchange for or in lieu of which
other Securities have been authenticated and delivered pursuant to
this Indenture, or which shall have been paid pursuant to the terms of
Section 306 (except with respect to any such Security as to which
proof satisfactory to the Trustee is presented that such Security is
held by a person in whose hands such Security is a legal, valid and
binding obligation of the Company).
In determining whether the Holders of the requisite principal amount of such
Securities Outstanding have given any request, demand, authorization,
direction, notice, consent or waiver hereunder, (i) the principal amount of any
Original Issue Discount Security that shall be deemed to be Outstanding shall
be the amount of the principal thereof that would be due and payable as of the
date of the taking of such action upon a declaration of acceleration of the
Maturity thereof and (ii) Securities owned by the Company or any other obligor
upon the Securities or any Affiliate of the Company or of such other obligor
shall be disregarded and deemed not to be Outstanding. In determining whether
the Trustee shall be protected in relying upon any such request, demand,
authorization, direction, notice, consent or waiver, only Securities which a
Responsible Officer assigned to the corporate trust department of the Trustee
knows to be owned by the Company or any other obligor upon the Securities or
any Affiliate of the Company or such other obligor shall be so disregarded.
Securities so owned which have been pledged in good faith may be regarded as
Outstanding if the pledgee establishes to the satisfaction of the Trustee the
pledgee's right to act as owner with respect to such Securities and that the
pledgee is not the Company or any other obligor upon the Securities or any
Affiliate of the Company or such other obligor.
"Paying Agent" means any Person authorized by the Company to
pay the principal of (and premium, if any) or interest on any Securities on
behalf of the Company.
"Permitted Mortgage" means (i) any Mortgage upon property
owned or leased by a corporation existing at the time such corporation becomes
a Restricted Subsidiary, (ii) any Mortgage upon property existing at the time
<PAGE> 14
7
of the acquisition thereof or to secure payment of any part of the purchase
price thereof or any Debt incurred to finance the purchase thereof, (iii) any
Mortgage upon property to secure any part of the cost of development,
construction, alteration, repair or improvement of such property, or Debt
incurred to finance such cost, (iv) any Mortgage securing Debt of a Restricted
Subsidiary owing to the Company or to another Restricted Subsidiary, (v) any
Mortgage existing on the date of the Senior Indenture, (vi) Mortgages on
property of the Company or a Restricted Subsidiary in favor of the United
States of America or any State or political subdivision thereof, or in favor of
any other country or any political subdivision thereof, to secure payment
pursuant to any contract or statute or to secure any indebtedness incurred for
the purpose of financing all or part of the purchase price or the cost of
construction or improvement of the property subject to such Mortgages; (vii)
Mortgages on any property subsequently acquired by the Company or any
Restricted Subsidiary, contemporaneously with such acquisition or within 120
days thereafter, to secure or provide for the payment of any part of the
purchase price of such property, or Mortgages assumed by the Company or any
Restricted Subsidiary upon any property subsequently acquired by the Company or
any Restricted Subsidiary which were existing at the time of such acquisition,
provided that the amount of any Indebtedness secured by any such Mortgage
created or assumed does not exceed the cost to the Company or Restricted
Subsidiary, as the case may be, of the property covered by such Mortgage; and
(viii) any extension, renewal or replacement, in whole or in part, of any
Mortgage referred to in the foregoing clauses (i) through (vii); provided,
however, that the principal amount of Debt secured thereby shall not exceed the
principal amount of Debt so secured at the time of such extension, renewal or
replacement and provided, further, that such Mortgage shall be limited to all
or such part of the property which secured the Mortgage so extended, renewal or
replaced.
Notwithstanding the foregoing, the Company may, and may permit any Restricted
Subsidiary to create, assume, incur or suffer to exist any Mortgage upon any
Principal Property without equally and ratably securing the Senior Debt
Securities if the aggregate amount of all Debt then outstanding secured by such
Mortgage and all similar Mortgages does not exceed 10% of the total
consolidated stockholders' equity (including preferred stock) of the Company as
shown on the audited consolidated balance sheet contained in the latest annual
report to stockholders of the Company; provided that Debt secured by Permitted
Mortgages shall not be included in the amount of such secured debt.
"Person" means any individual, corporation, partnership,
limited liability company, joint venture, association, joint-stock company,
trust, unincorporated organization or government or any agency or political
subdivision thereof.
<PAGE> 15
8
"Place of Payment" means with respect to any series of
Securities issued hereunder the city or political subdivision so designated
with respect to the series of Securities in question in accordance with the
provisions of Section 301.
"Predecessor Securities" of any particular Security means
every previous Security evidencing all or a portion of the same debt as that
evidenced by such particular Security; and, for the purposes of this
definition, any Security authenticated and delivered under Section 306 in lieu
of a lost, destroyed or stolen Security shall be deemed to evidence the same
debt as the lost, destroyed or stolen Security.
"Principal Property" means any radio broadcasting, television
broadcasting or outdoor advertising property owned or leased by the Company or
any Subsidiary, unless, in the opinion of the Board of Directors of the
Company, such properties are not of material importance to the total business
conducted by the Company and its Subsidiaries as an entirety.
"Redemption Date", when used with respect to any Security to
be redeemed, means the date fixed for such redemption by or pursuant to this
Indenture.
"Redemption Price", when used with respect to any Security to
be redeemed, means the price specified in the Security at which it is to be
redeemed pursuant to this Indenture.
"Regular Record Date" for the interest payable on any Security
on any Interest Payment Date means the date specified in such Security as the
Regular Record Date.
"Repayment Date", when used with respect to any Security to be
repaid, means the date fixed for such repayment pursuant to such Security.
"Repayment Price", when used with respect to any Security to
be repaid, means the price at which it is to be repaid pursuant to such
Security.
"Responsible Officer", when used with respect to the Trustee,
means the chairman or vice-chairman of the board of directors, the chairman or
vice-chairman of the executive committee of the board of directors, the
president, any vice president, the secretary, any assistant secretary, the
treasurer, any assistant treasurer, the cashier, any assistant cashier, any
senior trust officer or trust officer, the controller and any assistant
controller or any other officer of the Trustee customarily performing functions
similar to those performed by any of the above designated officers and also
means, with respect to a particular corporate trust matter, any other officer
<PAGE> 16
9
to whom such matter is referred because of his knowledge of and familiarity
with the particular subject.
"Restricted Subsidiary" means each Subsidiary as of the date
of this Indenture and each Subsidiary thereafter acquired, unless expressly
excluded by resolution of the Board of Directors before, or within 120 days
following, such creation or acquisition.
"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, of any series authenticated and delivered from time to time under
this Indenture.
"Security Register" shall have the meaning specified in
Section 305.
"Security Registrar" means the Person who keeps the Security
Register specified in Section 305.
"Securityholder" means a Person in whose name a Security is
registered in the Security Register.
"Special Record Date" for the payment of any Defaulted
Interest (as defined in Section 307) means a date fixed by the Trustee pursuant
to Section 307.
"Stated Maturity" when used with respect to any Security or
any installment of principal thereof or interest thereon means the date
specified in such Security as the fixed date on which the principal of such
Security or such installment of principal or interest is due and payable.
"Subsidiary" of any specified corporation means any
corporation at least a majority of whose outstanding Voting Stock shall at the
time be owned, directly or indirectly, by the specified corporation or by one
or more of its Subsidiaries, or both.
"Trust Indenture Act" or "TIA" means the Trust Indenture Act
of 1939, as amended by the Trust Indenture Reform Act of 1990, as in force at
the date as of which this instrument was executed except as provided in Section
905.
"Trustee" means the Person named as the Trustee in the first
paragraph of this instrument until a successor Trustee shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Trustee" shall mean and include each Person who is then a Trustee hereunder.
<PAGE> 17
10
If at any time there is more than one such Person, "Trustee" as used with
respect to the Securities of any series shall mean the Trustee with respect to
Securities of that series.
"U.S. Government Obligations" means securities that are
(x) direct obligations of the United States of America for the payment of which
its full faith and credit is pledged or (y) obligations of a Person controlled
or supervised by and acting as an agency or instrumentality of the United
States of America, the payment of which is unconditionally guaranteed as a full
faith and credit obligation by the United States of America, which, in either
case, are not callable or redeemable at the option of the issuer thereof.
"Vice President" when used with respect to the Company or the
Trustee means any vice president, whether or not designated by a number or a
word or words added before or after the title "vice president", including,
without limitation, an assistant vice president.
"Voting Stock", as applied to the stock of any corporation,
means stock of any class or classes (however designated) having by the terms
thereof ordinary voting power to elect a majority of the members of the board
of directors (or other governing body) of such corporation other than stock
having such power only by reason of the happening of a contingency.
Section 102. Compliance Certificates and Opinions. Upon any
application or request by the Company to the Trustee to take any action under
any provision of this Indenture, the Company shall furnish to the Trustee an
Officers' Certificate 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
is specifically required by any provision of this Indenture relating to such
particular application or request, no additional certificate or opinion need be
furnished.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture (except for the written
statement required by Section 1004) shall include
(1) a statement that each individual signing such certificate
or opinion has read such covenant or condition 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;
<PAGE> 18
11
(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
covenant or condition 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 103. 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 the 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 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
stating that the information with respect to such factual matters is in the
possession of the Company, 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, they may, but need not, be consolidated
and form one instrument.
Section 104. Acts of Securityholders. (a) Any request,
demand, authorization, direction, notice, consent, waiver or other action
provided by this Indenture to be given or taken by Securityholders or
Securityholders of any series may be embodied in and evidenced by one or more
instruments of substantially similar tenor signed by such Securityholders in
person or by an agent duly appointed in writing; and, except as herein
otherwise expressly provided, such action shall become effective when such
instrument or instruments are delivered to the Trustee, and, where it is hereby
expressly required, to the Company. If any Securities are denominated in coin
or currency other than that of the United States, then for the purposes of
determining whether the Holders of the requisite principal amount of Securities
have taken any action as herein described, the principal amount of such
<PAGE> 19
12
Securities shall be deemed to be that amount of United States dollars that
could be obtained for such principal amount on the basis of the spot rate of
exchange into United States dollars for the currency in which such Securities
are denominated (as evidenced to the Trustee by an Officers' Certificate) as of
the date the taking of such action by the Holders of such requisite principal
amount is evidenced to the Trustee as provided in the immediately preceding
sentence. Such instrument or instruments (and the action embodied therein and
evidenced thereby) are herein sometimes referred to as the "Act" of the
Securityholders signing such instrument or instruments. Proof of execution of
any such instrument or of a writing appointing any such agent shall be
sufficient for any purpose of this Indenture and (subject to Section 601)
conclusive in favor of the Trustee and the Company, if made in the manner
provided in this Section.
(b) The fact and date of the execution by any Person of any
such instrument or writing may be proved by the affidavit of a witness to such
execution or by the certificate of any notary public or other officer
authorized by law to take acknowledgments of deeds, certifying that the
individual signing such instrument or writing acknowledged to him the execution
thereof. Where such execution is by an officer of a corporation or a member of
a partnership, on behalf of such corporation or partnership, such certificate
or affidavit shall also constitute sufficient proof of his authority. The fact
and date of the execution of any such instrument or writing, or the authority
of the person executing the same, may also be proved in any other manner which
the Trustee deems sufficient.
(c) The ownership of Securities shall be proved by the
Security Register.
(d) If the Company shall solicit from the Holders any
request, demand, authorization, direction, notice, consent, waiver or other
action, the Company may, at its option, by Board Resolution, fix in advance a
record date for the determination of Holders entitled to give such request,
demand, authorization, direction, notice, consent, waiver or other action, but
the Company shall have no obligation to do so. If such a record date is fixed,
such request, demand, authorization, direction, notice, consent, waiver or
other action may be given before or after the record date, but only the Holders
of record at the close of business on the record date shall be deemed to be
Holders for the purposes of determining whether Holders of the requisite
proportion of Securities Outstanding have authorized or agreed or consented to
such request, demand, authorization, direction, notice, consent, waiver or
other action, and for that purpose the Securities Outstanding shall be computed
as of the record date; provided that no such authorization, agreement or
consent by the Holders on the record date 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.
<PAGE> 20
13
(e) Any request, demand, authorization, direction, notice,
consent, waiver or other action by the Holder of any Security shall bind the
Holder of every Security issued upon the transfer thereof or in exchange
therefor or in lieu thereof, in respect of anything done or suffered to be done
by the Trustee or the Company in reliance thereon whether or not notation of
such action is made upon such Security.
Section 105. Notices, etc., to Trustee and Company. Any
request, demand, authorization, direction, notice, consent, waiver or Act of
Securityholders 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 Securityholder 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 by the Trustee or by any Securityholder shall
be sufficient for every purpose hereunder (except as provided in
Section 501(4) or, in the case of a request for repayment, as
specified in the Security carrying the right to repayment) if in
writing and mailed, first-class postage prepaid, to the Company
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.
Section 106. Notices to Securityholders; Waiver. Where this
Indenture or any Security provides for notice to Securityholders of any event,
such notice shall be sufficiently given (unless otherwise herein or in such
Security expressly provided) if in writing and mailed, first-class postage
prepaid, to each Securityholder 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. In
any case where notice to Securityholders is given by mail, neither the failure
to mail such notice, nor any defect in any notice so mailed, to any particular
Securityholder shall affect the sufficiency of such notice with respect to
other Securityholders. Where this Indenture or any Security 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
Securityholders 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.
In case, by reason of the suspension of regular mail service
as a result of a strike, work stoppage or otherwise, it shall be impractical to
<PAGE> 21
14
mail notice of any event to any Securityholder when such notice is required to
be given pursuant to any provision of this Indenture, then any method of
notification as shall be satisfactory to the Trustee and the Company shall be
deemed to be a sufficient giving of such notice.
Section 107. Conflict with Trust Indenture Act. If any
provision hereof limits, qualifies or conflicts with the duties imposed by any
of Sections 310 to 317, inclusive, of the Trust Indenture Act through the
operation of Section 318(c) thereof, such imposed duties shall control.
Section 108. 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.
Section 109. Successors and Assigns. All covenants and
agreements in this Indenture by the Company shall bind its successors and
assigns, whether so expressed or not.
Section 110. Separability Clause. In case any provision in
this Indenture or in the Securities 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 111. Benefits of Indenture. Nothing in this
Indenture or in any Securities, express or implied, shall give to any Person,
other than the parties hereto and their successors hereunder, any
Authenticating Agent or Paying Agent, the Security Registrar and the Holders of
Securities (or such of them as may be affected thereby), any benefit or any
legal or equitable right, remedy or claim under this Indenture.
Section 112. Governing Law. This Indenture shall be
construed in accordance with and governed by the laws of the State of New York.
Section 113. Counterparts. This instrument may be executed
in any number of counterparts, each of which so executed shall be deemed to be
an original, but all such counterparts shall together constitute but one and
the same instrument.
Section 114. Judgment Currency. The Company 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
the Securities of any series (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 Required Currency with
the Judgment Currency on the New York Banking Day (as defined below) preceding
<PAGE> 22
15
that on which 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 subsection (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 required by law
or executive order to close.
ARTICLE TWO
Security Forms
Section 201. Forms Generally. The Securities shall have such
appropriate insertions, omissions, substitutions and other variations as are
required or permitted by this Indenture and may have such letters, numbers or
other marks of identification and such legends or endorsements placed thereon,
as may be required to comply with applicable laws or regulations or with the
rules of any securities exchange, or as may, consistently herewith, be
determined by the officers executing such Securities, as evidenced by their
execution of the Securities. Any portion of the text of any Security may be
set forth on the reverse thereof, with an appropriate reference thereto on the
face of the Security.
The definitive Securities shall be printed, lithographed or
engraved or produced by any combination of these methods on steel engraved
borders or may be produced in any other manner, all as determined by the
officers executing such Securities, as evidenced by their execution of such
Securities, subject, with respect to the Securities of any series, to the rules
of any securities exchange on which such Securities are listed.
Section 202. Forms of Securities. Each Security shall be in
one of the forms approved from time to time by or pursuant to a Board
Resolution, or established in one or more indentures supplemental hereto.
Prior to the delivery of a Security to the Trustee for authentication in any
form approved by or pursuant to a Board Resolution, the Company shall deliver
to the Trustee the Board Resolution by or pursuant to which such form of
<PAGE> 23
16
Security has been approved, which Board Resolution shall have attached thereto
a true and correct copy of the form of Security which has been approved thereby
or, if a Board Resolution authorizes a specific officer or officers to approve
a form of Security, a certificate of such officer or officers approving the
form of Security attached thereto. Any form of Security approved by or
pursuant to a Board Resolution must be acceptable as to form to the Trustee,
such acceptance to be evidenced by the Trustee's authentication of Securities
in that form or a certificate signed by a Responsible Officer of the Trustee
and delivered to the Company.
Section 203. Form of Trustee's Certificate of Authentication.
The form of Trustee's Certificate of Authentication for any Security issued
pursuant to this Indenture shall be substantially as follows:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the series designated therein
referred to in the within-mentioned Indenture.
THE BANK OF NEW YORK,
as Trustee,
Dated: By: -------------------------------
----------- Authorized Signatory
Section 204. Securities Issuable in the Form of a Global
Security. (a) If the Company shall establish pursuant to Sections 202 and 301
that the Securities of a particular series are to be issued in whole or in part
in the form of one or more Global Securities, then the Company shall execute
and the Trustee or its agent shall, in accordance with Section 303 and the
Company Request delivered to the Trustee or its agent thereunder,
authenticate and deliver, such Global Security or Securities, which (i) shall
represent, and shall be denominated in an amount equal to the aggregate
principal amount of, the Outstanding Securities of such series to be
represented by such Global Security or Securities, or such portion thereof as
the Company shall specify in a Company Request, (ii) shall be registered in the
name of the Depositary for such Global Security or Securities or its nominee,
(iii) shall be delivered by the Trustee or its agent to the Depositary or
pursuant to the Depositary's instruction and (iv) shall bear a legend
substantially to the following effect: "Unless and until it is exchanged in
whole or in part for the individual Securities represented hereby, this Global
Security may not be transferred except as a whole by the Depositary to a
nominee of the Depositary or by a nominee of the Depositary to the Depositary
<PAGE> 24
17
or another nominee of the Depositary or by the Depositary or any such nominee
to a successor Depositary or a nominee of such successor Depositary."
(b) Notwithstanding any other provisions of this Section 204
or of Section 305, and subject to the provisions of paragraph (c) below, unless
the terms of a Global Security expressly permit such Global Security to be
exchanged in whole or in part for individual Securities, a Global Security may
be transferred, in whole but not in part and in the manner provided in Section
305, only to a nominee of the Depositary for such Global Security, or to the
Depositary, or a successor Depositary for such Global Security selected or
approved by the Company, or to a nominee of such successor Depositary.
(c) (i) If at any time the Depositary for a Global Security
notifies the Company that it is unwilling or unable to continue as Depositary
for such Global Security or if at any time the Depositary for the Securities
for such series ceases to be a clearing agency registered under the Securities
Exchange Act of 1934, as amended, or other applicable statute or regulation,
the Company shall appoint a successor Depositary with respect to such Global
Security. If a successor Depositary for such Global Security is not appointed
by the Company within 90 days after the Company receives such notice or becomes
aware of such ineligibility, the Company will execute, and the Trustee or its
agent, upon receipt of a Company Request for the authentication and delivery
of individual Securities of such series in exchange for such Global Security,
will authenticate and deliver, individual Securities of such series of like
tenor and terms in an aggregate principal amount equal to the principal amount
of the Global Security in exchange for such Global Security.
(ii) The Company may at any time and in its sole discretion
determine that the Securities of any series or portion thereof issued or
issuable in the form of one or more Global Securities shall no longer be
represented by such Global Security or Securities. In such event the Company
will execute, and the Trustee, upon receipt of a Company Request for the
authentication and delivery of individual Securities of such series in exchange
in whole or in part for such Global Security, will authenticate and deliver
individual Securities of such series of like tenor and terms in definitive form
in an aggregate principal amount equal to the principal amount of such Global
Security or Securities representing such series or portion thereof in exchange
for such Global Security or Securities.
(iii) If specified by the Company pursuant to Sections 202
and 301 with respect to Securities issued or issuable in the form of a Global
Security, the Depositary for such Global Security may surrender such Global
Security in exchange in whole or in part for individual Securities of such
series of like tenor and terms in definitive form on such terms as are
acceptable to the Company and such Depositary. Thereupon the Company shall
execute, and the Trustee or its agent shall authenticate and deliver, without
<PAGE> 25
18
service charge, (1) to each Person specified by such Depositary a new Security
or Securities of the same series of like tenor and terms and of any authorized
denomination as requested by such Person in aggregate principal amount equal to
and in exchange for such Person's beneficial interest in the Global Security;
and (2) to such Depositary a new Global Security of like tenor and terms and in
an authorized denomination equal to the difference, if any, between the
principal amount of the surrendered Global Security and the aggregate principal
amount of Securities delivered to the Holders thereof.
(iv) In any exchange provided for in any of the preceding
three paragraphs, the Company will execute and the Trustee or its agent will
authenticate and deliver individual Securities in definitive registered form in
authorized denominations. Upon the exchange of the entire principal amount of
a Global Security for individual Securities, such Global Security shall be
canceled by the Trustee or its agent. Except as provided in the preceding
paragraph, Securities issued in exchange for a Global Security pursuant to this
Section shall be registered in such names and in such authorized denominations
as the Depositary for such Global Security, pursuant to instructions from its
direct or indirect participants or otherwise, shall instruct the Trustee or the
Security Registrar. The Trustee or the Security Registrar shall deliver such
Securities to the Persons in whose names such Securities are so registered.
ARTICLE THREE
The Securities
Section 301. General Title; General Limitations; Issuable in
Series; Terms of Particular Series. The aggregate principal amount of
Securities which may be authenticated and delivered and Outstanding under this
Indenture is not limited.
The Securities may be issued in one or more series up to an
aggregate principal amount of Securities as from time to time may be authorized
by the Board of Directors. All Securities of each series under this Indenture
shall in all respects be equally and ratably entitled to the benefits hereof
with respect to such series without preference, priority or distinction on
account of the actual time of the authentication and delivery or Stated
Maturity of the Securities of such series.
Each series of Securities shall be created either by or
pursuant to a Board Resolution or by or pursuant to an indenture supplemental
hereto. The Securities of each such series may bear such date or dates, be
payable at such place or places, have such Stated Maturity or Maturities, be
issuable at such premium over or discount from their face value, bear interest
at such rate or rates (which may be fixed or floating), from such date or
dates, payable in such installments and on such dates and at such place or
<PAGE> 26
19
places to the Holders of Securities registered as such on such Regular Record
Dates, or may bear no interest, and may be redeemable or repayable at such
Redemption Price or Prices or Repayment Price or Prices, as the case may be,
whether at the option of the Holder or otherwise, and upon such terms, all as
shall be provided for in or pursuant to the Board Resolution or in or pursuant
to the supplemental indenture creating that series. There may also be
established in or pursuant to a Board Resolution or in or pursuant to a
supplemental indenture prior to the issuance of Securities of each such series,
provision for:
(1) the exchange or conversion of the Securities of that
series, at the option of the Holders thereof, for or into new
Securities of a different series or other securities or other property
of the Company or another Person, including shares of capital stock of
the Company or any subsidiary of the Company or of any other Person or
securities directly or indirectly convertible into or exchangeable for
any such shares;
(2) a sinking or purchase fund or other analogous obligation;
(3) if other than U.S. dollars, the currency or currencies or
units based on or related to currencies (including European Currency
Units) in which the Securities of such series shall be denominated and
in which payments of principal of, and any premium and interest on,
such Securities shall or may be payable;
(4) if the principal of (and premium, if any) or interest, if
any, on the Securities of such series are to be payable, at the
election of the Company or a holder thereof, in a currency or
currencies or units based on or related to currencies (including
European Currency Units) other than that in which the Securities are
stated to be payable, the period or periods within which, and the
terms and conditions upon which, such election may be made;
(5) if the amount of payments of principal of (and premium, if
any) or interest, if any, on the Securities of such series may be
determined with reference to an index based on (i) a currency or
currencies or units based on or related to currencies (including
European Currency Units) other than that in which the Securities are
stated to be payable, (ii) changes in the price of one or more other
securities or groups or indexes of securities or (iii) changes in the
prices of one or more commodities or groups or indexes of commodities,
or any combination of the foregoing, the manner in which such amounts
shall be determined;
<PAGE> 27
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(6) if the aggregate principal amount of the Securities of
that series is to be limited, such limitations, and the maturity date
of the principal amount of the Securities of that series (which may be
fixed or extendible), and the rate or rates (which may be fixed or
floating) per annum at which the Securities of that series will bear
interest, if any, or the method of determining such rate or rates, and
the payment dates and record dates relating to such interest payments;
(7) the exchange of Securities of that series, at the option
of the Holders thereof, for other Securities of the same series of the
same aggregate principal amount of a different authorized kind or
different authorized denomination or denominations, or both;
(8) the appointment by the Trustee of an Authenticating Agent
in one or more places other than the location of the office of the
Trustee with power to act on behalf of the Trustee and subject to its
direction in the authentication and delivery of the Securities of any
one or more series in connection with such transactions as shall be
specified in the provisions of this Indenture or in or pursuant to the
Board Resolution or the supplemental indenture creating such series;
(9) the percentage of their principal amount at which such
Securities will be issued, and the portion of the principal amount of
Securities of the series, if other than the total principal amount
thereof, which shall be payable upon declaration of acceleration of the
Maturity thereof pursuant to Section 502 or provable in bankruptcy
pursuant to Section 504;
(10) any Event of Default with respect to the Securities of
such series, if not set forth herein and any additions, deletions or
other changes to the Events of Default set forth herein that shall be
applicable to the Securities of such series (including a provision
making any Event of Default set forth herein inapplicable to the
Securities of that series);
(11) any covenant solely for the benefit of the Securities of
such series and any additions, deletions or other changes to the
provisions of Article Ten or any definitions relating to such Article
that shall be applicable to the Securities of such series (including a
provision making any Section of such Article inapplicable to the
Securities of such series);
<PAGE> 28
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(12) the applicability of Section 402(b) of this Indenture to
the Securities of such series;
(13) if the Securities of the series shall be issued in whole
or in part in the form of a Global Security or Global Securities, the
terms and conditions, if any, upon which such Global Security or
Global Securities may be exchanged in whole or in part for other
individual Securities; and the Depositary for such Global Security or
Global Securities (if other than the Depositary specified in Section
101 hereof);
(14) the subordination of the Securities of such series to
any other indebtedness of the Company, including without limitation,
the Securities of any other series; and
(15) any other terms of the series, which shall not be
inconsistent with the provisions of this Indenture, all upon such
terms as may be determined in or pursuant to a Board Resolution or in
or pursuant to a supplemental indenture with respect to such series.
All Securities of the same series shall be substantially identical in
tenor and effect, except as to denomination.
The form of the Securities of each series shall be established
pursuant to the provisions of this Indenture in or pursuant to the Board
Resolution or in or pursuant to the supplemental indenture creating such
series. The Securities of each series shall be distinguished from the
Securities of each other series in such manner, reasonably satisfactory to the
Trustee, as the Board of Directors may determine.
Unless otherwise provided with respect to Securities of a
particular series, the Securities of any series may only be issuable in
registered form, without coupons.
Any terms or provisions in respect of the Securities of any
series issued under this Indenture may be determined pursuant to this Section
by providing in a Board Resolution or supplemental indenture for the method by
which such terms or provisions shall be determined.
Section 302. Denominations. The Securities of each series
shall be issuable in such denominations and currency as shall be provided in
the provisions of this Indenture or in or pursuant to the Board Resolution or
the supplemental indenture creating such series. In the absence of any such
provisions with respect to the Securities of any series, the Securities of that
series shall be issuable only in fully registered form in denominations of
$1,000 and any integral multiple thereof.
<PAGE> 29
22
Section 303. Execution, Authentication and Delivery and
Dating. The Securities shall be executed on behalf of the Company by its
Chairman of the Board, its President, one of its Vice Presidents or its
Treasurer under its corporate seal reproduced thereon and attested by its
Secretary or one of its Assistant Secretaries. The signature of any of these
officers on the Securities may be manual or facsimile.
Securities 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 or did not hold such offices at the date of such Securities.
At any time and from time to time after the execution and
delivery of this Indenture, the Company may deliver Securities executed by the
Company to the Trustee for authentication; and the Trustee shall, upon Company
Order, authenticate and make available for delivery such Securities as in this
Indenture provided and not otherwise.
Prior to any such authentication and delivery, the Trustee
shall be entitled to receive, in addition to any Officers' Certificate and
Opinion of Counsel required to be furnished to the Trustee pursuant to Section
102, and the Board Resolution and any certificate relating to the issuance of
the series of Securities required to be furnished pursuant to Section 202, an
Opinion of Counsel stating that:
(1) all instruments furnished to the Trustee conform to the
requirements of the Indenture and constitute sufficient authority
hereunder for the Trustee to authenticate and deliver such Securities;
(2) the form and terms (or in connection with the issuance of
medium-term Securities under Section 311, the manner of determining
the terms) of such Securities have been established in conformity with
the provisions of this Indenture;
(3) all laws and requirements with respect to the execution
and delivery by the Company of such Securities have been complied
with, the Company has the corporate power to issue such Securities and
such Securities have been duly authorized and delivered by the Company
and, assuming due authentication and delivery by the Trustee,
constitute legal, valid and binding obligations of the Company
enforceable in accordance with their terms (subject, as to enforcement
of remedies, to applicable bankruptcy, reorganization, insolvency,
<PAGE> 30
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fraudulent conveyance, moratorium or other laws and legal principles
affecting creditors' rights generally from time to time in effect and
to general equitable principles, whether applied in an action at law or
in equity) and entitled to the benefits of this Indenture, equally and
ratably with all other Securities, if any, of such series Outstanding;
and
(4) such other matters as the Trustee may reasonably request;
and, if the authentication and delivery relates to a new series of Securities
created by an indenture supplemental hereto, also stating that all laws and
requirements with respect to the form and execution by the Company of the
supplemental indenture with respect to that series of Securities have been
complied with, the Company has corporate power to execute and deliver any such
supplemental indenture and has taken all necessary corporate action for those
purposes and any such supplemental indenture has been executed and delivered
and constitutes the legal, valid and binding obligation of the Company
enforceable in accordance with its terms (subject, as to enforcement of
remedies, to applicable bankruptcy, reorganization, insolvency, fraudulent
conveyance, moratorium or other laws and legal principles affecting creditors'
rights generally from time to time in effect and to general equitable
principles, whether applied in an action at law or in equity).
The Trustee shall not be required to authenticate such
Securities if the issue thereof will adversely affect the Trustee's own rights,
duties or immunities under the Securities and this Indenture.
Unless otherwise provided in the form of Security for any
series, all Securities shall be dated the date of their authentication.
No Security 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 herein executed by the Trustee by manual signature of an
authorized signatory, and such certificate upon any Security shall be
conclusive evidence, and the only evidence, that such Security has been duly
authenticated and delivered hereunder.
Section 304. Temporary Securities. Pending the preparation
of definitive Securities of any series, the Company may execute, and, upon
receipt of the documents required by Section 303, together with a Company
Order, the Trustee shall authenticate and deliver, temporary Securities which
are printed, lithographed, typewritten, mimeographed or otherwise produced, in
any authorized denomination, substantially of the tenor of the definitive
<PAGE> 31
24
Securities in lieu of which they are issued and with such appropriate
insertions, omissions, substitutions and other variations as the officers
executing such Securities may determine, as evidenced by their execution of
such Securities.
If temporary Securities of any series are issued, the Company
will cause definitive Securities of such series to be prepared without
unreasonable delay. After the preparation of definitive Securities, the
temporary Securities of such series shall be exchangeable for definitive
Securities of such series upon surrender of the temporary Securities of such
series at the office or agency of the Company in a Place of Payment, without
charge to the Holder; and upon surrender for cancellation of any one or more
temporary Securities the Company shall execute and the Trustee shall
authenticate and deliver in exchange therefor a like principal amount of
definitive Securities of such series of authorized denominations and of like
tenor and terms. Until so exchanged the temporary Securities of such series
shall in all respects be entitled to the same benefits under this Indenture as
definitive Securities of such series.
Section 305. Registration, Transfer and Exchange. The
Company shall keep or cause to be kept a register (herein sometimes referred to
as the "Security Register") in which, subject to such reasonable regulations as
it may prescribe, the Company shall provide for the registration of Securities,
or of Securities of a particular series, and for transfers of Securities or of
Securities of such series. Any such register shall be in written form or in
any other form capable of being converted into written form within a reasonable
time. At all reasonable times the information contained in such register or
registers shall be available for inspection by the Trustee at the office or
agency to be maintained by the Company as provided in Section 1002.
Subject to Section 204, upon surrender for transfer of any
Security of any series at the office or agency of the Company in a Place of
Payment, 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 Securities of such series of any authorized
denominations, of a like aggregate principal amount and Stated Maturity and of
like tenor and terms.
Subject to Section 204, at the option of the Holder,
Securities of any series may be exchanged for other Securities of such series
of any authorized denominations, of a like aggregate principal amount and
Stated Maturity and of like tenor and terms, upon surrender of the Securities
<PAGE> 32
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to be exchanged at such office or agency. Whenever any Securities are so
surrendered for exchange, the Company shall execute, and the Trustee shall
authenticate and make available for delivery, the Securities which the
Securityholder making the exchange is entitled to receive.
All Securities issued upon any transfer or exchange of
Securities shall be the valid obligations of the Company, evidencing the same
debt, and entitled to the same benefits under this Indenture, as the Securities
surrendered upon such transfer or exchange.
Every Security presented or surrendered for transfer or
exchange shall (if so required by the Company or the Trustee) be duly endorsed,
or be accompanied by a written instrument of transfer in form satisfactory to
the Company and the Security Registrar duly executed, by the Holder thereof or
his attorney duly authorized in writing.
Unless otherwise provided in the Security to be transferred or
exchanged, no service charge shall be made on any Securityholder for any
transfer or exchange of Securities, but the Company may (unless otherwise
provided in such Security) require payment of a sum sufficient to cover any tax
or other governmental charge that may be imposed in connection with any
transfer or exchange of Securities, other than exchanges pursuant to Section
304 or 906 not involving any transfer.
The Company shall not be required (i) to issue, transfer or
exchange any Security of any series during a period beginning at the opening of
business 15 days before the day of the mailing of a notice of redemption of
Securities of such series selected for redemption under Section 1103 and ending
at the close of business on the date of such mailing, or (ii) to transfer or
exchange any Security so selected for redemption in whole or in part, except
for the portion of such Security not so selected for redemption.
None of the Company, the Trustee, any agent of 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.
The Company initially appoints the Trustee to act as Security
Registrar for the Securities on its behalf. The Company may at any time and
from time to time authorize any Person to act as Security Registrar in place of
the Trustee with respect to any series of Securities issued under this
Indenture.
Section 306. Mutilated, Destroyed, Lost and Stolen
Securities. If (i) any mutilated Security is surrendered to the Trustee, or
<PAGE> 33
26
the Company and the Trustee receive evidence to their satisfaction of the
destruction, loss or theft of any Security, and (ii) there is delivered to the
Company and the Trustee such security or indemnity as may be required by them
to save each of them harmless, then, in the absence of notice to the Company or
the Trustee that such Security has been acquired by a bona fide purchaser, the
Company shall execute and upon its request the Trustee shall authenticate and
deliver, in exchange for or in lieu of any such mutilated, destroyed, lost or
stolen Security, a new Security of like tenor, series, Stated Maturity and
principal amount, bearing a number not contemporaneously Outstanding.
In case any such mutilated, destroyed, lost or stolen Security
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.
Upon the issuance of any new Security under this Section, 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 issued pursuant to this Section in lieu of
any destroyed, lost or stolen Security shall constitute an original additional
contractual obligation of the Company, whether or not the destroyed, lost or
stolen Security shall be at any time enforceable by anyone, and shall be
entitled to all the benefits of this Indenture equally and proportionately with
any and all other Securities of the same series duly issued hereunder.
The provisions of this Section are 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.
Section 307. Payment of Interest; Interest Rights Preserved.
Unless otherwise provided with respect to such Security pursuant to Section
301, interest on any Security which is payable, and is punctually paid or duly
provided for, on any Interest Payment Date shall be paid to the Person in whose
name that Security (or one or more Predecessor Securities) is registered at the
close of business on the Regular Record Date for such interest.
Any interest on any Security which is payable, but is not
punctually paid or duly provided for, on any Interest Payment Date (herein
called "Defaulted Interest") shall forthwith cease to be payable to the
registered Holder on the relevant Regular Record Date by virtue of his having
been such Holder; and, except as hereinafter provided, such Defaulted Interest
may be paid by the Company, at its election in each case, as provided in Clause
(1) or Clause (2) below:
<PAGE> 34
27
(1) The Company may elect to make payment of any Defaulted
Interest to the Persons in whose names any such Securities (or their
respective Predecessor Securities) are registered at the close of
business on a Special Record Date for the payment of such Defaulted
Interest, which shall be fixed in the following manner. The Company
shall notify the Trustee in writing of the amount of Defaulted
Interest proposed to be paid on each such Security 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 prior to the
date of the proposed payment, such money when deposited to be held in
trust for the benefit of the Persons entitled to such Defaulted
Interest as in this Clause provided. Thereupon the Trustee shall fix
a Special Record Date for the payment of such Defaulted Interest which
shall be not more than 15 nor less than 10 days prior to the date of
the proposed payment and not less than 10 days after the receipt by
the Trustee of the notice of the proposed payment. The Trustee shall
promptly notify the Company of such Special Record Date and, in the
name and at the expense of the Company, shall 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 each such Security at his address as it appears in the Security
Register, not less than 10 days prior to 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 Persons in whose names such
Securities (or their respective Predecessor Securities) are registered
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 Securities 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 manner of payment shall be deemed practicable by
the Trustee.
If any installment of interest the Stated Maturity of which is
on or prior to the Redemption Date for any Security called for redemption
pursuant to Article Eleven is not paid or duly provided for on or prior to the
Redemption Date in accordance with the foregoing provisions of this Section,
such interest shall be payable as part of the Redemption Price of such
Securities.
<PAGE> 35
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Subject to the foregoing provisions of this Section, each
Security delivered under this Indenture upon 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.
Section 308. Persons Deemed Owners. The Company, the Trustee
and any agent of the Company or the Trustee may treat the Person in whose name
any Security is registered in the Security Register as the owner of such
Security for the purpose of receiving payment of principal of (and premium, if
any), and (subject to Section 307) interest on, such Security and for all other
purposes whatsoever, whether or not such Security be overdue, and neither the
Company, the Trustee nor any agent of the Company or the Trustee shall be
affected by notice to the contrary.
Section 309. Cancellation. All Securities surrendered for
payment, redemption, transfer, conversion or exchange or credit against a
sinking fund shall, if surrendered to any Person other than the Trustee, be
delivered to the Trustee and, if not already canceled, shall be promptly
canceled by it. 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 promptly canceled by the Trustee. No Security
shall be authenticated in lieu of or in exchange for any Securities canceled as
provided in this Section, except as expressly permitted by this Indenture. The
Trustee shall return all canceled Securities to the Company.
Section 310. Computation of Interest. Unless otherwise
provided as contemplated in Section 301, interest on the Securities shall be
calculated on the basis of a 360-day year of twelve 30-day months.
Section 311. Medium-term Securities. Notwithstanding any
contrary provision herein, if all Securities of a series are not to be
originally issued at one time, it shall not be necessary for the Company to
deliver to the Trustee an Officers' Certificate, Board Resolution, supplemental
indenture, Opinion of Counsel or Company Request otherwise required pursuant to
Sections 202, 301 and 303 at or prior to the time of authentication of each
Security of such series if such documents are delivered to the Trustee or its
agent at or prior to the authentication upon original issuance of the first
Security of such series to be issued; provided that any subsequent request by
the Company to the Trustee to authenticate Securities of such series upon
original issuance shall constitute a representation and warranty by the Company
that as of the date of such request, the statements made in the Officers'
Certificate delivered pursuant to Section 102 shall be true and correct as if
made on such date.
<PAGE> 36
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An Officers' Certificate, supplemental indenture or Board
Resolution delivered by the Company to the Trustee in the circumstances set
forth in the preceding paragraph may provide that Securities which are the
subject thereof will be authenticated and delivered by the Trustee or its agent
on original issue from time to time upon the telephonic or written order of
persons designated in such Officers' Certificate, Board Resolution or
supplemental indenture (any such telephonic instructions to be confirmed
promptly in writing by such persons) and that such persons are authorized to
determine, consistent with such Officers' Certificate, supplemental indenture
or Board Resolution, such terms and conditions of said Securities as are
specified in such Officers' Certificate, supplemental indenture or Board
Resolution.
Section 312. 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.
Section 313. Global Securities. (a) Each Global Security
authenticated under this Indenture shall be registered in the name of the
Depositary designated by the Company for such Global Security or a nominee
thereof and delivered to such Depositary or a nominee thereof or custodian
therefor, and each such Global Security shall constitute a single Security for
all purposes of this Indenture.
(b) Notwithstanding any other provision of this Indenture, no
Global Security may be exchanged in whole or in part for Securities registered,
and no transfer of a Global Security in whole or in part may be registered, in
the name of any Person other than the Depositary for such Global Security or a
nominee thereof unless (i) such Depositary (A) has notified the Company that
it is unwilling or unable to continue as Depositary for such Global Security or
(B) has ceased to be a clearing agency registered as such under the Exchange
Act or announces an intention permanently to cease business or does in fact do
so or (ii) there shall have occurred and be continuing an Event of Default with
respect to such Global Security.
<PAGE> 37
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(c) If any Global Security is to be exchanged for other
Securities or canceled in whole, it shall be surrendered by or on behalf of the
Depositary or its nominee to the Trustee, as Security Registrar, for exchange
or cancellation, as provided in this Article Three. If any Global Security is to
be exchanged for other Securities or canceled in part, or if another Security
is to be exchanged in whole or in part for a beneficial interest in any Global
Security, in each case, as provided in Section 305, then either (i) such Global
Security shall be so surrendered for exchange or cancellation, as provided in
this Article Three or (ii) the principal amount thereof shall be reduced or
increased by an amount equal to the portion thereof to be so exchanged or
canceled, or equal to the principal amount of such other Security to be so
exchanged for a beneficial interest therein, as the case may be, by means of an
appropriate adjustment made on the records of the Trustee, as Security
Registrar, whereupon the Trustee, in accordance with the Applicable Procedures,
shall instruct the Depositary or its authorized representative to make a
corresponding adjustment to its records. Upon any such surrender or adjustment
of a Global Security, the Trustee shall, subject to Section 305 and as
otherwise provided in this Article Three, authenticate and deliver any
Securities issuable in exchange for such Global Security (or any portion
thereof) to or upon the order of, and registered in such names as may be
directed by, the Depositary or its authorized representative. Upon the request
of the Trustee in connection with the occurrence of any of the events specified
in the preceding paragraph, the Company shall promptly make available to the
Trustee a reasonable supply of Securities that are not in the form of Global
Securities. The Trustee shall be entitled to rely upon any order, direction or
request of the Depositary or its authorized representative which is given or
made pursuant to this Article Three if such order, direction or request is given
or made in accordance with the Applicable Procedures.
(d) Every Security authenticated and delivered upon registration
of transfer of, or in exchange for or in lieu of, a Global Security or any
portion thereof, whether pursuant to this Article Three or otherwise, shall be
authenticated and delivered in the form of, and shall be, a registered Global
Security, unless such Security is registered in the name of a Person other than
the Depositary for such Global Security or a nominee thereof, in which case
such Registered Security shall be authenticated and delivered in definitive,
fully registered form, without interest coupons.
(e) The Depositary or its nominee, as registered owner of a
Global Security, shall be the Holder of such Global Security for all purposes
under the Indenture and the Registered Securities, and owners of beneficial
interests in a Global Security shall hold such interests pursuant to the
Applicable Procedures. Accordingly, any such owner's beneficial interest in a
<PAGE> 38
31
Global Security will be shown only on, and the transfer of such interest
shall be effected only through, records maintained by the Depositary or its
nominee or its Agent Members and such owners of beneficial interests in a Global
Security will not be considered the owners or holders thereof.
ARTICLE FOUR
Satisfaction and Discharge of Indenture; Defeasance;
Unclaimed Moneys
Section 401. Applicability of Article. If, pursuant to Section 301,
provision is made for the defeasance of Securities of a series and if the
Securities of such series are denominated and payable only in Dollars (except
as provided pursuant to Section 301), then the provisions of this Article
Four relating to defeasance of Securities shall be applicable except as
otherwise specified pursuant to Section 301 for Securities of such series.
Defeasance provisions, if any, for Securities denominated in a Foreign Currency
may be specified pursuant to Section 301.
Section 402. Satisfaction and Discharge of Indenture; Defeasance.
(a) If at any time (i) the Company shall have delivered to the Trustee for
cancellation all Securities of any series theretofore authenticated and
delivered (other than (1) any Securities of such series which shall have been
destroyed, lost or stolen and which shall have been replaced or paid as
provided in Section 306 and (2) Securities for whose payment money has
theretofore been deposited in trust and thereafter repaid to the Company as
provided in Section 405) or (ii) all Securities of such series not theretofore
delivered to the Trustee for cancellation shall have become due and payable, or
are by their terms to become due and payable within one year or are to be
called for redemption within one year under arrangements satisfactory to the
Trustee for the giving of notice of redemption, and the Company shall deposit
with the Trustee as trust funds the entire amount in the Currency in which such
Securities are denominated (except as otherwise provided pursuant to Section
301) sufficient (in the opinion of a nationally recognized firm of independent
public accountants expressed in a written certification thereof delivered to
the Trustee) without consideration of any reinvestment and after payment of all
taxes or other charges and assessments in respect thereof payable by the
Trustee, to pay at maturity or upon redemption all Securities of such series
not theretofore delivered to the Trustee for cancellation, including principal
and premium, if any, and interest due or to become due on such date of maturity
or redemption date, as the case may be, no default with respect to the
Securities has occurred and is continuing on the date of such deposit, such
deposit does not result in a breach or violation of, or constitute a default
<PAGE> 39
32
under, the Indenture or any other agreement or instrument to which the Company
is a party and the Company delivers an Officers' Certificate and an Opinion of
Counsel each stating that such conditions have been complied with and if in
either case the Company shall also pay or cause to be paid all other sums
payable hereunder by the Company, then this Indenture shall cease to be of
further effect (except as to any surviving rights of registration of transfer or
exchange of such Securities herein expressly provided for and rights to receive
payments of principal of, and premium, if any, and interest on, such Securities)
with respect to the Securities of such series, and the Trustee, on demand of the
Company, shall execute proper instruments acknowledging satisfaction of and
discharging this Indenture.
(b) Subject to Sections 402(c), 403 and 407, the Company at any time
may terminate, with respect to Securities of a particular series, (i) all its
obligations under the Securities of such series and this Indenture with respect
to the Securities of such series ("legal defeasance option") or (ii) its
obligations with respect to the Securities of such series under Section 1006 or
1007 and clause (3) of Section 801 ("covenant defeasance option"). The Company
may exercise its legal defeasance option notwithstanding its prior exercise of
its covenant defeasance option.
If the Company exercises its legal defeasance option, payment of the
Securities of the defeased series may not be accelerated because of an Event of
Default. If the Company exercises its covenant defeasance option, payment of the
Securities may not be accelerated because of an Event of Default specified in
Section 501(4) to the extent it relates to Section 1006 or 1007.
Upon satisfaction of the conditions set forth herein and upon request
of the Company, the Trustee shall acknowledge in writing the discharge of those
obligations that the Company terminates.
(c) Notwithstanding clause (a) above and the exercise of the legal
defeasance option in clause (b) above, the Company's obligations in Sections
305, 306, 1002, 701, 607, 608, 405, 406 and 407 shall survive until the
Securities of the defeased series have been paid in full. Thereafter, the
Company's obligations in Sections 607, 405 and 406 shall survive.
Section 403. Conditions of Defeasance. The Company may exercise its
legal defeasance option or its covenant defeasance option with respect to
Securities of a particular series only if:
<PAGE> 40
33
(1) the Company irrevocably deposits in trust with the Trustee
money or U.S. Government Obligations for the payment of principal of,
and premium, if any, and interest on, the Securities of such series to
maturity or redemption, as the case may be;
(2) the Company delivers to the Trustee a certificate from a
nationally recognized firm of independent public accountants expressing
their opinion that the payments of principal and interest when due and
without reinvestment on the deposited U.S. Government Obligations plus
any deposited money without investment will provide cash at such times
and in such amounts as will be sufficient to pay the principal, premium,
if any, and interest when due on all the Securities of such series to
maturity or redemption, as the case may be;
(3) 91 days pass after the deposit is made and during the 91-day
period no Default specified in Section 501(5) or (6) with respect to the
Company occurs which is continuing at the end of the period;
(4) no Default has occurred and is continuing on the date of such
deposit and after giving effect thereto;
(5) the deposit does not constitute a default under any other
agreement binding on the Company;
(6) the Company delivers to the Trustee an Opinion of Counsel to
the effect that the trust resulting from the deposit does not
constitute, or is qualified as, a regulated investment company under
the Investment Company Act of 1940;
(7) in the event of the legal defeasance option, 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 ruling, or (ii)
since the date of this Indenture there has been a change in the
applicable Federal income tax law, in either case to the effect that,
and based thereon such Opinion of Counsel shall confirm that, the
Holders of Securities of such series 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;
(8) in the event of the covenant defeasance option, the Company
shall have delivered to the Trustee an Opinion of Counsel to the
effect that the Holders of Securities of such series will not recognize
<PAGE> 41
34
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; and
(9) the Company delivers to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that all conditions precedent
to the defeasance and discharge of the Securities of such series as
contemplated by this Article Four have been complied with.
Before or after a deposit, the Company may make arrangements
satisfactory to the Trustee for the redemption of Securities of such series at a
future date in accordance with Article Four.
Section 404. Application of Trust Money. The Trustee shall hold in
trust money or U.S. Government Obligations deposited with it pursuant to this
Article Four. It shall apply the deposited money and the money from U.S.
Government Obligations through any paying agent and in accordance with this
Indenture to the payment of principal of, and premium, if any, and interest on,
the Securities of the defeased series.
Section 405. Repayment to Company. The Trustee and any paying
agent shall promptly turn over to the Company upon request any excess money or
securities held by them at any time.
Subject to any applicable abandoned property law, the Trustee and any
paying agent shall pay to the Company upon request any money held by them for
the payment of principal, premium or interest that remains unclaimed for two
years, and, thereafter, Holders entitled to such money must look to the Company
for payment as general creditors and all liability of the Trustee or such paying
agent with respect to such money shall thereupon cease.
Section 406. Indemnity for U.S. Government Obligations. The Company
shall pay and shall indemnify the Trustee and the Holders against any tax,
<PAGE> 42
35
fee or other charge imposed on or assessed against deposited U.S. Government
Obligations or the principal and interest received on such U.S. Government
Obligations.
Section 407. Reinstatement. If the Trustee or any paying agent is
unable to apply any money or U.S. Government Obligations in accordance with this
Article Four by reason of any legal proceeding or by reason of any order or
judgment of any court or government authority enjoining, restraining or
otherwise prohibiting such application, the Company's obligations under this
Indenture and the Securities of the defeased series shall be revived and
reinstated as though no deposit had occurred pursuant to this Article Four
until such time as the Trustee or any paying agent is permitted to apply all
such money or U.S. Government Obligations in accordance with this Article
Four.
ARTICLE FIVE
Remedies
Section 501. Events of Default. "Event of Default", wherever
used herein, means with respect to any series of Securities 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
either inapplicable to a particular series or it is specifically deleted or
modified in the supplemental indenture creating such series of Securities or in
the form of Security for such series:
(1) default in the payment of any interest upon any Security
of that series when it becomes 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 premium, if
any, on) any Security of that series at its Maturity; or
(3) default in the payment of any sinking or purchase fund or
analogous obligation when the same becomes due by the terms of the
Securities of such series; or
<PAGE> 43
36
(4) default in the performance, or breach, of any covenant or
warranty of the Company in this Indenture in respect of the Securities
of such series (other than a covenant or warranty in respect of the
Securities of such series a default in the performance of which or the
breach of which is elsewhere in this Section specifically dealt with),
all of such covenants and warranties in the Indenture which are not
expressly stated to be for the benefit of a particular series of
Securities being deemed in respect of the Securities of all series for
this purpose, and continuance of such default or breach for a period
of 90 days after there has 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 or
breach and requiring it to be remedied and stating that such notice is
a "Notice of Default" hereunder; or
(5) the entry of an order for relief against the Company under
the Federal Bankruptcy Code by a court having jurisdiction in the
premises or a decree or order by a court having jurisdiction in the
premises adjudging the Company a bankrupt or insolvent under any other
applicable Federal or State law, or the entry of a decree or order
approving as properly filed a petition seeking reorganization,
arrangement, adjustment or composition of or in respect of the Company
under the Federal Bankruptcy Code or any other applicable Federal or
State law, or appointing a receiver, liquidator, assignee, trustee,
sequestrator (or other similar official) of the Company or of any
substantial part of its property, or ordering the winding up or
liquidation of its affairs, and the continuance of any such decree or
order unstayed and in effect for a period of 60 consecutive days; or
(6) the consent by the Company to the institution of
bankruptcy or insolvency proceedings against it, or the filing by it
of a petition or answer or consent seeking reorganization or relief
under the Federal Bankruptcy Code or any other applicable Federal or
State law, or the consent by it to the filing of any such petition or
to the appointment of a receiver, liquidator, assignee, trustee,
sequestrator (or other similar official) of the Company or of any
substantial part of its property, or the making by it of an assignment
for the benefit of creditors, or the admission by it in writing of its
inability to pay its debts generally as they become due, or the taking
of corporate action by the Company in furtherance of any such action;
or
(7) any other Event of Default provided in the supplemental
indenture under which such series of Securities is issued or in the
form of Security for such series.
<PAGE> 44
37
Section 502. Acceleration of Maturity; Rescission and
Annulment. If an Event of Default described in paragraph (1), (2), (3), (4) or
(7) (if the Event of Default under paragraph (4) or (7) is with respect to less
than all series of Securities then Outstanding) of Section 501 occurs and is
continuing with respect to any series, then and in each and every such case,
unless the principal of all the Securities of such series shall have already
become due and payable, either the Trustee or the Holders of not less than 25%
in aggregate principal amount of the Securities of such series then Outstanding
hereunder (each such series acting as a separate class), by notice in writing
to the Company (and to the Trustee if given by Holders), may declare the
principal amount (or, if the Securities of such series are Original Issue
Discount Securities, such portion of the principal amount as may be specified
in the terms of that series) of all the Securities of such series then
Outstanding and all accrued interest thereon to be due and payable immediately,
and upon any such declaration the same shall become and shall be immediately
due and payable, anything in this Indenture or in the Securities of such
series contained to the contrary notwithstanding. If an Event of Default
described in paragraph (4) or (7) (if the Event of Default under paragraph (4)
or (7) is with respect to all series of Securities then Outstanding), or (5) or
(6) of Section 501 occurs and is continuing, then and in each and every such
case, unless the principal of all the Securities shall have already become due
and payable, either the Trustee or the Holders of not less than 25% in
aggregate principal amount of all the Securities then Outstanding hereunder
(treated as one class), by notice in writing to the Company (and to the Trustee
if given by Holders), may declare the principal amount (or, if any Securities
are Original Issue Discount Securities, such portion of the principal amount as
may be specified in the terms thereof) of all the Securities then Outstanding
and all accrued interest thereon to be due and payable immediately, and upon
any such declaration the same shall become and shall be immediately due and
payable, anything in this Indenture or in the Securities contained to the
contrary notwithstanding.
At any time after such a declaration of acceleration has been
made with respect to the Securities of any series 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 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 has paid or deposited with the Trustee a sum
sufficient to pay
<PAGE> 45
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(A) all overdue installments of interest on the
Securities of such series,
(B) the principal of (and premium, if any, on) any
Securities of such series which have become due otherwise than
by such declaration of acceleration, and interest thereon at
the rate or rates prescribed therefor by the terms of the
Securities of such series, to the extent that payment of such
interest is lawful,
(C) interest upon overdue installments of interest at
the rate or rates prescribed therefor by the terms of the
Securities of such series to the extent that payment of such
interest is lawful, 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
607;
and
(2) all Events of Default with respect to such series of
Securities, other than the nonpayment of the principal of the
Securities of such series which have become due solely by such
acceleration, have been cured or waived as provided in Section 513.
No such rescission shall affect any subsequent default or impair any right
consequent thereon.
Section 503. 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 any Security of any series when such interest becomes due
and payable, or
(2) default is made in the payment of the principal of (or
premium, if any, on) any Security at the Maturity thereof, or
(3) default is made in the payment of any sinking or purchase
fund or analogous obligation when the same becomes due by the terms of
the Securities of any series,
and any such default continues for any period of grace provided with respect to
the Securities of such series, the Company will, upon demand of the Trustee,
pay to it, for the benefit of the Holder of any such Security (or the Holders
<PAGE> 46
39
of any such series in the case of Clause (3) above), the whole amount then due
and payable on any such Security (or on the Securities of any such series in
the case of Clause (3) above) for principal (and premium, if any) and interest,
with interest, to the extent that payment of such interest shall be legally
enforceable, upon the overdue principal (and premium, if any) and upon overdue
installments of interest, at such rate or rates as may be prescribed therefor
by the terms of any such Security (or of Securities of any such series in the
case of Clause (3) above); and, in addition thereto, such further amount as
shall be sufficient to cover the costs and expenses of collection, including
the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel and all other amounts due the Trustee under
Section 607.
If the Company fails to pay such amounts forthwith upon such
demand, the Trustee, in its own name and as trustee of an express trust, may
institute a judicial proceeding for the collection of the sums so due and
unpaid, and may prosecute such proceeding to judgment or final decree, and may
enforce the same against the Company or any other obligor upon the Securities
of such series and collect the money adjudged or decreed to be payable in the
manner provided by law out of the property of the Company or any other obligor
upon such Securities, wherever situated.
If an Event of Default with respect to any series of
Securities 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 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 in aid
of the exercise of any power granted herein, or to enforce any other proper
remedy.
Section 504. 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 or any other obligor upon the Securities or
the property of the Company or of 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
for the payment of overdue principal or interest) shall be entitled and
empowered, by intervention in such proceedings or otherwise,
(i) to file and prove a claim for the whole amount of
principal (and premium, if any) and interest owing and unpaid in
respect of the Securities and to file such other papers or documents
as may be necessary and advisable in order to have the claims of the
<PAGE> 47
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Trustee (including any claim for the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and
counsel and all other amounts due the Trustee under Section 607) and
of the Securityholders allowed in such judicial proceeding, and
(ii) to collect and receive any moneys or other property
payable or deliverable on any such claims and to distribute the same;
and any receiver, assignee, trustee, liquidator, sequestrator (or other similar
official) in any such judicial proceeding is hereby authorized by each
Securityholder to make such payment to the Trustee and in the event that the
Trustee shall consent to the making of such payments directly to the
Securityholders, 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 607.
Nothing herein contained shall be deemed to authorize the
Trustee to authorize or consent to or accept or adopt on behalf of any
Securityholder any plan or reorganization, arrangement, adjustment or
composition affecting the Securities or the rights of any Holder thereof, or to
authorize the Trustee to vote in respect of the claim of any Securityholder in
any such proceeding.
Section 505. Trustee May Enforce Claims Without Possession of
Securities. All rights of action and claims under this Indenture or the
Securities of any series may be prosecuted and enforced by the Trustee without
the possession of any of the Securities of such series 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 of judgment shall, after provision for the payment of the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agent and counsel, be for the ratable benefit of the Holders of the
Securities of the series in respect of which such judgment has been recovered.
Section 506. Application of Money Collected. Any money
collected by the Trustee with respect to a series of Securities 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 premium, if any) or interest, upon presentation of the
Securities of such series 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 under
Section 607.
<PAGE> 48
41
SECOND: To the payment of the amounts then due and unpaid
upon the Securities of that series for principal (and premium, if any) and
interest, 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 amounts due and payable on such Securities for principal (and premium, if
any) and interest, respectively.
THIRD: To the Company.
Section 507. Limitation on Suits. No Holder of any Security
of any series 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 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
reasonable indemnity 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 Holders of Securities of
such series shall have any right in any manner whatever by virtue of, or by
availing of, any provision of this Indenture to affect, disturb or prejudice
the rights of any other Holders of Securities of such series, or to obtain or
to seek to obtain priority or preference over any other such Holders or to
enforce any right under this Indenture, except in the manner herein provided
and for the equal and proportionate benefit of all the Holders of all
Securities of such series.
<PAGE> 49
42
Section 508. Unconditional Right of Securityholders to
Receive Principal, Premium and Interest. Notwithstanding any other provisions
in this Indenture, the Holder of any Security shall have the right, which is
absolute and unconditional, to receive payment of the principal of (and
premium, if any) and (subject to Section 307) interest on such Security on the
respective Stated Maturities expressed in such Security (or, in the case of
redemption or repayment, on the Redemption Date or Repayment Date, as the case
may be) and to institute suit for the enforcement of any such payment, and such
right shall not be impaired without the consent of such Holder.
Section 509. Restoration of Rights and Remedies. If the
Trustee or any Securityholder has instituted any proceeding to enforce any
right or remedy under this Indenture and such proceeding has been discontinued
or abandoned for any reason, then and in every such case the Company, the
Trustee and the Securityholders 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 the
Securityholders shall continue as though no such proceeding had been
instituted.
Section 510. Rights and Remedies Cumulative. No right or
remedy herein conferred upon or reserved to the Trustee or to the
Securityholders is intended to be exclusive of any other right or remedy, and
every right and remedy shall, to the extent permitted by law, 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 prevent the concurrent
assertion or employment of any other appropriate right or remedy.
Section 511. Delay or Omission Not Waiver. No delay or
omission of the Trustee or of any Holder of any Security 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 the Securityholders may be exercised from time to time, and as often as
may be deemed expedient, by the Trustee or by the Securityholders, as the case
may be.
Section 512. Control by Securityholders. 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,
provided that
(1) the Trustee shall have the right to decline to follow any
such direction if the Trustee, being advised by counsel, determines
<PAGE> 50
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that the action so directed may not lawfully be taken or would
conflict with this Indenture or if the Trustee in good faith shall, by
a Responsible Officer, determine that the proceedings so directed
would involve it in personal liability or be unjustly prejudicial to
the Holders not taking part in such direction, and
(2) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction.
Section 513. Waiver of Past Defaults. The Holders of not
less than a majority in principal amount of the Outstanding Securities of any
series may on behalf of the Holders of all the Securities of such series waive
any past default hereunder with respect to such series and its consequences,
except a default not theretofore cured
(1) in the payment of the principal of (or premium, if any) or
interest on any Security of such series, or in the payment of any
sinking or purchase fund or analogous obligation with respect to the
Securities of such series, or
(2) in respect of a covenant or provision hereof which under
Article Nine cannot be modified or amended without the consent of the
Holder of each Outstanding Security of such series.
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 514. 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 an 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 shall not apply to any suit instituted by the Trustee, to any suit
instituted by any Securityholder, or group of Securityholders, holding in the
aggregate more than 10% in principal amount of the Outstanding Securities of
any series to which the suit relates, or to any suit instituted by any
Securityholder for the enforcement of the payment of the principal of (or
premium, if any) or interest on any Security on or after the respective Stated
Maturities expressed in such Security (or, in the case of redemption or
repayment, on or after the Redemption Date or Repayment Date).
<PAGE> 51
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Section 515. Waiver of Stay or Extension Laws. The Company
covenants (to the extent that it may lawfully do so) that it will not at any
time insist upon, or plead, or in any manner whatsoever claim or take the
benefit or advantage of, any 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 the Company (to the extent that it may lawfully do so)
hereby expressly waives 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.
ARTICLE SIX
The Trustee
Section 601. Certain Duties and Responsibilities. (a)
Except during the continuance of an Event of Default with respect to any series
of Securities,
(1) the Trustee undertakes to perform such duties and only
such duties as are specifically set forth in this Indenture with
respect to the Securities of such series, and no implied covenants or
obligations shall be read into this Indenture against the Trustee; and
(2) in the absence of bad faith on its part, the Trustee may,
with respect to Securities of such series, 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.
(b) In case an Event of Default with respect to any series of
Securities has occurred and is continuing, the Trustee shall exercise with
respect to the Securities of such series 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 person would exercise or use under the circumstances in
the conduct of such person's own affairs.
(c) No provision of this Indenture shall be construed to
relieve the Trustee from liability for its own negligent action, its own
negligent failure to act, or its own willful misconduct, except that
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(1) this Subsection shall not be construed to limit the effect
of Subsection (a) of this Section;
(2) the Trustee shall not be liable for any error of judgment
made in good faith by a Responsible Officer, unless it shall be proved
that the Trustee was negligent in ascertaining the pertinent facts;
(3) the Trustee shall not be liable with respect to any action
taken or omitted to be taken by it in good faith in accordance with
the direction of the Holders of a majority in principal amount of the
Outstanding Securities of any series relating to the time, method and
place of conducting any proceeding for any remedy available to the
Trustee, or exercising any trust or power conferred upon the Trustee,
under this Indenture with respect to the Securities of such series;
and
(4) 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.
(d) Whether or not therein 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 602. Notice of Defaults. Within 90 days after the
occurrence of any default hereunder with respect to Securities of any series,
the Trustee shall transmit by mail to all Securityholders of such series, as
their names and addresses appear in the Security Register, notice of such
default hereunder known to 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 on any
Security of such series or in the payment of any sinking or purchase fund
installment or analogous obligation with respect to Securities 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 interests of the Securityholders of such
series; and provided, further, that in the case of any default of the character
specified in Section 501(4) with respect to Securities of such series no such
notice to Securityholders of such series shall be given until at least 90 days
after the occurrence thereof. For the purpose of this Section, the term
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"default", with respect to Securities of any series, 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.
Section 603. Certain Rights of Trustee. Except as otherwise
provided in Section 601:
(a) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, debenture or
other paper or document believed by it to be genuine and to have been signed or
presented by the proper party or parties;
(b) any request or direction of the Company mentioned herein
shall be sufficiently evidenced by a Company Request or Company Order and any
resolution of the Board of Directors may be sufficiently evidenced by a Board
Resolution;
(c) 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 be herein specifically prescribed) may, in the absence of bad faith on
its part, rely upon an Officers' Certificate;
(d) the Trustee may consult with counsel of its selection and
the written 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;
(e) the Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Indenture at the request or
direction of any of the Securityholders pursuant to this Indenture, unless such
Securityholders shall have offered to the Trustee reasonable security or
indemnity against the costs, expenses and liabilities which might be incurred
by it in compliance with such request or direction;
(f) 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 or other paper or document, but the Trustee, in its discretion, may
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 the books, records and premises
of the Company, personally or by agent or attorney; and
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(g) 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.
Section 604. Not Responsible for Recitals or Issuance of
Securities. The recitals contained herein and in the Securities, except the
certificates of authentication, shall be taken as the statements of the
Company, and the Trustee assumes no responsibility for their correctness. The
Trustee makes no representations as to the validity or sufficiency of this
Indenture or of the Securities. The Trustee shall not be accountable for the
use or application by the Company of Securities or the proceeds thereof.
Section 605. May Hold Securities. The Trustee, any Paying
Agent, the Security Registrar or any other agent of the Company, in its
individual or any other capacity, may
become the owner or pledgee of Securities and, subject to Sections 608 and 613,
may otherwise deal with the Company with the same rights it would have if it
were not Trustee, Paying Agent, Security Registrar or such other agent.
Section 606. Money Held in Trust. Money held by the Trustee
in trust hereunder need not be segregated from other funds except to the extent
required by law. The Trustee shall be under no liability for interest on any
money received by it hereunder except as otherwise agreed with the Company.
Section 607. Compensation and Reimbursement. The Company
agrees
(1) to pay to the Trustee from time to time such compensation
for all services rendered by it hereunder as the parties shall agree
from time to time (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 (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 its negligence or bad faith; and
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(3) to indemnify the Trustee for, and to hold it harmless
against, any loss, liability or expense incurred without negligence or
bad faith on its part, arising out of or in connection with the
acceptance or administration of this trust, including the costs and
expenses of defending itself against any claim or liability in
connection with the exercise or performance of any of its powers or
duties hereunder.
As security for the performance of the obligations of the
Company under this Section the Trustee shall have a lien prior to the
Securities 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,
if any) or interest on particular Securities.
Section 608. Disqualification; Conflicting Interests. The
Trustee for the Securities of any series issued hereunder shall be subject to
the provisions of Section 310(b) of the Trust Indenture Act during the period
of time provided for therein. In determining whether the Trustee has a
conflicting interest as defined in Section 310(b) of the Trust Indenture Act
with respect to the Securities of any series, there shall be excluded for
purposes of the conflicting interest provisions of such Section 310(b) the
Securities of every other series issued under this Indenture (i) every series
of securities issued under the Indenture dated as of __________ __, 199_,
between Clear Channel Communications, Inc. and _________________, (ii) every
series of securities issued under the Indenture dated as of _________ __, 199_,
between Clear Channel Communications, Inc. and ____________. Nothing herein
shall prevent the Trustee from filing with the Commission the application
referred to in the second to last paragraph of Section 310(b) of the Trust
Indenture Act.
Section 609. Corporate Trustee Required; Eligibility. There
shall at all times be a Trustee hereunder with respect to each series of
Securities, which shall be a corporation organized and doing business under the
laws of the United States of America or of any State, authorized under such
laws to exercise corporate trust powers, having a combined capital and surplus
of at least $50,000,000, and subject to supervision or examination by Federal
or State authority. If such corporation publishes reports of condition at
least annually, pursuant to law or to the requirements of the aforesaid
supervising or examining authority, then for the purposes of this Section, the
combined capital and surplus of such corporation shall be deemed to be its
combined capital and surplus as set forth in its most recent report of
condition so published. If at any time the Trustee with respect to any series
of Securities 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.
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Section 610. Resignation and Removal; Appointment of
Successor. (a) 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 under Section 611.
(b) The Trustee may resign with respect to any series of
Securities at any time by giving written notice thereof to the Company. If an
instrument of acceptance by a successor Trustee 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.
(c) The Trustee may be removed with respect to any series of
Securities at any time by Act of the Holders of a majority in principal amount
of the Outstanding Securities of that series, delivered to the Trustee and to
the Company. If an instrument of acceptance by a successor Trustee 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.
(d) If at any time:
(1) the Trustee shall fail to comply with Section 310(b) of
the Trust Indenture Act pursuant to Section 608(a) with respect to any
series of Securities after written request therefor by the Company or
by any Securityholder who has been a bona fide Holder of a Security of
that series for at least 6 months, or
(2) the Trustee shall cease to be eligible under Section 609
with respect to any series of Securities and shall fail to resign
after written request therefor by the Company or by any such
Securityholder, or
(3) the Trustee shall become incapable of acting with respect
to any series of Securities, or
(4) the Trustee 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 a Board Resolution may remove the
Trustee, with respect to the series, or in the case of Clause (4), with respect
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to all series, or (ii) subject to Section 514, any Securityholder who has been
a bona fide Holder of a Security of such series for at least 6 months may, on
behalf of himself and all others similarly situated, petition any court of
competent jurisdiction for the removal of the Trustee and the appointment of a
successor Trustee with respect to the series, or, in the case of Clause (4),
with respect to all series.
(e) If the Trustee shall resign, be removed or become
incapable of acting with respect to any series of Securities, or if a vacancy
shall occur in the office of the Trustee with respect to any series of
Securities for any cause, the Company, by a Board Resolution, shall promptly
appoint a successor Trustee for that series of Securities. If, within one year
after such resignation, removal or incapacity, or the occurrence of such
vacancy, a successor Trustee with respect to such series of Securities 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, become the successor Trustee with respect to
such series and supersede the successor Trustee appointed by the Company with
respect to such series. If no successor Trustee with respect to such series
shall have been so appointed by the Company or the Securityholders of such
series and accepted appointment in the manner hereinafter provided, any
Securityholder who has been a bona fide Holder of a Security of that series for
at least 6 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 such series.
(f) The Company shall give notice of each resignation and
each removal of the Trustee with respect to any series and each appointment of
a successor Trustee with respect to any series by mailing written notice of
such event by first-class mail, postage prepaid, to the Holders of Securities
of that series as their names and addresses appear in the Security Register.
Each notice shall include the name of the successor Trustee and the address of
its principal Corporate Trust Office.
Section 611. Acceptance of Appointment by Successor. Every
successor Trustee appointed hereunder shall execute, acknowledge and deliver to
the Company and to the predecessor Trustee an instrument accepting such
appointment, and thereupon the resignation or removal of the predecessor
Trustee shall become effective with respect to any series as to which it is
resigning or being removed as Trustee, and such successor Trustee, without any
further act, deed or conveyance, shall become vested with all the rights,
powers, trusts and duties of the predecessor Trustee with respect to any such
series; but, on request of the Company or the successor Trustee, such
predecessor Trustee shall, upon payment of its reasonable charges, if any,
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execute and deliver an instrument transferring to such successor Trustee all
the rights, powers and trusts of the predecessor Trustee, and shall duly
assign, transfer and deliver to such successor Trustee all property and money
held by such predecessor Trustee hereunder with respect to all or any such
series, subject nevertheless to its lien, if any, provided for in Section 607.
Upon request of any such successor Trustee, the Company 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.
In case of the appointment hereunder of a successor Trustee
with respect to the Securities of one or more (but not all) series, the
Company, the predecessor Trustee and each successor Trustee with respect to the
Securities of any applicable series shall execute and deliver an indenture
supplemental hereto which shall contain such provisions as shall be deemed
necessary or desirable to confirm that all the rights, powers, trusts and
duties of the predecessor Trustee with respect to the Securities of any series
as to which the predecessor Trustee is not being succeeded shall continue to be
vested in the predecessor Trustee, and 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 and 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.
No successor Trustee with respect to any series of Securities
shall accept its appointment unless at the time of such acceptance such
successor Trustee shall be qualified and eligible with respect to that series
under this Article.
Section 612. 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,
provided such corporation shall be otherwise qualified and eligible under this
Article, 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 613. Preferential Collection of Claims Against
Company. (a) Subject to Subsection (b) of this Section, if the Trustee shall
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be or shall become a creditor, directly or indirectly, secured or unsecured, of
the Company within 3 months prior to a default, as defined in Subsection (c) of
this Section, or subsequent to such a default, then, unless and until such
default shall be cured, the Trustee shall set apart and hold in a special
account for the benefit of the Trustee individually, the Holders of the
Securities and the holders of other indenture securities (as defined in
Subsection (c) of this Section):
(1) an amount equal to any and all reductions in the amount
due and owing upon any claim as such creditor in respect of principal
or interest, effected after the beginning of such 3-month period and
valid as against the Company and its other creditors, except any such
reduction resulting from the receipt or disposition of any property
described in paragraph (2) of this Subsection, or from the exercise of
any right of set-off which the Trustee could have exercised if a
petition in bankruptcy had been filed by or against the Company upon
the date of such default; and
(2) all property received by the Trustee in respect of any
claim as such creditor, either as security therefor, or in
satisfaction or composition thereof, or otherwise, after the beginning
of such 3-month period, or an amount equal to the proceeds of any such
property, if disposed of, subject, however, to the rights, if any, of
the Company and its other creditors in such property or such proceeds.
Nothing herein contained, however, shall affect the right of the Trustee
(A) to retain for its own account (i) payments made
on account of any such claim by any Person (other than the
Company) who is liable thereon, and (ii) the proceeds of the
bona fide sale of any such claim by the Trustee to a third
person, and (iii) distributions made in cash, securities or
other property in respect of claims filed against the Company
in bankruptcy or receivership or in proceedings for
reorganization pursuant to the Federal Bankruptcy Act or
applicable State law;
(B) to realize, for its own account, upon any
property held by it as security for any such claim, if such
property was so held prior to the beginning of such 3-month
period;
(C) to realize, for its own account, but only to the
extent of the claim hereinafter mentioned, upon any property
held by it as security for any such claim, if such claim was
created after the beginning of such 3-month period and such
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property was received as security therefor simultaneously with
the creation thereof, and if the Trustee shall sustain the
burden of proving that at the time such property was so
received the Trustee had no reasonable cause to believe that a
default as defined in Subsection (c) of this Section would
occur within 3 months; or
(D) to receive payment on any claim referred to in
paragraph (B) or (C), against the release of any property held
as security for such claim as provided in paragraph (B) or
(C), as the case may be, to the extent of the fair value of
such property.
For the purposes of paragraphs (B), (C) and (D), property
substituted after the beginning of such 3-month period for property held as
security at the time of such substitution shall, to the extent of the fair
value of the property released, have the same status as the property released,
and, to the extent that any claim referred to in any of such paragraphs is
created in renewal of or in substitution for or for the purpose of repaying or
refunding any pre-existing claim of the Trustee as such creditor, such claim
shall have the same status as such pre-existing claim.
If the Trustee shall be required to account, the funds and
property held in such special account and the proceeds thereof shall be
apportioned between the Trustee, the Securityholders and the holders of other
indenture securities in such manner that the Trustee, the Securityholders and
the holders of other indenture securities realize, as a result of payments from
such special account and payments of dividends on claims filed against the
Company in bankruptcy or receivership or in proceedings for reorganization
pursuant to the Federal Bankruptcy Act or applicable State law, the same
percentage of their respective claims, figured before crediting to the claim of
the Trustee anything on account of the receipt by it from the Company of the
funds and property in such special account and before crediting to the
respective claims of the Trustee and the Securityholders and the holders of
other indenture securities dividends on claims filed against the Company in
bankruptcy or receivership or in proceedings for reorganization pursuant to the
Federal Bankruptcy Act or applicable State law, but after crediting thereon
receipts on account of the indebtedness represented by their respective claims
from all sources other than from such dividends and from the funds and property
so held in such special account. As used in this paragraph, with respect to any
claim, the term "dividends" shall include any distribution with respect to such
claim, in bankruptcy or receivership or proceedings for reorganization
pursuant to the Federal Bankruptcy Act or applicable State law, whether such
distribution is made in cash, securities, or other property, but shall not
include any such distribution with respect to the secured portion, if any, of
such claim. The court in which such bankruptcy, receivership or proceedings for
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reorganization is pending shall have jurisdiction (i) to apportion between the
Trustee and the Securityholders and the holders of other indenture securities
in accordance with the provisions of this paragraph, the funds and property
held in such special account and proceeds thereof, or (ii) in lieu of such
apportionment, in whole or in part, to give to the provisions of this paragraph
due consideration in determining the fairness of the distributions to be made
to the Trustee and the Securityholders and the holders of other indenture
securities with respect to their respective claims, in which event it shall not
be necessary to liquidate or to appraise the value of any securities or other
property held in such special account or as security for any such claim, or to
make a specific allocation of such distributions as between the secured and
unsecured portions of such claims, or otherwise to apply the provisions of this
paragraph as a mathematical formula.
Any Trustee which has resigned or been removed after the
beginning of such 3-month period shall be subject to the provisions of this
Subsection as though such resignation or removal had not occurred. If any
Trustee has resigned or been removed prior to the beginning of such 3-month
period, it shall be subject to the provisions of this Subsection if and only if
the following conditions exist:
(i) the receipt of property or reduction of claim,
which would have given rise to the obligation to account, if
such Trustee had continued as Trustee, occurred after the
beginning of such 3-month period; and
(ii) such receipt of property or reduction of claim
occurred within 3 months after such resignation or removal.
(b) There shall be excluded from the operation of Subsection
(a) of this Section a creditor relationship arising from
(1) the ownership or acquisition of securities issued under
any indenture, or any security or securities having a maturity of one
year or more at the time of acquisition by the Trustee;
(2) advances authorized by a receivership or bankruptcy court
of competent jurisdiction, or by this Indenture, for the purpose of
preserving any property which shall at any time be subject to the lien
of this Indenture or of discharging tax liens or other prior liens or
encumbrances thereon, if notice of such advances and of the
circumstances surrounding the making thereof is given to the
Securityholders at the time and in the manner provided in this
Indenture;
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(3) disbursements made in the ordinary course of business in
the capacity of trustee under an indenture, transfer agent, registrar,
custodian, paying agent, fiscal agent or depositary, or other similar
capacity;
(4) an indebtedness created as a result of services rendered
or premises rented; or an indebtedness created as a result of goods or
securities sold in a cash transaction as defined in Subsection (c) of
this Section;
(5) the ownership of stock or of other securities of a
corporation organized under the provisions of Section 25(a) of the
Federal Reserve Act, as amended, which is directly or indirectly a
creditor of the Company; or
(6) the acquisition, ownership, acceptance or negotiation of
any drafts, bills of exchange, acceptances or obligations which fall
within the classification of self liquidating paper as defined in
Subsection (c) of this Section.
(c) For the purposes of this Section only:
(1) The term "default" means any failure to make payment in
full of the principal of or interest on any of the Securities or upon
the other indenture securities when and as such principal or interest
becomes due and payable.
(2) The term "other indenture securities" means securities
upon which the Company is an obligor outstanding under any other
indenture (i) under which the Trustee is also trustee, (ii) which
contains provisions substantially similar to the provisions of this
Section, and (iii) under which a default exists at the time of the
apportionment of the funds and property held in such special account.
(3) The term "cash transaction" means any transaction in
which full payment for goods or securities sold is made within 7 days
after delivery of the goods or securities in currency or in checks or
other orders drawn upon banks or bankers and payable upon demand.
(4) The term "self-liquidating paper" means any draft, bill
of exchange, acceptance or obligation which is made, drawn, negotiated
or incurred by the Company for the purpose of financing the purchase,
processing, manufacturing, shipment, storage or sale of goods, wares
or merchandise and which is secured by documents evidencing title to,
possession of, or a lien upon, the goods, wares or merchandise or the
receivables or proceeds arising from the sale of the goods, wares or
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merchandise previously constituting the security, provided the
security is received by the Trustee simultaneously with the creation
of the creditor relationship with the Company arising from the making,
drawing, negotiating or incurring of the draft, bill of exchange,
acceptance or obligation.
(5) The term "Company" means any obligor upon the Securities.
Section 614. Appointment of Authenticating Agent. At any
time when any of the Securities remain Outstanding the Trustee, with the
approval of the Company, may appoint an Authenticating Agent or Agents with
respect to one or more series of Securities which shall be authorized to act on
behalf of the Trustee to authenticate Securities of such series issued upon
exchange, registration of transfer or partial redemption thereof or pursuant to
Section 306, 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 shall be
acceptable to the Company and shall at all times be a corporation organized and
doing business under the laws of the United States of America, any State
thereof or the District of Columbia, authorized under such laws to act as an
Authenticating Agent, having a combined capital and surplus of not less than
$50,000,000 and, if other than the Company itself, subject to supervision or
examination by Federal or State authority. If such Authenticating Agent
publishes reports of condition at least annually, pursuant to law or to the
requirements of said supervising or examining authority, then for the purposes
of this Section, the combined capital and surplus of such Authenticating Agent
shall be deemed to be its combined capital and surplus as set forth in its most
recent report of condition so published. If at any time an Authenticating Agent
shall cease to be eligible in accordance with the provisions of this Section,
such Authenticating Agent 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 succeeding to the
corporate agency or corporate trust business of an Authenticating Agent, shall
continue to be an Authenticating Agent, 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.
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An Authenticating Agent may resign at any time by giving
written notice thereof to the Trustee and, if other than the Company, to 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, if
other than the Company, to 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, with the approval of the Company, may
appoint a successor Authenticating Agent which shall be acceptable to the
Company and shall mail written notice of such appointment by first-class mail,
postage prepaid, to all Holders of Securities of the series with respect to
which such Authenticating Agent will serve, as their names and addresses appear
in the Security Register. 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 Trustee agrees to pay to each Authenticating Agent (other
than an Authenticating Agent appointed at the request of the Company from time
to time) reasonable compensation for its services under this Section, and the
Trustee shall be entitled to be reimbursed for such payments, subject to the
provisions of Section 607.
If an appointment with respect to one or more series is made
pursuant to this Section, the Securities of such series may have endorsed
thereon, in addition to the Trustee's certificate of authentication, an
alternate certificate of authentication in the following form:
This is one of the Securities of the series designated therein
referred to in the within-mentioned Indenture.
THE BANK OF NEW YORK,
as Trustee
By:
---------------------------------
As Authenticating Agent
Date: By:
--------------------------- ---------------------------------
Authorized Signatory
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ARTICLE SEVEN
Securityholders' Lists and Reports by
Trustee and Company
Section 701. Company To Furnish Trustee Names and Addresses
of Securityholders. The Company will furnish or cause to be furnished to the
Trustee
(a) semi-annually, not more than 15 days after each Regular
Record Date, in each year in such form as the Trustee may reasonably
require, a list of the names and addresses of the Holders of
Securities of such series as of such date, and
(b) at such other times as the Trustee may request in writing,
within 30 days after the receipt by the Company 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,
excluding from any such list names and addresses received by the Trustee in its
capacity as Security Registrar.
Section 702. Preservation of Information; Communications to
Securityholders. (a) The Trustee shall preserve, in as current a form as is
reasonably practicable, the names and addresses of Holders of Securities
contained in the most recent list furnished to the Trustee as provided in
Section 701 and the names and addresses of Holders of Securities received by
the Trustee in its capacity as Security Registrar. The Trustee may destroy any
list furnished to it as provided in Section 701 upon receipt of a new list so
furnished.
(b) If 3 or more Holders of Securities of any series
(hereinafter referred to as "applicants") apply in writing to the Trustee, and
furnish to the Trustee reasonable proof that each such applicant has owned a
Security of such series for a period of at least 6 months preceding the date of
such application, and such application states that the applicants desire to
communicate with other Holders of Securities of such series or with the Holders
of all Securities with respect to their rights under this Indenture or under
such Securities and is accompanied by a copy of the form of proxy or other
communication which such applicants propose to transmit, then the Trustee
shall, within 5 Business Days after the receipt of such application, at its
election, either
(i) afford such applicants access to the information preserved
at the time by the Trustee in accordance with Section 702(a), or
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(ii) inform such applicants as to the approximate number of
Holders of Securities of such series or all Securities, as the case
may be, whose names and addresses appear in the information preserved
at the time by the Trustee in accordance with Section 702(a), and as
to the approximate cost of mailing to such Securityholders the form of
proxy or other communication, if any, specified in such application.
If the Trustee shall elect not to afford such applicants
access to such information, the Trustee shall, upon the written request of such
applicants, mail to each Holder of a Security of such series or to all
Securityholders, as the case may be, whose names and addresses appear in the
information preserved at the time by the Trustee in accordance with Section
702(a), a copy of the form of proxy or other communication which is
specified in such request, with reasonable promptness after a tender to the
Trustee of the material to be mailed and of payment, or provision for the
payment, of the reasonable expenses of mailing, unless, within 5 days after
such tender, the Trustee shall mail to such applicants and file with the
Commission, together with a copy of the material to be mailed, a written
statement to the effect that, in the opinion of the Trustee, such mailing would
be contrary to the best interests of the Holders of Securities of such series
or all Securityholders, as the case may be, or would be in violation of
applicable law. Such written statement shall specify the basis of such opinion.
If the Commission, after opportunity for a hearing upon the objections
specified in the written statement so filed, shall enter an order refusing to
sustain any of such objections or if, after the entry of an order sustaining
one or more of such objections, the Commission shall find, after notice and
opportunity for hearing, that all the objections so sustained have been met and
shall enter an order so declaring, the Trustee shall mail copies of such
material to all Securityholders of such series or all Securityholders, as the
case may be, with reasonable promptness after the entry of such order and the
renewal of such tender; otherwise the Trustee shall be relieved of any
obligation or duty to such applicants respecting their application.
(c) Every Holder of Securities, by receiving and holding the
same, agrees with the Company and the Trustee that neither the Company nor the
Trustee shall be held accountable by reason of the disclosure of any such
information as to the names and addresses of the Holders of Securities in
accordance with Section 702(b), regardless of the source from which such
information was derived, and that the Trustee shall not be held accountable by
reason of mailing any material pursuant to a request made under Section 702(b).
Section 703. Reports by Trustee. (a) The term "reporting
date" as used in this Section means May 15 of each year. Within 60 days after
the reporting date in each year, beginning in 199__, the Trustee shall transmit
by mail to all Securityholders, as their names and addresses appear in the
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Security Register, a brief report dated as of such reporting date with respect
to any of the following events which may have occurred during the 12 months
preceding the date of such report (but if no such event has occurred within
such period no report need be transmitted):
(1) any change to its eligibility under Section 609 and its
qualifications under Section 608;
(2) the creation of or any material change to a relationship
specified in Section 310(b)(1) through Section 310(b)(10) of the Trust
Indenture Act;
(3) the character and amount of any advances (and if the
Trustee elects so to state, the circumstances surrounding the making
thereof) made by the Trustee (as such) which remain unpaid on the date
of such report, and for the reimbursement of which it claims or may
claim a lien or charge, prior to that of Securities of any series, on
any property or funds held or collected by it as Trustee, except that
the Trustee shall not be required (but may elect) to report such
advances if such advances so remaining unpaid aggregate not more than
1/2 of 1% of the principal amount of the Securities of such series
outstanding on the date of such report;
(4) any change to the amount, interest rate and maturity date
of all other indebtedness owing by the Company (or by any other
obligor on the Securities) to the Trustee in its individual capacity,
on the date of such report, with a brief description of any property
held as collateral security therefor, except an indebtedness based
upon a creditor relationship arising in a manner described in Section
613(b)(2), (3), (4) or (6);
(5) any change to the property and funds, if any, physically
in the possession of the Trustee as such on the date of such report;
(6) any additional issue of Securities which the Trustee has
not previously reported; and
(7) any action taken by the Trustee in the performance of its
duties hereunder which it has not previously reported and which in its
opinion materially affects the Securities, except action in respect of
a default, notice of which has been or is to be withheld by the
Trustee in accordance with Section 602.
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(b) The Trustee shall transmit by mail to all
Securityholders, as their names and addresses appear in the Security Register,
a brief report with respect to the character and amount of any advances (and if
the Trustee elects so to state, the circumstances surrounding the making
thereof) made by the Trustee (as such) since the date of the last report
transmitted pursuant to Subsection (a) of this Section (or if no such
report has yet been so transmitted, since the date of execution of this
instrument) for the reimbursement of which it claims or may claim a lien or
charge, prior to that of the Securities of any series, on property or funds
held or collected by it as Trustee, and which it has not previously reported
pursuant to this Subsection, except that the Trustee shall not be required (but
may elect) to report such advances if such advances remaining unpaid at any
time aggregate 10% or less of the principal amount of the Securities
Outstanding of such series at such time, such report to be transmitted within
90 days after such time.
(c) A copy of each such report shall, at the time of such
transmission to Securityholders, be filed by the Trustee with each stock
exchange upon which the Securities are listed, and also with the Commission.
The Company will notify the Trustee when the Securities are listed on any stock
exchange.
Section 704. Reports by Company. The Company will
(1) file with the Trustee, within 15 days after the Company 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 may
be required to file with the Commission pursuant to Section 13 or
Section 15(d) of the Securities Exchange Act of 1934; or, if the
Company is not required to file information, documents or reports
pursuant to either of said Sections, then it will 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 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 with the conditions and covenants
of this Indenture as may be required from time to time by such rules
and regulations; and
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(3) transmit by mail to all Securityholders, as their names
and addresses appear in the Security Register, within 30 days after
the filing thereof with the Trustee, such summaries of any
information, documents and reports required to be filed by the Company
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.
ARTICLE EIGHT
Consolidation, Merger, Conveyance or Transfer
Section 801. Company May Consolidate, etc., only on Certain
Terms. The Company shall not consolidate with or merge into any other
corporation or convey or transfer its properties and assets substantially as an
entirety to any Person, unless:
(1) the corporation formed by such consolidation or into which
the Company is merged or the Person which acquires by conveyance or
transfer the properties and assets of the Company substantially as an
entirety shall be a corporation organized and existing under the laws
of the United States of America or any State or the District of
Columbia, and shall expressly assume, by an indenture supplemental
hereto, executed and delivered to the Trustee, in form satisfactory to
the Trustee, the due and punctual payment of the principal of (and
premium, if any) and interest on all the Securities and the
performance of every covenant of this Indenture on the part of the
Company 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 happened and be
continuing; and
(3) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel each stating that such
consolidation, merger, conveyance or transfer and such supplemental
indenture comply with this Article and that all conditions precedent
herein provided for relating to such transaction have been complied
with.
Section 802. Successor Corporation Substituted. Upon any
consolidation or merger, or any conveyance or transfer of the properties and
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assets of the Company substantially as an entirety in accordance with Section
801, the successor corporation formed by such consolidation or into which the
Company is merged or to which such conveyance or transfer 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
corporation had been named as the Company herein. In the event of any such
conveyance or transfer, the Company as the predecessor corporation may be
dissolved, wound up or liquidated at any time thereafter.
ARTICLE NINE
Supplemental Indentures
Section 901. Supplemental Indentures Without Consent of
Securityholders. Without the consent of the Holders of any Securities, the
Company, when authorized by a Board Resolution, and the Trustee, at any time
and from time to time, may enter into one or more indentures supplemental
hereto, in form satisfactory to the Trustee, for any of the following purposes:
(1) to evidence the succession of another corporation to the
Company, and the assumption by any such successor of the covenants of
the Company herein and in the Securities contained; or
(2) to add to the covenants of the Company, or to surrender
any right or power herein conferred upon the Company, for the benefit
of the Holders of the Securities of any or all series (and if such
covenants or the surrender of such right or power are to be for the
benefit of less than all series of Securities, stating that such
covenants are expressly being included or such surrenders are
expressly being made solely for the benefit of one or more specified
series); or
(3) to cure any ambiguity, to correct or supplement any
provision herein which may be inconsistent with any other provision
herein, or to make any other provisions with respect to matters or
questions arising under this Indenture; or
(4) to add to this Indenture such provisions as may be
expressly permitted by the TIA, excluding, however, the provisions
referred to in Section 316(a)(2) of the TIA as in effect at the date
as of which this instrument was executed or any corresponding
provision in any similar federal statute hereafter enacted; or
(5) to establish any form of Security, as provided in Article
Two, and to provide for the issuance of any series of Securities as
provided in Article Three and to set forth the terms thereof, and/or
to add to the rights of the Holders of the Securities of any series;
or
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(6) to evidence and provide for the acceptance of appointment
by another corporation as a successor Trustee hereunder with respect
to one or more series of Securities 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 Section 611; or
(7) to add any additional Events of Default in respect of the
Securities of any or all series (and if such additional Events of
Default are to be in respect of less than all series of Securities,
stating that such Events of Default are expressly being included
solely for the benefit of one or more specified series); or
(8) to provide for the issuance of Securities in coupon as
well as fully registered form.
No supplemental indenture for the purposes identified in
Clauses (2), (3), (5) or (7) above may be entered into if to do so would
adversely affect the interest of the Holders of Securities of any series.
Section 902. Supplemental Indentures with Consent of
Securityholders. 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 or indentures, by Act of said Holders delivered to
the Company and the Trustee, the Company, when authorized by a Board
Resolution, and the Trustee may enter into an indenture 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 the Securities of each
such series under this Indenture; provided, however, that no such supplemental
indenture shall, without the consent of the Holder of each Outstanding Security
affected thereby,
(1) change the Maturity of the principal of, or the Stated
Maturity of any premium on, or any installment of interest on, any
Security, or reduce the principal amount thereof or the interest or
any premium thereon, or change the method of computing the amount of
principal thereof or interest thereon on any date or change any Place
of Payment where, or the coin or currency in which, any Security or
any premium or interest thereon is payable, or impair the right to
institute suit for the enforcement of any such payment on or after the
Maturity or the Stated Maturity, as the case may be, thereof (or, in
the case of redemption or repayment, on or after the Redemption Date
or the Repayment Date, as the case may be); or
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(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
(3) modify any of the provisions of this Section or Section
513, 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.
A supplemental indenture which changes or eliminates any
covenant or other provision of this Indenture which has expressly been included
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.
It shall not be necessary for any Act of Securityholders 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 903. Execution of Supplemental Indentures. In
executing, or accepting the additional trusts created by, any supplemental
indenture permitted by this Article or the modifications thereby of the trusts
created by this Indenture, the Trustee shall be entitled to receive, and
(subject to Section 601) 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. The Trustee may, but shall not
(except to the extent required in the case of a supplemental indenture entered
into under Section 901(4) or 901(6)) 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 904. 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
Securities theretofore or thereafter authenticated and delivered hereunder
shall be bound thereby to the extent provided therein.
Section 905. Conformity with Trust Indenture Act. Every
supplemental indenture executed pursuant to this Article shall conform to the
requirements of the TIA as then in effect.
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Section 906. Reference in Securities to Supplemental
Indentures. Securities 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 so modified as to conform, in the opinion of the
Trustee and the Board of Directors, to any such supplemental indenture may be
prepared and executed by the Company and authenticated and delivered by the
Trustee in exchange for Outstanding Securities.
ARTICLE TEN
Covenants
Section 1001. Payment of Principal, Premium and Interest.
With respect to each series of Securities, the Company will duly and punctually
pay the principal of (and premium, if any) and interest on such Securities in
accordance with their terms and this Indenture, and will duly comply with all
the other terms, agreements and conditions contained in, or made in the
Indenture for the benefit of, the Securities of such series.
Section 1002. Maintenance of Office or Agency. The Company
will maintain an office or agency in each Place of Payment where Securities may
be presented or surrendered for payment, where Securities may be surrendered
for transfer or exchange and where notices and demands to or upon the Company
in respect of the Securities and this Indenture may be served. The Company
will give prompt written notice to the Trustee of the location, and of any
change in the location, of such office or agency. If at any time the Company
shall fail to maintain such 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 principal Corporate Trust Office of the
Trustee, and the Company hereby appoints the Trustee its agent to receive all
such presentations, surrenders, notices and demands.
Section 1003. Money for Security Payments to be Held in
Trust. If the Company shall at any time act as its own Paying Agent for any
series of Securities, it will, on or before each due date of the principal of
(and premium, if any) or interest on, any of the Securities of such series,
segregate and hold in trust for the benefit of the Persons entitled thereto a
sum sufficient to pay the principal (and premium, if any) or interest so
becoming due until such sums shall be paid to such Persons or otherwise
disposed of as herein provided, and will promptly notify the Trustee of its
action or failure to act.
Whenever the Company shall have one or more Paying Agents for
any series of Securities, it will, on or prior to each due date of the
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principal of (and premium, if any) or interest on, any Securities of such
series, deposit with a Paying Agent a sum sufficient to pay the principal (and
premium, if any) or interest so becoming due, such sum to be held in trust for
the benefit of the Persons entitled to such principal (and premium, if any) or
interest, 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 will cause each Paying Agent other than the
Trustee for any series of Securities 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 will
(1) hold all sums held by it for the payment of principal of
(and premium, if any) or interest on 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 herein
provided;
(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 such payment of principal (and premium, if any) or interest on 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.
The Company may at any time, for the purpose of
obtaining the satisfaction and discharge of this Indenture with
respect to any series of Securities or for any other purpose, pay, or
by Company Order direct any Paying Agent to pay, to the Trustee all
sums held in trust by the Company or such Paying Agent in respect of
each and every series of Securities as to which it seeks to discharge
this Indenture or, if for any other purpose, all sums so held in trust
by the Company in respect of all Securities, such sums to be held by
the Trustee upon the same trusts 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 money.
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 (and
premium, if any) or interest on any Security of any series and remaining
unclaimed for two years after such principal (and premium, if any) or interest
has become due and payable shall be paid to the Company on Company Request, or
(if then held by the Company) shall be discharged from such trust; and the
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Holder of such Security shall thereafter, as an unsecured general creditor,
look only to the Company for payment thereof, and all liability of the Trustee
or such Paying Agent with respect to such trust money, and all liability of the
Company as trustee thereof, shall thereupon cease. The Trustee or such Paying
Agent, before being required to make any such repayment, may at the expense of
the Company mail to the Holders of the Securities as to which the money to be
repaid was held in trust, as their names and addresses appear in the Security
Register, a notice that such moneys remain unclaimed and that, after a date
specified in the notice, which shall not be less than 30 days from the date
on which the notice was first mailed to the Holders of the Securities as to
which the money to be repaid was held in trust, any unclaimed balance of such
moneys then remaining will be paid to the Company free of the trust formerly
impressed upon it.
The Company initially authorizes the Trustee to act as Paying
Agent for the Securities on its behalf. The Company may at any time and from
time to time authorize one or more Persons to act as Paying Agent in addition
to or in place of the Trustee with respect to any series of Securities issued
under this Indenture.
Section 1004. Statement as to Compliance. The Company will
deliver to the Trustee, within 120 days after the end of each fiscal year, a
written statement signed by the principal executive officer, principal
financial officer or principal accounting officer of the Company, stating that
(1) a review of the activities of the Company during such year
and of the Company's performance under this Indenture and under the
terms of the Securities has been made under his supervision; and
(2) to the best of his knowledge, based on such review, the
Company has complied with all conditions and covenants under this
Indenture through such year, or, if there has been a default in the
fulfillment of any such obligation, specifying each such default known
to him and the nature and status thereof.
For purposes of this Section 1004, compliance shall be
determined without regard to any grace period or requirement of notice provided
pursuant to the terms of this Indenture.
Section 1005. Corporate Existence. Subject to Article Eight
the Company will do or cause to be done all things necessary to preserve and
keep in full force and effect its corporate existence.
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Section 1006. Limitation on Mortgages. The Company will not,
nor will it permit any Restricted Subsidiary to, create, assume, incur or suffer
to exist (i) any Mortgage upon any stock or indebtedness of any Restricted
Subsidiary, whether owned on the date of this Indenture or hereafter acquired,
to secure any Debt of the Company or any other Person (other than the
Securities), and (ii) any Mortgage upon any Principal Property, whether owned or
leased on the date of this Indenture, or thereafter acquired, to secure any Debt
of the Company or any other person (other than the Securities) without in any
such case making effective provision whereby all of the Securities
Outstanding shall be directly secured equally and ratably with such Debt,
excluding, however, from the operation of the foregoing provisions of this
Section 1006 any Mortgage upon stock or indebtedness of any corporation
existing at the time such corporation becomes a Subsidiary, or existing upon
stock or indebtedness of a Subsidiary at the time of acquisition of such stock
or indebtedness, and any extension, renewal or replacement (or successive
extensions, renewals or replacements) in whole or in part of any such Mortgage;
provided, however, that the principal amount of Debt secured thereby shall not
exceed the principal amount of Debt so secured at the time of such extension,
renewal or replacement; and provided further, that such Mortgage shall be
limited to all or such part of the stock or indebtedness which secured the
Mortgage so extended, renewed or replaced.
Notwithstanding the foregoing, the Company may, and may permit
any Restricted Subsidiary to, create, assume, incur or suffer to exist (i) any
Permitted Mortgages and (ii) any Mortgage upon any Principal Property without
equally and ratably securing the Senior Debt Securities if the aggregate amount
of all Debt then outstanding secured by such Mortgage and all similar Mortgages
does not exceed 15% of the total consolidated stockholders' equity (including
preferred stock) of the Company as shown on the audited consolidated balance
sheet contained in the latest annual report to stockholders of the Company;
provided that Debt secured by Permitted Mortgages shall not be included in the
amount of such secured Debt.
Section 1007. Limitation on Sale and Leaseback Transactions.
The Company will not, nor will it permit any Restricted Subsidiary to, enter
into any arrangement with any person providing for the leasing by the Company
or a Restricted Subsidiary as lessee of any Principal Property (except for
temporary leases for a term, including renewals, of not more than three years),
which property has been or is to be sold or transferred by the Company or such
Restricted Subsidiary to such person (herein referred to as a "Sale-Leaseback
Transaction"), unless (i) such Sale-Leaseback Transaction occurs within 120
days from the date of acquisition of such Principal Property or the date of the
completion of construction or commencement of full operations on such Principal
Property, whichever is later, or (ii) the Company, within 120 days after such
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Sale-Leaseback Transaction, applies or causes to be applied to the retirement
of Funded Debt of the Company or any Subsidiary (other than Funded Debt of the
Company which by its terms or the terms of the instrument pursuant to which
it was issued is subordinate in right of payment to the Senior Debt Securities)
an amount not less than the net proceeds of the sale of such Principal
Property. Notwithstanding the foregoing provisions, the Company may, and may
permit any Restricted Subsidiary to, effect any Sale-Leaseback Transaction
involving any Principal Property, provided that the net sale proceeds from such
Sale-Leaseback Transaction, together with all Debt secured by Mortgages other
than Permitted Mortgages, does not exceed 15% of the total consolidated
stockholders' equity of the Company as shown on the audited consolidated
balance sheet contained in the latest annual report to stockholders of the
Company.
Section 1008. Waiver of Certain Covenants. The Company may
omit in respect of any series of Securities, in any particular instance, to
comply with any covenant or condition set forth in Section 1006, if before or
after the time for such compliance the Holders of at least a majority in
principal amount of the Securities at the time Outstanding of such series
shall, by Act of such Securityholders, either waive such compliance in such
instance or generally waive compliance with such covenant or condition, but no
such waiver shall extend to or affect such covenant or condition except to the
extent so expressly waived, and, until such waiver shall become effective, the
obligations of the Company and the duties of the Trustee in respect of any such
covenant or condition shall remain in full force and effect.
ARTICLE ELEVEN
Redemption of Securities
Section 1101. Applicability of Article. The Company may
reserve the right to redeem and pay before Stated Maturity all or any part of
the Securities of any series, either by optional redemption, sinking or
purchase fund or analogous obligation or otherwise, by provision therefor in
the form of Security for such series established and approved pursuant to
Section 202 and on such terms as are specified in such form or in the Board
Resolution or indenture supplemental hereto with respect to Securities of such
series as provided in Section 301. Redemption of Securities of any series
shall be made in accordance with the terms of such Securities and, to the
extent that this Article does not conflict with such terms, the succeeding
Sections of this Article.
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Section 1102. Election to Redeem; Notice to Trustee. The
election of the Company to redeem any Securities redeemable at the election of
the Company shall be evidenced by, or made pursuant to authority granted by, a
Board Resolution. In case of any redemption at the election of the Company of
any Securities of any series, 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.
In the case of any redemption of Securities (i) prior to the
expiration of any restriction on such redemption provided in the terms of such
Securities or elsewhere in this Indenture, or (ii) pursuant to an election of
the Company which is subject to a condition specified in the terms of such
Securities, the Company shall furnish the Trustee with an Officers' Certificate
evidencing compliance with such restriction or condition.
Section 1103. Selection by Trustee of Securities to Be
Redeemed. If less than all the Securities of like tenor and terms of any
series 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 include provision for the selection for redemption of portions of the
principal of Securities of such series of a denomination larger than the
minimum authorized denomination for Securities of that series. Unless
otherwise provided in the terms of a particular series of Securities, the
portions of the principal of Securities so selected for partial redemption
shall be equal to the minimum authorized denomination of the Securities of such
series, or an integral multiple thereof, and the principal amount which remains
outstanding shall not be less than the minimum authorized denomination for
Securities of such series. If less than all the Securities of unlike tenor and
terms of a series are to be redeemed, the particular Securities to be redeemed
shall be selected by the Company.
The Trustee shall promptly notify the Company in writing of
the Securities selected for redemption and, in the case of any Security
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 Security redeemed or to be redeemed only in
part, to the portion of the principal of such Security which has been or is to
be redeemed.
Section 1104. Notice of Redemption. Notice of redemption
shall be given by first-class mail, postage prepaid, mailed not less than 30
nor more than 60 days prior to the Redemption Date, to each holder of
Securities to be redeemed, at his address appearing in the Security Register.
<PAGE> 79
72
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, including CUSIP numbers, (and, in
the case of partial redemption, the respective principal amounts) of
the Securities to be redeemed, from the Holder to whom the notice is
given;
(4) that on the Redemption Date the Redemption Price will
become due and payable upon each such Security, and that interest, if
any, thereon shall cease to accrue from and after said date;
(5) the place where such Securities are to be surrendered for
payment of the Redemption Price, which shall be the office or agency
of the Company in the Place of Payment; and
(6) that the redemption is on account of a sinking or purchase
fund, or other analogous obligation, if that be the case.
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. Such
notice shall be deemed to have been given to each Holder if sent in accordance
with Section 105 hereof.
Section 1105. Deposit of Redemption Price. On or prior to
10:00 a.m. on any Redemption Date, the Company shall deposit 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 1003) an amount of money
sufficient to pay the Redemption Price of all the Securities which are to be
redeemed on that date.
Section 1106. 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
<PAGE> 80
73
default in the payment of the Redemption Price) such Securities shall cease to
bear interest. Upon surrender of such Securities for redemption in accordance
with the notice, such Securities shall be paid by the Company at the Redemption
Price. Installments of interest the Stated Maturity of which is on or prior to
the Redemption Date shall be payable to the Holders of such Securities
registered as such on the relevant Regular Record Dates according to their
terms and the provisions of Section 307.
If any Security called for redemption shall not be so paid
upon surrender thereof for redemption, the principal shall, until paid, bear
interest from the Redemption Date at the rate borne by the Security, or as
otherwise provided in such Security.
Section 1107. Securities Redeemed in Part. Any Security
which is to be redeemed only in part shall be surrendered at the office or
agency of the Company in the Place of Payment with respect to that series
(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 Security
or Securities of the same series and Stated Maturity and of like tenor and
terms, of any authorized denomination as requested by such Holder in aggregate
principal amount equal to and in exchange for the unredeemed portion of the
principal of the Security so surrendered.
Section 1108. Provisions with Respect to any Sinking Funds.
Unless the form or terms of any series of Securities shall provide otherwise,
in lieu of making all or any part of any mandatory sinking fund payment with
respect to such series of Securities in cash, the Company may at its option (1)
deliver to the Trustee for cancellation any Securities of such series
theretofore acquired by the Company, or (2) receive credit for any Securities
of such series (not previously so credited) acquired by the Company and
theretofore delivered to the Trustee for cancelation or redeemed by the Company
other than through the mandatory sinking fund, and if it does so then (i)
Securities so delivered or credited shall be credited at the applicable sinking
fund Redemption Price with respect to Securities of such series, and (ii) on or
before the 60th day next preceding each sinking fund Redemption Date with
respect to such series of Securities, the Company will deliver to the Trustee
(A) an Officers' Certificate specifying the portions of such sinking fund
payment to be satisfied by payment of cash and by delivery or credit of
Securities of such series acquired by the Company or so redeemed, and (B) such
Securities so acquired, to the extent not previously surrendered. Such
Officers' Certificate shall also state the basis for such credit and that the
Securities for which the Company elects to receive credit have not been
previously so credited and were not redeemed by the Company through operation
<PAGE> 81
74
of the mandatory sinking fund, if any, provided with respect to such Securities
and shall also state that no Event of Default with respect to Securities of
such series has occurred and is continuing. All Securities so delivered to the
Trustee shall be canceled by the Trustee and no Securities shall be
authenticated in lieu thereof.
If the sinking fund payment or payments (mandatory or
optional) with respect to any series of Securities made in cash plus any unused
balance of any preceding sinking fund payments with respect to Securities of
such series made in cash shall exceed $50,000 (or a lesser sum if the Company
shall so request), unless otherwise provided by the terms of such series of
Securities, that cash shall be applied by the Trustee on the sinking fund
Redemption Date with respect to Securities of such series next following the
date of such payment to the redemption of Securities of such series at the
applicable sinking fund Redemption Price with respect to Securities of such
series, together with accrued interest, if any, to the date fixed for
redemption, with the effect provided in Section 1106. The Trustee shall
select, in the manner provided in Section 1103, for redemption on such
sinking fund Redemption Date a sufficient principal amount of Securities of
such series to utilize that cash and shall thereupon cause notice of redemption
of the Securities of such series for the sinking fund to be given in the manner
provided in Section 1104 (and with the effect provided in Section 1106) for the
redemption of Securities in part at the option of the Company. Any sinking
fund moneys not so applied or allocated by the Trustee to the redemption of
Securities of such series shall be added to the next cash sinking fund payment
with respect to Securities of such series received by the Trustee and, together
with such payment, shall be applied in accordance with the provisions of this
Section 1108. Any and all sinking fund moneys with respect to Securities of
any series held by the Trustee at the Maturity of Securities of such series,
and not held for the payment or redemption of particular Securities of such
series, shall be applied by the Trustee, together with other moneys, if
necessary, to be deposited sufficient for the purpose, to the payment of the
principal of the Securities of such series at Maturity.
On or before each sinking fund Redemption Date provided with
respect to Securities of any series, the Company shall pay to the Trustee in
cash a sum equal to all accrued interest, if any, to the date fixed for
redemption on Securities to be redeemed on such sinking fund Redemption Date
pursuant to this Section 1108.
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.
<PAGE> 82
75
CLEAR CHANNEL COMMUNICATIONS, INC.,
by
------------------------------------
Name:
Title:
THE BANK OF NEW YORK,
as Trustee
by
------------------------------------
Name:
Title:
<PAGE> 1
EXHIBIT 4.5
================================================================================
CLEAR CHANNEL COMMUNICATIONS, INC.
and
THE BANK OF NEW YORK
Trustee
FORM OF
SUBORDINATED INDENTURE
Dated as of ________, 1997
Providing for Issuance of Securities in Series
================================================================================
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
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<S> <C>
Recitals of the Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Agreements of the Parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE ONE
Definitions and Other Provisions of General Application
Section 101. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Affiliate . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Authenticating Agent . . . . . . . . . . . . . . . . . . . . . . 2
Board of Directors . . . . . . . . . . . . . . . . . . . . . . . 2
Board Resolution . . . . . . . . . . . . . . . . . . . . . . . . 3
Business Day . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Commission. . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Company Request, Company Order and Company Consent . . . . . . . 3
Corporate Trust Office . . . . . . . . . . . . . . . . . . . . . 3
Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Defaulted Interest . . . . . . . . . . . . . . . . . . . . . . . 4
Depositary. . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Event of Default . . . . . . . . . . . . . . . . . . . . . . . . 4
Global Security . . . . . . . . . . . . . . . . . . . . . . . . . 4
Holder . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Indenture, this Indenture . . . . . . . . . . . . . . . . . . . . 4
Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Interest Payment Date . . . . . . . . . . . . . . . . . . . . . . 5
Junior Subordinated Securities . . . . . . . . . . . . . . . . . 5
Maturity . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Officers' Certificate . . . . . . . . . . . . . . . . . . . . . . 5
Opinion of Counsel . . . . . . . . . . . . . . . . . . . . . . . 5
Original Issue Discount Security . . . . . . . . . . . . . . . . 5
Outstanding . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Paying Agent . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Person . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Place of Payment . . . . . . . . . . . . . . . . . . . . . . . . 7
Predecessor Securities . . . . . . . . . . . . . . . . . . . . . 7
Redemption Date . . . . . . . . . . . . . . . . . . . . . . . . . 7
Redemption Price . . . . . . . . . . . . . . . . . . . . . . . . 7
Regular Record Date . . . . . . . . . . . . . . . . . . . . . . . 8
Repayment Date . . . . . . . . . . . . . . . . . . . . . . . . . 8
</TABLE>
<PAGE> 3
Contents, p. 2
<TABLE>
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Repayment Price . . . . . . . . . . . . . . . . . . . . . . . . . 8
Responsible Officer . . . . . . . . . . . . . . . . . . . . . . . 8
Security or Securities . . . . . . . . . . . . . . . . . . . . . 8
Security Register . . . . . . . . . . . . . . . . . . . . . . . . 8
Security Registrar . . . . . . . . . . . . . . . . . . . . . . . 8
Securityholder. . . . . . . . . . . . . . . . . . . . . . . . . . 8
Senior Indebtedness . . . . . . . . . . . . . . . . . . . . . . . 9
Special Record Date . . . . . . . . . . . . . . . . . . . . . . . 9
Stated Maturity . . . . . . . . . . . . . . . . . . . . . . . . . 9
Subsidiary . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Trust Indenture Act or TIA . . . . . . . . . . . . . . . . . . . 9
Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
U.S. Government Obligations . . . . . . . . . . . . . . . . . . . 10
Vice President. . . . . . . . . . . . . . . . . . . . . . . . . . 10
Voting Stock . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 102. Compliance Certificates and Opinions . . . . . . . . . . . . . . 10
Section 103. Form of Documents Delivered to Trustee . . . . . . . . . . . . . 11
Section 104. Acts of Securityholders . . . . . . . . . . . . . . . . . . . . . 11
Section 105. Notices, etc., to Trustee and Company . . . . . . . . . . . . . . 13
Section 106. Notices to Securityholders; Waiver . . . . . . . . . . . . . . . 13
Section 107. Conflict with Trust Indenture Act . . . . . . . . . . . . . . . . 14
Section 108. Effect of Headings and Table of Contents . . . . . . . . . . . . 14
Section 109. Successors and Assigns . . . . . . . . . . . . . . . . . . . . . 14
Section 110. Separability Clause . . . . . . . . . . . . . . . . . . . . . . . 14
Section 111. Benefits of Indenture . . . . . . . . . . . . . . . . . . . . . . 14
Section 112. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 113. Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 114. Judgment Currency . . . . . . . . . . . . . . . . . . . . . . . . 15
ARTICLE TWO
Security Forms
Section 201. Forms Generally . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 202. Forms of Securities . . . . . . . . . . . . . . . . . . . . . . . 16
Section 203. Form of Trustee's Certificate of Authentication . . . . . . . . . 16
Section 204. Securities Issuable in the Form of a Global Security . . . . . . 17
</TABLE>
<PAGE> 4
Contents, p. 3
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ARTICLE THREE
The Securities
Section 301. General Title; General Limitations; Issuable in Series; Terms of
Particular Series . . . . . . . . . . . . . . . . . . . 19
Section 302. Denominations . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Section 303. Execution, Authentication and Delivery and Dating . . . . . . . . 22
Section 304. Temporary Securities . . . . . . . . . . . . . . . . . . . . . . 24
Section 305. Registration, Transfer and Exchange . . . . . . . . . . . . . . . 25
Section 306. Mutilated, Destroyed, Lost and Stolen Securities . . . . . . . . 27
Section 307. Payment of Interest; Interest Rights Preserved . . . . . . . . . 27
Section 308. Persons Deemed Owners . . . . . . . . . . . . . . . . . . . . . . 29
Section 309. Cancellation . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Section 310. Computation of Interest . . . . . . . . . . . . . . . . . . . . . 29
Section 311. Medium-Term Securities . . . . . . . . . . . . . . . . . . . . . 30
Section 312. CUSIP Numbers . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Section 313. Global Securities . . . . . . . . . . . . . . . . . . . . . . . . 31
ARTICLE FOUR
Satisfaction and Discharge of Indenture;
Defeasance; Unclaimed Moneys
Section 401. Applicability of Article . . . . . . . . . . . . . . . . . . . . 32
Section 402. Satisfaction and Discharge of Indenture; Defeasance . . . . . . . 33
Section 403. Conditions of Defeasance . . . . . . . . . . . . . . . . . . . . 34
Section 404. Application of Trust Money . . . . . . . . . . . . . . . . . . . 35
Section 405. Repayment to Company . . . . . . . . . . . . . . . . . . . . . . 36
Section 406. Indemnity for U.S. Government Obligations . . . . . . . . . . . . 36
Section 407. Reinstatement . . . . . . . . . . . . . . . . . . . . . . . . . . 36
ARTICLE FIVE
Remedies
Section 501. Events of Default . . . . . . . . . . . . . . . . . . . . . . . . 36
Section 502. Acceleration of Maturity; Rescission and Annulment . . . . . . . 38
Section 503. Collection of Indebtedness and Suits for Enforcement by Trustee . 39
Section 504. Trustee May File Proofs of Claim . . . . . . . . . . . . . . . . 40
Section 505. Trustee May Enforce Claims Without Possession of Securities . . . 41
Section 506. Application of Money Collected . . . . . . . . . . . . . . . . . 42
Section 507. Limitation on Suits . . . . . . . . . . . . . . . . . . . . . . . 42
</TABLE>
<PAGE> 5
Contents, p. 4
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Section 508. Unconditional Right of Securityholders to Receive Principal,
Premium and Interest . . . . . . . . . . . . . . . . . . 43
Section 509. Restoration of Rights and Remedies . . . . . . . . . . . . . . . 43
Section 510. Rights and Remedies Cumulative . . . . . . . . . . . . . . . . . 43
Section 511. Delay or Omission Not Waiver . . . . . . . . . . . . . . . . . . 44
Section 512. Control by Securityholders . . . . . . . . . . . . . . . . . . . 44
Section 513. Waiver of Past Defaults . . . . . . . . . . . . . . . . . . . . . 44
Section 514. Undertaking for Costs . . . . . . . . . . . . . . . . . . . . . . 45
Section 515. Waiver of Stay or Extension Laws . . . . . . . . . . . . . . . . 45
ARTICLE SIX
The Trustee
Section 601. Certain Duties and Responsibilities . . . . . . . . . . . . . . . 45
Section 602. Notice of Defaults . . . . . . . . . . . . . . . . . . . . . . . 47
Section 603. Certain Rights of Trustee . . . . . . . . . . . . . . . . . . . . 47
Section 604. Not Responsible for Recitals or Issuance of Securities . . . . . 48
Section 605. May Hold Securities . . . . . . . . . . . . . . . . . . . . . . . 48
Section 606. Money Held in Trust . . . . . . . . . . . . . . . . . . . . . . . 49
Section 607. Compensation and Reimbursement . . . . . . . . . . . . . . . . . 49
Section 608. Disqualification; Conflicting Interests . . . . . . . . . . . . . 49
Section 609. Corporate Trustee Required; Eligibility . . . . . . . . . . . . . 50
Section 610. Resignation and Removal; Appointment of Successor . . . . . . . . 50
Section 611. Acceptance of Appointment by Successor . . . . . . . . . . . . . 52
Section 612. Merger, Conversion, Consolidation or Succession to Business . . . 53
Section 613. Preferential Collection of Claims Against Company . . . . . . . . 53
Section 614. Appointment of Authenticating Agent . . . . . . . . . . . . . . . 58
ARTICLE SEVEN
Securityholders' Lists and Reports by Trustee and Company
Section 701. Company to Furnish Trustee Names and Addresses of Securityholders 60
Section 702. Preservation of Information; Communications to Securityholders . 60
Section 703. Reports by Trustee . . . . . . . . . . . . . . . . . . . . . . . 62
Section 704. Reports by Company . . . . . . . . . . . . . . . . . . . . . . . 63
</TABLE>
<PAGE> 6
Contents, p. 5
<TABLE>
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ARTICLE EIGHT
Consolidation, Merger, Conveyance or Transfer
Section 801. Company May Consolidate, etc., only on Certain Terms . . . . . . 64
Section 802. Successor Corporation Substituted . . . . . . . . . . . . . . . . 65
ARTICLE NINE
Supplemental Indentures
Section 901. Supplemental Indentures Without Consent of Securityholders . . . 65
Section 902. Supplemental Indentures with Consent of Securityholders . . . . . 66
Section 903. Execution of Supplemental Indentures . . . . . . . . . . . . . . 67
Section 904. Effect of Supplemental Indentures . . . . . . . . . . . . . . . . 67
Section 905. Conformity with Trust Indenture Act . . . . . . . . . . . . . . . 68
Section 906. Reference in Securities to Supplemental Indentures . . . . . . . 68
ARTICLE TEN
Covenants
Section 1001. Payment of Principal, Premium and Interest . . . . . . . . . . . 68
Section 1002. Maintenance of Office or Agency . . . . . . . . . . . . . . . . . 68
Section 1003. Money for Security Payments to Be Held in Trust . . . . . . . . . 68
Section 1004. Statement as to Compliance . . . . . . . . . . . . . . . . . . . 70
Section 1005. Corporate Existence . . . . . . . . . . . . . . . . . . . . . . . 71
ARTICLE ELEVEN
Redemption of Securities
Section 1101. Applicability of Article . . . . . . . . . . . . . . . . . . . . 71
Section 1102. Election to Redeem; Notice to Trustee . . . . . . . . . . . . . . 71
Section 1103. Selection by Trustee of Securities to Be Redeemed . . . . . . . . 72
Section 1104. Notice of Redemption . . . . . . . . . . . . . . . . . . . . . . 72
Section 1105. Deposit of Redemption Price . . . . . . . . . . . . . . . . . . . 73
</TABLE>
<PAGE> 7
Contents, p. 6
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Section 1106. Securities Payable on Redemption Date . . . . . . . . . . . . . . 73
Section 1107. Securities Redeemed in Part . . . . . . . . . . . . . . . . . . . 74
Section 1108. Provisions with Respect to any Sinking Funds . . . . . . . . . . 74
ARTICLE TWELVE
Subordination
Section 1201. Agreement of Securityholders that Securities Subordinated to
Extent Provided . . . . . . . . . . . . . . . . . . . . 76
Section 1202. Company not to Make Payments With Respect to Securities in
Certain Circumstances . . . . . . . . . . . . . . . . . 76
Section 1203. Securities Subordinated to Prior Payments of All Senior
Indebtedness on Dissolution, Liquidation or
Reorganization of the Company . . . . . . . . . . . . . 77
Section 1204. Securityholders to be Subrogated to Right of Holders of Senior
Indebtedness . . . . . . . . . . . . . . . . . . . . . . 78
Section 1205. Obligation of the Company Unconditional . . . . . . . . . . . . . 79
Section 1206. Trustee Entitled to Assume Payments Not Prohibited in Absence of
Notice . . . . . . . . . . . . . . . . . . . . . . . . . 79
Section 1207. Application by Trustee of Monies Deposited With It . . . . . . . 80
Section 1208. Subordination Rights Not Impaired by Acts or Omissions of Company
or Holders of Senior Indebtedness . . . . . . . . . . . 80
Section 1209. Securityholders Authorize Trustee to Effectuate Subordination of
Securities . . . . . . . . . . . . . . . . . . . . . . . 80
Section 1210. Right of Trustee to Hold Senior Indebtedness . . . . . . . . . . 81
Section 1211. Article Twelve Not to Prevent Events of Default . . . . . . . . . 81
</TABLE>
<PAGE> 8
THIS SUBORDINATED INDENTURE (the "Indenture")
between CLEAR CHANNEL COMMUNICATIONS, INC., a Texas
corporation (hereinafter called the "Company") having
its principal office at 200 Concord Plaza, Suite 600,
San Antonio, Texas 78216, and THE BANK OF NEW YORK, a
New York banking corporation, trustee (hereinafter
called the "Trustee"), is made and entered into as of
this ___ day of ________, 1997.
Recitals of the Company
The Company has duly authorized the execution and delivery of this
Indenture to provide for the issuance of its Securities, notes, bonds or other
evidences of indebtedness, to be issued in one or more fully registered series.
All things necessary to make this Indenture a valid agreement of the
Company, in accordance with its terms, have been done.
Agreements of the Parties
To set forth or to provide for the establishment of the terms and
conditions upon which the Securities are and are to be authenticated, issued
and delivered, and in consideration of the premises and the purchase of
Securities by the Holders thereof, it is mutually covenanted and agreed as
follows, for the equal and proportionate benefit of all Holders of the
Securities or of a series thereof, as the case may be:
ARTICLE ONE
Definitions and Other Provisions
of General Application
Section 101. Definitions. For all purposes of this Indenture and of
any indenture supplemental hereto, except as otherwise expressly provided 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> 9
2
(2) all other terms used herein which are defined in the Trust
Indenture Act or by Commission rule under 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 and, except as otherwise herein expressly provided, the term
"generally accepted accounting principles" 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 of such
computation;
(4) all references in this instrument to designated "Articles",
"Sections" and other subdivisions are to the designated Articles, Sections
and other subdivisions of this instrument as originally executed. 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) "including" and words of similar import shall be deemed to be
followed by "without limitation". Certain terms, used principally in
Article Six, are defined in that Article.
"Act", when used with respect to any Security-holder, has the meaning
specified in Section 104.
"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 meanings correlative to the
foregoing.
"Authenticating Agent" means any Person authorized by the Trustee to
authenticate Securities under Section 614.
"Board of Directors" means either the board of directors of the
Company or any duly authorized committee of that board.
<PAGE> 10
3
"Board Resolution" means a copy of a resolution 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 of such
certification, and delivered to the Trustee.
"Business Day" means each day which is neither a Saturday, Sunday or
other day on which banking institutions in the pertinent Place or Places of
Payment are authorized or required by law or executive order to be closed.
"Commission" means the Securities and Exchange Commission, as from
time to time constituted, created under the Securities Exchange Act of 1934,
or, if at any time after the execution of this instrument such Commission is
not existing and performing the duties now assigned to it under the Trust
Indenture Act, then the body performing such duties on such date.
"Company" means the Person named as the "Company" in the first
paragraph of this instrument until a successor corporation shall have become
such pursuant to the applicable provisions of this Indenture, and thereafter
"Company" shall mean such successor corporation.
"Company Request", "Company Order" and "Company Consent" mean,
respectively, a written request, order or consent signed in the name of the
Company by its Chairman of the Board, President or a Vice President, and by its
Treasurer, an Assistant Treasurer, Controller, an Assistant Controller,
Secretary or an Assistant Secretary, and delivered to the Trustee.
"Corporate Trust Office" means the principal office of the Trustee in
New York, New York at which at any particular time its corporate trust business
shall be principally administered, which office at the date hereof is located
at 101 Barclay Street, 21st Floor, New York, New York 10286, except that with
respect to the presentation of Securities for payment or for registration of
transfer and exchange, such term shall mean the office or the agency of the
Trustee in said city at which at any particular time its corporate agency
business shall be conducted, which office at the date hereof is located at 101
Barclay Street, 21st Floor, New York, New York 10286.
"Debt" means indebtedness for money borrowed.
<PAGE> 11
4
"Defaulted Interest" has the meaning specified in Section 307.
"Depositary" means, unless otherwise specified by the Company pursuant
to either Section 204 or 301, with respect to Securities of any series issuable
or issued as a Global Security, The Depository Trust Company, New York, New
York, or any successor thereto registered as a clearing agency under the
Securities Exchange Act of 1934, as amended, or other applicable statute or
regulation.
"Event of Default" has the meaning specified in Article Five.
"Global Security" means with respect to any series of Securities
issued hereunder, a Security which is executed by the Company and authenticated
and delivered by the Trustee to the Depositary or pursuant to the Depositary's
instruction, all in accordance with this Indenture and an indenture
supplemental hereto, if any, or Board Resolution and pursuant to a Company
Request, which shall be registered in the name of the Depositary or its nominee
and which shall represent, and shall be denominated in an amount equal to the
aggregate principal amount of, all of the Outstanding Securities of such series
or any portion thereof, in either case having the same terms, including,
without limitation, the same original issue date, date or dates on which
principal is due, and interest rate or method of determining interest.
"Holder", when used with respect to any Security, means a
Securityholder.
"Indenture" or "this Indenture" means this instrument as originally
executed or 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 shall include the terms of particular series of
Securities established as contemplated by Section 301.
<PAGE> 12
5
"Interest", when used with respect to an Original Issue Discount
Security which by its terms bears interest only after Maturity, means interest
payable after Maturity.
"Interest Payment Date", when used with respect to any series of
Securities, means the Stated Maturity of any installment of interest on those
Securities.
"Junior Subordinated Securities" means the securities issued under the
Junior Subordinated Indenture dated as of , 1997, between the
Company and The Bank of New York.
"Maturity", when used with respect to any Securities, means the date
on which the principal of any such Security becomes due and payable as therein
or herein provided, whether on a Repayment Date, at the Stated Maturity or by
declaration of acceleration, call for redemption or otherwise.
"Officers' Certificate" means a certificate signed by the Chairman of
the Board, the President or a Vice President, and by the Treasurer, an
Assistant Treasurer, the Controller, an Assistant Controller, the Secretary or
an Assistant Secretary of the Company, and delivered to the Trustee. Wherever
this Indenture requires that an Officers' Certificate be signed also by an
engineer or an accountant or other expert, such engineer, accountant or other
expert (except as otherwise expressly provided in this Indenture) may be in the
employ of the Company, and shall be acceptable to the Trustee.
"Opinion of Counsel" means a written opinion of counsel, who may
(except as otherwise expressly provided in this Indenture) be an employee of or
of counsel to the Company. Such counsel shall be acceptable to the Trustee,
whose acceptance shall not be unreasonably withheld.
"Original Issue Discount Security" means (i) any Security which
provides for an amount less than the principal amount thereof to be due and
payable upon a declaration of acceleration of the Maturity thereof, and (ii)
any other Security deemed an Original Issue Discount Security for United States
Federal income tax purposes.
<PAGE> 13
6
"Outstanding", when used with respect to Securities or Securities of
any series, means, as of the date of determination, all such Securities
theretofore authenticated and delivered under this Indenture, except:
(i) such Securities theretofore canceled by the Trustee or delivered
to the Trustee for cancellation;
(ii) such Securities for whose payment or redemption money in the
necessary amount has been theretofore deposited with the Trustee or any
Paying Agent in trust for the Holders of such Securities; 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; and
(iii) such Securities in exchange for or in lieu of which other
Securities have been authenticated and delivered pursuant to this
Indenture, or which shall have been paid pursuant to the terms of Section
306 (except with respect to any such Security as to which proof
satisfactory to the Trustee is presented that such Security is held by a
person in whose hands such Security is a legal, valid and binding
obligation of the Company).
In determining whether the Holders of the requisite principal amount of such
Securities Outstanding have given any request, demand, authorization,
direction, notice, consent or waiver hereunder, (i) the principal amount of any
Original Issue Discount Security that shall be deemed to be Outstanding shall
be the amount of the principal thereof that would be due and payable as of the
date of the taking of such action upon a declaration of acceleration of the
Maturity thereof and (ii) Securities owned by the Company or any other obligor
upon the Securities or any Affiliate of the Company or of such other obligor
shall be disregarded and deemed not to be Outstanding. In determining whether
the Trustee shall be protected in relying upon any such request, demand,
authorization, direction, notice, consent or waiver, only Securities which a
Responsible Officer assigned to the corporate trust department of the Trustee
knows to be owned by the Company or any other obligor upon the Securities or
any Affiliate of the Company or such other obligor shall be so disregarded.
Securities so owned which have been pledged in good faith may be regarded as
Outstanding if the pledgee establishes to the satisfaction of the Trustee the
pledgee's right to act as owner with respect to such Securities and that the
pledgee is not the Company or any other obligor upon the Securities or any
Affiliate of the Company or such other obligor.
<PAGE> 14
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"Paying Agent" means any Person authorized by the Company to pay the
principal of (and premium, if any) or interest on any Securities on behalf of
the Company.
Notwithstanding the foregoing, the Company may, and may permit any Restricted
Subsidiary to create, assume, incur or suffer to exist any Mortgage upon any
Principal Property without equally and ratably securing the Senior Debt
Securities if the aggregate amount of all Debt then outstanding secured by such
Mortgage and all similar Mortgages does not exceed 10% of the total
consolidated stockholders' equity (including preferred stock) of the Company as
shown on the audited consolidated balance sheet contained in the latest annual
report to stockholders of the Company; provided that Debt secured by Permitted
Mortgages shall not be included in the amount of such secured debt.
"Person" means any individual, corporation, partnership, limited
liability company, joint venture, association, joint-stock company, trust,
unincorporated organization or government or any agency or political
subdivision thereof.
"Place of Payment" means with respect to any series of Securities
issued hereunder the city or political subdivision so designated with respect
to the series of Securities in question in accordance with the provisions of
Section 301.
"Predecessor Securities" of any particular Security means every
previous Security evidencing all or a portion of the same debt as that
evidenced by such particular Security; and, for the purposes of this
definition, any Security authenticated and delivered under Section 306 in lieu
of a lost, destroyed or stolen Security shall be deemed to evidence the same
debt as the lost, destroyed or stolen Security.
"Redemption Date", when used with respect to any Security to be
redeemed, means the date fixed for such redemption by or pursuant to this
Indenture.
"Redemption Price", when used with respect to any Security to be
redeemed, means the price specified in the Security at which it is to be
redeemed pursuant to this Indenture.
<PAGE> 15
8
"Regular Record Date" for the interest payable on any Security on any
Interest Payment Date means the date specified in such Security as the Regular
Record Date.
"Repayment Date", when used with respect to any Security to be repaid,
means the date fixed for such repayment pursuant to such Security.
"Repayment Price", when used with respect to any Security to be
repaid, means the price at which it is to be repaid pursuant to such Security.
"Responsible Officer", when used with respect to the Trustee, means
the chairman or vice-chairman of the board of directors, the chairman or
vice-chairman of the executive committee of the board of directors, the
president, any vice president, the secretary, any assistant secretary, the
treasurer, any assistant treasurer, the cashier, any assistant cashier, any
senior trust officer or trust officer, the controller and any assistant
controller or any other officer of the Trustee customarily performing functions
similar to those performed by any of the above designated officers and also
means, with respect to a particular corporate trust matter, any other officer
to whom such matter is referred because of his knowledge of and familiarity
with the particular subject.
"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, of any series authenticated and delivered from time to time under this
Indenture.
"Security Register" shall have the meaning specified in Section 305.
"Security Registrar" means the Person who keeps the Security Register
specified in Section 305.
"Securityholder" means a Person in whose name a Security is registered
in the Security Register.
<PAGE> 16
9
"Senior Indebtedness" means the principal of and premium, if any, and
interest on the following whether outstanding on the date of execution of this
Indenture or thereafter incurred or created (i) indebtedness of the Company for
money borrowed by the Company (including purchase money obligations with an
original maturity in excess of one year) or evidenced by securities (other than
the Junior Subordinated Securities and the Securities), notes, bankers'
acceptances or other corporate debt securities or similar instruments issued by
the Company; (ii) obligations with respect to letters of credit; (iii)
indebtedness of the Company constituting a guarantee of indebtedness of others
of the type referred to in the preceding clauses (i) and (ii); or (iv) renewals,
extensions or refundings of any of the indebtedness referred to in the preceding
clauses (i), (ii) and (iii) unless, in the case of any particular indebtedness,
renewal, extension or refunding, under the express provisions of the instrument
creating or evidencing the same, or pursuant to which the same is outstanding,
such indebtedness or such renewal, extension or refunding thereof is not
superior in right of payment to the Securities.
"Special Record Date" for the payment of any Defaulted Interest (as
defined in Section 307) means a date fixed by the Trustee pursuant to Section
307.
"Stated Maturity" when used with respect to any Security or any
installment of principal thereof or interest thereon means the date specified
in such Security as the fixed date on which the principal of such Security or
such installment of principal or interest is due and payable.
"Subsidiary" of any specified corporation means any corporation at
least a majority of whose outstanding Voting Stock shall at the time be owned,
directly or indirectly, by the specified corporation or by one or more of its
Subsidiaries, or both.
"Trust Indenture Act" or "TIA" means the Trust Indenture Act of 1939,
as amended by the Trust Indenture Reform Act of 1990, as in force at the date
as of which this instrument was executed except as provided in Section 905.
"Trustee" means the Person named as the Trustee in the first paragraph
of this instrument until a successor Trustee shall have become such pursuant to
the applicable provisions of this Indenture, and thereafter "Trustee" shall
mean and include each Person who is then a Trustee hereunder. If at any time
there is more than one such Person, "Trustee" as used with respect to the
Securities of
<PAGE> 17
10
any series shall mean the Trustee with respect to Securities of that series.
"U.S. Government Obligations" means securities that are (x) direct
obligations of the United States of America for the payment of which its full
faith and credit is pledged or (y) obligations of a Person controlled or
supervised by and acting as an agency or instrumentality of the United States
of America, the payment of which is unconditionally guaranteed as a full faith
and credit obligation by the United States of America, which, in either case,
are not callable or redeemable at the option of the issuer thereof.
"Vice President" when used with respect to the Company or the Trustee
means any vice president, whether or not designated by a number or a word or
words added before or after the title "vice president", including, without
limitation, an assistant vice president.
"Voting Stock", as applied to the stock of any corporation, means
stock of any class or classes (however designated) having by the terms thereof
ordinary voting power to elect a majority of the members of the board of
directors (or other governing body) of such corporation other than stock having
such power only by reason of the happening of a contingency.
Section 102. Compliance Certificates and Opinions. Upon any
application or request by the Company to the Trustee to take any action under
any provision of this Indenture, the Company shall furnish to the Trustee an
Officers' Certificate 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
is specifically required by any provision of this Indenture relating to such
particular application or request, no additional certificate or opinion need be
furnished.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture (except for the written
statement required by Section 1004) shall include
(1) a statement that each individual signing such certificate or
opinion has read such covenant or condition 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;
<PAGE> 18
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(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 covenant or condition
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 103. 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 the 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 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 stating that the
information with respect to such factual matters is in the possession of the
Company, 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, they may, but need not, be consolidated and
form one instrument.
Section 104. Acts of Securityholders. (a) Any request, demand,
authorization, direction, notice, consent, waiver or other action provided by
this Indenture to be given or taken by Securityholders or Securityholders of
any series may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Securityholders in person or by an
agent duly appointed in writing; and, except as herein otherwise expressly
provided, such action shall become effective when such instrument or
instruments are delivered to the Trustee, and, where it is hereby expressly
required, to the Company. If any Securities are denominated in coin or
currency other than
<PAGE> 19
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that of the United States, then for the purposes of determining whether the
Holders of the requisite principal amount of Securities have taken any action
as herein described, the principal amount of such Securities shall be deemed to
be that amount of United States dollars that could be obtained for such
principal amount on the basis of the spot rate of exchange into United States
dollars for the currency in which such Securities are denominated (as evidenced
to the Trustee by an Officers' Certificate) as of the date the taking of such
action by the Holders of such requisite principal amount is evidenced to the
Trustee as provided in the immediately preceding sentence. Such instrument or
instruments (and the action embodied therein and evidenced thereby) are herein
sometimes referred to as the "Act" of the Securityholders signing such
instrument or instruments. Proof of execution of any such instrument or of a
writing appointing any such agent shall be sufficient for any purpose of this
Indenture and (subject to Section 601) conclusive in favor of the Trustee and
the Company, if made in the manner provided in this Section.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness to such
execution or by the certificate of any notary public or other officer
authorized by law to take acknowledgments of deeds, certifying that the
individual signing such instrument or writing acknowledged to him the execution
thereof. Where such execution is by an officer of a corporation or a member of
a partnership, on behalf of such corporation or partnership, such certificate
or affidavit shall also constitute sufficient proof of his authority. The fact
and date of the execution of any such instrument or writing, or the authority
of the person executing the same, may also be proved in any other manner which
the Trustee deems sufficient.
(c) The ownership of Securities shall be proved by the Security
Register.
(d) If the Company shall solicit from the Holders any request,
demand, authorization, direction, notice, consent, waiver or other action, the
Company may, at its option, by Board Resolution, fix in advance a record date
for the determination of Holders entitled to give such request, demand,
authorization, direction, notice, consent, waiver or other action, but the
Company shall have no obligation to do so. If such a record date is fixed,
such request, demand, authorization, direction, notice, consent, waiver or
other action may be given before or after the record date, but only the Holders
of record at the close of business on the record date shall be deemed to be
Holders
<PAGE> 20
13
for the purposes of determining whether Holders of the requisite proportion of
Securities Outstanding have authorized or agreed or consented to such request,
demand, authorization, direction, notice, consent, waiver or other action, and
for that purpose the Securities Outstanding shall be computed as of the record
date; provided that no such authorization, agreement or consent by the Holders
on the record date 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.
(e) Any request, demand, authorization, direction, notice, consent,
waiver or other action by the Holder of any Security shall bind the Holder of
every Security issued upon the transfer thereof or in exchange therefor or in
lieu thereof, in respect of anything done or suffered to be done by the Trustee
or the Company in reliance thereon whether or not notation of such action is
made upon such Security.
Section 105. Notices, etc., to Trustee and Company. Any request,
demand, authorization, direction, notice, consent, waiver or Act of
Securityholders 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 Securityholder 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 by the Trustee or by any Securityholder shall be
sufficient for every purpose hereunder (except as provided in Section
501(4) or, in the case of a request for repayment, as specified in the
Security carrying the right to repayment) if in writing and mailed,
first-class postage prepaid, to the Company 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.
Section 106. Notices to Securityholders; Waiver. Where this
Indenture or any Security provides for notice to Securityholders of any event,
such notice shall be sufficiently given (unless otherwise herein or in such
Security expressly provided) if in writing and mailed, first-class postage
prepaid, to each Securityholder 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. In
any case where notice to Securityholders is given by mail, neither the failure
to mail such
<PAGE> 21
14
notice, nor any defect in any notice so mailed, to any particular
Securityholder shall affect the sufficiency of such notice with respect to
other Securityholders. Where this Indenture or any Security 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
Securityholders 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.
In case, by reason of the suspension of regular mail service as a
result of a strike, work stoppage or otherwise, it shall be impractical to mail
notice of any event to any Securityholder when such notice is required to be
given pursuant to any provision of this Indenture, then any method of
notification as shall be satisfactory to the Trustee and the Company shall be
deemed to be a sufficient giving of such notice.
Section 107. Conflict with Trust Indenture Act. If any provision
hereof limits, qualifies or conflicts with the duties imposed by any of
Sections 310 to 317, inclusive, of the Trust Indenture Act through the
operation of Section 318(c) thereof, such imposed duties shall control.
Section 108. 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.
Section 109. Successors and Assigns. All covenants and agreements in
this Indenture by the Company shall bind its successors and assigns, whether so
expressed or not.
Section 110. Separability Clause. In case any provision in this
Indenture or in the Securities 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 111. Benefits of Indenture. Nothing in this Indenture or in
any Securities, express or implied, shall give to any Person, other than the
parties hereto and their successors hereunder, any Authenticating Agent or
Paying Agent, the Security Registrar and the Holders of Securities (or such of
them as may be affected thereby), any benefit or any legal or equitable right,
remedy or claim under this Indenture.
<PAGE> 22
15
Section 112. Governing Law. This Indenture shall be construed in
accordance with and governed by the laws of the State of New York.
Section 113. Counterparts. This instrument may be executed in any
number of counterparts, each of which so executed shall be deemed to be an
original, but all such counterparts shall together constitute but one and the
same instrument.
Section 114. Judgment Currency. The Company 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 the
Securities of any series (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 Required Currency with the
Judgment Currency on the New York Banking Day (as defined below) preceding that
on which 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 subsection (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 required by law or executive order to
close.
ARTICLE TWO
Security Forms
Section 201. Forms Generally. The Securities shall have such
appropriate insertions, omissions, substitutions and other variations as are
required or permitted by this Indenture and may have such letters, numbers or
other marks of identification and such legends or endorsements placed thereon,
as may be required to comply with applicable laws or regulations or with the
rules of any securities exchange, or as may, consistently herewith, be
determined by the officers executing such Securities, as evidenced by their
execution of the Securities. Any portion of the text of any Security may be
set forth on the reverse thereof, with an appropriate reference thereto on the
face of the Security.
<PAGE> 23
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The definitive Securities shall be printed, lithographed or engraved
or produced by any combination of these methods on steel engraved borders or
may be produced in any other manner, all as determined by the officers
executing such Securities, as evidenced by their execution of such Securities,
subject, with respect to the Securities of any series, to the rules of any
securities exchange on which such Securities are listed.
Section 202. Forms of Securities. Each Security shall be in one of
the forms approved from time to time by or pursuant to a Board Resolution, or
established in one or more indentures supplemental hereto. Prior to the
delivery of a Security to the Trustee for authentication in any form approved
by or pursuant to a Board Resolution, the Company shall deliver to the Trustee
the Board Resolution by or pursuant to which such form of Security has been
approved, which Board Resolution shall have attached thereto a true and correct
copy of the form of Security which has been approved thereby or, if a Board
Resolution authorizes a specific officer or officers to approve a form of
Security, a certificate of such officer or officers approving the form of
Security attached thereto. Any form of Security approved by or pursuant to a
Board Resolution must be acceptable as to form to the Trustee, such acceptance
to be evidenced by the Trustee's authentication of Securities in that form or a
certificate signed by a Responsible Officer of the Trustee and delivered to the
Company.
Section 203. Form of Trustee's Certificate of Authentication. The
form of Trustee's Certificate of Authentication for any Security issued
pursuant to this Indenture shall be substantially as follows:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the series designated therein
referred to in the within-mentioned Indenture.
THE BANK OF NEW YORK,
as Trustee,
Dated: By:
------------------- ------------------------------------
Authorized Signatory
<PAGE> 24
17
Section 204. Securities Issuable in the Form of a Global Security.
(a) If the Company shall establish pursuant to Sections 202 and 301 that the
Securities of a particular series are to be issued in whole or in part in the
form of one or more Global Securities, then the Company shall execute and the
Trustee or its agent shall, in accordance with Section 303 and the Company
Request delivered to the Trustee or its agent thereunder, authenticate and
deliver, such Global Security or Securities, which (i) shall represent, and
shall be denominated in an amount equal to the aggregate principal amount of,
the Outstanding Securities of such series to be represented by such Global
Security or Securities, or such portion thereof as the Company shall specify in
a Company Request, (ii) shall be registered in the name of the Depositary for
such Global Security or Securities or its nominee, (iii) shall be delivered by
the Trustee or its agent to the Depositary or pursuant to the Depositary's
instruction and (iv) shall bear a legend substantially to the following effect:
"Unless and until it is exchanged in whole or in part for the individual
Securities represented hereby, this Global Security may not be transferred
except as a whole by the Depositary to a nominee of the Depositary or by a
nominee of the Depositary to the Depositary or another nominee of the
Depositary or by the Depositary or any such nominee to a successor Depositary
or a nominee of such successor Depositary."
(b) Notwithstanding any other provisions of this Section 204 or of
Section 305, and subject to the provisions of paragraph (c) below, unless the
terms of a Global Security expressly permit such Global Security to be
exchanged in whole or in part for individual Securities, a Global Security may
be transferred, in whole but not in part and in the manner provided in Section
305, only to a nominee of the Depositary for such Global Security, or to the
Depositary, or a successor Depositary for such Global Security selected or
approved by the Company, or to a nominee of such successor Depositary.
(c) (i) If at any time the Depositary for a Global Security notifies
the Company that it is unwilling or unable to continue as Depositary for such
Global Security or if at any time the Depositary for the Securities for such
series ceases to be a clearing agency registered under the Securities Exchange
Act of 1934, as amended, or other applicable statute or regulation, the Company
shall appoint a successor Depositary with respect to such Global Security. If
a successor Depositary for such Global Security is not appointed by the Company
within 90 days after the Company receives such notice or becomes aware of such
ineligibility, the Company will execute, and the Trustee or its agent, upon
receipt of a Company Request for the authentication and delivery of individual
Securities of such series in exchange for such Global Security, will
authenticate and deliver, individual Securities of such series of like tenor
and terms in an aggregate principal amount equal to the principal amount of the
Global Security in exchange for such Global Security.
<PAGE> 25
18
(ii) The Company may at any time and in its sole discretion determine
that the Securities of any series or portion thereof issued or issuable in the
form of one or more Global Securities shall no longer be represented by such
Global Security or Securities. In such event the Company will execute, and the
Trustee, upon receipt of a Company Request for the authentication and delivery
of individual Securities of such series in exchange in whole or in part for
such Global Security, will authenticate and deliver individual Securities of
such series of like tenor and terms in definitive form in an aggregate
principal amount equal to the principal amount of such Global Security or
Securities representing such series or portion thereof in exchange for such
Global Security or Securities.
(iii) If specified by the Company pursuant to Sections 202 and 301
with respect to Securities issued or issuable in the form of a Global Security,
the Depositary for such Global Security may surrender such Global Security in
exchange in whole or in part for individual Securities of such series of like
tenor and terms in definitive form on such terms as are acceptable to the
Company and such Depositary. Thereupon the Company shall execute, and the
Trustee or its agent shall authenticate and deliver, without service charge,
(1) to each Person specified by such Depositary a new Security or Securities of
the same series of like tenor and terms and of any authorized denomination as
requested by such Person in aggregate principal amount equal to and in exchange
for such Person's beneficial interest in the Global Security; and (2) to such
Depositary a new Global Security of like tenor and terms and in an authorized
denomination equal to the difference, if any, between the principal amount of
the surrendered Global Security and the aggregate principal amount of
Securities delivered to the Holders thereof.
(iv) In any exchange provided for in any of the preceding three
paragraphs, the Company will execute and the Trustee or its agent will
authenticate and deliver individual Securities in definitive registered form in
authorized denominations. Upon the exchange of the entire principal amount of
a Global Security for individual Securities, such Global Security shall be
canceled by the Trustee or its agent. Except as provided in the preceding
paragraph, Securities issued in exchange for a Global Security pursuant to this
Section shall be registered in such names and in such authorized denominations
as the Depositary for such Global Security, pursuant to instructions from its
direct or indirect participants or otherwise, shall instruct the Trustee or the
Security Registrar. The Trustee or the Security Registrar shall deliver such
Securities to the Persons in whose names such Securities are so registered.
<PAGE> 26
19
ARTICLE THREE
The Securities
Section 301. General Title; General Limitations; Issuable in Series;
Terms of Particular Series. The aggregate principal amount of Securities which
may be authenticated and delivered and Outstanding under this Indenture is not
limited.
The Securities may be issued in one or more series up to an aggregate
principal amount of Securities as from time to time may be authorized by the
Board of Directors. All Securities of each series under this Indenture shall
in all respects be equally and ratably entitled to the benefits hereof with
respect to such series without preference, priority or distinction on account
of the actual time of the authentication and delivery or Stated Maturity of the
Securities of such series.
Each series of Securities shall be created either by or pursuant to a
Board Resolution or by or pursuant to an indenture supplemental hereto. The
Securities of each such series may bear such date or dates, be payable at such
place or places, have such Stated Maturity or Maturities, be issuable at such
premium over or discount from their face value, bear interest at such rate or
rates (which may be fixed or floating), from such date or dates, payable in
such installments and on such dates and at such place or places to the Holders
of Securities registered as such on such Regular Record Dates, or may bear no
interest, and may be redeemable or repayable at such Redemption Price or Prices
or Repayment Price or Prices, as the case may be, whether at the option of the
Holder or otherwise, and upon such terms, all as shall be provided for in or
pursuant to the Board Resolution or in or pursuant to the supplemental
indenture creating that series. There may also be established in or pursuant
to a Board Resolution or in or pursuant to a supplemental indenture prior to
the issuance of Securities of each such series, provision for:
(1) the exchange or conversion of the Securities of that series, at the
option of the Holders thereof, for or into new Securities of a different
series or other securities or other property of the Company or another
Person, including shares of capital stock of the Company or any subsidiary
of the Company or of any other Person or securities directly or indirectly
convertible into or exchangeable for any such shares;
<PAGE> 27
20
(2) a sinking or purchase fund or other analogous obligation;
(3) if other than U.S. dollars, the currency or currencies or units
based on or related to currencies (including European Currency Units) in
which the Securities of such series shall be denominated and in which
payments of principal of, and any premium and interest on, such Securities
shall or may be payable;
(4) if the principal of (and premium, if any) or interest, if any, on
the Securities of such series are to be payable, at the election of the
Company or a holder thereof, in a currency or currencies or units based on
or related to currencies (including European Currency Units) other than
that in which the Securities are stated to be payable, the period or
periods within which, and the terms and conditions upon which, such
election may be made;
(5) if the amount of payments of principal of (and premium, if any) or
interest, if any, on the Securities of such series may be determined with
reference to an index based on (i) a currency or currencies or units based
on or related to currencies (including European Currency Units) other than
that in which the Securities are stated to be payable, (ii) changes in the
price of one or more other securities or groups or indexes of securities or
(iii) changes in the prices of one or more commodities or groups or indexes
of commodities, or any combination of the foregoing, the manner in which
such amounts shall be determined;
(6) if the aggregate principal amount of the Securities of that series
is to be limited, such limitations, and the maturity date of the principal
amount of such Securities of that series (which may be fixed or extendible),
and the rate or rates (which may be fixed or floating) per annum at which
the Securities of that series will bear interest, if any, or the method of
determining such rate or rates, and the payment dates and record dates
relating to such interest payments;
(7) the exchange of Securities of that series, at the option of the
Holders thereof, for other Securities of the same series of the same
aggregate principal amount of a different authorized kind or different
authorized denomination or denominations, or both;
<PAGE> 28
21
(8) the appointment by the Trustee of an Authenticating Agent in one
or more places other than the location of the office of the Trustee with
power to act on behalf of the Trustee and subject to its direction in the
authentication and delivery of the Securities of any one or more series in
connection with such transactions as shall be specified in the provisions
of this Indenture or in or pursuant to the Board Resolution or the
supplemental indenture creating such series;
(9) the percentage of their principal amount at which such Securities
will be issued, and the portion of the principal amount of Securities of the
series, if other than the total principal amount thereof, which shall be
payable upon declaration of acceleration of the Maturity thereof pursuant to
Section 502 or provable in bankruptcy pursuant to Section 504;
(10) any Event of Default with respect to the Securities of such
series, if not set forth herein and any additions, deletions or other
changes to the Events of Default set forth herein that shall be applicable
to the Securities of such series (including a provision making any Event of
Default set forth herein inapplicable to the Securities of that series);
(11) any covenant solely for the benefit of the Securities of such
series and any additions, deletions or other changes to the provisions of
Article Ten or any definitions relating to such Article that shall be
applicable to the Securities of such series (including a provision making
any Section of such Article inapplicable to the Securities of such series);
(12) the applicability of Section 402(b) of this Indenture to the
Securities of such series;
(13) if the Securities of the series shall be issued in whole or in
part in the form of a Global Security or Global Securities, the terms and
conditions, if any, upon which such Global Security or Global Securities
may be exchanged in whole or in part for other individual Securities; and
the Depositary for such Global Security or Global Securities (if other than
the Depositary specified in Section 101 hereof);
(14) the subordination of the Securities of such series to any other
indebtedness of the Company, including without limitation, the Securities
of any other series; and
<PAGE> 29
22
(15) any other terms of the series, which shall not be inconsistent
with the provisions of this Indenture,
all upon such terms as may be determined in or pursuant to a Board Resolution
or in or pursuant to a supplemental indenture with respect to such series. All
Securities of the same series shall be substantially identical in tenor and
effect, except as to denomination.
The form of the Securities of each series shall be established
pursuant to the provisions of this Indenture in or pursuant to the Board
Resolution or in or pursuant to the supplemental indenture creating such
series. The Securities of each series shall be distinguished from the
Securities of each other series in such manner, reasonably satisfactory to the
Trustee, as the Board of Directors may determine.
Unless otherwise provided with respect to Securities of a particular
series, the Securities of any series may only be issuable in registered form,
without coupons.
Any terms or provisions in respect of the Securities of any series
issued under this Indenture may be determined pursuant to this Section by
providing in a Board Resolution or supplemental indenture for the method by
which such terms or provisions shall be determined.
Section 302. Denominations. The Securities of each series shall be
issuable in such denominations and currency as shall be provided in the
provisions of this Indenture or in or pursuant to the Board Resolution or the
supplemental indenture creating such series. In the absence of any such
provisions with respect to the Securities of any series, the Securities of that
series shall be issuable only in fully registered form in denominations of
$1,000 and any integral multiple thereof.
Section 303. Execution, Authentication and Delivery and Dating. The
Securities shall be executed on behalf of the Company by its Chairman of the
Board, its President, one of its Vice Presidents or its Treasurer under its
corporate seal reproduced thereon and attested by its Secretary or one of its
Assistant Secretaries. The signature of any of these officers on the
Securities may be manual or facsimile.
Securities 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 or did not
hold such offices at the date of such Securities.
<PAGE> 30
23
At any time and from time to time after the execution and delivery of
this Indenture, the Company may deliver Securities executed by the Company to
the Trustee for authentication; and the Trustee shall, upon Company Order,
authenticate and make available for delivery such Securities as in this
Indenture provided and not otherwise.
Prior to any such authentication and delivery, the Trustee shall be
entitled to receive, in addition to any Officers' Certificate and Opinion of
Counsel required to be furnished to the Trustee pursuant to Section 102, and
the Board Resolution and any certificate relating to the issuance of the series
of Securities required to be furnished pursuant to Section 202, an Opinion of
Counsel stating that:
(1) all instruments furnished to the Trustee conform to the
requirements of the Indenture and constitute sufficient authority hereunder
for the Trustee to authenticate and deliver such Securities;
(2) the form and terms (or in connection with the issuance of
medium-term Securities under Section 311, the manner of determining the
terms) of such Securities have been established in conformity with the
provisions of this Indenture;
(3) all laws and requirements with respect to the execution and
delivery by the Company of such
Securities have been complied with, the Company has the corporate power
to issue such Securities and such Securities have been duly authorized and
delivered by the Company and, assuming due authentication and delivery by
the Trustee, constitute legal, valid and binding obligations of the Company
enforceable in accordance with their terms (subject, as to enforcement of
remedies, to applicable bankruptcy, reorganization, insolvency, fraudulent
conveyance, moratorium or other laws and legal principles affecting
creditors' rights generally from time to time in effect and to general
equitable principles, whether applied in an action at law or in equity) and
entitled to the benefits of this Indenture, equally and ratably with all
other Securities, if any, of such series Outstanding; and
(4) such other matters as the Trustee may reasonably request;
<PAGE> 31
24
and, if the authentication and delivery relates to a new series of Securities
created by an indenture supplemental hereto, also stating that all laws and
requirements with respect to the form and execution by the Company of the
supplemental indenture with respect to that series of Securities have been
complied with, the Company has corporate power to execute and deliver any such
supplemental indenture and has taken all necessary corporate action for those
purposes and any such supplemental indenture has been executed and delivered and
constitutes the legal, valid and binding obligation of the Company enforceable
in accordance with its terms (subject, as to enforcement of remedies, to
applicable bankruptcy, reorganization, insolvency, fraudulent conveyance,
moratorium or other laws and legal principles affecting creditors' rights
generally from time to time in effect and to general equitable principles,
whether applied in an action at law or in equity).
The Trustee shall not be required to authenticate such Securities if
the issue thereof will adversely affect the Trustee's own rights, duties or
immunities under the Securities and this Indenture.
Unless otherwise provided in the form of Security for any series, all
Securities shall be dated the date of their authentication.
No Security 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 herein
executed by the Trustee by manual signature of an authorized signatory, and
such certificate upon any Security shall be conclusive evidence, and the only
evidence, that such Security has been duly authenticated and delivered
hereunder.
Section 304. Temporary Securities. Pending the preparation of
definitive Securities of any series, the Company may execute, and, upon receipt
of the documents required by Section 303, together with a Company Order, the
Trustee shall authenticate and deliver, temporary Securities 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 and with such appropriate
insertions, omissions, substitutions and other variations as the officers
executing such Securities may determine, as evidenced by their execution of
such Securities.
<PAGE> 32
25
If temporary Securities of any series are issued, the Company will
cause definitive Securities of such series to be prepared without unreasonable
delay. After the preparation of definitive Securities, the temporary
Securities of such series shall be exchangeable for definitive Securities of
such series upon surrender of the temporary Securities of such series at the
office or agency of the Company in a Place of Payment, without charge to the
Holder; and upon surrender for cancellation of any one or more temporary
Securities the Company shall execute and the Trustee shall authenticate and
deliver in exchange therefor a like principal amount of definitive Securities
of such series of authorized denominations and of like tenor and terms. Until
so exchanged the temporary Securities of such series shall in all respects be
entitled to the same benefits under this Indenture as definitive Securities of
such series.
Section 305. Registration, Transfer and Exchange. The Company shall
keep or cause to be kept a register (herein sometimes referred to as the
"Security Register") in which, subject to such reasonable regulations as it may
prescribe, the Company shall provide for the registration of Securities, or of
Securities of a particular series, and for transfers of Securities or of
Securities of such series. Any such register shall be in written form or in
any other form capable of being converted into written form within a reasonable
time. At all reasonable times the information contained in such register or
registers shall be available for inspection by the Trustee at the office or
agency to be maintained by the Company as provided in Section 1002.
Subject to Section 204, upon surrender for transfer of any Security of
any series at the office or agency of the Company in a Place of Payment, 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 Securities of such series of any authorized denominations, of a like
aggregate principal amount and Stated Maturity and of like tenor and terms.
Subject to Section 204, at the option of the Holder, Securities of any
series may be exchanged for other Securities of such series of any authorized
denominations, of a like aggregate principal amount and Stated Maturity and of
like tenor and terms, upon surrender of the Securities to be exchanged at such
office or agency. Whenever any Securities are so surrendered for exchange, the
Company shall execute, and the Trustee shall authenticate and make available
for delivery, the Securities which the Securityholder making the exchange is
entitled to receive.
<PAGE> 33
26
All Securities issued upon any transfer or exchange of Securities
shall be the valid obligations of the Company, evidencing the same debt, and
entitled to the same benefits under this Indenture, as the Securities
surrendered upon such transfer or exchange.
Every Security presented or surrendered for transfer or exchange shall
(if so required by the Company or the Trustee) be duly endorsed, or be
accompanied by a written instrument of transfer in form satisfactory to the
Company and the Security Registrar duly executed, by the Holder thereof or his
attorney duly authorized in writing.
Unless otherwise provided in the Security to be transferred or
exchanged, no service charge shall be made on any Securityholder for any
transfer or exchange of Securities, but the Company may (unless otherwise
provided in such Security) require payment of a sum sufficient to cover any tax
or other governmental charge that may be imposed in connection with any
transfer or exchange of Securities, other than exchanges pursuant to Section
304 or 906 not involving any transfer.
The Company shall not be required (i) to issue, transfer or exchange
any Security of any series during a period beginning at the opening of business
15 days before the day of the mailing of a notice of redemption of Securities
of such series selected for redemption under Section 1103 and ending at the
close of business on the date of such mailing, or (ii) to transfer or exchange
any Security so selected for redemption in whole or in part, except for the
portion of such Security not so selected for redemption.
None of the Company, the Trustee, any agent of 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.
The Company initially appoints the Trustee to act as Security
Registrar for the Securities on its behalf. The Company may at any time and
from time to time authorize any Person to act as Security Registrar in place of
the Trustee with respect to any series of Securities issued under this
Indenture.
<PAGE> 34
27
Section 306. Mutilated, Destroyed, Lost and Stolen Securities. If
(i) any mutilated Security is surrendered to the Trustee, or the Company and
the Trustee receive evidence to their satisfaction of the destruction, loss or
theft of any Security, and (ii) there is delivered to the Company and the
Trustee such security or indemnity as may be required by them to save each of
them harmless, then, in the absence of notice to the Company or the Trustee
that such Security has been acquired by a bona fide purchaser, the Company
shall execute and upon its request the Trustee shall authenticate and deliver,
in exchange for or in lieu of any such mutilated, destroyed, lost or stolen
Security, a new Security of like tenor, series, Stated Maturity and principal
amount, bearing a number not contemporaneously Outstanding.
In case any such mutilated, destroyed, lost or stolen Security 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.
Upon the issuance of any new Security under this Section, 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 issued pursuant to this Section in lieu of any
destroyed, lost or stolen Security shall constitute an original additional
contractual obligation of the Company, whether or not the destroyed, lost or
stolen Security shall be at any time enforceable by anyone, and shall be
entitled to all the benefits of this Indenture equally and proportionately with
any and all other Securities of the same series duly issued hereunder.
The provisions of this Section are 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.
Section 307. Payment of Interest; Interest Rights Preserved. Unless
otherwise provided with respect to such Security pursuant to Section 301,
interest on any Security which is payable, and is punctually paid or duly
provided for, on any Interest Payment Date shall be paid to the Person in whose
name that Security (or one or more Predecessor Securities) is registered at the
close of business on the Regular Record Date for such interest.
Any interest on any Security which is payable, but is not punctually
paid or duly provided for, on any Interest Payment Date (herein called
"Defaulted Interest") shall forthwith cease to be payable to the registered
<PAGE> 35
28
Holder on the relevant Regular Record Date by virtue of his having been such
Holder; and, except as hereinafter provided, such Defaulted Interest may be
paid by the Company, at its election in each case, as provided in Clause (1) or
Clause (2) below:
(1) The Company may elect to make payment of any Defaulted Interest
to the Persons in whose names any such Securities (or their respective
Predecessor Securities) are registered at the close of business on a
Special Record Date for the payment of such Defaulted Interest, which shall
be fixed in the following manner. The Company shall notify the Trustee in
writing of the amount of Defaulted Interest proposed to be paid on each
such Security 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
prior to the date of the proposed payment, such money when deposited to be
held in trust for the benefit of the Persons entitled to such Defaulted
Interest as in this Clause provided. Thereupon the Trustee shall fix a
Special Record Date for the payment of such Defaulted Interest which shall
be not more than 15 nor less than 10 days prior to the date of the proposed
payment and not less than 10 days after the receipt by the Trustee of the
notice of the proposed payment. The Trustee shall promptly notify the
Company of such Special Record Date and, in the name and at the expense of
the Company, shall 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 each such Security at his address as it
appears in the Security Register, not less than 10 days prior to 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 Persons in whose
names such Securities (or their respective Predecessor Securities) are
registered 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 Securities 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 manner of payment shall be deemed practicable by the Trustee.
<PAGE> 36
29
If any installment of interest the Stated Maturity of which is on or
prior to the Redemption Date for any Security called for redemption pursuant to
Article Eleven is not paid or duly provided for on or prior to the Redemption
Date in accordance with the foregoing provisions of this Section, such interest
shall be payable as part of the Redemption Price of such Securities.
Subject to the foregoing provisions of this Section, each Security
delivered under this Indenture upon 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.
Section 308. Persons Deemed Owners. The Company, the Trustee and any
agent of the Company or the Trustee may treat the Person in whose name any
Security is registered in the Security Register as the owner of such Security
for the purpose of receiving payment of principal of (and premium, if any), and
(subject to Section 307) interest on, such Security and for all other purposes
whatsoever, whether or not such Security be overdue, and neither the Company,
the Trustee nor any agent of the Company or the Trustee shall be affected by
notice to the contrary.
Section 309. Cancellation. All Securities surrendered for payment,
redemption, transfer, conversion or exchange or credit against a sinking fund
shall, if surrendered to any Person other than the Trustee, be delivered to the
Trustee and, if not already canceled, shall be promptly canceled by it. 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
promptly canceled by the Trustee. No Security shall be authenticated in lieu
of or in exchange for any Securities canceled as provided in this Section,
except as expressly permitted by this Indenture. The Trustee shall return all
canceled Securities to the Company.
Section 310. Computation of Interest. Unless otherwise provided as
contemplated in Section 301, interest on the Securities shall be calculated on
the basis of a 360-day year of twelve 30-day months.
<PAGE> 37
30
Section 311. Medium-term Securities. Notwithstanding any contrary
provision herein, if all Securities of a series are not to be originally issued
at one time, it shall not be necessary for the Company to deliver to the
Trustee an Officers' Certificate, Board Resolution, supplemental indenture,
Opinion of Counsel or Company Request otherwise required pursuant to Sections
202, 301 and 303 at or prior to the time of authentication of each Security of
such series if such documents are delivered to the Trustee or its agent at or
prior to the authentication upon original issuance of the first Security of
such series to be issued; provided that any subsequent request by the Company
to the Trustee to authenticate Securities of such series upon original issuance
shall constitute a representation and warranty by the Company that as of the
date of such request, the statements made in the Officers' Certificate
delivered pursuant to Section 102 shall be true and correct as if made on such
date.
An Officers' Certificate, supplemental indenture or Board Resolution
delivered by the Company to the Trustee in the circumstances set forth in the
preceding paragraph may provide that Securities which are the subject thereof
will be authenticated and delivered by the Trustee or its agent on original
issue from time to time upon the telephonic or written order of persons
designated in such Officers' Certificate, Board Resolution or supplemental
indenture (any such telephonic instructions to be confirmed promptly in writing
by such persons) and that such persons are authorized to determine, consistent
with such Officers' Certificate, supplemental indenture or Board Resolution,
such terms and conditions of said Securities as are specified in such Officers'
Certificate, supplemental indenture or Board Resolution.
Section 312. 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.
<PAGE> 38
31
SECTION 3.13. Global Securities. (a) Each Global Security authenticated
under this Indenture shall be registered in the name of the Depositary
designated by the Company for such Global Security or a nominee thereof and
delivered to such Depositary or a nominee thereof or custodian therefor, and
each such Global Security shall constitute a single Security for all purposes
of this Indenture.
(b) Notwithstanding any other provision of this Indenture, no Global
Security may be exchanged in whole or in part for Securities registered, and no
transfer of a Global Security in whole or in part may be registered, in the name
of any Person other than the Depositary for such Global Security or a nominee
thereof unless (i) such Depositary (A) has notified the Company that it is
unwilling or unable to continue as Depositary for such Global Security or (B)
has ceased to be a clearing agency registered as such under the Exchange Act or
announces an intention permanently to cease business or does in fact do so or
(ii) there shall have occurred and be continuing an Event of Default with
respect to such Global Security.
(c) If any Global Security is to be exchanged for other Securities or
canceled in whole, it shall be surrendered by or on behalf of the Depositary or
its nominee to the Trustee, as Security Registrar, for exchange or cancellation,
as provided in this Article Three. If any Global Security is to be exchanged
for other Securities or canceled in part, or if another Security is to be
exchanged in whole or in part for a beneficial interest in any Global Security,
in each case, as provided in Section 305, then either (i) such Global
Security shall be so surrendered for exchange or cancellation, as provided in
this Article Three or (ii) the principal amount thereof shall be reduced or
increased by an amount equal to the portion thereof to be so exchanged or
canceled, or equal to the principal amount of such other Security to be so
exchanged for a beneficial interest therein, as the case may be, by means of an
appropriate adjustment made on the records of the Trustee, as Security
Registrar, whereupon the Trustee, in accordance with the Applicable Procedures,
shall instruct the Depositary or its authorized representative to make a
corresponding adjustment to its records. Upon any such surrender or adjustment
of a Global Security, the Trustee shall, subject to Section 305 and as
otherwise provided in this Article Three, authenticate and deliver any
Securities issuable in exchange for such Global Security (or any portion
thereof) to or upon the order of, and registered in such names as may be
directed by, the Depositary or its authorized representative. Upon the request
of the Trustee in connection with the occurrence of any of the events specified
in the preceding
<PAGE> 39
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paragraph, the Company shall promptly make available to the Trustee a
reasonable supply of Securities that are not in the form of Global Securities.
The Trustee shall be entitled to rely upon any order, direction or request of
the Depositary or its authorized representative which is given or made pursuant
to this Article III if such order, direction or request is given or made in
accordance with the Applicable Procedures.
(d) Every Security authenticated and delivered upon registration of
transfer of, or in exchange for or in lieu of, a Global Security or any portion
thereof, whether pursuant to this Article Three or otherwise, shall be
authenticated and delivered in the form of, and shall be, a registered Global
Security, unless such Security is registered in the name of a Person other than
the Depositary for such Global Security or a nominee thereof, in which case
such Registered Security shall be authenticated and delivered in definitive,
fully registered form, without interest coupons.
(e) The Depositary or its nominee, as registered owner of a Global
Security, shall be the Holder of such Global Security for all purposes under
the Indenture and the Registered Securities, and owners of beneficial interests
in a Global Security shall hold such interests pursuant to the Applicable
Procedures. Accordingly, any such owner's beneficial interest in a Global
Security will be shown only on, and the transfer of such interest shall be
effected only through, records maintained by the Depositary or its nominee or
its Agent Members and such owners of beneficial interests in a Global Security
will not be considered the owners or holders thereof.
ARTICLE FOUR
Satisfaction and Discharge of Indenture; Defeasance;
Unclaimed Moneys
Section 401. Applicability of Article. If, pursuant to Section 301,
provision is made for the defeasance of Securities of a series and if the
Securities of such series are denominated and payable only in Dollars (except
as provided pursuant to Section 301), then the provisions of this Article
Four relating to defeasance of Securities shall be applicable except as
otherwise specified pursuant to Section 301 for Securities of such series.
Defeasance provisions, if any, for Securities denominated in a Foreign Currency
may be specified pursuant to Section 301.
<PAGE> 40
33
Section 402. Satisfaction and Discharge of Indenture; Defeasance.
(a) If at any time (i) the Company shall have delivered to the Trustee for
cancellation all Securities of any series theretofore authenticated and
delivered (other than (1) any Securities of such series which shall have been
destroyed, lost or stolen and which shall have been replaced or paid as
provided in Section 306 and (2) Securities for whose payment money has
theretofore been deposited in trust and thereafter repaid to the Company as
provided in Section 405) or (ii) all Securities of such series not theretofore
delivered to the Trustee for cancellation shall have become due and payable, or
are by their terms to become due and payable within one year or are to be
called for redemption within one year under arrangements satisfactory to the
Trustee for the giving of notice of redemption, and the Company shall deposit
with the Trustee as trust funds the entire amount in the Currency in which such
Securities are denominated (except as otherwise provided pursuant to Section
301) sufficient (in the opinion of a nationally recognized firm of independent
public accountants expressed in a written certification thereof delivered to
the Trustee) without consideration of any reinvestment and after payment of all
taxes or other charges and assessments in respect thereof payable by the
Trustee, to pay at maturity or upon redemption all Securities of such series
not theretofore delivered to the Trustee for cancellation, including principal
and premium, if any, and interest due or to become due on such date of maturity
or redemption date, as the case may be, no default with respect to the
Securities has occurred and is continuing on the date of such deposit, such
deposit does not result in a breach or violation of, or constitute a default
under, the Indenture or any other agreement or instrument to which the Company
is a party and the Company delivers an Officers' Certificate and an Opinion of
Counsel each stating that such conditions have been complied with and if in
either case the Company shall also pay or cause to be paid all other sums
payable hereunder by the Company, then this Indenture shall cease to be of
further effect (except as to any surviving rights of registration of transfer or
exchange of such Securities herein expressly provided for and rights to receive
payments of principal of, and premium, if any, and interest on, such Securities)
with respect to the Securities of such series, and the Trustee, on demand of the
Company, shall execute proper instruments acknowledging satisfaction of and
discharging this Indenture.
(b) Subject to Sections 402(c), 403 and 407, the Company at any time may
terminate, with respect to Securities of a particular series, (i) all its
obligations under the Securities of such series and this Indenture with respect
to the Securities of such series ("legal defeasance option") or (ii) its
obligations with respect to the Securities of such series under clause (3) of
Section 801 ("covenant defeasance option"). The Company may exercise its legal
defeasance option notwithstanding its prior exercise of its covenant defeasance
option.
<PAGE> 41
34
If the Company exercises its legal defeasance option, payment of the
Securities of the defeased series may not be accelerated because of an Event of
Default. If the Company exercises its covenant defeasance option, payment of the
Securities may not be accelerated because of an Event of Default related to the
specified covenants.
Upon satisfaction of the conditions set forth herein and upon request
of the Company, the Trustee shall acknowledge in writing the discharge of those
obligations that the Company terminates.
(c) Notwithstanding clause (a) above and the exercise of the legal
defeasance option in clause (b) above, the Company's obligations in Sections
305, 306, 1002, 701, 607, 608, 405, 406 and 407 shall survive until the
Securities of the defeased series have been paid in full. Thereafter, the
Company's obligations in Sections 607, 405 and 406 shall survive.
Section 403. Conditions of Defeasance. The Company may exercise its
legal defeasance option or its covenant defeasance option with respect to
Securities of a particular series only if:
(1) the Company irrevocably deposits in trust with the Trustee
money or U.S. Government Obligations for the payment of principal of,
and premium, if any, and interest on, the Securities of such series to
maturity or redemption, as the case may be;
(2) the Company delivers to the Trustee a certificate from a
nationally recognized firm of independent public accountants expressing
their opinion that the payments of principal and interest when due and
without reinvestment on the deposited U.S. Government Obligations plus
any deposited money without investment will provide cash at such times
and in such amounts as will be sufficient to pay the principal, premium,
if any, and interest when due on all the Securities of such series to
maturity or redemption, as the case may be;
(3) 91 days pass after the deposit is made and during the 91-day
period no Default specified in Section 501(5) or (6) with respect to the
Company occurs which is continuing at the end of the period;
(4) no Default has occurred and is continuing on the date of such
deposit and after giving effect thereto;
<PAGE> 42
35
(5) the deposit does not constitute a default under any other
agreement binding on the Company;
(6) the Company delivers to the Trustee an Opinion of Counsel to
the effect that the trust resulting from the deposit does not
constitute, or is qualified as, a regulated investment company under
the Investment Company Act of 1940;
(7) in the event of the legal defeasance option, 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 ruling, or (ii)
since the date of this Indenture there has been a change in the
applicable Federal income tax law, in either case to the effect that,
and based thereon such Opinion of Counsel shall confirm that, the
Holders of Securities of such series 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;
(8) in the event of the covenant defeasance option, the Company
shall have delivered to the Trustee an Opinion of Counsel to the
effect that the Holders of Securities of such series 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; and
(9) the Company delivers to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that all conditions precedent
to the defeasance and discharge of the Securities of such series as
contemplated by this Article Four have been complied with.
Before or after a deposit, the Company may make arrangements
satisfactory to the Trustee for the redemption of Securities of such series at a
future date in accordance with Article Four.
Section 404. Application of Trust Money. The Trustee shall hold in
trust money or U.S. Government Obligations deposited with it pursuant to this
Article Four. It shall apply the deposited money and the money from U.S.
Government Obligations through any paying agent and in accordance with this
Indenture to the payment of principal of, and premium, if any, and interest on,
the Securities of the defeased series.
<PAGE> 43
36
Section 405. Repayment to Company. The Trustee and any paying agent
shall promptly turn over to the Company upon request any excess money or
securities held by them at any time.
Subject to any applicable abandoned property law, the Trustee
and any paying agent shall pay to the Company upon request any money held by
them for the payment of principal, premium or interest that remains unclaimed
for two years, and, thereafter, Holders entitled to such money must look to the
Company for payment as general creditors and all liability of the Trustee or
such paying agent with respect to such money shall thereupon cease.
Section 406. Indemnity for U.S. Government Obligations. The Company
shall pay and shall indemnify the Trustee and the Holders against any tax, fee
or other charge imposed on or assessed against deposited U.S. Government
Obligations or the principal and interest received on such U.S. Government
Obligations.
Section 407. Reinstatement. If the Trustee or any paying agent is
unable to apply any money or U.S. Government Obligations in accordance with this
Article Four by reason of any legal proceeding or by reason of any order or
judgment of any court or government authority enjoining, restraining or
otherwise prohibiting such application, the Company's obligations under this
Indenture and the Securities of the defeased series shall be revived and
reinstated as though no deposit had occurred pursuant to this Article Four until
such time as the Trustee or any paying agent is permitted to apply all such
money or U.S. Government Obligations in accordance with this Article Four.
ARTICLE FIVE
Remedies
Section 501. Events of Default. "Event of Default", wherever used
herein, means with respect to any series of Securities 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 either inapplicable
<PAGE> 44
37
to a particular series or it is specifically deleted or modified in the
supplemental indenture creating such series of Securities or in the form of
Security for such series:
(1) default in the payment of any interest upon any Security of that
series when it becomes due and payable, and continuance of such default for
a period of 90 days; or
(2) default in the payment of the principal of (or premium, if any,
on) any Security of that series at its Maturity; or
(3) default in the payment of any sinking or purchase fund or
analogous obligation when the same becomes due by the terms of the
Securities of such series; or
(4) default in the performance, or breach, of any covenant or warranty
of the Company in this Indenture in respect of the Securities of such
series (other than a covenant or warranty in respect of the Securities of
such series a default in the performance of which or the breach of which is
elsewhere in this Section specifically dealt with), all of such covenants
and warranties in the Indenture which are not expressly stated to be for
the benefit of a particular series of Securities being deemed in respect of
the Securities of all series for this purpose, and continuance of such
default or breach for a period of 90 days after there has 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 or breach and requiring it to be remedied and stating that such
notice is a "Notice of Default" hereunder; or
(5) the entry of an order for relief against the Company under the
Federal Bankruptcy Code by a court having jurisdiction in the premises or a
decree or order by a court having jurisdiction in the premises adjudging
the Company a bankrupt or insolvent under any other applicable Federal or
State law, or the entry of a decree or order approving as properly filed a
petition seeking reorganization, arrangement, adjustment or composition of
or in respect of the Company under the Federal Bankruptcy Code or any other
applicable Federal or State law, or appointing a receiver, liquidator,
assignee, trustee, sequestrator (or other similar official) of the Company
or of any substantial part of its property, or ordering the winding up or
liquidation of its affairs, and the continuance of any such decree or order
unstayed and in effect for a period of 60 consecutive days; or
<PAGE> 45
38
(6) the consent by the Company to the institution of bankruptcy or
insolvency proceedings against it, or the filing by it of a petition or
answer or consent seeking reorganization or relief under the Federal
Bankruptcy Code or any other applicable Federal or State law, or the
consent by it to the filing of any such petition or to the appointment of a
receiver, liquidator, assignee, trustee, sequestrator (or other similar
official) of the Company or of any substantial part of its property, or the
making by it of an assignment for the benefit of creditors, or the
admission by it in writing of its inability to pay its debts generally as
they become due, or the taking of corporate action by the Company in
furtherance of any such action; or
(7) any other Event of Default provided in the supplemental indenture
under which such series of Securities is issued or in the form of Security
for such series.
Section 502. Acceleration of Maturity; Rescission and Annulment. If
an Event of Default described in paragraph (1), (2), (3), (4) or (7) (if the
Event of Default under paragraph (4) or (7) is with respect to less than all
series of Securities then Outstanding) of Section 501 occurs and is continuing
with respect to any series, then and in each and every such case, unless the
principal of all the Securities of such series shall have already become due
and payable, either the Trustee or the Holders of not less than 25% in
aggregate principal amount of the Securities of such series then Outstanding
hereunder (each such series acting as a separate class), by notice in writing
to the Company (and to the Trustee if given by Holders), may declare the
principal amount (or, if the Securities of such series are Original Issue
Discount Securities, such portion of the principal amount as may be specified
in the terms of that series) of all the Securities of such series then
Outstanding and all accrued interest thereon to be due and payable immediately,
and upon any such declaration the same shall become and shall be immediately
due and payable, anything in this Indenture or in the Securities of such series
contained to the contrary notwithstanding. If an Event of Default described in
paragraph (4) or (7) (if the Event of Default under paragraph (4) or (7) is
with respect to all series of Securities then Outstanding), or (5) or (6) of
Section 501 occurs and is continuing, then and in each and every such case,
unless the principal of all the Securities shall have already become due and
payable, either the Trustee or the Holders of not less than 25% in aggregate
principal amount of all the Securities then Outstanding hereunder (treated as
one class), by notice in writing to the Company (and to the Trustee if given by
Holders), may declare the principal amount (or, if any Securities are Original
Issue Discount Securities, such portion of the principal amount as may be
specified in the terms thereof) of all the Securities then Outstanding and all
accrued interest thereon to be due and payable immediately, and upon any such
declaration the same shall become and shall be immediately due and payable,
anything in this Indenture or in the Securities contained to the contrary
notwithstanding.
<PAGE> 46
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At any time after such a declaration of acceleration has been made
with respect to the Securities of any series 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 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 has paid or deposited with the Trustee a sum sufficient
to pay
(A) all overdue installments of interest on the Securities of such
series,
(B) the principal of (and premium, if any, on) any Securities of
such series which have become due otherwise than by such declaration
of acceleration, and interest thereon at the rate or rates prescribed
therefor by the terms of the Securities of such series, to the extent
that payment of such interest is lawful,
(C) interest upon overdue installments of interest at the rate or
rates prescribed therefor by the terms of the Securities of such
series to the extent that payment of such interest is lawful, 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 607;
and
(2) all Events of Default with respect to such series of Securities,
other than the nonpayment of the principal of the Securities of such series
which have become due solely by such acceleration, have been cured or
waived as provided in Section 513.
No such rescission shall affect any subsequent default or impair any right
consequent thereon.
Section 503. 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
any Security of any series when such interest becomes due and payable, or
<PAGE> 47
40
(2) default is made in the payment of the principal of (or premium, if
any, on) any Security at the Maturity thereof, or
(3) default is made in the payment of any sinking or purchase fund or
analogous obligation when the same becomes due by the terms of the
Securities of any series,
and any such default continues for any period of grace provided with respect to
the Securities of such series, the Company will, upon demand of the Trustee,
pay to it, for the benefit of the Holder of any such Security (or the Holders
of any such series in the case of Clause (3) above), the whole amount then due
and payable on any such Security (or on the Securities of any such series in
the case of Clause (3) above) for principal (and premium, if any) and interest,
with interest, to the extent that payment of such interest shall be legally
enforceable, upon the overdue principal (and premium, if any) and upon overdue
installments of interest, at such rate or rates as may be prescribed therefor
by the terms of any such Security (or of Securities of any such series in the
case of Clause (3) above); and, in addition thereto, such further amount as
shall be sufficient to cover the costs and expenses of collection, including
the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel and all other amounts due the Trustee under
Section 607.
If the Company fails to pay such amounts forthwith upon such demand,
the Trustee, in its own name and as trustee of an express trust, may institute
a judicial proceeding for the collection of the sums so due and unpaid, and may
prosecute such proceeding to judgment or final decree, and may enforce the same
against the Company or any other obligor upon the Securities of such series and
collect the money adjudged or decreed to be payable in the manner provided by
law out of the property of the Company or any other obligor upon such
Securities, wherever situated.
If an Event of Default with respect to any series of Securities 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
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 in aid of the
exercise of any power granted herein, or to enforce any other proper remedy.
Section 504. 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 or any other obligor upon the Securities or the property of the
Company or of such other
<PAGE> 48
41
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 for the payment of overdue principal or
interest) shall be entitled and empowered, by intervention in such proceedings
or otherwise,
(i) to file and prove a claim for the whole amount of principal (and
premium, if any) and interest owing and unpaid in respect of the Securities
and to file such other papers or documents as may be necessary and
advisable in order to have the claims of the Trustee (including any claim
for the reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel and all other amounts due the Trustee
under Section 607) and of the Securityholders allowed in such judicial
proceeding, and
(ii) to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same;
and any receiver, assignee, trustee, liquidator, sequestrator (or other similar
official) in any such judicial proceeding is hereby authorized by each
Securityholder to make such payment to the Trustee and in the event that the
Trustee shall consent to the making of such payments directly to the
Securityholders, 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 607.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Securityholder any
plan or reorganization, arrangement, adjustment or composition affecting the
Securities or the rights of any Holder thereof, or to authorize the Trustee to
vote in respect of the claim of any Securityholder in any such proceeding.
Section 505. Trustee May Enforce Claims Without Possession of
Securities. All rights of action and claims under this Indenture or the
Securities of any series may be prosecuted and enforced by the Trustee without
the possession of any of the Securities of such series 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 of judgment shall, after provision for the
<PAGE> 49
42
payment of the reasonable compensation, expenses, disbursements and advances of
the Trustee, its agent and counsel, be for the ratable benefit of the Holders
of the Securities of the series in respect of which such judgment has been
recovered.
Section 506. Application of Money Collected. Any money collected by
the Trustee with respect to a series of Securities 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 premium, if any) or interest, upon presentation of the Securities of such
series 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 under Section
607.
SECOND: To the payment of the amounts then due and unpaid upon the
Securities of that series for principal (and premium, if any) and interest, 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 amounts
due and payable on such Securities for principal (and premium, if any) and
interest, respectively.
THIRD: To the Company.
Section 507. Limitation on Suits. No Holder of any Security of any
series 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 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 reasonable
indemnity against the costs, expenses and liabilities to be incurred in
compliance with such request;
<PAGE> 50
43
(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 Holders of Securities of
such series shall have any right in any manner whatever by virtue of, or by
availing of, any provision of this Indenture to affect, disturb or prejudice
the rights of any other Holders of Securities of such series, or to obtain or
to seek to obtain priority or preference over any other such Holders or to
enforce any right under this Indenture, except in the manner herein provided
and for the equal and proportionate benefit of all the Holders of all
Securities of such series.
Section 508. Unconditional Right of Securityholders to Receive
Principal, Premium and Interest. Notwithstanding any other provisions in this
Indenture, the Holder of any Security shall have the right, which is absolute
and unconditional, to receive payment of the principal of (and premium, if any)
and (subject to Section 307) interest on such Security on the respective Stated
Maturities expressed in such Security (or, in the case of redemption or
repayment, on the Redemption Date or Repayment Date, as the case may be) and to
institute suit for the enforcement of any such payment, and such right shall
not be impaired without the consent of such Holder.
Section 509. Restoration of Rights and Remedies. If the Trustee or
any Securityholder has instituted any proceeding to enforce any right or remedy
under this Indenture and such proceeding has been discontinued or abandoned for
any reason, then and in every such case the Company, the Trustee and the
Securityholders 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 the Securityholders shall
continue as though no such proceeding had been instituted.
Section 510. Rights and Remedies Cumulative. No right or remedy
herein conferred upon or reserved to the Trustee or to the Securityholders is
intended to be exclusive of any other right or remedy, and every right and
remedy shall, to the extent permitted by law, be cumulative and in addition to
every other right and remedy given
<PAGE> 51
44
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 prevent the concurrent assertion or employment of any other appropriate
right or remedy.
Section 511. Delay or Omission Not Waiver. No delay or omission of
the Trustee or of any Holder of any Security 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 the
Securityholders may be exercised from time to time, and as often as may be
deemed expedient, by the Trustee or by the Securityholders, as the case may be.
Section 512. Control by Securityholders. 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, provided that
(1) the Trustee shall have the right to decline to follow any such
direction if the Trustee, being advised by counsel, determines that the
action so directed may not lawfully be taken or would conflict with this
Indenture or if the Trustee in good faith shall, by a Responsible Officer,
determine that the proceedings so directed would involve it in personal
liability or be unjustly prejudicial to the Holders not taking part in such
direction, and
(2) the Trustee may take any other action deemed proper by the Trustee
which is not inconsistent with such direction.
Section 513. Waiver of Past Defaults. The Holders of not less than a
majority in principal amount of the Outstanding Securities of any series may on
behalf of the Holders of all the Securities of such series waive any past
default hereunder with respect to such series and its consequences, except a
default not theretofore cured
(1) in the payment of the principal of (or premium, if any) or
interest on any Security of such series, or in the payment of any sinking
or purchase fund or analogous obligation with respect to the Securities of
such series, or
(2) in respect of a covenant or provision hereof which under Article
Nine cannot be modified or amended without the consent of the Holder of
each Outstanding Security of such series.
<PAGE> 52
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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 514. 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 an 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 shall not apply to
any suit instituted by the Trustee, to any suit instituted by any
Securityholder, or group of Securityholders, holding in the aggregate more than
10% in principal amount of the Outstanding Securities of any series to which
the suit relates, or to any suit instituted by any Securityholder for the
enforcement of the payment of the principal of (or premium, if any) or interest
on any Security on or after the respective Stated Maturities expressed in such
Security (or, in the case of redemption or repayment, on or after the
Redemption Date or Repayment Date).
Section 515. Waiver of Stay or Extension Laws. The Company covenants
(to the extent that it may lawfully do so) that it will not at any time insist
upon, or plead, or in any manner whatsoever claim or take the benefit or
advantage of, any 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 the Company (to the extent that it may lawfully do so) hereby
expressly waives 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.
ARTICLE SIX
The Trustee
Section 601. Certain Duties and Responsibilities. (a) Except during
the continuance of an Event of Default with respect to any series of
Securities,
(1) the Trustee undertakes to perform such duties and only such duties
as are specifically set forth in this Indenture with respect to the
Securities of such series, and no implied covenants or obligations shall be
read into this Indenture against the Trustee; and
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(2) in the absence of bad faith on its part, the Trustee may, with
respect to Securities of such series, 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.
(b) In case an Event of Default with respect to any series of
Securities has occurred and is continuing, the Trustee shall exercise with
respect to the Securities of such series 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 person would exercise or use under the circumstances in
the conduct of such person's own affairs.
(c) No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act, or its own willful misconduct, except that
(1) this Subsection shall not be construed to limit the effect of
Subsection (a) of this Section;
(2) the Trustee shall not be liable for any error of judgment made in
good faith by a Responsible Officer, unless it shall be proved that the
Trustee was negligent in ascertaining the pertinent facts;
(3) the Trustee shall not be liable with respect to any action taken
or omitted to be taken by it in good faith in accordance with the direction
of the Holders of a majority in principal amount of the Outstanding
Securities of any series relating to the time, method and place of
conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred upon the Trustee, under this
Indenture with respect to the Securities of such series; and
(4) 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.
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(d) Whether or not therein 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 602. Notice of Defaults. Within 90 days after the occurrence
of any default hereunder with respect to Securities of any series, the Trustee
shall transmit by mail to all Securityholders of such series, as their names
and addresses appear in the Security Register, notice of such default hereunder
known to 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 on any Security of such series or
in the payment of any sinking or purchase fund installment or analogous
obligation with respect to Securities 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 interests of the Securityholders of such series; and provided,
further, that in the case of any default of the character specified in Section
501(4) with respect to Securities of such series no such notice to
Securityholders of such series shall be given until at least 90 days after the
occurrence thereof. For the purpose of this Section, the term "default", with
respect to Securities of any series, 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.
Section 603. Certain Rights of Trustee. Except as otherwise provided
in Section 601:
(a) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, debenture or
other paper or document believed by it to be genuine and to have been signed or
presented by the proper party or parties;
(b) any request or direction of the Company mentioned herein shall be
sufficiently evidenced by a Company Request or Company Order and any resolution
of the Board of Directors may be sufficiently evidenced by a Board Resolution;
(c) 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
be herein specifically prescribed) may, in the absence of bad faith on its
part, rely upon an Officers' Certificate;
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(d) the Trustee may consult with counsel of its selection and the
written 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;
(e) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction of
any of the Securityholders pursuant to this Indenture, unless such
Securityholders shall have offered to the Trustee reasonable security or
indemnity against the costs, expenses and liabilities which might be incurred
by it in compliance with such request or direction;
(f) 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 or
other paper or document, but the Trustee, in its discretion, may 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 the books, records and premises
of the Company, personally or by agent or attorney; and
(g) 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.
Section 604. Not Responsible for Recitals or Issuance of Securities.
The recitals contained herein and in the Securities, except the certificates of
authentication, shall be taken as the statements of the Company, and the
Trustee assumes no responsibility for their correctness. The Trustee makes no
representations as to the validity or sufficiency of this Indenture or of the
Securities. The Trustee shall not be accountable for the use or application by
the Company of Securities or the proceeds thereof.
Section 605. May Hold Securities. The Trustee, any Paying Agent, the
Security Registrar or any other agent of the Company, in its individual or any
other capacity, may become the owner or pledgee of Securities and, subject to
Sections 608 and 613, may otherwise deal with the Company with the same rights
it would have if it were not Trustee, Paying Agent, Security Registrar or such
other agent.
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Section 606. Money Held in Trust. Money held by the Trustee in trust
hereunder need not be segregated from other funds except to the extent required
by law. The Trustee shall be under no liability for interest on any money
received by it hereunder except as otherwise agreed with the Company.
Section 607. Compensation and Reimbursement. The Company agrees
(1) to pay to the Trustee from time to time such compensation
for all services rendered by it hereunder as the parties shall agree
from time to time (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 (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 its negligence or bad
faith; and
(3) to indemnify the Trustee for, and to hold it harmless against, any
loss, liability or expense incurred without negligence or bad faith on its
part, arising out of or in connection with the acceptance or administration
of this trust, including the costs and expenses of defending itself against
any claim or liability in connection with the exercise or performance of
any of its powers or duties hereunder.
As security for the performance of the obligations of the Company
under this Section the Trustee shall have a lien prior to the Securities 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, if any) or interest
on particular Securities.
Section 608. Disqualification; Conflicting Interests. The Trustee
for the Securities of any series issued hereunder shall be subject to the
provisions of Section 310(b) of the Trust Indenture Act during the period of
time provided for therein. In determining whether the Trustee has a
conflicting interest as defined in Section 310(b) of the Trust Indenture Act
with respect to the Securities of any series, there shall be excluded for
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purposes of the conflicting interest provisions of such Section 310(b) the
Securities of every other series issued under this Indenture (i) every series
of securities issued under the Indenture dated as of __________ __, 199_,
between Clear Channel Communications, Inc. and _________________, (ii) every
series of securities issued under the Indenture dated as of _________ __, 199_,
between Clear Channel Communications, Inc. and ____________. Nothing herein
shall prevent the Trustee from filing with the Commission the application
referred to in the second to last paragraph of Section 310(b) of the Trust
Indenture Act.
Section 609. Corporate Trustee Required; Eligibility. There shall at
all times be a Trustee hereunder with respect to each series of Securities,
which shall be a corporation organized and doing business under the laws of the
United States of America or of any State, authorized under such laws to
exercise corporate trust powers, having a combined capital and surplus of at
least $50,000,000, and subject to supervision or examination by Federal or
State authority. If such corporation publishes reports of condition at least
annually, pursuant to law or to the requirements of the aforesaid supervising
or examining authority, then for the purposes of this Section, the combined
capital and surplus of such corporation shall be deemed to be its combined
capital and surplus as set forth in its most recent report of condition so
published.
If at any time the Trustee with respect to any series of Securities 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 610. Resignation and Removal; Appointment of Successor. (a)
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 under Section 611.
(b) The Trustee may resign with respect to any series of Securities
at any time by giving written notice thereof to the Company. If an instrument
of acceptance by a successor Trustee 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.
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(c) The Trustee may be removed with respect to any series of
Securities at any time by Act of the Holders of a majority in principal amount
of the Outstanding Securities of that series, delivered to the Trustee and to
the Company. If an instrument of acceptance by a successor Trustee 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.
(d) If at any time:
(1) the Trustee shall fail to comply with Section 310(b) of the Trust
Indenture Act pursuant to Section 608(a) with respect to any series of
Securities after written request therefor by the Company or by any
Securityholder who has been a bona fide Holder of a Security of that series
for at least 6 months, or
(2) the Trustee shall cease to be eligible under Section 609 with
respect to any series of Securities and shall fail to resign after written
request therefor by the Company or by any such Securityholder, or
(3) the Trustee shall become incapable of acting with respect to any
series of Securities, or
(4) the Trustee 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 a Board Resolution may remove the
Trustee, with respect to the series, or in the case of Clause (4), with respect
to all series, or (ii) subject to Section 514, any Securityholder who has been
a bona fide Holder of a Security of such series for at least 6 months may, on
behalf of himself and all others similarly situated, petition any court of
competent jurisdiction for the removal of the Trustee and the appointment of a
successor Trustee with respect to the series, or, in the case of Clause (4),
with respect to all series.
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(e) If the Trustee shall resign, be removed or become incapable of
acting with respect to any series of Securities, or if a vacancy shall occur in
the office of the Trustee with respect to any series of Securities for any
cause, the Company, by a Board Resolution, shall promptly appoint a successor
Trustee for that series of Securities. If, within one year after such
resignation, removal or incapacity, or the occurrence of such vacancy, a
successor Trustee with respect to such series of Securities 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, become the successor Trustee with respect to such series and
supersede the successor Trustee appointed by the Company with respect to such
series. If no successor Trustee with respect to such series shall have been so
appointed by the Company or the Securityholders of such series and accepted
appointment in the manner hereinafter provided, any Securityholder who has been
a bona fide Holder of a Security of that series for at least 6 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 such series.
(f) The Company shall give notice of each resignation and each
removal of the Trustee with respect to any series and each appointment of a
successor Trustee with respect to any series by mailing written notice of such
event by first-class mail, postage prepaid, to the Holders of Securities of
that series as their names and addresses appear in the Security Register. Each
notice shall include the name of the successor Trustee and the address of its
principal Corporate Trust Office.
Section 611. Acceptance of Appointment by Successor. Every successor
Trustee appointed hereunder shall execute, acknowledge and deliver to the
Company and to the predecessor Trustee an instrument accepting such appointment,
and thereupon the resignation or removal of the predecessor Trustee shall become
effective with respect to any series as to which it is resigning or being
removed as Trustee, and such successor Trustee, without any further act, deed or
conveyance, shall become vested with all the rights, powers, trusts and duties
of the predecessor Trustee with respect to any such series; but, on request of
the Company or the successor Trustee, such predecessor Trustee shall, upon
payment of its reasonable charges, if any, execute and deliver an instrument
transferring to such successor Trustee all the rights, powers and trusts of the
predecessor Trustee, and shall duly assign, transfer and deliver to such
successor Trustee all property and money held by such predecessor Trustee
hereunder with respect to all or any such series, subject nevertheless to its
lien, if any, provided for in Section 607. Upon request of any such successor
Trustee, the Company 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.
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In case of the appointment hereunder of a successor Trustee with
respect to the Securities of one or more (but not all) series, the Company, the
predecessor Trustee and each successor Trustee with respect to the Securities
of any applicable series shall execute and deliver an indenture supplemental
hereto which shall contain such provisions as shall be deemed necessary or
desirable to confirm that all the rights, powers, trusts and duties of the
predecessor Trustee with respect to the Securities of any series as to which
the predecessor Trustee is not being succeeded shall continue to be vested in
the predecessor Trustee, and 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 and 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.
No successor Trustee with respect to any series of Securities shall
accept its appointment unless at the time of such acceptance such successor
Trustee shall be qualified and eligible with respect to that series under this
Article.
Section 612. 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,
provided such corporation shall be otherwise qualified and eligible under this
Article, 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 613. Preferential Collection of Claims Against Company. (a)
Subject to Subsection (b) of this Section, if the Trustee shall be or shall
become a creditor, directly or indirectly, secured or unsecured, of the Company
within 3 months prior to a default, as defined in Subsection (c) of this
Section, or subsequent to such a default, then, unless and until such default
shall be cured, the Trustee shall set apart and hold in a special account for
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the benefit of the Trustee individually, the Holders of the Securities and the
holders of other indenture securities (as defined in Subsection (c) of this
Section):
(1) an amount equal to any and all reductions in the amount due and
owing upon any claim as such creditor in respect of principal or interest,
effected after the beginning of such 3-month period and valid as against
the Company and its other creditors, except any such reduction resulting
from the receipt or disposition of any property described in paragraph (2)
of this Subsection, or from the exercise of any right of set-off which the
Trustee could have exercised if a petition in bankruptcy had been filed by
or against the Company upon the date of such default; and
(2) all property received by the Trustee in respect of any claim as
such creditor, either as security therefor, or in satisfaction or
composition thereof, or otherwise, after the beginning of such 3-month
period, or an amount equal to the proceeds of any such property, if
disposed of, subject, however, to the rights, if any, of the Company and
its other creditors in such property or such proceeds.
Nothing herein contained, however, shall affect the right of the Trustee
(A) to retain for its own account (i) payments made on account of
any such claim by any Person (other than the Company) who is liable
thereon, and (ii) the proceeds of the bona fide sale of any such claim
by the Trustee to a third person, and (iii) distributions made in
cash, securities or other property in respect of claims filed against
the Company in bankruptcy or receivership or in proceedings for
reorganization pursuant to the Federal Bankruptcy Act or applicable
State law;
(B) to realize, for its own account, upon any property held by it
as security for any such claim, if such property was so held prior to
the beginning of such 3-month period;
(C) to realize, for its own account, but only to the extent of the
claim hereinafter mentioned, upon any property held by it as security
for any such claim, if such claim was created after the beginning of
such 3-month period and such property was received as security
therefor simultaneously with the creation thereof, and if the Trustee
shall sustain the burden of proving that at the time such property was
so received the Trustee had no reasonable cause to believe that a
default as defined in Subsection (c) of this Section would occur
within 3 months; or
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(D) to receive payment on any claim referred to in paragraph (B)
or (C), against the release of any property held as security for such
claim as provided in paragraph (B) or (C), as the case may be, to the
extent of the fair value of such property.
For the purposes of paragraphs (B), (C) and (D), property substituted
after the beginning of such 3-month period for property held as security at the
time of such substitution shall, to the extent of the fair value of the
property released, have the same status as the property released, and, to the
extent that any claim referred to in any of such paragraphs is created in
renewal of or in substitution for or for the purpose of repaying or refunding
any pre-existing claim of the Trustee as such creditor, such claim shall have
the same status as such pre-existing claim.
If the Trustee shall be required to account, the funds and property
held in such special account and the proceeds thereof shall be apportioned
between the Trustee, the Securityholders and the holders of other indenture
securities in such manner that the Trustee, the Securityholders and the holders
of other indenture securities realize, as a result of payments from such
special account and payments of dividends on claims filed against the Company
in bankruptcy or receivership or in proceedings for reorganization pursuant to
the Federal Bankruptcy Act or applicable State law, the same percentage of
their respective claims, figured before crediting to the claim of the Trustee
anything on account of the receipt by it from the Company of the funds and
property in such special account and before crediting to the respective claims
of the Trustee and the Securityholders and the holders of other indenture
securities dividends on claims filed against the Company in bankruptcy or
receivership or in proceedings for reorganization pursuant to the Federal
Bankruptcy Act or applicable State law, but after crediting thereon receipts on
account of the indebtedness represented by their respective claims from all
sources other than from such dividends and from the funds and property so held
in such special account. As used in this paragraph, with respect to any claim,
the term "dividends" shall include any distribution with respect to such claim,
in bankruptcy or receivership or proceedings for reorganization pursuant to the
Federal Bankruptcy Act or applicable State law, whether such distribution is
made in cash, securities, or other property, but shall not include any such
distribution with respect to the secured portion, if any, of such claim. The
court in which such bankruptcy, receivership or proceedings for reorganization
is pending shall have jurisdiction (i) to apportion between the Trustee and the
Securityholders and the holders of other indenture securities in accordance
with the provisions of this paragraph, the funds and property held in such
special account and proceeds thereof, or (ii) in lieu of such apportionment, in
whole or in part, to give to the provisions of this paragraph due consideration
in determining the fairness of the distributions to be made to the Trustee and
the Securityholders and the holders of other indenture securities with respect
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to their respective claims, in which event it shall not be necessary to
liquidate or to appraise the value of any securities or other property held in
such special account or as security for any such claim, or to make a specific
allocation of such distributions as between the secured and unsecured portions
of such claims, or otherwise to apply the provisions of this paragraph as a
mathematical formula.
Any Trustee which has resigned or been removed after the beginning of
such 3-month period shall be subject to the provisions of this Subsection as
though such resignation or removal had not occurred. If any Trustee has
resigned or been removed prior to the beginning of such 3-month period, it
shall be subject to the provisions of this Subsection if and only if the
following conditions exist:
(i) the receipt of property or reduction of claim, which would
have given rise to the obligation to account, if such Trustee had
continued as Trustee, occurred after the beginning of such 3-month
period; and
(ii) such receipt of property or reduction of claim occurred
within 3 months after such resignation or removal.
(b) There shall be excluded from the operation of Subsection (a) of
this Section a creditor relationship arising from
(1) the ownership or acquisition of securities issued under any
indenture, or any security or securities having a maturity of one year or
more at the time of acquisition by the Trustee;
(2) advances authorized by a receivership or bankruptcy court of
competent jurisdiction, or by this Indenture, for the purpose of preserving
any property which shall at any time be subject to the lien of this
Indenture or of discharging tax liens or other prior liens or encumbrances
thereon, if notice of such advances and of the circumstances surrounding
the making thereof is given to the Securityholders at the time and in the
manner provided in this Indenture;
(3) disbursements made in the ordinary course of business in the
capacity of trustee under an indenture, transfer agent, registrar,
custodian, paying agent, fiscal agent or depositary, or other similar
capacity;
(4) an indebtedness created as a result of services rendered or
premises rented; or an indebtedness created as a result of goods or
securities sold in a cash transaction as defined in Subsection (c) of this
Section;
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(5) the ownership of stock or of other securities of a corporation
organized under the provisions of Section 25(a) of the Federal Reserve Act,
as amended, which is directly or indirectly a creditor of the Company; or
(6) the acquisition, ownership, acceptance or negotiation of any
drafts, bills of exchange, acceptances or obligations which fall within the
classification of self liquidating paper as defined in Subsection (c) of
this Section.
(c) For the purposes of this Section only:
(1) The term "default" means any failure to make payment in full of
the principal of or interest on any of the Securities or upon the other
indenture securities when and as such principal or interest becomes due and
payable.
(2) The term "other indenture securities" means securities upon which
the Company is an obligor outstanding under any other indenture (i) under
which the Trustee is also trustee, (ii) which contains provisions
substantially similar to the provisions of this Section, and (iii) under
which a default exists at the time of the apportionment of the funds and
property held in such special account.
(3) The term "cash transaction" means any transaction in which full
payment for goods or securities sold is made within 7 days after delivery
of the goods or securities in currency or in checks or other orders drawn
upon banks or bankers and payable upon demand.
(4) The term "self-liquidating paper" means any draft, bill of
exchange, acceptance or obligation which is made, drawn, negotiated or
incurred by the Company for the purpose of financing the purchase,
processing, manufacturing, shipment, storage or sale of goods, wares or
merchandise and which is secured by documents evidencing title to,
possession of, or a lien upon, the goods, wares or merchandise or the
receivables or proceeds arising from the sale of the goods, wares or
merchandise previously constituting the security, provided the security is
received by the Trustee simultaneously with the creation of the creditor
relationship with the Company arising from the making, drawing, negotiating
or incurring of the draft, bill of exchange, acceptance or obligation.
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(5) The term "Company" means any obligor upon the Securities.
Section 614. Appointment of Authenticating Agent. At any time when
any of the Securities remain Outstanding the Trustee, with the approval of the
Company, may appoint an Authenticating Agent or Agents with respect to one or
more series of Securities which shall be authorized to act on behalf of the
Trustee to authenticate Securities of such series issued upon exchange,
registration of transfer or partial redemption thereof or pursuant to Section
306, 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 shall be
acceptable to the Company and shall at all times be a corporation organized and
doing business under the laws of the United States of America, any State
thereof or the District of Columbia, authorized under such laws to act as an
Authenticating Agent, having a combined capital and surplus of not less than
$50,000,000 and, if other than the Company itself, subject to supervision or
examination by Federal or State authority. If such Authenticating Agent
publishes reports of condition at least annually, pursuant to law or to the
requirements of said supervising or examining authority, then for the purposes
of this Section, the combined capital and surplus of such Authenticating Agent
shall be deemed to be its combined capital and surplus as set forth in its most
recent report of condition so published. If at any time an Authenticating
Agent shall cease to be eligible in accordance with the provisions of this
Section, such Authenticating Agent 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 succeeding to the corporate agency or
corporate trust business of an Authenticating Agent, shall continue to be an
Authenticating Agent, 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.
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An Authenticating Agent may resign at any time by giving written
notice thereof to the Trustee and, if other than the Company, to 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, if other than
the Company, to 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, with the approval of the Company, may appoint a successor
Authenticating Agent which shall be acceptable to the Company and shall mail
written notice of such appointment by first-class mail, postage prepaid, to all
Holders of Securities of the series with respect to which such Authenticating
Agent will serve, as their names and addresses appear in the Security Register.
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 Trustee agrees to pay to each Authenticating Agent (other than an
Authenticating Agent appointed at the request of the Company from time to time)
reasonable compensation for its services under this Section, and the Trustee
shall be entitled to be reimbursed for such payments, subject to the provisions
of Section 607.
If an appointment with respect to one or more series is made pursuant
to this Section, the Securities of such series may have endorsed thereon, in
addition to the Trustee's certificate of authentication, an alternate
certificate of authentication in the following form:
This is one of the Securities of the series designated therein
referred to in the within-mentioned Indenture.
THE BANK OF NEW YORK,
as Trustee
By:
-----------------------------------------
As Authenticating Agent
Date: By:
----------------- -----------------------------------------
Authorized Signatory
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ARTICLE SEVEN
Securityholders' Lists and Reports by
Trustee and Company
Section 701. Company To Furnish Trustee Names and Addresses of
Securityholders. The Company will furnish or cause to be furnished to the
Trustee
(a) semi-annually, not more than 15 days after each Regular Record
Date, in each year in such form as the Trustee may reasonably require, a
list of the names and addresses of the Holders of Securities of such series
as of such date, and
(b) at such other times as the Trustee may request in writing, within
30 days after the receipt by the Company 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,
excluding from any such list names and addresses received by the Trustee in its
capacity as Security Registrar.
Section 702. Preservation of Information; Communications to
Securityholders. (a) The Trustee shall preserve, in as current a form as is
reasonably practicable, the names and addresses of Holders of Securities
contained in the most recent list furnished to the Trustee as provided in
Section 701 and the names and addresses of Holders of Securities received by
the Trustee in its capacity as Security Registrar. The Trustee may destroy any
list furnished to it as provided in Section 701 upon receipt of a new list so
furnished.
(b) If 3 or more Holders of Securities of any series (hereinafter
referred to as "applicants") apply in writing to the Trustee, and furnish to
the Trustee reasonable proof that each such applicant has owned a Security of
such series for a period of at least 6 months preceding the date of such
application, and such application states that the applicants desire to
communicate with other Holders of Securities of such series or with the Holders
of all Securities with respect to their rights under this Indenture or under
such Securities and is accompanied by a copy of the form of proxy or other
communication which such applicants propose to transmit, then the Trustee
shall, within 5 Business Days after the receipt of such application, at its
election, either
(i) afford such applicants access to the information preserved at the
time by the Trustee in accordance with Section 702(a), or
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(ii) inform such applicants as to the approximate number of Holders of
Securities of such series or all Securities, as the case may be, whose
names and addresses appear in the information preserved at the time by the
Trustee in accordance with Section 702(a), and as to the approximate cost
of mailing to such Securityholders the form of proxy or other
communication, if any, specified in such application.
If the Trustee shall elect not to afford such applicants access to
such information, the Trustee shall, upon the written request of such
applicants, mail to each Holder of a Security of such series or to all
Securityholders, as the case may be, whose names and addresses appear in the
information preserved at the time by the Trustee in accordance with Section
702(a), a copy of the form of proxy or other communication which is specified
in such request, with reasonable promptness after a tender to the Trustee of
the material to be mailed and of payment, or provision for the payment, of the
reasonable expenses of mailing, unless, within 5 days after such tender, the
Trustee shall mail to such applicants and file with the Commission, together
with a copy of the material to be mailed, a written statement to the effect
that, in the opinion of the Trustee, such mailing would be contrary to the best
interests of the Holders of Securities of such series or all Securityholders,
as the case may be, or would be in violation of applicable law. Such written
statement shall specify the basis of such opinion. If the Commission, after
opportunity for a hearing upon the objections specified in the written
statement so filed, shall enter an order refusing to sustain any of such
objections or if, after the entry of an order sustaining one or more of such
objections, the Commission shall find, after notice and opportunity for
hearing, that all the objections so sustained have been met and shall enter an
order so declaring, the Trustee shall mail copies of such material to all
Securityholders of such series or all Securityholders, as the case may be, with
reasonable promptness after the entry of such order and the renewal of such
tender; otherwise the Trustee shall be relieved of any obligation or duty to
such applicants respecting their application.
(c) Every Holder of Securities, by receiving and holding the same,
agrees with the Company and the Trustee that neither the Company nor the
Trustee shall be held accountable by reason of the disclosure of any such
information as to the names and addresses of the Holders of Securities in
accordance with Section 702(b), regardless of the source from which such
information was derived, and that the Trustee shall not be held accountable by
reason of mailing any material pursuant to a request made under Section 702(b).
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Section 703. Reports by Trustee. (a) The term "reporting date" as
used in this Section means May 15 of each year. Within 60 days after the
reporting date in each year, beginning in 199__, the Trustee shall transmit by
mail to all Securityholders, as their names and addresses appear in the
Security Register, a brief report dated as of such reporting date with respect
to any of the following events which may have occurred during the 12 months
preceding the date of such report (but if no such event has occurred within
such period no report need be transmitted):
(1) any change to its eligibility under Section 609 and its
qualifications under Section 608;
(2) the creation of or any material change to a relationship specified
in Section 310(b)(1) through Section 310(b)(10) of the Trust Indenture Act;
(3) the character and amount of any advances (and if the Trustee
elects so to state, the circumstances surrounding the making thereof) made
by the Trustee (as such) which remain unpaid on the date of such report,
and for the reimbursement of which it claims or may claim a lien or charge,
prior to that of Securities of any series, on any property or funds held or
collected by it as Trustee, except that the Trustee shall not be required
(but may elect) to report such advances if such advances so remaining
unpaid aggregate not more than 1/2 of 1% of the principal amount of the
Securities of such series outstanding on the date of such report;
(4) any change to the amount, interest rate and maturity date of all
other indebtedness owing by the Company (or by any other obligor on the
Securities) to the Trustee in its individual capacity, on the date of such
report, with a brief description of any property held as collateral
security therefor, except an indebtedness based upon a creditor
relationship arising in a manner described in Section 613(b)(2), (3), (4)
or (6);
(5) any change to the property and funds, if any, physically in the
possession of the Trustee as such on the date of such report;
(6) any additional issue of Securities which the Trustee has not
previously reported; and
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(7) any action taken by the Trustee in the performance of its duties
hereunder which it has not previously reported and which in its opinion
materially affects the Securities, except action in respect of a default,
notice of which has been or is to be withheld by the Trustee in accordance
with Section 602.
(b) The Trustee shall transmit by mail to all Securityholders, as
their names and addresses appear in the Security Register, a brief report with
respect to the character and amount of any advances (and if the Trustee elects
so to state, the circumstances surrounding the making thereof) made by the
Trustee (as such) since the date of the last report transmitted pursuant to
Subsection (a) of this Section (or if no such report has yet been so
transmitted, since the date of execution of this instrument) for the
reimbursement of which it claims or may claim a lien or charge, prior to that
of the Securities of any series, on property or funds held or collected by it
as Trustee, and which it has not previously reported pursuant to this
Subsection, except that the Trustee shall not be required (but may elect) to
report such advances if such advances remaining unpaid at any time aggregate
10% or less of the principal amount of the Securities Outstanding of such
series at such time, such report to be transmitted within 90 days after such
time.
(c) A copy of each such report shall, at the time of such
transmission to Securityholders, be filed by the Trustee with each stock
exchange upon which the Securities are listed, and also with the Commission.
The Company will notify the Trustee when the Securities are listed on any stock
exchange.
Section 704. Reports by Company. The Company will
(1) file with the Trustee, within 15 days after the Company 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 may be required to file
with the Commission pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934; or, if the Company is not required to file
information, documents or reports pursuant to either of said Sections, then
it will 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 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;
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(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 with the conditions and covenants of this Indenture as may be
required from time to time by such rules and regulations; and
(3) transmit by mail to all Securityholders, as their names and
addresses appear in the Security Register, within 30 days after the filing
thereof with the Trustee, such summaries of any information, documents and
reports required to be filed by the Company 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.
ARTICLE EIGHT
Consolidation, Merger, Conveyance or Transfer
Section 801. Company May Consolidate, etc., only on Certain Terms.
The Company shall not consolidate with or merge into any other corporation or
convey or transfer its properties and assets substantially as an entirety to
any Person, unless:
(1) the corporation formed by such consolidation or into which the
Company is merged or the Person which acquires by conveyance or transfer
the properties and assets of the Company substantially as an entirety shall
be a corporation organized and existing under the laws of the United States
of America or any State or the District of Columbia, and shall expressly
assume, by an indenture supplemental hereto, executed and delivered to the
Trustee, in form satisfactory to the Trustee, the due and punctual payment
of the principal of (and premium, if any) and interest on all the
Securities and the performance of every covenant of this Indenture on the
part of the Company 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 happened and be continuing; and
(3) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel each stating that such consolidation, merger,
conveyance or transfer and such supplemental indenture comply with this
Article and that all conditions precedent herein provided for relating to
such transaction have been complied with.
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Section 802. Successor Corporation Substituted. Upon any
consolidation or merger, or any conveyance or transfer of the properties and
assets of the Company substantially as an entirety in accordance with Section
801, the successor corporation formed by such consolidation or into which the
Company is merged or to which such conveyance or transfer 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
corporation had been named as the Company herein. In the event of any such
conveyance or transfer, the Company as the predecessor corporation may be
dissolved, wound up or liquidated at any time thereafter.
ARTICLE NINE
Supplemental Indentures
Section 901. Supplemental Indentures Without Consent of
Securityholders. Without the consent of the Holders of any Securities, the
Company, when authorized by a Board Resolution, and the Trustee, at any time
and from time to time, may enter into one or more indentures supplemental
hereto, in form satisfactory to the Trustee, for any of the following purposes:
(1) to evidence the succession of another corporation to the Company,
and the assumption by any such successor of the covenants of the Company
herein and in the Securities contained; or
(2) to add to the covenants of the Company, or to surrender any right
or power herein conferred upon the Company, for the benefit of the Holders
of the Securities of any or all series (and if such covenants or the
surrender of such right or power are to be for the benefit of less than all
series of Securities, stating that such covenants are expressly being
included or such surrenders are expressly being made solely for the benefit
of one or more specified series); or
(3) to cure any ambiguity, to correct or supplement any provision
herein which may be inconsistent with any other provision herein, or to
make any other provisions with respect to matters or questions arising
under this Indenture; or
(4) to add to this Indenture such provisions as may be expressly
permitted by the TIA, excluding, however, the provisions referred to in
Section 316(a)(2) of the TIA as in effect at the date as of which this
instrument was executed or any corresponding provision in any similar
federal statute hereafter enacted; or
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(5) to establish any form of Security, as provided in Article Two, and
to provide for the issuance of any series of Securities as provided in
Article Three and to set forth the terms thereof, and/or to add to the
rights of the Holders of the Securities of any series; or
(6) to evidence and provide for the acceptance of appointment by
another corporation as a successor Trustee hereunder with respect to one or
more series of Securities 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 Section 611; or
(7) to add any additional Events of Default in respect of the
Securities of any or all series (and if such additional Events of Default
are to be in respect of less than all series of Securities, stating that
such Events of Default are expressly being included solely for the benefit
of one or more specified series); or
(8) to provide for the issuance of Securities in coupon as well as
fully registered form.
No supplemental indenture for the purposes identified in Clauses (2),
(3), (5) or (7) above may be entered into if to do so would adversely affect
the interest of the Holders of Securities of any series.
Section 902. Supplemental Indentures with Consent of Securityholders.
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 or indentures, by Act of said Holders delivered to the Company and
the Trustee, the Company, when authorized by a Board Resolution, and the
Trustee may enter into an indenture 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 the Securities of each such series under this
Indenture; provided, however, that no such supplemental indenture shall,
without the consent of the Holder of each Outstanding Security affected
thereby,
(1) change the Maturity of the principal of, or the Stated Maturity of
any premium on, or any installment of interest on, any Security, or reduce
the principal amount thereof or the interest or any premium thereon, or
change the method of computing the amount of principal thereof or interest
thereon on any date or change any Place of Payment where, or the coin or
currency in which, any Security or any premium or interest thereon is
payable, or impair the right to institute suit for the enforcement of any
such payment on or after the Maturity or the Stated Maturity, as the case
may be, thereof (or, in the case of redemption or repayment, on or after
the Redemption Date or the Repayment Date, as the case may be); or
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(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
(3) modify any of the provisions of this Section or Section 513,
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.
A supplemental indenture which changes or eliminates any covenant or
other provision of this Indenture which has expressly been included 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.
It shall not be necessary for any Act of Securityholders 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 903. Execution of Supplemental Indentures. In executing, or
accepting the additional trusts created by, any supplemental indenture
permitted by this Article or the modifications thereby of the trusts created by
this Indenture, the Trustee shall be entitled to receive, and (subject to
Section 601) 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. The Trustee may, but shall not (except to the
extent required in the case of a supplemental indenture entered into under
Section 901(4) or 901(6)) 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 904. 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 Securities
theretofore or thereafter authenticated and delivered hereunder shall be bound
thereby to the extent provided therein.
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Section 905. Conformity with Trust Indenture Act. Every supplemental
indenture executed pursuant to this Article shall conform to the requirements
of the TIA as then in effect.
Section 906. Reference in Securities to Supplemental Indentures.
Securities 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 so modified as to conform, in the opinion of the Trustee and the
Board of Directors, to any such supplemental indenture may be prepared and
executed by the Company and authenticated and delivered by the Trustee in
exchange for Outstanding Securities.
ARTICLE TEN
Covenants
Section 1001. Payment of Principal, Premium and Interest. With
respect to each series of Securities, the Company will duly and punctually pay
the principal of (and premium, if any) and interest on such Securities in
accordance with their terms and this Indenture, and will duly comply with all
the other terms, agreements and conditions contained in, or made in the
Indenture for the benefit of, the Securities of such series.
Section 1002. Maintenance of Office or Agency. The Company will
maintain an office or agency in each Place of Payment where Securities may be
presented or surrendered for payment, where Securities may be surrendered for
transfer or exchange and where notices and demands to or upon the Company in
respect of the Securities and this Indenture may be served. The Company will
give prompt written notice to the Trustee of the location, and of any change in
the location, of such office or agency. If at any time the Company shall fail
to maintain such 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 principal Corporate Trust Office of the Trustee, and the
Company hereby appoints the Trustee its agent to receive all such
presentations, surrenders, notices and demands.
Section 1003. Money for Security Payments to be Held in Trust. If
the Company shall at any time act as its own Paying Agent for any series of
Securities, it will, on or before each due date of the principal of (and
premium, if any) or interest on, any of the Securities of such series,
segregate and hold in trust for the benefit of the Persons entitled thereto a
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sum sufficient to pay the principal (and premium, if any) or interest so
becoming due until such sums shall be paid to such Persons or otherwise
disposed of as herein provided, and will promptly notify the Trustee of its
action or failure to act.
Whenever the Company shall have one or more Paying Agents for any
series of Securities, it will, on or prior to each due date of the principal of
(and premium, if any) or interest on, any Securities of such series, deposit
with a Paying Agent a sum sufficient to pay the principal (and premium, if any)
or interest so becoming due, such sum to be held in trust for the benefit of
the Persons entitled to such principal (and premium, if any) or interest, 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 will cause each Paying Agent other than the Trustee for
any series of Securities 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 will
(1) hold all sums held by it for the payment of principal of (and
premium, if any) or interest on 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 herein provided;
(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 such
payment of principal (and premium, if any) or interest on 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.
The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture with respect to any series of
Securities or for any other purpose, pay, or by Company Order direct any Paying
Agent to pay, to the Trustee all sums held in trust by the Company or such
Paying Agent in respect of each and every series of Securities as to which it
seeks to discharge this Indenture or, if for any other purpose, all sums so
held in trust by the Company in respect of all Securities, such sums to be held
by the Trustee upon the same trusts 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 money.
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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 (and premium, if
any) or interest on any Security of any series and remaining unclaimed for two
years after such principal (and premium, if any) or interest has become due and
payable shall be paid to the Company on Company Request, or (if then held by
the Company) shall be discharged from such trust; and the Holder of such
Security shall thereafter, as an unsecured general creditor, look only to the
Company for payment thereof, and all liability of the Trustee or such Paying
Agent with respect to such trust money, and all liability of the Company as
trustee thereof, shall thereupon cease. The Trustee or such Paying Agent,
before being required to make any such repayment, may at the expense of the
Company mail to the Holders of the Securities as to which the money to be
repaid was held in trust, as their names and addresses appear in the Security
Register, a notice that such moneys remain unclaimed and that, after a date
specified in the notice, which shall not be less than 30 days from the date on
which the notice was first mailed to the Holders of the Securities as to which
the money to be repaid was held in trust, any unclaimed balance of such moneys
then remaining will be paid to the Company free of the trust formerly impressed
upon it.
The Company initially authorizes the Trustee to act as Paying Agent
for the Securities on its behalf. The Company may at any time and from time to
time authorize one or more Persons to act as Paying Agent in addition to or in
place of the Trustee with respect to any series of Securities issued under this
Indenture.
Section 1004. Statement as to Compliance. The Company will deliver
to the Trustee, within 120 days after the end of each fiscal year, a written
statement signed by the principal executive officer, principal financial officer
or principal accounting officer of the Company, stating that
(1) a review of the activities of the Company during such year and of
the Company's performance under this Indenture and under the terms of the
Securities has been made under his supervision; and
(2) to the best of his knowledge, based on such review, the Company
has complied with all conditions and covenants under this Indenture through
such year, or, if there has been a default in the fulfillment of any such
obligation, specifying each such default known to him and the nature and
status thereof.
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For purposes of this Section 1004, compliance shall be determined
without regard to any grace period or requirement of notice provided pursuant
to the terms of this Indenture.
Section 1005. Corporate Existence. Subject to Article Eight the
Company will do or cause to be done all things necessary to preserve and keep
in full force and effect its corporate existence.
ARTICLE ELEVEN
Redemption of Securities
Section 1101. Applicability of Article. The Company may reserve the
right to redeem and pay before Stated Maturity all or any part of the
Securities of any series, either by optional redemption, sinking or purchase
fund or analogous obligation or otherwise, by provision therefor in the form of
Security for such series established and approved pursuant to Section 202 and
on such terms as are specified in such form or in the Board Resolution or
indenture supplemental hereto with respect to Securities of such series as
provided in Section 301. Redemption of Securities of any series shall be made
in accordance with the terms of such Securities and, to the extent that this
Article does not conflict with such terms, the succeeding Sections of this
Article.
Section 1102. Election to Redeem; Notice to Trustee. The election of
the Company to redeem any Securities redeemable at the election of the Company
shall be evidenced by, or made pursuant to authority granted by, a Board
Resolution. In case of any redemption at the election of the Company of any
Securities of any series, 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.
In the case of any redemption of Securities (i) prior to the
expiration of any restriction on such redemption provided in the terms of such
Securities or elsewhere in this Indenture, or (ii) pursuant to an election of
the Company which is subject to a condition specified in the terms of such
Securities, the Company shall furnish the Trustee with an Officers' Certificate
evidencing compliance with such restriction or condition.
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Section 1103. Selection by Trustee of Securities to Be Redeemed. If
less than all the Securities of like tenor and terms of any series 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 include provision
for the selection for redemption of portions of the principal of Securities of
such series of a denomination larger than the minimum authorized denomination
for Securities of that series. Unless otherwise provided in the terms of a
particular series of Securities, the portions of the principal of Securities so
selected for partial redemption shall be equal to the minimum authorized
denomination of the Securities of such series, or an integral multiple thereof,
and the principal amount which remains outstanding shall not be less than the
minimum authorized denomination for Securities of such series. If less than
all the Securities of unlike tenor and terms of a series are to be redeemed,
the particular Securities to be redeemed shall be selected by the Company.
The Trustee shall promptly notify the Company in writing of the
Securities selected for redemption and, in the case of any Security 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 Security redeemed or to be redeemed only in part, to the
portion of the principal of such Security which has been or is to be redeemed.
Section 1104. Notice of Redemption. Notice of redemption shall be
given by first-class mail, postage prepaid, mailed not less than 30 nor more
than 60 days prior to the Redemption Date, to each holder of Securities to be
redeemed, at his address appearing in the Security Register.
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, including CUSIP numbers, (and, in the case of
partial redemption, the respective principal amounts) of the Securities to
be redeemed, from the Holder to whom the notice is given;
<PAGE> 80
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(4) that on the Redemption Date the Redemption Price will become due
and payable upon each such Security, and that interest, if any, thereon
shall cease to accrue from and after said date;
(5) the place where such Securities are to be surrendered for payment
of the Redemption Price, which shall be the office or agency of the Company
in the Place of Payment; and
(6) that the redemption is on account of a sinking or purchase fund,
or other analogous obligation, if that be the case.
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. Such notice shall be
deemed to have been given to each Holder if sent in accordance with Section 105
hereof.
Section 1105. Deposit of Redemption Price. On or prior to 10:00 a.m.
of any Redemption Date, the Company shall deposit 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 1003) an amount of money sufficient to
pay the Redemption Price of all the Securities which are to be redeemed on that
date.
Section 1106. 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 Redemption Price) such Securities shall cease to bear
interest. Upon surrender of such Securities for redemption in accordance with
the notice, such Securities shall be paid by the Company at the Redemption
Price. Installments of interest the Stated Maturity of which is on or prior to
the Redemption Date shall be payable to the Holders of such Securities
registered as such on the relevant Regular Record Dates according to their terms
and the provisions of Section 307.
If any Security called for redemption shall not be so paid upon
surrender thereof for redemption, the principal shall, until paid, bear
interest from the Redemption Date at the rate borne by the Security, or as
otherwise provided in such Security.
<PAGE> 81
74
Section 1107. Securities Redeemed in Part. Any Security which is to
be redeemed only in part shall be surrendered at the office or agency of the
Company in the Place of Payment with respect to that series (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 Security or Securities of
the same series and Stated Maturity and of like tenor and terms, of any
authorized denomination as requested by such Holder in aggregate principal
amount equal to and in exchange for the unredeemed portion of the principal of
the Security so surrendered.
Section 1108. Provisions with Respect to any Sinking Funds. Unless
the form or terms of any series of Securities shall provide otherwise, in lieu
of making all or any part of any mandatory sinking fund payment with respect to
such series of Securities in cash, the Company may at its option (1) deliver to
the Trustee for cancellation any Securities of such series theretofore acquired
by the Company, or (2) receive credit for any Securities of such series (not
previously so credited) acquired by the Company and theretofore delivered to
the Trustee for cancellation or redeemed by the Company other than through the
mandatory sinking fund, and if it does so then (i) Securities so delivered or
credited shall be credited at the applicable sinking fund Redemption Price with
respect to Securities of such series, and (ii) on or before the 60th day next
preceding each sinking fund Redemption Date with respect to such series of
Securities, the Company will deliver to the Trustee (A) an Officers'
Certificate specifying the portions of such sinking fund payment to be
satisfied by payment of cash and by delivery or credit of Securities of such
series acquired by the Company or so redeemed, and (B) such Securities so
acquired, to the extent not previously surrendered. Such Officers' Certificate
shall also state the basis for such credit and that the Securities for which the
Company elects to receive credit have not been previously so credited and were
not redeemed by the Company through operation of the mandatory sinking fund, if
any, provided with respect to such Securities and shall also state that no Event
of Default with respect to Securities of such series has occurred and is
continuing. All Securities so delivered to the Trustee shall be canceled by the
Trustee and no Securities shall be authenticated in lieu thereof.
<PAGE> 82
75
If the sinking fund payment or payments (mandatory or optional) with
respect to any series of Securities made in cash plus any unused balance of any
preceding sinking fund payments with respect to Securities of such series made
in cash shall exceed $50,000 (or a lesser sum if the Company shall so request),
unless otherwise provided by the terms of such series of Securities, that cash
shall be applied by the Trustee on the sinking fund Redemption Date with
respect to Securities of such series next following the date of such payment to
the redemption of Securities of such series at the applicable sinking fund
Redemption Price with respect to Securities of such series, together with
accrued interest, if any, to the date fixed for redemption, with the effect
provided in Section 1106. The Trustee shall select, in the manner provided in
Section 1103, for redemption on such sinking fund Redemption Date a sufficient
principal amount of Securities of such series to utilize that cash and shall
thereupon cause notice of redemption of the Securities of such series for the
sinking fund to be given in the manner provided in Section 1104 (and with the
effect provided in Section 1106) for the redemption of Securities in part at
the option of the Company. Any sinking fund moneys not so applied or allocated
by the Trustee to the redemption of Securities of such series shall be added to
the next cash sinking fund payment with respect to Securities of such series
received by the Trustee and, together with such payment, shall be applied in
accordance with the provisions of this Section 1108. Any and all sinking fund
moneys with respect to Securities of any series held by the Trustee at the
Maturity of Securities of such series, and not held for the payment or
redemption of particular Securities of such series, shall be applied by the
Trustee, together with other moneys, if necessary, to be deposited sufficient
for the purpose, to the payment of the principal of the Securities of such
series at Maturity.
On or before each sinking fund Redemption Date provided with respect
to Securities of any series, the Company shall pay to the Trustee in cash a sum
equal to all accrued interest, if any, to the date fixed for redemption on
Securities to be redeemed on such sinking fund Redemption Date pursuant to this
Section 1108.
<PAGE> 83
76
ARTICLE TWELVE
Subordination
Section 1201. Agreement of Securityholders that Securities
Subordinated to Extent Provided. The Company, for itself, its successors and
assigns, covenants and agrees and each Holder of the Securities by his or her
acceptance thereof likewise covenants and agrees that the payment of the
principal of, premium, if any, and interest on each and all of the Securities
is hereby expressly subordinated, to the extent and in the manner hereinafter
set forth, to the prior payment in full of all Senior Indebtedness. The
provisions of this Article shall constitute a continuing offer to all persons
who, in reliance upon such provisions, become holders of, or continue to hold,
Senior Indebtedness, and such provisions are made for the benefit of the
holders of Senior Indebtedness, and such holders are hereby made obligees
hereunder the same as if their names were written herein as such, and the
and/or each of them may proceed to enforce such provisions.
Section 1202. Company Not to Make Payments With Respect to
Securities in Certain Circumstances. (a) Upon the maturity of any Senior
Indebtedness by lapse of time, acceleration or otherwise, all principal thereof
and premium, if any, and interest thereon shall first be paid in full, or such
payment duly provided for in cash or in a manner satisfactory to the holder or
holders of such Senior Indebtedness, before any payment is made on account of
the principal of or premium, if any, or interest on the Securities or to acquire
any of the Securities or on account of any sinking fund (except sinking fund
payments made in Securities acquired by the Company before the maturity of such
Senior Indebtedness).
(b) Upon the happening of (i) an event of default with respect to
any Senior Indebtedness, as such event of default is defined therein or in the
instrument under which it is outstanding, permitting the holders to accelerate
the maturity thereof, or (ii) an event which, with the giving of notice, or
lapse of time, or both, would constitute such an event of default, then, unless
and until such event shall have been cured or waived or shall have ceased to
exist, no payment shall be made by the Company with respect to the principal of
or premium, if any, or interest on the Securities or to acquire any of the
Securities or on account of any sinking fund for the Securities (except sinking
fund payments made in Securities acquired by the Company before such default and
notice thereof).
<PAGE> 84
77
(c) In the event that notwithstanding the provisions of this Section
1202 the Company shall make any payment to the Trustee on account of the
principal of or premium, if any, or interest on the Securities, or on account
of any sinking fund, or the Holders of the Securities shall receive any such
payment, after the happening of a default in payment of the principal of or
premium, if any, or interest on Senior Indebtedness, then, unless and until
such default or event of default shall have been cured or waived or shall have
ceased to exist, such payment (subject to the provisions of Section 1206) shall
be held by the Trustee or the Holders of the Securities, as the case may be, in
trust for the benefit of, and shall be paid forthwith over and delivered to,
the holders of Senior Indebtedness (pro rata as to each of such holders on the
basis of the respective amounts of Senior Indebtedness held by them) or their
representatives or the trustee under the indenture or other agreement (if any)
pursuant to which any instruments evidencing any Senior Indebtedness may have
been issued, as their respective interests may appear, for application to the
payment of all Senior Indebtedness remaining unpaid to the extent necessary to
pay all Senior Indebtedness in full in accordance with the terms of such Senior
Indebtedness, after giving effect to any concurrent payment or distribution to
or for the holders of Senior Indebtedness. The Company shall give prompt
written notice to the Trustee of any default under any Senior Indebtedness or
under any agreement pursuant to which Senior Indebtedness may have been issued.
Section 1203. Securities Subordinated to Prior Payments of All Senior
Indebtedness on Dissolution, Liquidation or Reorganization of the Company.
Upon any distribution of assets of the Company upon any dissolution, winding
up, liquidation or reorganization of the Company (whether in bankruptcy,
insolvency or receivership proceedings or upon an assignment for the benefit of
creditors or otherwise):
(a) the holders of all Senior Indebtedness shall first be entitled to
receive payment in full of the principal thereof, premium, if any, and
interest due thereon before the Holders of the Securities are entitled to
receive any payment on account of the principal of, premium, if any, or
interest on the Securities;
<PAGE> 85
78
(b) any payment or distribution of assets of the Company of any kind
or character, whether in cash, property or securities, to which the
Holders of the Securities or the Trustees would be entitled except for the
provisions of this Article Twelve, shall be paid by the liquidating trustee
or agent or other person making such payment or distribution, whether a
trustee in bankruptcy, a receiver or liquidating trustee or other trustee
or agent, directly to the holders of Senior Indebtedness or their
representative or representatives, or to the trustee or trustees under any
indenture under which any instruments evidencing any of such Senior
Indebtedness may have been issued, to the extent necessary to make payment
in full of all Senior Indebtedness remaining unpaid, after giving effect to
any concurrent payment or distribution or provision therefor to the holders
of such Senior Indebtedness;
(c) in the event that notwithstanding the foregoing provisions of
this Section 1203, any payment or distribution of assets of the Company of
any kind or character, whether in cash, property or securities, shall be
received by the Trustee or the Holders of the Securities on account of
principal, or premium, if any, or interest on the Securities before all
Senior Indebtedness is paid in full, or effective provisions made for its
payment, such payment or distribution (subject to the provisions of
Sections 1206 and 1207) shall be received and held in trust for and shall
be paid over to the holders of the Senior Indebtedness remaining unpaid or
unprovided for or their representative or representatives, or to the
trustee or trustees under any indenture under which any instruments
evidencing any of such Senior Indebtedness may have been issued, for
application to the payment of such Senior Indebtedness until all such
Senior Indebtedness shall have been paid in full, after giving effect to
any concurrent payment or distribution or provision therefor to the holders
of such Senior Indebtedness.
Section 1204. Securityholders to be Subrogated to Right of Holders of
Senior Indebtedness. Subject to the payment in full of all Senior
Indebtedness, the Holders of the Securities shall be subrogated to the rights
of the holders of Senior Indebtedness to receive payments or distributions of
assets of the Company applicable to the Senior Indebtedness until all amounts
owing on the Securities shall be paid in full, and for the purpose of such
subrogation no payments or distributions to the holders of the Senior
Indebtedness by or on behalf of the Company or by or on behalf of the Holders of
the Securities by virtue of this Article which otherwise would have been made to
the Holders of the Securities, be deemed to be payment by the Company to or on
account of the Senior Indebtedness, it being understood that the provisions of
this Article Twelve are and are intended solely for the purpose of defining the
relative rights of the Holders of the Securities, on the one hand, and the
holders of the Senior Indebtedness, on the other hand.
<PAGE> 86
79
Section 1205. Obligation of the Company Unconditional. Nothing
contained in this Article Twelve or elsewhere in this Indenture or in the
Securities is intended to or shall impair as between the Company and the
Holders of the Securities, the obligations of the Company, which is absolute
and unconditional, to pay to the Holders of the Securities the principal of,
premium, if any, and interest on the Securities as and when the same shall
become due and payable in accordance with their terms, or is intended to or
shall affect the relative rights of the Holders of the Securities and creditors
of the Company other than the holders of the Senior Indebtedness, nor shall
anything herein or therein prevent the Trustee or the Holder of any Security
from exercising all remedies otherwise permitted by applicable law upon default
under this Indenture, subject to the rights, if any, under this Article Twelve
of the holders of Senior Indebtedness in respect of cash, property or
securities of the Company received upon the exercise of any such remedy. Upon
any distribution of assets of the Company referred to in this Article Twelve,
the Trustee, subject to the provisions of Section 601, and the Holders of the
Securities shall be entitled to rely upon any order or decree made by any court
of competent jurisdiction in which such dissolution, winding up, liquidation or
reorganization proceedings are pending, or a certificate of the liquidating
trustee or agent or other person making any distribution to the Trustee or to
the Holders of the Securities, for the purpose of ascertaining the persons
entitled to participate in such distribution, the holders of the Senior
Indebtedness and other indebtedness of the Company, the amount thereof or
payable thereon, the amount or amounts paid or distributed thereon and all
other facts pertinent thereto or to this Article Twelve.
Section 1206. Trustee Entitled to Assume Payments Not Prohibited in
Absence of Notice. The Trustee shall not at any time be charged with knowledge
of the existence of any facts which would prohibit the making of any payment of
monies to or by the Trustee, unless and until a Responsible Officer of the
Trustee shall have received written notice thereof from the Company or from one
or more holders of Senior Indebtedness or from any trustee therefor; and, prior
to the receipt of any such written notice, the Trustee, subject to the
provisions of Section 601, shall be entitled to assume conclusively that no such
facts exist.
<PAGE> 87
80
Section 1207. Application by Trustee of Monies Deposited With It.
Anything in this Indenture to the contrary notwithstanding, any deposit of
monies by the Company with the Trustee or any paying agent (whether or not in
trust) for the payment of the principal of or premium, if any, or interest on
any Securities shall be subject to the provisions of Sections 1201, 1202, 1203
and 1204 except that, if prior to the date on which by the terms of this
Indenture any such monies may become payable for any purpose (including,
without limitation, the payment of either the principal of or interest or
premium, if any, on any Security) a Responsible Officer of the Trustee shall
not have received with respect to such monies the notice provided for in
Section 1206, then, anything herein contained to the contrary notwithstanding,
the Trustee shall have full power and authority to receive such monies and to
apply the same to the purpose for which they were received, and shall not be
affected by any notice to the contrary which may be received by it on or after
such date.
Section 1208. Subordination Rights Not Impaired by Acts or Omissions
of Company or Holders of Senior Indebtedness. No right of any present or
future holders of any Senior Indebtedness to enforce subordination as herein
provided shall at any time in any way be prejudiced or impaired by any act or
failure to act on the part of the Company or by any act or failure to act, in
good faith, by any such holder, or by any noncompliance by the Company with the
terms, provisions and covenants of this Indenture, regardless of any knowledge
thereof which any such holder may have or be otherwise charged with.
Section 1209. Securityholders Authorize Trustee to Effectuate
Subordination of Securities. Each Holder of the Securities by his or her
acceptance thereof authorizes and expressly directs the Trustee on his or her
behalf to take such action as may be necessary or appropriate to effectuate the
subordination provided in this Article Twelve and appoints the Trustee his/her
attorney-in-fact for such purpose, including, in the event of any dissolution,
winding up, liquidation or reorganization of the Company (whether in
bankruptcy, insolvency or receivership proceedings or upon an assignment for
the benefit of creditors or otherwise) tending towards liquidation of the
business and assets of the Company, the immediate filing of a claim for the
unpaid balance of its or his or her Securities in the form required in said
proceedings and cause said claim to be approved. If the trustee does not file a
proper claim or proof of debt in the form required in such proceeding prior to
30 days before the expiration of the time to file such claim or claims, then the
holder or holders of the Senior Indebtedness are hereby authorized to and have
the right to file an appropriate claim for and on behalf of the holders of said
Securities.
<PAGE> 88
81
Section 1210. Right of Trustee to Hold Senior Indebtedness. The
Trustee shall be entitled to all of the rights set forth in this Article Twelve
in respect of any Senior Indebtedness at any time held by it to the same extent
as any other holder of Senior Indebtedness, and nothing in Section 613 or
elsewhere in this Indenture shall be construed to deprive the Trustee of any of
its rights as such holder.
Section 1211. Article Twelve Not to Prevent Events of Default. The
failure to make a payment on account of principal, interest or sinking fund by
reason of any provision of this Article Twelve shall not be construed as
preventing the occurrence of an Event of Default under Section 501.
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.
CLEAR CHANNEL COMMUNICATIONS, INC.,
by
--------------------------
Name:
Title:
THE BANK OF NEW YORK,
as Trustee
by
--------------------------
Name:
Title:
<PAGE> 1
EXHIBIT 4.7
================================================================================
CLEAR CHANNEL COMMUNICATIONS, INC.
and
THE BANK OF NEW YORK
Trustee
FORM OF
JUNIOR SUBORDINATED INDENTURE
Dated as of ________, 1997
Providing for Issuance of Securities in Series
================================================================================
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
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Recitals of the Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Agreements of the Parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE ONE
Definitions and Other Provisions of General Application
Section 101. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Affiliate . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Authenticating Agent . . . . . . . . . . . . . . . . . . . . . . 2
Board of Directors . . . . . . . . . . . . . . . . . . . . . . . 2
Board Resolution . . . . . . . . . . . . . . . . . . . . . . . . 2
Business Day . . . . . . . . . . . . . . . . . . . . . . . . . . 2
CCCI Capital Trust . . . . . . . . . . . . . . . . . . . . . . . 2
CCCI Capital Trust Guarantee . . . . . . . . . . . . . . . . . . 2
Commission. . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Common Securities . . . . . . . . . . . . . . . . . . . . . . . . 3
Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Company Request, Company Order and Company Consent . . . . . . . 3
Corporate Trust Office . . . . . . . . . . . . . . . . . . . . . 3
Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Declaration of Trust . . . . . . . . . . . . . . . . . . . . . . 3
Defaulted Interest . . . . . . . . . . . . . . . . . . . . . . . 3
Depositary. . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Event of Default . . . . . . . . . . . . . . . . . . . . . . . . 4
Extension Period . . . . . . . . . . . . . . . . . . . . . . . . 4
Funded Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Global Security . . . . . . . . . . . . . . . . . . . . . . . . . 4
Guarantee . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Holder . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Indenture, this Indenture . . . . . . . . . . . . . . . . . . . . 4
Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Interest Payment Date . . . . . . . . . . . . . . . . . . . . . . 5
Maturity . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Officers' Certificate . . . . . . . . . . . . . . . . . . . . . . 5
Opinion of Counsel . . . . . . . . . . . . . . . . . . . . . . . 5
Other Guarantee . . . . . . . . . . . . . . . . . . . . . . . . . 5
Original Issue Discount Security . . . . . . . . . . . . . . . . 5
Outstanding . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Paying Agent . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Person . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Place of Payment . . . . . . . . . . . . . . . . . . . . . . . . 6
Predecessor Securities . . . . . . . . . . . . . . . . . . . . . 7
Preferred Securities . . . . . . . . . . . . . . . . . . . . . . 7
Property Trustee . . . . . . . . . . . . . . . . . . . . . . . . 7
</TABLE>
<PAGE> 3
Contents, p.2
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Redemption Date . . . . . . . . . . . . . . . . . . . . . . . . . 7
Redemption Price . . . . . . . . . . . . . . . . . . . . . . . . 7
Regular Record Date . . . . . . . . . . . . . . . . . . . . . . . 7
Repayment Date . . . . . . . . . . . . . . . . . . . . . . . . . 7
Repayment Price . . . . . . . . . . . . . . . . . . . . . . . . . 7
Responsible Officer . . . . . . . . . . . . . . . . . . . . . . . 7
Security or Securities . . . . . . . . . . . . . . . . . . . . . 7
Security Exchange . . . . . . . . . . . . . . . . . . . . . . . 8
Security Register . . . . . . . . . . . . . . . . . . . . . . . . 8
Security Registrar . . . . . . . . . . . . . . . . . . . . . . . 8
Securityholder . . . . . . . . . . . . . . . . . . . . . . . . . 8
Senior Indebtedness . . . . . . . . . . . . . . . . . . . . . . . 8
Special Record Date . . . . . . . . . . . . . . . . . . . . . . . 8
Stated Maturity . . . . . . . . . . . . . . . . . . . . . . . . . 8
Subsidiary . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Trust Indenture Act or TIA . . . . . . . . . . . . . . . . . . . 9
Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
U.S. Government Obligations . . . . . . . . . . . . . . . . . . .
Vice President. . . . . . . . . . . . . . . . . . . . . . . . . . 9
Voting Stock . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 102. Compliance Certificates and Opinions . . . . . . . . . . . . . . 9
Section 103. Form of Documents Delivered to Trustee . . . . . . . . . . . . . 10
Section 104. Acts of Securityholders . . . . . . . . . . . . . . . . . . . . . 10
Section 105. Notices, etc., to Trustee and Company . . . . . . . . . . . . . . 12
Section 106. Notices to Securityholders; Waiver . . . . . . . . . . . . . . . 12
Section 107. Conflict with Trust Indenture Act . . . . . . . . . . . . . . . . 13
Section 108. Effect of Headings and Table of Contents . . . . . . . . . . . . 13
Section 109. Successors and Assigns . . . . . . . . . . . . . . . . . . . . . 13
Section 110. Separability Clause . . . . . . . . . . . . . . . . . . . . . . . 13
Section 111. Benefits of Indenture . . . . . . . . . . . . . . . . . . . . . . 13
Section 112. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Section 113. Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Section 114. Judgment Currency . . . . . . . . . . . . . . . . . . . . . . . . 13
Section 115. Certain Rights of Holders of Preferred Securities . . . . . . . . 14
ARTICLE TWO
Security Forms
Section 201. Forms Generally . . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 202. Forms of Securities . . . . . . . . . . . . . . . . . . . . . . . 15
Section 203. Form of Trustee's Certificate of Authentication . . . . . . . 15
Section 204. Securities Issuable in the Form of a Global Security . . . . . . 15
</TABLE>
<PAGE> 4
Contents, p.3
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ARTICLE THREE
The Securities
Section 301. General Title; General Limitations; Issuable in Series; Terms of
Particular Series . . . . . . . . . . . . . . . . . . . 17
Section 302. Denominations . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Section 303. Execution, Authentication and Delivery and Dating . . . . . . . . 21
Section 304. Temporary Securities . . . . . . . . . . . . . . . . . . . . . . 22
Section 305. Registration, Transfer and Exchange . . . . . . . . . . . . . . . 23
Section 306. Mutilated, Destroyed, Lost and Stolen Securities . . . . . . . . 24
Section 307. Payment of Interest; Interest Rights Preserved . . . . . . . . . 25
Section 308. Persons Deemed Owners . . . . . . . . . . . . . . . . . . . . . . 26
Section 309. Cancellation . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Section 310. Computation of Interest . . . . . . . . . . . . . . . . . . . . . 27
Section 311. Medium-Term Securities . . . . . . . . . . . . . . . . . . . . . 27
Section 312. CUSIP Numbers . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Section 313. Global Securities . . . . . . . . . . . . . . . . . . . . . . . . 28
Section 314. Deferrals of Interest Payment Dates . . . . . . . . . . . . . . . 29
ARTICLE FOUR
Satisfaction and Discharge of Indenture;
Defeasance; Unclaimed Moneys
Section 401. Applicability of Article . . . . . . . . . . . . . . . . . . . . 31
Section 402. Satisfaction and Discharge of Indenture; Defeasance . . . . . . . 31
Section 403. Conditions of Defeasance . . . . . . . . . . . . . . . . . . . . 32
Section 404. Application of Trust Money . . . . . . . . . . . . . . . . . . . 34
Section 405. Repayment to Company . . . . . . . . . . . . . . . . . . . . . . 34
Section 406. Indemnity for U.S. Government Obligations . . . . . . . . . . . . 35
Section 407. Reinstatement . . . . . . . . . . . . . . . . . . . . . . . . . . 35
ARTICLE FIVE
Remedies
Section 501. Events of Default . . . . . . . . . . . . . . . . . . . . . . . . 35
Section 502. Acceleration of Maturity; Rescission and Annulment . . . . . . . 37
Section 503. Collection of Indebtedness and Suits for Enforcement by Trustee . 38
</TABLE>
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Section 504. Trustee May File Proofs of Claim . . . . . . . . . . . . . . . . . . 39
Section 505. Trustee May Enforce Claims Without Possession of Securities . . . . . 40
Section 506. Application of Money Collected . . . . . . . . . . . . . . . . . . . 40
Section 507. Limitation on Suits . . . . . . . . . . . . . . . . . . . . . . . . . 41
Section 508. Unconditional Right of Securityholders to Receive Principal,
Premium and Interest . . . . . . . . . . . . . . . . . . . . 42
Section 509. Restoration of Rights and Remedies . . . . . . . . . . . . . . . . . 42
Section 510. Rights and Remedies Cumulative . . . . . . . . . . . . . . . . . . . 42
Section 511. Delay or Omission Not Waiver . . . . . . . . . . . . . . . . . . . . 42
Section 512. Control by Securityholders . . . . . . . . . . . . . . . . . . . . . 43
Section 513. Waiver of Past Defaults . . . . . . . . . . . . . . . . . . . . . . . 43
Section 514. Undertaking for Costs . . . . . . . . . . . . . . . . . . . . . . . . 44
Section 515. Waiver of Stay or Extension Laws . . . . . . . . . . . . . . . . . . 44
ARTICLE SIX
The Trustee
Section 601. Certain Duties and Responsibilities . . . . . . . . . . . . . . . . . 44
Section 602. Notice of Defaults . . . . . . . . . . . . . . . . . . . . . . . . . 46
Section 603. Certain Rights of Trustee . . . . . . . . . . . . . . . . . . . . . . 46
Section 604. Not Responsible for Recitals or Issuance of Securities . . . . . . . 47
Section 605. May Hold Securities . . . . . . . . . . . . . . . . . . . . . . . . . 47
Section 606. Money Held in Trust . . . . . . . . . . . . . . . . . . . . . . . . . 47
Section 607. Compensation and Reimbursement . . . . . . . . . . . . . . . . . . . 47
Section 608. Disqualification; Conflicting Interests . . . . . . . . . . . . . . . 48
Section 609. Corporate Trustee Required; Eligibility . . . . . . . . . . . . . . . 48
Section 610. Resignation and Removal; Appointment of Successor . . . . . . . . . . 49
Section 611. Acceptance of Appointment by Successor . . . . . . . . . . . . . . . 50
Section 612. Merger, Conversion, Consolidation or Succession to Business . . . . . 51
Section 613. Preferential Collection of Claims Against Company . . . . . . . . . . 51
Section 614. Appointment of Authenticating Agent . . . . . . . . . . . . . . . . . 55
ARTICLE SEVEN
Securityholders' Lists and Reports by Trustee and Company
Section 701. Company to Furnish Trustee Names and Addresses of Securityholders . . 57
Section 702. Preservation of Information; Communications to Securityholders . . . 58
Section 703. Reports by Trustee . . . . . . . . . . . . . . . . . . . . . . . . . 59
Section 704. Reports by Company . . . . . . . . . . . . . . . . . . . . . . . . . 60
</TABLE>
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ARTICLE EIGHT
Consolidation, Merger, Conveyance or Transfer
Section 801. Company May Consolidate, etc., only on Certain Terms . . . . . . 61
Section 802. Successor Corporation Substituted . . . . . . . . . . . . . . . . 62
ARTICLE NINE
Supplemental Indentures
Section 901. Supplemental Indentures Without Consent of Securityholders . . . 62
Section 902. Supplemental Indentures with Consent of Securityholders . . . . . 63
Section 903. Execution of Supplemental Indentures . . . . . . . . . . . . . . 64
Section 904. Effect of Supplemental Indentures . . . . . . . . . . . . . . . . 64
Section 905. Conformity with Trust Indenture Act . . . . . . . . . . . . . . . 65
Section 906. Reference in Securities to Supplemental Indentures . . . . . . . 65
ARTICLE TEN
Covenants
Section 1001. Payment of Principal, Premium and Interest . . . . . . . . . . . 65
Section 1002. Maintenance of Office or Agency . . . . . . . . . . . . . . . . . 65
Section 1003. Money for Security Payments to Be Held in Trust . . . . . . . . . 65
Section 1004. Statement as to Compliance . . . . . . . . . . . . . . . . . . . 67
Section 1005. Corporate Existence . . . . . . . . . . . . . . . . . . . . . . . 67
Section 1006. Additional Covenants . . . . . . . . . . . . . . . . . . . . . . 67
ARTICLE ELEVEN
Redemption of Securities
Section 1101. Applicability of Article . . . . . . . . . . . . . . . . . . . . 69
Section 1102. Election to Redeem; Notice to Trustee . . . . . . . . . . . . . . 69
Section 1103. Selection by Trustee of Securities to Be Redeemed . . . . . . . . 69
Section 1104. Notice of Redemption . . . . . . . . . . . . . . . . . . . . . . 70
Section 1105. Deposit of Redemption Price . . . . . . . . . . . . . . . . . . . 70
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Section 1106. Securities Payable on Redemption Date . . . . . . . . . . . . . . 71
Section 1107. Securities Redeemed in Part . . . . . . . . . . . . . . . . . . . 71
Section 1108. Provisions with Respect to any Sinking Funds . . . . . . . . . . 71
ARTICLE TWELVE
Subordination
Section 1201. Agreement of Securityholders that
Securities Subordinated to Extent Provided . . . . . . . 73
Section 1202. Company not to Make payments With
Respect to Securities in Certain Circumstances . . . . . 73
Section 1203. Securities Subordinated to Prior
Payments of All Senior Indebtedness on Dissolution,
Liquidation or Reorganization of the Company . . . . . . 74
Section 1204. Securityholders to be Subrogated to
Right of Holders of Senior Indebtedness . . . . . . . . 75
Section 1205. Obligation of the Company
Unconditional . . . . . . . . . . . . . . . . . . . . . 75
Section 1206. Trustee Entitled to Assume Payments
Not Prohibited in Absence of Notice . . . . . . . . . . 76
Section 1207. Application by Trustee of Monies
Deposited With It . . . . . . . . . . . . . . . . . . . 76
Section 1208. Subordination Rights Not Impaired by
Acts or Omissions of Company or Holders of Senior
Indebtedness . . . . . . . . . . . . . . . . . . . . . . 77
Section 1209. Securityholders Authorize Trustee to
Effectuate Subordination of Securities . . . . . . . . . 77
Section 1210. Right of Trustee to Hold Senior
Indebtedness . . . . . . . . . . . . . . . . . . . . . . 77
Section 1211. Article Twelve Not to Prevent Events
of Default . . . . . . . . . . . . . . . . . . . . . . . 77
</TABLE>
<PAGE> 8
THIS JUNIOR SUBORDINATED INDENTURE (the "Indenture") between
CLEAR CHANNEL COMMUNICATIONS, INC., a Texas corporation
(hereinafter called the "Company") having its principal office at
200 Concord Plaza, Suite 600, San Antonio, Texas 78216, and THE
BANK OF NEW YORK, a New York banking corporation, trustee
(hereinafter called the "Trustee"), is made and entered into as of
this ___ day of ________, 1997.
Recitals of the Company
The Company has duly authorized the execution and delivery of this
Indenture to provide for the issuance of its Securities, notes, bonds or other
evidences of indebtedness, to be issued in one or more fully registered series.
All things necessary to make this Indenture a valid agreement of the
Company, in accordance with its terms, have been done.
Agreements of the Parties
To set forth or to provide for the establishment of the terms and
conditions upon which the Securities are and are to be authenticated, issued
and delivered, and in consideration of the premises and the purchase of
Securities by the Holders thereof, it is mutually covenanted and agreed as
follows, for the equal and proportionate benefit of all Holders of the
Securities or of a series thereof, as the case may be:
ARTICLE ONE
Definitions and Other Provisions
of General Application
Section 101. Definitions. For all purposes of this Indenture and of
any indenture supplemental hereto, except as otherwise expressly provided 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;
(2) all other terms used herein which are defined in the Trust
Indenture Act or by Commission rule under 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 and, except as otherwise herein expressly provided, the term
"generally accepted accounting principles" 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 of such
computation;
<PAGE> 9
2
(4) all references in this instrument to designated "Articles",
"Sections" and other subdivisions are to the designated Articles, Sections
and other subdivisions of this instrument as originally executed. 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) "including" and words of similar import shall be deemed to be
followed by "without limitation".
Certain terms, used principally in Article Six, are defined in that
Article.
"Act", when used with respect to any Security-holder, has the meaning
specified in Section 104.
"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 meanings correlative to the
foregoing.
"Authenticating Agent" means any Person authorized by the Trustee to
authenticate Securities under Section 614.
"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 a resolution 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 of such
certification, and delivered to the Trustee.
"Business Day" means each day which is neither a Saturday, Sunday or
other day on which banking institutions in the pertinent Place or Places of
Payment are authorized or required by law or executive order to be closed.
"CCCI Capital Trust" means such business trust created under the laws
of the State of Delaware specified in the applicable Board Resolution or
supplemental indenture establishing a particular series of Securities pursuant
to Section 2.01 and to whom such Series of Securities will be sold.
"CCCI Capital Trust Guarantee" means _________________.
<PAGE> 10
3
"Commission" means the Securities and Exchange Commission, as from
time to time constituted, created under the Securities Exchange Act of 1934,
or, if at any time after the execution of this instrument such Commission is
not existing and performing the duties now assigned to it under the Trust
Indenture Act, then the body performing such duties on such date.
"Common Securities" means the common undivided beneficial interests in
the assets of the applicable CCCI Capital Trust.
"Company" means the Person named as the "Company" in the first
paragraph of this instrument until a successor corporation shall have become
such pursuant to the applicable provisions of this Indenture, and thereafter
"Company" shall mean such successor corporation.
"Company Request", "Company Order" and "Company Consent" mean,
respectively, a written request, order or consent signed in the name of the
Company by its Chairman of the Board, President or a Vice President, and by its
Treasurer, an Assistant Treasurer, Controller, an Assistant Controller,
Secretary or an Assistant Secretary, and delivered to the Trustee.
"Corporate Trust Office" means the principal office of the Trustee in
New York, New York at which at any particular time its corporate trust business
shall be principally administered, which office at the date hereof is located
at 101 Barclay Street, 21st Floor, New York, New York 10286, except that with
respect to the presentation of Securities for payment or for registration of
transfer and exchange, such term shall mean the office or the agency of the
Trustee in said city at which at any particular time its corporate agency
business shall be conducted, which office at the date hereof is located at 101
Barclay Street, 21st Floor, New York, New York 10286.
"Debt" means indebtedness for money borrowed.
"Declaration of Trust" means the Declaration of Trust of the CCCI
Capital Trust, if any, specified in the applicable Board Resolution or
supplemental indenture establishing a particular series of Securities pursuant
to Section 301.
"Defaulted Interest" has the meaning specified in Section 307.
"Depositary" means, unless otherwise specified by the Company pursuant
to either Section 204 or 301, with respect to Securities of any series issuable
or issued as a Global Security, The Depository Trust Company, New York, New
York, or any successor thereto registered as a clearing agency under the
Securities Exchange Act of 1934, as amended, or other applicable statute or
regulation.
<PAGE> 11
4
"Event of Default" has the meaning specified in Article Five.
"Extension Period" has the meaning specified in Section 314 of this
Indenture.
"Funded Debt" of any person means all indebtedness for borrowed money
created, incurred, assumed or guaranteed in any manner by such person, and all
indebtedness, contingent or otherwise, incurred or assumed by such person in
connection with the acquisition of any business, property or asset, which in
each case matures more than one year after, or which by its terms is renewable
or extendible or payable out of the proceeds of similar indebtedness incurred
pursuant to the terms of any revolving credit agreement or any similar
agreement at the option of such person for a period ending more than one year
after the date as of which Funded Debt is being determined; provided, however,
that Funded Debt shall not include (i) any indebtedness for the payment,
redemption or satisfaction of which money (or evidences of indebtedness, if
permitted under the instrument creating or evidencing such indebtedness) in the
necessary amount shall have been irrevocably deposited in trust with a trustee
or proper depository either on or before the maturity or redemption date
thereof or (ii) any indebtedness of such person to any of its Subsidiaries or
of any Subsidiary to such person or any other Subsidiary or (iii) any
indebtedness incurred in connection with the financing of operating,
construction or acquisition projects, provided that the recourse for such
indebtedness is limited to the assets of such projects.
"Global Security" means with respect to any series of Securities
issued hereunder, a Security which is executed by the Company and authenticated
and delivered by the Trustee to the Depositary or pursuant to the Depositary's
instruction, all in accordance with this Indenture and an indenture
supplemental hereto, if any, or Board Resolution and pursuant to a Company
Request, which shall be registered in the name of the Depositary or its nominee
and which shall represent, and shall be denominated in an amount equal to the
aggregate principal amount of, all of the Outstanding Securities of such series
or any portion thereof, in either case having the same terms, including,
without limitation, the same original issue date, date or dates on which
principal is due, and interest rate or method of determining interest.
"Guarantee" means the guarantee, if any, that the Company may enter
into that operates directly or indirectly for the benefit of holders of
Preferred Securities issued by a CCCI Capital Trust.
"Holder", when used with respect to any Security, means a
Securityholder.
"Indenture" or "this Indenture" means this instrument as originally
executed or as it may from time to time be supplemented or amended by one or
<PAGE> 12
5
more indentures supplemental hereto entered into pursuant to the applicable
provisions hereof and shall include the terms of particular series of
Securities established as contemplated by Section 301.
"Interest", when used with respect to an Original Issue Discount
Security which by its terms bears interest only after Maturity, means interest
payable after Maturity.
"Interest Payment Date", when used with respect to any series of
Securities, means the Stated Maturity of any installment of interest on those
Securities.
"Maturity", when used with respect to any Securities, means the date
on which the principal of any such Security becomes due and payable as therein
or herein provided, whether on a Repayment Date, at the Stated Maturity or by
declaration of acceleration, call for redemption or otherwise.
"Officers' Certificate" means a certificate signed by the Chairman of
the Board, the President or a Vice President, and by the Treasurer, an
Assistant Treasurer, the Controller, an Assistant Controller, the Secretary or
an Assistant Secretary of the Company, and delivered to the Trustee. Wherever
this Indenture requires that an Officers' Certificate be signed also by an
engineer or an accountant or other expert, such engineer, accountant or other
expert (except as otherwise expressly provided in this Indenture) may be in the
employ of the Company, and shall be acceptable to the Trustee.
"Opinion of Counsel" means a written opinion of counsel, who may
(except as otherwise expressly provided in this Indenture) be an employee of or
of counsel to the Company. Such counsel shall be acceptable to the Trustee,
whose acceptance shall not be unreasonably withheld.
"Other Guarantee" means ________________________ .
"Original Issue Discount Security" means (i) any Security which
provides for an amount less than the principal amount thereof to be due and
payable upon a declaration of acceleration of the Maturity thereof, and (ii)
any other Security deemed an Original Issue Discount Security for United States
Federal income tax purposes.
"Outstanding", when used with respect to Securities or Securities of
any series, means, as of the date of determination, all such Securities
theretofore authenticated and delivered under this Indenture, except:
(i) such Securities theretofore canceled by the Trustee or delivered
to the Trustee for cancellation;
<PAGE> 13
6
(ii) such Securities for whose payment or redemption money in the
necessary amount has been theretofore deposited with the Trustee or any
Paying Agent in trust for the Holders of such Securities; 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; and
(iii) such Securities in exchange for or in lieu of which other
Securities have been authenticated and delivered pursuant to this
Indenture, or which shall have been paid pursuant to the terms of Section
306 (except with respect to any such Security as to which proof
satisfactory to the Trustee is presented that such Security is held by a
person in whose hands such Security is a legal, valid and binding
obligation of the Company).
In determining whether the Holders of the requisite principal amount of such
Securities Outstanding have given any request, demand, authorization,
direction, notice, consent or waiver hereunder, (i) the principal amount of any
Original Issue Discount Security that shall be deemed to be Outstanding shall
be the amount of the principal thereof that would be due and payable as of the
date of the taking of such action upon a declaration of acceleration of the
Maturity thereof and (ii) Securities owned by the Company or any other obligor
upon the Securities or any Affiliate of the Company or of such other obligor
shall be disregarded and deemed not to be Outstanding. In determining whether
the Trustee shall be protected in relying upon any such request, demand,
authorization, direction, notice, consent or waiver, only Securities which a
Responsible Officer assigned to the corporate trust department of the Trustee
knows to be owned by the Company or any other obligor upon the Securities or
any Affiliate of the Company or such other obligor shall be so disregarded.
Securities so owned which have been pledged in good faith may be regarded as
Outstanding if the pledgee establishes to the satisfaction of the Trustee the
pledgee's right to act as owner with respect to such Securities and that the
pledgee is not the Company or any other obligor upon the Securities or any
Affiliate of the Company or such other obligor.
"Paying Agent" means any Person authorized by the Company to pay the
principal of (and premium, if any) or interest on any Securities on behalf of
the Company.
"Person" means any individual, corporation, partnership, limited
liability company, joint venture, association, joint-stock company, trust,
unincorporated organization or government or any agency or political
subdivision thereof.
"Place of Payment" means with respect to any series of Securities
issued hereunder the city or political subdivision so designated with respect
to the series of Securities in question in accordance with the provisions of
Section 301.
<PAGE> 14
7
"Predecessor Securities" of any particular Security means every
previous Security evidencing all or a portion of the same debt as that
evidenced by such particular Security; and, for the purposes of this
definition, any Security authenticated and delivered under Section 306 in lieu
of a lost, destroyed or stolen Security shall be deemed to evidence the same
debt as the lost, destroyed or stolen Security.
"Preferred Securities" means the preferred undivided beneficial
interests in the assets of the applicable CCCI Capital Trust.
"Property Trustee" means the entity performing the function of the
Property Trustee under the applicable Declaration of Trust of a CCCI Capital
Trust.
"Redemption Date", when used with respect to any Security to be
redeemed, means the date fixed for such redemption by or pursuant to this
Indenture.
"Redemption Price", when used with respect to any Security to be
redeemed, means the price specified in the Security at which it is to be
redeemed pursuant to this Indenture.
"Regular Record Date" for the interest payable on any Security on any
Interest Payment Date means the date specified in such Security as the Regular
Record Date.
"Repayment Date", when used with respect to any Security to be repaid,
means the date fixed for such repayment pursuant to such Security.
"Repayment Price", when used with respect to any Security to be
repaid, means the price at which it is to be repaid pursuant to such Security.
"Responsible Officer", when used with respect to the Trustee, means
the chairman or vice-chairman of the board of directors, the chairman or vice-
chairman of the executive committee of the board of directors, the president,
any vice president, the secretary, any assistant secretary, the treasurer, any
assistant treasurer, the cashier, any assistant cashier, any senior trust
officer or trust officer, the controller and any assistant controller or any
other officer of the Trustee customarily performing functions similar to those
performed by any of the above designated officers and also means, with respect
to a particular corporate trust matter, any other officer to whom such matter
is referred because of his knowledge of and familiarity with the particular
subject.
"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, of any series authenticated and delivered from time to time under this
Indenture.
<PAGE> 15
8
"Security Exchange" when used with respect to the Securities of any
series which are held as trust assets of a CCCI Capital Trust pursuant to the
Declaration of Trust of such CCCI Capital Trust means the distribution of the
Securities of such series by such CCCI Capital Trust in exchange for the
Preferred Securities and Common Securities of such CCCI Capital Trust in
dissolution of such CCCI Capital Trust pursuant to the Declaration of Trust of
such CCCI Capital Trust.
"Security Register" shall have the meaning specified in Section 305.
"Security Registrar" means the Person who keeps the Security Register
specified in Section 305.
"Securityholder" means a Person in whose name a Security is registered
in the Security Register.
"Senior Indebtedness" means the principal of and premium, if any, and
interest on the following, whether outstanding on the date of execution of this
Indenture or thereafter incurred or created (i) indebtedness of the Company for
money borrowed by the Company (including purchase money obligations with an
original maturity in excess of one year) or evidenced by securities (other than
the Securities), notes, bankers' acceptances or other corporate debt securities
or similar instruments issued by the Company; (ii) obligations with respect to
letters of credit; (iii) indebtedness of the Company constituting a guarantee of
indebtedness of others of the type referred to in the preceding clauses (i) and
(ii); or (iv) renewals, extensions or refundings of any of the indebtedness
referred to in the preceding clauses (i), (ii) and (iii) unless, in the case of
any particular indebtedness, renewal, extension or refunding, under the express
provisions of the instrument creating or evidencing the same, or pursuant to
which the same is outstanding, such indebtedness or such renewal, extension or
refunding thereof is not superior in right of payment to the Securities.
"Special Record Date" for the payment of any Defaulted Interest (as
defined in Section 307) means a date fixed by the Trustee pursuant to Section
307.
"Stated Maturity" when used with respect to any Security or any
installment of principal thereof or interest thereon means the date specified
in such Security as the fixed date on which the principal of such Security or
such installment of principal or interest is due and payable.
"Subsidiary" of any specified corporation means any corporation at
least a majority of whose outstanding Voting Stock shall at the time be owned,
directly or indirectly, by the specified corporation or by one or more of its
Subsidiaries, or both.
<PAGE> 16
9
"Trust Indenture Act" or "TIA" means the Trust Indenture Act of 1939,
as amended by the Trust Indenture Reform Act of 1990, as in force at the date
as of which this instrument was executed except as provided in Section 905.
"Trustee" means the Person named as the Trustee in the first paragraph
of this instrument until a successor Trustee shall have become such pursuant to
the applicable provisions of this Indenture, and thereafter "Trustee" shall
mean and include each Person who is then a Trustee hereunder. If at any time
there is more than one such Person, "Trustee" as used with respect to the
Securities of any series shall mean the Trustee with respect to Securities of
that series.
"U.S. Government Obligations" means securities that are (x) direct
obligations of the United States of America for the payment of which its full
faith and credit is pledged or (y) obligations of a Person controlled or
supervised by and acting as an agency or instrumentality of the United States
of America, the payment of which is unconditionally guaranteed as a full faith
and credit obligation by the United States of America, which, in either case,
are not callable or redeemable at the option of the issuer thereof.
"Vice President" when used with respect to the Company or the Trustee
means any vice president, whether or not designated by a number or a word or
words added before or after the title "vice president", including, without
limitation, an assistant vice president.
"Voting Stock", as applied to the stock of any corporation, means
stock of any class or classes (however designated) having by the terms thereof
ordinary voting power to elect a majority of the members of the board of
directors (or other governing body) of such corporation other than stock having
such power only by reason of the happening of a contingency.
Section 102. Compliance Certificates and Opinions. Upon any
application or request by the Company to the Trustee to take any action under
any provision of this Indenture, the Company shall furnish to the Trustee an
Officers' Certificate 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
is specifically required by any provision of this Indenture relating to such
particular application or request, no additional certificate or opinion need be
furnished.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture (except for the written
statement required by Section 1004) shall include
<PAGE> 17
10
(1) a statement that each individual signing such certificate or
opinion has read such covenant or condition 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 covenant or condition
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 103. 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 the 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 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 stating that the
information with respect to such factual matters is in the possession of the
Company, 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, they may, but need not, be consolidated and
form one instrument.
Section 104. Acts of Securityholders. (a) Any request, demand,
authorization, direction, notice, consent, waiver or other action provided by
this Indenture to be given or taken by Securityholders or Securityholders of
any series may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Securityholders in person or by an
<PAGE> 18
11
agent duly appointed in writing; and, except as herein otherwise expressly
provided, such action shall become effective when such instrument or
instruments are delivered to the Trustee, and, where it is hereby expressly
required, to the Company. If any Securities are denominated in coin or
currency other than that of the United States, then for the purposes of
determining whether the Holders of the requisite principal amount of Securities
have taken any action as herein described, the principal amount of such
Securities shall be deemed to be that amount of United States dollars that
could be obtained for such principal amount on the basis of the spot rate of
exchange into United States dollars for the currency in which such Securities
are denominated (as evidenced to the Trustee by an Officers' Certificate) as of
the date the taking of such action by the Holders of such requisite principal
amount is evidenced to the Trustee as provided in the immediately preceding
sentence. Such instrument or instruments (and the action embodied therein and
evidenced thereby) are herein sometimes referred to as the "Act" of the
Securityholders signing such instrument or instruments. Proof of execution of
any such instrument or of a writing appointing any such agent shall be
sufficient for any purpose of this Indenture and (subject to Section 601)
conclusive in favor of the Trustee and the Company, if made in the manner
provided in this Section.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness to such
execution or by the certificate of any notary public or other officer
authorized by law to take acknowledgments of deeds, certifying that the
individual signing such instrument or writing acknowledged to him the execution
thereof. Where such execution is by an officer of a corporation or a member of
a partnership, on behalf of such corporation or partnership, such certificate
or affidavit shall also constitute sufficient proof of his authority. The fact
and date of the execution of any such instrument or writing, or the authority
of the person executing the same, may also be proved in any other manner which
the Trustee deems sufficient.
(c) The ownership of Securities shall be proved by the Security
Register.
(d) If the Company shall solicit from the Holders any request,
demand, authorization, direction, notice, consent, waiver or other action, the
Company may, at its option, by Board Resolution, fix in advance a record date
for the determination of Holders entitled to give such request, demand,
authorization, direction, notice, consent, waiver or other action, but the
Company shall have no obligation to do so. If such a record date is fixed,
such request, demand, authorization, direction, notice, consent, waiver or
other action may be given before or after the record date, but only the Holders
of record at the close of business on the record date shall be deemed to be
Holders for the purposes of determining whether Holders of the requisite
proportion of Securities Outstanding have authorized or agreed or consented to
such request, demand, authorization, direction, notice, consent, waiver or
<PAGE> 19
12
other action, and for that purpose the Securities Outstanding shall be computed
as of the record date; provided that no such authorization, agreement or
consent by the Holders on the record date 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.
(e) Any request, demand, authorization, direction, notice, consent,
waiver or other action by the Holder of any Security shall bind the Holder of
every Security issued upon the transfer thereof or in exchange therefor or in
lieu thereof, in respect of anything done or suffered to be done by the Trustee
or the Company in reliance thereon whether or not notation of such action is
made upon such Security.
Section 105. Notices, etc., to Trustee and Company. Any request,
demand, authorization, direction, notice, consent, waiver or Act of
Securityholders 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 Securityholder 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 by the Trustee or by any Securityholder shall be
sufficient for every purpose hereunder (except as provided in Section
501(4) or, in the case of a request for repayment, as specified in the
Security carrying the right to repayment) if in writing and mailed,
first-class postage prepaid, to the Company 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.
Section 106. Notices to Securityholders; Waiver. Where this
Indenture or any Security provides for notice to Securityholders of any event,
such notice shall be sufficiently given (unless otherwise herein or in such
Security expressly provided) if in writing and mailed, first-class postage
prepaid, to each Securityholder 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. In
any case where notice to Securityholders is given by mail, neither the failure
to mail such notice, nor any defect in any notice so mailed, to any particular
Securityholder shall affect the sufficiency of such notice with respect to
other Securityholders. Where this Indenture or any Security 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
Securityholders 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.
<PAGE> 20
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In case, by reason of the suspension of regular mail service as a
result of a strike, work stoppage or otherwise, it shall be impractical to mail
notice of any event to any Securityholder when such notice is required to be
given pursuant to any provision of this Indenture, then any method of
notification as shall be satisfactory to the Trustee and the Company shall be
deemed to be a sufficient giving of such notice.
Section 107. Conflict with Trust Indenture Act. If any provision
hereof limits, qualifies or conflicts with the duties imposed by any of
Sections 310 to 317, inclusive, of the Trust Indenture Act through the
operation of Section 318(c) thereof, such imposed duties shall control.
Section 108. 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.
Section 109. Successors and Assigns. All covenants and agreements in
this Indenture by the Company shall bind its successors and assigns, whether so
expressed or not.
Section 110. Separability Clause. In case any provision in this
Indenture or in the Securities 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 111. Benefits of Indenture. Nothing in this Indenture or in
any Securities, express or implied, shall give to any Person, other than the
parties hereto and their successors hereunder, any Authenticating Agent or
Paying Agent, the Security Registrar and the Holders of Securities (or such of
them as may be affected thereby), any benefit or any legal or equitable right,
remedy or claim under this Indenture.
Section 112. Governing Law. This Indenture shall be construed in
accordance with and governed by the laws of the State of New York.
Section 113. Counterparts. This instrument may be executed in any
number of counterparts, each of which so executed shall be deemed to be an
original, but all such counterparts shall together constitute but one and the
same instrument.
Section 114. Judgment Currency. The Company 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 the
Securities of any series (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
<PAGE> 21
14
Trustee could purchase in the City of New York the Required Currency with the
Judgment Currency on the New York Banking Day (as defined below) preceding that
on which 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 subsection (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 required by law or executive order to
close.
Section 115. Certain Rights of Holders of Preferred Securities.
The Company hereby acknowledges that, to the extent specifically set forth
herein, prior to a Security Exchange with respect to the Securities of any
series held as trust assets of a CCCI Capital Trust, the holders of the
Preferred Securities of such CCCI Capital Trust shall expressly be third party
beneficiaries of this Indenture. The Company further acknowledges that, prior
to a Security Exchange with respect to Securities of any series held as trust
assets of a CCCI Capital Trust, if the Property Trustee of such CCCI Capital
Trust fails to enforce its rights under this Indenture as the holder of the
Securities of a series held as trust assets of such CCCI Capital Trust, any
holder of the Preferred Securities of such CCCI Capital Trust may institute
legal proceedings directly against the Company to enforce such Property
Trustee's rights under this Indenture without first instituting any legal
proceedings against such Property Trustee or any other Person.
ARTICLE TWO
Security Forms
Section 201. Forms Generally. The Securities shall have such
appropriate insertions, omissions, substitutions and other variations as are
required or permitted by this Indenture and may have such letters, numbers or
other marks of identification and such legends or endorsements placed thereon,
as may be required to comply with applicable laws or regulations or with the
rules of any securities exchange, or as may, consistently herewith, be
determined by the officers executing such Securities, as evidenced by their
execution of the Securities. Any portion of the text of any Security may be
set forth on the reverse thereof, with an appropriate reference thereto on the
face of the Security.
<PAGE> 22
15
The definitive Securities shall be printed, lithographed or engraved
or produced by any combination of these methods on steel engraved borders or
may be produced in any other manner, all as determined by the officers
executing such Securities, as evidenced by their execution of such Securities,
subject, with respect to the Securities of any series, to the rules of any
securities exchange on which such Securities are listed.
Section 202. Forms of Securities. Each Security shall be in one of
the forms approved from time to time by or pursuant to a Board Resolution, or
established in one or more indentures supplemental hereto. Prior to the
delivery of a Security to the Trustee for authentication in any form approved
by or pursuant to a Board Resolution, the Company shall deliver to the Trustee
the Board Resolution by or pursuant to which such form of Security has been
approved, which Board Resolution shall have attached thereto a true and correct
copy of the form of Security which has been approved thereby or, if a Board
Resolution authorizes a specific officer or officers to approve a form of
Security, a certificate of such officer or officers approving the form of
Security attached thereto. Any form of Security approved by or pursuant to a
Board Resolution must be acceptable as to form to the Trustee, such acceptance
to be evidenced by the Trustee's authentication of Securities in that form or a
certificate signed by a Responsible Officer of the Trustee and delivered to the
Company.
Section 203. Form of Trustee's Certificate of Authentication. The
form of Trustee's Certificate of Authentication for any Security issued
pursuant to this Indenture shall be substantially as follows:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the series designated therein
referred to in the within-mentioned Indenture.
THE BANK OF NEW YORK,
as Trustee,
Dated: By:
---------------------- --------------------------
Authorized Signatory
Section 204. Securities Issuable in the Form of a Global Security.
(a) If the Company shall establish pursuant to Sections 202 and 301 that the
Securities of a particular series are to be issued in whole or in part in the
form of one or more Global Securities, then the Company shall execute and the
Trustee or its agent shall, in accordance with Section 303 and the Company
Request delivered to the Trustee or its agent thereunder, authenticate and
<PAGE> 23
16
deliver, such Global Security or Securities, which (i) shall represent, and
shall be denominated in an amount equal to the aggregate principal amount of,
the Outstanding Securities of such series to be represented by such Global
Security or Securities, or such portion thereof as the Company shall specify in
a Company Request, (ii) shall be registered in the name of the Depositary for
such Global Security or Securities or its nominee, (iii) shall be delivered by
the Trustee or its agent to the Depositary or pursuant to the Depositary's
instruction and (iv) shall bear a legend substantially to the following effect:
"Unless and until it is exchanged in whole or in part for the individual
Securities represented hereby, this Global Security may not be transferred
except as a whole by the Depositary to a nominee of the Depositary or by a
nominee of the Depositary to the Depositary or another nominee of the
Depositary or by the Depositary or any such nominee to a successor Depositary
or a nominee of such successor Depositary."
(b) Notwithstanding any other provisions of this Section 204 or of
Section 305, and subject to the provisions of paragraph (c) below, unless the
terms of a Global Security expressly permit such Global Security to be
exchanged in whole or in part for individual Securities, a Global Security may
be transferred, in whole but not in part and in the manner provided in Section
305, only to a nominee of the Depositary for such Global Security, or to the
Depositary, or a successor Depositary for such Global Security selected or
approved by the Company, or to a nominee of such successor Depositary.
(c) (i) If at any time the Depositary for a Global Security notifies
the Company that it is unwilling or unable to continue as Depositary for such
Global Security or if at any time the Depositary for the Securities for such
series ceases to be a clearing agency registered under the Securities Exchange
Act of 1934, as amended, or other applicable statute or regulation, the Company
shall appoint a successor Depositary with respect to such Global Security. If a
successor Depositary for such Global Security is not appointed by the Company
within 90 days after the Company receives such notice or becomes aware of such
ineligibility, the Company will execute, and the Trustee or its agent, upon
receipt of a Company Request for the authentication and delivery of individual
Securities of such series in exchange for such Global Security, will
authenticate and deliver, individual Securities of such series of like tenor
and terms in an aggregate principal amount equal to the principal amount of the
Global Security in exchange for such Global Security.
(ii) The Company may at any time and in its sole discretion determine
that the Securities of any series or portion thereof issued or issuable in the
form of one or more Global Securities shall no longer be represented by such
Global Security or Securities. In such event the Company will execute, and the
Trustee, upon receipt of a Company Request for the authentication and delivery
of individual Securities of such series in exchange in whole or in part for
such Global Security, will authenticate and deliver individual Securities of
such series of like tenor and terms in definitive form in an aggregate
principal amount equal to the principal amount of such Global Security or
Securities representing such series or portion thereof in exchange for such
Global Security or Securities.
<PAGE> 24
17
(iii) If specified by the Company pursuant to Sections 202 and 301
with respect to Securities issued or issuable in the form of a Global Security,
the Depositary for such Global Security may surrender such Global Security
in exchange in whole or in part for individual Securities of such series of
like tenor and terms in definitive form on such terms as are acceptable to the
Company and such Depositary. Thereupon the Company shall execute, and the
Trustee or its agent shall authenticate and deliver, without service charge,
(1) to each Person specified by such Depositary a new Security or Securities of
the same series of like tenor and terms and of any authorized denomination as
requested by such Person in aggregate principal amount equal to and in exchange
for such Person's beneficial interest in the Global Security; and (2) to such
Depositary a new Global Security of like tenor and terms and in an authorized
denomination equal to the difference, if any, between the principal amount of
the surrendered Global Security and the aggregate principal amount of
Securities delivered to the Holders thereof.
(iv) In any exchange provided for in any of the preceding three
paragraphs, the Company will execute and the Trustee or its agent will
authenticate and deliver individual Securities in definitive registered form in
authorized denominations. Upon the exchange of the entire principal amount of
a Global Security for individual Securities, such Global Security shall be
canceled by the Trustee or its agent. Except as provided in the preceding
paragraph, Securities issued in exchange for a Global Security pursuant to this
Section shall be registered in such names and in such authorized denominations
as the Depositary for such Global Security, pursuant to instructions from its
direct or indirect participants or otherwise, shall instruct the Trustee or the
Security Registrar. The Trustee or the Security Registrar shall deliver such
Securities to the Persons in whose names such Securities are so registered.
ARTICLE THREE
The Securities
Section 301. General Title; General Limitations; Issuable in Series;
Terms of Particular Series. The aggregate principal amount of Securities which
may be authenticated and delivered and Outstanding under this Indenture is not
limited.
The Securities may be issued in one or more series up to an aggregate
principal amount of Securities as from time to time may be authorized by the
Board of Directors. All Securities of each series under this Indenture shall
in all respects be equally and ratably entitled to the benefits
hereof with respect to such series without preference, priority or distinction
on account of the actual time of the authentication and delivery or Stated
Maturity of the Securities of such series.
<PAGE> 25
18
Each series of Securities shall be created either by or pursuant to a
Board Resolution or by or pursuant to an indenture supplemental hereto. The
Securities of each such series may bear such date or dates, be payable at such
place or places, have such Stated Maturity or Maturities, be issuable at such
premium over or discount from their face value, bear interest at such rate or
rates (which may be fixed or floating), from such date or dates, payable in
such installments and on such dates and at such place or places to the Holders
of Securities registered as such on such Regular Record Dates, or may bear no
interest, and may be redeemable or repayable at such Redemption Price or Prices
or Repayment Price or Prices, as the case may be, whether at the option of the
Holder or otherwise, and upon such terms, all as shall be provided for in or
pursuant to the Board Resolution or in or pursuant to the supplemental
indenture creating that series. There may also be established in or pursuant
to a Board Resolution or in or pursuant to a supplemental indenture prior to
the issuance of Securities of each such series, provision for:
(1) the exchange or conversion of the Securities of that series, at
the option of the Holders thereof, for or into new Securities of a
different series or other securities or other property of the Company or
another Person, including shares of common stock, preferred stock,
indebtedness or securities of any kind of the Company, any subsidiary of the
Company or of any other Person or securities directly or indirectly
convertible into or exchangeable for any such securities;
(2) a sinking or purchase fund or other analogous obligation;
(3) if other than U.S. dollars, the currency or currencies or units
based on or related to currencies (including European Currency Units) in
which the Securities of such series shall be denominated and in which
payments of principal of, and any premium and interest on, such Securities
shall or may be payable;
(4) if the principal of (and premium, if any) or interest, if any, on
the Securities of such series are to be payable, at the election of the
Company or a holder thereof, in a currency or currencies or units based on
or related to currencies (including European Currency Units) other than
that in which the Securities are stated to be payable, the period or
periods within which, and the terms and conditions upon which, such
election may be made;
(5) if the amount of payments of principal of (and premium, if any) or
interest, if any, on the Securities of such series may be determined with
reference to an index based on (i) a currency or currencies or units based
on or related to currencies (including European Currency Units) other than
that in which the Securities are stated to be payable, (ii) changes in the
price of one or more other securities or groups or indexes of securities or
(iii) changes in the prices of one or more commodities or groups or indexes
of commodities, or any combination of the foregoing, the manner in which
such amounts shall be determined;
<PAGE> 26
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(6) if the aggregate principal amount of the Securities of that series
is to be limited, such limitations, and the maturity date of the principal
amount of the Securities of that series (which may be fixed or extendible),
and the rate or rates (which may be fixed or floating) per annum at which
the Securities of such series will bear interest, if any, or the method of
determining such rate or rates and the payment dates and record dates
relating to interest payments;
(7) the exchange of Securities of that series, at the option of the
Holders thereof, for other Securities of the same series of the same
aggregate principal amount of a different authorized kind or different
authorized denomination or denominations, or both;
(8) the appointment by the Trustee of an Authenticating Agent in one
or more places other than the location of the office of the Trustee with
power to act on behalf of the Trustee and subject to its direction in the
authentication and delivery of the Securities of any one or more series in
connection with such transactions as shall be specified in the provisions
of this Indenture or in or pursuant to the Board Resolution or the
supplemental indenture creating such series;
(9) the percentage of their principal amount of which such Securities
will be issued and the portion of the principal amount of Securities of the
series, if other than the total principal amount thereof, which shall be
payable upon declaration of acceleration of the Maturity thereof pursuant to
Section 502 or provable in bankruptcy pursuant to Section 504;
(10) any Event of Default with respect to the Securities of such
series, if not set forth herein and any additions, deletions or other
changes to the Events of Default set forth herein that shall be applicable
to the Securities of such series (including a provision making any Event
of Default set forth herein inapplicable to the Securities of that series);
(11) any covenant solely for the benefit of the Securities of such
series and any additions, deletions or other changes to the provisions of
Article Ten or any definitions relating to such Article that shall be
applicable to the Securities of such series (including a provision making
any Section of such Article inapplicable to the Securities of such series);
(12) the applicability of Section 402(b) of this Indenture to the
Securities of such series;
<PAGE> 27
20
(13) if the Securities of the series shall be issued in whole or in
part in the form of a Global Security or Global Securities, the terms and
conditions, if any, upon which such Global Security or Global Securities
may be exchanged in whole or in part for other individual Securities; and
the Depositary for such Global Security or Global Securities (if other than
the Depositary specified in Section 101 hereof);
(14) the subordination of the Securities of such series to any other
indebtedness of the Company, including without limitation, the Securities
of any other series;
(15) if the Securities of the series are to be deposited as trust
assets in a CCCI Capital Trust, the name of the applicable CCCI Capital
Trust (which shall distinguish such statutory business trust from all other
CCCI Capital Trusts) into which the Securities of the series are to be
deposited as trust assets and the date of its Declaration of Trust;
(16) if the Securities of the series are to have an interest deferral
feature, the terms relating to such interest deferral feature; and
(17) any other terms of the series, which shall not be inconsistent
with the provisions of this Indenture,
all upon such terms as may be determined in or pursuant to a Board Resolution
or in or pursuant to a supplemental indenture with respect to such series. All
Securities of the same series shall be substantially identical in tenor and
effect, except as to denomination.
The form of the Securities of each series shall be established
pursuant to the provisions of this Indenture in or pursuant to the Board
Resolution or in or pursuant to the supplemental indenture creating such
series. The Securities of each series shall be distinguished from the
Securities of each other series in such manner, reasonably satisfactory to the
Trustee, as the Board of Directors may determine.
Unless otherwise provided with respect to Securities of a particular
series, the Securities of any series may only be issuable in registered form,
without coupons.
Any terms or provisions in respect of the Securities of any series
issued under this Indenture may be determined pursuant to this Section by
providing in a Board Resolution or supplemental indenture for the method by
which such terms or provisions shall be determined.
Section 302. Denominations. The Securities of each series shall be
issuable in such denominations and currency as shall be provided in the
provisions of this Indenture or in or pursuant to the Board Resolution or the
supplemental indenture creating such series. In the absence of any such
<PAGE> 28
21
provisions with respect to the Securities of any series, the Securities of that
series shall be issuable only in fully registered form in denominations of
$25 and any integral multiple thereof.
Section 303. Execution, Authentication and Delivery and Dating. The
Securities shall be executed on behalf of the Company by its Chairman of the
Board, its President, one of its Vice Presidents or its Treasurer. The
signature of any of these officers on the Securities may be manual or
facsimile.
Securities 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 or did not
hold such offices at the date of such Securities.
At any time and from time to time after the execution and delivery of
this Indenture, the Company may deliver Securities executed by the Company to
the Trustee for authentication; and the Trustee shall, upon Company Order,
authenticate and make available for delivery such Securities as in this
Indenture provided and not otherwise.
Prior to any such authentication and delivery, the Trustee shall be
entitled to receive, in addition to any Officers' Certificate and Opinion of
Counsel required to be furnished to the Trustee pursuant to Section 102, and
the Board Resolution and any certificate relating to the issuance of the series
of Securities required to be furnished pursuant to Section 202, an Opinion of
Counsel stating that:
(1) all instruments furnished to the Trustee conform to the
requirements of the Indenture and constitute sufficient authority hereunder
for the Trustee to authenticate and deliver such Securities;
(2) the form and terms (or in connection with the issuance of medium-
term Securities under Section 311, the manner of determining the terms) of
such Securities have been established in conformity with the provisions of
this Indenture;
(3) all laws and requirements with respect to the execution and
delivery by the Company of such Securities have been complied with, the
Company has the corporate power to issue such Securities and such
Securities have been duly authorized and delivered by the Company and,
assuming due authentication and delivery by the Trustee, constitute legal,
valid and binding obligations of the Company enforceable in accordance with
their terms (subject, as to enforcement of remedies, to applicable
<PAGE> 29
22
bankruptcy, reorganization, insolvency, fraudulent conveyance, moratorium
or other laws and legal principles affecting creditors' rights generally
from time to time in effect and to general equitable principles, whether
applied in an action at law or in equity) and entitled to the benefits of
this Indenture, equally and ratably with all other Securities, if any, of
such series Outstanding; and
(4) such other matters as the Trustee may reasonably request;
and, if the authentication and delivery relates to a new series of Securities
created by an indenture supplemental hereto, also stating that all laws and
requirements with respect to the form and execution by the Company of the
supplemental indenture with respect to that series of Securities have been
complied with, the Company has corporate power to execute and deliver any such
supplemental indenture and has taken all necessary corporate action for those
purposes and any such supplemental indenture has been executed and delivered
and constitutes the legal, valid and binding obligation of the Company
enforceable in accordance with its terms (subject, as to enforcement of
remedies, to applicable bankruptcy, reorganization, insolvency, fraudulent
conveyance, moratorium or other laws and legal principles affecting creditors'
rights generally from time to time in effect and to general equitable
principles, whether applied in an action at law or in equity).
The Trustee shall not be required to authenticate such Securities if
the issue thereof will adversely affect the Trustee's own rights, duties or
immunities under the Securities and this Indenture.
Unless otherwise provided in the form of Security for any series, all
Securities shall be dated the date of their authentication.
No Security 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 herein
executed by the Trustee by manual signature of an authorized signatory, and
such certificate upon any Security shall be conclusive evidence, and the only
evidence, that such Security has been duly authenticated and delivered
hereunder.
Section 304. Temporary Securities. Pending the preparation of
definitive Securities of any series, the Company may execute, and, upon receipt
of the documents required by Section 303, together with a Company Order, the
Trustee shall authenticate and deliver, temporary Securities which are printed,
lithographed, typewritten, mimeographed or otherwise produced, in any
authorized denomination, substantially of the tenor of the definitive
<PAGE> 30
23
Securities in lieu of which they are issued and with such appropriate
insertions, omissions, substitutions and other variations as the officers
executing such Securities may determine, as evidenced by their execution of
such Securities.
If temporary Securities of any series are issued, the Company will
cause definitive Securities of such series to be prepared without unreasonable
delay. After the preparation of definitive Securities, the temporary
Securities of such series shall be exchangeable for definitive Securities of
such series upon surrender of the temporary Securities of such series at the
office or agency of the Company in a Place of Payment, without charge to the
Holder; and upon surrender for cancellation of any one or more temporary
Securities the Company shall execute and the Trustee shall authenticate and
deliver in exchange therefor a like principal amount of definitive Securities
of such series of authorized denominations and of like tenor and terms. Until
so exchanged the temporary Securities of such series shall in all respects be
entitled to the same benefits under this Indenture as definitive Securities of
such series.
Section 305. Registration, Transfer and Exchange. The Company shall
keep or cause to be kept a register (herein sometimes referred to as the
"Security Register") in which, subject to such reasonable regulations as it may
prescribe, the Company shall provide for the registration of Securities, or of
Securities of a particular series, and for transfers of Securities or of
Securities of such series. Any such register shall be in written form or in
any other form capable of being converted into written form within a reasonable
time. At all reasonable times the information contained in such register or
registers shall be available for inspection by the Trustee at the office or
agency to be maintained by the Company as provided in Section 1002.
Subject to Section 204, upon surrender for transfer of any Security of
any series at the office or agency of the Company in a Place of Payment, 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 Securities of such series of any authorized denominations, of a like
aggregate principal amount and Stated Maturity and of like tenor and terms.
Subject to Section 204, at the option of the Holder, Securities of any
series may be exchanged for other Securities of such series of any authorized
denominations, of a like aggregate principal amount and Stated Maturity and of
like tenor and terms, upon surrender of the Securities to be exchanged at such
office or agency. Whenever any Securities are so surrendered for exchange, the
Company shall execute, and the Trustee shall authenticate and make available
for delivery, the Securities which the Securityholder making the exchange is
entitled to receive.
<PAGE> 31
24
All Securities issued upon any transfer or exchange of Securities
shall be the valid obligations of the Company, evidencing the same debt, and
entitled to the same benefits under this Indenture, as the Securities
surrendered upon such transfer or exchange.
Every Security presented or surrendered for transfer or exchange shall
(if so required by the Company or the Trustee) be duly endorsed, or be
accompanied by a written instrument of transfer in form satisfactory to the
Company and the Security Registrar duly executed, by the Holder thereof or his
attorney duly authorized in writing.
Unless otherwise provided in the Security to be transferred or
exchanged, no service charge shall be made on any Securityholder for any
transfer or exchange of Securities, but the Company may (unless otherwise
provided in such Security) require payment of a sum sufficient to cover any tax
or other governmental charge that may be imposed in connection with any
transfer or exchange of Securities, other than exchanges pursuant to Section
304 or 906 not involving any transfer.
The Company shall not be required (i) to issue, transfer or exchange
any Security of any series during a period beginning at the opening of business
15 days before the day of the mailing of a notice of redemption of Securities
of such series selected for redemption under Section 1103 and ending at the
close of business on the date of such mailing, or (ii) to transfer or exchange
any Security so selected for redemption in whole or in part, except for the
portion of such Security not so selected for redemption.
None of the Company, the Trustee, any agent of 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.
The Company initially appoints the Trustee to act as Security
Registrar for the Securities on its behalf. The Company may at any time and
from time to time authorize any Person to act as Security Registrar in place of
the Trustee with respect to any series of Securities issued under this
Indenture.
Section 306. Mutilated, Destroyed, Lost and Stolen Securities. If
(i) any mutilated Security is surrendered to the Trustee, or the Company and
the Trustee receive evidence to their satisfaction of the destruction, loss or
theft of any Security, and (ii) there is delivered to the Company and the
Trustee such Security or indemnity as may be required by them to save each of
them harmless, then, in the absence of notice to the Company or the Trustee
that such Security has been acquired by a bona fide purchaser, the Company
shall execute and upon its request the Trustee
<PAGE> 32
25
shall authenticate and deliver, in exchange for or in lieu of any such
mutilated, destroyed, lost or stolen Security, a new Security of like tenor,
series, Stated Maturity and principal amount, bearing a number not
contemporaneously Outstanding.
In case any such mutilated, destroyed, lost or stolen Security 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.
Upon the issuance of any new Security under this Section, 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 issued pursuant to this Section in lieu of any
destroyed, lost or stolen Security shall constitute an original additional
contractual obligation of the Company, whether or not the destroyed, lost or
stolen Security shall be at any time enforceable by anyone, and shall be
entitled to all the benefits of this Indenture equally and proportionately with
any and all other Securities of the same series duly issued hereunder.
The provisions of this Section are 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.
Section 307. Payment of Interest; Interest Rights Preserved. Unless
otherwise provided with respect to such Security pursuant to Section 301,
interest on any Security which is payable, and is punctually paid or duly
provided for, on any Interest Payment Date shall be paid to the Person in whose
name that Security (or one or more Predecessor Securities) is registered at the
close of business on the Regular Record Date for such interest.
Any interest on any Security which is payable, but is not punctually
paid or duly provided for, on any Interest Payment Date (herein called
"Defaulted Interest") shall forthwith cease to be payable to the registered
Holder on the relevant Regular Record Date by virtue of his having been such
Holder; and, except as hereinafter provided, such Defaulted Interest may be
paid by the Company, at its election in each case, as provided in Clause (1) or
Clause (2) below:
(1) The Company may elect to make payment of any Defaulted Interest
to the Persons in whose names any such Securities (or their respective
Predecessor Securities) are registered at the close of business on a
Special Record Date for the payment of such Defaulted Interest, which shall
be fixed in the following manner. The Company shall notify the Trustee in
writing of the amount of Defaulted Interest proposed to be paid on each
such Security and the date of the proposed payment, and at the same time
<PAGE> 33
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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
prior to the date of the proposed payment, such money when deposited to be
held in trust for the benefit of the Persons entitled to such Defaulted
Interest as in this Clause provided. Thereupon the Trustee shall fix a
Special Record Date for the payment of such Defaulted Interest which shall
be not more than 15 nor less than 10 days prior to the date of the proposed
payment and not less than 10 days after the receipt by the Trustee of the
notice of the proposed payment. The Trustee shall promptly notify the
Company of such Special Record Date and, in the name and at the expense of
the Company, shall 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 each such Security at his address as it
appears in the Security Register, not less than 10 days prior to 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 Persons in whose
names such Securities (or their respective Predecessor Securities) are
registered 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 Securities 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 manner of payment shall be deemed practicable by the Trustee.
If any installment of interest the Stated Maturity of which is on or
prior to the Redemption Date for any Security called for redemption pursuant to
Article Eleven is not paid or duly provided for on or prior to the Redemption
Date in accordance with the foregoing provisions of this Section, such interest
shall be payable as part of the Redemption Price of such Securities.
Subject to the foregoing provisions of this Section, each Security
delivered under this Indenture upon 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.
Section 308. Persons Deemed Owners. The Company, the Trustee and any
agent of the Company or the Trustee may treat the Person in whose name any
Security is registered in the Security Register as the owner of such Security
for the purpose of receiving payment of principal of (and premium, if any), and
(subject to Section 307) interest on, such Security and for all other purposes
whatsoever, whether or not such Security be overdue, and neither the Company,
the Trustee nor any agent of the Company or the Trustee shall be affected by
notice to the contrary.
<PAGE> 34
27
Section 309. Cancellation. All Securities surrendered for payment,
redemption, transfer, conversion or exchange or credit against a sinking fund
shall, if surrendered to any Person other than the Trustee, be delivered to the
Trustee and, if not already canceled, shall be promptly canceled by it. 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
promptly canceled by the Trustee. No Security shall be authenticated in lieu
of or in exchange for any Securities canceled as provided in this Section,
except as expressly permitted by this Indenture. The Trustee shall return all
canceled Securities to the Company.
Section 310. Computation of Interest. Unless otherwise provided as
contemplated in Section 301, interest on the Securities shall be calculated on
the basis of a 360-day year of twelve 30-day months.
Section 311. Medium-term Securities. Notwithstanding any contrary
provision herein, if all Securities of a series are not to be originally issued
at one time, it shall not be necessary for the Company to deliver to the
Trustee an Officers' Certificate, Board Resolution, supplemental indenture,
Opinion of Counsel or Company Request otherwise required pursuant to Sections
202, 301 and 303 at or prior to the time of authentication of each Security of
such series if such documents are delivered to the Trustee or its agent at or
prior to the authentication upon original issuance of the first Security of
such series to be issued; provided that any subsequent request by the Company
to the Trustee to authenticate Securities of such series upon original issuance
shall constitute a representation and warranty by the Company that as of the
date of such request, the statements made in the Officers' Certificate
delivered pursuant to Section 102 shall be true and correct as if made on such
date.
An Officers' Certificate, supplemental indenture or Board Resolution
delivered by the Company to the Trustee in the circumstances set forth in the
preceding paragraph may provide that Securities which are the subject thereof
will be authenticated and delivered by the Trustee or its agent on original
issue from time to time upon the telephonic or written order of persons
designated in such Officers' Certificate, Board Resolution or supplemental
indenture (any such telephonic instructions to be confirmed promptly in writing
by such persons) and that such persons are authorized to determine, consistent
with such Officers' Certificate, supplemental indenture or Board Resolution,
such terms and conditions of said Securities as are specified in such Officers'
Certificate, supplemental indenture or Board Resolution.
Section 312. 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;
<PAGE> 35
28
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.
Section 313. Global Securities. (a) Each Global Security
authenticated under this Indenture shall be registered in the name of the
Depositary designated by the Company for such Global Security or a nominee
thereof and delivered to such Depository or a nominee thereof or custodian
therefor, and each such Global Security shall constitute a single Security for
all purposes of this Indenture.
(b) Notwithstanding any other provision of this Indenture, no Global
Security may be exchanged in whole or in part for Securities registered, and
no transfer of a Global Security in whole or in part may be registered, in the
name of any Person other than the Depositary for such Global Security or a
nominee thereof unless (i) such Depositary (A) has notified the Company that
it is unwilling or unable to continue as Depositary for such Global Security
or (B) has ceased to be a clearing agency registered as such under the Exchange
Act or announces an intention permanently to cease business or does in fact do
so or (ii) there shall have occurred and be continuing an Event of Default with
respect to such Global Security.
(c) If any Global Security is to be exchanged for other Securities
or canceled in whole, it shall be surrendered by or on behalf of the Depositary
or its nominee to the Trustee, as Security Registrar, for exchange or
cancellation, as provided in this Article Three. If any Global Security is to
be exchanged for other Securities or canceled in part, or if another Security
is to be exchanged in whole or in part for a beneficial interest in any Global
Security, in each case, as provided in Section 305, then either (i) such Global
Security shall be so surrendered for exchange or cancellation, as provided in
this Article Three or (ii) the principal amount thereof shall be reduced or
increased by an amount equal to the portion thereof to be so exchanged or
canceled, or equal to the principal amount of such other Security to be so
exchanged for a beneficial interest therein, as the case may be, by means of
an appropriate adjustment made on the records of the Trustee, as Security
Registrar, whereupon the Trustee in accordance with the Applicable Procedures,
shall instruct the Depositary or its authorized representative to make a
corresponding adjustment to its records. Upon any such surrender or adjustment
of a Global Security, the Trustee shall, subject to Section 305 and as
otherwise provided in this Article Three, authenticate and deliver any
Securities issuable in exchange for such Global Security (or any portion
thereof) to or upon the order of, and registered in such names as may
<PAGE> 36
29
be directed by, the Depositary or its authorized representative. Upon the
request of the Trustee in connection with the occurrence of any of the events
specified in the preceding paragraph, the Company shall promptly make
available to the Trustee a reasonable supply of Securities that are not
in the form of Global Securities. The Trustee shall be entitled to rely upon
any order, direction or request of the Depositary or its authorized
representative which is given or made pursuant to this Article III if such
order, direction or request is given or made in accordance with the Applicable
Procedures.
(d) Every Security authenticated and delivered upon registration
of transfer of, or in exchange for or in lieu of, a Global Security or any
portion thereof, whether pursuant to this Article Three or otherwise, shall
be authenticated and delivered in the form of, and shall be, a registered
Global Security, unless such Security is registered in the name of a Person
other than the Depositary for such Global Security or a nominee thereof, in
which case such Registered Security shall be authenticated and delivered in
definitive, fully registered form, without interest coupons.
(e) The Depositary or its nominee, as registered owner of a Global
Security, shall be the Holder of such Global Security for all purposes under
the Indenture and the Registered Securities, and owners of beneficial interests
in a Global Security shall hold such interests pursuant to the Applicable
Procedures. Accordingly, any such owner's beneficial interest in a Global
Security will be shown only on, and the transfer of such interest shall be
effected only through, records maintained by the Depositary or its nominee
or its Agent Members and such owners of beneficial interests in a Global
Security will not be considered the owners of holders thereof.
SECTION 314. Deferrals of Interest Payment Dates. If the Securities of
a particular series are to be deposited as trust assets in a CCCI Capital Trust
and as specified by Section 301 with respect to the Securities of such series,
provided that no Event of Default has occurred and is continuing with respect to
such Securities, the Company shall have the right, at any time or from time to
time during the term of such series, to defer the payment of interest on such
Securities for such period or periods as may be specified as contemplated by
Section 301 (each, an "Extension Period") during which Extension Periods the
Company shall have the right to make partial payments of interest on any
Interest Payment Date. No Extension Period shall end on a date other than an
Interest Payment Date. At the end of any such Extension Period the Company
shall pay all interest then accrued and unpaid on the Securities (together with
interest thereon accrued in a manner to be specified in Section 301 compounded
in a manner to be specified in Section 301 from the relevant Interest Payment
Date, to the extent permitted by applicable law), provided, however, that no
Extension Period may extend beyond the Stated Maturity of such Securities.
<PAGE> 37
30
During an Extension Period, interest will continue to accrue and Holders of the
Securities will be required to accrue interest income for U.S. Federal income
tax purposes. During any such Extension Period, the Company shall not (i)
declare or pay dividends or distributions on, or redeem, purchase, acquire or
make a liquidation payment with respect to, any of the Company's capital stock
(which includes the Common Stock and the Preferred Stock), or (ii) make any
payment of principal, interest, or premium, if any, on or repay, repurchase or
redeem any debt securities of the Company (including other Securities) that
rank pari passu with or junior in interest to the Securities of such series or
(iii) make any guarantee payments with respect to any guarantee by the Company
of the debt securities of any Subsidiary of the Company if such guarantee ranks
pari passu with or junior in interest to the Securities of such series (other
than (a) dividends or distributions in Common Stock, (b) any declaration of a
dividend in connection with the implementation of a stockholders' rights plan,
or the issuance of stock under any such plan in the future, or the redemption
or repurchase of any such rights pursuant thereto, (c) payments under the
applicable CCCI Capital Trust Guarantee, (d) purchases or acquisitions of
shares of the Common Stock in connection with the satisfaction by the Company
of its obligations under any employee benefit plan or other contractual
obligation of the Company (other than a contractual obligation ranking pari
passu with or junior to these Securities), (e) as a result of a
reclassification of the Company's capital stock or the exchange or conversion
of one class or series of the Company's capital stock for another class or
series of the Company's capital stock, or (f) the purchase of fractional
interests in shares of the Company's capital stock pursuant to the conversion
or exchange provisions of such capital stock or the security being converted or
exchanged). Prior to the termination of any such Extension Period, the Company
may further extend such Extension Period; provided, however, that no Extension
Period shall exceed the specified number of specified consecutive periods or
extend beyond the Stated Maturity of such Securities. Upon termination of any
Extension Period and upon the payment of all accrued and unpaid interest then
due on any Interest Payment Date, and subject to the foregoing limitations, the
Company may elect to begin a new Extension Period. No interest shall be due and
payable during an Extension Period, except at the end thereof. The Company
shall give the Holders and the Trustee notice of its election to begin any such
Extension Period (or an extension thereof) at least three Business Days prior
to the Interest Payment Date or, with respect to the Securities of a series
issued to a CCCI Capital Trust, prior to the earlier of (i) the date the
distributions on the Common Securities and the Preferred Securities of such
CCCI Capital Trust would have been payable except for the election to begin or
extend such Extension Period or (ii) the date the regular trustees of such CCCI
Capital Trust are required to give notice to any automated quotation system or
to holders of the Common Securities and the Preferred Securities of the record
date or the date such distributions are payable, but in any event not less than
three Business Days prior to such record date. There is no limitation on the
number of times that the Company may elect to begin an Extension Period.
<PAGE> 38
31
ARTICLE FOUR
Satisfaction and Discharge of Indenture; Defeasance; Unclaimed Moneys
SECTION 401. Applicability of Article. If, pursuant to Section 301,
provision is made for the defeasance of Securities of a series and if the
Securities of such series are denominated and payable only in Dollars (except
as provided pursuant to Section 301), then the provisions of this Article
Four relating to defeasance of Securities shall be applicable except as
otherwise specified pursuant to Section 301 for Securities of such series.
Defeasance provisions, if any, for Securities denominated in a Foreign
Currency may be specified pursuant to Section 301.
SECTION 402. Satisfaction and Discharge of Indenture; Defeasance.
(a) If at any time (i) the Company shall have delivered to the Trustee for
cancellation all Securities of any series theretofore authenticated and
delivered (other than (1) any Securities of such series which shall have been
destroyed, lost or stolen and which shall have been replaced or paid as
provided in Section 306 and (2) Securities for whose payment money has
theretofore been deposited in trust and thereafter repaid to the Company as
provided in Section 405) or (ii) all Securities of such series not theretofore
delivered to the Trustee for cancellation shall have become due and payable, or
are by their terms to become due and payable within one year or are to be
called for redemption within one year under arrangements satisfactory to the
Trustee for the giving of notice of redemption, and the Company shall deposit
with the Trustee as trust funds the entire amount in the Currency in which such
Securities are denominated (except as otherwise provided pursuant to Section
301) sufficient (in the opinion of a nationally recognized firm of independent
public accountants expressed in a written certification thereof delivered to
the Trustee) without consideration of any reinvestment and after payment of all
taxes or other charges and assessments in respect thereof payable by the
Trustee, to pay at maturity or upon redemption all Securities of such series
not theretofore delivered to the Trustee for cancellation, including principal
and premium, if any, and interest due or to become due on such date of maturity
or redemption date, as the case may be, no default with respect to the
Securities has occurred and is continuing on the date of such deposit, such
deposit does not result in a breach or violation of, or constitute a default
under, the Indenture or any other agreement or instrument to which the Company
is a party and the Company delivers an Officers' Certificate and an Opinion of
Counsel each stating that such conditions have been complied with and if in
<PAGE> 39
32
either case the Company shall also pay or cause to be paid all other sums
payable hereunder by the Company, then this Indenture shall cease to be of
further effect (except as to any surviving rights of registration of transfer
or exchange of such Securities herein expressly provided for and rights to
receive payments of principal of, and premium, if any, and interest on, such
Securities) with respect to the Securities of such series, and the Trustee, on
demand of the Company, shall execute proper instruments acknowledging
satisfaction of and discharging this Indenture.
(b) Subject to Sections 402(c), 403 and 407, the Company at any
time may terminate, with respect to Securities of a particular series, (i) all
its obligations under the Securities of such series and this Indenture with
respect to the Securities of such series ("legal defeasance option") or (ii)
its obligations with respect to the Securities of such series under clause (3)
of Section 801 ("covenant defeasance option"). The Company may exercise its
legal defeasance option notwithstanding its prior exercise of its covenant
defeasance option.
If the Company exercises its legal defeasance option, payment of the
Securities of the defeased series may not be accelerated because of an Event of
Default. If the Company exercises its covenant defeasance option, payment of
the Securities may not be accelerated because of an Event of Default related to
the specified covenants.
Upon satisfaction of the conditions set forth herein and upon request
of the Company, the Trustee shall acknowledge in writing the discharge of those
obligations that the Company terminates.
(c) Notwithstanding clause (a) above and the exercise of the legal
defeasance option in clause (b) above, the Company's obligations in Sections
305, 306, 1002, 701, 607, 608, 405, 406 and 407 shall survive until the
Securities of the defeased series have been paid in full. Thereafter, the
Company's obligations in Sections 607, 405 and 406 shall survive.
SECTION 403. Conditions of Defeasance. The Company may exercise its
legal defeasance option or its covenant defeasance option with respect to
Securities of a particular series only if:
<PAGE> 40
33
(1) the Company irrevocably deposits in trust with the Trustee money
or U.S. Government Obligations for the payment of principal of, and
premium, if any, and interest on, the Securities of such series to
maturity or redemption, as the case may be;
(2) the Company delivers to the Trustee a certificate from a
nationally recognized firm of independent public accountants expressing
their opinion that the payments of principal and interest when due and
without reinvestment on the deposited U.S. Government Obligations plus any
deposited money without investment will provide cash at such times and in
such amounts as will be sufficient to pay the principal, premium, if any,
and interest when due on all the Securities of such series to maturity or
redemption, as the case may be;
(3) 91 days pass after the deposit is made and during the 91-day
period no Default specified in Section 501(5) or (6) with respect to the
Company occurs which is continuing at the end of the period;
(4) no Default has occurred and is continuing on the date of such
deposit and after giving effect thereto;
(5) the deposit does not constitute a default under any other
agreement binding on the Company;
(6) the Company delivers to the Trustee an Opinion of Counsel to the
effect that the trust resulting from the deposit does not constitute, or is
qualified as, a regulated investment company under the Investment Company
Act of 1940;
(7) in the event of the legal defeasance option, 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 ruling, or (ii)
since the date of this Indenture there has been a change in the applicable
Federal income tax law, in either case to the effect that, and based
<PAGE> 41
34
thereon such Opinion of Counsel shall confirm that, the Holders of
Securities of such series 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;
(8) in the event of the covenant defeasance option, the Company shall
have delivered to the Trustee an Opinion of Counsel to the effect that the
Holders of Securities of such series 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; and
(9) the Company delivers to the Trustee an Officers' Certificate and
an Opinion of Counsel, each stating that all conditions precedent to the
defeasance and discharge of the Securities of such series as contemplated
by this Article Four have been complied with.
Before or after a deposit, the Company may make arrangements
satisfactory to the Trustee for the redemption of Securities of such series at
a future date in accordance with Article Four.
SECTION 404. Application of Trust Money. The Trustee shall hold in
trust money or U.S. Government Obligations deposited with it pursuant to this
Article Four. It shall apply the deposited money and the money from U.S.
Government Obligations through any paying agent and in accordance with this
Indenture to the payment of principal of, and premium, if any, and interest on,
the Securities of the defeased series.
SECTION 405. Repayment to Company. The Trustee and any paying agent
shall promptly turn over to the Company upon request any excess money or
securities held by them at any time.
<PAGE> 42
35
Subject to any applicable abandoned property law, the Trustee and any
paying agent shall pay to the Company upon request any money held by them for
the payment of principal, premium or interest that remains unclaimed for two
years, and, thereafter, Holders entitled to such money must look to the Company
for payment as general creditors and all liability of the Trustee or such
paying agent with respect to such money shall thereupon cease.
SECTION 406. Indemnity for U.S. Government Obligations. The Company
shall pay and shall indemnify the Trustee and the Holders against any tax, fee
or other charge imposed on or assessed against deposited U.S. Government
Obligations or the principal and interest received on such U.S. Government
Obligations.
SECTION 407. Reinstatement. If the Trustee or any paying agent is
unable to apply any money or U.S. Government Obligations in accordance with
this Article Four by reason of any legal proceeding or by reason of any order
or judgment of any court or government authority enjoining, restraining or
otherwise prohibiting such application, the Company's obligations under this
Indenture and the Securities of the defeased series shall be revived and
reinstated as though no deposit had occurred pursuant to this Article Four
until such time as the Trustee or any paying agent is permitted to apply all
such money or U.S. Government Obligations in accordance with this Article
Four.
ARTICLE FIVE
Remedies
Section 501. Events of Default. "Event of Default", wherever used
herein, means with respect to any series of Securities 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 either inapplicable
to a particular series or it is specifically deleted or modified in the
supplemental indenture creating such series of Securities or in the form of
Security for such series:
<PAGE> 43
36
(1) default in the payment of any interest upon any Security of that
series when it becomes due and payable, and continuance of such default for
a period of 90 days (subject to the deferral of any due date in the case of
an Extension Period); or
(2) default in the payment of the principal of (or premium, if any,
on) any Security of that series at its Maturity; or
(3) default in the payment of any sinking or purchase fund or
analogous obligation when the same becomes due by the terms of the
Securities of such series; or
(4) default in the performance, or breach, of any covenant or warranty
of the Company in this Indenture in respect of the Securities of such
series (other than a covenant or warranty in respect of the Securities of
such series a default in the performance of which or the breach of which is
elsewhere in this Section specifically dealt with), all of such covenants
and warranties in the Indenture which are not expressly stated to be for
the benefit of a particular series of Securities being deemed in respect
of the Securities of all series for this purpose, and continuance of such
default or breach for a period of 90 days after there has 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 or breach and requiring it to be remedied and
stating that such notice is a "Notice of Default" hereunder; or
(5) the entry of an order for relief against the Company under the
Federal Bankruptcy Code by a court having jurisdiction in the premises or a
decree or order by a court having jurisdiction in the premises adjudging
the Company a bankrupt or insolvent under any other applicable Federal or
State law, or the entry of a decree or order approving as properly filed a
petition seeking reorganization, arrangement, adjustment or composition of
or in respect of the Company under the Federal Bankruptcy Code or any other
applicable Federal or State law, or appointing a receiver, liquidator,
assignee, trustee, sequestrator (or other similar official) of the Company
or of any substantial part of its property, or ordering the winding up or
liquidation of its affairs, and the continuance of any such decree or order
unstayed and in effect for a period of 60 consecutive days; or
(6) the consent by the Company to the institution of bankruptcy or
insolvency proceedings against it, or the filing by it of a petition or
answer or consent seeking reorganization or relief under the Federal
Bankruptcy Code or any other applicable Federal or State law, or the
consent by it to the filing of any such petition or to the appointment of a
receiver, liquidator, assignee, trustee, sequestrator (or other similar
official) of the Company or of any substantial part of its property, or the
<PAGE> 44
37
making by it of an assignment for the benefit of creditors, or the
admission by it in writing of its inability to pay its debts generally as
they become due, or the taking of corporate action by the Company in
furtherance of any such action; or
(7) any other Event of Default provided in the supplemental indenture
under which such series of Securities is issued or in the form of Security
for such series.
Section 502. Acceleration of Maturity; Rescission and Annulment. If
an Event of Default described in paragraph (1), (2), (3), (4) or (7) (if the
Event of Default under paragraph (4) or (7) is with respect to less than all
series of Securities then Outstanding) of Section 501 occurs and is continuing
with respect to any series, then and in each and every such case, unless the
principal of all the Securities of such series shall have already become due
and payable, either the Trustee or the Holders of not less than 25% in
aggregate principal amount of the Securities of such series then Outstanding
hereunder (each such series acting as a separate class), by notice in writing
to the Company (and to the Trustee if given by Holders), may declare the
principal amount (or, if the Securities of such series are Original Issue
Discount Securities, such portion of the principal amount as may be specified
in the terms of that series) of all the Securities of such series then
Outstanding and all accrued interest thereon to be due and payable immediately,
and upon any such declaration the same shall become and shall be immediately
due and payable, anything in this Indenture or in the Securities of such series
contained to the contrary notwithstanding. If an Event of Default described in
paragraph (4) or (7) (if the Event of Default under paragraph (4) or (7) is
with respect to all series of Securities then Outstanding), or (5) or (6) of
Section 501 occurs and is continuing, then and in each and every such case,
unless the principal of all the Securities shall have already become due and
payable, either the Trustee or the Holders of not less than 25% in aggregate
principal amount of all the Securities then Outstanding hereunder (treated as
one class), by notice in writing to the Company (and to the Trustee if given by
Holders), may declare the principal amount (or, if any Securities are Original
Issue Discount Securities, such portion of the principal amount as may be
specified in the terms thereof) of all the Securities then Outstanding and all
accrued interest thereon to be due and payable immediately, and upon any such
declaration the same shall become and shall be immediately due and payable,
anything in this Indenture or in the Securities contained to the contrary
notwithstanding.
At any time after such a declaration of acceleration has been made
with respect to the Securities of any series 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 a majority in principal amount of the
<PAGE> 45
38
Outstanding Securities of such series (subject to, in the case of any series of
Securities held as trust assets of a CCCI Capital Trust and with respect to
which a Security Exchange has not theretofore occurred, such consent of the
holders of the Preferred Securities and the Common Securities of such CCCI
Capital Trust as may be required under the Declaration of Trust of such CCCI
Capital Trust), by written notice to the Company and the Trustee, may rescind
and annul such declaration and its consequences if
(1) the Company has paid or deposited with the Trustee a sum
sufficient to pay
(A) all overdue installments of interest on the Securities of such
series,
(B) the principal of (and premium, if any, on) any Securities of
such series which have become due otherwise than by such declaration
of acceleration, and interest thereon at the rate or rates prescribed
therefor by the terms of the Securities of such series, to the extent
that payment of such interest is lawful,
(C) interest upon overdue installments of interest at the rate or
rates prescribed therefor by the terms of the Securities of such
series to the extent that payment of such interest is lawful, 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 607;
and
(2) all Events of Default with respect to such series of Securities,
other than the nonpayment of the principal of the Securities of such series
which have become due solely by such acceleration, have been cured or
waived as provided in Section 513.
No such rescission shall affect any subsequent default or impair any right
consequent thereon.
Section 503. 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
any Security of any series when such interest becomes due and payable, or
(2) default is made in the payment of the principal of (or premium, if
any, on) any Security at the Maturity thereof, or
<PAGE> 46
39
(3) default is made in the payment of any sinking or purchase fund or
analogous obligation when the same becomes due by the terms of the
Securities of any series,
and any such default continues for any period of grace provided with respect to
the Securities of such series, the Company will, upon demand of the Trustee,
pay to it, for the benefit of the Holder of any such Security (or the Holders
of any such series in the case of Clause (3) above), the whole amount then due
and payable on any such Security (or on the Securities of any such series in
the case of Clause (3) above) for principal (and premium, if any) and interest,
with interest, to the extent that payment of such interest shall be legally
enforceable, upon the overdue principal (and premium, if any) and upon overdue
installments of interest, at such rate or rates as may be prescribed therefor
by the terms of any such Security (or of Securities of any such series in the
case of Clause (3) above); and, in addition thereto, such further amount as
shall be sufficient to cover the costs and expenses of collection, including
the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel and all other amounts due the Trustee under
Section 607.
If the Company fails to pay such amounts forthwith upon such demand,
the Trustee, in its own name and as trustee of an express trust, may institute
a judicial proceeding for the collection of the sums so due and unpaid, and may
prosecute such proceeding to judgment or final decree, and may enforce the same
against the Company or any other obligor upon the Securities of such series and
collect the money adjudged or decreed to be payable in the manner provided by
law out of the property of the Company or any other obligor upon such
Securities, wherever situated.
If an Event of Default with respect to any series of Securities 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
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 in aid of the
exercise of any power granted herein, or to enforce any other proper remedy.
Section 504. 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 or any other obligor upon the Securities or
the property of the Company or of 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
for the payment of overdue principal or interest) shall be entitled and
empowered, by intervention in such proceedings or otherwise,
<PAGE> 47
40
(i) to file and prove a claim for the whole amount of principal (and
premium, if any) and interest owing and unpaid in respect of the Securities
and to file such other papers or documents as may be necessary and
advisable in order to have the claims of the Trustee (including any claim
for the reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel and all other amounts due the Trustee
under Section 607) and of the Securityholders allowed in such judicial
proceeding, and
(ii) to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same;
and any receiver, assignee, trustee, liquidator, sequestrator (or other similar
official) in any such judicial proceeding is hereby authorized by each
Securityholder to make such payment to the Trustee and in the event that the
Trustee shall consent to the making of such payments directly to the
Securityholders, 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 607.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Securityholder any
plan or reorganization, arrangement, adjustment or composition affecting the
Securities or the rights of any Holder thereof, or to authorize the Trustee to
vote in respect of the claim of any Securityholder in any such proceeding.
Section 505. Trustee May Enforce Claims Without Possession of
Securities. All rights of action and claims under this Indenture or the
Securities of any series may be prosecuted and enforced by the Trustee without
the possession of any of the Securities of such series 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 of judgment shall, after provision for the payment of the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agent and counsel, be for the ratable benefit of the Holders of the
Securities of the series in respect of which such judgment has been recovered.
Section 506. Application of Money Collected. Any money collected by
the Trustee with respect to a series of Securities 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 premium, if any) or interest, upon presentation of the Securities of such
series 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 under Section
607.
<PAGE> 48
41
SECOND: To the payment of the amounts then due and unpaid upon the
Securities of that series for principal (and premium, if any) and interest, 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 amounts
due and payable on such Securities for principal (and premium, if any) and
interest, respectively.
THIRD: To the Company.
Section 507. Limitation on Suits. No Holder of any Security of any
series 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 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 reasonable
indemnity 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 (subject to,
in the case of any series of Securities held as trust assets of a CCCI
Capital Trust and with respect to which a Security Exchange has not
theretofore occurred, such consent of the holders of the Preferred
Securities and the Common Securities of such CCCI Capital Trust as may be
required under the Declaration of Trust of such CCCI Capital Trust);
it being understood and intended that no one or more Holders of Securities of
such series shall have any right in any manner whatever by virtue of, or by
availing of, any provision of this Indenture to affect, disturb or prejudice
the rights of any other Holders of Securities of such series, or to obtain or
to seek to obtain priority or preference over any other such Holders or to
enforce any right under this Indenture, except in the manner herein provided
and for the equal and proportionate benefit of all the Holders of all
Securities of such series.
<PAGE> 49
42
The Company expressly acknowledges that if, prior to a Security
Exchange with respect to the Securities of any series, a Default with respect
to the Securities of such series shall have occurred, under the circumstances
set forth in the applicable Declaration of Trust, any holder of Preferred
Securities of the applicable CCCI Capital Trust may, to the extent permitted by
applicable law, enforce directly against the Company the applicable Property
Trustee's rights hereunder. In furtherance of the foregoing and for the
avoidance of any doubt, the Company acknowledges that, under the circumstances
described in the applicable Declaration of Trust, any such holder of Preferred
Securities, in its own name, in the name of the applicable CCCI Capital Trust
or in the name of the holders of the Preferred Securities issued by such CCCI
Capital Trust, may institute or cause to be instituted a proceeding, including,
without limitation, any suit in equity, an action at law or other judicial or
administrative proceeding, to enforce the applicable Property Trustee's rights
hereunder directly against the Company as issuer of the applicable series of
Securities, and may prosecute such proceeding to judgment or final decree, and
enforce the same against the Company.
Section 508. Unconditional Right of Securityholders to Receive
Principal, Premium and Interest. Notwithstanding any other provisions in this
Indenture, the Holder of any Security shall have the right, which is absolute
and unconditional, to receive payment of the principal of (and premium, if any)
and (subject to Section 307) interest on such Security on the respective Stated
Maturities expressed in such Security (or, in the case of redemption or
repayment, on the Redemption Date or Repayment Date, as the case may be) and to
institute suit for the enforcement of any such payment, and such right shall
not be impaired without the consent of such Holder.
Section 509. Restoration of Rights and Remedies. If the Trustee or
any Securityholder has instituted any proceeding to enforce any right or remedy
under this Indenture and such proceeding has been discontinued or abandoned for
any reason, then and in every such case the Company, the Trustee and the
Securityholders 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 the Securityholders shall
continue as though no such proceeding had been instituted.
Section 510. Rights and Remedies Cumulative. No right or remedy
herein conferred upon or reserved to the Trustee or to the Securityholders is
intended to be exclusive of any other right or remedy, and every right and
remedy shall, to the extent permitted by law, 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 prevent the concurrent assertion or
employment of any other appropriate right or remedy.
Section 511. Delay or Omission Not Waiver. No delay or omission of
the Trustee or of any Holder of any Security to exercise any right or remedy
<PAGE> 50
43
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 the
Securityholders may be exercised from time to time, and as often as may be
deemed expedient, by the Trustee or by the Securityholders, as the case may be.
Section 512. Control by Securityholders. The Holders of a majority
in principal amount of the Outstanding Securities of any series (subject to, in
the case of any series of Securities held as trust assets of a CCCI Capital
Trust and with respect to which a Security Exchange has not theretofore
occurred, such consent of the holders of the Preferred Securities and the
Common Securities of such CCCI Capital Trust as may be required under the
Declaration of Trust of such CCCI Capital Trust) 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, provided that
(1) the Trustee shall have the right to decline to follow any such
direction if the Trustee, being advised by counsel, determines that the
action so directed may not lawfully be taken or would conflict with this
Indenture or if the Trustee in good faith shall, by a Responsible Officer,
determine that the proceedings so directed would involve it in personal
liability or be unjustly prejudicial to the Holders not taking part in such
direction, and
(2) the Trustee may take any other action deemed proper by the Trustee
which is not inconsistent with such direction.
Section 513. Waiver of Past Defaults. The Holders of not less than a
majority in principal amount of the Outstanding Securities of any series
(subject to, in the case of any series of Securities held as trust assets of a
CCCI Capital Trust and with respect to which a Security Exchange has not
theretofore occurred, such consent of the holders of the Preferred Securities
and the Common Securities of such CCCI Capital Trust as may be required under
the Declaration of Trust of such CCCI Capital Trust) may on behalf of the
Holders of all the Securities of such series waive any past default hereunder
with respect to such series and its consequences, except a default not
theretofore cured
(1) in the payment of the principal of (or premium, if any) or
interest on any Security of such series, or in the payment of any sinking
or purchase fund or analogous obligation with respect to the Securities of
such series, or
(2) in respect of a covenant or provision hereof which under Article
Nine cannot be modified or amended without the consent of the Holder of
each Outstanding Security of such series.
<PAGE> 51
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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 514. 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 an 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 shall not apply to
any suit instituted by the Trustee, to any suit instituted by any
Securityholder, or group of Securityholders, holding in the aggregate more than
10% in principal amount of the Outstanding Securities of any series to which
the suit relates, or to any suit instituted by any Securityholder for the
enforcement of the payment of the principal of (or premium, if any) or interest
on any Security on or after the respective Stated Maturities expressed in such
Security (or, in the case of redemption or repayment, on or after the
Redemption Date or Repayment Date).
Section 515. Waiver of Stay or Extension Laws. The Company covenants
(to the extent that it may lawfully do so) that it will not at any time insist
upon, or plead, or in any manner whatsoever claim or take the benefit or
advantage of, any 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 the Company (to the extent that it may lawfully do so) hereby
expressly waives 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.
ARTICLE SIX
The Trustee
Section 601. Certain Duties and Responsibilities. (a) Except during
the continuance of an Event of Default with respect to any series of
Securities,
(1) the Trustee undertakes to perform such duties and only such duties
as are specifically set forth in this Indenture with respect to the
Securities of such series, and no implied covenants or obligations shall be
read into this Indenture against the Trustee; and
<PAGE> 52
45
(2) in the absence of bad faith on its part, the Trustee may, with
respect to Securities of such series, 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.
(b) In case an Event of Default with respect to any series of
Securities has occurred and is continuing, the Trustee shall exercise with
respect to the Securities of such series 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 person would exercise or use under the circumstances in
the conduct of such person's own affairs.
(c) No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act, or its own willful misconduct, except that
(1) this Subsection shall not be construed to limit the effect of
Subsection (a) of this Section;
(2) the Trustee shall not be liable for any error of judgment made in
good faith by a Responsible Officer, unless it shall be proved that the
Trustee was negligent in ascertaining the pertinent facts;
(3) the Trustee shall not be liable with respect to any action taken
or omitted to be taken by it in good faith in accordance with the
direction of the Holders of a majority in principal amount of the
Outstanding Securities of any series relating to the time, method and
place of conducting any proceeding for any remedy available to the
Trustee, or exercising any trust or power conferred upon the Trustee,
under this Indenture with respect to the Securities of such series; and
(4) 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.
(d) Whether or not therein 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.
<PAGE> 53
46
Section 602. Notice of Defaults. Within 90 days after the occurrence
of any default hereunder with respect to Securities of any series, the Trustee
shall transmit by mail to all Securityholders of such series, as their names
and addresses appear in the Security Register, notice of such default hereunder
known to 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 on any Security of such series or
in the payment of any sinking or purchase fund installment or analogous
obligation with respect to Securities 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 interests of the Securityholders of such series; and provided,
further, that in the case of any default of the character specified in Section
501(4) with respect to Securities of such series no such notice to
Securityholders of such series shall be given until at least 90 days after the
occurrence thereof. For the purpose of this Section, the term "default", with
respect to Securities of any series, 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.
Section 603. Certain Rights of Trustee. Except as otherwise provided
in Section 601:
(a) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, debenture
other paper or document believed by it to be genuine and to have been signed or
presented by the proper party or parties;
(b) any request or direction of the Company mentioned herein shall be
sufficiently evidenced by a Company Request or Company Order and any resolution
of the Board of Directors may be sufficiently evidenced by a Board Resolution;
(c) 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
be herein specifically prescribed) may, in the absence of bad faith on its
part, rely upon an Officers' Certificate;
(d) the Trustee may consult with counsel of its selection and the
written 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;
<PAGE> 54
47
(e) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction of
any of the Securityholders pursuant to this Indenture, unless such
Securityholders shall have offered to the Trustee reasonable security or
indemnity against the costs, expenses and liabilities which might be incurred
by it in compliance with such request or direction;
(f) 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
other paper or document, but the Trustee, in its discretion, may 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 the books, records and premises
of the Company, personally or by agent or attorney; and
(g) 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.
Section 604. Not Responsible for Recitals or Issuance of Securities.
The recitals contained herein and in the Securities, except the certificates of
authentication, shall be taken as the statements of the Company, and the
Trustee assumes no responsibility for their correctness. The Trustee makes no
representations as to the validity or sufficiency of this Indenture or of the
Securities. The Trustee shall not be accountable for the use or application by
the Company of Securities or the proceeds thereof.
Section 605. May Hold Securities. The Trustee, any Paying Agent, the
Security Registrar or any other agent of the Company, in its individual or any
other capacity, may become the owner or pledgee of Securities and, subject to
Sections 608 and 613, may otherwise deal with the Company with the same rights
it would have if it were not Trustee, Paying Agent, Security Registrar or such
other agent.
Section 606. Money Held in Trust. Money held by the Trustee in trust
hereunder need not be segregated from other funds except to the extent required
by law. The Trustee shall be under no liability for interest on any money
received by it hereunder except as otherwise agreed with the Company.
Section 607. Compensation and Reimbursement. The Company agrees
(1) to pay to the Trustee from time to time such compensation for all
services rendered by it hereunder as the parties shall agree from time to
time (which compensation shall not be limited by any provision of law in
regard to the compensation of a trustee of an express trust);
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48
(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 (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 its negligence or bad
faith; and
(3) to indemnify the Trustee for, and to hold it harmless against, any
loss, liability or expense incurred without negligence or bad faith on its
part, arising out of or in connection with the acceptance or administration
of this trust, including the costs and expenses of defending itself against
any claim or liability in connection with the exercise or performance of
any of its powers or duties hereunder.
As security for the performance of the obligations of the Company
under this Section the Trustee shall have a lien prior to the Securities 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, if any) or interest
on particular Securities.
Section 608. Disqualification; Conflicting Interests. The Trustee
for the Securities of any series issued hereunder shall be subject to the
provisions of Section 310(b) of the Trust Indenture Act during the period of
time provided for therein. In determining whether the Trustee has a
conflicting interest as defined in Section 310(b) of the Trust Indenture Act
with respect to the Securities of any series, there shall be excluded for
purposes of the conflicting interest provisions of such Section 310(b) the
Securities of every other series issued under this Indenture (i) every series
of securities issued under the Indenture dated as of __________ __, 199_,
between Clear Channel Communications, Inc. and _________________, (ii) every
series of securities issued under the Indenture dated as of _________ __, 199_,
between Clear Channel Communications, Inc. and ____________. Nothing herein
shall prevent the Trustee from filing with the Commission the application
referred to in the second to last paragraph of Section 310(b) of the Trust
Indenture Act.
Section 609. Corporate Trustee Required; Eligibility. There shall at
all times be a Trustee hereunder with respect to each series of Securities,
which shall be a corporation organized and doing business under the laws of the
United States of America or of any State, authorized under such laws to
exercise corporate trust powers, having a combined capital and surplus of at
least $50,000,000, and subject to supervision or examination by Federal or
State authority. If such corporation publishes reports of condition at least
annually, pursuant to law or to the requirements of the aforesaid supervising
or examining authority, then for the purposes of this Section,
<PAGE> 56
49
the combined capital and surplus of such corporation shall be deemed to be its
combined capital and surplus as set forth in its most recent report of
condition so published. If at any time the Trustee with respect to any series
of Securities 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 610. Resignation and Removal; Appointment of Successor. (a)
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 under Section 611.
(b) The Trustee may resign with respect to any series of Securities
at any time by giving written notice thereof to the Company. If an instrument
of acceptance by a successor Trustee 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.
(c) The Trustee may be removed with respect to any series of
Securities at any time by Act of the Holders of a majority in principal amount
of the Outstanding Securities of that series, delivered to the Trustee and to
the Company. If an instrument of acceptance by a successor Trustee 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.
(d) If at any time:
(1) the Trustee shall fail to comply with Section 310(b) of the Trust
Indenture Act pursuant to Section 608(a) with respect to any series of
Securities after written request therefor by the Company or by any
Securityholder who has been a bona fide Holder of a Security of that series
for at least 6 months, or
(2) the Trustee shall cease to be eligible under Section 609 with
respect to any series of Securities and shall fail to resign after written
request therefor by the Company or by any such Securityholder, or
(3) the Trustee shall become incapable of acting with respect to any
series of Securities, or
(4) the Trustee 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,
<PAGE> 57
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then, in any such case, (i) the Company by a Board Resolution may remove the
Trustee, with respect to the series, or in the case of Clause (4), with respect
to all series, or (ii) subject to Section 514, any Securityholder who has been
a bona fide Holder of a Security of such series for at least 6 months may, on
behalf of himself and all others similarly situated, petition any court of
competent jurisdiction for the removal of the Trustee and the appointment of a
successor Trustee with respect to the series, or, in the case of Clause (4),
with respect to all series.
(e) If the Trustee shall resign, be removed or become incapable of
acting with respect to any series of Securities, or if a vacancy shall occur in
the office of the Trustee with respect to any series of Securities for any
cause, the Company, by a Board Resolution, shall promptly appoint a successor
Trustee for that series of Securities. If, within one year after such
resignation, removal or incapacity, or the occurrence of such vacancy, a
successor Trustee with respect to such series of Securities 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, become the successor Trustee with respect to such series and
supersede the successor Trustee appointed by the Company with respect to such
series. If no successor Trustee with respect to such series shall have been so
appointed by the Company or the Securityholders of such series and accepted
appointment in the manner hereinafter provided, any Securityholder who has been
a bona fide Holder of a Security of that series for at least 6 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 such series.
(f) The Company shall give notice of each resignation and each
removal of the Trustee with respect to any series and each appointment of a
successor Trustee with respect to any series by mailing written notice of such
event by first-class mail, postage prepaid, to the Holders of Securities of
that series as their names and addresses appear in the Security Register. Each
notice shall include the name of the successor Trustee and the address of its
principal Corporate Trust Office.
Section 611. Acceptance of Appointment by Successor. Every successor
Trustee appointed hereunder shall execute, acknowledge and deliver to the
Company and to the predecessor Trustee an instrument accepting such
appointment, and thereupon the resignation or removal of the predecessor
Trustee shall become effective with respect to any series as to which it is
resigning or being removed as Trustee, and such successor Trustee, without any
further act, deed or conveyance, shall become vested with all the rights,
powers, trusts and duties of the predecessor Trustee with respect to any such
series; but, on request of the Company or the successor Trustee, such
predecessor Trustee shall, upon payment of its reasonable charges, if any,
<PAGE> 58
51
execute and deliver an instrument transferring to such successor Trustee all
the rights, powers and trusts of the predecessor Trustee, and shall duly
assign, transfer and deliver to such successor Trustee all property and money
held by such predecessor Trustee hereunder with respect to all or any such
series, subject nevertheless to its lien, if any, provided for in Section 607.
Upon request of any such successor Trustee, the Company 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.
In case of the appointment hereunder of a successor Trustee with
respect to the Securities of one or more (but not all) series, the Company, the
predecessor Trustee and each successor Trustee with respect to the Securities
of any applicable series shall execute and deliver an indenture supplemental
hereto which shall contain such provisions as shall be deemed necessary or
desirable to confirm that all the rights, powers, trusts and duties of the
predecessor Trustee with respect to the Securities of any series as to which
the predecessor Trustee is not being succeeded shall continue to be vested in
the predecessor Trustee, and 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 and 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.
No successor Trustee with respect to any series of Securities shall
accept its appointment unless at the time of such acceptance such successor
Trustee shall be qualified and eligible with respect to that series under this
Article.
Section 612. 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,
provided such corporation shall be otherwise qualified and eligible under this
Article, 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 613. Preferential Collection of Claims Against Company. (a)
Subject to Subsection (b) of this Section, if the Trustee shall be or shall
become a creditor, directly or indirectly, secured or unsecured, of the Company
within 3 months prior to a default, as defined in Subsection (c) of this
<PAGE> 59
52
Section, or subsequent to such a default, then, unless and until such default
shall be cured, the Trustee shall set apart and hold in a special account for
the benefit of the Trustee individually, the Holders of the Securities and the
holders of other indenture securities (as defined in Subsection (c) of this
Section):
(1) an amount equal to any and all reductions in the amount due and
owing upon any claim as such creditor in respect of principal or interest,
effected after the beginning of such 3-month period and valid as against
the Company and its other creditors, except any such reduction resulting
from the receipt or disposition of any property described in paragraph (2)
of this Subsection, or from the exercise of any right of set-off which the
Trustee could have exercised if a petition in bankruptcy had been filed by
or against the Company upon the date of such default; and
(2) all property received by the Trustee in respect of any claim as
such creditor, either as security therefor, or in satisfaction or
composition thereof, or otherwise, after the beginning of such 3-month
period, or an amount equal to the proceeds of any such property, if
disposed of, subject, however, to the rights, if any, of the Company and
its other creditors in such property or such proceeds.
Nothing herein contained, however, shall affect the right of the Trustee
(A) to retain for its own account (i) payments made on account of
any such claim by any Person (other than the Company) who is liable
thereon, and (ii) the proceeds of the bona fide sale of any such claim
by the Trustee to a third person, and (iii) distributions made in
cash, securities or other property in respect of claims filed against
the Company in bankruptcy or receivership or in proceedings for
reorganization pursuant to the Federal Bankruptcy Act or applicable
State law;
(B) to realize, for its own account, upon any property held by it
as security for any such claim, if such property was so held prior to
the beginning of such 3-month period;
(C) to realize, for its own account, but only to the extent of the
claim hereinafter mentioned, upon any property held by it as Security
for any such claim, if such claim was created after the beginning of
such 3-month period and such property was received as security
therefor simultaneously with the creation thereof, and if the Trustee
shall sustain the burden of proving that at the time such property was
so received the Trustee had no reasonable cause to believe that a
default as defined in Subsection (c) of this Section would occur
within 3 months; or
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53
(D) to receive payment on any claim referred to in paragraph (B)
or (C), against the release of any property held as security for such
claim as provided in paragraph (B) or (C), as the case may be, to the
extent of the fair value of such property.
For the purposes of paragraphs (B), (C) and (D), property substituted
after the beginning of such 3-month period for property held as security at the
time of such substitution shall, to the extent of the fair value of the
property released, have the same status as the property released, and, to the
extent that any claim referred to in any of such paragraphs is created in
renewal of or in substitution for or for the purpose of repaying or refunding
any pre-existing claim of the Trustee as such creditor, such claim shall have
the same status as such pre-existing claim.
If the Trustee shall be required to account, the funds and property
held in such special account and the proceeds thereof shall be apportioned
between the Trustee, the Securityholders and the holders of other indenture
securities in such manner that the Trustee, the Securityholders and the holders
of other indenture securities realize, as a result of payments from such
special account and payments of dividends on claims filed against the Company
in bankruptcy or receivership or in proceedings for reorganization pursuant to
the Federal Bankruptcy Act or applicable State law, the same percentage of
their respective claims, figured before crediting to the claim of the Trustee
anything on account of the receipt by it from the Company of the funds and
property in such special account and before crediting to the respective claims
of the Trustee and the Securityholders and the holders of other indenture
securities dividends on claims filed against the Company in bankruptcy or
receivership or in proceedings for reorganization pursuant to the Federal
Bankruptcy Act or applicable State law, but after crediting thereon receipts on
account of the indebtedness represented by their respective claims from all
sources other than from such dividends and from the funds and property so held
in such special account. As used in this paragraph, with respect to any claim,
the term "dividends" shall include any distribution with respect to such claim,
in bankruptcy or receivership or proceedings for reorganization pursuant to the
Federal Bankruptcy Act or applicable State law, whether such distribution is
made in cash, securities, or other property, but shall not include any such
distribution with respect to the secured portion, if any, of such claim. The
court in which such bankruptcy, receivership or proceedings for reorganization
is pending shall have jurisdiction (i) to apportion between the Trustee and the
Securityholders and the holders of other indenture Securities in accordance
with the provisions of this paragraph, the funds and property held in such
special account and proceeds thereof, or (ii) in lieu of such apportionment, in
whole or in part, to give to the provisions of this paragraph due consideration
in determining the fairness of the distributions to be made to the Trustee and
the Securityholders and the holders of other indenture Securities with respect
to their respective claims, in which event it shall not be necessary to
liquidate or to appraise the value of any Securities or other property held in
such special account or as Security for any such claim, or to make a specific
allocation of such distributions as between the secured and unsecured portions
of such claims, or otherwise to apply the provisions of this paragraph as a
mathematical formula.
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Any Trustee which has resigned or been removed after the beginning of
such 3-month period shall be subject to the provisions of this Subsection as
though such resignation or removal had not occurred. If any Trustee has
resigned or been removed prior to the beginning of such 3-month period, it
shall be subject to the provisions of this Subsection if and only if the
following conditions exist:
(i) the receipt of property or reduction of claim, which would
have given rise to the obligation to account, if such Trustee had
continued as Trustee, occurred after the beginning of such 3-month
period; and
(ii) such receipt of property or reduction of claim occurred
within 3 months after such resignation or removal.
(b) There shall be excluded from the operation of Subsection (a) of
this Section a creditor relationship arising from
(1) the ownership or acquisition of securities issued under any
indenture, or any security or securities having a maturity of one year or
more at the time of acquisition by the Trustee;
(2) advances authorized by a receivership or bankruptcy court of
competent jurisdiction, or by this Indenture, for the purpose of preserving
any property which shall at any time be subject to the lien of this
Indenture or of discharging tax liens or other prior liens or encumbrances
thereon, if notice of such advances and of the circumstances surrounding
the making thereof is given to the Securityholders at the time and in the
manner provided in this Indenture;
(3) disbursements made in the ordinary course of business in the
capacity of trustee under an indenture, transfer agent, registrar,
custodian, paying agent, fiscal agent or depositary, or other similar
capacity;
(4) an indebtedness created as a result of services rendered or
premises rented; or an indebtedness created as a result of goods or
securities sold in a cash transaction as defined in Subsection (c) of this
Section;
(5) the ownership of stock or of other securities of a corporation
organized under the provisions of Section 25(a) of the Federal Reserve
Act, as amended, which is directly or indirectly a creditor of the
Company; or
(6) the acquisition, ownership, acceptance or negotiation of any
drafts, bills of exchange, acceptances or obligations which fall within the
classification of self liquidating paper as defined in Subsection (c) of
this Section.
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(c) For the purposes of this Section only:
(1) The term "default" means any failure to make payment in full of
the principal of or interest on any of the securities or upon the other
indenture securities when and as such principal or interest becomes due and
payable.
(2) The term "other indenture securities" means securities upon which
the Company is an obligor outstanding under any other indenture (i) under
which the Trustee is also trustee, (ii) which contains provisions
substantially similar to the provisions of this Section, and (iii) under
which a default exists at the time of the apportionment of the funds and
property held in such special account.
(3) The term "cash transaction" means any transaction in which full
payment for goods or securities sold is made within 7 days after delivery
of the goods or securities in currency or in checks or other orders drawn
upon banks or bankers and payable upon demand.
(4) The term "self-liquidating paper" means any draft, bill of
exchange, acceptance or obligation which is made, drawn, negotiated or
incurred by the Company for the purpose of financing the purchase,
processing, manufacturing, shipment, storage or sale of goods, wares or
merchandise and which is secured by documents evidencing title to,
possession of, or a lien upon, the goods, wares or merchandise or the
receivables or proceeds arising from the sale of the goods, wares or
merchandise previously constituting the security, provided the security is
received by the Trustee simultaneously with the creation of the creditor
relationship with the Company arising from the making, drawing, negotiating
or incurring of the draft, bill of exchange, acceptance or obligation.
(5) The term "Company" means any obligor upon the Securities.
Section 614. Appointment of Authenticating Agent. At any time when
any of the Securities remain Outstanding the Trustee, with the approval of the
Company, may appoint an Authenticating Agent or Agents with respect to one or
more series of Securities which shall be authorized to act on behalf of the
Trustee to authenticate Securities of such series issued upon exchange,
registration of transfer or partial redemption thereof or pursuant to Section
306, 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 shall be
acceptable to the Company and shall at all times be a corporation organized and
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doing business under the laws of the United States of America, any State
thereof or the District of Columbia, authorized under such laws to act as an
Authenticating Agent, having a combined capital and surplus of not less than
$50,000,000 and, if other than the Company itself, subject to supervision or
examination by Federal or State authority. If such Authenticating Agent
publishes reports of condition at least annually, pursuant to law or to the
requirements of said supervising or examining authority, then for the purposes
of this Section, the combined capital and surplus of such Authenticating Agent
shall be deemed to be its combined capital and surplus as set forth in its most
recent report of condition so published. If at any time an Authenticating
Agent shall cease to be eligible in accordance with the provisions of this
Section, such Authenticating Agent 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 succeeding to the corporate agency or
corporate trust business of an Authenticating Agent, shall continue to be an
Authenticating Agent, 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, if other than the Company, to 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, if other than
the Company, to 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, with the approval of the Company, may appoint a successor
Authenticating Agent which shall be acceptable to the Company and shall mail
written notice of such appointment by first-class mail, postage prepaid, to all
Holders of Securities of the series with respect to which such Authenticating
Agent will serve, as their names and addresses appear in the Security Register.
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 Trustee agrees to pay to each Authenticating Agent (other than an
Authenticating Agent appointed at the request of the Company from time to time)
reasonable compensation for its services under this Section, and the Trustee
shall be entitled to be reimbursed for such payments, subject to the provisions
of Section 607.
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If an appointment with respect to one or more series is made pursuant
to this Section, the Securities of such series may have endorsed thereon, in
addition to the Trustee's certificate of authentication, an alternate
certificate of authentication in the following form:
This is one of the Securities of the series designated therein
referred to in the within-mentioned Indenture.
THE BANK OF NEW YORK,
as Trustee
By:
--------------------------
As Authenticating Agent
Dated: By:
----------- --------------------------
Authorized Signatory
ARTICLE SEVEN
Securityholders' Lists and Reports by
Trustee and Company
Section 701. Company To Furnish Trustee Names and Addresses of
Securityholders. The Company will furnish or cause to be furnished to the
Trustee
(a) semi-annually, not more than 15 days after each Regular Record
Date, in each year in such form as the Trustee may reasonably require, a
list of the names and addresses of the Holders of Securities of such series
as of such date, and
(b) at such other times as the Trustee may request in writing, within
30 days after the receipt by the Company 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,
excluding from any such list names and addresses received by the Trustee in its
capacity as Security Registrar.
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Section 702. Preservation of Information; Communications to
Securityholders. (a) The Trustee shall preserve, in as current a form as is
reasonably practicable, the names and addresses of Holders of Securities
contained in the most recent list furnished to the Trustee as provided in
Section 701 and the names and addresses of Holders of Securities received by
the Trustee in its capacity as Security Registrar. The Trustee may destroy any
list furnished to it as provided in Section 701 upon receipt of a new list so
furnished.
(b) If 3 or more Holders of Securities of any series (hereinafter
referred to as "applicants") apply in writing to the Trustee, and furnish to
the Trustee reasonable proof that each such applicant has owned a Security of
such series for a period of at least 6 months preceding the date of such
application, and such application states that the applicants desire to
communicate with other Holders of Securities of such series or with the Holders
of all Securities with respect to their rights under this Indenture or under
such Securities and is accompanied by a copy of the form of proxy or other
communication which such applicants propose to transmit, then the Trustee
shall, within 5 Business Days after the receipt of such application, at its
election, either
(i) afford such applicants access to the information preserved at the
time by the Trustee in accordance with Section 702(a), or
(ii) inform such applicants as to the approximate number of Holders of
Securities of such series or all Securities, as the case may be, whose
names and addresses appear in the information preserved at the time by the
Trustee in accordance with Section 702(a), and as to the approximate cost
of mailing to such Securityholders the form of proxy or other
communication, if any, specified in such application.
If the Trustee shall elect not to afford such applicants access to
such information, the Trustee shall, upon the written request of such
applicants, mail to each Holder of a Security of such series or to all
Securityholders, as the case may be, whose names and addresses appear in the
information preserved at the time by the Trustee in accordance with Section
702(a), a copy of the form of proxy or other communication which is specified
in such request, with reasonable promptness after a tender to the Trustee of
the material to be mailed and of payment, or provision for the payment, of the
reasonable expenses of mailing, unless, within 5 days after such tender, the
Trustee shall mail to such applicants and file with the Commission, together
with a copy of the material to be mailed, a written statement to the effect
that, in the opinion of the Trustee, such mailing would be contrary to the best
interests of the Holders of Securities of such series or all Securityholders,
as the case may be, or would be in violation of applicable law. Such written
statement shall specify the basis of such opinion. If the Commission, after
opportunity for a hearing upon the objections specified in the written
statement so filed, shall enter an order refusing to sustain any of such
objections or if,
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after the entry of an order sustaining one or more of such objections, the
Commission shall find, after notice and opportunity for hearing, that all the
objections so sustained have been met and shall enter an order so declaring,
the Trustee shall mail copies of such material to all Securityholders of such
series or all Securityholders, as the case may be, with reasonable promptness
after the entry of such order and the renewal of such tender; otherwise the
Trustee shall be relieved of any obligation or duty to such applicants
respecting their application.
(c) Every Holder of Securities, by receiving and holding the same,
agrees with the Company and the Trustee that neither the Company nor the
Trustee shall be held accountable by reason of the disclosure of any such
information as to the names and addresses of the Holders of Securities in
accordance with Section 702(b), regardless of the source from which such
information was derived, and that the Trustee shall not be held accountable by
reason of mailing any material pursuant to a request made under Section 702(b).
Section 703. Reports by Trustee. (a) The term "reporting date" as
used in this Section means May 15 of each year. Within 60 days after the
reporting date in each year, beginning in 199__, the Trustee shall transmit by
mail to all Securityholders, as their names and addresses appear in the
Security Register, a brief report dated as of such reporting date with respect
to any of the following events which may have occurred during the 12 months
preceding the date of such report (but if no such event has occurred within
such period no report need be transmitted):
(1) any change to its eligibility under Section 609 and its
qualifications under Section 608;
(2) the creation of or any material change to a relationship specified
in Section 310(b)(1) through Section 310(b)(10) of the Trust Indenture Act;
(3) the character and amount of any advances (and if the Trustee
elects so to state, the circumstances surrounding the making thereof) made
by the Trustee (as such) which remain unpaid on the date of such report,
and for the reimbursement of which it claims or may claim a lien or charge,
prior to that of Securities of any series, on any property or funds held or
collected by it as Trustee, except that the Trustee shall not be required
(but may elect) to report such advances if such advances so remaining
unpaid aggregate not more than 1/2 of 1% of the principal amount of the
Securities of such series outstanding on the date of such report;
(4) any change to the amount, interest rate and maturity date of all
other indebtedness owing by the Company (or by any other obligor on the
Securities) to the Trustee in its individual capacity, on the date of such
report, with a brief description of any property held as collateral
security therefor, except an indebtedness based upon a creditor
relationship arising in a manner described in Section 613(b)(2), (3), (4)
or (6);
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(5) any change to the property and funds, if any, physically in the
possession of the Trustee as such on the date of such report;
(6) any additional issue of Securities which the Trustee has not
previously reported; and
(7) any action taken by the Trustee in the performance of its duties
hereunder which it has not previously reported and which in its opinion
materially affects the Securities, except action in respect of a default,
notice of which has been or is to be withheld by the Trustee in accordance
with Section 602.
(b) The Trustee shall transmit by mail to all Securityholders, as
their names and addresses appear in the Security Register, a brief report with
respect to the character and amount of any advances (and if the Trustee elects
so to state, the circumstances surrounding the making thereof) made by the
Trustee (as such) since the date of the last report transmitted pursuant to
Subsection (a) of this Section (or if no such report has yet been so
transmitted, since the date of execution of this instrument) for the
reimbursement of which it claims or may claim a lien or charge, prior to that
of the Securities of any series, on property or funds held or collected by it
as Trustee, and which it has not previously reported pursuant to this
Subsection, except that the Trustee shall not be required (but may elect) to
report such advances if such advances remaining unpaid at any time aggregate
10% or less of the principal amount of the Securities Outstanding of such
series at such time, such report to be transmitted within 90 days after such
time.
(c) A copy of each such report shall, at the time of such
transmission to Securityholders, be filed by the Trustee with each stock
exchange upon which the Securities are listed, and also with the Commission.
The Company will notify the Trustee when the Securities are listed on any stock
exchange.
Section 704. Reports by Company. The Company will
(1) file with the Trustee, within 15 days after the Company 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 may be required to file
with the Commission pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934; or, if the Company is not required to file
information, documents or reports pursuant to either of said Sections, then
it will 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
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required pursuant to Section 13 of the Securities Exchange Act of 1934
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 with the conditions and covenants of this Indenture as may be
required from time to time by such rules and regulations; and
(3) transmit by mail to all Securityholders, as their names and
addresses appear in the Security Register, within 30 days after the filing
thereof with the Trustee, such summaries of any information, documents and
reports required to be filed by the Company 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.
ARTICLE EIGHT
Consolidation, Merger, Conveyance or Transfer
Section 801. Company May Consolidate, etc., only on Certain Terms.
The Company shall not consolidate with or merge into any other corporation or
convey or transfer its properties and assets substantially as an entirety to
any Person, unless:
(1) the corporation formed by such consolidation or into which the
Company is merged or the Person which acquires by conveyance or transfer
the properties and assets of the Company substantially as an entirety shall
be a corporation organized and existing under the laws of the United States
of America or any State or the District of Columbia, and shall expressly
assume, by an indenture supplemental hereto, executed and delivered to the
Trustee, in form satisfactory to the Trustee, the due and punctual payment
of the principal of (and premium, if any) and interest on all the
Securities and the performance of every covenant of this Indenture on the
part of the Company 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 happened and be continuing; and
(3) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel each stating that such consolidation, merger,
conveyance or transfer and such supplemental indenture comply with this
Article and that all conditions precedent herein provided for relating to
such transaction have been complied with.
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Section 802. Successor Corporation Substituted. Upon any
consolidation or merger, or any conveyance or transfer of the properties and
assets of the Company substantially as an entirety in accordance with Section
801, the successor corporation formed by such consolidation or into which the
Company is merged or to which such conveyance or transfer 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
corporation had been named as the Company herein. In the event of any such
conveyance or transfer, the Company as the predecessor corporation may be
dissolved, wound up or liquidated at any time thereafter.
ARTICLE NINE
Supplemental Indentures
Section 901. Supplemental Indentures Without Consent of Securityholders.
Without the consent of the Holders of any Securities, the Company, when
authorized by a Board Resolution, and the Trustee, at any time and from time to
time, may enter into one or more indentures supplemental hereto, in form
satisfactory to the Trustee, for any of the following purposes:
(1) to evidence the succession of another corporation to the Company,
and the assumption by any such successor of the covenants of the Company
herein and in the Securities contained; or
(2) to add to the covenants of the Company, or to surrender any right
or power herein conferred upon the Company, for the benefit of the Holders
of the Securities of any or all series (and if such covenants or the
surrender of such right or power are to be for the benefit of less than all
series of Securities, stating that such covenants are expressly being
included or such surrenders are expressly being made solely for the benefit
of one or more specified series); or
(3) to cure any ambiguity, to correct or supplement any provision
herein which may be inconsistent with any other provision herein, or to
make any other provisions with respect to matters or questions arising
under this Indenture; or
(4) to add to this Indenture such provisions as may be expressly
permitted by the TIA, excluding, however, the provisions referred to in
Section 316(a)(2) of the TIA as in effect at the date as of which this
instrument was executed or any corresponding provision in any similar
federal statute hereafter enacted; or
(5) to establish any form of Security, as provided in Article Two, and
to provide for the issuance of any series of Securities as provided in
Article Three and to set forth the terms thereof, and/or to add to the
rights of the Holders of the Securities of any series; or
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(6) to evidence and provide for the acceptance of appointment by
another corporation as a successor Trustee hereunder with respect to one
or more series of Securities 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 Section 611; or
(7) to add any additional Events of Default in respect of the
Securities of any or all series (and if such additional Events of Default
are to be in respect of less than all series of Securities, stating that
such Events of Default are expressly being included solely for the benefit
of one or more specified series); or
(8) to provide for the issuance of Securities in coupon as well as
fully registered form.
No supplemental indenture for the purposes identified in Clauses (2),
(3), (5) or (7) above may be entered into if to do so would adversely affect
the interest of the Holders of Securities of any series.
Section 902. Supplemental Indentures with Consent of Securityholders.
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 or indentures (and, in the case of any series of Securities held as
trust assets of a CCCI Capital Trust and with respect to which a Security
Exchange has not theretofore occurred, such consent of holders of the Preferred
Securities and the Common Securities of such CCCI Capital Trust as may be
required under the Declaration of Trust of such CCCI Capital Trust), by Act of
said Holders delivered to the Company and the Trustee, the Company, when
authorized by a Board Resolution, and the Trustee may enter into an indenture
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 the
Securities of each such series under this Indenture; provided, however, that no
such supplemental indenture shall, without the consent of the Holder of each
Outstanding Security affected thereby (and, in the case of any series of
Securities held as trust assets of a CCCI Capital Trust and with respect to
which a Security Exchange has not theretofore occurred, such consent of holders
of the Preferred Securities and the Common Securities of such CCCI Capital
Trust as may be required under the Declaration of Trust of such CCCI Capital
Trust),
(1) change the Maturity of the principal of, or the Stated Maturity of
any premium on, or any installment of interest on, any Security, or reduce
the principal amount thereof or the interest or any premium thereon, or
change the method of computing the amount of principal thereof or interest
thereon on any date or change any Place of Payment where, or the coin or
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currency in which, any Security or any premium or interest thereon is
payable, or impair the right to institute suit for the enforcement of any
such payment on or after the Maturity or the Stated Maturity, as the case
may be, thereof (or, in the case of redemption or repayment, on or after
the Redemption Date or the Repayment Date, as the case may be); 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
(3) modify any of the provisions of this Section or Section 513,
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.
A supplemental indenture which changes or eliminates any covenant or
other provision of this Indenture which has expressly been included 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.
It shall not be necessary for any Act of Securityholders 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 903. Execution of Supplemental Indentures. In executing, or
accepting the additional trusts created by, any supplemental indenture
permitted by this Article or the modifications thereby of the trusts created by
this Indenture, the Trustee shall be entitled to receive, and (subject to
Section 601) 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. The Trustee may, but shall not (except to the
extent required in the case of a supplemental indenture entered into under
Section 901(4) or 901(6)) 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 904. 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 Securities
theretofore or thereafter authenticated and delivered hereunder shall be bound
thereby to the extent provided therein.
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Section 905. Conformity with Trust Indenture Act. Every supplemental
indenture executed pursuant to this Article shall conform to the requirements
of the TIA as then in effect.
Section 906. Reference in Securities to Supplemental Indentures.
Securities 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 so modified as to conform, in the opinion of the Trustee and the
Board of Directors, to any such supplemental indenture may be prepared and
executed by the Company and authenticated and delivered by the Trustee in
exchange for Outstanding Securities.
ARTICLE TEN
Covenants
Section 1001. Payment of Principal, Premium and Interest. With
respect to each series of Securities, the Company will duly and punctually pay
the principal of (and premium, if any) and interest on such Securities in
accordance with their terms and this Indenture, and will duly comply with all
the other terms, agreements and conditions contained in, or made in the
Indenture for the benefit of, the Securities of such series.
Section 1002. Maintenance of Office or Agency. The Company will
maintain an office or agency in each Place of Payment where Securities may be
presented or surrendered for payment, where Securities may be surrendered for
transfer or exchange and where notices and demands to or upon the Company in
respect of the Securities and this Indenture may be served. The Company will
give prompt written notice to the Trustee of the location, and of any change in
the location, of such office or agency. If at any time the Company shall fail
to maintain such 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 principal Corporate Trust Office of the Trustee, and the
Company hereby appoints the Trustee its agent to receive all such
presentations, surrenders, notices and demands.
Section 1003. Money for Security Payments to be Held in Trust. If
the Company shall at any time act as its own Paying Agent for any series of
Securities, it will, on or before each due date of the principal of (and
premium, if any) or interest on, any of the Securities of such series,
segregate and hold in trust for the benefit of the Persons entitled thereto a
sum sufficient to pay the principal (and premium, if any) or interest so
becoming due until such sums shall be paid to such Persons or otherwise
disposed of as herein provided, and will promptly notify the Trustee of its
action or failure to act.
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Whenever the Company shall have one or more Paying Agents for any
series of Securities, it will, on or prior to each due date of the principal of
(and premium, if any) or interest on, any Securities of such series, deposit
with a Paying Agent a sum sufficient to pay the principal (and premium, if any)
or interest so becoming due, such sum to be held in trust for the benefit of
the Persons entitled to such principal (and premium, if any) or interest, 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 will cause each Paying Agent other than the Trustee for
any series of Securities 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 will
(1) hold all sums held by it for the payment of principal of (and
premium, if any) or interest on 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 herein provided;
(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 such
payment of principal (and premium, if any) or interest on 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.
The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture with respect to any series of
Securities or for any other purpose, pay, or by Company Order direct any Paying
Agent to pay, to the Trustee all sums held in trust by the Company or such
Paying Agent in respect of each and every series of Securities as to which it
seeks to discharge this Indenture or, if for any other purpose, all sums so
held in trust by the Company in respect of all Securities, such sums to be held
by the Trustee upon the same trusts 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 money.
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 (and premium, if
any) or interest on any Security of any series and remaining unclaimed for two
years after such principal (and premium, if any) or interest has become due and
payable shall be paid to the Company on Company Request, or (if then held by
the Company) shall be discharged from such trust; and the Holder of such
Security shall thereafter, as an unsecured general creditor, look
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only to the Company for payment thereof, and all liability of the Trustee or
such Paying Agent with respect to such trust money, and all liability of the
Company as trustee thereof, shall thereupon cease. The Trustee or such Paying
Agent, before being required to make any such repayment, may at the expense of
the Company mail to the Holders of the Securities as to which the money to be
repaid was held in trust, as their names and addresses appear in the Security
Register, a notice that such moneys remain unclaimed and that, after a date
specified in the notice, which shall not be less than 30 days from the date on
which the notice was first mailed to the Holders of the Securities as to which
the money to be repaid was held in trust, any unclaimed balance of such moneys
then remaining will be paid to the Company free of the trust formerly impressed
upon it.
The Company initially authorizes the Trustee to act as Paying Agent
for the Securities on its behalf. The Company may at any time and from time to
time authorize one or more Persons to act as Paying Agent in addition to or in
place of the Trustee with respect to any series of Securities issued under this
Indenture.
Section 1004. Statement as to Compliance. The Company will deliver
to the Trustee, within 120 days after the end of each fiscal year, a written
statement signed by the principal executive officer, principal financial
officer or principal accounting officer of the Company, stating that
(1) a review of the activities of the Company during such year and of
the Company's performance under this Indenture and under the terms of the
Securities has been made under his supervision; and
(2) to the best of his knowledge, based on such review, the Company
has complied with all conditions and covenants under this Indenture through
such year, or, if there has been a default in the fulfillment of any such
obligation, specifying each such default known to him and the nature and
status thereof.
For purposes of this Section 1004, compliance shall be determined
without regard to any grace period (other than an Extension Period) or
requirement of notice provided pursuant to the terms of this Indenture.
Section 1005. Corporate Existence. Subject to Article Eight the
Company will do or cause to be done all things necessary to preserve and keep
in full force and effect its corporate existence.
SECTION 1006. Additional Covenants. The Company covenants and agrees
with each Holder of Securities of a series issued to a CCCI Capital Trust that
it will not (i) declare or pay any dividends or distributions on, or redeem,
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purchase, acquire or make a liquidation payment with respect to, any shares of
the Company's capital stock (which includes the Common Stock and the Preferred
Stock), or (ii) make any payment of principal, interest or premium, if any, on
or repay, repurchase or redeem any debt securities of the Company (including
other Securities) that rank pari passu with or junior in interest to the
Securities of such series or (iii) make any guarantee payments with respect to
any guarantee by the Company of debt securities of any subsidiary of the Company
(including Other Guarantees) if such guarantee ranks pari passu with or junior
in interest to the Securities of such series (other than (a) dividends or
distributions in Common Stock of the Company, (b) any declaration of a dividend
in connection with the implementation of a stockholders' rights plan, or the
issuance of stock under any such plan in the future, or the redemption or
repurchase of any such rights pursuant thereto, (c) payments under the
applicable CCCI Capital Trust Guarantee, (d) purchases or acquisitions of shares
of the Common Stock in connection with the satisfaction by the Company of its
obligations under any employee benefit plan or other contractual obligation of
the Company (other than a contractual obligation ranking pari passu with or
junior in interest to these Securities), (e) as a result of a reclassification
of the Company's capital stock or the exchange or conversion of one class or
series of the Company's capital stock for another class or series of the
Company's capital stock or (f) the purchase of fractional interests in shares of
the Company's capital stock pursuant to the conversion or exchange provisions of
such capital stock or the security being converted or exchanged), if at such
time (i) there shall have occurred an Event of Default, (ii) the Company shall
be in default with respect to its payment of any obligations under the related
CCCI Capital Trust Guarantee or (iii) the Company shall have given notice of its
election to begin an Extension Period as provided herein and shall not have
rescinded such notice, or such Extension Period, or any extension thereof, shall
be continuing.
The Company also covenants with each Holder of Securities of a series
issued to a CCCI Capital Trust (i) to maintain directly, or indirectly through
a wholly owned Subsidiary, 100% ownership of the Common Securities of such CCCI
Capital Trust; provided, however, that any permitted successor of the Company
hereunder may succeed to the Company's ownership of such Common Securities,
(ii) not to voluntarily terminate, windup or liquidate such CCCI Capital Trust,
except (a) in connection with a distribution of the Securities of such series
to the holders of Preferred Securities in liquidation of such CCCI Capital
Trust or (b) in connection with certain mergers, consolidations or
amalgamations permitted by the related Declaration of Trust and (iii) to use
its reasonable best efforts, consistent with the terms and provisions of such
Declaration of Trust, to cause such CCCI Capital Trust to remain classified as
a grantor trustee and not as an association taxable as a corporation for United
States Federal income tax purposes.
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ARTICLE ELEVEN
Redemption of Securities
Section 1101. Applicability of Article. The Company may reserve the
right to redeem and pay before Stated Maturity all or any part of the
Securities of any series, either by optional redemption, sinking or purchase
fund or analogous obligation or otherwise, by provision therefor in the form of
Security for such series established and approved pursuant to Section 202 and
on such terms as are specified in such form or in the Board Resolution or
indenture supplemental hereto with respect to Securities of such series as
provided in Section 301. Redemption of Securities of any series shall be made
in accordance with the terms of such Securities and, to the extent that this
Article does not conflict with such terms, the succeeding Sections of this
Article.
Section 1102. Election to Redeem; Notice to Trustee. The election of
the Company to redeem any Securities redeemable at the election of the Company
shall be evidenced by, or made pursuant to authority granted by, a Board
Resolution. In case of any redemption at the election of the Company of any
Securities of any series, 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.
In the case of any redemption of Securities (i) prior to the
expiration of any restriction on such redemption provided in the terms of such
Securities or elsewhere in this Indenture, or (ii) pursuant to an election of
the Company which is subject to a condition specified in the terms of such
Securities, the Company shall furnish the Trustee with an Officers' Certificate
evidencing compliance with such restriction or condition.
Section 1103. Selection by Trustee of Securities to Be Redeemed. If
less than all the Securities of like tenor and terms of any series 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 include provision
for the selection for redemption of portions of the principal of Securities of
such series of a denomination larger than the minimum authorized denomination
for Securities of that series. Unless otherwise provided in the terms of a
particular series of Securities, the portions of the principal of Securities so
selected for partial redemption shall be equal to the minimum authorized
denomination of the Securities of such series, or an integral multiple thereof,
and the principal amount which remains outstanding shall not be less than the
minimum authorized denomination for Securities of such series. If less than
all the Securities of unlike tenor and terms of a series are to be redeemed,
the particular Securities to be redeemed shall be selected by the Company.
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The Trustee shall promptly notify the Company in writing of the
Securities selected for redemption and, in the case of any Security 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 Security redeemed or to be redeemed only in part, to the
portion of the principal of such Security which has been or is to be redeemed.
Section 1104. Notice of Redemption. Notice of redemption shall be
given by first-class mail, postage prepaid, mailed not less than 30 nor more
than 60 days prior to the Redemption Date, to each holder of Securities to be
redeemed, at his address appearing in the Security Register.
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, including CUSIP numbers (and, in the case of
partial redemption, the respective principal amounts) of the Securities to
be redeemed, from the Holder to whom the notice is given;
(4) that on the Redemption Date the Redemption Price will become due
and payable upon each such Security, and that interest, if any, thereon
shall cease to accrue from and after said date;
(5) the place where such Securities are to be surrendered for payment
of the Redemption Price, which shall be the office or agency of the Company
in the Place of Payment; and
(6) that the redemption is on account of a sinking or purchase fund,
or other analogous obligation, if that be the case.
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. Such notice shall be
deemed to have been given to each Holder if sent in accordance with Section 105
hereof.
Section 1105. Deposit of Redemption Price. On or prior to 10:00 a.m.
on any Redemption Date, the Company shall deposit 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 1003) an amount of money sufficient to
pay the Redemption Price of all the Securities which are to be redeemed on that
date.
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Section 1106. 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 Redemption Price) such Securities shall cease to
bear interest. Upon surrender of such Securities for redemption in accordance
with the notice, such Securities shall be paid by the Company at the Redemption
Price. Installments of interest the Stated Maturity of which is on or prior to
the Redemption Date shall be payable to the Holders of such Securities
registered as such on the relevant Regular Record Dates according to their
terms and the provisions of Section 307.
If any Security called for redemption shall not be so paid upon
surrender thereof for redemption, the principal shall, until paid, bear
interest from the Redemption Date at the rate borne by the Security, or as
otherwise provided in such Security.
Section 1107. Securities Redeemed in Part. Any Security which is to
be redeemed only in part shall be surrendered at the office or agency of the
Company in the Place of Payment with respect to that series (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 Security or Securities of
the same series and Stated Maturity and of like tenor and terms, of any
authorized denomination as requested by such Holder in aggregate principal
amount equal to and in exchange for the unredeemed portion of the principal of
the Security so surrendered.
Section 1108. Provisions with Respect to any Sinking Funds. Unless
the form or terms of any series of Securities shall provide otherwise, in lieu
of making all or any part of any mandatory sinking fund payment with respect to
such series of Securities in cash, the Company may at its option (1) deliver to
the Trustee for cancellation any Securities of such series theretofore acquired
by the Company, or (2) receive credit for any Securities of such series (not
previously so credited) acquired by the Company and theretofore delivered to
the Trustee for cancellation or redeemed by the Company other than through the
mandatory sinking fund, and if it does so then (i) Securities so delivered or
credited shall be credited at the applicable sinking fund Redemption Price with
respect to Securities of such series, and (ii) on or before the 60th day next
preceding each sinking fund Redemption Date with respect to such series of
Securities, the Company will deliver to the Trustee (A) an Officers'
Certificate specifying the portions of such sinking fund payment to be
satisfied by payment of cash and by delivery or credit of Securities of such
series acquired by the Company or so redeemed, and (B) such Securities so
acquired, to the extent not previously surrendered. Such Officers' Certificate
shall also state the basis for such credit and that the Securities for which
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the Company elects to receive credit have not been previously so credited and
were not redeemed by the Company through operation of the mandatory sinking
fund, if any, provided with respect to such Securities and shall also state
that no Event of Default with respect to Securities of such series has occurred
and is continuing. All Securities so delivered to the Trustee shall be
canceled by the Trustee and no Securities shall be authenticated in lieu
thereof.
If the sinking fund payment or payments (mandatory or optional) with
respect to any series of Securities made in cash plus any unused balance of any
preceding sinking fund payments with respect to Securities of such series made
in cash shall exceed $50,000 (or a lesser sum if the Company shall so request),
unless otherwise provided by the terms of such series of Securities, that cash
shall be applied by the Trustee on the sinking fund Redemption Date with
respect to Securities of such series next following the date of such payment to
the redemption of Securities of such series at the applicable sinking fund
Redemption Price with respect to Securities of such series, together with
accrued interest, if any, to the date fixed for redemption, with the effect
provided in Section 1106. The Trustee shall select, in the manner provided in
Section 1103, for redemption on such sinking fund Redemption Date a sufficient
principal amount of Securities of such series to utilize that cash and shall
thereupon cause notice of redemption of the Securities of such series for the
sinking fund to be given in the manner provided in Section 1104 (and with the
effect provided in Section 1106) for the redemption of Securities in part at
the option of the Company. Any sinking fund moneys not so applied or allocated
by the Trustee to the redemption of Securities of such series shall be added to
the next cash sinking fund payment with respect to Securities of such series
received by the Trustee and, together with such payment, shall be applied in
accordance with the provisions of this Section 1108. Any and all sinking fund
moneys with respect to Securities of any series held by the Trustee at the
Maturity of Securities of such series, and not held for the payment or
redemption of particular Securities of such series, shall be applied by the
Trustee, together with other moneys, if necessary, to be deposited sufficient
for the purpose, to the payment of the principal of the Securities of such
series at Maturity.
On or before each sinking fund Redemption Date provided with respect
to Securities of any series, the Company shall pay to the Trustee in cash a sum
equal to all accrued interest, if any, to the date fixed for redemption on
Securities to be redeemed on such sinking fund Redemption Date pursuant to this
Section 1108.
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ARTICLE TWELVE
Subordination
SECTION 1201. Agreement of Securityholders that Securities
Subordinated to Extent Provided. The Company, for itself, its successors and
assigns, covenants and agrees and each Holder of the Securities by his or her
acceptance thereof likewise covenants and agrees that the payment of the
principal of, premium, if any, and interest on each and all of the Securities
is hereby expressly subordinated, to the extent and in the manner hereinafter
set forth, to the prior payment in full of all Senior Indebtedness. The
provisions of this Article shall constitute a continuing offer to all persons
who, in reliance upon such provisions, become holders of, or continue to hold,
Senior Indebtedness, and such provisions are made for the benefit of the
holders of Senior Indebtedness, and such holders are hereby made obligees
hereunder the same as if their names were written herein as such, and the
and/or each of them may proceed to enforce such provisions.
SECTION 1202. Company Not to Make Payments With Respect to Securities
in Certain Circumstances. (a) Upon the maturity of any Senior Indebtedness by
lapse of time, acceleration or otherwise, all principal thereof and premium, if
any, and interest thereon shall first be paid in full, or such payment duly
provided for in cash or in a manner satisfactory to the holder or holders of
such Senior Indebtedness, before any payment is made on account of the
principal of or premium, if any, or interest on the Securities or to acquire
any of the Securities or on account of any sinking fund (except sinking fund
payments made in Securities acquired by the Company before the maturity of such
Senior Indebtedness).
(b) Upon the happening of (i) an event of default with respect to any
Senior Indebtedness, as such event of default is defined therein or in the
instrument under which it is outstanding, permitting the holders to accelerate
the maturity thereof, or (ii) an event which, with the giving of notice, or
lapse of time, or both, would constitute such an event of default, then, unless
and until such event shall have been cured or waived or shall have ceased to
exist, no payment shall be made by the Company with respect to the principal of
or premium, if any, or interest on the Securities or to acquire any of the
Securities or on account of any sinking fund for the Securities (except sinking
fund payments made in Securities acquired by the Company before such default
and notice thereof).
<PAGE> 81
74
(c) In the event that notwithstanding the provisions of this Section
1202 the Company shall make any payment to the Trustee on account of the
principal of or premium, if any, or interest on the Securities, or on account
of any sinking fund, or the Holders of the Securities shall receive any such
payment, after the happening of a default in payment of the principal of or
premium, if any, or interest on Senior Indebtedness, then, unless and until
such default or event of default shall have been cured or waived or shall have
ceased to exist, such payment (subject to the provisions of Section 1206) shall
be held by the Trustee or the Holders of the Securities, as the case may be, in
trust for the benefit of, and shall be paid forthwith over and delivered to,
the holders of Senior Indebtedness (pro rata as to each of such holders on the
basis of the respective amounts of Senior Indebtedness held by them) or their
representatives or the trustee under the indenture or other agreement (if any)
pursuant to which any instruments evidencing any Senior Indebtedness may have
been issued, as their respective interests may appear, for application to the
payment of all Senior Indebtedness remaining unpaid to the extent necessary to
pay all Senior Indebtedness in full in accordance with the terms of such Senior
Indebtedness, after giving effect to any concurrent payment or distribution to
or for the holders of Senior Indebtedness. The Company shall give prompt
written notice to the Trustee of any default under any Senior Indebtedness or
under any agreement pursuant to which Senior Indebtedness may have been issued.
SECTION 1203. Securities Subordinated to Prior Payments of All Senior
Indebtedness on Dissolution, Liquidation or Reorganization of the Company.
Upon any distribution of assets of the Company upon any dissolution, winding
up, liquidation or reorganization of the Company (whether in bankruptcy,
insolvency or receivership proceedings or upon an assignment for the benefit of
creditors or otherwise):
(a) the holders of all Senior Indebtedness shall first be entitled to
receive payment in full of the principal thereof, premium, if any, and
interest due thereon before the Holders of the Securities are entitled to
receive any payment on account of the principal of, premium, if any, or
interest on the Securities;
(b) any payment or distribution of assets of the Company of any kind
or character, whether in cash, property or securities, to which the Holders
of the Securities or the Trustees would be entitled except for the
provisions of this Article Twelve, shall be paid by the liquidating
trustee or agent or other person making such payment or distribution,
whether a trustee in bankruptcy, a receiver or liquidating trustee or other
trustee or agent, directly to the holders of Senior Indebtedness or their
representative or representatives, or to the trustee or trustees under any
indenture under which any instruments evidencing any of such Senior
<PAGE> 82
75
Indebtedness may have been issued, to the extent necessary to make payment
in full of all Senior Indebtedness remaining unpaid, after giving effect to
any concurrent payment or distribution or provision therefor to the holders
of such Senior Indebtedness;
(c) in the event that notwithstanding the foregoing provisions of this
Section 1203, any payment or distribution of assets of the Company of any
kind or character, whether in cash, property or securities, shall be
received by the Trustee or the Holders of the Securities on account of
principal, or premium, if any, or interest on the Securities before all
Senior Indebtedness is paid in full, or effective provisions made for its
payment, such payment or distribution (subject to the provisions of
Sections 1206 and 1207) shall be received and held in trust for and shall
be paid over to the holders of the Senior Indebtedness remaining unpaid or
unprovided for or their representative or representatives, or to the
trustee or trustees under any indenture under which any instruments
evidencing any of such Senior Indebtedness may have been issued, for
application to the payment of such Senior Indebtedness until all such
Senior Indebtedness shall have been paid in full, after giving effect to
any concurrent payment or distribution or provision therefor to the holders
of such Senior Indebtedness.
SECTION 1204. Securityholders to be Subrogated to Right of Holders of
Senior Indebtedness. Subject to the payment in full of all Senior Indebtedness,
the Holders of the Securities shall be subrogated to the rights of the holders
of Senior Indebtedness to receive payments or distributions of assets of the
Company applicable to the Senior Indebtedness until all amounts owing on the
Securities shall be paid in full, and for the purpose of such subrogation no
payments or distributions to the holders of the Senior Indebtedness by or on
behalf of the Company or by or on behalf of the Holders of the Securities by
virtue of this Article which otherwise would have been made to the Holders of
the Securities, be deemed to be payment by the Company to or on account of the
Senior Indebtedness, it being understood that the provisions of this Article
Twelve are and are intended solely for the purpose of defining the relative
rights of the Holders of the Securities, on the one hand, and the holders of
the Senior Indebtedness, on the other hand.
SECTION 1205. Obligation of the Company Unconditional. Nothing
contained in this Article Twelve or elsewhere in this Indenture or in the
Securities is intended to or shall impair as between the Company and the
Holders of the Securities, the obligations of the Company, which is absolute
and unconditional, to pay to the Holders of the Securities the principal of,
premium, if any, and interest on the Securities as and when the same shall
<PAGE> 83
76
become due and payable in accordance with their terms, or is intended to or
shall affect the relative rights of the Holders of the Securities and creditors
of the Company other than the holders of the Senior Indebtedness, nor shall
anything herein or therein prevent the Trustee or the Holder of any Security
from exercising all remedies otherwise permitted by applicable law upon default
under this Indenture, subject to the rights, if any, under this Article Twelve
of the holders of Senior Indebtedness in respect of cash, property or
securities of the Company received upon the exercise of any such remedy. Upon
any distribution of assets of the Company referred to in this Article Twelve,
the Trustee, subject to the provisions of Section 601, and the Holders of the
Securities shall be entitled to rely upon any order or decree made by any court
of competent jurisdiction in which such dissolution, winding up, liquidation or
reorganization proceedings are pending, or a certificate of the liquidating
trustee or agent or other person making any distribution to the Trustee or to
the Holders of the Securities, for the purpose of ascertaining the persons
entitled to participate in such distribution, the holders of the Senior
Indebtedness and other indebtedness of the Company, the amount thereof or
payable thereon, the amount or amounts paid or distributed thereon and all
other facts pertinent thereto or to this Article Twelve.
SECTION 1206. Trustee Entitled to Assume Payments Not Prohibited in
Absence of Notice. The Trustee shall not at any time be charged with knowledge
of the existence of any facts which would prohibit the making of any payment of
monies to or by the Trustee, unless and until a Responsible Officer of the
Trustee shall have received written notice thereof from the Company or from one
or more holders of Senior Indebtedness or from any trustee therefor; and, prior
to the receipt of any such written notice, the Trustee, subject to the
provisions of Section 601, shall be entitled to assume conclusively that no
such facts exist.
SECTION 1207. Application by Trustee of Monies Deposited With It.
Anything in this Indenture to the contrary notwithstanding, any deposit of
monies by the Company with the Trustee or any paying agent (whether or not in
trust) for the payment of the principal of or premium, if any, or interest on
any Securities shall be subject to the provisions of Sections 1201, 1202, 1203
and 1204 except that, if prior to the date on which by the terms of this
Indenture any such monies may become payable for any purpose (including,
without limitation, the payment of either the principal of or interest or
premium, if any, on any Security) a Responsible Officer of the Trustee shall
not have received with respect to such monies the notice provided for in
Section 1206, then, anything herein contained to the contrary notwithstanding,
the Trustee shall have full power and authority to receive such monies and to
apply the same to the purpose for which they were received, and shall not be
affected by any notice to the contrary which may be received by it on or after
such date.
<PAGE> 84
77
SECTION 1208. Subordination Rights Not Impaired by Acts or Omissions
of Company or Holders of Senior Indebtedness. No right of any present or
future holders of any Senior Indebtedness to enforce subordination as herein
provided shall at any time in any way be prejudiced or impaired by any act or
failure to act on the part of the Company or by any act or failure to act, in
good faith, by any such holder, or by any noncompliance by the Company with the
terms, provisions and covenants of this Indenture, regardless of any knowledge
thereof which any such holder may have or be otherwise charged with.
SECTION 1209. Securityholders Authorize Trustee to Effectuate
Subordination of Securities. Each Holder of the Securities by his or her
acceptance thereof authorizes and expressly directs the Trustee on his or her
behalf to take such action as may be necessary or appropriate to effectuate the
subordination provided in this Article Twelve and appoints the Trustee his/her
attorney-in-fact for such purpose, including, in the event of any dissolution,
winding up, liquidation or reorganization of the Company (whether in
bankruptcy, insolvency or receivership proceedings or upon an assignment for
the benefit of creditors or otherwise) tending towards liquidation of the
business and assets of the Company, the immediate filing of a claim for the
unpaid balance of its or his or her Securities in the form required in said
proceedings and cause said claim to be approved. If the trustee does not file
a proper claim or proof of debt in the form required in such proceeding prior
to 30 days before the expiration of the time to file such claim or claims, then
the holder or holders of the Senior Indebtedness are hereby authorized to and
have the right to file an appropriate claim for and on behalf of the holders of
said Securities.
SECTION 1210. Right of Trustee to Hold Senior Indebtedness. The
Trustee shall be entitled to all of the rights set forth in this Article Twelve
in respect of any Senior Indebtedness at any time held by it to the same extent
as any other holder of Senior Indebtedness, and nothing in Section 613 or
elsewhere in this Indenture shall be construed to deprive the Trustee of any of
its rights as such holder.
SECTION 1211. Article Twelve Not to Prevent Events of Default. The
failure to make a payment on account of principal, interest or sinking fund by
reason of any provision of this Article Twelve shall not be construed as
preventing the occurrence of an Event of Default under Section 501.
<PAGE> 85
78
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed, all as of the day and year first above written.
CLEAR CHANNEL COMMUNICATIONS, INC.,
by
--------------------------
Name:
Title:
THE BANK OF NEW YORK,
as Trustee,
by
--------------------------
Name:
Title:
<PAGE> 1
EXHIBIT 5.1
[Akin, Gump, Strauss, Hauer & Feld Letterhead]
August 29, 1997
Clear Channel Communications, Inc.
200 Concord Plaza, Suite 600
San Antonio, Texas 78216
Ladies and Gentlemen:
We have acted as counsel to Clear Channel Communications, Inc., a
Texas corporation (the "Company"), and CCCI Capital Trust I, CCCI Capital Trust
II, and CCCI Capital Trust III (each a "Trust" and collectively the "Trusts")
in connection with the filing of a registration statement on Form S-3
(Registration Nos. 333-33371, 333-33371-01, 333-33371-02, and 333-33371-03),
as amended (the "Registration Statement") with the Securities and Exchange
Commission pursuant to the Securities Act of 1933, as amended, for the
registration of the sale from time to time of up to $1,500,000,000 aggregate
amount of (i) unsecured senior debt securities, unsecured subordinated debt
securities and unsecured junior subordinated debt securities of the Company
(collectively, the "Debt Securities"), (ii) preferred stock, par value $1.00
per share, of the Company (the "Preferred Stock"), (iii) common stock, par
value $0.10 per share, of the Company (the "Common Stock"), (iv) preferred
securities of the Trusts (the "Preferred Securities"), (v) guarantees of the
Preferred Securities by the Company (the "Guarantees"), (vi) warrants of the
Company to purchase Common Stock, Preferred Stock or Debt Securities (the
"Warrants"), (viii) stock purchase contracts to purchase Common Stock or
Preferred Stock (the "Purchase Contracts"), and (ix) stock purchase units, each
representing ownership of a Purchase Contract and Debt Securities, Preferred
Securities, or debt obligations of third parties securing a holder's obligation
to purchase Common Stock or Preferred Stock under the Purchase Contracts (the
"Stock Purchase Units").
The senior Debt Securities are to be issued pursuant to an Indenture
(the "Senior Indenture") between the Company and The Bank of New York, as
trustee. The subordinated Debt Securities are to be issued pursuant to an
Indenture (the "Subordinated Indenture") between the Company and The Bank of
New York, as trustee. The junior subordinated Debt Securities are to be issued
pursuant to an Indenture (the "Junior Subordinated Indenture") between the
Company and The Bank of New York, as trustee. The Bank of New York, in its
capacity as trustee under the Senior Indenture, the Subordinated Indenture and
the Junior Subordinated Indenture, is referred to herein as the "Trustee" and
the Senior Indenture, Subordinated Indenture and Junior Subordinated Indenture
are referred to herein collectively as the "Indentures". The Preferred
Securities are to be issued from time to time by each Trust pursuant to an
Amended and Restated Declaration of Trust (the "Amended Declaration") to be
filed with the Secretary of State of the State of Delaware by the Trustee of
the relevant Trust.
<PAGE> 2
Clear Channel Communications, Inc.
August 29, 1997
Page 2
We have, as counsel, examined such corporate records, certificates and
other documents and reviewed such questions of law as we have deemed necessary,
relevant or appropriate to enable us to render the opinions expressed below.
In rendering such opinions, we have assumed the genuiness of all signatures and
the authenticity of all documents examined by us. As to various questions of
fact material to such opinions, we have relied upon representations of the
Company.
Based upon such examination and representations, we advise you that,
in our opinion:
1. Assuming that the Indentures, any Debt Securities and any
supplemental indentures to be entered into in connection with
the issuance of such Debt Securities have been duly
authorized, when (i) a supplemental indenture in respect of
the Debt Securities has been duly executed and delivered, (ii)
the terms of the Debt Securities have been duly established in
accordance with the applicable Indenture and the applicable
supplemental indenture relating to such Debt Securities so as
not to violate any applicable law or result in a default under
or breach of any agreement or instrument binding upon the
Company and so as to comply with any requirement or
restriction imposed by any court or governmental or regulatory
body having jurisdiction over the Company, and (iii) the Debt
Securities have been duly executed and authenticated in
accordance with the applicable Indenture and the applicable
supplemental indenture relating to such Debt Securities and
duly issued and delivered by the Company in the manner
contemplated on the Registration Statement and any prospectus
supplement relating thereto, the Debt Securities (including
any Debt Securities duly issued (a) upon exchange or
conversion of any shares of Preferred Stock that are
exchangeable or convertible into Debt Securities, (b) upon the
exercise of any Warrants exercisable for Debt Securities or
(c) as part of Stock Purchase Units) will constitute valid and
binding obligations of the Company, enforceable in accordance
with their terms, except as (1) the enforceability thereof may
be limited by bankruptcy, insolvency, reorganization,
fraudulent transfer, moratorium or other similar laws now or
hereinafter in effect relating to or affecting the enforcement
of creditors' rights generally, and (2) the availability of
equitable remedies may be limited by equitable principles of
general applicability (regardless of whether considered in a
proceeding at law or in equity).
2. Assuming that the Guarantees have been duly authorized, when
(i) the applicable Guarantee Agreement (the "Guarantee
Agreement") has been duly executed and delivered so as not to
violate any applicable law or result in a default under or
breach of any agreement or instrument binding upon the Company
and so as to comply with any requirement or restriction
imposed by any court or governmental or regulatory body having
jurisdiction over the Company, and (ii) the Preferred
Securities have
<PAGE> 3
Clear Channel Communications, Inc.
August 29, 1997
Page 3
been duly issued and delivered by the applicable Trusts
contemplated by the Registration Statement and any prospectus
supplement relating thereto, the Guarantees will constitute
valid and binding obligations of the Company, enforceable in
accordance with their terms, except as (a) the enforceability
thereof may be limited by bankruptcy, insolvency,
reorganization, fraudulent transfer, moratorium or similar
laws now or hereinafter in effect relating to or affecting the
enforcement of creditors' rights generally, and (b) the
availability of equitable remedies may be limited by equitable
principles of general applicability (regardless of whether
considered in a proceeding at law or in equity).
3. Assuming that a Warrant Agreement relating to the Warrants,
(the "Warrant Agreement") has been duly authorized, when (i)
the Warrant Agreement has been duly executed and delivered,
(ii) the terms of the Warrants and of their issuance and sale
have been duly established in conformity with the Warrant
Agreement relating to such Warrants so as not to violate any
applicable law or result in a default under or breach of any
agreement or instrument binding upon the Company and so as to
comply with any requirement or restriction imposed by any
court or governmental or regulatory body having jurisdiction
over the Company, and (iii) the Warrants have been duly
executed and countersigned in accordance with the Warrant
Agreement relating to such Warrants, and issued and sold in
the form and in the manner contemplated in the Registration
Statement and any prospectus supplement relating thereto, such
Warrants will constitute valid and binding obligations of the
Company, enforceable in accordance with their terms, except as
(a) the enforceability thereof may be limited by bankruptcy,
insolvency, reorganization, fraudulent transfer, moratorium
and other similar laws now or hereinafter in effect relating
to or affecting creditors' rights generally, and (b) the
availability of equitable remedies may be limited by equitable
principles of general applicability (regardless of whether
considered in a proceeding at law or in equity).
4. Assuming that a Purchase Contract Agreement relating to the
Purchase Contracts (the "Purchase Contract Agreement") and
such Purchase Contracts have been duly authorized, when (i)
the Purchase Contract Agreement has been duly executed and
delivered, (ii) the terms of the Purchase Contracts and of
their issuance and sale have been duly established in
conformity with the Purchase Contract Agreement so as not to
violate any applicable law or result in a default under or
breach of any agreement or instrument binding upon the Company
and so as to comply with any requirement or restriction
imposed by any court or governmental or regulatory body having
jurisdiction over the Company, and (iii) the Purchase
Contracts have been duly executed and issued in accordance
with the Purchase Contract Agreement relating to
<PAGE> 4
Clear Channel Communications, Inc.
August 29, 1997
Page 4
such Purchase Contracts, and issued and sold in the form and
in the manner contemplated in the Registration Statement and
any prospectus supplement relating thereto, such Purchase
Contracts will constitute valid and binding obligations of the
Company, enforceable in accordance with their terms, except as
(a) the enforceability thereof may be limited by bankruptcy,
insolvency, reorganization, fraudulent transfer, moratorium
and other similar laws now or hereinafter in effect relating
to or affecting creditors' rights generally, and (b) the
availability of equitable remedies may be limited by equitable
principles of general applicability (regardless of whether
considered in a proceeding at law or in equity).
5. Assuming that the Stock Purchase Units, a Purchase Contract
Agreement relating to the Purchase Contracts comprising a part
of the Stock Purchase Units and such Purchase Contracts have
been duly authorized, when (i) the Purchase Contract Agreement
has been duly executed and delivered, (ii) the terms of the
Purchase Contracts and of their issuance and sale have been
duly established in conformity with the Purchase Contract
Agreement so as not to violate any applicable law or result in
a default under or breach of any agreement or instrument
binding upon the Company and so as to comply with any
requirement or restriction imposed by any court or
governmental or regulatory body having jurisdiction over the
Company, (iii) the terms of the collateral arrangements
relating to such Stock Purchase Units have been duly
established and the agreement(s) relating thereto have been
duly executed and delivered, in each case so as not to violate
any applicable law or result in a default under or breach of
any agreement or instrument binding upon the Company and so as
to comply with any requirement or restriction imposed by any
court or governmental or regulatory body having jurisdiction
over the Company and the collateral has been deposited with
the collateral agent in accordance with such arrangements, and
(iv) the Purchase Contracts have been duly executed and issued
in accordance with the Purchase Contract Agreement relating to
such Purchase Contracts, and issued and sold in the form and
in the manner contemplated in the Registration Statement and
any prospectus supplement relating thereto, such Stock
Purchase Units will constitute valid and binding obligations
of the Company, enforceable in accordance with their terms,
except as (a) the enforceability thereof may be limited by
bankruptcy, insolvency, reorganization, fraudulent transfer,
moratorium and other similar laws now or hereinafter in effect
relating to or affecting creditors' rights generally, and (b)
the availability of equitable remedies may be limited by
equitable principles of general applicability (regardless of
whether considered in a proceeding at law or in equity).
<PAGE> 5
Clear Channel Communications, Inc.
August 29, 1997
Page 5
6. Upon designation of the relative rights, preferences and
limitations of any series of Preferred Stock by the Board of
Directors of the Company and the proper filing with the
Secretary of State of the State of Texas of a Statement of
Designations, Preferences and Rights relating to such series
of Preferred Stock, all necessary corporate action on the part
of the Company will have been taken to authorize the issuance
and sale of such series of Preferred Stock proposed to be sold
by the Company, and when such shares of Preferred Stock are
paid for, issued and delivered in accordance with the
applicable underwriting or other agreement, such shares of
Preferred Stock (including any shares of Preferred Stock
issued (i) upon exercise of any Warrants for Preferred Stock,
(ii) upon conversion of any Debt Securities that are
convertible or exchangeable into Preferred Stock, or (iii)
pursuant to Stock Purchase Contracts) will be validly issued,
fully paid and non-assessable.
7. When all necessary corporate action on the part of the Company
has been taken to authorize the issuance and sale of such
shares of Common Stock proposed to be sold by the Company, and
when such shares of Common Stock are issued and delivered in
accordance with the applicable underwriting or other
agreement, such shares of Common Stock (including any shares
of Common Stock issued (i) upon exercise of any Warrants for
Common Stock, (ii) upon conversion of any Debt Securities that
are convertible or exchangeable for Common Stock, (iii)
pursuant to Stock Purchase Contracts, or (iv) upon the
exchange or conversion of any shares of Preferred Stock that
are exchangeable or convertible into Common Stock) will be
validly issued, fully paid and non-assessable.
In connection with the opinions expressed above, we have assumed that,
at or prior to the time of the delivery of any such security, (i) the Board of
Directors shall have duly established the terms of such security and duly
authorized the issuance and sale of such security and such authorization shall
not have been modified or rescinded, (ii) the Registration Statement shall have
been declared effective and such effectiveness shall not have been terminated
or rescinded, and (iii) there shall not have occurred any change in law
affecting the validity or enforceability of such security. We have also
assumed that none of the terms of any security to be established subsequent to
the date hereof, nor the issuance and delivery of such security, nor the
compliance by the Company with the terms of such security will violate any
applicable law or will result in a violation of any provision of any instrument
or agreement then binding upon the Company, or any restriction imposed by any
court or governmental body having jurisdiction over the Company.
We are members of the Bar of the State of Texas and the State of New
York and the foregoing opinion is limited to the laws of the State of Texas,
the State of New York, and the federal laws of the United States of America.
<PAGE> 6
Clear Channel Communications, Inc.
August 29, 1997
Page 6
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement. In addition, we consent to the reference to us under
the caption "Legal Opinions" in the prospectus.
This opinion is rendered solely to you in connection with the above
matter. This opinion may not be relied upon by you for any other purpose or
relied upon by or furnished to any other person without our prior written
consent.
Very truly yours,
/s/ AKIN, GUMP, STRAUSS, HAUER & FELD, L.L.P.
AKIN, GUMP, STRAUSS, HAUER & FELD, L.L.P.
<PAGE> 1
EXHIBIT 5.2
[Letterhead of Morris, Nichols, Arsht & Tunnell]
August 29, 1997
The CCCI Trusts
(as defined below)
c/o Clear Channel Communications, Inc.
200 Concord Plaza, Suite 600
San Antonio, Texas 78216
Re: The CCCI Trusts (as defined below)
Ladies and Gentlemen:
We have acted as special Delaware counsel to CCCI Capital
Trust I, CCCI Capital Trust II and CCCI Capital Trust III, each a Delaware
statutory business trust (collectively referred to herein as the "CCCI Trusts"
and each, individually, as a "CCCI Trust"), in connection with certain matters
relating to the creation of the CCCI Trusts and the proposed issuance of
Preferred Securities therein to beneficial owners pursuant to and as described
in Registration Statement Nos. 333-33371, 333-33371-01, 333-33371-02, and
333-33371-03 (and the Prospectus forming a part thereof) on Form S-3 filed with
the Securities and Exchange Commission (the "Commission") by the CCCI Trusts
and Clear Channel Communications, Inc. (the "Company") on August 11, 1997, as
amended by Pre-Effective Amendment No. 1 thereto (as so amended, the
"Registration Statement"). Capitalized terms used herein and not otherwise
herein defined are used with respect to each CCCI Trust as defined in the form
of Amended and Restated Declaration of Trust of such CCCI Trust attached as an
exhibit to the Registration Statement.
In rendering this opinion, we have examined and relied upon
copies of the following documents in the forms provided to us: the Certificate
of Trust of each CCCI Trust as filed in the Office of the Secretary of State of
the State of Delaware (the "State Office") on July 30, 1997 (the Certificate of
Trust of each CCCI Trust is referred to herein as a "Certificate"); the
Declaration of Trust of each CCCI Trust dated as of July 30, 1997 (the
Declaration of Trust of each CCCI Trust is referred to herein as an "Original
Governing Instrument"); a draft form of Amended and Restated Declaration of
Trust of each CCCI Trust dated August 8, 1997 (the
<PAGE> 2
The CCCI Trusts
c/o Clear Channel Communications, Inc.
August 29, 1997
Page 2
draft form of Amended and Restated Declaration of each CCCI Trust is referred
to herein as a "Governing Instrument"); the form of Junior Subordinated
Indenture to be entered into between the Company and the Bank of New York, as
Trustee; the form of Guarantee Agreement to be made by the Company with respect
to each CCCI Trust; the form of Underwriting Agreement relating to the
Preferred Securities to be entered into between the Company, on its own behalf
and on behalf of each CCCI Trust, and the Underwriters (as defined therein)
(the "Underwriting Agreement"); the Registration Statement; and a certification
of good standing of each CCCI Trust obtained as of a recent date from the State
Office. In such examinations, we have assumed the genuineness of all
signatures, the conformity to original documents of all documents submitted to
us as drafts or copies or forms of documents to be executed and the legal
capacity of natural persons to complete the execution of documents. We have
further assumed for purposes of this opinion: (i) the due formation or
organization, valid existence and good standing of each entity (other than the
CCCI Trusts) that is a party to any of the documents reviewed by us under the
laws of the jurisdiction of its respective formation or organization; (ii) the
due authorization, execution and delivery by, or on behalf of, each of the
parties thereto of the above-referenced documents with respect to each CCCI
Trust; (iii) that the Company, the Bank of New York, the Bank of New York
(Delaware) and the appropriate Regular Trustees will duly authorize, execute
and deliver the applicable Governing Instrument, Underwriting Agreement and all
other documents contemplated thereby or by the Registration Statement to be
executed in connection with the issuance by each CCCI Trust of Preferred
Securities, in each case prior to the first issuance ofPreferred Securities;
(iv) that the Preferred Securities of each CCCI Trust will be offered and sold
pursuant to the Registration Statement and a prospectus supplement that will be
consistent with, and accurately describe, the terms of the applicable Governing
Instrument and the applicable Guarantee Agreement relating to each such CCCI
Trust and all other relevant documents; (v) that no event has occurred
subsequent to the filing of any Certificate that would cause a dissolution or
liquidation of any CCCI Trust under the applicable Original Governing
Instrument or the applicable Governing Instrument; (vi) that the activities of
each CCCI Trust have been and will be conducted in accordance with its Original
Governing Instrument or its Governing Instrument, as applicable, and the
Delaware Business Trust Act, 12 Del. C. Sections 3801 et seq. (the "Delaware
Act"); (vii) that each Holder of Preferred Securities of a CCCI Trust has, or
prior to the first issuance of Preferred Securities of such CCCI Trust will
have, made payment of the required consideration therefor and received a
Preferred Securities Certificate of such CCCI Trust in consideration thereof in
accordance with the terms and conditions of the applicable Governing
Instrument, the Registration Statement, the applicable
<PAGE> 3
The CCCI Trusts
c/o Clear Channel Communications, Inc.
August 29, 1997
Page 3
prospectus supplement and Underwriting Agreement and that the Preferred
Securities of each CCCI Trust are otherwise issued and sold in accordance with
the terms, conditions, requirements and procedures set forth in the applicable
Governing Instrument, the Registration Statement, the applicable prospectus
supplement and Underwriting Agreement; and (viii) that the documents examined
by us are in full force and effect, express the entire understanding of the
parties thereto with respect to the subject matter thereof and have not been
modified, supplemented or otherwise amended, except as herein referenced. No
opinion is expressed with respect to the requirements of, or compliance with,
federal or state securities or blue sky laws. We have not participated in the
preparation of the Registration Statement or any other offering material
relating to the Preferred Securities, and we assume no responsibility for their
contents. As to any fact material to our opinion, other than those assumed, we
have relied without independent investigation on the above-referenced documents
and certificates and on the accuracy, as of the date hereof, of the matters
therein contained.
Based on and subject to the foregoing, and limited in all
respects to matters of Delaware law, it is our opinion that:
1. Each CCCI Trust is a duly created and validly
existing statutory business trust in good standing under the laws of the State
of Delaware.
2. The Preferred Securities of each CCCI Trust, upon
issuance, will constitute validly issued and, subject to the qualifications set
forth in paragraph 3 below, fully paid and non-assessable beneficial interests
in the assets of such CCCI Trust.
3. Under the Delaware Act and the terms of the
applicable Governing Instrument, each Preferred Security Holder of a CCCI
Trust, in such capacity, will be entitled to the same limitation of personal
liability as that extended to stockholders of private corporations for profit
organized under the General Corporation Law of the State of Delaware; provided,
however, we express no opinion with respect to the liability of any Preferred
Security Holder of a CCCI Trust who is, was or may become a named Trustee of
such CCCI Trust. We note that pursuant to Section 11.04 of each Governing
Instrument, each CCCI Trust may withhold amounts otherwise distributable to a
Holder of such CCCI Trust and pay over such amounts to the applicable
jurisdictions in accordance with federal, state and local law and any amount
withheld will be deemed to have been distributed to such Holder and that,
pursuant to each Governing Instrument, Preferred Security Holders of a CCCI
Trust may be obligated to make payments or provide indemnity or security under
the circumstances set forth therein.
<PAGE> 4
The CCCI Trusts
c/o Clear Channel Communications, Inc.
August 29, 1997
Page 4
We hereby consent to the filing of this opinion as an exhibit
to the Registration Statement and to the use of our name under the heading
"LEGAL OPINIONS" in the Prospectus forming a part thereof. In giving this
consent, we do not thereby admit that we come within the category of persons
whose consent is required under Section 7 of the Securities Act of 1933, as
amended, or the rules and regulations of the Commission thereunder. This
opinion speaks only as of the date hereof and is based on our understandings
andassumptions as to present facts, and on our review of the above-referenced
documents and the application of Delaware law as the same exist as of the date
hereof, and we undertake no obligation to update or supplement this opinion
after the date hereof for the benefit of any person or entity with respect to
any facts or circumstances that may hereafter come to our attention or any
changes in facts or law that may hereafter occur or take effect. This opinion
is intended solely for the benefit of the addressees hereof in connection with
the matters contemplated hereby and may not be relied on by any other person or
entity or for any other purpose without our prior written consent.
Very truly yours,
MORRIS, NICHOLS, ARSHT & TUNNELL
/S/Morris, Nichols, Arsht & Tunnell
<PAGE> 1
EXHIBIT 12
CLEAR CHANNEL COMMUNICATIONS, INC.
COMPUTATION OF RATIO OF EARNINGS TO COMBINED FIXED CHARGES
AND PREFERRED STOCK DIVIDENDS
(in thousands except ratio)
<TABLE>
<CAPTION>
Six Months Year Ended
Ended ---------------------------------------------------------
June 30,
1997 1996 1995 1994 1993 1992
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Income before income taxes . . . . $34,679 $ 71,240 $49,817 $36,396 $15,696 $ 7,574
Distributed income received
from nonconsolidated
affiliates . . . . . . . . . . . . 1,648 10,430 1,432 - - -
------- -------- ------- ------- ------- -------
36,327 81,670 51,249 36,396 15,696 7,574
------- -------- ------- ------- ------- -------
Fixed Charges:
Interest Expense. . . . . . . 32,315 30,080 20,752 7,669 5,390 4,739
Amotization of loan fees. . . 354 506 1,004 82 5 1
Interest portion of
rental expense . . . . . . . 280 424 361 262 188 135
Total Fixed Charges . . . . . . . 32,949 31,010 22,117 8,013 5,583 4,875
------- -------- ------- ------- ------- -------
Preferred Stock Dividends. . . . . 0 0 0 0 0 0
Total Fixed Charges and
Preferred Stock Dividends. . . . . 32,949 31,010 22,117 8,013 5,583 4,875
------- -------- ------- ------- ------- -------
Total earnings available for
payment of fixed charges . . . . . $69,276 $112,680 $73,366 $44,409 $21,279 $12,449
------- -------- ------- ------- ------- -------
Ratio of earnings to fixed
charges. . . . . . . . . . . . . . 2.10 3.63 3.32 5.54 3.81 2.55
======= ======== ======= ======= ======= =======
</TABLE>
<PAGE> 1
EXHIBIT 23.1
CONSENT OF ERNST & YOUNG LLP
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement (Form S-3) and related Prospectus of Clear Channel
Communications, Inc. and to the incorporation by reference therein of our
reports dated February 17, 1997 (except for Note K, as to which the date is
February 25, 1997), with respect to the consolidated financial statements of
Clear Channel Communications, Inc. incorporated by reference in its Annual
Report (Form 10-K) for the year ended December 31, 1996 and the related
financial statement schedules included therein, filed with the Securities and
Exchange Commission.
/s/ Ernst & Young LLP
ERNST & YOUNG LLP
San Antonio, Texas
September 2, 1997
<PAGE> 1
EXHIBIT 23.2
CONSENT OF ERNST & YOUNG LLP
We consent to the reference to our firm under the caption "Experts" and to
the use of our report dated March 10, 1995, with respect to the consolidated
financial statements of Ragan Henry Communications Group, L.P., US Radio, L.P.,
and US Radio Stations, L.P. incorporated by reference in the Registration
Statement (Form S-3) and related Prospectus of Clear Channel Communications,
Inc.
/s/ Ernst & Young LLP
ERNST & YOUNG LLP
Philadelphia, Pennsylvania
September 2, 1997
<PAGE> 1
EXHIBIT 23.3
CONSENT OF ERNST & YOUNG LLP
We consent to the reference to our firm under the caption "Experts" and to
the use of our report dated March 4, 1996, with respect to the consolidated
financial statements of US Radio, Inc. incorporated by reference in the
Registration Statement (Form S-3) and related Prospectus of Clear Channel
Communications, Inc.
/s/ Ernst & Young LLP
ERNST & YOUNG LLP
Philadelphia, Pennsylvania
September 2, 1997
<PAGE> 1
EXHIBIT 23.4
CONSENT OF KPMG
Board of Directors
Clear Channel Communications, Inc.
We consent to the incorporation by reference in the Registration Statement on
form S-3 of our report dated March 4, 1997, relating to the consolidated
financial statements of Australian Radio Network Pty Limited and its controlled
entities (such consolidated financial statements not separately presented in
the Form 10-K referred to below), which report appears in the December 31, 1996
annual report on Form 10-K of Clear Channel Communications, Inc.
/s/ KPMG
KPMG
Sydney, Australia
September 2, 1997
<PAGE> 1
EXHIBIT 23.5
CONSENT OF KPMG PEAT MARWICK, LLP
Radio Equity Partners, L.P. and subsidiary:
We consent to the incorporation by reference in the registration statement on
Form S-3 of Clear Channel Communications, Inc. of our report dated March 29,
1996, relating to the consolidated balance sheets of Radio Equity Partners,
L.P. and subsidiary as of December 31, 1995 and 1994, and the related
consolidated statements of operations, partners' capital and cash flows for the
years then ended, which report appears in the Current Report on Form 8-K of
Clear Channel Communications, Inc. dated June 5, 1996.
/s/ KPMG PEAT MARWICK, LLP
KPMG PEAT MARWICK, LLP
New York, New York
September 2, 1997
<PAGE> 1
EXHIBIT 23.6
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation
by reference in this registration statement on Form S-3 of our reports dated
March 14, 1997 and March 9, 1995 covering Eller Media Corporation and Eller
Investment Company, Inc., respectively, included in Clear Channel
Communications, Inc. Current Report on Form 8-K, filed April 17, 1997 and to
all references to our firm included in this registration statement.
/s/ ARTHUR ANDERSEN LLP
ARTHUR ANDERSEN LLP
Phoenix, Arizona
September 2, 1997
<PAGE> 1
EXHIBIT 23.7
CONSENT OF KPMG PEAT MARWICK, LLP
The Board of Directors
PMG Holdings, Inc.
We consent to the incorporation by reference in Amendment No. 1 to the
Registration Statement on Form S-3 of Clear Channel Communications, Inc. of our
report dated April 27, 1995, with respect to the consolidated balance sheet of
PMG Holdings, Inc. and Subsidiaries as of December 31, 1994, and the related
consolidated statements of operations, changes in stockholders' deficit and
cash flows for the year then ended, which report appears in the Current Report
on Form 8-K of Clear Channel Communications, Inc. dated April 17, 1997.
We also consent to the reference to our firm under the heading "Experts"
in the Registration Statement.
/s/ KPMG PEAT MARWICK, LLP
KPMG PEAT MARWICK, LLP
Stamford, Connecticut
September 2, 1997
